In re Claim of Teti, 112020 COWC, 3-948-315-003

Case DateNovember 20, 2020
CourtColorado
IN THE MATTER OF THE CLAIM OF: JASON TETI, Claimant,
v.
COLORADO GOLD WHOLESALE, Employer,
and
COLORADO INSURANCE GUARANTY ASSOCIATION, Insurer, Respondents.
W.C. No. 3-948-315-003
Colorado Workers Compensation
Industrial Claim Appeals Office
November 20, 2020
          KEATING WAGNER POLIDORI FREE PC, Attn: MELISSA A HAILEY ESQ, C/O: LAURENCE J FREE ESQ, (For Claimant)           RITSEMA & LYON PC, Attn: DOUGLAS L STRATTON ESQ, C/O: KRISTIN A CARUSO ESQ, (For Respondents)          FINAL ORDER          The respondent, Colorado Insurance Guaranty Association (CIGA) seeks review of an order of Administrative Law Judge Michelle Jones (ALJ) dated March 5, 2020, that determined CIGA has an obligation to continue paying workers’ compensation benefits to the claimant without an offset from money received from a third party settlement. We affirm the ALJ’s order.          This matter went to hearing on the issue of whether the claimant established that he had a pre-insolvency right to receive workers’ compensation benefits from an insolvent insurer without an offset for money he received and continues to receive from Ford Motor Company (Ford) and Ford assignees. The ALJ was also asked to address whether the claimant has established that CIGA has a post-insolvency obligation to pay workers’ compensation benefits to or on behalf of the claimant without an offset for money the claimant received and continues to receive from Ford and Ford assignees. Finally, the ALJ was asked to resolve whether the money the claimant received and continues to receive form Ford and Ford assignees are claims against an insurer under any provision, in any insurance policy, and whether the claimant is required to exhaust his rights under such insurance policy thus reducing the amount payable from CIGA by the amount the claimant has recovered under such insurance policies consistent with the non-duplication of recovery statute at §10-4-512, C.R.S.          After hearing the ALJ entered factual findings that for purposes of review can be summarized as follows. On June 16, 1989, the 18 year-old claimant sustained an admitted work-related injury when he was involved in a motor vehicle rollover accident while driving down a frontage road in Adams County. The claimant was executing a curve when he lost control of the vehicle and the vehicle rolled. The claimant sustained multiple serious injuries, including severe head trauma, rupture of the liver and spleen and pelvic fracture. The claimant was hospitalized at St. Anthony’s hospital for two months, at Craig hospital for an additional six months and then spent several years in a supported living program. The claimant reached maximum medical improvement (MMI) on June 24, 1992, and is permanently and totally disabled.          The claimant’s employer was a wholesale floral business owned by the claimant’s family. The employer’s workers’ compensation insurer at the time of the accident was Millers First Insurance. The employer and Millers admitted liability by filing a general admission on July 13, 1989, and began paying benefits to the claimant.          On June 12, 1991, the claimant, through his parents, filed a civil tort action against Ford Motor Company in the United Stated District Court for the District of Colorado. The complaint alleged the following against Ford: negligence and willful and wanton negligence; breach of warranties; strict liability; fraudulent misrepresentation and fraudulent concealment. The complaints all related to the Bronco II that the claimant was driving at the time of the work-related motor vehicle accident. The complaint also noted damages requested including economic and non-economic damages due to the accident, injuries and losses the claimant sustained and would sustain in the future.          The attorney representing the employer and Millers in the claimant’s workers’ compensation claim was Thomas Schrant, Esq. Mr. Schrant was aware of the civil action against Ford Motor Company. On November 18, 1992, Mr. Schrant signed an affidavit noting that he was Millers’ attorney representing its interests involving the workers’ compensation claim of the claimant and that he believed payment of benefits by his client operated as an assignment of the cause of action against the third-party tortfeasor to his client. He indicated that he had retained a consultant to look into the rollover accident.          On December 9, 1992, the claimant’s mother, Kaye Teti, was appointed by court order as the claimant’s guardian and was deemed the claimant’s personal representative with full authority to act on the claimant’s behalf with limited restrictions. She was also appointed as the claimant’s conservator.          I. The Global Settlement Agreements          Starting in June of 1993, the claimant, Millers and Ford entered into a global settlement of the workers’ compensation claim and the third party tort claim as summarized in the separate agreements below:          A. Workers’ Compensation Agreement: Millers and the claimant          The Division of Workers’ Compensation received a Motion for Approval of Settlement, and attached Stipulation and a proposed Order from W. Randolph Barnhart, the attorney for the claimant in his workers’ compensation claim against the employer and Millers. Mr. Barnhart indicated in the motion that the parties moved the Director for an Order approving settlement in the case and that the Stipulation for Settlement was submitted concurrently with the motion. Mr. Barnhart and Mr. Schrant signed a document named in the hearing, “Stipulation” on June 2, 1993.          In the body of the agreement, the two attorneys noted they were submitting the following stipulation for an order approving a partial compromise and settlement of these claims. The agreement notes the claimant was injured in a work-related accident, that the employer was insured by Millers and that a civil lawsuit was brought against a third-party tortfeasor (Ford) and had been resolved by a separate settlement. The agreement states that the parties were cognizant that pursuant to the provisions of the Workers’ Compensation Act, the employer and Millers had certain rights against Ford and, therefore, has entitlement to certain credits to offset any further liability they may have to the claimant for any amount received in the civil action. The agreement further provided that the parties wished to compromise and resolve the potential credit that the employer and Millers may have against any future benefits owed to the claimant under the Workers’ Compensation Act and submitted the following agreement for compromise and settlement of this potential offset, commonly known as the right of “use up.”          The parties agreed that Millers had received a sum certain in the civil action from Ford which amount was subject to a confidentiality agreement. The parties agreed that in exchange for receipt of that amount of money, Millers agreed to continue to pay benefits under the Workers’ Compensation Act that may become due to the claimant in the future without any assertion of offset for the amount the claimant received as a result of a settlement of the third party action.          The parties asked that an order be entered approving the agreement of the parties of the partial compromise settlement. The parties certified that the proposed settlement had been personally reviewed with the claimant and the claimant and the respondents waived any personal appearance of the claimant before the Director or Administrative Officer and they requested the settlement be approved. The attorney for the claimant and the attorney for the employer and Miller signed the agreement. The stipulation for a partial compromise was approved by ALJ Janski on September 29, 1993.          B. Settlement: Ford and Millers          On June 22, 1993, Ford entered into a settlement agreement with Millers. In the agreement, Ford paid Millers a confidential sum in exchange for any interest Millers would have in the settlement of the civil suit by the claimant against Ford. Millers agreed they were forever releasing, acquitting and discharging Ford and acknowledged that Ford paid certain amount to the claimant and would in the future make certain payments to or for the benefits of the claimant in settlement of the civil product liability lawsuit...

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