ERISA, Health Insurance and the "Make Whole" Doctrine in Colorado

Your client's auto crash injury medical bills were paid by the client's employer's health insurance. Your client aks: "My health insurer says that it is entitled to 100% reimbursement from my settlement. Can they do that?"

Indeed, can they do that?

If you're giving one word answers to that question then contact your malpractice carrier. Whenever I get that question I have to psych myself up to deliver the ERISA lecture as well as to prepare the client to receive it. I won't deliver the ERISA lecture here, but I will give a synopsis.

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Negligence Per Se

Most attorneys and judges don't understand negligence per se. They treat it the same as negligence; i.e., at trial, they talk about the "reasonable person" and the "reasonable care" standard of liability with no differentiation between negligence and negligence per se. But the reasonable person/reasonable care standard does not apply to many negligence per se claims. Why?

Because the standard of care in a negligence per se claim based on a statute is the standard of care contained in the statute. And, the standard of care is often not the reasonable person standard.

Take, for example, C.R.S. 42-4-702 (left turn statute): "The driver of a vehicle intending to turn left within an intersection...shall yield the right-of-way to any vehicle approaching from the opposite direction which is within the intersection...."

The left turn statute does not contain a standard of reasonable care.

Consider, on the other hand, C.R.S. 42-4-1402 (careless driving statute): "Any person who drives any motor vehicle, bicycle, or motorized bicycle in a careless and imprudent manner, without due regard for the width, grade, curves, corners, traffic, and use of the streets and highways and all other attendant circumstances, is guilty of careless driving."

The careless driving statute does contain a standard of reasonable care.

So how should you present (or exclude) evidence and law on a negligence per se claim that doesn't have a reasonable care standard?

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A Brief Introduction to Clausewitz' On War

Carl von Clausewitz' On War, published posthumously in 1832, is THE seminal Western exegesis of war and military strategy and was the basis for Western military teaching and the conduct of war from its publication up until at least 1989, when the U.S. Marines adopted an official doctrine of warfighting largely based upon the priniciples of Sun Tzu's Art of War and U.S. Air Force Colonel Boyd's "OODA Loop." The crux of On War is attrition warfare as compared to the maneuver warfare of Art of War (but this is, of course, grossly oversimplified).

The U.S. invasion of Iraq is an interesting application (misapplicaiton) of the principles of the Art of War and an ignorant rejection of core principles of both On War and the Art of War. Defense secretary Rumsfeld planned for, and achieved, a quick military victory, but did not plan for, and did not achieve, stability and political victory. General Shinsheki's call for hundreds of thousands of troops, classic attrition warfare of Clausewitz' time, also was not the correct strategy. Had Clausewitz and Sun Tzu been consulted, both would have counseled President Bush to not invade Iraq. But the Iraq war is an article for another day.

The 10 principles that I have gleaned from On War are presented below.

 

 

 

 

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My Favorite Translation of the Art of War

John Minford's translation of the Art of War, Penguin Books 2002 (ISBN 0-670-03156-9(hc.); ISBN 0 14 04.3919 6 (pbk.)) is my favorite translation. Minford says that the Art of War is "beautiful and chilling." The same can be said of his translation, a portion of which (Chapter 5) is presented below. However, in order to save space, the excerpt is regrettably not presented in Minford's poetic structure. It is still beautiful and chilling nonetheless. Continue Reading...

Colorado "Caps" on Personal Injury Damages

  • Non-economic damages: $366,250 ($250,000 adjusted for inflation). But can be doubled if "clear and convincing evidence" shown. C.R.S. 13-21-102.5.
  • Punitive damages:  Not to exceed actual damages. C.R.S. 13-21-102.
  • Health care providers:  $1 million present value presumptive total, but may be exceeded for good cause shown if application of the cap is unfair; $300,000 for non-economic damages. C.R.S. 13-64-302.
  • Wrongful death: Economic damages not capped. Non-economic $341,250. C.R.S. 13-21-203.
  • Solatium for wrongful death:   $68,250. Economic damages not capped. C.R.S. 13-21-203.5.
  • Alcohol vendors, hosts:   $219,750. C.R.S. 12-47-801.
  • Ski areas:  $1 million present value; $250,000 non-economic. C.R.S. 33-44-113.
  • Government:  $150,000 per person; $600,000 per incident. C.R.S. 24-10-114.
  • Recreational lands:  $150,000 per person; $600,000 per incident. C.R.S. 33-41-103.
  • Construction professionals:  $250,000. C.R.S. 13-20-806.
  • Volunteers:  Applicable vehicle liability coverage. C.R.S. 13-21-115.5.
  • Reservoirs:  Must carry at least $50,000 per person and $500,000 per incident liability coverage (if so, then certain pesons are immunized). C.R.S. 37-87-104.
  • Damage caused by minor:  $3500. C.R.S. 12-21-107.

NOTE: This is only a summary of certain damage "caps"  and should not be solely relied upon. The applicable statutes must be reviewed carefully, as the statutes contain conditions, qualifications, and exceptions; e.g., the Governmental Immunity Act has a strict 180 day notice requirement that must be formally complied with.

Fort Collins Colorado Automobile Injury Attorney Mac Hester

 

Collateral Sources in Colorado

At common law, compensation paid to the injured person from a collateral source, independent of the tortfeasor, did not reduce the damages owed by the tortfeasor.

Now, by statute (C.R.S. 13-21-111.6), the trial court will reduce the verdict by the amount of collateral sources - except that the verdict cannot be reduced by compensation paid to the plaintiff as a result of a contract entered into and paid by or on behalf of the plaintiff. Quite often this "contract exception" swallows up the general rule of the statute, as shown in the cases below.

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Allstate Scorched Earth Claim & Litigation Tactics

Allstate, over the past several years, has implemented scorched earth insurance claim and litigation tactics, which were developed in large measure by McKinsey & Company. McKinsy was inspired by military strategy and tactics, especially the strategy and tactics advocated by Colonel Boyd of the U.S. Air Force (e.g., "OODA Loop") which subsequently were adopted by the U.S. Marines and implemented in the first Gulf War ("shock and awe") and in the invasion of Iraq ("seize the initiative"; "change the game"). McKinsey decided to focus on "change the game" and Allstate adopted McKinsey's plan and implemented it as "The New Game: 'Good Hands to Boxing Gloves'". The adandonment of the good hands metaphor in favor of the boxing gloves metaphor illustrates Allstate's strategy of confrontation and combat and implementation of intimidation tactics that are designed to bludgeon claimants and claimant attorneys into submission by making pursuit of claims unpleasant, stressful, time consuming and financially, mentally and emotionally expensive and by making claims uneconomic; e.g., incentivizing claimant attorneys to decline "soft tissue" cases and/or settle them cheaply and forcing claimants to drop claims or settle them cheaply.

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