Posted on January 19, 2007 by 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.

Collateral sources and other payments that do NOT reduce the verdict:

  • Health insurance. Publix Cab. Co. v. Colo. Nat'l Bank of Denver, 338 P.2d 702 (Colo.1959); Jones v. USAA Cas. Ins. Co., 952 P.2d 819 (Colo.App.1997).
  • Sick pay. Jones v. USAA Cas. Ins. Co., 952 P.2d 819 (Colo.App.1997).
  • Pension benefits. Moyer v. Merrick, 392 P.2d 653 (Colo.1964); Van Waters & Rogers v. Keelen, 840 P.2d 1070 (Colo.1992).
  • Disability benefits. Van Waters & Rogers v. Keelan, 840 P.2d 1070 (Colo.1992).
  • Fireman's disability benefits. Van Waters & Rogers v. Keelan, 840 P.2d 1070 (Colo.1992).
  • Contracts for payments (e.g., indirect payments for fire insurance). Frost v. Schroeder & Co., 876 P.2d 126 (Colo.App.1994).
  • Social Security. Combined Community Corp., Inc. v. Public Service Co., 865 P.2d 893 (Colo.App.1993).
  • Social Security Disability. Barnett v. American Family Mut. Ins. Co., 843 P.2d 1302 (Colo.1993).
  • Workers Compensation benefits. Combined Community Corp., Inc. v. Public Service Co., 865 P.2d 893, 901-902 (Colo.App.1993).
  • Medicare. Powell v. Brady, 496 P.2d 328 (Colo.App.1972) aff'd Brady v. City and County of Denver, 508 P.2d 1254 (Colo.1973); Berg v. United States, 806 F.2d 978 (10th Cir.1986).
  • Medicaid benefits other than past medical expenses. Arkansas Dept. of Human Services v. Ahlborn, 547 U.S. ___, 126 S.Ct. 1752 (2006).
  • Restitution payments as a condition of parole. Kahn v. Quintana, 811 P.2d 458 (Colo.App.1991).
  • Payments by settling defendants. Montoya v. Grease Monkey Holding Corp., 883 P.2d 486 (Colo.App.1994); Smith v. Vincent, 77 P.3d 927 (Colo.App.2003); see Smith v. Zufelt, 880 P.2d 1178 (Colo.1994).
  • The status of automobile no-fault insurance (PIP) benefits for claims arising after the July 1, 2003 "sunset" of PIP is unclear, with various trial judges entering contradictory rulings.

Payments that DO reduce the verdict:

  • No fault (PIP) benefits prior to the July 1, 2003 "sunset" of the no-fault statutes. Martinez v. Shapland, 833 P.2d 837 (Colo.App.1992).
  • Medicaid. Rose Medical Center v. State Farm Mut. Auto Ins. Co., 903 P.2d 15 (Colo.App.1973). Medicaid benefits for past medical expenses. Arkansas Dept. of Human Services v. Ahlborn, 547 U.S. ___, S.Ct. 1752 (2006).
  • CHAMPUS benefits. Mays v. United States, 806 F.2d 976 (10th Cir.1986).
  • Veterans disability benefits in a Federal Tort Claims Act suit. Steckler v. United States, 549 F.2d 1372 (10tj Cir.1977); United States v. Gray, 199 F.2d 239 (10th Cir.1952).
  • Workers compensation benefits may be set off against PIP. Barnett v. American Family Mutual Ins. Co., 843 P.2d 1302 (Colo.1993).

 

 

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