July 18, 2019

Archives for April 5, 2013

Colorado Court of Appeals: No Right to Reimbursement for Temporary Total Disability Benefits in Excess of Statutory Cap

The Colorado Court of Appeals issued its opinion in United Airlines v. Industrial Claim Appeals Office on Thursday, March 28, 2013.

Workers’ Compensation—$75,000 Statutory Cap for Temporary Total Disability Benefits.

In this workers’ compensation action, United Airlines (employer) sought review of a final order of the Industrial Claim Appeals Office (Panel) affirming the administrative law judge’s (ALJ) denial of employer’s request for reimbursement of temporary total disability (TTD) benefits in excess of the $75,000 statutory cap. The judgment was affirmed.

After claimant sustained a compensable injury in 2007, employer admitted liability for TTD benefits. TTD benefits ceased when claimant was released to return to work in May 2011, by which time she had been paid $99,484.14. Shortly thereafter, a physician performed a division-sponsored independent medical examination and placed claimant at maximum medical improvement (MMI) with a permanent impairment of 5% of the whole person.

Relying on CRS § 8-42-107.5, which caps combined TTD and permanent disability benefits at $75,000 for a claimant whose impairment rating is 25% or less of the whole person, employer sought to recover the $24,483.14 it had paid in excess of the cap. Claimant responded that under CRS § 8-42-105(3), employer was required to continue paying TTD benefits until she was released to work.

The ALJ concluded the cap did not apply as long as claimant was entitled to receive TTD benefits. The Panel agreed and the Court of Appeals affirmed.

The Workers’ Compensation Act (Act) limits the total disability benefits that a claimant whose personal impairment rating is less than 26% may receive. However, the Act provides that benefits continue until one of a number of conditions is met.

Employer argued that benefits paid in excess of the cap must be repaid once claimant’s entitlement to TTD benefits has ended. The Court rejected that contention. Here, claimant received benefits to which she was entitled, and the amount in excess of the cap therefore did not constitute an overpayment.

The Court also found unpersuasive employer’s argument that allowing claimant to keep more than $75,000 in TTD benefits violates equal protection. Equal protection guarantees that similarly situated persons will receive like treatment under the law. Here, no fundamental right is affected or suspect class involved, so a “traditional or rational basis standard of review” applies.

Employer asserted that two classes of claimants are created by the Panel’s decision: those whose benefits will be capped because their benefits had not exceeded the cap when they reached MMI or were released to work, and those whose benefits exceeded the cap before they reached MMI or were released to work. This disparity does not, however, violate equal protection. First, the two classes are not similarly situated. Those claimants who take longer to reach MMI are different from those who take a shorter time. Second, even if they were similarly situated, requiring a claimant to pay back benefits to which she was entitled and needed would create hardships at odds with the purposes of the Act. Proceedings to recover excess payments also could burden the administrative process. These reasons rationally justify the resulting difference in treatment. The order was affirmed.

Summary and full case available here.

Colorado Court of Appeals: Underinsured Motorist Benefits Only Triggered When Policy Limits Reached on Tortfeasor’s Liability Policy

The Colorado Court of Appeals issued its opinion in Jordan v. Safeco Insurance Company of America, Inc. on Thursday, March 28, 2013.

Summary Judgment—Underinsured Motorist Benefits.

Plaintiffs Philip and Roberta Jordan appealed the district court’s summary judgment in favor of defendant Safeco Insurance Company of America, Inc. (Safeco) on their claim that Safeco unreasonably denied them underinsured motorist (UIM) benefits. The judgment was affirmed.

In 2009, the Jordans were involved in an automobile accident with J.F., a minor driver. The Jordans were injured and sued J.F. J.F.’s automobile insurance policy covered damages for injury to others up to $100,000 per person or $300,000 per accident. The Jordans settled for $60,000 and $38,500, respectively.

The Jordans sought underinsured motorist (UIM) benefits under their policy with Safeco, asserting that the policy covered all damages unpaid under the settlements, up to the policy limit. Safeco maintained that their UIM coverage would be triggered only if either of them had damages exceeding the $100,000 limit of J.F.’s policy, which neither did.

The Jordans sued Safeco, asserting claims for (1) common law bad faith breach of an insurance contract; (2) unreasonable delay and denial of payment of a claim in violation of CRS §§ 10-3-1115 and -1116; and (3) deceptive trade practice in violation of the Colorado Consumer Protection Act (CCPA). The Jordans moved for summary judgment under their unreasonable delay claims, and Safeco moved for summary judgment on the same claims and the bad faith claim. The parties stipulated that neither could prove damages in excess of $100,000, and the court granted the Jordans’ motion to dismiss their own CCPA claim.

The court granted Safeco’s motion for summary judgment. On appeal, the Jordans challenged only the grant of summary judgment in favor of Safeco under CRS §§ 10-3-1115 and -1116 and conceded that no material facts were disputed.

The Court of Appeals concluded that Safeco’s denial of coverage was permissible under the clear language of the policy, as well as the unambiguous terms of CRS § 10-4-609. The policy language unambiguously provides that payment of UIM benefits are only for damages above the tortfeasor’s insurance policy liability limit. Here, the damages did not exceed those limits.

The Jordans also argued that under CRS § 10-4-609, an insured’s good faith settlement with a tortfeasor necessarily exhausts the tortfeasor’s liability limits. That section, as amended January 1, 2008, requires that UIM coverage “shall be in addition to any legal liability coverage and shall cover the difference, if any, between the amount of the limits of any legal liability coverage and the amount of the damages sustained.” This is plain and unambiguous language. The trigger is the exhaustion of the tortfeasor’s “limits of . . . legal liability coverage.” The judgment was affirmed.

Summary and full case available here.

Colorado Court of Appeals: Assessor’s Reference Library of State Property Tax Administrator Correctly Used to Determine Valuation

The Colorado Court of Appeals issued its opinion in Bachelor Gulch Operating Co., LLC v. Board of County Commissioners of Eagle County on Thursday, March 28, 2013.

Tax Abatement/Refund—Subdivision of Property During a Tax Year.

Bachelor Gulch Operating Company, LLC (Bachelor Gulch) appealed the order of the Board of Assessment Appeals (BAA) denying its petition for an abatement or refund of taxes for tax year 2007. The order was affirmed.

Bachelor Gulch owns a substantial portion of the Ritz Carlton Hotel in Eagle County (hotel). For tax year 2007, the Eagle County Assessor assigned the hotel an actual value of approximately $47 million. As of January 1, 2007, which was the assessment date for tax year 2007, the hotel was a single unit for tax assessment purposes. During that year, two new plats were filed that subdivided the original hotel unit, ultimately creating fifty-one separate “child parcels.” Fifty of these were residential condominiums created out of existing hotel rooms. The other was what remained of the hotel after the subdivision (hotel child parcel).

Following the subdivisions, the Assessor allocated the $47 million among the child parcels in proportion to the square footage of each. Approximately $36 million was allocated to the hotel child parcel. Bachelor Gulch petitioned the Board of County Commissioners of Eagle County for an abatement or refund of taxes, which was rejected. Bachelor Gulch then appealed to the BAA, and the appeal was denied.

The Court of Appeals was confronted with the question of what procedure an assessor should use when a property is subdivided during the course of a particular tax year, after the initial valuation and before the next statutory assessment date or a revaluation due to unusual conditions. Colorado statutes provide for the biennial appraisal and valuation of real and personal property for property tax purposes. Bachelor Gulch argued that CRS § 39-5-125(1) applied and the Assessor was required to determine the actual value of the hotel child parcel for 2007. The Court found that the statute unambiguously allows an assessor to conduct a valuation only when it is discovered the taxable property had been omitted from the assessment roll. Because that was not the case here, CRS 39-5-125(1) does not apply.

The Court found no Colorado statute that addresses the question of what to do when a property is subdivided after the initial valuation but before the next assessment date. The State Property Tax Administrator has provided guidance in the Assessor’s Reference Library (ARL). Specifically, the ARL provides that although subdivision and condominium plats can be processed at any time during the year, “the original parcel value and classification must remain the same as assigned to the property on the January 1 assessment date.” In addition, if a project is subdivided after the notice of valuation deadline, the current actual value as of the assessment date is apportioned to the lots or units in the project. Having found that the ARL governs this situation, the Court held that the BAA correctly found that the Assessor complied with its provisions. The order was affirmed.

Summary and full case available here.

HB 13-1246: Allowing Property Tax Exemptions for Property Used for Charitable Purposes

On March 4, 2013, Rep. Lois Court and Sen. Pat Steadman introduced HB 13-1246 – Concerning Modifications in Connection with Current Property Tax Exemptions for Nonprofit Organizations. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Tax exempt property acquired by nonprofit housing provider for low-income housing: Current law allows a property tax exemption for real property acquired by a nonprofit housing provider upon which the provider intends to construct or rehabilitate housing to be sold to a low-income applicant. The bill modifies the property tax exemption by also allowing it to apply to real property acquired by a nonprofit housing provider that the provider intends to sell to a low-income applicant for the purpose of constructing or rehabilitating housing for the low-income applicant’s residential use.

In addition, the bill changes the criteria to qualify as a low-income applicant from an individual or family whose total median income is no greater than 60 percent of the area median income to an individual or family whose total median income is no greater than 80 percent of the area median income.

Waiver of filing deadline for annual report from owners of tax-exempt property: An owner of property that is exempt from property tax as determined by the property tax administrator is required to file an annual report to the state board of equalization (state board) regarding the tax-exempt property. Currently, the state board may waive the filing deadline for the annual report under certain circumstances. The bill allows the state board to determine a deadline for the property owner to file the report when granting the waiver and specifies that the waiver is invalid after the date established by the state board.

Effective date of property tax exemptions when a public official has made an error: The property tax administrator is currently authorized to grant a property tax exemption for certain types of property. The property tax administrator may grant the exemption back to Jan. 1 of the year preceding the year in which the application was filed, but no earlier. The bill allows the state board to authorize the property tax administrator to make an exemption effective earlier than is currently allowed when the property has been added back to the tax roll as omitted property and would otherwise have met all criteria for exemption during the time that it was omitted.

On March 27, the House gave final approval to the bill on 3rd Reading; the bill has not been assigned to a committee in the Senate.

Since this summary, the bill has been assigned to the Finance Committee in the Senate.

HB 13-1243: Requiring Specific Findings of Fact for Restrictions of Parenting Time

On February 28, 2013, Rep. Dave Young and Sen. Jessie Ulibarri introduced HB 13-1243 – Concerning Factual Findings Included in Parenting Time Orders. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill requires a court restricting parenting time based upon a finding that parenting time would endanger the child’s physical health or significantly impair the child’s emotional development to enumerate in its order the specific findings supporting the restriction on parenting time. The bill passed out of the House on March 18 and is assigned to the Judiciary Committee in the Senate.

Since this summary, the bill was laid over for Second Reading in the Senate on April 4.

HB 13-1242: Repealing Mandatory Sentencing Provisions for Violation of Bail Bond Conditions but Leaving Sentencing Range

On February 27, 2013, Rep. Brittany Pettersen introduced HB 13-1242 – Concerning a Repeal of the Mandatory Sentencing Requirement for Violation of Bail Bond Conditions. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Under current law, a person who commits the offense of violation of bail bond conditions is subject to mandatory incarceration in prison for a felony and jail for a misdemeanor. The offense also requires mandatory consecutive sentencing. This bill repeals the mandatory sentencing provisions but does not change the sentencing range. On March 26, the Judiciary Committee approved the bill and sent it, unamended, to the Appropriations Committee for consideration of the fiscal impact to the state.