A division of the Colorado Court of Appeals has cut-off an avenue of recovery for plaintiffs injured by negligent co-workers while driving on the job. In doing so, the division has created a split that will likely have to be resolved by the Colorado Supreme Court.
In Ryser v. Shelter Mutual Insurance, 2019 COA 88, the appellate panel rejected a plaintiff-friendly interpretation of the meaning of the phrase “legally entitled to recover” in Colorado's uninsured/underinsured (“UM/UIM”) motorist statute. The panel held that the phrase bars recovery of UM/UIM benefits when the plaintiff is legally prohibited from recovering liability damages against the at-fault driver because of co-worker immunity under the Workers' Compensation Act of Colorado.
The Ryser holding on its face is limited to a case configuration in which an injured person is seeking UM/UIM benefits from the at-fault co-worker's insurance policy. The implications, however, are much broader. If the Ryser interpretation of “legally entitled to recover” is adopted by the Supreme Court, intellectual consistency will demand that it be applied similarly to configurations in which a claimant injured by a co-worker is seeking UM/UIM benefits under the claimant's own automobile insurance policy or alternatively under the employer's auto policy. The result would be same in each configuration – no UM/UIM recovery for the plaintiff. In this way, Ryser is a stone that aims to kill three birds in one throw.
The Facts and Procedural Posture of Ryser
Ryser sustained serious injuries in a car crash. He was the passenger. The driver was a co-worker whose negligence allegedly caused the one-car accident. The owner of the vehicle gave the co-worker and Ryser permission to use the vehicle. All three were employees of Walmart. At the time of the accident, both Ryser and the at-fault co-worker were acting in the course and scope of their employment.
The owner of the car had UM/UIM coverage which extended to Ryser and the at-fault co-worker because they were permissive users under the policy.
Ryser sought and received workers' compensation benefits. He also recovered benefits under his own underinsured motorist coverage. But when he tried to recover compensation under the car-owner's UM/UIM coverage, Shelter Insurance denied the claim. In response, Ryser brought an action for breach of contract, statutory bad faith and common law bad faith.
Shelter wins summary judgment
Shelter Insurance sought summary judgment on the argument that the Workers' Compensation Act granted immunity to co-workers for their negligence. Since the Act barred Ryser from suing his co-worker for liability damages, Shelter argued Ryser was also barred from recovering UIM damages under §10-4-609(4), C.R.S. Under that section, uninsured motorist coverage “shall include coverage for damage for bodily injury or death that an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle.” (emphasis added)
Shelter argued successfully to the trial court that because co-worker immunity under the Act barred Ryser from suing the at-fault driver, Ryser was not legally entitled to collect from the driver's underinsured motorist coverage.
The Court of Appeals affirms summary judgment while raising doubts about the meaning of “legally entitled to collect”
The appellate panel in Ryser split with two earlier opinions from the Court of Appeals regarding the meaning of “legally entitled to collect.” The Ryser opinion discussed both Borjas v. State Farm, 33 P.3d 1265 (Colo. App. 2001), and American Family v. Ashour, 2017 COA 67. The Ryser court dismissed both opinions as “background” and probably would have tagged on the word “noise” had it not been for professional courtesy. The Ryser opinion is notably critical of the other divisions' reliance on “policy considerations” to justify square-peg interpretations of “legally entitled to collect”:
Neither the division in Borjas nor that in Ashour found the phrase “legally entitled to recover damages from owners or operators of uninsured motor vehicles” to be ambiguous. Still, both divisions interpreted the phrase based on policy considerations. See Borjas, 33 P.3d at 1269 (“The contrary line of cases all give a strict interpretation to the statutory language ‘legally entitled to recover' that we find inconsistent with the public policy expressed in § 10-4-609.”); see also Ashour, ¶62 (“[W]e choose to adopt the Borjas interpretation of that phrase because it is consistent with the policies underlying the UM/UIM statute, the purpose of which is to compensate the injured party ‘for injuries received at the hands of one from whom damages cannot be recovered.'” (quoting Borjas, 33 P.3d at 1267).
Ryser 2019 COA, ¶25.
Almost certainly, the Colorado Supreme Court will need to determine which interpretation of “legally entitled to collect” will be the guiding principle under Colorado law.
What does it mean for Plaintiffs?
Until the Colorado Supreme Court weighs in, there are several important implications for plaintiffs. First, insurance companies will be emboldened to deny UM/UIM claims involving a claimant injured by a co-worker's negligence when workers' compensation is involved. Second, UM/UIM denials won't necessarily be limited to just the factual configuration of Ryser (UM/UIM claims against the at-fault co-worker's auto coverage). Insurance carriers may attempt to extend the specific holding in Ryser to also deny UM/UIM claims against the injured party's own auto coverage as well as the employer's coverage. Regrettably for plaintiffs, this will make it more difficult for people to purchase additional insurance to protect themselves from the negligence of co-workers.