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Carnival v. Geico Casualty Co.

United States District Court, D. Colorado

March 28, 2017

NICHOLAS CARNIVAL, Plaintiff,
v.
GEICO CASUALTY COMPANY, Defendant.

          ORDER

          PHILIP A. BRIMMER United States District Judge

         This matter is before the Court on defendant's motion for partial summary judgment [Docket No. 26] and defendant's motion in limine [Docket No. 27]. The Court has jurisdiction pursuant to 28 U.S.C. § 1332.

         I. BACKGROUND

         A. Factual Background [1]

         Plaintiff Nicholas Carnival is a Colorado State Patrol officer. Docket No. 26 at 2, ¶ 1. On May 12, 2014, he was injured in a motor vehicle accident while working. Id. As a result, he was entitled to workers' compensation benefits. Id., ¶ 3. The driver of the other vehicle, who was at fault, had a motor vehicle insurance policy with a limit of $100, 000. Id., ¶ 2. Plaintiff had purchased an automobile insurance policy from defendant GEICO Casualty Company that included underinsured motorist (“UIM”) coverage with a $50, 000 limit per individual. Id. at 3, ¶ 5 (citing Docket No. 26-3 at 3). Such UIM policies provide additional insurance that “cover[s] the difference, if any, between the amount of the limits of any legal liability coverage and the amount of the damages sustained . . . up to the maximum amount of the coverage obtained.” Colo. Rev. Stat. § 10-4-609(1)(c).

         Plaintiff received $97, 882.07 in workers' compensation benefits. Docket No. 26 at 2-3, ¶ 3 (citing Docket No. 26-2 at 1, 8-9). On June 22, 2015, Dr. Theodore Villavicencio performed a medical examination as part of the workers' compensation process. Id. Using the statutorily required criteria, Dr. Villavicencio found that plaintiff had a whole body impairment rating of 15%. Id. This 15% disability rating was used as part of a statutory formula to arrive at the $74, 585.79 benefit for permanent partial disability (“PPD”). Docket No. 26-2 at 1. Additionally, plaintiff's workers' compensation benefits included $21, 043.33 for medical expenses and $2, 252.95 for temporary partial disability (“TPD”). Docket No. 26-2 at 1.

         On August 21, 2015, plaintiff settled his claims against the at-fault driver for the $100, 000 policy limit. Docket No. 26 at 2, ¶ 2 (citing Docket No. 26-1 at 4, 79:23-80:4). That same day, plaintiff sent a letter to defendant offering to settle for the UIM policy limit. Docket No. 26-5; see also Docket No. 26-3 at 3.

         Defendant's claims adjuster evaluated plaintiff's claim and, without reference to the workers' compensation settlement funds, considered plaintiff to be “well compensated” by the $100, 000 settlement with the at-fault driver's insurance company despite the 15% whole person impairment rating. Docket No. 36-8 at 3. Defendant sent plaintiff a letter with a “nuisance offer” of $1, 000 without explaining how defendant arrived at that figure. Id. at 1; Docket No. 36-5 at 1. Settlement negotiations ensued.

         Plaintiff's counsel responded with a letter noting the workers' compensation evaluation indicated permanent physical impairment and stating, “any money my client receives from the bodily injury provider, which only has a $100, 000 insurance policy, he has to return in subrogation [to the workers' compensation insurer], at this moment, approximately $95, 000.” Docket No. 36-4 at 1. Defendant asked for documentation of the subrogated claim, stating “it is our position that Mr. Carnival was well compensated by the bodily injury carrier's policy limits of $100, 000.00, ” and again offering $1, 000. Docket No. 36-5. Plaintiff's counsel responded by citing Colo. Rev. Stat. § 10-4-609 and arguing that the entire $97, 882.07 was subrogated. Docket No. 36-6 at 1. Defendant gave permission for plaintiff to settle with the at-fault driver's insurance and requested plaintiff's counsel make contact “once settlement is reached regarding the underinsured motorist claim.”[2]

         Correspondence between GEICO claims handlers indicates there was uncertainty about whether plaintiff would be required to repay the entire amount of his workers' compensation settlement from the proceeds of his settlement with the at-fault driver. Docket No. 36-8. Defendant's claims adjuster expressed doubt that plaintiff would have to repay the full amount, but nevertheless reasoned that plaintiff received “$100k from the [at-fault driver's insurance] carrier, and $97, 882.07 from work comp, so $197, 882.07 total. Even if he has to pay back work comp 100%, he's still walking away with $102k, not just $2k like [plaintiff's] attorney is trying to allege.” Id. at 1. Further exchanges resulted in defendant raising its settlement offer to $5, 000, but maintaining that plaintiff's damages were compensated by his settlement with the at-fault driver. Docket No. 36-9 at 1. Defendant stated, “it is our position that Mr. Carnival's $100, 000 liability settlement fully covered his claimed specials[3] of $43, 995.70 and over $55, 000 for any subjective non-economic losses, which may already fully compensate him for his claimed losses.” Id.

         B. Procedural History

         Plaintiff filed suit on October 26, 2015 in the District Court for Jefferson County, Colorado. Docket No. 1-7. Plaintiff alleges claims for breach of contract and unreasonable delay or denial in payment of insurance benefits under Colo. Rev. Stat. §§ 10-3-1115, 10-3-1116. Docket No. 5 at 4-5. Defendant removed the case to this Court on November 24, 2015. Docket No. 1.

         Plaintiff seeks damages for “‘past, present and future medical expenses, for past, present and future pain and suffering, for personal injuries, for emotional distress, and for other non-economic damages.'” Docket No. 26 at 4, ¶ 9. Plaintiff claims $49, 470.90 in medical expenses resulting from the accident. Id., ¶ 10. Despite plaintiff's injuries, he has continued to work full time after the accident and does not claim any lost wages through this case. Id. at ¶ 8 (citing Docket No. 26-4 at 2 (“Plaintiff is not claiming a wage loss”)).

         On March 29, 2016, defendant filed the pending motions. Defendant's motions address the interaction between the workers' compensation insurance benefits received by plaintiff and the UIM coverage provided by defendant. The summary judgment motion requests the Court to enter “partial summary judgment on Plaintiffs tort-based UIM claim for the TPD and PPD benefits paid by the workers' compensation insurer, as well on as any aspect of Plaintiffs extra-contractual claim based upon those same TPD and PPD amounts.” Docket No. 26 at 10. On March 15, 2017, defendant filed a notice stating that it “withdraws its request for exclusion of evidence at trial of Plaintiff's workers' compensation temporary partial disability (TPD) and permanent partial ...


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