United States District Court, D. Colorado
ERIN L. LEBSACK, Plaintiff,
JORGE L. RIOS, SEABOARD FOODS, LLC, a Limited Liability Company d/b/a Seaboard Farms, SEABOARD CORPORATION, a Foreign Corporation, Defendants.
Brooke Jackson United States District Judge.
matter is before the Court on the parties' respective
motions for a determination of law. See ECF Nos. 20,
Specifically, they ask this Court to address two basic
questions: (1) which claims does Ms. Lebsack have standing to
bring in light of a settlement between defendants and her
workers' compensation carrier; and (2) what medical
expense evidence is admissible in light of the collateral
source rule and Colorado workers' compensation law. I
answer those questions in this order.
Erin Lebsack alleges that on September 27, 2013, while
driving her employer's vehicle, she was struck by a
vehicle driven by defendant Jorge L. Rios. ECF No. 1 at
¶ 14. Like Ms. Lebsack, Mr. Rios was driving his
employer's vehicle and performing company business at the
time of the crash. Id. at ¶ 11-12. As a result
of the crash, Ms. Lebsack required medical treatment and
missed some work. Id. at ¶ 61.
Lebsack claimed and received workers' compensation
benefits from her employer, TMB Corporation, through its
insurer, Pharmacist Mutual Insurance Company (PMI). ECF No.
20-1. PMI covered Ms. Lebsack's medical treatment costs,
lost wages, and physical impairment claims from the date of
the crash until June 7, 2016. ECF No. 20-3. Ms. Lebsack's
medical treatment was billed at $152, 575.62, but PMI
satisfied these medical bills by paying the healthcare
providers a total of $67, 434.46. Id. Further, PMI
paid Ms. Lebsack $19, 270.92 for lost wages and physical
September 19, 2016 Ms. Lebsack sued Mr. Rios and his
employers, Seaboard Foods, LLC, and Seaboard Corporation,
(together, “defendants”). ECF No. 1. Ms. Lebsack
seeks damages including past and future healthcare expenses,
wage losses, permanent impairments and disfigurements, and
non-economic losses. Id. Relevant to the pending
motions, she is specifically seeking to recover for medical
treatment at the billed amount of $152, 575.62, lost wages
totaling $10, 000, and an unidentified amount for physical
impairment. ECF No. 20 at 2 (referencing Plaintiff's
Initial Disclosure Ex. E).
week after Ms. Lebsack filed her suit against defendants, PMI
sued defendants in Colorado state court pursuant to its
subrogation right as Ms. Lebsack's workers'
compensation carrier. ECF No. 20-6. PMI sought the full
amount of all benefits it paid to or on behalf of Ms.
Lebsack, totaling $90, 167.81. Id. Later, PMI and
defendants settled these claims on March 9, 2017 under
confidential terms. ECF No. 20-7.
thereafter, Ms. Lebsack filed an unopposed motion for a
telephonic hearing to discuss the effect of the settlement
between PMI and defendants on this case. ECF No. 18. On March
21, 2017 I ordered that in lieu of a hearing, the parties
should submit briefing on the issues raised in Ms.
Lebsack's motion. ECF No. 19. The motions have been fully
briefed. ECF Nos. 20-25.
Court has subject matter jurisdiction over this case by
reason of diversity of citizenship. 28 U.S.C. § 1332. In
diversity actions, a federal court must “apply the
substantive law of the forum state, ” Macon v.
United Parcel Serv., Inc., 743 F.3d 708, 713 (10th Cir.
2014), which, in this case, is Colorado. Because the Colorado
Supreme Court has not addressed the precise questions
presented here, this Court must “attempt to predict how
[Colorado's] highest court would interpret [the
issue].” Squires v. Breckenridge Outdoor Educ.
Ctr., 715 F.3d 867, 875 (10th Cir. 2013); see also
Pehle v. Farm Bureau Life Ins. Co., 397 F.3d 897, 901
(10th Cir. 2005) (“Because [Colorado] has not directly
addressed this issue, this court must make an Erie-guess as
to how the [Colorado] Supreme Court would rule.”). This
Court may “consider all resources available” in
doing so, “including decisions of [Colorado] courts,
other state courts and federal courts, in addition to the
general weight and trend of authority.” In re
Dittmar, 618 F.3d 1199, 1204 (10th Cir. 2010) (internal
quotation marks omitted).
Ms. Lebsack's Claims Post-Settlement.
workers' compensation carrier pays an injured
employee's expenses that are covered under the
workers' compensation statute it is subrogated for the
amount of the benefits paid. One option for pursuing its
subrogation right is to place a lien on any settlement or
judgment the employee might obtain from the tortfeasor. After
the employee obtains a settlement or judgment, the employee
reimburses the workers' compensation carrier for benefits
paid (sometimes negotiated downward for various reasons
including to account for a proportionate share of the
employee's litigation costs).
however, PMI did not wait for Ms. Lebsack's case against
the defendants to run its course. Rather, it filed a state
court suit directly against the defendants seeking
reimbursement of the benefits it paid to or on behalf of Ms.
Lebsack and then settled that claim. The terms of that
settlement have not been revealed, but presumably defendants
paid less than 100% of the benefits for which PMI sought
reimbursement. While defendants agree that initially both PMI
and Ms. Lebsack had the right to pursue claims against
defendants for the amount that PMI paid on Ms. Lebsack's
behalf, they argue that after PMI settled with defendants
both PMI's and Ms. Lebsack's claims were
extinguished. Ms. Lebsack, in contrast, argues that the
timing of defendants' settlement with PMI was a strategic
“trick” hatched by defendants to reduce her
potential damage recovery, and that it contravened
established law. ECF No. 21 at 10 (“It is a trick to
manipulate one measure of Lebsack's damages in a manner
that the Colorado state and federal courts have
established law to which she refers is the “collateral
source rule.” Under that rule, codified at C.R.S.
§ 13-21-111.6, a plaintiff's damage claim must be
reduced by the amount by which she has been compensated by a
third party unless the third party payment was the result of
a contract entered into and paid for by the plaintiff. Thus,
if an injured plaintiff's medical expenses were paid by
her own health insurance carrier, her claim against the
tortfeasor who caused her injuries is not reduced by her
insurer's payment of those expenses. Moreover, the
plaintiff may recover the full amount of the medical expenses
billed by the healthcare providers, not the discounted amount
to which the providers agreed as a result of negotiations
with plaintiff's health insurer. See Volunteers of
America Colorado Branch v. Gardenswartz, 242 P.3d 1080,
1085-88 (Colo. 2010). Indeed, the amount actually paid by her
health insurer to settle the bills of the healthcare provider
is not even admissible in evidence. Wal-Mart Stores,