Colorado Collateral Source Rule and Pro-Rata Liability Statute

The bread and butter for any Colorado personal injury lawyer is negligence. In essence, the plaintiff alleges that someone else acted carelessly and that failure to exercise “reasonable care” caused an injury. When a plaintiff is injured, an insurance company often steps in and pays at least a portion of the medical bills and/or property damage. If there are multiple parties responsible for the plaintiff’s injury, complexities may arise when one defendant settles and another defendant goes forward with trial. When an injured party receives money from a third party such as an insurance company or a settling defendant, a personal injury lawyer must analyze how those payments will impact any judgment that is obtained at trial.

The first question is whether the pro-rata liability statute (“Contribution Statute”), C.R.S. 13-21-111.5, or collateral source statute (“Collateral Source Statute”), C.R.S. 13-21-111.6, applies.  Generally, if the settling party is not found to be at fault, the Collateral Source Statute and its dollar reduction rule control.  Smith v. Zufelt, 880 P.2d 1178 (Colo. 1994); Gutierrez v. Bussey, 837 P.2d 272 (Colo. App. 1992).  If the settling party is found to be at fault, the Contribution Statute and its percentage reduction rule control.  Id.  The amount to be reduced from the trial verdict shall be calculated by multiplying the total percentage of liability attributed to the settling nonparties by the total trial verdict awarded the plaintiff.  Id.

Second, if working within the Contribution Statute, there is an exception to reducing the total verdict by the amount of fault attributed to the settling nonparties: joint and several liability.  C.R.S. 13-21-111.5(4).  “Joint liability shall be imposed on two or more persons who consciously conspire and deliberately pursue a common plan or design to commit a tortious act. . ..”  Id.  The cases on point for this area of law are intensely fact-driven.  Below are several cases on point in this area with parenthetical citations included.

Toothman v. Freeborn & Peters, 80 P.3d 804 (Colo. App. 2003) (law firm and securities promoter acted in concert).

Resolution Trust Corp. v. Heiserman, 898 P.2d 1049 (Colo. 1995) (analyzes both Schneider and Messler below).

Schneider v. Midtown Motor Co., 854 P.2d 1322 (Colo. App. 1992) (car dealer selling vehicle to known unlicensed driver who injured plaintiff could be found to have acted in concert).

Messler v. Phillips, 867 P.2d 128 (Colo. App. 1993) (rev’d on other grounds) (holding that real estate broker’s romantic relationship with co-defendant was insufficient for civil conspiracy because it is impossible to “conspire” to be negligent”).


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