Opinion
No. 78-543
Decided November 2, 1978. Rehearing denied November 24, 1978. Certiorari granted February 5, 1979.
In declaratory judgment action, trial court ruled that plaintiff's insurer, having paid No Fault benefits to plaintiff, was entitled to exercise its right of subrogation against insurer of alleged tortfeasor that had caused plaintiff's injuries. Plaintiff appealed.
Affirmed as Modified
1. INSURANCE — No Fault Statute — Preserves Without Qualification — Insurer's Right — Recover P.I.P. Benefits — Paid by Tortfeasor's Insurer. The "No Fault" Statute preserves without qualification, the insurer's right to recover P.I.P benefits, in excess of $500, already paid to the injured person by the tortfeasor's insurance carrier.
Appeal from the District Court of the City and County of Denver, Honorable George M. McNamara, Judge.
Norton Frickey Associates, Dan W. Corson, for plaintiff-appellant.
Burnett, Horan Hilgers, Mike Hilgers, for defendant-appellee.
Plaintiff, Johnny E. Marquez, appeals the district court's judgment in favor of defendant Prudential Property Casualty Insurance Company. We affirm the judgment as modified.
Plaintiff brought an action in district court against Donna Marie Wright, alleging that Wright negligently caused an automobile accident in which plaintiff suffered personal injuries. Wright had $15,000 of liability insurance coverage with defendant American Standard Insurance Company of Wisconsin. American stipulated that the accident was proximately caused by the negligence of Wright, and it deposited the $15,000 into the registry of the court.
Meanwhile, plaintiff's own insurer, defendant Prudential Property Casualty Insurance Company, paid plaintiff $12,023.38 in personal injury protection (P.I.P.) benefits under the no fault provisions of plaintiff's policy. Concerned that Prudential might seek to recoup this amount be exercising its right of subrogation to the $15,000 deposited with the court, plaintiff brought this declaratory judgment action against both American and Prudential.
The district court ruled that, under the subrogation provision of plaintiff's policy, Prudential was entitled to full reimbursement. That provision states:
"In the event of any payment to any person under this coverage: The company shall be entitled to the extent of such payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury because of which such payment is made; and the company shall have a lien to the extent of such payment, notice of which may be given to the person or organization causing such bodily injury, his agent, his insurer or a court having jurisdiction in the matter. . . ."
The district court therefore awarded $12,023.38 of the $15,000 to Prudential, and the balance of $2,976.62 to plaintiff.
The parties stipulated that plaintiff's total damages, including disability, past and future pain and suffering, past and future medical bills, and past and future loss of income, are worth approximately $30,000. Plaintiff argues that by permitting Prudential to recoup the P.I.P. payments which it made, the district court's judgment leaves plaintiff uncompensated to the extent of $15,000, a result so inconsistent with the fundamental tenets of the no fault statute that the provision in plaintiff's insurance policy permitting the subrogation should be declared void.
[1] However, the no fault statute itself permits such subrogation:
"Neither any person eligible for [P.I.P.] benefits . . . nor any insurer providing [such] benefits . . . shall have any right to recover against an owner, user, or operator of a motor vehicle or against any person or organization legally responsible for the acts or omissions of such person in any action for damages . . . except that an insurer paying [P.I.P.] benefits . . . to or for any one person in excess of five hundred dollars shall have a direct cause of action against an alleged tort-feasor to the extent of benefits paid in excess of five hundred dollars and limited to the liability insurance coverage of the alleged tort-feasor." Section 10-4-713(1), C.R.S. 1973. (emphasis added)
Thus, while we agree with plaintiff that cases like Alliance Mutual Casualty Co. v. Duerson, 184 Colo. 117, 518 P.2d 1177 (1974) and Nationwide Mutual Fire Insurance Co. v. Newton, 40 Colo. App. 425, 579 P.2d 1178 (1978), are not a complete answer to the issue of inter- company subrogation, the statute is dispositive. It preserves, without qualification, the insurer's right to recover P.I.P. benefits already paid from the tortfeasor's insurance carrier. Cf. Pennsylvania Manufacturer's Ass'n Insurance Co. v. GEICO, 136 N.J. Super. 491, 347 A.2d 5 (1975), aff'd, 72 N.J. 348, 370 A.2d 855 (1977). Though we recognize that the right of intercompany subrogation may, to some extent, cut against the philosophical grain of no fault theory, the language of § 10-4-713(1) must be given effect. See American Metal Climax, Inc. v. Butler's Claimant, 188 Colo. 116, 532 P.2d 951 (1975).
We note, however, that the insurer's right to direct benefits is limited to P.I.P. paid in excess of five hundred dollars. Accordingly, the cause is remanded with directions to enter a judgment awarding Prudential $11,523.38 and plaintiff $3,476.62.
JUDGE RULAND and JUDGE VAN CISE concur.