Chavez: Court Decision on Subrogation Rights

In the Chavez decision the Colorado Court of Appeals ruled against Pinnacol's efforts to obtain or share in a settlement made between the injured worker and a third party. Subrogation can give the workers comp insurer rights to obtain reimbursement from some other responsible party. Here the claimant was injured in an auto accident but received workers comp benefits. He then sought to pursue a tort claim on the accident against others. Pinnacol joined that case because it can assert its right to reimbursement should there be a big recovery. However in this case the employee settled what was called his non-economic damages such as pain and suffering. The settlement was set up not to prejudice Pinnacol's right to proceed but Pinnacol felt it was entitled to approve the settlement or at least that it was entitled to some portion of that settlement. The court ruled that the settlement was reasonable and did not affect Pinnacol's rights. As set up by the language in the settlement Pinnacol's ability to pursue its claims was not affected by all this so it was not entitled to any of the settlement. Here the non-economic damages that were settled involve matters never paid through workers comp by Pinnacol. Pain and suffering for example is not a workers comp benefit but Pinnacol felt it was wronged anyway. It lost in the original case and then in this appeal.