No. 91CA1061Colorado Court of Appeals.
Decided September 24, 1992. Opinion Modified, and as Modified Rehearing Denied November 27, 1992. Certiorari Granted July 26, 1993 (92SC845).
Certiorari Granted on the following issues: Whether the court of appeals erred when it excluded attorney fees and costs from the gross settlement amount for which the plaintiffs had been compensated for their loss as defined by § 13-21-111.6, 6A C.R.S. (1987). Whether the court of appeals erred in holding that the jury verdict should be reduced by the amount of the settlement sum paid jointly by non-parties Maude and Ellis Smith to Kory Zufelt.
Appeal from the District Court of La Plata County Honorable Al H. Haas, Judge
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Shand, McLachlan, Newbold Spear, P.C., Michael E. McLachlan, for Defendants-Appellants.
Dawes and Crane, P.C., Robert C. Dawes, Alex C. Tejada, Gail C. Harriss, for Plaintiffs-Appellees.
Division II.
Opinion by JUDGE TURSI.
[1] Defendants, Charles and Michael Smith, appeal from a judgment entered upon jury verdicts in favor of plaintiffs, Kory Zufelt and his parents and next friends, Ronald and Katherine Zufelt. We affirm in part, reverse in part, and remand for further proceedings. [2] This appeal arises from injuries sustained by plaintiff Kory Zufelt in a hunting accident which occurred on January 16, 1988. The following facts are not in dispute. [3] Ellis and Maude Smith agreed to watch 8-year-old Kory and 12-year-old Troy Zufelt for the day at their rural home while the senior Zufelts were at work. Because Maude Smith and Katherine Zufelt had agreed that the boys could hunt on the Smith property, the boys arrived at the Smith residence with their guns. [4] Maude was aware that the boys had previously hunted without adult supervision, and the Zufelts testified that their boys had done so with their consent. Neither Maude nor Katherine recalled discussing whetherPage 10
adults would supervise the boys while hunting at the Smith property, but Katherine did not request adults to accompany the boys, and Maude assumed that the Zufelts consented to their unsupervised hunting.
[5] During the day that the Zufelt boys were at the Smiths’, their son, daughter-in-law, and grandson arrived at the house for a visit. Although the grandson, 12-year-old Michael Smith, had never hunted without adult supervision, his father, Charles, gave Michael permission to hunt with the Zufelt boys unattended. [6] Michael used a gun and ammunition supplied by Ellis Smith, and during their hunting activities, Kory sustained a gunshot wound when Michael’s rifle accidentally discharged. [7] Thereafter, this negligence action was initiated against Michael Smith, Charles and Hazel Smith, and Ellis and Maude Smith. Kory Zufelt sought to recover damages for the serious bodily injury he had suffered, while his parents asserted a separate claim for past and future medical expenses incurred by Kory to the age of majority. [8] Plaintiffs’ claims against Maude and Ellis Smith were dismissed with prejudice before trial when, in a settlement agreement with all plaintiffs, these defendants jointly agreed to pay the sum of $88,629.24. The net settlement proceeds were allocated in the agreement to different parties, including $50,000 to Kory, $2,500 to the Zufelt family, and $7,000 to Troy. Additionally, the sum of $29,129.24 was paid to plaintiffs’ attorneys for fees and costs. [9] Subsequently, pursuant to § 13-21-111.5(3)(6), C.R.S. (1992 Cum. Supp.), defendants designated Maude and Ellis Smith as statutory non-parties having fault. Upon trial against the remaining defendants, the jury returned two verdicts in favor of plaintiffs. In each verdict, the jury apportioned negligence for plaintiffs’ injuries by allocating 84% fault to Charles Smith, 1% to Michael Smith, 0% to Hazel Smith, 15% to Maude Smith, and 0% to Ellis Smith. [10] The total award in favor of Kory amounted to $105,000, while Ronald and Katherine Zufelt received the total sum of $25,000. However, the trial court reduced the awards by 15%, the amount of liability apportioned by the jury to Maude Smith. Hence, defendants were ordered to pay plaintiffs $110,500, or 85% of the combined jury awards, their pro-rata share of liability. I.
[11] Defendants contend that the trial court erroneously denied their motion to offset the amount of the settlement proceeds against the damages awarded to plaintiffs. Plaintiffs respond that inasmuch as the damages awards were reduced by the percentage of Maude Smith’s liability, pursuant to § 13-50.5-105, C.R.S. (1987 Repl. Vol. 6A), the trial court correctly refused to offset their settlement proceeds by application of the collateral source rule. We agree that a set-off is required.
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fact-finder not to have any fault for the injury sustained. Gutierrez v. Bussey, 837 P.2d 272 (Colo.App. No. 91CA0330, April 23, 1992); see United States Fidelity Guaranty Co. v. Salida Gas Service Co., 793 P.2d 602
(Colo.App. 1989).
(Colo. 1991), and we must also presume that the General Assembly intended a just and reasonable result when enacting them. Section 2-4-201(1)(c), C.R.S. (1980 Repl. Vol. 1B). [20] Therefore, when determining whether defendants are entitled to set off settlement monies from non-parties at fault as a collateral source, we must reconcile these statutes to effectuate the General Assembly’s intent to limit a tortfeasor’s liability to his percentage of fault, §§13-21-111.5, C.R.S. (1990 Cum. Supp.) and 13-50.5-105, and to prevent injured parties from receiving a double recovery. See United States Fidelity Guaranty Co. V. Salida Gas Service Co., supra. [21] We conclude that when the jury designates fault attributable to the settling non-parties, the trial court is required by § 13-50.5-105 to reduce the award of damages by an amount equivalent to the percentage of fault assessed. [22] When the injured party receives a settlement amount from the non-parties which is less than the percentage of total damages chargeable to them, the trial court achieves this result by subsuming the apportioned settlement proceeds into the percentage of causation assessed against the non-parties. Under these circumstances, the collateral source rule does not apply to reduce the jury award any further. Herrera v. Gene’s Towing supra. [23] On the other hand, when the amount of settlement proceeds contributed by the non-parties to the injured party exceeds the percentage of total damages chargeable to them, the trial court must determine the amount actually indemnified or compensated from the collateral amount and reduce the jury verdict award accordingly. This equation permits plaintiffs to recover the full amount of their damages while defendants remain liable for their pro-rata share of fault. See Gutierrez v. Bussey, supra; § 13-21-111.5. [24] In this case, the jury verdict awarded Kory Zufelt $105,000 in total damages and assessed 15% fault against the non-party defendants, reducing the verdict by $15,750. Accordingly, defendants are liable for
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payment of the remaining 85% of the verdict, or $89,250.
[25] However, because plaintiff received $50,000 from the non-party defendants in settlement, he is in receipt of an additional $34,250, the difference between the non-party defendants’ settlement amount of $50,000 and the amount of $15,750. This amount constitutes a collateral payment to which defendants are entitled as an offset, and the trial court must reduce the judgment entered on the verdict from $105,000 by $50,000 to $55,000 chargeable to these defendants. Hence, as a general rule, when the settlement amount actually received by the plaintiff exceeds the percentage of fault assigned to the settling non-party, the total settlement is deducted from the total verdict. [26] Therefore, we conclude that the trial court erred by not reducing the verdict for Kory Zufelt accordingly. II.
[27] Defendants also contend that the trial court erroneously refused to instruct the jury to consider Ronald and Katherine Zufelt’s comparative negligence, based on theories of negligent entrustment and negligent supervision, when apportioning liability. We disagree.
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