Personal Injury and Workers' Compensation Settlements for Incapacitated Persons: Part I

• Jurisdiction: Colorado,United States
• Citation: Vol. 30 No. 1 Pg. 43
• Pages: 43
• Publication year: 2001

30 Colo.Law. 1 Colorado Lawyer 2001.

2001, January, Pg. 43. Personal Injury and Workers' Compensation Settlements For Incapacitated Persons: Part I

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Vol. 30, No. 1, Pg. 1

The Colorado Lawyer
January 2001
Vol. 30, No. 1 [Page 43]

Specialty Law Columns
Estate and Trust Forum
Personal Injury and Workers' Compensation Settlements For Incapacitated Persons: Part I
by Spencer J. Crona, Byron K. Hammond

In November 1995, the entire Colorado Rules of Probate Procedure ("C.R.P.P.") Rule 16 was repealed and readopted, essentially replacing the prior Probate Form 31A with an outline of requirements for what information a personal injury settlement approval petition must provide to the court. C.R.P.P. Rule 16 requires much more detail than its predecessor rule and probate form for court review of a settlement proposed for approval on behalf of a minor or incapacitated person. Now, the new Colorado Uniform Guardianship and Protective Proceedings Act ("Colorado UGPPA")1 similarly imposes significantly expanded requirements for detailed information to the court about the nature of alleged incapacity

The Colorado UGPPA will affect how Probate Rule 16 proceedings are prepared and handled after the UGPPA effective date of January 1, 2001. The new statute also confers expanded due-process rights on the person alleged to be incapacitated (whom the statute designates as "Respondent" in all cases)

Part I of this article chiefly reviews C.R.P.P. Rule 16 and the Colorado UGPPA, and describes anticipated areas of interplay between them in the context of personal injury Part II, to be published in the February 2001 issue, covers workers' compensation settlements.

Probate Rule 16 Overview

C.R.P.P. Rule 16 establishes a detailed and case-specific framework for petitioning the court for approval of a personal injury settlement on behalf of a minor or incapacitated person. Rule 16 does not explicitly require court approval of such a settlement.2 However, the rationales for such court approval are: (1) a minor or incapacitated person lacks contractual capacity to consent to settlement (and the plan for distribution); and (2) a fiduciary for the person, whether a "next friend" or conservator, must have authorization from a court to consent.

The Rule 16 petition prescribes a uniform mode for providing the court the information the court needs to determine whether to authorize such consent. The standard for such determination by the court is whether the settlement, as proposed and described in the Rule 16 petition, would serve the best interests of the minor or incapacitated person.3

Specific Provisions

The facts section of the Rule 16 petition comprises the ward's name, address, and date of birth, and the parents' names and addresses for minors. Where a custodian or fiduciary has been appointed, the custodian or fiduciary must be identified by name, address, and description of duties or authority. Finally, this section must describe the nature of the event or transaction fostering the claim, as to which the petition proposes settlement approval.4

The liability section comprises the names and addresses of each party who bears or might bear liability for the claim in question, the basis for the claim, the defenses (if any) to the claim, the name and address of each insurer involved, and the type of policy and its limits.5 In this section, it is important to inform the court about the potential defenses to the claim, as well as the potential coverage limits, to the extent insurance coverage is available,6 to assist the court in determining that the settlement value is sufficient in light of the overall issues raised by all parties.

The damages section must provide a description of the nature and extent of the injuries and losses suffered by the claimant as a proximate result of the event, including loss of time from school or work, economic losses, and property damage, if any. This section also must provide a description of expenses incurred for medical treatment or other care-provider services or therapies resulting from the event.7

Although the rule requires the medical-status section to include a description of the nature and extent of the person's injuries, for the sake of economy, reference may be made to the preceding section's description of the same. The focus of the medical-status section is a more detailed description of the current condition of the injured person; the nature and extent of anticipated future treatment, care, and therapy related to the injuries; and the person's prognosis, including particularly the nature and extent of the person's disability, disfigurement, and permanent impairment. The rule also requires the attachment of a "written statement" by the person's attending physician, for which the medical records or chart might be expected to suffice. Nevertheless, these authors strongly recommend, and it is required in some jurisdictions, that the petitioner attach a physician's narrative report.8

As to status of claims, the rule essentially requires a report, including identification of the court, case number, and parties if the proposed settlement pertains to a lawsuit, as opposed to an insurance claim settled without filing a lawsuit.9 Here, the petitioner also must identify, by name and address, any parties with a subrogation interest and any public agency paying or planning to pay benefits to the claimant.

The section on proposed settlement requires a detailed description of the amount, terms, and proposed distribution of settlement. This section further requires a description of the terms of any structured payout, including identification of the insurance or annuity company involved, disclosure of the performance ratings for that entity, explanation of the present cash value, and cost of the structure scheme. Finally, the section requires reporting of the attorney fees and legal expenses incurred, including attachment of the fee agreement and attorney's billing records.10

Regarding the attorney fees provisions...