Colorado § 8-43-204 - Settlements - rules.

§ 8-43-204. Settlements - rules.

(1) An injured employee may settle all or part of any claim for compensation, benefits, penalties, or interest. If such settlement provides by its terms that the employee's claim or award shall not be reopened, such settlement shall not be subject to being reopened under any provisions of articles 40 to 47 of this title other than on the ground of fraud or mutual mistake of material fact.

(2) Such a settlement shall be in writing and shall be signed by a representative of the employer or insurer and signed and sworn to by the injured employee. For claims that have a settlement amount of seventy-five thousand dollars or more, a written notice of the settlement agreement shall be provided to the employer.

(3) The settlement shall be reviewed in person with the injured employee and approved in writing by an administrative law judge or the director of the division prior to the finalization of such settlement. The settlement shall be filed with the division as a part of the injured employee's permanent record.

(4) If an employee owes child support and a garnishment has been filed pursuant to section 13-54.5-101, C.R.S., or the state child support enforcement agency has filed a notice of administrative lien and attachment pursuant to section 26-13-122, C.R.S., with the insurer or self-insured employer, all proceeds of any award, lump sum settlement, and the indemnity portion of any structured settlement shall be subject to said garnishment or administrative lien and attachment. Proceeds up to the amount of the garnishment or administrative lien and attachment shall be paid as directed on the notice to the obligee or to the state child support enforcement agency on behalf of the obligee to whom support is owed.

(5) If an employee owes a debt for which a writ is issued as a result of a judgment for fraudulently obtained public assistance, fraudulently obtained overpayments of public assistance, or excess public assistance paid for which the recipient was ineligible and a garnishment has been filed pursuant to section 13-54-104 or 13-54.5-101 with the insurer or self-insured employer, all proceeds of any award, lump sum settlement, and the indemnity portion of any structured settlement are subject to the garnishment. Proceeds up to the amount of the garnishment shall be paid as directed by the county department of human or social services responsible for administering the state public assistance programs.

(6) To aid in settlement, the director shall review mortality tables from the United States government and private industry and issue rules establishing a single life expectancy table on July 1 in every even-numbered year, commencing July 1, 2010. The director may adopt current mortality tables used by medicare. Nothing in this subsection (6) shall be construed to limit the use of rated ages.

(7) Any lump sum payable as a full or partial settlement shall be paid to the claimant or the claimant's attorney within fifteen calendar days after the date the executed settlement order is received by the carrier or the noninsured or self-insured employer.

(8) The director shall adopt rules as necessary to implement the procedure to review and approve settlement documents. At a minimum, the rules must:

(a) Allow a represented claimant to submit settlement documents for approval electronically;

(b) Provide for the approval of settlement documents if the claimant's signature is not an original but is notarized; and

(c) Require the division to serve counsel of record, or the insurance carrier or self-insured employer if not represented, with a copy of the division's order approving the settlement agreement of the parties.

(9) In accordance with section 24-30-1510.7 (6), if the state enters into a settlement agreement with a state employee pursuant to subsection (1) of this section, the state shall neither suggest nor require:

(a) That the state employee resign from state employment;

(b) That the state employee refrain from seeking or obtaining employment with the state in the future; or

(c) That any other restrictions be placed on the state employee's ability to work for the state.

Source: L. 90: Entire article R&RE, p. 502, § 1, effective July 1. L. 98: Entire section amended, p. 530, § 1, effective April 30. L. 2001: Entire section amended, p. 720, § 2, effective May 31. L. 2006: (5) added, p. 949, § 7, effective August 7. L. 2010: (6) and (7) added, (SB 10-163), ch. 66, p. 233, § 5, effective March 31. L. 2014: (8) added, (SB 14-191), ch. 316, p. 1371, § 2, effective July 1. L. 2018: (5) amended, (SB 18-092), ch. 38, p. 397, § 3, effective August 8. L. 2024: (9) added, (SB 24-149), ch. 482, p. 3380, § 2, effective June 7. L. 2026: (8)(a) and (8)(c) amended, (SB 26-186), ch. 315, p. 1850, § 8, effective August 12.

Editor's note: (1) This section is similar to former § 8-53-105 as it existed prior to 1990.

(2) Section 9 of chapter 208, Session Laws of Colorado 2006, provides that the act enacting subsection (5) applies to judgments entered prior to, on, or after August 7, 2006.

Cross references: (1) For the legislative intent contained in the 2006 act enacting subsection (5), see section 8(2) of chapter 208, Session Laws of Colorado 2006.

(2) For the legislative declaration in SB 18-092, see section 1 of chapter 38, Session Laws of Colorado 2018.

ANNOTATION

Law reviews. For article, "Settlement Procedure in Workers' Compensation Claims", see 46 Colo. Law. 40 (July 2017).

Annotator's note. The following annotations include cases decided under former provisions similar to this section.

Interest of state in recovery of just compensation induced provision requiring approval of settlements. It is the fact that the state has an interest in the recovery of just compensation by injured employees to the end that they do not, because of their injuries, become public charges, which induced the lawmakers to require the approval of settlements as a condition of their becoming binding on the parties to them. Indus. Comm'n v. London Guarantee & Accident Co. 66 Colo. 575, 185 P. 344 (1919).

A settlement made on stipulation in court is no more effective without such approval than is any other settlement. Indus. Comm'n v. London Guarantee & Accident Co., 66 Colo. 575, 185 P. 344 (1919).

Settlement does not discharge claim against physician for malpractice. Settlement under the workmen's compensation act for accidental injuries incurred by an employee does not operate to release or discharge a claim for damages for malpractice which he may have against the physician who treated his injuries. Froid v. Knowles, 95 Colo. 223, 36 P.2d 156 (1934).

A claim may be closed upon payment of a final settlement. In re Brunetti v. Indus. Comm'n, 670 P.2d 1246 (Colo. App. 1983).

The division of labor's approving the employer's admission of liability "subject to any further liability as provided by law" did not constitute a termination of claimant's right to payment for medical treatments by the employer's doctor. To the contrary, specific provision is made in the act for obtaining final approval by the commission of the settlement of a claim. Granite Constr. Co. v. Leonard, 40 Colo. App. 20, 568 P.2d 500 (1977).

Effect of settlements on reopening. In view of prior cases, the beneficial purposes of the act and the language of §§ 8-51-108 and 8-53-113, the conclusion is inescapable that the general assembly has given the director authority to reopen a case within requisite time limitations regardless of whether there was a settlement. Padilla v. Indus. Comm'n, 696 P.2d 273 (Colo. 1985) (decided prior to 1985 amendment).

Worker's compensation claim may be reopened despite claimant's stipulation waiving right to reopen case because the supreme court decision in Padilla v. Indus. Comm'n (696 P.2d 273 (Colo. 1985)) allowing such reopenings should be given retroactive effect. Loffland Bros. v. Indus. Claim Appeals Office, 754 P.2d 768 (Colo. App. 1988), aff'd, 770 P.2d 1221 (Colo. 1989).

Effect of settlement waiving claims for all injuries, both known and unknown. Settlement form adopted by the director of the division of workers' compensation could not override an employee's statutory right under subsection (1) to reopen a claim due to a mutual mistake concerning an existing, material fact. Therefore, to the extent the form purported to waive all claims for "unknown injuries", its operation was limited to those arising in the future, and an existing injury unknown to the parties at the time of the settlement could provide a basis on which to reopen the claim. England v. Amerigas Propane, 2017 CO 55, 395 P.3d 766.

Document signed by claimant at request of claims adjuster in which claimant rejected his right to workers' compensation benefits was ineffective as a waiver where document was in the nature of a settlement and was not approved as required by this section. Oxford Chems., Inc. v. Richardson, 782 P.2d 843 (Colo. App. 1989).

Release signed by injured worker was ineffective in barring her pursuit of workers' compensation claims because it was not approved by the division. Cook v. McLister, 820 P.2d 1167 (Colo. App. 1991).

Administrative law judge (ALJ) properly found settlement was voidable on ground claimant was mentally incompetent at the time he entered into the settlement. Although the settlement of a claim may be reopened only on grounds of fraud or mutual mistake of fact, an ALJ is empowered to determine the competency of a claimant entering into such a settlement agreement, and when no such capacity exists because of mental incompetency, the contract is voidable by the person lacking capacity to contract. Powderhorn Coal Co. v. Weaver, 835 P.2d 616 (Colo. App. 1992).

A mutual mistake is one which is reciprocal and common to both parties to an agreement, and both parties must share the same misconception as to the terms and conditions of the agreement. Cary v. Chevron U.S.A., Inc., 867 P.2d 117 (Colo. App. 1993).

A prehearing ALJ has jurisdiction to enter an order approving a settlement agreement in a workers' compensation case. Indus. Claim Appeals Office v. Orth, 965 P.2d 1246 (Colo. 1998).

The orders of a prehearing ALJ that relate to prehearing conferences are not final for purposes of appeal. Indus. Claim Appeals Office v. Orth, 965 P.2d 1246 (Colo. 1998).

However, the orders of a prehearing ALJ approving a settlement are final for purposes of appeal. Indus. Claim Appeals Office v. Orth, 965 P.2d 1246 (Colo. 1998).

Subsection (4) applies to a claimant's settlement for an injury that occurred prior to the enactment of subsection (4), thereby subjecting the settlement to a lien filed by the division of child support enforcement for unpaid child support. While the state constitution prohibits laws that are retrospective in operation, subsection (4) can be applied retroactively because it created a procedural enforcement remedy that does not impair the claimant's substantive rights. Div. of Child Support Enforcement v. Indus. Claim Appeals Office, 109 P.3d 1042 (Colo. App. 2004).

The statutory amendment creating subsection (4) merely created a new enforcement remedy by allowing a portion of a claimant's settlement to be sent directly to the child support registry to satisfy a preexisting child support obligation. Claimant's right to the lump-sum settlement vested after subsection (4) was enacted and is, therefore, subject to the lien filed by the division of child support enforcement. Div. of Child Support Enforcement v. Indus. Claim Appeals Office, 109 P.3d 1042 (Colo. App. 2004).