May 20, 2019

Colorado Supreme Court: Plain Language of Statute Prohibits Offsets for Medical Payment Benefits

The Colorado Supreme Court issued its opinion in Calderon v. American Family Mutual Insurance Co. on Monday, November 7, 2016.

Statutory Construction—Automobile Insurance Coverage—Automobile Insurance Setoffs— Uninsured or Underinsured Motorist Policy Coverage.

Calderon sustained injuries caused by an uninsured driver. Calderon was insured under policies issued by American Family Mutual Insurance Co., which paid the $5,000 policy limit of Calderon’s medical payments (MedPay) coverage but disputed the amount due under the uninsured/underinsured motorist (UM/UIM) coverage. Calderon filed suit, and the jury returned a verdict of $68,338.97 in his favor. The trial court reduced the award, pursuant to a provision of the policy agreement, by the $5,000 that had already been paid under MedPay coverage. The Colorado Court of Appeals affirmed, interpreting the language of C.R.S. § 10-4-609(1)(c), which prohibits setoffs from “[t]he amount of the [UM/UIM] coverage available pursuant to this section,” as barring only those setoffs that would reduce the coverage limit, or $300,000. The Colorado Supreme Court reversed and held that “[t]he amount of the [UM/UIM] coverage available pursuant to this section” refers to the amount of UM/UIM coverage available on a particular claim (here, $68,338.97), rather than the amount available in the abstract (here, $300,000). Therefore, C.R.S. § 10-4-609(1) barred the setoff of MedPay payments from Calderon’s UM/UIM claim.

Summary provided courtesy of The Colorado Lawyer.

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