Colorado Supreme Court Embraces Double Dip

In Calderon v. American Family Mutual Insurance Company, 2016 CO 72, Nov. 7, 2016 the Colorado Supreme Court reached a surprising conclusion, reversing the Colorado Court of Appeals and trial court’s plain language interpretation of Section 10-4609, C.R.S. and a standard UM/UIM insurance provision.

The insured, Calderon, sustained injuries in an automobile accident with an uninsured driver. His insurance carrier, American Family, paid out $5,000 under MedPay coverage. Calderon also brought suit against American Family to recover under his UM/UIM motorist coverage. The case went to trial and a jury determined Calderon’s total damages as a result of the accident was $68,338.97 inclusive of his past medical expenses compensated under MedPay. The trial court then reduced the verdict by the $5,000 American Family had already paid. The Court of Appeals affirmed the trial court’s decision interpreting the language of section 10-4-609, C.R.S. as barring only those setoffs that would reduce the UM/UIM coverage limit.

The Supreme Court reversed, holding that the amount of the UM/UIM coverage available pursuant to this section refers to the value of a particular claim rather than the total coverage amount. The Court rationalized that any set off, even if aggregate UM/UIM coverage limits have not been reached, would “make little sense.”

Perhaps I am merely being a contrarian, but it makes little sense that a Plaintiff should be able to recover the same amount of damages from it’s insurer two times – first when his medical expenses are paid by MedPay and again under his UM/UIM coverage. Particularly where, because of other nuances in Colorado law, the Plaintiff need never reimburse his health insurer for his treatment expenses.