The case of Arnold Calderon v. American Family Mutual Insurance Co. (AMFAM) was elevated to the CO Supreme Court in last month. The other driver in the accident, who was at-fault, was uninsured. Calderon's auto insurance policy with AMFAM included a $300,000 limit for Uninsured Motorist/Underinsured Motorist (UM/UIM) coverage and $5,000 in “Med Pay” coverage. AMFAM paid $5,000 for his medical bills directly to the providers under MedPay; however, they disputed the UM/UIM claim. Calderon filed suit and a jury in a CO District Court awarded him $68,338, which was reduced by $5,000 for the amount already paid.
Colorado MedPay (MPC) Insurance
Beginning in 2009, auto insurance providers in Colorado were required to offer $5,000 in MedPay coverage within their policies. Drivers must “opt-out” of coverage, otherwise the plan and added premium will be in force. This coverage is designated for paying driver and passenger(s) medical, hospital and rehab costs regardless of fault.
Provisions in the UM/UIM Policy
The AMFAM policy states that claimants may not receive multiple payments for the same loss. Amounts paid under UM/UIM will have a reduction to account for any other payments made in the policy. Coverage limits will not be reduced below any minimums that the law requires.
The Appeals Case
The CO Appeals Court affirmed the lower court ruling which allowed for the $5,000 reduction. They found that an insurer may reduce payments under the UM/UIM coverage by an amount equal to what was already paid under MedPay. Otherwise, they found that this would be a case of “double recovery”.
The CO Collateral Source Rule
Under common law, compensation received from an alternate or collateral source did not affect the damages that a plaintiff could recover. This prevented the defendant from benefitting due to the plaintiff's insurance. The CO statute does limit receiving “double” compensation in personal injury matters. Damage awards must have a deduction to account for funds received from another individual, business, etc. This limitation does not apply if the source of compensation that the plaintiff receives is based on a contract entered into.
Supreme Court's View
The tortfeasor in the case is the uninsured driver that caused the action. The collateral source exception rule explains that when the plaintiff's other source of funds was based on a contract that they are enrolled; the tortfeasor may not reduce it accordingly. In this case, AMFAM is effectively in the role of the tortfeasor (uninsured driver); therefore, is also prevented from applying a reduction.
Have the reckless or careless actions of another driver caused you severe injuries? In Colorado, injury victims are eligible to recover financial retribution from those responsible. The Law Firm of Jeremy Rosenthal has acted as a champion on behalf of those who have experienced such hardship and losses by aggressively pursuing these cases. Contact the office today for a free initial consultation at (303) 825-2223.