Arnold A. Calderon, Plaintiff-Appellant,
American Family Mutual Insurance Company, Defendant-Appellee.
City And County Of Denver District Court No. 11Cv5532 Honorable R. Michael Mullins, Judge
Franklin D. Azar & Associates, P.C., Tonya L. Melnichenko, Robert O. Fischel, Aurora, Colorado, for Plaintiff-Appellant
Sutton | Booker | P.C., Debra K. Sutton, Jacquelyn S. Booker, Katie B. Johnson, Littleton, Colorado, for Defendant-Appellee
White and Steele, P.C., Joel N. Varnell, Denver, Colorado, for Amicus Curiae Colorado Defense Lawyers Association
¶1 Plaintiff, Arnold A. Calderon, appeals the trial court’s order reducing his judgment, entered on a jury verdict, by $5000 to set off medical payments previously made to him by defendant, American Family Mutual Insurance Company.
¶2 This case raises an issue of first impression in Colorado: Under sections 10-4-609(1)(c) and 10-4-635(3)(b)(II), C.R.S. 2013, may an insurer reduce the amount of uninsured/underinsured motorist (UM/UIM) benefits due its insured by the amount of medical payment (MedPay) benefits it has already paid the insured, when the insured’s UM/UIM coverage is not impaired by such a setoff?
¶3 We conclude that an insurer may do so, consistent with Colorado statutes and public policy, and, accordingly, we affirm.
I. Factual and Procedural Background
¶4 The material facts are not in dispute. In 2010, Calderon sustained multiple injuries in an automobile accident with an uninsured driver, requiring him to seek medical treatment and miss work.
¶5 At the time of the accident, Calderon was insured by American Family under an insurance policy providing a total of $300, 000 in UM/UIM coverage and $5000 in MedPay coverage.  The policy’s UM/UIM provision included the following relevant terms:
C. INSURING AGREEMENT
1. [American Family] will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle or an underinsured motor vehicle.
E. LIMITS OF LIABILITY
3. No one will be entitled to receive duplicate payments for the same elements of loss. Any amount [American Family] pay[s] under this Part to or for an insured person will be reduced by any payment made to that person under any other Part of this policy. In no event shall a coverage limit be reduced below any amount required by law.
¶6 Following the accident, American Family paid Calderon $5000 under the policy’s MedPay provision. Calderon filed a claim under the UM/UIM provision, but the parties could not agree on the benefit amount due. Consequently, Calderon filed suit for breach of contract, violation of section 10-3-1115, C.R.S. 2013 (prohibiting unreasonable delay or ...