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Zevallos v. Allstate Property and Casualty Co.

United States District Court, D. Colorado

July 28, 2017

MIRIAM ZEVALLOS, Plaintiff,
v.
ALLSTATE PROPERTY AND CASUALTY COMPANY, Defendant.

          RECOMMENDATION REGARDING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS

          Craig B. Shaffer Magistrate Judge

         This matter comes before the court on Defendant Allstate Property and Casualty Company's (hereinafter “Allstate”)[1] Motion for Judgment on the Pleadings (doc. #32), filed on March 2, 2017. Judge Moore referred the motion to this Magistrate Judge pursuant to a Memorandum. Doc. #33. Allstate argues that Plaintiff Miriam Zevallos's claims for Uninsured and Underinsured Motorists (“UM/UIM”) benefits are barred by a release that she executed with Allstate in 2014 and that the Colorado Supreme Court's decision in Calderon v. American Family Mutual Insurance Co., 383 P.3d 676 (Colo. 2016) can be applied only prospectively.

         Ms. Zevallos filed her Response (doc. #37) to the motion on March 23, 2017, which was followed by Defendant's Reply (doc. #38) on April 6, 2017. On May 3, 2017, I heard oral argument. Doc. #43 (transcript). The court has also received from Allstate three notices of supplemental authority. Docs. #44-46. For the following reasons, I recommend granting the motion and dismissing this action.

         I. BACKGROUND

         Since a 2007 amendment, section 10-4-609 of the Colorado insurance code has provided:

The amount of the [Uninsured Motorist/Underinsured Motorist] coverage available pursuant to this section shall not be reduced by a setoff from any other coverage, including, but not limited to, legal liability insurance, medical payments coverage, health insurance, or other uninsured or underinsured motor vehicle insurance.

         C.R.S. § 10-4-609(1)(c). Plaintiff alleges that despite this statute, “Defendants uniformly reduce amounts paid to their insureds under their Uninsured Motorist/Underinsured Motorist (‘UM/UIM') coverages by setoffs from their medical payments (‘MedPay') coverages under their respective automobile policies.” Doc. #5, Complaint ¶ 16.

Plaintiff Zevallos was insured by Allstate with a policy of insurance that included $5, 000.00 of MedPay coverage and $50, 000/$100, 000 of UM/UIM coverage [the “Policy.”] This policy constitutes a contract. Zevallos was injured by an underinsured motorist on August 20, 2012. As a result of her injuries, … Zevallos submitted claims under her MedPay and UM/UIM coverages. Allstate paid MedPay benefits on … Zevallos's behalf. Allstate paid … Zevallos UM/UIM benefits of $2, 700.00.

Doc. #5, Complaint ¶¶ 20-25 (paragraph breaks omitted).

         Allstate alleges that the $2700 it paid to Plaintiff was in settlement of Plaintiff's claim for UM/UIM benefits under the Policy. Doc. #31, Answer ¶ 25. In consideration of the settlement payment, on September 26, 2014, Plaintiff released Allstate from

any and all liability and from any and all contractual obligations whatsoever under the coverage designated above [underinsured motorist insurance - Coverage SU] of [the Policy] . . . and arising out of bodily injury sustained by Miriam Zevallos due to an accident on or about the 20th day of August, 2012.

Doc. #31-2, Answer Ex. B (Release) at 2.[2]

         Plaintiff alleges that “[i]n reaching the $2, 700.00 UM/UIM benefit number, Allstate explicitly subtracted the $5, 000.00 in MedPay coverage from its evaluation.” Doc. #5, Complaint ¶ 26. With respect to this assertion, Allstate “admits only that, in evaluating Zevallos's underinsured motorist claim, Allstate Property considered, pursuant to the express terms and conditions of the Policy, among other things, the amount paid in Medical Payment benefits as an offset in establishing a range of settlement value.” Doc. #31, Answer ¶ 26.

         Plaintiff further alleges that “Allstate confirmed this subtraction on June 11, 2014, in a letter regarding … Zevallos' claim.” Doc. #5, Complaint ¶ 27. Plaintiff did not attach the referenced letter to the Complaint, but Allstate attaches it to its Answer. Doc. #31-3. The letter states among other things:

Based on the information provided, your office has submitted approximately $69, 663.63 in medical bills to date. Of the amount submitted, I considered $68, 737 in the evaluation based on usual and customary charges. Because of the non-duplication of benefits clause, the specials were reduced by $5000 that was paid under Medical Payments coverage.
Additionally, I evaluated Ms. Zevallos' non-economic damages in the amount of $28, 000, making the total evaluation $91, 737. Even if I allowed the entire amount of specials, $69, 663.63, her evaluation is still within ...

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