United States District Court, D. Colorado
PATRICIA MISCHEK, individually and on behalf of all persons similarly situated, Plaintiff,
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a foreign corporation, Defendant. SKUYA CHRISTENSEN, individually and on behalf of all persons similarly situated, Plaintiff,
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a foreign corporation, Defendant.
AMENDED ORDER 
A. BRIMMER United States District Judge.
matter is before the Court on State Farm Mutual Automobile
Insurance Company's Motion for Summary Judgment Re: (1)
Enforcement of Settlement; and (2) Accord and Satisfaction
[Docket No. 58]. The Court has subject matter jurisdiction
pursuant to 28 U.S.C. § 1332.
a consolidated action for underinsured motorist
(“UIM”) benefits. Plaintiffs Patricia Mischek and
Skuya Christensen were insured by defendant State Farm Mutual
Automobile Insurance Company (“State Farm”) when
they were involved in separate collisions with underinsured
motorists. Both plaintiffs submitted claims for UIM benefits
to State Farm. After the parties settled those claims, the
Colorado Supreme Court held, in Calderon v. American
Mutual Family Insurance Co., 383 P.3d 676 (Colo. 2016),
that Colo. Rev. Stat. § 10-4-609(1)(c) bars insurance
companies from reducing the payment owed under an
insured's uninsured/underinsured motorist
(“UM/UIM”) coverage by amounts paid out under the
insured's medical payments (“MedPay”)
coverage.Relying on Calderon, plaintiffs
filed suit alleging that State Farm had breached the terms of
their insurance contracts by unlawfully reducing their UM/UIM
benefits by the amount of MedPay benefits awarded following
their collisions. The following undisputed facts are material
to each plaintiff's claims.
to the events giving rise to this lawsuit, Ms. Mischek
(formerly, Ms. Eheart) purchased an automobile policy from
State Farm that included (1) UIM coverage up to $100, 000 per
person and (2) MedPay Coverage up to $5, 000 per person.
Docket No. 52 at 4-5, ¶ 1. The section of the policy
pertaining to UIM coverage contained the following
We will pay compensatory damages for bodily
injury an insured is
legally entitled to collect from the owner or driver of an
uninsured motor vehicle or an underinsured motor vehicle. . .
. We will not pay any damages . . . that have already been
paid as expenses under Medical Payments Coverage of this
policy, the medical payments coverage of any other policy, or
other similar vehicle insurance.
Docket No. 52-8 at 19; Docket No. 52 at 5, ¶
14, 2013, Ms. Mischek was involved in a car accident with an
underinsured motorist. Docket No. 52 at 6, ¶ 7. She
submitted claims for MedPay and UIM benefits to State Farm
pursuant to the terms of her insurance policy. Id.
On or about October 25, 2013, Ms. Mischek received a letter
from State Farm informing her that State Farm had exhausted
her MedPay coverage by paying out $5, 000 for medical
expenses incurred as a result of the accident. Id.
at 6, ¶ 8; Docket No. 55-5 at 3.
March 17, 2015, Ms. Mischek's attorney sent State Farm a
letter demanding the “UNDERINSURED MOTORIST POLICY
LIMITS for a full and final settlement of all claims which
she may have arising out of the June 14, 2013,
incident.” Docket No. 52 at 7, ¶ 11; Docket No.
53-6 at 13. On May 8, 2015, State Farm offered Ms. Mischek
$64, 000 to settle her UIM claim. Docket No. 52 at 8, ¶
13. State Farm explained that the offer accounted for Ms.
Mischek's $25, 000 settlement with the underinsured
motorist and the $5, 000 paid in MedPay benefits.
Id.; Docket No. 53-2 at 3. On the same day, State
Farm sent a letter to Ms. Mischek's attorney
“confirm[ing State Farm's] settlement offer in the
amount of $64, 000.” Docket No. 52 at 8, ¶ 13;
Docket No. 53-2 at 3; Docket No. 53-9. On May 21, 2015, Ms.
Mischek's attorney made a counter-offer in the amount of
$95, 000, to which State Farm responded with an offer of $67,
000, “inclusive of all damages.” Docket No. 52 at
8, ¶¶ 14-15; Docket No. 53-10. After Ms.
Mischek's attorney demanded $90, 000, State Farm made a
final offer in the amount of $70, 531.89. Docket No. 52 at 8,
¶¶ 16-17. Ms. Mischek accepted the offer on May 29,
2015, id., and on June 1, 2015, State Farm sent a
letter to her attorney stating, “It is our
understanding Ms. Eheart has accepted our offer of $70,
531.89 inclusive of all liens.” Id., ¶
18; Docket No. 53-11. Ten days later, on June 11, 2015, State
Farm sent another letter confirming the parties'
settlement and enclosing payment in the amount of $70,
531.89. Docket No. 52 at 8-9, ¶ 20. The letter states:
Enclosed is our payment in the amount of $70, 531.89 for
settlement of your Underinsured Motorist Claim. There is no
release requested in exchange for our payment. However, this
will confirm our agreement settles any and all claims under
the Underinsured Motorist Coverage with State Farm arising
out of the accident on June 14, 2013.
Docket No. 53-13. The check stub for one of the checks
enclosed with the letter bears the notation “Full and
final UIM settlement.” Docket No. 55-3 at 2. Ms.
Mischek did not return State Farm's payment or challenge
the amount of the settlement. Docket No. 52 at 9, ¶ 22;
Docket No. 71 at 6.
November 7, 2016, the Colorado Supreme Court issued its
decision in Calderon. See Calderon, 383
P.3d 676. On November 29, 2016, Ms. Mischek filed her
complaint in the District Court for Larimer County, Colorado.
Docket No. 1-1 at 1. The case was removed to this Court on
December 30, 2016. Docket No. 1. In her first amended
complaint, Ms. Mischek asserts a claim for breach of contract
on behalf of herself and a class of persons “(a) who
were covered for UM/UIM under automobile policies issued by
the Defendant in the State of Colorado; (b) who presented
claims for payment of Colorado UM/UIM coverage for covered
injuries occurring on or after January 1, 2008; and (c) who
received UM/UIM payments in a reduced amount due to the
Defendant's application of its Med-Pay Reduction
Policy.” Docket No. 5 at 3, ¶ 16. Ms. Mischek
alleges that State Farm “breached the contract of
insurance by applying its Med-Pay Reduction Policy to avoid
paying statutorily-mandated UM/UIM benefits to Plaintiff and
other class members.” Id. at 5, ¶ 26. She
seeks “payment of all UM/UIM benefits due and owing,
” as well as interest, fees, and costs. Id. at
November 6, 2014, Ms. Christensen was involved in a car
accident with an underinsured motorist. Docket No. 52 at 9,
¶ 23. At the time of the accident, she was covered under
two automobile insurance policies issued by State Farm.
Id. at 5, 9, ¶¶ 2-3, 25-26. Those policies
included UIM motorist coverage of up to $100, 000 per person
and MedPay coverage of up to $5, 000 per person. Id.
at 5, ¶¶ 2-3. Ms. Christensen filed claims for
MedPay benefits and UIM benefits under the policies.
Id. at 9, ¶ 23. On April 9, 2015, State Farm
sent a letter to Ms. Christensen's attorney stating that
Ms. Christensen's MedPay coverage limits had been
exhausted due to a $5, 000 final payment sent by State Farm
on April 9. Id., ¶ 25; Docket No. 53-17. On
November 19, 2015, State Farm sent a letter to Ms.
Christensen's attorney stating: “We have completed
the evaluation of Ms. Christensen's Underinsured Injury
claim. Please contact us as soon as possible so that we may
discuss settlement.” Docket No. 52 at 10, ¶ 28;
Docket No. 53-19. Four days later, State Farm sent a letter
confirming its “settlement offer in the amount of $1,
000.00.” Docket No. 52 at 10, ¶ 29; Docket No.
53-20. On December 13, 2015, Ms. Christensen's attorney
acknowledged receipt of State Farm's “November 23,
2015 letter offering $1, 000.00 to settle Ms.
Christensen's claim” and requested further
information regarding how State Farm calculated the offer.
Docket No. 52 at 10, ¶ 30; Docket No. 53-21. State Farm
responded with a letter on December 22, 2015 explaining the
basis for the settlement amount, including the $5, 000.00
off-set for MedPay benefits that Ms. Christensen had already
received. Docket No. 52 at 10, ¶ 31; Docket No.
53-22. On January 4, 2016, Ms. Christensen's
attorney sent State Farm a letter challenging State
Farm's benefits calculation and asking if it accounted
for future pain and suffering, future treatment, permanency,
and interest. Docket No. 52 at 11, ¶ 32; Docket No.
53-23. The letter further requested that State Farm
“provide an updated evaluation” and “tender
the benefits [it had] determined [were] owed at [that]
time.” Docket No. 53-23. State Farm made two additional
offers of $6, 000 and $10, 016.50 to settle Ms.
Christensen's UIM claim. Docket No. 52 at 11, ¶ 33.
On February 1, 2016, Ms. Christensen accepted State
Farm's ultimate offer of $16, 000. Docket No. 52 at 11,
¶ 34; Docket No. 55-4 at 4. That same day, State Farm
sent a letter to Ms. Christensen's attorney confirming
that they had “agreed to settle [Ms. Christensen's]
underinsured motorist claim for $16, 000, inclusive of all
liens” and enclosing payment. Docket No. 52 at 11,
¶ 35; Docket No. 53-24. Ms. Christensen does not dispute
that she deposited State Farm's check without challenging
the amount. Docket No. 52 at 11, ¶ 36; Docket No. 69 at
November 10, 2016, three days after the issuance of the
Calderon decision, Ms. Christensen filed her
complaint in the District Court for the City and County of
Denver. Civil Action No. 17-cv-00041, Docket No. 1-1. On
January 4, 2017, State Farm removed the case to this Court.
Civil Action No. 17-cv-00041, Docket No. 1. Plaintiff seeks
compensatory damages for breach of contract and a declaratory
judgment that State Farm wrongfully denied UM/UIM benefits to
plaintiff and other similarly situated current and former
insureds of State Farm. Civil Action No. 17-cv-00041, Docket
No. 4 at 6.
31, 2017, Ms. Christensen filed a motion for partial summary
judgment requesting a ruling that the Colorado Supreme
Court's decision in Calderon is retroactive to
January 1, 2008. Docket No. 39. On June 20, 2017, State Farm
moved for summary judgment on the ground that
Calderon does not apply retroactively to support Ms.
Christensen's and Ms. Mischek's claims for breach of
contract and declaratory relief. Docket No. 52. That same
day, State Farm filed a second motion for summary judgment
arguing that plaintiffs' claims are barred by their
settlements with State Farm and/or by accord and
satisfaction. Docket No. 58.
STANDARD OF REVIEW
judgment is warranted under Federal Rule of Civil Procedure
56 when the “movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a);
see Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248-50 (1986). A disputed fact is “material” if
under the relevant substantive law it is essential to proper
disposition of the claim. Wright v. Abbott Labs.,
Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). Only
disputes over material facts can create a genuine issue for
trial and preclude summary judgment. Faustin v. City
& Cty. of Denver, 423 F.3d 1192, 1198 (10th Cir.
2005). An issue is ...