and County of Denver District Court No. 16CV34390 Honorable
Elizabeth A. Starrs, Judge
Bradley A. Levin, Susan S. Minamizono, Denver, Colorado;
Patricia Meester, Keith R. Scranton, Aurora, Colorado, for
Baker Daniels LLP, Michael S. McCarthy, Todd P. Walker,
Matthew D. Clark, Denver, Colorado, for Defendant-Appellee
1 Plaintiff, Anitra Arline, appeals a district court's
judgment dismissing her complaint pursuant to C.R.C.P.
12(b)(1). Arline sought class action certification and
damages resulting from her receipt of benefits under her
uninsured motorist/underinsured motorist (UM/UIM) policy and
the allegedly unenforceable release and trust agreement
(Agreement) she concurrently entered into with defendant,
American Family Mutual Insurance Company (American). We
2 Arline's complaint alleges that she was injured by an
underinsured motorist in November 2014. She submitted claims
to American under insurance policies which provided $5000 in
MedPay coverage and a total of $50, 000 in individual UIM
coverage. American paid $5000 in MedPay benefits on
Arline's behalf to medical providers. American negotiated
Arline's damages under her UIM coverage to be $27, 000
after subtracting the $5000 in MedPay benefits already paid.
Arline alleges that American confirmed the subtraction of
$5000 in a letter to Arline in June 2015.
3 In November 2015, Arline, represented by counsel, accepted
the $27, 000 payment and signed the Agreement stating, as
relevant here, as follows:
For the sole consideration of Twenty-Seven Thousand Dollars .
. . paid by [American], . . . receipt of which is hereby
acknowledged, Anitra Arline hereby fully and forever
release(s) and discharge(s) [American] from all claims,
demands, actions and rights of action, of whatever kind or
nature which she now has or may hereafter have against
[American] under [her UIM policy], on account of bodily
injury sustained [as a result of the November 2014 accident].
Anitra Arline understand(s) and agree(s) that the sum paid as
consideration for this Release and Trust Agreement was
agreed to as a compromise to avoid expense and to
terminate all controversy or claims for benefits [under the
UIM policy for the November 2014 accident] and that her
acceptance of such payment shall be a complete bar to any
causes of action or claims against [American] now existing or
which may arise in the future . . . .
4 In November 2016, one year after Arline settled, the
supreme court held for the first time that section
10-4-609(1)(c), C.R.S. 2017, prohibits insurers from reducing
the UIM benefits paid on a claim by the amount of MedPay
benefits paid on that claim, which the court termed a
"setoff." See Calderon v. Am. Family Mut. Ins.
Co., 2016 CO 72, ¶ 16 ("To the extent that
[the plaintiff's] insurance purports to allow the setoff
in this case, it is contrary to the setoff prohibition of
section 10-4-609(1)(c) and is unenforceable."); see
also § 10-4-609(1)(c) ("The amount of the
coverage available pursuant to this section shall not be
reduced by a setoff from any other coverage, including, but
not limited to, . . . medical payments coverage.").
Calderon's counsel now represents Arline.
5 Shortly after the Calderon decision, Arline sued
American on her own behalf, asserting breach of contract
based on the facts described above, and seeking class
certification based on the assertion that American had
unlawfully reduced UIM payments to similarly situated class
members using a MedPay setoff. American responded that the
Agreement was a complete bar to the cause of action in
simultaneous motions to dismiss for (1) lack of standing,
pursuant to C.R.C.P. 12(b)(1); and (2) failure to state a
claim upon which relief can be granted, pursuant to C.R.C.P.
6 Arline argued that the Agreement was unenforceable because
it was contrary to applicable law and public policy. However,
the district court found that Arline's arguments were
relevant only to the terms of her insurance policy and not to
the Agreement. Accordingly, the court found that the
Agreement was enforceable, granted American's motion to
dismiss for lack of ...