896 F.3d 1166
10th Cir.2018Background
- Plaintiffs (Archuleta, Hecht, McCracken) settled UM/UIM claims after receiving MedPay payments; insurers deducted prior MedPay payments (setoffs) when calculating UM/UIM settlement amounts.
- Settlements and signed releases occurred after Colorado amended § 10-4-609(1)(c) (2007) but before the Colorado Supreme Court decided Calderon (383 P.3d 676), which held MedPay setoffs cannot reduce UM/UIM recovery on a claim.
- Each plaintiff signed a release stating the settlement was in full satisfaction and discharge of all claims arising from the collision.
- Plaintiffs sued, alleging insurers violated § 10-4-609(1)(c) by taking MedPay setoffs; insurers removed to federal court and argued the releases bar the suits.
- District courts enforced the releases and entered judgment for the insurers; the Tenth Circuit consolidated appeals.
- The Tenth Circuit reversed in part on jurisdictional grounds (Archuleta lacked standing to sue USAA Casualty) and otherwise affirmed, holding the releases enforceable under Colorado law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of pre-Calderon releases that incorporated MedPay setoffs | Releases are void as against Colorado public policy after Calderon; plaintiffs should recover UM/UIM without setoffs | Releases are valid contracts; parties voluntarily settled and released claims, so releases bar suit | Releases enforceable; public policy does not clearly outweigh enforcement; releases bar plaintiffs’ claims |
| Whether Calderon retroactively invalidates completed settlements | Calderon should apply to these pre-Calderon settlements, making releases unenforceable | Even if Calderon governs, parties may voluntarily waive statutory rights by settlement; court need not decide retroactivity because releases prevail | Court did not resolve retroactivity; concluded releases bar claims even assuming Calderon applies |
| Whether parties can agree to setoffs in negotiated settlements despite § 10-4-609(1)(c) | Statutory protection for full UM/UIM recovery prevents contracting away setoff prohibition | Statutory rights can be waived voluntarily; settlements reflect negotiated valuation of damages | Parties may voluntarily settle and accept setoffs; Kral does not prohibit negotiated releases that reflect agreed values |
| Standing/jurisdiction as to USAA Casualty (Archuleta) | Archuleta named USAA Casualty in class allegations | Defendants argued plaintiff’s allegations concerned only USAA | Archuleta lacked standing against USAA Casualty; dismissal should be without prejudice for lack of jurisdiction |
Key Cases Cited
- Calderon v. American Family Mutual Insurance Co., 383 P.3d 676 (Colo. 2016) (statutory interpretation: UM/UIM recovery may not be reduced by MedPay setoffs on a particular claim)
- Kral v. American Hardware Mutual Insurance Co., 784 P.2d 759 (Colo. 1989) (release provisions are unenforceable to the extent they prevent insured from achieving full compensation)
- Brereton v. Bountiful City Corp., 434 F.3d 1213 (10th Cir. 2006) (dismissals for lack of jurisdiction must be without prejudice)
- Stickley v. State Farm Mutual Auto. Ins. Co., 505 F.3d 1070 (10th Cir. 2007) (federal court should follow intermediate state appellate decisions unless convinced highest court would decide otherwise)