Mischek v. State Farm Mutual Automobile Insurance Company

MOTION for Summary Judgment Partial

D. Colo.May 31, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 1:16-cv-03208-PAB-CBS (Consolidated with Civil Action No. 17-cv-00041-PAB-CBS) ______________________________________________________________________________ PATRICIA MISCHEK, individually and on behalf of all persons similarly situated, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a foreign corporation, Defendant. __________________________________________________________________________ SKUYA CHRISTENSEN, individually and on behalf of all other similarly situated, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. ______________________________________________________________________________ PLAINTIFF SKUYA CHRISTENSEN'S MOTION FOR PARTIAL SUMMARY JUDGMENT ______________________________________________________________________________ Plaintiff, Skuya Christensen ("Plaintiff"), by and through her attorneys, LEVIN SITCOFF PC and FRANKLIN D. AZAR & ASSOCIATES, P.C., files this Motion for Partial Summary Judgment pursuant to Fed. R. Civ. P. 56, seeking a ruling that the Colorado Supreme Court’s holding in Calderon v. Am. Fam. Mut. Ins. Co., 383 P.3d 676 (Colo. 2016), is retroactive to January 1, 2008, when Colo. Rev. Stat. § 10-4-609(1)(c) took effect. Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 1 of 10 2 I. INTRODUCTION This class action arises from the Colorado Supreme Court’s November 7, 2016 ruling in Calderon v. Am. Fam. Mut. Ins. Co., wherein the court held that Colo. Rev. Stat. § 10-4-609(1)(c) bars the setoff of amounts paid under Medical Payments (“MedPay”) coverage from an insured’s UM/UIM benefits. Plaintiff alleges that Defendant State Farm Mutual Automobile Insurance Company ("State Farm") uniformly, and improperly, setoff MedPay payments from UM/UIM benefits due to their insureds. In order to move this putative class action forward in the most expeditious and efficient manner, the issue of whether the Colorado Supreme Court’s decision applies retroactively should be addressed. A ruling on this issue will significantly affect whether this case can be certified as a Rule 23 class action. This ruling is a seminal aspect of Plaintiff's claims for breach of contract and declaratory judgment, the elements upon which Plaintiff has the burden of proof. There are no disputed facts relating to this legal issue. II. STATEMENT OF UNDISPUTED MATERIAL FACTS The Court should take judicial notice of the following statutes, case law, and legal principles. “That the courts are allowed to take judicial notice of statutes is unquestionable.” United States v. Coffman, 638 F.2d 192, 194 (10th Cir. 1980). [J]udicial notice of law is ‘commonsense doctrine that the rules of evidence governing admissibility and proof of documents generally do not make sense to apply to statutes or judicial opinions-which are technically documents-because they are presented to the court as law, not to the jury as evidence.’ The district court can judicially notice a matter of law as a matter of fact, ‘i.e., the court can look to the law not as a rule governing the case before it but as a social fact with evidential consequences. Thus, the law allows the district court to take judicial notice of opinions and case law[.]” Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 2 of 10 3 Pers. Dept., Inc. v. Prof’l Staff Leasing Corp., 297 Fed.Appx. 773, 785 n. 10 (10th Cir. 2008). Plaintiff requests that the Court take judicial notice of the following: 1. On January 1, 2008, certain amendments to Colorado's uninsured/underinsured ("UM/UIM") statute, Colo. Rev. Stat. § 10-4-609, went into effect. These included subsection (1)(c) of the statute, which sets forth the following restrictions on the types of insurance coverage that could reduce available UM/UIM benefits: 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, legal liability insurance, medical payments coverage, health insurance, or other uninsured or underinsured motor vehicle insurance. 2. On May 22, 2014, in Calderon v. Am. Fam. Mut. Ins. Co., 2014 COA 70, 2014 WL 2149652, a division of the Colorado Court of Appeals issued an unpublished decision upholding a setoff of MedPay payments from the amount paid to the plaintiff in UM/UIM benefits. 3. The plaintiff sought certiorari review of the Court of Appeals decision, which was granted by the Colorado Supreme Court. 4. On November 7, 2016, the Colorado Supreme Court held that Colo. Rev. Stat. § 10-4- 609(1)(c) barred the setoff of MedPay payments from the plaintiff's claim for UM/UIM benefits. Calderon, 383 P.3d at 680. In so holding, the court found that the insurance company's anti- duplication policy provision, which precluded duplicate payments for the same elements of loss, contravened Colo. Rev. Stat. § 10-4-609(1)(c) and was thus unenforceable. Calderon, 383 P.3d at 679-80. Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 3 of 10 4 III. LEGAL ARGUMENT A. The Calderon Decision Was Not A New Principle of Law And Has Retroactive Effect Generally, statutes operate prospectively, while judicial decisions are applied retroactively. U.S. v. Security Indus. Bank, 459 U.S. 70, 79 (1982). In deciding Calderon, the Colorado Supreme Court did nothing more than confirm the plain meaning of Colo. Rev. Stat. § 10-4-609(1)(c). Where a court merely interprets and applies a statute enacted prior to the litigation at issue, a court does not establish a new principle of law, and its legal opinion will have retroactive effect. Clark v. State Farm Mut. Auto. Ins. Co., 319 F.3d 1234, 1242 (10th Cir. 2003) (citing Broyles v. Fort Lyon Canal Co., 695 P.2d 1136, 1144 (Colo. 1985). In Clark, the Tenth Circuit held that a Colorado appellate decision relating to personal injury protection ("PIP") benefits as interpreted under the statutory scheme of the Colorado Auto Accident Reparations Act ("CAARA") was required to be retroactively applied. In so doing, the court looked to Brennan v. Farmers Alliance Mut. Ins. Co., 961 P.2d 550 (Colo. App. 1998), where the Colorado Court of Appeals determined that Colo. Rev. Stat. § 10-4-710 extended supplemental PIP coverage to pedestrians based on categories explicitly listed in § 10-4-707(1). Clark, 319 F.3d at 1239; Brennan, 961 P.2d at 552-54. There, State Farm argued that Brennan announced a new principle of law since no court had decided whether the statute at issue applied to pedestrians prior to the Brennan decision. Clark, 319 F.3d at 1242. The court rebuffed this entreaty, based on the Colorado Supreme Court's decision in Broyles. Id. In Broyles, the court found that Town of De Beque v. Enewold, 606 P.2d 48 (Colo. 1980), did not establish a new principle of law when it interpreted and applied a statute related to water rights that was enacted prior to the date of controversy. Broyles, 695 P.2d at 1144. Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 4 of 10 5 As such, the Broyles Court found the statutory interpretation in De Beque applied retroactively to cancel the plaintiff's conditional water rights. Id. Relying on Broyles, the Tenth Circuit found that Brennan did not announce a new rule of procedure or substantive law, but rather, simply interpreted CAARA, which was enacted prior to the time the subject automobile policy was issued. Clark, 319 F.3d at 1242. Accordingly, the court held there was no need to proceed to an analysis of the remaining factors for evaluating whether a ruling in a civil case should only have prospective application, as set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07 (1971). Id. Instead the court determined that the Brennan Court's interpretation of Section 10-4-710 was to be applied retroactively. Id. In Calderon, the Colorado Supreme Court examined the amendment to subsection (1)(c) of Colo. Rev. Stat. § 10-4-609, that went into effect in 2008, which prohibited setoffs of MedPay and other types of insurance and coverages from insureds' claims for UM/UIM benefits. Calderon, 383 P.3d at 677-80. The court did not establish a new principle of law; it did nothing more than interpret the statutory language on its face. Specifically, the Court examined the following statutory provision in its entirety: "The amount of [UM/UIM] 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." Id., at 678 (emphasis added). The court found that, applying a proper approach to statutory interpretation, namely, by reading the phrase in the context of the entire statute, the term "coverage" denotes the amount of coverage available under a particular claim, "because it makes sense of the entirety of the provision at issue here." Id. (emphasis added). Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 5 of 10 6 This is not unlike the court's approach to statutory construction in Brennan, where it considered the meaning of the "types" of extended coverage as referred to in former Colo. Rev. Stat. Section 10-4-706(1)(b)1. 961 P.2d at 553. And, notably, both the Brennan and Calderon Courts construed the respective statutes in view of the Colorado Legislature's aim to adequately compensate automobile accident victims. Brennan, 961 P.2d at 553 (the statute at issue was read "in accordance with its plain and ordinary meaning in order to give full effect to the intent of the legislature"); Calderon, 383 P.3d at 678. Thus, the Tenth Circuit's decision in Clark, predicated on the holding in Brennan, leads to a singular conclusion: as Calderon merely interpreted the amendment to section 10-4-609, and did not announce a new legal principle, the Colorado Supreme Court's ruling is to be applied retroactively. B. Evaluation Of The Second And Third Chevron Factors, Although Unnecessary Here, Would Still Result In A Finding In Favor Of Retroactivity. In People in the Interest of C.A.K., 652 P.2d 603 (Colo. 1982), the Colorado Supreme Court adopted and applied the factors for determining whether a judicial decision is to be retroactively applied, as outlined in Chevron Oil Co. v. Huson, supra, and found that the question of retroactivity arises only when a judicial ruling establishes a new principle of law. Marinez v. Indus. Comm'n of State of Colo., 746 P.2d 552, 556-57 (Colo. 1987). The Chevron Oil factors are as follows: "First, the decision, if it is not to be applied retroactively, must establish a new rule of law. Second, the merits of each case must be weighed by looking to the purpose and effect of the rule in question and whether retrospective operation will further or retard its operation. Third, the inequity 1 CAAR has since been repealed. Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 6 of 10 7 imposed by retroactive application must be weighed to avoid injustice or hardship." Id. However, "[w]hen a decision does not establish a new rule of law, it is given the retroactive effect traditionally accorded to all judicial decisions and any analysis of the second and third Chevron factors is unnecessary." Loffland Bros. Co. v. Indus. Claim Appeals Panel of the State of Colo., 770 P.2d 1221, 1224-25 (Colo. 1989). In that, as set forth above, Calderon did not establish a new rule of law, but instead simply interpreted the amendment to Colo. Rev. Stat. § 10-4-609(1)(c), no further analysis of the additional Chevron Oil factors is required. Even if this Court were to proceed further, and look to the two remaining Chevron Oil factors, the outcome would be the same. With respect to the statute's purpose and effect, the Calderon Court found its interpretation consistent with the UM/UIM statutes designed "to put 'an injured party having uninsured motorist coverage in the same position as if the uninsured motorist had been insured.'" 383 P.2d at 678 (quoting Barnett v. Am. Fam. Mut. Ins. Co., 843 P.2d 1302, 1308 (Colo. 1993)). This purpose would be promoted by retroactive application of the decision, as the Plaintiff and putative class members would receive the full measure of compensation they would have received from the uninsured or underinsured tortfeasor (subject to the UM/UIM coverage limits), without subtraction of the MedPay coverage amounts for which they paid a separate premium. In this regard, the Calderon Court observed that the insured "paid separate premiums for the types of coverage at issue here," and, therefore, "[p]ermitting an insured who purchased both UM/UIM and MedPay coverage to recover benefits equal to those obtainable for injury caused by an adequately insured motorist simply guarantees that insureds like Calderon get what they paid for." 383 P.3d at 679. As such, retroactive application of the Colorado Supreme Court's ruling will not "retard its operation," Chevron Oil, 414 U.S. at 107, but instead will permit Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 7 of 10 8 Plaintiff and the putative class members to receive the benefits they bought and paid for, but did not receive due to State Farm's improper imposition of its non-duplication provision. Similarly, no injustice or hardship will result from retroactive application of the decision. Id. Certainly, State Farm cannot be heard to complain that it would be unjust or unfair to keep premium payments, but not pay commensurate policy benefits which, under the Colorado Supreme Court's ruling, they should have paid in accordance with the statutory mandate. On the other hand, from the insured's perspective, it is only fair that, at this juncture, they finally "get what they paid for" from their automobile insurance carrier. Thus, as a matter of law, this Court should find that the Colorado Supreme Court’s ruling in Calderon is retroactive to January 1, 2008, when Colo. Rev. Stat. § 10-4-609(1)(c) took effect. IV. CONCLUSION For the foregoing reasons, this Court should grant Plaintiff's Motion and enter an order finding that the Calderon decision applies retroactively. Dated this 31st day of May 2017. Respectfully submitted, LEVIN SITCOFF PC s/ Bradley A. Levin Bradley A. Levin Nelson A. Waneka Susan S. Minamizono 1512 Larimer Street, Suite 650 Denver, CO 80202 Phone: (303) 575-9390 Fax: (303) 575-9385 bal@levinsitcoff.com naw@levinsitcoff.com ssm@levinsitcoff.com Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 8 of 10 9 FRANKLIN D. AZAR &ASSOCIATES, P.C. Franklin D. Azar Tonya L. Melnichenko Patricia Meester Keith R. Scranton 14426 E. Evans Ave. Aurora, CO 80014 azarf@fdazar.com melnichenkot@fdazar.com scrantonk@fdazar.com meesterp@fdazar.com Attorneys for Plaintiff Skuya Christensen Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 9 of 10 10 CERTIFICATE OF SERVICE I hereby certify that on this 31st day of May 2017, a true and correct copy of the foregoing PLAINTIFF SKUYA CHRISTENSEN'S MOTION FOR PARTIAL SUMMARY JUDGMENT was electronically filed with the Clerk of the Court using the CM/ECF system and served on the following by the method indicated which will send notification of said filing to the following: Sheryl L. Anderson L. Michael Brooks, Jr. Sarah Smyth O'Brien Andrew K. Lavin Wells, Anderson & Race, LLC 1700 Broadway, Suite 1020 Denver, CO 80290 sanderson@warllc.com mbrooks@warllc.com ssobrien@warllc.com dlavin@warllc.com Frank Falzetta Jeffrey S. Crowe Sheppard, Mullin, Richter & Hampton, LLP 333 South Hope St., 43rd Floor Los Angeles, CA 90071 ffalzetta@shepparemullin.com jcrowe@sheppardmullin.com Gregory A. Gold, Esq. Michael J. Rosenberg, Esq. The Gold Law Firm, LLC 7375 East Orchard Road, Suite 300 Greenwood Village, CO 80111 J. Kyle Bachus, Esq. Darin L Schanker, Esq. Claire F. Soto, Esq. Bachus & Schanker, LLC 1899 Wynkoop Street, Suite 700 Denver, CO 80202 s/ Nicole R. Peterson Nicole R. Peterson Case 1:16-cv-03208-PAB-CBS Document 39 Filed 05/31/17 USDC Colorado Page 10 of 10