The U.S. Court of Appeals for the Tenth Circuit, affirming a district court decision, has ruled that the doctrine of accord and satisfaction barred insureds who accepted payment from their insurer to settle their uninsured/underinsured motorist benefits (“UIM”) claims from seeking additional UIM benefits, even if they had not signed a release.
The Case
Patricia Mischek and Skuya Christensen filed two putative class actions that were consolidated in the U.S. District Court for the District of Colorado, contending that State Farm Mutual Automobile Insurance Company had impermissibly reduced its insureds' UIM benefits by the amounts it paid under medical payments coverage.
State Farm sought summary judgment on the ground that the plaintiffs had previously “settled and/or reached an accord and satisfaction” on their disputed insurance claims against State Farm.
The district court agreed and granted summary judgment in favor of State Farm.
The plaintiffs appealed to the Tenth Circuit, contending that they had not truly settled their claims with State Farm because they had never signed a release.
The Tenth Circuit's Decision
The circuit court affirmed.
In its decision, the Tenth Circuit found that it was “immaterial” that the plaintiffs had not signed a release because Colorado law did not require a written release to settle claims.
Rather, the circuit court said, to constitute an accord and satisfaction, money had to be offered “in full satisfaction of the demand,” accompanied by acts and declarations indicating that accepting the money satisfied the demand.
The circuit court then ruled that both plaintiffs had accepted a payment in full satisfaction of their disputed insurance claims against State Farm. It noted that Ms. Mischek's attorney had engaged in settlement negotiations with State Farm that resulted in Ms. Mischek receiving a “payment in the amount of $70,531.89 for settlement of [her] [u]nderinsured [m]otorist claim,” which State Farm “confirm[ed] . . . settle[d] any and all claims under the [u]nderinsured [m]otorist [c]overage.” The Tenth Circuit added that the check stub for this payment bore the notation, “Full and final UIM settlement.”
The circuit court pointed out that Ms. Mischek did not dispute the amount of payment or return the check; rather, the settlement check was accepted and deposited, which was sufficient under Colorado law to “discharge[] the underlying obligation.”
The Tenth Circuit also noted that Ms. Christensen had accepted a $16,000 payment made by State Farm based on the parties' “agree[ment] to settle [her] underinsured motorist claim for $16,000, inclusive of all liens.” The circuit court concluded that the plaintiffs had cited no persuasive reason why their acceptance of State Farm's settlement checks did not meet the elements of the doctrine of accord and satisfaction under Colorado law.
The case is Mischek v. State Farm Mutual Auto. Ins. Co., No. 18-1156 (10th Cir. May 23, 2019). Attorneys involved include: For PATRICIA MISCHEK, individually and on behalf of all persons similarly situated, SKUYA CHRISTENSEN, individually and on behalf of all persons similarly situated, Plaintiffs – Appellants: Bradley A. Levin, Susan S. Minamizono, Nelson Andrew Waneka, Levin Sitcoff, Denver, CO; Patricia A. Meester, Keith R. Scranton, Franklin D. Azar & Associates, Aurora, CO; Michael J. Rosenberg, Gold Law Firm, Greenwood Village, CO. For STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a foreign corporation, Defendant – Appellee: Sheryl Anderson, Lawrence Michael Brooks, Jr., Esq., Wells Anderson & Race, Denver, CO; Jeffrey Scott Crowe, Sheppard Mullin Richter & Hampton, Costa Mesa, CA; Frank Falzetta, Sheppard Mullin Richter & Hampton, Los Angeles, CA; Andrew Lavin, Wells Anderson & Race, Denver, CO; Karin Dougan Vogel, Sheppard Mullin Richter & Hampton, San Diego, CA.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].