United States District Court, D. New Mexico
ORDER DENYING MOTION TO DISMISS
GREGORY B. WORMUTH UNITED STATES MAGISTRATE JUDGE
matter comes before the Court on Defendant's Motion to
Dismiss. Doc. 4. For the reasons discussed below,
the Court denies Defendant's motion.
September 13, 2005, Plaintiff was involved in an automobile
collision which she alleges caused her serious injuries.
Doc 1-2 at 3. Plaintiff had purchased an insurance
policy from Defendant, which Plaintiff alleges included $100,
000.00 of uninsured/underinsured motorist coverage (UIM).
Id. at 4. After the accident, Plaintiff obtained a
policy limits settlement of $25, 000 from the insurance
company of another driver involved in the collision, and
Defendant consented to this settlement. Id. at 3.
Plaintiff contends that the $25, 000 settlement was
insufficient to cover all of her damages, and she therefore
filed a claim against Defendant for UIM benefits.
Id. After extensive correspondence spanning many
years, Defendant has not paid Plaintiff's claim, and the
parties dispute the point at which Defendant's
communications to Plaintiff constituted a denial of her
claim. Id. at 5-7; doc. 4 at 1-2; doc.
12 at 1. On October 13, 2016, Plaintiff filed suit
against Defendant in the Second Judicial District Court for
Declaratory Judgment, Breach of Contract, and Bad Faith.
Doc. 1-2 at 2. Defendant removed the action to this
Court on November 23, 2016. Doc. 1. On December 1,
2016, Defendant filed the present Motion to Dismiss, alleging
that Plaintiff's claims are barred by the statute of
limitations under New Mexico law. Doc. 4.
Standard of Review
Rule of Civil Procedure 12(b)(6) allows a court to dismiss a
complaint for failure to state a claim upon which the court
can grant relief. When ruling on a motion to dismiss, the
court must accept as true all well-pleaded factual
allegations in the complaint and must view them in the light
most favorable to the nonmoving party. Sutton v. Utah
State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236
(10th Cir. 1999). “The court's function on a Rule
12(b)(6) motion is not to weigh potential evidence that the
parties might present at trial, but to assess whether the
plaintiff's complaint alone is legally sufficient to
state a claim for which relief may be granted.”
survive a motion to dismiss, the complaint must include
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “The
plausibility standard is not akin to a ‘probability
requirement, ' but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
“Thus, the mere metaphysical possibility that some
plaintiff could prove some set of facts in support of the
pleaded claims is insufficient; the complaint must give the
court reason to believe that this plaintiff has a reasonable
likelihood of mustering factual support for these
claims.” Ridge at Red Hawk, LLC v. Schneider,
493 F.3d 1174, 1177 (10th Cir. 2007).
complaint challenged by a Rule 12(b)(6) motion to dismiss
does not require detailed factual allegations, a complaint
does not “suffice if it tenders naked assertions devoid
of further factual enhancement.” Iqbal, 556
U.S. at 678 (internal alterations, citations, and quotations
omitted); see also Bixler v. Foster, 596 F.3d 751,
756 (10th Cir. 2010). The court is not required to accept
conclusions of law or the asserted application of law to the
alleged facts. Hackford v. Babbitt, 14 F.3d 1457,
1465 (10th Cir. 1994).
“the complaint shows on its face that the action has
not been instituted within the statutory period, ” the
issue may be resolved by a motion to dismiss. Rohner v.
Union Pac. R.R. Co., 225 F.2d 272, 274 (10th Cir. 1955).
Thus, the Tenth Circuit has instructed that “although a
statute of limitations bar is an affirmative defense, it may
be resolved on a Rule 12(b)(6) motion to dismiss ‘when
the dates given in the complaint make clear that the right
sued upon has been extinguished.'”
Radloff-Francis v. Wyo. Med. Ctr., Inc., 524 F.
App'x 411, 412-13 (10th Cir. 2013) (unpublished) (quoting
Aldrich v. McCulloch Props., Inc., 627 F.2d 1036,
1041 n.4 (10th Cir. 1980)). “When a party has asserted
a statute of limitations issue in a rule 12(b)(6) motion, a
court accepts all well- pled factual allegations in the
complaint as true and views them in the light most favorable
to the plaintiff to determine whether the statute of
limitations has run.” Anderson Living Trust v. WPX
Energy Prod., LLC, 27 F.Supp.3d 1188, 1213 (D.N.M.
removed the present action to this Court on the basis of
diversity jurisdiction. See doc. 1 at 1-2. “A
federal court sitting in diversity applies state law for
statute of limitations purposes.” Burnham v.
Humphrey Hosp. Reit Trust, Inc., 403 F.3d 709, 712 (10th
Cir. 2005). In New Mexico, the six-year statute of
limitations for breach of contract claims applies to UIM
claims. Ellis v. Cigna Prop. & Cas. Companies,
989 P.2d 429, 431 (N.M. 1999). “Under the discovery
rule, the statute of limitations begins to run when the
plaintiff knows[, ] or with reasonable diligence should
know, of his injury and its cause.” Gerke v.
Romero, 237 P.3d 111, 115 (N.M. Ct. App. 2010). Thus,
the six- year limitation period for insurance claims
“begins to accrue when the insurance contract is
breached.” Brooks v. State Farm Ins. Co., 154
P.3d 697, 700 (N.M. Ct. App. 2007).
the parties disagree as to when the statute of limitations
began to accrue. Doc. 4 at 2; doc. 12 at 1.
Plaintiff alleges that the accrual date is set, at the
earliest, by a letter sent from Defendant to Plaintiff on
October 13, 2010, in which Defendant denies Plaintiff's
request for arbitration. Doc. 12 at 1. Defendant, on
the other hand, alleges that the statute of limitations began
to accrue when it first denied Plaintiff's insurance
claim on April 30, 2010. Doc. 4 at 2. Plaintiff
filed this lawsuit in state court on October 13, 2016,
exactly six years after Plaintiff alleges that the statute of
limitations began to accrue. Doc. 1-2 at 2. Thus,
the question before the Court is whether the statute of
limitations began to accrue at any point prior to October 13,
2010, as any such finding would result in dismissal of this
action as time-barred by the statute of limitations.
Brooks v. State Farm Ins. Co., the New Mexico Court
of Appeals considered a similar case in which the defendant
alleged that the plaintiffs failed to file their insurance
contract action within the statute of limitations. 154 P.3d
at 699. On Defendant's motion for summary judgment, the
court found that “the record [did] not clearly indicate
when the agreement between the parties as to the value of
[the plaintiffs'] UIM claim ultimately failed, ”
but held that “[a]s long as negotiations in compliance
with the insurance contract were ongoing, there was no breach
of contract.” Id. at 703. Applying this rule,
the court concluded that “the parties were engaged in
negotiations over the value of the UIM claim, in compliance
with the insurance contract, during the six-year limitations
period for bringing contract actions[, ]” and that
therefore the complaint was not barred by the statute of
limitations. Id. Thus, the essential question in
determining when the statute of limitations began to accrue
is when the parties ended their negotiations of
Plaintiff's UIM claim, according to the facts set forth
in Plaintiff's Complaint.
Plaintiff alleges in her Complaint that “[a]fter
[Defendant] consented to the third party settlement of $25,
000 on February 26, 2010, the parties engaged in a multi-
year correspondence and exchange of phone calls concerning
[Plaintiff's] medical treatment, injuries, medical
expenses, and [Defendant's] evaluation of the
uniderinsured motorist claim.” Doc. 1-2 at 4.
Plaintiff references some of the correspondence between the
parties and alleges that the multi-year negotiations
continued until at least October 13, 2010. Id. Thus,
on its face, the breach of contract asserted in
Plaintiff's Complaint falls within the statute of
limitations. Of course, this fact does ...