United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
matter comes before the Court on the following motions: (i)
Plaintiff's First Motion for Partial Summary Judgment
(Count II-Breach of Fiduciary Duty) (ECF No. 9); (ii)
Plaintiff's Second Motion for Partial Summary Judgment
(Count V-Violation of Unfair Practices Act) (ECF No. 12);
(iii) Defendant's Motion for Summary Judgment on the
Grounds of Plaintiff's Breach of Insurance Policy by
Fraud (ECF No. 102); (iv) Plaintiff's Motion to Certify
Questions to the New Mexico Supreme Court (ECF No. 131); and
(v) Plaintiff's “Motion to Allow Filing of
‘Plaintiff's Motion to Certify Questions to the New
Mexico Supreme Court' [Doc. 131]” (ECF No. 133).
The Court, having considered the motions, briefs, evidence,
and relevant law, will grant the motion to allow the filing
of the motion to certify out of time, but will deny the
motion to certify on the merits, and will deny the
parties' motions for summary judgment.
Car Accident and Uninsured/Underinsured Policy
Williamson was involved in a car collision on April 27, 2012,
in which she was rear-ended. See Independent Medical
Evaluation (“IME”) Report 2, ECF No. 9-1; Aff. of
Horace Williamson ll. 9-11, ECF No. 9-1; Pl.'s Third Mot.
for Summ. J., Undisputed Fact (“UF”) ¶ 1,
ECF No. 95. The at-fault driver's insurance company was
American National Property and Casualty Company
(“ANPAC”). See Letter dated July 14,
2015, ECF No. 9-1 at 14 of 18; Def.'s Resp. to Pl.'s
Third Mot. for Summ. J. 1, ECF No. 96. On May 1, 2012, Ms.
Williamson had a recorded telephone conversation with Mara
Bell, Claims Adjuster for ANPAC, in which she informed Ms.
Bell she was experiencing spasms in her right arm and
shoulder, through her shoulder and neck. See May 1,
2012 Tr., ECF No. 53-1 at 1-2 of 33. When asked if she had
ever before had any previous injuries to the areas she
mentioned, Ms. Williamson replied, “Not on my shoulder
and neck. On my leg, on the right leg I had a knee surgery a
year ago.” Id. at 3 of 33.
time of the collision, Ms. Williamson was insured by
Metropolitan Property and Casualty Company
(“Metropolitan”), which provided
uninsured/underinsured motorist coverage. Compl. ¶ 7,
ECF No. 1-2; Answer ¶ 7, ECF No. 7. The policy with
Metropolitan provided $10, 000 in MedPay coverage and $250,
000 in underinsured motorist coverage (“UIM”).
Pl.'s First Mot. for Summ. J., UF ¶ 3, ECF No. 9.
The UIM component of the Policy, however, did not provide
coverage for bodily injury “due to or resulting from an
accident which occurred before the effective date of this
coverage.” Endorsement NM400B ¶ H, ECF No. 102-2
at 2 of 2.
insurance policy with Metropolitan has a “Fraud and
Misrepresentation” provision that states:
All coverages under this policy are void if, whether before
or after a loss, you or any
person seeking coverage has:
a. concealed or misrepresented any material fact or made any
fraudulent statements; or
b. in the case of any fraud or attempted fraud, affected any
matter regarding this policy or any loss for
which coverage is sought.
Policy ¶ 3, ECF No. 102-2 at 1 of 2 (bold in original).
April 15, 2013, Mary Sadousky, a Claims Investigator with
Metropolitan, interviewed Ms. Williamson. See April
15, 2013 Tr., ECF No. 53-1 at 4-6 of 33. Ms. Williamson
reported she developed pain “all in [her] back”
about five days after the accident. April 15, 2013 Tr., ECF
No. 102-4 at 1-2 of 6. Ms. Williamson reported that Dr.
Roche, her primary care physician, treated her after the
accident, addressing the pain she was experiencing all the
way down to her tailbone. See April 15, 2013 Tr.,
ECF No. 102-4 at 2-3 of 6. Ms. Sadousky asked if anything
outside of the accident could have injured her tailbone, to
which Ms. Williamson responded that Dr. Roche did an x-ray,
said her tailbone was not broken, and believed the muscles
around that area were really tender. Id. Ms.
Sadousky then inquired, “And, and he wasn't
thinking that you had, uh, a disk problem, or did he?”
Id. Ms. Williamson said, “No.”
Id. Ms. Sadousky later asked Ms. Williamson if she
had ever been injured at work, like slipping or falling, to
which Ms. Williamson responded that she fell on her back 20
years ago, was treated by a doctor, but she got to a point
where that pain was gone. See Id. at 4 of 6. Ms.
Sadousky then asked Ms. Williamson if in the last five years
she had seen a chiropractor before, to which Ms. Williamson
replied, “Never.” Id. at 5 of 6. Ms.
Sadousky asked if Dr. Roche had ever treated her because she
was having problems with her back or neck. See Id.
Ms. Williamson responded, “Um, I, I was, but not even
treated, but I was, uh, one, I had a sciatic pain
sometimes…. And I don't know if he ever treat for
that, uh, maybe not. I get the massage, a massage sometimes
where it happen ‘cuz…” Id. When
asked if there was anything about the accident, her injury,
and her condition that she would like Metropolitan to know,
Ms. Williamson responded, “No, no, you have been very
thorough.” April 15, 2013 Tr., ECF No. 102-4 at 6 of 6.
Plaintiff's Underinsured Motorist Claim
made a claim with Metropolitan for medical payments coverage
(“MedPay”) after the accident. See Aff.
of Horace Williamson ll. 9-13, ECF No. 9-1; Answer ¶ 12,
ECF No. 7. On January 30, 2013, Metropolitan received signed
medical authorizations from Ms. Williamson. Pl.'s Ex. B,
ECF No. 106-2. As part of the claims process, Metropolitan
required Plaintiff to undergo an Independent Medical
Examination (“IME”). See Compl. ¶
12, ECF No. 1-2; Answer ¶ 12, ECF No. 7.
contends that Metropolitan required she undergo the IME as a
prerequisite to paying her MedPay benefits. See Aff.
of Horace Williamson ll. 12-13, ECF No. 12-1. Defendant
disputes this latter contention, arguing that the MedPay
benefits were temporarily delayed to allow it time to obtain
medical records and an IME to determine if the treatment was
related to the accident, reasonable, and necessary.
See Def.'s Resp. to Pl.'s Second Mot. for
Summ. J. 4, ECF No. 26.
MedPay adjuster selected and hired the Medical Examiner, an
Orthopedic Surgeon, Dr. Douglas Slaughter, to examine Ms.
Williamson. Pl.'s First Mot. for Summ. J., UF
¶¶ 5-6, ECF No. 9. The medical examination took
place on October 18, 2013. Id. UF ¶ 7; IME
Report, ECF No. 9-1 at 4 of 18. Ms. Williamson reported to
Dr. Slaughter that the day after the car collision she began
experiencing neck and low back pains and listed her medical
care following the collision, including medical providers Dr.
Roche, Physical Therapist Kern, and Dr. Emil Cheng.
See IME Report 2-5, ECF No. 9-1 at 5-6 of 18. She
complained to Dr. Slaughter of “neck pain, neck spasm,
and low back pain.” Id. at 3. During the IME,
Plaintiff informed Dr. Slaughter that she had no back and
neck pain symptoms prior to the April 2012 collision. Dep. of
Teresa Williamson 103:5-17, ECF No. 53-1; Aff. of Dr.
Slaughter ¶ 5, ECF No. 46-1.
Slaughter reviewed x-rays Plaintiff brought from Dr. Roche.
See IME Report 2, 4, ECF No. 9-1. He also reviewed
her medical records, the first of which was dated May 9,
2012. See Id. 4-5. Dr. Slaughter noted that he
reviewed medical records that Plaintiff had provided from
Plaintiff's visit to Dr. Cheng on April 30, 2013 at New
Mexico Orthopaedics for neck, mid back, and low back pain.
See Id. at 5; Def.'s Resp., Ex. 1, ECF No. 18-1
at 1 of 7; Aff. of Teresa Williamson, ECF No. 60-4. In Dr.
Cheng's report, Dr. Cheng had noted that Plaintiff
“reports having a history of right sciatica, ”
she was involved in a motor vehicle accident in April 2012,
she noticed pain in May 2012, and she “is not sure if
her symptoms are related to the motor vehicle
accident.” Def.'s Resp., Ex. 1, ECF No. 18-1 at 1
completing the IME, Dr. Slaughter reported, as relevant here,
the following in response to Metropolitan's questions:
2. Based on the records provided, what is the
typical, necessary treatment, frequency, and duration of care
for an injury of this type?
This is a soft tissue injury. In the past, it has been shown
that cervical whiplash injuries can last up to two years with
a minority lasting longer than that as far as symptoms are
concerned. The claimant obviously by MRI does have some
degeneration of the cervical and lumbar spine. This will be
an ongoing issue as far as treatment and symptoms. In her
physical therapy and chiropractic notes, she had what is
typical for degenerative conditions which is waxing and
waning of symptoms without any significant long term
3. Has the claimant's condition stabilized to a
point where he/she has received maximum benefit from medical
and/or chiropractic care?
The claimant has undergone a significant amount of
chiropractic care and has ceased this on her own. She has
also undergone massage therapy, as well as physical therapy.
She can definitely have her own exercise program and does not
need further physical therapy. Chiropractic treatment also
does not need to be explored further. However, if the
claimant has done relatively well from her single set of
facet blocks, radiofrequency ablation may be beneficial to
alleviate her pain for much longer periods of time. She
has not undergone any cervical injections to see if this
helps to alleviate her symptoms. She may be a good
candidate for cervical facet blocks and radiofrequency
ablation on a periodic basis as well.
4. Does the claimant currently require further
medical and/or chiropractic treatment or diagnostic studies
for the condition resulting from the accident(s)? If so,
please specify type, frequency, and duration.
As stated above, the claimant has disc degeneration and facet
arthropathy. The diagnosis related to the motor vehicle
collision, including whiplash associated disorder at the
cervical spine. In addition, the claimant does have or has an
exacerbation of her degeneration in the lumbar spine. It
is felt that this claimant could undergo further lumbar facet
blocks and potential radiofrequency ablation to assist in the
pain relief from her degeneration which reportedly she was
asymptomatic from prior to the motor vehicle collision.
This could also be a reasonable treatment in the cervical
spine. However, Dr. Cheng has not been able to ascertain
whether epidural injections or facet blacks are going to be
most beneficial for her cervical pain. As far as the cervical
pain is concerned, I would suggest that she have the
appropriate injection approximately two to three times per
year as needed for pain relief…. The
injections in the lumbar spine would also be approximately
two to three times per year based on symptom
5. Re: Causation, within a reasonable degree of
medical certainty, when could have (or can) the condition
that relates to the accident in question be considered
resolved, requiring no further care? Does the medical
documentation support a causal relationship between the
accident in question and the injuries sustained?
Regarding causation, the claimant definitely had a
pre-existing degenerative condition in both the cervical and
lumbar spine. It is felt by this examiner that she
has had an exacerbation or a permanent aggravation of her
cervical degeneration and lumbar degeneration. No
further injury has obviously been sustained in the motor
vehicle collision. The injuries, unfortunately, can be
DIAGNOSES RELATED TO THE MOTOR VEHICLE
1. Cervical spondylosis without myelopathy or facet joint
2. Cervical disc degeneration/aggravation/exacerbation.
3. Lumbar disc degeneration, aggravation/exacerbation.
4. Lumbar facet arthropathy/lumbar spondylosis without
Report 7-9, ECF No. 9-1 (italics emphasis added).
subsequently paid Plaintiff $10, 000 for medical payments
pursuant to the MedPay benefits in the Policy. See
Aff. of Horace Williamson ll. 17-19, ECF No. 9-1 at 1 of 18;
Def.'s Resp. ¶ 14, ECF No. 18. On March 13, 2015,
Plaintiff settled for $43, 000 her third-party claim against
the at-fault driver, who had an insurance policy limit of
$50, 000. See Pl.'s First Mot. for Summ. J., UF
¶ 15, ECF No. 9.
14, 2015, Thomas Mescall, counsel for Plaintiff, sent
Metropolitan a letter notifying it of the settlement of her
third-party claim and offering to settle her first party
underinsured claim for $207, 000. Letter dated July 14, 2015,
ECF No. 9-1 at 14 of 18. In the letter, counsel stated that
the $43, 000 settlement barely covered Ms. Williamson's
past medical expenses, and thus, failed to compensate her for
past pain and suffering, future pain and suffering and future
medical payments. Id. Counsel attached the IME
Report and included copies of past medical bills, asserting
that the total amount for past medical treatment was $37,
125. See Id. at 14-16 of 18. Mr. Mescall attached
medical records and bills for post-accident treatment from
Dr. Roche, Terry Kern Physical Therapy, Michelle Emberger,
Soothing Hands Massage, and NM Orthopaedics. Id. at
16 of 18. The records included a print-out of medical
treatment from New Mexico Orthopaedics, beginning in July 1,
2011, which listed treatments for “Lumbago” and
treatment by Dr. Christopher Patton. Pl.'s Ex. G, ECF No.
106-7. In his letter, Mr. Mescall based his past medical
treatment cost on treatment beginning on May 9, 2012, with
the last listed date of treatment as December 29, 2014.
Letter dated July 14, 2015, ECF No. 9-1 at 16 of 18.
explaining the reasons behind the settlement offer, Mr.
Mescall asserted that Dr. Slaughter recommended future
medical treatment of cervical facet blocks and lumbar facet
blocks; Plaintiff had a cervical facet block at a cost of $3,
893 and lumbar facet blocks ranging in cost from $4, 132 to
$9, 967; and calculating two to three of each block per year
for her life expectancy of over 30 years, her future medical
costs would exceed the UIM policy limits (giving, for
example, the amount for three cervical facet blocks per year
for 30 years as $342, 000 and $371, 880 for three lumbar
facet blocks per year for 30 years, at the low end of the
cost range). See Id. at 15-16 of 18. Mr. Mescall
concluded that Ms. Williamson was entitled to 100% of her
damages because “the uncontradicted medical records and
the uncontradicted testimony establish that Ms. Williamson
was asymptomatic at the time of the 2012 car
collision.” Id. at 17 of 18.
Martinez, a Senior Claims Adjuster employed by Metropolitan,
was assigned to Plaintiff's claim. Aff. of Jacob Martinez
¶¶ 2-4, ECF No. 18-1 at 5 of 7. Mr. Martinez
reviewed Plaintiff's settlement demand letter, including
the medical bills from May 9, 2012 through December 29, 2014.
See Id. ¶¶ 6-8. Metropolitan did not
receive any additional medical records or bills about
treatments from Plaintiff or her counsel during 2015. See
Id. Metropolitan asserts it evaluated Plaintiff's
claim to be approximately $50, 000 to $56, 000, relying on
the assumption that Plaintiff had ended medical treatment in
December 2014 and, therefore, it did not consider any future
medical costs in the evaluation. See Id.
letter dated August 21, 2015, Mr. Martinez informed Mr.
Mescall: “As discussed in our conversation of
08/21/2015, we offer a settlement of $1000 for your
client's bodily injury claim.” Letter dated Aug.
21, 2015, ECF No. 96-1 at 3 of 6. Mr. Martinez gave no
written explanation in the letter for the settlement offer
amount. See Id. Metropolitan's offer occurred in
the regular course of its insurance business. Pl.'s
Second Mot. for Summ. J., UF ¶ 31, ECF No. 12.
Metropolitan contends that it was a reasonable settlement,
because it paid $10, 000 in MedPay to Plaintiff, and she
received $43, 000 from the other driver. See Aff. of
Jacob Martinez ¶¶ 10-12, ECF No. 18-1 at 6 of 7.
Plaintiff disputes the reasonableness of the offer.
Subrogation of MedPay 
Policy contains a provision that reduces the amount paid to
the insured by any amount paid under the Medical Expense
sections of the Policy. See Endorsement NM400B, ECF
No. 96-1 at 6 of 6. On October 16, 2014, Shannon Kelly, a
Subrogation Adjuster for Metropolitan, wrote counsel for
Plaintiff the following: “You were previously put on
notice of our subrogation rights for the 1st party benefits
paid on behalf of your client. Please provide a status of our
subrogation claim.” Letter dated Oct. 16, 2014, ECF No.
100-1. On September 21, 2015, Mr. Mescall wrote Ms. Gauthier
a letter asserting the reasons under New Mexico law why
Metropolitan was not entitled to subrogation because
Plaintiff had not been fully compensated when she settled her
third-party claim against the at-fault driver. See
Pl.'s Ex. C, ECF No. 34-2. According to a note in the
claim file, on September 23, 2015, Margaret Gauthier, a
Supervisor for Metropolitan, wrote “it looks like you
have taken the offset of the 10K in amp subro in AUU
evaluation along with the tort limits - please confirm you
have used this in their eval and are waiving our subro -
thanks!” Pl.'s Ex. B, ECF No. 34-3; Pl.'s Ex.
D, ECF No. 34-3. The next note in the claim file is dated
September 24, 2015 from Mr. Martinez to Ms. Gauthier,
stating, “I discussed this matter with Management and
we are not waiving subro. And please keep me updated if there
is a payment or rejection from American National.”
Pl.'s Ex. B, ECF No. 34-1. By letter dated October 6,
2015 from Ms. Gauthier, Metropolitan informed Plaintiff that
it was agreeing to waive its MedPay subrogation. Pl.'s
Ex. D, ECF No. 34-3.
argues that Metropolitan unlawfully demanded subrogation for
her MedPay benefits, and that the $1, 000 settlement offer
was conditioned on having to repay Metropolitan's
subrogation claim for $10, 000. Pl.'s Third Mot. ¶
3, ECF No. 95 at 7 of 9. Defendant disputes this fact,
arguing instead that the internal claim file note referred to
waiving subrogation against ANPAC based on the $7, 000
remaining under ANPAC's policy. See Def.'s
Resp. 3-4, ECF No. 96. Mr. Martinez avers that it “was
never my intention to not waive subrogation with respect to
the insured” and he never discussed subrogation issues
with Mr. Mescall. Aff. of Jacob Martinez ¶¶ 7, 9,
ECF No. 96-1.
Complaint and Interrogatories
September 22, 2015, Plaintiff filed suit against Metropolitan
for breach of its insurance duties. Compl., ECF No. 1-2. In
Count I, Plaintiff alleges Defendant breached its contractual
duty to provide underinsured coverage by offering only $1,
000 for her past pain and suffering, future pain and
suffering, and future medical payments. Plaintiff asserts in
Count II and III that Defendant breached its fiduciary duty
and breached the covenant of good faith and fair dealing,
respectively, by requiring her to undergo an IME, then
refusing to accept the medical examiner's findings that
she would require future medical treatment that would exceed
policy limits and offering her only $1, 000, thereby
subjecting her to a needlessly intrusive medical examination.
In Count IV, Plaintiff claims a violation of New Mexico's
Unfair Insurance Practices Act by unreasonably subjecting her
to an intrusive and irrelevant IME as an abusive tool to
delay processing her claim and by offering her a frivolous