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Fred Loya Insurance Co. v. Swiech

Court of Appeals of New Mexico

December 4, 2017

FRED LOYA INSURANCE COMPANY, Plaintiff Counter-Defendant-Appellant,
v.
THOMAS J. SWIECH, Defendant/Counter-Plaintiff- Appellee.

         APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY Victor S. Lopez, District Judge

          Craig, Terrill, Hale & Grantham, LLP Elizabeth G. Hill Leonard R. Grossman Andrew B. Curtis Lubbock, TX for Appellant

          Carter & Valle Law Firm, P.C. Richard J. Valle Matthew J. Zamora Albuquerque, NM for Appellee

          Jarmie & Associates Mark D. Standridge Las Cruces, NM for Amicus Curiae

          OPINION

          Linda M. Vanzi, Chief Judge

         {1} The dispositive issue in these consolidated appeals is whether New Mexico's uninsured/underinsured motorist statute, NMSA 1978, § 66-5-301 (l983)(UM/UIM Act), requires an insurance company to pay punitive damages from the uninsured/underinsured (UM/UIM) bodily injury coverage limits of its insured's automobile insurance policy, where (1) the insured motorist sustained only property damage caused by an uninsured motorist; (2) the insurer paid the full amount of the UM/UIM property damage coverage limits of the policy; and (3) the punitive damages claim arose only from the uninsured motorist's conduct in causing that property damage. We hold that an insurer that has paid the full amount of the policy's UM/UIM property damage coverage limits is not required to pay from the policy's separate and distinct UM/UIM bodily injury coverage limits amounts representing punitive damages arising solely from property damage. Based on this holding, we reverse the district court's contrary ruling and its award of attorney fees to the insured under NMSA 1978, Section 39-2-1 (1977). We also conclude that the district court abused its discretion in denying the insurer's motion to seal confidential mediation communications pursuant to NMSA 1978, Section 44-7B-4 (2007).

         FACTUAL BACKGROUND

         {2} In the early morning hours of June 21, 2013, Defendant/Counter-Plaintiff Thomas J. Swiech was asleep in his apartment when an uninsured motorist, fleeing from police, struck Swiech's unoccupied 2001 Chevrolet Suburban. The Suburban sustained disabling property damage from the collision. No one was in the vehicle at the time of the accident, and no one-including Swiech-sustained any bodily injury.

         {3} Swiech incurred $3, 566.24 in property damage to his Suburban and sought UM/UIM property damage coverage from his automobile insurer, Plaintiff/Counter-Defendant Fred Loya Insurance Company (Loya). The declarations page of Swiech's insurance policy with Loya provided the following UM/UIM coverage limits: $25, 000 per person/$50, 000 per accident for bodily injury and $10, 000 for property damage. The policy defines "bodily injury" as "bodily harm, sickness, or disease, including death that results from bodily harm, sickness, or disease." It defines "property damage" as "physical damage to or destruction of a covered vehicle; and .. . physical damage to or destruction of any property owned by an insured person which is contained in the covered vehicle at the time of the accident." Part III of the policy, which specifically pertains to UM/UIM coverage, provides:

Subject to the Limits of Liability, if you pay a premium for [UM/UIM] Motorist Bodily Injury Coverage, we will pay for damages which an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle because of bodily injury:
1.sustained by an insured person;
2. caused by accident; and
3. arising out of the ownership, maintenance, or use of an uninsured motor vehicle or an underinsured motor vehicle.
Subject to the Limits of Liability, if you pay a premium for [UM/UIM] Motorist Property Damage Coverage, we will pay for damages which an insured person is entitled to recover from the owner or operator of an uninsured motor vehicle because of property damage:
1. caused by accident; and
2. arising out of the ownership, maintenance, or use of an uninsured motor vehicle. (Emphases added.) The policy, including Part III, is silent as to punitive damages.

         {4} Loya paid Swiech the policy's $ 10, 000 coverage limit for UM/UIM property damage: $3, 566.24 in property damage actually incurred plus $6, 433.76. Swiech thereafter demanded that punitive damages arising from the property damage be paid from his UM/UIM bodily injury coverage, which Loya denied.[1]

         PROCEDURAL ...


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