United States District Court, D. New Mexico
William Ferguson Adrian O. Vega Kedar Bhasker Will Ferguson
& Associates Albuquerque, New Mexico Attorneys for the
Lee Allensworth Alicia M. Santos O'Brien & Padilla,
PC Albuquerque New Mexico Mark L. Hanover Dentons Chicago,
Illinois Attorneys for the Defendant
MEMORANDUM OPINION AND ORDER
MATTER comes before the Court on the Defendant's Motion
to Dismiss First Amended Complaint and Memorandum of Law in
Support, filed April 28, 2017 (Doc. 15) (“MTD”).
The Court held a hearing on July 24, 2017. The primary issues
are: (i) whether New Mexico's filed rate doctrine bars
Plaintiff Helen Bhasker's negligence claims, claims under
New Mexico's Unfair Practices Act, N.M. Stat. Ann. §
57-12-1 (“UPA”) violations, claims under New
Mexico's Unfair Insurance Practices Act, N.M. Stat. Ann.
§ 59A-16-1 (“UIPA”), and claims of breach of
contract alleging that Financial Indemnity Company
(“Financial Indemnity”) sold her illusory
underinsured motorist insurance (“UIM”); (ii)
whether, if New Mexico applies the filed rate doctrine to
consumer-protection claims against insurers, Bhasker can seek
premium-based damages, which depends on whether Bhasker's
UIM coverage was illusory; (iii) whether, if the UIM coverage
is not illusory, Bhasker's claims fail as a matter of
law, because the UIM coverage offers benefits in some
situations; and (iv) whether the voluntary payment doctrine
bars Bhasker's claims. The Court concludes that: (i) the
filed rate doctrine does not bar Bhasker's claims,
because the Supreme Court of New Mexico would not apply the
filed rate doctrine to claims against insurers alleging
unfair or deceptive business practices; (ii) even if New
Mexico applied the filed rate doctrine to those claims,
Bhasker and the proposed class could still seek premium-based
damages, because the Supreme Court of New Mexico would
determine that the UIM coverage was illusory in light of
little coverage it provides; (iii) even if the UIM coverage
is not illusory, Bhasker's claims may proceed, because
they do not require that the UIM coverage be illusory; and
(iv) the voluntary payment doctrine does not bar
Bhasker's claims, because she alleges that she did not
know all the material facts. Accordingly, the Court denies
contends that, “[b]ased on the information provided by
the Defendant, ” she agreed to “pay a six-month
premium for the State of New Mexico mandated minimum
automobile bodily injury and uninsured/underinsured motorist
coverage.” First Amended Class Action Complaint for
Breach of Statutory, Common law, and Contractual Duties
¶ 30, at 5, filed March 23, 2017 (Doc.
12)(“Complaint”). According to Bhasker, her
insurance policy features: (i) liability coverage on one
vehicle for $25, 000.00 per person and $50, 000.00 per
accident, per vehicle; and (ii) underinsured coverage on one
vehicle for $25, 000.00 per person and $50, 000 per
occurrence, per vehicle. See Complaint ¶¶
42-43, at 7 (citing Coverage for 1995 Lexus LS 500 4D at 1
(Doc. 12-2)). Bhasker asserts that Financial Indemnity did
not “fully inform” her that “a purchase of
25/50 underinsured coverage, when triggered by a crash with a
tortfeasor who has 25/50 bodily injury liability limits, will
result in a payment of premium for which no payment of
benefits will occur . . . .” Complaint ¶ 48, at 8.
avers that, on June 24, 2015, she was driving eastbound on
I-40 in Albuquerque, New Mexico, when another driver,
Stephanie Martinez, “failed to stop for the traffic in
front of her vehicle” and struck Bhasker's car in
the rear, causing “serious bodily injuries and other
damages.” Complaint ¶¶ 12-14, at 2-3. Bhasker
asserts that Martinez “was an underinsured motorist at
the time of the collision” as Bhasker's insurance
policy and New Mexico law define the term. Complaint ¶
17, at 3. Bhasker contends that she “received the full
extent of liability coverage carried by Ms. Martinez, ”
which was $25, 000.00. Complaint ¶ 18, at 3. Bhasker
asserts that after the accident, Financial Indemnity provided
a certified copy of a document summarizing her policy.
See Complaint ¶ 38, at 6 (citing New Mexico
Personal Auto Application at 1-4 (Doc. 12-1)(“Policy
Application”)). Bhasker contends that the
“certified copy of the [Policy Application] materially
misrepresented the terms of [its] underinsured [motorist]
coverage and did not contain clear, unambiguous language
regarding the effects of New Mexico's underinsured
coverage offset laws.” Complaint ¶ 39, at 6.
Furthermore, Bhasker contends that the Policy
Application's language is “deceptive and clearly
ambiguous in that it states that the applicant may purchase
underinsured coverage in excess of the bodily injury coverage
limits, which is the opposite of the legislative
intent” of N.M. Stat. Ann. § 66-5-301 and New
Mexico case law. Complaint ¶ 40, at 6. Bhasker contends
that Financial Indemnity's Policy Application
did not alert [her], nor make clear to the ordinary and
similarly situated insured, the fact that the New Mexico
offset law drastically and materially diminished payment of
benefits arising from a covered occurrence under the policy.
. . . Specifically, there is virtually no possible
underinsured minimum limits claim available to the Plaintiff
and other similarly situated members of the class.
Complaint ¶ 43, at 7. Bhasker avers that, when she,
“through counsel, demanded Defendant provide [her] with
underinsured benefits that Defendant solicited and for which
the Plaintiff paid a premium, ” Financial Indemnity
denied her claim for underinsured benefits. Complaint ¶
44, at 7.
further contends that Financial Indemnity has “written
direct premium automobile insurance to thousands of New
Mexico residents and, from 2010-12-14, wrote direct
premiums” around the United States totaling $1.09
billion. Complaint ¶ 22, at 4.
originally brought this case in the Second Judicial District
Court, County of Bernalillo, State of New Mexico.
See Class Action Complaint for Breach of Statutory,
Common Law, and Contractual Duties, filed in the Second
Judicial District Court, County of Bernalillo, State of New
Mexico (filed in state court on December 30, 2016), filed in
federal court February 24, 2016 (Doc. 1-1)(“State
Complaint”). Financial Indemnity removed the action to
federal court on February 24, 2017. See Notice of
Removal, filed February 24, 2017 (Doc. 1). Financial
Indemnity removed the case pursuant to the Class Action
Fairness Act, 28 U.S.C. § 1332(d) (“CAFA”),
because “this is a putative class action with more than
100 putative class members that seeks to recover more than
$5, 000, 000.00.” Notice of Removal at 1. One week
later, Financial Indemnity filed a Motion to Dismiss.
See Defendant Financial Indemnity Company's
Motion to Dismiss and Memorandum of Law in Support, filed
March 2, 2017 (Doc. 4).
weeks later, Bhasker filed her Complaint on March 23, 2017.
In her Complaint, Bhasker argues that Financial
Indemnity “failed to act honestly and in good
faith when it solicited and sold superfluous and illusory
minimal limits underinsured motorist coverage to their
insureds (in whole or in part)” in violation of New
Mexico law, “and/or they denied claims for the benefits
of that coverage.” Complaint ¶ 1, at 1. Bhasker
contends that, “[b]asically, there is no such thing as
‘minimum limits underinsured motorist
coverage.'” Complaint ¶ 1, at 1. Bhasker
asserts that she “brings this action on her own behalf,
and on behalf of the many insured around the state who have
been deceived by [Financial Indemnity's]
practices.” Complaint ¶ 4, at 2. Bhasker contends
that, before the accident, she had “properly paid a
premium for automobile coverage under the Financial Indemnity
Company auto insurance policy, ” and, therefore,
“had a reasonable expectation” that she carried
underinsured motorist coverage for “$25, 000.00 each
person and $50, 000.00 each accident.” Complaint ¶
19, at 3.
Bhasker asserts that the Supreme Court of New Mexico
“established that underinsured coverage is superfluous
when the tortfeasor and the injured driver both carry the
statutory minimum of liability and underinsured
coverage.” Complaint ¶ 23, at 4 (citing
Progressive v. Weed Warrior, 2010-NMSC-050, ¶
10, 245 P.3d 1209, 1213 (“Weed
then asserts that Financial Indemnity's insurance agents
told her that she “must be insured for the state
mandated minimum automobile bodily injury insurance coverage
of $25, 000.00 per person and $50, 000.00 per
accident.” Complaint ¶ 26, at 4. Bhasker also
avers that Financial Indemnity used an “incorrect and
inappropriate form from another state, ” which
“included ambiguous language that Plaintiff could
purchase underinsured coverage in excess of her selected
liability coverage limits.” Complaint ¶ 27, at 4
(citing Policy Application at 1-4).
alleges that Financial Indemnity “misrepresented to
[her] that she would benefit from underinsured coverage when
they knew, or should have known, that the coverage was
meaningless, ” and that Financial Indemnity made these
misrepresentations “knowingly and willfully, with the
intent to deceive and induce the Plaintiff in purchasing
underinsured coverage.” Complaint ¶ 29, at 5.
contends that Financial Indemnity breached its duty to
“fully inform Plaintiff what the monthly premiums would
be for the next available tier of coverage.” Complaint
¶ 33, at 5. Bhasker states that she paid a $80.00
premium for bodily injury coverage and $54.00 for
uninsured/underinsured (“UM/UIM”) coverage for a
total of $134.00 “for minimal combined coverage,
” and that a “purchase of higher limits, for
example, at a premium of $201 would yield a disproportionate
underinsured indemnification to premium ratio of 308/1, when
compared to the purchase of minimal combined coverage for
virtually no underinsured indemnification.” Complaint
¶ 34, at 5-6.
argues that the Policy Application violated New Mexico law,
because it “failed to state that underinsured coverage
is illusory in the event of a covered occurrence . . .
involving a minimally insured driver.” Complaint ¶
32, at 5. Bhasker also asserts that Financial Indemnity
breached its duty to “act fairly, honestly, and in good
faith” when it (i) “failed to fully inform
Plaintiff of illusory underinsured coverage with a
disproportionate premium/indemnification ratio when compared
to the next tier of available coverage”; and (ii)
“materially misrepresent[ed] the terms of underinsured
coverage.” Complaint ¶ 35, at 6.
alleges that, by “fail[ing] to offer their insured
sufficient information and knowledge regarding the
superfluous, illusory, and deceptive coverage, ”
Financial Indemnity violated the New Mexico Unfair Practices
Act, N.M. Stat. Ann. § 57-12-1 (“UPA”), the
New Mexico Unfair Insurance Practices Act, N.M. Stat. Ann.
§ 59A-16-1 (“UIPA”), and “New Mexico
common law.” Complaint ¶ 46, at 7. Relatedly,
Bhasker asserts that, under New Mexico law, the
“underinsured application, coverage, and the
corresponding policy language must not be so complex such
that a reasonable person would be unable to understand its
full impact . . . .” Complaint ¶ 49, at 8 (citing
King v. Travelers Ins. Co., 1973-NMSC-013, 505 P.2d
1226, 1232; Romero v. Dairyland Ins. Co.,
1990-NMSC-111, ¶ 17, 803 P.2d 243, 248). Bhasker
concludes that, because Financial Indemnity did not
“fully inform [her] of the New Mexico offset law or
that New Mexico is a ‘different state' during the
application and policy underwriting stages, in a matter
consistent with the requirements imposed by the UPA, the
UIPA, and New Mexico common law, ” Financial Indemnity
should compensate Bhasker for her injuries and/or actual
damages sustained in the June 24, 2015 accident “via
the underinsured benefits ($25, 000.00) for which she paid a
premium.” Complaint ¶ 50, at 8.
then asserts that, because Financial Indemnity has deceived
many other New Mexicans in the same way as it deceived her,
the action is “properly maintainable as a class action
pursuant to Rule 1-023 NMRA.” Complaint ¶¶
53-54, at 9. Bhasker proffers a class definition:
All persons (and their heirs, executors, administrators,
successors, and assigns) who, in the prior six years from the
date of filing of this complaint, were a policyholder and/or
insured, of a Motor Vehicle Policy issued by defendant where
that policy did not and does not provide underinsured
coverage paid for by the policyholder, and sold and solicited
by the defendant, due to the application of an offset as set
forth in NMSA 66-5-301, otherwise known as the New Mexico
offset law or being a “difference state”. . . .
Excluded from the Class are all present or former officers
and/or directors of Defendant, the “Referees” for
purposes of the Evaluation Appeal process set forth below,
Class Counsel and their resident relatives, and
Defendant's counsel of record and their resident
Complaint ¶¶ 54-55, at 9.
then enumerates specific claims. See Complaint
¶¶ 65-109, at 13-21. First, Bhasker argues that
Financial Indemnity was negligent, because Financial
Indemnity breached its duty to ensure that she and other
class members “would be offered and obtain the maximum
benefit of underinsured coverage and would not be sold
underinsured coverage.” Complaint ¶ 66, at 13.
See Complaint ¶¶ 65-70, at 13-14.
Moreover, Bhasker asserts that it was “reasonably
foreseeable” that the underinsured coverage was,
“in large part, ” illusory and that a
“reasonably prudent insurance company exercising
ordinary care” would not sell illusory coverage.
Complaint ¶ 68, at 14. Bhasker contends that Financial
Indemnity's negligence means that it is liable for actual
damages as well as punitive damages for its actions that were
“willful, reckless and wanton, and in bad faith.”
Complaint ¶¶ 67-70, at 14.
Bhasker argues that Financial Indemnity violated the
See Complaint ¶¶ 71-75, at 14-16. She
argues that Financial Indemnity “failed to deliver the
quality or quantity of services, ” because (i)
Financial Indemnity did not provide sufficient information to
“fully inform a reasonably prudent person charged with
the task of purchasing underinsured insurance, which
Plaintiff was under the reasonable belief that such coverage
existed”; and (ii) did not pay benefit claims.
Complaint ¶ 73, at 15.
Bhasker alleges that Financial Indemnity violated the UIPA.
See Complaint ¶¶ 76-96, at 16-17. Bhasker
contends that Financial Indemnity violated its “duties
of good faith, fair dealing, and the accompanying fiduciary
obligations.” Complaint ¶ 80, at 16. Specifically,
Bhasker asserts that Financial Indemnity: (i) misrepresented
its policy's terms; (ii) did not disclose material facts;
(iii) took advantage of Bhasker's lack of knowledge and
experience; (iv) committed negligence per se by violating its
statutory duties under the UIPA; (v) did not
“acknowledge and act reasonably and promptly to
Bhasker's communications regarding her claims, in
violation of N.M. Stat. Ann. § 59A-16-20(B)”; (vi)
did not “adopt and implement reasonable standards for
the prompt investigation and processing” of
Bhasker's claims, in violation of N.M. Stat. Ann. §
59A-16-20(C); (vii) did not “properly affirm and pay
the coverage for claims” within a reasonable period of
time, in violation of N.M. Stat. Ann. § 59A-16-20(D);
(viii) did not act in good faith to promptly and fairly
settle Bhasker's claims, in violation of N.M. Stat. Ann.
§ 59A-16-20(E); (ix) compelled Bhasker to sue Financial
Indemnity because Financial Indemnity offered
“substantially less (i.e. nothing)” than the
amount owed to Bhasker, in violation N.M. Stat. Ann. §
59A-16-20(G); and (x) did not promptly explain why it denied
her claims, in violation of N.M. Stat. Ann. §
59A-16-20(N). Complaint ¶¶ 83-94, at 17-18. Bhasker
contends that she and other class members are entitled to
attorneys' fees and costs pursuant to N.M. Stat. Ann.
§ 59A-16-30, plus actual damages. See Complaint
¶ 96, at 18.
Bhasker asserts that Financial Indemnity breached their
contract by not providing underinsured coverage or,
alternatively, by improperly denying underinsured benefit
claims. See Complaint ¶¶ 91-95, at 18-19.
Bhasker contends that she and other class members are
entitled to “actual damages, including but not limited
to, underinsured coverage in an amount equal to liability
limits and may be entitled to payment of underinsured
benefits, or payment of additional underinsured benefits
accordingly and to damage to Plaintiff and the Class in an
amount to be proven at trial.” Complaint ¶ 95, at
Bhasker asserts that Financial Indemnity breached their
contract, and the covenant of good faith and fair dealing.
See Complaint ¶¶ 96-102, at 19-20. Bhasker
contends that Financial Indemnity breached the implied
covenant of good faith and fair dealing by, e.g.,
denying coverage, not investigating her claim promptly, and
refusing to resolve her claim. See Complaint ¶
100(a)-(f), at 20.
Bhasker seeks injunctive relief preventing Financial
Indemnity from continuing practices that violate the duties,
contractual, and legal obligations” owed to her and the
class, Complaint ¶ 104, at 21, and a declaratory
judgment that “establish[es] the respective rights and
obligations of the parties with respect to the claims set
forth herein, ” Complaint ¶ 108, at 21.
Bhasker argues that the Court should award punitive damages,
because Financial Indemnity acted in “willful, wanton,
and in reckless disregard” of Bhasker's and the
proposed class' rights. Complaint ¶ 109, at 21.
concludes by summarizing her requests:
A. Certifying this action as a class action pursuant to Rule
l-023(A) & (B) NMRA;
B. Awarding compensatory damages to the Plaintiff and the
Class for the damages done to them by Defendant in an amount
to be proven at trial;
C. Awarding punitive damages to the Plaintiff and the Class
in an amount sufficient to punish Defendant for their willful
and wanton conduct, and to deter them, and others similarly
situated, from such conduct in the future in an amount to be
proven at trial;
D. Awarding the Plaintiff and the Class damages from
Defendant as a result of its violations of UIPA, in an amount
to be determined at trial and for attorneys' fees and
E. Awarding treble damages in accordance with the UPA which
will deter Defendant and others from such unfair trade
practices and wrongful conduct in the future and will punish
them or the conduct set forth in this Complaint;
F. Granting a declaratory judgment that establishes the
rights and obligations of the parties with respect to the
claims set forth herein;
G. Granting injunctive relief as may be deemed proper by the
Court to require Defendant to desist in the wrongful actions
H. Awarding the Plaintiff and the Class their costs and
expenses incurred in this actions, including reasonable
attorneys' fees, experts' fees, and costs; and
I. Granting such other and further relief as the Court deems
just and proper.
Complaint at 22.
The Motion to Dismiss.
MTD, Financial Indemnity moves to dismiss the Complaint.
See MTD at 1. Financial Indemnity argues that the
filed rate and voluntary payments doctrines bar Bhasker's
claims. See MTD at 1. Financial Indemnity also
asserts that Bhasker's illusory coverage argument is
“simply wrong” as a matter of law, “because
minimum limits underinsured motorists coverage does provide
tangible benefits to those who choose it.” MTD at 1.
Indemnity asserts that the filed rate doctrine bars
Bhasker's claims. See MTD at 3. Financial
Indemnity characterizes Bhasker's claims as challenging
rates Financial Indemnity charged for UIM coverage such that
her “theory is, simply stated that Defendant charged
her a premium for UIM coverage that was
‘illusory.'” MTD at 3. Financial Indemnity
argues that, because her Complaint is “premised on her
‘unlawful premium' theory, all her claims run afoul
of the filed rate doctrine.” MTD at 3.
to Financial Indemnity, New Mexico's filed rate doctrine
“provides that ‘any filed rate -- that is, one
approved by the governing regulatory agency -- [is] per se
reasonable and unassailable in judicial proceedings brought
by ratepayers.'” MTD at 3 (quoting Coll v.
First Am. Title Ins. Co., 642 F.3d 876, 886-87 (10th
Cir. 2011)). Financial Indemnity contends that the filed rate
doctrine's policy “is to preserve the role of
agencies in approving rates and to keep courts out of the
rate-making process.” MTD at 3-4 (citing Coll v.
First Am. Title Ins. Co., 642 F.3d at 887; Korte v.
Allstate Ins. Co., 48 F.Supp.2d 647, 650 (E.D. Tex.
Indemnity contends that the filed rate doctrine applies
“regardless of the label plaintiffs may attach to the
underlying allegedly wrongful conduct, ” which means
that courts will apply the doctrine “even where
plaintiffs allege fraud or other illegal activity.” MTD
at 4 (citing Montana-Dakota Utilities Co. v. Northwestern
Public Serv. Co., 341 U.S. 246, 248-52 (1951));
Keogh v. Chicago & Northwestern Ry. Co., 260
U.S. 156, 159-62 (1922)). Financial Indemnity asserts that
the filed rate doctrine applies when, as in this case, the
“relevant rates are filed with the Insurance
Department.” MTD at 4. Financial Indemnity contends
that courts have “repeatedly applied the filed rate
doctrine in the insurance context.” MTD at 4 (citing
Peacock v. AARP, Inc., 181 F.Supp.3d 430, 441 (S.D.
Tex. 2016)(Hanks Jr., J.); Sher v. Allstate Ins.
Co., 947 F.Supp.2d 370, 387-88 (S.D.N.Y. 2013)(Koeltl,
Indemnity asserts that an Alabama state court “faced an
‘illusory' UIM coverage claim similar to
Plaintiff's claim here” and determined that the
filed rate doctrine barred the claim. MTD at 5 (citing
Alabama Mut. Ins. Corp. v. City of Fairfield, 178
So.3d 350, 363-64 (Ala. 2013), on return to remand
(Dec. 19, 2014), reh'g denied (Feb. 20, 2015)).
Financial Indemnity also asserts that a the United States
District Court to the Eastern District of Texas determined
that the filed rate doctrine barred the plaintiffs'
claims that the insurers overcharged them in premiums,
because: (i) the filed rate doctrine applies to the insurance
industry; and (ii) the plaintiffs' claims
“implicated the reasonableness of the filed
rates.” MTD at 6 (citing Korte v. Allstate Ins.
Co., 48 F.Supp.2d at 650).
Indemnity asserts that, in New Mexico, an insurer must
“‘file with the superintendent rates and
supplementary rate information prior to their use in New
Mexico.'” MTD at 6 (quoting N.M. Stat. Ann. §
59A-17-9(A)(2)(a)). Financial Indemnity contends that the
statute's purpose is to “‘promote the public
welfare by regulating insurance rates to the end that they
shall not be excessive, inadequate or unfairly
discriminatory, and to protect policy holders and the public
against the adverse effects of excessive, inadequate or
unfairly discriminatory rates.'” MTD at 6 (quoting
N.M. Stat. Ann. § 59A-17-3).
Indemnity contends that “[t]he Insurance Code makes it
clear that the Superintendent of Insurance has exclusive
authority over challenges to filed rates.” MTD at 7
(citing N.M. Stat. Ann. § 59A-17-26, -34). Financial
Indemnity asserts that the New Mexico Insurance Code
“leaves no doubt that the New Mexico Legislature did
not intend that the premiums charged by insurers could be
collaterally attacked, ” yet “that is precisely
what Plaintiff is attempting to do here.” MTD at 7.
Financial Indemnity contends that, if Bhasker's claims
are “permitted to stand, ” the Court would have
to “make an independent determination of the propriety
of rate filings with the Insurance Department, and would
undermine the exclusive authority vested in the
Superintendent of Insurance to determine the propriety of
insurance rates.” MTD at 8.
Indemnity also contends that Bhasker's claims “fail
pursuant to the voluntary payments doctrine.” MTD at 8.
Financial Indemnity asserts that it is a “‘well
established rule that payments voluntarily made with full
knowledge of all material facts cannot be recovered back in
absence of fraud or duress.'” MTD at 8 (quoting
Rabbit Ear Cattle Co. v. Frieze, 1969-NMSC-043,
¶ 5, 453 P.2d 373, 374). Financial Indemnity then
summarizes cases from various jurisdictions that show,
Financial Indemnity contends, that “[t]he voluntary
payments doctrine bars all claims by a plaintiff who
complains he or she has been misled by a defendant into
paying for something where, as here, the plaintiff could have
easily learned of the law underlying the basis for the
disputed charge.” MTD at 9-12 (citing Randazzo v.
Harris Bank Palatine, N.A., 262 F.3d 663, 667-68 (7th
Cir. 2001)(Ripple, J.); Chris Albritton Const. Co. v.
Pitney Bowes Inc., 304 F.3d 527, 531 (5th Cir.
2002)(Duhe, J.); Robbins v. Scana Energy Mktg. Inc.,
No. 08-CV-640, 2008 WL 7724171, at *5 (N.D.Ga. June 13,
2008)(Martin, J.); Cheesecake Factory, Inc. v.
Baines, 1998-NMCA-120, ¶ 6, 964 P.2d 183, 185-86).
Financial Indemnity contends that those cases show that
Financial Indemnity's “alleged failure to advise
Plaintiff about New Mexico's offset law, or any argument
that Plaintiff was ignorant of the law, does not preclude
application of the voluntary payments doctrine.” MTD at
12-13. Financial Indemnity adds that Bhasker “is
attempting to do precisely what the Randazzo court
described as contrary to the voluntary payments doctrine --
i.e., postponing litigation by paying the disputed
charge in silence, then afterward suing to recover the amount
paid.” MTD at 13 (citing Randazzo v. Harris Bank
Palatine, N.A., 262 F.3d 663). Moreover, Financial
Indemnity asserts that Bhasker's contention that
Financial Indemnity “was required to disclose the
existence and effect of the New Mexico offset law”
contravenes the “well-established rule” that
“all persons are charged with knowledge of the
law.” MTD at 13 (citing New Jersey v.
Delaware, 552 U.S. 597, 621 n.20; City of Aztec v.
Groh, No. 29, 951, 2010 WL 4162051, *1 (N.M. Ct. App.
May 25, 2010)(unpublished)). Financial Indemnity concludes
[a]s a matter of law, Plaintiff was presumed to know the law,
clearly in the public domain, regarding New Mexico's UIM
offset provision [and] she cannot now be heard to complain
that she was misled into paying premiums based on
Defendant's supposedly failing to tell her about New
Mexico's offset law or its effect on her UIM coverage.
MTD at 13.
Indemnity then addresses Bhasker's contention that she
had a “reasonable expectation” that she had UIM
coverage of $25, 000.00 for each person and $50, 000 for each
accident. MTD at 13. Financial Indemnity asserts that the
“reasonable expectations doctrine simply does
not come into play in the face of clear and
unambiguous policy language.” MTD at 13-14 (citing
Sheldon v. Hartford Ins. Co., 2008-NMCA-098, ¶
17, 189 P.3d 695, 700; Truck Ins. Exch. V.
Gagnon, 2001-NMCA-092, ¶ 7, 33 P.3d 901, 903).
Financial Indemnity contends that the insurance policy
documents that Bhasker attached to the
Complaint “not only list the level of UIM
coverage Plaintiff selected, they also explicitly state when
UIM coverage applies, describing the very ‘offset'
of bodily injury liability coverage against UIM coverage
which Plaintiff complaints results in ‘illusory'
UIM coverage here.” MTD at 14. Financial Indemnity
asserts that Bhasker “need only have looked at the very
policy documents attached to her Complaint to see exactly
what coverage she had.” MTD at 14. Consequently,
Financial Indemnity concludes, the reasonable expectations
doctrine “does not apply in these circumstances, nor
can any conclusory allegation of some type of fraud or
artifice by Defendant stand in the face of the unambiguous
policy documents telling Plaintiff exactly what her coverage
would be.” MTD at 14.
Financial Indemnity contends -- contrary to Bhasker's
allegation that Financial Indemnity's insurance-policy
application should have “advise[d] her what the monthly
premiums would be for the next available tier of coverage or
list[ed] corresponding levels of coverage, ” MTD at 15
-- that New Mexico requires that “corresponding premium
levels be disclosed only where the policy holder
rejects UM/UIM coverage equal to the bodily injury liability
limits or altogether.” MTD at 15 (citing Jordan v.
Allstate Ins. Co., 2010-NMSC-051, ¶ 25, 245 P.3d
1214, 1222); Farm Bureau Prop. & Cas. Ins. Co. v.
Hale, No. CIV 14-0527, 2014 WL 11512598, at *8 (D.N.M.
Nov. 14, 2014)(Johnson, J.); Gov't Employees Ins. Co.
v. Shroyer, No. CIV 15-0306, 2015 WL 12669885, *2
(D.N.M. Dec. 1, 2015)(Kelly, J.). Financial Indemnity asserts
that, in cases alleging improper failure to list coverage
premiums, “the remedy is to reform the UIM limits to
equal the bodily injury liability limits.” MTD at 16
(citing Jordan v. Allstate Ins. Co., 2010-NMSC-051,
¶ 36, 245 P.3d at 1225; Sinclair v. Zurich Am. Ins.
Co., 141 F.Supp.3d 1162, 1168 (D.N.M. 2015)(Lynch, J.).
Financial Indemnity asserts that it did not have to list
corresponding premiums, because Bhasker “selected
UM/UIM coverage limits equal to, not lower than, her bodily
injury liability limits.” MTD at 16 (citing Complaint
¶ 26, at 4). Financial Indemnity further asserts that
Bhasker “already has equalized UIM and bodily injury
liability limits, and the need to list premiums . . . simply
. . . does not apply.” MTD at 16.
Indemnity contends that, as a matter of law, Bhasker's
insurance coverage was not illusory, because there are
“several situations in which minimum limits UIM
coverage has value for New Mexico policyholders.” MTD
at 16. First, Financial Indemnity asserts that an Idaho state
court held that “UIM coverage equal to minimum bodily
injury liability limits was not illusory, even if no vehicle
covered by a policy issued in the state could satisfy the
definition of an underinsured motor vehicle, ” because,
“if the tortfeasor was a driver with an out-of-state
policy with lower bodily injury minimum limits than in the
policy state, the policyholder could recover the difference
as to those limits.” MTD at 17 (citing Vincent v.
Safeco Ins. Co. of Am., 29 P.3d 943, 948 (Idaho 2001)).
Financial Indemnity contends that an Indiana state court
arrived at a similar conclusion, determining that
underinsured motorist coverage is not illusory, because
underinsured automobiles could include vehicles from states
that require less liability insurance than Indiana requires.
See MTD at 18 (citing Meridian Mut. Ins. Co. v.
Richie, 544 N.E.2d 488, 489-90 (Ind. 1989)).
Financial Indemnity argues that policyholders with minimum
limits UIM coverage “policyholders will be paid, even
if they have minimum limits UIM coverage, where there are
multiple injured parties in an accident, such that no single
policyholder will recover the entirety of the
tortfeasor's liability limit.” MTD at 18 (citing
Showman v. Busser, No. 311141, 2013 WL 6037161, *4
(Mich. Ct. App. Nov. 14, 2013)). Third, Financial Indemnity
contends that, under New Mexico law, “if the insured
receives less than the tortfeasor's policy limits due to
a contractual exclusion for punitive damages, the insurer may
not offset the full amount of the tortfeasor's liability
limits.” MTD at 19 (citing Farmers Ins. Co. of
Arizona v. Sandoval, 2011-NMCA-051, ¶ 1, 253 P.3d
Indemnity asserts that the coverage is not, as a matter of
law, illusory, because the “above cases show there is
no question that minimum limits UIM coverage has value for
New Mexico policyholders.” MTD at 19. Financial
Indemnity notes, however, that “some courts have
reached the opposite conclusion.” MTD at 19-20 (citing
Hardy v. Progressive Specialty Ins. Co., 67 P.3d
892, 897; Schemberg v. Progressive Cas. Ins. Co.,
709 F.Supp. 620, 621-22 (E.D. Pa. 1989)(Cahn, J.)). Financial
Indemnity asserts, nonetheless, that the cases holding that
minimum limits UIM coverage has value for policy holders
“represent a clear majority of the authority existing
on this issue, and [those] which reject the notion that the
coverage ‘illusory' in these circumstances [are]
better reasoned.” MTD at 20. According to Financial
Indemnity, “[i]t makes no sense to deem coverage
‘illusory' when it clearly provides valuable
benefits to insureds, as the above cases demonstrate minimum
limits UIM coverage does in multiple situations.” MTD
Financial Indemnity addresses Bhasker's argument that the
Supreme Court of New Mexico “established that UIM
coverage is ‘superfluous' when the insured and
tortfeasor both have the statutory minimum level of
coverage.” MTD at 20 (quoting Complaint ¶ 23, at
4). Financial Indemnity contends the case which Bhasker cites
for this proposition -- Weed Warrior --
does not support Bhasker. See MTD at 20. Financial
Indemnity asserts that the Supreme Court of New Mexico
considered only whether “elect[ing] to take UM/UIM
coverage for less than the general policy liability limits
constitute[s] a rejection under the New Mexico uninsured
motorist statute.” MTD at 20 (quoting Weed
Warrior, 2010-NMSC-050, ¶ 3, 245 P.3d at 1210).
Financial Indemnity contends that the Supreme Court of New
held only that New Mexico insurers had to offer UM/UIM
coverage up to the bodily injury liability limits of the
subject policy. Here, of course, there is no dispute that
this was done, since Plaintiff chose UM/UIM limits equal to
her bodily injury liability limits. Nothing in Weed
Warrior, though, in any way prohibited an insured from
purchasing minimum limits UM/UIM coverage, or deemed such
MTD at 21. Financial Indemnity asserts that the Supreme Court
of New Mexico “had no occasion to consider or address
all the situations in which minimum limits UM/UIM coverage
does in fact have value.” MTD at 21.
Indemnity then asserts that a California state court ruled
that, when an insurer offers minimum limits underinsured
coverage that is consistent with applicable law, “there
can be no argument that the coverage is
‘illusory.'” MTD at 21 (citing Fagundes
v. Am. Internat. Adjustment Co., 3 Cal.Rptr.2d 763, 767
Financial Indemnity addresses Bhasker's contention that
Financial Indemnity allegedly charged excessive premiums for
underinsured motorist coverage that Financial Indemnity did
not, in the end, provide. See MTD at 22. Financial
Indemnity asserts that this argument “is negated by her
own Complaint allegation and exhibits.” MTD at 22.
Financial Indemnity contends that Bhasker's policy
documents shows that Financial Indemnity charged her a single
premium for combined uninsured motorist (“UM”)
and underinsured coverage. See MTD at 22. Financial
Indemnity then argues:
Under New Mexico law, rates must be charged based on the
insurers' loss history. See, e.g., N.M. Stat. Ann. §
59A-17-7 (“In determining whether rates comply with the
rate standards, the following criteria shall be applied: A.
due consideration shall be given to past and prospective loss
and expense experience within and without this
state[.]”); N.M. Stat. Ann. § 59A-17-6
(“Rates are inadequate if they are clearly
insufficient, together with the investment income
attributable to them, to sustain projected losses and
expenses in the line, kind or class of business to which they
apply.”). Taking Plaintiff's Complaint allegations
that Defendant rarely, if ever, pays under minimum limits UIM
coverage as true, then by definition the portion of the rate
for the combined UM/UIM coverage that is attributable to UIM,
as opposed to UM, coverage would be minimal based on a
minimal loss payment history. So, again taking
Plaintiff's Complaint allegations as true, Defendant
cannot, as a matter of law, be collecting excessive premiums
for UIM coverage that has an allegedly small or
“illusory” value. And that analysis only further
underscores why, as fully discussed above, the filed rate
doctrine also bars Plaintiff's claims.
MTD at 22-23.
responds to Financial Indemnity's MTD. See
Plaintiff's Response and Memorandum of Law in Opposition
to Defendant's Motion to Dismiss First Amended Complaint
and Memorandum of Law in Support, filed May 23, 2017 (Doc.
18)(“Response”). Bhasker argues that the filed
rate doctrine does not apply to her claims. See
Response at 3. Bhasker acknowledges that she paid a premium
“for illusory coverage, ” but her Complaint
concerns “disputed contractual coverage,
misrepresentations to sell coverage, and failure to properly
advise Plaintiff as to the impact of her choice.”
Response at 3. Bhasker contends that “[s]uch conduct is
separate from any regulatory framework or the setting of
rates.” Response at 3. Bhasker asserts that the United
States District Court for the Southern District of Illinois
determined that the filed rate doctrine “was wholly
inapplicable to claim of illusory UIM coverage” where
the plaintiff alleges deception and fraud. Response at 4
(citing Keeling v. Esurance Ins. Co., No.
10-0835-DRH, 2012 WL 699580, at *4-5 (S.D. Ill. Mar. 1,
2012)(Herndon, C.J.)). In other words, Bhasker asserts that
the filed rates doctrine does not apply where a plaintiff
alleges claims that “‘challenge defendant's
alleged deception, not the amount charged for the
underinsured coverage and do not seek to change the
rates.'” Response at 4 (quoting Keeling v.
Esurance Ins. Co., 2012 WL 699580, at *5).
asserts that the same analysis should apply in this case,
because she alleges that, “based on fraudulent and
deceptive behavior by the insurer, the coverage provided was
a sham, ” and New Mexico law “precludes an
insurer from retaining premiums on an insurance contract
where the policy is illegal.” Response at 4 (citing
Forrest Currell Lumber Co. v. Thomas, 1970-NMSC-018,
¶¶ 15-16, 464 P.2d 891, 895 (1970)). Bhasker also
contends that New Mexico law “provides that approval of
a policy form by a regulatory body does not conclusively
establish the validity of the policy or shield it from review
by the courts.” Response at 4 (citing Azar v.
Prudential Ins. Co. of Am., 2003-NMCA-062, ¶ 69, 68
P.3d 909, 929 (Ct. App. 2003)). Bhasker asserts that
“[a]pplying the filed rate doctrine to every insurance
dispute in which an insured alleges that the contract was
illusory is clearly contrary to New Mexico law and cannot
stand.” Response at 4. Bhasker concludes, accordingly,
that, because she alleges that Financial Indemnity made
fraudulent misrepresentations, the filed rate doctrine does
not apply. See Response at 4-5.
Bhasker contends that the voluntary payment doctrine does not
apply to her claims. See Response at 5. Bhasker
asserts that the voluntary payment doctrine is “not a
legally adequate affirmative defense to claims of unfair and
deceptive business practices.” Response at 5 (citing
Deere Constr., LLC v. Cemex Constr. Materials Florida,
LLC, 198 F.Supp.3d 1332, 1342 (S.D. Fla. 2016);
Soule v. Hilton Worldwide, Inc., 1 F.Supp.3d 1084,
1104 (D. Haw. 2014); Huch v. Charter Commc'ns,
Inc., 290 S.W.3d 721 (Mo. 2009); State ex rel.
Miller v. Vertrue, Inc., 834 N.W.2d 12 (Iowa 2013);
Samuel v. Time Warner, Inc., 10 Misc.3d 537, 549,
809 N.Y.S.2d 408, 418 (Sup. Ct. 2005)). Bhasker asserts that
one of Financial Indemnity's voluntary payment cases
“identifie[s] the exception to the rule's
application which is pertinent to the instant dispute:
‘payments voluntarily made with full knowledge of all
material facts cannot be recovered back in absence of
fraud or duress.'” Response at 5 (quoting
Rabbit Ear Cattle Co. v. Frieze, 1969-NMSC-043,
¶ 5, 453 P.2d at 374)(emphasis added by Bhasker).
Bhasker also discusses a Washington state court case, in
which, she asserts, the state court recognized the voluntary
payment doctrine's “generally recognized
exception” that it is “inapplicable where the
payment was induced by fraud.” Response at 6-7 (quoting
Indoor Billboard/Washington, Inc. v. Integra Telecom of
Washington, Inc., 170 P.3d 10, 23 (Wash. 2007)). Bhasker
asserts that the Washington state court rejected the
voluntary payment doctrine's application in an action
brought under the state's consumer protection laws.
Response at 7 (citing Indoor Billboard/Washington, Inc.
v. Integra Telecom of Washington, Inc., 170 P.3d at 24).
Moreover, Bhasker contends, federal district courts have
“uniformly recognized” that the voluntary payment
doctrine does not apply when the payment is made under duress
or as a result of fraud. Response at 7 (citing Shaw v.
Marriott Int'l, Inc., 474 F.Supp.2d 141, 151 (D.D.C.
2007)(Kessler, J.); Fink v. Time Warner Cable, 810
F.Supp.2d 633, 649 (S.D.N.Y. 2011)(Swain, J.), on
reconsideration, 2011 WL 5121068 (S.D.N.Y. Oct. 28,
then asserts that, on the few occasions on which New Mexico
courts have considered the voluntary payment doctrine, they
have “simply not recognized or applied the voluntary
payment doctrine outside the context of restitution claims
and clearly never in the context of a bar to a statutory
cause of action.” Response at 7-8 (citing Aetna
Life Ins. Co. v. Nix, 1973-NMSC-069, ¶ 9, 512 P.2d
1251, 1253; Cheesecake Factory, Inc. v. Baines,
1998-NMCA-120, ¶ 6, 964 P.2d 183, 185-86). Bhasker
concludes that, “whether based on an improper extension
of state law, or the well-recognized exceptions to the common
law doctrine, the voluntary payment doctrine is equally
inapplicable to the instant action and must fail.”
Response at 8.
Bhasker asserts that her illusory-coverage claims is viable.
See Response at 8. Bhasker contends that she
“believed that she was purchasing valuable coverage,
” but “was led to purchase . . . worthless and
illusory [coverage] since the insurer would never incur
liability under the policy.” Response at 8-9 (citing
Pompa v. Am. Family Mut. Ins. Co. 520 F.3d 1139,
1145 (10th Cir. 2008)). Bhasker contends that the Supreme
Court of New Mexico has determined that an
“‘insured carries UIM coverage only if
the UM/UIM limits on her or his policy are greater than the
statutory minimum of $25, 000.'” Response at 9
(quoting Weed Warrior, 2010-NMSC-050, ¶ 10, 245
P.3d 1209, 1212-13). Bhasker argues that, because New Mexico
courts have not “squarely addressed” whether the
UIM coverage which she purchased was illusory, the Court
should consider authority in jurisdictions with “a
similar statutory framework to that in New Mexico.”
Response at 9. Bhasker contends:
In other jurisdictions where the limits of the
tortfeasor's liability coverage and the claimants'
underinsured motorist coverage limits are the same, and where
the state law determines a claimant's status as
underinsured solely by considering the contractual limits of
liability rather than the damages sustained, courts have
recognized that under the principle of illusory coverage, or
under the reasonable expectations of the claimant, UIM
coverage may be activated.
Response at 9.
contends that “different jurisdictions define and apply
UIM coverage differently, ” with some jurisdictions
“compar[ing] the damages sustained by the insured to
the limits of coverage under the tortfeasor's policy,
” Response at 9-10 (citing Brainard v. Trinity
Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006)),
while other jurisdictions “require a comparison of the
limits of the tortfeasor's policy to the limits of the
insured's UIM policy to satisfy the definition of an
underinsured motorist, ” Response at 10 (citing
S'Dao v. National Grange Mut. Ins. Co., 661
N.E.2d 1378 (N.Y. 1995)). Bhasker concludes that “those
jurisdictions that have considered the issue which is most
pertinent to Plaintiff's dispute are those where the
definition of underinsured motorist requires an examination
of the limits of coverage, as is required under the policy at
issue in this case.” Response at 10 (citing Smith
v. Auto-Owners Ins. Co., 500 So.2d 1042, 1044 (Ala.
1986); Glazewski v. Allstate Ins. Co., 466 N.E.2d
1151, 1156 (Ill.App.Ct. 1984), aff'd in part,
rev'd in part sub nom., Glazewski v. Coronet
Ins. Co., 483 N.E.2d 1263 (Ill. 1985); Hardy v.
Progressive Specialty Ins. Co., 67 P.3d 892 (Mont.
2003); Pristavec v. Westfield Ins. Co., 400 S.E.2d
575, 577 ( W.Va. 1990); Hoglund v. Secura Ins., 500
N.W.2d 354, 355 (Wis. Ct. App. 1993), superseded by
statute). Regarding Pristavec v. Westfield Ins.
Co., Bhasker asserts that the court concluded that West
Virginia's underinsured motorist statute public policy
provides full compensation for damages not paid by a
negligent tortfeasor to support its conclusion that
“UIM coverage was activated” under the
state's underinsured statute. Response at 14 (citing
Pristavec v. Westfield Ins. Co., S.E.2d at 582).
Bhasker contends that New Mexico's underinsured statute
“also furthers a public policy of compensating injured
persons not compensated by a negligent tortfeasor.”
Response at 14 n.3 (citing Salas v. Mountain States Mut.
Cas. Co., 2009-NMSC-005, ¶ 20, 202 P.3d 901, 808;
Richards v. Mountain States Mut. Cas. Co.,
1986-NMSC-021, ¶ 9, 716 P.2d at 240). Bhasker contends
that, “[w]here an insured's underinsured coverage
was equal to a tortfeasor's liability coverage, ”
Indiana courts “held that such coverage was illusory
under a policy that defined an underinsured motorist as one
whose limits of liability coverage were less than the limits
of UIM coverage.” Response at 14-15 (citing W.
Reserve Mut. Cas. Co. v. Holland, 666 N.E.2d 966, 968
(Ind.Ct.App. 1996); Landis v. Am. Interinsurance
Exch., 542 N.E.2d 1351, 1354 (Ind.Ct.App. 1989)).
Bhasker considers Financial Indemnity's argument that the
contract is not illusory, because, in New Mexico, it is
possible that an out-of-state driver may have liability
insurance with lower limits than those New Mexico mandates.
See Response at 15. Bhasker argues that this
argument is unreasonable as a matter of law, because New
Mexico courts “have already decided that a New Mexico
insured with only $25, 000 in UM/UIM coverage does
not, in fact, carry underinsured coverage.”
Response at 15 (citing Weed Warrior Services,
2010-NMSC-050, ¶ 10, 245 P.3d at 1213). Bhasker also
even if a tortfeasor has an out-of-state liability policy
with lower bodily injury liability minimum limits than those
required in New Mexico, there is always the possibility that
the tortfeasor's policy will contain an out-of-state
coverage clause which will provide liability limits in an
amount equal to the liability limits imposed by New
Mexico's Mandatory Financial Responsibilities Act[, N.M.
Stat. Ann. § 66-5-201]. See, for example, Bristol
West Ins. Co. v. Wawanesa Mut. Ins. Co., 570 F.3d 461,
463-64 (1st Cir. 2009)). The effect of such a clause would be
to increase the out-of-state tortfeasor's liability
limits to the minimum amount required in New Mexico, namely,
$25, 000. In such an instance, a New Mexico resident with
minimum UIM limits would not be able to recover the
benefits of his or her UIM coverage in an auto accident with
an out-of-state driver.
Response at 15 (emphasis in original).
then considers Financial Indemnity's argument that the
coverage is not illusory, because there are some instances in
which the policy holder may recover benefits. See
Response at 16-17. Bhasker argues that Financial
Indemnity's “hypothetical and remote”
examples do not negate the coverage's “illusory
nature.” Response at 16 (citing Hardy v.
Progressive Specialty Ins. Co., 67 P.3d at 894).
Bhasker argues that her reasonable expectations “are of
paramount importance when considering what benefits an
insured is entitled to under the terms of an insurance
policy.” Response at 18 (citing Rummel v. Lexington
Ins. Co., 1997-NMSC-041, ¶ 22, 945 P.2d 970,
977(1997); Sanchez v. Herrera, 1989-NMSC-073, ¶
24, 783 P.2d 465, 469). Bhasker also contends that the
reasonable expectations doctrine applies, because, in New
Mexico, the reasonable expectations doctrine “‘is
not restricted to those cases in which the policy language is
at issue.'” Response at 18 (quoting Barth v.
Coleman, 1994-NMSC-067, ¶ 15, 878 P.2d 319,
323)(citing Berlangieri v. Running Elk Corp.,
2002-NMCA-046, ¶ 13, 44 P.3d 538, 541-42). Bhasker
contends that, in any case, the policy's language at
issue “is not clear and unambiguous.” Response at
19. Bhasker asserts that, in applying the reasonable
expectations doctrine, “courts will look to how a
reasonable non-attorney would view the terms of
coverage.” Response at 19 (citing Battishill v.
Farmers Alliance Ins. Co., 2006-NMSC-004, ¶ 13, 127
P.3d 1111, 1114; Computer Corner, Inc. v. Fireman's
Funds Ins. Co., 2002-NMCA-054, ¶ 13, 46 P.3d 1264,
1268). Bhasker asserts that courts will also consider the
kind of insurance at issue. See Response at 20
(citing Hinkle v. State Farm Fire & Cas. Co.,
2013-NMCA-084, ¶ 18, 308 P.3d 1009, 1014).
concludes that she has
pled facts which, if taken as true and viewed in the light
most favorable to the Plaintiff, suffice to evidence her
entitlement to relief for her claims against Defendant for
negligence, violation of the New Mexico Unfair Trade
Practices Act, violation of the New Mexico Unfair Insurance
Practices Act, breach of contract, breach of the covenant of
good faith and fair dealing, and for punitive damages. Both
of Defendant's affirmative defenses must fail as a matter
of law and Bhasker has shown that the underinsured coverage
she purchased must be considered illusory. Accordingly,
Defendant's Motion to Dismiss must be denied in its
entirety and the matter permitted to proceed.
Response at 20-21.
Indemnity replies to Bhasker's response. See
Reply in Support of Defendant's Motion to Dismiss First
Amended Complaint, filed June 6, 2017 (Doc.
20)(“Reply”). Financial Indemnity first argues
that the filed rate doctrine bars Bhasker's claims.
See Reply at 1. Financial Indemnity disputes
Bhasker's contention that her claims are
“‘separate from any regulatory framework or the
setting of rates.'” See Reply at 1
(quoting Response at 3). Financial Indemnity argues that
“clear authority” in the United States Court of
Appeals for the Tenth Circuit and in other United States
Courts of Appeals hold that the filed rate doctrine
“applies regardless of the label used to describe the
claims, including where fraud or other illegal activity is
alleged.” Reply at 1. Financial Indemnity contends that
the Tenth Circuit, applying New Mexico law, “rejected
the same type of ‘fraudulent activity' argument
Plaintiff asserts here, upholding dismissal, based on the
filed rate doctrine, of plaintiffs' claims against the
insurer defendants of conspiracy and bribery.” Reply at
1-2 (citing Coll v. First Am. Title Ins. Co., 642
F.3d 876 (10th Cir. 2011)). In Coll v. First American
Title Insurance Co., Financial Indemnity asserts, the
Tenth Circuit held that the “‘focus for
determining whether the filed rate doctrine applies is the
impact the court's decision will have on agency
procedures and rate determinations, '” and that the
“‘underlying conduct does not control whether the
filed rate doctrine applies.'” Reply at 2 (quoting
642 F.3d at 890). Financial Indemnity asserts that the Tenth
Circuit concludes that the “‘dispositive
question'” is whether a win for the plaintiff would
impact the regulatory agency's rate determinations;
“‘if so, the ‘filed rate' doctrine will
bar the claim.'” Reply at 2 (quoting 642 F.3d at
890). Financial Indemnity argues that the Tenth Circuit, in
Coll v. First American Title Insurance Co., looked
to New Mexico precedent in Valdez v. State,
2002-NMSC-028, 54 P.3d 71, and “concluded that, under
New Mexico law, there is no fraud exception to the
‘filed rate' doctrine.” Reply at 2 (citing
642 F.3d at 890). Financial Indemnity contends that other
courts have reached similar conclusions. See Reply
at 2-3 (citing Crumley v. Time Warner Cable, Inc.,