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Miller v. Cincinnati Insurance Co.

United States District Court, D. New Mexico

April 2, 2018

PAMELA MILLER, Plaintiff,
v.
CINCINNATI INSURANCE COMPANY, Defendant.

          MEMORANDUM AND OPINION ORDER

         THIS MATTER comes before the Court on the parties' cross-motions for declaratory judgment. Docs. 16, 17. Plaintiff filed her Complaint for Declaratory Judgment, Breach of Contract, and Negligence in New Mexico state district court on January 6, 2017. Doc. 1-1. Defendant removed the action to federal court on February 28, 2017. Doc. 1. Plaintiff's claim for declaratory judgment is premised on allegations that Defendant refused to negotiate settlement of Plaintiff's claim for underinsured motorist (“UM”) coverage pursuant to her insurance policy with Defendant. Defendant denied Plaintiff's claim for UM coverage due to Plaintiff's failure to timely make a claim for UM coverage pursuant to the terms of the policy. Having reviewed the briefing, the relevant law, and being otherwise fully advised, the Court will grant Plaintiff's Motion in part and deny Defendant's Motion.

         I. PRELIMINARY PROCEDURAL MATTTERS

         Before getting into the substance of the parties' arguments, the Court will first address whether the state or the federal declaratory judgment act applies. Second, the Court then considers what type of relief is available under the Declaratory Judgment Act.

         First, some confusion exists among the parties as to whether the Court's consideration of Plaintiff's claim for declaratory judgment is controlled by the federal Declaratory Judgment Act, 28 U.S.C. § 2201-2202, or New Mexico's Declaratory Judgment Act, NMSA 1978 § 44-6-1 to -15. Importantly, Defendant's removed this case to federal Court on the basis of the Court's diversity jurisdiction. A federal court exercising jurisdiction over a case based on diversity of citizenship looks to federal procedural law and to state substantive law. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 72 (1938). The federal Declaratory Judgment Act is procedural. Farmers Alliance Mut. Ins. Co. v. Jones, 570 F.2d 1384, 1386 (10th Cir. 1978). It “does not create substantive rights for parties…[but] merely provides another procedure whereby parties may obtain judicial relief.” Id. Accordingly, while New Mexico law will control the substantive issues of the case, the federal Declaratory Judgment Act will control the procedure governing Plaintiff's claim for declaratory judgment.

         Second, although the parties have filed cross-motions for declaratory judgment, the Court clarifies that the Declaratory Judgment Act does not contemplate “motions for declaratory judgment.” Under the Act, a court “may declare the rights and other legal relations of any interested party seeking such a declaration” where a party files “an appropriate pleading.” 28 U.S.C. § 2201(a). The Federal Rules “govern the procedure for obtaining a declaratory judgment under [the Act].” Fed.R.Civ.P. 57. As such, “the requirements of pleading and practice in actions for declaratory relief are exactly the same as in other civil actions.” Thomas v. Blue Cross and Blue Shield Ass'n, 594 F.3d 823, 830 (11th Cir. 2010). When faced with a motion for declaratory judgment, courts therefore often construe the motion as a motion for summary judgment on a declaratory judgment action. See e.g., Kam-Ko Bio-Pharm Trading, 560 F.3d 935, 943 (9th Cir. 2009) (upholding the district court's decision to construe a motion for declaratory judgment as a motion for summary judgment); Int'l Bhd. of Teamsters v. E. Conference of Teamsters, 160 F.R.D. 452, 456 (S.D.N.Y. 1995) (citation omitted) (stating that “[t]he only way plaintiffs' motion [for declaratory relief] can be construed as being consistent with the Federal Rules is to construe it as a motion for summary judgment on an action for a declaratory judgment.”). Consistent with these authorities the Court construes the parties' cross-motions for declaratory judgment as cross-motions for partial summary judgment on Plaintiff's claim for declaratory judgment.

         II. STANDARD OF REVIEW

         Under Federal Rule of Civil Procedure 56(a), this Court must “grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The movant bears the initial burden of “show[ing] that there is an absence of evidence to support the nonmoving party's case.” Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Once the movant meets this burden, Rule 56(c) requires the non-moving party to designate specific facts showing that there is a genuine issue for trial. See Celotex Corp., 477 U.S. at 324; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).

         “An issue is ‘genuine' if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way. An issue of fact is ‘material' if under the substantive law it is essential to the proper disposition of the claim.” Thom v. Bristol Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2003) (internal citation omitted). “A party asserting that a fact cannot be or is genuinely disputed must support the assertion by . . . citing to particular parts of materials in the record . . . .” Fed.R.Civ.P. 56(c)(1)(A). All material facts set forth in the motion and response which are not specifically controverted are deemed undisputed. D.N.M.LR-Civ. 56.1(b).

         When reviewing a motion for summary judgment, the court should keep in mind three principles. First, the court's role is not to weigh the evidence, but determine whether a genuine issue exists as to material facts requiring a trial. See Liberty Lobby, 477 U.S. at 249. Second, the court must resolve all reasonable inferences and doubts in favor of the non-moving party, and construe all evidence in the light most favorable to the non-moving party. See Hunt v. Cromartie, 526 U.S. 541, 550-55 (1999). Third, the court cannot decide any issues of credibility. See Liberty Lobby, 477 U.S. at 255. “[T]o survive the . . . motion, [the nonmovant] need only present evidence from which a jury might return a verdict in his favor.” Id. at 257.

         III. BACKGROUND

         Unless otherwise noted, the following are the undisputed material facts. In November 2011, Defendant issued Plaintiff an automobile insurance policy. Defendant's Ex. C, Doc. 16 at 20. The policy was issued by an Ohio insurance agent. Id. The policy indicates that Plaintiff resided in Ohio and that the vehicle would be garaged in Ohio. Id. It is therefore undisputed that the policy was issued in Ohio. This is material because the policy included a choice of law provision stating that the policy should be “construed and interpreted in conformity with the laws of the state in which it was issued.” Id. at 39. The policy included a limitation on the timeframe for which Plaintiff could bring a claim for UM coverage. Specifically, the policy stated that

Any claim for Uninsured Motorist Coverage must be brought within three (3) years of the date of the accident causing “bodily injury” or one (1) year after the date the liability insurer of the “uninsured motor vehicle” becomes insolvent, whichever is later.

Id. at 45.

         On June 1, 2012, Plaintiff was involved in a motor vehicle accident in Taos, New Mexico. Doc. 17 at 2, ¶ 1; Doc. 19 at 1, ¶ 1. The driver of the other vehicle, Stephen Salandre, was insured by GEICO with liability limits of $25, 000 for bodily injury. Doc. 17 at 2, ¶ 2; Doc. 19 at 2, ¶ 2. Approximately one day after the accident, Plaintiff notified Defendant of the accident and on June 4, 2012, Defendant took Plaintiff's recorded statement regarding the incident. Doc. 17 at 2, ¶ 4; Doc. 19 at 2, ¶ 4. Though largely immaterial to the present issues, Defendant and GEICO subsequently engaged in a protracted disagreement as to who was at fault for the accident. Their disagreement was ultimately submitted to arbitration and the ...


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