United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER DENYING IN PART AND
GRANTING IN PART DEFENDANT'S MOTION TO DISMISS AND
DENYING DEFENDANT'S MOTION TO CERTIFY
MATTER comes before the Court upon Defendant's Motion to
Dismiss Plaintiff's Amended Complaint, filed May 14, 2018
(Doc. 9), and Defendant's Motion to
Certify Questions to the New Mexico Supreme Court, filed May
14, 2018 (Doc. 7). Having reviewed the
parties' pleadings and the applicable law, the Court
finds that Defendant's Motion to Dismiss is not
well-taken and, therefore, is DENIED IN
PART. However, the Court will dismiss certain counts
as specified below, with leave to amend. Finally, the Motion
to Certify is DENIED WITHOUT PREJUDICE as
class action arises out of a dispute over “underinsured
motorist coverage.” NMSA § 66-5-301
(“‘underinsured motorist' means an operator
of a motor vehicle with respect to the ownership, maintenance
or use of which the sum of the limits of liability under all
bodily injury liability insurance applicable at the time of
the accident is less than the limits of liability under the
insured's uninsured motorist coverage.”). Plaintiff
alleges that Defendant misrepresented or failed to adequately
explain to her and similarly situated class members the
extent of “underinsured motorist” coverage when
purchased at the minimum level of $25, 000.
was the victim of a car crash on December 11,
2012. While Plaintiff was stopped at a red light
on Academy Blvd. in Albuquerque, New Mexico, the tortfeasor
attempted to slip between her and another stopped car,
crashing into both. She received $25, 000 in compensation
from the tortfeasor's minimum liability policy. Because
she alleges her damages were in excess of $25, 000, she
apparently sought benefits from her own uninsured and
underinsured motorist coverage from her insurance company,
Defendant State Farm. Her policy with Defendant included
statutory minimum amount of uninsured and underinsured of
$25, 000. Defendant allegedly denied coverage according to
the insurance policy and New Mexico law, because the amount
received from tortfeasor's minimum liability insurance
was offset against Plaintiffs $25, 000 uninsured and
underinsured policy. See generally Schmick v. State Farm
Mut. Auto. Ins. Co., 103 N.M. 216, 704 P.2d 1092 (N.M.
1985) (explaining statutory offset in NMSA § 66-5-301).
Defendant State Farm claims to have paid under the
underinsured motorist provisions for property damage, but
Plaintiff alleged that Defendant denied underinsured motorist
coverage for bodily harm.
generally alleges that Defendant misrepresented and misled
the nature of underinsured motorist coverage she purchased,
causing her to reasonably expect that the purchased coverage
would compensate her for damages that were greater than the
limits of the tortfeasor's liability limits. Doc.
1-02, ¶ 24, 30, 33, 40.
Plaintiff claims that Defendant did not inform her of the
limited nature of underinsured motorist coverage when
purchased at the minimum level. Based on this allegation,
Plaintiff filed a complaint asserting the following claims:
Count I: Negligence;
Count II: Violations of the Unfair Trade Practices Act;
Count III: Violations of the Unfair Insurance Practices Act;
Count IV: Breach of Contract and Claim for Motorist Coverage;
Count V: Breach of Contract and Covenant of Good Faith and
Count VI: Injunctive Relief;
Count VII: Declaratory Judgment; and
Count VIII: Punitive Damages.
seeks to dismiss all claims for lack of standing under
Fed.R.Civ.P. 12(b)(1), or alternatively, for failure to state
a claim under Fed.R.Civ.P. 12(b)(6).
Motion to Dismiss for Lack of Standing under Fed.R.Civ.P.
argues that this case should be dismissed under Rule 12(b)(1)
for lack of subject matter jurisdiction, because Plaintiff
lacks standing. Plaintiff “must demonstrate standing to
sue by establishing (1) an injury in fact, (2) a sufficient
causal connection between the injury and the conduct
complained of, and (3) a likelihood that the injury will be
redressed by a favorable decision.” Philadelphia
Indem. Ins. Co. v. Lexington Ins. Co., 845 F.3d 1330,
1335 (10th Cir. 2017) (internal citations and quotation marks
omitted). Here, Defendant solely argues that Plaintiff has
not demonstrated an injury in fact.
12(b)(1) motions generally take one of two forms: (1) a
facial attack on the sufficiency of the complaint's
allegations as to subject matter jurisdiction; or (2) a
challenge to the actual facts upon which subject matter
jurisdiction is based.” Ruiz v. McDonnell, 299
F.3d 1173, 1180 (10th Cir. 2002), citing Holt v. United
States, 46 F.3d 1000, 1002-03 (10th Cir.1995) (citation
omitted). When considering evidence outside the pleadings
under Fed.R.Civ.P. 12(b), the Court need not convert the
motion to Rule 56, unless the standing issue is intertwined
with the merits of the Plaintiff's case. Holt,
46 F.3d at 1003.
sole argument in the motion is that Plaintiff failed to plead
any facts that she was actually harmed. Defendant points out
that it in fact paid Defendant $3, 225 under the underinsured
motorist coverage, and therefore Plaintiff has no standing to
assert a denial of underinsured coverage. However, this
payment was apparently solely for property damage.
Doc. 1-4, ¶ 4-5. Defendant's
argument does not tend to facially attack Plaintiffs
complaint, because she alleges that she sustained bodily
injuries in an accident in which she was not at fault
and for which she was not compensated under her underinsured
motorist coverage. First Amended Complaint
(“FAC) ¶ 10. Plaintiff alleges that
Defendant denied coverage under her underinsured motorist
coverage. FAC ¶ 30, 32. Based on these
allegations, Plaintiff has adequately pled an injury in fact.
Defendant could be interpreted to attack the facts upon which
Plaintiffs standing rests. In response, Plaintiff filed a
declaration stating she incurred bodily injury in excess of
the tortfeasor's liability policy, and Defendant
preemptively denied coverage under her underinsured motorist
coverage. Doc. 24-1, ¶ 8 (“State
Farm denied my request for uninsured/underinsured motorist
coverage on November 5, 2015, stating “there is not
underinsured motorist exposure form [sic] the motor vehicle
accident.”). She also attached a letter from Defendant
that states that Defendant concluded that because the
tortfeasor's liability limits were $25, 000, she had no
underinsured motorist coverage, and that they would therefore
close the case. Plaintiff has shown that Defendant denied
coverage under the underinsured motorist provision.
it appears that Defendant's standing arguments may be
tied together with the merits of the case. To the extent
Defendant argues that Plaintiff suffered no harm because
coverage was not illusory and there was no misrepresentation,
that goes to the merits of the case, and is best addressed
under Fed.R.Civ.P. 56. Holt v. United States, 46
F.3d 1000, 1003 (10th Cir. 1995) (“Consequently, unless
the jurisdictional issue is intertwined with the merits of
Plaintiff's case, the district court properly considered
evidence outside of the pleadings and resolved factual
disputes without converting the motion into a Rule 56
Motion to Dismiss for Failure to State a Claim under
Legal Standard under Fed.R.Civ.P. 12(b)(6).
survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the
complaint “must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 570 (2007). “A claim
has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550
U.S. at 556). Conclusory allegations of liability, without
supporting factual content, are insufficient. “The
allegations must be enough that, if assumed to be true, the
plaintiff plausibly (not just speculatively) has a claim for
relief.” Robbins v. Oklahoma, 519 F.3d 1242,
1247 (10th Cir. 2008).
this is a diversity case based on New Mexico law, this Court
must ascertain and apply New Mexico law. In doing so, the
Court must either follow the decisions of the New Mexico
Supreme Court, or attempt to predict what the New Mexico
Supreme Court would do. Coll v. First Am. Title Ins.
Co., 642 F.3d 876, 886 (10th Cir. 2011); Federated
Serv. Ins. Co. v. Martinez, 529 Fed.Appx. 954, 957 (10th
Cir. 2013) (if no controlling state supreme court case,
district court must predict how such court would rule based
on intermediate appellate decisions, decisions of other
states, federal decisions, and general weight and trend of
not attached to the complaint or the motion to dismiss, the
Court may consider the insurance policy as it is referred to
in the complaint, it is central to the Plaintiff's claims
and the parties do not dispute its authenticity. Jacobsen
v. Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002),
cited in Brokers' Choice of America, Inc. v. NBC
Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017).
Therefore, the Court may consider the policy and need not
convert to Fed.R.Civ.P. 56.
New Mexico Statutory Offset Procedure for Underinsured
§ 66-5-301(A) mandates that every motor vehicle policy
include uninsured and underinsured motorist coverage for
bodily injury or death and property damage. This statute is
“intended to expand insurance coverage and to protect
individual members of the public against the hazard of
culpable uninsured motorists.” Progressive Nw. Ins.
Co. v. Weed Warrior Servs., 2010-NMSC-050, ¶ 5, 149
N.M. 157, 159, 245 P.3d 1209, 1211, quoting Romero v.
Dairyland Ins. Co., 111 N.M. 154, 156, 803 P.2d
243, 245 (1990). Motor vehicle policies must contain bodily
injury limits at a minimum level of $25, 000 per person and
$50, 000 per accident. NMSA § 66-5-215(A)(2)-(3).
Uninsured and underinsured motorist coverage has the same
minimum level, and may be bought at an amount up to the
liability amount in the policy. Insureds have the option of
rejecting uninsured and underinsured motorist coverage. NMSA
§ 66-5-301(C). Underinsured motorist coverage is defined
The uninsured motorist coverage described in Subsection A ...
shall include underinsured motorist coverage for
persons protected by an insured's policy....
“[U]nderinsured motorist” means an operator of a
motor vehicle ... which the sum of the limits of liability
under all bodily injury liability insurance applicable at the
time of the accident is less than the limits of liability
under the insured's uninsured motorist coverage.
NMSA § 66-5-301(B) (emphasis added). “The state of
being underinsured exists when the aggregate of the
insured's uninsured motorist coverage reduced by the
tortfeasor's liability coverage is greater than
zero.” Schmick v. State Far Mutual Automobile
Insurance Co., 103 N.M. 216, 223 (N.M. 1985). Thus,
according to the New Mexico Supreme Court, underinsured
motorist coverage does not exist where the tortfeasor carries
the minimum liability amount of $25, 000, and the insured has
the same amount of uninsured motorist coverage.
Progressive Nw. Ins. Co. v. Weed Warrior Servs.,
2010-NMSC-050, ¶ 10, 149 N.M. 157, 161, 245 P.3d 1209,
1213 (“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.”). Based on that
reasoning, the New Mexico Supreme Court required insurers to
offer underinsured motorist insurance in an amount greater
than $25, 000, reasoning that an offer of underinsured
motorist coverage at the minimum level is no offer at all.
Plaintiff States a Claim for Negligent
argues that Plaintiff failed to state a claim as to the
negligence count, because (1) she failed to allege sufficient
facts to support a negligence claim, and (2) as a matter of
law a negligence claim may not arise where there is
contractual relationship between an insurer and insured.
See Ambassador Ins. Co. v. St. Paul Fire & Marine
Ins. Co.,102 N.M. 28, ...