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Foy v. Union Development Corp.

United States District Court, D. New Mexico

September 17, 2018

ERIN FOY, Plaintiff,

          Paul M. Dominguez, Dominguez Law Firm, LLC, Albuquerque, New Mexico, for Plaintiff.

          Terry R. Guebert and Elizabeth M. Piazza, Guebert Bruckner P.C., Albuquerque, New Mexico, for Defendant State Farm Mutual Automobile Insurance Co.


         THIS MATTER comes before the court on Defendant State Farm Mutual Automobile Insurance Company's Motion for Partial Summary Judgment on the validity of its uninsured and unknown motorists coverage rejection form and corresponding premium table, filed April 26, 2018 (ECF No. 42). In her response, Plaintiff has attempted to cross-move for summary judgment, but the court agrees with State Farm that a separate motion is required. CM/ECF Administrative Procedures Manual, § 9(f)(2) (rev. Aug. 2017). Upon consideration thereof, State Farm's motion is well taken and should be granted and Plaintiff's attempted cross-motion for partial summary judgment should be denied.


         Ms. Foy filed this declaratory judgment action against Defendants Build NM, her employer, and State Farm Mutual Automobile Insurance Co., her employer's insurer, alleging that Defendants failed to provide her with uninsured/underinsured motorist coverage (UM coverage) for an automobile accident that occurred during the scope of her employment. Compl. 1-3, 6, ECF No. 1-2. The court dismissed Build NM as fraudulently joined to defeat diversity jurisdiction. ECF No. 19 at 6. After granting Ms. Foy leave to amend her complaint, the court dismissed her added defendant, a local State Farm agent, as a dispensable, non-diverse defendant. ECF No. 46 at 7. The court declined to reconsider that ruling. ECF No. 164 at 2.

         Turning to the facts, Ms. Foy was struck from behind by Nicole Chacon on July 3, 2013. At the time of the accident, Ms. Foy was driving a vehicle insured by State Farm under a policy issued to Build New Mexico, her employer. The policy provided liability coverage for bodily injury of $1 million each person / $1 million each accident and UM coverage of $100, 000 each person / $300, 000 each accident. Ms. Foy contends that State Farm did not obtain a valid rejection of UM coverage and did not provide her with an appropriate menu of UM coverage options and associated premiums. Accordingly, she contends that she is entitled to reformation of the policy to provide of $1 million each person / $1 million each accident of UM coverage.


         Summary judgment is appropriate “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 court views the facts in the light most favorable to a party opposing summary judgment. See Plumhoff v. Rickard, 134 S.Ct. 2012, 2017 (2014). Disputes about immaterial issues of fact will not preclude summary judgment. Celotex v. Catrett, 477 U.S. 317, 322-23 (1986). Given a properly supported summary judgment motion, the non-movant must come forward with “significantly probative” evidence that could permit a trier of fact to find in her favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). In this removed diversity case, the court applies New Mexico substantive law and federal procedural law. Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 (1996).

         New Mexico law requires insurers to offer UM/UIM coverage up to the liability limits of the policy. N.M. Stat. § 66-5-301(A) & (B) (2018). Insureds have the right to reject such coverage, Id. § 66-5-301(C), but before such coverage is excluded, an insurer must obtain a valid rejection. Jordan v. Allstate Ins. Co., 245 P.3d 1214, 1221 (N.M. 2010). The rejection must be in writing and must be made part of the policy. N.M. Code R. § (2018). The statute and its implementing regulation are intended to expand coverage and protect members of the public from the hazard of at-fault uninsured or under-insured motorists. See Romero v. Dairyland Ins. Co., 803 P.2d 243, 245 (N.M. 1990) (citing Chavez v. State Farm Mut. Auto. Ins. Co., 533 P.2d 100 (N.M. 1975) and Sandoval v. Valdez, 580 P.2d 131 (N.M. Ct. App. 1978)). Accordingly, these provisions are interpreted liberally to further their remedial purpose; providing the maximum of UM/UIM coverage is the default rule, and exceptions are construed strictly to protect an insured. Jordan, 245 P.3d at 1219.

         In Progressive Nw. Ins. Co. v. Weed Warrior Servs., 245 P.3d 1209, 1213 (N.M. 2010), the New Mexico Supreme Court held that an insurer must offer UM/UIM limits up to the liability limits of the policy and that an insured's decision to purchase a lower amount constitutes a rejection of the maximum amount. Accord Lueras v. GEICO Gen. Ins. Co., No. A-1-CA-34961, 2018 WL 2999630, at *6 (N.M. Ct. App. June 14, 2018).

         Thereafter, the New Mexico Supreme Court explained what is necessary for an effective rejection of UM/UIM coverage:

In these cases, we detail for the first time the technical requirements for a valid rejection of UM/UIM coverage in an amount equal to liability limits. By requiring insurance carriers to list premium costs corresponding to each available UM/UIM coverage level, we are providing specific guidance concerning the form and manner that valid offers and rejections of UM/UIM insurance must take to comply with controlling statutory and regulatory provisions.

Jordan, 245 P.3d at 1222. The court requires insurers to “provide the insured with the premium charges corresponding to each available option for UM/UIM coverage so that the insured can make a knowing and intelligent decision to receive or reject ...

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