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Bhasker v. Kemper Casualty Insurance Co.

United States District Court, D. New Mexico

February 7, 2019

HELEN BHASKER, Plaintiff,
v.
KEMPER CASUALTY INSURANCE COMPANY; UNITRIN SPECIALTY FINANCIAL INDEMNITY COMPANY; FINANCIAL INDEMNITY COMPANY; ELITE FINANCIAL INSURANCE and NOELIA LUNA SUCET, Defendants.

          William Ferguson Adrian O. Vega Kedar Bhasker Will Ferguson & Associates Albuquerque, New Mexico Attorneys for the Plaintiff

          Kerri Lee Allensworth Alicia M. Santos O'Brien & Padilla, PC Albuquerque New Mexico and Mark L. Hanover Dentons Chicago, Illinois Attorneys for the Defendant

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on the Defendant's Motion for Judgment on the Pleadings and Memorandum of Law in Support, filed April 4, 2018 (Doc. 58)(“MJP”). The Court held a hearing on August 10, 2018. The primary issues are: (i) whether Defendant Financial Indemnity Company is entitled to judgment as a matter of law as to all claims for insureds who have non-minimum limits underinsured motorist (“UIM”) coverage;[1] and (ii) whether, as a matter of law, Financial Indemnity can be liable to Plaintiff Helen Bhasker for extracontractual or punitive damages. The Court concludes that: (i) Financial Indemnity is not entitled to judgment as a matter of law as to all claims for insureds who have non-minimum limits UIM coverage, because Bhasker has alleged that Financial Indemnity's business practices misled and deceived not only herself but also proposed class members who purchased greater-than-minimum-limits UIM coverage; and (ii) Financial Indemnity can be liable to Bhasker for extracontractual and punitive damages, at this stage in the proceedings, because Bhasker has alleged that Financial Indemnity's decision to sell illusory UIM coverage was willful or reckless. Although the Court will not dismiss Bhasker's claims on behalf of proposed class members who purchased greater-than-minimum-limits UIM coverage, the Court predicts that the Supreme Court of New Mexico would conclude that higher-than-minimum limits UIM coverage has value, because New Mexico's statutory offset provision is in accord with New Mexico public policy. The Court therefore permits Bhasker's claims on behalf of proposed class members to proceed on the theory that Financial Indemnity misled her and a class of insureds who, like Bhasker, purchased UIM coverage believing that they would receive the full UIM coverage reflected on their declarations pages, whether minimum limits or some greater figure. Accordingly, the Court denies the MJP.

         FACTUAL BACKGROUND

         Bhasker 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, 000.00 per occurrence, per vehicle. See Complaint ¶¶ 42-43, at 7 (citing Coverage for 1995 Lexus LS 500 4D at 1 (dated May 14, 2015), filed March 23, 2017 (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.

         Bhasker 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 (dated July 14, 2011), filed March 23, 2017 (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. Bhasker further contends that Financial Indemnity has “written direct premium automobile insurance to thousands of New Mexico residents and, from 2010-2014, wrote direct premiums” around the United States totaling $1.09 billion. Complaint ¶ 22, at 4.

         PROCEDURAL BACKGROUND

         Bhasker 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”).[2] 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.

         Financial Indemnity filed a Motion to Dismiss. See Defendant's Motion to Dismiss First Amended Complaint and Memorandum of Law in Support, filed April 28, 2017 (Doc. 15)(“MTD”). In the MTD, 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. The Court held a hearing on July 24, 2017. See Hearing Transcript (taken July 24, 2017) (Doc. 34).

         The Court filed a Memorandum Opinion and Order (“MOO”) denying Financial Indemnity's requests in the MTD. See Memorandum Opinion and Order, filed January 10, 2018 (Doc. 48); Bhasker v. Kemper Cas. Ins. Co., 284 F.Supp.3d 1191, 1191 (D.N.M. 2018)(Browning, J.). Specifically, the Court concluded 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[3] to bar claims against insurers for unfair or deceptive business practices; (ii) Bhasker's claims are well-pled even if the UIM insurance is not illusory; and (iii) the voluntary payment doctrine[4] does not bar Bhasker's claims, because she alleges that she did not know all the material facts. See MOO at 56; Bhasker v. Kemper Cas. Ins. Co., 284 F.Supp.3d at 1226.

         1.The MJP.

         In the MJP, Financial Indemnity, pursuant to rule 12(c) of the Federal Rules of Civil Procedure, moves for the entry of an order granting Financial Indemnity partial judgment on the pleadings as to two of Bhasker's claims: “1. Defendant is entitled to judgment as a matter of law as to all claims for insureds who have non-minimum limits underinsured motorist . . . coverage; and 2. Defendant cannot, as a matter of law, be liable to Plaintiff for extra-contractual or punitive damages.” MJP at 1. Financial Indemnity asserts that, although the Court, in its MOO, denied Financial Indemnity's MTD, the MOO reflects that all Bhasker's claims “are premised on the theory that the minimum limits UIM coverage at issue in this case is ‘illusory.'” MJP at 1. Financial Indemnity further asserts that the Court should hold that Bhasker is not entitled, as a matter of law, to the extracontractual or putative damages that she seeks, because Financial Indemnity “certainly had a reasonable basis for enforcing the offset as it did, and for believing its minimum limits UIM coverage was neither illusory nor otherwise unlawful.” MJP at 2.

         Financial Indemnity argues that “[t]his Court's Order indicates clearly that the illusory coverage claim raised by this case applies to minimum limits UIM coverage, not where any level of UIM limits above the minimum is at issue.” MJP at 4. Financial Indemnity cites language from the Court's MOO which emphasizes, for example, that Bhasker's UIM insurance is illusory and that, because of New Mexico's offset law, “there is virtually no possible underinsured minimum limits claim available” to Bhasker and “other similarly situated members of the class.” MJP at 4 (quoting MOO at 3; Bhasker v. Kemper Cas. Ins. Co., 284 F.Supp.3d at 1194)(emphasis in MJP). Financial Indemnity summarized Bhasker's illusory insurance coverage theory: “when the tortfeasor's minimum bodily injury liability limits, which would be at least $25, 000/$50, 000, are offset against the insured's minimum $25, 000/$50, 000 UIM limits, the injured insured would have paid a premium for which no payment of benefits will occur once the offset is applied.” MJP at 4-5. Financial Indemnity argues that this theory does not apply outside the minimum limits UIM context, because, for example, “if the insured has UIM limits of $50, 000, $100, 000 or any amount greater than $25, 000, and the tortfeasor has $25, 000 in bodily injury liability limits and that amount is offset, the injured insured will recover UIM benefits where the damages exceed the tortfeasor's limits.” MJP at 5 (emphasis in MJP).

         Financial Indemnity further asserts that the Court should limit Bhasker's illusory coverage theory to insureds with minimum limits UIM coverage, because Progressive Northwest Insurance Co. v. Weed Warrior Services, 2010-NMSC-050, 245 P.3d 1209 (“Weed Warrior”), which, according to Financial Indemnity, Bhasker “primarily relie[s]” for her illusory coverage theory, does not contemplate insureds with greater than minimum limits UIM coverage. See MJP at 5. Hence, according to Financial Indemnity, Weed Warrior confirms that

the problem of “illusory” UIM coverage arises, if at all, only in connection with minimum limits UIM coverage -- i.e., where an injured insured's minimum UIM limits of $25, 000 are offset by a tortfeasor's $25, 000 bodily injury liability limits. It would not arise in cases involving UIM coverage limits above the minimum --e.g., where an insured's $50, 000 or $100, 000 UIM limits (or any amount above $25, 000) are only partially offset by a tortfeasor's $25, 000 bodily injury liability limits.

MJP at 6.

         Financial Indemnity adds that the Court “would directly contravene the purpose of New Mexico's UM/UIM statute” if the Court permits Bhasker to apply her theory beyond the minimum limits UIM coverage context, because the Supreme Court of New Mexico has stated that § 66-5-301's purpose “is to assure that, in the event of an accident with an underinsured vehicle, an insured motorist entitled to compensation will receive at least the sum certain in underinsurance coverage purchased for his or her benefit, ” and that the UIM insurer must satisfy the difference only “[t]o the extent the amount of other available insurance proceeds from responsible underinsured tortfeasors does not equal or exceed the amount of coverage purchased.” MJP at 7 (quoting Farmers Ins. Co. of Arizona v. Sandoval, 2011-NMCA-051, ¶ 13, 253 P.3d 944, 948 (emphasis in MJP only)). According to Financial Indemnity, these cases demonstrate that “the purpose of the UIM statute and offset provision is to make the injured insured whole up to the level of UIM coverage he or she has purchased.” MJP at 7. Financial Indemnity suggests that the Supreme Court of New Mexico in Fasulo v. State Farm Mutual Automobile Insurance Co., 1989-NMSC-060, ¶ 15, 780 P.2d 633, 637, offers further support for this position when it concluded: “Regardless of the number of underinsured tortfeasors at fault, the legislature intended that the injured party's underinsurance recovery should be limited to the amount of UIM coverage purchased, less available liability proceeds.” MJP at 8 (quoting Fasulo v. State Farm Mut. Auto. Ins. Co., 1989-NMSC-060, ¶ 15, 780 P.2d at 637). Similarly, Financial Indemnity asserts, § 66-5-301(B) mandates offset “to ensure that the insured does not receive payment from his or her insurer greater than the coverage purchased.” MJP at 8 (quoting Samora v. State Farm Mut. Auto. Ins. Co., 1995-NMSC-022, ¶ 10, 892 P.2d 600, 603 (emphasis in MJP only)). Financial Indemnity also asserts that federal courts have reached the same conclusion regarding New Mexico's UM/UIM statute. See MJP at 8 (citing Ortiz v. Safeco Ins. Co. of Am., 207 F.Supp.3d 1216, 1219 (D.N.M. 2016)(Lynch, M.J.)(“[The] purpose of New Mexico's UM/UIM statute is to expand such coverage in New Mexico to protect the public from damages caused by uninsured or underinsured motorists by putting the insured in the same position as if the tortfeasor had liability insurance.”)). According to Financial Indemnity, these cases show that the purpose of New Mexico's UIM statute, with its express offset provision, “is to put the insured in the same position as he or she would have been had the tortfeasor had liability insurance coverage in the amount of UIM coverage purchased by the insured.” MJP at 8. Hence, Financial Indemnity alleges:

If Plaintiff's “illusory” UIM coverage approach were adopted beyond the minimum UIM limits context, and the offset provision could therefore not be applied, that would defeat the whole purpose of the statute. It would create a windfall for insureds by requiring UIM insurers to put the insured in a better position than he or she would have been had the tortfeasor had liability insurance coverage. It would also result, in contravention of the statute's purpose, in insureds receiving UIM payments in amounts greater than the coverage they purchased.

MJP at 8-9 (emphasis in MJP).

         According to Financial Indemnity, that New Mexico law offsets the first $25, 000.00 of coverage should not result in Financial Indemnity's penalization, regardless whether that provision aggrieves insureds. See MJP at 9. Financial Indemnity adds that, even in jurisdictions where courts have held that minimum limits UIM coverage is illusory, “these same courts have rejected the theory that UIM coverage above the statutory minimum limits is illusory.” MJP at 9 (emphasis in MJP). For example, contends Financial Indemnity, the Supreme Court of Wisconsin in Taylor v. Greatway, Insurance Co., 628 N.W.2d 916 (Wis. 2001), rejected the argument that the insured's coverage was illusory because of a reducing clause which, when applied, meant that the insured “could never recover $25, 000 of the $50, 000 in UIM coverage under each policy, due to the requirement . . . that drivers have at least $25, 000 in liability insurance, ” and instead stated that the tortfeasor's vehicle was not underinsured, because the tortfeasor and the insured had equal liability and UIM coverage limits of $50, 000.00. MJP at 9 (quoting Taylor v. Greatway, Ins. Co., 628 N.W.2d at 919). Financial Indemnity adds that the Supreme Court of Wisconsin distinguishes Taylor v. Greatway, Insurance Co. from cases where minimum limits UIM coverage is involved when it states that in the minimum limits context “there was no possibility . . . that the insured driver could recover under her UIM policy because the policy defined an underinsured vehicle as a vehicle with liability limits less than the limits of the UIM coverage and because [the insured] had a UIM coverage limit of $25, 000, ” which was the minimum amount for liability insurance that the law required. MJP at 9-10 (quoting Taylor v. Greatway, Ins. Co., 628 N.W.2d at 923). For the same proposition, Financial Indemnity refers the Court to DeGrand v. Motors Ins. Corp., 903 F.2d 1100, 1103 n.2 (7th Cir. 1990)(“[U]nderinsurance would not be illusory to drivers who purchase underinsured motorist coverage in an amount greater than the minimum amount of uninsured motorist coverage required by law.”). Financial Indemnity concludes by arguing that, “even if minimum limits UIM coverage is considered ‘illusory,' UIM coverage above the minimum limits would not be . . . because the insured will recover UIM coverage where the tortfeasor has liability coverage in excess of the statutory minimum.” MJP at 10.

         Financial Indemnity next turns to its argument that the Court should not permit the factfinder to consider extracontractual damages and begins by reciting the New Mexico legal standard for awarding such damages: “the existence of ‘willful, wanton, malicious, reckless, oppressive, fraudulent or in bad faith' conduct.” MJP at 10 (quoting Obenauf v. Frontier Fin. Grp., Inc., 785 F.Supp.2d 1188, 1225 (D.N.M. 2011)(Browning, J.); and citing Gallup Med Flight, LLC v. Phoenix Ins. Co., No. CV 16-01197 KG/KBM, 2018 WL 344956, at *2 (D.N.M. Jan. 9, 2018)(Gonzales, J.); NMRA, Civ. UJI 13-1827). Financial Indemnity contends that punitive damages are not available when a defendant's conduct “is neither willful, wanton, nor in bad faith.” MJP at 11 (citing Obenauf v. Frontier Fin. Grp., Inc., 785 F.Supp.2d at 1226; Ensey v. Ozzie's Pipeline Padder, Inc., No. CIV 08-0801 JAP/CG, 2009 WL 10665015, at *10 (D.N.M. Oct. 6, 2009)(Parker, J.), aff'd, 446 Fed.Appx. 977 (10th Cir. 2011); Bevan v. Valencia, No. CIV 15-73 KG/SCY, 2017 WL 5054703, at *5 (D.N.M. Nov. 2, 2017)(Gonzales, J.)). Financial Indemnity asserts that the Court may not award punitive damages “where, as here, a defendant has a justifiable basis for its conduct, ” MJP at 11 (citing Lite Cookies Ltd. v. Tassy & Assocs., Inc., No. CV 08-1172 BB/WDS, 2011 WL 13162088, at *3 (D.N.M. Sept. 1, 2011)(Black, J.)(“[I]ntentional breach of contract by itself is not enough to support an award of punitive damages. . . . Plaintiff must show that Defendant's acts were without justification.”)), and “where, as here, the applicable area of law is unsettled, ” MPJ at 12 (citing Equal Emp't Opportunity Comm'n v. Flambeau, Inc., 846 F.3d 941, 948 (7th Cir. 2017)(“An employer's or its attorney's disagreement with EEOC guidance does not by itself support a punitive damages award, at least where the guidance addresses an area of law as unsettled as this one.”); McCann v. Coughlin, 698 F.2d 112, 127 (2d Cir. 1983)(“Given the unsettled state of the law on this issue . . . we decline to find that the district court's decision not to award McCann punitive damages was an abuse of discretion.”).

         Financial Indemnity further asserts that, “where, as here, the insurer had a legitimate basis for disputing the claim, ” courts have refused to award punitive damages, even for erroneous coverage determinations. MJP at 12-13 (citing United Nuclear Corp. v. Allendale Mut. Ins. Co., 1985-NMSC-090, ¶ 17, 709 P.2d 649, 654 (“[S]ince there were legitimate questions regarding the amount of [the insured's] claimed damages . . . we cannot say that [the insurer's] failure to pay [the insured's] claim was malicious or in bad faith . . . . Thus, we determine that the trial court's award of $25 million in punitive damages was erroneous.”); T.G.S. Transp., Inc. v. Canal Ins. Co., 216 Fed.Appx. 708, 708 (9th Cir. 2007); Crenshaw v. MONY Life Ins. Co., No. 02CV2108-LAB RBB, 2004 WL 7094011, at *8 (S.D. Cal. May 3, 2004)(Bruns, J.)(“[I]f there is a proper basis to dispute coverage, even an erroneous denial of a claim in breach of the insurer's contract will not by itself support tort liability . . . . Only the damages flowing from the breach of contract . . . are at issue.”).

         Financial Indemnity contends that the Court in its MOO recognized that “this was an issue of first impression in New Mexico” and that numerous courts have held that a limits offset in these circumstances is not unlawful. MJP at 13-14. Hence, Financial Indemnity asserts that, although the Court predicted that the Supreme Court of New Mexico would conclude that the minimum limits UIM coverage in this case is illusory, the Court is correct when it states that it “is receptive to the argument that the rare scenarios where a policyholder would benefit from a policy suggests that the policy has at least some value.” MJP at 13-14 (citing MOO at 74; Bhasker v. Kemper Cas. Ins. Co., 284 F.Supp.3d at 1237). Financial Indemnity then discusses several cases where courts have concluded that minimum limits UIM coverage is not illusory, thereby suggesting, according to Financial Indemnity, that Financial Indemnity had a reasonable basis for its position that minimum limits UIM coverage provides value, “and therefore did not act with the requisite animus to allow for a valid extra-contractual or punitive damages claim.” MJP at 14. For example, according to Financial Indemnity, the Supreme Court of Idaho in Vincent v. Safeco Insurance Co. of America, 136 Idaho 107, 29 P.3d 943 (Idaho 2001), 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 liability minimum limits than in the state policy, the policyholder could recover the difference as to those limits. See MJP at 14 (citing Vincent v. Safeco Ins. Co. of Am, 29 P.3d at 948). A further example is seen in Meridian Mutual Insurance Co. v. Richie, 544 N.E.2d 488 (Ind. 1989), asserts Financial Indemnity, because there the Supreme Court of Indiana concluded that underinsured automobiles could include “vehicles from other states which require lesser amounts than does Indiana of liability insurance, so that conceivably [the insured] could have benefitted from his underinsured motorist coverage. . . . Consequently, the policy . . . does not violate the public policy against illusory coverage.” MJP at 15 (quoting Meridian Mut. Ins. Co. v. Richie, 544 N.E.2d at 489-90).

         Financial Indemnity asserts that additional support for its position -- that it had a reasonable basis to believe that minimum limits UIM coverage is not illusory -- is seen in cases where courts have found that minimum limits UIM coverage provides value “where there are multiple injured parties in an accident, such that no single policy holder will recover the entirety of the tortfeasor's liability limit.” MJP at 15-16 (citing Showman v. Busser, No. 311141, 2013 WL 6037161, at *4 (Mich. Ct. App. Nov. 14, 2013)(“Although the policy limits equal the statutory minimum in Michigan, the insurance policy in question still provides underinsured motorist benefits . . . when the tortfeasor's liability insurance is reduced to less than $20, 000 by payments to other injured persons other than resident relatives.”); Hallihan v. Progressive Direct Ins. Co., No. 315CV01068NJRSCW, 2016 WL 4617243, at *6 (S.D. Ill. Sept. 6, 2016)(Rosenstengel, J.)(“[T]he Court concludes that Progressive's minimum UIM coverage is not illusory. There are certainly circumstances where a claimant may recover less than the minimum liability limits from the at-fault driver; the insured is then entitled to seek the difference, up to the UIM policy limits, from Progressive.”)).

         Financial Indemnity avers that a third scenario where a minimum limits policy has at least some value occurs when the insured receives less than the tortfeasor's policy limits because of a contractual exclusion for punitive damages, in which case, under New Mexico law, the insurer may not offset the full amount of the tortfeasor's liability limits. MJP at 16 (citing Farmers Ins. Co. of Arizona v. Sandoval, 2011-NMCA-051, ¶ 13, 253 P.3d at 946). In addition, argues Financial Indemnity, because Bhasker paid a single premium for combined UM and UIM coverage, and because, under New Mexico law, rates must be charged based on the insurer's loss history, see MJP at 17 (citing N.M. Stat. Ann. § 59A-17-7 (“In determining whether rates comply with the rate standards . . . 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.”), the portion of the rate for the combined UM/UIM coverage that is attributable to UIM coverage would be minimal, according to Bhasker's theory, based on a minimal loss payment history, see MJP at 17. Hence, Financial Indemnity contends, it cannot, as a matter of law, be collecting excessive premiums for UIM coverage that has an allegedly small or “illusory” value. MJP at 17. Moreover, Financial Indemnity maintains that the UM portion of the combined coverage “certainly” has value even at minimum limits. MJP at 17. Finally, an insured can recover minimum limits UIM benefits, contends Financial Indemnity, when he or she has stackable UIM coverage and multiple vehicles. See MJP at 17.

         Financial Indemnity concludes by arguing that the above caselaw and potential minimum limits recovery scenarios prove that its coverage position in enforcing its minimum limits UIM offset was, as a matter of law, reasonable. See MJP at 17. Thus, avers Financial Indemnity, because it “had solid grounds, particularly in this case of first impression, ” for its position that its limits offset was valid, which “is the antithesis of the willful, wanton, bad faith or fraudulent conduct necessary to warrant extra-contractual or punitive damages, ” the Court should grant it judgment on the pleadings as to all Bhasker's extracontractual and punitive damage claims. MJP at 18.

         2. The MJP Response.

         Bhasker responds to Financial Indemnity's MJP. See Plaintiff's Response and Memorandum of Law in Opposition to Defendant's Motion for Judgment on the Pleadings and Memorandum in Support, filed April 4, 2018 (Doc. 59)(“MJP Response”). Bhasker argues that the Court should deny the MJP, because “it is duplicative of defendant's previous motion or raises factual issues inappropriate for a motion under Rule 12(c), issues about which plaintiff has not yet had an opportunity to conduct discovery.” MJP Response at 1. Bhasker summarizes her theory of the case, i.e., that Financial Indemnity deceptively solicited and sold UIM coverage in amounts equal to the statutory minimum limits liability coverage without properly advising her that such UIM coverage under New Mexico law was illusory. See MJP Response at 1-2 (citing Complaint ¶¶ 1, 43, 46, 48, at 1, 7-8). 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 Defendant's practices, ” MJP Response at 2 (quoting Complaint ¶ 4, at 2)(alteration in MJP Response), because, according to Bhasker, Financial Indemnity “committed the same unfair and/or deceptive practices, omissions of material fact, wrongful failures to provide UIM, wrongful denials of claims for UIM benefits, and/or breaches of the implied covenant of good faith and fair dealing” against other New Mexico policyholders or insureds, MJP Response at 2 (citing Complaint ¶ 53, at 9).

         According to Bhasker, in its MOO, the Court not only concluded that Bhasker's claims were well-pled, see MJP at 2 (citing MOO at 76; Bhasker v. Kemper Cas. Ins. Co., 284 F.Supp.3d at 1237), but also “implicitly found that underinsured motorist coverage at minimal and higher limits is illusory when it stated that, ‘the Supreme Court of New Mexico would join Montana and West Virginia in determining that the UIM coverage is illusory, '” MJP Response at 2 (quoting MOO at 75 n.15; Bhasker v. Kemper Cas. Ins. Co., 284 F.Supp.3d at 1237 n.15). Hence, Bhasker contends, appropriate relief may include a punitive damages award. See MJP at 2.

         Bhasker further contends that the MJP is premature, because it moves the Court to rule on Bhasker's claims pertaining to the proposed class before the Court rules on class certification. See MJP Response at 2-3. According to Bhasker, only when the Court certifies a class, “which includes individuals who purchased UIM coverage at higher limits, ” may Financial Indemnity litigate its claim that Bhasker's illusory coverage theory does not apply to insureds with greater than minimum limits UIM coverage. MJP Response at 4. Bhasker contends that, because such claims are not presently before the Court, Financial Indemnity “now serves to waste the Court's time” with a motion duplicative of the MTD, which the Court denied. MJP Response at 4. Nonetheless, Bhasker asserts that the putative class members who purchased UIM coverage at higher limits deserve relief, and intends, through information gleaned from her discovery requests, “to satisfy ‘the district court's requirement that [it] must undertake a rigorous analysis' to satisfy itself that a putative class meets the applicable Rule 23 requirements.” MJP at 4 (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 345 (2011)(“Wal-Mart”)).

         Bhasker next insists that the MOO and relevant caselaw support her allegations that non-minimum limits UIM coverage is illusory and that the MJP is incorrect in stating that no courts have concluded that UIM coverage levels above minimum limits are illusory. See MJP Response at 5. According to Bhasker, the MOO cites caselaw which concludes that “UIM coverage at higher limits of $100, 000.00 and $50, 000.00, respectfully, to be illusory because of an offset that went against the interests of public policy.” MJP Response at 5 (emphasis in MJP Response)(citing Pristavec v. Westfield Ins. Co., 400 S.E.2d 575 ( W.Va. 1990); Hardy v. Progressive Specialty Ins. Co., 67 P.3d 892 (Mont. 2003); Bhasker v. Kemper Cas. Ins. Co., 284 F.Supp.3d at 1236 n.15). That the MOO cites Pristavec v. Westfield Insurance Co. and Hardy v. Progressive Specialty Insurance Co. indicates that the Court “implicitly recognized” that Bhasker's illusory coverage theory applies to higher limits. MJP Response at 5 (citing MOO at 75 n.15; Bhasker v. Kemper Cas. Ins. Co., 284 F.Supp.3d at 1237 n.15 (“[T]he Supreme Court of New Mexico would join Montana and West Virginia in determining that UIM coverage is illusory.”)).

         Bhasker quotes heavily from Pristavec v. Westfield Ins. Co. to support her assertion that non-minimum limits UIM coverage is illusory:

We believe underinsured motor vehicle status is required, but we believe that, despite the literal meaning of the definitional part of the statute in isolation, the unmistakable spirit of the statute as a whole provides for such status when the amount of the tortfeasor's motor vehicle liability insurance actually available to the injured person in question is less than the amount of damages sustained by the injured person, regardless of whether such liability insurance limits actually available are less than the underinsured motorist coverage limits.

MJP Response at 5-6 (quoting Pristavec v. Westfield Ins. Co., 400 S.E.2d at 577). Bhasker contends that further support for her illusory coverage theory is in the Supreme Court of West Virginia's discussion of the legislative intent behind that state's UIM statute:

we will not ascribe to the legislature an intent to “shortchange” the public by an overly restrictive definition of an “underinsured motor vehicle.” An overly restrictive definition of that term would be one which is inconsistent with the preeminent public policy of the statute as a whole, specifically, the full compensation of the injured party for his or her damages not compensated by a negligent tortfeasor, up to the limits of the underinsured motorist coverage. Some well established rules of statutory construction support our holding on legislative intent under the underinsured motorist statute.

MJP Response at 5-6 (quoting Pristavec v. Westfield Ins. Co., 400 S.E.2d at 581). Bhasker adds that the Supreme Court of West Virginia recognized that West Virginia's UM/UIM statute was remedial in nature and that a remedial statute “must be construed liberally to effect its purpose.” MJP Response at 6 (citing Pristavec v. Westfield Ins. Co., 400 S.E.2d at 581).

         Bhasker asserts that, in Hardy v. Progressive Specialty Insurance Co., the Supreme Court of Montana concluded that UIM coverage at higher limits, in that case $50, 000.00, is illusory, because “the offset provision, as well as the definition of underinsured motorist, violate Montana public policy because they create an ambiguity regarding coverage, render coverage that Progressive promised to provide illusory, and defeat the insured's reasonable expectation.” MJP Response at 6 (quoting Hardy v. Progressive Specialty Ins. Co., 67 P.3d at 897). Bhasker insists that the Supreme Court of Montana is in accord with the Supreme Court of West Virginia when the former states:

When we look at an insurance contract for purpose and intent we examine the contract as a whole, giving no special deference to any specific clause. The terms and words used in an insurance contract are to be given their usual meaning and construed using common sense. Any ambiguity in an insurance policy must be construed in favor of the insured and in favor of extending coverage. An ambiguity exists where the contract, when taken as a whole, is reasonably subject to two different interpretations. Whether an ambiguity exists is determined through the eyes of a consumer with average intelligence but not trained in the law or insurance business.

MJP Response at 6-7 (quoting Hardy v. Progressive Specialty Ins. Co., 67 P.3d at 895-96). Bhasker requests that the Court apply “the same logical analysis” to this case, because, according to Bhasker, Financial Indemnity applied § 66-5-301's offset in the same manner under similar statutory language. MJP Response at 7. Moreover, Bhasker asserts that New Mexico caselaw states that § 66-5-301 is a remedial statute and recognizes the reasonable expectations doctrine.[5]See MJP Response at 7 (citing Rummel v. Lexington Ins. Co., 1997-NMSC-041, ¶ 22, 945 P.2d 970, 977; Romero v. Dairyland Ins. Co., 1990-NMSC-111, ¶ 5, 803 P.2d 243, 245; Computer Corner, Inc. v. Fireman's Fund Ins. Co., 2002-NMCA-054, ¶ 13, 46 P.3d 1264, 1268; Jordan v. Allstate Ins. Co., 2010-NMSC-051, ¶ 24, 245 P.3d 1214, 1221).

         Bhasker contends that Financial Indemnity has not identified “any logical explanation, reasoning or case law” to support its argument that the Court should distinguish between insureds with minimum limits coverage and insureds with non-minimum limits UIM coverage. MJP Response at 7. According to Bhasker, Financial Indemnity benefits at insureds' expense each time it applies a “Schmick offset”[6] to prevent insureds from receiving their purchased UIM coverage's “the full dollar value.” MJP Response at 7. For this reason, asserts Bhasker, the UIM coverage at higher limits is equally illusory to the insured who, because of the Schmick v. State Farm Mut. Auto. Ins. Co., 1985-NMSC-073, ¶ 28, 704 P.2d 1092 (“Schmick”), offset, cannot enjoy the higher UIM benefits they thought they had purchased. See MJP Response at 7-8.

         Bhasker contends that a rule 12(c) motion is inappropriate “where, as here, ” the Complaint displays disputed issues of material fact. MJP Response at 8. In this case, maintains Bhasker, one such disputed issue is that insureds with non-minimum limits UIM coverage did not receive benefits for which they paid and, thus, reasonably expected. See MJP Response at 8. According to Bhasker, because her policy application evidences that she reasonably expected UIM benefits, contains inaccurate statements of New Mexico insurance law, and fails to inform her about the Schmick offset, she is entitled, through discovery, to obtain similar documents, testimony, and admissions from Financial Indemnity, so that a jury may decide if Financial Indemnity's business practices misled and deceived the proposed class in the same manner. See MJP Response at 8. According to Bhasker, the disputed issue of material fact is whether Financial Indemnity “knew or should have known that the sale of illusory UIM coverage at higher limits would harm putative class members.” MJP Response at 8. Moreover, adds Bhasker, the jury must determine whether Financial Indemnity's alleged misleading and deceptive business practices breach the covenant of good faith and fair dealing, given that Bhasker intends to prove that Financial Indemnity was consciously aware of its misleading and deceptive practices, and nevertheless proceeded with deliberate disregard for the potential harm to the proposed class members that purchased non-minimum limits UIM coverage. See MJP Response at 8.

         Bhasker asserts that additional material facts in dispute include the punitive damages question, resolution of which is premature, according to Bhasker, because discovery is ongoing and because Financial Indemnity has not responded to most of Bhasker's discovery requests. See MJP Response at 9. Moreover, adds Bhasker, because the Complaint's allegations assert that Financial Indemnity knew of and failed to avoid the harm that selling “illegal coverage in New Mexico these many years” caused insureds, punitive damages are appropriate pursuant to the Supreme Court of New Mexico's “reckless disregard” definition. MJP Response at 9 (quoting Paiz v. State Farm Fire & Cas. Co., 1994-NMSC-079, ¶ 26, 880 P.2d at 308 (defining “reckless disregard, ” for punitive damages purposes, as “when the defendant knows of potential harm to the interests of the plaintiff but nonetheless utterly fails to exercise care to avoid the harm”).

         Bhasker next contends that the cases which Financial Indemnity cites in the MJP do not support its position that Bhasker has failed to plead conduct that could support a punitive damages award. See MJP Response at 9. Bhasker asserts, for example, that Farmers Insurance Co. of Arizona v. Sandoval considers only how a third-party tortfeasor's aggravating conduct affects a claim for UIM coverage -- and not whether such coverage is illusory -- because the insured in that case did not dispute the contractual offset. See MJP at 9 (citing Farmers Ins. Co. of Arizona v. Sandoval, 2011-NMCA-051, ¶ 4, 253 P.3d at 946). Farmers Insurance Co. of Arizona v. Sandoval supports Bhasker's theory that the sale of illusory coverage is against public policy, contrary to New Mexico law, and contrary to § 66-5-301's legislative intent, contends Bhasker, because the Court of Appeals of New Mexico in that case stated: “Because we liberally interpret [§ 66-5-301] in order to implement its remedial purpose, language in the statute that provides for an exception to uninsured coverage should be construed strictly to protect the insured.” MJP Response at 9-10 (quoting Farmers Ins. Co. of Arizona v. Sandoval, 2011-NMCA-051, ¶ 4, 253 P.3d at 946). Similarly, argues Bhasker, the Supreme Court of New Mexico in Fasulo v. State Farm Mutual Automobile Insurance Co. does not consider the illusory nature of the UIM coverage purchased, as Financial Indemnity asserts, because the insured in that case sought a declaratory judgment to obtain $100, 000.00 in UIM coverage when the insured paid for only $75, 000.00, excluding any offset. See MJP Response at 10 (citing Fasulo v. State Farm Mut. Auto. Ins. Co., 1989-NMSC-060, ¶ 3, 780 P.2d at 634).

         In addition, charges Bhasker, Financial Indemnity errs when it states that § 66-5-301 has an “express offset provision, ” MJP Response at 10 (quoting MJP at 8), because, according to Bhasker, the Supreme Court of New Mexico recognizes that the statute does not expressly authorize an offset when it states: “While our statute does not specifically provide that the insured's underinsured motorist liability insurance is to be offset by the tortfeasor's liability coverage as do the statutes of other states . . . such an offset is inherent in our statutory definition of underinsured motorist.” MJP Response at 10 (quoting Schmick, 1985-NMSC-073, ¶ 28, 704 P.2d at 1099). “This matters because defendant insists that its insureds are charged to read and understand New Mexico case law in the same manner lawyers and members of the Supreme Court of New Mexico would, ” which, Bhasker contends, “goes against established New Mexico case law that protects the rights of consumer laymen.” MJP Response at 10 (citing Rummel v. Lexington Ins. Co., 1997-NMSC-041, ¶ 22, 945 P.2d at 977). Bhasker contends that Financial Indemnity errs further when it states that, should the Court consider UIM coverage at higher limits, the insured will receive a windfall, because “as demonstrated in Pristavec and Hardy, higher limits may be considered illusory when the insureds UIM limits are equal or less than the bodily injury limits.” MJP Response at 11 (citing Pristavec v. Westfield Ins. Co., 400 S.E.2d at 577 and Hardy v. Progressive Specialty Ins. Co., 67 P.3d at 894). Bhasker asserts that these cases stand for the proposition that the reasonable expectation of an insured with non-minimum limits UIM coverage is not met, in the same manner as an insured with minimal limits, and that applying a Schmick offset “similarly shortchange[s]” an insured with higher limits, “except that they may be shortchanged for even more premium money lost and even more benefits denied.” MJP Response at 11.

         Bhasker asserts that her Complaint is well-pled, that it includes facts sufficient to support a plausible claim for punitive damages, and that the Court should not dismiss her punitive damage claims “[a]t this early stage of litigation, ” because, according to Bhasker, the Court must consider her allegations as true, “including factual allegations that the defendant was willful or reckless in its decision to continue to sell illusory coverage to consumers in this state.” MJP Response at 11-12. Bhasker argues that, because Financial Indemnity alone possesses information regarding whether it knew that it was violating New Mexico consumer protections laws, the Court should postpone ruling on punitive damages questions while discovery is ongoing. See MJP Response at 12. Bhasker contends that the Court's MOO concludes that she “properly and sufficiently pled that defendant acted in bad faith, ” and that Financial Indemnity may present its defense to such allegations at trial and after class certification. MJP Response at 12 (citing United Nuclear Corp. v. Allendale Mut. Ins. Co., 1985-NMSC-090, ¶16, 709 P.2d 649, 654 (“To assess punitive damages for breach of an insurance policy there must be evidence of bad faith or malice in the insurer's refusal to pay the claim.”)). Bhasker further contends that, contrary to Financial Indemnity's assertions that the law is unsettled and that extracontractual damages are therefore unavailable, “underinsured motorist law in New Mexico on how to properly inform an insured is well-settled and consistent with longstanding principles.” MJP Response at 12. For example, Bhasker asserts that the Supreme Court of New Mexico established that, to properly inform an insured, insurers must “meaningfully incorporate[]” into an insured's policy the insured's rejection of UM/UIM coverage equal to the liability limits and that insurers must provide the insured with the premium charges corresponding to each available coverage. MJP Response at 12-13 (citing Jordan v. Allstate Ins. Co., 2010-NMSC-051, ¶ 16, 245 P.3d at 1219). Bhasker adds that the Supreme Court of New Mexico has determined that such disclosure requirements “will enable the insured to make an informed decision about the level of UM/UIM coverage he or she wants to purchase and can afford and will minimize uncertainty and litigation with regard to the coverage that the insured has obtained.” MJP at 13 (Jordan v. Allstate Ins. Co., 2010-NMSC-051, ¶ 16, 245 P.3d at 1219). According to Bhasker, Jordan v. Allstate Insurance Co. requires Financial Indemnity to disclose that it rarely pays UIM claims, and that, therefore, a jury could find that Financial Indemnity's “lack of disclosure . . . was indeed intentional, reckless, and worthy of the imposition of punitive damages.” MJP Response at 13.

         Bhasker maintains that Financial Indemnity is “well aware” that the UIM coverage it sells at minimum and higher limits is illusory, because “numerous” courts have concluded that UIM coverage nearly identical to the coverage that Financial Indemnity offers is illusory in jurisdictions where Financial Indemnity does business. MJP at 13 (citing Pristavec v. Westfield Ins. Co., 400 S.E.2d at 577; Hardy v. Progressive Specialty Ins. Co., 67 P.3d at 894; Glazewski v. Coronet Ins. Co., 483 N.E.2d 1263 (Ill. 1985)(“Underinsured coverage in the minimum limits . . . is indeed illusory because it would never be payable when recovery is sought from another Illinois resident. Furthermore, it would not be payable . . . where the at-fault driver is insured in other states which have financial responsibility limits equal to or greater than . . . Illinois.”); Hoglund v. Secura Ins., 500 N.W.2d 354, 357 (Wis. Ct. App. 1993)(“Because the insured had paid a premium for a benefit that would never be available, the court found the coverage illusory and contrary to public policy.”)).

         Bhasker contends that Financial Indemnity violated the “special duty” that arises from a “superior knowledge of insurance law over . . . insureds, ” the existence of which requires Financial Indemnity to “fully and properly inform” its insureds about the Schmick offset. MJP Response at 14 (citing N.M. Stat. Ann. § 57-12-2(E)(1); Weed Warrior, 2010-NMSC-050, ¶ 13, 245 P.3d at 1213 (citing Computer Corner, Inc., 2002-NMCA-054, ¶ 7, 46 P.3d 1264 (“[W]e will not impose on the consumer an expectation that she or he will be able to make an informed decision as to the amount of UM/UIM coverage desired or required without first receiving information from the insurance company.”))). Given that the Supreme Court of New Mexico decided Schmick in 1985, Bhasker asserts that Financial Indemnity “has benefited from its superior knowledge for over 33 years and counting but has nevertheless continued to sell illusory coverage in this state.” MJP Response at 14.

         Bhasker concludes that the Court should not preclude her punitive damages claim while discovery is ongoing, because discovery may produce evidence that Financial Indemnity knew that it “would never have to pay out on the vast majority of the UIM claims situations” given New Mexico's status as an offset state, and, thereafter, “proceeded with deliberate disregard for the potential harm and detriment to Helen and putative class members.” MJP Response at 14. Such conduct, asserts Bhasker, “is precisely the sort of information, which, if presented to a jury, could lead to an award of punitive damages.” MJP Response at 14.

         3. The MJP Reply.

         Financial Indemnity replies to Bhasker's MJP Response. See Reply in Support of Defendant's Motion for Partial Judgment on the Pleadings, filed May 1, 2018 (Doc. 61)(“MJP Reply”). Financial Indemnity argues that, in Schmick, the Supreme Court of New Mexico expressly held that § 66-5-301 entitles insurers, in the UIM context, to offset the tortfeasor's liability limits payments. MJP at 1 (citing Schmick, 1985-NMSC-073, ¶ 28, 704 P.2d at 1099). Should the Court rule that Financial Indemnity cannot offset the tortfeasor's liability limits payments where the UIM coverage limits exceed the statutory minimum “and thus indisputably provide a potential monetary benefit to the policyholder, ” asserts Financial Indemnity, the Court would “eviscerate Schmick.” MJP Reply at 1. Financial Indemnity contends that, because the Court in its MOO recognizes that its mandate in this case is to ascertain what the Supreme Court of New Mexico would conclude, see MJP at 1 (citing MOO at 46-47), the Court should interpret Schmick as requiring the Court to grant the MJP with respect to non-minimum limits UIM coverage, which, according to Financial Indemnity, is the conclusion that the Supreme Court of New Mexico would reach, see MJP Reply at 2. Financial Indemnity charges that Bhasker knows that the Supreme Court of New Mexico would rule in Financial Indemnity's favor and that Bhasker argues that the MJP is premature merely to postpone such a ruling. See MJP at 2. Financial Indemnity contends, however, that Bhasker has put her illusory-coverage-at-all-levels theory “squarely before the court, ” and, in doing so, made the issue ripe for decision, given that Financial Indemnity “has clearly established that no material issue of fact remains to be resolved and the party is entitled to judgment as a matter of law.” MJP Reply at 2 (quoting Newsome v. The GEO Grp., Inc., No. CIV 12-0733 MCA/GBW, 2014 WL 12796733, at *1 (D.N.M. Jan. 22, 2014)(Wormuth, M.J.), report and recommendation adopted, No. CIV 12-0733 MCA/GBW, 2014 WL 12796748 (D.N.M. Apr. 8, 2014)(Armijo, J.)(citation and internal quotation omitted)). Financial Indemnity asserts that, in Schmick, the Supreme Court of New Mexico

addressed two questions: (1) “whether New Mexico's UIM laws allow an insured to stack two UIM policies for purposes of determining the tortfeasor's underinsured status”; and (2) “whether underinsured motorist benefits are calculated by subtracting the amount of the tortfeasor's liability coverage from the amount of the insured's uninsured motorist coverage or whether the underinsurance benefits due equal the amount of uninsured motorist coverage purchased for the insured's benefit in addition to the amount of liability insurance proceeds available from the tortfeasor.”

         MJP Reply at 2 (quoting Schmick, 1985-NMSC-073, ¶ 6, 704 P.2d at 1094). The Supreme Court of New Mexico explains, according to Financial Indemnity, that the intent behind New Mexico's UIM scheme is “to put an injured insured in the same position he would have been in had the tortfeasor had liability coverage in an amount equal to the uninsured/underinsured motorist protection purchased for the insured's benefit.” MJP Reply at 3 (quoting Schmick, 1985-NMSC-073, ¶ 10, 704 P.2d at 1095). Financial Indemnity quotes extensively from Schmick to support its proposition that insurers must reduce or “offset” UIM benefits by the amount of liability insurance that the insured receives from the tortfeasor:

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. Hence, offset is required. Our statute limits the insured's recovery to the amount of uninsured motorist coverage purchased for the insured's benefit; that amount will be paid in part by the tortfeasor's liability carrier and the remainder by the insured's uninsured motorist insurance carrier.

         MJP at 3 (quoting Schmick, 1985-NMSC-073, ¶ 28, 704 P.2d at 1099). Hence, the Court should reject Bhasker's theory, asserts Financial Indemnity, because to conclude otherwise, i.e., to apply Bhasker's illusory coverage theory to higher limits UIM coverage, would mean that insurers could not offset the first $25, 000.00 in UIM coverage, which “turns Schmick on its head.” MJP at 3.

         Financial Indemnity characterizes Bhasker's assertion that the Court's MOO supports her position that the first $25, 000.00 in UIM coverage is illusory even at non-minimum limits as “wholly without merit, ” because, although Financial Indemnity concedes that the Court accepted Bhasker's theory as true for MTD purposes, “nothing in the Court's Order can even remotely be construed to apply to non-minimum limits UIM coverage.” MJP Reply at 4. Rather, according to Financial Indemnity, the Court's MOO “leaves no doubt” that the ceiling of Bhasker's illusory coverage theory is capped at minimum limits, “not where any level of UIM limits above the minimum is at issue.” MJP Reply at 4 (emphasis in MJP Reply)(citing MOO at 2 (“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.” (emphasis in MJP Reply))). Financial Indemnity adds that the Court properly characterizes Bhasker's theory when the Court quotes from the portion of Bhasker's Complaint which states that “there is virtually no possible underinsured minimum limits claim available to the Plaintiff and other similarly situated members of the class.” MJP at 4 (emphasis in MJP) (quoting MOO at 3 (quoting Complaint ¶ 43, at 4))). Financial Indemnity adds that further portions of Bhasker's Complaint emphasize that her theory applies to only minimum limits. See MJP Reply at 4 (citing Complaint ¶ 1, at 1 (“Basically, there is no such thing asminimum limits underinsured motorist coverage.'” (emphasis in MJP)); Id. ¶ 23, at 4 (“[U]nderinsured coverage is superfluous when the tortfeasor and the injured driver both carry the statutory minimum of liability and underinsured coverage.” (emphasis in MJP))). The Court's reasoning in its MOO, therefore, according to Financial Indemnity, was restricted to the minimum limits UIM coverage context. See MJP Reply at 4-5.

         Financial Indemnity contends that Bhasker's MJP Response ignores Financial Indemnity's point that Weed Warrior, which compelled the Court, according to Financial Indemnity, to deny the MTD as to minimum limits UIM coverage, concerns only minimum limits situations. See MJP Reply at 5 (citing MOO at 74-75). Hence, Financial Indemnity maintains, the MOO's Weed Warrior citations emphasize that the illusory UIM coverage problem arises, “if at all, ” only where a tortfeasor's bodily injury liability limits offset completely an insured's minimum limits UIM coverage. MJP Reply at 5 (citing Weed Warrior, 2010-NMSC-050, ¶ 10, 245 P.3d at 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.” (emphasis in MJP)).

         Financial Indemnity alleges that Bhasker does not address the caselaw which shows that, even in jurisdictions where courts have held that minimum limits UIM coverage is illusory, courts have rejected her theory that UIM coverage is illusory at higher than minimum limits. See MJP Reply at 5. To support this proposition, Financial Indemnity cites to Taylor v. Greatway Insurance Co., for example, wherein the Supreme Court of Wisconsin states:

Taylor's UIM coverage limit in each of her policies issued by American Family is $50, 000. Hermanson's $50, 000 liability coverage limit is equal to, not less than, Taylor's $50, 000 UIM coverage limit in each policy. The vehicle driven by Hermanson is not an underinsured vehicle as defined by American Family's policies. Taylor is therefore not entitled to UIM coverage under her policies with American Family.

         MJP Reply at 5-6 (quoting Taylor v. Greatway Ins. Co. 628 N.W.2d at 921). According to Financial Indemnity, the above quotation distinguishes Taylor v. Greatway Insurance Co. from minimum limits UIM coverage cases when considered alongside the Supreme Court of Wisconsin's assertion that, in the minimum limits context, “there was no possibility . . . that the insured driver could recover under her UIM policy because the policy defined an underinsured vehicle as a vehicle with liability limits less than the limits of the UIM coverage, ” whereas Taylor had “a UIM coverage limit . . . greater than the minimum amount of liability coverage required. . . . As a result, it is possible for another driver to have a liability coverage limit less than Taylor's UIM coverage limit and, therefore, satisfy the American Family policy definition of underinsured vehicle.” 628 N.W.2d at 923. Financial Indemnity also cites to DeGrand v. Motors Insurance Corp., wherein the United States Court of Appeals for the Seventh Circuit concludes that “underinsurance would not be illusory to drivers who purchase underinsured motorist coverage in an amount greater than the minimum amount of uninsured motorist coverage required by law.” MJP Reply at 6 (citing DeGrand v. Motors Ins. Corp., 903 F.2d at 1103 n.2).

         Financial Indemnity disputes Bhasker's contention that Pristavec v. Westfield Insurance Co. is persuasive, because, according to Financial Indemnity, New Mexico and West Virginia use different methods to determine whether a motorist is underinsured. See MJP Reply at 6. Financial Indemnity avers that determining whether a vehicle is “underinsured” under West Virginia law requires comparing the tortfeasor's liability coverage limit with the injured insured's total damages and not with the insured's UIM coverage limit, see MJP Reply at 6 (citing Pristavec v. Westfield Ins. Co., 400 S.E.2d. at 582-83 (“This Court holds that underinsured motorist coverage is activated . . . when the amount of such tortfeasor's motor vehicle liability insurance actually available to the injured person . . . is less than the total amount of damages sustained . . . regardless of the comparison between such liability insurance limits actually available and the underinsured motorist coverage limits.”), whereas New Mexico determines whether a motorist is underinsured by comparing the tortfeasor's liability coverage limit with the total amount of UIM coverage limits available to the injured insured, see MJP Reply at 6 (citing Schmick, 1985-NMSC-073, ¶ 28, 704 P.2d at 1099). Hence, asserts Financial Indemnity, the Court has no basis to conclude that the Supreme Court of New Mexico would follow West Virginia's approach to determining whether a motorist in underinsured. See MJP Reply at 7.

         Additionally, Financial Indemnity disputes Bhasker's contention that Hardy v. Progressive Specialty Insurance Co. is persuasive, because, Financial Indemnity contends, in that case, which involved an insured who argued that $25, 000.00 of his $50, 000.00 UIM coverage was illusory because of his insurer's offset provision, the Supreme Court of Montana concluded that the offset provision violates Montana public policy and is therefore unenforceable. See MJP Reply at 7-8 (citing 67 P.3d at 897 (“[T]he offset provision, as well as the definition of underinsured motorist, violate Montana public policy because they create an ambiguity regarding coverage, render coverage that Progressive promised to provide illusory, and defeat the insured's reasonable expectation.”). Unlike the Supreme Court of Montana, avers Financial Indemnity, the Supreme Court of New Mexico ruled in Schmick that New Mexico's public policy mandates the UIM limits reduction. See MJP Reply at 8 (citing Schmick, 1985-NMSC-073, ¶ 28, 704 P.2d at 1099). Financial Indemnity disputes Bhasker's assertion that, because “New Mexico ‘case law states that Section 66-5-301 is a remedial statute and recognizes the reasonable expectations doctrine, '” MJP Reply at 8 (quoting MJP Response at 7), such cases therefore stand for the proposition that non-minimum limits UIM coverage is illusory or unlawful; “that could not be the law in light of Schmick.” MJP Reply at 8.

         Financial Indemnity repeats its argument that both Farmers Insurance Co. of Arizona v. Sandoval and Fasulo v. State Farm Mutual Automobile Insurance Co. demonstrate that the Court would directly contravene the purpose behind New Mexico's UIM coverage statute if the Court applies Bhasker's illusory coverage theory beyond the minimum limits UIM context. See MJP Reply at 8. The Court of Appeals of New Mexico in Farmers Insurance Co. of Arizona v. Sandoval concludes, according to Financial Indemnity, that the UIM coverage statute's purpose and offset provision are designed to make the injured insured whole only up to the UIM coverage level that he or she has purchased, and to put the insured in the same position as he or she would have been had the tortfeasor had liability insurance coverage equal to the amount of UIM coverage that the insured purchased. See MJP Reply at 8-9 (citing Farmers Ins. Co. of Arizona v. Sandoval, 2011-NMCA-051, ¶¶ 9-13, 253 P.3d at 947-48). Financial Indemnity maintains, without providing argument, that Fasulo v. State Farm Mutual Automobile Insurance Co. stands for the same proposition. See MJP Reply at 9 (citing Fasulo v. State Farm Mut. Auto. Ins. Co., 1989-NMSC-060, ¶ 15, 780 P.2d at 637). Extending Bhasker's illusory coverage theory beyond the minimum limits context would mean, according to Financial Indemnity, that insurers could not offset the first $25, 000.00 of coverage, thereby putting “the insured in a better position than he or she would have been had the tortfeasor had commensurate liability insurance coverage, ” and granting insureds “UIM coverage payments in amounts greater than the coverage they purchased.” MJP Reply at 9 (emphasis in original).

         Financial Indemnity reiterates that the Court should grant the MJP as to Bhasker's extracontractual and punitive damage claims, because Financial Indemnity maintains that it has a reasonable basis for its coverage position in this case. See MJP Reply at 9. Financial Indemnity contends that Bhasker does not address the authorities, which the MJP cites and which conclude that “extra-contractual and punitive damages are not available unless, unlike here, the defendant's conduct is ‘willful, wanton, malicious, reckless, oppressive, fraudulent or in bad faith.'” MJP Reply at 9 (quoting Obenauf v. Frontier Fin. Grp., Inc., 785 F.Supp.2d at 1225). Moreover, Financial Indemnity continues, that the Court “expressly noted that Defendant's position was not without merit . . . alone shows that Defendant's position did not, as a matter of law, rise to the level of conduct required under New Mexico law for extra-contractual and punitive damages to be assessed.” MJP Reply at 9-10 (citing MOO at 74). Financial Indemnity adds that “Schmick alone demonstrates the reasonableness of Defendant's position” as to Bhasker's non-minimum limits arguments, which thereby forecloses Financial Indemnity's liability for extracontractual and punitive damages that could result from applying the limits offset. MJP Reply at 10.

         Financial Indemnity reasserts that, although the Court did not accept its argument that minimum limits UIM coverage is not illusory, “the fact that the clear majority of cases throughout the country to have considered the issue had held minimum limits UIM coverage not to be illusory demonstrate, as a matter of law, that Defendant had a reasonable basis for its position.” MJP Reply at 10. Financial Indemnity adds that Bhasker does not address the caselaw which states that extracontractual damages are not available where the law is unsettled, see MJP Reply at 10 (citing MJP at 13-14), and instead “merely cites Jordan v. Allstate Ins. Co. . . . for the general principle that New Mexico law is settled on how insurers must advise insureds regarding underinsured motorist coverage, ” MJP Reply at 10. According to Financial Indemnity, Jordan v. Allstate Insurance Co. does not discuss whether minimum or higher limits UIM coverage is illusory. See MJP Reply at 11. Moreover, Financial Indemnity maintains that “no New Mexico case had ever held, prior to this Court's decision, that, despite Schmick, a limits offset could not be taken in the minimum limits UIM coverage context, ” and asserts that, accordingly, “the case law showing that extra-contractual and punitive damages should not be awarded where the law is unsettled plainly applies here.” MJP Reply at 11.

         Financial Indemnity concludes by arguing that the Court should discredit Bhasker's insistence that disputed issues of fact exist and that the Court should thus permit her to proceed with discovery before it decides the MJP, see MJP Reply at 11 (citing MJP Response at 8), because, avers Financial Indemnity, Bhasker's claims fail “as a matter of law, ” MJP Reply at 11 (citing Chavez v. City of Albuquerque, No. CIV 13-0557 WJ/SMV, 2014 WL 12796831, at *2 (D.N.M. March 7, 2014)(Vidmar, M.J.)(“[T]he disputes are purely questions of law. Accordingly, Plaintiff's requests for discovery . . . will be denied.”)). Bhasker asserts that no amount of discovery in this case “could change New Mexico law as set forth in Schmick, so discovery cannot possibly have any bearing on Defendant's arguments regarding non-minimum limits UIM coverage.” MJP Reply at 11. Moreover, Financial indemnity adds that no amount of discovery in this case “can change the unsettled nature of the question regarding use of the offset in the minimum limits UIM coverage context or the reasonable coverage position, based on ample case law, that Defendant took regarding that issue.” MJP Reply at 11.

         4. The August 10, 2018, Hearing.

         The Court held a hearing on August 10, 2018. See Transcript of Hearing at 1:13 (taken August 10, 2018), filed August 22, 2018 (Doc. 83)(“Aug. 10 Tr.”). The Court began by stating that the MJP “sure seems like a motion to reconsider” its MOO, and asking why Financial Indemnity did not label the MJP as such, “which then forces it to go through the standards for a motion to reconsider, which are high, rather than just something that seems . . . to be raising the same issues under the same standard.” Aug. 10 Tr. at 3:10-22 (Court). Financial Indemnity replied by summarizing the arguments made before the Court in its MTD, see Aug. 10 Tr. at 4:1-19 (Hanover), and asserted:

Since that time, several things have occurred. First, the plaintiff's bar of New Mexico has filed parallel punitive class actions against State Farm, Liberty Mutual, Safeco, GEICO, and Young America. In all but one of those cases, the insurance company has moved to certify questions to the New Mexico Supreme Court, and in at least one of the cases the parties jointly agree that a question should be certified to the Supreme Court, though they don't agree on the wording.
The second thing that's occurred is that there has been extensive discovery in the present case, including multiple discovery disputes. Plaintiffs currently have pending two motions to compel, and FIC has pending a motion for protective order. While the discovery disputes between the parties include many discrete issues, the source of some of them arises from disagreements about the scope of the plaintiff's case and that's partly what drove FIC to file the present motion.

Aug. 10 Tr. at 4:20-5:15 (Hanover).

         The Court stated that filing a motion on the pleadings after the Court has decided a 12(b)(6) motion is “a very unusual practice” that the Court has neither seen before nor wants to encourage. Aug. 10 Tr. at 5:16-24 (Court). Financial Indemnity replied that it is not asking the Court to reconsider its decision but is asking instead that the Court clarify the scope of how Bhasker can proceed in this case, which will affect ongoing discovery disputes between the parties. See Aug. 10 Tr. at 5:1-6 (Hanover). Financial Indemnity added that it understands the Court's ruling as to Bhasker's minimum limits UIM theory, but is asking the Court to rule as a matter of law that Financial Indemnity is entitled to judgment in its favor for anyone who has greater than minimum limits UIM coverage. See Aug. 10 Tr. at 6:23-7:1 (Hanover).

         Financial Indemnity asserted that the problem with Bhasker's position “is that it makes no sense for any policyholder who has limits higher than the statutory minimum.” Aug. 10 Tr. at 7:8-10 (Hanover). Financial Indemnity then provided the Court with several examples involving a hypothetical policyholder with $100, 000.00 in UIM coverage who suffers damages exceeding her $100, 00.00 liability limits. See Aug. 10 Tr. at 7:10-13 (Hanover). Financial Indemnity first conceded that, if the hypothetical tortfeasor has $100, 000.00 in liability limits, the policy holder would not recover anything under her UIM claim, see Aug. 10 Tr. at 7:15-17 (Hanover); however, Financial Indemnity then asserted that in most cases the policyholder would recover, for example, “if the tortfeasor has liability limits of $25, 000, $50, 000, . . . because the Schmick offset would still leave the policyholder with a positive dollar differential of recovery, ” Aug. 10 Tr. at 7:21-8:4 (Hanover). Under Bhasker's theory, contended Financial Indemnity, the Schmick offset renders all UIM coverage illusory, and, should the Court adopt it for limits above the minimum, the Court would, in effect, overrule Schmick. See Aug. 10 Tr. at 7:21-8:4 (Hanover).

         The Court then asked Financial Indemnity to summarize what Financial Indemnity wants the Court to say, see Aug. 10 Tr. at 8:19-20 (Court), and Financial Indemnity replied: “The Court grants judgment to Financial Indemnity Company as to any putative class member with limits above the statutory minimum, ” Aug. 10 Tr. at 8:21-24 (Hanover). The Court asked why, see Aug. 10 Tr. at 8:25 (Court), and Financial Indemnity replied that, in addition to the previously articulated reasons, UIM policies have value with respect to anyone who has liability limits lower than the UIM policy limits, “which is going to be a lot of people in the state.” Aug. 10 Tr. at 9:2-9 (Hanover). Financial Indemnity then quoted from Schmick to describe how New Mexico's offset provision permits insurers to offset the UIM coverage purchased for the insured's benefit by any available liability proceeds. See Aug. 10 Tr. at 9:17-10:6 (Hanover). Financial Indemnity returned to its $100, 000.00 coverage hypothetical and stated that, pursuant to New Mexico law, if the policyholder collided with a tortfeasor with $25, 000.00 of liability coverage, then the $25, 000.00 is offset, and the most that the policyholder could recover from her insurer is $75, 000.00; “that's how premiums are determined, and that's how people have been paid, and it has value, and it has value for everyone over the minimum.” Aug. 10 Tr. at 10:7-15 (Hanover).

         Financial Indemnity stated that, when it last appeared before the Court, it had the impression that Bhasker's theory was limited to insureds with minimum limits only, because, in a collision, insureds with such coverage face two possibilities: “You're in a collision with someone who has no insurance coverage, in which case your uninsured motorist coverage has full value; or you're insured [sic] with someone who's got $25, 000 minimum limits, in which case the plaintiffs say there's no value at all.” Aug. 10 Tr. at 10:16-11:3 (Hanover). Financial Indemnity added that it still thinks that value exists in the latter scenario, but that those two scenarios alone is where the Court made its prediction about how the Supreme Court of New Mexico would rule. See Aug. 10 Tr. at 11:3-6 (Hanover). Financial Indemnity argued that, because nothing in the Court's MOO considers what would happen if the limits were higher than the minimum, the Court should grant judgment in its favor, which would also resolve ongoing discovery disputes and enable Financial Indemnity to gauge its exposure in this case. See Aug. 10 Tr. at 11:7-13 (Hanover).

         Financial Indemnity next alleged that a second problem with Bhasker's theory is that it is inconsistent with the Court's MOO, because, according to Financial Indemnity, the MOO “envisioned” that the case is about minimum limits. Aug. 10 Tr. at 11:17-19 (Hanover)(citing MOO at 2-5). A third problem with Bhasker's theory, alleged Financial Indemnity, is that it contradicts Progressive v. Weed Warrior. See Aug. 10 Tr. at 11:20-22 (Hanover). Financial Indemnity argued that, in Progressive v. Weed Warrior, the Supreme Court of New Mexico was considering only minimum limits coverage when it stated 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.” Aug. 10 Tr. at 11:20-22 (Hanover)(quoting Weed Warrior, 2010-NMSC-050, ¶ 10, 245 P.3d at 1213). Hence, Financial Indemnity charged, the Court's reliance on Progressive v. Weed Warrior to predict how the Supreme Court of New Mexico would rule is “explicitly limited to situations where the UM/UIM coverage is not greater than $25, 000.” Aug. 10 Tr. at 12:3-8 (Hanover).

         Financial Indemnity alleged that the final problem with Bhasker's theory is that it is inconsistent with caselaw from both within and outside New Mexico. See Aug. 10 Tr. at 12:10-12 (Hanover). Financial Indemnity insisted that the reasoning behind both Farmers Insurance Co. of Arizona v. Sandoval, and Fasulo v. State Farm Mutual Automobile Insurance Co. is on making the policyholder whole, i.e., to the purchased UIM coverage limits. See Aug. 10 Tr. at 12:12-17 (Hanover). Under Bhasker's theory, however, argued Financial Indemnity, insurers could not apply a Schmick offset at any UIM coverage level, thereby permitting policy holders to recover their UIM limits plus the tortfeasor's liability limits. See Aug. 10 Tr. at 12:17-21 (Hanover). Financial Indemnity returned to its $100, 000.00 UIM limits hypothetical and asserted that, under Bhasker's theory and a tortfeasor with $25, 000.00 of liability limits, “the policyholder recovers $25, 000 in liability, and they get the full $100, 000 in UIM for a grand total of $125, 000 of insurance recovery.” Aug. 10 Tr. at 12:21-13:3 (Hanover). This result, insisted Financial Indemnity, ignores Schmick, which says that insurers measure UIM limits based on the “dec page, [7] $100, 000” in the hypothetical, and apply an offset. Aug. 10 Tr. at 13:6-9 (Hanover). Financial Indemnity contends that, when it explained the Schmick offset to Bhasker, Bhasker replied: “All UIM coverage is illusory”; Financial Indemnity thus seeks a ruling from the Court that this case involves only minimum limits UIM coverage. Aug. 10 Tr. at 13:13-18 (Hanover).

         Financial Indemnity turned to out-of-state caselaw and asserted that it cited to Taylor v. Greatway, Insurance Co. -- a case from a state where the state supreme court had held previously that minimum limits UIM coverage is illusory -- as a real-world example of the $100, 000.00 hypothetical, with the only material difference being that the insured in that case had $50, 000.00 of UIM coverage. See Aug. 10 Tr. at 13:21-14:5 (Hanover). In rejecting the insured's theory that recovery was illusory, because the entirety of her $50, 000.00 UIM coverage was offset, the Supreme Court of Wisconsin concluded that, because in most situations the tortfeasor will have less than $50, 000.00 in liability coverage, which would permit an insured to recover, her UIM coverage had value. See Aug. 10 Tr. at 14:5-11 (Hanover). Financial Indemnity insisted that the Supreme Court of Wisconsin rejected “basically” the same theory that Bhasker advances in this case. Aug. 10 Tr. at 14:12-14 (Hanover).

         Financial Indemnity contended that Pristavec v. Westfield Insurance Co., the first of two out-of-state cases on which Bhasker relies, although similar to New Mexico caselaw in that West Virginia defines underinsured situations to include those where the tortfeasor's liability limit was lower than the insured's UIM limits, involves a statute which, unlike § 66-5-301, specifies that insurers evaluate UIM coverage by comparing the tortfeasor's liability limit with the insured's damages -- not with the insured's UIM limits -- and that this results in an offset scheme that differs from what New Mexico law requires. See Aug. 10 Tr. at 14:16-15:10 (Hanover). Financial Indemnity conceded that Hardy v. Progressive Specialty Insurance Co., the second of Bhasker's two out-of-state cases, indeed found UIM coverage illusory at all levels, as Bhasker argues here, but asserted that the Supreme Court of Montana did so as a matter of Montana public policy, which differs significantly from New Mexico public policy. See Aug. 10 Tr. at 15:11-22 (Hanover). Pursuant to Schmick, New Mexico public policy, urged Financial Indemnity, requires offsets. See Aug. 10 Tr. at 15:19-22 (Hanover).

         The Court then asked to hear from Bhasker on the illusory coverage issue before turning to Financial Indemnity's extracontractual damages argument. See Aug. 10 Tr. at 16:2-7 (Hanover, Court). Bhasker replied that, as she described in the prior hearing, this case is about Financial Indemnity's misleading and deceptive business practices, and that the illusory coverage question “is a subissue to the overarching theme.” See Aug. 10 Tr. at 16:11-15 (Bhasker).[8] Bhasker stated that she believes, as the Court opined at the beginning of the hearing, that “this is just a motion to reconsider, ” Aug. 10 Tr. at 16:16-19 (Bhasker), and disputed Financial Indemnity's contention that the Court narrowed the case to UIM coverage at minimum limits: “However, if defendants had taken a thorough reading of the complaint, as the Court did, and a thorough reading of the class definition, the defendants would understand that this case is for the deceptive and misleading practices for all insureds who have ever had an offset applied against them, ” Aug. 10 Tr. at 16:20-17:3 (Bhasker). Bhasker insisted that specific language from the Court's MOO indicates the Court's support for this proposition:

Bhasker also asserts that [F]inancial [I]ndemnity misled the proposed class in the same way. See complaint (paragraph 52 at 9) stating that upon information and belief all underinsured applications and insurance policies issued by the defendant to New Mexico policyholders are uniform in all respects material to the claims brought herein (complaint, paragraph 73 at page 15) alleging that [F]inancial [I]ndemnity failed to deliver the quality or quantity of the services applied for and purchased for plaintiffs and other insureds by not providing sufficiently clear applications and policies (complaint, paragraph 83 at 17), alleging that [F]inancial [I]ndemnity misrepresented the terms of the policy sold and provided to plaintiff and other insureds (complaint, paragraph 93, at page 19), stating that [F]inancial [I]ndemnity failed to provide underinsured coverage and/or denied underinsured claims for benefits to plaintiff and other members of the class.

Aug. 10 Tr. at 17:3-25 (Bhasker)(quoting MOO at 79). Consequently, Bhasker asserted that she is “dumbfounded” as to why Financial Indemnity has the impression that the Court narrowed the case to minimum limits UIM coverage. Aug. 10 Tr. at 18:1-3 (Bhasker). Bhasker added that the Court also determined that Bhasker's allegations, which include negligence, New Mexico's Unfair Insurance Practices Act, N.M. Stat. Ann. § 59A-16-20 (“UIPA”) violations, and misleading and deceptive business practices that “amount[] to punitive conduct, ” are well pled. Aug. 10 Tr. 18:3-15 (Bhasker). To that end, Bhasker admitted that she “did launch discovery requests which also include discovery that would encompass insureds who purchase coverage at higher limits.” Aug. 10 Tr. at 18:19-22 (Bhasker).

         Bhasker next turned to Financial Indemnity's $100, 000.00 UIM limits hypothetical and asserted that, although a collision with a minimum limits tortfeasor would result in a maximum offset of $25, 000.00, a collision with a $100, 000.00 liability limits tortfeasor -- “maybe they're in the Northeast Heights or driving around Academy school”[9] -- would result in a $100, 000.00 offset, “even though they have damages that are outstanding.” Aug. 10 Tr. at 18:24-19:11 (Bhasker). Bhasker reasoned that such higher limits UIM policyholders “were mislead and deceived in the same manner as the class representative.” Aug. 10 Tr. at 19:11-15 (Bhasker).

         Bhasker argued that cases like Pristavec v. Westfield Insurance Co. and Hardy v. Progressive Specialty Insurance Co., provide the Court with persuasive authority to support her assertion that a total offset, like the offset described above, goes against public policy. See Aug. 10 Tr. at 19:16-21 (Bhasker). Bhasker added that New Mexico has robust public policy concerns, as evidenced by its “consumer-friendly framework, ” to include a consumer protection act which permits private rights of action for instances such as Bhasker's allegations against Financial Indemnity. Aug. 10 Tr. at 19:21-20:1 (Bhasker). The Court asked Bhasker whether the statutory structure of Montana's laws are too different to help the Court predict how the Supreme Court of New Mexico would decide this case. See Aug. 10 Tr. at 20:8-12 (Court). Bhasker replied that the Supreme Court of West Virginia in Pristavec v. Westfield Insurance Co. ignored the statutory structure's “internal inconsistency with what an underinsured is” and decided to calculate the offset from the total damages, rather than from the limits and liabilities, which is how New Mexico calculates the offset despite having the same UIM definition as West Virginia. Aug. 10 Tr. at 20:13-25 (Bhasker). Bhasker contended that, in answer to the Court's question, New Mexico's UIM statute and how New Mexico defines a UIM is similar to West Virginia. See Aug. 10 Tr. at 21:3-6 (Bhasker). Bhasker added that the statute in Hardy v. Progressive Specialty Ins. Co., as Financial Indemnity acknowledged, is ambiguous, and therefore the Supreme Court of Montana concluded that the statute goes against public policy. See Aug. 10 Tr. at 21:3-6 (Bhasker). Bhasker implied that New Mexico's Schmick offset creates an absurd result that the Supreme Court of New Mexico could change. See Aug. 10 Tr. at 21:6- 11 (Bhasker). The Court asked whether Bhasker's position requires the Court to do something that is inconsistent with Schmick. See Aug. 10 Tr. at 21:12-14 (Court). Bhasker replied that the Court has the power “to go that far . . . . However . . . the coverage does not have to be considered illusory for claims of deceptive and misleading practices to survive, ” which does not require the Court overrule Schmick. See Aug. 10 Tr. at 21:15-21 (Bhasker). Bhasker concluded her arguments on the illusory coverage issue by reiterating her position that, in the Court's MOO, the Court recognized that there are two separate, viable claims: “One, that minimum limits UIM coverage was illusory; and two, that defendant failed to meaningfully explain the circumstances in which it would not pay UIM benefits. Those two theories could apply at higher limits, and that's why the class definition also covers claims for those at higher limits.” Aug. 10 Tr. at 22:4-12 (Bhasker).

         The Court asked whether Financial Indemnity had concluding thoughts on the illusory coverage issue. See Aug. 10 Tr. at 22:15-16 (Court). In response, Financial Indemnity questioned whether the Court could overrule Schmick and reasserted that, assuming the Court follows Schmick, Bhasker's theory falls apart for above minimum limits policyholders, because Schmick means that insureds recover only what is on their declarations page, which in both Bhasker and Financial Indemnity's $100, 000.00 UIM limits hypotheticals is “a grand total of $100, 000”; “it's the way the law has worked in New Mexico since 1985.” Aug. 10 Tr. at 23:2-16 (Hanover).

         The Court then asked whether Financial Indemnity wanted to argue the extracontractual damages issue. See Aug. 10 Tr. at 23:19-20 (Court). Financial Indemnity replied that, regarding extracontractual damages, New Mexico requires willful, wanton, malicious, reckless, oppressive, fraudulent, or in bad faith conduct; “no punitive damages are awardable when the defendant has a justifiable basis for its conduct.” Aug. 10 Tr. at 23:21-24:2 (Hanover). Financial Indemnity contended that it is thus entitled to judgment as a matter of law, because, according to Financial Indemnity, “the only conduct that's well-pleaded in the complaint is that the plaintiff purchased an insurance policy with minimum limits UM/UIM coverage, she paid premiums on the coverage; FIC did not pay her UIM claim because the tortfeasor's $25, 000 liability limits were offset on her UIM limits. And that's it.” Aug. 10 Tr. at 24:3-11 (Hanover). Because Bhasker's Complaint neither alleges oral statements nor alludes to unattached documents, “even if FIC were wrong about the offset, this could not rise as a matter of law to the level of willful, wanton, malicious, oppressive, fraudulent, or bad faith.” Aug. 10 Tr. at 24:12-18 (Hanover). Financial Indemnity asserted that, although the Court denied the MTD because, in the absence of controlling New Mexico law, the Court predicted how the Supreme Court of New Mexico would rule, the Court also acknowledged out-of-state caselaw wherein courts ruled in the insurers' favor. See Aug. 10 Tr. at 24:19-25 (Hanover). Hence, contended Financial Indemnity, because this issue is a matter of first impression, and because there are several pending parallel matters wherein the parties have sought to certify questions to the Supreme Court of New Mexico, the Court, therefore, should grant judgment on Bhasker's request for extracontractual and punitive damages. See Aug. 10 Tr. at 24:25-25:14 (Hanover).

         The Court then asked to hear from Bhasker on the extracontractual damages question. See Aug. 10 Tr. at 25:15 (Court). Bhasker replied that the Court should grant a motion for judgment on the pleadings only when a complaint fails to state a claim for relief that is plausible on its face and when the factual allegation fail to raise the right to relief above the speculative level. See Aug. 10 Tr. at 25:21-24 (Bhasker). Bhasker asserted that the MJP does not recognize that the Court must accept all facts as true and grant Bhasker all reasonable inferences. See Aug. 10 Tr. at 25:25-26:3 (Bhasker). Bhasker further contended that the issue whether Bhasker and proposed class members are entitled to punitive damages is separate from whether the class is entitled to “out-of-pocket premium-based” damages or “benefit-of-the-bargain” damages. Aug. 10 Tr. at 26:3-8 (Bhasker). Bhasker added that, because the Court is sitting in diversity, Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1983)(“Erie”), applies, and, therefore, the issue is whether the Supreme Court of New Mexico would allow punitive damages here. See Aug. 10 Tr. at 26:8-12 (Bhasker).

         Bhasker charged that the Supreme Court of New Mexico would look to Uniform Jury Instruction 13-1718, which defines dishonest judgment as “[a] failure by the insured [sic] to honestly and fairly balance its own interests and the interests of the insured.” Aug. 10 Tr. at 26:12-17 (Bhasker). Bhasker added that the Complaint pleads factual allegations that, taken as true, support a claim against Financial Indemnity for dishonest business judgment, because Weed Warrior, which the Supreme Court of New Mexico decided in 2010, states that UIM coverage is illusory and that insureds do not carry UIM coverage at minimum limits. See Aug. 10 Tr. at 26:19-27:1 (Bhasker). Nevertheless, argued Bhasker, “since Weed Warrior, defendant FIC continues to market, solicit, and . . . sell and receive premiums for this illusory minimal UIM coverage.” Aug. 10 Tr. at 27:2-5 (Bhasker). Bhasker asserted that this practice amounts to dishonest business judgement, which the Complaint details, and thus, the Court must accept such assertions as true and draw inferences in Bhasker's favor. See Aug. 10 Tr. at 27:6-10 (Bhasker). Bhasker adds that Financial Indemnity could have litigated this issue in its MTD “but failed to do so.” Aug. 10 Tr. at 27:13-16 (Bhasker).

         Bhasker argued that the discovery which she is seeking would support her theory that Financial Indemnity misled and deceived her and the proposed class with the knowledge that Bhasker and the proposed class will not receive their policy's benefits in circumstances that permit a complete offset. See Aug. 10 Tr. at 27:17-23 (Bhasker). Bhasker added that she is “very confident” that, because there was an offset in her case, “there are other insureds out there who have been in the same situation . . . whether it was minimal limits or at higher limits. It's not a hypothetical.” Aug. 10 Tr. at 27:24-28:3 (Bhasker).

         The Court then asked to hear from Financial Indemnity. See Aug. 10 Tr. at 28:9 (Court). Financial Indemnity responded that it does not deny that it, together with “the entire industry, ” has applied a Schmick offset to a lot of insureds over the last thirty years, resulting in stipulations where the policyholder does not recover under UIM, so Financial Indemnity does not see a problem with the number of people affected. Aug. 10 Tr. at 28:10-17 (Hanover). The question, contended Financial Indemnity, is whether such an offset is permissible at minimum limits, and, although the Court must assume as true the Complaint's factual allegations, those allegations include “nothing that the plaintiff can point to that would possibly justify anything other than some sort of contract-based compensatory damages if it's ultimately determined that minimum limits coverage has no value.” Financial Indemnity added that the MOO expressly leaves open Financial Indemnity's possible defenses to Bhasker's damages claims, see Aug. 10 Tr. at 29:2-7 (Hanover)(citing MOO at 76; Bhasker v. Kemper Cas. Ins. Co., 284 F.Supp.3d at 1238 n.16), but regarding such claims for punitive damages, “this is an issue of first impression in which FIC and, frankly, the rest of the industry has taken a justifiable decision, . . . regardless of whether it's legally correct or not, ” Aug. 10 Tr. at 29:10-17 (Hanover). Financial Indemnity asserted that it has nothing further to say on its motion. See Aug. 10 Tr. at 29:18 (Hanover).

         The Court asked whether Bhasker had concluding remarks. See Aug. 10 Tr. at 29:19-22 (Court). Bhasker directed the Court to her Complaint, specifically paragraphs 70, 87, 95, and 102, which, according to Bhasker, describe bad-faith conduct and assert Bhasker's entitlement to punitive damages. See Aug. 10 Tr. at 29:23-30:3 (Bhasker).

         The Court expressed its disinclination to overrule Schmick, but that it would need to decide whether Bhasker's position requires such a decision. See Aug. 10 Tr. at 30:8-15 (Court). The Court added that, although it intends to look at the Uniform Jury Instructions that Bhasker referenced and to relook at Bhasker's theory, the case does not seem to have the intentional or reckless element that New Mexico law requires for punitive damages. See Aug. 10 Tr. at 30:18-24 (Court).

         5. The October 26, 2018, Hearing.

         The Court held a hearing on October 26, 2018. See Transcript of Hearing at 1:22 (taken October 26, 2018)(“Oct. 26 Tr.”).[10] During the hearing, which focused primarily on ongoing discovery disputes, Financial Indemnity alleged that Bhasker “wanted documents that reach beyond minimum limits, ” but that the Honorable Jerry H. Ritter, Jr., United States Magistrate Judge for the District of New Mexico, to whom the Court has delegated discovery and other pretrial matters, denied Bhasker's motion to compel, because “the case is clearly limited to m[inimum] limits UIM” coverage. Oct. 26 Tr. at 28:15-18 (Hanover). Financial Indemnity stated that it agrees with Judge Ritter's ruling, although it conceded that the Court has not ruled on the issue. See Oct. 26 Tr. at 28:18-20 (Hanover). Financial Indemnity alleged that, because Bhasker did not object to Judge Ritter's ruling within the prescribed two-week period to object, “that shouldn't be at issue.” Oct. 26 Tr. at 28:22-24 (Hanover). What remains at issue, argued Financial Indemnity, is its motion for a protective order, because, in seeking to fulfil its obligations under rule 30(b)(6), Financial Indemnity desires to limit its corporate representative to the minimum limits UIM context, and Judge Ritter “takes the opposite approach.” Oct. 26 Tr. at 28:24-29:4 (Hanover). Financial Indemnity insisted that both it and Bhasker agree that Judge Ritter's position is inconsistent, albeit Bhasker, according to Financial Indemnity, disagrees with Judge Ritter's ruling on the motion to compel and not with his ruling on the motion for a protective order. See Oct. 26 Tr. at 29:5-9 (Hanover).

         The Court asked Bhasker whether she is ready to begin depositions in this case. See Oct. 26 Tr. at 29:15-16 (Court). Bhasker responded in the negative, because, according to Bhasker, she has another motion to compel pending either before Judge Ritter or before the Court. See Oct. 26 Tr. at 29:17-20 (Bhasker). The Court then asked Bhasker whether the Court could hold this issue, i.e., not compel anything further from Financial Indemnity on her illusory-at-greater-than-minimum-limits claim, until issuing a memorandum opinion and order on Financial Indemnity's MJP. See Oct. 26 Tr. at 30:1-7 (Court). Both parties consented to the Court's proposal. See Oct. 26 Tr. at 30:8-11 (Bhasker, Hanover).

         LAW REGARDING RULE 12(b)(6)

         Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a court to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). A complaint's sufficiency is a question of law, and, when considering a rule 12(b)(6) motion, a court must accept as true all well-pled factual allegations in the complaint, view those allegations in the light most favorable to the nonmoving party, and draw all reasonable inferences in the plaintiff's favor. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)(“[O]nly if a reasonable person could not draw . . . an inference [of plausibility] from the alleged facts would the defendant prevail on a MTD.”); Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)(“[F]or purposes of resolving a Rule 12(b)(6) motion, we accept as true all well-pled factual allegations in a complaint and view these allegations in the light most favorable to the plaintiff.” (citing Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir. 2006))).

         A complaint need not set forth detailed factual allegations, yet a “pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action” is insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(citing Bell Atl. Corp. v. Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. at 678. “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. at 555.

         To survive a motion to dismiss, a plaintiff's complaint must contain sufficient facts that, if assumed to be true, state a claim to relief that is plausible on its face. See Bell Atl. Corp. v. Twombly, 550 U.S. at 570; Mink v. Knox, 613 F.3d 995, 1000 (10th Cir. 2010). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. at 556). “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complainant must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)(emphasis omitted). The United States Court of Appeals for the Tenth Circuit has stated:

“[P]lausibility” in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs “have not nudged their claims across the line from conceivable to plausible.” 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)(citations omitted)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570). See Gallegos v. Bernalillo Cty. Bd. of Cty. Comm'rs, 278 F.Supp.3d 1245, 1259 (D.N.M. 2017)(Browning, J.).

         “When a party presents matters outside of the pleadings for consideration, as a general rule ‘the court must either exclude the material or treat the motion as one for summary judgment.'” Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017)(quoting Alexander v. Oklahoma, 382 F.3d 1206, 1214 (10th Cir. 2004)). There are three limited exceptions to this general principle: (i) documents that the complaint incorporates by reference, see Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. at 322; (ii) “documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity, ” Jacobsen v. Deseret Book Co., 287 F.3d at 941; and (iii) ”matters of which a court may take judicial notice, ” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. at 322. See Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d at 1103 (holding that the district court did not err by reviewing a seminar recording and a television episode on a rule 12(b)(6) motion, which were “attached to or referenced in the amended complaint, ” central to the plaintiff's claim, and “undisputed as to their accuracy and authenticity”). “[T]he court is permitted to take judicial notice of its own files and records, as well as facts which are a matter of public record.” Van Woudenberg v. Gibson, 211 F.3d 560, 568 (10th Cir. 2000), abrogated on other grounds by McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001).

         In Gee v. Pacheco, 627 F.3d 1178 (10th Cir. 2010), the defendants “supported their motion with numerous documents, and the district court cited portions of those motions in granting the [motion to dismiss].” 627 F.3d at 1186. The Tenth Circuit held that “[s]uch reliance was improper” and that, even if “the district court did not err initially in reviewing the materials, the court improperly relied on them to refute Mr. Gee's factual assertions and effectively convert the motion to one for summary judgment.” 627 F.3d at 1186-87. In other cases, the Tenth Circuit has emphasized that, “[b]ecause the district court considered facts outside of the complaint . . . it is clear that the district court dismissed the claim under Rule 56(c) and not Rule 12(b)(6).” Nard v. City of Okla. City, 153 Fed.Appx. 529, 534 n.4 (10th Cir. 2005)(unpublished).[11] In Douglas v. Norton, 167 Fed.Appx. 698 (10th Cir. 2006)(unpublished), the Tenth Circuit addressed an untimely filed charge with the Equal Employment Opportunity Commission -- which the Tenth Circuit analogized to a statute of limitations -- and concluded that, because the requirement was not jurisdictional, the district court should have analyzed the question under rule 12(b)(6), and “because the district court considered evidentiary materials outside of Douglas' complaint, it should have treated Norton's motion as a motion for summary judgment.” 167 Fed.Appx. at 704-05.

         The Court has previously ruled that, when a plaintiff references and summarizes defendants' statements in a complaint, the Court cannot rely on documents containing those statements that the defendants attach in their briefing. See Mocek v. City of Albuquerque, No. CIV 11-1009 JB/KBM, 2013 WL 312881, at *50-51 (D.N.M. Jan. 14, 2013)(Browning, J.). The Court reasoned that the statements were neither incorporated by reference nor central to the plaintiff's allegations in the complaint, because the plaintiff cited the statements only to attack the defendant's reliability and truthfulness. See 2013 WL 312881, at *50-51. The Court has also previously ruled that, when determining whether to toll a statute of limitations in an action alleging fraud and seeking subrogation from a defendant, the Court may not use interviews and letters attached to an motion to dismiss, which show that a plaintiff was aware of the defendant's alleged fraud before the statutory period expired. See Great Am. Co. v. Crabtree, No. CIV 11-1129 JB/KBM, 2012 WL 3656500, at *3, *22-23 (D.N.M. Aug. 23, 2012)(Browning, J.)(“Crabtree”). The Court in Crabtree determined that the documents did not fall within any of the Tenth Circuit's exceptions to the general rule that a complaint must rest on the sufficiency of its contents alone, as the complaint did not incorporate the documents by reference or refer to the documents. See 2012 WL 3656500, at *22-23; Mocek v. City of Albuquerque, 2013 WL 312881, at *50 (refusing to consider statements that were not “central to [the plaintiff's] claims”).

         On the other hand, in a securities class action, the Court has ruled that a defendant's operating certification, to which plaintiffs refer in their complaint, and which was central to whether the plaintiffs adequately alleged a loss, falls within an exception to the general rule, so the Court may consider the operating certification when ruling on the defendant's motion to dismiss without converting the motion into one for summary judgment. See Genesee Cty. Emps.' Ret. Sys. v. Thornburg Mortg. Secs. Tr. 2006-3, 825 F.Supp.2d 1082, 1150-51 (D.N.M. 2011)(Browning, J.). See also Sec. & Exch. Comm'n v. Goldstone, 952 F.Supp.2d 1060, 1217-18 (D.N.M. 2013)(Browning, J.)(considering, on a motion to dismiss, electronic mail transmissions referenced in the complaint as “documents referred to in the complaint, ” which are “central to the plaintiff's claim” and whose authenticity the plaintiff did not challenge); Mata v. Anderson, 760 F.Supp.2d 1068, 1101 (D.N.M. 2009)(Browning, J.)(relying on documents outside of the complaint because they were “documents that a court can appropriately view as either part of the public record, or as documents upon which the Complaint relies, and the authenticity of which is not in dispute”).

         LAW REGARDING JUDGMENT ON THE PLEADINGS UNDER RULE 12(c)

         “After the pleadings are closed -- but early enough not to delay trial -- a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). A rule 12(c) motion is designed to provide a means of disposing of cases when the material facts are not in dispute between the parties. See Kruzitis v. Okuma Mach. Tool, Inc., 40 F.3d 52, 54 (3d Cir. 1994)(“Under Rule 12(c), we will not grant judgment on the pleadings unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law.” (citation and internal quotation marks omitted)). A “[j]udgment on the pleadings should not be granted ‘unless the moving party has clearly established that no material issue of fact remains to be resolved and the party is entitled to judgment as a matter of law.'” Park Univ. Enters., Inc. v. Am. Cas. Co. of Reading, Pa., 442 F.3d 1239, 1244 (10th Cir. 2006)(citing United States v. Any & All Radio Station Transmission Equip., 207 F.3d 458, 462 (8th Cir. 2000)). Claims dismissed pursuant to a motion under rule 12(c) are dismissed with prejudice. See In re Great Lakes Dredge & Dock Co. LLC, 624 F.3d 201, 209 (5th Cir. 2010).

         “Any party may move for judgment on the pleadings if no material facts are in dispute and the dispute can be resolved on both the pleadings and any facts of which the Court can take judicial notice.” Ramirez v. Wal-Mart Stores, Inc., 192 F.R.D. at 304 (citing Fed.R.Civ.P. 12(c)). A motion pursuant to rule 12(c) is generally treated in the same manner as a motion to dismiss under rule 12(b)(6). See Ramirez v. Wal-Mart Stores, Inc., 192 F.R.D. at 304 (citing Irish Lesbian & Gay Org. v. Giuliani, 143 F.3d 638, 644 (2d Cir. 1998)). A motion for a judgment on the pleadings will be granted if the pleadings demonstrate that the moving party is entitled to judgment as a matter of law. See Ramirez v. Wal-Mart Stores, Inc., 192 F.R.D. at 304.

         A court considering a motion for judgment on the pleadings should “accept all facts pleaded by the non-moving party as true and grant all reasonable inferences from the pleadings in favor of the same.” Park Univ. Enters. Inc. v. Am. Cas. Co. of Reading, Pa., 442 F.3d at 1244. The court must view the facts presented in the pleadings and draw the inferences therefrom in the light most favorable to the nonmoving party. See Ramirez v. Wal-Mart Stores, Inc., 192 F.R.D. at 304. All of the nonmoving parties' allegations are deemed to be true, and all of the movants' contrary assertions are taken to be false. See Nat'l Metro. Bank v. United States, 323 U.S. 454, 456-57 (1945); Ramirez v. Dep't of Corr., 222 F.3d 1238, 1240 (10th Cir. 2000); Freeman v. Dep't of Corr., 949 F.2d 360, 361 (10th Cir. 1991).

         The same standards that govern a motion to dismiss under rule 12(b)(6) also govern a motion for judgment on the pleadings under rule 12(c). See Atl. Richfield Co. v. Farm Credit Bank, 226 F.3d 1138, 1160 (10th Cir. 2000). Under rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). A complaint's sufficiency is a question of law, and when considering and addressing a rule 12(b)(6) motion, a court must accept as true all of the complaint's well-pleaded factual allegations, view those allegations in the light most favorable to the nonmoving party, and draw all reasonable inferences in the plaintiff's favor. See Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir. 2006); Hous. Auth. of Kaw Tribe v. City of Ponca City, 952 F.2d 1183, 1187 (10th Cir. 1991).

         A complaint challenged by a rule 12(b)(6) motion to dismiss does not require detailed factual allegations, but a plaintiff's obligation to set forth the grounds of his or her entitlement to relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. at 555. “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. at 555 (citation omitted). “[T]he Supreme Court recently . . . prescribed a new inquiry for us to use in reviewing a dismissal: whether the complaint contains ‘enough facts to state a claim to relief that is plausible on its face.'” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d at 1177 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 558, 562). “The [Supreme] Court explained that a plaintiff must ‘nudge his claims across the line from conceivable to plausible' in order to survive a motion to dismiss.” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d at 1177 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570)(alterations omitted). “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d at 1177. The Tenth Circuit has stated:

“[P]lausibility” in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs “have not nudged their claims across the line from conceivable to plausible.” The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.
This requirement of plausibility serves not only to weed out claims that do not (in the absence of additional allegations) have a reasonable prospect of success, but also to inform the defendants of the actual grounds of the claim against them. “Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only ‘fair notice' of the nature of the claim, but also ‘grounds' on which the claim rests.” Bell Atl. Corp. v. Twombly, 127 S.Ct. at 1965 n.3. See Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499 F.3d 663, 667 (7th Cir. 2007)(“[A]t some point the factual detail in a complaint may be so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is entitled under Rule 8.”). The Twombly Court was particularly critical of complaints that “mentioned no specific time, place, or person involved in the alleged conspiracies.” 127 S.Ct. at 1971 n.10. Given such a complaint, “a defendant seeking to respond to plaintiffs' conclusory allegations . . . would have little idea where to begin.” Id.

Robbins v. Oklahoma, 519 F.3d at 1247-48 (footnote and citations omitted).

         In determining the complaint's sufficiency, all well-pled factual allegations are to be taken as true. See Timpanogos Tribe v. Conway, 286 F.3d 1195, 1204 (l0th Cir. 2002). “Nevertheless, conclusory allegations without supporting factual averments are insufficient to state a claim upon which relief can be based.” Hall v. Belman, 935 F.2d 1106, 1110 (l0th Cir. 1991). “Moreover, in analyzing the sufficiency of the plaintiff's complaint, the court need accept as true only the plaintiff's well-pleaded factual contentions, not his conclusory allegations.” Hall v. Belman, 935 F.2d at 1110. Only well-pled facts, as distinguished from conclusory allegations, are admitted when considering a motion to dismiss for failure to state a claim upon which relief can be granted. See Smith v. Plati, 258 F.3d 1167, 1174 (10th Cir. 2001).

         A court must convert a motion to dismiss into a motion for summary judgment if “matters outside the pleading are presented to and not excluded by the court, ” and “all parties . . . [are] given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.” Fed.R.Civ.P. 12(d). Facts subject to judicial notice may be considered without converting a motion to dismiss into a motion for summary judgment. See Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279 n.1 (10th Cir. 2004)(citing 27A Federal Procedure, Lawyers' Ed. § 62:520 (2003)). Furthermore, when considering a motion to dismiss, “the court is permitted to take judicial notice of its own files and records, as well as facts which are a matter of public record.” Van Woudenberg v. Gibson, 211 F.3d 560, 568 (10th Cir.2000), abrogated on other grounds by McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001). A court may consider documents to which the complaint refers if the documents are central to the plaintiff's claim, and the parties do not dispute the documents' authenticity. See Jacobsen v. Deseret Book Co., 287 F.3d 936, 941-42 (10th Cir. 2002). If, however, a complaint does not reference or attach a document, but the complaint refers to the document and the document is central to the plaintiff's claim, the defendant may submit an “indisputably authentic copy to the court to be considered on a motion to dismiss.” GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). See 5A Charles Alan Wright & Arthur Miller, Federal Practice & Procedure § 1327 (3d ed. 2004)(“[W]hen the plaintiff fails to introduce a pertinent document as part of her pleading . . . the defendant may introduce the document as an exhibit to a motion attacking the sufficiency of the pleading.”).

         LAW REGARDING CLASS CERTIFICATION UNDER RULE 23

         Rule 23 sets forth the requirements for certifying a class action under the Federal Rules of Civil Procedure. See Fed.R.Civ.P. 23. All classes must satisfy: (i) all the requirements of rule 23(a); and (ii) one of the three sets of requirements under rule 23(b), where the three sets of requirements correspond to the three categories of classes that a court may certify. See Fed.R.Civ.P. 23(a)-(b). The plaintiff[12] bears the burden of showing that the requirements are met, see Rex v. Owens ex rel. Okla., 585 F.2d 432, 435 (10th Cir. 1978); Pueblo of Zuni v. United States, 243 F.R.D. 436, 444 (D.N.M. 2007)(Johnson, J.), but, in doubtful cases, class certification is favored, see Esplin v. Hirschi, 402 F.2d 94, 101 (10th Cir. 1968)(“[T]he interests of justice require that in a doubtful case, . . . any error, if there is to be one, should be committed in favor of allowing the class action.”); Eisen v. Carlisle & Jacquelin, 391 F.2d 555, 563 (2d Cir. 1968)(“[W]e hold that . . . rule [23] should be given a liberal rather than a restrictive interpretation, and that [denying certification] is justified only by a clear showing to that [end].”). In ruling on a class certification motion, the Court need not accept either party's representations, but must independently find the relevant facts by a preponderance of the evidence.[13] See Rutstein v. Avis Rent-A-Car Sys., Inc., 211 F.3d at 1234 (“Going beyond the pleadings is necessary, as a court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues.”). “In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met.” Anderson v. City of Albuquerque, 690 F.2d at 799. See Vallario v. Vandehey, 554 F.3d at 1267 (“We, of course, adhere to the principle that class certification does not depend on the merits of a suit.”). Still, the Court must conduct a rigorous analysis of the rule 23 requirements, even if the facts that the Court finds in its analysis bear on the merits of the suit:

Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively demonstrate his compliance with the Rule -- that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc. We recognized in [General Telephone Co. of the Southwest v.] Falcon that “sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question, ” and that certification is proper only if “the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied. Actual, not presumed, conformance with Rule 23(a) remains indispensable.” Frequently that “rigorous analysis” will entail some overlap with the merits of the plaintiff's underlying claim. That cannot be helped. The class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action. Nor is there anything unusual about that consequence: The necessity of touching aspects of the merits in order to resolve preliminary matters, e.g., jurisdiction and venue, is a familiar feature of litigation.

Wal-Mart, 564 U.S. at 350-52. In a subsequent, seemingly contradictory admonition, however, the Supreme Court cautioned district courts not to decide the case's merits at the class certification stage:

Although we have cautioned that a court's class-certification analysis must be “rigorous” and may “entail some overlap with the merits of the plaintiff's underlying claim, ” Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage. Merits questions may be considered to the extent -- but only to the extent -- that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied.

Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 465-66 (2013). To reconcile these two directives, the Court will find facts for the purposes of class certification by the preponderance of the evidence but will allow the parties to challenge these findings during the subsequent merits stage of this case. This approach is analogous to preliminary injunction practice, and many circuits have endorsed it. See Abbott v. Lockheed Martin Corp., 725 F.3d 803, 810 (7th Cir. 2013); In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 313 (3d Cir. 2008); Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 2004). Because of the res judicata effect a class judgment has on absent parties, a court may not simply accept the named parties' stipulation that class certification is appropriate but must conduct its own independent rule 23 analysis. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620-22 (1997). In taking evidence on the question of class certification, the Federal Rules of Evidence apply, albeit in a relaxed fashion. See Anderson Living Trust v. WPX Energy Prod. LLC, 306 F.R.D. 312, 378 n.39 (D.N.M. 2015)(Browning, J.).

         1. Rule 23(a).

         All classes must satisfy the prerequisites of rule 23(a):

(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). “A party seeking to certify a class is required to show . . . that all the requirements of [rule 23(a)] are clearly met.” Reed v. Bowen, 849 F.2d 1307, 1309 (10th Cir. 1988). “Although the party seeking to certify a class bears the burden of proving that all the requirements of Rule 23 are met, the district court must engage in its own ‘rigorous analysis' of whether ‘the prerequisites of Rule 23(a) have been satisfied.'” Shook v. El Paso Cty., 386 F.3d 963, 968 (10th Cir. 2004)(quoting Gen. Tel. Co. of the S.W. v. Falcon, 457 U.S. 147, 161 (1982), and citing Reed v. Bowen, 849 F.2d at 1309). These four requirements are often referenced as numerosity, commonality, typicality, and adequacy, respectively. See Fed.R.Civ.P. 23(a).

         Rule 23(a)(2) requires that “there are questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). Even “factual differences in the claims of the individual putative class members should not result in a denial of class certification where common questions of law exist.” In re Intelcom Grp. Sec. Litig., 169 F.R.D. 142, 148 (D. Colo. 1996)(Daniel, J.). See Adamson v. Bowen, 855 F.2d 668, 676 (10th Cir. 1988)(“That the claims of individual putative class members may differ factually should not preclude certification under Rule 23(b)(2) of a claim seeking the application of a common policy.”); Lopez v. City of Santa Fe, 206 F.R.D. 285, 289 (D.N.M. 2002)(Vázquez, J.)(“Commonality requires only a single issue common to the class, and the fact that ‘the claims of individual putative class members may differ factually should not preclude certification under Rule 23(b)(2) of a claim seeking the application of a common policy.'” (citations omitted)(citing In re Am. Med. Sys., Inc., 75 F.3d 1069, 1080 (6th Cir. 1996); Adamson v. Bowen, 855 F.2d at 676)). A single common question will suffice to satisfy rule 23(a)(2), but the question must be one “that is central to the validity of each one of the claims.” Wal-Mart, 564 U.S. at 349. “Where the facts as alleged show that Defendants' course of conduct concealed material information from an entire putative class, the commonality requirement is met.” In re Oxford Health Plans, Inc. Sec. Litig., 191 F.R.D. 369, 374 (S.D.N.Y. 2000)(Brieant, J.).

         The commonality requirement was widely perceived to lack teeth before the Supreme Court's decision in Wal-Mart, which grafted the following requirements onto rule 23(a)(2): (i) that the common question is central to the validity of each claim that the proposed class brings; and (ii) that the common question is capable of a common answer. See Wal-Mart, 564 U.S. at 348-52. In that case, a proposed class of about 1.5 million current and former Wal-Mart employees sought damages under Title VII for Wal-Mart's alleged gender-based discrimination. See 564 U.S. at 342. Wal-Mart, however, had no centralized company-wide hiring or promotion policy, instead opting to leave personnel matters to the individual store managers' discretion. See 564 U.S. at 343-45. The plaintiffs argued that, although no discriminatory formal policy applied to all proposed class members, “a strong and uniform ‘corporate culture' permits bias against women to infect, perhaps subconsciously, the discretionary decisionmaking of each one of Wal-Mart's thousands of managers -- thereby making every [proposed class member] the victim of one common discriminatory practice.” 564 U.S. at 345. The Supreme Court disagreed that such a theory constitutes a common question under rule 23(a)(2).

The crux of this case is commonality -- the rule requiring a plaintiff to show that “there are questions of law or fact common to the class.” Rule 23(a)(2). That language is easy to misread, since “[a]ny competently crafted class complaint literally raises common ‘questions.'” Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 131-132 (2009). For example: Do all of us plaintiffs indeed work for Wal-Mart? Do our managers have discretion over pay? Is that an unlawful employment practice? What remedies should we get? Reciting these questions is not sufficient to obtain class certification. Commonality requires the plaintiff to demonstrate that the class members “have suffered the same injury, ” [Gen. Tel. Co. of the S.W. v. Falcon, 457 U.S. at 157]. This does not mean merely that they have all suffered a violation of the same provision of law. Title VII, for example, can be violated in many ways -- by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company. Quite obviously, the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate-impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once. Their claims must depend upon a common contention -- for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution -- which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.
What matters to class certification . . . is not the raising of common “questions” -- even in droves -- but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation. Dissimilarities within the proposed class are what have the potential to impede the generation of common answers.

Wal-Mart, 564 U.S. at 349-50 (emphasis in original)(quoting Nagareda, supra). In EQT Production Co. v. Adair, 764 F.3d 347 (4th Cir. 2011), the United States Court of Appeals for the Fourth Circuit stated:

         We first review the aspects of the district court's analysis that apply to all five royalty underpayment classes.

At bottom, the district court believed that both the commonality and predominance requirements of Rule 23 were satisfied by the same basic fact: the defendants employed numerous uniform practices related to the calculation and payment of CBM [coalbed methane gas] royalties. These common practices are not irrelevant to Rule 23(b)'s predominance requirement. But we hold that the district court abused its discretion by failing to consider the significance of this common conduct to the broader litigation.
The district court identified numerous common royalty payment practices. For example, it noted that EQT sells all of the CBM it produces in Virginia to an affiliate, EQT Energy, and that “all royalty owners within the same field have been paid royalties based on the same sales price for the CBM.” With respect to CNX, it noted that CNX “has uniform policies and procedures which governed its calculation of CBM revenues, ” and that “it has deducted severance and license taxes when calculating royalties since January 1, 2004.”
That the defendants engaged in numerous common practices may be sufficient for commonality purposes. As noted above, the plaintiffs need only demonstrate one common question of sufficient importance to satisfy Rule 23(a)(2).

         764 F.3d at 366 (citations omitted).

         In Wal-Mart, the Honorable Antonin Scalia, then-Associate Justice of the Supreme Court of the United States, stated: “Wal-Mart is entitled to individualized determinations of each employee's eligibility for backpay.” 564 U.S. at 366. From this observation, he then concluded:

Because the Rules Enabling Act forbids interpreting Rule 23 to “abridge, enlarge or modify any substantive right, ” 28 U.S.C. § 2072(b), a class cannot be certified on the premise that Wal-Mart will not be entitled to litigate its statutory defenses to individual claims. And because the necessity of that litigation will prevent backpay from being “incidental” to the classwide injunction, respondents' class could not be certified even assuming, arguendo, that “incidental” monetary relief can be awarded to a 23(b)(2) class.

Wal-Mart, 131 U.S. at 367. Thus, the common question or questions cannot be “incidental, ” nor can the plaintiff submit a long list of “incidental” questions or issues, and say that they predominate over the real issues to be used.

         2. Rule 23(b).

         Once the court concludes that the threshold requirements have been met, “it must then examine whether the class falls within at least one of three categories of suits set forth in Rule 23(b).” Adamson v. Bowen, 855 F.2d at 675. See DG ex rel. Stricken v. Devaughn, 594 F.3d 1188, 1199 (10th Cir. 2010)(“In addition to satisfying Rule 23(a)'s requirements, the class must also meet the requirements of one of the types of classes described in subsection (b) of Rule 23.”). Rule 23(b) provides that a class action is appropriate if the threshold requirements are satisfied, and the case falls into one or more of three categories:

(b) Types of Class Actions. A class action may be maintained if Rule 23(a) is satisfied and if:
(1) prosecuting separate actions by or against individual putative class members would create a risk of:
(A) inconsistent or varying adjudications with respect to individual putative class members that would establish incompatible standards of conduct for the party opposing the class; or
(B) adjudications with respect to individual putative class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests;
(2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or
(3) the court finds that the questions of law or fact common to putative class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include:
(A) the putative class members' interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against ...

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