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Martinez v. Progressive Preferred Insurance Co.

United States District Court, D. New Mexico

July 8, 2019

DIANE MARTINEZ; and ERIN MARTIN, individually and on behalf of other similarly situated individuals. Plaintiffs,
v.
PROGRESSIVE PREFERRED INSURANCE COMPANY; PROGRESSIVE CLASSIC INSURANCE COMPANY; PROGRESSIVE CASUALTY INSURANCE COMPANY; PROGRESSIVE MAX INSURANCE COMPANY; PROGRESSIVE DIRECT INSURANCE COMPANY; PROGRESSIVE ADVANCED INSURANCE COMPANY; PROGRESSIVE SPECIALTY INSURANCE COMPANY; and PROGRESSIVE NORTHERN INSURANCE COMPANY, Defendants.

          MEMORANDUM OPINION AND ORDER

          Jerry H. Ritter, U.S. Magistrate Judge.

         This matter comes before the Court on Plaintiffs' Opposed Motion to Stay [Doc. 18], filed February 1, 20');">2019');">19, and Defendants' 12(b)(6) Motion to Dismiss, Alternative Motion to Certify Questions to the New Mexico Supreme Court, and Brief in Support [Doc. 19');">19], filed February 8, 20');">2019');">19.[1] Pursuant to 28 U.S.C. § 636(c) and Fed.R.Civ.P. 73(b) the parties have consented to the undersigned magistrate judge to preside over this case and enter final judgment. [See Docs. 14, 15]. Having considered the parties' respective response and reply briefs, as well as the notices of supplemental authority filed pursuant to Local Rule 7.8 [Docs. 21, 25, 31, 32, 33, 34], the Court grants Plaintiffs' Motion to Stay these proceedings pending the New Mexico Supreme Court's decision in Crutcher v. Liberty Mutual Insurance Company, CV 18-0412 JCH/LF, and denies Defendants' Motion to Dismiss and Alternative Motion to Certify, for the reasons set forth below.

         I) BACKGROUND

         Plaintiffs Diane Martinez and Erin Martin were both insured by the Progressive Defendants during the relevant time period. [Doc. 17, pp. 3');">p. 3, 7]. Ms. Martin's policy provided liability coverage for one vehicle in the amount of $25, 0000.00 per person, $50, 000.00 per accident (New Mexico's minimum required liability insurance limit) and also purportedly provided uninsured and underinsured motorist coverage in the amount of up to $25, 000.00 per person, $50, 000.00 per accident. [Id., p. 3');">p. 3]. Ms. Martinez' policy also provided for liability coverage in the amount of $25, 000.00 per person, $50, 000.00 per accident, but she has three vehicles; thus, her policy also provided for uninsured and underinsured motorist coverage in the amount of $25, 000.00 per person, $50, 000.00 per accident, stackable for total uninsured and underinsured motorist coverage in the amount of up to $75, 000.00 per person, $150, 000.00 per accident. [Id., p. 7].

         Both Plaintiffs were injured in automobile collisions. [Id., pp. 5, 9]. Neither were determined to be at fault, [id.], and both were injured by drivers who maintained New Mexico's minimum required liability insurance limits of $25, 000.00 per person, $50, 000.00 per accident. [Id., pp. 6, 10]. Both received $25, 000.00, the full extent of liability coverage, from the tortfeasors' insurers. [Id.]. However, both suffered damages in excess of this amount. [Id.]. Accordingly, both then turned to their own insurers - the Progressive Defendants - for additional compensation. [Id.]. Both claims were denied as to the first $25, 000.00, because the Progressive Defendants deducted from the coverage they owed Plaintiffs the amount paid by the tortfeasors' insurers. [Id., pp. 7, 11]. This left Ms. Martin, who only had one vehicle insured by the Progressive Defendants, with nothing other than her recovery from the tortfeasor, and Ms. Martinez with a total of only $50, 000.00 in available underinsured motorist benefits. [Id.].

         Plaintiffs now bring this putative class action case against the Progressive Defendants, asserting that the first $25, 000.00 of their purported uninsured motorist benefits were illusory. [Id.]. They seek to represent the following class:

All persons … who paid a premium for an (sic) underinsured motorist coverage on a policy that was issued or renewed in New Mexico by Progressive and that purported to provide the statutorily require UM/UIM minimum limits of $25, 000 per person/$50, 000 per accident, but which effectively provides no underinsured motorists (sic) coverage, because of the statutory offset recognized in Schmick v. State Farm Mutual Automobile Insurance Company, 704 P.2d 1092 (19');">1985).

[Id., p. 11].

         This is not the first case of its kind. While the parties were briefing the instant Motions, District Judge Herrera certified, and the New Mexico Supreme Court accepted, the following question:

Under N.M. Stat. Ann. § 66-5-301, is underinsured motorist coverage on a policy that offers only minimum UM/UIM limits of $25, 000 per person/$50, 000 per accident illusory for an insured who sustains more than $25, 000 in damages caused by a minimally insured tortfeasor because of the offset recognized in Schmick v. State Farm Mutual Automobile Insurance Company, and, if so, may insurers charge a premium for that non-accessible underinsured motorist coverage?

See Crutcher v. Liberty Mutual Insurance Company, CV 18-0412 JCH/LF, Doc. 53 (Certification to the New Mexico Supreme Court), Doc. 55 (Order Accepting Certified Question). As Judge Herrera explained in her Certification Order, a series of federal cases have been filed in the wake of District Judge Browning's decision in Bhasker v. Kemper Cas. Ins. Co., CV 17-0260 JB/JHR, where the Court “made an [E]rie judgment that under New Mexico law Ms. Bhasker plausibly alleged that an insurer sold her illusory UIM coverage when it sold her UM/UIM coverage at the minimum level.” CV 18-0412 JCH/LF, Doc. 53, p. 7. Following the New Mexico Supreme Court's acceptance of the certified question in Crutcher, District Judge Vazquez subsequently stayed the proceedings in Thaxton v. GEICO Advantage Ins. Co., CV 18-0306 MV/KK, and concluded that the defendants' motion to certify in that case was rendered moot. Chief District Judge Johnson followed suit in Schwartz v. State Farm Mutual Automobile Ins. Co., CV 18-0328 WJ/SCY, after determining that the certified question is substantially similar to the question the defendants in that case sought to certify. See id., Doc. 55, p. 4. Chief Judge Johnson also denied additional certification on the grounds that he would be able to address the second proposed certified question in that case once the New Mexico Supreme Court responded to the certified question in Crutcher. Id., p. 6.

         Plaintiffs now move the Court to enter a stay in this case until the New Mexico Supreme Court answers the certified question in Crutcher. [See generally Doc. 18]. Defendants generally oppose a stay, arguing in their Motion to Dismiss that this Court should determine that the coverage they provided to both Plaintiffs was not illusory. [See Doc. 19');">19, p. 3');">p. 3 (Defendants argue that both claims are barred, positing that “[t]he numbers are different, but the methodology is the same. Progressive did exactly what Schmick instructs, and following the law cannot be unlawful as Plaintiffs claim.”)]. That said, in the event that this Court is inclined to stay the case, Defendants ask the Court to certify two questions to the New Mexico Supreme Court. As to Ms. Martin, Defendants ask the Court to certify the following question:

Where a tortfeasor's minimum auto liability insurance limits are the same as an injured driver's minimum UM/UIM limits such that the tortfeasor is not “underinsured” under N.M.S.A. § 66-5-301(B), does the non-occurrence of the covered risk of being hit by an “underinsured” driver create “illusory” UIM coverage even though the risk of being hit by an “underinsured” driver is covered when it occurs?

[Doc. 19');">19, p. 2');">p. 25');">p. 2');">p. 25]. Asserting that Ms. Martinez' factual situation is distinct from Ms. Martin's, Defendants ask the Court to certify the ...


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