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Haygood v. United Services Automobile Association

Court of Appeals of New Mexico

September 5, 2019

MATTHEW HAYGOOD, Plaintiff-Appellant,
v.
UNITED SERVICES AUTOMOBILE ASSOCIATION and HEIDI HAWKEN, Defendants-Appellees.

          APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY C. Shannon Bacon, District Judge.

          The Law Offices of Rachel E. Higgins Rachel E. Higgins Mary L. Higgins Albuquerque, NM, Wray and Girard, P.C. Katherine A. Wray Albuquerque, NM, for Appellant.

          Rodey, Dickason, Sloan, Akin & Robb, P.A. Leslie McCarthy Apodaca Albuquerque, NM for Appellees.

          OPINION

          JENNIFER L. ATTREP, JUDGE.

         {¶1} Plaintiff Matthew Haygood appeals the district court's grant of summary judgment, dismissing his claims for breach of contract, breach of the implied covenant of good faith and fair dealing, insurance bad faith, unfair insurance practices, and unfair trade practices against insurer United Services Automobile Association (USAA) and claims examiner Heidi Hawken (collectively, Defendants). Haygood initiated the lawsuit after he was denied uninsured motorist coverage by USAA for injuries he sustained during an assault occurring in and around an uninsured motor vehicle parked outside a residence. Applying the coverage test adopted by our Supreme Court in Britt v. Phoenix Indemnity Insurance Co., 1995-NMSC-075, 120 N.M. 813, 907 P.2d 994, to the stipulated facts, the district court determined Haygood's injuries had not arisen from the use of the uninsured motor vehicle. The district court therefore concluded Haygood was not entitled to coverage under the policy and dismissed all of his claims, concluding each was predicated on coverage. We conclude the district court did not err in determining Haygood was not entitled to coverage, and we accordingly affirm the district court's dismissal of the coverage-based claims. The district court, however, erred in concluding Haygood's bad faith claim depended entirely on the presence of coverage. We accordingly reverse the district court's dismissal of Haygood's bad faith claim premised on Defendants' investigation and evaluation of the claim and remand for further proceedings.

         BACKGROUND

         {¶2} We draw the background from the facts stipulated by the parties in the summary judgment briefing. Late one night, Haygood was walking on the sidewalk near the house of the assailant, Kyle Cordova. As Haygood passed Cordova's house, he heard the door slam and saw Cordova running toward him, brandishing a gun. Cordova accused Haygood of breaking into his car and told Haygood he kept drugs in the car. Cordova then "pistol-whipped" Haygood in the face and pushed him into the car. Haygood resisted, but at some point in the scuffle, he was shot in the back. In recounting the course of events, Haygood recalled feeling blood on his face and laying on the ground outside the car by the time he heard the gunshot. But for purposes of summary judgment, the parties stipulated the shooting occurred while Haygood was actually inside the vehicle. There was no evidence that the car was turned on, running, or driven before, during, or after the assault.

         {¶3} At the time of the assault, Cordova's car was uninsured, and Haygood sought uninsured motorist coverage from USAA, his insurer, for the injuries he sustained. The uninsured motorist portion of his policy provided that the insurer "will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle" because of injury or damage sustained and/or caused by an accident. The policy further specified that "[t]he owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle."

         {¶4} The initial claims examiner recommended coverage, concluding Haygood's injuries had likely arisen out of use of the car if the shooting occurred inside the vehicle. After the first claims examiner retired, Hawken examined the claim. Inhouse counsel suggested to Hawken the determination turned on where the shooting had occurred and instructed Hawken to seek more information. Hawken and USAA continued to investigate. Eventually, without uncovering additional evidence of where exactly the shooting had occurred, USAA denied the claim, concluding Haygood's injuries had not arisen out of use of the car. Within the claim file, however, in-house counsel wrote, “I don't know that a jury would award damages to a car thief who is shot while stealing a car. If he was simply outside the car looking in and was shot, then the shooting isn't essential to the use of the vehicle. I recommend informing the attorney that we will need more information about the loss.”

         {¶5} Haygood filed a lawsuit, alleging Defendants breached the insurance contract by failing to provide coverage, breached the implied covenant of good faith and fair dealing, engaged in insurance bad faith, violated NMSA 1978, Section 59A-16-20 (1997) of the New Mexico Unfair Insurance Claims Practices Act (UIPA), NMSA 1978, §§ 59A-16-1 to -30 (1984, as amended through 2019), and violated portions of the New Mexico Unfair Practices Act (UPA), NMSA 1978, §§ 57-12-1 to -26 (1967, as amended through 2019). Defendants moved for summary judgment, contending that, regardless of where the gunshot occurred, Haygood's injuries had not arisen out of use of the uninsured vehicle. The district court agreed, concluding that Cordova's use of the gun constituted an intervening act breaking any causal link between use of the car and Haygood's injuries and that the use of the car under the circumstances was not the kind of "normal use" required for coverage under relevant case law. The district court then concluded Haygood's claims all depended on the presence of coverage, and, as a result, dismissed each of his claims with prejudice. Haygood brought this appeal.

         DISCUSSION

         {¶6} Haygood contends the district court erred in imposing a normal use requirement because New Mexico's statutory provision relating to uninsured motorist insurance, NMSA 1978, § 66-5-301(A) (1983), and the related policy language, impose only a requirement of use for coverage and makes no mention of normal use. Haygood adds that even if normal use is required, the district court erred in concluding the car was not put to a normal use and Cordova's battery was an act of independent significance breaking any causal connection between use of the car and Haygood's injuries. Finally, Haygood argues the district court erred in concluding his claim of bad faith depended entirely on coverage.

         I. Standard of Review

         {¶7} We review de novo the question of whether the application of law to undisputed facts supports a summary judgment determination regarding uninsured motorist coverage. Miera v. State Farm Mut. Auto. Ins. Co., 2004-NMCA-059, ¶ 6, 135 N.M. 574, 92 P.3d 20. We view the facts in the light most favorable to a trial on the issues, id., examining the whole record for any evidence generating a dispute as to any material fact, Rummel v. Lexington Ins. Co., 1997-NMSC-041, ¶ 15, 123 N.M. ...


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