FROM THE DISTRICT COURT OF BERNALILLO COUNTY C. Shannon
Bacon, District Judge.
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.
Dickason, Sloan, Akin & Robb, P.A. Leslie McCarthy
Apodaca Albuquerque, NM for Appellees.
JENNIFER L. ATTREP, JUDGE.
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.
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.
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."
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.”
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.
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.
Standard of Review
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. ...