United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
C. BRACK, SENIOR U.S. DISTRICT JUDGE.
MATTER is before the Court on Plaintiffs' Partial Motion
for Summary Judgment Regarding Uninsured Motorist Property
Damage Coverage for Punitive Damages, filed May 16, 2019
(Doc. 14), and Defendant's Motion for Summary Judgment,
filed May 27, 2019 (Doc. 16).
two vehicles were stolen by unknown tortfeasors. The cars
were recovered but suffered physical damage. Plaintiffs
received compensatory compensation from their insurer,
Allstate Insurance Company, for loss of use and physical
damage to the vehicles. Plaintiffs now seek payment from
their Uninsured Motorist Coverage for punitive damages
against the unknown tortfeasors. The parties filed
cross-motions for summary judgment. Defendants argue that
punitive damages are not recoverable from Uninsured Motorist
Coverage because (1) the tortfeasors are unknown and (2) the
vehicles are not uninsured vehicles. For the reasons stated
below, the Court DENIES Plaintiffs'
partial Motion for Summary Judgment (Doc. 14) and
GRANTS Defendant's Motion for Summary
Judgment (Doc. 16).
2014 Dodge Dart and 2016 Volkswagen Passat were stolen by
unknown tortfeasors sometime on March 5 or March 6, 2017.
(Doc. 16 at 2 ¶ 1.) Both vehicles were insured by
Allstate (Policy No. 829505005). (Id. ¶ 2.) The
vehicles were taken by unknown tortfeasors who did not have
Plaintiffs' permission to take them. (Doc. 19 at 4 ¶
2.) They were recovered with significant property damage.
(Id. ¶ 3.)
claims for the theft of the vehicles and their contents, loss
of use, diminution of value, storage, towing value, repairs,
and for Allstate's handling of the underlying property
loss were resolved at a pre-litigation mediation with
Allstate on April 17, 2018. (Doc. 16 at 2 ¶ 3.)
Plaintiffs' claims in this case arise out of their claim
for punitive damages under their uninsured motorist
(“UM”) coverage and Allstate's handling of
those punitive damages claims. (Id.) The policy
provided auto collision insurance for Plaintiffs'
vehicles, which paid for “direct and accidental loss to
your insured auto . . . from a collision.”
(Id. ¶ 4.) The policy also provided
comprehensive insurance that covered loss caused by theft as
well as auto theft insurance that paid for “direct and
accidental loss to your insured auto caused by theft or
larceny.” (Id.) Allstate asserts they paid for
the theft under the comprehensive coverage. The comprehensive
and collision provisions included coverage for auto theft.
(Doc. 14-2 at 5 (“We will pay for direct and accidental
loss to your insured auto caused by theft or
larceny.”).) The comprehensive insurance under the
Allstate policy does not cover punitive damages. (Doc. 19 at
5 ¶ 10.)
policy's UM coverage for property damage is as follows:
We will pay damages that an insured person
is legally entitled to recover from the owner or operator of
an uninsured auto because of
property damage. The property
damage must be caused by an accident and arise out
of the ownership, maintenance or use of an uninsured auto.
(Doc. 16 ¶ 5.) The policy defines an insured auto as
“a motor vehicle described on the Policy
Declarations.” (Id. ¶ 6.) The policy
defines an uninsured auto, in relevant part,
as “a motor vehicle which has no property damage
liability bond or policy in effect at the item of the
accident, ” or “a motor vehicle covered by a
property damage liability bond or policy which doesn't
provide at least minimum financial security requirements
specific in the financial responsibility law of New
Mexico.” (Id. ¶ 7.) However, the policy
also provides that an “uninsured auto is not: (1) a
motor vehicle which is insured for Liability Coverage under
Part 1 of this policy.” (Id. ¶ 8.)
Plaintiffs' vehicles are listed as insured under Part 1.
(Id.) The UM coverage also excludes property damage
that is paid by other insurance. (Id. ¶ 9.) The
policy provided liability coverage for an insured person,
which it defines as a named insured or any other person
getting into an insured vehicle only “with [an
insured's] permission.” (Doc. 19 ¶ 5.)
the settlement, Allstate agreed to “continue to adjust
Laurent Dockery's and Odilia Nino's separate claims
for the punitive damages” stemming from the two thefts.
(Id. ¶ 7.) Allstate acknowledged that
“some portion [of the settlement funds of $45, 000.00]
is for compensatory damages as a basis for punitive
damages.” (Id. at 5 ¶ 8.) The settlement
agreement does not mention the coverage under which the
settlement would be paid. (Id. ¶ 9.) Allstate
chose to pay the damages under the comprehensive coverage.
(Id.) In a letter sent on May 23, 2018, Allstate
denied Plaintiffs' punitive damages claims because (1)
the vehicles were insured at the time of the thefts; and (2)
the identify of the tortfeasors is unknown. (Id.
¶¶ 11, 12.)
assert the following claims:
Count I: Breach of Contract
Count II: Contractual Benefits
Count III: Declaratory Action for Punitive Damages and
Count IV: Unfair Insurance Claim ...