American Mutual Insurance Company v. Romero

• Decision Date: 16 July 1970
• Docket Number: No. 670-69.,670-69.
• Citation: 428 F.2d 870
• Parties: AMERICAN MUTUAL INSURANCE COMPANY, Appellant, v. Charles A. ROMERO, Jr. and Cecil Corcoran, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

428 F.2d 870 (1970)

AMERICAN MUTUAL INSURANCE COMPANY, Appellant, v.Charles A. ROMERO, Jr. and Cecil Corcoran, Appellees.

No. 670-69.

United States Court of Appeals, Tenth Circuit.

July 16, 1970.

Bruce D. Hall, Albuquerque, N. M.(Rodey, Dickason, Sloan, Akin & Robb, and James C. Ritchie, Albuquerque, N. M., with him on the brief), for appellant.

Edward T. Curran, Albuquerque, N. M. (Menig & Sager, Albuquerque, N. M., with him on the brief), for appellee Romero.

Before LEWIS, Chief Judge, and BREITENSTEIN and SETH, Circuit Judges.

SETH, Circuit Judge.

The appellant insurance company has taken an appeal in a declaratory judgment proceeding commenced by it against its insured, Mr. Charles A. Romero, Jr., and Mr. Cecil Corcoran.The trial court held in favor of the insured on an issue of coverage of an uninsured motorist clause contained in the policy and under the New Mexico statutes pertaining to such insurance.

The record shows that the declaratory judgment defendant Romero was a passenger in a car driven by Miss Sally Summers and was seriously injured in a collision between the car in which he was riding and one driven by Corcoran.Romero brought a suit against Miss Summers in the State court and the action was settled before trial by payment to him of the sum of $25,000 by the insurer of Summers.Romero also was paid some medical benefits under his policy issued by the appellant, American Mutual Insurance Company.He sought under the uninsured motorist clause of this policy to have the liability of Corcoran as an uninsured motorist arbitrated.

American then filed this declaratory judgment action, asserting among other points that the payment to Romero by Summers' insurer eliminated its liability under the uninsured motorist clause in the policy it issued to Romero.This assertion was based upon a provision in the policy which provided in effect that payment for the loss received by the insured from other sources should be applied against the amount to be paid under the uninsured motorist coverage.The uninsured motorist coverage in the policy in issue is $20,000 for each accident which is the minimum permitted by statute.

Romero asserted in the trial court that Summers and Corcoran were joint tortfeasors, one of whom was insured and the other was not, and that the uninsured motorist clause in the American policy which Romero had received was available to the extent of its stated coverage to reimburse him for his loss.

As indicated above, the trial court held that the uninsured motorist clause should be applied to the full extent of its coverage and there would not be deducted therefrom amounts theretofore received by the insured regardless of the wording of the policy.

On this appeal the appellant does not challenge any findings made by the trial court and the sole question is presented as to whether or not the policy provisions are contrary to the New Mexico statutes relating to uninsured motorists.There are no New Mexico decisions construing these statutes, and the trial court considered the issue in the light of comparable statutes and decisions from other States.

It should be pointed out at the outset that this action was commenced at a time when the liability of Corcoran had not yet been determined, nor had the extent of damages of Romero been determined.The record does not indicate that at the time the suit was commenced that any proceedings had been brought by Romero against Corcoran.It is assumed by the parties that Corcoran was an "uninsured motorist" as defined in the Statestatutes.

The policy provision which is in issue reads as follows:

"Any amount payable under the Uninsured Motorists Coverage because of bodily injury sustained in an accident by a person who is an insured under this coverage shall be reduced by

(1) all sums paid on account of such bodily injury by or on behalf of

(i) the owner or operator of the uninsured highway vehicle and

(ii) any other person or organization jointly or severally liable together with such owner or operator for such bodily injury, including all sums paid under the Liability Coverages of the policy, and * * *."

This above policy provision must be considered with the New Mexico statutes relating to uninsured motorists and any insurance relating thereto.This statutory provision is as follows, N.M.Stat. Ann.1953, § 64-24-105, for uninsured coverage:

"On and after January 1, 1968, no motor vehicle or automobile liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person, * * * shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state, unless coverage is provided therein or supplemental thereto in limits for bodily injury or death, and for injury to or destruction of property as set forth in section 64-24-79 New Mexico Statutes Annotated, 1953 Compilation, according to rules and regulations promulgated by, and under provisions filed with and approved by the superintendent of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, and for injury to or destruction of property resulting therefrom. * * *"

The statute in section 64-24-79 referred to above provides a minimum coverage of $10,000 for any one person and $20,000 for any one accident.This statutory requirement must be set against the policy provision hereinabove quoted.

We agree with the disposition of the case made by the trial court and hold that the policy provision is contrary to the statutory requirement for a stated minimum coverage.

As the issue is presented to us on appeal, the insurance company seeks to reduce its uninsured motorist coverage in the policy issued to Romero.The appellant so asserts in its brief.This follows from the fact that it has not been established that there is another tortfeasor, nor that Romero is injured in an amount in excess of the sum he has heretofore received.

The insurance company urges that under the unambiguous policy provision above quoted, its coverage for losses caused by an uninsured motorist is reduced to zero by reason of the receipt by Romero of the settlement with the driver of the automobile in which he was riding.This application of the policy provision as a dollar for dollar reduction in the coverage under the uninsured motorist clause results in a direct reduction in its coverage below the minimum provided by statute and is thus invalid.

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