Arnold v. Farmers Ins. Co. of Ariz.

• Citation: 760 F.Supp.2d 1272
• Decision Date: 12 November 2010
• Docket Number: No. CIV 09–0330 JB/WDS.,CIV 09–0330 JB/WDS.
• Parties: Harold ARNOLD, for himself and all other similarly situated, Jimmy Jaramillo, for himself and all other similarly situated, Gary Wise, for himself and all other similarly situated, Plaintiffs,v.FARMERS INSURANCE COMPANY OF ARIZONA, an Arizona corporation; Farmers Group, Inc., a Nevada corporation, Defendants.
• Court: U.S. District Court — District of New Mexico

760 F.Supp.2d 1272

Harold ARNOLD, for himself and all other similarly situated, Jimmy Jaramillo, for himself and all other similarly situated, Gary Wise, for himself and all other similarly situated, Plaintiffs,
v.
FARMERS INSURANCE COMPANY OF ARIZONA, an Arizona corporation; Farmers Group, Inc., a Nevada corporation, Defendants.

No. CIV 09–0330 JB/WDS.

United States District Court, D. New Mexico.

Nov. 12, 2010.

[760 F.Supp.2d 1273]

Matthew L. Garcia, Bach & Garcia and Geoffrey R. Romero, Law Offices of Geoffrey R. Romero, Esq., Albuquerque, NM, for Plaintiffs.Emily Cates, Steven J. Hulsman, Lewis and Roca, LLP, Phoenix, AR and Ross L. Crown, Lewis and Roca, LLP, Albuquerque, NM, for Defendants.

MEMORANDUM OPINION AND ORDER JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on: (i) the Plaintiffs' Motion for Summary Judgment Declaring Uninsured Motorist Property Damage Coverage is Applicable to the Plaintiffs' Losses, filed April 2, 2010 (Doc. 57); and (ii) the Defendants' Opposition to Plaintiffs' Summary Judgment & Cross–Motion for Summary Judgment, filed April 29, 2010 (Doc. 64)(“Cross–Motion”). The Court held a hearing on August 17, 2010. The primary issues are: (i) whether the phrase “injury to or destruction of property” in the Uninsured Motorist Act, NMSA 1978, § 66–5–301 (“UMA”), requires coverage for loss-of-use ¹-of-property claims; (ii) whether, if the UMA requires coverage for loss-of-use claims, theft of property would constitute property damage; and (iii) whether, if the UMA requires coverage for loss-of-use claims, an insured can bring a loss-of-use claim without an accompanying claim for physical damage. The Court concludes that the phrase “injury to or destruction of property” in the UMA does not require coverage for loss of use, because the New Mexico Legislature's omission of loss of use language in the UMA indicates that the Legislature intended the omission, and even though New Mexico courts liberally construe the UMA, the Court declines to disregard the statute's plain language. The Court also believes, based on its review of New Mexico law and law from other jurisdictions, that even if the UMA requires coverage for loss of use, there is a strong argument that the UMA would not require coverage for theft or for loss-of-use damages without accompanying physical damage, but because the Court may make its determination on the statutory language itself, the Court need not decide this issue. Because the Court finds that the UMA does not require coverage for the Plaintiffs' loss-of-use claims, the Court will grant summary judgment on the Plaintiffs'

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claims.² The Court therefore need not inquire into whether each Plaintiffs' claims for loss of use arose from the ownership, maintenance, or use of a motor vehicle, and whether each Plaintiff is legally entitled to recover damages from the owners or operators of the uninsured motor vehicles.

FACTUAL BACKGROUND

The Plaintiffs are suing for the Defendants' uninsured-motorist-property-damage benefits under their automobile insurance policies with Farmers Insurance Company of Arizona (“Farmers”) relating to stolen personal property. Plaintiffs' insurance policies define uninsured motorist property damage as: “[D]amage to or destruction of [the insured's] insured car including personal property contained in [the insured's] insured car at the time of the accident. This does not include the loss of use of damaged or destroyed property.” Farmers Declarations at 7, filed April 29, 2010 (Doc. 64–10).³ Defense witnesses testified that, if there is damage or destruction to property that arises out of ownership, maintenance, or use—i.e., property damage—Farmers will pay for loss of use resulting from that property damage in certain circumstances. See, e.g., Deposition of Daniel J. O'Brien at 51:16–52:19 (taken February 24, 2010), filed April 29, 2010 (Doc. 64–13); Cross–Motion ¶ 42, at 8 (setting forth this fact); Plaintiffs' Reply and Response ¶ 14, at 5 (admitting this fact). The Plaintiffs' auto insurance policies provided coverage for “theft” of their insured automobiles under the policies' coverage provisions. Farmers Declarations at 10 (“We will pay for loss to your insured car caused by any accidental means except collision, ... Loss caused by missiles, falling objections, fire, theft or larceny ... is not deemed loss caused by collision.”). G. Wise previously submitted a theft claim for his insured automobile, and his insurer paid the theft claim. See Deposition of Shirley Wise at 32:18–33:10 (taken August 26, 2009), filed April 29, 2010 (Doc. 64–2). Each Plaintiff could have purchased separate coverage for their allegedly stolen property. See, e.g., Deposition of Gary Wise at 10:14–11:6 (taken August 27, 2009), filed April 29, 2010 (Doc. 64–1); Deposition of Sonny Jaramillo at 43:10–44:5 (taken August 25,

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2009), filed April 29, 2010 (Doc. 64–8).⁴

1. Undisputed Facts Relating to the Circumstances of J. Jaramillo's Claim. ⁵

The Plaintiffs allege that, on or about February 6, 2005, a flat-bed trailer and a bobcat tractor that Plaintiff Jimmy Jaramillo's father, Sonny Jaramillo, used in his landscaping business were stolen. See, e.g., Amended Class Action Complaint for Breach of Statutory, Common Law, and Contractual Duties ¶ 14, at 3, filed July 24, 2009 (Doc. 21)(“Amended Complaint”); Cross–Motion ¶ 21, at 6 (setting forth this fact); Plaintiff's Reply and Response ¶ 4, at 3 (admitting this fact). S. Jaramillo is not a plaintiff in this case. See, e.g., S. Jaramillo Depo. at 99:15–25; Doc. 21; Cross–Motion ¶ 23, at 6 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact). At the time of the alleged theft, both J. Jaramillo and S. Jaramillo had auto insurance policies with Farmers. See, e.g., S. Jaramillo Depo. at 43:22–44:5; Amended Complaint ¶ 16, at 3; Cross–Motion ¶ 22, at 6 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact); Answer to Amended Complaint ¶¶ 16, 23, at 3–4, filed July 31, 2009 (Doc. 23)(“Answer”); Plaintiffs' Memorandum in Support of Their Motion for Summary Judgment Regarding Coverage ¶ 16, at 5, filed April 2, 2010 (Doc. 58)(stating that, at the time of the theft, J. Jaramillo had a motor-vehicle insurance policy issued by Farmers, which included uninsured motorists property damage)(“Memorandum”); Cross–Motion at 9 (not controverting this fact).

S. Jaramillo's landscaping business, called Sonny's Trees, is a sole proprietorship and S. Jaramillo is the sole owner. See Deposition of Jimmy Jaramillo at 12:1–13:23 (taken February 1, 2010), filed April 29, 2010 (Doc. 64–9).⁶ J. Jaramillo does

[760 F.Supp.2d 1276]

not have an ownership or partnership interest in Sonny's Trees; he has never invested money in Sonny's business with the expectation of receiving a profit, and he has never received any investment income from Sonny's Trees. See J. Jaramillo Depo. at 13:15–23, 14:10–21.⁷ The Federal Bureau of Investigation employs J. Jaramillo. See, e.g., J. Jaramillo Depo. at 15–16:2; Cross–Motion ¶ 25, at 6 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact). Nevertheless, on occasion, J. Jaramillo helped S. Jaramillo with landscaping jobs. See, e.g., J. Jaramillo Depo. at 13:1–9; id. at 16:3–17:9; Cross–Motion ¶ 25, at 6 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact). S. Jaramillo would compensate J. Jaramillo for his labor like any day laborer. See, e.g., J. Jaramillo Depo. at 17:4–9; Cross–Motion ¶ 25, at 6 (setting forth this fact); Plaintiff's Reply and Response ¶ 4, at 3 (admitting this fact). After the FBI promoted J. Jaramillo in 2003, he rarely was able to assist S. Jaramillo on landscaping jobs. See, e.g., J. Jaramillo Depo. at 15:1–17; Cross–Motion ¶ 25, at 6 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact).

J. Jaramillo bought the bobcat tractor under his name for use by Sonny's Trees. See J. Jaramillo Depo. at 58:7–11; S. Jaramillo Depo. at 149:1–2. ⁸ Sometimes J.

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Jaramillo assisted his father with the installment payments for the bobcat. See, e.g., J. Jaramillo Depo. at 22:21–24; Cross–Motion ¶ 28, at 7 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact). J. Jaramillo's payments were in the nature of gifts, and he never expected to be repaid for any of the payments. See, e.g., J. Jaramillo Depo. at 22:25–23:6; Cross–Motion ¶ 28, at 7 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact). Had S. Jaramillo sold the bobcat, J. Jaramillo would not have expected to be reimbursed for any payments he made on the bobcat. See, e.g., J. Jaramillo Depo. at 23:4–11; Cross–Motion ¶ 28, at 7 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact).

The bobcat used a universal key to operate. See, e.g., S. Jaramillo Depo. at 75:14–15; Cross–Motion ¶ 30, at 7 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact). “You can go anywhere in town and the same Bobcat key will work on any [Bobcat].” S. Jaramillo Depo. at 75:15–16. See Cross–Motion ¶ 30, at 7 (setting forth this fact); Plaintiffs' Reply and Response ¶ 4, at 3 (admitting this fact).

On February 6, 2005, the bobcat, which was parked and secured on top of the trailer, which was hitched to S. Jaramillo's pickup truck, was stolen from a parking lot at a local hotel where S. Jaramillo lived. See S. Jaramillo Depo. at 62:6–24.⁹ The trailer had to be disconnected from S. Jaramillo's pickup truck and then connected to another truck before the theft could have taken place. See, e.g., id. at 62:6–24; Cross–Motion ¶ 34, at 7 (setting forth this fact); Plaintiffs' Reply and Response at 3–4 (not controverting this fact). Neither J. Jaramillo nor S. Jaramillo witnessed the alleged...