Arnold v. Farmers Ins. Co. of Arizona

• Decision Date: 10 May 2012
• Docket Number: No. CIV 09-0330 JB/WDS,CIV 09-0330 JB/WDS
• Parties: HAROLD ARNOLD, for himself and all others similarly situated, JIMMY JARAMILLO, for himself and all others similarly situated, GARY WISE, for himself and and all others 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

HAROLD ARNOLD, for himself and all others similarly situated,

JIMMY JARAMILLO, for himself and all others similarly situated,

GARY WISE, for himself and and all others 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 FOR THE DISTRICT OF NEW MEXICO

Dated: May 10, 2012

MEMORANDUM OPINION AND ORDER

THIS MATTER comes before the Court on the Plaintiffs' Motion for Clarification and Motion for Reconsideration of Order Granting Summary Judgment, as Amended, for Relief from Judgment, or to Alter or Amend the Judgment, filed October 26, 2011 (Doc. 114)("Second Motion to Reconsider"). The Court held a hearing on April 12, 2012. The primary issues are: (i) whether the Court has altered or amended its Final Judgment, filed November 12, 2010 (Doc. 100); (ii) whether the Plaintiffs previously challenged under rule 59(e) of the Federal Rules of Civil Procedure the Court's analysis addressing uninsured motorist coverage in its Memorandum Opinion and Order, filed November 12, 2010 (Doc. 99)("Nov. 12, 2010 MOO"); (iii) whether the Court should analyze the Plaintiffs' Second Motion to Reconsider the Court's Memorandum Opinion and Order at 17-18, filed September 29, 2011 (Doc. 113)("Sept. 29, 2011 MOO"), as one brought under rule 59(e) or under rule 60 of the Federal Rules of Civil Procedure; (iv) whether reconsideration is warranted ofthe Court's conclusion that, as a matter of law, the New Mexico Uninsured Motorist Act, N.M.S.A. 1978, § 66-5-301 ("UMA"), does not provide mandatory coverage for theft of the Plaintiffs' personal property; and (v) whether the Court's September 29, 2011 MOO requires clarification. The Court finds that its Nov. 12, 2010 MOO did not hold that the Supreme Court of New Mexico would conclude that the theft of personal property absent damage to the property would preclude the recovery of loss-of-use damages. The Court also concludes, however, that the Plaintiffs had a full opportunity to respond to the Court's discussion of those issues and did so by responding to the Court's discussion in their Plaintiffs' Motion for Reconsideration of Order Granting Summary Judgment, for Relief from Judgment, or to Alter or Amend the Judgment, and Request for Certification to the New Mexico Supreme Court, filed December 9, 2010 (Doc. 101)("First Motion to Reconsider"). In any case, the Court never set aside or altered or amended its Final Judgment in a way that would start a new twenty-eight day period for filing a subsequent rule 59(e) motion. The Second Motion to Reconsider was not brought within twenty-eight days of entry of the final judgment, thus the Court will analyze the Second Motion to Reconsider as one brought under rule 60(b). There are no extraordinary circumstances under rule 60(b) that would justify reconsideration of the Final Judgment. Additionally, because the Plaintiffs have not shown any other proper basis for reconsideration under rule 60(b), the Court will deny the Second Motion to Reconsider. Further, because clarifying its Sept. 29, 2011 MOO in the manner the Plaintiffs have requested would constitute an advisory opinion on facts not before the Court, the Court declines to clarify its Sept. 29, 2011 MOO.

PROCEDURAL BACKGROUND

On April 2, 2010, the Plaintiffs filed their Motion for Summary Judgment Declaring Uninsured Motorist Property Damage Coverage Is Applicable to the Plaintiffs' Losses. See Doc.57. On April 28, 2010, the Defendants filed their Opposition to Plaintiffs' Motion for Summary Judgment and Cross-Motion for Summary Judgment. See Doc. 63. The Plaintiffs in their motion asked the Court to declare that uninsured motorist property damage coverage applies to the Plaintiffs' losses. On August 17, 2010, the Court held a hearing on the two motions.

In its fifty-three page Nov. 12, 2010 MOO, the Court listed three "primary issues:"

(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-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.

Nov. 12, 2010 MOO at 1-2. One of the Court's conclusions was that:

[T]he 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.

Nov. 12, 2010 MOO at 2. Because all of the Plaintiffs' remaining claims were for loss of use and the Court's holding regarding loss-of-use damages barred the Plaintiffs' claims, the Court stated that it was not required to address the two remaining issues. See MOO at 2 & n.2, 35. The Court nonetheless fully set out the relevant law, the parties' arguments, and an analysis predicting how the Supreme Court of New Mexico would rule on the issue whether the UMA provides coverage for theft of personal property, resulting in the following statement: "The Court finds that, even if the UMA requires coverage for loss-of-use damages, it would not provide coverage for the theft of the Plaintiffs' property." Nov. 12, 2010 MOO at 42. The Court denied the Plaintiffs' request for summary judgment and granted the Defendant's cross-motion for summary judgment. See Nov. 12, 2010 MOO at 52. In its Final Judgment, the Court noted that it "granted summary judgment on thePlaintiffs' claims after finding that the Uninsured Motorist Act, NMSA 1978, § 66-5-301, did not require coverage for the Plaintiffs' claims" and that its November 12, 2010 MOO "resolves all matters before it." Final Judgment at 1. The Final Judgment dismissed the Plaintiffs' claims with prejudice. See Final Judgment at 1-2.

On December 9, 2010, the Plaintiffs filed their First Motion for Reconsider under rules 59 and 60. See Doc. 101. In their First Motion to Reconsider, the Plaintiffs first challenged the Court's ruling that the UMA does not provide coverage for loss-of-use damages. See First Motion to Reconsider at 2-13. The Plaintiffs also noted that, in its Nov. 12, 2010 MOO, the Court had issued alternative rulings. See First Motion to Reconsider at 14-15 ("As noted, this Court's ruling allows Farmers to limit its uninsured motorist property damage coverage in a more narrow fashion than the property damage coverage mandated by the MFRA."). The Plaintiffs challenged the Court's analysis and conclusions on these alleged alternative rulings and reiterated their prior contentions. See First Motion to Reconsider at 14. The Plaintiffs asserted, however, that the Court did not expressly decide the alleged alternative rulings. See First Motion to Reconsider at 14 ("Similarly, this Court indicates, but does not hold, that . . . loss of use damages are recoverable only when accompanied by physical damage to property.").

The Court reconsidered and reversed its ruling on the loss-of-use issue, holding that the Supreme Court of New Mexico "would reach the decision that the UMA requires coverage for loss-of-use damages resulting from a vehicle driven by an uninsured motorist." Sept. 29, 2011 MOO at 17-18. The Court next addressed the Plaintiffs' challenge to the alleged alternative rulings under rule 59(e):

The Plaintiffs briefly contend that the Court also erred in its alternative holding that, even if loss-of-use damages are available under the UMA, the Plaintiffs cannot recover loss-of-use damages for their stolen personal property. They contendthat the Court's alternative holding improperly "rejects the Supreme Court's definition of 'injury' as something done against the right of a party, producing damage" found in Clark v. Cassetty, and improperly rejects "a body of case law from other jurisdictions which holds that loss of property, or theft of property, constitutes property damage." The Plaintiffs postulate that the Court's alternative ruling that the "UMA should be read as providing loss of use damages in the event of 'injury, with accompanying physical damage to, or destruction of property' . . . is contrary to the afore-cited cases holding that the only limitations to uninsured motorist coverage are those which are specifically set forth in the statute." The Court continues to disagree.

The Defendant has focused on the argument that "theft, in itself [does not] constitute 'injury to or destruction of property'" under the UMA. In its MOO, the Court set forth the differences in the New Mexico insurance code between "property insurance" and "vehicle insurance"; law regarding whether the loss of property through theft is equated with "property damage"; and law regarding whether loss-of-use damages are recoverable without accompanying physical damage. The Court noted that "[t]he UMA provides coverage solely for 'injury to or destruction of property.' NMSA 1978, § 66-5-301A." Based on the applicable statutes and case law, the Court concluded that, "even if the UMA requires coverage for loss-of-use damages, it would not provide coverage for the theft of the Plaintiffs' property." Chavez v. State Farm noted that the Legislative purpose in enacting "compulsory uninsured motorist coverage was to place the injured policyholder in the same position, with regard to the recovery of damages, that he would have been in if the tortfeasor had possessed liability insurance." Additionally, the Court concluded that the Supreme Court of New Mexico's opinion in Cress v. Scott indicated that they would not likely award loss-of-use damages where there was no accompanying property damage. As the Defendants correctly point

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