Belanger v. Allstate Fire & Cas. Ins. Co., 1:19-cv-00317-WJ-SCY
| Docket Number | 1:19-cv-00317-WJ-SCY |
| Decision Date | 02 March 2022 |
| Parties | Yvonne BELANGER, Plaintiff, v. ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY, Allstate Indemnity Insurance Company, Allstate Insurance Company, Allstate Assurance Company Allstate Property & Casualty Insurance Company, Allstate Vehicle and Property Insurance Company, and Allstate Northbrook Indemnity Company, Defendants. |
| Court | U.S. District Court — District of New Mexico |
Corbin Hildebrandt, Corbin Hildebrandt, P.C., Geoffrey R. Romero, Law Offices of Geoffrey R. Romero, Kedar Bhasker, Law Office of Kedar Bhasker, LLC, Albuquerque, NM, for Plaintiff.
Eric R. Burris, Joseph Haupt, Debashree Nandy, Brownstein Hyatt Farber Schreck, LLP, Albuquerque, NM, Peter J. Valeta, Stephanie Nashban, Pro Hac Vice, Cozen O'Connor, Chicago, IL, for Defendants Allstate Fire and Casualty Insurance Company, Allstate Indemnity Insurancy Company, Allstate Assurance Company, Allstate Property & Casualty Insurance Company, Allstate Vehicle and Property Insurance Company.
Eric R. Burris, Joseph Haupt, Brownstein Hyatt Farber Schreck, LLP, Albuquerque, NM, Peter J. Valeta, Stephanie Nashban, Pro Hac Vice, Cozen O'Connor, Chicago, IL, for Defendants Allstate Insurance Company, Allstate Northbrook Indemnity Company.
THIS MATTER comes before the Court upon a Motion to Dismiss the Second Amended Class Action Complaint, filed on January 18, 2022 by Defendants Allstate Indemnity Insurance Company, Allstate Insurance Company, Allstate Assurance Company, Allstate Property and Casualty Insurance Company, Allstate Vehicle and Property Insurance Company, and Allstate Northbrook Indemnity Company ("Defendants" or "Allstate") (Doc. 42 ). Having reviewed the parties’ pleadings and the applicable law, the Court GRANTS the Defendants’ motion as to Counts 1 and 7 (negligence and unjust enrichment claims) but DENIES Defendants’ motion as to the other counts in the second amended complaint.1
This case is a putative class action arising out of a dispute over "underinsured motorist coverage" in an automobile policy. NMSA § 66-5-301 ().
Plaintiff alleges that she was solicited and sold illusory underinsured motorist coverage and seeks to collect damages for Defendants’ alleged deceptive business practices under various causes of actions including but not limited to negligence, violations of the New Mexico Unfair Trade Practices Act and Breach of the Covenant of Good Faith and Fair Dealing. Plaintiff also seeks reformation of coverage, declaratory relief and injunctive relief. Doc. 40 (Sec. Am. Compl.). On April 4, 2019, Defendants removed the case from the Second Judicial District, County of Bernalillo under the Class Action Fairness Act of 2005 ("CAFA"), codified in pertinent part at 28 U.S.C. §§ 1332(d) and 1453, on the grounds that (1) this is a putative class action with more than 100 putative class members; (2) there is minimal diversity among the parties; and (3) the Complaint places into controversy an amount that exceeds $5,000,000 in the aggregate.
The allegations in the Second Amended Complaint ("SAC") revolve around Plaintiff's "Uninsured Motorists Insurance – Coverage ST" ("Coverage ST") at the minimum limits of $25,000 per person/$50,000 per accident. Ms. Belanger alleges that on September 4, 2015 she sustained bodily injuries and other damages arising from a motor vehicle accident, when an underinsured motorist rear-ended her vehicle. At the time of the accident, Belanger's policy provided Coverage ST with minimum limits under Allstate automobile policy number 829 720 835, which she originally purchased on or about July 1, 2014, and for which she paid a premium of $65 for the UM/UIM Coverage that Allstate offered for the six months from July 1, 2014 to January 1, 2015 (the "Policy"); see Doc. 40-3. The tortfeasor had the same minimum financial responsibility liability coverage of $25,000 per person/$50,000 per accident. (SAC ¶32).
After the accident, the tortfeasor's insurer paid Ms. Belanger the full $25,000 under her liability policy, but denied her claim for damages above the $25,000 paid by the tortfeasor's insurer because (1) Allstate deducted from the ST Coverage the sums paid by the tortfeasor's insurer; and (2) the tortfeasor's liability coverage limits, which were the minimum financial liability limits of $25,000 per person/$50,000 per accident, equaled her minimum limits Coverage ST.
On December 17, 2021, Plaintiff filed the SAC asserting the following claims:
Belanger contends that Allstate failed to properly inform her: (1) how the Coverage ST is illusory in the event of a covered occurrence involving an underinsured driver; and (2) that she would not benefit from the purchase of Coverage ST because pursuant to the Schmick offset, Ms. Belanger's recovery of Coverage ST benefits would be offset by the amount of the tortfeasor's liability coverage.2 (SAC ¶¶ 18-20). Plaintiff's putative class action seeks to maintain a class of the following:
All persons (and their heirs, executors, administrators, successors, and assigns) from whom Defendants collected a premium for an underinsured motorist coverage on a policy that was issued or renewed in New Mexico by Defendants and that purported to provide underinsured motorist coverage on the face of its application and declaration pages, but which effectively provides no underinsured motorists coverage and/or misleading underinsured coverage, because of the statutory offset recognized in Schmick v. State Farm Mutual Automobile Insurance Company , 704 P.2d 1092 (1985).
Doc. 40, ¶42. Plaintiff also asserts the following subclass:
All Class Members (and their heirs, executors, administrators, successors, and assigns from whom Defendants collected a premium for an underinsured motorist coverage on a policy that was issued or renewed in New Mexico by Defendants and that purported to provide the underinsured motorist coverage on the face of its application and declaration pages, but which in fact provides no underinsured motorists coverage and/or misleading underinsured coverage, because of the statutory offset recognized in Schmick v. State Farm Mutual Automobile Insurance Company , 704 P.2d 1092 (1985), and who sustained damages in excess of an insured tortfeasor's policy limits, received the extent of all bodily injury liability limits available and would be or were denied those benefits by Defendants due to the Schmick offset.
In Crutcher v. Liberty Mut. Ins. Co., et al. , United States District Judge Judith C. Herrera certified the following questions to the New Mexico Supreme Court:
Under N.M. Stat. Ann. § 66-5-301, is underinsured motorist coverage on a policy that offers only minimum UM/UIM limits of $25,000 per person/$50,000 per accident illusory for an insured who sustains more than $25,000 in damages caused by a minimally insured tortfeasor because of the offset recognized in Schmick v. State Farm Mutual Automobile Insurance Company , and, if so, may insurers charge a premium for that non-accessible underinsured motorist coverage?
Crutcher v. Liberty Mut. Ins. Co. , Case No.:18-cv-00412-JCH-LF (D.N.M.), 2019 WL 12661166, at *4, 2019 U.S. Dist. LEXIS 203469, at *12 (D.N.M. Jan. 9, 2019). The instant case was stayed pending the New Mexico Supreme Court's ruling regarding the questions certified to it by Judge Herrera, in the expectation that it "may resolve substantial issues in this case." Doc. 33 at 2. On December 10, 2021, the Supreme Court answered those questions, concluding that (1) underinsured motorist coverage at the minimum limits was illusory in the sense that it was misleading to the average insured, but (2) the future sale of such insurance was lawfully permitted as long as the limitations of minimum limits underinsured motorist coverage were disclosed to insureds in the form of an "exclusion." Crutcher v. Liberty Mut. Ins. Co. , 2022-NMSC-001, ¶ 33, 501 P.3d 433. The stay was lifted in this case (Doc. 38) and before the Court now is Defendants’ motion to dismiss. Allstate contends that none of Plaintiff's claims survive after Crutcher while Plaintiff maintains that Crutcher did not moot any of the asserted claims in the second amended complaint (Doc. 40).
To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the complaint "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 570 (2007) ). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). Conclusory allegations of liability, without supporting factual content, are insufficient. "The allegations must be enough that,...
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