Curry v. Great Nw. Ins. Co.

• Decision Date: 07 March 2014
• Docket Number: No. 31,990.,31,990.
• Citation: 320 P.3d 482
• Parties: Lonnie CURRY, and Mildred Curry, for themselves and all other similarly situated, Plaintiffs–Appellees, v. GREAT NORTHWEST INSURANCE COMPANY, a foreign Corporation, J.S. Ward & Son, Inc. A New Mexico Corporation, Dean Chavez, John Doe Adjusters and Agents of Great Northwest Insurance Company and J.S. Ward & Son, Inc., Defendants–Appellants.
• Court: Court of Appeals of New Mexico

320 P.3d 482

Lonnie CURRY, and Mildred Curry, for themselves and all other similarly situated, Plaintiffs–Appellees,

v.GREAT NORTHWEST INSURANCE COMPANY, a foreign Corporation, J.S. Ward & Son, Inc. A New Mexico Corporation, Dean Chavez, John Doe Adjusters and Agents of Great Northwest Insurance Company and J.S. Ward & Son, Inc., Defendants–Appellants.

No. 31,990.

Court of Appeals of New Mexico.

Nov. 20, 2013.

Certiorari Denied, No. 34,451, March 7, 2014.

The Rowe Law Firm, P.C., Gordon H. Rowe, III, Albuquerque, NM, for Appellees.

McClaugherty & Silver, P.C., Joe L. McClaugherty, Santa Fe, NM, for Appellants.

OPINION

ZAMORA, Judge.

{1} This case presents us with the limited question of whether our Supreme Court's decision in Jordan v. Allstate Insurance Co., 2010–NMSC–051, 149 N.M. 162, 245 P.3d 1214, requires that uninsured and underinsured motorist (UM/UIM) coverage options and corresponding premiums appear on the written UM/UIM coverage rejection form itself. Unpersuaded that Jordan creates such a specific requirement, we conclude that Plaintiffs' complaint is based upon an incorrect reading of Jordan, thereby failing to state a claim upon which relief could be granted. We reverse the district court's decision denying Defendants' motion to dismiss as to that issue and remand for proceedings consistent with this Opinion.

I. BACKGROUND

{2} We take the relevant facts from the allegations of the complaint filed by Lonnie Curry and Mildred Curry (Plaintiffs) for themselves and on behalf of others similarly situated. We accept these facts as true for purposes of reviewing a motion to dismiss. Padilla v. Wall Colmonoy Corp., 2006–NMCA–137, ¶ 2, 140 N.M. 630, 145 P.3d 110. A motion to dismiss tests the legal sufficiency of the complaint, not the facts that support it. SeeRule 1–012(B)(6) NMRA; Three Rivers Land Co. v. Maddoux, 1982–NMSC–111, ¶ 13, 98 N.M. 690, 652 P.2d 240,overruled on other grounds by Universal Life Church v. Coxon, 1986–NMSC–086, 105 N.M. 57, 728 P.2d 467.

{3} In September 2009, Plaintiffs were involved in a serious motor vehicle accident. Plaintiffs' vehicle was covered by a standard insurance policy with Great Northwest Insurance Company (Defendant) ¹, which provided liability coverage for their vehicle. Because coverage from the underlying liability carriers was insufficient to compensate for all of their injuries, Plaintiffs filed an underinsured motorist claim with Defendant. Defendant denied Plaintiffs' underinsured motorist claim based on a written rejection of UM/UIM coverage Plaintiffs signed when they purchased their policy.

{4} Plaintiffs filed suit alleging that the UM/UIM coverage rejection form Defendant relied upon in denying their uninsured motorist claim was invalid under Jordan because it did not contain a list of premium charges corresponding to the available UM/UIM coverage options. Plaintiffs also asserted that because the UM/UIM coverage rejection form was invalid, their policy should be reformed as a matter of law by providing UM/UIM coverage equal to their limits of liability.

{5} In response to Plaintiffs' suit, Defendants moved for dismissal claiming that Plaintiffs misconstrued Jordan and as a result failed to state a claim upon which relief could be granted. Defendants argued that Jordan requires insurers to provide UM/UIM coverage options and corresponding premium information, but that it does not require that the information also appear directly on the written rejection of UM/UIM coverage.

{6} The claims in Plaintiffs' complaint are limited to the rejection form. Aside from the rejection form issue, none of the parties raised an issue of whether the UM/UIM coverage and corresponding premiums were provided in writing when the insurance policy was being considered. Therefore, we limit our decision to the issue of whether New Mexico law requires that an insurer provide available UM/UIM coverage options and corresponding premium information on the written rejection form delivered with the insurance policy to the insured.

{7} After hearing the parties' arguments, the district court denied Defendants' motion to dismiss. In its order, the court found that although Jordan did not directly address the issue of whether a valid waiver or rejection of UM/UIM coverage requires that the insured be provided a written list of coverage options and corresponding premium charges on the rejection form itself, an argument could be made that Jordan created such a requirement. The court therefore certified this specific question for interlocutory appeal. This Court granted the request for an interlocutory appeal pursuant to NMSA 1978, Section 39–3–4 (1999) and Rule 12–203(A) NMRA.²

{8} Although we are not confined to the particular questions the district court certified for this interlocutory appeal, the scope of our review must be limited to the issues fairly contained in the order. Pena Blanca P'ship v. San Jose de Hernandez Cmty. Ditch, 2009–NMCA–016, ¶ 7, 145 N.M. 555, 202 P.3d 814. This Court has declined to decide issues that were not the basis of the order actually appealed from. See Bell v. Estate of Bell, 2008–NMCA–045, ¶ 9, 143 N.M. 716, 181 P.3d 708 (declining to address an issue that was neither the basis of the district court's order nor specifically certified for interlocutory appeal); see also Ellis v. Cigna Prop. & Cas. Cos., 2007–NMCA–123, ¶ 14, 142 N.M. 497, 167 P.3d 945 (concluding that the issues raised by appellant were not certified for interlocutory appeal by the district court); cf. Armijo v. Wal–Mart Stores, Inc., 2007–NMCA–120, ¶ 19, 142 N.M. 557, 168 P.3d 129 (stating an appellate court can decide issues other than those certified, where a party raises issues which were not stated in the questions certified, but were not wholly unrelated to the issues identified by the lower court in its order). The argument before the district court by both parties, the district court's order, and the question before this Court is limited to the question of whether a valid waiver or rejection of UM/UIM coverage requires that the insured be provided a written list of coverage options and corresponding premium charges on the rejection form itself.

II. DISCUSSIONA. Standard of Review

{9} The decision of the district court to deny Defendants' Rule 1–012(B)(6) motion is a question of law that we review de novo. Valles v. Silverman, 2004–NMCA–019, ¶ 6, 135 N.M. 91, 84 P.3d 1056. De novo review requires appellate courts “to make an independent assessment of the record.” Aken v. Plains Elec. Generation & Transmission Coop., Inc., 2002–NMSC–021, ¶ 19, 132 N.M. 401, 49 P.3d 662.

B. UM/UIM Rejections in New Mexico

{10} NMSA 1978, Section 66–5–301 (1983) and its implementing regulation, now codified as 13.12.3.9 NMAC (5/14/2004), govern UM/UIM insurance coverage in New Mexico. Jordan, 2010–NMSC–051, ¶¶ 16–18, 149 N.M. 162, 245 P.3d 1214. The New Mexico Supreme Court construes the statute liberally, and the default rule is to provide the maximum possible amount of UM/UIM coverage. Id. ¶ 15. Any exception to that rule is strictly construed to protect the insured. Id. Section 66–5–301 embodies a public policy of New Mexico that UM/UIM coverage be provided with every automobile liability insurance policy issued in this state. Romero v. Dairyland Ins. Co., 1990–NMSC–111, ¶ 6, 111 N.M. 154, 803 P.2d 243. For that reason, “the insurer may not exclude UM/UIM coverage from an automobile liability policy unless it has offered it to the insured, and the insured has exercised the right to reject the coverage through some positive act.” Marckstadt v. Lockheed Martin Corp., 2010–NMSC–001, ¶ 15, 147 N.M. 678, 228 P.3d 462 (citation omitted).

{11} Section 66–5–301 provides insureds the right to reject UM/UIM coverage. It does not specify the form or manner that an effective rejection must take. Romero, 1990–NMSC–111, ¶ 4, 111 N.M. 154, 803 P.2d 243. The form and manner of effective UM/UIM coverage rejections are established by rules and regulations promulgated by the superintendent of insurance. Kaiser v. DeCarrera, 1996–NMSC–050, ¶ 8, 122 N.M. 221, 923 P.2d 588.Regulation 13.12.3.9 NMAC requires rejections of UM/UIM coverage to be written and included in the policy delivered to the insured. Marckstadt, 2010–NMSC–001, ¶ 17, 147 N.M. 678, 228 P.3d 462. This “furthers [the] legislative purpose to provide for the inclusion of uninsured motorist coverage in every automobile liability policy unless the insured has knowingly and intelligently waived such coverage.” Romero, 1990–NMSC–111, ¶ 9, 111 N.M. 154, 803 P.2d 243. Any insured rejecting UM/UIM coverage should be well informed as to that decision. Id. The rejection, as part of the delivered policy, provides affirmative evidence of the extent of coverage. Id. This affirmative evidence “comports with [the] policy that any rejection of the coverage be knowingly and intelligently made.” Id.

C. Jordan Does Not Require UM/UIM Coverage Options and Corresponding Premium Charges to Be Provided on the Written Rejection Form Itself

{12} In Jordan, the New Mexico Supreme Court recognized that insurers were offering UM/UIM coverage in ways that did not allow insureds to make realistically informed choices. 2010–NMSC–051, ¶ 20, 149 N.M. 162, 245 P.3d 1214. After examining Section 66–5–301, the corresponding regulation 13.12.3.9 NMAC, and related case law, the Court endeavored to set forth workable requirements for valid, meaningful rejections of UM/UIM coverage. Jordan, 2010–NMSC–051, ¶¶ 20–21, 149 N.M. 162, 245 P.3d 1214. The Jordan Court determined that UM/UIM coverage equal to the liability limits would be the default coverage unless the insurer:

(1) offer[s] the insured UM/UIM coverage equal to his or her liability limits, (2) inform[s] the insured about premium costs corresponding to the available levels of coverage, (3) obtain[s] a written rejection of UM/UIM coverage equal to the liability limits, and (4) incorporate[s] that rejection into the...