Hartford Ins. Co. v. Cline, 29,506.

• Decision Date: 20 June 2006
• Docket Number: No. 29,506.,29,506.
• Parties: HARTFORD INSURANCE COMPANY of the Midwest and Interstate Indemnity Insurance Company, Plaintiffs-Counter-Defendants-Appellees, v. Charles D. CLINE and Judith E. Davis, Defendants-Counter-Claimants-Appellants.
• Court: New Mexico Supreme Court

139 P.3d 176

2006 NMSC 033

HARTFORD INSURANCE COMPANY of the Midwest and Interstate Indemnity Insurance Company, Plaintiffs-Counter-Defendants-Appellees, v. Charles D. CLINE and Judith E. Davis, Defendants-Counter-Claimants-Appellants.

No. 29,506.

Supreme Court of New Mexico.

June 20, 2006.

Stout & Stout, Mark L. Stout, Hobbs, NM, Templeman & Crutchfield, C. Barry Crutchfield, Lovington, NM, Michael B. Browde, Albuquerque, NM, for Appellants.

Yenson, Lynn, Allen & Wosick, P.C., Matthew A. Pullen, April D. White, Beall & Biehler, P.A., Kelley J. Friedman, Larry D. Beall, Albuquerque, NM, for Appellees.

OPINION

CHÁVEZ, Justice.

{1} Charles Cline and Judith Davis have lived together since 1997. Although they are not married, they have held themselves out to the public as husband and wife. After Davis was involved in an automobile accident, she made a claim for underinsured motorist benefits as a Class I insured under insurance contracts issued only to Cline as the named insured. See Morro v. Farmers Ins. Group, 106 N.M. 669, 670-71, 748 P.2d 512, 513-14 (1988) (defining Class I insureds as named insureds under a policy, their spouse, and relatives living in the household; defining Class II insureds as those covered only because they occupy an insured vehicle). These contracts were issued by Hartford Insurance Company of the Midwest and Interstate Indemnity Insurance Company. Each contract extended Class I coverage to Cline as the named insured and his family members, as defined by each policy. With slight differences in language, "family member" is defined in each policy to mean "a person related to the named insured by blood, marriage or adoption who is a resident of the named insured's household, including a ward or foster child." Both Hartford and Interstate denied the claim for underinsured motorist benefits, asserting that Davis was neither a named insured nor a family member under their respective policies. She was, however, listed as a driver, along with Cline, on the declaration page of the Hartford policy.¹

{2} Following a declaratory judgment action filed by the insurance companies, a federal judge held that Davis was not entitled to underinsured motorist benefits under either policy because "New Mexico does not recognize the doctrine of common law marriage" and therefore Class I insurance coverage does not extend to domestic partners. Cline and Davis appealed to the Tenth Circuit, which certified the following question to this Court pursuant to the provisions of NMSA 1978, Section 39-7-4 (1997)²:

Is excluding domestic partners from the definition of family member in an automobile-insurance policy invalid as contrary to the public policy of the state of New Mexico?

Because there is no express statutory language or indication of legislative intent in New Mexico that domestic partners must be included in the definition of family member for purposes of automobile insurance coverage, we answer the question certified to us in the negative.

DISCUSSION

{3} Cline and Davis urge this Court to answer the certified question in the affirmative. Their argument is based on the public policy in New Mexico against family member exclusions in automobile policies, coupled with recently declared judicial, executive, and legislative policies providing legal protections to domestic partners. According to Cline and Davis, these policies preclude automobile insurance contracts from excluding domestic partners from coverage as family members.

{4} We agree that family member exclusions in automobile insurance policies are void as against the public policy of New Mexico. See Estep v. State Farm Mut. Auto. Ins. Co., 103 N.M. 105, 111, 703 P.2d 882, 888 (1985) (holding that household exclusions in automobile liability insurance policies violate the public policy of New Mexico); GEICO v. Welch, 2004-NMSC-014, ¶ 3, 135 N.M. 452, 90 P.3d 471 (holding that "household exclusions in umbrella policies related to liability and uninsured or underinsured automobile coverage are void as against public policy"). Although these cases involved contract language that excluded coverage for the entire class of household members as defined in the insurance contracts, we have also invalidated exclusions that purported to limit uninsured motorist coverage to a Class I insured. See Loya v. State Farm Mut. Auto. Ins. Co., 119 N.M. 1, 8, 888 P.2d 447, 454 (1994) (invalidating a limitation of uninsured motorist coverage for a dependent minor child who was not living with the insured at the time of the accident, based on a policy definition of "relative" which required the child to be living with the insured unless the child was unmarried, unemancipated and away at school).

{5} In this case the insurance contracts at issue do not exclude the entire class of household members from underinsured motorist coverage. Cline and Davis contend that by not including domestic partners in the definition of family members, by implication domestic partners are excluded from coverage. If family member exclusions are invalid in New Mexico as against public policy, Cline and Davis argue, a fortiori, limiting the definition of family member by excluding domestic partners must also violate public policy. Their argument depends on whether the public policy of New Mexico requires that domestic partners be considered family members for purposes of automobile insurance contracts.

{6} Cline and Davis argue that recently declared judicial, executive, and legislative policies providing legal protections to domestic partners demonstrate that New Mexico's public policy recognizes domestic partners as "family members." As evidence of a judicial policy extending legal protections to domestic partners, Cline and Davis cite to Lozoya v. Sanchez, 2003-NMSC-009, 133 N.M. 579, 66 P.3d 948. In Lozoya, we permitted Sara Lozoya to pursue a claim for loss of consortium when her domestic partner, Osbaldo Lozoya, was seriously injured. We held that a common law cause of action for loss of consortium was not limited to married partners because loss of consortium is a claim to recover compensation for damage to a relational interest with a person, not a legal interest. Id. at ¶ 20; see also Fitzjerrell v. City of Gallup, 2003-NMCA-125, ¶ 11, 134 N.M. 492, 79 P.3d 836. In so holding we were careful to note that "the State has a continuing interest in protecting the legal interest of marriage as well. Allowing an unmarried partner to recover for loss of consortium neither advances nor retracts from that interest." Lozoya, 2003-NMSC-009, ¶ 20, 133 N.M. 579, 66 P.3d 948. We agree with Cline and Davis that our ruling in Lozoya recognizes an important relational interest. However, our ruling in Lozoya was not intended to confer general contractual rights to domestic partners similar to those contractual rights enjoyed by married couples.

{7} Cline and Davis next cite to Executive Order No.2003-010, signed April 9, 2003, as additional proof that the public policy of New Mexico forbids the exclusion of domestic partners from the definition of family member in automobile insurance contracts. This Order, entitled "Establishing Benefits for Domestic Partners of State Employees," provides in relevant part:

I, Bill Richardson, Governor of the State of New Mexico, by virtue of the authority vested in me by the Constitution and the Laws of New Mexico, do hereby order the General Services Department and the State Personnel Office to engage in negotiations with benefits providers to ensure that domestic partners of state employees are afforded the same benefits as spouses by July 1, 2003. Such benefits shall extend to domestic partners who are in a mutually exclusive, committed relationship, who share a primary residence for twelve or more consecutive months, who are jointly responsible for the common welfare of each other and who share financial obligations. Each state employee and domestic partner must execute an affidavit of domestic partnership. . . .

As important as this executive order is to domestic partners of state employees, our interpretation of the Order is not as broad as Cline and Davis' interpretation. The Order simply instructs the General Services Department to negotiate with benefits providers to extend to domestic partners of state employees those benefits that are available to spouses of state employees. The Order does not define spouse to include domestic partners nor does it interpret existing contracts to apply equally to spouses and domestic partners. A fair interpretation of the Order, however, does support a statement that the executive believes employment benefits that are available to a spouse of a state employee should also be available to a domestic partner of a state employee. Undoubtedly, the Governor was aware of the need for contracts to be modified to make sure that domestic partners receive the same benefits as dependents of state employees. See NMSA 1978, § 10-7B-6(A) (1989) ("Any such group benefits self-insurance plan shall afford coverage for employees' dependents at each employee's option."). Indeed, a reasonable inference is that since the executive order requires domestic partners to be jointly responsible for the common welfare of each other, they are dependents. See Brokenbaugh v. N.J. Mfrs. Ins. Co., 158 N.J.Super. 424, 386 A.2d 433, 436 (Ct.App.Div.1978) (stating "the Commissioner indicates that family shall include those who live within the domestic circle of, and are economically dependent on, the named insured").

{8} Although Executive Order No.2003-010 may be viewed as some evidence of the public policy in New Mexico, the Order alone, without parallel action by the legislature, is not sufficient proof of the public policy of New Mexico. The predominant voice behind the declaration of public policy of the state must come from the legislature, with an additional supporting role played by the courts and the executive department:

[I]t is the...