Hawley v. Farm Bureau Prop. & Cas. Ins. Co.
| Decision Date | 05 January 2021 |
| Docket Number | No. 19-2183,19-2183 |
| Parties | JOHN HAWLEY, Plaintiff - Appellant, v. FARM BUREAU PROPERTY & CASUALTY INSURANCE COMPANY, Defendant - Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
(D. N.M.)
ORDER AND JUDGMENT*Before MATHESON, McHUGH, and EID, Circuit Judges.
John Hawley suffered injuries in an automobile accident. The other driver was at fault and underinsured. Mr. Hawley recovered $25,000 from the at-fault driver's insurer, State Farm. He then asked his insurer, Farm Bureau, to pay the rest of his damages under his uninsured motorist/underinsured motorist ("UM/UIM") coverage. Farm Bureau paid $75,000—the UM/UIM policy limit of $100,000 less $25,000 to offset the State Farm payment.
When Mr. Hawley purchased his Farm Bureau policy, he selected UM/UIM coverage, but he also signed an endorsement rejecting stacked coverage, limiting his UM/UIM coverage to $100,000. After the accident, however, Mr. Hawley thought he should be entitled to "stacked" UM/UIM coverage of $600,000 because he insured six vehicles with Farm Bureau.
Mr. Hawley sued Farm Bureau, alleging his rejection of stacked coverage was not valid under New Mexico law. The district court disagreed and granted summary judgment to Farm Bureau. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
An at-fault driver in an automobile accident who lacks enough insurance to cover the injured party's damages is an uninsured or underinsured motorist. UM/UIM coverage allows an injured party to recover from its own insurer in this circumstance, up to the UM/UIM coverage limit. See Progressive Nw. Ins. Co. v. Weed Warrior Servs., 245 P.3d 1209, 1211 (N.M. 2010).
"Stacked" coverage enables an insured to increase this coverage limit by aggregating UM/UIM coverage across multiple vehicles for an accident involving any one of the vehicles. As explained in State Farm Mutual Automobile Insurance Co. v. Safeco Insurance Co., 298 P.3d 452 (N.M. 2013), "The term 'stacking' refers to an insured's attempt to recover damages in aggregate under more than one policy or one policy covering more than one vehicle until all damages either are satisfied or the totalpolicy limits are exhausted." Id. at 454 (quotation omitted). For instance, the coverage limit doubles when an injured party insures two vehicles and stacks coverage across those vehicles.
Farm Bureau issued Mr. Hawley a motor vehicle insurance policy covering six vehicles and providing bodily injury liability coverage of $100,000 per person and $300,000 per accident. When Mr. Hawley bought the policy, he completed an "Uninsured And Underinsured Motor Vehicle Coverage Stacking Rejection/Coverage Selection" form. See App. at 91-92.
As described below, Farm Bureau allowed Mr. Hawley to (a) select UM/UIM coverage and, if he did, (b) select stacked UM/UIM coverage. He chose UM/UIM coverage but rejected stacked coverage. Farm Bureau then issued the policy showing Mr. Hawley's selections as (c) declarations.
The selection form described base-level UM/UIM coverage—UM/UIM coverage without stacking. It instructed Mr. Hawley that he could (1) purchase coverage up to his liability limit, (2) purchase coverage in a lesser amount, or (3) reject coverage.
The form provided a menu of "Available UM Coverage Limit[s]": the "[l]iability limit" of "$100,000 per person/$300,000 per accident," two intermediate offerings of $50,000/$100,000 and $25,000/$50,000, and "$0 - REJECT UM coverage completely."Id. at 91. Next to the various coverage levels, the form listed the applicable premiums. The following excerpt from his policy shows Mr. Hawley selected the maximum coverage level ($100,000/$300,000).
Please select the desired UM coverage limit below:
Available UM Coverage Limit
[cannot exceed Liability limit]: Non- stacked UM Comparable Policy Premium* Stacked UM Comparable Policy Premium* [ ] $0 - REJECT UM coverage completely: $ 0 $ 0 [ ] $25,000 per person/$50,000 per accident $ 137.12 $ 348.24 [ ] $50,000 per person/$100,000 per accident $ 198.80 $ 542.72 [×]$100,000 per person/$300,000 per accident $274.16 $ 725.56 * The selection Of Non-stacked UM verses Stacked UM is made on the next page. (The premiums shown above are UM premiums only)
Id.1 Note that the policy offered non-stacked and stacked coverage at various levels of base UM/UIM coverage.
The policy listed "[r]epresentations," including that "UM coverage ha[d] been explained" and that the insured "selected the UM coverage limit as indicated." Id. at 92 (emphasis omitted). Mr. Hawley signed below these representations.
The policy also allowed Mr. Hawley to select whether any UM/UIM coverage he purchased would be stacked for all six vehicles. As the foregoing excerpt shows, the selection form listed the options and applicable premiums for non-stacked and stacked coverage. For example, the premium for the maximum level of non-stacked UM/UIM coverage was $274.16, and the premium for the stacked equivalent was $726.56. Farm Bureau did not offer Mr. Hawley a choice of stacked coverage on fewer than six vehicles.
The form then instructed that Mr. Hawley could reject stacked coverage. It also explained the benefits from paying for stacked coverage: "Intra-Policy Stacked UM Coverage refers to combining the UM coverage limits . . . for each vehicle specifically insured for UM coverage under the policy." Id.
The following excerpt from the policy shows Mr. Hawley selected the option stating "I reject Intra-Policy Stacked UM Coverage and, instead, select Non-Stacked UM Coverage." Id. He signed his name under this selection.2
The declarations in Mr. Hawley's policy reflected both the UM/UIM coverage level he selected and his rejection of stacking for each of his six insured vehicles. Eachentry said that the UM/UIM coverage was $100,000 per person/$300,000 per accident, and "Uninsured and Underinsured Motor Vehicle Stacking Rejected." Id. at 94-96.
The policy also explained the meaning of "stacking rejected":
If stacking rejected is indicated in the Declarations for a particular vehicle then the limits provided for that vehicle to protect against damages "caused by" accidents with "uninsured motor vehicles" and "underinsured motor vehicles" are to be applied separately to that vehicle and cannot be stacked, added together or combined to determine the amount of insurance available from one "occurrence" . . . .
In 2015, Mr. Hawley was involved in a car accident and suffered injuries. He recovered the policy limit of $25,000 from State Farm, the at-fault driver's insurer. Farm Bureau then paid Mr. Hawley $75,000, reflecting $100,000 of UM/UIM coverage minus the statutory offset of $25,000 from the at-fault driver's policy.4 Farm Bureau capped its payment at the non-stacked coverage limit in Mr. Hawley's policy.
In 2018, Mr. Hawley sued Farm Bureau in New Mexico state court. Farm Bureau removed the action to the U.S. District Court for the District of New Mexico on diversitygrounds. Mr. Hawley and Farm Bureau agreed to have a magistrate judge conduct the proceedings.
Mr. Hawley voluntarily dismissed all of his claims except those relating to stacking. Farm Bureau then moved for summary judgment, arguing that Mr. Hawley could not stack his UM/UIM coverages. The district court granted summary judgment for Farm Bureau and dismissed the action with prejudice.
Mr. Hawley argues his rejection of stacked UM/UIM insurance was invalid because Farm Bureau did not provide him an opportunity to "reject each and every possible combination of stacking for each and every vehicle under his policy." See Aplt. Br. at 12. He insists that Farm Bureau—rather than offering a choice only between no stacking at all or stacking coverage on all six of his vehicles—should have offered him the choice of stacking on a per-vehicle basis.
For example, at his selected base UM/UIM coverage level of $100,000 per person, Mr. Hawley contends that Farm Bureau should have offered him the opportunity to stack his UM/UIM coverage across two vehicles (doubling his coverage to $200,000), or stack his coverage across three vehicles (tripling his coverage to $300,000), or stack his coverage across four vehicles (quadrupling his coverage to $400,000), and so on.5 Only then, he argues, would a rejection of stacked coverage be valid.
We conclude New Mexico law does not require insurers to offer such per-vehicle stacking to obtain a valid rejection.
"We review de novo the district court's grant of summary judgment and apply the same legal standard used by the district court." Cornhusker Cas. Co. v. Skaj, 786 F.3d 842, 849 (10th Cir. 2015) (quotation omitted). A court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "In applying this standard, [the court] view[s] the evidence and the reasonable inferences to be drawn from the evidence in the light most favorable to the nonmoving party." Parker Excavating, Inc. v. Lafarge W., Inc., 863 F.3d 1213, 1220 (10th Cir. 2017) (quotation omitted).
"We also review legal questions de novo, including the district...
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