Jaramillo v. Gov't Emps. Ins. Co.

• Decision Date: 29 July 2014
• Docket Number: No. 12-2108,12-2108
• Parties: MELVYN JARAMILLO; DEBBIE JARAMILLO, for themselves and others similarly situated, Plaintiffs-Appellants, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY; GEICO GENERAL INSURANCE COMPANY; GEICO INDEMNITY COMPANY; GEICO CASUALTY COMPANY, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

MELVYN JARAMILLO; DEBBIE JARAMILLO,for themselves and others similarly situated, Plaintiffs-Appellants, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY;GEICO GENERAL INSURANCE COMPANY; GEICO INDEMNITY COMPANY;GEICO CASUALTY COMPANY, Defendants-Appellees.

No. 12-2108

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

July 29, 2014

(D.C. No. 6:10-CV-01095-JCH-LFG)

(D.N.M.)

ORDER AND JUDGMENT^*

Before TYMKOVICH, HOLLOWAY,^** and HOLMES, Circuit Judges.

Melvyn and Debbie Jaramillo filed a class-action complaint against Government Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company, and GEICO Casualty Company (collectively "GEICO"), bringing claims arising out of a motor vehicle accident. The district court granted summary judgment to GEICO and denied the Jaramillos' subsequent motion to reconsider, and the Jaramillos challenge both rulings on appeal. In addition, the Jaramillos have filed a motion with this court requesting certification of a legal question to the New Mexico Supreme Court.

Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the district court's award of summary judgment to GEICO, affirm the district court's denial of reconsideration, and deny the Jaramillos' motion to certify.

I

On March 31, 2009, the Jaramillos purchased an automobile insurance policy ("the Policy") from GEICO. The Policy insured four vehicles owned by the Jaramillos; for each vehicle, it provided bodily-injury liability coverage with limits of $50,000 per person and $100,000 per occurrence (alternatively styled "$50,000/$100,000"), and property-damage coverage with a limit of $50,000. As initially issued, the Policy also supplied uninsured/underinsured motorist ("UM/UIM") coverage. That version of thePolicy provided UM/UIM bodily-injury coverage limits of $25,000 per person and $50,000 per occurrence on each vehicle.¹

Also on March 31, 2009, in connection with the Jaramillos' purchase of the Policy, GEICO sent the Jaramillos a "new business packet" including, inter alia, a copy of the Policy, endorsement declarations, and a blank New Mexico UM/UIM Coverage Information and Selection Form (the "Option Form"). On April 21, 2009, GEICO received a returned copy of the Option Form containing the printed name "Debbie Jaramillo" and the signature "D. Jaramillo." Aplt. App. at 192 (Option Form, filed Feb. 21, 2011). Although that document is not dated, the envelope in which the Jaramillos mailed it bears a stamp indicating transmittal from Albuquerque, New Mexico on April 4, 2009. See id. at 193.

The first page of the Option Form reads, "I have had [UM/UIM] Coverageexplained to me and I fully understand it," and continues:

I also understand that my [UM/UIM] Coverage election applies to this policy and all vehicles insured under this policy until I notify [GEICO], in writing, that I wish to change my election. My [UM/UIM] Coverage election shall apply to any renewal, reinstatement, substitute, amended, altered, modified, or replaced policy with this company or any affiliated Government Employees Insurance Company. If a box is not checked, I understand that UM/UIM Bodily Injury Coverage will be issued with limits equal to the Bodily Injury Liability Limits of my policy and my UM Property Damage Coverage will be issued with limits of $10,000 each accident.

Any change to my [UM/UIM] Coverage election shall be effective as of the date of the written notification being received and shall apply to all vehicles currently on the policy and to all vehicles added to the policy in the future.

Id. at 191.

Beneath these statements are two boxes corresponding to the insured's choice regarding UM/UIM coverage. Next to the first box is the option to reject UM/UIM coverage, which is presented as follows:

I reject UM/UIM Bodily Injury Coverage and UM Property Damage Coverage. I have been offered [UM/UIM] Coverage up to an amount equal to the limits of liability coverage and I reject the option to purchase any [UM/UIM] Coverage. I understand that New Mexico law requires [GEICO] to include [UM/UIM] Coverage with each policy of automobile insurance sold in New Mexico. I understand that UM/UIM provides insurance for losses which I may incur if I am injured by a person who is not insured or who does not have enough insurance to compensate me for my injury. I understand that New Mexico law allows me to decide whether I want to keep the UM/UIM Coverage on my insurance policy. Based on my understanding, I choose to decline UM/UIM Coverage. I understand that until I inform [GEICO] in writing that I wish to add UM/UIM Coverage to my insurance policy, no automobile insurance policy issued to me by [GEICO] will provide coverage if I am injured or my property is damaged by an uninsured orunderinsured motorist.

Id. The Option Form signed and returned by the Jaramillos contains a checkmark in the box beside the foregoing language.

The second box on the Option Form—left blank on the version returned by the Jaramillos—accompanies the option to select UM/UIM coverage. This option states:

I select UM/UIM Bodily Injury Coverage and UM Property Damage Coverage for the following limits which are equal to or lower than my selected Bodily Injury Liability Limits (limits higher than the Bodily Injury Liability Limits may not be selected). I have also selected my option for UM Property Damage Coverage and understand that this coverage cannot be purchased without UM/UIM Bodily Injury Coverage.

Id.

The second page of the Option Form, which bears Ms. Jaramillo's signature, notes at the top that the Jaramillos' "bodily injury liability coverage limit is: $50,000/$100,000." Id. at 192 (capitalization altered). It then itemizes several options for UM/UIM coverage that may be purchased: eleven different UM/UIM bodily-injury coverage limits, and six different UM property-damage coverage limits. In detailing these potential coverage choices, the Option Form indicates the premium that would be assessed for each option for each of the Jaramillos' four vehicles. None of the boxes corresponding to any UM/UIM selections have been checked on the Jaramillos' returned Option Form.

"After receiving the signed Option Form" on April 21, 2009, "GEICO deleted the UM/UIM coverage initially selected by the Jaramillos . . . and refunded the proratedUM/UIM premium of $163.23." Id. at 304 (Mem. Op. & Order on Summ. J., filed Sept. 14, 2011). On April 22, 2009, GEICO issued a new Policy packet to the Jaramillos that contained a revised set of endorsement declarations. A section of the packet labeled "Important Messages" notifies the recipient that "[c]overages and/or limits were changed as you requested or due to state requirements." Id. at 199 (Family Auto. Pol'y Endorsement Decls., issued Apr. 22, 2009) (emphasis added) (capitalization altered). The next two pages set forth the Policy's updated coverage limits and associated premiums for all four insured vehicles—including the notation "INSURED REJECTS" in the sections corresponding to UM/UIM coverage limits. Id. at 200-01. In addition, both pages advise the insureds that "[c]overage applies where a premium or 0.00 is shown for the vehicle." Id. For each vehicle, the document displays a blank space in the premium section for UM/UIM coverage, as opposed to a dollar amount or "0.00." The revised Policy packet also included a blank Option Form listing the same coverage options and premiums as the version of the Option Form signed by Ms. Jaramillo—presumably for the Jaramillos' use if they chose to reconsider their rejection of UM/UIM coverage.

On July 11, 2009, while driving one of his insured vehicles, Mr. Jaramillo was involved in an automobile accident. He sustained serious injuries, spent several days in the hospital, and "incurred more than $200,000 in medical costs." Aplt. Opening Br. at 7. Because the operator of the other vehicle involved in the accident—who was apparently at fault—was an underinsured motorist, the Jaramillos sought UM/UIM benefits. When they did, GEICO refused to pay the claim, reasoning that the Jaramillos had expresslyrejected UM/UIM coverage. See Aplt. App. at 176 (Decl. of Ruben Garay, filed Feb. 21, 2011) (stating GEICO's view that on the date of the accident, "the Jaramillo Policy did not provide UM/UIM Bodily Injury coverage or UM/UIM Property Damage coverage as to any vehicle on the Jaramillo Policy").

After GEICO denied their claim, the Jaramillos filed suit in New Mexico state court. Their complaint, styled as a putative class action, stated eight² causes of action related to GEICO's refusal to pay UM/UIM benefits: (1) violation of New Mexico's Unfair Trade Practices Act; (2) violation of New Mexico's Trade Practices and Frauds Act and its insurance code; (3) a claim for UM/UIM benefits; (4) breach of the implied covenant of good faith and fair dealing; (5) breach of contract; (6) a request for injunctive relief;³ (7) a request for a declaratory judgment articulating their rights under the Policy; and (8) a request for punitive damages. GEICO timely removed the matter to federal court under the Class Action Fairness Act, see 28 U.S.C. § 1441(a); id. § 1332(d), and the parties agreed to submit to the district court the legal and factual issues underlying only the Jaramillos' claims before proceeding to address the question of class certification.See Dist. Ct. Doc. 33, at 1 (Am. Scheduling Order, filed Feb. 15, 2011) (noting the parties' "agree[ment] on a process where key legal issues could [first] be presented").

In early 2011, GEICO filed a motion for summary judgment, arguing that the Policy provided no UM/UIM coverage for Mr. Jaramillo's accident. GEICO contended that the Jaramillos' "written rejection of UM/UIM coverage [was] valid and enforceable as it fully complie[d] with New Mexico law." Aplt. App. at 162 (Summ. J. Mem., filed Feb. 21, 2011). As a result, GEICO argued, its denial of UM/UIM benefits was justified—and because all of the Jaramillos' claims stemmed from an allegedly improper denial of...