Lucero v. Nationwide Mut. Ins. Co.
| Decision Date | 30 September 2022 |
| Docket Number | 19-cv-0311 KK/JHR |
| Parties | PATRICIA LUCERO, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY; NATIONWIDE PROPERTY AND CASUALTY INSURANCE COMPANY; NATIONWIDE GENERAL INSURANCE COMPANY; NATIONWIDE INSURANCE COMPANY OF AMERICA; NATIONWIDE ASSURANCE COMPANY; NATIONWIDE MUTUAL FIRE INSURANCE COMPANY; TITAN INDEMNITY COMPANY; and VICTORIA FIRE AND CASUALTY COMPANY, Defendants. |
| Court | U.S. District Court — District of New Mexico |
THIS MATTER is before the Court on three fully briefed motions (1) a Motion to Strike Plaintiff's Response to Notice of Supplemental Authority (Doc. 48) (“Motion to Strike”), filed by Defendants Nationwide Mutual Insurance Company, Nationwide Property and Casualty Insurance Company, Nationwide General Insurance Company, Nationwide Insurance Company of America, Nationwide Assurance Company and Nationwide Mutual Fire Insurance Company (collectively “Nationwide” or the “Nationwide Defendants”), (2) a Motion for Judgment on the Pleadings (Doc. 27) filed by the Nationwide Defendants (the “Nationwide Motion”), and (3) a Motion for Judgment on the Pleadings (Docs. 24, 25) filed by Titan Indemnity Company and Victoria Fire and Casualty Company (collectively, “Titan”) (the “Titan Motion”).
Having reviewed the entire record and the applicable law and being otherwise sufficiently advised, the Court finds Nationwide's Motion to Strike well-taken and grants the motion. The Court further finds the Nationwide Motion well-taken in its challenge to the Court's subject matter jurisdiction over the Nationwide Defendants based on the claims presently asserted against them. As such, the Court dismisses Plaintiff's claims against these Defendants without prejudice to her ability to seek leave to amend her First Amended Complaint (“FAC”). Finally, the Court finds the Titan Motion well-taken in part. Specifically, the Court dismisses Plaintiff's claims for Reformation of Insurance Policy (Claim 4), Unjust Enrichment (Claim 6), and Injunctive Relief in whole, and dismisses in part Plaintiff's claims for Negligence (Claim 1), Violations of the New Mexico Unfair Insurance Practices Act (Claim 3) and Breach of the Covenant of Good Faith and Fair Dealing (Claim 5). In all other respects, the Titan Motion is denied.
Under New Mexico law, motorists are required “to carry liability insurance limits of at least $25,000 per person and $50,000 per occurrence and uninsured motorist coverage (which includes underinsured motorist coverage) of at least the same amount.” Crutcher v. Liberty Mut. Ins. Co., 2022-NMSC-001, ¶ 17, 501 P.3d 433, 437 (“Crutcher”[2]); see N.M. Stat. Ann. §§ 66-5-215(A)(1), 66-5-301(A)-(B) (1983). “[O]nly if the motorist purchases higher than minimum liability coverage may higher than minimum [uninsured/underinsured motorist (“UM/UIM”)] coverage be purchased.” Crutcher, 2022-NMSC-001, ¶ 17, 501 P.3d at 437. Consistent with this statutory scheme, Plaintiff purchased liability insurance coverage issued by Titan, with the minimum legal limits of $25,000 per person and $50,000 per occurrence. (Doc. 1-1 at 9). Plaintiff also purchased UM/UIM coverage of $25,000 per person and $50,000 per occurrence, which was the maximum amount permitted due to Plaintiff's purchase of liability coverage at that level. (Doc. 1-1 at 9); § 66-5-301(A)-(B). Plaintiff paid a premium of $74 for UM/UIM coverage for the period from August 4, 2014, to February 4, 2015.[3] (Doc. 1-1 at 9).
Plaintiff's policy (the “Policy”) defines an “underinsured motor vehicle” as “a motor vehicle for which bodily injury or property damage liability coverage is in effect; however, their total amount is less than the limits of this coverage.” (Doc. 25-1 at 25). It further provides that “[c]overage limits will be reduced by any . . . sums paid by or for any liable parties, including, with respect to an uninsured motor vehicle which is underinsured: (1) reimbursement for Personal Injury Protection benefits; (2) proceeds paid to medical providers; or (3) proceeds received as attorney fees.” (Id. at 27-28) (“Offset Provision”). The Offset Provision is consistent with Schmick v. State Farm Mutual Automobile Insurance Company, in which the New Mexico Supreme Court held that an insured's UM/UIM recovery “is always offset by the tortfeasor's liability insurance coverage.” 1985-NMSC-073, ¶ 30, 704 P.2d 1092, 1100. This principle is known as the “offset rule.” Crutcher, 2022-NMSC-001, ¶ 9, 501 P.3d at 435.
On January 2, 2015, Plaintiff was involved in an automobile accident caused by a driver whose liability coverage was the same as Plaintiff's: $25,000 per person and $50,000 per occurrence. (Doc.1-1 ¶¶ 34-35, 39). Plaintiff received $25,000 from the tortfeasor's insurer. (Id. ¶¶ 34-35, 39, 43-45). Because she incurred over $50,000 in damages from the accident, Plaintiff filed a claim for underinsured motorist benefits under the Policy. (Id. at ¶¶37, 39, 43-44). Titan denied Plaintiff's claim on the ground that the maximum amount she could recover through the UM/UIM coverage she had purchased from Titan, i.e., $25,000, was offset by the $25,000 she received from the tortfeasor's insurer pursuant to the Offset Provision in the Policy. (Id. ¶ 47). Plaintiff then filed suit in the Second Judicial District of New Mexico, and Defendants removed the matter to this Court. (Docs. 1, 1-1).
In the FAC, Plaintiff alleges that Titan's application, application process, and Policy misled her about the offset rule and failed to inform her that “underinsured motorist coverage is illusory in the event of a covered occurrence involving an underinsured driver” who also carries minimum limits insurance. (Doc. 1-1 ¶ 26). Plaintiff also alleges that Titan's agents made “oral and written statements that were false and misleading in connection with the sale of underinsured motorist insurance in New Mexico.” (Id. ¶ 81). She asserts that Titan “or its agents took advantage of its customers' lack of knowledge, ability, experience or capacity to a grossly unfair degree by marketing, advertising, selling, and receiving premium payments for illusory and/or misleading underinsured motorist coverage.” (Id. ¶ 83). In addition, Plaintiff maintains that, because of Titan's misrepresentations, she “mistakenly believed that, by paying a premium for underinsured motorist coverage, [she] would receive underinsured motorist coverage at those same specific dollar amounts and limits.” (Id. ¶¶ 104, 106).
(Doc. 1-1 at ¶ 50). The proposed class includes a proposed subclass, which includes All Class Members (and their heirs, executors, administrators, successors, and assigns from whom Nationwide collected a premium for an underinsured motorist coverage on a policy that was issued or renewed in New Mexico by Nationwide 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 motorist coverage, because of the statutory offset recognized in Schmick v. State Farm Mutual Automobile Insurance Company, [1985-NMSC-073,] 704 P.2d 1092 [], 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 denied those benefits by Nationwide due to the Schmick offset.
(Id. ¶ 52).
In sum, as in several other cases currently pending in this district, Apodaca v. Young Am. Ins. Co., No. 18-cv-399 RB/JHR, 2019 WL 231757, at *6 (D.N.M. Jan. 16, 2019); see Belanger v. Allstate Fire & Cas. Ins. Co., No. 19-cv-317 WJ/SCY, 2022 WL 611487, at *8 (D.N.M. Mar. 2, 2022); Thaxton v. GEICO Advantage Ins. Co., No. 18-cv-306 KWR/KK, 2022 WL 562264, at *1 (D.N.M. Feb. 24, 2022); Palmer v. State Farm Mut. Auto. Ins. Co., No. 19-cv-301 KWR/SCY, 2022 WL 343590, at *1 (D.N.M. Feb. 4, 2022); Crutcher v. Liberty Mut. Ins. Co., No.: 18-cv-412 JCH/KBM, 2019 WL 12661166 at *2(D.N.M. Jan. 9, 2019); Schwartz v. State Farm Mut. Auto. Ins. Co., No. 18-cv-328 WJ/SCY, 2018 WL 4148434, at *5 (D.N.M. Aug. 30, 2018).
Based on these allegations, Plaintiff asserts claims for negligence; violations of New Mexico's Unfair Trade Practices Act (“UTPA”), N.M. Stat. Ann. §§ 57-12-1 to -26; violations of New Mexico's Unfair Insurance Practices Act (“UIPA”) N.M. Stat. Ann. §§ 59A-16-1 to -30; reformation of the insurance policy; breach of the covenant of good faith and fair dealing; unjust enrichment; negligent misrepresentation; and declaratory judgment and injunctive relief. (Doc.1-1).
Defendants filed answers to the FAC. (Docs. 5, 6). While this matter was pending, United States District Judge Judith C. Herrera presiding in ...
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