Marckstadt v. Lockheed Martin Corp.
Decision Date | 19 November 2009 |
Docket Number | 447.,No. 31,258,31 |
Citation | 228 P.3d 462 |
Parties | Timothy MARCKSTADT, Plaintiff-Petitioner, v. LOCKHEED MARTIN CORPORATION, Missiles & Fire Control, Mid-Century Insurance Company, and Pacific Employers Company, Insurance Company of Philadelphia, Pennsylvania, Defendants-Respondents. Federated Service Insurance Company, a Minnesota corporation, Plaintiff-Appellee, v. Danny Martinez, Defendant-Appellant. |
Court | New Mexico Supreme Court |
COPYRIGHT MATERIAL OMITTED
Law Office of Stephen E. Hosford, P.C., Stephen E. Hosford, Las Cruces, NM, for Petitioner.
Butt, Thornton & Baehr, P.C., Emily A. Franke, Albuquerque, NM, Stevens & Associates, J. Monty Stevens, El Paso, TX, Gant & Hicks, P.L.L.C., Craig C. Gant, Dallas, TX, for Respondents.
Peifer, Hanson & Mullins, P.A., Robert E. Hanson, Lauren Keefe, Albuquerque, NM, for Appellee and for Amicus Curiae Federated Service Insurance Company.
Janet Santillanes, P.C., Janet K. Santillanes, James T. Roach, Ewing & Ewing, P.C., Steven C. Ewing, Albuquerque, NM, for Appellant and for Amicus Curiae Danny Martinez.
{1} In these consolidated cases, Appellants, employees who were injured on the job, sought uninsured or underinsured (UM/UIM) motorist benefits under their employers' insurance policies, which were denied. They claim that because they were covered under their employers' automobile liability policies and because their employers and their employers' insurers failed to properly reject UM/UIM coverage, it should be read into their employers' policies. Specifically, Appellants argue that in order to reject UM/UIM coverage in New Mexico, the insured must provide the insurer with a written, signed rejection, which must be attached to the insurance policy. Appellees, the insurers in both cases and one of the employers, contend that because there is no dispute that the employers intended to reject such coverage, and because this rejection was evidenced by endorsements to their policies, UM/UIM coverage was successfully rejected.
{2} NMSA 1978, Section 66-5-301 (1983) provides, in relevant part:
13.12.3.9 NMAC provides that:
The rejection of the provisions covering damage caused by an uninsured or unknown motor vehicle as required in writing by the provisions of Section 66-5-301 NMSA 1978 must be endorsed, attached, stamped or otherwise made a part of the policy of bodily injury and property damage insurance.
{3} We consolidated these cases because they involve substantially similar issues. Gov't Employees Ins. Co. v. Welch, 2004-NMSC-014, ¶ 3, 135 N.M. 452, 90 P.3d 471. In Marckstadt v. Lockheed Martin Corp., the issue reaches us on appeal of the district court's grant of summary judgment in favor of Appellees. In Federated Service Insurance Co. v. Martinez, the question has been certified from the Tenth Circuit Court of Appeals.
{4} Answering the question certified in Federated, we hold that an insurer must obtain a written rejection of UM/UIM coverage from the insured in order to exclude it from an automobile liability insurance policy under Section 66-5-301 and 13.12.3.9 NMAC. However, we hold that neither the statute nor the regulation requires that the insured's written rejection be signed. Also, despite the clear requirement under 13.12.3.9 NMAC that the rejection of UM/UIM coverage be attached, endorsed, stamped, or otherwise made part of the policy, we hold that the written rejection itself need not be made part of the policy. Accordingly, with respect to Marckstadt, because we cannot determine on the basis of the record before us whether the insurer obtained a written rejection of UM/ UIM coverage from the insured, we find the district court's grant of summary judgment improper and remand.
{5} The facts of Marckstadt are not in dispute. Defendant-Appellee Lockheed Martin Corp. entered into an insurance policy with Defendant-Appellee Pacific Employers Insurance Co. that became effective on September 1, 1998. It appears undisputed that the policy included some liability coverage for Plaintiff-Appellant Timothy Marckstadt, a Lockheed employee. The policy also included an endorsement entitled "Limits of Liability — Uninsured Motorists" that featured a list of states and next to each, either an "X" indicating the rejection of UM/UIM coverage or a dollar figure reflecting the state's "minimum limits." Next to New Mexico, the endorsement contained an "X" indicating rejection. Lockheed maintains that it intended to reject UM/UIM coverage, and Marckstadt does not appear to dispute this.
{6} However, the record is not clear regarding the circumstances resulting in the inclusion of this endorsement in the policy. There is no evidence of any discussions or correspondence in which Lockheed directed Pacific to exclude UM/UIM coverage from its policy. The record shows that before the policy went into effect, documents were provided to Lockheed "for its execution" that were subsequently returned to its underwriter post-execution. The record does not contain all of the documents that were "executed," but it does include a copy of the relevant endorsement and several associated portions of the policy as they appeared when Lockheed returned them to its underwriter. From these documents alone, it is not clear exactly what Lockheed did to "execute" its policy: there is no signature on the endorsement, and from the record we cannot determine whether it was Lockheed, Pacific, or some other party who drafted or filled in the endorsement, for example, by indicating with an "X" that coverage in New Mexico was rejected. It was only after the accident giving rise to this case that Lockheed signed a rejection of UM/UIM coverage.1
{7} On November 25, 1998, after the policy was in effect, Plaintiff-Appellant Timothy Marckstadt was injured in an automobile accident through no fault of his own while acting within the scope and course of his employment by Lockheed. Marckstadt received workers' compensation benefits and was awarded $25,000 from Allstate, the insurer of the driver who hit him. He then brought this action, asking the district court to determine whether he was owed UIM benefits from his personal insurer, Farmers Insurance Group, or from his employer, Lockheed, or both. Marckstadt later amended his complaint to name Defendant Mid-Century Insurance Co. instead of Farmers and to include Pacific, Lockheed's insurance provider. Marckstadt's claims against Mid-Century were removed to arbitration and abated pending the determination of whether Lockheed was primarily responsible for UIM coverage. Lockheed and Pacific moved for summary judgment, claiming that because Lockheed's policy contained the endorsement reflecting Lockheed's intent to reject, UIM coverage had been rejected under Section 66-5-301 and 13.12.3.9 NMAC, and that, in any case, Marckstadt was precluded from seeking his claims under the Texas Workers' Compensation Act, Tex. Lab.Code Ann. § 408.001(a) (1993).
The district court did not reach the question regarding the Texas workers' compensation statute. The Court of Appeals affirmed, holding that the attached but unsigned endorsement satisfied the requirements of the insurance code and regulations, and that public policy did not mandate a contrary outcome. Marckstadt v. Lockheed Martin Corp., 2008-NMCA-138, ¶¶ 12, 23, 145 N.M. 90, 194 P.3d 121. Like the trial court, the Court of Appeals did not find support for Marckstadt in either the statute or the regulation. Id. ¶ 23. The Court opined that the regulation's purpose is to provide affirmative evidence to the insured of the rejection of coverage. Id. ¶ 12. Since the regulation allowed many methods of providing such evidence, and since there was no signature requirement on its face, the Court could find no evidence that a signature was required. Id. ¶¶ 15-23. In addition, the Court could not discern any policy reason to require a signature where "the insured maintains that he or she never doubted whether UM coverage had been rejected." Id. ¶ 21.
{9} We granted certiorari to decide "whether a rejection of uninsured motorist (UM) and/or...
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