Marckstadt v. Lockheed Martin Corporation

Decision Date08 July 2008
Docket NumberNo. 27,222.,27,222.
Citation2008 NMCA 138,194 P.3d 121
PartiesTimothy MARCKSTADT, Plaintiff-Appellant, v. LOCKHEED MARTIN CORPORATION MISSILES & FIRE CONTROL, Mid-Century Insurance Company and Pacific Employers Insurance Company of Philadelphia, Pennsylvania, Defendants-Appellees.
CourtCourt of Appeals of New Mexico

Stephen E. Hosford, Martin, Lutz, Roggow, Hosford & Eubanks, P.C., Las Cruces, NM, for Appellant.

J. Monty Stevens, Stevens and Associates, El Paso, TX, Craig D. Gant, Gant & Hicks, P.L.L.C., Thalassia Mombeleur, Dallas, TX, for Appellees.

OPINION

BUSTAMANTE, Judge.

{1} Plaintiff-Appellant's motion for rehearing is granted. The opinion filed in this case on June 6, 2008, is withdrawn and this opinion is substituted in its place.

{2} The question presented in this case is whether, under New Mexico law, the requirements for a valid rejection of uninsured motorist (UM) and/or underinsured motorist (UIM) coverage have been met when a business automobile insurance policy contains a written—but unsigned—endorsement indicating such rejection. The district court concluded that the unsigned endorsement constituted sufficient evidence of a valid rejection. We affirm.

BACKGROUND

{3} The facts of this case are not in dispute. Defendant Pacific Employers Insurance Company (PEIC) issued a business automobile insurance policy (the Policy) to Defendant Lockheed Martin Corporation (Lockheed) on September 1, 1998. Endorsement No. 8 to the Policy (the Endorsement) sets forth the status of UM/UIM coverage in a variety of states. The Endorsement contains the following statement: "It is hereby understood and agreed that Uninsured/Underinsured Motorist Coverage is rejected in those [s]tates where permitted and minimum limits apply in all other [s]tates as designated below." Beneath that statement are three columns: "State," "Reject," and "Minimum Limits." The "State" column contains a vertical list of states represented by their two-letter initials. The "Reject" column displays the letter "X" next to certain states to indicate whether UM/UIM coverage has been rejected for that state. The "Minimum Limits" column contains a numeric notation (e.g. 50,000) that indicates the minimal recovery permitted by statute in states that do not permit an insured to waive UM/UIM coverage. There is a signature line for an "Authorized Agent" at the bottom of each page of the Endorsement.

{4} With respect to New Mexico, the "Reject" column contains an "X" next to the initials "NM," indicating that Lockheed rejected UM/UIM coverage in New Mexico. However, the Endorsement does not contain a signature or the initials of a Lockheed agent. Lockheed Vice President Walter Skowronski signed a separate UM/UIM coverage rejection form on February 2, 1999, several months after the Policy went into effect.

{5} On November 25, 1998, while the Policy was in effect but before Mr. Skowronski signed the UM/UIM rejection form, Timothy Marckstadt (Plaintiff) was injured in an automobile accident while in the scope and course of his employment with Lockheed. Plaintiff filed a civil suit against the Estate of Gerardo Rios, the driver of the vehicle that collided with Plaintiff, and recovered policy limits of $25,000. Plaintiff sought UIM coverage from Lockheed under the Policy. However, Lockheed stated that it believed it had lawfully rejected UIM coverage.

{6} Plaintiff brought suit against Lockheed and PEIC seeking declaratory relief regarding, among other things, whether Lockheed and PEIC have any obligation to provide Plaintiff UIM benefits under the Policy. Lockheed filed a motion for summary judgment in which it argued that it validly rejected UM/UIM coverage as evidenced by the Endorsement. PEIC filed an answer and counterclaim asserting the same argument.

{7} After several lengthy delays in the litigation, the district court held a hearing on Lockheed's motion for summary judgment on August 28, 2006. Counsel for Plaintiff argued that, in order for Lockheed's rejection of UIM coverage to be valid, the Endorsement had to be signed and attached to the Policy. Counsel relied on New Mexico Administrative Code Section 13.12.3.9 regarding the proper method for rejection of UIM coverage. That section provides as follows:

The rejection of the provisions covering damage caused by an uninsured or unknown motor vehicle as required in writing by the provisions of [NMSA 1978, § 66-5-301 (1983)] must be endorsed, attached, stamped or otherwise made a part of the policy of bodily injury and property damage insurance.

13.12.3.9 NMAC. During the hearing, the district court had the following exchange with Plaintiff's counsel:

COURT: [I]t is the Plaintiff's position that an endorsement has to be signed and that signature did not occur until after the accident. Is that a fair statement of your argument?

COUNSEL: That's fair. Yes, there had to be a signed rejection attached to the policy.

COURT: Why would that "or otherwise" clause [of Section 13.12.3.9 NMAC] not take care of that, "or otherwise" be made part of the policy?

COUNSEL: The way I read those regulations, it said it must be endorsed, attached ....

COURT: It seems like it's not.... It has to be any one of them, it sounds like to me.

{8} At the conclusion of the hearing, the district court announced its decision from the bench:

Well, that regulation [Section 13.12.3.9, NMAC], it may not be the best written regulation I ever saw [sic]. But I think that "or otherwise made part of the policy," I think that this matter—that Lockheed has done that. Even though they call it an endorsement. Even though there may be a question as to whether that endorsement should be signed, I think it's clear that they intended to reject [UM coverage], and [the Endorsement] is otherwise made a part of the policy.

So with respect to that issue, I think that Lockheed prevails on that one.

The parties later confirmed with the district court that its grant of summary judgment to Lockheed would also apply to PEIC. The district court entered its order granting summary judgment in favor of Lockheed and PEIC on October 12, 2006. Plaintiff timely appealed from that order.

{9} Plaintiff sets forth two arguments on appeal: (1) Lockheed failed to timely reject UIM coverage prior to Plaintiff's injury and (2) public policy mandates that a selection/rejection form be signed and attached to an automobile insurance policy before rejection of UM/UIM coverage can be effective. Lockheed and PEIC respond that (1) Lockheed validly rejected UIM benefits under either Texas or New Mexico law and (2) this Court may affirm summary judgment on the alternative ground that Plaintiff received workers' compensation benefits that constitute Plaintiff's exclusive remedy under either Texas or New Mexico law.

{10} We note at the outset that the district court did not reach the exclusive remedy issue because it granted summary judgment on the dispositive issue of Lockheed's rejection of UM/UIM coverage. Because we affirm the district court's grant of summary judgment on that basis, we likewise do not reach the exclusive remedy issue. Additionally, because there was no argument below regarding whether Texas law should apply to the UIM coverage rejection issue, and because the district court made its decision on the basis of New Mexico law, we apply New Mexico law in our analysis of this case. See Jim v. CIT Fin. Servs. Corp., 86 N.M. 784, 786, 527 P.2d 1222, 1224 (Ct.App.1974) (declining to address conflict of laws issue that was not raised in the district court).

DISCUSSION
Standard of Review

{11} "Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law." Phoenix Indem. Ins. Co. v. Pulis, 2000-NMSC-023, ¶ 6, 129 N.M. 395, 9 P.3d 639 (internal quotation marks and citation omitted). We review the district court's decision to grant summary judgment de novo. Id. We also review questions of statutory construction de novo. State Farm Mut. Auto. Ins. Co. v. Luebbers, 2005-NMCA-112, ¶ 6, 138 N.M. 289, 119 P.3d 169, cert. quashed, 2006-NMCERT-010, 140 N.M. 675, 146 P.3d 810.

New Mexico Procedure for Rejecting UM/UIM Coverage

{12} Rejection of UM/UIM coverage in New Mexico is governed by Section 66-5-301. Section 66-5-301 requires an insurer to provide UM/UIM coverage in an automobile liability policy unless the named insured rejects such coverage in accordance with the rules and regulations promulgated by the superintendent of insurance. Romero v. Dairyland Ins. Co., 111 N.M. 154, 155, 803 P.2d 243, 244 (1990). As mentioned above, the applicable regulation is found at NMAC 13.12.3.9 and states:

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 ... must be endorsed, attached, stamped or otherwise made a part of the policy of bodily injury and property damage insurance.

Our Supreme Court has stated that Section 66-5-301 "embodies a public policy of New Mexico to make [UM] coverage a part of every automobile liability insurance policy issued in this state, with certain limited exceptions." Romero, 111 N.M. at 156, 803 P.2d at 245. The Court explained the purpose of the regulation as follows:

The regulation that the rejection be made a part of the policy delivered to the insured quite apparently is to ensure that the insured has affirmative evidence of the extent of coverage. Upon further reflection, consultation with other individuals, or after merely having an opportunity to review one's policy at home, an individual may well reconsider his or her rejection of [UM] coverage. Providing affirmative evidence of the rejection of the coverage comports with a policy that any rejection of the coverage be knowingly and intelligently made.... For that reason [UM] coverage will be read into an insured's liability policy when a...

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  • Marckstadt v. Lockheed Martin Corp.
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    ...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 op......
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