Montano v. Allstate Indem. Co.

• Decision Date: 20 May 2004
• Docket Number: No. 27,966.,27,966.
• Citation: 2004 NMSC 20,92 P.3d 1255,135 N.M. 681
• Parties: John MONTANO, Plaintiff-Petitioner, v. ALLSTATE INDEMNITY COMPANY, Defendant-Respondent.
• Court: New Mexico Supreme Court

92 P.3d 1255

135 N.M. 681

2004 NMSC 20

John MONTANO, Plaintiff-Petitioner, v. ALLSTATE INDEMNITY COMPANY, Defendant-Respondent.

No. 27,966.

Supreme Court of New Mexico.

May 20, 2004.

Rehearing Denied June 23, 2004.

McGinn & Carpenter, P.A., Randi McGinn, Clay Campbell, Albuquerque, NM, for Petitioner.

Modrall, Sperling, Roehl, Harris & Sisk, P.A., Lisa Mann, Jennifer A. Noya, Albuquerque, NM, for Respondent.

Miller Stratvert, P.A., Rudolph A. Lucero, Ruth Fuess, Albuquerque, NM, for Amicus Curiae, National Association of Independent Insurers.

Janet Santillanes, Albuquerque, NM, for Amicus Curiae, New Mexico Consumer Action, New Mexico Trial Lawyers Association.

OPINION

CHÁVEZ, Justice.

{1} In this case we are required, once again, to determine whether an insurance company effectively precluded its insured from stacking the policy limits of all of his vehicles insured under the policy for his uninsured motorist ("UM") claim. Although we have reviewed several such attempts by the insurance industry in the past, each case has presented a new wrinkle. Yet, this Court has never upheld an anti-stacking clause in UM policies because in each case we found either an ambiguity in the policy or the payment of multiple premiums. We have done so in order to protect the reasonable expectations of the insured and because the insured should only get what he or she pays for. In this case we decline Plaintiff's invitation to declare all anti-stacking provisions void as against public policy. However, to further the important principles previously described, and influenced by NMSA 1978, § 66-5-301(A) and (C) (1983), we modify Rodriguez v. Windsor Insurance Co., 118 N.M. 127, 879 P.2d 759 (1994) and Lopez v. Foundation Reserve Insurance Co., 98 N.M. 166, 646 P.2d 1230 (1982), and hold that insurance companies must obtain written rejections of stacking in order to limit their liability. Such a modification to our judicially-created stacking doctrine will ensure that the insured's reasonable expectations are met and that an insured gets what he or she pays for and no more. Such a change should also, we hope, end the seemingly constant litigation in this area of law. Because, however, we recognize that this represents a new direction in our stacking jurisprudence, we will resolve the stacking question in this case under Rodriguez, which we read to require a plain and affirmative declaration that the amount charged represents a single premium for a single amount of coverage. This policy lacks such a declaration, and in the absence of such a declaration, Plaintiff is entitled to stack all four coverages.

I. Facts

{2} Plaintiff was injured in a single-car accident allegedly caused by an unidentified truck who negligently sprayed rocks onto the road. As a result, Plaintiff filed suit against his insurer, Defendant Allstate Indemnity Company ("Allstate"), alleging that he was contractually entitled to compensation under his UM policy, as well as other independent causes of action. Plaintiff further claimed that he was entitled to "stack," or aggregate the UM coverage limits of his four insured automobiles. Allstate, on the other hand, contends that under the contract Plaintiff is only entitled to stack the coverage limits of two policies, and that the contract is enforceable under New Mexico law. After resolving all other claims, the parties submitted the resolution of the stacking question to the District Court on cross-motions for summary judgment, agreeing that the matter be submitted on the basis of "stipulated facts by the parties, affidavits and sworn deposition testimony." The District Court granted Allstate's motion and denied Plaintiff's. Plaintiff appealed, and the Court of Appeals, with Judge Bustamante specially concurring, affirmed the District Court. Montano v. Allstate Indemnity Co., 2003-NMCA-066, 133 N.M. 696, 68 P.3d 936. In a lengthy but lucid opinion, a majority of the Court of Appeals concluded that: (1) it would not advance this state's public policy to require stacking in every instance, id. ¶ 77; (2) courts should not look at the actuarial data behind a policy's premium structure, id. ¶¶ 58-59; and (3) the relevant provisions of Montano's insurance contract were not ambiguous, id. ¶ 47.

{3} The parties stipulate that the relevant contractual provisions are the declarations page, the policy itself, an amendatory endorsement, and an explanatory insert. The first page of Plaintiff's declarations lists separate premiums for each of Plaintiff's four covered automobiles, including a separate charge for UM property damage coverage, but one single charge for "additional coverages." That "additional coverage" is explained on a separate sheet to be UM coverage for bodily injury, and the limits of the coverage ($25,000 per person / $50,000 per accident) are indicated next to a single premium figure of $114.30.

{4} The relevant "Limits of Liability" policy provision, as amended by a later endorsement, provides in part:

The Uninsured Motorists Insurance for Bodily Injury limit stated on the declarations page is the maximum amount payable for this coverage by this policy for any one accident, except when two or more vehicles are insured under this policy, we will stack or aggregate up to two, but no more than two, uninsured motorist insurance for bodily injury coverages under this policy. This means the insuring of more than one auto for other coverages or under Section II of this coverage will not increase our limit of liability beyond the amount shown in the declarations, except when two or more vehicles are insured under this policy, we will stack or aggregate up to two, but no more than two, Uninsured Motorist Insurance for Bodily Injury coverages under this policy.

Along with the amendatory endorsement came an explanatory insert, which provided:

We have revised the "Limits of Liability" provision under "Bodily Injury Caused by Uninsured Motorists" ...:

If you insure two or more vehicles under this policy, you can now "stack" the limits of Uninsured Motorists Insurance for Bodily Injury for two of the vehicles. For example, if you have two or more vehicles, which are each insured under this policy at $100,000 per accident for this coverage, we will pay up to $200,000 (subject to the "per person" limit) for injuries sustained as the result of an accident with a legally-liable uninsured motorist.

{5} After the amendment, therefore, Allstate's policy no longer contained an absolute anti-stacking clause, but rather a limitation-of-stacking clause. Allstate changed its former absolute anti-stacking policy as a result of court decisions in Kentucky and Oklahoma. See Kramer v. Allstate Ins. Co., 909 P.2d 128 (Okla.Ct.App.1994)

; Wilson v. Allstate Ins. Co., 912 P.2d 345 (Okla.1996); Swartz v. Metropolitan Prop. & Cas. Co., 949 S.W.2d 72 (Ky.Ct.App.1997). In Wilson, one of the two Oklahoma cases, Allstate issued a single insurance policy covering the plaintiff's two vehicles. The policy provided for $25,000.00 per person and $50,000.00 per accident in UM coverage and contained language purporting to limit Allstate's liability to pay only one UM amount per accident, regardless of the number of automobiles covered under the policy. However, Allstate charged nearly twice the premium to multiple-car policyholders than it charged to single-car policyholders for identical UM coverage limits. Allstate had argued that, even with a higher premium for multi-vehicle policies, it charged a single premium and unambiguously precluded stacking; thus, stacking should not be required. Wilson, 912 P.2d at 346; see also Kramer, 909 P.2d at 129. The Oklahoma Supreme Court disagreed and concluded that, because the premium for a multi-vehicle policy was nearly twice as large as for a single-vehicle policy, Allstate should be required to stack two coverage limits for UM claims. Wilson, 912 P.2d at 347; see also Kramer, 909 P.2d at 129; Swartz, 949 S.W.2d at 76-77. The original policy issued to Plaintiff by Allstate contained the same provisions rejected by the Wilson court.

{6} The parties in this case also stipulate that Allstate charges a "single uninsured motorist bodily injury cover premium," for a multiple-car policy, although they also stipulate that Plaintiff paid $114.30 "in premiums" for his coverage. The parties further stipulate that Allstate also charged, at the same time, a single premium of $61.80 for a single-vehicle policy. The parties now dispute the legal significance of Allstate's "single" premium and the relevance of actuarial justifications for this premium structure, but both agree that the dispute should not prevent the determination of this case on summary judgment.

{7} On appeal, Plaintiff argues: (1) that all anti-stacking clauses should be declared void as against New Mexico's public policy; and alternatively, (2) that under the circumstances of this case, he should be permitted to stack four coverage limits, Allstate's limitation-of-stacking clause notwithstanding. For the following reasons, we reverse the Court of Appeals and hold that Allstate's limitation-of-stacking clause is unenforceable.

II. Plaintiff's Public Policy Argument

{8} Plaintiff first argues that we should follow United States Fidelity & Guaranty Co. v. Ferguson, 698 So.2d 77 (Miss.1997), and declare that all anti-stacking clauses are void as against New Mexico's stated policy in favor of stacking. In Ferguson, the Mississippi Supreme Court held that its public policy required stacking of UM coverage for every vehicle insured under every policy regardless of the number or amount of premiums paid for the coverage. Id. at 79. The Mississippi Supreme Court had previously determined that the intent of Mississippi's UM statute was "to provide the insured with adequate protection against injury caused by an uninsured motorist," id. (emphasis added), and that stacking had become a "positive gloss" on the UM statute. Id. (quoted authority omitt...