Palmer v. State Farm Mut. Auto. Ins. Co.
| Decision Date | 04 February 2022 |
| Docket Number | 1:19-cv-00301-KWR-SCY |
| Citation | 584 F.Supp.3d 1018 |
| Parties | Freeman J. PALMER, and Chelsea Palmer, on behalf of themselves and all others similarly situated, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, et al., Defendants. |
| Court | U.S. District Court — District of New Mexico |
Corbin Hildebrandt, Corbin Hildebrandt, P.C., Geoffrey R. Romero, Law Offices of Geoffrey R. Romero, Kedar Bhasker, Law Office of Kedar Bhasker, LLC, Albuquerque, NM, for Plaintiff Freeman J. Palmer.
Kedar Bhasker, Law Office of Kedar Bhasker, LLC, Albuquerque, NM, for Plaintiff Chelsea Palmer.
David Ketai, Marrs Griebel Law, Ltd., Elizabeth M. Piazza, Terry R. Guebert, Guebert Gentile & Piazza P.C., Todd Schwarz, Miller Stratvert PA, Albuquerque, NM, James Gaughan, Pro Hac Vice, Joseph A. Cancila, Jr., Pro Hac Vice, Riley Safer Holmes & Cancila LLP, Chicago, IL, for Defendant State Farm Mutual Automobile Insurance Company.
David Ketai, Marrs Griebel Law, Ltd., Elizabeth M. Piazza, Terry R. Guebert, Guebert Gentile & Piazza P.C., Todd Schwarz, Miller Stratvert PA, Albuquerque, NM, for Defendants State Farm Fire and Casualty Company, State Farm General Insurance Company.
THIS MATTER comes before the Court upon Defendants’ Motion to Dismiss Plaintiffs’ First Amended Complaint, filed December 6, 2021 (Doc. 46). Having reviewed the parties’ pleadings and the applicable law, the Court finds that Defendants’ Motion to Dismiss is not well-taken and, therefore, is DENIED.
This putative class action arises out of a dispute over "underinsured motorist coverage." NMSA § 66-5-301 ().
Since 2014, Defendants issued insurance policies to Plaintiff Freeman Palmer which provided for liability coverage in the amount of $25,000 per person/$50,000 per occurrence, and uninsured and underinsured motorist coverage in the amount of $25,000 per person/$50,000 per occurrence. Doc. 44 at 3.
Plaintiffs allege that Defendants misrepresented or failed to adequately explain to them and similarly situated class members the extent of "underinsured motorist" coverage when purchased at the minimum level of $25,000. Doc. 44 at 4 (). Plaintiffs allege that Defendants "misled insureds into believing they are purchasing the amount of underinsured motorist coverage they have selected without any offset." Doc. 44 at 5. Plaintiff Freeman Palmer alleges that Defendants did not inform him that that he would be unlikely to recover any underinsured motorist coverage when purchased at minimum limits. Doc. 44 at 7.
On April 13, 2015, Chelsea Palmer sustained bodily injuries arising from an automobile collision in Albuquerque, New Mexico. Doc. 44 at 8. Plaintiffs allege that an "underinsured motorist" ran a traffic signal and collided into Chelsea Palmer's vehicle. Doc. 44 at 8. Chelsea Palmer alleges that she suffered serious bodily injuries and other damages, and suffered total damages in excess of $50,000. Doc. 44 at 8.
At the time of the collision, Chelsea Palmer was an insured beneficiary under the Freeman J. Palmer policy, which provided her with uninsured and underinsured motorist insurance coverage up to $25,000 per person and $50,000 per occurrence. The alleged tortfeasor carried minimum limit liability insurance with limits of $25,000 per person. Doc. 44 at 8.
Plaintiffs allege that they had a reasonable expectation that they carried underinsured motorist coverage of $25,000 per person and $50,000 per occurrence. Plaintiffs allege that they had a reasonable belief that Chelsea Palmer was entitled to underinsured motorist benefits pursuant to their insurance policy.
Chelsea Palmer apparently received $25,000 in liability payments from the tortfeasor. She also filed a claim with Defendants for underinsured motorist coverage. Defendants denied the claim for minimum limits underinsured motorist coverage, asserting that "[d]ue to the limits of the BI [bodily injury] portion of the claim being equal to that of our UIM policy, it appears the offset would apply, therefore there is no UIM claim." Doc. 44-4 at 1; See generally Schmick v. State Farm Mut. Auto. Ins. Co. , 103 N.M. 216, 704 P.2d 1092 (1985) (). Chelsea Palmer received nothing from Defendants for her underinsured motorist coverage.
Plaintiffs’ putative class action complaint seeks to maintain a class of the following:
"All persons (and their heirs, executors, administrators, successors, and assigns), from whom Defendants collected a premium for underinsured motorist coverage after August 14, 1985 to present, on a policy that was issued or renewed in New Mexico by Defendants and that purported to provide underinsured motorist coverage, but which effectively provides no underinsured motorist coverage (‘UIM’) and/or misleading UIM coverage, because of the statutory offset recognized in Schmick v. State Farm Mutual Automobile Insurance Company , 704 P.2d 1092 (1985)."
Doc. 44 at 10. They also assert the following subclass:
Plaintiffs filed a First Amended Complaint asserting the following claims:
In Crutcher v. Liberty Mut. Ins. Co., et al. , Case No.: 18-cv-00412-JCH-LF (D.N.M. 2019), United States District Judge Judith C. Herrera certified the following questions to the New Mexico Supreme Court:
Under N.M. Stat. Ann. § 66-5-301, is underinsured motorist coverage on a policy that offers only minimum UM/UIM limits of $25,000 per person/$50,000 per accident illusory for an insured who sustains more than $25,000 in damages caused by a minimally insured tortfeasor because of the offset recognized in Schmick v. State Farm Mutual Automobile Insurance Company , and, if so, may insurers charge a premium for that non-accessible underinsured motorist coverage?
Crutcher , 2019 WL 12661166, at *4. This matter was stayed pending the New Mexico Supreme Court's answer. As explained below, the New Mexico Supreme Court answered this question and Defendants moved to dismiss the claims in this case.
To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the complaint "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). Conclusory allegations of liability, without supporting factual content, are insufficient. "The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief." Robbins v. Oklahoma , 519 F.3d 1242, 1247 (10th Cir. 2008).
Because this is a diversity case based on New Mexico law, this Court must ascertain and apply New Mexico law. In doing so, the Court must either follow the decisions of the New Mexico Supreme Court, or attempt to predict what the New Mexico Supreme Court would do. Coll v. First Am. Title Ins. Co. , 642 F.3d 876, 886 (10th Cir. 2011) ; Federated Serv. Ins. Co. v. Martinez , 529 F. App'x 954, 957 (10th Cir. 2013) ().
The Court may consider the insurance policy as it is referred to in the complaint, it is central to the Plaintiffs’ claims and the parties do not dispute its authenticity. Jacobsen v. Deseret Book Co. , 287 F.3d 936, 941 (10th Cir. 2002), cited in Brokers’ Choice of America, Inc. v. NBC Universal, Inc. , 861 F.3d 1081, 1103 (10th Cir. 2017). Therefore, the Court may consider the policy and need not convert to Fed. R. Civ. P. 56.
Defendants move to dismiss all claims in this case. The Court finds that Plaintiffs stated plausible claims upon which relief can be granted under each count.
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