Richardson v. Farmers Ins. Co. of Arizona

• Decision Date: 21 May 1991
• Docket Number: No. 19286,19286
• Citation: 1991 NMSC 52,811 P.2d 571,112 N.M. 73
• Parties: Cathi RICHARDSON, Plaintiff-Appellant, v. FARMERS INSURANCE COMPANY OF ARIZONA and/or Mid-Century Insurance Company, Defendant-Appellee.
• Court: New Mexico Supreme Court

Page 571

811 P.2d 571

112 N.M. 73

Cathi RICHARDSON, Plaintiff-Appellant, v. FARMERS INSURANCE COMPANY OF ARIZONA and/or Mid-Century

Insurance Company, Defendant-Appellee.

No. 19286.

Supreme Court of New Mexico.

May 21, 1991.

Rehearing Denied June 12, 1991.

[112 NM 73] David H. Pearlman, Albuquerque, for plaintiff-appellant.

Civerolo, Hansen & Wolf, William P. Gralow and Stephen C. Ross, Albuquerque, for defendant-appellee.

OPINION

FRANCHINI, Justice.

The single issue presented on appeal is whether appellant, Cathi Richardson, as a permissive user of an insured automobile covered by one of three policies of insurance issued by appellee, Farmers Insurance Company (Farmers), can "stack" the three coverages to pay for damages resulting from the negligence of an underinsured motorist. Each policy defined the "limit of liability" as the total limits for each separate underinsured motorist premium paid "under this or other policies issued by [Farmers]." The policies did not restrict the limit of liability to the named insured, family members, or "Class I" insureds. Given the language of the insurance contracts written by Farmers, we find this case presents a question as to the limit of liability under the policies rather than a question of "Class I" or "Class II" stacking. We reverse the trial court and find Richardson to be an "insured person" entitled to recover underinsured motorist benefits to the limit of liability provided in each of the Farmers' policies then in force.

Prior to July 24, 1986, Farmers issued three policies of automobile insurance to Howard Mickelson. Mickelson paid three separate uninsured/underinsured motorist premiums for three separate policies covering three separate automobiles. Each policy contained coverage for damages arising from the acts of underinsured motorists with limits of $25,000 per person. All three policies contained the following endorsement:

If more than one premium is paid for uninsured motorists under this or other policies issued by the Farmers Insurance Group of Companies, the limit of liability will be the total limits for each separate uninsured motorists premium.

On July 24, 1986, Richardson, with the owner's permission, was driving one of Mickelson's vehicles insured under one of Farmers' policies. On that date, Richardson was rear ended by another driver, Castillo, who had $25,000 coverage for public liability under his own insurance policy. Richardson sustained a severe back injury, resulting in back surgery that was unsuccessful. Her damages exceeded $95,000. Richardson settled for $25,000 with Castillo. She collected $25,000 underinsured motorist coverage on the Farmers' policy insuring the Mickelson automobile she was driving. She then sought to recover $50,000 more from Farmers by "stacking" the underinsured coverages remaining under the Mickelson policies insuring the other two automobiles that were not being driven by Richardson at the time of the collision. Farmers denied coverage, asserting that Richardson could not "stack" the policies because she was neither a member of the Mickelson family, nor a named insured under the remaining two policies.

Richardson then filed suit for a declaratory judgment seeking to "stack" the remaining coverages. Both parties moved for summary judgment. The trial court determined that under its view of prevailing New Mexico law, Richardson was not permitted to "stack" coverages as a matter of law and granted summary...