Schwartz v. State Farm Mut. Auto. Ins. Co.
| Decision Date | 30 August 2018 |
| Docket Number | No. 1:18-cv-00328-WJ-SCY,1:18-cv-00328-WJ-SCY |
| Parties | DANA SCHWARTZ, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of New Mexico |
THIS MATTER comes before the Court upon Defendant's Motion to Dismiss Plaintiff's Amended Complaint, filed May 14, 2018 (Doc. 9), and Defendant's Motion to Certify Questions to the New Mexico Supreme Court, filed May 14, 2018 (Doc. 7). Having reviewed the parties' pleadings and the applicable law, the Court finds that Defendant's Motion to Dismiss is not well-taken and, therefore, is DENIED IN PART. However, the Court will dismiss certain counts as specified below, with leave to amend. Finally, the Motion to Certify is DENIED WITHOUT PREJUDICE as premature.
This class action arises out of a dispute over "underinsured motorist coverage." NMSA § 66-5-301 (). Plaintiff alleges that Defendant misrepresented or failed to adequately explain to her and similarly situated class members the extent of "underinsured motorist" coverage when purchased at the minimum level of $25,000.
Plaintiff was the victim of a car crash on December 11, 2012.1 While Plaintiff was stopped at a red light on Academy Blvd. in Albuquerque, New Mexico, the tortfeasor attempted to slip between her and another stopped car, crashing into both. She received $25,000 in compensation from the tortfeasor's minimum liability policy. Because she alleges her damages were in excess of $25,000, she apparently sought benefits from her own uninsured and underinsured motorist coverage from her insurance company, Defendant State Farm. Her policy with Defendant included statutory minimum amount of uninsured and underinsured of $25,000. Defendant allegedly denied coverage according to the insurance policy and New Mexico law, because the amount received from tortfeasor's minimum liability insurance was offset against Plaintiff's $25,000 uninsured and underinsured policy. See generally Schmick v. State Farm Mut. Auto. Ins. Co., 103 N.M. 216, 704 P.2d 1092 (N.M. 1985) (). Defendant State Farm claims to have paid under the underinsured motorist provisions for property damage, but Plaintiff alleged that Defendant denied underinsured motorist coverage for bodily harm.
Plaintiff generally alleges that Defendant misrepresented and misled the nature of underinsured motorist coverage she purchased, causing her to reasonably expect that the purchased coverage would compensate her for damages that were greater than the limits of the tortfeasor's liability limits. Doc. 1-02, ¶ 24, 30, 33, 40. Plaintiff claims that Defendant did not inform her of the limited nature of underinsured motorist coverage when purchased at the minimum level. Based on this allegation, Plaintiff filed a complaint asserting the following claims:
Defendant seeks to dismiss all claims for lack of standing under Fed. R. Civ. P. 12(b)(1), or alternatively, for failure to state a claim under Fed. R. Civ. P. 12(b)(6).
Defendant argues that this case should be dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction, because Plaintiff lacks standing. Plaintiff "must demonstrate standing to sue by establishing (1) an injury in fact, (2) a sufficient causal connection between the injury and the conduct complained of, and (3) a likelihood that the injury will be redressed by a favorable decision." Philadelphia Indem. Ins. Co. v. Lexington Ins. Co., 845 F.3d 1330, 1335 (10th Cir. 2017) (internal citations and quotation marks omitted). Here, Defendant solely argues that Plaintiff has not demonstrated an injury in fact.
"Rule 12(b)(1) motions generally take one of two forms: (1) a facial attack on the sufficiency of the complaint's allegations as to subject matter jurisdiction; or (2) a challenge to the actual facts upon which subject matter jurisdiction is based." Ruiz v. McDonnell, 299 F.3d 1173, 1180 (10th Cir. 2002), citing Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir.1995) (citation omitted). When considering evidence outside the pleadings under Fed. R. Civ. P. 12(b), the Court need not convert the motion to Rule 56, unless the standing issue is intertwined with the merits of the Plaintiff's case. Holt, 46 F.3d at 1003.
Defendant's sole argument in the motion is that Plaintiff failed to plead any facts that she was actually harmed. Defendant points out that it in fact paid Defendant $3,225 under the underinsured motorist coverage, and therefore Plaintiff has no standing to assert a denial of underinsured coverage. However, this payment was apparently solely for property damage. Doc. 1-4, ¶ 4-5. Defendant's argument does not tend to facially attack Plaintiff's complaint, because she alleges that she sustained bodily injuries in an accident in which she was not at fault and for which she was not compensated under her underinsured motorist coverage. First Amended Complaint ("FAC) ¶ 10. Plaintiff alleges that Defendant denied coverage under her underinsured motorist coverage. FAC ¶ 30, 32. Based on these allegations, Plaintiff has adequately pled an injury in fact.
Alternatively, Defendant could be interpreted to attack the facts upon which Plaintiff's standing rests.2 In response, Plaintiff filed a declaration stating she incurred bodily injury in excess of the tortfeasor's liability policy, and Defendant preemptively denied coverage under her underinsured motorist coverage. Doc. 24-1, ¶ 8 (). She also attached a letter from Defendant that states that Defendant concluded that because the tortfeasor's liability limits were $25,000, she had no underinsured motorist coverage, and that they would therefore close the case. Plaintiff has shown that Defendant denied coverage under the underinsured motorist provision.
Moreover, it appears that Defendant's standing arguments may be tied together with the merits of the case. To the extent Defendant argues that Plaintiff suffered no harm because coverage was not illusory and there was no misrepresentation, that goes to the merits of the case,and is best addressed under Fed. R. Civ. P. 56. Holt v. United States, 46 F.3d 1000, 1003 (10th Cir. 1995) ().
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 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (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). 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) ().
Although not attached to the complaint or the motion to dismiss, the Court may consider the insurance policy as it is referred to in the complaint, it is central to the Plaintiff's 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.
NMSA § 66-5-301(A) mandates that every motor vehicle policy include uninsured and underinsured motorist coverage for bodily injury or death and property damage. This statute is "intended to expand insurance coverage and to protect individual members of the public against the hazard of culpable uninsured...
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