Shope v. State Farm Ins. Co.

• Decision Date: 07 October 1996
• Docket Number: No. 23155,23155
• Citation: 1996 NMSC 52,925 P.2d 515,122 N.M. 398
• Court: New Mexico Supreme Court
• Parties: Charles P. SHOPE, individually and as personal representative of the Estate of Joseph Shope, Plaintiff-Appellee, v. STATE FARM INSURANCE COMPANY, Defendant-Appellant.

Page 515

925 P.2d 515

122 N.M. 398

Charles P. SHOPE, individually and as personal representative of the Estate of Joseph Shope Plaintiff-Appellee, v. STATE FARM INSURANCE COMPANY, Defendant-Appellant.

No. 23155.

Supreme Court of New Mexico.

Oct. 7, 1996.

Guebert & Yeomans, P.C., Terry R. Guebert, Don Bruckner, Albuquerque, for Defendant-Appellant.

David L. Plotsky Law Office, David L. Plotsky, Albuquerque, for Plaintiff-Appellee.

OPINION

RANSOM, Justice.

1. State Farm Insurance Company appeals from a summary judgment, on stipulated facts, granting uninsured motorist benefits to its insured, Charles P. Shope, whose son Joseph was killed by an uninsured motorist in Albuquerque, New Mexico. The district court found that the insurance contract between the parties was a Virginia contract that should be interpreted under Virginia law. However, the court concluded that application of Virginia law to provisions in the insurance contract so as to deny the stacking of uninsured motorist coverage would violate New Mexico public policy. We agree with the trial court that Virginia law governs the contract in this case. Because we do not believe that application of Virginia law would violate New Mexico public policy, we reverse.

2. The Shopes lived in Albuquerque prior to August 1991. Then, Marlene Shope moved from Albuquerque to Virginia where she registered to vote and opened a checking account into which her two disability checks were directly deposited. Her husband Charles moved to Virginia in June 1992 with most of the couple's belongings. He likewise opened a savings account in Virginia and began to have his disability check directly deposited there. In January 1993 both Marlene and Charles obtained Virginia driver's licenses. Joseph moved from Albuquerque to Virginia in February 1993 to live with his parents.

3. In July 1992 the Shopes purchased a home and two automobiles in Virginia. At that time they purchased insurance covering both automobiles from a State Farm Insurance agent in Virginia. The policy provided that each vehicle had uninsured motorist coverage of $100,000 per person for bodily injury. This insurance policy included Endorsement 6520.7 Uninsured Motorist Insurance (Virginia), which provided in part as follows:

III. Limits of Liability.

Regardless of the number of ...

(4) motor vehicles to which this insurance applies,

(a) If the schedule or declarations indicate split limits of liability, the limit of liability for bodily injury stated as applicable to "each person" is the limit of the company's liability for all damages because of bodily injury sustained by one person as the result of one accident.

4. The Shope family decided to move back to New Mexico, and on January 2, 1994, they moved into an apartment in Albuquerque. Administration of the State Farm Insurance policy was not transferred to New Mexico and the premiums continued to be paid from Marlene's account in Virginia. On January 15 Joseph was struck and killed by an uninsured motorist as he walked on a street in Albuquerque. Charles claims to be entitled to wrongful-death damages against the uninsured motorist in excess of $200,000, and that he consequently is entitled to the stacked uninsured motorist benefits of $200,000 under his policy.

5. In State Farm Mutual Insurance Co. v. Conyers, 109 N.M. 243, 784 P.2d 986 (1989), this Court applied the law of the state where an insurance contract was made, not the law of the state where insureds resided and where an accident occurred. The Conyers purchased insurance on one automobile while they lived in New Mexico. Later, while they lived in California, they purchased automobile insurance for at least one other car from the same State Farm agent in New Mexico. The Conyers then moved to Nevada where an accident occurred. The insurer sought, in accordance with New Mexico law, e.g., Schmick v. State Farm Mut. Auto. Ins. Co., 103 N.M. 216, 223, 704 P.2d 1092, 1099 (1985), to offset against its underinsured motorist liability the amount received by the insured from the tortfeasor's insurer. This Court held that "[t]he policy of New Mexico's law governing a contract of insurance applied for and issued in this state ... on a vehicle at least assumed to be located here and owned by an individual who declared his residence as being here, seems to us to weigh more heavily than any possibly countervailing policy that would underlie applicability of Nevada law." Conyers, 109 N.M. at 247-48, 784 P.2d at 990-91. We concluded that under either the rule of lex loci contractus or the principles of Restatement (Second) Conflict of Laws, New Mexico rather than Nevada law should be applied.

6. Under Virginia law, stacking of insurance coverage is permitted unless clear and unambiguous language in the policy prevents it. Goodville Mut. Casualty Co. v. Borror, 221 Va. 967, 275 S.E.2d 625, 627 (1981); USAA Casualty Ins. Co. v. Alexander 248 Va. 185, 445 S.E.2d 145, 148 (1994). The Shopes' insurance contract clearly and unambiguously prevents stacking. The Limits of Liability provide that "[r]egardless of the number of ... motor vehicles to which this insurance applies ... the limit of liability for bodily injury ... applicable to 'each person' is the limit of the company's liability for all damages because of bodily injury sustained by one person as the result of one accident." The parties agree that under Virginia law the Shopes may not stack.

7. State Farm correctly points out that in United Wholesale Liquor Co. v. Brown-Forman Distillers Corp., 108 N.M. 467, 775 P.2d 233 (1989), we applied Kentucky rather than New Mexico law to a franchise dispute, holding that the application of Kentucky law did "not violate some fundamental principle of justice." Id. at 471, 775 P.2d at 237. While New Mexico public policy does favor the stacking of coverage in underinsured motorist cases, Jimenez v. Foundation Reserve Ins. Co., 107 N.M. 322, 324-25, 757 P.2d 792, 794-95 (1988) ("Insurance policy clauses that prohibit stacking are particularly repugnant to public policy when the injured insured has paid separate...