Slack v. Robinson

• Decision Date: 01 May 2003
• Docket Number: No. 23,189.,23,189.
• Citation: 2003 NMCA 83,71 P.3d 514,134 N.M. 6
• Parties: Linda Ann SLACK, Jacqueline Denise Wilson, and James Douglas Robinson, co-personal representatives of the Estate Of Jimmie L. Robinson, deceased, and Lucille Grier, Plaintiffs-Appellants, v. James ROBINSON, Hartford Insurance Company Of The Midwest, National Casualty Company, And Colonial Penn Franklin Insurance Company, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

71 P.3d 514

134 N.M. 6

2003 NMCA 83

Linda Ann SLACK, Jacqueline Denise Wilson, and James Douglas Robinson, co-personal representatives of the Estate Of Jimmie L. Robinson, deceased, and Lucille Grier, Plaintiffs-Appellants, v. James ROBINSON, Hartford Insurance Company Of The Midwest, National Casualty Company, And Colonial Penn Franklin Insurance Company, Defendants-Appellees.

No. 23,189.

Court of Appeals of New Mexico.

May 1, 2003.

Certiorari granted June 11, 2003.

James T. Roach, Janet Santillanes, Albuquerque, NM, for Appellants.

Bruce S. McDonald, Law Offices of Bruce S. McDonald, Albuquerque, NM, for Appellee Colonial Penn Franklin Insurance Company.

Lisa E. Lear, Douglas G. Houser, Bullivant Houser Bailey PC, Portland, OR, Larry D. Beall, Jose R. Blanton, Beall & Biehler, Albuquerque, NM, for Appellee Hartford Insurance Company of the Midwest.

Gary Kilpatric, Jennifer L. Weed, Montgomery & Andrews, P.A., Santa Fe, NM, for Amicus Curiae American Insurance Association.

Certiorari granted, No. 28,077, June 11, 2003.

OPINION

SUTIN, Judge.

{1} Plaintiffs appeal summary judgments favoring two insurers and holding that liability coverages on each of two specifically listed insured vehicles did not both apply to loss that occurred when the insured was operating a non-owned vehicle. We affirm.

BACKGROUND

{2} James Robinson was driving a rental vehicle at the time of the accident. Jimmie Robinson and Lucille Grier were passengers in that vehicle. Jimmie Robinson was killed. Lucille Grier was injured.

{3} Plaintiffs are Linda Ann Slack, Jacqueline Denise Wilson, and James Douglas Robinson, as co-personal representatives of the Estate of Jimmie L. Robinson, deceased, and Lucille Grier (collectively, Plaintiffs). Plaintiffs sued James Robinson (the Insured), who was a named insured under vehicle liability policies issued by Hartford Insurance Company of the Midwest (Hartford) and Colonial Penn Franklin Insurance Company (Colonial). Plaintiffs also sued Hartford and Colonial, whose policies overlapped in coverage because the accident occurred during a transition period as James Robinson was obtaining new insurance coverage. At times, we refer to Hartford and Colonial together in this opinion as "the Insurers." Although not involved in this appeal, Plaintiffs also sued the insurer of the non-owned, rental vehicle occupied by Plaintiffs, National Casualty Company.

{4} The Hartford and Colonial policies each specifically listed the same two vehicles owned by the Insured. Separate premiums were required for two separate liability coverages in each policy, each with liability limits of $100,000 per person and $300,000 per accident. Each policy also provided liability coverage for the Insured while using a non-owned vehicle.

{5} In their action, Plaintiffs contended that each policy provided $100,000/$300,000 liability coverage on each of the two listed vehicles. Thus, according to Plaintiffs, when the Insured was driving the non-owned vehicle, the liability coverage should total $400,000/$1,200,000 when all applicable coverages of each policy were combined. Plaintiffs also asserted violations of the Mandatory Financial Responsibility Act, NMSA 1978, §§ 66-5-201 to -239 (1978, as amended through 2001) (MFRA), and the New Mexico Insurance Code, NMSA 1978, § 59A-16-24(A) (1984).

{6} The district court granted summary judgments in favor of Hartford and Colonial. We granted Plaintiffs' interlocutory appeal. No material facts are in dispute.

DISCUSSION

I. The Policies' Liability Coverages

A. Standard of Review

{7} Where an appellant does not assert the existence of a genuine issue of material fact precluding summary judgment, but rather agrees that the facts are undisputed, "our task is to determine whether the district court correctly applied the law to the facts." Gonzales v. Allstate Ins. Co., 122 N.M. 137, 139, 921 P.2d 944, 946. "To the extent our review involves ... the application of law to undisputed facts, the review is de novo." Grogan v. N.M. Taxation & Revenue Dep't, 2003-NMCA-033, ¶ 10, 133 N.M. 354, 62 P.3d 1236; Barncastle v. Am. Nat'l Prop. & Cas. Cos., 2000-NMCA-095, ¶ 5, 129 N.M. 672, 11 P.3d 1234.

The obligation of an insurer is a matter of contract law and must be determined by the terms of the insurance policy. An insurance contract should be construed as a complete and harmonious instrument designed to accomplish a reasonable end. Unambiguous insurance contracts must be construed in their usual and ordinary sense. A clause is ambiguous if it is reasonably and fairly susceptible of different constructions.

Miller v. Triad Adoption & Counseling Servs., Inc., 2003-NMCA-055, ¶ 8, 133 N.M. 544, 65 P.3d 1099 (internal quotation marks and citations omitted). The insurance contract will be construed as a whole. Rummel v. St. Paul Surplus Lines Ins. Co., 1997-NMSC-042, ¶ 10, 123 N.M. 767, 945 P.2d 985.

Rules of Construction

{8} Whether aggregation of coverage limits is proper is a question of contract interpretation. Shope v. State Farm Ins. Co., 1996-NMSC-052, ¶ 10, 122 N.M. 398, 925 P.2d 515. "[W]hether an ambiguity exists is also a matter of law to be decided by the court." Richardson v. Farmers Ins. Co. of Ariz., 112 N.M. 73, 74, 811 P.2d 571, 572 (1991). "When this [C]ourt reviews a contract for ambiguity, it examines the entire document in an attempt to ascertain the intent of the parties." Sanchez v. Herrera, 109 N.M. 155, 159, 783 P.2d 465, 469 (1989). Whether ambiguity is resolved against the insurer is tested by an insured's reasonable expectations. See Rummel, 1997-NMSC-042, ¶ 22, 123 N.M. 767, 945 P.2d 985; Ivy Nelson Grain Co. v. Commercial Union Ins. Co., 80 N.M. 224, 225, 453 P.2d 587, 588 (1969). When a clause is ambiguous, it will usually be construed against the insurance company as the drafter of the policy. Rummel, 1997-NMSC-042, ¶ 20, 123 N.M. 767, 945 P.2d 985. "Absent ambiguity, provisions of [an insurance] contract need only be applied, rather than construed or interpreted." Richardson, 112 N.M. at 74, 811 P.2d at 572. This Court must enforce clear and unambiguous contract terms. Id.; Sanchez, 109 N.M. at 159,

783 P.2d at 469. "[W]hen the language in the policy is unambiguous, we will not strain the words to encompass meanings they do not clearly express." Miller, 2003-NMCA-055, ¶ 8, 133 N.M. 544, 65 P.3d 1099 (internal quotation marks and citation omitted). "[A]n ambiguity does not exist merely because the parties disagree as to the meaning of a particular word," id. ¶ 13, or on the construction to be given to the contract. Levenson v. Mobley, 106 N.M. 399, 401, 744 P.2d 174, 176 (1987). "The fact that a particular policy contains a broad coverage provision followed by a specific coverage exclusion does not automatically render the policy ambiguous or invalidate the exclusion." N.M. Physicians Mut. Liab. Co. v. LaMure, 116 N.M. 92, 95, 860 P.2d 734, 737 (1993). Lack of symmetry in language is not necessarily a sign of ambiguity. See Martinez v. Allstate Ins. Co., 1997-NMCA-100, ¶¶ 7-9, 124 N.M. 36, 946 P.2d 240 (holding that lack of symmetry between "per person" language in the limits of liability clause pertaining to liability coverage and uninsured motorist coverage did not render the policy ambiguous). Where provisions in a policy are internally inconsistent or in irreconcilable conflict, the court is "not so much construing an ambiguity in the policy in favor of the insured as [it is] refusing to give effect to the irreconcilable exclusionary language in the policy." Allstate Ins. Co. v. Stone, 116 N.M. 464, 467, 863 P.2d 1085, 1088 (1993).

B. The Language in the Policies

1. The Colonial Policy

{9} The declarations page of the Colonial policy states:

DESCRIPTION OF COVERAGES: The insurance afforded is only as indicated by the following coverages. T[ ]¹ of the Company's liability for each coverage is as stated below, subject to all the terms of the policy.

The declarations page then identifies the following liability coverages and coverage limits for the Insured's two vehicles:

COVERAGE LIMITS CAR 1 CAR 2 Bodily Injury Each Person $100,000 100,000 Liability Each Occurrence $300,000 300,000 PREMIUM $ 297.20 $283.60

The description given within the Colonial policy of bodily injury liability coverage, in part, reads:

We will pay all sums that anyone insured under this coverage is legally required to pay as damages for bodily injury or property damage. The injury or damage must result from the use of an auto or trailer listed on your Declarations Page or for certain persons, from the use of a non-owned auto.... Use of an auto means owning, operating, loading, unloading or maintaining it. A non-owned auto is one that isn't owned by or registered to You or anyone living in your household.

(Emphasis omitted.²) The policy also states: "You are protected when using a non-owned auto." Further, with regard to limits of liability coverage, the policy states:

The limits of Liability Coverage are shown on your Declarations Page. These limits apply separately to each auto listed there. The insurance under the Liability Coverages also applies separately to each insured person against whom a claim is made or a suit is brought. The applicability of this insurance to more than one insured person does not, however, increase our liability.

There are two limits of coverage for Bodily Injury Liability. The amount shown on your Declarations Page for "Each Person" is the most We'll pay for damages because of bodily injury to one person caused by any one occurrence. The amount shown on your Declarations Page for "Each Occurrence" is the most We'll pay for all damages as a result of any one occurrence, no matter how many people are injured. For example, say the amounts shown are $10,000 for Each Person and $20,000 for Each Occurrence. If only one person is injured in an accident the limit of coverage is $10,000. Even if five people are injured, however, $20,000 is the most We'll

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