Valdez v. Metro. Prop. & Cas. Ins. Co.

• Citation: 867 F.Supp.2d 1143
• Decision Date: 19 March 2012
• Docket Number: No. CIV 11–0507 JB/KBM.,CIV 11–0507 JB/KBM.
• Court: United States District Courts. 10th Circuit. District of New Mexico
• Parties: Michael VALDEZ, Kim Dressel, Dressel Construction, Inc., Freddie Sue Gatewood, Mary Jo Vaughn, and Marcus Perkins, Plaintiffs, v. METROPOLITAN PROPERTY & CASUALTY INSURANCE COMPANY, Colorado Casualty Insurance Company A Subsidiary Of Liberty Mutual Insurance Company, Pacific Indemnity Insurance Company, Travelers Insurance Company, d/b/a The Travelers Home and Marine Insurance Company, 21st Century Insurance Company, and Desert Mountain Agency, Defendants.

867 F.Supp.2d 1143

Michael VALDEZ, Kim Dressel, Dressel Construction, Inc., Freddie Sue Gatewood, Mary Jo Vaughn, and Marcus Perkins, Plaintiffs,
v.
METROPOLITAN PROPERTY & CASUALTY INSURANCE COMPANY, Colorado Casualty Insurance Company A Subsidiary Of Liberty Mutual Insurance Company, Pacific Indemnity Insurance Company, Travelers Insurance Company, d/b/a The Travelers Home and Marine Insurance Company, 21st Century Insurance Company, and Desert Mountain Agency, Defendants.

No. CIV 11–0507 JB/KBM.

United States District Court,
D. New Mexico.

March 19, 2012.

[867 F.Supp.2d 1146]

David J. Berardinelli, Santa Fe, NM, for the Plaintiffs.

Andrew G. Schultz, R. Nelson Franse, Rodey, Dickason, Sloan, Akin & Robb, P.A., Albuquerque, NM, John M. Vaught, Sean D. Baker, Jason C. Astle, Wheeler Trigg O'Donnell LLP, Denver, CO, for Defendant Amica Mutual Insurance Company.

Ann Maloney Conway, Keleher & McLeod, P.A., Albuquerque, NM, Floyd P. Bienstock, Jon T. Neumann, Timothy M. Strong, Phoenix, AZ, for Defendant Metropolitan Property & Casualty Insurance Co.

Robert A. Corchine, Miller Stratvert P.A., Albuquerque, NM, Brian J. Spano, Jessica L. Fuller, Rothgerber, Johnson & Lyons, LLP, Denver CO, for Defendant Colorado Casualty Insurance Company a subsidiary of Liberty Mutual Insurance Company.

James H. Johnson, Geoffrey D. White, Butt Thornton & Baehr, PC Albuquerque, NM, for Defendant Pacific Indemnity Insurance Company.

Gary W. Larson, Hinkle, Hensley, Shanor & Martin, LLP, Santa Fe, NM, Gail L. Gottehrer, Thomas G. Rohback, Axinn, Veltrop & Harkrider LLP, Hartford, CT, for Defendant Travelers Insurance Company d/b/a The Travelers Home and Marine Insurance Company.

Thomas A. Simons, IV, Faith Kalman Reyes, Kelcey C. Nichols, The Simons Firm, LLP, Santa Fe, NM, Daniel V. Kohls, Hansen, Kohls, Jones, Sommer & Jacob, LLP, Roseville, CA, for Defendant Desert Mountain Agency.

MEMORANDUM OPINION AND ORDER
JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Plaintiffs' Memorandum Motion to Remand to State Court for Lack of Federal Jurisdiction, filed June 24, 2011 (Doc. 55)(“Motion”). The Court held a hearing on March 7, 2012. The primary issues are: (i) whether the Court has subject-matter jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332(d)(4)(A) (“CAFA”) or the traditional diversity-jurisdiction analysis, under 28 U.S.C. § 1332; and (ii) if the Court has jurisdiction, whether the Court should decline to exercise

[867 F.Supp.2d 1147]

that jurisdiction. The Court will deny the Motion. The Court has jurisdiction under CAFA, and no CAFA exception applies. Additionally, the Court concludes that there is no reason to decline to exercise that jurisdiction, because no party challenges a final state court judgment, there is no pending state proceeding, and federal review of this matter will not interfere with New Mexico's ability to oversee its laws regulating insurance.

FACTUAL BACKGROUND

All of the Plaintiffs are New Mexico residents. See Petition for Declaratory Judgment and Injunctive Relief ¶¶ 1–6, at 1–2 (dated April 15, 2011), filed June 10, 2011 (Doc. 4)(“Complaint”). Defendants Metropolitan Property & Casualty Insurance Company (“Metropolitan Casualty”), Colorado Casualty Insurance Company (“Colorado Casualty”), Pacific Indemnity Insurance Company (“Pacific Indemnity”), The Travelers Insurance Company d/b/a The Travelers Home & Marine Insurance Company (“Travelers Insurance”), 21st Century Insurance Company (“21st Century Insurance”), and Amica Mutual Insurance Company (“Amica Insurance”) are foreign insurance companies authorized to issue automobile liability insurance policies within the State of New Mexico in compliance with all the rules and regulations promulgated by the Superintendent of Insurance as well as the applicable New Mexico statutes and case law. See Complaint ¶¶ 10–16, at 3–4. Defendant Desert Mountain Agency (“Desert Mountain”) is a New Mexico corporation authorized to sell automobile insurance policies in New Mexico. See Complaint ¶¶ 17–18, at 4–5.

Plaintiff Michael Valdez is a named insured in an insurance policy with Metropolitan Casualty, policy number 045192877–3, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 29, at 7. Plaintiff Kim Dressel is a named insured in an insurance policy with Pacific Indemnity, policy number 12714973–03, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 31, at 7. Plaintiff Dress Construction, Inc. is a named insured in an insurance policy with Colorado Casualty, policy number CBP08431076, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 33, at 8. Plaintiff Freddie Sue Gatewood is a named insured in an insurance policy with Travelers Insurance, policy number 979038Q62–1011, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 35, at 8. Plaintiff Mary Jo Vaughn is a named insured in an insurance policy with 21st Century Insurance, policy number 979038Q62–1011, whose policy provided uninsured motorist coverage with limits that were less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 38, at 9. Plaintiff Marcus Perkins is a named insured in an insurance policy with Amica Insurance, policy number 910730–20FF, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 39, at 9.

[867 F.Supp.2d 1148]

PROCEDURAL BACKGROUND

The Plaintiffs initiated this action by filing the Complaint against six insurance companies and one New Mexico Insurance Agency in the First Judicial District Court, Santa Fe County, State of New Mexico. The Plaintiffs allege that the Defendants have failed to comply with the Supreme Court of New Mexico's decisions in Progressive Northwestern Insurance Co. v. Weed Warrior Services, 149 N.M. 157, 245 P.3d 1209 (2010), and in Jordan v. Allstate Insurance Co., 149 N.M. 162, 245 P.3d 1214 (2010), because they failed to provide the Plaintiffs with full and adequate information about their legal options, at the point of sale, when buying uninsured motorist coverage. See Complaint ¶¶ 7, 46, at 2, 10. The Plaintiffs allege:

In Jordan and Weed Warrior, the Supreme Court [of New Mexico] established, as a matter of New Mexico public policy, the following retroactive rules regulating all MFRA[ ¹] policies and [uninsured or underinsured motorist] coverages issued in New Mexico since May 20, 2004: a) the purchase of less than equal limits [uninsured or underinsured motorist] coverage constitutes a “rejection” by the insured of the available equal limited [uninsured or underinsured motorist] coverage; b) an insured's rejection of [uninsured or underinsured motorist] coverage or equal limits [uninsured or underinsured motorist] coverage under a New Mexico MFRA policy must be in writing and must be attached to, endorsed upon, or otherwise made a part of the MFRA/[uninsured or underinsured motorist] policy; c) every written rejection of [uninsured or underinsured motorist] coverage in New Mexico must include a “menu” showing each vehicle insured, each limit of [uninsured or underinsured motorist] coverage available for purchase for that vehicle (up to the policy's limits for that type of coverage whether [uninsured or underinsured motorist] or [property damage] ), and the premium prices for each available limit of [uninsured or underinsured motorist] coverage for each vehicle (hereinafter “the Jordan menu”); d) if an insurer does not, or did not after May 20, 2004, comply with these requirements for a written rejection, then any [uninsured or underinsured motorist] policy issued in New Mexico that provides, or provided, less than equal limits [uninsured or underinsured motorist] coverage must be retroactively reformed as a matter of law to provide equal limits [uninsured or underinsured motorist] coverage regardless of the payment of any premium or the intent of the parties so that all similarly situated insureds will be treated equally.

Complaint ¶ 27, at 6–7. The Plaintiffs assert that the Defendants are violating a retroactive duty to provide them with “full and complete information about all [uninsured or underinsured motorist] coverage available to them.” Complaint ¶ 42, at 9–10. The Plaintiffs assert that the Defendants engaged in “unconscionable trade

[867 F.Supp.2d 1149]

practices” under the New Mexico Unfair Trade Practices Act, N.M.S.A.1978, § 57–12–2 to 58–12–10 (“UTPA”). Complaint ¶ 48, at 11. They allege that the Defendants have issued and renewed thousands of policies which did not comply with Jordan v. Allstate Insurance Co. and that none of the Defendants will comply with the Supreme Court of New Mexico's mandate unless ordered to do so. See Complaint ¶¶ 50, 52, at 11. With respect to the class allegations, the Plaintiffs assert that each of the Defendants has failed: (i) “to affirmatively offer their insured equal limits [uninsured or underinsured motorist] coverage[—]together with a Jordan menu[—]at the time of the sale of the policy”; (ii) “to obtain written rejections of all [uninsured or underinsured motorist] coverage or of equal limits [uninsured or underinsured motorist] coverage as retroactively mandated by ...