Allstate Fire and Casualty Insurance Company v. Trissell et al
MEMORANDUM OPINION and ORDER by Circuit Judge Paul Kelly, Jr. granting 15 Plaintiff/Counter-Defendant Allstate's Motion for Summary Judgment; denying 16 Defendants/Counter-Plaintiffs Trissells' Motion for Summary Judgment. (rt)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
ALLSTATE FIRE and CASUALTY
BERNIE and MICHAEL TRISSELL,
MEMORANDUM OPINION AND ORDER
THIS MATTER comes on for consideration of Plaintiff/Counter-Defendant
Allstate’s Motion for Summary Judgment filed September 18, 2017, ECF No. 15, and
Defendants/Counter-Plaintiffs Bernie and Michael Trissell’s Motion for Summary
Judgment filed September 18, 2017, ECF No. 16. Plaintiff Allstate filed this declaratory
judgment action urging that (1) the Trissells selected non-stacked uninsured/underinsured
(UM/UIM) coverage, and their selection was valid under New Mexico law, (2) the policy
provides only non-stacked UM/UIM coverage of $25,000 per person and $50,000 per
accident, and (3) Allstate has not acted in bad faith in so interpreting the policy.
Defendants filed a counterclaim for declaratory judgment that Allstate failed to properly
offer stacked coverage and did not obtain a valid rejection of stacked coverage. The
Trissells seek reformation of the policy to provide stacked UM/UIM coverage of $75,000
per person and $150,000 per accident, and they also counterclaim for breach of contract,
violations of the Unfair Insurance Practices Act, insurance bad faith, and punitive
damages. ECF No. 6 at 6–11. The court will grant summary judgment in favor of
Allstate and deny the Trissells’ motion for summary judgment. Because the court
concludes that Allstate’s decision on the Trissells’ stacking claim was proper, the court
will enter judgment on the counterclaim in favor of Allstate.1
The following facts are uncontroverted by the parties. On January 30, 2016, the
Trissells were involved in auto accident when they were struck by an intoxicated driver.
ECF No. 15 at 2, UDF2 No. 1. The Trissells were insured under an Allstate policy that
insured three vehicles, including the one involved in the accident. Id., UDF No. 2. Each
vehicle carried UM/UIM bodily injury insurance of $25,000 per person, $50,000 per
accident. ECF No. 16 at 2, UDF No. 5. The Trissells claim that as a result of the
accident, their injuries are greater than that available under the tortfeasor’s policy and that
they should be allowed to stack their UM/UIM benefits under the Allstate policy. ECF
No. 15 at 3, UDF No. 5. The Trissells initialed a form indicating that they selected non-
The Trissells suggest that in the event the court rules in favor of Allstate, the statutory
violations and bad faith action would be moot. ECF No. 19 at 8.
UDF = undisputed fact.
stacked UM/UIM for bodily injury and non-stacked UIM for property damage. Id., UDF
No. 7. That form provides in pertinent part:
I select non-stacked Uninsured Motorists Insurance for Bodily Injury and nonstacked Uninsured Motorists Insurance for Property Damages at limits:
equal to my Bodily Injury and Property Damage Liability
Insurance limits of $25,000/$50,000/$50,000 for all vehicles
on the policy, for $121.66
Id. After signing the UM/UIM Selection/Rejection Form in April 2015 and prior to the
accident, the Trissells never informed Allstate in writing that they wanted a change in the
UM/UIM selection. Id. at 4, UDF No. 9.
The Trissells’ position is that Allstate and its form are noncompliant with New
Mexico law regarding the selection and rejection of UM/UIM coverage and stacking.
ECF No. 19 at 3; ECF No. 16 at 6–7. They contend that Allstate’s form is invalid
It does not provide a menu list with the price of UM/UIM coverage for each
vehicle for the available level of coverage on each vehicle.
It does not show the available levels of stacked coverage per vehicle with a
corresponding price per vehicle.
It does not contain a per-vehicle rejection of UM/UIM on each vehicle.
ECF No. 16 at 3–4. The Trissells argue that these deficiencies mean that they were not
properly informed about the premium costs corresponding to the available levels of
coverage; thus, the form and their rejection are invalid and the policy must be reformed.
Id. They also maintain that Allstate failed to incorporate their rejection into the policy,
denying them a fair opportunity to reconsider their decision to reject. Id. at 2.
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). Once a movant comes forward with a fact of consequence it claims
is undisputed, the nonmovant cannot rest on mere denials. Fed. R. Civ. P. 56(c)(1). The
nonmoving party must cite materials from the summary judgment record or show that the
materials relied upon by the movant do not establish the fact or that the movant cannot
present the material in a form that would be admissible. Id.; see also D.N.M.LR-Civ.
56.1(b) (requiring reference to record materials for disputed facts).
The court views the facts in the light most favorable to a party opposing summary
judgment, see White v. Pauly, 137 S. Ct. 548, 550 (2017), and must determine whether
any genuine issue of material fact exists on either side of the case, SEC v. Am.
Commodity Exch., Inc., 546 F.2d 1361, 1365 (10th Cir. 1976). Normally, only the
evidence filed by the parties need be considered in resolving the dispute. Am.
Commodity Exch., 546 F.2d at 1366. In this diversity case, the court applies New
Mexico substantive law and federal procedural law. See Gasperini v. Ctr. for Humanities,
Inc., 518 U.S. 415, 427 (1996).
New Mexico law requires insurers to offer UM/UIM coverage up to the liability
limits of the policy. N.M. Stat. Ann. § 66-5-301(A)–(B) (2017). The minimum liability
limits for bodily injury are $25,000/$50,000. Id. §§ 66-5-215(A)(1)–(2), -301(A).
Insureds have the right to reject such coverage, id. § 66-5-301(C), but before such
coverage is excluded, an insurer must obtain a valid rejection. Jordan v. Allstate Ins. Co.,
245 P.3d 1214, 1221 (N.M. 2010). The rejection must be in writing and must be made
part of the policy. N.M. Code R. § 22.214.171.124 (2017). The statute and its implementing
regulation are intended to expand coverage and protect members of the public from the
hazard of at-fault uninsured or under-insured motorists. See Romero v. Dairyland Ins.
Co., 803 P.2d 243, 245 (N.M. 1990). Accordingly, these provisions are interpreted
liberally to further their remedial purpose; providing the maximum of UM/UIM coverage
is the default rule, and exceptions are construed strictly to protect an insured. Jordan, 245
P.3d at 1219.
In Progressive Northwest Insurance Co. v. Weed Warrior Services, 245 P.3d 1209
(N.M. 2010), the New Mexico Supreme Court held that an insurer must offer UM/UIM
limits up to the liability limits of the policy and that an insured’s decision to purchase a
lower amount constitutes a rejection of the maximum amount. 245 P.3d at 1213.
Thereafter, the New Mexico Supreme Court explained what is necessary for an
effective rejection of UM/UIM coverage:
In these cases, we detail for the first time the technical requirements for a
valid rejection of UM/UIM coverage in an amount equal to liability limits.
By requiring insurance carriers to list premium costs corresponding to each
available UM/UIM coverage level, we are providing specific guidance
concerning the form and manner that valid offers and rejections of
UM/UIM insurance must take to comply with controlling statutory and
Jordan, 245 P.3d at 1222. The court requires insurers to “provide the insured with the
premium charges corresponding to each available option for UM/UIM coverage so that
the insured can make a knowing and intelligent decision to receive or reject the full
amount of coverage.” Id. at 1217. The court provided the following analysis:
If an insurer does not (1) offer the insured UM/UIM coverage equal to his
or her liability limits, (2) inform the insured about premium costs
corresponding to the available levels of coverage, (3) obtain a written
rejection of UM/UIM coverage equal to the liability limits, and (4)
incorporate that rejection into the policy in a way that affords the insured a
fair opportunity to reconsider the decision to reject, the policy will be
reformed to provide UM/UIM coverage equal to the liability limits.
Id. at 1221.
The Trissells contend that the selection form is deficient based on these
requirements, particularly the second requirement. ECF No. 16 at 6–7. They maintain
that the form also should have shown the separate costs of stacking none, two, or three of
the coverages (and offered such options) and contained a written rejection of stacking for
each vehicle. Id.
In this case, there are several material facts that remain undisputed notwithstanding
the Trissells various responses. ECF No. 19 at 1–2, response to UDF No. 6, 8, 10, 13–15.
The Trissells indicate that they merely deny the fact, or they are not in a position to admit
or deny, or the fact is immaterial, or they question whether the fact is an accurate
statement of New Mexico law. Many of these material facts are supported by the policy
documents and the UM/UIM Selection/Rejection Form. In reality, the Trissells contest
the legal implications of these facts, not the authenticity of the underlying documents.
The UM/UIM Selection/Rejection Form explained that the insured could select
stacked or non-stacked coverage only for bodily injury liability limits, not property
damage. ECF No. 1-3 at 3. It allowed the Trissells to select stacked UM/UIM coverage
“equal to my Bodily Injury and Property Damage Liability Insurance limits of
$25,000/$50,000/$50,000 for all vehicles on the policy, for $226.79.” Id. Thus, the
Trissells were given a choice to stack the bodily injury liability limits of $25,000/$50,000,
the only stacking option available. On multi-vehicle policies in New Mexico, Allstate
does not provide an option to purchase UM/UIM coverage on some vehicles and reject it
on others. ECF No. 15 at 6, UDF No. 13; ECF No. 15-1 at 1 (Hall Decl.). Nor does
Allstate offer an option to stack less than all of the UM/UIM coverage under the multivehicle policy. ECF No. 15 at 6, UDF No. 14; ECF No. 15-1 at 1 (Hall Decl.).
The Trissells also signed the UM/UIM Selection/Rejection Form affirming that the
options selected would apply to future renewals unless Allstate was notified in writing.
ECF No. 1-3 at 5; ECF No. 15 at 3, UDF No. 8. The Trissells have admitted that they did
not notify Allstate in writing of any desired changes to their selection. ECF No. 1 at 3
(Complaint para. 14); ECF No. 6 at 2 (Answer para. 14). That selection was incorporated
into the renewal auto policy declarations (coverage detail for each vehicle) and indicated
that “Uninsured Motorist Insurance Bodily Injury limits of insured vehicles may not be
stacked.” ECF No. 15 at 4, UDF No. 10; ECF No. 1-2 at 9–10; see also ECF No. 1-2 at
13 (indicating non-stacked UM coverage equal to bodily injury liability limits of
$25,000/$50,000 in the supplement to policy declarations).
The court concludes that Allstate satisfied the Jordan requirements. Allstate
offered the Trissells all of the options available based upon the liability limits selected
and quoted the premiums charged for UM/UIM coverage. See ECF No. 1-3 at 3–4. The
Trissells had the option to select the maximum stacked UM/UIM they could purchase
given their bodily injury limits of $25,000/$50,000. There is no requirement that an
insurer offer UM/UIM coverage on a per-vehicle basis in a multi-vehicle policy, nor is
there a requirement that an insurer provide premium amounts for options not available.
Jordan requires premium costs be disclosed for “each available option.” Jordan, 245 P.3d
The Trissells argue that a per-vehicle rejection of stacking is required by Bird v.
State Farm Mutual Auto Insurance Co., 165 P.3d 343, 349 (N.M. Ct. App. 2007). Bird
indicated in a parenthetical that under Montano v. Allstate Indemnity Co., 92 P.3d 1255
(N.M. 2004), an insurer must obtain a written rejection of stacking for each additional
vehicle given an anti-stacking provision. Bird, 165 P.3d at 349. The illustration in
Montano concerns a policy where the insurer offers stacking on a per-vehicle basis (so a
written rejection of stacking on each vehicle would be appropriate), but it does not
mandate such an offering. As courts in this district have explained, the premium
disclosure and rejection are designed for available options, not every permutation
imaginable. See Gov’t Emps. Ins. Co. v. Shroyer, No. 1:15-cv-00306 PJK/SCY, 2015
WL 12669885, at *4 (D.N.M. Dec. 1, 2015); Jaramillo v. GEICO, No. 6:10-cv-1095
JCH-LFG, 2011 WL 13085936, at *7 (D.N.M. Sept. 14, 2011) (noting that where insurer
offers UM/UIM coverage on a per-policy, rather than a per-vehicle basis, “[a] form
presenting the illusory option to select UM/UIM coverage on one vehicle while rejecting
it on another would simply have caused confusion rather than alleviating it”).
For the same reason, the court must reject the Trissells’ contention that they could
not make a knowing rejection of stacking in the absence of disclosure of premiums for
stacking for each vehicle. The Trissells were informed that the option they selected
would be incorporated into the policy and could be changed upon written notification to
Allstate. That did not occur. Moreover, the choice not to stack was incorporated into the
policy and disclosed. Accordingly, the Trissells (in accordance with the policy terms)
may not stack. See ECF No. 1-2 at 35. Thus, it is unnecessary to decide the extent of or
legal import of any regulatory approval of Allstate’s UM Selection/Rejection Form by the
New Mexico Office of the Superintendent of Insurance in 2013.
NOW, THEREFORE, IT IS ORDERED, ADJUDGED and DECREED that:
(1) Plaintiff/Counter-Defendant Allstate’s Motion for Summary Judgment filed
September 18, 2017, ECF No. 15, is granted;
(2) Defendants/Counter-Plaintiffs Bernie and Michael Trissell’s Motion for
Summary Judgment filed September 18, 2017, ECF No. 16; is denied.
DATED this 5th day of December 2017, at Santa Fe, New Mexico.
/s/Paul Kelly, Jr.
United States Circuit Judge
Sitting by Designation
Jennifer A. Noya (Anna E. Indahl with her on the briefs), Modrall, Sperling, Roehl,
Harris & Sisk, P.A., Albuquerque, New Mexico for Plaintiff/Counter-Defendant.
Brian G. Grayson, Grayson Law Office, LLC, Albuquerque, New Mexico, for
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