This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The case involves two sets of plaintiffs who held automobile insurance policies with the defendant, Allstate Insurance Company. Both policies provided liability coverage of $100,000 per person and $300,000 per occurrence, but lower uninsured/underinsured motorist (UM/UIM) coverage of $25,000 per person and $50,000 per accident. The plaintiffs signed forms selecting these lower UM/UIM coverage limits, but these forms were not attached to the policies. After being injured in separate accidents caused by uninsured/underinsured drivers, the plaintiffs sought UM/UIM coverage equal to their liability limits, arguing that Allstate failed to obtain valid written rejections of higher UM/UIM coverage.
Procedural History
- District Court of Santa Fe County: Granted summary judgment in favor of the plaintiffs, holding that Allstate failed to obtain valid rejections of UM/UIM coverage at the liability limits, and therefore, such coverage must be read into the policies.
Parties' Submissions
- Appellant (Allstate Insurance Company): Argued that the plaintiffs’ selection of lower UM/UIM coverage did not constitute a rejection of higher coverage and that its forms, notices, and policy declarations met New Mexico’s regulatory requirements for a valid rejection. Additionally, Allstate contended that the district court erred in refusing to dismiss or sever the plaintiffs’ complaint for improper joinder and lack of standing.
- Appellees (Plaintiffs): Claimed that Allstate failed to obtain valid written rejections of UM/UIM coverage at the liability limits, as required by New Mexico law, and sought declaratory relief to enforce UM/UIM coverage equal to the liability limits of their policies.
Legal Issues
- Did the plaintiffs’ selection of lower UM/UIM coverage constitute a rejection of higher UM/UIM coverage under New Mexico law?
- Did Allstate meet the regulatory requirements for a valid rejection of UM/UIM coverage?
- Should the plaintiffs’ complaint have been dismissed or severed for improper joinder or lack of standing?
Disposition
- The Court of Appeals affirmed the district court’s decision, holding that Allstate failed to obtain valid rejections of UM/UIM coverage at the liability limits and that such coverage must be read into the policies.
Reasons
Per Vanzi J. (Bustamante and Vigil JJ. concurring):
Rejection of UM/UIM Coverage: The Court held that under New Mexico law, insurers must offer UM/UIM coverage up to the liability limits of a policy. A selection of lower UM/UIM coverage constitutes a rejection of the higher coverage, which must meet specific regulatory requirements to be valid.
Regulatory Requirements for Rejection: The Court found that Allstate’s rejection forms, notices, and policy declarations did not comply with the requirements set forth in 13.12.3.9 NMAC. Specifically, the rejection forms were not attached to the policies, the notices were generic and not policy-specific, and the declarations pages did not reference the rejection of UM/UIM coverage. As a result, the rejections were invalid, and UM/UIM coverage at the liability limits must be read into the policies.
Improper Joinder and Lack of Standing: The Court declined to address Allstate’s arguments regarding improper joinder and lack of standing, as these issues were not preserved for appeal. Allstate failed to raise them after the stay in proceedings was lifted and did not include them in its motion for summary judgment, indicating waiver or abandonment of these issues.
The Court concluded that the district court correctly granted summary judgment in favor of the plaintiffs, affirming that UM/UIM coverage at the liability limits must be read into the policies due to Allstate’s failure to obtain valid rejections.