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 Plaintiff was involved in an accident with an uninsured motorist while driving a vehicle not insured under his family's State Farm automobile insurance policies. The Plaintiff's father had signed a driver exclusion agreement with State Farm, which excluded the Plaintiff from coverage under all family policies. The Plaintiff sought uninsured motorist coverage under these policies, which provided $25,000 per person for uninsured motorist coverage (paras 2-3).
Procedural History
- District Court of Bernalillo County: Granted summary judgment in favor of State Farm, holding that the driver exclusion agreement was valid under New Mexico law and that the Plaintiff was not entitled to uninsured motorist coverage (headnotes, para 1).
Parties' Submissions
- Plaintiff-Appellant: Argued that the driver exclusion agreement should not apply to uninsured motorist coverage and that the exclusion agreement was invalid because it did not comply with statutory requirements, including form, signature, and consideration (paras 3, 8-15).
- Defendants-Appellees (State Farm and Raymond P. Pratt): Asserted that the driver exclusion agreement was valid under New Mexico law and that it excluded the Plaintiff from uninsured motorist coverage. They also argued that the agreement complied with statutory requirements and was supported by consideration (paras 3, 8-15).
Legal Issues
- Does a driver exclusion agreement under NMSA 1978, Sections 66-5-221(K) and -222, apply to uninsured motorist coverage as well as liability coverage?
- Is the driver exclusion agreement signed by the Plaintiff's father valid under New Mexico law, including compliance with statutory requirements for form, signature, and consideration?
Disposition
- The Court of Appeals affirmed the district court's decision, upholding the validity of the driver exclusion agreement and denying the Plaintiff's claim for uninsured motorist coverage (para 16).
Reasons
Per Alarid J. (Pickard and Black JJ. concurring):
Application of Driver Exclusion Agreement to Uninsured Motorist Coverage: The Court reaffirmed that driver exclusion agreements under Sections 66-5-221(K) and -222 apply to uninsured motorist coverage as well as liability coverage. The Court relied on precedent from State Farm Automobile Insurance Co. v. Kiehne, which held that such exclusions are valid and do not violate the purpose of New Mexico's uninsured motorist statute (paras 4-7).
Validity of the Driver Exclusion Agreement: The Court found that the exclusion agreement signed by the Plaintiff's father was substantially similar to the statutory form provided in Section 66-5-222. The Court rejected the Plaintiff's argument that the omission of the phrase "insured hereinunder" invalidated the agreement, holding that the agreement complied with the statutory requirements (paras 8-10).
Compliance with Signature Requirement: The Court determined that the exclusion agreement was valid for the policies covering the 1977 Datsun and 1987 Mazda, as the Plaintiff's father was the named insured and had signed the agreement. The agreement was not valid for the 1980 Oldsmobile policy because the Plaintiff's mother, a co-named insured, had not signed it. However, the Oldsmobile policy was not in effect at the time of the accident, rendering this issue moot (paras 12-14).
Compliance with Consideration Requirement: The Court held that the exclusion agreement was supported by consideration because State Farm agreed to continue insuring the Plaintiff's family only if the Plaintiff was excluded as a driver. The Court rejected the Plaintiff's argument that a reduction in premiums was required to satisfy the consideration requirement (para 15).
Public Policy: The Court emphasized the importance of freedom to contract, noting that the exclusion agreement allowed the Plaintiff's father to obtain insurance coverage while excluding a high-risk driver. The Court found no violation of public policy (paras 10-11).