Garcia v. Allstate Fire and Cas. Ins. Co.
Background
- Plaintiff Linda Garcia purchased an auto insurance policy from Allstate, initially insuring one vehicle with liability and UM/UIM coverage.
- Upon adding a second vehicle, Garcia signed a written waiver opting for non-stacked UM/UIM coverage after being presented options and premiums for both stacked and non-stacked coverage.
- The waiver made clear that premiums listed were "per policy," and non-stacked coverage required a lower premium.
- Allstate’s subsequent policy declaration pages showed allocation of the total UM/UIM premium (matching the waiver amount) on a per-vehicle basis, but specified coverage was non-stacked.
- Garcia was injured by an underinsured motorist and demanded Allstate allow "stacking" of her UM/UIM policies; Allstate refused, citing her signed waiver.
- The district court found for Allstate, but the Court of Appeals reversed, finding ambiguity in the policy created by the premium presentation; the Supreme Court of New Mexico granted certiorari.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Garcia’s waiver of stacked coverage valid? | Waiver invalid due to ambiguity created by per-vehicle premium on declaration pages. | Waiver was knowing, written, and in accord with law, indicating explicit rejection of stacking. | Waiver was valid and complied with all legal requirements. |
| Did the per-vehicle premium presentation on declarations create an ambiguity? | Declaration pages made it unclear if multiple premiums were paid (suggesting stacking). | The per-vehicle amounts simply allocated the total per-policy premium declared on the waiver. | No ambiguity: documents, taken as a whole, clearly communicated non-stacked, per-policy coverage. |
| Should the policy be reformed to require stacking? | Ambiguity allegedly entitled Plaintiff to stacked coverage. | Reformation unwarranted; insured received exactly the coverage selected and paid for. | No reformation required; contract enforced as written. |
Key Cases Cited
- Montano v. Allstate Indem. Co., 92 P.3d 1255 (N.M. 2004) (requiring written waiver of stacking to limit UM/UIM liability in multi-vehicle policies)
- Ullman v. Safeway Ins. Co., 539 P.3d 668 (N.M. 2023) (clarifying requirements for UM/UIM waiver effectiveness, including brief stacking explanation)
- Rummel v. Lexington Ins. Co., 945 P.2d 970 (N.M. 1997) (discussing contract construction and ambiguity in insurance policies)
- Knowles v. United Servs. Auto. Ass’n, 832 P.2d 394 (N.M. 1992) (insurance obligation determined by contract terms as a whole)