542 F.Supp.3d 1159
D.N.M.2021Background
- On Jan 1, 2018 Greenwich issued a commercial auto policy to The Hershey Company (Hershey); the policy was delivered to Hershey’s broker Aon in Philadelphia on Feb 14, 2018.
- Aon requested UM/UIM Symbol 6 coverage; Greenwich sent state-specific UM/UIM rejection forms and Hershey’s Risk Manager signed a New Mexico UM/UIM rejection on Nov 9, 2017 in Pennsylvania.
- The policy did not include a New Mexico UM/UIM endorsement; Hershey rejected NM UM/UIM coverage. Symbol 6 limited UM/UIM to vehicles required by state law.
- Plaintiff Jennifer Lewis was injured in a March 14, 2018 crash while driving a company car in Roswell, NM; she filed a UIM claim under Hershey’s policy in April 2020, which Greenwich denied for lack of NM UIM coverage.
- Lewis moved for partial summary judgment seeking reformation under Jordan v. Allstate (arguing Greenwich failed to comply with NM waiver rules); Greenwich moved for summary judgment arguing New Mexico law does not apply because the policy was issued/delivered in Pennsylvania.
- The Court denied Lewis’s motion (procedural deficiency) and granted Greenwich’s motion on the merits: Pennsylvania controls, New Mexico statute §66-5-301 requires the policy be both issued/delivered in NM and relate to NM-registered/garaged vehicles, so Jordan reformation does not apply; Counts II–IV and punitive damages were dismissed; Greenwich’s declaratory-counterclaim was granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether New Mexico UM/UIM statute and Jordan apply to the policy | Lewis: Greenwich failed to follow NM waiver rules; policy should be reformed to provide UM/UIM under Jordan | Greenwich: Policy was issued/delivered in Pennsylvania, so NM §66-5-301 and Jordan do not apply | Court: Policy was delivered/issued in Pennsylvania; NM law does not apply; no reformation under Jordan |
| Choice of law for the policy | Lewis: Lex loci contractus or other principles make NM law apply (relies on Douglas) | Greenwich: Policy issued/delivered to Hershey in PA; NY/NM choice-of-law rules point to PA (per Delgado/Wilkeson) | Court: Pennsylvania law governs because policy issuance/delivery and signatures occurred in PA |
| Breach of contract / duty to pay UIM | Lewis: Insurer breached by denying UIM benefits | Greenwich: No contractual duty because Hershey rejected NM UM/UIM | Court: No duty to pay; summary judgment for Greenwich on breach count |
| Bad faith (Count II) | Lewis: Denial of UIM benefits was in bad faith | Greenwich: No duty to pay; bad faith requires contractual duty | Court: Dismissed; bad faith claim fails without a duty to pay |
| Unfair Insurance Practices (Count III) | Lewis: Denial violated NM Unfair Practices statutes | Greenwich: Provided prompt, written coverage denial and documentation | Court: Dismissed; insurer provided reasonable explanation and proof quickly |
| Punitive damages (Count IV) | Lewis: Conduct was willful/wanton; punitive damages warranted | Greenwich: No underlying liability; punitive damages require underlying award | Court: Dismissed; punitive damages unavailable without underlying recovery |
Key Cases Cited
- Jordan v. Allstate Ins. Co., 245 P.3d 1214 (N.M. 2010) (sets NM requirements for valid UM/UIM waiver and reformation remedy)
- Wilkeson v. State Farm Mut. Auto. Ins. Co., 329 P.3d 749 (N.M. Ct. App. 2014) (choice-of-law guidance on where a policy is issued/delivered)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard for genuine issues of material fact)
- Celotex Corp. v. Catrett, 477 U.S. 317 (allocation of burdens at summary judgment)
- McGoff v. Acadia Ins. Co., 30 A.3d 680 (Vt. 2011) (interpreting similar UM/UIM statute as conjunctive: issuance/delivery plus garaging/registration)
- Central Transport, Inc. v. Blake, 985 S.W.2d 805 (Mo. Ct. App. 1998) (refusing to apply state UM statute where policy issued/delivered elsewhere)