Ullman v. Safeway Ins. Co.
2017 NMCA 71
| N.M. Ct. App. | 2017Background
- Plaintiff Betty Ullman brought a putative class action alleging Safeway’s standard New Mexico auto insurance forms failed to validly offer/obtain UM/UIM coverage waivers (including with respect to stacking), so UM/UIM benefits should be read into class members’ policies.
- Safeway moved for class-related summary judgment arguing its uniform documents (application, UM/UIM Selection/Rejection form, declarations/endorsement pages, policy) complied with New Mexico law and showed insureds were informed and executed written rejections.
- The district court denied Safeway’s summary judgment and certified an interlocutory question: whether Safeway’s uniform documentation complied with New Mexico law in obtaining UM/UIM waivers, including stacked coverage.
- On appeal, the Court of Appeals reviewed the documentary adequacy de novo (mixed question of law/fact) and treated the question as legal because Ullman conceded the inquiry concerned the sufficiency of uniform forms.
- The appellate court examined whether Safeway: (1) offered the maximum statutorily-available UM/UIM (equal to liability limits); (2) disclosed premium costs for available options; (3) obtained a written rejection that clearly evidenced an informed choice; and (4) incorporated the rejection into the policy so it called the insured’s attention.
- The Court of Appeals held Safeway’s documents satisfied New Mexico law and reversed the district court; remaining class-certification issues were left for the district court on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Safeway’s uniform forms meaningfully offered the maximum UM/UIM (equal to liability limits) | Ullman: forms failed to explain full range/options and therefore did not meaningfully offer the maximum | Safeway: forms informed insureds they could purchase UM/UIM up to liability limits and showed corresponding options | Held: Forms complied; insured was sufficiently informed of the maximum (equal to liability limits) |
| Whether Safeway disclosed premium costs for all available coverage levels (menu of options) | Ullman: premium disclosure was inadequate/ambiguous and didn’t tie costs to available levels (including stacking) | Safeway: selection/rejection form and declarations listed premiums for BI and UM options as required by Jordan and related cases | Held: Safeway disclosed required premium information; Jordan requires premiums for min, max (liability-equal), and intermediate options, not stacked totals |
| Whether Safeway obtained a valid written rejection that clearly evidenced an informed decision | Ullman: rejection was not incorporated/called to insured’s attention; factual issues exist about what Ullman received | Safeway: Ullman signed application and selection/rejection form showing explicit "X" rejections; documents stated insured received copies and understanding | Held: Written rejection existed, was signed, and manifested an informed choice; Marckstadt/Jordan requirements met |
| Whether the rejection was made part of the policy so it called insured’s attention (incorporation/ability to reconsider); and whether stacking required separate explanation | Ullman: rejection not incorporated in a way that called attention; stacking required explicit explanation and stacked-amount disclosure | Safeway: declarations, endorsement, application and selection form together incorporated selections/rejections into the policy; Jordan/Montano do not require separate stacking-calculation disclosure | Held: Rejection was incorporated (policy, declarations, endorsement reference the application and forms); insurer need not explain stacking or multiply limits for stacked totals to satisfy Jordan/Montano |
Key Cases Cited
- Romero v. Dairyland Ins. Co., 803 P.2d 243 (N.M. 1990) (regulation requires rejection be made part of policy and unambiguous notice of waiver)
- Marckstadt v. Lockheed Martin Corp., 228 P.3d 462 (N.M. 2010) (insurer must obtain a written rejection; rejection need not be signed or attached but insurer must secure evidence the insured knowingly rejected)
- Jordan v. Allstate Ins. Co., 245 P.3d 1214 (N.M. 2010) (prescribes that insurer must inform insured of right to purchase UM/UIM up to liability limits and disclose premium for maximum, minimum, and other offered levels)
- Montano v. Allstate Indem. Co., 92 P.3d 1255 (N.M. 2004) (stacking doctrine; insurer should obtain written rejections of stacking to limit liability; disclosure of premiums per vehicle to let insured know what they pay for)
- Progressive Northwestern Ins. Co. v. Weed Warrior Servs., 245 P.3d 1209 (N.M. 2010) (insurer must offer UM/UIM up to liability limits; insured’s choice of lower amount functions as rejection of maximum)
- Whelan v. State Farm Mut. Auto. Ins. Co., 329 P.3d 646 (N.M. 2014) (confirms Montano’s requirement that insurers disclose premium costs for available levels of stacked coverage)