Western Farm Bureau Insurance v. CarterWestern Farm Bureau Insurance v. Carter
OPINION
{1} In this case, we determine that repossession of a stolen vehicle is a covered loss under a comprehensive automobile insurance policy that states that the insurer “will pay for any direct and accidental loss of, or damage to, your insured vehicle and its equipment not caused by collision or rollover,” provided the insured party innocently purchased the stolen vehicle.
{2} The facts relevant to this appeal are straightforward. In May and June 1995, Sterling and Judith Carter and their adult son, Brian Carter, (the Carters) purchased two vehicles that were later determined by law enforcement officials to have been stolen. Prior to such determination, the Carters had added both vehicles to an insurance policy (the Policy) issued to them by Western Farm Bureau Insurance Company (Western). Following impoundment of the vehicles by the police and repossession of the vehicles by their rightful owners, the Carters filed a claim with Western for loss of the vehicles. Western denied the claim. Subsequently, Western filed this action in the district court seeking a declaratory judgment that the Carters’ loss of the vehicles was not a covered loss under the Policy.
{3} After cross-motions by the parties, the district court issued an order granting Western’s motion for summary judgment and dismissing the Carters’ counterclaims against Western for failure to pay. The Carters appealed. The Court of Appeals certified the matter to this Court as a ease involving an issue of substantial public interest and first impression in New Mexico, namely, “whether the comprehensive clause of an insurance policy covers the repossession of a stolen vehicle from a subsequent purchaser of the vehicle.” We accepted certification and now reverse the district court’s grant of summary judgment.
DISCUSSION
Standard of Review
{4} Interpretation of the coverage provisions of an insurance contract is a matter of law reviewed de novo. See Rummel v. Lexington Ins. Co.,
Whether the Carters’ Loss Is Covered by the Policy
{5} The terms and conditions of the Policy are clear. “Coverage S” of the Policy states in pertinent part:
We will pay for any direct and accidental loss of, or damage to, your insured vehicle and its equipment not caused by collision or rollover. Loss or damage from missiles, falling objects, theft, collision with animals, or accidental glass breakage are comprehensive losses.
(Boldface type in original.) We have no difficulty determining from this language that the Carters’ loss of their vehicles by repossession was a covered loss. First, use of the word “any” suggests that every loss of a vehicle is covered except those that are specifically excluded, such as “Collision or rollover” losses. Second, we note that outside of this provision Western took the trouble of attaching additional exclusions to the automobile section of the Policy; for example, “Under Coverages, [sic] R, S, and T, loss caused by recall of an insured vehicle.” Loss by an innocent purchaser through repossession is not so excluded. Third, the fact that Western labeled the “Coverage S” provision of the Policy “Comprehensive” indicates that the enumerated covered losses (from damage by missiles, etc.) are simply illustrative and not exhaustive. (Boldface type in original.)
{6} Based on the foregoing analysis, we hold that the Policy covered the loss of a vehicle in the circumstances presented here. A majority of courts have reached the same conclusion. See, e.g., Butler v. Farmers Ins. Co.,
{7} Western argues that the Carters’ loss by repossession is not within “Coverage S” of the Policy because it was not “direct and accidental.” Western contends that the Carters only indirectly lost their vehicles and that their true, direct loss was the loss of their purchase money to the car thieves. We disagree with this characterization of the Carters’ loss. The Carters’ vehicles were physically taken from their possession and the Carters will not be able to use those vehicles again, which is sufficient in our view to constitute a direct and complete loss.
{8} Western also contends that the Carters’ loss was not accidental because “repossession of these vehicles was a deliberate and calculated process by the true owners as well as the law enforcement agencies involved.” This construction of the word “accidental” focuses on the intentions of the repossessing parties and agents, consequently overlooking what we believe is the rationale behind the requirement that a loss be accidental. As described by one authority in a related context, “[A]mong the evils sought to be discouraged by the insurable interest requirement [in insurance contracts] is the intentional destruction of the covered property [by the insured] in order to profit from the insurance proceeds.” Jay M. Zitter, Annotation, Automobile Fire, Theft, and Collision Insurance: Insurable Interest in Stolen Motor Vehicle,
{9} As we discuss below, however, we express no opinion at this time as to whether the Carters did or did not innocently purchase their vehicles. Similarly, we do not determine whether the Carters had an insurable interest in their vehicles, since such a determination turns on whether they were innocent purchasers. See NMSA 1978, § 59A-18-6(B) (1984) (defining “insurable interest” as “any ... lawful ... economic interest in the safety and preservation of the subject of the insurance”) (emphasis added). Our purpose herein is solely to determine the scope of coverage set out in the Policy issued by Western to the Carters. In that regard, we do not find it necessary to formulate a comprehensive definition of the term “accidental” for use in cases such as this one. Rather, in the words of the Arizona Supreme Court concerning a policy provision similar to “Coverage S” of the Policy in this case, “Suffice it to say ... that either unanticipated or unintentional occurrences are sufficient, and since repossession by an unknown owner is neither foreseeable nor deliberate, the loss to appellant must fall within the coverage of the contract.” Butler,
{10} Citing Cueto,
Issues to Be Decided on Remand
{11} In their brief on appeal, the Carters request that this Court provide an answer to the fact question of whether they were innocent purchasers of the stolen vehicles. They also ask that the district court be directed to permit certain discovery related to damages alleged in the Carters’ counterclaims against Western. These matters are not within the province of this Court, but belong more properly to the judgment and discretion of the district court on remand. See Torres v. Plastech Corp.,
{12} Western argues that, before remanding to the district court, we should eliminate some or all of the Carters’ counterclaims instead of reinstating them in full. For instance, Western contends that it cannot be deemed to have acted in bad faith in denying the Carters’ claim because bad faith requires a frivolous or unfounded refusal to pay, see Jackson Nat'l Life Ins. Co. v. Receconi
CONCLUSION
{13} We conclude that, if the Carters were innocent purchasers of the stolen vehicles involved in this case, the insurance policy issued to the Carters by Western covered the loss of those vehicles by repossession. Therefore, the decision of the district court in favor of Western on the coverage issue is reversed and the Carters’ counterclaims are reinstated. Initial judgment on the Carters’ counterclaims, as well as an answer to the fact question of whether the Carters innocently purchased the stolen vehicles, are properly addressed in the district court on remand, not this Court now.
{14} IT IS SO ORDERED.