PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

_________________________________ 

ACE FIRE UNDERWRITERS 

INSURANCE COMPANY, 

 Plaintiff Counter Defendant - 

Appellant, 

v. 

DAVE ROMERO, JR., as personal 

representative of the wrongful death 

proceedings of Jose A. (Felix) Chavez, 

deceased; ISABEL CHAVEZ, 

individually; BRANDON CHAVEZ, 

individually; LUIS GUTIERREZ, 

individually; TIFFANY FISHER, 

individually, 

 Defendants Counter Plaintiffs - 

Appellees. 

No. 14-2073 

_________________________________ 

Appeal from the United States District Court 

for the District of New Mexico 

(D.C. No. 1:12-CV-01129-KG-RHS)

_________________________________ 

Danny L. Worker, Lewis Brisbois Bisgaard & Smith, LLP, Chicago, Illinois; (Stephen D. 

Hoffman, Lewis Brisbois Bisgaard & Smith, LLP, Phoenix, Arizona, with him on the 

briefs), for Plaintiff Counter Defendant-Appellant. 

Randy Knudson, Doerr & Knudson, P.A., Portales, New Mexico; (W.H. Greig, Greig & 

Richards, P.A., Clovis, New Mexico, with him on the brief), for Defendant Counter 

Plaintiffs-Appellees. 

_________________________________ 

Before HOLMES, MATHESON, and MORITZ, Circuit Judges. 

FILED 

United States Court of Appeals

Tenth Circuit 

August 1, 2016

Elisabeth A. Shumaker 

Clerk of Court

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_________________________________ 

MORITZ, Circuit Judge. 

_________________________________ 

ACE Fire Underwriters Insurance Company appeals the district court’s 

declaration that a policy ACE issued offers total coverage up to $2 million for an 

accident involving two insured vehicles: a tractor and trailer. Because we agree with 

ACE that the policy instead limits its liability to only $1 million, we reverse. 

BACKGROUND

I. The Accident and Insurance Dispute 

In the early morning hours of March 24, 2011, Jesse Hale left Finney Farms 

driving a tractor-trailer rig. When he pulled onto a highway adjacent to Finney 

Farms, the trailer detached from the tractor. Hale drove his tractor off the roadway 

and back onto the farm, hoping to make a quick U-turn and return to the roadway so 

that he could pull up behind the trailer and illuminate it on the dark highway. But 

before he could complete this maneuver, Jose Chavez’s vehicle collided with the 

unlit trailer, killing Chavez. 

The personal representative of Chavez’s estate, Dave Romero, Jr., together 

with Chavez’s surviving family members (collectively, the Estate), brought a 

wrongful death action against Finney Farms and Hale. As the insurer of the tractor 

and the trailer, ACE reached a settlement with the Estate. But the parties conditioned 

the settlement upon litigating the available limits of the policy. ACE maintained that 

the policy provisions limited its liability to $1 million per accident, regardless of the 

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number of covered autos1

 involved. The Estate, on the other hand, insisted that 

ACE’s liability under the policy was $1 million per covered auto involved in each 

accident. That interpretation of the policy would cap ACE’s liability in this case at 

$2 million because, according to the Estate, the tractor and the trailer were both 

involved in the accident. Under the terms of the settlement, ACE initially paid the 

Estate $1 million. But it agreed to pay it an additional $550,000 if the court accepted 

the Estate’s interpretation of the policy. 

II. The District Court’s Original Decision 

In accordance with the terms of the settlement agreement, ACE sought a 

declaratory judgment as to the policy limits, and both parties moved for summary 

judgment. The district court initially sided with ACE, concluding that the policy 

unambiguously limits ACE’s liability to $1 million per accident under New Mexico 

contract law.2

In reaching that conclusion, the court relied heavily on two provisions in the 

policy: (1) Item Two of the declarations, titled “SCHEDULE OF COVERAGES 

AND COVERED AUTOS,” and (2) a section in the body of the policy titled “Limit 

of Insurance.” App. vol. 1, 38, 76. The court explained that Item Two—which lists 

“$1,000,000” in the liability coverage row under the heading “LIMIT THE MOST 

WE WILL PAY FOR ANY ONE ACCIDENT OR LOSS”—unambiguously limits 

liability coverage to $1 million per accident. See id. at 38. The court further 

 1

 “Auto” is a defined term under the policy encompassing both the tractor and 

trailer at issue. 

2

 The parties agree that New Mexico law controls in this diversity action. 

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explained that the Limit of Insurance provision—which provides that regardless of 

the number of covered autos involved, “the most [ACE] will pay for the total of all 

damages . . . resulting from any one ‘accident’ is the Limit of Insurance for Liability 

Coverage shown in the Declarations”—reinforces that the policy’s provisions limit 

liability coverage to Item Two’s $1 million cap. Accordingly, the court entered 

summary judgment in favor of ACE. 

III. The District Court’s Decision Following a Motion to Reconsider 

But following the district court’s initial decision, the New Mexico Court of 

Appeals reached the opposite conclusion after considering a similar policy. See 

Lucero v. Northland Ins. Co. (Lucero I), 326 P.3d 42 (N.M. Ct. App. 2014), rev’d, 

346 P.3d 1154 (N.M. 2015). In Lucero I, the court interpreted an insurance policy 

(the Northland policy) containing (1) an Item Two that was nearly identical to the 

Item Two in the ACE policy, and (2) a Limit of Insurance provision that was 

identical to the Limit of Insurance provision in the ACE policy. Id. at 49; Lucero v. 

Northland Ins. Co. (Lucero II), 346 P.3d 1154, 1156 (N.M. 2015) (reproducing Item 

Two of the Northland policy, which includes a “LIMITS OF LIABILITY” column 

and a corresponding entry of “$1,000,000 each ‘accident’” in the liability coverage 

row). 

The Lucero I court concluded that the Northland policy limited liability to 

$1 million for each covered auto involved in an accident. 326 P.3d at 44. In reaching 

that conclusion, the court found it significant that Item Two included a qualifier 

stating, “Each of these coverages will apply only to those ‘autos’ shown as Covered 

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‘Autos.’” Id. at 44.3

 Relying on this language, the court explained, “It follows that 

each vehicle involved in an accident that is a ‘Covered “Auto”’ carries $1 million in 

liability coverage.” Id. at 46-47. 

The Lucero I court further concluded that the Limit of Insurance provision 

didn’t apply when more than one covered auto was involved in the same accident. 

Instead, the Lucero I court reasoned that the Limit of Insurance provision only 

prevented aggregating “policy limits applicable to more than one vehicle where the 

other vehicles are not involved in the accident.” Id. at 47 (quoting Progressive

Premier Ins. Co. of Ill. v. Kocher ex rel. Fleming, 932 N.E.2d 1094, 1098 (Ill. App. 

Ct. 2010)). 

Alternatively, the Lucero I court noted that even if the Limit of Insurance 

provision applied, the policy was ambiguous. Id. at 48-49. The court explained that 

the Northland policy’s listing of covered autos “show[ed] a separate premium paid 

for each listed vehicle, and each listed vehicle [was] provided $1 million in 

coverage.” Id. at 49. In contrast, the Limit of Insurance provision ostensibly 

“eliminate[d] all liability coverage available to one of the two vehicles involved in 

the accident,” resulting in an ambiguity that the court construed against the insurer. 

Id.

Following Lucero I, the Estate in this case filed a motion to reconsider in the 

district court, arguing that the New Mexico Court of Appeals’ interpretation of the 

Northland policy controlled here because—according to the Estate—the Northland 

 3

 The ACE policy contains a nearly identical qualifier. See App. vol. 1, 38. 

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policy at issue in Lucero I was “virtually identical” to the policy at issue here. App. 

vol. 4, 498. The district court recognized the nonbinding nature of the New Mexico 

Court of Appeals’ decision, but concluded that “the New Mexico Supreme Court 

would most likely adopt the New Mexico Court of Appeals’ ruling in Lucero [I].” 

App. vol. 5, 554. Then, applying Lucero I, the district court concluded that the 

qualifier contained in Item Two of the ACE policy provides up to $1 million in 

liability coverage for each covered auto. And the court explained that the Limit of 

Insurance provision—if interpreted to apply when more than one covered auto was 

involved in a single accident—would eliminate coverage to all but one covered auto. 

Accordingly, the district court found the ACE policy ambiguous and construed the 

ambiguity against ACE. The court thus amended its judgment to reflect that the 

policy limited liability to $1 million per covered auto involved in an accident. 

IV. The New Mexico Supreme Court’s Decision 

But the legal landscape was about to shift again. That’s because after the 

district court amended its judgment to reflect New Mexico’s intermediate appellate 

court’s ruling in Lucero I, the New Mexico Supreme Court agreed to review Lucero 

I. This action prompted ACE to seek (1) a stay of the case pending the New Mexico 

Supreme Court’s decision, and (2) reconsideration of the district court’s decision 

granting rehearing and adopting the rationale of Lucero I. But the district court 

declined to reconsider or stay enforcement of its judgment against ACE. ACE 

appealed, and we held the appeal in abeyance pending the New Mexico Supreme 

Court’s review of Lucero I. 

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Ultimately, the New Mexico Supreme Court reversed Lucero I and, in doing 

so, specifically rejected Lucero I’s characterization of the Northland policy as 

ambiguous. Instead, the state’s highest court characterized that policy as 

unambiguously “limit[ing] [the insurer’s] exposure to $1,000,000 per accident 

regardless of the number of covered autos involved in any one accident.” Lucero II, 

346 P.3d at 1158. In arriving at this conclusion, the court relied on three sections of 

the Northland policy: (1) Item Two; (2) the Limit of Insurance provision; and (3) a 

“Liability Coverage” provision. That provision stated, in relevant part, “We will pay 

all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or 

‘property damage’ to which this insurance applies, caused by an ‘accident’ and 

resulting from the ownership, maintenance or use of a covered ‘auto’.” Id. at 1157.4

Reading these three provisions together, the New Mexico Supreme Court concluded 

that Northland’s promise to “pay all sums an ‘insured’ legally must pay” remained 

subject to, per the Limit of Insurance provision, “the Limit of Insurance for Liability 

Coverage shown in the Declarations.” And that limit, according to the New Mexico 

Supreme Court, was $1 million per accident, as specified in Item Two. Id. at 1157. 

Moreover, the New Mexico Supreme Court rejected the portion of Lucero I’s

analysis that construed Item Two’s qualifier—i.e., “Each of these coverages will 

apply only to those ‘autos’ shown as Covered ‘Autos’”—as meaning Northland 

promised to pay $1 million for each auto involved in an accident. Id. at 1156-57. The 

 4

 Notably, the ACE policy contains an identical Liability Coverage provision. 

See App. vol. 1, 73. 

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court explained that the policy didn’t say, “[E]ach of these coverages will apply to 

[each of] those autos shown,” but rather said, “[E]ach of these coverages will apply 

only to those ‘autos’ shown.” Id. The court noted that “the provision [was] phrased 

not as a grant but as a limitation,” and emphasized the “critical distinction between a 

grant of coverage and ‘the amount of such coverage.’” Id. at 1157-58 (quoting Vigil 

v. Cal. Cas. Ins. Co., 811 P.2d 565, 567 (N.M. 1991)). Thus, the court rejected 

Lucero I’s conclusion that Item Two’s qualifier granted each covered auto $1 million 

in liability coverage. Instead, the court concluded that while Item Two “makes 

liability coverage available for each of the covered autos . . . it does not grant policy 

limits for each covered auto.” Id. at 1158. 

Finally, the court noted that even “if there were reasonable grounds for 

disagreement over the terms” of Item Two, language in the Limit of Insurance 

provision “settle[d] the matter.” Id. at 1158. The court explained that, read together, 

the Limit of Insurance provision and Item Two clearly indicate that, regardless of the 

number of covered autos involved in a single accident, the most Northland will pay 

“is the Limit of Insurance for Liability Coverage shown in the Declarations,” i.e., 

“$1,000,000 each accident.” Id.; see also id. at 1158, 1160 (citing cases from 

numerous other jurisdictions “interpreting similar insurance clauses” and “reach[ing] 

a similar conclusion”). 

Following Lucero II, we lifted the abatement of ACE’s appeal. 

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DISCUSSION

Summary judgment is appropriate “if the movant shows that there is no 

genuine dispute as to any material fact and the movant is entitled to judgment as a 

matter of law.” Fed. R. Civ. P. 56(a). “We review the district court’s grant of 

summary judgment de novo, employing the same legal standard applicable in the 

district court.” Thomson v. Salt Lake County, 584 F.3d 1304, 1311 (10th Cir. 2009). 

In this diversity action, “we apply state law with the objective of obtaining the result 

that would be reached in state court.” Butt v. Bank of Am., N.A., 477 F.3d 1171, 1179 

(10th Cir. 2007). 

Here, the parties stipulated to the relevant facts and agree that New Mexico 

law governs our interpretation of the policy. Thus, the question before us is purely a 

matter of contract interpretation under New Mexico law. See Ponder v. State Farm 

Mut. Auto. Ins. Co., 12 P.3d 960, 964 (N.M. 2000) (explaining that the court resolves 

“questions regarding insurance policies by interpreting their terms and provisions in 

accordance with the ‘same principles which govern the interpretation of all 

contracts’” (quoting Rummel v. Lexington Ins. Co., 945 P.2d 970, 976 (N.M. 1997))). 

When interpreting the provisions at issue, we will “look to the rulings of the [New 

Mexico Supreme Court], and, if no such rulings exist, must endeavor to predict how 

that high court would rule.” Johnson v. Riddle, 305 F.3d 1107, 1118 (10th Cir. 2002). 

In that regard, the parties disagree over whether we may “look to” Lucero II as 

the New Mexico Supreme Court’s controlling opinion on this issue. See id. ACE 

argues Lucero II controls because the Northland policy contained language identical 

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to the language in the ACE policy, placing Lucero II “on all fours with the present 

case.” Aplt. Br. 2, 16. The Estate, on the other hand, maintains that material 

distinctions exist between the ACE and Northland policies and that Lucero II 

therefore doesn’t apply.5

 

Specifically, the Estate points to Item Three of the ACE policy, which is titled 

“SCHEDULE OF COVERED AUTOS YOU OWN.” App. vol. 1, 48, 52 (reproduced 

in relevant part below). 

 5

 In support of its motion to reconsider, the Estate initially represented to the 

district court that Lucero I should control because it involved “a policy virtually 

identical to the policy in this case.” App. vol. 4, 498 (emphasis added). On appeal, 

however, the Estate reverses course and insists that Lucero I “has no applicability or 

relevance to an interpretation of the [ACE] policy” because—contrary to the Estate’s 

initial position—the policies contain key differences. Aplee. Br. 19. 

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That schedule lists both the tractor and trailer at issue6

 and includes a qualifier 

noting that the “[a]bsence of a deductible or limit entry in any column below means 

that the limit or deductible entry in the corresponding ITEM TWO column applies 

instead.” Id. Immediately following this qualifier, the policy separately lists the 

tractor and trailer, and provides a $1 million liability limit for each vehicle. Id. The 

Estate argues that Item Three—which it insists wasn’t in the Northland policy, thus 

rendering Lucero II inapplicable—introduces two sources of ambiguity into the 

policy language, which the Estate asserts must be construed against ACE. See 

Ponder, 12 P.3d at 967 (explaining that a court should construe ambiguities against 

the insurer as a matter of public policy). 

At the outset, it’s not at all clear that the Northland policy didn’t contain this 

or a similar schedule. In fact, Lucero I and Lucero II both point out that the 

Northland policy included a schedule of covered autos, and Lucero I further 

described the schedule as a “separate listing of covered autos, which in turn shows a 

separate premium paid for each listed vehicle, and each listed vehicle is provided $1 

million in coverage.” Lucero I, 326 P.3d at 49. This description suggests that the 

Northland policy may have contained a substantially similar schedule to the ACE 

policy’s Item Three, particularly in light of the striking similarities between the other 

provisions of the two policies. And if the Northland policy did contain a similar Item 

Three, Lucero II would foreclose the Estate’s argument. 

 6

 The parties agree that covered auto numbers 38 and 49 refer to the trailer and 

tractor at issue, respectively. 

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But because neither Lucero I nor Lucero II contained a visual depiction of the 

Northland policy’s schedule of covered autos or mentioned whether the Northland 

policy contained an “[a]bsence of a deductible or limit entry” qualifier similar to the 

one in the ACE policy, see App. vol. 1, 48, 52, we assume for purposes of this 

decision that the policies differ in this regard. 

Even so, we disagree that Item Three renders the ACE policy ambiguous. The 

Estate first argues that the policy is ambiguous because the $1 million-per-coveredauto limits of Item Three conflict with the $1 million-per-accident limit of Item Two. 

More specifically, the Estate points to the qualifier included with Item Three: the 

“[a]bsence of a deductible or limit entry in any column below means that the limit or 

deductible entry in the corresponding ITEM TWO column applies instead.” App. vol. 

1, 48, 52. The Estate reads this qualifier as standing for a corollary principle: namely, 

that the Item Two, per-accident limit “only applies to the specific covered autos 

identified in the policy under Item Three” when there are no limits specified in Item 

Three. Aplee. Br. 15. Accordingly, it argues that because each covered auto listed in 

Item Three is associated with a liability limit in the next column, those limits, and 

only those limits, apply for each of the 51 covered autos. 

We disagree. At the outset, the policy clearly indicates that the autos listed in 

Item Three are subject to Item Two’s $1 million-per-accident limit. See App. vol. 1, 

38 (indicating that covered autos denoted by symbol 7 are subject to Item Two’s 

$1 million liability limit); id. at 72 (explaining that symbol 7 denotes those autos 

described in Item Three). And contrary to the Estate’s characterization of the policy’s 

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provisions, the policy contains no indication or statement that the per-accident limit 

of Item Two only applies in the absence of a deductible or limit entry in Item Three. 

Rather, Item Three simply says that the “[a]bsence of a deductible or limit entry in 

any column below means that the limit or deductible entry in the corresponding 

ITEM TWO column applies instead.” Id. at 48, 52. The plain meaning of this 

provision is that if ACE hadn’t provided a liability limit for each covered auto in 

Item Three, the per-accident limit of Item Two would serve as the appropriate percovered-auto limit. See Christmas v. Cimarron Realty Co., 648 P.2d 788, 790 (N.M. 

1982) (explaining that it’s “established that courts will apply the plain meaning of the 

contract language as written in interpreting terms of a contract”). 

The Estate’s proffered interpretation of the language—that the per-accident 

limit of Item Two only applies when there is no limit provided in Item Three—

requires us to read the word “only” into the policy when that word doesn’t appear 

there.7

 We decline to do so. See Heimann v. Kinder-Morgan CO2 Co., 144 P.3d 111, 

115 (N.M. Ct. App. 2006). Instead, we apply the plain meaning of the policy’s 

language: Each covered vehicle carries the corresponding liability limit provided in 

 7

 In addition to adding language to the policy that isn’t there, the Estate’s 

interpretation commits the fallacy of denying the antecedent. See TorPharm, Inc. v. 

Ranbaxy Pharm., Inc., 336 F.3d 1322, 1329 n.7 (Fed. Cir. 2003) (defining fallacy of 

denying antecedent as “[a]n invalid argument of the general form: If p, then q. Not p. 

Therefore, not q”). Here, the policy states that if there is no limit listed in Item Three, 

then the limit in Item Two applies. The Estate insists this means that if there is a limit 

listed in Item Three, then the limit in Item Two doesn’t apply. “But this does not 

logically follow, as an example illustrates: ‘Because it’s not cold outside, it’s not 

snowing. It is now cold outside, therefore it must be snowing.’” Agri Processor Co. 

v. NLRB, 514 F.3d 1, 6 (D.C. Cir. 2008). 

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Item Three. But regardless of the number of covered autos or their individual liability 

limits for a single accident, ACE’s per-accident liability is capped at the limit 

provided in Item Two: $1 million. See Mayfield Smithson Enters. v. Com-Quip, Inc., 

896 P.2d 1156, 1161 (N.M. 1995) (refusing to give defendant’s proffered contract 

interpretation weight because it was “incongruous with other contract provisions” 

and made “great portions of [the] agreement surplusage”); Brooks v. Tanner, 680 

P.2d 343, 346 (N.M. 1984) (noting “each part of the contract is to be accorded 

significance according to its place in the contract”). Thus, Item Three’s qualifier 

doesn’t render the policy ambiguous. 

And this conclusion also controls the Estate’s second ambiguity argument: i.e., 

that the liability limits specified in Item Three render the Limit of Insurance 

provision ambiguous. The Estate points out that the Limit of Insurance provision 

limits liability for any one accident to “the Limit of Insurance for Liability Coverage 

shown in the Declarations.” App. vol. 1, 76 (emphasis added). It suggests that it’s 

unclear which limit “shown in the Declarations” this provision refers to. And it 

argues that a reasonable insured would understand the Limit of Insurance provision 

as referring to the limits listed in Item Three because “the Item Two limit would only 

apply if no coverage was listed in the column [of Item Three] relating to coverage.” 

Aplee. Br. 18 (emphasis added). 

But once again, accepting this argument would require that we read the word 

“only” into Item Three’s qualifier. And for the reasons discussed above, we decline 

to do so. 

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Because Item Three introduces no ambiguity into the policy, the New Mexico 

Supreme Court’s Lucero II decision controls. Specifically, under New Mexico law, 

we interpret the ACE policy as establishing that ACE’s promise to “pay all sums an 

‘insured’ legally must pay” remains subject to, per the Limit of Insurance provision, 

“the Limit of Insurance for Liability Coverage shown in the Declarations,” which 

includes Item Two’s $1 million-per-accident limit. See Lucero II, 346 P.3d at 1157. 

Accordingly, the ACE policy unambiguously limits ACE’s liability to $1 million per 

accident regardless of the number of covered autos involved.8

 We therefore reverse 

and remand to the district court with instructions to enter judgment in favor of ACE. 

 8

 Because we conclude that the policy limits ACE’s liability to $ 1 million per 

accident regardless of the number of covered autos involved, we need not resolve 

whether the trailer was “involved” in the March 24, 2011, accident. 

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