Court Opinion

ID: 9594704
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:32:12.490303+00
Date Added: 2024-06-11T18:01:04.562465
License: Public Domain

STOWERS, Justice dissenting. Although I agree with the portion of the majority opinion that reverses the judgment with respect to the amount of medical payments and costs of expert witness fees, I respectfully dissent on the issue of stacking the insurance coverage in this case. The exclusionary provision limiting liability in the uninsured/underinsured motorist coverage herein is enforceable as a term or condition within the policy, and neither contravenes public policy nor any relevant statutes. The insurance policy issued by defendant-appellant, Foundation Reserve Insurance Company (Foundation Reserve), sets forth conditions for recovery of underinsured motorist benefits. Underinsured motorist coverage is a subcategory of uninsured motorist coverage. Underinsured coverage is afforded when a “covered person” is legally entitled to recover from the owner or operator of an underinsured motor vehicle. An “underinsured motor vehicle” is defined as one that is insured at the time of the accident with limits equal or greater to the minimum limits required by New Mexico law, NMSA 1978, § 66-5-208 (Repl.Pamp.1984), but less than the limit of liability available under the insurance policy. The provisions in the Foundation Reserve policy are consistent with NMSA 1978, Section 66-5-301(B) (Repl.Pamp. 1984), which states that an insured is entitled to underinsured motorist benefits to the extent that the insured’s underinsured motorist coverage exceeds the tortfeasor’s liability. Schmick v. State Farm Mut. Auto. Ins. Co., 103 N.M. 216, 222-23, 704 P.2d 1092, 1098-99 (1985). The uninsured/underinsured motorist coverage also contains a limit of liability provision which states: The limit of liability shown in the Declarations for this coverage is our maximum limit of liability for all damages resulting from any one accident. This is the most we will pay regardless of the number of (1) Covered persons; (2) Claims made; (3) Vehicles or premiums shown in the Declaration; or (4) Vehicles involved in the accident. This provision notifies the insured that uninsured/underinsured motorist coverage is restricted to the limits contained in the declaration sheets accompanying the policy. In New Mexico, the principles of contract law are applied to the terms of an insurance’policy to determine the obligations of the insurer vis-a-vis the insured. March v. Mountain States Mut. Cas. Co., 101 N.M. 689, 691, 687 P.2d 1040, 1042 (1984). Exclusionary provisions are enforceable as long as their meaning is clear and they do not conflict with public policy as set forth by the expressed statutory language or by legislative intent. Id. I agree with the majority opinion that the limit of liability provision is clear and unambiguous in meaning but disagree with the majority’s conclusion that the provision conflicts with public policy. Where the language is clear and unambiguous, coverage must be determined according to the plain meaning of the words employed. Taking the plain meaning of the words used in reading and interpreting the New Mexico uninsured/underinsured statutes, NMSA 1978, § 66-5-301(B) (Repl. Pamp.1984), it is apparent that the purpose of uninsured motorists insurance coverage is to provide to innocent automobile accident victims a means of insulating themselves from damages incurred as a result of unfortunate and far too frequently occurring collisions with uninsured motorists. See Lopez v. Foundation Reserve Ins. Co., 98 N.M. 166, 646 P.2d 1230 (1982). As of this date there is no stated statutory public policy in New Mexico requiring or prohibiting stacking which would vitiate clear insurance policy terms. If the legislature intends to permit stacking of all uninsured/underinsured motorists insurance coverage, it should supply the requirement by express statute, showing its clear intent and recognizing the underwriting principle and costs which result. See Annotation, Combining or “Stacking” of “No-Fault” or Personal Injury Protection (PIP) Coverages in Automobile Liability Policy or Policies, 29 A.L.R. 4th 1 (1984). Stacking in this state has been permitted only by judicial decree. See Schmick v. State Farm Mut. Auto Ins. Co. and Lopez v. Foundation Reserve Ins. Co. However, we have not until today rewritten a contract to permit stacking under the guise of public policy, as the majority opinion does, where no such policy exists in New Mexico either for or against stacking and there is a clear contractual prohibition against it within the insurance policy as in this case. The majority would have us rewrite the insurance policy for the parties even though the majority agrees that the terms and conditions, including the limitation of liability provision, are clearly stated therein. It is not a proper function of the courts to relieve either party to a contract from its binding effect by rewriting the contract where it has been entered into without fraud or imposition and is not due to a mistake against which equity will afford relief. See In re Tocci, 45 N.M. 133, 142, 112 P.2d 515, 521 (1941). Thus, in light of the increased risk incurred by a carrier while insuring separate automobiles under uninsured/underinsured motorist coverage, the clear contractual limitation against stacking in the insurance policy, and the absence of any public policy with respect to stacking by the legislature, I find the majority’s reasoning permitting stacking on the basis of public policy is without merit. Since, as I have already stated, no statute in New Mexico requires nor prohibits the aggregation of multiple uninsured motorist coverage, the problem becomes one of determining what the contract of insurance in question provides. The rules applicable to such an analysis are that a policy of insurance is to be construed as any other contract, so as to give effect to the intent of the parties at the time it was made. March v. Mountain States Mut. Cas. Co. That intent is to be determined objectively, that is, by what a reasonable person would have understood the words to mean. It is the function of the courts to construe a contract of insurance as it is written, and not create a liability not assumed by the insurer, nor make a new contract for the parties, or one different from that plainly intended, nor add words to the contract of insurance to either create or avoid liability. See Farmers Alliance Mut. Ins. Co. v. Bakke, 619 F.2d 885 (10th Cir.1980) (applying New Mexico law). Once the parties entered into a contractual relationship, they were bound by the terms and conditions therein including the limit of liability provision. The majority agrees that the policy herein states in intelligible and unambiguous language that regardless of the number of automobiles insured, the declared limit of the insurer’s liability to each person would be the limit of its liability for all damages sustained by any one person in any one accident with an uninsured motorist. Since the insurance agreement is not ambiguous and does not conflict with pertinent statutes or public policy, the exclusionary provision limiting the liability of the carrier is enforceable under contract law. For these reasons, I dissent.