Dockery v. Allstate Ins. Co.

491 F.Supp.3d 980

Laurent DOCKERY and Odilia Dockery, Plaintiffs,

v.ALLSTATE INSURANCE COMPANY, Defendant.

No. 1:19-CV-0190-RB-GJF

United States District Court, D. New Mexico.

Filed September 9, 2020

Andrea D. Harris, Richard J. Valle, Carter & Valle Law Firm P.C., Albuquerque, NM, for Plaintiffs.

Sonya R. Burke, Jennifer A. Noya, Modrall Sperling Roehl Harris & Sisk PA, Albuquerque, NM, for Defendant.

MEMORANDUM OPINION AND ORDER

ROBERT C. BRACK, SENIOR U.S. DISTRICT JUDGE

THIS MATTER is before the Court on Plaintiffs’ Motion for Reconsideration of Memorandum Opinion and Order and Request for Certification to the New Mexico Supreme Court. (Doc. 26.) Jurisdiction arises under 28 U.S.C. § 1332.

Plaintiffs’ two vehicles were stolen by unknown tortfeasors. The cars were recovered but suffered physical damage. Plaintiffs received compensatory compensation from their insurer, Allstate Insurance Company, for loss of use and physical damage to the vehicles. But in an untested turn of events, Plaintiffs sought payment from their Uninsured Motorist Coverage for punitive damages against the unknown tortfeasors. Defendant argued in its Motion for Summary Judgment that punitive damages were not recoverable from the Uninsured Motorist Coverage because (1) the tortfeasors are unknown and (2) the vehicles are not uninsured vehicles. (Doc. 14). The Court agreed and entered its Final Order in favor of Defendant and dismissed the case with prejudice. (Doc. 24). Now Plaintiffs move the Court to reconsider its judgment and argue that the Court overlooked and/or misconstrued controlling law. Having considered the submissions of counsel and relevant law, the Court will DENY Plaintiffs’ motion.

I. Factual and Procedural Background¹

Plaintiffs’ 2014 Dodge Dart and 2016 Volkswagen Passat were stolen by unknown tortfeasors sometime on March 5 or March 6, 2017. (Doc. 16 at 2 ¶ 1.) They were recovered with significant property damage, and both vehicles were insured by Allstate (Policy No. 829505005). (Id. ¶¶ 2, 3.)

Plaintiffs’ claims in this case arise from their claim for punitive damages under their uninsured motorist ("UM") coverage and Allstate's handling of those punitive damages claims. (Id. ) The policy provided auto collision insurance for Plaintiffs’ vehicles, which paid for "direct and accidental loss to your insured auto ... from a collision." (Id. ¶ 4.) The policy also provided comprehensive coverage that covered loss caused by theft, as well as auto theft coverage that paid for "direct and accidental loss to your insured auto caused by theft or larceny." (Id. ) Allstate asserts they paid for the theft under the comprehensive coverage. The comprehensive and collision provisions included coverage for auto theft. (Doc. 14-2 at 5 ("We will pay for direct and accidental loss to your insured auto caused by theft or larceny.").) The comprehensive insurance under the Allstate policy does not cover punitive damages. (Doc. 19 at 5 ¶ 10.) The policy defines an insured auto as "a motor vehicle described on the Policy Declarations." (Id. ¶ 6.) The policy defines an uninsured auto, in relevant part, as "a motor vehicle which has no property damage liability bond or policy in effect at the item of the accident," or "a motor vehicle covered by a property damage liability bond or policy which doesn't provide at least minimum financial security requirements specific in the financial responsibility law of New Mexico." (Id. ¶ 7.) However, the policy also provides that an "uninsured auto is not: (1) a motor vehicle which is insured for Liability Coverage under Part 1 of this policy." (Id. ¶ 8.) Plaintiffs’ vehicles are listed as insured under Part 1. (Id. ) The UM coverage also excludes property damage that is paid by other insurance. (Id. ¶ 9.) The policy provided liability coverage for an insured person, which it defines as a named insured or any other person getting into an insured vehicle only "with [an insured's] permission." (Doc. 19 ¶ 5.)

Following the settlement, Allstate agreed to "continue to adjust Laurent Dockery's and Odilia Nino's separate claims for the punitive damages" stemming from the two thefts. (Id. ¶ 7.) Allstate acknowledged that "some portion [of the settlement funds of $45,000.00] is for compensatory damages as a basis for punitive damages." (Id. at 5 ¶ 8.) The settlement agreement does not mention the coverage under which the settlement would be paid. (Id. ¶ 9.) Allstate chose to pay the damages under the comprehensive coverage. (Id. ) In a letter sent on May 23, 2018, Allstate denied Plaintiffs’ punitive damages claims because (1) the vehicles were insured at the time of the thefts; and (2) the identity of the tortfeasors is unknown. (Id. ¶¶ 11, 12.)

Plaintiffs asserted various claims, and Defendant moved for summary judgment. Plaintiffs moved for partial summary judgment on the issue of whether Allstate wrongfully refused to pay punitive damages from the UM coverage. The Court granted Defendant's motion. (Doc. 24.) Plaintiffs now moves for reconsideration of the Court's Opinion. (Doc. 26.)

II. Legal Standard

Whether a motion for reconsideration is reviewed under Rule 59 or Rule 60 of the Federal Rules of Civil Procedure is not solely dependent on the timing of filing, but also "on the reasons expressed by the movant." Patterson v. Nine Energy Serv., LLC , 355 F. Supp. 3d 1065, 1105 (D.N.M. 2018) (quoting Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Registration Sys., Inc. , 680 F.3d 1194, 1200 (10th Cir. 2011) ). If "the motion involves ‘reconsideration of matters properly encompassed in a decision on the merits,’ a court considers the motion under rule 59(e)." Id. (citing Phelps v. Hamilton , 122 F.3d 1309, 1323–24 (10th Cir. 1997) ) (internal quotation marks omitted). "In other words, if the reconsideration motion seeks to alter the district court's substantive ruling, then it should be considered a rule 59 motion and be subject to rule 59 ’s constraints." Id. (citing Phelps , 122 F.3d at 1324 ).

Juxtaposed with rule 59, rule 60 allows the court to

relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b) ;

(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

(6) any other reason that justifies relief.

Id. at 1106 (quoting Fed. R. Civ. P. 60(b) ).

Plaintiffs assert in their reply brief that their motion should be considered under Rule 60(b). But because they filed their motion within the 28-day period provided for in Rule 59(b), and because the motion "involves ‘reconsideration of matters properly encompassed in a decision on the merits,’ " it is properly considered under Rule 59(e). See Patterson , 355 F. Supp. 3d at 1106. (citing Jennings v. Rivers , 394 F.3d 850, 854 (10th Cir. 2005) (internal quotation marks omitted). Accordingly, the Court will analyze the motion under Rule 59(e). See Van Skiver v. United States , 952 F.2d 1241, 1243 (10th Cir. 1991) (stating that "[t]he Federal Rules of Civil Procedure do not recognize a motion to reconsider[,]" so parties seeking such relief must file a motion under either Rule 59(e) or Rule 60(b) ) (internal quotation marks omitted)); see also Ysais v. Richardson , 603 F.3d 1175, 1178 n.3 (10th Cir. 2010) (noting that as of December 1, 2009, "a motion to alter or amend a judgment may be filed within 28 days after the entry of judgment"; previously parties had to file within ten days).

Rule 59(e) has a narrow scope. "A motion for reconsideration under rule 59(e) is an ‘inappropriate vehicle[ ] to reargue an issue previously addressed by the court when the motion merely advances new arguments, or supporting facts which were available at the time of the original motion.’ " Jarita Mesa Livestock Grazing Ass'n v. U.S. Forest Serv. , 58 F. Supp. 3d 1191, 1218 (D.N.M. 2014) (quoting Servants of Paraclete v. Does , 204 F.3d 1005, 1012 (10th Cir. 2000) ). "Grounds warranting a motion to reconsider include (1) an intervening change in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest injustice." Id. (quoting Servants of Paraclete , 204 F.3d at 1012 (internal quotation marks omitted)). "It is not appropriate to revisit issues already addressed or advance arguments that could have been raised in prior briefing." Servants of Paraclete , 204 F.3d at 1012 (citing Van Skiver , 952 F.2d at 1243 ). "Thus, a motion for reconsideration is appropriate where the court has misapprehended the facts, a party's position, or the controlling law." Jarita Mesa , 58 F. Supp. 3d at 1218 (citing Van Skiver , 952 F.2d at 1243 ). Because of this high standard, "[a] district court has considerable discretion in ruling on a motion to reconsider under rule 59(e)." Id. (citing Phelps , 122 F.3d at 1324 ).

III. Discussion

Plaintiffs allege four points of error with the Court's January 6, 2020 Opinion: (1) the Court's determination that Plaintiffs’ vehicles were insured and thus not entitled to uninsured motorist coverage; (2) the Court's determination that punitive damages cannot be awarded when a tortfeasor is unknown; (3) the dismissal of Plaintiffs’ claims for punitive damages with prejudice; and (4) the Court's dismissal of Plaintiff's extra-contractual claims. (Doc. 26 at 5–16.)

A. The Court's determination that Plaintiffs’ vehicles were insured stands.

Because this Court is sitting in diversity jurisdiction, the substantive law governing this case is that of New Mexico. Racher v. Westlake Nursing Home Ltd. P'ship , 871...