Opinion
No. CIV 04-406 BB/DJS.
January 19, 2005
CERTIFICATION ORDER
THIS MATTER comes before the Court pursuant to a motion for summary judgment filed by Intervenors Kimberly Baca, individually as next friend of Victoria Baca, and Kimberly Baca, as personal representative of the Estate of Mario Baca. [Doc. 21] As a part of their motion, Intervenors request this Court certify the question that follows to the New Mexico Supreme Court. The undersigned finds certification is appropriate because the question involves an issue of New Mexico public policy that is determinative of a significant portion of the case before this Court, and there are no controlling New Mexico appellate decisions, statutes or constitutional provisions answering the question. NMSA § 39-7-4; NMRA 12-607.
Question of Law to be Answered: Does a Household Exclusion Clause contained in an umbrella insurance policy violate the public policy of New Mexico where the claim arises under a homeowner's, rather than an automobile, policy.
Facts Relevant to Determination of the Question: Victor Baca was married to Intervenor Kimberly Baca from March 8, 1997, until their divorce on October 24, 2000. Victor and Kim had two children, Victoria Marie Baca, born on May 8, 1997, and Mario Victor Baca, born on September 22, 1999.
On November 1, 2000, Liberty Mutual Insurance Company issued a homeowner's insurance policy to Victor Baca. Victor resided at the insured property full-time with his girlfriend, Sonia Jojola, and her two children. Kim and Victor were given joint custody of the children under the parenting plan entered into at the time of the divorce, and Victor's children resided with him during the week. On April 9, 2001, Mario was taken to the University of New Mexico Hospital with injuries consistent with child abuse. Mario had been at the insured property in the care of Sonia on that day. Sonia was ultimately convicted of child abuse resulting in death.
Intervenors demanded the policy limits and Liberty Mutual denied coverage in July 2001. Intervenors filed suit in the Second Judicial District in 2003 ("the State action"). In 2004, Liberty Mutual filed this action against the policyholder, Victor Baca, who defaulted. Intervenors were then permitted to file a complaint-in-intervention and the State action was stayed pending the outcome of this insurance coverage claim.
Reason for Certification: Intervenors argue the legal rationale underlying Government Employees Ins. Co. v. Welch, 90 P.3d 471 (N.M. 2004), and State Farm Mut. Auto. Ins. Co. v. Ballard, 54 P.3d 537 (N.M. 2002), dictates all household exclusions be found void as a per se violation of public policy of New Mexico. However, in Welch, the Court said, "we conclude that family exclusions in liability and uninsured or underinsured motorist coverage offered through umbrella policies implicate a fundamental principle of justice and are contrary to New Mexico public policy." 90 P.3d at 474. Later, the Court again specified, "When we describe `public policy' in this opinion, we describe a public policy grounded in our Legislature's provisions for mandatory automobile liability coverage and uninsured or underinsured motorist coverage benefits." 90 P.3d at 476. Finally, after recognizing the Court of Appeals decision in Risk Management Div. ex rel. Apodaca v. Farmers Ins. Co. of Ariz., 75 P.3d 404 (N.M.App. 2003), which involved a homeowner's policy containing a household exclusion, this Court concluded, "Because it is unnecessary to the disposition of this case, we expressly do not address household or family exclusions beyond automobile liability and uninsured or underinsured coverage contained in umbrella policies." 90 P.3d at 477.
Liberty Mutual counters Intervenors by arguing that "numerous other jurisdictions have upheld such household exclusions when contained in similar homeowner's policies." See, e.g., Salviejo v. State Farm Fire Cas. Co., 958 P.2d 552 (Haw.App. 1998); Shannon v. Shannon, 442 N.W.2d 25 (Wisc. 1989); Kentucky Farm Bureau Mut. Ins. Co. v. Thompson, 1 S.W.3d 475 (Ky. 1999); State Farm General Ins. Co. v. Emerson, 687 P.2d 1139 (Wash. 1984). However, in Welch, this Court rejected the majority rule for automobile claims.
Since the factual issue presented in the case at bar has not been addressed by this Court, the undersigned is uncertain whether to follow the New Mexico Court of Appeals opinion in Risk Management and assume the exclusion is valid on homeowner's claims in line with the majority of other jurisdictions, or to apply the underlying logic of Welch. Comity dictates the New Mexico Supreme Court initially be given the opportunity to consider the issue.
Acknowledgment: Pursuant to NMRA 12-607(C)(4), the Court acknowledges that the New Mexico Supreme Court has discretion to accept or reject this certification, and to reformulate the question presented.
Names and Addresses of Counsel of Record: Counsel for Intervenors is Charlotte Mary Toulouse, Toulouse Associates, 122 Girard SE, Albuquerque, NM 87106. Counsel for Plaintiff are Daniel W. Lewis, Jennifer M. Rozzoni, Hatch Allen Shepherd, Post Office Box 30488, Albuquerque, NM 87190. Order of Certification: For the reasons stated, the Court hereby certifies the question stated above to the New Mexico Supreme Court for decision, in that Court's discretion. The Clerk of the United States District Court for the District of New Mexico is hereby directed to forward a certified copy of this certification order to the New Mexico Supreme Court. All case management deadlines applicable to this case remain in place, unless and until it becomes necessary to change those deadlines.