A federal district court in New Mexico, predicting how the Supreme Court of New Mexico would rule, has decided that an uninsured motorist policy and New Mexico's uninsured motorist law did not cover theft of an insured's vehicle.
The Case
After Keith Mortensen's truck was stolen, he sought compensation from his automobile insurer, Liberty Mutual Insurance, claiming that the theft constituted “property damage” within the meaning of the uninsured motorist provisions of his policy.
Liberty denied the claim and Mr. Mortensen sued.
Liberty moved to dismiss, arguing that the theft of Mr. Mortensen's truck did not constitute “injury to or destruction of . . . property.”
The Court's Decision
The court granted Liberty's motion.
In its decision, the court explained that Mr. Mortensen's argument that his uninsured motorist policy covered auto theft hinged on the meaning of the phrase “injury to or destruction of property” in New Mexico's Uninsured Motorist Act.
The court then noted that the New Mexico Supreme Court had not decided whether auto theft constituted “injury to or destruction of property” under that law, adding that the phrase “injury to or destruction of property” ordinarily signified “physical mutilation or damage, and not theft.”
The court pointed out that comprehensive insurance coverage usually protected against the distinct hazard of vehicle theft, and that Mr. Mortensen had not presented any authority for the proposition that vehicle theft fell under the umbrella of uninsured motorist coverage as well.
The court predicted that the New Mexico Supreme Court would conclude that “injury to or destruction of property” as used in New Mexico's uninsured motorist law and in Liberty's uninsured motorist policy did “not include the theft and resultant loss” of Mr. Mortensen's truck as alleged in his complaint.
Therefore, it concluded, Liberty had no contractual obligation to cover the loss.
The case is Mortensen v. Liberty Mutual Ins., No. 18-1121 KK/SMV (D. N. Mex. April 22, 2019). Attorneys involved include: For Keith Mortensen, Plaintiff: Gregory D Abel, LEAD ATTORNEY, Parnall Law Firm, Albuquerque, NM. For Liberty Mutual Insurance, Defendant: Christopher P Winters, LEAD ATTORNEY, Allen, Shepherd, Lewis, Syra & Chapman, P.A., Albuquerque, NM; Brant L Lillywhite, Allen, Shepherd, Lewis & Syra, P.A., Albuquerque, NM.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].