{ "id": 1217109, "name": "PHOENIX INDEMNITY INSURANCE COMPANY, Plaintiff-Respondent, v. Lynette PULIS and Larry Pulis, individually and Lynette Pulis, mother, parent and natural guardian of Steven Reese, a minor, Defendants-Petitioners", "name_abbreviation": "Phoenix Indemnity Insurance v. Pulis", "decision_date": "2000-07-06", "docket_number": "No. 25,978", "first_page": "395", "last_page": "404", "citations": [ { "type": "official", "cite": "129 N.M. 395" }, { "type": "parallel", "cite": "2000-NMSC-023" }, { "type": "parallel", "cite": "9 P.3d 639" } ], "court": { "name_abbreviation": "N.M.", "id": 8835, "name": "Supreme Court of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "506 N.W.2d 920", "category": "reporters:state_regional", "reporter": "N.W.2d", "year": 1993, "pin_cites": [ { "page": "924", "parenthetical": "upholding driver exclusion in part because the warnings placed on the exclusion and policy stated \"[w]hen a named excluded person operates a vehicle all liability coverage is void - no one is insured. Owners of the vehicle and others ... remain fully personally liable\"" } ], "opinion_index": 0 }, { "cite": "201 Mich.App. 635", "category": "reporters:state", "reporter": "Mich. App.", "case_ids": [ 1858788 ], "year": 1993, "pin_cites": [ { "parenthetical": "upholding driver exclusion in part because the warnings placed on the exclusion and policy stated \"[w]hen a named excluded person operates a vehicle all liability coverage is void - no one is insured. Owners of the vehicle and others ... remain fully personally liable\"" } ], "opinion_index": 0, "case_paths": [ "/mich-app/201/0635-01" ] }, { "cite": "118 N.M. 127", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1563548 ], "weight": 4, "year": 1994, "pin_cites": [ { "page": "130" }, { "page": "762" }, { "page": "763" } ], "opinion_index": 0, "case_paths": [ "/nm/118/0127-01" ] }, { "cite": "113 N.M. 162", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 723192 ], "weight": 2, "year": 1992, "pin_cites": [ { "page": "168", "parenthetical": "\"Giving effect to the insured's reasonable expectations, in cases of policy ambiguity, is of course a well-settled approach to construing and applying language in insurance policies.\"" }, { "page": "308", "parenthetical": "\"Giving effect to the insured's reasonable expectations, in cases of policy ambiguity, is of course a well-settled approach to construing and applying language in insurance policies.\"" } ], "opinion_index": 0, "case_paths": [ "/nm/113/0162-01" ] }, { "cite": "105 N.M. 346", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1599001 ], "weight": 2, "year": 1987, "pin_cites": [ { "page": "348" }, { "page": "875" } ], "opinion_index": 0, "case_paths": [ "/nm/105/0346-01" ] }, { "cite": "946 P.2d 240", "category": "reporters:state_regional", "reporter": "P.2d", "weight": 2, "opinion_index": 0 }, { "cite": "124 N.M. 36", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 17750 ], "opinion_index": 0, "case_paths": [ "/nm/124/0036-01" ] }, { "cite": "1997-NMCA-100", "category": "reporters:neutral", "reporter": "NMCA", "pin_cites": [ { "page": "\u00b6 18" } ], "opinion_index": 0 }, { "cite": "122 N.M. 221", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 322350 ], "weight": 6, "year": 1996, "pin_cites": [ { "page": "222-23" }, { "page": "589-90" }, { "page": "223" }, { "page": "590" }, { "page": "222-24" }, { "page": "589-91" } ], "opinion_index": 0, "case_paths": [ "/nm/122/0221-01" ] }, { "cite": "1997-NMCA-029", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 142274 ], "weight": 3, "pin_cites": [ { "page": "\u00b6 16" } ], "opinion_index": 0, "case_paths": [ "/nm/123/0200-01" ] }, { "cite": "981 P.2d 1209", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1999, "pin_cites": [ { "parenthetical": "stating \"the Court's footnote ... can be considered unnecessary dicta\"" } ], "opinion_index": 0 }, { "cite": "127 N.M. 391", "category": "reporters:state", "reporter": "N.M.", "year": 1999, "pin_cites": [ { "parenthetical": "stating \"the Court's footnote ... can be considered unnecessary dicta\"" } ], "opinion_index": 0 }, { "cite": "1999-NMCA-092", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 257723 ], "weight": 3, "year": 1999, "pin_cites": [ { "page": "\u00b6 13", "parenthetical": "stating \"the Court's footnote ... can be considered unnecessary dicta\"" }, { "parenthetical": "stating \"the Court's footnote ... can be considered unnecessary dicta\"" }, { "parenthetical": "stating \"the Court's footnote ... can be considered unnecessary dicta\"" } ], "opinion_index": 0, "case_paths": [ "/nm/127/0625-01" ] }, { "cite": "85 N.M. 718", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2772426 ], "weight": 2, "year": 1973, "pin_cites": [ { "page": "721", "parenthetical": "stating dicta \"is not controlling\"" }, { "page": "692", "parenthetical": "stating dicta \"is not controlling\"" } ], "opinion_index": 0, "case_paths": [ "/nm/85/0718-01" ] }, { "cite": "87 N.M. 327", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2832613 ], "weight": 8, "year": 1975, "pin_cites": [ { "page": "330", "parenthetical": "interpreting former UM statute that is materially identical to the present statute" }, { "page": "103", "parenthetical": "interpreting former UM statute that is materially identical to the present statute" }, { "page": "329" }, { "page": "102", "parenthetical": "internal quotation marks and quoted authority omitted" }, { "page": "327-28" }, { "page": "100-01" }, { "page": "330" }, { "page": "103" } ], "opinion_index": 0, "case_paths": [ "/nm/87/0327-01" ] }, { "cite": "109 N.M. 533", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1590257 ], "weight": 2, "year": 1990, "pin_cites": [ { "page": "535" }, { "page": "454" } ], "opinion_index": 0, "case_paths": [ "/nm/109/0533-01" ] }, { "cite": "98 N.M. 166", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1582455 ], "weight": 2, "year": 1982, "pin_cites": [ { "page": "169" }, { "page": "1233" } ], "opinion_index": 0, "case_paths": [ "/nm/98/0166-01" ] }, { "cite": "97 N.M. 470", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1555128 ], "weight": 16, "year": 1982, "pin_cites": [ { "page": "470" }, { "page": "501" }, { "page": "470-71" }, { "page": "501-02" }, { "page": "470" }, { "page": "501" }, { "page": "471" }, { "page": "502" }, { "page": "471-72" }, { "page": "502-03" }, { "page": "471-72" }, { "page": "502-03" } ], "opinion_index": 0, "case_paths": [ "/nm/97/0470-01" ] }, { "cite": "105 N.M. 220", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1599018 ], "weight": 16, "year": 1986, "pin_cites": [ { "page": "221-22" }, { "page": "364-65" }, { "page": "220" }, { "page": "363" }, { "page": "221" }, { "page": "364" }, { "page": "221" }, { "page": "364" }, { "page": "222" }, { "page": "365" }, { "page": "222" }, { "page": "365", "parenthetical": "emphasis omitted" } ], "opinion_index": 0, "case_paths": [ "/nm/105/0220-01" ] }, { "cite": "119 N.M. 122", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1561381 ], "weight": 12, "pin_cites": [ { "page": "126" }, { "page": "1008" }, { "page": "124" }, { "page": "1006" }, { "page": "123-24" }, { "page": "1005-06" }, { "page": "123" }, { "page": "1005" }, { "page": "125" }, { "page": "1007" } ], "opinion_index": 0, "case_paths": [ "/nm/119/0122-01" ] }, { "cite": "33 A.L.R.5th 121", "category": "reporters:specialty", "reporter": "A.L.R. 5th", "weight": 2, "year": 1995, "pin_cites": [ { "page": "\u00a7 2" }, { "page": "141" } ], "opinion_index": 0 }, { "cite": "109 N.M. 555", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1590278 ], "weight": 4, "year": 1990, "pin_cites": [ { "page": "558" }, { "page": "838" }, { "page": "558" }, { "page": "838" } ], "opinion_index": 0, "case_paths": [ "/nm/109/0555-01" ] }, { "cite": "111 N.M. 154", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 715228 ], "weight": 9, "year": 1990, "pin_cites": [ { "page": "156" }, { "page": "245" }, { "page": "156" }, { "page": "245" }, { "page": "156" }, { "page": "245" }, { "page": "157" }, { "page": "246" } ], "opinion_index": 0, "case_paths": [ "/nm/111/0154-01" ] }, { "cite": "103 N.M. 112", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 711382 ], "weight": 2, "year": 1985, "pin_cites": [ { "page": "115", "parenthetical": "defining class-one insured as \"the named insured as stated in the policy, the spouse, and relatives residing in the household\" and class-two insured as \"any person while occupying an insured motor vehicle\"" }, { "page": "892", "parenthetical": "defining class-one insured as \"the named insured as stated in the policy, the spouse, and relatives residing in the household\" and class-two insured as \"any person while occupying an insured motor vehicle\"" } ], "opinion_index": 0, "case_paths": [ "/nm/103/0112-01" ] }, { "cite": "1999-NMSC-023", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 257642 ], "weight": 3, "pin_cites": [ { "page": "\u00b6 9" } ], "opinion_index": 0, "case_paths": [ "/nm/127/0316-01" ] }, { "cite": "1998-NMSC-046", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 827320 ], "weight": 3, "pin_cites": [ { "page": "\u00b6 6" } ], "opinion_index": 0, "case_paths": [ "/nm/126/0396-01" ] }, { "cite": "620 So.2d 441", "category": "reporters:state_regional", "reporter": "So. 2d", "case_ids": [ 7471628 ], "opinion_index": 1, "case_paths": [ "/so2d/620/0441-01" ] }, { "cite": "263 So.2d 912", "category": "reporters:state_regional", "reporter": "So. 2d", "case_ids": [ 9813089 ], "pin_cites": [ { "page": "918" } ], "opinion_index": 1, "case_paths": [ "/so2d/263/0912-01" ] }, { "cite": "104 N.M. 756", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1594988 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "758" }, { "page": "1388" } ], "opinion_index": 1, "case_paths": [ "/nm/104/0756-01" ] }, { "cite": "105 N.M. 346", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1599001 ], "weight": 2, "year": 1987, "pin_cites": [ { "page": "348", "parenthetical": "stating that test for evaluating policy ambiguities is \"what a reasonable person in the insured's position would have understood them to mean\"" }, { "page": "875", "parenthetical": "stating that test for evaluating policy ambiguities is \"what a reasonable person in the insured's position would have understood them to mean\"" } ], "opinion_index": 1, "case_paths": [ "/nm/105/0346-01" ] }, { "cite": "87 N.M. 327", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2832613 ], "weight": 2, "year": 1975, "pin_cites": [ { "page": "330", "parenthetical": "quoting Elledge v. Warren, 263 So.2d 912, 918 (La.Ct.App.1972)" }, { "page": "103", "parenthetical": "quoting Elledge v. Warren, 263 So.2d 912, 918 (La.Ct.App.1972)" } ], "opinion_index": 1, "case_paths": [ "/nm/87/0327-01" ] }, { "cite": "97 N.M. 470", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1555128 ], "weight": 6, "year": 1982, "pin_cites": [ { "page": "472", "parenthetical": "holding that driver exclusion applies to UM coverage" }, { "page": "503", "parenthetical": "holding that driver exclusion applies to UM coverage" }, { "page": "471-72" }, { "page": "502-03" }, { "page": "471-72" }, { "page": "502-03" } ], "opinion_index": 1, "case_paths": [ "/nm/97/0470-01" ] }, { "cite": "105 N.M. 220", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1599018 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "223", "parenthetical": "holding that driver exclusion applies to liability coverage" }, { "page": "366", "parenthetical": "holding that driver exclusion applies to liability coverage" } ], "opinion_index": 1, "case_paths": [ "/nm/105/0220-01" ] } ], "analysis": { "cardinality": 1243, "char_count": 33252, "ocr_confidence": 0.709, "pagerank": { "raw": 1.7284147024973572e-07, "percentile": 0.7050096356969074 }, "sha256": "573c2887747a7175323555a094cd88230da21c0a05e50c7e6c3c1b76e40611ad", "simhash": "1:bf6b6c8e3497f091", "word_count": 5403 }, "last_updated": "2023-07-14T18:00:16.735179+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "FRANCHINI, SERNA, and MAES, JJ., concur.", "BACA, Justice, specially concurring." ], "parties": [ "PHOENIX INDEMNITY INSURANCE COMPANY, Plaintiff-Respondent, v. Lynette PULIS and Larry Pulis, individually and Lynette Pulis, mother, parent and natural guardian of Steven Reese, a minor, Defendants-Petitioners." ], "opinions": [ { "text": "OPINION\nMINZNER, Chief Justice.\n{1} Appellants Larry and Lynette Pulis appeal from the district court\u2019s order granting summary judgment in favor of Appellee Phoenix Indemnity Insurance Company. Phoenix filed a complaint for declaratory relief alleging that Lynette Pulis\u2019s minor son, Steven, was not entitled to class-one uninsured motorist (UM) coverage for injuries sustained in an automobile accident. The Pulises counterclaimed. The Pulises and Phoenix both moved for summary judgment. The district court granted Phoenix\u2019s motion on the basis that the endorsed named-driverexelusion provision in the Pulises\u2019 policy excluded all coverage if Michael, Steven\u2019s older minor brother, were driving. The Court of Appeals affirmed. See Phoenix Indem. Ins. Co. v. Pulis, No. 20,343 slip op. at 1 (NMCA Sept. 17, 1999). On appeal, the Pulises contend that (1) exclusion of a minor driver based solely on age violates public policy; (2) the driver exclusion is not applicable because Steven is a class-one insured under the Pulises\u2019 UM coverage; and (3) Phoenix\u2019s policy is ambiguous as a matter of law. We hold that the named-driver exclusion in this ease does not preclude Steven from recovery under the UM coverage provision of the policy. In this case, the driver exclusion was an ineffective rejection of coverage for a class-one insured because the insured had no notice that class-one insureds lacked UM coverage. The provisions for class-one-insured coverage suggested all exclusions were expressed, and UM coverage for class-one insureds was not expressly excluded. We therefore reverse and remand. We do not address the first issue.\nI.\n{2} The facts are undisputed. Lynette Pulis and Donald Reese are the biological parents of Michael and Steven, who reside with their mother and her husband, Larry Pulis. On October 28, 1996, the Pulises purchased an automobile insurance policy from Phoenix. Prior to purchasing the policy, the Pulises completed Phoenix\u2019s New Mexico auto application. The application contained three separate endorsements titled: New Mexico Agreement to Delete Uninsured/Underinsured Motorists Coverage, Business Use Warranty, and Exclusion of Named Driver. The driver-exclusion provision states:\nIn consideration of the premium for which the policy is written, it is agreed that the insurance company shall not be liable and no liability or obligation of any kind shall be attached to the insurance company for losses or damages sustained after the effective date of this endorsement while any motor vehicle is driven or operated by____\nBy endorsing this section of the application, the Pulises elected to exclude Michael from the policy. The Pulises also elected to purchase UM coverage. The portion of the application describing UM coverage provides \u201cthat if [the insured] suffer[s] bodily injury or sickness including death, resulting from an accident with a person who does not carry liability insurance, and that driver is at fault, you may make a claim against your own insurance company for general and special damages.\u201d\n{3} The application also included certain provisions explaining an insured\u2019s duties, applicable coverage, applicable exclusions, and limits of liability. The policy was silent on the effect of the named-driver exclusion on an insured\u2019s UM coverage. The Pulises\u2019 policy went into effect on October 28, 1996 and was therefore in effect on the date of the accident.\n{4} On November 5, 1996, during a scheduled visitation, Reese took Michael, fourteen years old, and Steven, ten years old, on an overnight deer-hunting trip without notifying the Pulises. Reese also brought along another boy, Kevin, who was fifteen years old. During the trip, Michael was driving Reese\u2019s uninsured Toyota pickup truck. Steven was sitting in the passenger side of the cab and Kevin was standing in the bed of the truck scouting deer with a loaded 30:30 rifle. Michael accelerated and then immediately stopped the pickup truck causing Kevin to fall into the bed of the truck; as he fell, his rifle accidentally discharged. The bullet struck Michael in the head, fatally wounding him. Steven ran from the truck in an effort to obtain help, but Michael was already dead. Steven was spattered with Michael\u2019s blood and sustained emotional injuries.\n{5} The Pulises filed a UM claim under their Phoenix policy for Steven\u2019s injuries. Phoenix denied coverage contending that the named-driver exclusion excludes all coverage when an excluded driver is operating any motor vehicle. The district judge agreed and granted Phoenix summary judgment.\nII.\n{6} \u201cSummary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.\u201d Self v. United Parcel Serv., Inc., 1998-NMSC-046, \u00b6 6, 126 N.M. 396, 970 P.2d 582. On appeal, we review de novo the district court\u2019s decision to grant summary judgment. See Hasse Contracting Co. v. KBK Fin., Inc., 1999-NMSC-023, \u00b6 9, 127 N.M. 316, 980 P.2d 641. The question we address is whether the district court erred in granting summary judgment on the basis that the named-driver exclusion within the Pulises\u2019 policy barred Steven from recovery under the UM provision of the policy. This appeal does not raise an issue of first impression for this Court; however, it does provide us with an opportunity to revisit our case law on UM coverage and driver exclusions. We first examine the text of the controlling statutes and our cases interpreting them.\nA.\n{7} In the Uninsured Motorist Statute, NMSA 1978, \u00a7 66-5-301 (1983), the Legislature has provided:\nNo motor vehicle or automobile liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person ... shall be delivered or issued for delivery in New Mexico ... unless coverage is provided therein or supplemental thereto ... for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury ... resulting therefrom, according to the rules and regulations promulgated by, and under provisions filed with and approved by, the superintendent of insurance.\nSection 66-5-301(A). This section incorporates UM coverage into every automobile liability insurance policy issued in the state. UM coverage is divided into three distinct classes of insureds: \u201c(1) the named insureds and members of a named insured\u2019s household [(class-one insureds)], (2) persons who are injured while occupying an insured vehicle [(class-two insureds)], and (3) persons who sustain consequential damages as a result of personal injuries sustained by persons who are \u2018class (1)\u2019 or \u2018class (2)\u2019 insureds.\u201d Robert E. Keeton & Alan I. Widiss, Insurance Law \u00a7 4.9(e), at 400 (1988); see also Konnick v. Farmers Ins. Co., 103 N.M. 112, 115, 703 P.2d 889, 892 (1985) (defining class-one insured as \u201cthe named insured as stated in the policy, the spouse, and relatives residing in the household\u201d and class-two insured as \u201cany person while occupying an insured motor vehicle\u201d). The objective of compulsory UM coverage is \u201cto protect individual members of the public against the hazard of culpable uninsured motorists.\u201d Romero v. Dairyland Ins. Co., 111 N.M. 154, 156, 803 P.2d 243, 245 (1990). \u201c[C]ases involving uninsured motorist coverage must be given a qualitatively different analysis by this court than cases which do not involve such coverage.\u201d Padilla v. Dairyland Ins. Co., 109 N.M. 555, 558, 787 P.2d 835, 838 (1990). We interpret Section 66-5-301 liberally to implement its remedial purpose; any provision allowing for an exception to uninsured coverage is strictly construed to protect the insured. See Romero, 111 N.M. at 156, 803 P.2d at 245.\n{8} Nevertheless, by express statutory provision, an insured has the right to reject UM coverage. See \u00a7 66-5-301(C). To be valid, the method of rejection must comply with the regulations promulgated by the New Mexico Superintendent of Insurance. See Romero, 111 N.M. at 156, 803 P.2d at 245. Those regulations require that\n[t]he rejection must be made a part of the policy by endorsement on the declarations sheet, by attachment of the written rejection to the policy, or by some other means that makes the rejection a part of the policy so as to clearly and unambiguously call to the attention of the insured the fact that such coverage has been waived.\nId. Because we strictly construe exceptions to UM coverage, unless the named insured rejects UM coverage in a manner consistent with the rules and regulations established by the Superintendent of Insurance, deviations will be invalid, and UM coverage will be deemed part of an insured\u2019s liability policy. See id. at 157, 803 P.2d at 246.\n{9} Further, by express statutory provision, an insured may elect to exclude a driver from coverage under the policy. See NMSA 1978, \u00a7 66-5-222 (1998). Section 66-5-222 provides a sample form for use as a driver-exclusion provision which states:\nIn consideration of the premium for which the policy is written, it is agreed that the company shall not be liable and no liability or obligation of any kind shall be attached to the company for losses or damages sustained after the effective date of this endorsement while any motor vehicle insured hereinunder is driven or operated by....\nThe driver-exclusion provision signed by the Pulises parallels the language provided by the Legislature in Section 66-5-222.\n{10} Driver exclusions are designed to allow an insured to avoid the cost of coverage for \u201csomeone with a bad driving record or in a high-risk category, such as a teenage child of the named insureds, since otherwise the premium for the coverage would be exceedingly high.\u201d Jay M. Zitter, Annotation, Validity, Construction, and Application of \u201cNamed Driver Exclusion\u201d in Automobile Insurance Policy, 33 A.L.R.5th 121, \u00a7 2[a], at 137-38 (1995). Because named-driver exclusions eliminate significant coverage, such exclusions must be accompanied by \u201cstrict requirements in the policies so as to insure the insured\u2019s full knowledge and consent to the endorsement.\u201d Id. at 141. \u201c[A]ll named insureds on a policy are required to sign the driver\u2019s exclusion agreement for the exclusion to be valid.\u201d Moore v. State Farm Mut. Auto. Ins. Co., 119 N.M. 122, 126, 888 P.2d 1004, 1008 (Ct.App.1994) (emphasis omitted).\nB.\n{11} This Court and the Court of Appeals have sustained insurance company defenses based on named-driver exclusions. See Garza v. Glen Falls Ins. Co., 105 N.M. 220, 731 P.2d 363 (1986); State Farm Auto. Ins. Co. v. Kiehne, 97 N.M. 470, 641 P.2d 501 (1982); Moore, 119 N.M. 122, 888 P.2d 1004. These cases addressed named-driver-exclusion provisions substantially similar to Section 66-5-222 as well as the provision in the Pulises\u2019 policy and we are certain the district court and the Court of Appeals relied on them. We address the cases in the order in which they were decided.\n{12} In Kiehne, the plaintiff purchased an automobile policy from State Farm containing liability and UM coverage. 97 N.M. at 470, 641 P.2d at 501. At the time Kiehne purchased the policy, he elected to exclude his minor son from coverage through a named-driver-exclusion endorsement. See id. at 470-71, 641 P.2d at 501-02. During the term of the policy, Kiehne\u2019s vehicle was driven by the excluded minor son who was involved in an automobile accident which resulted in the death of a passenger. See id. at 470, 641 P.2d at 501. The trial court entered a declaratory judgment in favor of State Farm declaring that State Farm had no liability to the passenger\u2019s estate under the UM provision of the policy. See id. at 471, 641 P.2d at 502. On appeal, we addressed the issue of whether the endorsed named-driver exclusion barred claims by the passenger\u2019s estate. In concluding that recovery was barred, we determined that the driver-exclusion endorsement was \u201cclear and unambiguous\u201d; the policy excluded \u201cany kind\u201d of liability. Id. \u201c\u2018Any,\u2019 in its usual and ordinary sense, means \u201cwithout limit.\u2019 \u201d Id Thus, \u201cany\u201d precluded all UM coverage for anyone injured when an excluded driver was operating the vehicle. See id. The only recourse of the passenger\u2019s estate was the passenger\u2019s own UM policy if he or she had one.\n{13} As a non-household passenger, the passenger in Kiehne was a class-two insured under the State Farm policy. In Kiehne, however, we also made the following comment regarding recovery of the class-one insured:\nIn this case, Kiehne bargained for a policy which would exclude all coverage if [Kiehne\u2019s son] were the driver of one of the insured automobiles involved in an accident. Kiehne could not have recovered under the uninsured motorist provision had he been the passenger; similarly, the estate of [the passenger] cannot recover. In effect, no automobile insurance policy covering the 1973 Chevrolet existed while [Kiehne\u2019s son] drove the automobile. Therefore, no one could be an \u201cinsured\u201d and claim coverage under the uninsured motorist provision of the policy.\nKiehne, 97 N.M. at 471-72, 641 P.2d at 502-03.\n{14} Four years later, in Garza, we were presented with a different but related issue: whether a named-driver exclusion bars recovery under a policy\u2019s liability provisions. See 105 N.M. at 221-22, 731 P.2d at 364-65. In Garza, the plaintiff sought recovery for damages sustained in an automobile accident. See id. at 220, 731 P.2d at 363. At the time of the accident, the plaintiffs son was operating the vehicle; he was an excluded driver under the policy insuring the vehicle. See id. at 221, 731 P.2d at 364. The plaintiff endorsed the exclusion because his son had a prior conviction for driving while intoxicated and had been involved in multiple accidents. See id. The plaintiff acknowledged during his deposition that the insurance agent explained why his son was being excluded and that he knew and \u201cunderstood that there would be no insurance for him or for his son ... at any time that [his son] was driving one of plaintiffs cars after this drivers exclusion endorsement became effective.\u201d Id. The language of the exclusion stated that the insurer \u201cshall not be liable and no liability or obligation of any kind shall be attached to the company for losses or damages sustained ... while any motor vehicle insured hereunder is driven or operated by\u201d the plaintiffs son. Id. at 221, 731 P.2d at 364. We interpreted this language to withhold all coverage under the policy when the plaintiffs son was operating any vehicle. See id. at 222, 731 P.2d at 365. Relying on Kiehne, we concluded \u201cthat the clear and unambiguous drivers exclusion endorsement ... relieves [Glen Falls] from their obligations of any kind under liability provisions of the policy.\u201d Garza, 105 N.M. at 222, 731 P.2d at 365 (emphasis omitted).\n{15} Similarly, in Moore, the Court of Appeals relied on the holdings of Kiehne and Garza in reaffirming \u201cthat a driver exclusion agreement ... applies to uninsured motorist coverage as well as liability coverage in New Mexico.\u201d Moore, 119 N.M. at 124, 888 P.2d at 1006. In Moore, the plaintiff was a named excluded driver on his parents\u2019 insurance policy at the time he was involved in an automobile accident. See id. at 123-24, 888 P.2d at 1005-06. The plaintiff was the driver of the vehicle; however, the vehicle was not listed as insured on the policy. See id. at 123, 888 P.2d at 1005. The Court of Appeals concluded that the plaintiff was wholly without any coverage when he operated any vehicle, whether insured or uninsured. See id. at 125, 888 P.2d at 1007. In reaching this conclusion, the Court of Appeals stated that \u201c[i]t would be illogical to allow State Farm to exclude a certain driver from uninsured motorist coverage when he is operating an insured vehicle, and at the same time require it to cover that person while operating an uninsured vehicle.\u201d Id,\n{16} Kiehne, Garza, and Moore establish named-driver exclusions as valid endorsements in New Mexico that are applicable to all auto coverage, including liability and UM coverage. Under these cases, an excluded driver, when operating any vehicle, lacks the coverage that he or she would have as a passenger. Further, our cases lead to the conclusion the district court and the Court of Appeals reached: the vehicle the excluded driver is operating becomes an uninsured vehicle for all purposes.\n{17} As applied to the facts of this case, the law as it has evolved with respect to driver exclusions seems inconsistent with our approach to UM coverage. See Padilla, 109 N.M. at 558, 787 P.2d at 838. In this case, our precedent creates a gap in coverage for a class-one insured. As a class-one insured, Steven had an expectation of UM coverage if he were injured in an accident involving an uninsured car. See Lopez v. Foundation Reserve Ins. Co., 98 N.M. 166, 169, 646 P.2d 1230, 1233 (1982). Phoenix\u2019s policy did not alert the Pulises that they had no UM coverage in an uninsured car driven by Michael. In enacting the UM statute, \u201c[t]he legislature intended that an injured person be compensated to the extent of liability coverage purchased for his or her benefit.\u201d Foundation Reserve Ins. Co. v. Marin, 109 N.M. 533, 535, 787 P.2d 452, 454 (1990). Allowing Phoenix\u2019s exclusion to apply to class-one insureds without notice or disclosure appears to be contrary to the Legislature\u2019s purpose. Cf. Chavez v. State Farm Mut. Auto. Ins. Co., 87 N.M. 327, 330, 533 P.2d 100, 103 (1975) (interpreting former UM statute that is materially identical to the present statute).\n{18} The facts of prior eases are, in fact, distinguishable. In Kiehne, we were presented with deciding the recovery of a class-two insured, not a class-one insured. Unlike Kiehne, the Pulises are seeking recovery under the passenger\u2019s policy, which is the same policy insuring the excluded driver when he is not operating a vehicle. Kiehne did not reach this situation but rather addressed the recovery of a class-two insured not covered by the same automobile policy. In this situation, the estate could seek recovery only under the deceased\u2019s own policy for the injury and death resulting from the accident. We recognize Kiehne comments that a class-one insured passenger would have no UM coverage if an excluded driver was driving. See Kiehne, 97 N.M. at 471-72, 641 P.2d at 502-03. We are not, however, bound by comments that exceed the scope of the holding. See generally Groendyke Transport, Inc. v. New Mexico State Corp. Comm\u2019n, 85 N.M. 718, 721, 516 P.2d 689, 692 (1973) (stating dicta \u201cis not controlling\u201d); State v. Wenger, 1999-NMCA-092, \u00b6 13, 127 N.M. 625, 985 P.2d 1205, cert. granted, 127 N.M. 391, 981 P.2d 1209 (1999) (stating \u201cthe Court\u2019s footnote ... can be considered unnecessary dicta\u201d); State v. Coyazo, 1997-NMCA-029, \u00b6 16, 123 N.M. 200, 936 P.2d 882. In Garza, the insured admitted on the record that he was informed by the insurance agent that no policy covered the son or anyone else when the son operated any vehicle. This was not the case for the Pulises. Here, no record exists supporting the inference that Phoenix\u2019s insurance agent informed the Pulises that by endorsing the exclusion no coverage existed for any insured when Michael operated any vehicle.\n{19} We believe that under our UM statute and our case law on UM coverage, we must address a question not addressed in either Kiehne or Garza. That question is whether the named-driver exclusion precludes class-one-insured coverage if the only notice of that possibility arises from the statutory form of driver exclusion provided in Section 66-5-222.\nC.\n{20} \u201c[E]xelusionary [provisions] in insurance contracts shall be enforced so long as their meaning is clear;\u201d however, if the exclusion is ambiguous or conflicts with legislative intent it is rendered void. Chavez, 87 N.M. at 329, 533 P.2d at 102 (internal quotation marks and quoted authority omitted) (alteration in original). We have consistently invalidated rejections of UM coverage provisions that are inconsistent with the requirements imposed by statute and the Superintendent. In Chavez, for example, we invalidated a restriction on UM recovery that prohibited an insured from recovery when he or she operated an uninsured motor vehicle owned by the insured at the time of the accident. 87 N.M. at 327-28, 533 P.2d at 100-01. This restriction created a gap in coverage that was in conflict with the UM statute. See id. at 330, 533 P.2d at 103. In Kaiser v. DeCarrera, 122 N.M. 221, 222-23, 923 P.2d 588, 589-90 (1996), we read UM coverage into a policy where the insured had signed a rejection of UM coverage as part of an application for automobile insurance and had never paid premiums for UM coverage. The written rejection in itself, however, was insufficient to exclude UM coverage. See id. at 223, 923 P.2d at 590. The declaration pages excluding UM coverage were not attached to, or otherwise made a part of, the policy; thus, the insured lacked affirmative evidence detailing the extent of their coverage. See id. at 222-24, 923 P.2d at 589-91. In Martinez v. Allstate Ins. Co., 1997-NMCA-100, \u00b6 18, 124 N.M. 36, 946 P.2d 240, the Court of Appeals prohibited the application of a household exclusion to reduce class-one UM coverage. In reaching this conclusion, the Court of Appeals stated that \u201cunderinsured benefits for a Class I insured may be limited only by the conditions imposed by statute: (1) the insured must have the legal right to recover damages, and (2) the negligent driver must be underinsured.\u201d Id.\n{21} We believe that under these cases exclusions from class-one-insured coverage are invalid when unclear. We see no reason under either our eases or the relevant statutes that the named-driver exclusion should be treated differently. The remaining question is whether in this case the insurance application and contract provided notice that UM coverage for a class-one insured ended when an excluded driver operated the insured vehicle.\nD.\n{22} Considering the application and policy together, we are persuaded there is an ambiguity created by the election of UM coverage and the driver-exclusion agreement. The auto application and policy do not clearly and explicitly define the limits of insured UM coverage for class-one insureds when the driver is a named excluded driver.\n{23} \u201cWhen there is ambiguity [in an insurance contract] ... the test is not what the insurer intended its words to mean, but what a reasonable person in the insured\u2019s position would have understood them to mean.\u201d Western Commerce Bank v. Reliance Ins. Co., 105 N.M. 346, 348, 732 P.2d 873, 875 (1987); see Federal Ins. Co. v. Century Fed. Sav. & Loan Ass\u2019n, 113 N.M. 162, 168, 824 P.2d 302, 308 (1992) (\u201cGiving effect to the insured\u2019s reasonable expectations, in cases of policy ambiguity, is of course a well-settled approach to construing and applying language in insurance policies.\u201d). \u201c[W]hen we speak of the insured\u2019s reasonable expectations we refer to what the hypothetical reasonable insured would glean from the wording of the policy and the kind of insurance at issue, rather than how the particular insured who happens to buy the policy might understand it.\u201d Rodriguez v. Windsor Ins. Co., 118 N.M. 127, 130, 879 P.2d 759, 762 (1994). The insurer bears the sole burden of issuing an intelligible policy. See id at 131, 879 P.2d at 763. \u201cIf the insurer issues an ambiguous policy, the ambiguities are construed against the insurer.\u201d Id.\n{24} Phoenix disclosed other specific situations in which no UM coverage existed for the insureds. For example, the application stated that \u201c[w]e do not cover bodily injury or property damage suffered while occupying or if struck by a motor vehicle owned by you or a relative and not described on the Declarations page(s)\u201d and \u201c[w]e do not insure any car while used in any racing, demolition or stunting activity.\u201d (Emphasis omitted). We also note that additional coverage exclusions are found in the \u201cFamily Car Policy\u201d issued to the Pulises. In total, the liability exclusion section details twenty scenarios where liability coverage is excluded. No such section exists for the named-driver-exclusion provision; rather, the provision merely states that \u201cno liability or obligation of any kind shall be attached.\u201d\n{25} On its face, the exclusionary provisions contained in Phoenix\u2019s policy are silent as to their applicability to a class-one insured when he or she is a passenger in an uninsured automobile operated by a named excluded driver. Based on the disclosures in the application, we presume that the Pulises were aware of the above restrictions and we believe the Pulises may have read these exclusions as the only exclusions on recovery under UM provisions. The express language of the application only informs a lay person that the named driver is excluded. That is not sufficient notice that class-one insureds are excluded. See Verbison v. Auto Club Ins. Ass\u2019n, 201 Mich.App. 635, 506 N.W.2d 920, 924 (1993) (upholding driver exclusion in part because the warnings placed on the exclusion and policy stated \u201c[w]hen a named excluded person operates a vehicle all liability coverage is void \u2014 no one is insured. Owners of the vehicle and others ... remain fully personally liable\u201d).\n{26} We conclude the excluded-driver provision did not exclude Steven from UM coverage. In reaching this conclusion we do not preclude all named-driver exclusions. We believe that an insurance company can validly exclude high-risk drivers from any and all coverage; but to do so, they are required to adequately inform an insured of the consequences to all class-one insureds of excluding that driver. This requires written disclosure within the body of the application and policy detailing the lack of UM coverage available to named insureds as well as to household members when they elect to exclude a driver or actual notice of the limitations on coverage. The facts of this ease illustrate the necessity to adequately inform the insured of the full extent of coverage and the exclusions and limitations applicable to the policy.\nIII.\n{27} Phoenix\u2019s auto insurance application and issued policy, as currently written, fail to notify the insured of the lack of coverage for class-one insureds when an excluded driver is operating any vehicle. Accordingly, we reverse the trial court\u2019s grant of summary judgment and remand for further proceedings.\n{28} IT IS SO ORDERED.\nFRANCHINI, SERNA, and MAES, JJ., concur.\nBACA, Justice, specially concurring.", "type": "majority", "author": "MINZNER, Chief Justice." }, { "text": "BACA, Justice\n(Specially Concurring).\n{29} I agree with the result reached by the majority, however I write separately to express my concern about the consequences of the majority\u2019s holding. I have serious concerns about the wisdom of a rule that allows an insurance company, even with proper notice, to deny uninsured or underinsured motorist coverage for all class-one insureds in a particular policy when a person subject to a driver exclusion provision under the same policy takes the wheel. I believe that this case presents an issue of first impression. This Court has not, until now, been confronted with a factual scenario where an excluded driver, Michael, was driving while, a class-one insured, Steven, was injured as a passenger, and sought compensation under the same policy as the excluded driver. I agree with the majority that the issue before us is whether, \u201cthe named-driver exclusion precludes elass-one-insured coverage\u201d but I am not convinced that any amount of notice would be sufficient to deprive Steven or other members of his family of their class-one status. See ante at \u00b6 19.\n{30} In this ease we are not concerned with Michael\u2019s coverage as the excluded driver, we are only concerned with Steven\u2019s coverage. Steven\u2019s coverage as a class-one insured is derived solely from the provisions of the contract without regard to the driver exclusion provision. As a member of the household, Steven was entitled to class-one status and UM coverage. The question then is whether the driver exclusion will be allowed to trump Steven\u2019s class-one protection. While the majority concludes that the driver exclusion, when read in concert with the policy was ambiguous and ineffective as a waiver of UM coverage, the majority then holds that if an insurance company \u201cadequately informs an insured of the consequences to all class-one insureds of excluding that driver\u201d then the company can exclude \u201cany and all\u201d coverage. See ante at \u00b626. I disagree, and doubt whether any amount of notice contained within a driver exclusion would be sufficient to deprive the remaining members of the family of their class-one status.\n{31} I recognize that it is completely reasonable to allow insureds to bargain away both liability coverage and UM coverage for individual high-risk drivers by signing driver exclusions, and we have so held. See State Farm Auto. Ins. v. Kiehne, 97 N.M. 470, 472, 641 P.2d 501, 503 (1982) (holding that driver exclusion applies to UM coverage); Garza v. Glen Falls Ins. Co., 105 N.M. 220, 223, 731 P.2d 363, 366 (1986) (holding that driver exclusion applies to liability coverage). I believe that the Legislature, when drafting the broad language contained in NMSA 1978, \u00a7 66-5-222 (1998), intended that the excluded driver would have absolutely no coverage while driving. However, I do not believe that the Legislature intended to eliminate all coverage for the entire family when a driver subject to an exclusion under the same policy takes the wheel. More importantly, I do not believe that any reasonable insured would understand they are bargaining away their entire family\u2019s class-one status by signing a driver exclusion for an individual high-risk driver. See Western Commerce Bank v. Reliance Ins. Co., 105 N.M. 346, 348, 732 P.2d 873, 875 (1987) (stating that test for evaluating policy ambiguities is \u201cwhat a reasonable person in the insured\u2019s position would have understood them to mean\u201d).\n{32} We have previously described the broad protection of class-one insureds as \u201ccovered by policies no matter where they are or in what circumstances they may be; coverage is not limited to a particular vehicle.\u201d Gamboa v. Allstate Insurance Co., 104 N.M. 756, 758, 726 P.2d 1386, 1388 (1986). With regard to class-one UM coverage we have stated, \u201cThere is no requirement in the statute that the insured have any relation, at the time of the accident, with any vehicle he owns and that is insured with the insurer. The uninsured motorists protection covers the insured and the family members while riding in uninsured vehicles, while riding in commercial vehicles, while pedestrians or while rocking on the front porch.\u201d Chavez v. State Farm Mut. Auto. Ins. Co., 87 N.M. 327, 330, 533 P.2d 100, 103 (1975) (quoting Elledge v. Warren, 263 So.2d 912, 918 (La.Ct.App.1972)), superceded by statute recognized in Sandoz v. State Farm Mut. Auto. Ins. Co., 620 So.2d 441 (La.Ct.App.1993). I fail to see how these broad protections could be so easily abrogated for the entire family merely by signing a driver exclusion clause that relates to only one driver. Steven was merely riding in an uninsured vehicle, that happened to be driven by an excluded driver under the same policy, when an accident occurred, and he sought compensation for his injuries as a class-one insured. Since UM coverage is personal and follows the individual, and is not dependent on the excluded driver, this is a situation that UM coverage was designed to address.\n{33} I recognize, as does the majority, that the Court in Kiehne seemed to indicate that the class-one insured, Kiehne, could not recover under his own policy because an excluded driver was operating the vehicle. 97 N.M. at 471-72, 641 P.2d at 502-03; see ante at \u00b6 13. However, the issue in Kiehne was the recovery of a class-two passenger and not a class-one insured. Since class-two insureds derive their coverage from the status of the vehicle and not from the original policy, the passenger in Kiehne was properly denied coverage. 97 N.M. at 471-72, 641 P.2d at 502-03. In Kiehne there was no coverage on the vehicle while the excluded driver operated it, and therefore, there was no coverage for the class-two insured. However, Kiehne did not face the issue that we address today. I believe that the dicta in Kiehne which suggested that a class-one insured would not be covered failed to recognize the special status that class-one protection affords under New Mexico law.\n{34} In the final analysis, I do not believe that once a family has chosen to pay for the protection of UM coverage, a simple driver exclusion should be allowed to infect the entire family\u2019s class-one status regardless of the notice afforded the insured. For these reasons, I specially concur in this case.", "type": "concurrence", "author": "BACA, Justice" } ], "attorneys": [ "Berardinelli & Associates, David J. Berardinelli, Santa Fe, NM, for Petitioners.", "Law Offices of Bruce S. McDonald, Bruce S. McDonald, Albuquerque, NM, for Respondent." ], "corrections": "", "head_matter": "9 P.3d 639\n2000-NMSC-023\nPHOENIX INDEMNITY INSURANCE COMPANY, Plaintiff-Respondent, v. Lynette PULIS and Larry Pulis, individually and Lynette Pulis, mother, parent and natural guardian of Steven Reese, a minor, Defendants-Petitioners.\nNo. 25,978.\nSupreme Court of New Mexico.\nJuly 6, 2000.\nRehearing Denied Aug. 17, 2000.\nBerardinelli & Associates, David J. Berardinelli, Santa Fe, NM, for Petitioners.\nLaw Offices of Bruce S. McDonald, Bruce S. McDonald, Albuquerque, NM, for Respondent." }, "file_name": "0395-01", "first_page_order": 429, "last_page_order": 438 }