The United States District Court for the District of New Mexico recently denied a motion to dismiss brought on behalf of an insurance company that sought the dismissal of a class action complaint. The class action complaint sought recovery of damages against an insurance company based on several theories of liability, including the sale of allegedly illusory underinsured motorist coverage, breach of contract, and assorted violations of New Mexico’s Unfair Insurance Practices Act.
The lead plaintiff, who had been denied coverage by her insurer following a car accident caused by an underinsured driver, filed suit in state court in Bernalillo County. Her insurer removed the complaint to federal district court and unsuccessfully moved the federal district judge to dismiss the class action lawsuit.
The lead plaintiff alleged that she was driving eastbound on I-40 in Albuquerque when another driver failed to stop for traffic in front of that driver’s vehicle and struck the lead plaintiff’s vehicle, causing serious bodily injuries and other damages. The lead plaintiff further alleged that the driver whose vehicle struck hers was an underinsured motorist at the time of the accident and that the underinsured driver’s insurance company paid the lead plaintiff $25,000 following the accident.