The U.S. District Court for the District of New Mexico handed down a decision on January 3, 2019 in favor of a plaintiff who was seeking a recovery from her insurance company following a New Mexico car accident resulting in the plaintiff allegedly suffering personal injuries. The insurance company had argued that the plaintiff needed to prove entitlement to underinsured motorist coverage (UIM) benefits before she could proceed with her other claims against the insurance company. The court denied the defendant insurance company’s motion for bifurcation, thereby allowing the plaintiff’s claims to proceed forward together.
The plaintiff alleged that she had suffered injuries after her vehicle was rear-ended by another vehicle. She settled with the insurance company of the driver who had allegedly caused the accident for the limits of that driver’s insurance policy, and then made a demand on her own insurance company for UIM and the insurance company refused to pay. She then sued her insurance company, asserting two different sets of claims. She claimed a breach of contract based on her insurer’s non-payment of UIM benefits and breach of the duties of good faith and fair dealing. These were contract based claims under her insurance policy with the defendant insurance company.
In separate counts, the plaintiff’s complaint alleged extra-contractual claims for insurance bad faith, violations of New Mexico’s Unfair Insurance Practices Act (UIPA), and violations of New Mexico’s Unfair Trade Practices Act (UTPA). The defendant insurance company moved to bifurcate the trials of Plaintiff’s UIM contract based claims from her bad faith, UIPA, and UTPA claims and stay discovery on those extra-contractual claims “until such time as a jury has found that the Plaintiff is legally entitled to recover benefits on the underlying UIM breach of contract claim.” The plaintiff opposed.