Garcia v. Allstate: Written UM/UIM Anti-Stacking Waivers Trump Ambiguity Claims

Introduction

Garcia v. Allstate Fire and Casualty Insurance Company, decided by the Supreme Court of New Mexico on 2 July 2025 (No. S-1-SC-40157), revisits the perennial question of whether an insured who signed a written rejection of stacked Uninsured/Underinsured Motorist (UM/UIM) coverage may nevertheless demand stacked benefits because the policy’s declaration pages list per-vehicle premiums. Although the judgment is designated “non-precedential” under Rule 12-405 NMRA, the opinion provides the Court’s most explicit guidance to date on the hierarchy between (i) the Montano requirement that insurers obtain a written waiver if they wish to prevent stacking, and (ii) the traditional “ambiguity analysis” outlined in Rodriguez.

In essence, the Court holds that a facially valid written waiver is dispositive: once an insured knowingly rejects stacked coverage in writing, later-issued declaration pages that allocate the single premium across individual vehicles do not revive the ambiguity inquiry or justify reformation of the policy. The decision therefore shields insurers from post-loss attempts to undo anti-stacking agreements and clarifies for lower courts that Rodriguez-style ambiguity analysis is unnecessary when a Montano-compliant waiver exists.

Summary of the Judgment

• Holding: Linda Garcia validly waived stacked UM/UIM coverage; the declaration pages did not render the policy ambiguous; judgment for Allstate reinstated.
• Disposition: Reversal of the Court of Appeals; remand to the district court to enter summary judgment for Allstate.
• Key Points:
  • The waiver met all Montano/Ullman requirements: written; explained stacking; disclosed premiums; invited questions.
  • The declaration pages’ per-vehicle premiums merely allocated a single per-policy charge and repeated the anti-stacking election; therefore no reasonable insured could believe multiple premiums were paid for multiple UM/UIM coverages.
  • Because a valid waiver existed, courts need not apply the broader, pre-Montano ambiguity analysis of Rodriguez.

Analysis

1. Precedents Cited

Montano v. Allstate Indemnity Co., 2004-NMSC-020

The cornerstone case requiring insurers to obtain written rejections of stacking if they wish to enforce anti-stacking clauses in multi-vehicle policies. Garcia reinforces Montano by emphasizing that, once the waiver is duly executed, the insured’s election controls.

Ullman v. Safeway Ins. Co., 2023-NMSC-030

Clarified that every UM/UIM offer must contain a “brief discussion of stacking”. Garcia relies on Ullman to confirm that Allstate’s form complied by explaining both cost and coverage consequences.

Rodriguez v. Windsor Ins. Co., 1994-NMSC-075 (modified by Montano)

Earlier case focused on contract ambiguity without insisting on written waivers. The Court explicitly states that Rodriguez-style analysis is superseded when a valid waiver exists—a point the Court of Appeals overlooked.

Other Authorities

• Rummel v. Lexington Ins. Co. (standard of review/ambiguity test)
• Crutcher v. Liberty Mutual (reasonable insured perspective)
• Knowles v. USAA (policy construed as harmonious whole)
• Salas v. Mountain States (summary-judgment standard)

2. Legal Reasoning

1. Validity of the Waiver
   Allstate’s form:
   • Identified three options—stacked, non-stacked, reject entirely—with corresponding premiums.
   • Stated premiums were “per policy”.
   • Contained a succinct definition of stacking and invited questions.
   Plaintiff initialed the non-stacked option and signed. Under Montano/Ullman, these elements suffice to bar stacking.
2. Contract Ambiguity Rejected
   The Court viewed the waiver, declaration pages, and policy booklet together. Because the sum of the listed per-vehicle premiums ($40.89 + $48.24) equaled the single non-stacked amount on the waiver ($89.13) and the declarations repeated the anti-stacking disclaimer, no conflicting signals were present.
3. Hierarchy of Doctrines
   When a valid waiver exists, the Court will not resurrect the older ambiguity inquiry designed for policies lacking such waivers. This re-orders the analytical framework for lower courts: waiver analysis first; only if the waiver is invalid or missing does the court examine ambiguity.
4. Standard of Review
   Both policy interpretation and summary-judgment rulings receive de novo review, enabling the Supreme Court to substitute its own judgment without deference to either lower court.

3. Impact of the Judgment

• For Insurers – Provides a litigation safe-harbor: a Montano-style waiver that conforms to Ullman will foreclose post-loss stacking claims even if declarations are issued in per-vehicle format.
• For Policyholders – Heightens the need to read and understand stacking waivers; subsequent policy paperwork is unlikely to reopen the question once the waiver is signed.
• For Trial & Appellate Courts – Clarifies that the first inquiry is “waiver validity.” Only if the waiver is defective does ambiguity become relevant. This roadmap should reduce inconsistent outcomes across New Mexico courts.
• For Insurance Drafting – Encourages explicit “per policy” labelling of premiums on waiver forms and cross-references on declaration pages to forestall any future ambiguity arguments.

Complex Concepts Simplified

Stacking

The practice of adding (cumulating) coverage limits from two or more vehicles or policies to increase the total amount available to pay a single loss.

UM/UIM Coverage

Insurance that pays when you are harmed by a motorist with no (uninsured) or insufficient (underinsured) liability coverage.

Written Waiver

A document in which the insured consciously rejects a benefit (here, stacking) after being informed of its nature and cost. Once signed, it becomes part of the insurance contract.

Declaration Pages

Summary pages of an insurance policy listing coverages, limits, premiums, and vehicles. They are often updated mid-policy term.

Ambiguity Doctrine

If policy language can be interpreted more than one reasonable way, courts construe it against the insurer. Garcia limits the doctrine’s reach when a valid anti-stacking waiver exists.

Per-Policy vs. Per-Vehicle Premium

Per-policy: one lump sum covers all vehicles under the policy. Per-vehicle: the insurer allocates portions of that lump sum to each vehicle for accounting purposes.

Conclusion

Although labelled non-precedential, Garcia v. Allstate delivers a clear, practical rule: a compliant written rejection of stacking is dispositive, and subsequent declaration pages that list per-vehicle allocations do not resurrect questions of ambiguity. The decision reinforces the supremacy of the Montano/Ullman waiver framework, streamlines judicial analysis, and brings welcome certainty to UM/UIM disputes in New Mexico. Insureds must be vigilant before signing anti-stacking waivers, and insurers must continue to draft waiver forms that plainly disclose the trade-off between price and coverage. Going forward, challenges to anti-stacking provisions will likely succeed only where the waiver itself is defective, not where declaration pages merely itemize a single, already-disclosed premium.