Court of Appeals of New Mexico

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: __________

Filing Date: March 23, 2026

No. A-1-CA-42510

CLAY P. LINDSTROM,

          Plaintiff-Appellee,

v.

PROGRESSIVE DIRECT

INSURANCE COMPANY,

          Defendant-Appellant,

and

JOHN DOE,

Defendant.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY

Daniel E. Ramczyk, District Court Judge

Valle, O’Cleireachain, Zamora & Harris

Andrea D. Harris

Albuquerque, NM

Romero, Harada & Winters, LLC

Geoffrey R. Romero

Nikko Harada

Christopher P. Winters

Albuquerque, NM

for Appellee

Cuddy & McCarthy, LLP

Scott P. Hatcher

Robert A. Corchine

Santa Fe, NM

for Appellant

OPINION

MEDINA, Chief Judge.

{1}      In this interlocutory appeal, Appellee Clay Lindstrom and Appellant Progressive Direct Insurance Company (Progressive) ask us to resolve whether Appellee is entitled to recover punitive damages under his uninsured and underinsured (UM/UIM) policy when the tortfeasor is unknown. Determining that Appellee is not entitled to recover punitive damages, we reverse.

BACKGROUND

{2}      Appellee was the victim of a hit-and-run while operating his vehicle. Appellee alleges that Defendant John Doe violently collided with his vehicle, but instead of remaining at the scene and identifying himself, Defendant Doe fled. Appellee brought negligence and negligence per se claims against Defendant Doe, seeking to recover compensatory and punitive damages. At the time of the accident, Appellee had UM/UIM coverage through Progressive. Appellee argued entitlement to compensatory and punitive damages from Progressive based on Defendant Doe’s conduct. Progressive paid Appellee’s compensatory property damages claim but denied his punitive damages claim.

{3}      During motions practice, the parties litigated whether Appellee was entitled to recover punitive damages from Progressive based on Defendant Doe’s conduct. The district court—having already determined Defendant Doe’s liability for the damage to Appellee’s property—granted Appellee’s motion for partial summary judgment as to Progressive’s punitive damages liability, and denied Progressive’s opposing motion for summary judgment. In its order, the district court determined that Progressive owes “a contractual duty to pay damages that the insured is legally entitled to recover against Defendant . . . Doe, including any award of punitive damages that may be entered against Defendant . . . Doe.” The district court certified for interlocutory appeal the questions of “whether punitive damages can be awarded against an unknown driver, and whether an insurer is obligated to cover punitive damages awarded against an unknown tortfeasor.” The parties filed a joint interlocutory appeal application, which this Court granted.

DISCUSSION

{4}      Interpretation of New Mexico’s UM/UIM statute, NMSA 1978, § 66-5-301 (1983), in order to determine whether punitive damages can be awarded against an unknown driver, and whether an insurer is obligated to cover punitive damages awarded against an unknown tortfeasor, is a question of law subject to de novo review. See Jordan v. Allstate Ins. Co., 2010-NMSC-051, ¶ 14, 149 N.M. 162, 245 P.3d 1214. We also review a district court’s grant of summary judgment de novo. Kileen v. Didio, 2025-NMSC-038, ¶ 9, 578 P.3d 1180.

{5}      Progressive argues that the district court erred in ruling that punitive damages may be recovered under a UM policy where the tortfeasor is unknown. In support of its position, Progressive contends that such an award undermines the rationale for punitive damages, frustrates the limited purpose of punitive damages, and would contravene existing New Mexico precedent. Appellee disagrees and argues that he is legally entitled to punitive damages under Section 66-5-301, New Mexico’s UM/UIM statute, and that the absence of a known tortfeasor cannot abridge the availability of any category of damages codified by the UM/UIM statute.

{6}      The purpose of New Mexico’s UM/UIM statute is “to encourage insureds to purchase such coverage,” Kileen, 2025-NMSC-038, ¶ 12 (internal quotation marks and citation omitted), and to “place the insured in the same position as to the recovery of damages that [they] would have been in had the tort[]feasor had liability insurance.” State Farm Mut. Auto. Ins. Co. v. Maidment, 1988-NMCA-060, ¶ 18, 107 N.M. 568, 761 P.2d 446 (citing Wood v. Millers Nat’l Ins. Co., 1981-NMSC-086, ¶ 10, 96 N.M. 525, 632 P.2d 1163; Gantt v. L & G Air Conditioning, 1983-NMCA-083, ¶ 20, 101 N.M. 208, 680 P.2d 348 (same), superseded by statute as stated in Mountain States Mut. Cas. Co. v. Vigil, 1996-NMCA-062, ¶ 11, 121 N.M. 812, 918 P.2d 728. This is achieved by requiring insurers to offer UM coverage so that “an injured insured is compensated for injuries even when the tortfeasor is financially irresponsible.” Jaramillo v. Providence Wash. Ins. Co., 1994-NMSC-018, ¶ 24, 117 N.M. 337, 871 P.2d 1343. This coverage includes coverage for punitive damages. See Stewart v. State Farm Mut. Auto. Ins. Co., 1986-NMSC-073, ¶ 9, 104 N.M. 744, 726 P.2d 1374. Indeed, “punitive damages are as much a part of the potential award under the uninsured motorist statute as damages for bodily injury.” Stinbrink v. Farmers Ins. Co. of Ariz., 1990-NMSC-108, ¶ 5, 111 N.M. 179, 803 P.2d 664. As Appellee acknowledges, however, recovery of punitive damages is not absolute.

{7}      Relevant to this appeal, and heavily relied on by Progressive, our Supreme Court has barred recovery of punitive damages against a deceased tortfeasor’s estate, despite the UM/UIM statute’s purpose of placing an insured in the same position as to the recovery of damages that they would have been in had the tortfeasor had liability insurance. See Jaramillo, 1994-NMSC-018, ¶¶ 24-26; see also Maidment, 1988-NMCA-060, ¶ 18 (noting that the UM/UIM statute’s purpose is to “place the insured in the same position as to the recovery of damages that [they]would have been in had the tort[]feasor had liability insurance”). Maidment held both that “punitive damages may not be awarded against the estate of a deceased tort[]feasor,” 1988-NMCA-060, ¶ 14, and that “the insurer may assert the death of the uninsured motorist as a bar to recovery of punitive damages,” id. ¶ 25.

{8}      In Jaramillo, our Supreme Court indicated that an insurer’s ability to subrogate was an important factor in determining that insurance policies may cover punitive damages; otherwise, the purpose of punitive damages would be “diluted.” 1994-NMSC-018, ¶ 24. The Court also reasoned that the purpose of awarding punitive damages—to punish and deter—is not achieved when the tortfeasor has died. Id. ¶ 26. This is because, “[w]hen the tortfeasor cannot be punished for [their] culpable behavior, punitive damages no longer have the desired effect and, therefore, the victim loses the legal entitlement to recover those damages.” Id. ¶ 24.

{9}      Appellee contends that Jaramillo is readily distinguishable from this case. Appellee argues that he is legally entitled to recover punitive damages because a deceased tortfeasor is unlike an unknown tortfeasor because an unknown tortfeasor may be discovered. An unknown tortfeasor could therefore be punished if they are later identified, which may deter others from engaging in similar conduct. As such, the purpose of punitive damages can be accomplished by awarding punitive damages against an unknown tortfeasor. Progressive, on the other hand, cites cases to support its argument that punitive damages should be unavailable against an unknown tortfeasor.

{10}     Appellee cites no controlling authority from any jurisdiction, without statutory authority or a more expansive view of the role of punitive damages, holding that punitive damages are available against an unknown tortfeasor, nor have we found any such cases in our own research.[1] Instead, Appellee contends that he is legally entitled to recover punitive damages in this case because punitive damages are only barred in cases brought against the government and those brought against a deceased tortfeasor. Appellee argues that it “makes sense” that punitive damages cannot be recovered against the government and a deceased tortfeasor because their status is not subject to change. This is unlike an unknown tortfeasor whose status would change if they are later identified. We are unpersuaded that the unchanging status of the tortfeasor is dispositive in determining whether a plaintiff is legally entitled to recover punitive damages. As our Supreme Court has acknowledged, “The phrase ‘legally entitled to recover’ seems something of a chameleon, varying with the facts and procedural context in which the need to define the phrase arises.” Boradiansky v. State Farm Mut. Auto. Ins. Co., 2007-NMSC-015, ¶ 13, 141 N.M. 387, 156 P.3d 25. Indeed, our courts have been inconsistent and unclear in how to define this phrase. Id. ¶ 12. What is clear, however, is that punitive damages are unavailable against the government because they penalize the innocent taxpayers, see, e.g., Faber v. King, 2015-NMSC-015, ¶¶ 22-26, 348 P.3d 173, and, are unavailable against a deceased tortfeasor because they fail to accomplish the purpose of punitive damages, Jaramillo, 1994-NMSC-018, ¶ 26. Given our Supreme Court’s reasoning in these cases, we conclude that Appellee is not legally entitled to recover punitive damages because the purpose of punitive damages would not be accomplished and the insureds would likely incur increased premiums.[2]

{11}     Moreover, although there is a dearth of case law directly on point, we are persuaded by the cases that preclude punitive damages against an unknown tortfeasor. In State Farm Mutual Insurance Co. v. Kuharik, the Georgia Court of Appeals reversed a district court’s decision allowing for punitive damages against an unknown tortfeasor who allegedly drove in a reckless and wanton manner in causing a collision before unlawfully leaving the scene.[3] 347 S.E.2d 281, 282 (Ga. Ct. App. 1986). The court explained that “to award punitive damages against an unknown tortfeasor for the purpose of deterring [them] from repeating [their] alleged misconduct would be nonsensical.” Kuharik, 347 S.E.2d at 282. In coming to this conclusion, the Court of Appeals for Georgia analogized allowing a punitive damages award against an unknown tortfeasor to that of a deceased tortfeasor—which, like New Mexico, Georgia prohibits.[4] See Kuharik, 347 S.E.2d at 282.

{12}     There are also at least three published New Mexico federal district court cases reaching the same conclusion. See Ammons v. Sentry Ins. Co., 431 F. Supp. 3d 1280 (D.N.M. 2019); Dockery v. Allstate Ins. Co., 491 F. Supp. 3d 980 (D.N.M. 2020); Padilla v. Doe, 781 F. Supp. 3d 1205 (D.N.M. 2025). And while “we are not bound by federal court decisions purporting to interpret New Mexico state common or statutory law,” Hovey-Jaramillo v. Liberty Mut. Ins., 2023-NMCA-068, ¶ 18, 535 P.3d 747, such opinions, “particularly of courts of our own [c]ircuit, are entitled to special consideration.” Sanchez v. Cont. Trucking Co., 1941-NMSC-049, ¶ 8, 45 N.M. 506, 117 P.2d 815. In doing so, “we accord them the deference they merit based on our view of the correctness of their analysis of our law.” Hovey-Jaramillo, 2023-NMCA-068, ¶ 18.

{13}     In both Ammons and Dockery, plaintiffs sought punitive damages under their UM policy based on their vehicle being stolen and damaged by unknown tortfeasors. See Ammons, 431 F. Supp. 3d at 1284; Dockery, 491 F. Supp. 3d at 983. In Padilla, a plaintiff sought punitive damages under her UM policy based on an automobile accident with an unknown tortfeasor. 781 F. Supp. 3d at 1206-07. Because both Dockery and Padilla applied the reasoning articulated in Ammons to preclude a punitive damages award against an unknown tortfeasor, see Dockery, 491 F. Supp. 3d at 988-89; Padilla, 781 F. Supp. 3d at 1210-13, our discussion will focus on the analysis presented in Ammons.

{14}     In Ammons, the district court applied Jaramillo’s reasoning to conclude that punitive damages were unavailable against an unknown tortfeasor. Ammons, 431 F. Supp. 3d at 1296-98. The court arrived at this conclusion despite acknowledging that “‘punitive damages are as much a part of the potential award under the uninsured motorist statute as damages for bodily injury.’” Id. at 1297 (quoting Stinbrink, 1990-NMSC-108, ¶ 5. This is because the district court found that under Jaramillo’s reasoning, the purpose of punitive damages would not be achieved by allowing such an award against an unknown tortfeasor. See Ammons, 431 F. Supp. 3d at 1296-97 (“‘Such additional damages are awarded for the limited purposes of punishment and to deter others from the commission of like offenses.’” (quoting Jaramillo, 1994-NMSC-018, ¶ 26)).

{15}     The court in Ammons also determined that a punitive damages award would not further the UM/UIM statute’s goal of “covering the gap in compensation caused by an irresponsible tortfeasor who does not have legally mandated liability insurance.” Id. at 1297. As the court noted, “‘The purpose of requiring an insurer to provide UM coverage is to be sure that an injured insured is compensated for injuries even when the tortfeasor is financially irresponsible.’” Id. at 1296 (emphasis added) (quoting Jaramillo, 1994-NMSC-018, ¶ 24). And the “goal of punitive damages is not compensation.” Id. at 1297 (citing Madrid v. Marquez, 2001-NMCA-087, ¶ 4, 131 N.M. 132, 33 P.3d 683). We find this analysis persuasive.

{16}     In keeping with Jaramillo, we are convinced that the purpose of punitive damages would not be fulfilled by allowing such an award against an unknown tortfeasor in hit-and-run accidents. See Jaramillo, 1994-NMSC-018, ¶ 26. The punishment an unknown tortfeasor might face is far too attenuated to hold otherwise. We also doubt that any hit-and-run driver would be deterred from fleeing the scene if an insurance company was responsible for paying punitive damages. See, e.g., Braley v. Berkshire Mut. Ins. Co., 440 A.2d 359, 363 (Me. 1982) (“[N]o deterrent effect can be anticipated from an award of punitive damages against an insurance company under an uninsured motorist provision.”). And although not dispositive, allowing for punitive damages in a situation where the tortfeasor is unknown would undoubtedly “dilute” the purpose of punitive damages because an insurer would be unable to subrogate.[5] See Jaramillo, 1994-NMSC-018, ¶ 24.

{17}     Our holding is also guided by common sense. A contrary conclusion would almost certainly result in increased litigation. Instead of incentivizing speedy settlements on compensatory damages claims, individuals who suffer hit-and-run injuries might be more likely to litigate their claims in hope of a punitive damages award. Furthermore, determining a punitive damages award is often a fact-intensive inquiry based on reason and justice. Our jury instructions state that the “amount of punitive damages must be based on reason and justice taking into account all the circumstances, including the nature and enormity of the wrong and such aggravating and mitigating circumstances.” UJI 13-1827 NMRA. Additionally, the “property or wealth of the defendant is a legitimate factor” to consider. Id. As a result, we question the prudence or possibility of appropriately assessing reasonable and just punitive damages against an unknown tortfeasor.

{18}     To be clear, we sympathize with Appellee—and all the victims of hit-and-run collisions—and acknowledge that important policy objectives might be furthered by allowing an injured insured to recover punitive damages in such situations. Indeed, there is great public benefit in incentivizing individuals who cause an accident to remain at the scene, it is not at all clear that this policy would provide such an incentive. And while awarding punitive damages in these situations would likely provide additional incentive for insurers to locate the responsible driver, that is not the purpose of punitive damages in New Mexico.

{19}     As Appellee notes, the Legislature has already conferred a duty upon insurers to investigate claims. Specifically, insurers must “adopt and implement reasonable standards for the prompt investigation and processing of insureds’ claims.” NMSA 1978, § 59A-16-20(C) (1997, amended 2025). Appellee cites no authority to suggest that an insurer must identify an unknown tortfeasor or face the threat of paying a punitive damages award. Of course, insurers cannot avoid their statutory obligation to reasonably and promptly investigate claims. See id. But appropriate remedies already exist for such a violation. See, e.g., NMSA 1978, § 59A-16-30 (1990).

{20}     Finally, we arrive at our conclusion that punitive damages are unavailable against an unknown tortfeasor with full acknowledgment that the UM/UIM statute is a remedial statute. See Progressive Nw. Ins. Co., 2010-NMSC-050, ¶ 14. Consequently, we interpret the UM/UIM statute liberally “to implement the purpose of compensating those injured through no fault of their own,” and strictly construe any exceptions. Kileen, 2025-NMSC-038, ¶ 12 (emphasis added) (alteration, internal quotation marks, and citation omitted). We are unpersuaded, however, that a liberal interpretation of the statute directs us to a different conclusion. We are also unpersuaded that our determination conflicts with the remedial nature of the statute.

{21}     Our holding aligns with the UM/UIM statute’s remedial purpose to compensate injured insureds when the tortfeasor is underinsured, uninsured, or unknown because compensatory and punitive damages are distinct. Punitive damages are intended to punish wrongdoers and deter others from engaging in similar conduct. Jaramillo, 1994-NMSC-018, ¶ 26. They are not intended to compensate an individual insured who suffers an injury. See Madrid, 2001-NMCA-087, ¶ 4; see also Manzanares v. Allstate Ins. Co., 2006-NMCA-104, ¶ 10, 140 N.M. 227, 141 P.3d 1281 (noting that “while under our case law punitive damages are a part of UIM coverage, we have also recognized that punitive damages generally evoke less compelling concerns”); State ex rel. N.M. State Highway & Transp. Dep’t v. Baca, 1995-NMSC-033, ¶ 22, 120 N.M. 1, 896 P.2d 1148 (“By their nature, punitive damages confer a windfall upon an otherwise fully-compensated plaintiff.”). Because neither punishment nor deterrence would be achieved by making punitive damages available against an unknown tortfeasor, we do not believe that a punitive award would protect the car-owning, insured public in a case such as this. And, as we have noted, our conclusion is consistent with the heavy balance of authority on this issue.

CONCLUSION

{22}     For the foregoing reasons, we conclude that punitive damages, in a case such as this, are unavailable against an unknown tortfeasor. As a result, Appellee may not recover punitive damages from Progressive, his insurer, under his UM policy. We therefore reverse the district court’s grant of Appellee’s motion for partial summary as to Progressive’s punitive damages liability, and reverse the district court’s denial of Progressive’s motion for summary judgment as to punitive damages liability. We remand the case to the district court for further proceedings consistent with this opinion.

{23}     IT IS SO ORDERED.

____________________________________

JACQUELINE R. MEDINA, Chief Judge

I CONCUR:

___________________________

J. MILES HANISEE, Judge

JANE B. YOHALEM, Judge (dissenting).

YOHALEM, Judge (dissenting).

{24}     I respectfully dissent from the majority’s conclusion that an insured motorist is not entitled to recover punitive damages from their insurance company under the UM/UIM statute when the tortfeasor is an unknown motorist. I believe that the answer to the question before this Court about UM/UIM coverage for punitive damages is controlled by the plain language of the UM/UIM statute and by existing precedent in this Court and in our Supreme Court construing the UM/UIM statute. I agree with the district court’s conclusion that under New Mexico’s UM/UIM statute, Progressive owes “a contractual duty to pay damages that the insured is legally entitled to recover against Defendant . . . Doe, including any award of punitive damages that may be entered against Defendant . . . Doe.”

{25}     The UM/UIM statute requires, in relevant part, that insurance coverage be provided “for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles.” Section 66-5-301(A). The title of the UM/UIM statute is “Insurance against uninsured and unknown motorists.” (Emphasis added.) The title of the statute has assisted both the public and the courts, including the parties in this case, in uniformly construing the statutory phrase “owners or operators of uninsured motor vehicles,” see id., as used in the UM/UIM statute as a reference to both uninsured and unknown motorists. See Lerma v. State, 2025-NMSC-033, ¶ 29, 578 P.3d 1111 (concluding that in discerning legislative intent, “we must construe the parts of [a statute] harmoniously, including the [statute’s] title . . . if [it is] necessary to its construction” (internal quotation marks and citation omitted)).[6] By discussing these two types of motorists together, without any distinction between them in the statutory language, the plain language of the UM/UIM statute suggests that our Legislature intended to treat uninsured and unknown motorists identically. Finding no authority to the contrary, I begin by assuming that the construction given the UM/UIM statute by our appellate courts is intended to apply equally to uninsured and unknown motorists alike, absent some compelling reason to treat them differently. See Sandoval v. Valdez, 1978-NMCA-016, ¶ 16, 91 N.M. 705, 580 P.2d 131 (concluding that the Legislature’s intent is the same whether the motorist is uninsured or unknown).

{26}     This construction of the plain language of the UM/UIM statute informs my reading of the precedent from our Supreme Court and from this Court relevant to an insured’s entitlement to punitive damages under the UM/UIM statute. In Stewart, our Supreme Court examined the language of the UM/UIM statute and held that “an insured may recover punitive damages from [an] insurer if [they] would be legally entitled to recover [punitive damages] from the uninsured tortfeasor.” 1986-NMSC-073, ¶ 13. See § 66-5-301(A) (mandating insurance coverage for bodily injury or destruction of property “for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles”). In addition to relying on the plain language of the UM/UIM statute in concluding that uninsured motorist coverage includes punitive damages, our Supreme Court in Stewart relied on the legislative purpose, explaining that the UM/UIM statute is intended “to protect the insured against the financially unresponsible motorist, not to protect the insurance company.” 1986-NMSC-073, ¶ 9 (internal quotation marks and citation omitted); see Stinbrink, 1990-NMSC-108, ¶ 5 (“[P]unitive damages are as much a part of the potential award under the uninsured motorist statute as damages for bodily injury.”).

{27}     The controversy in this appeal focuses on Stewart’s holding that “under our uninsured motorist law, an insured may recover punitive damages from [their] insurer if [they] would be legally entitled to recover them from the uninsured tortfeasor.” 1986-NMSC-073, ¶ 13 (emphasis added). Progressive argues that when its insured is injured by an unknown motorist, rather than by an uninsured motorist, the insured is not “legally entitled to recover [punitive damages]” from the unknown tortfeasor. See id. Progressive claims that our Supreme Court’s holding in Stewart as to an injury caused by an uninsured motorist is not controlling when the injury is caused by an unknown motorist. Progressive’s argument turns on its contention that an unknown tortfeasor is the same, under the law, as a deceased tortfeasor, pointing to our Supreme Court’s holding in Jaramillo that punitive damages are not recoverable under the UM/UIM statute from a deceased tortfeasor as the controlling authority. See 1994-NMSC-018, ¶ 21. Progressive argues that an unknown tortfeasor must be treated the same as a deceased tortfeasor for purposes of a punitive damages award under the UM/UIM statute. According to Progressive, even when an insured is entitled to punitive damages under tort law principles, if the tortfeasor is unknown, punitive damages are not recoverable because their purpose—punishment and deterrence—cannot be served. Progressive equates this policy argument with a lack of a “legal entitlement” to punitive damages.

{28}     In my view, the distinction argued by Progressive, and adopted by the majority, between unknown motorists and uninsured motorists as to recovery of punitive damages under the UM/UIM statute is not supported by analogizing an unknown tortfeasor to a tortfeasor who dies prior to payment. Our Supreme Court’s decision in Jaramillo and this Court’s decision in Maidment, which Jaramillo approved, see 1994-NMSC-018, ¶ 26 (adopting Maidment), apply the principle taken directly from the plain language of the UM/UIM statute that “an insured may recover punitive damages . . . if [they] would be legally entitled to recover them from the uninsured tortfeasor.” Jaramillo, 1994-NMSC-018, ¶ 23 (emphasis added) (internal quotation marks and citation omitted). Maidment explains that the phrase “legally entitled to recover damages” in the UM/UIM statute “requires that the injured person prove the elements necessary to establish an action in negligence: duty, breach, proximate cause, and loss or damages” that entitle them under the common law of torts to recover either compensatory damages, or both compensatory and punitive damages. 1988-NMCA-060, ¶ 19 (internal quotation marks omitted). Where the conduct of the tortfeasor supports an award of punitive damages under the common law, Jaramillo and Maidment agree that punitive damages are damages that the insured is “legally entitled to recover” absent some other traditional common law defense that would be available to the tortfeasor. See Maidment, 1988-NMCA-060, ¶¶ 21-23, 25 (internal quotation marks and citation omitted).

{29}     Jaramillo and Maidment both examine whether an injured motorist would be “legally entitled to recover [punitive damages] from the uninsured tortfeasor” when the tortfeasor is deceased. Maidment, 1988-NMCA-060, ¶ 7; Jaramillo, 1994-NMSC-018, ¶ 23. They conclude that the death of the tortfeasor before payment of the punitive damages is a common law defense to punitive damages. The common law prohibits recovery of punitive damages from the estate of a deceased tortfeasor. Maidment, 1988-NMCA-060, ¶ 7; Jaramillo, 1994-NMSC-018, ¶ 23. Because an insured motorist cannot obtain damages from their insurer that they are not “legally entitled to recover” from the uninsured tortfeasor, both courts hold that punitive damages cannot be recovered when the uninsured motorist is deceased. Maidment, 1988-NMCA-060, ¶ 7; Jaramillo, 1994-NMSC-018, ¶ 23.

{30}     Although both Jaramillo and Maidment discuss the policy behind the common law rule that recovery cannot be had from the estate of a deceased tortfeasor, noting that neither punishment nor deterrence are able to be achieved when the tortfeasor is dead, the basis of both decisions is not the policy, but the statutory language limiting recovery to damages that the insured is “legally entitled to recover from owners or operators of uninsured motor vehicles because of bodily injury, . . . and for injury to or destruction of property.” NMSA 1978, § 66-5-301(A).

{31}     I am not persuaded by Progressive’s argument that an unknown motorist is the same as a deceased motorist under the law. Nor am I persuaded by its policy argument that allowing recovery from an unknown motorist would subvert the purposes of punitive damages. Our Supreme Court rejected this policy argument in Stewart as to uninsured motorists, holding that its decision did not subvert the policy behind punitive damages because punitive damages were still the responsibility of the uninsured motorist: the Court stated that it was merely shifting the burden of recovering from the insured to the insurer.

{32}     I do not find Progressive’s arguments that it is as impossible for an insurer to recover in subrogation from an unknown motorist as it is to recover from a deceased motorist, and that requiring an insurance company to pay punitive damages to its insured under these circumstances subverts the policy of punishment and deterrence served by punitive damages, persuasive. Our Supreme Court considered and rejected these arguments in Stewart, noting (in the context of an uninsured motorist) that because the insurance company could seek subrogation from the tortfeasor, the Court’s holding “merely shifts the burden of filing suit against an uninsured tortfeasor for the payment of punitive damages from the insured to the insurer.” Stewart, 1986-NMSC-073, ¶ 14. I see no reason to assume a different legislative intent concerning placing the burden on the insurance company of investigating a hit-and-run injury, finding the motorist, and seeking subrogation. Merely hiding one’s identity at the time of the tort does not have the finality of death.

{33}     Finally, contrary to the majority, I do not see a danger of spiraling insurance premiums from allowing recovery for punitive damages against both unknown and uninsured motorists. Payment under an uninsured motorist policy cannot exceed the policy limit set by the insurance contact. See id. ¶ 18 (“[T]he total amount of damages for which [the insurer] can be held liable should not exceed the policy limits.”). There is no statutory requirement to pay the insured the full amount of compensatory damages incurred by the insured, let alone the full amount of punitive damages awarded, if that amount exceeds the policy limits. The liability of the insurance company is thus controlled by its contract.

{34}     Though the majority ably presents a policy argument to the contrary, I believe that the plain language of the UM/UIM statute and the decisions of our Supreme Court construing that language require Progressive to pay the punitive damages its insured is legally entitled to receive from the tortfeasor, despite the status of the tortfeasor as an unknown motorist. The majority having concluded otherwise, I respectfully dissent.

____________________________________

JANE B. YOHALEM, Judge, dissenting