                                                                              FILED
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                      UNITED STATES COURT OF APPEALS                      July 8, 2010
                                       TENTH CIRCUIT                 Elisabeth A. Shumaker
                                                                         Clerk of Court


 FEDERATED SERVICE INSURANCE
 COMPANY, a Minnesota Corporation,

               Plaintiff - Appellee,
                                                              No. 07-2293
 v.                                             (D. Ct. No. 1:06-CV-00638-JAP-WDS)
                                                              (D. N. Mex.)
 DANNY MARTINEZ,

               Defendant - Appellant.


                              ORDER AND JUDGMENT*


Before TACHA, EBEL, and HARTZ, Circuit Judges.


       This appeal concerns the requirements for rejecting uninsured motorist (“UM”)

coverage under New Mexico law. Following a workplace accident in which he was

struck and injured by an uninsured motorist, defendant-appellant Danny Martinez made a

demand on Federated Insurance Company (“Federated”) for UM benefits pursuant to a

policy between Federated and his employer, Capitol Motor. Federated refused to pay and

sought a declaratory judgment that Mr. Martinez is not entitled to benefits under the UM

provision of Capitol Motor’s insurance policy. Mr. Martinez counterclaimed for a



       *
        This order and judgment is not binding precedent except under the doctrines of
law of the case, res judicata and collateral estoppel. It may be cited, however, for its
persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
declaratory judgment that he is entitled to such benefits, and he brought additional

counterclaims for damages based on personal injury, breach of contract, bad faith

violation of the New Mexico Insurance Code and Unfair Practices Act, and negligence.

Thereafter, both parties sought summary judgment as to every claim except Mr.

Martinez’s negligence counterclaim. The district court granted Federated’s motion and

denied Mr. Martinez’s, concluding that Capitol Motor had effectively rejected UM

coverage for non-management employees like Mr. Martinez. Mr. Martinez appealed

from that decision,1 and because the appeal turned on an important and unsettled question

of New Mexico law, we certified that question to the New Mexico Supreme Court.

Having received the New Mexico Supreme Court’s answer, we take jurisdiction under 28

U.S.C. § 1291, REVERSE the district court’s order holding that Capitol Motor rejected

UM coverage for non-management employees, and REMAND for further proceedings

consistent with this order and judgment.

                                        I. BACKGROUND

         Under New Mexico law, every automobile liability insurance policy issued

in the state must insure against damages from uninsured motorists unless such coverage is

rejected by the insured. See N.M. Stat. Ann. § 66-5-301(A), (C); see also Romero v.

Dairyland Ins. Co., 803 P.2d 243, 245 (N.M. 1990). Under the authority delegated to it

by the New Mexico legislature, the superintendent of insurance promulgated N.M.


         1
             The district court certified the order as a final judgment under Fed. R. Civ. P.
54(b).

                                                 -2-
Admin. Code § 13.12.3.9, which dictates the manner in which an insured must reject UM

coverage for rejection to be effective. That regulation provides that “[t]he rejection of the

provisions covering damage caused by an uninsured or unknown motor vehicle as

required in writing . . . must be endorsed, attached, stamped or otherwise made a part of

the policy of bodily injury and property damage insurance.” N.M. Admin. Code

§ 13.12.3.9. When the rejection of UM coverage is ineffective for failing to comply with

this regulation, UM coverage is read into the insured’s liability policy. Romero, 803 P.2d

at 246.

          Capitol Motor first obtained a commercial insurance policy from Federated in

2001. Initially, it selected $500,000 of UM coverage per accident for management

employees and $60,000 of UM coverage per accident for non-management employees.

On November 30, 2001, however, Capitol Motor’s general manager, Marc Brandt,

directed a Federated employee, Denny Rommann, to execute a policy adjustment request

that would eliminate UM coverage for Capitol Motor’s non-management employees. No

Capitol Motor officer or employee signed or otherwise executed the policy adjustment

request. Furthermore, and seemingly contrary to Mr. Brandt’s earlier decision to alter the

scope of Capitol Motor’s insurance policy, on March 29, 2002, Mr. Brandt signed an

automobile coverage option form in which he selected $60,000 of UM coverage for non-

management employees.

          Federated issued a policy change endorsement on May 8, 2002 that purports to

eliminate UM coverage for Capitol Motor’s non-management employees. Additionally,

                                             -3-
Federated returned $505 in premium payments based on this reduction in coverage.

Federated subsequently attached the endorsement to each of Capitol Motor’s yearly

policy renewals, but no Capitol Motor officer or employee ever signed or otherwise

executed the endorsement.

       On May 11, 2005, Mr. Martinez was struck by an uninsured motorist while

working as a non-management employee for Capitol Motor. Federated denied Mr.

Martinez’s demand for UM benefits, citing the policy change endorsement and

contending that Capitol Motor had rejected UM coverage for all non-management

employees. The district court agreed with Federated’s position and concluded that the

policy change endorsement satisfies the requirements for a valid rejection of UM

coverage under New Mexico law.

       On appeal, we certified the following question to the New Mexico Supreme Court:

“[f]or a valid rejection of UM/UIM coverage under New Mexico law, must that rejection

be written, signed by the insured, and attached to the policy?” See Federated Serv. Ins.

Co. v. Martinez, No. 07-2293, 2008 WL 5062783, at *1 (10th Cir. Dec. 1, 2008). The

New Mexico Supreme Court accepted the certified question and consolidated this case

with an appeal from the New Mexico Court of Appeals that involved a substantially

similar legal issue. See Marckstadt v. Lockheed Martin Corp., 228 P.3d 462 (N.M. 2009).

Upon receiving the New Mexico Supreme Court’s answer to our certified question, we

ordered the parties to file supplemental briefing to address its decision.




                                             -4-
                                        II. DISCUSSION

       When interpreting state statutes and regulations, we are bound by the

interpretations and decisions of the state’s highest court. TMJ Implants, Inc. v. Aetna,

Inc., 498 F.3d 1175, 1181 (10th Cir. 2007). In response to our certified question, the New

Mexico Supreme Court held that UM coverage will be included in all New Mexico

liability policies unless “the insured has exercised the right to reject [UM] coverage

through some positive act.” Marckstadt, 228 P.3d at 468. The court further explained

that N.M. Admin. Code § 13.12.3.9 requires insurers to “obtain a written rejection of

UM/UIM coverage from the insured in order to exclude it from an automobile liability

insurance policy . . . .” Id. at 464.

       In its motion for summary judgment, Federated argues that both the policy change

endorsement and the policy adjustment request satisfy the statutory and regulatory

requirements for a valid rejection of UM coverage. The district court granted Federated

summary judgment based solely on the endorsement. In Marckstadt, however, the New

Mexico Supreme Court clearly rejected the district court’s interpretation of New Mexico

law that supported its summary judgment order. The New Mexico Supreme Court

explained that “we would not find that [UM] coverage had been rejected if the insured

never acted to reject coverage, even if an endorsement were attached to the policy by the

insurer.” Id. at 468. In this appeal, however, Federated argues that it is nevertheless

entitled to summary judgment because the policy adjustment request constitutes a valid

rejection of UM coverage. We disagree.

                                             -5-
        Federated posits that the policy adjustment request qualifies as a written rejection

of UM coverage by Capitol Motor because the Federated employee who created and

executed the request was authorized to do so by Capitol Motor’s general manager. Put

another way, Federated contends that its employee was acting as an agent of Capitol

Motor and thus validly rejected UM coverage for Capitol Motor. That argument,

however, is foreclosed by the unambiguous language of N.M. Stat. Ann. § 59A-18-24,

which provides that “[a]ny licensed agent appointed as agent by an insurer shall, in any

controversy between the insured or his beneficiary and the insurer, be held to be the agent

of the insurer . . .”

        Furthermore, Federated’s reliance on Vigil v. Rio Grand Ins. of Santa Fe, 950 P.2d

297 (N.M. Ct. App. 1997) is misplaced. There, the New Mexico Court of Appeals held

that a husband who authorized his wife to purchase insurance on his behalf was bound by

his wife’s rejection of UM coverage. Id. at 327. Whether a husband may be bound by his

wife’s rejection of UM coverage, however, is an entirely different question than whether

a beneficiary of an insured may be bound by an agent of an insurer in a dispute between

the beneficiary and the insurer. Indeed, Vigil does not even mention N.M. Stat. Ann. §

59A-18-24, nor does it purport to create an exception to that clearly worded statute.

Accordingly, the policy adjustment request that was wholly created by a Federated

employee, albeit at the direction of Capitol Motor’s general manager, does not constitute

a written rejection from the insured, which is required by New Mexico law.

        Federated also argues that even if the policy adjustment request does not constitute

                                             -6-
a valid rejection of UM coverage, Mr. Martinez is not entitled to summary judgment.

Federated claims it “now believes that additional documents that were produced in

discovery may constitute a written rejection from the insured.” Specifically, Federated

contends that Mr. Brandt signed yearly client review forms that expressly reject UM

coverage for non-management employees. According to Federated, “[b]efore [this] Court

would even consider entering summary judgment in favor of Mr. Martinez on this issue,

Federated should have the opportunity to present additional briefing to the district court . .

. .” Federated, however, cites no authority for the proposition that it should be given a

second opportunity to support its summary judgment motion and to defend against Mr.

Martinez’s motion with evidence that it never presented to the district court and by

asserting an argument it never made below.

       In responding to a motion for summary judgment, the non-moving party is entitled

to set out specific facts that demonstrate a triable issue of fact or that demonstrate that the

moving party is not entitled to judgment as a matter of law. See Allen v. Minnstar, Inc., 8

F.3d 1470, 1475 (10th Cir. 1993). Indeed, the non-moving party is obligated to provide

such specific facts if it hopes to avoid the entry of judgment against it. See Fed. R. Civ.

P. 56(e)(2) (“When a motion for summary judgment is properly made and supported, an

opposing party[’s] . . . response must . . . set out specific facts showing a genuine issue for

trial. If the opposing party does not so respond, summary judgment should, if

appropriate, be entered against that party.”). If the non-moving party fails to present

certain evidence to the district court in opposing a motion for summary judgment, we

                                             -7-
cannot consider that evidence in reviewing the district court’s judgment. Allen, 8 F.3d at

1475; see also Lantec, Inc. v. Novell, Inc., 306 F.3d 1003, 1022 (10th Cir. 2002).

Furthermore, “[a]bsent extraordinary circumstances, we will not consider arguments

raised for the first time on appeal.” Turner v. Pub. Svc. Co. of Colo., 563 F.3d 1136,

1143 (10th Cir. 2009).

       In his motion for summary judgment, Mr. Martinez asserts that there is no written

rejection of UM coverage from Capitol Motor. His motion is not confined to whether, as

a matter of law, the policy adjustment request or the policy change endorsement

constitutes an effective rejection. Federated, however, initially relied exclusively on these

two documents in opposing Mr. Martinez’s motion and it did not present the yearly client

review forms to the district court. If Federated intended to avoid summary judgment by

relying on the existence of the yearly client review forms, it should have presented those

forms and made the argument it now attempts to make for the first time. Federated is not

entitled to support or defend against a motion for summary judgment on one theory, and

when that theory proves unsuccessful, to supplement the record and pursue a different

theory on remand. Moreover, because neither the endorsement nor the policy adjustment

request comply with the requirements for a rejection of UM coverage under New Mexico

law, we conclude that Capitol Motor did not reject UM coverage for non-management

employees.

                                   III. CONCLUSION

       For the foregoing reasons, we REVERSE the district court’s order holding that

                                            -8-
Capitol Motor rejected UM coverage for non-management employees. Because this

holding provided the basis for the court’s entry of summary judgment in favor of

Federated on its claim that Mr. Martinez is not entitled to benefits under the UM

provision of Capitol Motor’s insurance policy, as well as on three of Mr. Martinez’s

counterclaims, we REMAND for additional proceedings not inconsistent with this order

and judgment. We express no opinion on the merits of Mr. Martinez’s counterclaim for

negligence, which was not part of the summary judgment proceedings below.

                                         ENTERED FOR THE COURT,



                                         Deanell Reece Tacha
                                         Circuit Judge




                                           -9-
