In a recent case, an insurance company brought an action in a New Mexico state court, the Second Judicial District Court, County of Bernalillo, seeking a declaration that its insured was not entitled to uninsured/underinsured (UM/UIM) coverage for any injuries or other damages resulting from a 2015 car accident.  The insured filed an answer and also asserted a counterclaim for personal injuries, to recover uninsured motorist benefits, for insurance bad faith and for violations of the Unfair Claims Practices Act.

People who have suffered personal injuries following a New Mexico car accident will often prefer to proceed with litigation in New Mexico state courts in the hopes of advancing a case past motion practice and towards trial.  Insurance companies will often prefer to proceed in federal courts, where they hope to bring successful motions to dismiss or for summary judgment, and avoid trial.  In this case, the insurance company filed a notice of removal, seeking to invoke the federal court’s jurisdiction and the insured driver successfully challenged the removal, resulting in the case being remanded to New Mexico state court.

The declaratory judgment by the insurance company and counterclaim by the insured driver arose from a four-car collision that occurred in Albuquerque, New Mexico.  Allegedly a vehicle struck the car in front of it, causing a series of collisions until ultimately the insured’s car, which was the front vehicle in the chain, was struck from behind.  The driver who caused the accident allegedly fled the scene and it was unknown whether that driver had liability insurance.  The insured driver filed a claim under his insurance company policy for personal injuries and damages related to the collision, which his insurance company denied on the basis that he had rejected UM/UIM coverage.

Typically contracts are enforced as per their terms.  In a case decided by the U.S. District Court for the District of New Mexico, the court held that an insurance policy provision limiting a plaintiff’s time to bring an action to three years from the date of her New Mexico vehicle accident was unenforceable.  At issue was a claim under an insurance policy issued by an Ohio insurance agent to a driver who lived in Ohio at the time the policy was issued to her.  A few months later the driver was involved in a car accident in Taos, New Mexico.  She settled with the insurer of the driver of the other car involved in the accident and then submitted a claim for underinsured motorist coverage to her insurer.  Based on a provision of the insurance policy, her insurer took the position the claim was untimely because it had been brought more than three years after the date of the accident with respect to which insurance benefits were claimed.

The driver then sued her insurer in New Mexico state court, bringing a complaint for declaratory judgment, breach of contract and negligence.  The defendant insurance company removed the insured plaintiff’s action to federal court.  The parties filed cross motions for declaratory judgment, which the court construed as motions for summary judgment on the plaintiff’s claim for declaratory judgment.

The plaintiff’s chief argument was that the three year time to sue provision for UM claims in the insurance contract violated New Mexico public policy, thereby precluding application of Ohio law and rendering the provision invalid and unenforceable.  She sought application of New Mexico’s six year statute of limitations for asserting UM claims.  The defendant sought application of the three year limit under Ohio law, arguing it did not violate New Mexico public policy.

The United States District Court for the District of New Mexico recently handed down an opinion dismissing claims by a New Mexico State Police trooper for failure to keep premises safe.  The Court interpreted New Mexico’s “firefighter’s rule” as also applying to claims brought by law enforcement officers.

The plaintiff had alleged as part of a complaint filed in state court that, during the course of executing a warrant, he was shot and critically wounded due to the failure of a property management company to keep its premises safe.  The plaintiff sought to hold the defendant liable for damages sustained after he was shot on the basis that the defendant was aware that the shooter was not an authorized resident, of his frequency on the premises, of his residency, and of his violent nature and criminal record.  According to the complaint, the defendant had previously removed the man from its property.

The defendant responded to the complaint by removing it to federal court and filing a motion to dismiss based on the “firefighter’s rule.”  The plaintiff opposed dismissal.  Pursuant to the standard for considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court was to accept the allegations in the complaint as true, view the allegations in the light most favorable to the plaintiff, and draw all reasonable inferences in the plaintiff’s favor.  The Court was to then consider whether the plaintiff’s claims were facially plausible, meaning whether the facts pleaded in the complaint could allow the court to draw reasonable inferences that the defendant could be held liable for the misconduct alleged.  After reciting the standard for assessing motions to dismiss, the Court concluded that the complaint failed to allege facts sufficient to state a plausible claim for relief.

The United States District Court for the District of New Mexico recently handed down an opinion dismissing a claim for punitive damages brought in connection with a personal injury case.  The plaintiffs had filed a complaint against the defendant’s insurer after a trial in which the plaintiffs had prevailed.  The plaintiffs brought their post-trial complaint in New Mexico state court under the New Mexico Unfair Claims Practices Act (“UCPA”), seeking to recover damages, including punitive damages, attorney’s fees, and other costs.  The defendant insurance company removed the case to federal district court and successfully argued that the damages available to the plaintiffs under the UCPA did not include punitive damages.

Allegedly, at the time of the accident that led to the trial, the plaintiffs were in a vehicle that was rear-ended by another vehicle and this caused them to suffer personal injuries and property damage.  The driver of the car that collided with the plaintiffs’ car was insured.  Her insurance company determined that she was at fault and paid plaintiffs for property damage.  The insurer refused to pay for personal injuries that the plaintiffs documented with materials, including medical records and bills.  The insurer then offered to settle for an amount that the plaintiffs rejected on the basis that it was less than the amount they believed they were owed.  After the plaintiffs filed a lawsuit against the driver of the car and her insurer, the parties engaged in a mediation.  The plaintiffs purportedly offered to settle their claims for $40,000 and the insurance company was willing to pay $16,000.  No settlement was achieved and the case went to trial.  Following the trial the jury found the driver that rear-ended the plaintiffs to be 100% at fault for the car accident and awarded the plaintiffs $100,000.

The plaintiffs then sued the insurance company for refusing to settle their personal injury claims sooner, alleging that this was in keeping with a policy and practice of the insurance company to refuse to settle or offer only unreasonably low settlements to people seeking recoveries for injuries arising from low speed accidents.  The plaintiffs based their claims on the UCPA.  The insurance company moved to dismiss the punitive damages claim asserted in the plaintiffs’ complaint on the basis that the UCPA allows for recovery of actual damages, but not punitive damages.  The plaintiffs asserted that the UCPA did not expressly preclude the award of punitive damages, and pointed to statutory language suggesting recoveries under the UCPA for punitive damages are available in addition to state common law and statutory recoveries.

Recently, the Court of Appeals of the State of New Mexico upheld a jury’s verdict and the denial of a defense motion for a new trial or a remittitur of the damages awarded by the jury.  The appellate court declined to use mathematic ratios as the basis for reversing a jury award, and also affirmed the award to the plaintiffs of prejudgment interest.

The trial underlying the appellate ruling occurred following a tragic accident on the interstate highway between Las Cruces and Deming, New Mexico.  A FedEx combination tractor-trailer vehicle driven at a speed of 65 miles an hour struck a small pickup truck that was stopped or barely moving.  There were multiple fatalities.  The driver of the tractor-trailer was killed. The driver of the pickup truck was also killed together with her four year old daughter; that driver’s nineteen month old son was seriously injured.

The husband of the woman driving the pickup truck that was struck sued individually, and as personal representative for his daughter and next friend for his son.  He also asserted claims for personal injury and wrongful death.  The father of the woman driving the pickup truck sued, as her personal representative, for wrongful death.  Together with his wife he also asserted claims via intervention for loss of consortium resulting from the death of their daughter.  FedEx stipulated prior to trial that it would pay for damages attributable to FedEx and the other named defendants.  Following the trial, the jury awarded compensatory damages in excess of $165 million in favor of the plaintiffs.  The jury awarded no punitive damages.

A plaintiff injured in a New Mexico car accident who sues to recover damages for personal injuries often can assert causes of action based on multiple theories of recovery.  Under some circumstances, a defendant can successfully move to bifurcate the causes of action.  The consequences will depend on what stage the litigation is in when bifurcation is sought and can result, for example, in the litigation being split up so that discovery proceeds with respect to one or more causes of action while being stayed with respect to other causes of action.

In a recent case, the plaintiff asserted causes of action against an insurance company, which included breach of the underinsured motorist coverage provisions of the contract he had entered into with the insurance company that provided him car insurance, plus alleging bad faith.  The insurance company filed a successful motion to bifurcate the cause of action for denial of underinsured motorist coverage under the insurance contract from extra-contractual causes of action, and to stay discovery with respect to all extra-contractual causes of action.

The plaintiff had filed a lawsuit in the Twelfth Judicial District for Lincoln County, New Mexico.  He alleged that a teenager had driven her parents’ car into his truck while talking on her cell phone after rolling through a stop sign, and that this resulted in his truck spinning on two wheels and sustaining severe damage.  The plaintiff also alleged that he suffered grave injuries, which necessitated evaluation and treatment of his chest, hip, back and neck at the Lincoln County Medical Center.  Continue reading

A terrible New Mexico car accident occurred when a tire tread peeled off the right rear tire of a 1993 Ford E-350 Super Club Wagon traveling on U.S. Highway 54 in Guadalupe County, New Mexico.  The vehicle, which was en route from Mexico to Colorado, left the road and rolled over three times. Two of the occupants of the vehicle were ejected and died, another occupant was rendered quadriplegic and died from the injuries he sustained in the accident, and several other people who were in the car at the time of the accident also sustained injuries.A lawsuit was filed against the car manufacturer, the tire manufacturer, and the person who installed the tire on the vehicle in the names of some of the individuals involved in the accident, and through representatives with respect to the other people involved in the accident.  The plaintiffs were all Mexican nationals.  The defendants, also not residents of New Mexico, each moved to dismiss, asserting that there was not personal jurisdiction over the defendants.  The District Court of Santa Fe County, New Mexico conducted a hearing, following which it denied dismissal of the lawsuit.  The defendants then filed applications for interlocutory appeal, which were granted by the Court of Appeals of New Mexico.

On appeal, the Court analyzed whether the defendants had minimum contacts with New Mexico that supported the exercise of specific jurisdiction.  The Court applied the standards of a precedent in which the Court had held that New Mexico courts could properly exercise jurisdiction over a Chinese corporate defendant that manufactured bicycle parts after it placed the allegedly defective parts on the market with the intention that they be distributed and sold in the United States, including in New Mexico.

The Court looked at the defendants’ contacts with New Mexico, which were presented in the form of evidence submitted by the plaintiffs.  The contacts included extensive contacts by the car manufacturer defendant, including having dealerships in the state, engaging in marketing in the state, and maintaining a website allowing prospective customers to obtain a quote on a vehicle and search an inventory of vehicles in stock in the state.  Similarly, the evidence that the plaintiffs presented with respect to the tire manufacturer showed that this defendant has dealers in New Mexico, sends personnel to the state to assess the performance of its tires, and maintains a website targeting people who live in New Mexico.  The Court observed that the claims at issue did not need to be causally related to the defendants’ conduct in the forum state but instead needed only to “lie in the wake” of the defendants’ activities in the forum state.  The Court affirmed the ruling below, denying the defendants’ motion to dismiss.

A U.S. Magistrate Judge recently ruled in favor of a plaintiff seeking discovery to aid his prosecution of a personal injury case.  The plaintiff had sought to obtain certain information from the defendant Home Depot, including a response to an interrogatory posed to the defendant concerning prior customer claims for injuries that the stores allegedly caused by or involving pallets.  The Court held a telephonic hearing on April 18, 2018 that ran over an hour after reviewing submissions by the plaintiff and the defendant.  Over the course of the hearing, the plaintiff’s counsel agreed to narrow the scope of the interrogatory that was a focus of the hearing, and the Court ordered the defendant to respond to the interrogatory as modified.

The plaintiff, via his counsel, filed a Motion to Compel on May 31, 2018, bringing to the Court’s attention that the defendant had not supplemented its discovery responses to include information concerning previous nationwide claims and lawsuits regarding injuries sustained by the defendant’s customers pertaining to slips, trips and falls involving pallets.  The plaintiff was frustrated because a few weeks earlier during the April 18 hearing the request had been modified to facilitate compliance with it.  The defendant had been allowed to respond with information stored in the defendant’s searchable database and, with respect to claims that had ripened into litigation, the defendant could respond by providing only names of the parties to the filed cases, the case numbers, and the districts in which the cases proceeded.

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Proposed federal legislation could prevent states including New Mexico from regulating the safety of autonomous vehicles.  These vehicles are sometimes referred to as “driverless.”  If the proposed federal laws are enacted, they could limit the role of states to registration and licensing of driverless vehicles and oversight over safety inspections, traffic laws and crash investigations.

The proposed legislation is controversial for several reasons.  On the one hand, building driverless vehicles in the United States could be good for domestic auto manufacturing.  The technology could potentially also reduce collisions caused by errors of tired, distracted or drunk drivers.  Some argue that a patchwork of state regulations could cause delays and complications.  On the other hand, public safety and consumer protection are issues because there is potential for accidents.  To address these important issues, the federal government would need to set enforceable standards and rules for these innovative forms of transportation, including for example, rules with respect to manufacturing.  How long it would take to develop an effective federal regulatory system for driverless vehicles and how a system would work remains to be determined.

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In some cases, a person who brings a civil law suit can decide whether to assert claims under state law, federal law, or both.  The decision comes with consequences because a defendant may prefer to defend the suit or seek its dismissal in state court under some circumstances, and federal court in others.  In a recent case, the plaintiff filed his complaint in the Eleventh Judicial District of the County of San Juan, in a New Mexico state court.  His claims were based on a traffic stop that occurred in a manner that he alleged was actionable under the New Mexico Tort Claims Act.

The defendants, a group that includes government entities, removed the plaintiff’s complaint to federal district court, asserting that there was federal question jurisdiction, and filed a motion seeking to have the complaint dismissed on the basis of purported failure to state a claim on which relief can be granted.  Instead of filing a response to the motion addressing the defendants’ arguments in support of dismissal, the plaintiff filed a motion to remand the case to state court, where he had filed his complaint and preferred to proceed.

The plaintiff made several contentions in support of remanding the case, including that the defendants improperly removed the case from state court on the basis of federal question jurisdiction because he had not pleaded a federal cause of action in his complaint and that the due process rights referenced in his complaint are rights conferred under New Mexico state law.  The court agreed with the plaintiff that the manner in which he had pleaded his complaint did not transform a state law tort claim into a federal constitutional claim.  The court also rejected the defendants’ argument that the plaintiff’s claims should be treated as federal law claims because he had sought punitive damages that are not available under the New Mexico Tort Claims Act.  The court further reasoned that, even were the court to construe the complaint as raising an embedded federal constitutional law claim, the plaintiff’s right to relief depended on the construction and application of New Mexico state law.  Ultimately, the court concluded it was appropriate to send the case back to state court, where the plaintiff had filed his complaint and wished to proceed, and accordingly remanded to the Eleventh Judicial District of the County of San Juan.