Articles Posted in Insurance Bad Faith

car accidentA 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

ContractInsurance companies sometimes try to change the forum for lawsuits filed against them or their insureds as part of their litigation strategy.  A common strategy is to try to remove a lawsuit filed by plaintiffs against them in state court to federal court and then make a motion to dismiss in order to try to stop the case from proceeding through the discovery process and to trial.

Federal courts are courts of limited jurisdiction and are restricted from adjudicating, for example, state law claims asserted by citizens of one state against citizens of another state.  In a recent case, an insurance company removed a state court lawsuit against it, its law firm, and one of the attorneys working for the law firm from state court, where the insureds had filed it, to federal court.

The insureds had filed suit in New Mexico state court, alleging causes of action including violations of the Trade Practices and Frauds Article (TPFA) of the New Mexico insurance code, stemming from interactions with the lawyers acting for the insurance company.  They alleged that they believed themselves to be victims of a profit-maximizing scheme designed to coerce them to settle for a fraction of what their insurance claims were worth arising from the stealing and burning of a van and the removal of tools and equipment from the van.

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