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Articles Posted in Insurance Companies

An accident in New Mexico recently resulted in litigation concerning coverage under an automobile insurance policy.  The facts, as alleged by the parties, are simple and tragic.  Allegedly a woman went to her neighbor’s house to respond to an alarm that had gone off at the house.  Sandoval County Sheriff’s Deputies went to the neighbor’s house as well.  One of the Deputies accidentally ran over the woman with his car when he was leaving, and she died.

In the next year, the personal representative for the woman’s estate sent a demand letter to the deceased’s automobile insurer, seeking a recovery under the underinsured motorist coverage provisions.

The insurance company refused to pay out.  It took the position that the personal representative of the estate of the woman who had been run over by the Deputy could not achieve a recovery under the insurance policy because the estate would be able to recover $400,000, the maximum allowed under the New Mexico Tort Claims Act, from the Sheriff’s Office.  The insurance company’s position was that such a recovery would reduce to less than zero the amount recoverable under the underinsured motorist provision of the automobile insurance policy, which limited recovery to $250,000 less any amount paid by the individual or organization responsible for the accident.

As part of a recent New Mexico personal injury case, insured property owners sought from their insurance company a defense under a landlord protection policy.  The property owners’ need for a defense arose after an alleged carbon monoxide leak in a property that they had rented out to a husband and wife seriously injured the husband and killed the wife.

Following those tragic events, the husband and the estate of his wife filed a state court complaint against the insurance company and other defendants, asserting claims of negligence, gross negligence, wrongful death and loss of consortium in the First Judicial District Court in Santa Fe, New Mexico.  The insurance company then sought a declaratory judgment from a federal court, the United States District Court for the District of New Mexico, providing that the insurance company was not obligated to defend the insured property owners in the state court case or indemnify them.

The insurance company’s position was that carbon monoxide poisoning fell within under the insurance policy’s pollutants and contaminants exclusion and the insurance policy’s expected or intended act or omission exclusion.

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Recently, the United States District Court for the District of New Mexico handed down a ruling denying an insurance company’s motion to intervene.  The insurance company allegedly had paid the plaintiff workers’ compensation benefits under California law, and asserted that it should be allowed to intervene to assert a subrogation right to recover sums it paid out from any recovery the plaintiff achieved against the trucking company allegedly responsible for the plaintiff’s injuries.

The accident underlying the plaintiff’s personal injury suit occurred on westbound Interstate 40 in McKinley County, New Mexico.  According to the plaintiff’s complaint, traffic was backed up at the time of the accident because the road was under construction.  The complaint further alleges that a truck driver was driving on cruise control at a speed of 66 miles per hour.  As the driver approached a mile marker, he was allegedly looking down.  When the truck he was driving was a second away from a pickup truck, the driver of the pickup truck looked up.  Tragically, it was too late to stop the collision, which allegedly resulted in a fire and chain reaction of accidents on the interstate.

Among those sustaining serious personal injuries was the plaintiff, who was en route to California at the time, according to the complaint he filed in New Mexico’s 11th Judicial District Court against the truck driver, the trucking company that employed the driver and corporate affiliates of the trucking company.  The trucking company removed the complaint from the state court in which it had been filed to federal court.

Recently the U.S. District Court for the District of New Mexico was presented with a dispute concerning whether an insurance coverage case presented to it for adjudication should be sent back to the state court in which the plaintiff had first filed the case.  The federal court trial court presented with this dispute ruled in favor of allowing the case to proceed in the plaintiff’s forum of choice.  The court concluded that it lacked jurisdiction and sent the case back to state court.

Underlying the dispute was a hit and run accident.  Allegedly a person was injured when the vehicle he was driving was struck by a pick up truck that did not stop at a stop sign.  The driver of the pick up truck drove off after the accident.  The injured person whose vehicle had been struck in the hit and run accident sought to recover money from the insurance company that insured his vehicle, based on uninsured motorist coverage.  The insurance company refused to pay out after being presented with a police report, medical records and bills.  The injured person, through counsel, filed a case against the insurance company in Bernalillo County.

The insurance company, via its counsel, removed the case the plaintiff had filed in state court to the U.S. District Court for the District of New Mexico.  The removal papers included an affidavit from counsel observing that, in his experience, the type of action at issue involves more than $75,000.  The plaintiff responded with a motion to remand the case to state court on the basis that the amount in controversy was less than $75,000.

A New Mexico federal court recently ruled that a homeowner’s insurance policy did not cover a dog bite occurring outside of the homeowner’s premises.  A woman was injured after she took two dogs out for a walk on a leash.  She and the leashed dogs were allegedly attacked outside of their home in Albuquerque by two American Pit Bull Terriers who lived with their owners about 2.7 miles away.  The attack resulted in the woman sustaining bodily injuries and her husband experiencing injury in the form of a loss of consortium.

The injured parties sued their neighbors in New Mexico state court, and the neighbors’ insurance company defended the neighbors under a homeowner’s insurance policy.  The insurance company then initiated proceedings in New Mexico federal court, seeking a declaration that it was not required to defend or indemnify its insureds in that suit, a dog bite case.

To resolve the dispute, the federal court reviewed the terms of the insurance policy at issue and the parties’ competing positions on availability of coverage.

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The United States District Court for the District of New Mexico recently ruled against an insurance company, and in favor of the wife of a man who was killed when the motorcycle he was driving was hit by a car.  The motorcyclist sustained fatal physical injuries while driving down San Mateo Blvd NE in Albuquerque, New Mexico after the driver of an automobile made a left turn resulting in a collision.  The driver who struck the motorcyclist was insured, and his insurance company provided a defense when the wife of the deceased motorcyclist sued the driver in state court on behalf of her husband’s estate and on her own behalf for loss of consortium. The parties’ settlement talks allegedly hit an impasse when they could not agree on the policy limit of the automobile driver’s insurance policy, which resulted in the insurance company bringing a declaratory action in federal court to resolve the issue.

The parties agreed that the insurance policy had a limit of $100,000 per person and $200,000 per accident.  The insurance company argued that even though the wife of the deceased motorcyclist asserted claims on his behalf as well as on her own behalf for loss of consortium, there was a physical injury to one party only and the so the per person limit applied.  The wife of the deceased motorcyclist asserted in response that there were two bodily injuries, hers and her husband’s, so the higher per accident insurance policy limit of $200,000 applied.

To resolve the dispute over the extent of coverage under the insurance policy the district court applied New Mexico law, which resolves disputes over insurance policies by interpreting their provisions in accordance with the same principles that govern the interpretation of contracts.  The court explained that, under the controlling law, when policy language is clear and unambiguous, courts must give the contractual language effect and enforce the insurance policy as written.

A person whose truck was stolen sought compensation in New Mexico state court from his automobile insurer on the basis that the theft constituted property damage under the uninsured motorist provisions of the parties’ contract.  The insurance company removed the lawsuit to federal court and filed a motion to dismiss, which the court granted.  In arriving at its conclusion that the insured’s case should be dismissed, the court accepted the insurance company’s construction of the uninsured motorist provisions of the contract between the insurance company and its insured.

The federal court deciding the motion to dismiss determined that it was tasked with predicting how New Mexico’s Supreme Court would decide the dispute under New Mexico’s Uninsured Motorist Act.  As a decision had not yet been made on the issues at that level, the federal court looked to legislative intent and rulings by other courts.  It concluded that the legislative intent was to protect the public from culpable underinsured motorists and that the phrases “injury to or destruction of property” and “property damage” do not ordinarily include theft.

The court observed that the insured plaintiff was correct that the New Mexico Supreme Court had liberally construed New Mexico law in favor of insureds.  The court rejected the insured’s position he was covered based on concerns the court expressed, including that accepting the position would in effect add a requirement that the New Mexico legislature could have but purportedly had not enacted – that every automobile liability insurance policy in New Mexico provide coverage for auto theft.
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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 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.