New Mexico Federal Trial Court Rejects Insurance Company’s Attempt to Deny Underinsured Motorist Coverage

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.

In support of its position, the insurance company filed a declaratory judgment action with the U.S. District Court for the District of New Mexico, seeking a declaration that it had no obligation to provide coverage under the insurance policy. The insurance company then filed a summary judgment motion with the district court, taking the position that the undisputed facts entitled it to a judgment as a matter of law.

The Judge presiding over the motion noted that the insurance company did not comply with Local Rule 7.1(a), which requires that a movant “determine whether a motion is opposed, and a motion that omits recitation of a good-faith request for concurrence may be summarily denied.” The Judge then took the unusual step of admonishing the insurance company’s counsel to comply with the rule with respect to future filings of motions, advising that failure to comply with the rule would result in summary denials of motions. Notwithstanding its concerns over the conduct of counsel for the insurance company, the court reached the merits of the insurance company’s motion.

The court reasoned that there was not undisputed evidence in the record before the court of availability of $400,000 in coverage from the Sheriff’s Office. Therefore, the court reasoned, the insurance company was not entitled to judgment as a matter of law that the $250,000 in coverage under the deceased’s insurance policy coverage was completely offset. Accordingly, the court denied the insurance company summary judgment in the declaratory judgment action.

If you, a family member, or other loved one has been injured in an New Mexico car accident, you may be entitled by law to receive a financial recovery. Recovering personal injury damages can help people pay out-of-pocket costs including lost wages and medical bills. You should not have to navigate the legal process alone. We are here to help. To understand more about your case and how it can be pursued to maximize your financial recovery, call New Mexico personal injury lawyer Matthew Vance. At the Law Office of Matthew Vance, P.C., we provide a free consultation and can be reached at (505) 242-6267 or send us a message online.