Railway Not Released from Liability After Accident on New Mexico State Highway 6

In some New Mexico personal injury cases the plaintiffs can seek to hold multiple parties accountable for payment of monetary damages. A federal trial court recently handed down a ruling denying a release to a railway after the plaintiffs settled with other property owners.

Litigation followed after a car collided with a cow on New Mexico State Highway 6. The people who were in the car at the time of the accident and sustained damages sued the partnership that owned the cow and two of the partnership’s employees or agents. The plaintiffs sued in New Mexico state court and the defendants took the position during the litigation that the cow entered the highway by jumping over a gate owned and maintained by a railway. The plaintiffs filed a separate lawsuit against the railway asserting that the railway’s negligence resulted in the cow gaining access to Highway 6. The railway demanded by letter that the partnership sued in the first lawsuit hold the railway harmless and indemnify it. The railway also demanded that any settlement negotiated with the partnership or its insurance carriers include a full and complete release of the railway. Counsel for the partnership responded with a letter denying the alleged obligations to defend and indemnify the railway.

The plaintiffs and defendants to the first lawsuit participated in a mediation and arrived at a settlement in the amount of $3 million, to be paid upon execution of a release to be prepared by the defendants. Disputes arose because the parties could not agree on terms of settlement documents that reflected the agreement reached following mediation. The railway, which was not a named party in the suit that had been settled but rather to a separate lawsuit, took the position that it was released. This was based on settlement agreement language contemplating the release of “all named or potential parties to the litigation.” The plaintiffs asserted the railway was not released.

The federal trial court resolving the conflicting positions looked to New Mexico case law holding that a purported third-party beneficiary of a release bears the burden of proving it was an intended beneficiary of the release. The court concluded that the railway had not met its burden of proof based mostly on the dictionary definition of “potential” as including “possible” or “capable of being or becoming.” The court reasoned that at the time the parties to the first lawsuit brought by the plaintiffs signed the settlement agreement, the railway was named in a separate litigation. Because the railway was a known and certain party in separate litigation, the court was not convinced the railway was also a potential party to the lawsuit that was settled. The court also found significant the railway’s alleged non-participation in mediation and other settlement discussions. The court granted the plaintiffs partial summary judgment, ruling that the railway was not released from liability and could not sustain a defense of release from liability.

If you or a loved one suffered personal injuries in an accident, there may be grounds for a recovery of monetary damages from parties who are responsible. In some situations, more than one party can be held responsible. Collecting monetary damages can help people who have suffered personal injuries with out-of-pocket costs, including medical expenses, lost wages, and pain and suffering. To understand more about your case and how it can be pursued to maximize your 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 online.