Updates on Insurance Coverage, Construction Defect
and Commercial Auto Law Developments
in Arizona and New Mexico
Greetings from Evans & Co. with another Case Notes summary of important developments in the courts where we practice. We write this month with updates on construction defect, insurance coverage litigation, and commercial auto law in the states of Arizona and New Mexico, which we last briefed about four months ago.  
Please recall that our past Case Notes are archived at and we would be pleased to bring current the decisions on which we've reported previously, at your request.
In Arizona, a Court of Appeals construes whether UM/UIM coverage for bodily injury arising out of “ownership, maintenance or use of an insured auto”, extends coverage to injuries that arouse out the later phases of an altercation which began inside a vehicle – and concludes it does not. Add this case to the many we have reported where courts draw the line in space where UM/UIM extends and ends, a never-ending development.
We digest a bad faith claim where the insured was found to have a meritorious claim for statutory bad faith damages, but not “clear and convincing” evidence to support punitive damages.
As reported in our prior Case Notes the business structure of “Certain Underwriters at Lloyds’ London” as they like to be called, gives them continuing problems with federal diversity jurisdiction.  Here we digest a case where the court required that the complaint itself (and not subsequent disclosures or related filings) disclose the actual domiciles of every subscriber to the underwriting “slip”. Lloyd’s underwriters on broadly subscribed scripts will find increasing difficulty in articulating diversity jurisdiction requirements as a consequence, and will find themselves remanded to state court.
Turning to New Mexico courts, we digest a pair of UM/UIM decisions, in federal court, where one spouse is found to be able to waive coverage for the other without express authority, and where a claimant failed to establish that his bodily injury arose from vehicle operations
The 10th Circuit Court of Appeals construes New Mexico law in regards the scope of general liability insurance for pollution cleanup. The insured discovered, through its own testing, soils on its property which were contaminated by hydrocarbons, and which might have posed a risk to nearby surface waters. However, no governmental nor private entity, threatened, brought suit nor regulatory compliance action, before the insured spent substantial sums on mitigation. The insurer argued successfully that the coverage was only for liability arising from third party claims, and this first party claim was excluded. Thus the insured will be incentivized to await – or even invite – suit or regulatory proceedings, before the next cleanup.  
Click here for our Case Notes for both states (16 pages).
Click here for Arizona only (7 pages).
Click here for New Mexico only (9 pages).
Click here to go to the Evans & Co. law firm website for firm information and access to prior case digests.

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