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 evanslawfirm.com and we would be pleased to bring current the decisions on which we've reported previously, at your request.
In Federal Court applying Arizona law, State Farm prevails on a contested UM/UIM claim on the grounds that the claimant was not an insured under the policy, because he did not live with the named insured. A second Federal Court case upholds properly executed cancellation for non-payment of premium procedures.
A third Federal Court case, applying Arizona law, denies the insurer summary judgment under an assault and battery exclusion, while holding the exclusion was unambiguous and applied to the facts of the case. The strange and troublesome “reasonable expectations of the insured” doctrine prevented summary proceedings and required trial – and no doubt resulted in exposure to the insurer that would not have existed in the majority of jurisdictions which reject this doctrine. Note “reasonable expectations” was applied here to a commercial insured with reasonable experience with insurance and an insurance agent, so the argument that it ought to apply to personal lines only carries no weight.
Turning to New Mexico cases, we digest an important Federal District Court case, applying and interpreting New Mexico’s anti-indemnity statute as it relates to contractual obligations to name the indemnitee as an additional insured on the indemnitor’s liability insurance policy. As we have seen in some other jurisdictions, the political “solution” that lead to the anti-indemnity statute, nonetheless permits the backdoor option of achieving what is forbidden, via the insurance of the indemnitee as an additional insured. The case also discusses preparations that may be indicated in litigation for preserving and advancing these issues, and for advancing issues regarding apportionment of damages among multiple insurers.
We also offer a truck insurance case, discussing UM/UIM coverage where a bad faith claim against the UIM insurer was brought more than four years after the facts occurred, on which the bad faith claim arose. The court rejects the six-year “written contract” statute of limitation, because the claim is statutory even though it arises from an insurance contract, and rejects the “discovery” theory which arguably would extend the limitations period. If you have a new suit on an old claim this case may provide guidance.
Clickherefor our Case Notes for both states. (20 pages)