Updates on Insurance Coverage, Construction Defectand Commercial Auto Law Developments
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 Arizona, their Supreme Court discusses the scope and effect of equitable indemnity, which subject should be of particular interest to insurers who seek contribution from other insurers (or from tortfeasors). We have used Arizona equitable indemnity law in the past, to collect for subrogated insurers (who also took an assignment from the injured party), nearly 300% of what the insurer paid for the claim and assignment (and attorneys’ fees).
We digest an Arizona Court of Appeals decision, which applies the peculiar and troubling bad faith law of that state, to uphold a jury verdict that the insurer did not cover the claim, but that the insurer was liable for bad faith damages for the manner in which it communicated with the insured about the claim. So particularly careful claims practice, and letter writing is in order in respect of Arizona claims.
In New Mexico, we analyze a Federal Court case, applying New Mexico law, which held that bifurcation of bad faith claims is appropriate, with a stay of same, pending resolution of the underlying coverage dispute. Counsel for plaintiffs and insureds are generally eager to get the bad faith claims in front of the jury at the same time as the coverage claims (as they did in the Arizona case discussed just above), but more temperate states, now clearly including New Mexico at least in federal court, see the prejudice in trying all at once and allow bifurcation and a stay.
In a second New Mexico case, the Federal Court discusses the law of forum non conveniens, as it applies to coverage actions brought in a state other than the site of the loss. We set out the criteria for getting a transfer to another Federal District Court, which were met here, and which relocated the case to Arizona. (One wonders why one would file a bad faith coverage case in New Mexico if Arizona had jurisdiction, given the plaintiff-friendly state of Arizona law!)
Click here for our Case Notes for both states (24 pages).