New Mexico's family purpose doctrine arises frequently in car accidents. The situation most frequently arises in personal injury claims where a child or young adult has caused an accident, and the inured party seeks recovery against the parents.
Questions arise frequently on both sides of accident. The person injured as a result of the accident will want to know may be held responsible for the accident. The other side, often the parents, will want to know the extent of their own liability for the accident. The issue is particularly important when the vehicle the child is driving is uninsured or underinsured. In New Mexico which leads the nation in uninsured drivers, this problem arises as often as not.
The law in New Mexico is pretty well established as set forth in the 1987 Supreme Court case of Madrid v. Shryock. The holding in Shryock has been codified in New Mexico Uniform Jury Instruction §13.1210.
Essentially, the law states that if the car was provided for general use for family members and/or was provided for use to the negligent driver for any purpose, then the head of household is liable for any damages caused by the negligent driver. It must be established that the head of household, typically a parent, provided the car to the negligent driver.
Incidentally, the Court in Shryock found that the facts did not meet the family purpose test. The young man who caused the accident actually owned the vehicle. He made all payments for the vehicle, insured the vehicle and paid for maintenance from his own personal funds. The only connection between his parents and the vehicle was the fact that they had co-signed on the financing. The Court found this was insufficient for liability for the parents.
The Court laid out the requirements in terms of control over the use of the vehicle stating:
Nothing was produced to overcome Vincent Madrid's denial of authority to control the use of the vehicle. Steven asserted that only he had such authority and, in fact, only he exercised that control over the use of the vehicle. The mere facts that Steven lived in the family home and that a family member was a passenger in the vehicle at the time of the accident are insufficient to establish a "family purpose."
In this case, the injured party is limited to recovery against the driver and his insurance company. In many cases, the result might be much different turning on the control of the vehicle. Evidence of control would include financial responsibly for car payments, auto insurance and maintenance among other factors. For those parents who do exert control over the vehicle, they would be well advised to carry ample liability coverage.