New Mexico Injury Attorney Blog

A recent case from the New Mexico Court of Appeals is good reading for both merchants and shoppers with the coming holiday shopping season. The case of Holguin v. Sally Beauty Supply illustrates some basic "do's and don'ts" of holiday shopping.

The case stemmed from the use of one of the "eco-friendly" bags that have become so popular these days. Ms. Holguin was shopping at Sally Beauty Supply with her eco-friendly bag. While doing so, she put merchandize in the bag and headed to the counter to ask some questions. Before she could get there, the assistant manager stopped her, accused her of shoplifting, and detained her until the police arrived. Upon refusal to sign a "no trespass" statement and admit guilt, Ms. Holguin was arrested.

It is not clear from the record, but apparently the criminal shoplifting charges were never filed or the charges were dismissed resulting in a personal injury lawsuit against Sally Beauty Supply for "false imprisonment, false accusation of shoplifting, and false and malicious abuse of prosecution."

The district court judge dismissed the action on the grounds that merchants have a qualified privilege to detain a shopper when they believe the shopper willfully concealed merchandise under NMSA §30-16-23 and therefore were immune from suit.

The New Mexico Court of Appeals framed the issues as follows:

"(1) whether a customer who places merchandise into a reusable, personal canvas shopping bag, without more, has "willfully concealed" merchandise; and (2) whether a statutory presumption of intent applicable to a criminal prosecution for shoplifting also applies to the merchant's conditional privilege."

Unlike the district court, the Court of Appeals answered in the negative to both these questions resulting in a reversal of the district court's grant of summary judgment. The case was then appealed to the New Mexico Supreme Court where certiorari was denied making this case the law for now.

The statute in question, NMSA § 30-16-23 states that if merchant has:

"probable cause for believing that a person has willfully taken possession of any merchandise with the intention of converting it without paying for it, or has willfully concealed merchandise... the merchant may...take the person into custody ...Such taking into custody or detention shall not subject...merchant to any criminal or civil liability."

The Court engaged in a lengthy discussion on the meaning of the terms probable cause, intent to convert (steal), and willfully conceal. The Court stated plainly that the burden is on the merchant to show probable cause at the time of the customer was detained.

The Court recognized that in self-serve stores as most stores are today, there are countless situations where merchandise might be concealed without the intent to steal. As such, simple concealment is not enough. The burden is also on the merchant to show the person concealed the merchandise with the intent to steal it.

The Court acknowledged that under the criminal law of shoplifting, there is a presumption of intent to steal once the merchandise is concealed. However, this is a mere presumption and it is left for the jury to decide. In any event the Court ruled that the statutory presumption of intent under the criminal shoplifting statute did not apply to a merchant's qualified privilege and immunity under NMSA §30-16-23.

The Court stated that whether the merchant has met the burden of proving probable cause is determined by the totality of the circumstances. In this particular case, the totality of the circumstances did not suggest that requisite intent to support summary judgment. The court basically said that this issue should be decided by a jury and not by the court on summary judgment.

In light of the prevalence of eco-friendly shopping bags, which presumably are for shopping, there are likely to be a number of such encounters during the holiday season. Both merchants and shoppers should proceed with due care in light of this decision. After all, there are significant risks for both.

Collins & Collins, P.C.
Albuquerque Attorneys

A home is often the single biggest investment one can make, and there are many types of risks associated with home ownership. The purchase of homeowners insurance can help minimize some risks, and is typically required by most mortgage lenders.

There are varying levels of insurance coverage. The level of coverage is set forth in the insurance policy limits. There will be different limits for different coverages within the same policy. Though it is generally advisable to get as much coverage as financially possible, a basic homeowners insurance policy can be an affordable option for those just starting out or for those needing to cut back on expenses.

A homeowner's policy typically includes two main sections: property and liability coverage. The property section includes coverage for the actual home and detached structures, like garages and sheds. Detached structures are generally insured for approximately 10% of the dwelling limit.

Keep in mind that the dwelling limit does not consider the value of the land the home sits on, so this limit will not reflect the full market value of the home. Nor should the dwelling limit reflect the amount of the mortgage, as this can leave a homeowner either underinsured or paying more for insurance than can be used.

In choosing property coverage limits, the dwelling limit can be considered in terms of "actual cash value" (ACV) or "replacement cost" (RC). ACV considers what it would cost to replace your home, less depreciation. RC reflects what it would cost to repair or rebuild your home without depreciation.

The property section also includes personal property coverage, which is the contents of the home and is usually covered at 50% to 70% of the dwelling limit. This coverage may also include "off-premises" coverage for items that incur loss outside of the home. Personal property coverage can also be considered in ACV or RC terms. RC coverage allows for replacement of an item with a similar type and quality at current prices, while ACV coverage considers depreciation of an item upon loss.

Loss of use, also known as additional living expense, is another coverage outlined in the property section of the basic homeowners policy. This coverage provides for expenses a homeowner incurs when unable to use the home due to a covered loss, and is typically limited to 20% of the dwelling limit. These expenses may involve staying at a hotel or eating at a restaurant while repairs are being made.

The second section of the basic homeowners policy involves liability coverage. This coverage is available when you or a family member has been found legally responsible for causing injury to someone or to someone's property. It helps protect against the financial loss resulting from a lawsuit. The typical limit is $100,000; however, this amount can fall short when a serious injury is involved. Like most insurance, the risk of inadequate insurance depends on your financial circumstances. Likewise, the ability to purchase additional levels of coverage may not be financially possible. But, it is wise to carry as much as possible to cover any potential judgment.

Medical payments coverage, or guest medical, is also found under the liability section and provides for payment of medical expenses incurred by someone who is accidentally injured on your property regardless of legal liability. Limits generally begin at $1,000 per person, per accident. Again, this is generally inadequate and one would be wise to carry greater limits if financially feasible.

The basic homeowners policy can help minimize the risk of typical losses that a homeowner may face. It may not cover every conceivable loss, but it will satisfy the requirements of most mortgage lenders and relieve some of the anxiety of managing one of life's biggest investments.

Collins & Collins, P.C.
Albuquerque Attorneys

Costs can be significant in a personal injury claim. These costs can include the standard filing fees, depositions costs, travel costs, and so on. In addition, there can also be significant expert witness costs on both sides of the lawsuit.

In some cases, a number of experts in different fields may be necessary. For instance, accident reconstruction experts may be required to determine the cause of an accident. Medical experts may be required to determine the cause and extent of injuries. Vocational rehabilitation experts may be required to determine disability. Economic experts may be required to prove loss of future income. There are countless other situations where the specialized knowledge of an expert would be needed. And again, these costs occur on both sides of the lawsuit.

Depending on the nature of the accident and the lawsuit, these costs can be enormous. For instance, for every expert there will be a deposition by the other side's attorney. Often out of state experts are required due to required expertise. The attorneys will have to travel to the expert, often requiring expensive travel expenses. The attorney or party requesting the deposition will also have to pay what are often very hefty hourly rates to the expert.

Many of the same costs, other than the hourly fees, apply to fact witnesses. Just like the experts, these witnesses are often out of state the same requiring the same travel expenses for their deposition. Finally, there are the court reporters that must be in attendance at each and every deposition. Court reporters are very expensive.

As one can see, a personal injury lawsuit can get very expensive very quickly for both sides. In light of this fact, clients generally want to know who will pay for these costs. In most run of the mill contingency cases, the costs are advanced by the attorney. The attorney is then reimbursed from any settlement or verdict. So ultimately, the client is responsible since the costs are paid out of the total verdict or settlement. This in turn reduces the proceeds that the client eventually receives.

Because the client is ultimately responsible for costs, clients need to consider all the possible costs of litigation at each stage of the case. Litigation costs should be carefully considered during settlement discussions. This includes pre-litigation settlement negotiations when potential costs are not so apparent as when the litigation begins.

Often times, clients have a figure in mind of what their case is worth. Many personal injury cases are emotionally charged and deeply personal which will sometimes influence the desired outcome. Without going into a discussion of the accuracy of these valuations, suffice it to say that the clients are prone both to overvalue their claims and to fail to consider the costs of getting to that figure when emotions rather than reason drive the valuation process . Often times, however, these costs will more than offset the possibility of a higher verdict or even a higher settlement further into the litigation process.

Though it can be very hard, it is generally best to try to look at the case in purely economic terms. This means carefully assessing the strengths of the case, the risks of litigation and the costs of litigation from beginning to end. Failure to approach the case with all this mind can result in a client netting less on a larger settlement or verdict than on a smaller one reached earlier in the process. And that is a net loss that can often be avoided.

Collins & Collins, P.C.
Albuquerque Attorneys

The $12 million verdict against Progressive Insurance last week in Albuquerque brings up a host of interesting issues. First, it is worth noting that the judgment was on counter-claims following a lawsuit initiated by Progressive against its own insured. Second, the verdict was 9 years in the making and the trial ending last week would not have occurred at all but for the persistence of the defendant/counter-claimant's attorney and the thoughtful analysis of the New Mexico Court of Appeals in its 2009 unpublished opinion Progressive v. Vigil.

The case involved a rollover car accident that resulted in the death of one of the passengers and serious injuries to 5 others. The police first suspected that alcohol was a factor in the crash but the driver later tested 0.0 on his blood alcohol test and the DWI related manslaughter charges were dismissed.

The gist of the case revolves around the bad faith denial of insurance coverage by Progressive Insurance for the passengers injured in the vehicle. Before getting to last week's trial, the case was dismissed on partial summary judgment by the first district court trial judge where the Vigil's claims were essentially dumped out. The judge in the first trial found that the plaintiff had failed to present evidence of coverage. In doing so, the court restricted consideration to the language in the policy itself, excluding from consideration verbal conversations with the agent, numerous automated responses, and subsequent notices indicating that the policy was in good standing.

The Court of Appeals found that this evidence should not have been excluded. Instead, it should have been presented to the jury for the jury to determine whether or not coverage was in place at the time of the accident. The Court stated that in the interpretation of insurance contracts, the courts are not restricted to the policy itself but may look to other evidence beyond the policy. Restriction of consideration to the policy itself is referred to as the "four corners" rule which means that the analysis is restricted to the four corners of the contract.

The Court of Appeals specifically rejected the four corners rule in cases involving consumer insurance contracts. The Court recognized that the great majority of policyholders rely largely or entirely on the representations of their agents. The court tacitly acknowledged that few if any consumers of insurance read the policy cover to cover. As such, the Court ruled that extrinsic evidence outside the contract such as conversations with an agent, automated responses, correspondence, and notices could be considered when ambiguity arises as to the terms of the contract. Specifically, the Court of Appeals stated:

"In this case, the evidence of the representations regarding the change in coverage to delete one vehicle and add another, followed by the repeated representations by the automated system and the customer service representatives about the November 15 premium date must be addressed at trial to determine whether the facts support a temporary contract of insurances, notwithstanding the existence of prior unambiguous policy language reflecting an end date of November 3, 2002." The Court of Appeals therefore reversed the district court's summary judgment on the coverage issue sending the case back to district court for retrial.

The evidence submitted to the jury this time around would have never gotten to the jury if the analysis was restricted solely to the insurance policy itself. Had the analysis been restricted to the policy itself, the jury would not have heard all of the evidence that the premiums were either current or at the very least that the Vigils were led to believe the premiums were current. Instead the jury would have heard only that Progressive made payments on the lapsed policy of a deadbeat client for which it sought reimbursement.

Fortunately, due to the New Mexico Court of Appeals and the persistence of the Vigils and their attorney, the jury did hear the evidence. And the jury spoke loud and clear. Suffice it to say that in light of the evidence formerly excluded by the original trial judge, the jury found Progressive's behavior to be outrageous enough to justify the $12 million verdict. In short, Progressive's miscalculation in filing a lawsuit against its own insured backfired in the worst possible way. We will have to wait to see how this verdict will be spun to paint Progressive and the insurance industry as the victim of greedy trial lawyers and opportunistic plaintiffs.

Collins & Collins, P.C.
Albuquerque Attorneys