New Mexico Injury Attorney Blog

In case of an uninsured/underinsured motorist claim on an automobile accident in New Mexico, the law requires that an insured party notify their insurance company of the uninsured/underinsured claim "as soon as practicable."

The requirement is a little bit vague but what it means in practice is that you must notify your carrier of an uninsured/underinsured motorist claim as soon as it becomes evident that the insurance coverage of the other driver is inadequate to compensate you for your injuries and damages.

This determination may take some time since insurance companies are not always willing to turn over insurance policy limits information on their drivers. Often times, insurance companies will turn over policy limits information only when a demand in excess of insurance policy limits is made and the insurance company feels that legitimate claims may be made in excess of policy limits.

This information may come well into the personal injury claims process. In fact, it may well be that the policy limits are not known until formal discovery is conducted in the litigation process. As such, "as soon as practicable" could be weeks, months or years after the accident has occurred. Only once an insured driver knows of a possible uninsured/underinsured motorist claim must the driver notify his or her insurance company of the claim.

The statute of limitations, always something to watch closely in every personal injury matter, is less of a concern in uninsured/underinsured motorist claims. Personal injury claims, including auto accidents, have a 3 year statute of limitation. The limitation period is shortened to 2 years in case of governmental defendants. However, the statute of limitations on a uninsured/underinsured motorist claims is 6 years. An uninsured/underinsured motorist claim is contractual in nature and disputes on written contracts have a 6 year statute of limitations.

Keep in mind that the statute of limitations is not the same as the notice requirement. The notice to a driver's insurance company must be made once the uninsured/underinsured claim is known. Of course, if this comes years after the accident, the longer statute of limitations on uninsured/underinsured claims provides the driver with added protection.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

The Tort Reform movement paints every personal injury claim as an assault on small business, doctors, health care, the public, the very American way of life. Every jury verdict is claimed as a victory of greedy trial lawyers and opportunistic plaintiffs who are just trying to profit at the expense of America. The tort reformers are not subtle in their claims. Unfortunately, their claims are completely false directed toward the protection of insurance industry profits.

This truth is born out in court every day, in every state, in every personal injury case. The mention of insurance coverage in personal injury actions is strictly prohibited. It is argued that jurors would unfairly factor the coverage into their decision-making. What escapes reason and discussion in the Tort Reform error is that jurors routinely and erroneously factor into their decisions the possibility that a large verdict would unduly harm the defendant whether it be a doctor, small business, large business, or individual.

In fact, this lie underlies the entire Tort Reform campaign which relies on the fact that the jury and the public are never told the truth behind each and every personal injury case. That truth is that personal injury cases are rarely filed at all unless there is insurance coverage. Insurance is called upon to reimburse plaintiffs for their injuries. In most cases, there is no point in filing against an uninsured defendant. Most uninsured individuals or businesses have no assets either. One of the first things anyone does upon the acquisition of wealth or assets is to obtain insurance to protect them. Where the defendant is uninsured, which is quite typical in auto accidents in New Mexico, the typical best case outcome is a large but uncollectable verdict. Few lawyers would put their clients or themselves through such a futile endeavor.

The truth is that the insurance industry, which records obscene earnings and profits each year, relies on the jury's lack of knowledge to protect not the doctor, the small business or the public but to protect its own profits. In the end, due to the huge success the lies of Tort Reform have in had on swaying juries against injured plaintiffs and effectively passing on the insurance industry's liability, it is both the public and the plaintiff who are harmed.

The Tort Reform movement in its successful campaigns for the protection of the insurance industry effectively shifts the costs of the insurance industry to the injured plaintiff and the public. After all, who pays when a plaintiff is horribly injured, forced to endure a lifetime of medical treatment and often unable to work? Medicare, Medicaid and Social Security then pick up the tab for what was contractually the responsibility of an insurance company. These costs are of course passed on to the public through taxes and debt.

Keep this in mind the next time you hear that personal injury suits harm the public. It is not the personal injury suit, the attorneys, or the plaintiff that hurt the public, it is the passing on of insurance coverage responsibilities from the ever successful and profitable insurance industry to the public health and welfare agencies that causes the true harm to the public.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

There is a strong public policy for the provision of uninsured/underinsured motorist (UM/UIM) coverage in auto accidents. In New Mexico, this policy dictates a liberal reading of both the statute governing uninsured motorist coverage as well as the auto insurance policies themselves.

An auto insurance policy will be held to provide uninsured coverage to the same degree as the liability coverage unless there is a specific signed rejection of the UM/UIM coverage attached to the policy. In addition, the UM/UIM coverage will have the same geographical coverage as the liability coverage under the policy. Because insurance policy limits are almost always an issue in car accident cases, the laws and cases governing uninsured motorists are critical. The issue can even arise on vacation or other travel abroad.

In the 2001 case of State Farm v. Marquez, the New Mexico Court of Appeals held that UM/UIM coverage in the policy extended to coverage for an automobile accident that occurred in Mexico. The court held this despite the fact that the policy had a specific exclusion of uninsured/underinsured coverage in Mexico.

The court ruled that because the policy provided liability coverage in Mexico, there was UM/UIM coverage as well. The court ruled that the policy behind uninsured/underinsured motorist coverage dictated that the uninsured/underinsured coverage be territorially coextensive with the liability coverage despite the language in the policy excluding uninsured motorist coverage in Mexico.

The court recognized that an insurance policy could exclude both liability and uninsured motorist coverage outside the United States. However, the uninsured coverage would follow the liability coverage. The court expressly refused to address whether or not an insured driver could reject uninsured coverage outside the United States. In light of subsequent case-law, it is clear that a policy holder could waive uninsured coverage outside the U.S. when the rejection is signed and properly attached to the policy.

If you have suffered personal injuries as a result of an automobile accident outside the United States, you would be well advised to have an experienced accident and injury attorney review your policy for possible coverage. Chances are that there is no coverage on the other driver and little chance of direct recovery through a lawsuit against the other driver.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

Medicare/Medicaid will have a lien on all funds from a personal injury settlement or judgment in cases where Medicare/Medicaid benefits were received. Medicare/Medicaid is very aggressive in pursuing these liens. Failure to properly account for and reimburse Medicare/Medicaid for its liens can result in serious penalties for both the personal injury plaintiff and his or her attorney.

Medicare/Medicaid often claims liens on all medical expenses, both past and future. These claims can significantly erode the funds received by the injured plaintiff. This is particularly so in cases where the personal injury plaintiff is seriously injured and there is little or no liability insurance and the defendant has no assets to cover a judgment. This is frequently the case in auto accidents where the at-fault driver is uninsured or underinsured.

Because Medicare/Medicaid typically claims a lien on all medical benefits provided by Medicare/Medicaid, the lien is often overstated, often times greatly overstated. Medicare/Medicaid is not entitled to recover on medical benefits that are not related to the incident that is the subject of the personal injury claims. This is frequently an issue since many of those injured in accidents had previous medical issues for which they were receiving and continue to receive Medicare/Medicaid benefits.

Medicare/Medicaid will often issue a lien that covers all medical benefits received by the plaintiff following the accident. Though the plaintiff may be receiving treatment for the accident related injuries, he or she will still be receiving benefits for other medical conditions during this time period. It is therefore important to go through the lien item by item to insure that Medicare/Medicaid is not claiming a lien on unrelated medical benefits.

Once these unrelated benefits are identified, Medicare/Medicaid will reduce the lien accordingly. In some cases, these unrelated medical expenses may form the bulk of the lien. A careful review of the Medicare/Medicaid lien can result in substantial savings to the plaintiff. In short, a reduction of the Medicare/Medicaid lien results in a dollar for dollar increase in the funds received by the plaintiff from the settlement or verdict. Likewise, each dollar paid to Medicare/Medicaid reduces the amount received by the plaintiff making it very important to carefully review and evaluate every item claimed on the Medicare/Medicaid lien.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

Many drivers that are involved in auto accidents have no medical insurance. As a result, they are often unable to get necessary medical treatment for their injuries. This is especially frustrating when the accident was caused by the negligence of the other driver. As with many insurance issues, the injured driver's rights can be somewhat confusing.

The issue comes up in frequently in auto accidents in New Mexico. Many times, the other party has no insurance or has very little insurance. However, the issue comes up just as often when the other driver does have auto insurance. In fact, this situation is even more frustrating when the other driver has insurance but the insurance company refuses to advance medical expenses despite their insured driver's clear liability for all injuries and recoverable damages including medical expenses suffered as a result of the accident.

Unfortunately, this is the case more often than not. The insurance company for the negligent driver has no duty to advance medical expenses for the innocent driver's injuries. The insurance company has a duty only to its own insured. As a result of the absence of any duty to the injured driver, insurance companies routinely refuse to advance medical expenses. In fact, it is rare that an insurance company would advance medical expenses to an injured driver other than its own policy holder.

New Mexico has the highest rate of uninsured drivers in the nation. Uninsured/Underinsured Motorist (UM/UIM) coverage is critical since the only coverage an innocent driver is likely to have in an auto accident is his or her own insurance. In addition to UM/UIM coverage, all drivers should carry their own MedPay coverage. MedPay (Medical Payments Coverage) provides coverage for just the situations discussed here.

MedPay provides for the advancement of medical expenses for its insured in case of an accident. MedPay is no-fault insurance so it is immaterial whose fault it is. MedPay allows an insured driver to seek immediate medical attention with the insurance company billed directly by the medical provider. An insured can choose the level of MedPay coverage which typically begins at $5000 limits. This means that $5000 in medical expenses will except in rare circumstances be automatically covered for injuries suffered in an auto accident.

Unfortunately, many New Mexicans have no auto insurance. They are equally likely to have no medical insurance. As a result, MedPay may provide the only possible source of funds for medical treatment following an auto accident. As with UM/UIM coverage, drivers are wise to carry as much MedPay as possible. This is particularly true for those without medical insurance since even minor auto accidents can result in medical expenses that far exceed $5000.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

Once again, the New Mexico Court of Appeals has reinforced the public policy of making uninsured/underinsured motorist (UM/UIM) coverage a part of every automobile insurance policy issued in New Mexico. Farmers v. Xian Chen stated just that in its ruling further reiterating that alleged waivers of uninsured/underinsured coverage are to be strictly construed against the insurer.

In Xian Chen, the Chens obtained liability coverage in the amount of $100,000 per person, $300,000 per occurrence. Farmers also had the Chens sign an Uninsured Motorist Election in the amount of $30,000 per person and $60,000 per occurrence. The Election stated that the Chens had the option of purchasing greater UM/UIM coverage but the Election was not attached to the policy and was not clear as to the amount of the coverage that the Chens were giving up. Ms. Chen was involved in an accident that killed her and injured her son. The accident was caused by the negligence of an underinsured driver.

Farmers denied the underinsured coverage claims over the reduced $30,000/$60,000 limits. The court in Xian Chen called upon several prior cases in the area in refuting Farmers' position. The court first cited Romero v. Progressive to state that insurers have a duty to offer UM/UIM coverage up to the liability limits of the policy. An election to carry less than liability limits constitutes a rejection of UM/UIM coverage. The court then cited Romero v. Dairyland for the rule that a valid rejection of UM/UIM coverage must clearly and unambiguously alert the insured to the rejection of UM/UIM coverage. The court then moved on to the recent case of Marckstadt v. Lockheed Martin where two essential requirements were set forth for the rejection of UM/UIM coverage; 1) there must be a written rejection of UM/UIM and rejection to be valid must be made knowingly and intelligently, 2) evidence of the rejection must be attached to the policy, and consistent with Romero v. Dairyland, must "clearly and unambiguously call to the attention of the insured that fact that such coverage has been waived."

The Court in Xian Chen found that the Chens had not knowingly and intelligently waived UM/UIM coverage because no single document in the transaction contained all the information necessary for a "knowing and intelligent" waiver. Instead, the waiver language, the liability limits, the UM/UIM limits and the amounts rejected were scattered across several documents. For the same reason, the notification requirement in Marckstadt was not met. Due to the deficiencies in the waiver, the Chens were entitled to the full amount of UM/UIM coverage.

There are a couple of lessons to be learned from this case. First and most important, it is extremely unwise to waive UM/UIM coverage. This case perfectly illustrates the dangers of uninsured/underinsured motorist in New Mexico which has the highest rate of uninsured drivers in the nation. Driving without UM/UIM coverage is often devastating. Realistically, even the higher limits of $100,000/$300,000 did not come close to compensating Mr. Chen and his son for the loss of a wife and mother. Which brings us to the second lesson, get as much UM/UIM as you can. Related to the first two lessons, there are insurers that will do whatever they can to get you to waive UM/UIM coverage completely or take reduced UM/UIM coverage. They may do this by either by hiding the ball as was done in the Xian Chen case or they may take the more common route of just flat out convincing drivers that UM/UIM coverage is a waste of money.

Any driver facing this situation should ask themselves why the state would go through so much trouble to force UM/UIM coverage and more importantly why some insurers go to such lengths to avoid it. This should be a rather quick analytical process. Upon completion, the driver should promptly find a new agent and a new insurance company that is equally concerned with the driver's welfare as it is for its own profits.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

The law in New Mexico regarding the rejection of uninsured/underinsured motorist coverage seems to be turned on its head in the recent New Mexico Supreme Court case of Marckstadt v. Lockheed Martin, consolidated with the 10th Circuit Court of Appeals case of Federated Insurance v. Martinez.

The case involved the purchase automobile insurance for company vehicles. An employee was injured in an auto accident and made a claim against the uninsured/underinsured coverage on the policy. There was no written rejection of the coverage and the rejection was not attached to the policy. However, the employer indicated that it was understood that the coverage was waived. The Court made no indication that its opinion was fact specific. The case should raise concerns for every purchases of insured. I will not even begin to address the problems with the possible complicity between the insurance company and the employer who no doubt saved a few bucks in the denial of its employee's rightful recovery of damages for his injuries.

The law seemed to be well established requiring a written rejection of uninsured/underinsured motorist coverage under New Mexico law to be both signed by the insured and attached to the policy. The case of Arias v. Phoenix Indemnity issued just in July 2009 said as much. So it is surprising that Marckstadt would come so quickly on its heals setting aside what seemed to be both good law and sound public policy.

Instead Marckstadt takes the rather perplexing position that rejection of uninsured/underinsured motorist converge must be written but need neither be signed nor attached to the policy. The court then stated that there should be some evidence that the insured's rejection was "made part of the policy by endorsement, attachment, or some other means that calls the insured's attention to the fact that coverage has been waived."

What in the world does this mean? Can the language be hidden in small print? Can it be written on the hand of the insurance agent? Could it be whispered in the agent's office with failure to acknowledge taken as acquiescence? In fact, it means nothing other than the insurance companies will be allowed every possible avenue for denying coverage to unwary customers. It is just one more accommodation to the insurance industry who will used every advantage to avoid payment of claims to preserve profits.

In the past, I would usually end by saying that when faced with an accident that calls your uninsured/underinsured motorist coverage into question, you would be well advised to seek the advice of a New Mexico Attorney. As the law now stands, you would be well advised to seek that attention when reviewing the insurance policy coverage limits. As a practical matter, since it seems clear that the rejection could be hidden in the vast array of documents involved in the auto insurance policy process, and therefore will be hidden, you would be well advised to write on the face of the application that you are not rejecting uninsured/underinsured coverage which may be the only possible means of recovery for your injuries. Then have your friendly insurance agent initial the statement next to your own.

Parrish Collins
Albuquerque Attorney
www.CollinsAttorneys.com

Punitive damages are awarded in limited cases for the purposes of punishment of the defendant. Punitive damages also serve to deter similar such behavior by the defendant and others similarly situated. In New Mexico personal injury cases, punitive damages are awarded only when a defendant's behavior is found to be malicious, willful, reckless or wanton.

Many New Mexico personal injury claims assert a claim for punitive damages but the "malicious, willful, reckless or wanton" standard is pretty difficult to meet. In essence, the defendant's behavior must be pretty outrageous in nature to justify a punitive damages jury instruction from the court.

In auto accident cases, the question then arises whether insurance will cover the punitive damages awards. This question actually involves two separate elements. First, will the negligent driver's auto insurance liability limits cover a punitive damage award? Second, assuming that the negligent driver's insurance is inadequate to cover the total damages award, will the innocent driver's uninsured/underinsured motorist coverage cover any part of the punitive damages award? These same issues would arise in a pre-trial or pre-litigation settlement. On the other hand, it is a rare and generous insurance company on either side of the claim that would admit the propriety of punitive damages prior to litigation.

The answer to both questions is yes. Insurance coverage, both liability and uninsured/underinsured motorist coverage, provides coverage for punitive damage awards in a New Mexico auto accidents. The innocent injured driver is entitled to recover for all allowable damages under the New Mexico personal injury law.

The issue will generally not arise in the case of liability coverage since liability coverage in New Mexico auto accidents is generally grossly inadequate. New Mexico carries the highest percentage of uninsured drivers in the nation with many more severely underinsured. Thus, the liability coverage limits will typically not even cover the compensatory damages, much less the punitive damages.

Instead, the issue will more often arise when the innocent driver makes a claim on his or her uninsured/underinsured motorist policy. Some insurance companies will attempt to deny these legal claims. However, the law is clear and has been clear for quite some time since the 1991 New Mexico Supreme Court case of Stinbrink v. Farmers Insurance Company of America. The Court in Stinbrink made clear that uninsured/underinsured coverage does provide coverage for punitive damages.

Even here, however, policy limits often become an issue. New Mexico drivers typically carry inadequate liability limits to cover the harm that they do. Likewise, they generally carry woefully inadequate uninsured/underinsured coverage as well. As such, the findings in Stinbrink are purely academic in most cases as the insurance policy limits will always dictate the coverage in any particular auto accident case.

Insurance issues are confusing. The policies themselves typically provide very little illumination and may leave some even more confused after reading. Thus, it is important to consult with a New Mexico attorney to address the many coverage issues related to a New Mexico personal injury claim.

Alysan Boothe Collins
Albuquerque Lawyer
www.CollinsAttorneys.com

Uninsured/Underinsured motorist coverage is vitally important to New Mexico drivers. New Mexico has one of the highest uninsured motorist rates in the nation with 29% of its drivers uninsured. Many more are underinsured meaning they carry only minimal liability coverage that will fall well short of covering any injuries they cause in an accident.

Uninsured/Underinsured (UM/UIM) motorist coverage can cause much confusion for motorists. This is particularly so with stacking of UM/UIM coverage. Stacking allows the insured driver to stack the coverage on several vehicles insured under the same policy. Stacking of UM/UIM coverage may be critical to an injured person recovery of damages.

Typically, UM/UIM is covered at the same level as the liability limits on the policy. As such, if a driver carries $25,000 in liability coverage, then the UM/UIM coverage will also be at $25,000. If the driver has 3 vehicles insured at $25,000 limits, then stacking will provide for a total of $75,000 in UM/UIM coverage.

UM/UIM coverage and the stacking of coverage is automatic on auto insurance policies in New Mexico. In order to either waive UM/UIM coverage or the stacking of UM/UIM coverage, the insurance company must obtain a rejection of UM/UIM coverage from the insured driver. Likewise, the insurance company must get an agreement with the insured driver to reject stacking of the coverage on all vehicles covered under the policy. Recent decisions have added some confusion to the issue stating that though the rejection must be made part of the policy, it need not be signed. This is contrary to prior case law.

In cases of serious auto accidents, the injuries can be very severe. Often, the medical costs alone, past and future, will far exceed $25,000 in cases of serious personal injuries. In these situations, stacking of coverage alone will provide the injured person with any reasonable compensation for his or her damages. Even this at times may prove grossly inadequate.

UM/UM is relatively inexpensive to carry. To be expected, because the coverage is such a good deal for its customers, some insurance companies will often try to talk drivers out of it. They will also try to convince the driver to waive stacking coverage.

All that a driver needs to know is that there is no good reason to reject uninsured/underinsured motorist coverage. Neither is there any good reason for waiving stacking of UM/UIM coverage. Such waivers of coverage benefit nobody but the insurance company. The consequences for the driver can be devastating leaving unrecoverable damages such as past and future medical expenses, lost earnings, disfigurement and permanent injuries, pain and suffering and the like.

www.CollinsAttorneys.com

As promised in my last post, I will set forth the issues of import for uninsured/underinsured motorist coverage in New Mexico addressed in Salaz v. Mountain States Mutual Casualty Company. The case is particular interest to injured passengers. However, the case also addresses several more general but equally important issues surrounding uninsured/underinsured motorist coverage.

First, and foremost, a passenger injured in an insured vehicle is covered by that vehicle's uninsured/underinsured motorists coverge. As such, if the other driver has insufficient policy limits to cover the person's injuries, the injured person can make a claim on the uninsured/underinsured provisions of the vehicle in which he or she was a passenger.

Secondly, there is indeed a consent to settle requirement, as asserted by Mountain States, in all uninsured/underinsured claims. In other words, an injured person must notify the uninsured/underinsured insurance provider of an offer of settlement prior to accepting the settlement. The insurance provider can conduct its own investigation to determine whether or not the underinsured driver is in fact judgment proof beyond the policy limits in his or her own coverage (i.e. has no money or assets to collect in a lawsuit). Failure to obtain consent prior to accepting a settlement will waive the uninsured/underinsured coverage.

Next, and equally important as the first two, insurance companies in New Mexico are held to a very high duty of fair dealing in dealing with their insured policy-holders. This includes class-two insureds who have no direct contractual relationship with the insurance company such as Ms. Salaz. This is particularly the case as here where the insurance company knew of the claims and the possible uninsured/underinsured coverage for the injured person and deliberately fails to notify the insured of the coverage.

Finally, and perhaps a little off message here, injured persons should recognize that there are many, not all, insurance companies or individual adjusters that will do everything they can to avoid paying the full value of claims. This is in fact what drives many injured people to lawyers. Countless injured individuals, particularly in smaller claims, attempt to work out their claims directly with an insurance company. Unfortunately, some insurance companies will view this as an opportunity to get off cheap or deny the claim completely. Some injured people just give up and accept this outcome. Others caught in this situation grow so frustrated or angry that they are forced to seek the assistance of an attorney.

Then what? You guessed it. The insurance companies cry foul, spend countless dollars on tort reform lobbying, lament the state of the legal system and the abuses of trial attorneys, and even accuse injured parties of greed for seeking the assistance of an attorney. You can bet that the insurance industry and their lobbyists had a part in designating the New Mexico Appellate Courts #5 on the tort reform list of judicial hellholes.

Thankfully, the New Mexico Courts hold insurance companies accountable time and time again leading one to conclude that hellholes are not all bad.

www.CollinsAttorneys.com

The case of Salaz v. Mountain States Mutual Casualty Company was filed in the New Mexico Supreme Court in early 2009. As such, this is not exactly a timely post but it addresses a number of important issues regarding uninsured/underinsured motorist coverage in New Mexico. The case could prove very helpful to those injured in New Mexico as passengers in another driver's insured vehicle.

The case involved uninsured/underinsured motorist coverage for a class-two insured which is defined as a passenger in a covered vehicle. Ms. Salaz was injured while riding in a vehicle insured by defendant Mountain States Insurance and therefore came under the policy's uninsured/underinsured (UM/UIM) provisions.

Ms. Salaz believed that the car in which she was injured was uninsured due to that indication on the police report. Ms. Salaz had filed a claim against the other driver and his insurance company Farmer's . Mountain States learned of this lawsuit, made a subrogation demand to Farmer's but failed to notify Ms. Salaz of the coverage available to her as a class-two insured. Ms. Salaz had no reason to know of the uninsured/underinsured coverage available to her, and did not make any attempt to discover the available coverage.

Ms. Salaz subsequently settled for policy limits with Farmer's. The check issued by Farmer's named defendant Mountain States as a payee consistent with Mountain States subrogation claim. This was the first that Ms. Salaz learned of Mountain States coverage on the vehicle in which she was injured. Ms. Salaz subsequently made a underinsured claim (UIM claim) against Mountain States. Mountain States refused coverage on the basis that Ms. Salaz had breached the "consent to settle" provision in the subject policy.

The District Court granted summary judgment in favor of the defendant Mountain States basically asserting that it was up to Ms. Salaz to determine all available coverage and that Mountain States had no affirmative duty to disclose coverage to her as a class-two insured due to the lack of a contractual relationship between Ms. Salaz and Mountain States.

Both the New Mexico Court of Appeals and the New Mexico Supreme Court disagreed with the District Court. Both found that indeed there was a duty to disclose available coverage to Ms. Salaz as a class-two insured. As a passenger in the covered vehicle, Ms. Salaz was covered by the uninsured/underinsured (UM/UIM) provisions of the policy. As an insured, Mountain States owed certain duties one of which was to disclose available coverage to Ms. Salaz once it learned of her claims.

The case points out a number of important issues regarding uninsured/underinsured motorist coverage in New Mexico. These will be addressed in the next post.

www.CollinsAttorneys.com

Auto accidents are among the leading causes of death of teenagers and young adults (ages 15-24) in New Mexico. Youth, drinking and driving is a lethal mix with often lethal consequences. The DWI/DUI laws and underage drinking laws in New Mexico are very strict to avoid the tragedy of youthful DWI/DUI accidents.

There are strict laws against underage drinking including felony charges for providing alcohol to underage drinkers. These penalties can be particularly harsh for service of alcohol to minors. However, despite these laws, minors often manage to obtain alcohol as a result of negligent or reckless bartenders, hosts, clerks or cashiers. Unfortunately, this negligence or recklessness can result in catastrophic injury and sometimes wrongful death.

Fortunately, New Mexico law holds these individuals and entities accountable for the damages caused by their negligence under dram shop laws, social hosts laws, and criminal laws designed to protect individuals from such behavior.

A recent case in California illustrates the law, the possible harm, and the potential recovery for injuries arising out of dram shop or negligent social host situations. The case of Apodaca v. Bradley involved two 20 year olds, Joshua Apodaca and Sean Patrick Bradley, who were served alcohol at a Sonoma County winery during a wedding reception, and then again at convenience store following the reception. The two were served alcohol at the wedding reception despite failing to present identification. Even more remarkably, they were later sold alcohol by a convenience store again with no identification which they then consumed in the store's parking lot.

Bradley who was driving crashed his car into a rock wall as the two travelled home. Apodaca suffered closed head traumatic brain injuries. Apodaca's brain injuries led to severe and permanent cognitive and motor deficits.

Unlike New Mexico, apparently California does not have formal dram shop laws. Instead, the lawsuit was brought under specially enacted laws to address teenage DWI/DUI. The result was a $3.1 million settlement. The winery contributed policy limits of $3 million under its insurance policy. The parents of Bradley contributed their policy limits of $100,000. Bradley himself contributed $5000.

The $3.1 million can never fully compensate Apodaca for all of the damages associated with his severe traumatic brain injury. Apodaca will likely suffer a lifetime of pain and suffering, loss of enjoyment of life, and permanent mental and physical limitations. The loss of income and earnings over his lifetime associated with his injuries are hard to calculate due to his youth. Rest assured, however, even a moderate income over his working life would approach the value of the settlement.

Instead, the bulk of the settlement proceeds will go toward a lifetime of medical care and expense for Apodaca. There will likely be little left to address his remaining damages. Unfortunately, this is often the reality of auto accidents, where there is inadequate insurance to compensate injured persons. In New Mexico, a $3.1 million settlement in an auto accident is extremely rare due to the high level of uninsured/underinsured motorists in the State. Though the settlement cannot possibly compensate Apodaca for his injuries, it is far better than the outcome in most DWI/DUI accidents where there simply is no insurance or financially responsible party to compensate the accident victim other than his or her own uninsured/underinsured motorist coverage.

www.CollinsAttorneys.com

Work related injuries in New Mexico, as in most states, typically leave the injured workers grossly under-compensated in cases of serious or permanent injuries or wrongful death. With on the job injuries, the worker is typically limited to recovery under the Workers Compensation Act.

There are exceptions. An injured worker can recover damages beyond the limits of the workers compensation statutes when a third party has caused the injuries by suing that third party. In addition, in the case of on the job auto accidents in work vehicles, the injured worker may obtain additional relief under the employer's uninsured/underinsured motorist coverage.

The recent case of Marckstadt v. Lockheed Martin (consolidated with Federated Service Insurance v. Martinez) forcefully reiterates the right to recovery under an employer's uninsured/underinsured motorist coverage. In these consolidated cases, employees had been injured in auto accidents while driving their work vehicles. In both cases, the other driver was underinsured. Likewise, in both cases, the injured worker made claims against the employer's uninsured/underinsured coverage on the vehicles.

Naturally, the insurance companies in both cases denied coverage. In both cases, the insurance companies argued that it was the intent of the insured employers to reject uninsured/underinsured coverage. However, there was no written rejection of uninsured/uninsured motorist coverage (UM/UIM). In the case of Lockheed Martin, there was an X on a form indicating that UM/UIM had been rejected. However, it was not clear who put the X on the form and only after the accident did Lockheed Martin actually sign a written rejection. Neither was there a signed written rejection in the Federated case though it was clear that the insured employer intended to reject coverage.

The Court ruled that though an actual signature was not required to reject coverage,and the rejection did not have to be attached to the policy, the rejection did have to be in writing no matter what the intentions of the parties. The Court recognized that the requirement of a writing was set forth in NMAC §13.12.3.9. The Court also recognized the problems with interpreting unwritten intentions, the possibility of fraud on the injured worker in these cases to avoid underinsured/uninsured coverage, and the litigation that would ensue if the writing requirement were not in place.

If you are injured on the job in a work vehicle as a result of negligence other than your own negligence, you may be entitled to recovery of damages beyond those limitations set forth in the workers compensation act. If the other party lacks insurance or is underinsured, and you have suffered serious or permanent injuries, then you should determine the availability of uninsured/underinsured coverage on your employer's vehicle(s). Due to the severe limitations of workers compensation, and the lack of insurance with the other driver, this may be the only way to recover fully on your injuries and other damages.

www.CollinsAttorneys.com

Underinsured coverage is often the only coverage available in auto accidents occurring in New Mexico. New Mexico and Albuquerque drivers are notoriously uninsured or underinsured. New Mexico has the highest rate of uninsured motorists in the country.

With 29% of New Mexico drivers uninsured, and many more underinsured, there is good chance if you have an accident, the other driver will have no insurance. It is a very good idea to have as much underinsured coverage as you can afford. Unfortunately, even when you have acquired significant levels of underinsured coverage, your own carrier may dispute the insurance policy limits on your coverage.

This is what happened in Bird v. State Farm. David Bird had four vehicles under his policy. He purchased a new Subaru which fell under the 30 day coverage provision for newly acquired vehicles. The Subaru was to replace a Jeep on the policy. However, David still had the Jeep which was to remain on the policy for the 30 day grace period, after which separate insurance would need to be purchased if the vehicle had not been sold.

During the 30 day grace period, David was killed in an auto accident caused by an uninsured motorist. State Farm promptly settled for the $400,000 on the four vehicles but refused the additional $100,000 on the Jeep though it was still covered under the policy. The estate of David Bird was awarded $100,000 on summary judgment.

State Farm appealed arguing that no additional premiums were paid on the Jeep and therefore it was not covered despite the 30 day grace period. The New Mexico Court of Appeals affirmed the summary judgment award on the grounds that the policy provisions were ambiguous. In light of the ambiguity, the court determined that the insured's reasonable expectation of coverage based upon the 30 day grace period dictated the finding of additional coverage on the Jeep.

The law in New Mexico is very protective of the rights of insured motorists. The public policy dictates that motorist be afforded coverage in the event of an accident with an uninsured or underinsured motorist, a very common event in New Mexico. This same policy is the basis for requiring that underinsured coverage be explicitly rejected in writing by the insured. Moreover, the signed rejection must be attached to the policy itself to be effective.

In short, the law in New Mexico does all it can to protect motorists against the harm of uninsured and underinsured motorists. It is up to every driver to acquire that protection through underinsured/uninsured motorist coverage.

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In personal injury cases in New Mexico, the injured person has often received medical care through Medicare or Medicaid (hereinafter referred to collectively as Medicare). Medicare by law has a lien against any settlement for the full amount of the Medicare benefits. This lien is prior to all other obligations or other distributions verdict or settlement funds. Failure to properly address these liens can have serious financial consequences.

Medicare liens are enforced through the Centers for Medicare and Medicaid Services (CMS). Often times, CMS will contact you or your attorney to put you both on notice of the liens. However, even if neither you nor attorney has received notice, you are both responsible for those liens. Therefore, if you have received any Medicare related medical treatment for your injuries, you should alert your attorney at the very first meeting.

Proper handling of these liens requires early attention to the liens. Medicare must be notified immediately of any possible claims or lawsuits associated with the Medicare related treatment. It is not the responsibility of Medicare to notify the parties. Medicare must also be kept informed of any settlement negotiations. Medicare technically has the authority to block a settlement if the settlement does not reasonably address its liens. Finally once the claims are resolved either through settlement or litigation, the lien must be resolved. In fact, Medicare is has first priority over any distribution of any funds.

There are significant potential penalties for failure properly account for Medicare liens. The rules are very strict. The Medicare lien must be paid within 60 days of the final notice of lien. Failure to do so can result in severe penalties including double damages and interest on delinquent liens. Thus, it is important to keep Medicare involved in the settlement or litigation process. This means negotiating the liens with Medicare prior to final settlement or immediately following a verdict.

The good news is that Medicare is very reasonable in the negotiation and resolution of its liens. Often, the final resolution will reflect inadequate insurance policy limits to cover the client's injuries and damages. In addition, Medicare often has overstated liens reflecting Medicare benefits unrelated to the personal injury claim. Medicare will routinely reduce its liens for an overstatement of benefits once it is brought to their attention. Once you have negotiated the lien, you will be able to move forward with the distribution of verdict or settlement funds with peace of mind.

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