Automobile Insurance SubrogationAutomobile Total Loss ThresholdsDeductible ReimbursementDiminution of ValueFirst Come, First Served: Subrogating Multiple Claims in Excess of Policy LimitsFuneral Procession Traffic LawsImputing Contributory Negligence of Driver to Vehicle OwnerLaws Regarding using Cell Phones/Headphones/Texting While DrivingLoss Of UseMed Pay/PIP SubrogationOwner Liability For Stolen VehiclesPayment of Sales Tax After Vehicle Total LossPedestrian and Crosswalk LawsRental Car Company Physical Damage and Loss of Use ClaimsRental Car Company’s Liability Insurance Primary or ExcessSlower Traffic Keep RightSudden Medical Emergencies While DrivingSuspension of Drivers’ LicensesUse of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Federal , State, and Local Governmental EntitiesMunicipal/County/Local Governmental Immunity and Tort LiabilityState Sovereign Immunity And Tort Liability
General Tort Laws/StatutesAnti-Indemnity StatutesContribution ActionsContributory Negligence/Comparative FaultDog Bite LawsEconomic Loss DoctrineParental ResponsibilitySpoliationStatute of LimitationsStatute of Limitations Exceptions
Health Insurance SubrogationHealth and Disability Insurance
InvestigationAdmissibility of Expert TestimonyPre-Suit Disclosure of Liability Policy Limits in Third-Party ClaimsRecording Conversations
Product Liability SubrogationProduct Liability Law
Property Subrogation“Matching Regulations” And Laws Affecting Homeowners Property ClaimsCondominium/Co-OP Waiver of Subrogation LawsDamage to Property Without Market ValueGeneral Contractor Overhead And Profit Payments In First-Party ACV Property Damage ClaimsLandlord/Tenant Subrogation
Subrogation GenerallyAnti-Subrogation RuleCriminal RestitutionMade Whole DoctrineMedical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Workers’ CompensationEmployee Leasing LawsHospital Lien LawsOCIP/CCIP Subrogation In Workers’ Compensation Construction CasesRecovery Of Increased Workers’ Compensation Premiums By EmployerWhich Workers’ Compensation “Benefits” Can Be Subrogated?Workers’ Compensation Subrogation Waiver EndorsementsWorkers’ CompensationWorkers’ Compensation Claims by Undocumented Employees
Automobile Insurance Subrogation
Automobile Total Loss Thresholds
Total Loss Formula (See HERE for definition).
Insurer determines if it is uneconomical to repair vehicle. N.M.S.A. § 66-1-4.16(C).
Automobile and Property: No applicable statute, Administrative Code provision or case law exists.
Diminution of Value
First Party: The New Mexico Court of Appeals has followed the majority trend toward disallowing recovery for the diminished market value under the terms of plaintiff’s policy of insurance. Davis v. Farmers Ins. Co. of Ariz., 142 P.3d 17 (N.M. App. 2006).
Third Party: New Mexico has held that “damage awards should provide full and just compensation for the injured party”, and that such compensation is tantamount to the concept of making the injured person whole. It has also been stated that the proper measure of damages for personal property damage will be whichever is less – repair costs plus depreciation or reduction in market value. Hubbard v. Albuquerque Truck Ctr. Ltd., 125 N.M. 153 (1998).
First Come, First Served: Subrogating Multiple Claims in Excess of Policy Limits
An automobile liability insurer’s statutory duty to attempt reasonable settlement efforts of an insured’s claims requires an attempt in good faith to settle the claim of a third party; the insurer’s duty to attempt in good faith to effectuate prompt, fair, and equitable settlements is not limited to first-party claims. Hovet v. Allstate Ins. Co., 89 P.3d 69 (N.M. 2004).
New Mexico has no case law defining whether and when it is appropriate for a liability carrier to settle with one of several claims against a limited pool of liability limits arising out of the same incident. New Mexico favors the use of interpleader actions. However, one of the essential requirements in an equitable interpleader action is that the plaintiff seeking interpleader be entirely indifferent to the conflicting claims, asserting no interest in the fund or property deposited. Fireman’s Ins. Co. of Newark, N.J. v. Bustani, 737 P.2d 541 (N.M. 1987).
Funeral Procession Traffic Laws
There are no state laws governing funeral processions.
Imputing Contributory Negligence of Driver to Vehicle Owner
Imputed Contributory Negligence Law: Driver’s contributory negligence is not imputed to owner in action against third party for property damage to vehicle, even if driver/owner is husband/wife. Pavlos v. Albuquerque Nat. Bank, 487 P.2d 558 (N.M. App. 1971).
Vicarious Liability/Family Purpose Doctrine: No Vicarious Liability Statute.
The Family Purpose is recognized in New Mexico based on agency. Madrid v. Shryock, 1987-NMSC-106, 106 N.M. 467, 468, 745 P.2d 375, 376.
Sponsor Liability for Minor’s Driving: N.M.S.A § 66-5-11: Liability imposed on parents when a child commits willful or negligent acts in operation of motor vehicle and parent signed child’s application for driver’s license or permit.
Laws Regarding using Cell Phones/Headphones/Texting While Driving
Cell Phone/Texting: No driver shall read, write, or view a text message on a hand-held device, unless it is an emergency situation. N.M.S.A. § 66-7-374
No state laws on telephone calls.
Other Prohibitions: No Applicable Laws.
Comments: Albuquerque, Santa Fe, Las Cruces, Silver City, Gallup, Taos, Espanola, and Rio Rancho have local ordinances against texting and/or cell phone use while driving.
Loss Of Use
Loss of Use: Yes. For the amount of time needed to repair the vehicle. Curtis v. Schwartzman Packing Co., 299 P.2d 776 (N.M. 1956). Loss of use damages are measured by the actual rental costs reasonably incurred if a substitute vehicle were to be rented, even if it was not actually rented. Cress v. Scott, 868 P.2d 648 (N.M. 1994). Jury instructions define “loss of use” as the “reasonable rental value of similar property during the period reasonably required for the repair of the damaged property.” N.M.R.A., Rule 13-1818. Loss of use is recoverable even in the absence of actual rental. Cress v. Scott, supra. The court allowed a jury instruction that would allow an award of damages for total loss of a vehicle or repair costs plus loss of use, but not both. Curtis v. Schwartzman Packing Co., 299 P.2d 776 (N.M. 1956).
Lost Profits: No case law or statutory support for lost profits as a measure of loss of use damages.
Med Pay/PIP Subrogation
Med Pay: Yes. Carrier is entitled to subrogation and reimbursement rights against insured. Jimenez v. Foundation Reserve Ins. Co., 757 P.2d 792 (N.M. 1988).
PIP: Coverage not applicable.
Made Whole: Doctrine of Equitable Apportionment applies. Subrogation interest reduced proportional to reduction of insured’s total claim. Amica Mut. Ins. Co. v. Maloney, 903 P.2d 834 (N.M. 1995).
Stature of Limitations: The statute of limitations for subrogation is three (3) years and for reimbursement it is six (6) years. Health Plus of N.M., Inc. v. Harrell, 958 P.2d 1235 (N.M. 1998).
Owner Liability For Stolen Vehicles
Key In The Ignition Statutes: N.M.S.A. § 66-7-353.
Common Law Rule: Liability may be imposed on an owner of a stolen vehicle for negligence and consequent injury or damage to a third party if theft was foreseeable. The court ruled that purpose of N.M.S.A. § 66-7-353 was to prevent inadvertent movement of vehicle and that deterring theft was another purpose and, therefore, an owner who left keys in vehicle could be found negligent under statute. Herrera v. Quality Pontiac, 73 P.3d 181 (N.M. 2003).
Payment of Sales Tax After Vehicle Total Loss
First-Party Claims: No applicable statute, case law, or regulation governing recovery of sales tax. However, New Mexico Public Regulation Commission states that after a cash settlement, the insurer must reimburse the state’s excise tax, any title fees, and any registration charges. http://www.nmprc.state.nm.us/consumer-relations/docs/settlement-total-loss.pdf.
Third-Party Claims: No applicable statute, case law, or regulation governing recovery of sales tax.
Pedestrian and Crosswalk Laws
N.M.S.A. § 66-7-105: Pedestrians facing a green traffic signal may proceed across the roadway within any marked or unmarked crosswalk; pedestrian may not enter the roadway until the green is shown (i.e., not on a yellow) alone unless authorized to do so by a pedestrian “walk” signal; pedestrian may not enter the roadway on a red light unless authorized to do so by a pedestrian “walk” signal.
N.M.S.A. § 66-7-333: Pedestrians are subject to traffic-control signals at intersections.
N.M.S.A. § 66-7-340: Pedestrians are not allowed to stand on or in proximity to a street or highway for the purpose of hitchhiking.
N.M.S.A. § 66-7-333: Local authorities have the power to pass ordinances that require pedestrians to comply with the directions of any traffic-control signals and may prohibit them from crossing street outside of crosswalk.
Summary: Statute providing that every pedestrian crossing a roadway at a point other than within a marked or unmarked crosswalk at an intersection shall yield right-of-way to all vehicles on roadway, applies to every person afoot who attempts to cross travelled portion of highway at a place other than a marked crosswalk or an intersection, and places upon him duty to yield right of way to vehicles upon highway. Williams v. Burke, 357 P.2d 1087 (N.M. 1960).
Rental Car Company Physical Damage and Loss of Use Claims
Recovery From Renter: Recovery of physical damage and loss of use are not prohibited or otherwise regulated. Terms of rental agreement control. Collision Damage Waivers not regulated.
Recovery From Third-Party: Nothing specifically addressing right of car rental company to recover loss of use. Generally, loss of use damages allowed for the amount of time needed to repair the vehicle. Curtis v. Schwartzman Packing Co., 299 P.2d 776 (N.M. 1956). Loss of use damages are measured by the actual rental costs reasonably incurred if a substitute vehicle were to be rented, even if it was not actually rented. Cress v. Scott, 868 P.2d 648 (N.M. 1994). Jury instructions define “loss of use” as the “reasonable rental value of similar property during the period reasonably required for the repair of the damaged property.” N.M.R.A. Rule 13-1818. Loss of use is recoverable even in the absence of actual rental. Cress v. Scott, supra. The court allowed a jury instruction that would allow an award of damages for total loss of a vehicle or repair costs plus loss of use, but not both. Curtis v. Schwartzman Packing Co., 299 P.2d 776 (N.M. 1956).
Rental Car Company’s Liability Insurance Primary or Excess
Summary: No case or statutory law dealing specifically with car rental companies. Terms of rental agreement and renter’s liability policy should be compared to determine which is primary. When a vehicle owned by a licensed auto dealer is loaned without a fee to a person for demonstration purposes, as a temporary substitute for that person’s vehicle while it is being serviced or repaired, the driver’s insurance is primary, and the dealer’s policy is excess. N.M. § 59A-32-23. However, if a car rental company is self-insured, it can shift primary liability for at least the minimum limits to the renter by prominently disclosing this in the rental contract. N.M. Admin. Code § 12.4.16.
Slower Traffic Keep Right
Statute: N.M.S.A. § 66-7-308 and N.M.S.A. § 66-7-310.
Summary: Drivers must drive in the right lane and use the left lane for passing only. Drivers must keep right unless overtaking another vehicle; when the right lane is closed to traffic for repair; upon a roadway with three marked traffic lanes; or upon a roadway designated for one-way traffic. Slower traffic must keep right. Except when overtaking and passing on the right is permitted, the driver of an overtaken vehicle shall give way to the right in favor of the overtaking vehicle on audible signal. Vehicles proceeding slower than the normal speed of traffic must drive in the right lane.
Sudden Medical Emergencies While Driving
Sudden Emergency Doctrine not recognized. New Mexico Supreme Court described the instruction as unnecessary, potentially confusing to the jury, and conducive to overemphasizing one party’s theory of the case. Dunleavy v. Miller, 862 P.2d 1212 (N.M. 1993).
No cases using the sudden emergency defense for a medical emergency.
Suspension of Drivers’ Licenses
Administrative Suspension: No provisions regarding suspension of driver’s license; however, Department has authority to suspend motor vehicle registration if no valid insurance. N.M.S.A. § 66-5-206. Term of suspension of driver’s license is discretionary. Johnson v. Sanchez, 67 N.M. 41, 45 (1960).
Judgment: Upon default of such agreement, notice is given to the Division who thereafter takes action to suspend the driver’s license of the person in default. N.M.S.A. § 66-5-210. Suspension remains in effect until the driver has paid the balance, or one (1) year has passed and no action at law as to settlement agreement has been filed. N.M.S.A. § 66-5-210.
Contact Information: State of New Mexico, Motor Vehicle Division, Joseph Montoya Building, P.O. Box 1028, 1100 South St. Francis Drive, Santa Fe, NM 87504-1028, (888) 683-4636, https://www.mvd.newmexico.gov/.
Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Authority: N.M. ADC § 12.2.6(12).
Summary: Failure to disclose the use of non-OEM parts by an insurer or repair facility shall be treated as an unfair or deceptive trade practice. If the use of non-OEM parts is not disclosed, the parts shall be assumed to be new, and be warranted as such.
Federal , State, and Local Governmental Entities
Municipal/County/Local Governmental Immunity and Tort Liability
New Mexico Tort Claims Act: N.M.R.A. §§ 41-4-1 through 41-4-30 (1976). The NMTCA applies to all governmental entities and their employees, including “local public bodies” (city, county, etc.). N.M.R.A. § 41-4-2A.
Notice Deadlines: Written notice must be provided to local public body within ninety (90) days after the occurrence. N.M.R.A. § 41-4-16. Action against local public body must be brought within two (2) years after occurrence. N.M.R.A. § 41-4-15.
Claims/Actions Allowed: Immunity is not waived. Tort Claims Act shields local public bodies and their employees from liability for torts except when immunity is specifically waived. N.M.R.A. §§ 41-4-1 & 41-4-4.
Comments/Exceptions: Exceptions to immunity: (1) Operation or maintenance of any motor vehicle, aircraft or watercraft. N.M.R.A. § 41-4-5. (2) Operation or maintenance of any building, public park, machinery, equipment or furnishings. N.M.R.A. § 41-4-6. (3) Operating certain public utilities and services such as gas, electric, water, waste collection or disposal, heating, and ground transportation. N.M.R.A. § 41-4-8. (4) Constructing and maintaining any bridge, culvert, highway, roadway, street, alley, sidewalk, or parking area. N.M.R.A. § 41-4-8. See N.M.R.A. §§ 41-4-4 through 41-4-12 for other exceptions.
Damage Caps: Liability shall not exceed: (1) $200,000 for damage to or destruction of real property; (2) $300,000 for past and future medical expenses; (3) $400,000 for all damages other than real property damage and medical expenses; and (4) total liability for a single occurrence shall not exceed $750,000. Local public body will not pay punitive damages. N.M.R.A. § 41-4-19.
State Sovereign Immunity And Tort Liability
Tort Claims Act: Tort Claims Act. N.M.R.A. §§ 41-4-1 through 41-4-30 (1976).
Notice Deadlines: Written notice must be provided within 90 days after the occurrence. N.M.R.A. § 41-4-16. Action against the State must be brought within two years after the occurrence. N.M.R.A. § 41-4-15.
Claims/Actions Allowed: Tort Claims Act shields the State and public employees from liability for torts except when immunity is specifically waived. N.M.R.A. §§ 41-4-1 and 41-4-4.
Comments/Exceptions: Exclusions to the Tort Claims Act include:
(1) negligence of public employees within the scope of their duties in the operation or maintenance of any motor vehicle, aircraft or watercraft. N.M.R.A. § 41-4-5; and
(2) negligence of public employees within the scope of their duties in the operation or maintenance of any building, public park, machinery, equipment or furnishings. N.M.R.A. § 41-4-6.
See N.M.R.A. §§ 41-4-4 through 41-4-12 for other exceptions.
Damage Caps: Liability of State for a single occurrence shall not exceed:
(1) $200,000 for damage to or destruction of real property;
(2) $300,000 for past and future medical expenses;
(3) $400,000 for all damages other than real property damage and medical expenses; and
(4) total liability for a single occurrence shall not exceed $750,000.
State will not pay punitive damages. N.M.R.A. § 41-4-19.
General Tort Laws/Statutes
Prohibits Additional Insureds. Applies to Construction Contracts. N.M. Stat. § 56-7-1.
New Mexico is one of four states that has enacted an anti-indemnity statute that specifically deals with the oilfield services industry (the others are Texas, Louisiana, and Wyoming).
Contract can require that party to contract purchase project-specific insurance policy.
Expressly prohibits the parties from including waivers of subrogation or provisions that require the indemnitee to be named as an additional insured on the indemnitor’s insurance policy.
Modified Joint and Several Liability. Pure comparative fault adopted in 1981. This abolished joint and several liability between concurrent tortfeasors. There is only several liability, except for intentional torts, vicariously liable defendants, matters involving inherently dangerous activities, and products liability cases. N.M.S.A. § 41-3A-1; Lewis v. Samson, 35 P.3d 972 (N.M. 2001).
Contribution is eliminated between concurrent tortfeasors. Several liability only. No contribution allowed by severally liable defendant. N.M.S.A. § 41-3A-1. If concurrent tortfeasor liable only for his respective share of fault, no need for contribution. Wilson v. Galt, 668 P.2d 1104 (N.M. App. 1983). When successive tortfeasor liability (exception to several liability) or one of the exceptions when joint and several applies (e.g., inherently dangerous activity), joint and several liability applies. The original injury and the subsequent enhancement of the injury must be “separate and causally-distinct injuries.” There must be negligence, causation, and a distinct original injury. Gulf Ins. Co. v. Cottone, 148 P.3d 814 (N.M. 2006). Example: injury followed by negligent medical care. There must be a second, distinct injury or enhancement.
Three (3) years from date contribution plaintiff has either discharged the common liability of the joint tortfeasors by payment, or has paid more than his pro-rata share. N.M.S.A. § 55-3-118; Mora-San Miguel Elec. Co-Op., Inc. v. Hicks & Ragland, 598 P.2d 218 (N.M. App. 1979).
Contributory Negligence/Comparative Fault
Pure Comparative Fault: Damaged parties can recover even if 99% at fault. Plaintiff’s negligence will reduce right to recovery, but it will not bar that right. Scott v. Rizzo, 634 P.2d 1234 (N.M. 1981).
Dog Bite Laws
Dog owner will only be found strictly liable if they had prior knowledge of the dog’s vicious propensities, or liable if they were negligent. Smith v. Village of Ruidoso, 128 N.M. 470, 994 P.2d 50 (N.M. 1999).
Economic Loss Doctrine
Majority Rule. As between commercial parties where there is no great disparity of bargaining power, the ELD prevents a plaintiff from recovering purely economic damages in tort actions. Utah Int’l, Inc. v. Caterpillar Tractor Co., 775 P.2d 741 (N.M. App. 1989). New Mexico feels such losses are better allocated to warranties and/or insurance. New Mexico has not yet decided whether the ELD applies to non-commercial consumers. The New Mexico Supreme Court has declined to overrule Utah Int’l, Inc. v. Caterpillar Tractor Co., stating that, if it did, “contract law would be subsumed by strict liability and negligence.” In re Consol. Vista Hills Retaining Wall Litig., 119 N.M. at 550, 893 P.2d at 446. The Supreme Court stated it would retain the rule to preserve the bedrock principle that contract damages be limited to those within the contemplation and control of the parties in framing their agreement. The law of contract allows parties to bargain and allocate the risk that the product will self-destruct. As a matter of policy, the parties should not be allowed to use tort law to alter or avoid the bargain struck in the contract. The law of contract provides an adequate remedy. If we overrule Utah Int’l, Inc. v. Caterpillar Tractor Co., contract law would be subsumed by strict liability and negligence. In order to preserve the line between contract law and tort law, the Supreme Court has declined to overrule Utah Int’l Bhandari v. VHA Sw. Cmty. Health Corp., 2011 WL 1336515 (D. N.M. 2011).
The contours of the ELD are uncertain at this point. The ELD “extends beyond the limited context of products liability law and applies to service contracts,” reasoning that the “legal and policy considerations that motivated New Mexico courts to adopt the Economic Loss Rule in the products liability context apply equally to service contracts.” Farmers Alliance Mut. Ins. Co. v. Naylor, 452 F.Supp.2d 1167 (D. N.M. 2006). A case note interpreting the existing law in New Mexico, has stated that it appears that New Mexico’s ELD “precludes recovery of economic loss”: (i) “when there is no great disparity in bargaining power between commercial parties to a contract for the sale of goods and the damages arise from injury of a product to itself”; and (ii) “when the parties to a service contract are sophisticated commercial entities and the tort claim is not based on an independent duty of care.” Daniel M. Alsup, Note, New Mexico’s Economic Loss Rule, Unconscionability Doctrine, and the Gap Between Them: Concepts, Realities, and How to Mend the Gap, 38 N.M. L.Rev. 483 (2008).
Property Damage / Personal Injury. Liability imposed on parents when a child willfully or maliciously injures person, or willfully or maliciously destroys property. N.M.S.A. 1978, § 32A-2-27.
The limit of liability is $4,000.00 plus costs and reasonable attorney’s fees. Child must be under 18-years-old.
Auto Liability. Liability imposed on parents when a child commits willful or negligent acts in operation of motor vehicle and parent signed child’s application for license or permit. N.M.S.A. 1978, § 66-5-11.
There is no limit to liability. Child must be under 18-years-old.
Tort of Intentional Spoliation: The New Mexico Supreme Court has recognized the tort of intentional spoliation of evidence. Coleman v. Eddy Potash, Inc., 120 N.M. 645, 649, 905 P.2d 185, 189 (N.M. 1995) overruled on other grounds, Delgado v. Phelps Dodge Chino, Inc., 34 P.3d 1148 (N.M. 2001). Coleman established the following elements for the tort of intentional spoliation of evidence: (1) the existence of a potential lawsuit; (2) the defendant’s knowledge of the potential lawsuit; (3) the destruction, mutilation, or significant alteration of potential evidence; (4) intent on the part of the defendant to disrupt or defeat the lawsuit; (5) a causal relationship between the act of spoliation and the inability to prove the lawsuit; and (6) damages.
Tort of Negligent Spoliation: The Court in Coleman rejected a separate cause of action for negligent spoliation of evidence. Coleman, 120 N.M. at 650, 905 P.2d at 190 (stating that “adequate remedies exist” under “traditional negligence principles” and relying on “the general expectation that an owner has a free hand in the manner in which he or she disposes of his or her property”).
Adverse Inference: Where the actions of the spoliator fail to rise to the level of malicious conduct or otherwise meet the elements of the tort of intentional spoliation of evidence, New Mexico believes a more appropriate remedy would be a permissible adverse evidentiary inference by the jury in the underlying claim. This evidentiary inference could be accomplished through an instruction to the jury that it is permissible to infer that evidence intentionally destroyed, concealed, mutilated, or altered by a party without reasonable explanation would have been unfavorable to that party. Trial courts, in determining whether to give this instruction, should consider whether the spoliation was intentional, whether the spoliator knew of the reasonable possibility of a lawsuit involving the spoliated object, whether the party requesting the instruction “acted with due diligence with respect to the spoliated evidence,” and whether the evidence would have been relevant to a material issue in the case. Torres v. El Paso Elec. Co., 987 P.2d 386, 401-407 (N.M. 1999).
Sanctions: New Mexico recognizes that spoliation of evidence may result in sanctions. These sanctions include dismissal or adverse inference. Segura v. K-Mart Corp., 62 P.3d 283, 286-87 (N.M. 2002).
Statute of Limitations
Personal Property4 YearsN.M.S.A. § 37-1-4
Personal Injury/Death3 YearsN.M.S.A. § 37-1-8
Breach of Contract/Written6 YearsN.M.S.A. § 37-1-3(A)
Breach of Contract/Oral4 YearsN.M.S.A. § 37-1-4
Breach of Contract/Sale of Goods4 YearsN.M.S.A. § 55-2-725(1)
Statute of Repose/ProductsN/AN/A
Statute of Repose/Real Property10 YearsN.M.S.A. § 37-1-27*
Breach of Warranty/U.C.C.4 YearsN.M.S.A. § 55-2-725(1); Fernandez v. Char-Li-Jon, Inc., 888 P.2d 471, 474 (N.M. Ct. App. 1994)
Workers’ Comp Third Party Case3 YearsN.M.S.A. § 52-5-17
Strict Product Liability/Personal Injury3 YearsN.M.S.A. § 37-1-8
Strict Product Liability/Property Damage4 YearsN.M.S.A. § 37-1-4
Statute of Limitations Exceptions
*10 Years from substantial completion of improvement to real property. N.M.S.A. § 37-1-27.
Health Insurance Subrogation
Health and Disability Insurance
Statute of Limitations: 3 Years. N.M.S.A. § 37-1-8.
Subrogation of Medical and Disability Benefits are allowed. Amica Mut. Ins. Co. v. Maloney, 903 P.2d 834 (N.M. 1995). Made Whole and Common Fund apply. Amica Mut. Ins. Co. v. Maloney, 903 P.2d 834 (N.M. 1995).
Admissibility of Expert Testimony
Admissibility Standards: Daubert
Case/Statutory Law: State v. Alberico, 861 P.2d 192 (N.M. 1993).
Comments: The differences between federal and New Mexico law in applying the Daubert requirements. See Rule 11-702 comm. cmt. 8. New Mexico has not adopted the changes made to the federal rule in 2000 to incorporate the requirements of Daubert.
Pre-Suit Disclosure of Liability Policy Limits in Third-Party Claims
Duty To Disclose: No.
One-Party Consent: The reading, interrupting, taking or copying of any message, communication or report is unlawful without the consent of one of the parties to said communication. N.M. Stat. Ann. § 30-12-1(C).
Product Liability Subrogation
Product Liability Law
Statute of Limitations/Repose: 3 years from injury. N.M.S.A. § 37-1-8 (1978).
Liability Standards: Negligence, Strict Liability, Warranty.
Fault Allocations: Pure Comparative.
Non-Economic Caps/Limits On Actual Damages: No.
Punitive Y/N and Limits: Yes.
Heeding Presumption?: No.
Innocent Seller Statute: No.
Joint and Several Liability: Yes, in Chain of Distribution. N.M.S.A. § 41-3A-1.
Available Defenses: Assumption of Risk; Misuse; Alteration; Learned Intermediary; State of the Art; Sophisticated User; Presumption.
Restatement 2nd or 3rd?: Restatement 3rd
“Matching Regulations” And Laws Affecting Homeowners Property Claims
Condominium/Co-OP Waiver of Subrogation Laws
Associations must maintain property insurance and liability insurance as to the common elements. Each unit owner must be an insured person under the policy and the insurance company must waive subrogation rights against any unit owner or member of their household. N.M.S.A. § 47-7C-13 (1978).
Damage to Property Without Market Value
Service Value: “Jasso is entitled to an offset for depreciation on the pole he damaged, to be determined by computing the depreciation recovered by PNM over the 27 years since the pole was originally installed.” Public Service Co. of New Mexico v. Jasso, 635 P.2d 1003 (N.M. Ct. App. 1981).
Intrinsic Value: Where the article lost has no market value, the rule of damages seems then to be its value to the plaintiff; and in ascertaining this value inquiry may be made into constituent elements of the cost to the plaintiff in producing it.” Wilcox v. Butt’s Drug Stores, 35 P.2d 978 (N.M. 1934).
Sentimental Value: “Where the article lost has no market value, the rule of damages seems then to be its value to the plaintiff; and in ascertaining this value inquiry may be made into constituent elements of the cost to the plaintiff in producing it.” Wilcox v. Butt’s Drug Stores, 35 P.2d 978 (N.M. 1934).
General Contractor Overhead And Profit Payments In First-Party ACV Property Damage Claims
Payment And Depreciation Of GCOP/Sales Tax: No applicable case law, statutes, administrative rules, or other guidance with regard to the calculation and/or depreciation of GCOP.
Where the lease indicated that the parties failed to agree that one, or both, of them would carry fire insurance, and where there was no specific exculpatory language relieving the tenant from liability for negligence, the tenant was liable for negligently having caused a fire in the leased premises. Acquisto v. Joe R. Hahn Enterprises, Inc., 619 P.2d 1237 (N.M. 1980).
An insurer may not subrogate against its own insured. State ex rel. Regents of New Mexico State University v. Siplast, Inc., 877 P.2d 38 (N.M. 1994). An insurer may not be subrogated against a contractor who is insured against damage to his own property under a builder’s risk policy, even though the subcontractor’s negligence may have resulted in a loss to another co-insured. Id. Where a builder’s risk insurance policy was issued to a general contractor to protect against losses to a structure under construction, and the insurer, pursuant to such policy, compensated the general contractor for a loss allegedly caused by the negligence of a subcontractor, the insurer could bring a subrogation action against the subcontractor if the subcontractor is not an insured on the policy. Great American Ins. Co. of New York v. Western States Fire Protection Co., 730 F.Supp.2d 1308 (D. N.M. 2009). Subcontractor was not co-insured under commercial insurance policy issued to general contractor on a project at a public university, and thus insurer was not barred, as subrogee of general contractor, from seeking subrogation from subcontractor for damages the insurer paid and which allegedly flowed from subcontractor’s negligence; the policy at issue contained no provision for coverage of subcontractors and listed only the general contractor as an insured. Id.
New Mexico statute states that restitution will be made by criminal defendants to the “victims” of the criminal activities, defined as a person who “suffered actual damages as a result” of the above-mentioned criminal activities—and actual damages include all damages a victim might recover in a civil action against the defendant. N.M.S.A. § 31‐17‐1. Due to the fact that an insurer has subrogation rights after payments made to insured, they qualify as a victim in New Mexico case law. State v. Brooks, 862 P.2d 57 (N.M. Ct. App. 1993).
Made Whole Doctrine
New Mexico, while not adopting the traditional Made Whole Doctrine as most other states, has come up with a hybrid version of the Made Whole Doctrine. Noting that one persistent criticism of subrogation is that subrogated insurers will seek reimbursement even when the insured tort victim has not been fully compensated for all damages, including pain and suffering. New Mexico recognizes that many states have applied the Made Whole Doctrine, which allows reimbursement only when the insured has been fully compensated. Amica Mut. Ins. Co. v. Maloney, 903 P.2d 834 (N.M. 1995). However, New Mexico has enacted something referred to as the “Doctrine of Equitable Apportionment.” Id. The Doctrine of Equitable Apportionment reduces the amount reimbursed to the subrogated insurer when the insurer’s recovery represents only a portion of the actual damages. Instead of the “all or nothing” effect of the Made Whole Doctrine, a Doctrine of Equitable Apportionment results in a fairer result where the subrogation interest is reduced proportionately to the reduction of the insured’s total claim. Id.
Medical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Collateral Source Rule: Common law CSR is a rule of damages, preventing defendant from reducing damages based on collateral sources received by plaintiff. Martinez v. Knowlton, 516 P.2d 1098 (N.M. App. 1975). CSR is not a complete bar to evidence of collateral sources. It is relevant to prove agency, ownership, bias or prejudice, or to impeach if he claims lack of funds to pay bills. N.M. R. Evid. Rule 11-411; Jojola v. Baldridge Lumber Co., 635 P.2d 316 (N.M. App. 1981).
Recovery of Medical Expenses Rule:
Private insurance: New Mexico appellate courts haven’t decided whether plaintiff can recover amount billed or amount paid by collateral source. However, federal district court has ruled portions of medical expenses that health care providers write off constitute compensation or indemnity received by a tort victim from a source collateral to the tortfeasor. The injured party should be made whole by the tortfeasor, not by a combination of compensation from the tortfeasor and collateral sources. Pipkins v. TA Operating Corporation, 466 F.Supp.2d 1255 (D. N.M. 2006); Candelaria v. The University of New Mexico Bd. of Regents, 2016 WL 3913790 (N.M. Dist. 2016) (trial court order).
Medicare/Medicaid: New Mexico hasn’t decided whether a plaintiff may recover the full amount of medical expenses billed by providers or whether plaintiff is limited to recovery of amounts actually paid by Medicare or Medicaid. Pipkins, supra.
Related Law/Comments: Plaintiff may recover his or her “full losses from the responsible defendant, even though he may have recovered part of his losses from a collateral source.” Summit Properties, Inc. v. Pub. Serv. Co. of New Mexico, 118 P.3d 716 (N.M. App. 2005).
Employee Leasing Laws
If certain conditions are met, the employee leasing company and the client company are both considered to be employers and immune from third-party actions under the Exclusive Remedy Rule. N.M.S.A. § 60-13A-5 (1978).
Hospital Lien Laws
Statute: N.M. Stat. §§ 48-8-1 to 48-8-7. Hospital Liens.
(1) File written notice of lien in office of county clerk where hospital is located.
(2) Notice must include itemized statement of claims certified by agent of hospital, date of accident, name and location of hospital, and name of tortfeasor.
(3) Notice must be sent by certified mail (return receipt requested) prior to settlement, to patient, his attorney, and tortfeasor.
(4) Tortfeasor must divulge name of insurance carrier.
(5) Mail copy of written notice by certified mail (return receipt requested) to the home office of such third-party carrier. § 48-8-2.
Comments: Every hospital in state has lien on third-party recover (not including attorneys’ fees), whether by settlement, judgment, or compromise. § 48-8-1. Tortfeasor and its carrier liable if they settle after lien is filed, up to one year after settlement. § 48-8-3. County clerk will maintain hospital lien index. § 48-8-4. Hospital must release lien when satisfied. § 48-8-5. Hospital has lien only; no interest in the amount or manner of any settlement or claim filed. § 48-8-7.
OCIP/CCIP Subrogation In Workers’ Compensation Construction Cases
OCIP Law: No statute or case law specifically dealing with effect of OCIP/CCIP. OCIP permitted, provided for projects in excess of $150 million over a five-year period. N.M.S.A. § 52-1-4.2(A).
Statutory Employer Law: If an employer procures any work to be done wholly or in part for him by a contractor, and the work to be done is a part or process in the trade or business or undertaking of such employer, then such employer shall be liable to pay all compensation benefits to employees of such subcontractor, just as if the work was done without the use of the subcontractor. N.M.S.A. § 52-1-22. A general contractor who pays benefits pursuant to § 52-1-22 may take advantage of the Exclusive Remedy Rule if sued by an employee of the subcontractor, provided that it shows that the subcontractor is not an independent contractor and that “the work so procured to be done as a part or process in the trade or business or undertaking of the general contractor.” Chavez v. Sundt Corp., 920 P.2d 1032 (N.M. 1996).
Recovery Of Increased Workers’ Compensation Premiums By Employer
Recovery For Increased Premiums? No.
Statute/Case Law: Nat’l Roofing, Inc. v. Alstate Steel, Inc., 366 P.3d 276 (N.M. App. 2015), cert. denied (2016).
Rule Summary: An employer does not have a cause of action against a tortfeasor the increased costs of workers’ compensation insurance premiums resulting from benefits paid by the compensation carrier to its employee for injuries sustained due to negligence of the third-party tortfeasor.
Which Workers’ Compensation “Benefits” Can Be Subrogated?
There is no precedent or discussion in case law regarding whether nurse case management fees or other allocated costs which may benefit the employer and/or employee can be recovered in subrogation. Section 52-5-17 describes a workers’ compensation carrier’s subrogation lien as follows:
… to the extent of payment by the employer to or on behalf of the worker for compensation or any other benefits to which the worker was entitled under the Workers’ Compensation Act… N.M.S.A. § 52-5-17.
As of July 1, 2013, New Mexico requires compliance with ODG Guidelines. See the state of Kentucky and the Preamble above for an argument that the subrogated carrier can recover the “case manager’s” fee for development of a “treatment plan,” utilizing the ODG guidelines.
Workers’ Compensation Subrogation Waiver Endorsements
Subrogation Statute: N.M.S.A. § 52-5-17
Waiver Allowed? Nothing in the New Mexico Workers’ Compensation Act or applicable case law prohibits the use or efficacy of a waiver of subrogation, except in oilfield services (see “other applicable law”).
Effect Of Waiver Endorsement on Carrier’s Right To Assert A Lien On Claimant’s Recovery: The effect of a waiver of subrogation on the carrier’s rights, including its right to enforce its statutory lien, has not yet been decided.
Other Applicable Law: The New Mexico Oilfield Anti-Indemnity Statute includes specific language specifically prohibiting the contracting party’s right to include language regarding waivers of subrogation regarding production activities at well heads. N.M.S.A. § 56-7-2.
Statute of Limitations: 3 Years. N.M.S.A. § 52-5-17.
Can Carrier Sue Third Party Directly: No, reimbursement only.
Right to Intervene: Yes.
Recovery from UM/UIM Benefits: Employer’s Policy Only.
Subrogation Against Medical Malpractice: Yes?
Subrogation Against Legal Malpractice: Undecided.
Recovery Allocation/Equitable Limitations: Hybrid Made Whole Doctrine: Subrogable. Elements Allocation Required. Employee has burden of proof. Court looks at percentage of each damage element recovered.
Employer Contribution/Negligence: Yes, reimbursement reduced by the percentage of fault.
Attorney’s Fees/Costs: Pro-rata, up to the discretion of the court.
Future Credit: Yes.
Auto No-Fault: No.
Workers’ Compensation Claims by Undocumented Employees
Statute: The statute expressly includes “aliens” and their legal status “legal” and “illegal”. N.M. Stat. Ann. § 52-3-3.
Case Law: Gonzalez v. Performance Painting, Inc., 259 P.3d 1098 (N.M. Ct. App. 2011).
Comments/Explanation/Other: Gonzalez held that undocumented workers are not entitled to modifier benefits, even though illegal aliens are not precluded from getting temporary or permanent disability benefits and medical expenses.