August 17, 2019

Archives for August 3, 2016

Tenth Circuit: Liability Limit Applies Per Accident, Not Per Covered Auto

The Tenth Circuit Court of Appeals issued its opinion in ACE Fire Underwriters Insurance Co. v. Romero on Monday, August 1, 2016.

Jesse Hale of Finney Farms was driving a tractor-trailer rig in rural New Mexico in the pre-dawn hours of March 24, 2011, when the trailer detached from the tractor. Before he could reattach it, Jose Chavez’s vehicle collided with the trailer, killing Chavez. Romero, the personal representative of Chavez’s estate, brought a wrongful death action against Finney Farms and Hale, and its insurer, ACE, settled with the estate. The parties conditioned settlement on litigating the policy limits applicable to the accident. ACE maintained that it had a $1 million per accident policy limit, but the estate argued that the limit was $1 million per covered auto, and because both the tractor and trailer had limits of $1 million, the liability limit for the accident should be $2 million.

The district court found that the policy unambiguously provided for a limit of $1 million per accident. However, following the district court’s order, the New Mexico Court of Appeals issued its opinion in Lucero v. Northland Ins. Co. (Lucero I), 326 P.3d 42 (N.M. Ct. App. 2014), rev’d, 346 P.3d 1154 (N.M. 2015), a case dealing with a similar policy, in which it reached the opposite conclusion. The estate filed a motion to reconsider in this case, arguing that the New Mexico Court of Appeals’ opinion controlled because the Northland policy was “virtually identical” to the ACE policy. The district court recognized the non-binding nature of the state court opinion, but reasoned that the New Mexico Supreme Court would probably follow the court of appeals, and amended its judgment to reflect the $1 million per auto limit.

The New Mexico Supreme Court accepted certiorari in Lucero I. ACE requested a stay of the district court’s order and reconsideration, which the district court denied. ACE appealed, and the Tenth Circuit held the appeal in abeyance during the pendency of the Lucero appeal. The New Mexico Supreme Court ultimately reversed the court of appeals, finding the policy language unambiguous that the liability limit applied per accident regardless of the number of covered vehicles.

The Tenth Circuit lifted the stay of the ACE appeal following the Lucero II decision. ACE argued that the policy at issue in Lucero II was substantially similar to its policy, while the estate argued that the ACE policy differed because of a table showing covered vehicles and premium amounts. The Tenth Circuit noted that although the table was not included in the Lucero opinion, it well could have been part of the Northland policy. The Tenth Circuit disagreed that the table rendered the policy ambiguous, finding instead that the plain language of the policy supported ACE’s interpretation. The Tenth Circuit found that Lucero II controlled, and reversed the district court.

Tenth Circuit: Unpublished Opinions, 8/2/2016

On Tuesday, August 2, 2016, the Tenth Circuit Court of Appeals issued no published opinion and five unpublished opinions.

Eyring v. Fondaco

In re Behrends: Lofstadt v. Oletski-Behrends

Herrera v. Falk

Drury v. BNSF Railway Co.

Johnson v. Dash

Case summaries are not provided for unpublished opinions. However, some published opinions are summarized and provided by Legal Connection.