Amicus Brief Fredloya V Swei

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO FRED LOYA INSURANCE CO., Plaintiff/Counterdefendant-Appellant, vs. NO. 35,338 THOMAS J. SWEICH, Defendant/Counterplaintiff-Appellee. ______________________________________________________________ BRIEF OF AMICUS CURIAE NEW MEXICO DEFENSE LAWYERS ASSOCIATION ______________________________________________________________ On Appeal From The Second Judicial District Court for the State of New Mexico The Honorable Victor Lopez Second Judicial District Judge, Presiding (No. D-202-CV-2014-00582) ______________________________________________________________ Mark D. Standridge Jarmie & Associates P.O. Box 344 500 North Church Street Las Cruces, N.M. 88004 (575) 526-3338 Fax: (575) 526-6791 Attorneys for New Mexico Defense Lawyers Association September 19, 2016 TABLE OF CONTENTS Page TABLE OF CONTENTS i TABLE OF AUTHORITIES ii STATEMENT REGARDING SUBMISSION OF AMICUS BRIEF 1 STATEMENT OF COMPLIANCE 2 SUMMARY OF PROCEEDINGS 3 I. Nature of the Case 3 II. Summary of Facts and Course of Proceedings Below 4 ARGUMENT AND AUTHORITIES 12 I. Punitive Damages are Awarded for Limited Purposes, and as Such, Courts Should Be Doubly Cautious in Awarding Them Against Persons or Entities Who Are Not at Fault 12 II. The District Court Erred in Looking Beyond the Property Damage Policy Limit in Awarding Punitive Damages 25 CONCLUSION 27 CERTIFICATE OF SERVICE 29 i TABLE OF AUTHORITIES Page Decisions of the New Mexico Courts Aken v. Plains Elec. Generation & Transmission Coop., Inc., 2002-NMSC-021, 132 N.M. 401, 49 P.3d 662 14 Allsup’s Convenience Stores, Inc. v. N. River Ins. Co., 1999-NMSC-006, 127 N.M. 1, 976 P.2d 1 14 Baker v. Armstrong, 1987-NMSC-101, 106 N.M. 395, 744 P.2d 170 7 Bird v. State Farm Mut. Auto. Ins. Co., 2007-NMCA-088, 142 N.M. 346, 165 P.3d 343 22, 23, 24 Chavarria v. Fleetwood Retail Corp., 2006-NMSC-046, 140 N.M. 478, 143 P.3d 717 14 City of Santa Fe v. Travelers Cas. & Sur. Co., 2010-NMSC-010, 147 N.M. 699, 228 P.3d 483 16-17 Espinoza v. Roswell Tower, Inc., 1996-NMCA-006, 121 N.M. 306, 910 P.2d 940 14 Farmers Ins. Co. of Arizona v. Sandoval, 2011-NMCA-051, 149 N.M. 654, 253 P.3d 944 15, 25 Faubion v. Tucker, 1954-NMSC-047, 58 N.M. 303, 270 P.2d 713 14 First Nat’l Bank in Albuquerque v. Sanchez, 1991-NMSC-065, 112 N.M. 317, 815 P.2d 613 13 Gonzales v. Sansoy, ii 1984-NMCA-133, 103 N.M. 127, 703 P.2d 904 12, 14 Green Tree Acceptance, Inc. v. Layton, 1989-NMSC-006, 108 N.M. 171, 769 P.2d 84 12, 13-14 Gulbransen v. Progressive Halcyon Ins. Co., 2010-NMCA-082, 148 N.M. 585, 241 P.3d 183 15 Jaramillo v. Providence Washington Ins. Co., 1994-NMSC-018, 117 N.M. 337, 871 P.2d 1343 13, 19 Kueffer v. Kueffer, 1990-NMSC-045, 110 N.M. 10, 791 P.2d 461 13 Madrid v. Marquez, 2001-NMCA-087, 131 N.M. 132, 33 P.3d 683 12 Manzanares v. Allstate Ins. Co., 2006-NMCA-104, 140 N.M. 227, 141 P.3d 1281 15, 25 Montoya v. Moore, 1967-NMSC-003, 77 N.M. 326, 422 P.2d 363 12-13 Pub. Serv. Co. of N.M. v. Diamond D Constr. Co., 2001-NMCA-082, 131 N.M. 100, 33 P.3d 651 24 Romero v. Dairyland Ins. Co., 1990-NMSC-111, 111 N.M. 154, 803 P.2d 243 20 Romero v. Mervyn’s, 1989-NMSC-081, 109 N.M. 249, 784 P.2d 992 13 Sloan v. State Farm Mut. Auto. Ins. Co., 2004-NMSC-004, 135 N.M. 106, 85 P.3d 230 23 State ex rel. New Mexico Highway and Transp. Dep’t v. Baca, 1995-NMSC-033, 120 N.M. 1, 896 P.2d 1148 13 iii State Farm Auto Ins. Co. v. Ovitz, 1994-NMSC-047, 117 N.M. 547, 873 P.2d 979 20 State Farm Mut. Auto. Ins. Co. v. Progressive Specialty Ins. Co., 2001-NMCA-101, 131 N.M. 304, 35 P.3d 309 19, 20 Stewart v. State Farm Mut. Auto. Ins. Co., 1986-NMSC-073, 104 N.M. 744, 726 P.2d 1374 17,18,23,24 Stinbrink v. Farmers Ins. Co. of Arizona, 1990-NMSC-108, 111 N.M. 179, 802 P.2d 664 7, 18, 19 Teague-Strebeck Motors, Inc. v. Chrysler Ins., 1999-NMCA-109, 127 N.M. 603, 985 P.2d 1183 23 Thompson v. Ruidoso-Sunland, Inc., 1987-NMCA-023, 105 N.M. 487, 734 P.2d 267 13, 22 Weidler v. Big J Enters., Inc., 1998-NMCA-021, 124 N.M. 591, 953 P.2d 1089 13 Whitely v. New Mexico State Personnel Bd., 1993-NMSC-019, 115 N.M. 308, 850 P.2d 1011 17 Wood v. Millers Nat. Ins. Co., 1981-NMSC-086, 96 N.M. 525, 632 P.2d 1163 16 Decisions of the United States Supreme Court City of Newport v. Fact Concerts, Inc., 453 U.S. 247 (1981) 13 Decisions of Other Jurisdictions Arnold v. Farmers Ins. Co. of Arizona, 827 F.Supp.2d 1289 (D.N.M. 2011) 17 iv Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653 (Tex. 2008) 21 Kentucky Cent. Ins. Co. v. Schneider, 15 S.W.3d 373 (Ky. 2000) 21 Kurent v. Farmers Ins., 62 Ohio St.3d 242, 581 N.E.2d 533 (1991) 20 Omni Ins. Co. v. Foreman, 802 So.2d 195 (Ala. 2001) 21 Statutes and Rules MSA 1978, § 56-8-4(A)(2) (2004) 23 NMSA 1978, § 66-5-301 (Repl.Pamp.1984) 18 NMSA 1978, § 66-5-301(A) (1983) 16, 26, 27 NMSA 1978, § 66-5-301(A) (Repl.Pamp.1989) 19 Rule 12-213(A)(1)(c) NMRA 2 Rule 12-213(F) NMRA 2 Rule 12-213(G) NMRA 2 Rule 12-215(A) NMRA 1 Rule 12-215(B) NMRA 1 Rule 12-215(F) NMRA 1 UJI 13-1802 NMRA 25 v UJI 13-1813 NMRA 25 UJI 13-1827 NMRA 13, 22 Other Authorities Alicia M. Santos, Who Are We Really Punishing? Why Mandating Coverage of Punitive Damages Under Liability Insurance Policies Does Not Make Sense, NMDLA DEFENSE NEWS, Winter 2014/15 21-22 vi STATEMENT REGARDING SUBMISSION OF AMICUS BRIEF Pursuant to Rule 12-215(A) NMRA, Amicus Curiae New Mexico Defense Lawyers Association (“NMDLA”) hereby submits this Amicus Brief pursuant to NMDLA’s contemporaneously-filed Motion for Leave to File Amicus Brief. Pursuant to Rule 12-215(F) NMRA, NMDLA states that no counsel for any party to this appeal authored any portion of this Brief, nor has any party’s counsel or any party to the appeal made any monetary contribution intended to fund the preparation or submission of this Brief. Pursuant to Rule 12-215(B) NMRA, counsel for all parties of record received timely notice of NMDLA’s intent to file this Amicus Brief. /s/ original signed by: Mark D. Standridge Jarmie & Associates 1 STATEMENT OF COMPLIANCE Pursuant to Rules 12-213(A)(1)(c) and 12-213(G) NMRA, Amicus Curiae New Mexico Defense Lawyers Association hereby certify that their Brief complies with the limitations of Rule 12-213(F) NMRA. This Brief has been prepared using a proportionally-spaced type style or typeface (Times New Roman, 14 point font), and contains 6,163 words (inclusive of footnotes). This word count was obtained using Microsoft Word 2013. /s/ original signed by: Mark D. Standridge Jarmie & Associates 2 SUMMARY OF PROCEEDINGS I. Nature of the Case This case began as a declaratory judgment action filed on January 21, 2014 by Fred Loya Insurance Company (Plaintiff-Counterdefendant below and Appellant here) against Thomas Sweich (Defendant-Counterplaintiff below and Appellee here) arising out of an insurance contract covering Sweich’s motor vehicle. Sweich’s vehicle (his personal property) was damaged by an uninsured third party. Loya sought a declaratory judgment stating that Sweich was entitled to no more than $10,000 from Loya under Sweich’s insurance policy, that amount representing the property damage limits available under the policy. See generally [1 RP 1-3, 10]. Sweich’s policy also had a coverage limit for “bodily injury” damages of $25,000. [1 RP 10]. On March 14, 2014, Sweich counterclaimed against Loya, asserting inter alia that Loya had breached the insurance contract by failing to pay Sweich “additional damages” above and beyond the $10,000 property damage policy limits. See generally [1 RP 14-19]. Specifically, Sweich asserted that Loya was liable for punitive damages arising out of the conduct of the uninsured third party. [1 RP 18]. As is relevant here, Loya appeals the award of punitive damages entered against Loya by the District Court. 3 II. Summary of Facts and Course of Proceedings Below On June 21, 2013, Thomas Sweich’s vehicle—a 2001 Chevrolet Suburban— was involved in an accident. See [10-5-15 4 Tr. 35:12-18]. Plaintiff purchased the Suburban in late 2003; it had been driven approximately 183,000 miles at the time of the accident. [10-5-15 4 Tr. 35:19-25]. Mr. Sweich was in his apartment and asleep when the collision occurred in the early morning. [10-5-15 4 Tr. 38:22- 39:3]. No one was inside the vehicle when it was hit—consequently, no one (including Sweich) suffered any bodily injuries. See [10-5-15 4 Tr. 39:13-17, 41:10-15]. There was, however, property damage to the vehicle. [10-5-15 4 Tr.

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