AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The case involves appellants Gustavo Beltran, Alma Beltran, and child A.B. who filed a suit against Manuel and Delfina Preciado, alleging sexual abuse of A.B. by Manuel and negligent supervision by Delfina while A.B. was in their foster care. The Preciados stipulated to money judgments, and their insurer, Farmers Insurance Exchange, sought a declaratory judgment for no indemnity coverage under their homeowner’s insurance policy for the claims. The appellants counterclaimed against Farmers and its agents for unfair trade practices, third-party bad faith insurance practices, and negligence (paras 2-3).

Procedural History

• District Court of Santa Fe County: Granted Farmers Insurance Exchange's motion for summary judgment, finding no coverage under the policy for claims based on Manuel’s intentional conduct. Dismissed appellants' counterclaims against Farmers and its agents for failure to state a claim and lack of standing (paras 1-3).

Parties' Submissions

• Appellants: Argued that they had standing to bring their counterclaims under Hovet v. Allstate Insurance Co., asserting that Appellees’ duty of reasonable care to procure adequate insurance coverage extends to them as foreseeable third-party beneficiaries (para 1).
• Appellee Farmers Insurance Exchange: Contended that appellants lacked standing to bring their counterclaims and that the insurance policy did not cover the claims based on Manuel’s intentional conduct (paras 3, 6).
• Appellee Lori Otero: Filed a motion to dismiss based on appellants’ failure to state a claim under the New Mexico Unfair Practices Act (para 3).
• Appellee Phillip M. Box: Parties stipulated to his motion for summary judgment on the same grounds as Farmers' successful motion to dismiss (para 3).

Legal Issues

• Whether appellants had standing to bring their counterclaims under Hovet v. Allstate Insurance Co.
• Whether the insurance policy’s exclusions precluded coverage for the claims against the Preciados, including the negligent supervision claim against Delfina Preciado.
• Whether the district court erred in dismissing appellants' negligent procurement claim against Ms. Otero and Mr. Box.

Disposition

• The Court of Appeals affirmed the district court’s pretrial adjudication of appellants' counterclaims against Appellees, upholding the dismissal of the claims for failure to state a claim and lack of standing, and the grant of summary judgment on the insurance coverage issue (para 17).

Reasons

• The Court of Appeals, per Judge Kristina Bogardus, held that Farmers had the right to refuse the insurance claim without exposure to a bad faith claim because it successfully challenged the coverage of appellants’ claim in its motion for summary judgment. The court found the policy exclusions for intentional acts and molestation clear and unambiguous, precluding coverage for Manuel Preciado’s actions. It also determined that any claims arising from Delfina’s negligent supervision were excluded by the policy, aligning with precedent set in Lopez v. New Mexico Public Schools Insurance Authority. The court concluded that appellants did not have standing for their counterclaims under Hovet as the district court’s order granting summary judgment on the insurance coverage issue disposed of the bad faith insurance practice claim. Additionally, the court did not consider appellants' unpreserved negligence claims against Ms. Otero and Mr. Box due to lack of preservation and development of these arguments in the lower court (paras 4-16).