This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
An automobile accident occurred on July 31, 1992, near Abilene, Texas, involving a vehicle driven by the Defendant and another vehicle driven by a third party. The Defendant and their passengers sustained injuries. The third party's liability insurance policy had limits of $25,000 per person and $50,000 per occurrence, which were paid out to settle claims. The Defendant and their passengers sought additional compensation under their own underinsured motorist coverage, claiming their damages exceeded the amounts received from the third party's policy (paras 2-5).
Procedural History
- District Court of Lea County: Granted summary judgment in favor of the Plaintiff, holding that the third party was not an underinsured motorist under New Mexico law (para 5).
Parties' Submissions
- Appellants (Defendants): Argued that the third party was an underinsured motorist because the amounts they received from the third party's liability policy were less than their own underinsured motorist coverage limits. They contended that their actual damages exceeded the amounts recovered from the third party's policy (paras 5-6).
- Appellee (Plaintiff): Asserted that the third party was not an underinsured motorist under New Mexico law because the third party's liability coverage limits were equal to or greater than the Defendants' underinsured motorist coverage limits (para 5).
Legal Issues
- Whether a tortfeasor is considered an underinsured motorist under New Mexico law when the total liability coverage available to multiple claimants is less than the injured insureds' underinsured motorist coverage (para 6).
Disposition
- The Court of Appeals reversed the District Court's summary judgment and remanded the case for further proceedings (para 15).
Reasons
Per Donnelly J. (Wechsler and Bustamante JJ. concurring):
The Court interpreted Section 66-5-301(B) of the New Mexico uninsured/underinsured motorist statute, emphasizing that it must be liberally construed to fulfill its purpose of compensating injured parties. The Court held that in multiple-claimant situations, the determination of whether a tortfeasor is underinsured should be based on the amount of liability coverage actually available to the injured insureds, rather than the total liability coverage limits of the tortfeasor's policy. This interpretation aligns with the legislative intent to protect injured motorists and ensures that insured individuals can recover up to the limits of their underinsured motorist coverage for damages exceeding the amounts received from the tortfeasor's liability policy (paras 6-14).