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Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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• UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

FILED . Uaited States Cour< of Appeals 

Tenth Circuit 

PETER H. JOHNSTONE, Personal 

Representative of the Estate of 

Ivan S. Fragua, Deceased, 

Plaintiff-Appellant, 

v. 

DAIRYLAND INSURANCE COMPANY, 

Defendant-Appellee. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

AUG 121991 

ROBERT L. HOECKER 

Clerk 

No. 91-2043 

(D.C. No. CIV-90-0269-M) 

(D. New Mexico) 

ORDER AND JUDGMENT* 

Before ANDERSON, TACHA, and BRORBY, Circuit Judges. 

After examining the briefs and the appellate record, this 

three-judge panel has determined unanimously that oral argument 

would not be of material assistance in the determination of this 

appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The 

cause is therefore ordered submitted without oral argument. 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 1 
Appellant is aggrieved as the district court granted summary 

judgment to the opposition. 

Both parties agree the significant facts are undisputed and 

they are accurately set forth in the district court's thorough 

Memorandum Opinion and Order. The facts will not be reiterated. 

We summarize the facts by stating there was a two car, head-on 

collision and people were killed in both cars. Mr. Herman 

(Plaintiff) was appointed personal representative of the deceased 

driver who was at fault. He was also appointed personal 

representative of the deceased driver who was not at fault and 

guardian of the minor passenger who was injured. For the sake of 

simplicity we will refer to the deceased, at-fault driver as the 

tort-feasor and the other deceased driver and her injured son as 

mother-son. 

Mr. Herman commenced a suit in state court on behalf of 

mother-son against 

pending and there 

tort-feasor's 

has been, to 

estate. This 

our knowledge, 

determination of liability or of damages. 

suit 

no 

is still 

judicial 

Mr. Herman, ostensibly on behalf of tort-feasor's estate, 

brought this action against tort-feasor's insurance carrier asking 

for damages in excess of the policy limits due to insurance 

carrier's bad faith refusal to settle mother-son's claim against 

tort-feasor. Mr. Johnstone was later substituted as the partyplaintiff and as the administrator of tort-feasor's estate. 

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Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 2 
The district court granted the insurance carrier's motion for 

summary judgment reasoning that, under New Mexico law, a bad faith 

claim may only be maintained between the carrier and its insured 

and in reality this action is being maintained by the mother-son, 

who were third parties to the insurance contract. The district 

court reached this conclusion in part because the same law firm 

represented both the tort-feasor and mother-son and represented 

that their interests are one and the same. 

Paraphrasing Appellant's argument, he asks, "What else can I 

do?" He asserts he was appointed personal representative of tortfeasor's estate as he (representing mother-son) is a creditor of 

this estate. He states he is representing mother-son as he was 

mother's husband and son's father. He makes no argument of 

disputed facts nor of incorrect law. He simply states this suit 

was in fact brought on behalf of tort-feasor's estate. 

The insurance carrier asserts this suit is premature, arguing 

in its brief to this court that a bad faith cause of action does 

not accrue until a judgment has been obtained against the insured 

in excess of the liability coverage. We are inclined to agree. 

In Torrez v. State Farm Mut. Auto. Ins. Co., 705 F.2d 1192, 1202 

(10th Cir. 1982), in deciding a case under the law of New Mexico 

(which is also the controlling law in this appeal), we held: 

[T]he cause of action for bad faith by State Farm did 

not accrue until the judgment was final It was 

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Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 3 
only then that the excess liability was established. 

Appellant attempts to distinguish Torrez from the case before us 

by arguing that Torrez involved an assignment and the case was 

brought by a third party. We are not persuaded and believe the 

law is equally applicable to the facts now before us. 

The judgment of the district court is AFFIRMED for the reason 

that we believe this suit to be premature. 

forthwith. 

The mandate shall issue 

Entered for the Court: 

WADE BRORBY 

United States Circuit Judge 

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Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 4 
IN '1'HE UNITED STATES DISTRICT COURT FIL 

FOR 'l'HE DISTRICT OF NEW MEXICO UN,ra, STA E D 

~;.~~.J-i.JER TES C13Tr.rcr COt:Rr 

PETER H. JOHNSTONE, Personal ) 

Representative of the Estate ) 

of IVANS. FRAGUA, Deceased, ) 

) 

Plaintiff, ) 

) 

"" QUf, NEW MEXICQ 

FEB - 119 11 

v. ) 

) 

DAIRYLAND INSURANCE COMPANY, ) 

) 

No. 9O-269-M Civil 

Defendant. ) 

MEMORANDUM OPINION 

Mm 

ORDER 

This matter came on for consideration on defendant's motion 

to disqualify opposing counsel and motion for summary judgment, and 

plaintiff's motion for summary judgment. Having considered the 

motions and memoranda of the parties and being otherwise fully 

advised in the premises, I find that the motion _t~ disqualify is 

not well taken and it will be denied. Plaintiff• s motion for 

summary judgment is not well taken and it will also be denied. 

However, the defendant's motion for summary judgment is well taken 

and it will be granted. 

Undisputed Pacts 

This action arose out of a two-car, head-on automobile 

accident that occurred on August 3, 1989. Susie Herman and her 

1 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 5 
passenger, Andrew Herman, were in one car. Ivan Fragua and his 

passenger, Paula Suazo, were in the other. At the time of the 

accident, Ivan Fragua was intoxicated and had pulled abruptly into 

the wrong, on-coming lane of traffic. As a result of the collision, Susie Herman, Ivan Fragua, and Paula Suazo died. Andrew 

Herman, who is a minor child, sustained personal injuries. The 

record does not reveal the nature or extent of Andrew's injuries. 

Ron Herman is the administrator of the estate of Susie Herman 

and the guardian and next friend of Andrew Herman. In that same 

capacity, Ron Herman is a creditor of Fragua • s estate. As a 

creditor, Ron Herman was also appointed as the personal representative of Fragua 's estate in a probate proceeding pursuant to 

N.K.Stat.AJm. 1§ 45-3-203 and 45-1-201(19) (1978). 

Fragua was insured as a permissive driver of the vehicle by 

Dairyland Insurance Company with liability limits of $25,000 per 

person and $50,000 per occurrence. Dairyland settled with the 

estate of Paula Suazo. Subsequently, an offer to settle with the 

Hermans within the remaining policy limits was made to Dairyland. 

However, the offer excluded settlement of subrogation rights that 

were held by a health care insurauce carri.ar fo.1.· Andrew Herman. 

Dairyland refused to settle the Hermans• claims unless all 

subrogation claims were also settled. Dairyland first denied, but 

since admitted, that the value of the Hermans' claims exceeds 

$25,000 each. 

2 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 6 
After settlement negotiations with Dairyland failed, Ron 

Herman initiated two lawsuits. Herman brought suit in State 

District Court as the personal representative and next friend of 

Susie and Andrew Herman against the estate of Ivan Fragua. Herman 

brought this second action in Federal District Court as personal 

representative of Fragua•s estate against Dairyland Insurance 

Company alleging damages for bad faith insurance dealings and 

seeking a declaration that the insurance cr>m~any must pay any 

judgment in excess of the policy limits. There has been no 

assignment from Fragua's estate to bring any claims against 

Fragua's insurer. 

Ron Herman is legally represented by the law firm of Grisham 

and Lawless, P.A. in both actions. Grisham and Lawless, therefore, 

represent Fragua's estate in the federal action and the Hermans 

against Fragua' s estate in the state court action. Fragua 's estate 

is represented by attorney John Klecan in the state court action. 

After defendant's summary judgment motion was filed in this federal 

lawsuit, Peter Johnstone was substituted for Ron Herman as the 

administrator of Fragua' s estate at the request of attorneys 

Grisham and Lawless. Grisham and Lawless remain the attorneys for 

Fragua's estate in the present federal action. 

Discussion 

I. Plaintiff's Motion for summary Judgment 

Based on the above facts, plaintiff moves for summary judgment 

on the issue of whether plaintiff is entitled to an order requiring 

3 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 7 
Dairyland to pay any judgment awarded in . excess of the policy 

limits. The relief that plaintiff seeks necessarily turns on the 

question of whether Dairyland' s failure to settle the Hermans• 

claims constitutes bad faith under New Mexico law. The facts as 

outlined, though undisputed, establish only that Dairyland refused 

to settle with the Hermans. The material question of whether 

Dairyland acted in bad faith is not resolved. "Furthermore, no 

cause of action for .bad fa!th by Dairyiand can ~c.crue until there 

is a final judgment against Fragua•s estate exposing the estate to 

liability in excess of the policy. Torrez v. state Farm Mutual 

Automobile Insurance co,, 705 F.2d 1192, 1202 (10th Cir. 1982). 

There is nothing in the record to indicate that a final judgment 

has been entered in the state court action. Where the evidentiary 

matter in support of the motion does not establish the absence of 

a genuine issue, summary judgment must be denied even if no 

opposing evidentiary matter is presented." (emphasis original). 

10A Wright, Killer, and Kana, Federal Practice, Procedure, Civ.2d 

§2739 (quoting Advisory committee note to 1963 amendments to 

Fed.R.Civ.P. 56). Plaintiff's motion is, therefore, denied. 

II. Defendant's Motion to Disqualify 

Defendant moves to disqualify Grisham and Lawless pursuant to 

the Rules of Professional conduct, Rule 16-307 because attorney 

Grisham is listed as a witness for plaintiff in the present federal 

action and Rule 16-107 based on a conflict of interest in representing adverse parties simultaneously. 

4 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 8 
Rule l.6-3O7 provides that "(a] lawyer shall not act as 

advocate at a trial in which the lawyer is likely to be a necessary 

witness except where (1) the testimony relates to an uncontested 

issue, or (2) the testimony relates to the nature and value of 

legal services rendered in the case." Neither exception applies 

in this case. The rule goes on to state that an associate attorney 

may act as trial advocate unless precluded by Rule 16-107, which 

addresses representation of adverse clients. In this case, 

although Mr. Grisham may be called as a witness, his associate Mr. 

Lawless will act as trial advocate. The pertinent question, 

therefore, is whether a conflict exists under Rule 16-107 as 

alleged by defendant. 

The standard applied to a motion to disqualify based on 

simultaneous or prior representation of an adverse party is whether 

a "substantial relationship" exists between the two actions. Smith 

v. Whatcott, 757 P.2d 1098, 1100 (10th Cir. 1985). "Substantiality 

is present if the factual context of the two representations are 

similar or related." li.,_ (quoting Trone v, smith. 621 P.2d 994, 

998 (9th Cir. 1980)). If a substantial relationship is found, a 

presmnption arises that a client has revealed fact3 tc the attorney 

that require his disqualification. smith v. Whatcott, supra at 

1100. The purpose is to protect client confidentiality and to 

avoid the appearance of impropriety. l4L 

A substantial relationship appears to exist between the two 

actions in question. Both arise, to some extent, from the motor 

5 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 9 
vehicle accident and subsequent events. However, keeping in mind 

that the underlying purpose of the rule is to protect client 

confidences, careful examination of this unusual set of circumstances distinguishes this case from Smith v. Whatcott and reveals 

. no possibility of confidences being breached. Having died in the 

crash, Mr. Fragua revealed nothing to Grisham and Lawless that 

could be used against his estate in the state court action. 

Furthermore, the interests of Fragua • s estate are in fact the 

interests of the Hermans in the present federal action, that is, 

to assure that any judgment in the Hermans' favor in the state 

court action is covered completely by Dairyland Insurance Company. 

Though highly unusual, I see no conflict that should preclude the 

Hermans • and Fragua • s estates from being represented by Grisham and 

Lawless. 

III. Defendant's Motion for Summary Judgment 

In the absence of disputed material facts, Dairyland moves for 

summary judgment on the issue of whether plaintiff's claim is 

barred by law. Under New Mexico law, a claim for bad faith dealing 

by an insurance company applies only between an insu~~~ and its 

insured, not a third-{)r.rty claimant. Chavez v. C!1eno~et,., •~ B.X. 

423, 429, 553 P.2d 703, 709 (Ct.App. 1976). Dairyland argues that 

even though the present federal action is brought nominally by 

Fragua•s estate, it is in reality a suit by the Hermans and is 

barred because the Hermans were third-parties to the contract 

between Fragua and Dairyland. I agree. Neither Ron Herman nor 

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Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 10 
Peter Johnstone have been given an assignment as required to bring 

claims against Fragua•s insurer. see Torrez v, state Parm Mutual 

Automobile Insurance co., supra at 1202. Ron Herman is a creditor 

of Fragua's estate by virtue of being the administrator of Susie 

. Herman's estate and next friend of Andrew Herman. It was only Ron 

Herman's status as a creditor that allowed him to be appointed 

administrator of Fragua•s estate and initiate this suit in its 

name. 

The fact that Ron Herman was replaced as the administrator of 

Fragua's estate appears in this case to be a cosmetic change only. 

The change was requested by the Hermans• attorneys after they were 

on notice that Dairyland challenged the suit as one by a third 

party. Finally, Grisham and Lawless continue to represent Fragua • s 

estate in this action and the Hermans in the nate action on the 

contention that the interests are one and the same. I find that 

defendant's motion for summary judgment is well taken and it is, 

therefore, granted. 

IT IS SO ORDERED. 

SENIOR UNITED STATES DISTRICT JUDGE 

7 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 11 
J:N 'l'HE UNJ:'l'ED S'l'A'l'ES DJ:STRJ:CT COURT F I L E D 

FOR '1'HE DJ:S'l'RJ:C'l' OP NEW KEXJ:CdJNiiEO STATES Di.:iF.iCT CCt:i\i 

J..:.uUCUERQUE, NEW MEXICO 

PETER H. JOHNSTONE, Personal ) 

Representative of the Estate ) 

of IVAN s. FRAGUA, Deceased, ) 

) 

Plaintiff, ) 

) 

V • ) 

) 

DAIRYLAND INSURANCE COMPANY, ) 

) 

Defendant. ) 

J U D G M E N T 

FEB - 1 ln~l 

No. 90-269-M Civil 

Having entered my memorandum opinion and order in this matter 

in favor of the defendant: Now, Therefore, 

J:'l' J:S ORDERED, ADJUDGED and DECREED that the plaintiff take 

nothing, that the action is dismissed on the merits, and that the 

defendants shall recover their costs from the plaintiff. 

SENIOR UNITED STATES DISTRICT JUDGE 

8 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 12 
37-2-1. What causes of action survive. 

In addition to the causes of action which survive at common law, causes of action for 

mesne profits, or for an injury to real or personal estate, or for any deceit or fraud, shall 

also survive, and the action may be brought, notwithstanding the death of the person 

entitled or liable to the same. The cause of action for wrongful death and the cause of action 

for personal injuries, shall survive the death of the party responsible therefor. 

9 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 13 
45-1-201. General definitions. 

A. AiJ used in the Probate Code and unless the context otherwise requires: 

(1) "application" means a written request to the probate court for an order of 

informal probate or appointment under Sections 45-3-301 through 45-3-311 NMSA 1978; 

(2) ''beneficiary", as it relates to trust beneficiaries, includes a person who has any 

present or future interest, vested or contingent, and also includes the owner of an interest 

by assignment or other transfer and, as it relates to a charitable trust, includes any person 

entitled to enforce the trust; 

(3) "child" includes any individual entitled to take as a child under the Probate Code 

by intestate succession from the parent whose relationship is involved and excludes any 

person who is only a stepchild, a foster child, a grandchild or any more remote descendant; 

(4) "claims", in respect to estates of decedents and protected persons, includes 

liabilities of the decedent or protected person, whether arising in contract, in tort or 

otherwise, and liabilities of the estate which arise at or after the death of the decedent or 

after the appointment of a conservator, including funeral expenses and expenses of 

administration. The term does not include estate or inheritance taxes, demands or disputes 

regarding title of a decedent or incapacitated person or minor ward to specific assets 

alleged to be included in the estate; 

(6) "conservator'' means a person who is appointed. by a court to manage the 

property or financial affairs or both of an incapacitated. person or a minor ward; 

(6) "devise", when used as a noun, means a testamentary disposition of real or 

personal property and, when used as a verb, means to dispose of real or personal property 

by will; 

(7) "devisee" means any person designated. in a will to receive a devise. In the case of 

a devise to an existing trust or trustee, or to a trustee on trust described by will, the trust 

or trustee is the devisee and the beneficiaries are not devisees; 

(8) "distributee" means any person who has received property of a decedent from his 

personal representative other than as a creditor or purchaser. A testamentary trustee is a 

distributee only to the extent of distributed assets or increment thereto Prnaining in his 

hands. A beneficiary of a testamentary trust to whom the trustee has distributed property 

received from a personal representative is a distributee of the personal representative. For 

purposes of this subsection, "testamentary trustee" includes a trustee to whom assets are 

transferred by will, to the extent of the devised assets; 

(9) "estate" means the property of the decedent, trust or other person whose .aft'aira 

are subject to the Probate Code as originally constituted and as it exists from time to time 

during Adrninish:'ation; 

(10) "general letters" means letters iuued to a general personal representative; 

(11) "fiduciary" includes personal representative, guardian, conservator or trustee; 

(12) "foreign personal representative" means a personal representative of another 

jurisdiction; 

(13) "formal proceeding" means one conducted before the district court with notice 

to intereated persons; 

(14) "general personal representative" includea an eucutor, adrninistTator, succeasor personal representative and persons who perform substantially the same function 

under the law governing their status. The term does not include a special administrator; 

(16) "guardian" means a person who has qualified to have the care, custody or 

control of the person of a minor or incapacitated person pursuant to testamentary or court 

appointment, but excludes one who is merely a guardian ad litem; 

(16) "heirs" means those persons, including the surviving spouse, who are entitled 

under the statutes of intestate succession to the property of a decedent; 

(17) "incapacitated. person" is as defined in Section 45-6-101 NMSA 1978; 

(18) "informal proceedings" means those conducted without notice to interested 

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Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 14 
,, 

persons, except as pro'rided for ~ Section 45-3-306 NMSA 1978, before the probate court for 

probate of a will or appointment of a personal representative; 

(19) "interested person" includes heirs, devisees, children, spouses, credit.ors, 

beneficiaries and any others having a property right in or claim against a trust estate or 

the estate of a decedent, minor ward or incapacitated person which may be affected by the 

proceeding. It also includes personal representatives or, if not yet appointed, persons 

having priority for appointment as a personal representative and other fiduciaries 

representing interested persons. This definition does not apply t.o Sections 45-5-101 

through 45-5-502 NMSA 1978; 

(20) "issue" means all of a person's lineal descendant.a of all generations, with the 

relationship of parent and child at each generation being determined by the definitions of 

child and parent contained in the Probate Code; 

(21) "letters" includes letters testamentary, letters of administration, letters of 

guardianship and letters of conservatorship; 

(22) "limited guardian" is as defined in Section 45-5-101; 

(23) "minor" means a person who has not reached the age of majority; 

(24) "mortgage" means any conveyance, agreement or arrangement in which 

property is used as security; 

(25) "nonresident decedent" means a decedent who was domiciled in another 

jurisdiction at the time of his death; 

(26) "organization" includes a corporation, government or governmental subdivision 

or agency, business trust, estate, trust, partnership or association, two or more persons 

having a joint or common interest, or any other legal entity; 

(27) "parent" includes any person entitled to take, or who would be entitled t.o take 

if the child died without a will, as a parent under the Probate Code by intestate succession 

from the child whose relationship is in question, and excludes any person who is only a 

stepparent, foster parent or grandparent; 

(28) "person" includes an individual, a corporation, an organization or any other 

legal entity; 

(29) "personal representative" includes an executor, administrator, successor personal representative, special administrator and persons who perform substantially the 

same function under the law governing their status; 

(30) "petition" means a written request to the district court for an order after notice; 

(31) "property" includes both real and personal property or any interest therein and 

means anything that may be the subject of ownership; 

(32) "protected person" is as defined in Section 45-5-101 NMSA 1978; 

(33) ''protective proceeding" is as defined in Section 45-5-101 NMSA 1978; 

(34) "security" includes any note, stock, treasury stock, bond, debenture, evidence of 

indebtedness, collateral trust certificate, transferable share, voting trust certificate or, in 

general, any interest or instrument commonly known as a security, or any certificate of 

interest, or participation, any temporary or interim certificate, receipt or certificate of 

deposit for or any warrant or right to subscribe to or purchase any of the foregoing; 

(35) "settlement", in reference to decedent's estate, includes the full process of 

administration, distribution and closing; 

(36) "special 11dministrator" means a personal representative as described by 

Sections 45-3-614 through 45-3-618 NMSA 1978; 

(37) "state" includes any state of the United States, the District of Columbia, the 

Commonwealth of Puerto Rico or any territory or possession subject to the legislative 

authority of the United States; 

(38) "successor personal representative" means a personal representative, other 

than a special administrator, who is appointed to succeed a previously appointed personal 

representative; 

(39) "successors" means those persons, other than creditors, who are entitled to 

property of a decedent under his will or the Probate Code; 

(40) "supervised administration" refers to the proceedings described in Sections 

45-3-501 through 45-3-505 NMSA 1978; 

(41) "testacy proceeding" means a proceeding to establish a will or determine 

intestacy; 

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Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 15 
., (42) "trust" includes any express trust, private or charitable, with additions thereto, 

wherever and however created. It also includes a trust created or determined by judgment 

or decree under which the trust is to be administ.P.red in the manner of an express trust. 

Trust excludes other constructive trusts, and it excludes resulting trusts, conservatorships, 

personal representatives, trust accounts, custodial arrangements including those created 

under the Uniform Gifts to Minors Act, business trusts providing for certificates to be 

issued to beneficiaries, common trust funds, voting trusts, security arrangements, 

liquidation trusts and trusts for the primary purpose of paying debts, dividends, interest, 

salaries, wages, profits, pensions or employee benefits of any kind, and any arrangement 

under which a person is nominee or escrowee for another; 

(43) "trustee" includes an original, additional or successor trustee, whether or not 

appointed or confirmed by court; 

(44) "ward" is as defined in Section 45-5-101 NMSA 1978; 

(45) "will" includes codicil and a testamentary instrument which merely appoints 

an executor or revokes or revises another will, and excludes holographic wills; and 

(46) "guardian ad litem" means a person appointed by the district court before 

litigation to represent and protect the interests of the minor or incapacitated person. 

B. The definitions found in Subsection A of this section are made subject to additional 

definitions contained in subsequent articles which are applicable to specific articles. 

1 2 

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., 

'I' 

7 

i 

) ; 

I 

' 

45-3-104. Claims against decedent; necessity of administration. 

A. No proceeding to enforce a claim against the estat.e of a decedent or his successors 

may be revived or commenced before the appointment of a personal representative. After 

the appointment and until distribution, all proceedings and actions to enforce a claim 

against the estate are governed by the procedure prescribed by Sections 3-101 through 

3-1204 (45-3-101 to 45-3-1204 NMSA 1978]. After distribution a creditor whose claim has 

not been barred may recover from the distribut.ees as provided in Section 3-1004 [45-3-1004 

NMSA 1978] or from a personal representative individually liable as provided in Section 

3-1005 (45-3-1005 NMSA 1978]. 

B. Subsection A of this section shall have no application to a proceeding by a secured 

creditor of the decedent to enforce his right to his security except as to any deficiency 

judgment which might be sought therein. 

) 

1 3 

Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 17 
45-3-203. Priority among persons seeking appointment as personal 

representative. 

A. Whether the proceedings are formal or informal, persons who are not disqualified 

have priority for appointment in the following order: . . . (1) the person with priority as determined by a probated will mcluding a person 

nominated by a power conferred in a will; 

(2) the surviving spouse of the decedent who i,s a devisee of the decedent; 

(3) other devisees of the decedent; 

(4) the surviving spouse of the decedent; 

(5) other heirs of the decedent; and . (6) on application or petition of an interested person other than a spouse, deV1See or 

heir, any qualified person. . . B. An objection to an appointment can be made only m formal proceedings. In case of 

objection the priorities stated in Subsection A of this section apply except that: 

(1) if the estate appears to be more than adequate to meet exemptions and costs of 

11drninistration but inadequate to discharge anticipated unsecured claims, the court, on 

petition of creditors, may appoint any qualified person; · · . . . 

(2) in case of objection to appointment of ~ person other than on~ w~ose pno~ty ts 

determined by will by an heir or devisee appeanng to have a substantial mterest m the 

estate, the court may appoint a person who is acceptable to heirs and devisees whose 

interests in the estate appear to be worth in total more than half of the probable 

distributable value of the estate, or, in default of this accord, any suitable person. 

C. A person entitled-to letters under Paragraphs (2) through (5) of Subsection A of this 

section, or a person who has not reached his age of majority and who might be entitled to 

letters but for his age, may nominate a qualified person to act as personal representative 

and thereby confer his relative priority for appointment on his nominee. Any person who 

has reached his age of majority may renounce his right to nominate or to an appointment 

by appropriate writing filed with the court. When two or more persons share a priority, 

those of them who do not renounce must concur in nominating another to act for them, or 

in applying for appointment. 

D. Conservators of the estates of protected persons, or if there is no conservator, any 

guardian except a guardian ad litem of a minor or incapacitated person, may exercise the 

same right to nominate, to object to another's appointment, or to participate in determining 

the preference of a majority in interest of the heirs and devisees that the protected person 

or ward would have if qualified for appointment. 

E. Appointment of one who does not have highest priority, including highest priority 

resulting from renunciation or nomination determined pursuant to this section, may be 

made only in formal proceedings. Before appointing one without highest priority, the court 

must determine that those having highest priority, although given notice of the 

proceedings, have failed to request appointment or to nominate another for appointment, 

and that 9.dministration is necessary. 

F. No person is qualified to serve as a personal representative who is: 

(1) under the age of majority; 

(2) a person whom the court finds unsuitable in formal proceedings; or 

(3) a creditor of the decedent, unless the appointment is to be made after forty-five 

days have elapsed from the death of the decedent. 

G. A personal representative appointed by a court of the decedent's domicile has priority 

over all other persons except where the decedent's will nominates different persons to be 

personal representatives in New Mexico and in the state of domicile. The domiciliary 

personal representative may nominate another, who shall have the same priority as the 

domiciliary personal representative. 

H. This section governs priority for appointment of a successor personal representative 

but does not apply to the selection of a special administrator. 

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• 

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45-3-703. General duties; relation and liability to persons interested 

in estate; standing to sue. 

A. A personal representative is under a duty to settle and distribute the estate of a 

decedent in accordance with the terms of any probated and effective will and the Probate 

Code, and as expeditiously and efficiently as is consistent with the best interests of the 

es_ta~-He shall use the auth~rity confe~ upon him by the Probate Code, the terms of~e 

will, if any, and any order in proceedings to which he is party for the best inte~f 

successors to the estate. ) 

B. A personal representative shall not be surcharged for acta of administration or 

distribution if the conduct in question was authorized at the time. Subject to other 

obligations of administration, an informally probated will is authority to administer and 

distribute the estate according to its terms. 

C. An order of appointment of a personal representative, whether issued in informal or 

formal proceedings, is authority to distribute apparently intestate assets to the heirs of the 

decedent if, at the time of distribution, the personal representative is not aware of: 

(1) a pending testacy proceeding; 

(2) a proceeding to vacate an order entered in an earlier testacy proceeding; 

(3) a formal proceeding questioning his appointment or fitness to continue; or 

(4) a supervised administration proceeding. 

D. Nothing in this section affects the duty of the personal representative to administer 

and distribute the estate in accordance with the rights of c)aimant.s, the surviving spouse, 

any minor and dependent children and any pretermitted child of the decedent. 

E. Except as to proceedings which do not surviye the death of the decedent, a personal 

representative of a decedent domiciled in New Mexico at his death has the same standing 

to sue and be sued in the courts of New Mexico and the courts of any other jurisdiction as 

his decedent had immediately prior to death. 

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Appellate Case: 91-2043 Document: 010110131486 Date Filed: 08/12/1991 Page: 19