Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-02068/USCOURTS-ca10-89-02068-0/pdf.json

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

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,,, . :PlLltD 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

UfllreJ Stif~ (.ou,i t>f Appeals 

Tenth Cirruit 

APR 2 5 1990 

ROBERT L. HOECKER 

Clerk 

CARLOS P. CANDELARIA, 

Plaintiff-Appellant, 

) 

) 

) 

) 

) 

v. ) No. 89-2068 

) (D.C. No. 87-1428-JP) 

GREAT AMERICAN INSURANCE COMPANY, ) (D. N.M.) 

a Corporation: and AMERICAN ALLIANCE 

INSURANCE COMPANY, a Corporation, 

Defendants-Appellees. 

) 

) 

) 

) 

) 

ORDER AND JUDGMENT* 

Before McKAY, BARRETT, Circuit Judges, and KANE,** District Judge. 

**Honorable John L. Kane, Senior District 

District Court for the District of 

designation. 

Judge, United States 

Colorado, sitting by 

Plaintiff-appellant appeals the district court's order of 

February 15, 1989, entering summary judgment against him on his 

claims against defendants-appellees. At the time plaintiff filed 

this appeal, a counterclaim against him remained unresolved by the 

* 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: 89-2068 Document: 01019972112 Date Filed: 04/25/1990 Page: 1 
district court. Accordingly, on February 20, 1990, we issued an 

order to plaintiff directing him to lodge with this court within 

thirty days either the determination and direction called for by 

Fed. R. Civ. P. 54(b) or an order and judgment finally 

adjudicating all remaining claims. Plaintiff subsequently filed a 

copy of an order entered by the district court on March 8, 1990, 

dismissing the outstanding counterclaim. Since a final judgment 

now has been entered in this case by the district court, we have 

jurisdiction to consider the merits of plaintiff's appeal and 

shall proceed to do so. See Lewis v. B.F. Goodrich Co., 850 F.2d 

641, 645-46 (10th Cir. 1988); Federal Sav. & Loan Ins. Corp. v. 

Huff, 851 F.2d 316, 320-21 (10th Cir. 1988). 

On or about August 9, 1984, plaintiff was a passenger in a 

car that was involved in a multiple car accident, as a result of 

which plaintiff suffered injuries. The accident was caused by the 

acts of another driver, David C. Smith. At the time of the 

accident, plaintiff had a policy of insurance issued by defendant 

Great American Insurance Company through its subsidiary, defendant 

American Alliance Insurance Company. Defendants will be referred 

to collectively as "Great American." 

Plaintiff's policy with Great American provided for 

underinsured motorist benefits. On September 24, 1985, 

plaintiff's counsel sent Great American a letter informing it that 

plaintiff intended to make a claim for uninsured or underinsured 

motorist benefits under his policy because the available funds 

from the insurance policy the tort-feasor, Mr. Smith, had with 

Allstate Insurance Company (Allstate), would not be enough to 

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Appellate Case: 89-2068 Document: 01019972112 Date Filed: 04/25/1990 Page: 2 
cover plaintiff's damages. The letter also informed Great 

American that the driver of the car in which plaintiff had been a 

passenger had commenced a lawsuit against the tort-feasor and 

plaintiff was contemplating intervening in that lawsuit. 

From the spring of 1986 through the spring of 1987, plaintiff 

and Great American were unable to agree as to the extent of 

plaintiff's injuries and, therefore, the amount of benefits 

payable to plaintiff under the policy over and above the $3,318.00 

Great American already had paid plaintiff. Great American, 

therefore, suggested that the parties submit their dispute to 

arbitration under the terms of the policy. 

On June 19, 1986, unbeknownst to Great American, plaintiff 

settled with the tort-feasor and Allstate for half the remaining 

Allstate policy limits. A portion of the settlement was in the 

form of a check issued by Allstate to plaintiff and Great 

American, jointly, for the total amount of benefits Great American 

had paid plaintiff as of that date. As part of the settlement, 

plaintiff executed a release which discharged the tort-feasor and 

Allstate from all further liability. 

Sometime thereafter, Great American learned of the settlement 

and release and refused to pay plaintiff any underinsured motorist 

benefits or to arbitrate the amount of plaintiff's damages. 

Plaintiff then instituted this action against Great American 

alleging breach of contract, bad faith, and "wilful, wanton, 

malicious, reckless, oppressive, grossly negligent, or fraudulent" 

conduct by Great American. R. Vol. I, Doc. 1. 

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Appellate Case: 89-2068 Document: 01019972112 Date Filed: 04/25/1990 Page: 3 
Great American answered plaintiff's complaint and 

subsequently filed a motion for summary judgment asserting that 

plaintiff's claims were barred under New Mexico law because 

plaintiff's settlement with the tort-feasor without Great 

American's knowledge or consent, in violation of the terms of 

plaintiff's policy, destroyed Great American's subrogation rights, 

thereby nullifying plaintiff's right to receive underinsured 

motorist benefits under his policy. The district court ultimately 

agreed with Great American and entered summary judgment against 

plaintiff. 

We review the granting of a motion for summary judgment de 

novo and apply the same standards as the district court under 

Fed. R. Civ. P. 56. See Osgood v. State Farm Mut. Auto. Ins. Co., 

848 F.2d 141, 143 (10th Cir. 1988). 

Plaintiff raises the same arguments on appeal that he did 

below, as well as an argument that because Great American did not 

demonstrate that it was prejudiced by plaintiff's settlement with 

Allstate and Mr. Smith, Great American was not entitled to summary 

judgment. Since the latter argument was not raised below or 

considered by the district court, we will not consider it on 

appeal. See Farmers Ins. Co. v. Hubbard, 869 F.2d 565, 570 (10th 

Cir. 1989). 

Based upon our review of the record on appeal, the parties' 

briefs, and the pertinent law, we conclude that plaintiff's 

settlement with the tort-feasor destroyed Great American's 

subrogation rights as to the underinsured motorist benefits and, 

therefore, relieved Great American of the responsibility of paying 

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I 

' • 

plaintiff such benefits. See Farmers Ins. Group of Cos. v. 

Martinez, 752 P.2d 797, 798-99 (N.M. Ct. App. 1988). Therefore, 

the district court properly entered summary judgment against 

plaintiff on his claims. 

The judgment of the United States District Court for the 

District of New Mexico is AFFIRMED, and Great American's motion to 

strike portions of plaintiff's reply brief is DENIED as moot. 

ENTERED FOR THE COURT 

PER CURIAM 

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