This memorandum opinion was not selected for pub lication in the New Mexico Reports. Please 1 see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. 2 Please also note that this electronic memorandum opinion may contain computer-generated 3 errors or other deviations from the official paper version filed by the Court of Appeals and does 4 not include the filing date. 5 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO 6 RODEO, INC., a New Mexico 7 corporation, d/b/a “COWBOYS”; 8 GENE HINKLE, individually; 9 HINKLE INVESTMENTS a/k/a 10 HINKLE INCOME PROPERTIES, 11 LLC, and RITA TRUJILLO, 12 Third-Party Plaintiffs/Appellees/ 13 Cross-Appellants, 14

v. NO. 28,384 & 28,445 15 (Consolidated) 16 COLUMBIA CASUALTY INSURANCE 17 COMPANY, 18 Third-Party Defendant/Appellant/ 19 Cross-Appellee. 20 APPEAL FROM THE DISTRICT COURT OF VALENCIA COUNTY 21 William A. Sanchez, District Judge 22 L. Helen Bennett 23 Steven Vogel 24 Bryan Query 25 Albuquerque, NM 26 for Appellees 27 Yenson, Lynn, Allen & Wosick, P.C. 28 Patrick D. Allen 29 Patricia A. Padrino 302 Albuquerque, NM 1 for Appellant 2

MEMORANDUM OPINION 3 VANZI, Judge. 4 In this consolidated appeal and cro ss-appeal, which stems from an action for 5 breach of contract, bad faith and breach of fiduciary duty, and violations of the New 6 Mexico Insurance Code and Un fair Practices Act, the trial court’s awards of attorney 7 fees, costs, and prejudgment interest are c ontested. In addition, Appellees challenge 8 the trial court’s admission of certain testimony at trial. We hold that the trial court 9 erred in finding, for purposes of awardi ng attorney fees under NMSA 1978, Section 10 39-2-1 (1977), that Appellant’s failure to provide insurance coverage was 11 unreasonable. Accordingly, we reverse the trial court’s award of attorney fees under 12 Section 39-2-1. We affirm on all other grounds. 13 BACKGROUND 14 Origin of This Litigation and Identity of the Parties 15 This is the second appeal to this Court concerning third-party claims by a bar 16 owner against its insurer after being sued for the wrongful death of a patron. The facts 17 which gave rise to the original controvers y are set forth in detail in this Court’s 18 previous opinion, Rodeo, Inc. v. Columbia Casualty Co. , 2007-NMCA-013, 141 N.M. 193 32, 150 P.3d 982 (hereinafter Rodeo I ). This second appeal c oncerns the trial court’s 1 rulings regarding attorney fees, costs, prejudgment interest, and the trial court’s 2 admission of certain testimony at trial. 3 Appellant is the Columbia Casualty In surance Company (Columbia). Columbia 4 provided commercial general liability and liquor liability insurance for Cowboys. 5 Appellees are all associated with Cowboys: Rodeo, Inc. (Rodeo) is the business entity 6 which owns and operates Cowboys; Gene Hinkle leased the property on which 7 Cowboys is located; and Rita Trujillo owned Cowboys’ liquor license. Hinkle and 8 Trujillo were both named as additional insure ds in the Columbia policy. We refer to 9 Rodeo, Hinkle, and Trujillo collectively as Appellees. 10 Rodeo obtained the insurance policy from Columbia through a premium finance 11 agreement. Under this ag reement, the finance company paid the annual premium in 12 full to Columbia, and Rodeo paid the fi nance company monthly premium payments. 13 The agreement required Rodeo to provide th e finance company with power of attorney 14 and also required Rodeo to accept the followi ng condition: In the event Rodeo failed 15 to make timely monthly premium payments, the finance company would take the 16 necessary steps to terminate the Columbia policy. 17 In the months immediately preceding th e death of the Cowboys patron, Rodeo 18 failed to make timely insurance premium payments. As a result, the finance company 194 initiated the process of canceling the policy, and Appellees were ultimately informed 1 that their liability insurance had been cancel ed. Appellees maintained that Columbia 2 was without grounds to cancel their insurance policy and brought suit against 3 Columbia. In that third-party complaint and the subsequently filed amended third4 party complaint, Appellees argued that Co lumbia had a duty to defend and indemnify 5 them in the wrongful death action and clai med breach of contract, bad faith and breach 6 of fiduciary duty, and violations of th e New Mexico Insurance Code and Unfair 7 Practices Act. 8 The trial court ruled that Appellees’ in surance policy had not been canceled at 9 the time the wrongful death suit was filed, and we agreed. Rodeo I, 2007-NMCA-013, 10 ¶¶ 8-9. In Rodeo I, issued on October 27, 2006, we held as a matter of first impression 11 that an insurance contract obtained through an insurance premiu m finance agreement 12 cannot be canceled under NMSA 1978, S ection 59A-45-11(A) (1984) unless the 13 insurer was in compliance with all of the subsections of Section 59-45-11. Rodeo I, 14 2007-NMCA-013, ¶ 1. We observed in Rodeo I that Rodeo obtained the policy from 15 Columbia through a premium finance agreement and that Columbia had not complied 16 with Subsection (E) (requiring Columbia to return the unearned premium before 17 canceling Appellees’ policy) at the time th e wrongful death suit had been filed. Id. 185 ¶¶ 33-34. Thus, we conclude d that Appellees’ policy had not been cancelled when the 1 wrongful death suit was filed. Id. 2 After we issued Rodeo I and on remand, Columbia assumed the representation 3 of Rodeo and Trujillo in the wrongful death suit. Columbia settled the claims against 4 Rodeo and Trujillo arising from the wrongf ul death suit and reimbursed Rodeo and 5 Trujillo for all the attorney fees and co sts they incurred defending those claims. 6 Columbia did not provide representation toHinkle. The parties do not dispute that 7 Hinkle’s insurance provider, Travelers Insurance, covered the costs of that 8 representation and settled all claims against Hinkle arising from the wrongful death 9 suit. According to Columbia , Travelers has not yet requested reimbursement for those 10 costs or filed suit to recoup them. 11 Although all claims against Appellees a ssociated with the wrongful death suit 12 had been settled and dismissed, Appellees’ claims against Columbia remained. These 13 claims proceeded to a jury trial. At the close of trial, the jury returned a verdict in 14 favor of Appellees on the breach of contract claim and against them on the bad faith, 15 violation of New Mexico Insurance Code , and violation of New Mexico Unfair 16 Practices Act claims. On the breach of c ontract claim, the jury awarded Hinkle and 17 Trujillo $45,000 each in incidental and consequential damages and awarded no 18 damages to Rodeo. 196 After trial, Appellees filed motions fo r attorney fees, costs, and prejudgment 1 interest. Columbia responded that, as the prevailing party at trial, it (not Appellees) 2 was entitled to costs. The trial court denied Columbia’s motion for costs. The trial 3 court also denied Appellees’ request for attorney fees and costs incurred after the 4 issuance of Rodeo I —the attorney fees and costs Appellees expended litigating the 5 breach of contract, bad faith, and Insuran ce Code and Unfair Practices Act claims. 6 However, citing Section 39-2-1, the trial court ordered Columbia to pay all of 7 Appellees’ attorney fees and costs, and interest on these fees and costs, incurred prior 8

to Rodeo I. The attorney fees and costs awarded were those that Appellees incurred 9 in compelling Columbia to provide insurance coverage. In addition, pursuant to 10 NMSA 1978, Section 56-8-4(B) (2004), the trial court awarded Hinkle and Trujillo 11 prejudgment interest at the rate of ten percent per annum fo r two years on their 12 respective $45,000 jury awards. Both parties appealed. 13 DISCUSSION 14 Appellees’ Cross-Appeal 15 Appellees raise four issues on appeal: (1) the trial court erred in denying 16 Appellees the ability to present evidence of the reasonable and necessary expenses, 17 including attorney fees, incurred in de fending the wrongful death claim and in 18 pursuing litigation against Columbia to obtain the benefits of the insurance contract; 197 (2) the trial court erred in refusing to allow evidence of attorney fees incurred in 1 pursuing coverage to be given to the jury and by reserving that decision to the court; 2 (3) the trial court erred in allowing evidence concerning th e legal posture of the case 3 which confused the jury; and (4) the trial court erred in denying costs to Rodeo. We 4 discuss each of these arguments in turn. 5 Issues I and II - Evidence of Expenses and Attorney Fees 6 The first issue raised by Appellees and part of the second issue appear to 7 overlap. They seem to be based on Appe llee’s position that the trial court erred by 8 preventing Appellees from introducing eviden ce to the jury of the full measure of 9 damages they suffered in (1) defending themselves against the wrongful death suit, 10 and (2) compelling Columbia to provide insurance coverage. It appears that Appellees 11 are challenging the trial court’s admission or exclusion of evidence. It is well settled 12 that we review such questions only for abuse of discretion. Coates v. Wal-Mart 13 Stores, Inc. , 1999-NMSC-013, ¶ 36, 127 N.M. 47, 976 P.2d 999. 14 Preliminarily, we note that Appellees havefailed to specifically designate any 15 portion of the record demonstrating theywere prohibited from offering evidence of 16 reasonable and necessary expenses, including atto rney fees. Other than to cite to three 17 dates on which “oral presentations” allegedl y occurred and pre-trial motions filed by 18 Appellees, Appellees provide no factual detail, record cite, or document to support 198 their argument. We are not ob ligated to search th e record on a party’s behalf to locate 1 support for propositions a party advances or representations of counsel as to what 2 occurred in the proceedings. See Bintliff v. Setliff , 75 N.M. 448, 450, 405 P.2d 931, 3 932 (1965) (determining that our Supreme Court would not consider the argument of 4 the appellant’s counsel due to the failure to provide speci fic references to the record 5 in violation of a Supreme Court rule); Murken v. Solv-Ex Corp ., 2005-NMCA-137, 6 ¶ 14, 138 N.M. 653, 124 P.3d 1192 (“[W]e declin e to review . . . arguments to the 7 extent that we would have to comb the record to do so.”); In re Estate of Heeter , 113 8 N.M. 691, 694, 831 P.2d 990, 993 (C t. App. 1992) ( “This [C]ourt will not search the 9 record to find evidence to support an appellant’s claims.”). 10 In contrast to Appellees ’ unsupported assertion that they were not permitted to 11 present evidence of the amount of attorney fees and costs, and coverage fees and 12 costs, Columbia points to several places in the record demonstrating that such 13 evidence was, in fact, introduced. Appellees were allowed to present this evidence 14 through various exhibits; the evidence was referenced in the special verdict form; and 15 it was referred to in closing argument. The record reflects that Appellees were 16 allowed to introduce evidence regarding e xpenditures related to compelling Columbia 17 to provide insurance coverage as well as expenditures associated with the defense 18 against the wrongful death suit. 199 Having concluded that Appellees had the opportunity—and did—present 1 evidence of fees and costs, we turn next to the remainder of Appellees’ second point: 2 error in the jury instructions . Here, Appellees assert thatthe trial court erred by failing 3 to instruct the jury that it could award Appellees damages base d on fees and costs 4 Columbia had already reimbursed, i.e. the fees and costs Appellees expended to 5 defend against the wrongful death suit. For the following reasons, we reject this 6 argument. We begin with the jury instruction. 7 At the conclusion of the trial, the trial c ourt instructed the jury that the attorney 8 fees and costs Appellees incurred defending themselves against the wrongful death 9 suit (before Columbia agreed to assume that representati on) could not be awarded as 10 damages. The trial court instructed the jury that Columbia had already reimbursed 11 Appellees for these attorney fees and costs. Specifically , jury instruction thirty-two 12 states “[b]ecause [Columbia] has paid [Appellees’] atto rney[] fees and costs in 13 defending the wrongful death lawsuit, you may not award those defense fees as 14 damages.” As Columbia had already reimbur sed Appellees for these attorney fees and 15 costs, the trial court properly instructed the jury that those fees and costs could not be 16 considered in their assessment of Appellees’ damages. Had the trial court instructed 17 the jury that it could award damages ba sed on these fees, it would have provided 18 Appellees double recovery, animpermissible result. See Hale v. Basin Motor Co. , 1910 110 N.M. 314, 320, 795 P.2d 1006, 1012 (1990) (holding double recovery 1 impermissible). 2 Further, we are not pers uaded by Appellees’ argument that the trial court 3 “invaded the province of the jury” by reserving to itself the question of Appellees’ 4 entitlement to attorney fees and costs asso ciated with compelling Columbia to provide 5 coverage. Instruction thirty -two also provided that “[ y]ou shall not award damages 6 to any of the [Appellees] for attorney[] fees and costs inseeking insurance coverage, 7 since the question of whether, or to what extent, such fees and costs should be 8 awarded will be determined by the [c]ourt after the completion of this trial.” Our 9 courts have long-held that attorney f ees are not allowable as consequential or 10 incidental damages for a breach of contract. See, e.g., Aboud v. Adams , 84 N.M. 683, 11 692, 507 P.2d 430, 439 (1973). The trial court did not abuse its discretion in this 12 regard. 13 Further, the trial court properly retained consideration of coverage fees for itself 14 on Appellees’ bad faith and statutory claims. We recognize that the jury found against 15 all Appellees on these claims. Neverthele ss, had the jury found for Appellees on the 16 bad faith and statutory clai ms and had the jury awarded damages to Appellees, 17 Sections 39-2-1, NMSA 1978, Section 59A-16-30 (1984), and NMSA 1978, Section 18 57-12-10(C) (2005) provide that fees and co sts associated with bringing such claims 1911 are awardable by the court and not the ju ry. Moreover, as we explained in Lujan v. 1 Gonzales , 84 N.M. 229, 238, 501 P.2d 673, 682 (Ct. App. 1972), “[f]ees for counsel 2 representing the insured in disputes with th e insurer are ordinarily not recoverable in 3 the absence of statute or contract.” In this case, the trial court awarded Appellees 4 attorney fees under Section 39-2-1 after the completion of the trial. Appellees have 5 not provided us with any statutory authority or New Mexico case law—and we have 6 found none—to support their position that coverage fees are to be considered an 7 element of damages that should be submittedto the jury. We therefore determine 8 there was no error in the trial court’s actions and reject Appellees’ assertion that the 9 jury should have been responsible for as certaining whether Appellees were entitled 10 to these fees and costs. 11 Issue III - Evidence About the Legal Pr ocedural Background of the Case 12 During the trial, Columbia introduced the testimony of two attorneys, Daniel 13 Lewis and Steven Plitt. Appellees assert that the testimony of Mr. Lewis and Mr. Plitt 14 was both improper and confused the jury. We review the trial court’s admission or 15 exclusion of evidence only for abuse of discretion. Coates , 1999-NMSC-013, ¶ 36. 16 We briefly summarize the testimony given by Mr. Lewis and Mr. Plitt. Mr. 17 Lewis is an attorney at Hatch, Allen & Shepherd, a law firm in Albuquerque, New 18 Mexico. Columbia hired Mr. Lewis’ firm in the latter part of 2001 to offer an 1912 independent evaluation of the propriety of the decision to treat Appellees’ insurance 1 policy as canceled. Mr. Lewis testified th at in October 2001 he informed Columbia 2 that, based on his assessment of the law inexistence at that time (we had not yet 3 issued Rodeo I ), they were on solid legal footing to treat Appellees’ insurance policy 4 as canceled. Mr. Plitt, an attorney based out of Arizona with substantial experience 5 and distinction in the field of insurance law, testified on Columbia’s behalf as an 6 expert witness in insurance law. Mr. Plitt al so claimed that after reviewing the law in 7 existence in 2001, he found no basis for the conclusion that Columbia acted 8 unreasonably or in bad faith in its decisi on to treat Appellees’ policy as canceled. 9 In their briefs on appeal, Appellees contend that Mr. Lewis’ testimony 10 presented “extraneous, irrelevant information to the jury” and that Mr. Plitt “was 11 permitted to second guess the conclusion of this Court” thus inviting speculation about 12 the correctness of this Court’s decision in Rodeo I. Appellees do not provide us with 13 any citation to the record indicating that th ey made these arguments to the trial court. 14 SeeRule 12-213(A)(4) NMRA (requiring a party to include a “statement explaining 15 how the issue was preserved in the court belo w”). Further, our review of the record 16 reveals that Appellees made no objections c oncerning the relevance of Mr. Lewis’ and 17 Mr. Plitt’s testimony during the course of trial. As Columbia observes, Appellees 1813 never objected during the testimony of Mr. Le wis and made only two objections to the 1 testimony of Mr. Plitt, both of which were unrelated to the issues on appeal. 2 Appellees respond by first arguing that “[i]n fact, two objections to the 3 testimony of Columbia Casualty’s expert Plitt were sustained by the trial court, when 4 Plitt attempted to counsel the jury in the law of bad faith.” We fail to see how these 5 two objections constitute preservation when, as noted above, they were unrelated to 6 the issues on appeal and, more importantly, were sustained by the trial court. We also 7 reject Appellees’ second contention that anobjection during trial would have been in 8 vain or futile because the trial court had already denied their motion in limine and 9 commented that “I would expect I’m going to let it all in.” The trial court’s ruling 10 sustaining the only two objections made by Appellees strongly indicates that any such 11 efforts would, in fact, have not been futile. Appellees made no effort to object to the 12 testimony of Mr. Lewis or Mr. Plitt, and as a result, the trial c ourt could not consider 13 these arguments of relevancy or confusion. See State v. Elliott , 2001-NMCA-108, ¶ 14 21, 131 N.M. 390, 37 P.3d 107 (“Our case law is clear that in order to preserve an 15 issue of appeal, a [p arty] must make a timely objection that specifically apprises the 16 trial court of the nature of the clai med error and invokes an intelligent ruling 17 thereon.”). 1814 We have previously observed that preservation serves the purposes of (1) 1 allowing the trial court an opportunity to co rrect any errors, thereby avoiding the need 2 for appeal, and (2) creating a record from which the appellate court can make 3 informed decisions. Diversey Corp. v. Chem-Source Corp. , 1998-NMCA-112, ¶ 38, 4 125 N.M. 748, 965 P.2d 332. Appellees did notprovide the trial court or Columbia 5 with an opportunity to address these arguments during the course of trial. 6 Consequently, we are without a proper record and decline to address Appellees’ 7 unpreserved arguments. 8 Issue IV - Rodeo’s Costs 9 Appellees’ final issue on appeal is their assertion that, in addition to having 10 been awarded the attorney fees they in curred in compelling Columbia to provide 11 coverage, Rodeo should have been awarde d the costs it incurred in litigating the 12 breach of contract, bad faith and breach of fiduciary duty, and Insurance Code and 13 Unfair Practices Act claims. “The trial c ourt has discretion in assessing costs, and its 14 ruling will not be disturbed on appeal unl ess it was an abuse of discretion.” Pioneer 15 Sav. & Trust, F.A. v. Rue , 109 N.M. 228, 231, 784 P.2d 415, 418 (1989). 16 The Rules of Civil Procedure provide for costs to be awarded to the prevailing 17 party in litigation as a matter of course. Mascarenas v. Jaramillo , 111 N.M. 410, 415, 18 806 P.2d 59, 64 (1991). Rule 1-054(D)(1) NMRA states that “costs, other than 1915 attorney fees, shall be allowed to the prevailing party unless the court otherwise 1 directs[.]” “A prevailing party is . . . the party who wins the lawsuit—that is, a 2 plaintiff who recovers a judgment or a de fendant who avoids an adverse judgment.” 3 Mayeux v. Winder , 2006-NMCA-028, ¶ 41, 139 N.M . 235, 131 P.3d 85 (filed 2005). 4 Rodeo argues that it was the prevaili ng party because it was successful in 5 maintaining its claim for declaratory judgment in Rodeo I and because the jury found 6 for Rodeo on its breach of contract action. We are not persuaded. With regard to 7 Rodeo I, the issue of coverage was decided we ll before trial and was not one of the 8 claims being litigated before the jury. Appellees recovered all their fees and costs 9 associated with defending the wrongful death claim and were awarded coverage costs 10 pursuant to Section 39-2-1 after trial. Th e trial court did not abuse its discretion by 11 denying Rodeo’s request for trial costs based on whether R odeo was a prevailing party 12 in the underlying declaratory judgment action. 13 In addition, although the jury found in favor of Rodeo on its breach of contract 14 claim, the jury did not award Rodeo any damages on that claim; therefore, Rodeo 15 cannot be considered the prevailing party at trial because it did not prevail on any 16 claim submitted to the jury. An abus e of discretion will be found if we can 17 characterize the trial court’s determination “as clearly untenable or not justified by 18 reason.” Coates , 1999-NMSC-013, ¶ 36, (internal quotation marks and citation 1916 omitted). In this case, the record reveals that the trial court—in awarding fees and 1 costs—considered the fact that Hinkle and Trujillo partially prevailed at trial and 2 explained why Rodeo did not. Accordingly, we are unwilling to conclude that the trial 3 court abused its discretion in denying R odeo the costs it incurred for unsuccessfully 4 litigating the claims that went to trial. 5 Appellant Columbia’s Appeal 6 Columbia raises three issues on appeal: (1) the trial court erred in awarding 7 Appellees attorney fees, costs, and interest on those fees; (2) the trial court erred in 8 awarding prejudgment interest to Hinkle and Trujillo; and (3) the trial court erred in 9 refusing to award Columbia its costs. 10 Issue I - Appellees’ Fees, Costs and Interest Under Section 39-2-1 11 Columbia asserts that th e trial court committed error in awarding Appellees 12 attorney fees and costs incurred prior to Rodeo I under Section 39-2-1. The attorney 13 fees and costs awarded under this statute included the attorney fees and costs 14 Appellees incurred in compelling Columbia to provide insurance coverage, i.e. to 15 compel Columbia to defend Appellees agains t the wrongful death suit. “The decision 16 whether to grant or deny a re quest for attorney fees rest s within the sound discretion 17 of the district court. Thus , we review the district court’s ruling on attorney fees only 1817 for an abuse of discretion.” Garcia v. Jeantette , 2004-NMCA-004, ¶ 15, 134 N.M. 1 776, 82 P.3d 947 (citation omitted). 2 Columbia argues that the trial court’s d ecision to award Appellees attorney fees 3 and costs under this statute was erroneous b ecause under the plain terms of the statute 4 such an award was not possible unless th e trial court found that Columbia acted 5 unreasonably in refusing to provide insuran ce coverage. Columbiafurther argues that 6 the trial court was precluded from making such a finding in light of the fact that the 7 jury rejected Appellees’ bad faith claim. Inrejecting that claim, Columbia contends, 8 the jury necessarily found that it acted reasonably in initially refusing to provide 9 Appellees insurance coverage, i.e. to defend Appellees against the wrongful death suit. 10 As explained below, we reject the sugges tion that the jury’s determination that 11 Columbia did not act in bad faith per sedemonstrated that Columbia did not act 12 unreasonably for purposes of awarding attorn ey fees under Section 39-2-1. However, 13 we are persuaded by Columbia’s reasoning, gi ven the facts of the present matter, that 14 the trial court’s conclusion that Columbia acted unreasonably is logically 15 irreconcilable with the jury’s determination that Columbia did not act in bad faith. We 16 begin our analysis by examining the statute in question. 17 Section 39-2-1 provides: 18 In any action where an insured prev ails against an insurer who has 19 not paid a claim on any type of firs t party coverage, the insured person 2018 may be awarded reasonable attorney[] fees and costs of the action upon 1 a finding by the court that the insurer acted unreasonably in failing to 2 pay the claim. 3 Columbia’s assertion that the trial court was required to find it acted unreasonably 4 prior to awarding Appellees attorney fees is borne out by the plain language of the 5 statute. We thus turn to Columbia’s a ssertion that the trial court was precluded from 6 finding that it acted unreasonably in light of the jury’s finding that Columbia did not 7 act in bad faith. Columbia alleges that the jury’s rej ection of Appellees’ bad faith 8 claim required the jury to fi nd that Columbia acted reasona bly in its decision to treat 9 Appellees’ insurance policy as canceled, whic h in turn prompted Columbia to refuse 10 (initially) to defend Appellees against the wrongful death suit. We agree with this 11 analysis. 12 Our review of the jury instructions rev eals that in rejecting Appellees’ bad faith 13 claim, the jury clearly determined that Columbia acted reasonably in its decision to 14 initially refuse to defend Appellees. The jury was instructed as follows: 15 To establish the claim of Bad Faith on the part of [Columbia], 16 [Appellees] have the burden of proving any one of the following 17 contentions: 18 1. [Columbia] failed to conduc t a timely investigation and fair 19 evaluation of its duty to defend [Appellees]. 20 2. [Columbia] acted in bad faith by failing to timely investigate 21 and fairly evaluate the clai ms made against [Appellees]. 22 3. [Columbia] acted in bad faith in refusing to defend claims 23 against [Appellees] because the term s of the insurance policy did not 24 provide a reasonable basis for the refusal. 2519 4. [Columbia] acted in bad faith by failing to accept reasonable 1 settlement offers within policy limits. 2 5. [Columbia] failed to conduct a competent investigation of the 3 claims against [Appellees] and to hone stly and fairly balance its own 4 interests and the interests of its po licyholders, [Appellees], in rejecting 5 a settlement offer within policy limits. 6 As Appellees’ bad faith claim was premised on Columbia’s decision to treat 7 Appellees’ insurance policy as canceled and Columbia’s attendant refusal to defend 8 Appellees against the wrongful death suit, the jury was presumably concerned only 9 with contentions one and three above. Indeed , in order to assist the jury in their 10 assessment of whether Columbia’s refusal to defend Appellees was in bad faith, the 11 trial court provided additional instructi ons regarding Columbia’s duty to defend. 12 The jury was instructed that “[a] liability insurance company has a duty to 13 defend its insured against all claims which fall within the coverage of the insurance 14 policy.” Accordingly, the instructions fu rther mandated that “[ a] liability insurance 15 company must act reasonably under th e circumstances to conduct a timely 16 investigation and fair evaluation of its duty to defend.” Finally, the instructions 17 included the following directive: “Under th e ‘bad faith’ claim, what is customarily 18 done by those engaged in the insurance indus try is evidence of whether the insurance 19 company acted in good faith.” Thus, the instructions explained, “the good faith of the 20 insurance company is determined by the reasonableness of its conduct.” 2120 Based on these instructions, the jury’s rejection of Appellees’ bad faith claim 1 was necessarily premised on its determin ation that Columbia acted reasonably in 2 initially refusing to defend Appellees. It seem s clear that the question presented to the 3 jury, whether Columbia reasonably refused to defend Appellees, is the same question 4 Section 39-2-1 required the trial court to address: Was Columbia’s decision to deny 5 coverage unreasonable? We see no way of reconciling the jury’s finding against 6 Appellees with the trial court’s contradictory conclusion that Columbia acted 7 unreasonably (in the same capacity) for purposes of awarding attorney fees and costs 8 under Section 39-2-1. 9 The trial court provided no explanation for its finding that, for purposes of 10 Section 39-2-1, Columbia acted unreasonabl y; moreover, no support for that finding 11 is demonstrated in the record. The order itself merely states that “[f]or the limited 12 purpose of awarding attorney[] fees, taxes and costs on the coverage issue, the [c]ourt 13 finds that [Columbia] acted unreasonably in failing to pay the claims of [Appellees].” 14 Our review of the record reveals that, in f act, the trial court was reluctant to make this 15 finding. At the hearing, the trial court obs erved that “I just don’t know if I’m prepared 16 to say that [Columbia] acted unreasonably infailing to pay the cl aims. The issue went 17 up to the Court of Appeals, and the Court of Appeals made a d ecision that there was 18 coverage.” Later in the hearing, upon be ing pressed by Appellees on the issue, the 1921 trial court again said, “I’m not sure if I can insert it in there ‘for purposes of paying 1 [Appellees’] attorney[] fees, I will find that [Columbia] acted unreasonably.’” 2 Ultimately, the trial court acquiesced and told counsel to “go ahead and do that on 3 your form that, for purposes of attorney[] fees award only, this [c]ourt finds that 4 Columbia . . . acted unreasonably, not for any other purpose.” The trial court never 5 made any finding of reasonableness but rath er appeared to allow inclusion of the 6 language only because “I know [Appellees] are not going to appeal, but in case 7 [Columbia] appeals, the language is there to protect you.” 8 Accordingly, based on the finding by the jury that Columbia acted reasonably, 9 the trial court’s reluctance to find that Co lumbia acted otherwise, and its finding that 10 Columbia acted unreasonably, we hold the trial court’s order was contrary to logic 11 and, thus, an abuse of discretion. See State v. Apodaca , 118 N.M. 762, 770, 887 P.2d 12 756, 764 (1994) (“An abuse of discretion occurs when the ruling is clearly against the 13 logic and effect of the facts and circumst ances of the case.” (internal quotation marks 14 and citation omitted)). 15 Although we hold that the trial court abus ed its discretion by awarding fees and 16 costs, we recognize that whether Columb ia acted unreasonably under Section 39-2-1 17 is a distinct question from whether Columbia acted in bad faith. We limit our decision 18 to the facts of this case and do not foreclose the possibility that circumstances might 1922 exist where a trial court could find an in surer acted unreasonably under Section 39-2-1 1 despite a jury’s finding that the insurer did not act in bad faith and that those 2 seemingly disparate findings could be adequately explained. However, as described 3 above, we are unable to concl ude that this is one of those circumstances. Because we 4 hold that the trial court abused its discretion, we reverse the trial court’s award of 5 attorney fees and costs under Section 39-2-1. In light of this conclusion, we need not 6 address Columbia’s arguments concerning whether Appellees’ claims involved first 7 party coverage or Columbia’s further assertion that the trial court erred in awarding 8 interest on the attorney fees awarded under Section 39-2-1. 9 Issue II - Prejudgment Interest to Hinkle and Trujillo 10 Columbia next asserts that the trial c ourt abused its discretion under Section 56- 11 8-4(B) by awarding prejudgment interest toHinkle and Trujillo on their respective 12 $45,000 judgments. This assertion is premised on two arguments. First, Columbia 13 claims that Hinkle and Trujillo failed to re quest prejudgment interest and are thus not 14 entitled to it. Second, because the trial court failed to provide the basis for its decision 15 to award prejudgment interest under Section 56-8-4(B), that award was in error. We 16 review the trial court’s determinations re garding awards of prejudgment interest under 17 Section 56-8-4 for abuse of discretion. Bird v. State Farm Mut. Auto. Ins. Co. , 2007- 18 NMCA-088, ¶ 27, 142 N.M. 346, 165 P.3d 343. 1923 Citing Gonzales v. Surgidev Corp. , 120 N.M. 133, 150, 899 P.2d 576, 593 1 (1995), Columbia argues that because Hinkle and Trujillo never requested 2 prejudgment interest on the jury verdict, theywere not entitled to such an award. In 3 Gonzales , the plaintiffs never requested prejudgment interest until after the court had 4 entered a final judgment and the court denied the request as untimely. Id. That is not 5 the case here. Although Appellees did not request prejudgment interest after trial, 6 their third-party complaint and amended complaint contain explicit requests for 7 prejudgment interest. Columbia has provide d no authority to suggest that a party’s 8 pre-trial request for prejudgment interest precludes such an award after trial when no 9 other request has been made. We hold that the trial court did not abuse its discretion 10 by granting Appellees’ request for prejudgment interest as set forth in their 11 complaints. 12 Columbia’s second argument that the award was in error because the trial court 13 did not provide the basis for the award also fails. In Gonzales , our Supreme Court 14 observed that “[u]nder Section 56-8-4(B), the trial court does not need to make 15 specific factual findings. . . . The court’s reasons for denying prejudgment interest 16 need only be ascertainable fro m the record and not contrary to logic and reason.” Id. 17 Accordingly, we reject Columbia’s contention that the award was erroneous because 18 the trial court failed to issue findings of fact or law to support the award. 1924 We are also unpersuaded by Columbia’s parallel argument that the trial court’s 1 reasons for issuing the award were unascertain able and contrary to logic. The trial 2 court, in determining whether prejudgment interest should be awarded, may consider 3 whether Columbia caused unreasonable delay in adjudication of its claims and 4 whether Columbia had previously made a timely and reasonable offer of settlement 5 to Appellees. See § 56-8-4(B)(1)(2) (stating that th e trial court, in determining 6 prejudgment interest, may consider whether the plaintiff unreasonably delayed 7 adjudication and whether the defendant made a settlement offer to the plaintiff). 8 Columbia concedes that Section 56-8-4(B )(1)(2) is a discretionary statute designed 9 to encourage settlement and discourage delay. 10 Appellees argue that Columbia delaye d the case and delayed payment of fees 11 and costs in the underlying wrongful death acti on. In its reply brief, Columbia’s sole 12 response is that “the record demonstrates conclusively that Columbia was not the 13 cause of any delay in the proceedings and made a reasonable settlement offer prior to 14 trial.” Although the trial c ourt offered only a terse explanation for its decision to 15 award Hinkle and Trujillo prejudgment intere st, we cannot say that its ruling was 16 contrary to logic and reason. 17 Issue III - Denial of Costs to Columbia 1825 Columbia’s third and final issue on appeal is its assertion that the trial court 1 abused its discretion when it rejected Columbia’s contention that as the prevailing 2 party it was entitled to an award of costs in curred in litigating the breach of contract, 3 bad faith, unfair practices and Insurance Code violation claims. “The matter of 4 assessing costs lies within the discretion of the trial court and will not be interfered 5 with absent abuse of that discretion.” Archuleta v. Safeway Stores, Inc. , 104 N.M. 6 769, 774, 727 P.2d 77, 82 (Ct. App. 1986). 7 The record reflects that the trial court’ s decision to deny Columbia its costs 8 associated with litigating these claims resu lted from the trial court’s consideration that 9 both parties prevailed on certainissues and that the award of costs should reflect this 10 outcome. The trial court explained that “in consideration of [Appellees] partially 11 prevailing on the issue concerning breach of contract, I’m going to forego the award 12 of costs to Columbia . . . in the amount of the [$]26,000.” The trial court then 13 explained in its judgment that this result was also the most equitable result for the 14 parties. The court stated, “I think that this [c]ourt is being very considerate in at least 15 considering not awarding the costs requestedfrom [the] defense[.]” Accordingly, we 16 hold that the trial court did not abuse its di scretion in finding thatboth parties partially 17 prevailed and thus denying Colu mbia’s request for costs. Cf. Sunwest Bank of 1826 Albuquerque v. Roderiguez , 108 N.M. 211, 213, 770 P.2d 533, 535 (1989) (stating 1 that a trial court abuses its discretion if its decision is arbitrary or unreasonable). 2 CONCLUSION 3 For the foregoing reasons, we reverse in part and affirm in part. 4

IT IS SO ORDERED. 5

___________________________ 6 LINDA M. VANZI, Judge 7

WE CONCUR: 8

______________________________________ 9 JONATHAN B. SUTIN, Judge 10

______________________________________ 11 CELIA FOY CASTILLO, Judge 12