Court Opinion

ID: 6472443
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:23:24.474741+00
Date Added: 2024-06-11T15:53:51.906791
License: Public Domain

WECHSLER, Judge (specially concurring). {39} Although I join in the result of the majority opinion, I write separately to express my belief that this ease presents no occasion to deviate from Price. The majority states that it adopts a rule that is consistent with New Mexico law. But the majority rule renders meaningless the statement in Price that “before the duty to defend arises there must be a demand.” Price, 101 N.M. at 443, 684 P.2d at 529. I agree with the majority’s conclusions that the evidence in this case was ambiguous and that actual notice may sometimes be sufficient to trigger the duty to defend. But I disagree with the majority’s choice to institute a presumption that actual notice triggers the duty to defend. {40} In Price, we determined that “reasonable minds could differ about whether a demand was made” when the attorney for the insured wrote two letters to the insurance company, neither of which made an explicit request for a defense. Instead, the first letter “state[d] that [the insured] was being sued, and the caption and number of the lawsuit.” Id. The second letter requested that the insurance company accept an offer of settlement. Id. at 444, 684 P.2d at 530. We held that this evidence, together with an ambiguous memo, “can support a conclusion that State Farm knew of the lawsuit and knew of the possibility of settlement, yet consciously disregarded what was happening.” Id. We then noted that because reasonable minds could differ about whether a demand had been made, that question should have been decided by the jury. Id. Thus, in Price, we found that a jury could conclude that a demand had been made when the insurance company had received little more than actual notice. {41} I agree with the current state of the law as expressed in Price. The question should be “whether there was a sufficient demand to defend.” Id. I would follow Price in this ease and allow the jury to make that determination. The ultimate inquiry should be whether Underwriters was placed on sufficient notice that a demand had been requested. I agree with the rule in Price that no particular magic words are required. Instead, the jury should determine whether, under the specific facts of the case, a demand for a defense was communicated to the insurance company. {42} While the majority claims to follow existing New Mexico law, its holding on this issue actually disregards Price. The majority does not require that the insured demand a defense. Although it states, and I agree, that actual notice may constitute a demand, it holds that actual notice presumptively triggers the duty to defend. It requires only that the insurer receive actual notice, from any source, and in any manner. The question for the majority then becomes whether the insured “knowingly declined a defense.” In other words, the majority has shifted the test from one in which the insured must demand a defense to one in which the insured must merely fail to decline a defense. {43} The significance of the majority opinion becomes clear when its holding is compared to the rule in Price. In Price, we stated that “whether there was a sufficient demand to defend” was a question for the jury. But, by holding that actual notice presumptively triggers a duty to defend, it appears that the majority would find a sufficient demand as a matter of law whenever the insurance company receives actual notice. The majority holds that this case should go to the jury not to determine whether a demand has been made, but to determine whether “the Perfetti Estate was foregoing a defense from Underwriters.” At the summary judgment stage, the practical difference is that, under the majority’s rule, if the insured can prove actual notice, summary judgment may be granted unless the insurance company submits evidence showing that the insured intended to decline a defense. Under Price, summary judgment should not be granted based on actual notice alone; instead, the jury would determine whether that notice constituted a demand. {44} I agree with the majority that the insurance company is in a better position to shoulder the burden of determining whether a defense has been requested. But the majority goes farther than necessary. I would not deviate from existing law when, as here, it provides a workable solution and would not change the result. See Padilla v. State Farm Mut. Auto. Ins. Co., 2003-NMSC-011, ¶ 7, 133 N.M. 661, 68 P.3d 901 (stating that stare decisis “lies at the very core of the judicial process” and that we must consider several questions, including “whether the precedent is so unworkable as to be intolerable” before overturning precedent) (internal quotation marks and citations omitted); Trujillo v. City of Albuquerque, 1998-NMSC-031, ¶¶ 33-35, 125 N.M. 721, 965 P.2d 305 (expressing the importance of stare decisis and also noting that stare decisis is more compelling in cases involving contracts). {45} For the reasons stated, I concur only in the result.