Helping real people with real injuries get the compensation they need.

Insurance Company Not Allowed to Intervene in New Mexico Personal Injury Suit

On Behalf of | Jun 27, 2020 | Insurance Bad Faith

Recently, the United States District Court for the District of New Mexico handed down a ruling denying an insurance company’s motion to intervene.  The insurance company allegedly had paid the plaintiff workers’ compensation benefits under California law, and asserted that it should be allowed to intervene to assert a subrogation right to recover sums it paid out from any recovery the plaintiff achieved against the trucking company allegedly responsible for the plaintiff’s injuries.

The accident underlying the plaintiff’s personal injury suit occurred on westbound Interstate 40 in McKinley County, New Mexico.  According to the plaintiff’s complaint, traffic was backed up at the time of the accident because the road was under construction.  The complaint further alleges that a truck driver was driving on cruise control at a speed of 66 miles per hour.  As the driver approached a mile marker, he was allegedly looking down.  When the truck he was driving was a second away from a pickup truck, the driver of the pickup truck looked up.  Tragically, it was too late to stop the collision, which allegedly resulted in a fire and chain reaction of accidents on the interstate.

Among those sustaining serious personal injuries was the plaintiff, who was en route to California at the time, according to the complaint he filed in New Mexico’s 11th Judicial District Court against the truck driver, the trucking company that employed the driver and corporate affiliates of the trucking company.  The trucking company removed the complaint from the state court in which it had been filed to federal court.

After the complaint was removed, an insurance company sought to intervene.  In support of the relief requested, the insurance company asserted that it had issued a workers’ compensation policy to the plaintiff’s employer, that at the time of the accident the plaintiff was acting in the course and scope of his employment, and that the insurance company had paid the plaintiff benefits and might be obligated to pay out more.  The insurance company argued it should be allowed to intervene under Federal Rule of Civil Procedure 24 because it was subrogated to the rights of the plaintiff against the defendants and was therefore entitled to recover sums the insurance company had paid the plaintiff or would be obligated to pay him in the future.

The court conducted a choice of law analysis and determined that New Mexico law governed.  The court then explained that, under New Mexico law, a workers’ compensation insurer does not have a direct right of subrogation against third party tortfeasors.  Only once the injured person recovers money by verdict or settlement can the insurer try to seek reimbursement. The court sided with the plaintiff, reasoning he should be able to prosecute his complaint “without interference” from the insurance company.  The court ruled, in the alternative, that the insurance company’s motion to intervene should be denied because it had not addressed why its interest was not adequately represented by the existing parties to the lawsuit or how its interest would be impaired if intervention is not allowed.

If you or a loved one has been injured by the actions of third parties, or their failure to take action, there may be grounds for a damages award.  An award of monetary damages can help people cover out-of-pocket costs, including medical costs, lost wages, and pain and suffering.  Insurance companies are among third parties that may be responsible for paying costs resulting from an accident, depending on the circumstances.  To understand more about your case and how it can be pursued in ways that maximize your recovery, contact New Mexico personal injury lawyer Matthew Vance at the Law Office of Matthew Vance, P.C.  We can provide you with a free consultation.  To contact Law Office of Matthew Vance, P.C., please call 505-445-1604 or contact attorney Matthew Vance online.