This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
An elderly woman using a wheeled walker fell and broke her femur after her walker caught on a torn floor mat at a building owned by Santa Fe Medical Dental Group (SFMDG). SFMDG was managed by Kokopelli Management Services, which was responsible for property maintenance. SFMDG's insurer, State Farm, settled the claim for $375,000 and sought reimbursement from Kokopelli's insurer, Farmers Alliance Mutual Insurance, arguing that Farmers was the primary insurer (paras 1-4).
Procedural History
- District Court of Santa Fe County: Determined that Farmers was the primary insurer, State Farm provided adequate notice, the settlement amount was unreasonable, and Farmers was required to reimburse $250,000 with prejudgment interest (headnotes, paras 1, 4).
Parties' Submissions
- Appellant (Farmers Alliance Mutual Insurance): Argued it was not the primary insurer, claimed it did not receive adequate notice to participate in settlement negotiations, and contested the reasonableness of the settlement amount and the award of prejudgment interest (paras 1, 12, 15, 17).
- Appellee (State Farm Fire and Casualty Company): Asserted that Farmers was the primary insurer under the "closest to the risk" doctrine, provided adequate notice, and sought reimbursement for the settlement amount and prejudgment interest (paras 1, 12, 17).
Legal Issues
- Was Farmers Alliance Mutual Insurance the primary insurer under the "closest to the risk" doctrine?
- Did State Farm provide adequate notice to Farmers regarding the claim and settlement negotiations?
- Was the settlement amount of $375,000 reasonable?
- Was the award of prejudgment interest to State Farm appropriate?
Disposition
- Farmers Alliance Mutual Insurance was the primary insurer.
- State Farm provided adequate notice to Farmers.
- The settlement amount was deemed unreasonable, and Farmers was required to reimburse $250,000.
- The award of prejudgment interest to State Farm was upheld.
Reasons
Per Roderick T. Kennedy J. (Castillo and Vigil JJ. concurring):
Primary Insurer: The court applied the "closest to the risk" doctrine, finding that Farmers' policy, which covered Kokopelli's maintenance duties, was closer to the risk than State Farm's general liability policy. Farmers was therefore the primary insurer (paras 7-11).
Notice: State Farm provided adequate notice to Farmers through its agent and directly, giving Farmers sufficient opportunity to participate in settlement negotiations. Farmers' failure to act on the notice did not negate its responsibility (paras 12-14).
Reasonableness of Settlement: The trial court found the $375,000 settlement unreasonable and determined a reasonable amount to be $250,000 based on medical expenses, pain and suffering, and other factors. Farmers was required to reimburse this amount (paras 15-16).
Prejudgment Interest: The trial court did not abuse its discretion in awarding prejudgment interest, as State Farm did not unreasonably delay the case, and Farmers failed to make a settlement offer (paras 17-18).
The decision of the trial court was affirmed in its entirety (para 19).