AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

A self-insured employer, Levi Strauss & Company, sought to recover losses incurred when its excess workers' compensation insurer, Mission Insurance Company, became insolvent. The policies in question required Mission to pay claims exceeding specific or aggregate retention amounts. Levi Strauss argued that these policies qualified as "covered claims" under the New Mexico Property & Casualty Insurance Guaranty Law (paras 2-3, 5).

Procedural History

• District Court of Santa Fe County: The court granted Levi Strauss' motion for partial summary judgment, finding that the policies were workers' compensation policies within the scope of the Guaranty Law and qualified as "covered claims." It also struck certain affirmative defenses raised by the New Mexico Property & Casualty Insurance Guaranty Association (paras 5, 18).

Parties' Submissions

• Appellant (New Mexico Property & Casualty Insurance Guaranty Association): Argued that the policies did not qualify as "covered claims" because they were not "direct insurance policies," were in the form of reinsurance or indemnity agreements, and were not true workers' compensation policies. It also contended that the Guaranty Law was intended to protect injured workers, not self-insured employers (paras 5, 7, 15, 17).
• Appellee (Levi Strauss & Company): Asserted that the policies were direct excess insurance policies and fell within the scope of the Guaranty Law. It argued that the policies were not reinsurance or indemnity agreements and that the Guaranty Law applied to its claims (paras 5, 8-9, 16-17).

Legal Issues

• Whether the excess workers' compensation policies issued to Levi Strauss qualified as "covered claims" under the New Mexico Property & Casualty Insurance Guaranty Law (para 1).
• Whether the policies constituted reinsurance or indemnity agreements excluded from coverage under the Guaranty Law (paras 9, 15).
• Whether the Guaranty Law was intended to protect self-insured employers like Levi Strauss (para 17).

Disposition

• The Supreme Court of New Mexico affirmed the district court's decision, holding that the policies were "covered claims" under the Guaranty Law and not excluded as reinsurance or indemnity agreements (para 18).

Reasons

Majority Opinion (Franchini J., with Sosa CJ., Ransom J., and Montgomery J. concurring):

• The court found that the policies were "direct insurance" because they established a direct relationship between Levi Strauss and Mission Insurance, uninterrupted by another insurer. It adopted the definition of "direct insurance" from Florida case law (paras 8-9).
• The policies were not reinsurance because Levi Strauss, as a self-insured employer, was not an "insurer" under the statutory definition. The court emphasized that self-insurance involves retaining one's own risk rather than assuming the risk of another (paras 9-13).
• The policies were not indemnity agreements excluded under the Guaranty Law. The court clarified that Levi Strauss' claim was for losses exceeding the retention amounts, not for reimbursement of paid claims (paras 15-16).
• The court rejected the argument that the Guaranty Law was intended solely to protect injured workers, finding that the law also applied to excess workers' compensation policies held by self-insured employers (para 17).

Dissenting Opinion (Baca J.):

• Justice Baca argued that the policies constituted reinsurance because Levi Strauss, as a self-insured employer, acted as a statutory insurer under the Workers' Compensation Act. He contended that the policies indemnified Levi Strauss for a portion of its assumed risk, fitting the definition of reinsurance (paras 20-22).
• He noted that the New Mexico Guaranty Law explicitly excluded reinsurance and indemnity agreements from "covered claims" and argued that Levi Strauss' claim fell within these exclusions (paras 24-26).
• Justice Baca also distinguished the case from Florida and Iowa precedents, emphasizing differences in statutory language and the absence of premium tax payments on the policies in question (paras 23-25).