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 guest at a lodge operated by the Defendant was injured in a horseback riding accident. The lodge was insured under a liability policy issued by the Plaintiff's insurer, which contained a clear exclusion for injuries arising from horseback riding. The Defendant argued that it had a reasonable expectation of coverage for such activities based on its interactions with its insurance agent and the lodge's operations (paras 2-10).
Procedural History
- District Court of Santa Fe County: Granted summary judgment in favor of the insurer, finding no coverage for the horseback riding accident due to the policy's explicit exclusion (paras 1, 11).
Parties' Submissions
- Defendant (Running Elk Corporation): Argued that it had a reasonable expectation of coverage for horseback riding injuries based on the lodge's operations, its reliance on its insurance agent, and the absence of specific discussions about the exclusion prior to the accident (paras 10, 16-20).
- Plaintiff (Western World Insurance Company): Contended that the policy's Saddle Animal Liability Exclusion was clear and unambiguous, and that the Defendant had ample opportunity to review the policy and was bound by its terms (paras 14-15, 19-20).
Legal Issues
- Whether the Defendant had a reasonable expectation of coverage for horseback riding injuries despite the explicit exclusion in the insurance policy.
Disposition
- The Court of Appeals of New Mexico affirmed the trial court's decision, holding that the Defendant did not have a reasonable expectation of coverage for horseback riding injuries (para 27).
Reasons
Per Sutin J. (Castillo and Alarid JJ. concurring):
The Court found that the Saddle Animal Liability Exclusion in the insurance policy was clear, unambiguous, and enforceable. The Defendant had possession of the policy for a significant period and had the opportunity to review its terms. The Court rejected the Defendant's argument that it had a reasonable expectation of coverage, noting that no specific request for such coverage was made, and the Defendant's reliance on its insurance agent did not create a genuine issue of material fact. The Court emphasized that subjective expectations of coverage, without an objectively reasonable basis, cannot override clear policy exclusions (paras 14-26).
Per Alarid J. (specially concurring):
Judge Alarid agreed with the result but emphasized that the Defendant's insurance agent, Bundy, was acting as the Defendant's agent, not the insurer's. Bundy's knowledge of the exclusion was imputed to the Defendant, further negating any reasonable expectation of coverage. Judge Alarid also noted that the Defendant failed to establish that the insurer had any reason to know of the Defendant's subjective belief regarding coverage, rendering such beliefs immaterial (paras 29-32).