This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The City of Santa Rosa terminated a worker's employment in February 1995. The worker subsequently filed a charge of racial discrimination with the Equal Employment Opportunity Commission (EEOC) and the New Mexico Human Rights Division (NMHRD). At the time, the City held a "claims made" public officials errors and omissions liability insurance policy with Twin City Fire Insurance Company, effective from January 27, 1995, to January 27, 1996. The worker later filed a federal lawsuit, which was settled in 1997. The City sought coverage under the policy for the settlement, but Twin City denied coverage, asserting that no "claim for damages" was made during the policy period (paras 2-5).
Procedural History
- District Court of Guadalupe County: Granted summary judgment in favor of Twin City Fire Insurance Company, holding that no coverage existed under the policy because no "claim for damages" was made during the policy period (para 5).
Parties' Submissions
- Appellant (City of Santa Rosa): Argued that the worker's EEOC and NMHRD charges constituted a "claim" under the insurance policy, as they were akin to legal actions and provided notice of potential damages. The City also contended that the policy's failure to exclude administrative actions implied coverage and that the policy terms were ambiguous (paras 6, 10, 15-16).
- Appellee (Twin City Fire Insurance Company): Asserted that the EEOC and NMHRD charges were not "claims for damages" as defined in the policy, as they did not include a demand for monetary relief. Twin City argued that the first demand for damages occurred when the worker filed a federal lawsuit, which was outside the policy period (paras 10-11).
Legal Issues
- Does a charge of discrimination filed with the EEOC or NMHRD constitute a "claim for damages" under a "claims made" insurance policy? (para 6)
Disposition
- The Court of Appeals of New Mexico affirmed the district court's grant of summary judgment in favor of Twin City Fire Insurance Company (para 19).
Reasons
Per Fry J. (Pickard and Robinson JJ. concurring):
- The Court reviewed the insurance policy de novo, emphasizing that clear and unambiguous policy language must be enforced as written to reflect the parties' intent (paras 6-7).
- The policy defined a "claim" as a "demand for damages," and "damages" as a "monetary judgment, award or settlement." The EEOC and NMHRD charges did not constitute a demand for monetary relief but were administrative grievances requesting information and investigation (paras 8-12).
- The Court rejected the City's argument that the policy terms were ambiguous, noting that ambiguity does not arise merely from differing interpretations by the parties (para 15).
- The absence of an exclusion for administrative actions did not imply coverage, as coverage must be explicitly provided in the policy (para 16).
- The Court distinguished the case from others where the term "claim" was undefined or where administrative proceedings were explicitly included in the policy's definition of a claim (para 17).
- The Court concluded that the worker's EEOC and NMHRD charges did not constitute a "claim for damages" under the policy, and therefore, Twin City owed no coverage (paras 18-19).