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 Plaintiffs, a class of Allstate automobile policy beneficiaries, alleged that Allstate Insurance Company used a computer program called "Colossus" in its claim handling procedures to undervalue bodily injury claims, violating the New Mexico Unfair Practices Act (UPA). Allstate argued that its use of Colossus was exempt from the UPA under Section 57-12-7, as it was expressly permitted by the New Mexico Superintendent of Insurance (SI) following a Market Conduct Examination (MCE) of its practices (paras 2-4).
Procedural History
- District Court, August 24, 2005: Held a three-day bench trial on the regulatory exemption issue and ruled in favor of Allstate, finding that the SI expressly permitted Allstate's use of Colossus through the adoption of the MCE report (paras 2, 5).
- District Court, Post-Judgment Motions: Denied Plaintiffs' motions challenging the partial judgment (para 6).
Parties' Submissions
- Plaintiffs: Argued that the district court improperly conducted a bench trial on the regulatory exemption issue, violating their right to a jury trial. They also contended that the SI's adoption of the MCE report did not constitute express permission under Section 57-12-7 (paras 6, 19).
- Allstate: Asserted that Plaintiffs waived their right to a jury trial by participating in the bench trial without objection. It further argued that the SI's adoption of the MCE report constituted express permission for its use of Colossus under Section 57-12-7 (paras 6, 19).
Legal Issues
- Did the Plaintiffs waive their right to a jury trial on the regulatory exemption issue?
- Did the district court err in concluding that Allstate's use of Colossus was expressly permitted under Section 57-12-7 of the UPA?
Disposition
- The Court of Appeals affirmed the district court's decision, holding that Plaintiffs waived their right to a jury trial and that the SI's adoption of the MCE report constituted express permission for Allstate's use of Colossus under Section 57-12-7 (paras 6, 25, 51).
Reasons
Majority Opinion (Bustamante J., Wechsler J. concurring):
Waiver of Jury Trial: The Court found that Plaintiffs waived their right to a jury trial by participating in the bench trial without objection, despite earlier raising concerns. Plaintiffs' conduct, including their statements and participation in the evidentiary hearing, demonstrated a knowing and voluntary waiver of their jury demand (paras 18-25).
Regulatory Exemption: The Court held that the SI's adoption of the MCE report, which included an examination of Allstate's use of Colossus, constituted express permission under Section 57-12-7. The MCE report found that Allstate's claim handling practices, including Colossus, complied with New Mexico law. The Court emphasized that the regulatory exemption applies when a regulatory body explicitly considers and approves the specific conduct in question (paras 29-50).
Dissenting Opinion (Vigil J.):
Right to Jury Trial: Vigil J. dissented, arguing that the record did not clearly and unequivocally demonstrate that Plaintiffs knowingly and voluntarily waived their constitutional right to a jury trial. He emphasized the presumption against waiver of fundamental rights and criticized the district court for failing to secure an explicit waiver on the record (paras 53-79).
Procedural Concerns: Vigil J. expressed concern over the district court's abrupt decision to conduct a bench trial on disputed factual issues, which he viewed as a violation of Plaintiffs' constitutional rights (paras 68-79).