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New Mexico Appeals Court Holds Uninsured Motorist Lawsuit Barred by Claim Preclusion

Posted in Auto Accidents

The Court of Appeals of New Mexico has held that a family’s lawsuit seeking uninsured motorist benefits was barred by claim preclusion. In Pielhau v. State Farm Mutual Auto. Ins. Co., Jared Pielhau was unfortunately killed in a single-vehicle traffic wreck in 2004. At the time of the deadly crash, the vehicle Jared was riding as a passenger in was uninsured and Jared’s parents owned five vehicles that were insured by State Farm through four separate policies. Following the accident, the Pielhaus sought to collect financial compensation as part of the uninsured motorist coverage on two of their vehicles. After State Farm refused to allow the Pielhaus family to stack coverage, the couple filed a lawsuit against their insurer and their insurance agent. That case was later settled and dismissed with prejudice.

In 2011, the Pielhaus sought to recover uninsured motorist coverage from the individual insurance policies that were in effect on each of the family’s remaining three vehicles in 2004. Prior to Jared’s fatal accident, however, the Pielhaus rejected uninsured motorist coverage on each of the three policies. After State Farm failed to respond to the Pielhaus’ request for uninsured motorist compensation, the couple filed a lawsuit for damages in district court. According to the Pielhaus, their rejection of uninsured motorist coverage was invalid pursuant to subsequent New Mexico caselaw.

After filing the second case, the family asked the court to grant a motion for partial summary judgment against State Farm. The trial court granted the motion and the Pielhaus voluntarily dismissed their remaining claims. State Farm then appealed the case to the Court of Appeals of New Mexico.

On appeal, State Farm argued that, among other things, the Pielhaus’ lawsuit was barred by issue claim preclusion. Claim preclusion prevents a party from engaging in “piecemeal litigation” by filing multiple lawsuits based upon the same incident or transaction. A claim is precluded if an earlier case was decided on the merits, the same parties are involved in both lawsuits, and both claims arise out of the same cause of action. According to the appellate court, the dismissal of a claim with prejudice is a decision on the merits. Additionally, the court stated that the underlying facts determine whether a claim arises out of the same cause of action. Finally, the New Mexico court held that a subsequent change in law does not limit the preclusive effect of a prior decision on the merits.

Because the Court of Appeals of New Mexico found that the Pielhaus’ 2011 uninsured motorist claim was precluded by the family’s 2004 lawsuit, the appeals court reversed the lower court’s order and dismissed the case.

Please contact the Fine Law Firm if you were hurt or a loved one was killed in a tragic New Mexico car wreck. Our knowledgeable Santa Fe auto accident attorneys have more than 100 years of combined experience helping individuals who were hurt or the close relatives of those killed as a result of another person’s negligent act. To schedule a free, confidential case evaluation with a dedicated advocate, give the lawyers at the Fine Law Firm a call at (505) 889-3463 or contact us through our website.

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