981 F. Supp. 2d 981
D.N.M.2013Background
- The Hartford filed a declaratory judgment action seeking to determine coverage under Gandy Dancer policies for Mercer LLC’s underlying claims.
- The court previously granted partial summary judgment finding some coverage but denied others, and later issued a March 28 MOO addressing ownership and duty to defend.
- The underlying state action involves BNSF Railway’s allegations against Mercer LLC and Gandy Dancer for trespass and nuisance related to a water-diversion project on Mercer Property.
- Mercer Property was part of an easement held by BNSF Railway; Mercer intended agricultural use with no residences in 2006.
- The 2nd MSJ seeks reconsideration of the March 28 MOO, arguing the Wrongful Eviction provision may or may not cover trespass and nuisance, depending on the interpretation of terms.
- The court ultimately finds the terms premises, person, and occupy ambiguous and construes them against The Hartford, halting some prior conclusions while revisiting others.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether premises, person, and occupy are ambiguous | Hartford argues terms have ordinary meaning including vacant land | BNSF/Gandy contend terms are ambiguous and should be construed against Hartford | Ambiguous; construed against Hartford |
| Whether Wrongful Eviction covers Mercer LLC’s trespass allegations | Wrongful Eviction extends to trespass by owners/occupants | Trespass not within Wrongful Eviction if not by an owner/lessor | Trespass not covered; nuisance potentially covered implying defense duty remains |
| Whether BNSF’s ownership through easement affects coverage | Ownership through easement supports coverage | Easement is not ownership; coverage depends on other facts | Ownership through easement not revisited; upheld in part; trespass not covered, nuisance covered for defense duty |
| Duty to defend vs duty to indemnify | If claims potentially covered, Hartford must defend | Indemnity depends on final liability; defense is broader | Duty to defend triggered for nuisance; trespass not covered; indemnity reserved for later |
Key Cases Cited
- Mark V, Inc. v. Mellekas, 114 N.M. 778 (1993-NMSC-001) (ambiguous language may be determined with extrinsic evidence; ambiguity decided as a matter of law or fact depending on record)
- Chimera Inv. Co. v. State Farm Fire & Cas. Co., 268 F. App’x 793 (10th Cir. 2008) (personal injury clause may exclude coverage for wrongful eviction where not by owner)
- Supreme Laundry Serv., LLC v. Hartford Cas. Ins. Co., 521 F.3d 743 (7th Cir. 2008) (holds that corporations can be within ‘person’ for wrongful eviction)
- United Nuclear Corp. v. Allstate Ins. Co., 2012-NMSC-032 (N.M. 2012) (ambiguous policy terms construed against insurer; governs insurance contract interpretation)
- Battishill v. Farmers Alliance Ins. Co., 139 N.M. 24 (2006-NMSC-004) (ambiguous terms construed in insured’s favor; adhesion contracts)