102 F. Supp. 3d 1230
D.N.M.2015Background
- Linda Williams (non-insured third-party) slipped and was injured at homeowners' property insured by Foremost; Foremost adjuster contacted Williams five days after the accident.
- Foremost investigated, denied insureds’ liability, then negotiated with Williams’ attorney; Williams accepted a $24,000 settlement releasing insureds and later sued Foremost alleging unlawful early contact and statutory violations.
- Williams asserted: violations of New Mexico Trade Practices and Frauds Act (TPFA/Unfair Claims Practices), Unfair Practices Act (UPA), the New Mexico Release Act, and sought declaratory and injunctive relief; she also pleaded putative class claims.
- Foremost moved for summary judgment arguing Williams lacks statutory standing as a third-party/non-consumer, failed required procedural steps (judgment requirement), lacks Article III standing for equitable relief, and the Release Act provides no private money remedy.
- Court granted summary judgment for Foremost, dismissed all claims and denied as moot the motion to strike class allegations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. TPFA standing: May a non-insured third party sue under TPFA? | Williams: TPFA §59A-16-30 covers any person who "suffered damages" from insurer violations, so she may sue. | Foremost: TPFA allows third-party claims only for narrow "special beneficiary" classes (e.g., compulsory auto, workers’ comp); homeowners' indemnity policy does not confer such status. | Court: Williams is not an intended third-party beneficiary; TPFA standing denied. |
| 2. TPFA procedural requirement after settlement: Can a third party who settled still sue? | Williams: She points to statutory violation (Release Act) rather than bad-faith claim; settlement should not bar TPFA claim. | Foremost: Hovet requires a judicial determination of insured’s fault (no settlement) before a third-party TPFA suit; settlement waives TPFA claim. | Court: Settlement forecloses TPFA claim under Hovet; judgment requirement not met. |
| 3. UPA standing: Can a non-consumer third party sue under UPA for insurer conduct? | Williams: UPA protects members of public from unfair practices and should extend to injured third parties. | Foremost: UPA requires an act "in connection with the sale of goods or services" and New Mexico courts restrict UPA suits to actual consumers/privity. | Court: Williams is not a consumer of the insurance; UPA standing denied. |
| 4. Equitable relief / Declaratory and Injunctive Relief (including Release Act): Does Williams have Article III standing and an actionable Release Act claim? | Williams: Asserts a "zone of interest" and seeks declaration that Foremost’s conduct entitles class members to nominal damages; seeks injunction and declaratory relief. | Foremost: Williams lacks imminent or likely future injury, federal declaratory relief requires a live case/controversy, Release Act supplies no private money remedy and provides a statutory disavowal remedy Williams did not use. | Court: No Article III standing for forward-looking relief; declaratory relief tied to money damages is superfluous; Release Act affords no private monetary cause of action—equitable claims dismissed. |
Key Cases Cited
- Hovet v. Allstate Ins. Co., 135 N.M. 397, 89 P.3d 69 (N.M. 2004) (recognized narrow third-party TPFA cause of action for automobile-accident victims and explained judgment requirement).
- Russell v. Protective Ins. Co., 107 N.M. 9, 751 P.2d 693 (N.M. 1988) (third-party beneficiary status recognized for workers’ compensation context).
- Raskob v. Sanchez, 126 N.M. 394, 970 P.2d 580 (N.M. 1998) (distinguishing indemnity/homeowner insurance from compulsory automobile liability insurance).
- Jolley v. Associated Elec. & Gas Ins. Servs. Ltd., 148 N.M. 436, 237 P.3d 738 (N.M. 2010) (refused to extend Hovet’s third-party status to nonmandatory excess liability insurance).
- Valdez v. Cillessen & Son, 105 N.M. 575, 734 P.2d 1258 (N.M. 1987) (third-party beneficiary status requires intent that contract benefit third party).
- Clapper v. Amnesty Int’l USA, 568 U.S. 398 (U.S. 2013) (threatened injury must be certainly impending for Article III standing).
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (Article III standing requires concrete, particularized, and imminent injury).