*1 point quotation I with a close this Thompson, 212

Surrat v. Va. 191 183 S.E.

2d 202 (1971): [Njothing the nature requires common law us to adhere to concept that a wife cannot

an outmoded separate

so herself from her husband’s capable maintaining flesh as Sutin, J., opin- dissented and filed an against him. action We therefore hold ion. plaintiff this ac- that the can maintain tion. summary re- judgment should be

versed. CRAWFORD, Plaintiff-Appellee

Oscar F. Cross-Appellant,

AMERICAN EMPLOYERS’ INSURANCE COMPANY, corporation, Defend ant-Appellant Cross-Appellee.

No. 1054. Appeals

Court of Mexico. New

May 29, 1974.

Rehearing Denied June 1974. Aug.

Certiorari Issued *2 damages

special punitive which totaled $3,000,000 $150,000 alleged plus breach provide of contract failure coverage. a max- policy provided for The Insured’s $100,000for bodily injury benefit of imum coverage for person. excluded each *3 if the accident of the Insured employees of the automobile out of the use arose ap- the Insured. It did not the business un- by the Insured ply assumed to did it agreement nor any contract or der Larrabee, Rex D. Throck- Charles B. damages. It punitive provide coverage for morton, Dickason, Sloan, Rodey, Akin & defend the Insurer would provide that did Robb, Richards, Albuquerque, R. E. Girand suit, groundless, suit was if the even Richards, Hobbs, appellant and for & provided that It also or fraudulent. false cross-appellee. investigation, make such the Insurer could Hinkle, any claim or Hensley settlement of Jr., negotiation Harold L. Bondur- Eaton, Fedric, Hunker, ant, expedient. Cox Don M. it deemed & s'uit as Roswell, ap- for Higginbotham, Fedric & con- instant action in the trial court pellee cross-appellant. whether Woolett that the issue cluded prior litigated in the employee was was an OPINION adversely the In- determined action and Therefore, a matter it held as sured. HERNANDEZ, Judge. applied. employee exclusion law that the This appeal judg- case involves of a questioned appeal. holding is not arising ment jury from a verdict for the from litigation prior The defense of plaintiff, Oscar F. (Insured), Crawford judgment through investigation brought action alleging breach of con- attorneys re- persons and by was conducted tract and bad faith negligence by the Insurer. tained defendant (Insurer) which in a resulted judgment 2 be consid- and will points the Insurer in 1 the sum of Insurer’s $633,000. wish prologue as we together and ered gov- that will rules of law certain set forth alleges The Insurer points three of er- ern that consideration. (1) ror: that Insurer was entitled di- to a rected verdict on the issues submitted to and In relationship jury; (2) that the trial court’s instruc- rise to a gives sured tion theory on .the Insured’s of the case its in all of good faith to act in the Insurer issues; created false (3) that the trial single No one the Insured. relations with court give erred failing to Insurer’s in- be practicable “good faith” definition of struction pertaining prejudice. variety of situations infinite cause might concerning The Insured cross-appealed problems alleging er- which good ror for faith punitive failure to instruct on dam- arise. Thus ages. determined must be bad faith converse case. each particular facts from We affirm. Gonzales, P.2d 501 Lujan 84 N.M. v. prior A action involving the Insured (Ct.App.1972). 673 arose out of a one-car accident in which “ party Lonnie is entitled to Woolett was a paraplegic. rendered [A] £2] le- associate, Insured’s business all correct M. have the instructed on John Penrose, support- was the driver his which are gal of the car. case Wool- theories ett’s complaint LeBarge v. prayed compensatory, for substantial evidence.” ed

615 event, (Ct. ad- Stewart, counsel. should be N.M. counsel, if for no other vised to obtain App.1972). complaint ex- than that the far reason for directed Upon a motion coverage.” of their ceeds amounts verdict, the evi trial court must view signed July Insured light favorable dence most agreement prepared of rights reservation indulge party resisting the all motion and Mann, portions of attorney Russell support of him inferences in reasonable which are follows: ignoring in the evidence un conflicts “WHEREAS, is desir- favorable him. If reasonable minds the INSURED COMPANY, might having differ as to the to be ous of conclusion attorneys to permissible agents, representatives reached evidence inferences, al- investigate then aforesaid continue to losses, jury. a set- Johnston, leged possibly negotiate N.M. Archuleta tlement, and INSURED 492 P.2d to furnish to (Ct.App.197i). *4 to said cause complete and defense full to the verdict facts most favorable * * * WHEREAS, the COMPANY out which the are these: accident of * * * to continuing is desirous of May 31, initial arose occurred action full and com- furnish with a INSURED upon being The Insurer notified of * * * plete the under- with defense investigation. the accident an On ordered possible investigation; standing that such investigators submitted June and defense negotiations settlement report which that their indicated Woolett * * * way change, any in shall not employee an claimed to be the Insured. waive, any or forfeit invalidate May 24, in the filed suit On Woolett terms, requirements conditions Francisco, Superior in Court Califor- San any policy or subject insurance nia, against the and others. De- Insured parties hereto under rights any fense of the suit tendered to In- policy. said attorney accepted engaged surer and who handle the defense. Friedrich 'was years on a June Robert E. ed the perienced er : this or not the ble * * * exclusion is a Mexico. served readily apparent ate have conducted a “I now 19, 1967Friedrich wrote to the Insur- opinion file, and, required * case Friedrich [wjhether or not an employee * * from a New attorney for about five to valid exclusion case referral basis. On * * * you * * * two on June claim exclusion is who had detailed have so things Mexico herein. is an immedi- (2) Whether review represent- are aptly employee one-half in New applica- 1967 to lawyer What most ex- ob- or the COMPANY any right that * * * circumstances tives or against the COMPANY’S tigate settlement cause and that rence SURED ^[*] full hereinafter policy agrees any attorneys ^[*] question, possibly does judgment that alleged and furnish to INSURED * * with complete INSURED the COMPANY have, hereby ^[*] shall in surrounding losses, damages, may the COMPANY * such agents, under ^[*] expressly continue hereby covenants defense may be rendered action any escape the INSURED negotiate for the terms ^[*] representa- may now taken the IN- to 'liability to consent causes occur- inves- waive ^[*] such by the the reservations and accede to ‡ ‡ ifc intend, rights If we * * of all to decline COMPANY * * * * premises rights of so that the this should be done at the earli- date, respects in all possible est so claim the said COMPANY will cannot rights it refused prejudice by delay had securing other identical with participate investigation, pos- in such action, plaintiff “In this asks for the Insurer: ICAN EMPLOYERS COMPANY It was following to the Insurer: ney and Agent.” many times, mains obscure.” exposure, and as we have discussed bility, policy contains language which would brought by him. your excess letter that if establish that he is an exclude substantial rected to Oscar F. Crawford. deed, and an excess letter should be di- received, “Needless to On * * * sible settlement ****** might the addressees of the any January 22, January signed by is but certainly claims made » any be will one By injuries the coverage coverage as to the claim with a is a say the Insured and “AMER- Russell D. 1968 Friedrich wrote the negotiations 1968 Friedrich ** a case of doubtful lia- [sic] very which the very view * employee serious Woolett letter, large potential INSURANCE Mann, point question INSURED wrote case, that th^ plaintiff out in should Attor- very re- in- to thing.” Mr. Mann called the Insured in ing do not ett’s company Employers Group also stated: “I have been in contact with as well as Russell Mann and as of now I initial fer of settlement received from Wool- Mr. your terests in $150,000 * * * you may will counsel of exposure beyond ^[*] matters, such as * * * Mr. damages said *5 Attorney Mann, Penrose, to settle for attorney suggested ^[*] September covered represent action, punitive damages reservation of own Woolett, know or Mr. Crawford will ’> worth of insurance in excess of the You are further advised that expense connection with one of your with on does what either that while Mr. Friedrich your of Insurance this August the limits of this 1969Friedrich wrote to $175,000. copies own selection and at not * the defendants telling him of an of- interests policy. choose to he was represent your rights agreement cover contractual 29, to the Insured the insurance the claim of any possible policy 1969 pursuant * Companies, do, and, also, form are promised if employ policy. offer- letter limits any- It “Following our discussion I am connection dictating with this offer if and asked he herein I appropri- what feel would wanted be an to settle. Insured said he did * * * ate form of excess As I not. Mr. Mann made letter. no recommendations explained, in discussing the coverage and to the Insured nor did he tell him what the Mann, situation might might with Mr. the at- not The In- do. torney employed by your Dallas surer Office made no counter-offer nor it did so- there was no New tence of coverage. This, subject of a determination of the exis- ^[******] Roswell, course, New gives Mexico, * Mexico law rise to the he told me that thought on cerning testified as follows: to his discussions with the Insurer con- licit Friedrich other offers at lesser Woolett’s offer of answer to questions figures. August 28, relating 1969 “A. policy The thread it that of was that the perhaps thing to bring do to declaratory $100,000, relief Mexico, action in limits being New that it re- would to determine whether or not there is cov- quire that Mr. Crawford contribute erage.” $175,000. order to come close to or not the arose to whether 2, On February response 1968 company pay Friedrich’s suggestion was prepared the Insurer wrote the following to the $100,000. Insured: not decision was it that their “Q. I take ‡ ‡ 0¡¡ 5j« ifc ifc that Company’s attitude still our do so? employ- alleged plaintiff has since the $100,000, they pay suggested “A. I responsible do not ment that we are eventually back to report came and the provide coverage under contract. so.” me that not do would * ** entirely possible, as a [I]t probably [sic], we matter fact He testified: further will associate counsel behalf other “ * * * Crawford, all of As to Mr. Compa- Employers American Insurance deposi- until the time of this ” contacts * * * ny. Mann, through tion were made Mr. Pres- in fact retain Mr. The Insurer did that Mr. I was at all times informed represent itself No- Ericksen to ton N. unwilling to make was Crawford testimony 4, vember Mr. Ericksen’s 1969. any set- payment of amount towards supposed to do he was as to what Mr. And I had solicited from tlement. “ investigate primarily to was attorney] Resner an offer or [Woolett’s procedure should be undertaken to what offer, to make an and I had asked him company protect the company at the same time advised the dur- coverage.” there Some time was that if an offer received within the December, it ing the latter limits, policy best in- that was file Ericksen should was decided that Mr. terests of all concerned that it should be declaratory relief action to resolve paid. Later after this offer seek coverage. He was also to received, ex- I asked the injunction stay the trial of the Wool- authority me, if tend the limits 1970, set March ett case which was time, only period for a limited coverage. The pending the resolution of this was not done.” declaratory was filed Febru- relief action restraining ary temporary A or- particular significance Of is the Insur- staying the February der dated er’s letter to Friedrich of October and an trial of the case was issued Woolett part: which states *6 was set to show cause on the matter order is “We have concluded that the case 22, temporary re- for March The 1970. fraught potential with inter- conflicts of hearing straining was at the order lifted carefully est *. have [W]e stay request the for on the 22nd and further brought everybody’s out to attention that The case as result denied. Woolett plaintiff if the employee is an Pen- 30, until these actions was continued March rose, coverage then there is no under party as a was named 1970. Insured policy. this areWe confronted with declaratory action but defendant traces, multiple all the denial from was personally never served. Mr. Ericksen coverage to denial of having through process him served subsequent litigation of that issue as when Secretary of State California Nevertheless, well. very because of the injunction was denied. The Insured problems pro- difficult involved and to declaratory action from learned of the first vide all of the people involved with the However, 30, March 1970. Friedrich on protection possible, maximum it is our him to what given explanation no conclusion that we must introduce into by accomplished it. to be was intended this case other counsel. lasted the initial action The trial of repre- office should continue to [Y]our 21, April 1970. through March sent M. Penrose *. [W]e attorney John April 1970 Woolett’s should continue the defense of Crawford following re- made the letter to Friedrich through the my office of Russell Mann. D. plaintiff and quest behalf of : “On Woolett, I action, in this Lonnie G.

client herewith solicit from the defendants trial, ed: “We both conducted good the insurance carrier a faith offer of main burden conducting prior settlement my to made to the responsibility.” conclu- And asked “I most present sion of evidence in questions trial.” and made almost all of the objections if is you that what Mr. mean.” letter was shown the Insured on participate Ericksen did not in the Woolett the 14th. No recommendations were made trial. requested him contribution ei- IS, ther April Friedrich or' Judge charged Mann. On Snead that: 1970 letter dated the 14th from the In- “Plaintiffs claims that the Defend- [sic] surer to Friedrich was received and shown negligent obliga- ant was or breached its to the Insured. It read as follows: tion good to use faith in with dealing “Our clear. We have De- Plaintiffs in one more of the follow- claratory Relief action under considera- ing acts: tion. do not We believe there cover- By (A) failure inform Plaintiffs of age for the this defendants under con- deny the decision of Defendant indemnity. tract for defending areWe coverage timely ap- surance in a under reservation. Our has propriate manner. never manifested the attitude (B) Failure to resolve case (nor, told, should be settled we are timely ap- in a has Crawford) Mr. reason. propriate manner. our firm conviction coverage legal (C) of defense of case after Retention indemnity cannot, does not exist and we conflicts interests between the therefore extend an offer to settle as Plaintiffs and the Defendant were suggested by Mr. Resner.” to exist. known The Insured testified that this was the (D) Failure to follow advise first time that he by anyone had been told in the conduct of the defense. counsel April did not exist. On (E) give proper Failure to considera- 1970the Insurer wrote to the : Insured tion to the financial risks to the Plain- you aware, “As are further there awas tiffs when balanced the mone- dispute between relating us exis- tary interests of Defendant.” tence protection of the insurance under questions raises several our and the defense of Woolett’s which peripheral are main suit was handled under the terms of a good pe- faith: will We consider these Rights agreement Reservation of signed ripheral questions first. by you July California, argues The Insurer that we must first separate to defend is and distinct *7 decide duty good whether the of faith obligation indemnify from the to (pay- arises contract de- or tort because the ment of judgments) becoming after cision dictates of will the law which State aware the testimony presented in the of e., apply, i. It California or New Mexico. clear, above it is and it our is con- duty states that if the arises from contract employment clusion that a contract of apply law of New Mexico will since you existed plaintiff, between Wool- policy countersigned in was issued and therefore, ett. It necessary that we conversely tort, New Mexico if you advise coverage for indemnification law of that is apply California will since * does not exist and that we are alleged where all faith of the acts of bad satisfy unable to of the verdict occurred. against you.” [Emphasis rendered ours] Mr. As it is rela Friedrich when we stated earlier sep- asked about the arate representation of that tionship the Insurer and Insured of Mr. Penrose and duty. relationship Mr. gives Crawford at the rise to That Woolett trial answer- “* * * held that the generally It is insur- of contract inception in the has interest alone of of a conflict duty existence can ance, however, the breach of defend- excuse an insurer from does not the im- of the breach more than embrace * * * More- ing. omitted] It can be good [Citation of faith. plied covenant over, re- several methods of there are amounting poor judgment of exercise conflict, none of which solving the negligence. it can negligence or to duty the insurer’s abdication of volve an to mislead an intent embrace can also contract. under the insurance defend to of Consequently, the breach deceive. v. Fire Insurance Co. Employers’ See contract in both good faith sounds duty of Beals, A.2d 397 R.I. New law of apply the tort and we Insur- Mutual (1968); Burd v. Sussex v. Traders General Mexico. Comunale & Co., (1970). 267 A.2d 7 ance Company, 328 P. 50 Cal.2d Insurance N.J. (1958). 2d 198 sought avoid the that it to Insurer claims that since The Insurer contends even every in possible, conflicts an em attorneys “pro- it determined that Woolett was retaining was three extent of was ployee the Insured and hence there everyone’s pass interest.” We tect duty good coverage there was no an Insurer question what moment say, That is that the determina faith. a dilemma. when faced with such should do coverage retroac tion that there was no that graphically demonstrates This record tively duty repre- all absolved the Insurer of attorneys an insurer retained Lujan in good pointed faith. As out as in such sent the insured circumstances Gonzales, supra, obligation an In v. in placed these are an untenable obliga pay independent surer to loyalty cannot be allowed. divided which subsequent foregoing tion to defend. The determina cor- Any objective reader they tion that there was no did not re only respondence could conclude duty acting lieve in of its interest of were all written with the best good faith in the conduct of that defense. in the Insurer mind. “* * argues that: Defendant alleges The Insurer that it had no variety in a faith has been found [B]ad declaratory

obligation judgment to file a every the insur instance situations but coverage prior as to action the Woolett refused to wrongfully either ance carrier suit. it had That correct. What action, wrongfully denied defend the tort duty good to act faith its rela accept coverage wrongfully refused to tions with the Insured. There are several limits.” settlement offer within things that it could or should have done to the usual situations that those are Granted obligation. fulfill this which was One of faith have arisen but where acts of bad have had the deter only situations where those are not the separate enough mined action far good faith might arise. The advance of the suit Woolett so As narrowly so circumscribed. cannot be conduct of that defense not have would infinite can be an we stated above there been affected un having acts variety‘of such situations out which eleventh answered. Insurer’s abortive Gonzales, supra; might Lujan arise. pertinent only hour action is far so *8 Co., Insurance see Yeomans v. All State relates the to of the Insurer’s N.J.Super. (1972). 296 A.2d 96 duty good breach of the of faith. primary The Insurer that the turn now to the issue also contends We particular interest In the circum conflict of between it and the whether under breached coverage sured over the was stances of case the Insurer duty obligation good such as would excuse it from its faith. record not its This, too, outset to defend. is correct. clear that the to the trial court’s instruction conflict interest aware of the serious As creating case theory Insurer’s coverage. Over as to two existed issues, to ad- false is no merit this con they were there years one-half before trial they tention. going deny if to cov- vised that were they possible as erage should so as soon do reads The introduction to 3.0 N.M.U.J.I. a prejudice

to avoid to Half Insured. in as follows: year they In- later to tell the were advised key appropriate “The to instructions language sured that contained of the issues of the law- formulation which would exclude it be should reading group a of abstract suit. The was the Insured’s determined that Woolett law, though applica- statements even April employee. in the midst in the case and art- ble to the evidence of trial the Insured was notified cov- to the fully guidance of little drawn are erage being denied. duty they are jury which bound to properly sum- perform unless court acceptance by the Insurer issues. the true marizes knowing the defense that a serious conflict foundation, pleadings supply byt existed, of interest be re which would only the foundation. is the evidence litigation, notifying solved in that without truly adduced at trial which determines the Insured in terms that he conflict presented the issues that are to the would understand and with sufficient em adjudication. their No matter how phasis appreciate gravity he that would pleadings may adroit bombastic of the situation that he faced was a breach drawn, duty it is to of the court sub- of good faith. The continued control jury only mit those issues which frequent the defense after admonishments supported by are the evidence.” by counsel to make full disclosure of their opinion deception. borders intentional It is our that the trial court’s in- sign correctly True presented did have the Insured a res structions the issues as joined rights agreement. agree by by ervation of pleadings presented provisions ment had relative to the evidence. general

which were couched terms so correctly rejected The trial court the In- only experienced those surer’s a motion for directed verdict be- appreciate law portent. could their Such cause much of the evidence this case reservation cannot be used as was contradicted and reasonable minds charge of bad faith. could differ as the inferences or conclu- sions be drawn from it. aWhere conflict of interest se as point Insurer’s 3 is that the trial court rious this one exists between an insurer erred in refusing give following and its insured which could affect deci struction “In : order an insurance com- settlement, sions as to strategy pany to be liable for its conduct toward defense, manner of the decisions as to the insured for the conduct of an insured to need for actions, etc., collateral the insurer relieve an insurance must insist that the insured separate retain an insured such party conduct of one must counsel his own choosing. The reason prejudice have resulted in par- to the other able value of these attorney’s fees should ty.” be borne the insurer. To do otherwise would allow an insurer to shift to in The trial court did not err sured the defense to which he is refusing entitled this instruction for two reasons: the terms of policy. First, See Satterwhite necessary was not that the Insur Stolz, 79 N.M. er’s (Ct. conduct in prejudice result to the In App.1968); Prashker v. United States sured. As we previously, stated a breach Company, Guarantee 1 N.Y.2d 136 N. of good faith sounds both E.2d 871 (1956). contract prejudice and tort

621 In recovery spite either. of the under fact that the bad essential element faith conduct the necessary Insurer’s conduct Insurer tended that the was ob “Injury”, question scure and the punitive Insured. confuse injury result in to the damages the we done believe that something judge the is defined as dam- was correct in producing taking this issue right rights or from the party, 89, jury. Although Cassetty, 71 N.M. the actions of the Insurer age. Clark v. however, could be entirely acknowl- characterized do,We as self-in (1962). P.2d 37 they well terested damage might do not rise and to the level of edge prejudice being “maliciously intentional, injury. fraudulent, Second the same op result from pressive, indicate or committed nothing recklessly in record to is the or there with wanton disregard resulted which anything rights.” Plaintiff’s that the Insured did prejudice to the.Insurer. in It is so ordered. the Insured’s point raised

The sole erred trial court is that the

cross-appeal LOPEZ, J., concurs. punitive issue of

refusing to submit jury.

damages SUTIN, J., dissents. governing in New Mexico law Albuquerque v. Loucks point set forth SUTIN, Judge (dissenting). 735, Bank, 418 P.2d 76 N.M. National I respectfully dissent. (1966). damages may be exemplary

“Punitive or Judgment should be granted defendant conduct of only when the awarded because: There was no (A) insurance cov- maliciously be be said to wrongdoer may erage. (B) Defendant conducted its de- fraudulent, oppressive, intentional, fense under rights. a reservation (C) recklessly with a wanton committed Defendant was entitled to a directed ver- rights. disregard plaintiffs’ dict. ^[******] the trial court may properly re- (A) There was no coverage. by the move case from consideration chambers, April 13, before fact issues of jury only when true no trial, in a discussion be- beginning * right presented.

have been counsel, tween and the trial court court issue of fact trial on stated: provisional, presented by pleadings So, me I take it that is for to deter- is- to form such if evidence fails and put my mine and I must shoes disap- jury trial right sue of fact stage, at this the cement determining whether pears. law, hold, the exclu- a matter has been raised fact or not a There sionary apply. clause does case, the trial proper issue in the [Emphasis primary coverage. in its most added]. must view the evidence court support party aspect favorable holding unchallenged. “The bur- issue, indulge reason- all raising the proving den of that there was an insurance to be conclusions able inferences or policy in force at the time of collision If reasonable drawn from evidence. upon plaintiffs failed to be the result to differ as to minds cannot Seal, sustain this burden.” v. Bourne evi- from a reached consideration (1964). Ill.App.2d 203 N.E.2d drawn dence, all to be inferences importance non-coverage was de- then, therefrom, then, only does termined Farm Mutual Automobile State deter- one of law issue become Gonzales, Company Insurance 83 N.M. court and to be taken mined Insurer, aby (1971). jury.” *10 suit, declaratory judgment sought to against plaintiff deter- Woolett had suit and filed mine coverage personal others injuries arising of under the for of out policy. granted The trial court insurer automobile accident which occurred May 31, 1966, California; summary judgment on this issue and no in the State of appeal However, plaintiff that was taken therefrom. desired to have defendant investigation, court permitted possibly case continue its negoti- to be tried to a ate jury plaintiff a and a on the of for settlement furnish estop- defenses waiver and pel. defense; full complete de- that returned a verdict de- fendant investigate desired to continue to Supreme fendants. The Court reversed plaintiff and furnish with a full and and said: com- plete defense, understanding that with * * * stated, As above it has been such matters in any way change, “shall not judicially determined that he per- had no waive, any or invalidate forfeit of mission to take automobile and was terms, requirements conditions Thus, not covered policy. under the at subject policy any insurance any rights no time were there and duties rights parties of the hereto under existing plaintiff him between under ”; policy said nothing that it shall this contract. do “shall in constitute a waiver of any rights, Company which the may have Insofar concerned, waiver it is under the escape terms dia- apparent “right plaintiff deny bility any judgment may ren- coverage to Gonzales” is not right dered the said Insured in the above arising insurance, under the contract of litigation.” [Emphasis described rights added]. and duties with which we are here are plaintiff concerned those of Rights Agreement Reservation under the policy. rights affect de- duties of the did policy. fendant under its In case, the instant policy, insurance Plaintiff contends: at the collision, time of the did not afford coverage plaintiff to the injuries non-coverage The fact of was not deter- Woolett. mined until California case was after All tried. the omissions of defendant respect were before that time (B) conducted its un- Defendant and, therefore, the fact that it was later der a reservation rights. determined that no was afford- Apex In Christner, Mutual Ins. Co. v. ed is of no moment. Ill.App.2d 153, 240 N.E.2d (111. App. 1968), quoted the court the following: This contention throws the Reservation paper Rights Agreement into waste However, all agree authorities quite plaintiff notified basket. Defendant often an insurer is faced with a dilemma trial. non-coverage the California after as to whether to defend or to refuse to purpose agreement pro- was to of the defend. In cases of doubt the answer is non-coverage was deter- tect defendant if simple. It (1) can seek a declaratory present trial which took mined before the judgment as obligations to its rights Roswell, place in New Mexico. or (2) defend under reservation Mutual, Apex supra, the court said rights. (p. 747): The defendant de- rights is a means reservation fended under a rights. reservation of which, prior to of the determination July 28, 1967,plaintiff and defendant insured, the insurer seeks of the entered into a Rights Reservation of suspend estoppel operation Agreement. provided in agree- through doctrines non-waiver doubt, negotiations nol (1) iri Settlement are ment. When *11 an issue the insured to defend insurer will offer of fact. reserving to agreement, “ an under such * * *(cid:127) motion, In defendant its stated: policy its the insurer all defenses of duty is no there no There settle where liable. case the insured [Em- found failure to coverage.” This is law. The phasis added]. negotiations did not con handle settlement duty by of defendant to the defense stitute breach the insurer undertakes When Hawkeye-Securi rights agreement plaintiff. Prickett v. without a reservation of Co., 294, (10th liability, ty Cir. or it waives Ins. 282 F.2d 300 other disclaimer of ; Mutual non-coverage. 1960) Pendleton v. Panizzi State Farm Au its defense of v. 600, (3rd Co., Co., 607 F.2d Ins. 386 F.2d Pan American Fire and Cas. 317 tomobile Seal, supra. 1967); v. (10th 1963). 96 Cir. Bourne Cir. N.M. Ging on American relies v. Plaintiff protect An company can its insurance Co., (5th Liberty Ins. 423 F.2d 115 Cir. rights its in- and declare duties under Surety Casualty and Co. Western 1970); in- surance with the consent of ; Herman, (8th 1968) F.2d Cir. v. 405 121 If the insured to consent to sured. refuses Co. of Ins. Radcliffe v. Franklin National Rights terms the Reservation of 1, N.Y., (1956); 208 Or. Agreement, he can undertake the defense Kelly, 388 Ins. Co. v. Foundation Reserve Mundry Ins. himself. v. Great American N.M.1968). (10th Cir. F.2d 528 Co., (2nd He 1966). 369 F.2d has 678 Cir. Foundation, Western, litigation. Rey- Radcliffe, and ultimate In control of Maramorosch, 626, Ging, the coverage existed. nolds 144 insurance 208 Mise. company undertook the can the in- (1955). He force N.Y.S.2d compensatory and liability seeking both company gamble un- a suit surance punitive damages. There was no policy. der the However, the insur- damages. for punitive Plaintiff’s that non-coverage contention company reservation ance obtained was determined after trial the California liability against rights protect itself has no merit. pro- punitive damages. non-coverage of puni- against the claim of to defend ceeded (C) was entitled a directed Defendant negotiations damages. tive Settlement verdict. not issue. were evidence, At the all close of coverage, was no there In the absence specific court issues left characterized the $100,000 on the lay “to of defendant (1) alleged the case: defendant’s fail- price of as the settlement.” table good ure use handling faith in the set- negotiations; tlement fail- defendant’s (2) timely (2) was no to make There failure timely adequate ure to make a disclo- adequate disclosure of defendant’s plaintiff sure position on defendant’s position on coverage. the question coverage; (3) de- timely fendant’s failure to resolu- make the trial court The second matter which coverage questions tion of the with the fact was bad held to be an issue of plaintiff. negligence of the defendant faith or timely adequate dis- failing to make a Defendant moved for a directed verdict to, position plaintiff closure defendant’s which the court denied. trial court coverage. on the erred. law and the does not record support plaintiff’s Uni- claims. Garcia v. Defendant’s Inc., 70, Constructors, versal in the Reservation N.M. was set forth (Ct.App.1970). P.2d 464 Agreement. Rights 31, May The accident occurred complete ties and a full and defense of complaint by brought second amended Woolett all against claims insured aas 20, filed on Crawford was October result of the hereinabove described auto- 1967. The answer to second amended mobile accident without complaint January dated but the curring any admission of appear. filing date of does Trial be- impairing gan March 1970. The Reservation of waiving any rights party of any Rights Agreement July was executed except hereto insured waives the *12 preceded 1967. This date the filing right to insist that handling such complaint, second amended the answer the claim will constitute thereto trial. and part on the admission * * * company. case, Under the this record in defendant timely made a disclosure. Stillwell Iowa v. reading This he later denied. But Co., 588, National Mutual Ins. 205 139 Va. not, whether it or he read he bound (1964); S.E.2d 72 Farm Ins. State Mutual agreement. duty He had a read Anderson, 815, Co. v. Ga.App. 104 123 S.E. agreement signed he it. If before he could 2d 191 (1961); v. United States Cas. Co. it, it not he to have understand had a Co., 493, Home N.J.Super. Ins. 79 192 A. explained to A. T. F. him. Morstad v. & S. 2d 169 (1963); Farm Auto State Mutual Co., 663, Ry. (1918). P. 886 23 N.M. 170 Co., Ins. MFA Co. v. Ins. 485 Mutual S. $3,000,000 staring a claim him With ; (Mo.1972) Inghram Dairy- W.2d 397 v. face, a and RESERVATION OF Co., land Mutual Ins. 178 299 N.W.2d placed in his RIGHTS AGREEMENT (Iowa 1970); 45 Insurance § C.J.S. hands, veracity challenges plain- it timely Disclosure is not where a reserva- explan- tiff that he did not read it without year tion rights delayed until a almost advice, yet understood legal and ation or filing and a half after an answer. Allstate it, signed you it. “As meaning Keller, Ill.App.2d 44, Ins. Co. 149 N. v. 17 your bed, you on make so must lie it.” (1958). E.2d 482 law, defendant did As a matter of adequate. speaks disclosure was timely adequate give fail to disclo- Surety itself. American Co. of N.Y. v. position coverage. on sure of defendant’s Gold, 523, (10th 375 F.2d 1967); 528 Cir. 116, Gallaway Schied, v. Ill.App.2d 219 73 There (3) failure 718, 723 (1966); N.E.2d State Mutual Farm timely make resolution defendant n with Anderson, supra; v. United States Cas. plain- coverage questions Co., supra; Co. v. Home Ins. Hardware tiff. Casualty Higgason, Mut. Co. v. 175 Tenn. court The third matter the trial held to 357, (1939). Compare 134 S.W.2d 169 be an issue of fact was failure of de- Henry Johnson, v. 191 Kan. P.2d timely fendant to make resolution of Gonzales, 538 (1963); Popovich Ill. coverage questions plaintiff. with the App.3d (1972). N.E.2d 757 that Mr. Mann Plaintiff testified ex- Plaintiff on July testified that did not plained to him that his insurance he understood the instrument mean coyer “ punitive damages. a claim for in no their would affect liability under anything might exist deposi- Plaintiff offered evidence * * *.” He first testified that he read the Friedrich, attorney for tion of Robert E. page portion the instrument law suit. Penrose the California which states: testified: Mr. Friedrich agree- purpose The intent and by me Mr. was told the aft- Crawford permit impartial

ment is full vestigation, explore deposition his was taken possibili- ernoon settlement before company- office that the in Mr. Mann’s more than one occasion expressed on

had deny coverage on

their intention exclusion, explained my and I

employee full that situation. him in evening again done this was

And the follow- it was home and done his Mann when he and Mr. afternoon

ing airport. took his wife me to deposition was taken. was when discussed times this was

These were

with him. subsequently by Mr. affirmed

This was testimony in his as a witness

Friedrich testimony also Mr. Mann’s defendant. *13 intention to

confirmed the defendant’s

deny coverage. de- failure on

There was no timely

fendant make resolution plaintiff. questions with entitled a directed ver-

Defendant was otherwise, I majority holding

dict. The o

dissent. Durrett, Jordon, Shipley, Con-

Wayne A. Sandenaw, for de- Alamogordo, & fendant-appellant. Norvell, Gen., Atty. F. Scott

David L. Fe, Gen., MacGillivray, Atty. Asst. Santa plaintiff-appellee. Mexico, Plaintiff-Appellee, New STATE of OPINION CHAVEZ, Defendant-Appellant.

Joe J. LOPEZ, Judge.

No. 1479. The defendant convicted and sen- Appeals Court of of New Mexico. pursuant burglary tenced for 40A-16- § Aug. 21, 1974. (2d Repl.Vol. 6). De- N.M.S.A.1953 appeals, claiming trial court fendant denying challenge erred in defendant’s panel persons un- jury which contained age years. affirm. der We the de whether impartial had a fair fendant petit jury. defendant order for the quash merit in his have motion jury array, things: (1) he must do two petit prove there were members on 21, age were under the who