{1} Plaintiffs Southwest Steel Coil, Inc., and Calstrip Industries, Inc., (together, Southwest Steel) appeal from the district court’s summary judgment order that dismisses Southwest Steel’s complaint against Defendants, Redwood Fire & Casualty Insurance Company (Redwood) and Gary Keenan and Keenan & Associates (Keenan) (together, Defendants), for lack of both standing and damages. This case addresses whether potential equitable subrogation rights of an insurer preclude as a matter of law any claims that the insured has against another insurer for failure to defend and indemnify. We hold that questions of fact exist regarding whether the insured has potential damages independent of the insurer’s subrogation rights and, for this reason, reverse.
I. BACKGROUND
{2} This case arises out of an underlying suit brought against Southwest Steel by the estate of an individual who died while working at Southwest Steel’s plant. At the time of the accident, Southwest Steel was insured by both Redwood (for workers’ compensation and employer liability) and Fireman’s Fund Insurance Company (Fireman’s Fund) (for general liability and umbrella coverage). Both Redwood and Fireman’s Fund initially declined to defend and indemnify Southwest Steel, resulting in Southwest Steel’s suit against both insurers and Keenan, an independent adjuster engaged by Redwood to process workers’ compensation claims. Southwest Steel dismissed its suit against Fireman’s Fund when Fireman’s Fund defended and indemnified Southwest Steel in a settlement with decedent’s estate for $2,125,000.
{3} In Southwest Steel’s second amended complaint against Defendants, Southwest Steel pursued its claims for declaratory judgment, breach of contract, bad faith, negligence, and violations of New Mexico’s Unfair Practices Act (UPA), NMSA 1978, §§ 57-12-1 to -24 (1967, as amended through 2005), and Unfair Insurance Practices Act, NMSA 1978, §§ 59A-16-1 to -30 (1984, as amended through 2006). The parties moved for summary judgment, disputing generally whether Southwest Steel provided adequate notice to Redwood of decedent’s accident and whether decedent was Southwest Steel’s employee for purposes of triggering Redwood’s policy obligation to defend Southwest Steel and to provide coverage. Apart from the underlying merits, Defendants argued that Southwest Steel suffered no damages because Fireman’s Fund defended and indemnified Southwest Steel in decedent’s settlement, that Fireman’s Fund was the real party in interest, and that consequently, Southwest Steel had no standing to sue.
{4} Southwest Steel appeals the order entered by the district court granting summary judgment in favor of Defendants. Although the district court ruled that two questions of fact existed regarding the employment status of the decedent and the adequacy of the notice to Redwood, the two questions became immaterial in this case because the district court determined that Fireman’s Fund, which ultimately defended and indemnified
II. STANDARD OF REVIEW
{5} We review the granting of summary judgment de novo, Celaya v. Hall,
III. DISCUSSION
{6} We address the parties’ arguments in four parts. First, we discuss the real party in interest and the subrogation right of Fireman’s Fund. Second, we clarify the distinction between Southwest Steel’s potential damages for the causes of action in this case and damages related to the underlying case. Third, we consider Redwood’s additional arguments, in regard to its duty to defend, adequate notice, and judicial estoppel. Finally, we address the parties’ arguments regarding the collateral source doctrine.
A. Real Party in Interest
{7} The district court’s ruling that Fireman’s Fund is the real party in interest correctly acknowledges that Fireman’s Fund, as a subrogee, may be entitled to exercise equitable subrogation rights against Redwood in the event that Redwood wrongfully denied coverage. Subrogation encompasses the right of an insurance company, who has paid an insured’s claim, to step into the shoes of its insured and pursue recovery from the party who is legally responsible for the insured’s losses. See White v. Sutherland,
{8} We conclude that Fireman’s Fund, as the equitable subrogee, is the only real party in interest to pursue any claims against Redwood for monies paid by Fireman’s Fund in the underlying claim. See State Farm,
B. Damages and Standing
{9} At issue in this case are two separate sources of potential harm to Southwest Steel arising from the alleged wrongful denial of coverage by insurer Redwood: (1) the litigation expenses and settlement money paid in the underlying case, which Southwest Steel argues should have been paid by Redwood but instead were paid by Fireman’s Fund, and (2) those damages that Southwest Steel may have suffered independent of any amount that Fireman’s Fund paid in the underlying case.
{10} The district court’s finding that Southwest Steel suffered no damages relates to the first source of potential harm, as the court’s ruling is premised on its determination that Fireman’s Fund “paid the expenses of litigation and the settlement proceeds” stemming from the suit by decedent’s estate. As discussed earlier, Fireman’s Fund may be entitled to pursue equitable subrogation rights against Redwood for monies paid out in the underlying case, in the event that Redwood wrongfully denied coverage. However, any potential right of Fireman’s Fund to reimbursement from Redwood does not preclude, as a matter of law, Southwest Steel’s right to a second source of potential damages — any independent damages for the infraction of legal rights not insured and covered by Fireman’s Fund’s payment. See Sanchez v. Clayton,
{11} In the present case, whether any nonsubrogated damages are merited depends on the facts, specifically on whether Southwest Steel can prove its claims and, if it does, on the types of damages that may flow from the various causes of action asserted by Southwest Steel. We express no opinion regarding whether coverage should have been provided or what damages Southwest Steel may be entitled to in the event that Redwood wrongfully denied coverage. Suffice it to say, without affirmatively addressing each of
{12} Our holding that Southwest Steel may proceed as a real party in interest is based on the existence of questions of fact regarding whether Southwest Steel suffered damages independent of Fireman’s Fund subrogation rights. This holding is not premised on Southwest Steel’s assertion that it is “protecting the contribution rights of Fireman’s Fund as against Redwood” as part of an assignment of rights, as Southwest Steel did not establish below that Fireman’s Fund had given it such authority. Granted, the general liability and umbrella policies between Southwest Steel and Fireman’s Fund provide that if the “[{Insured has rights to recover all or part of any payment” made under the policy, “those rights are transferred to us ... [and a]t our request, the [{Insured will bring suit or transfer those rights to us and help us enforce them.” However, no evidence was introduced below to show that Fireman’s Fund did in fact give Southwest Steel authority to recover any subrogation rights that Fireman’s Fund may have. Although Southwest Steel’s attorney asserted at the summary judgment hearing that “Fireman’s Fund did provide us a letter that ... instructed [Southwest Steel] to protect [Fireman’s Fund’s] claims of contribution,” the letter was not introduced as an exhibit, and the attorney’s statement is not evidence. See Trujillo v. Puro,
C. Other Arguments
{13} Redwood argues that even if the district court erred in its rulings, this Court nonetheless should affirm because Redwood did not wrongfully fail to defend or deny coverage to Southwest Steel. In support of its argument, Redwood contends that it had no obligation to defend or indemnify because the underlying complaint expressly alleged that the decedent was not an employee of Southwest Steel, and thus the allegations of the underlying complaint fell outside the coverage provided by the Redwood policy. Redwood also contends that Southwest Steel failed to provide notice of the decedent’s underlying action to Redwood, as required for coverage under the policy. In the alternative, Redwood argues that Southwest Steel was judicially estopped from asserting coverage
1. Duty to Defend
{14} The duty to defend can arise from the allegations of the complaint or from known but unpleaded facts that bring the claim arguably within the scope of coverage. Am. Gen. Fire,
{15} Southwest Steel contends that the complaint in the underlying case alleged the decedent was its employee. We disagree. The complaint states that the decedent “was an employee of Randstad Staffing Services working on the premises of [Southwest Steel] when he was killed.” The complaint does not, on its face, allege that the decedent was an employee of Southwest Steel. However, facts exist from which it could be inferred that the decedent was arguably an employee for purposes of the Redwood policy. For example, the complaint states that the decedent was working on the premises of Southwest Steel when he was killed. Moreover, the decedent’s status as an employee of another company does not negate the possibility that the decedent could be considered an employee of Southwest Steel for purposes of policy coverage. See Johnson v. Aztec Well Servicing Co.,
{16} Moreover, our review of the record reveals sufficient evidence to support the district court’s determination in this case that disputed issues of material fact exist regarding whether decedent was Southwest Steel’s employee. Southwest Steel introduced its president’s affidavit, wherein the president related that decedent was acting as a contract employee. The president’s affidavit also set forth that the major disputed issue in the decedent’s underlying suit against Southwest Steel was whether decedent was an employee of Southwest Steel. To this end, Southwest Steel provided documentary exhibits from the underlying suit, including the district court’s order denying Southwest Steel’s motion for summary judgment in the underlying case. The district court in the underlying case denied the motion because the court found disputed issues of fact existed regarding the willfulness of the decedent’s employer. This evidence, which created a question of fact regarding the decedent’s employment status, could be considered sufficient to arguably bring the decedent’s claim within the policy coverage, thereby creating a duty to defend. Cf. Servants,
2. Notice
{17} Moreover, the record provides substantial evidence supporting the district court’s determination that a question of fact exists as to whether Redwood received notice of decedent’s underlying action. Southwest Steel’s president stated in his affidavit that he notified Redwood of decedent’s accident, through a letter to Keenan. In addition, the president stated in his affidavit that Fireman’s Fund provided Redwood with a letter giving notice of the decedent’s lawsuit and Redwood’s coverage obligations. A copy of each letter was attached to the affidavit. Southwest Steel also introduced portions of the president’s deposition wherein the president indicated that he contacted an insurance agent affiliated with Redwood regarding the accident. The foregoing facts are sufficient evidence to support the district court’s findings that a question of fact exists regarding adequate notice. See Blea,
3. Judicial Estoppel
{18} Redwood also argues that Southwest Steel is judicially estopped from asserting coverage under the Redwood policy on the premise that the decedent was an employee because Southwest Steel had “accepted the benefits of the Fireman’s Fund coverages for injuries to non-employees on the premise that [the decedent] was not an employee.” We disagree. The doctrine of judicial estoppel “prevents a party who has successfully assumed a certain position in judicial proceedings from then assuming an inconsistent position, especially if doing so prejudices a party who had acquiesced in the former position.” Rodriguez v. La Mesilla Constr. Co.,
{19} First, in the underlying case, the district court denied Southwest Steel’s motion for summary judgment on grounds related to workers’ compensation and willfulness of the employer — issues that are directly related to decedent’s employment status. The parties in the underlying case settled before the lower court resolved this issue in favor of either party. Thus, Southwest Steel was not “successful” in assuming the position that the decedent was not an employee. See Daniel P. Jakala, Defense Against a Prima Facie Case § 1:08, at 24 (1990) (stating that judicial estoppel does not lie when a settlement occurs and a judgment has not been entered in favor of the party against whom estoppel is sought to be imposed). Second, Southwest Steel has consistently maintained its position on the core issue of this case — that Redwood did not fulfill its policy obligations. Cf. Johnson v. Yates Petroleum Carp.,
{20} Given our disposition of the issues, it is clear that the collateral source doctrine is inapplicable to the facts of this case. We agree with Southwest Steel that “[t]here is no danger of a double recovery presented by this case.” There has been no payment, by any source, collateral or otherwise, of the independent damages that could arise out of the causes of action alleged in this case. Fireman’s Fund paid litigation expenses and settlement funds for damages alleged by the estate of the decedent in the underlying case. Cf. Sanchez,
IV. CONCLUSION
{21} We reverse the district court’s summary judgment order that dismisses Southwest Steel’s second amended complaint on the basis that questions of fact exist regarding whether Southwest Steel is entitled to damages. This case is remanded for further proceedings consistent with this opinion.
{22} IT IS SO ORDERED.