The following parameters guidelines govern all certificates of coverage that may be issued under cover of a letter of administration.

1. A. By statute, NMSA 1978, Section 59A-1-16 (C), the general services department, risk management division is expressly exempt for the provisions of the insurance code of the state of New Mexico, NMSA 1978, Section 59A-1-1 et seq. Certificates of coverage do not provide insurance, but instead provide an understanding among the govnermental entitites of the state of New Mexico about the intent of the use of funds from the public liability fund. The public liability fund is a self-insurance mechanism established to handle losses to or claims against covered governmental entities. Although coverage through the fund may be in formats like or similar to insurance policies, the relationship between the fund and covered entities is not that of insurer and insured. No special duties, rules of construction, or other legal doctrines recognized by the courts or created by statute with respect to the relationship of an insurer to its insured shall apply to the fund or entities covered by it.
2. B. Pursuant to NMSA 1978, Section 41-4-23 (D), Aall decisions to expend money from the fund to provide coverage to defend, save harmless, and indemnify any state agency or employee of a state agency or a local public body or an employee of such local public body are within the discretion of the director.

3. C. Duty to Defend.

   (1) Pursuant to NMSA 1978, Section 41-4-23 (B) (3), the general services department, risk management division may expend money from the public liability fund to defend, save harmless, and indemnify a governmental entity or employee of a governmental entity. This defense extends only as far as a governmental entity’s duty to provide a defense pursuant to NMSA 1978, Section 41-4-20 (A) for causes of action that may be properly brought under the Tort Claims Act, and any defense provided by the general services department, risk management division for any legal claim or liability exposure is controlled by the terms of the valid and current certificate of coverage in force at the time the claim arose, to the limits of such certificate of coverage. The director may contract with one or more attorneys or law firms, or with the attorney general, to defend tort liability claims against governmental entities and their employees acting within the scope of their duties.

   (2) Pursuant to NMSA 1978, Section 41-4-4 (G) of the Tort Claims Act, the general services department, risk management division’s duty to defend continues after public employment with the governmental entity has been terminated if the occurrence for which damages are sought happened while the public employee was acting within the scope of duty while the public employee was in the employ of the governmental entity.

   (3) Pursuant to NMSA 1978, Section 41-4-17 (B), any settlement or judgment in any action brought under the act constitutes a complete bar to any further legal action on the same occurrence against a governmental entity or public employee whose negligence gave rise to the action. As a result of any settlement or judgment in any action brought under the act, the duty to defend is deemed to have been satisfied by the general services department, risk management division, and no further duty to defend continues to exist.

4. (3) The duty to defend does not extend to lawsuits or legal matters which are brought seeking remedies that are purely equitable in nature, such as writs of mandamus or declaratory judgments. Additionally, the duty to defend is deemed to have been satisfied, and no further duty to defend continues to exist, after an legal matter has been settled in a court of law or otherwise has been disposed of using legally authorized alternative dispute resolution or settlement methods, and in which all legal damage issues have been resolved and only equitable remedy issues remain. In such instances, the general services department, risk management division has no further duty to defend, and the governmental entity, not the general services department, risk management division, becomes primarily responsible for all remaining or continuing settlement, monitoring, or program tasks, fees, costs, and other financial obligations.D. Other than the following specified causes of action that have been waived under the Tort Claims Act, no other causes of action can be defended by the general services department, risk management division. Pursuant to the Tort Claims Act, a defenses shall can be provided for claims actions at law, but not suits in equity, brought on the following grounds:

   (1) ppursuant to NMSA 1978, Section 41-4-5 of the Tort Claims Act, liability for damages resulting from bodily injury, wrongful death, or property damage caused by the negligence of public employees while acting within the scope of their duties in the operation or maintenance of any motor vehicle, aircraft or watercraft;

   (2) pppursuant to NMSA 1978, Section 41-4-6 of the act, liability for damages resulting from bodily injury, wrongful death, or property damage caused by the negligence of public employees while acting within the scope of their duties in the operation or maintenance of any building, public park, machinery, equipment, or furnishings; provided, however, that nothing in this subparagraph shall be construed as granting waiver of immunity for any damages arising out of the operation or maintenance of works used for diversion or storage of water;

   (3) pppursuant to NMSA 1978, Section 41-4-7 of the act, liability for damages resulting from bodily injury, wrongful death, or property damage caused by the negligence of public employees while acting within the scope of their duties in the operation of airports; provided, however, that nothing in this subparagraph shall include liability for damages due to the existence of any condition arising out of compliance with any federal or state law or regulation governing the use and operation of airports;

   (4) p ppursuant to NMSA 1978, Section 41-4-8 of the act, liability for damages resulting from bodily injury, wrongful death, or property damage caused by the negligence of public employees while acting within the scope of their duties in the operation of the following public utilities and services: gas, electricity, water, solid or liquid waste collection or disposal, heating, and ground transportation; provided, however, that nothing in this subparagraph shall include liability for damages resulting from bodily injury, wrongful death, or property damage caused by a failure to provide an adequate supply of gas, water, electricity, or services or arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water;

   (5) p ppursuant to NMSA 1978, Section 41-4-9 of the act, liability for damages resulting from bodily injury, wrongful death, or property damage caused by the negligence of public employees while acting within the scope of their duties in the operation of any hospital, infirmary, mental institution, clinic, dispensary, medical care home, or like facilities;

   (6) p ppursuant to NMSA 1978, Section 41-4-10 of the act, liability for damages resulting from bodily injury, wrongful death, or property damage caused by the negligence of public employees licensed by the state or permitted by law to provide health care services while acting within the scope of their duties of providing health care services;

   (7) pppursuant to NMSA 1978, Section 41-4-11 of the act, liability for damages resulting from bodily injury, wrongful death, or property damage caused by the negligence of public employees while acting within the scope of their duties during the construction, and in subsequent maintenance of any bridge, culvert, highway, roadway, street, alley, sidewalk, or parking area; provided, however, that nothing in this subparagraph shall include liability for damages caused by a defect in plan or design of any bridge, culvert, highway, roadway, street, alley, sidewalk, or parking area; the failure to construct or reconstruct any bridge, culvert, highway, roadway, street, alley, sidewalk, or parking area; or a deviation from standard geometric design practices for any bridge, culvert, highway, roadway, street, alley, sidewalk, or parking area allowed on a case-by-case basis for appropriate cultural, ecological, economic, environmental, right-of-way through Indian lands, historical, or technical reasons, provided the deviation is required by extraordinary circumstances, has been approved by the governing authority; and is reasonable and necessary as determined by the application of sound engineering principles taking into consideration the appropriate cultural, ecological, economic, environmental, right-of-way through Indian lands, historical, or technical circumstances;

   (8) pppursuant to NMSA 1978, Section 41-4-12 of the act, liability for personal injury, bodily injury, wrongful death, or property damage resulting from assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, defamation of character, violation of property rights or deprivation of any rights, privileges, or immunities secured by the constitution and laws of the United States or New Mexico when caused by law enforcement officers while acting within the scope of their duties;

   (9) pppursuant to NMSA 1978, Section 41-4-4 (B) (2) of the act, when alleged to have been committed by a public employee while acting within the scope of their duties, liability for any violation of property rights or any rights, privileges or immunities secured by the constitution and laws of the United States or the constitution and laws of New Mexico.

5. E. Pursuant to NMSA 1978, Section 41-4-4 (D) of the act, and whether it is a governmental entity or the general services department, risk management division that provides a defense, the governmental entity shall pay any settlement or any final judgment entered against a public employee for any tort that was committed by the public employee while acting within the scope of their duty, or a violation of property rights or any rights, privileges, or immunities secured by the constitution and laws of the United States or the constitution and laws of New Mexico that occurred while the public empoyee was acting within the scope of their duty.
6. F. Pursuant to NMSA 1978, Section 41-4-4 (H) of the act, the duty of the governmental entity to pay any settlement or any final judgment entered against a public employee as provided in this section shall continue after employment with the governmental entity has terminated if the occurrence for which liability has been imposed happened while the public employee was acting within the scope of his duty while in the employ of the governmental entity.
7. G. All actions for damages brought against a governmental entity shall be subject to the maximum liability limits contained in NMSA 1978, Section 41-4-19.
8. H. Pursuant to NMSA 1978, Section 41-4-28, coverage which may be provided for liability arising under and subject to the substantive law of a jurisdiction other than New Mexico, including but not limited to other states, territories, and possessions and the United States, is not limited by the maximum liability limits contained in NMSA 1978, Section 41-4-19, and such coverage may be provided pursuant to the provisions of NMSA 1978, Section 41-4-28 (B).

[1.6.5.9 NMAC - N, 7/1/2004]