New Mexico High Court Blocks Estate’s Attempt to Go After Employer’s Uninsured Motorist Coverage

No Coverage Where Tortfeasor Was Co-Employee

Answering a question certified to it from a federal district court sitting in New Mexico, that state’s Supreme Court held that an employee injured in the course of the employment by a co-employee operating an employer-owned vehicle is not entitled to seek uninsured/underinsured motorist coverage under the employer’s vehicle policy, because the injured employee is not “legally entitled to recover damages” from the co-employee [see Vasquez v. American Cas. Co., 2016 N.M. LEXIS 186 (Oct. 13, 2016)]. The court distinguished its earlier decision in Draper v. Mountain States Mut. Cas. Co., 116 N.M. 775, 867 P.2d 1157 (1994), on the basis that Draper involved a third-party tortfeasor and not a co-employee [see Larson’s Workers’ Compensation Law, §§ 110.05[1], 111.03].

Background

Vasquez was killed at a work site after being struck by a steel beam that fell from a forklift during the course of his employment. A co-worker was operating the forklift. The co-worker jumped down to determine if the steam beam was properly secured, leaving the forklift unattended. The beam slid off the forks, striking Vasquez and causing fatal injuries. Vasquez’s estate collected workers’ compensation death benefits. It also collected uninsured motorist benefits under Vasquez’s own automobile insurance policy. The estate sought to collect uninsured motorist benefits also under the employer’s policy.

Draper Decision Was Distinguishable

The Supreme Court indicated the estate could not rely upon Draper, since in that case, the uninsured driver had been an unrelated third-party—not a co-employee. Because the estate could not seek damages from the co-employee, it could not recover under the uninsured/underinsured motorist provisions of the employer’s policy.

Practice Point: Was the Forklift a Covered Vehicle?

The Court was not asked to address the issue of whether the forklift was a motor vehicle for purposes of uninsured/underinsured motorist coverage. Since the estate’s case could not proceed against the co-employee under any theory, the status of the forklift was moot. A practice point: check both your own state law and the language of the insurance policy to determine if the definition of “motor vehicle” is sufficiently broad to include machine and equipment, such as a forklift.