AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• In August 2011, while directing traffic, Plaintiff William Thayer, a New Mexico State Police officer, was injured in a crash involving a semi-truck and a pickup truck. Thayer, along with another injured officer, intervened in a personal injury lawsuit against the semi-truck driver and the driver's employer, Quality 1st Produce. During mediation in August 2012, Thayer attempted to settle his claim with Granite State Insurance, Quality 1st's insurer, and sought consent from his insurer, State Farm, to accept a settlement offer. State Farm did not provide a clear response, leading Thayer to eventually accept a settlement without State Farm's written consent. State Farm denied Thayer's claim for underinsured motorist (UIM) benefits, citing breach of the consent-to-settle provision in the policy (paras 3-11).

Procedural History

• District Court of Doña Ana County: Granted State Farm's motion for summary judgment, dismissing Thayer's case with prejudice (para 15).

Parties' Submissions

• Plaintiff-Appellant: Argued that State Farm acted with unreasonable delay in responding to his request for consent to settle and breached its duty to timely investigate his claim. Contended that factual issues remained regarding whether he had waited a reasonable period before accepting the settlement and whether State Farm had acted reasonably under the circumstances (para 14).
• Defendant-Appellee: Asserted that Thayer was not entitled to UIM benefits under the policy because he settled with the tortfeasor without State Farm’s consent, breaching the policy’s consent-to-settle provision. Claimed substantial prejudice due to the settlement destroying its subrogation rights against Quality 1st (para 13).

Legal Issues

• Whether Thayer breached the consent-to-settle provision as a matter of law by settling with the tortfeasor before receiving State Farm’s decision (para 2).
• Whether State Farm waived its right to rely on the consent-to-settle clause by failing to notify its insured of the insurer’s decision to either grant or withhold consent to settle within a reasonable amount of time (para 2).

Disposition

• The Court of Appeals reversed the district court's summary judgment for State Farm and remanded the case for further proceedings (para 31).

Reasons

• The Court of Appeals, with Duffy, J., Hanisee, J., and Ives, J. concurring, held that there are disputed issues of fact regarding whether State Farm waived the consent-to-settle provision by failing to respond reasonably promptly to Thayer's request for consent to settle. The court found that Thayer complied with his initial obligations under the policy by notifying State Farm of the proposed settlement and requesting permission to accept it. The court determined that State Farm's failure to notify Thayer of its decision within a reasonable time could constitute a waiver of its right to enforce the consent-to-settle provision. The court also noted that State Farm's actions after receiving notice and a request for consent bear on the enforceability of the consent-to-settle provision, and that both New Mexico law and the common law duties of good faith support the proposition that an insurer has a duty to respond reasonably promptly to an insured’s request for consent to settle (paras 17-29).