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    United States Court of Appeals Tenth Circuit

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    This document is a court opinion from the United States Court of Appeals for the Tenth Circuit regarding an insurance company's (Lloyd's) attempt to enforce an assignment from an injured party (Garcia) entitling Lloyd's to half of any future settlement Garcia received from the manufacturer (Deere & Company) after Lloyd's had already paid Garcia a settlement. The court found the assignment to be unenforceable and against public policy under New Mexico's joint tortfeasor law, which aims to fairly allocate liability among negligent parties. Additionally, the court determined that the manufacturer was not subject to venue in New Mexico. The court affirmed the lower court's dismissal of Lloyd's claims.

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    United States Court of Appeals Tenth Circuit

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    Scribd Government Docs
    23 views5 pages
    This document is a court opinion from the United States Court of Appeals for the Tenth Circuit regarding an insurance company's (Lloyd's) attempt to enforce an assignment from an injured party (Garcia) entitling Lloyd's to half of any future settlement Garcia received from the manufacturer (Deere & Company) after Lloyd's had already paid Garcia a settlement. The court found the assignment to be unenforceable and against public policy under New Mexico's joint tortfeasor law, which aims to fairly allocate liability among negligent parties. Additionally, the court determined that the manufacturer was not subject to venue in New Mexico. The court affirmed the lower court's dismissal of Lloyd's claims.

    Original Description:

    Filed: 1963-11-18 Precedential Status: Precedential Citations: 324 F.2d 483 Docket: 7319_1

    Original Title

    Kenneth Frederick Alder, in Behalf of Himself and Other Underwriters at Lloyd's and British Companies, Subscribing Certificate Lab 2014 v. Damacio Garcia, Longanita Garcia, Deere & Company, a Delaware Corporation, and John Deere Company of Kansas City, a Missouri Corporation, 324 F.2d 483, 10th Cir. (1963)

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    This document is a court opinion from the United States Court of Appeals for the Tenth Circuit regarding an insurance company's (Lloyd's) attempt to enforce an assignment from an injured party (Garcia) entitling Lloyd's to half of any future settlement Garcia received from the manufacturer (Deere & Company) after Lloyd's had already paid Garcia a settlement. The court found the assignment to be unenforceable and against public policy under New Mexico's joint tortfeasor law, which aims to fairly allocate liability among negligent parties. Additionally, the court determined that the manufacturer was not subject to venue in New Mexico. The court affirmed the lower court's dismissal of Lloyd's claims.

    Copyright:

    Public Domain
    Download as PDF or read online from Scribd
    Download as pdf
    23 views5 pages

    United States Court of Appeals Tenth Circuit

    Uploaded by

    Scribd Government Docs
    This document is a court opinion from the United States Court of Appeals for the Tenth Circuit regarding an insurance company's (Lloyd's) attempt to enforce an assignment from an injured party (Garcia) entitling Lloyd's to half of any future settlement Garcia received from the manufacturer (Deere & Company) after Lloyd's had already paid Garcia a settlement. The court found the assignment to be unenforceable and against public policy under New Mexico's joint tortfeasor law, which aims to fairly allocate liability among negligent parties. Additionally, the court determined that the manufacturer was not subject to venue in New Mexico. The court affirmed the lower court's dismissal of Lloyd's claims.

    Copyright:

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    of 5

    324 F.

    2d 483

    Kenneth Frederick ALDER, in behalf of himself and other


    underwriters at Lloyd's and British Companies, Subscribing
    Certificate LAB 2014, Appellant,
    v.
    Damacio GARCIA, Longanita Garcia, Deere & Company, a
    Delaware corporation, and John Deere Company of Kansas
    City, a Missouri corporation, Appellees.
    No. 7319.

    United States Court of Appeals Tenth Circuit.


    November 18, 1963.

    Lewis R. Sutin, Albuquerque, N. M. (J. L. Leftow, Albuquerque, N. M.,


    was with him on the brief), for appellant.
    James T. Paulantis, Albuquerque, N. M. (B. G. Johnson, Albuquerque, N.
    M., was with him on the brief), for appellees.
    Before LEWIS, HILL and SETH, Circuit Judges.
    SETH, Circuit Judge.

    This is an action brought by Kenneth Alder for himself and other underwriters
    at Lloyd's against Damacio Garcia and wife, John Deere Company of Kansas
    City, and Deere & Company to recover on an assignment to Lloyd's of one-half
    of the proceeds of any settlement or judgment recovered by Garcia from Deere
    & Company. The appeal is only as to Damacio Garcia and Deere & Company,
    and is taken by the plaintiff-appellant from the action of the trial court in
    denying plaintiff's motion for summary judgment, in granting Garcia's motion
    for summary judgment, and in granting Deere & Company's motion to dismiss
    for improper venue.

    This suit grew out of injuries sustained by Garcia while moving a hay elevator
    owned by and located on a farm of Valley Gold Dairies. The machine was
    manufactured by Deere & Company. Lloyd's, appellant here, was the insurer of

    Valley Gold Dairies. Garcia sued Valley Gold in the Valencia County, New
    Mexico, court, and the matter was settled by payment by Lloyd's to Garcia of
    $40,000.00 for a release of Valley Gold Dairies, a joint tort-feasor release, and
    for an assignment by Garcia to Lloyd's of one-half of any recovery or
    settlement not to exceed $80,000.00, which Garcia might obtain in a future
    action from Deere & Company. A suit was filed thereafter by Garcia against
    Deere & Company, in which Garcia was assisted by the attorneys of Lloyd's
    who defended the original action brought by Garcia against Valley Gold
    Dairies. Deere & Company learned of the assignment by Garcia to Lloyd's
    taken in the original suit, and it then settled with Garcia by payment to him of
    $40,000.00 and by agreeing to indemnify and defend him against any suit by
    Lloyd's on its assignment from Garcia. Lloyd's did bring such suit against
    Garcia and Deere & Company to enforce the assignment, and this is the case at
    bar.
    3

    The trial court found that the assignment by Garcia to Lloyd's was void and
    unenforceable as contrary to the laws and public policy of New Mexico. It also
    found that Deere & Company was not doing business nor authorized to do
    business in New Mexico nor was it incorporated in that state.

    It is urged that the assignment by Garcia to Lloyd's of one-half of any future


    recovery against Deere & Company1 is contrary to policy expressed by the New
    Mexico Contribution Among Joint Tort Feasors Act, 24-1-11 to 24-1-18,
    N.M.Stat.Ann. (1953). This is a uniform act on the subject, and provides that
    the right of indemnity and contribution exists among joint tort-feasors. The
    purpose of the statute is to provide for a proportionate allocation of the burden
    among tort-feasors who are liable. 9 Uniform Laws Ann. 230; Annot., 34
    A.L.R.2d 1107.

    As mentioned, the appellant, in addition to this assignment and at the same


    time, took a joint tort-feasors release of its insured which it states was executed
    under 24-1-15, N.M.Stat.Ann. (1953). This release provided in part that the
    Garcias agreed to "reduce to the extent of the pro rata share of the Releasee as
    tort feasor, the Releasors' damages recoverable against all other tort feasors as
    provided by the Uniform Joint Tort Feasors Act of New Mexico, it being
    intended by this release to absolve the Releasee of any further liability of any
    nature which might grow out of any other action by Releasors against any other
    person, firm or corporation alleged to be a joint tort feasor of the Releasee."
    The statute provides that such a release of one tort-feasor does not discharge
    other tort-feasors. Thus Garcia's action against Deere & Company was
    preserved. The statute also provides in 24-1-15 as to contribution as follows:

    "A release by the injured person of one [1] joint tortfeasor does not relieve him
    from liability to make contribution to another joint tortfeasor unless the release
    is given before the right of the other tortfeasor to secure a money judgment for
    contribution has accrued, and provides for a reduction, to the extent of the pro
    rata share of the released tortfeasor, of the injured person's damages
    recoverable against all the other tortfeasors."

    The combination of the assignment with the joint tort-feasor release would
    permit Lloyd's to recover from Deere & Company by way of indirect
    contribution although Lloyd's settled in a way as to preserve Garcia's right of
    action against Deere & Company. The statute also provides in 24-1-12(3): "A
    joint tortfeasor who enters into a settlement with the injured person is not
    entitled to recover contribution from another joint tortfeasor whose liability to
    the injured person is not extinguished by the settlement." If the settlement had
    extinguished the liability of Deere & Company to Garcia, appellant could have
    sued Deere & Company for direct contribution; however, the settlement did not
    have such consequences. O'Keefe v. Baltimore Transit Co., 201 Md. 345, 94
    A.2d 26; Annot., 34 A.L.R.2d 1101. The express agreement was instead made
    that Lloyd's would assist in the action by Garcia against Deere & Company and
    obtain one-half of any recovery or settlement there obtained by him.

    Appellant urges that Deere & Company is primarily liable to Garcia anyway;
    however, the matter of primary liability and indemnity was not adjudicated in
    the other related suits, and it has not been litigated in this action. Appellant
    could have commenced a suit to determine who was primarily liable, but did
    not do so nor did anyone else. Allied Mutual Casualty Corp. v. General Motors
    Corp., 279 F.2d 455 (10th Cir.). The problems of burden of proof in such a suit
    perhaps account for such inaction. In any event, appellant secured an interest in
    Garcia's claim against Deere & Company by the assignment, and if it were to
    be permitted to secure relief here, the result would be to recoup to the extent of
    one-half of the settlement. This payment to appellant would of course come
    from its joint tort-feasor and appellant would thereby have benefited in a
    manner contrary to the public policy of the state as expressed in the New
    Mexico Contribution Among Joint Tortfeasors Act.

    The second point of appellant relates to venue. The trial court granted the
    motion of Deere & Company to dismiss because of improper venue. Appellant
    in his brief states that he has abandoned any contention that Deere & Company
    can be sued in New Mexico under 28 U.S.C. 1391(c). Instead appellant
    contends that the company has made a general appearance by defending Garcia
    under its indemnity agreement with him. Appellant relies on Ocean Accident &

    Guarantee Corp. v. Felgemaker, 143 F. 2d 950 (6th Cir.), where under the
    particular circumstances an insurance company was held to have made a
    general appearance by conducting the defense. However, this case has not been
    generally followed. Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260, 81
    S.Ct. 557, 5 L.Ed.2d 546. The appellee in undertaking the defense of Garcia in
    this action did not make a general appearance for itself. The objection to venue
    in New Mexico was timely raised and properly disposed of by the trial court.
    10

    The parties have raised several other points which have been considered but
    which need not be discussed separately.

    11

    Affirmed.

    Notes:
    1

    "DAMACIO GARCIA and RICARTE GALLEGOS, called Assignors,


    heretofore received from UNDERWRITERS AT LLOYDS AND BRITISH
    COMPANIES, Subscribing Certificate LAB 2014, called Assignees,
    $40,000.00 and $3,000.00, respectively, in compromise and settlement of their
    claim against Valley Gold Dairies, Inc., in causes Nos. 8234 and 8235 in the
    District Court of Valencia County, New Mexico
    "Assignors are desirous of filing suit and intend to file suit against John Deere
    Plow Company, the manufacturer of the hay elevator machine, and also Crist
    Implement Company, the dealer and distributor of said machine, for their
    injuries and damages on the ground that the manufacturer and the dealer and
    distributor are primarily liable. These Assignors desire the aid, evidence, law
    and cooperation of J. L. Leftow and Lewis R. Sutin, attorneys for Assignees,
    who spent much time and effort in this connection, and Assignees have
    consented that their attorneys give their aid, evidence, law and cooperation to
    Assignors.
    "THEREFORE, in consideration of $1.00 and other good and valuable
    consideration receipt whereof is hereby acknowledged by Assignors,
    I.
    "Assignors hereby assign and transfer to Assignees a sum equal to one-half ()
    of any settlement, or judgment, recovered by Assignors against John Deere
    Plow Company and/or Crist Implement Company, not to exceed any settlement,

    or judgment, of DAMACIO GARCIA in the sum of $80,000.00, and of


    RICARTE GALLEGOS in the sum of $6,000.00.
    II.
    "Assignees will not participate in any part of the amounts recovered in excess of
    $80,000.00 recovered by DAMACIO GARCIA, or $6,000.00 recovered by
    RICARTE GALLEGOS. In other words, the maximum amount assigned by
    Assignors to Assignees is $40,000.00 for DAMACIO GARCIA and $3,000.00
    for RICARTE GALLEGOS."

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