Safeco Insurance Co. of America v. United States Fidelity & Guaranty Co.

STOWERS, Justice,

dissenting.

I dissent.

This case came before this Court on a writ of certiorari to determine whether the Court of Appeals erred in reversing the trial court’s dismissal of the petitioner, Safeco, as a party below. The majority opinion has adopted a position that says, in essence, the fact of an insurer’s joinder is not to be disclosed to the jury. With this I disagree.

This Court has in the past taken progressive steps in recognizing the need to change and modify legal concepts. See Ramirez v. Armstrong, 100 N.M. 538, 673 P.2d 822 (1983); Scott v. Rizzo, 96 N.M. 682, 634 P.2d 1234 (1981). Here, in not recognizing the fact that disclosure of insurance companies as parties is proper and appropriate, the majority has missed an opportunity to do so again.

While the majority properly concludes that an insurance company may be the real party in interest and thus subject to joinder pursuant to NMSA 1978, Civ.P. Rule 17 (Repl.Pamp.1980), this opinion still proceeds to maintain the fiction that the insured is the real party in interest in order to protect insurance companies from allegedly oversympathetic juries.

I have great faith in the jury’s ability to consider difficult and complicated cases, and to do so free of bias or prejudice. I am not convinced that juries will be misled in deciding the issues that are appropriately before them simply because of the disclosure of insurance. The joinder provisions as found in the Rules of Civil Procedure have been developed to provide for joinder of necessary parties to the litigation. See NMSA 1978, Civ.P.R. 17, 18, 19, 20 and 21 (Repl.Pamp.1980). Civ.P.Rule 17(a) provides in pertinent part:

Every action shall be prosecuted in the name of the real party in interest; but an executor, administrator, guardian, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another or a party authorized by statute may sue in his own name without joining with him the party for whose benefit the action is brought * * * Where it appears that an action, by reason of honest mistake, is not prosecuted in the name of the real party in interest, the court may allow a reasonable time for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.

In other types of cases, disclosure of the joinder of the real party in interest has never been an issue. For reasons that may never have been valid, insurance has been an exception. Once properly joined, a party should not be given a special non-disclosed status. Nevertheless, the majority allows the fact of the insurer’s joinder to remain unknown to the jury. It is time we recognize that an insurance company is no different, and should be treated no differently.

Moreover, while establishing a non-disclosure procedure, the majority has at the same time placed an intolerable burden on the trial court in terms of trying to sift out what is admissible insofar as evidence that relates to insurance and insurance companies. In addition, the non-disclosure of an insurer as a real party in interest will only serve to provide an unneeded temptation to somehow get this information before the jury. A review of the cases indicates that it is difficult to control the admission of insurance disclosing evidence, and once it has been disclosed, the judicial remedies for this disclosure gives cause for thought as to their adequacy and efficiency. See Cardoza v. Town of Silver City, 96 N.M. 130, 628 P.2d 1126 (Ct.App.), cert. denied, 96 N.M. 116, 628 P.2d 686 (1981). Continuing to resort to this type of legal reasoning only compounds the problem.

In my opinion, the alleged benefits of the new non-disclosure rule are outweighed by the disadvantages. The majority could create a far more efficient procedure without damaging the concept of equitable jury verdicts by simply allowing for the disclosure that an insurance company is a party to the action.

For these reasons I dissent.