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Amica Mutual Insurance Co. v. Maloney9/18/1995
ty coverage" under Section 39-2-1, Amica's actions really amount to a failure to pay the insured's attorney in equity for services rendered. However, a subsequent claim for attorney's fees based in equity is distinct from an initial claim for coverage under the insured's policy since there is no longer a concern that the insured will go uncompensated despite having paid the insurer's premiums. Accordingly, we find that Amica's actions do not constitute nonpayment of a claim of first party coverage as contemplated by the statute. Maloney is not entitled to attorney's fees under Section 39-2-1.
29. The Silvas also have demanded attorney's fees for the underlying action in this appeal, based on Section 39-2-1 and for violations of Article 16 of the New Mexico Insurance Code NMSA 1978, Section 59A-16-1 to -30 (Repl. Pamp. 1995). For the reasons discussed above, the Silvas are not entitled to attorney's fees under Section 39-2-1. Additionally, because this issue has not previously been addressed by New Mexico courts and was open to legitimate debate, we find that the trial court's finding that Farmers' conduct was reasonable and did not violate Section 59A-16-30 is supported by substantial evidence. See (noting appellate court determines if substantial evidence exists to support verdict after viewing facts most favorable to appellee).
IV. CONCLUSION
30. We hold that the common-fund doctrine is applicable to insurance cases in which the insured incurs attorney's fees in recovering a judgment or settlement which benefits the subrogated insurer. Accordingly, the insured is entitled to set aside a proportionate share of attorney's fees and costs from the insurer's subrogation interest, subject to the equitable considerations discussed above. We therefore affirm the trial court's award of a proportionate share of attorney's fees in Amica v. Maloney and reverse the denial of fees in Silva v. Farmers and remand for an award of a proportionate share of attorney's fees, costs, and interest consistent with this opinion. We also reject both insureds' request for an award of attorney's fees in pursuing these claims.
31. IT IS SO ORDERED.
STANLEY F. FROST, Justice
WE CONCUR:
RICHARD E. RANSOM, Justice
PATRICIO M. SERNA, District Judge
1 The trial court determined that Maloney's attorney's fees and costs amounted to 36.19% of the total judgment.
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