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Burge v. Mid-Continent Casualty Co.12/4/1996
ned Burge's damages. Burge established Sanchez' liability for the accident and the extent of that liability, thereby establishing legal entitlement to coverage. United Nuclear Corp. v. General Atomic Co., 96 N.M. 155, 240, 629 P.2d 231, 316 (1980) (stating that "upon the default, the allegations of the complaint are taken as true), cert. denied, 451 U.S. 901, 68 L. Ed. 2d 289, 101 S. Ct. 1966 (1981). Thus, Burge did everything required of him under the contract, including providing Mid-Continent with adequate notice.
{32} Significantly, the burden of establishing comparative negligence was on Sanchez and Mid-Continent. See . As of April 1991, Mid-Continent was aware that Burge drank heavily the night before the accident and that witness statements contradicted Burge's account of the accident. On June 11, 1992, over one month before the default judgment was rendered, Mid-Continent received complete medical records that showed Burge's blood-alcohol level at the hospital. Clearly, this information would have been useful to Sanchez in his own defense. Yet there is no indication that Mid-Continent attempted to provide Sanchez with the evidence in order to reduce or eliminate its own potential loss under the policy. By June 11, Mid-Continent had notice of the action and evidence implicating Burge's comparative negligence. Having no indication that Sanchez would answer and defend, it was incumbent upon Mid-Continent to plead and attempt to prove Burge's comparative negligence to protect itself under the policy. Burge had no duty to warn Mid-Continent that Sanchez might not adequately defend against his claim. Having received timely notice of the action and having failed to timely intervene, Mid-Continent can not now successfully claim a denial of procedural due process.
{33} Both New Mexico and Oklahoma recognize that ambiguities in a policy will be construed in favor of the insured. See, e.g., ("When insurance contract is ambiguous, it must be construed against the insurance company as the drafter of the policy.") and Littlefield v. State Farm Fire & Casualty Co., 857 P.2d 65, 69 (Okla. 1993) ("Insurance contracts are contracts of adhesion. If susceptible of two constructions, the contract will be interpreted most favorably to the insured and against the insurance carrier."). Having drafted the uninsured motorist policy, Mid-Continent had an opportunity to unambiguously exclude default judgments from having conclusive effect. It is not unusual, and, indeed, quite common, for an action by an insured against an uninsured motorist to result in a default judgment. Nonetheless, Mid-Continent failed to draft such an exclusion into the policy. I would not read such an exclusion into the policy. . Once Burge met his contractual obligations, Mid-Continent became contractually obligated to provide coverage. Thus, the trial court in Burge II properly granted partial summary judgment by construing the policy in favor of Burge and concluding that Mid-Continent was contractually obligated to pay.
{34} Mid-Continent asserts that if the uninsured motorist policy is construed to include default judgments, Mid-Continent would be deprived of an opportunity to litigate Burge's comparative negligence. I disagree.
{35} It is well settled that an insurance carrier has a right to intervene in an action between an insured and an uninsured motorist. Lima v. Chambers, 657 P.2d 279, 281 (Utah 1982) (citing cases from various jurisdictions holding insurance carrier has right to intervene in action between insured and uninsured motorist). Intervention is proper when a person (1) has an interest relating to the subject matter of the action; (2) is so situated that the Disposition of the action may impai
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