Federal Court Should Not Conflict With State Court Action
Post 5432
Posted on August 24, 2026 by Barry Zalma
New Mexico State Lawsuits Cannot be Confused with a Federal Declaratory Relief Action
In Old Guard Insurance Co. v. Rudolfo Rodriguez; Emilio Pinon; et al, The City Of Albuquerque; Mayor Tim Keller; Jesse Valdez; And Consolidated Builders Of New Mexico et al., No. 1:26-cv-00073-MIS-JMR, United States District Court, D. New Mexico (August 18, 2026), Old Guard Insurance sought a federal declaratory judgment that it owed no duty to defend or indemnify Consolidated Builders and related defendants in asbestos-related New Mexico state lawsuits arising from renovation work at Albuquerque’s Gibson Health Hub/Gateway Center.
FACTS
On January 15, 2026, Old Guard filed the instant lawsuit seeking a declaration that there is no coverage for various asbestos-related claims under the Policy
Old Guard initially denied coverage to Consolidated Builders when the underlying state suits were filed, but reversed its denial of coverage on May 19, 2025, and began supporting Consolidated in all of the personal injury suits and the City’s breach of contract suit.
The district court declined to exercise jurisdiction under the Declaratory Judgment Act and the Tenth Circuit’s precedent, concluding that the state proceedings were the better forum because the federal action would not fully resolve the parties’ coverage dispute, could create friction with ongoing state litigation, and involved duty-to-defend and duty-to-indemnify issues better resolved in the consolidated state actions.
Old Guard issued commercial general liability and umbrella policies to Consolidated Builders, which performed renovation work at the Gibson Health Hub/Gateway Center. Multiple state-court plaintiffs alleged they were exposed to asbestos and other hazardous materials during the project. The City also sued Consolidated Builders for contractual defense and indemnity, later adding Old Guard. Old Guard filed this federal declaratory judgment action seeking a ruling that asbestos-related claims were excluded from coverage.
LAW:
Under the Declaratory Judgment Act, federal courts may declare parties’ rights but are not required to do so. The court considered whether the declaratory action would settle the controversy, clarify legal relations, constitute procedural fencing, increase friction with state courts, and whether a better alternative remedy existed. New Mexico law also treats the duty to defend as broader than and distinct from the duty to indemnify, with doubts about potential coverage resolved in favor of the insured at the defense stage.
Discussion/Analysis:
The court found that a federal declaration focused on the asbestos exclusion would not fully settle the parties’ dispute because the underlying complaints also referenced other hazardous substances and theories that might implicate coverage outside the asbestos exclusion. Although the court found insufficient evidence of procedural fencing, it concluded that exercising jurisdiction would risk friction with New Mexico courts because the state actions were already consolidated, involved overlapping facts, and could resolve coverage-related issues more effectively. The court emphasized New Mexico’s preference for resolving exclusion and duty-to-defend issues in the primary litigation when factual development may be necessary.
CONCLUSION:
Here, given the consolidation of the tort cases, the significant time that has already been spent in the litigation process, and the fact that the same judge presides over all the consolidated tort cases and the City’s action against Consolidated and Old Guard, the Court found that refraining from exercising jurisdiction is appropriate at this juncture and the best remedy rests with the state court actions. Even if the Court were to declare Old Guard had no duty to defend or indemnify with respect to the asbestos policy, there are other facts mentioned in the underlying complaints that potentially fall outside asbestos exclusion provision.
As such the declaratory judgment action at issue here would still leave controversy and not resolve all potential claims, nor does it place the Court in a position to fully clarify the legal relations at issue. The federal court granted defendants’ motions to dismiss, declined to proceed with Old Guard’s declaratory judgment action, and closed the case.
ZALMA OPINION
Federal Courts refuse to screw with state court actions. The case brought to federal court covered many of the issues pending in New Mexico State Court and that is why the USDC dismissed the federal action to avoid contradictory judgments and to accept the fact that the state court was capable of dealing with the insurance issues. The USDC found that exercising jurisdiction would risk friction with New Mexico courts because the state actions were already consolidated, involved overlapping facts, and could resolve coverage-related issues more effectively.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution
Post 5489
Posted on September 14, 2026 by Barry Zalma
Fraudster Refuses to Answer Questions About His Alleged Fraud
See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.
Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Communications with Arson Investigation is Privileged
Post 5488
Posted on September 11, 2026 by Barry Zalma
ACE Was Not Required To Produce Any Disputed Document Because Each Was Protected By The Attorney-Client Privilege, or The Work-Product Doctrine.
See the full video at and at https://rumble.com/v7fbzvo-arson-for-profit-is-ground-to-deny-claim.html
In Rubesne Resources LLC, a Colorado Limited Liability Company v. ACE Property And Casualty Insurance Company, a Foreign Corporation, Civil Action No. 1:24-cv-02300-DDD-SBP, United States District Court, D. Colorado (August 30, 2026) Rubesne Resources LLC sought insurance coverage from ACE Property and Casualty Company after a January 5, 2024 fire destroyed its business.
South Metro Fire Rescue classified the ignition as intentional, and ACE’s retained expert concluded that gasoline had been poured in multiple areas and ignited. ACE retained coverage and subrogation counsel, National Subrogation Services, and a cause-and-origin expert ...
Arson for Profit is Ground to Deny Claim
Posted on September 11, 2026 by Barry Zalma
Communications with Arson Investigation is Privileged
Post 5488
ACE Was Not Required To Produce Any Disputed Document Because Each Was Protected By The Attorney-Client Privilege, or The Work-Product Doctrine.
See the full video at and at https://rumble.com/v7fbzvo-arson-for-profit-is-ground-to-deny-claim.html
In Rubesne Resources LLC, a Colorado Limited Liability Company v. ACE Property And Casualty Insurance Company, a Foreign Corporation, Civil Action No. 1:24-cv-02300-DDD-SBP, United States District Court, D. Colorado (August 30, 2026) Rubesne Resources LLC sought insurance coverage from ACE Property and Casualty Company after a January 5, 2024 fire destroyed its business.
South Metro Fire Rescue classified the ignition as intentional.
After reviewing the disputed documents in camera, the court found that each was protected.
LAW
Colorado Revised Statutes § 10-4-1003 requires ...
Referral of Claims to its SIU Is Not Bad Faith
Post 5487
Posted on September 10, 2026 by Barry Zalma
In WIZ Collision, LLC, on behalf of itself and as assignee of Jawara Small, Chester Street LLC, and Aziz Brooks v. GEICO Corporation, No. 25-cv-4201 (KAM)(JAM), United States District Court, E.D. New York (August 28, 2026) Wiz Collision, a New York City auto-body shop, regularly repaired vehicles and submitted insurance claims for customers. It alleged that GEICO repeatedly approved claims and repairs, then referred certain claims to its Special Investigations Unit, stopped issuing payments, and delayed resolution despite ultimately finding no fraud.
Wiz Collision sued on its own behalf and as purported assignee of three customers, asserting contract, good-faith, consumer-protection, and injunctive claims. GEICO removed the case and moved to dismiss under Rule 12(b)(6).
LAW
Under Rule 12(b)(6), a complaint must plead facts supporting a facially plausible claim. Article III standing requires a concrete injury, ...
