"[T]he words ‘arising out of’ are very broad, general and comprehensive terms, ordinarily understood to mean ‘originating from,’ ‘having its origin in,’ ‘growing out of’ or ‘flowing from.’ " Krieger v. Wilson Corp. , 139 N.M. 274, 131 P.3d 661, 666 (N.M. Ct. App. 2005) (citing Baca v. N.M. State Highway Dep't , 82 N.M. 689, 486 P.2d 625, 628 (N.M. Ct. App. 1971) ). This broad reading of "arising out of" applies equally to exclusionary clauses.
at 908 (citing Krieger v. Wilson Corp., 2006-NMCA-034, ¶ 14, 131 P.3d 661, 666; Baca v. N.M. State Highway Dep't, 1971-NMCA-087, ¶ 14, 486 P.2d 625, 628). The Evanston court further noted that the New Mexico Supreme Court has twice read a similar phrase, i.e., “‘arising from,” in an exclusionary clause to be unambiguous.
And under New Mexico law, whether a contract is ambiguous-that is, “whether a contractual provision is susceptible to reasonable but conflicting meanings”-is a question of law. Krieger v. Wilson Corp., 2006-NMCA-034, ¶ 12, 131 P.3d 661 (citing C.R. Anthony Co. v. Loretto Mall Partners, 1991-NMSC-070, ¶ 17, 817 P.2d 238). But if contractual language is ambiguous, then “the ultimate factual issues must be resolved by the appropriate fact finder with the benefit of a full evidentiary hearing.
Similarly, the Court of Appeals of New Mexico has defined "arising out of" broadly, stating that the term is "ordinarily understood to mean ‘originating from,’ ‘having its origin in,’ ‘growing out of’ or ‘flowing from.’ " Krieger v. Wilson Corp., 2006-NMCA-034, ¶ 14, 139 N.M. 274, 131 P.3d 661, 666 (quoting Baca v. New Mexico State Highway Dep't, 1971-NMCA-087, ¶ 14, 82 N.M. 689, 486 P.2d 625, 628 ). In analyzing the term in an insurance contract exclusion, the Tenth Circuit surveyed New Mexico caselaw and concluded that "we have every reason to suppose that New Mexico law applies the same broad definition of arising out of in the exclusion context as in the coverage context."
"Furthermore, the interpretation of an insurance contract is a matter of law, which we review de novo." Krieger v. Wilson Corp. , 2006-NMCA-034, ¶ 30, 139 N.M. 274, 131 P.3d 661. Duty to Defend
The parties do not contend that the contract was ambiguous, and, therefore, "the interpretation of language in [the] contract is an issue of law which we review de novo." Krieger v. Wilson Corp., 2006-NMCA-034, ¶ 12, 139 N.M. 274, 131 P.3d 661 (2005). {14} In order to determine the applicability of an indemnity provision in a contract, "[w]e apply the general rules of contract construction in determining the meaning of the language used" by the parties.
In that area, the phrase "is given a broad interpretation by [New Mexico] courts and is generally understood to mean 'originating from,' 'having its origin in,' 'growing out of[,]' or 'flowing from.'" City ofAlbuquerque v. BPLW Architects & Eng'rs, Inc., 213 P.3d 1146, 1153 (N.M. Ct. App. 2009) (alteration in original) (quoting Krieger v. Wilson Corp., 131 P.3d 661, 666 (N.M. Ct. App. 2005)) (internal quotation marks omitted). What is less clear is what the phrase means in an exclusionary provision.
Similarly, the Court of Appeals of New Mexico has defined "arising out of" broadly, stating that the term is "ordinarily understood to mean 'originating from,' 'having its origin in,' 'growing out of' or 'flowing from.'" Krieger v. Wilson Corp., 2006-NMCA-034, ¶ 14, 139 N.M. 274, 279, 131 P.3d 661, 666 (quoting Baca v. N.M. State Highway Dep't, 1971-NMCA-087, ¶ 14, 82 N.M. 689, 486 P.2d 625, 628). In analyzing the term in an insurance contract exclusion, the Tenth Circuit surveyed New Mexico caselaw and concluded that "we have every reason to suppose that New Mexico law applies the same broad definition of arising out of in the exclusion context as in the coverage context."
It is worth noting this principle holds true under New Mexico law as well. SeeSalas v. Mountain States Mut. Cas. Co. , 145 N.M. 542, 202 P.3d 801, 806 (2009) (discussing disclosure requirements for "known" insureds, "whether the insured is a party to the insurance contract or a third-party beneficiary thereof"); Krieger v. Wilson Corp. , 139 N.M. 274, 131 P.3d 661, 674 (N.M. Ct. App. 2005) (concluding alleged additional insured was entitled to sue insurer for coverage as a potential indemnitee entitled to coverage). After being named as a defendant in the underlying malpractice action, Dr. Valenzuela notified Mt. Hawley of the claims alleged against him and accepted the defense provided by Mt. Hawley for over one and one-half years before obtaining independent counsel.
Similarly, the Court of Appeals of New Mexico has defined "arising out of" broadly, stating that the term is "ordinarily understood to mean ‘originating from,’ ‘having its origin in,’ ‘growing out of’ or ‘flowing from.’ " Krieger v. Wilson Corp., 2006-NMCA-034, ¶ 14, 139 N.M. 274, 131 P.3d 661, 666 (quoting Baca v. New Mexico State Highway Dep't, 1971-NMCA-087, ¶ 14, 82 N.M. 689, 486 P.2d 625, 628 ). In analyzing the term in an insurance contract exclusion, the Tenth Circuit surveyed New Mexico caselaw and concluded that "we have every reason to suppose that New Mexico law applies the same broad definition of arising out of in the exclusion context as in the coverage context."