DEMAND FOR SETTLEMENT - PRODUCTS LIABILITY

STATE OF NEW MEXICO

[FIRM NAME]
Attorneys at Law
[Street Address]
[City, New Mexico ZIP]
Telephone: [Phone]
Facsimile: [Fax]
Email: [Email]
Licensed in the State of New Mexico

DATE: [Date]

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND FIRST-CLASS MAIL

[General Counsel / Risk Management / Claims Representative]
[Manufacturer / Distributor / Retailer Name]
[Street Address]
[City, State ZIP]

RE: PRODUCTS LIABILITY CLAIM - SETTLEMENT DEMAND
Claimant: [Client Full Name]
Date of Incident: [Date]
Product: [Product Name, Model Number, Serial Number]
Manufacturer: [Manufacturer Name]
Purchase Date/Location: [Date / Retailer Name]
Claim Number: [If assigned]

Dear [Recipient Name]:

This firm represents [Client Name] in connection with serious personal injuries caused by a defective [Product Name] designed, manufactured, distributed, and/or sold by your company. This letter constitutes our formal demand for settlement under New Mexico products liability law.

I. NEW MEXICO PRODUCTS LIABILITY LEGAL FRAMEWORK

A. Governing Law

New Mexico products liability claims are governed by common law principles, with the New Mexico Supreme Court having adopted the Restatement (Second) of Torts Section 402A for strict products liability. Aalco Mfg. Co. v. City of Espanola, 95 N.M. 66, 618 P.2d 1230 (1980).

B. Statute of Limitations

Under N.M. Stat. Ann. Section 37-1-8, the statute of limitations for personal injury claims, including products liability, is three (3) years from the date of injury. This claim arises from an incident that occurred on [Date], and therefore the limitations period expires on [Expiration Date].

New Mexico applies the discovery rule, which tolls the statute of limitations until the plaintiff discovers or reasonably should have discovered the injury and its cause. Martinez v. Showa Denko, K.K., 1998-NMCA-111.

C. Statute of Repose

New Mexico does not have a statute of repose for products liability claims.

D. Theories of Liability Under New Mexico Law

New Mexico recognizes the following theories of products liability:

1. Strict Products Liability:

Under the Restatement (Second) of Torts Section 402A, as adopted by New Mexico, a seller of a defective product is strictly liable for physical harm caused to the ultimate user or consumer if:
- The seller is engaged in the business of selling such a product; and
- The product is expected to and does reach the user without substantial change in the condition in which it is sold.

Aalco Mfg. Co. v. City of Espanola, 95 N.M. 66 (1980).

2. Manufacturing Defect:

A manufacturing defect exists when the product departs from its intended design, making it more dangerous than expected. The product is compared to the manufacturer's own design specifications.

3. Design Defect:

New Mexico applies a hybrid test for design defects that incorporates both the consumer expectation test and the risk-utility test. Smith v. Bryco Arms, 2001-NMCA-090, 131 N.M. 87.

Consumer Expectation Test: A product is defective if it is dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it.

Risk-Utility Test: A product is defective if the risks of the design outweigh the benefits, considering:
- The gravity of the danger posed by the challenged design
- The likelihood that such danger would occur
- The mechanical feasibility of a safer alternative design
- The financial cost of an improved design
- The adverse consequences to the product and consumer from an alternative design

4. Failure to Warn:

A product may be defective due to inadequate warnings or instructions. The manufacturer has a duty to warn of known risks and risks that should have been discovered through reasonable testing and analysis. Perfetti v. McGhan Med., 99 N.M. 645, 662 P.2d 646 (Ct. App. 1983).

5. Negligence:

New Mexico recognizes negligence claims against manufacturers and sellers, including negligent design, negligent manufacture, negligent testing and inspection, and negligent failure to warn.

6. Breach of Warranty:

Claims for breach of express warranty, implied warranty of merchantability (N.M. Stat. Ann. Section 55-2-314), and implied warranty of fitness for a particular purpose (N.M. Stat. Ann. Section 55-2-315) are available.

E. Comparative Fault

New Mexico follows pure comparative negligence under Scott v. Rizzo, 96 N.M. 682, 634 P.2d 1234 (1981). A plaintiff's recovery is reduced by their percentage of fault, but recovery is not barred regardless of the degree of fault.

Our client bears no responsibility for this incident and was using the product in a foreseeable manner.

F. Punitive Damages

Punitive damages are available in New Mexico products liability cases where the plaintiff proves the defendant acted with "reckless disregard" for the safety of others or engaged in "willful, wanton, or fraudulent conduct." Paiz v. State Farm Fire & Cas. Co., 118 N.M. 203, 880 P.2d 300 (1994).

New Mexico does not have a statutory cap on punitive damages, but the U.S. Supreme Court's due process limits apply. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003).

II. PRESERVATION OF EVIDENCE - CRITICAL NOTICE

YOU ARE HEREBY DIRECTED TO IMMEDIATELY PRESERVE ALL EVIDENCE relating to this product and claim, including but not limited to:

Product-Related:
- The subject product and all component parts
- Design documents, specifications, and engineering drawings
- Manufacturing records and quality control data
- Testing data and safety assessments
- All versions of warnings, labels, and instructions
- Marketing and advertising materials

Regulatory and Compliance:
- Communications with CPSC, FDA, or other regulatory agencies
- Recall notices and service bulletins
- Adverse event reports and consumer complaints

Claims History:
- Prior claims and lawsuits involving this product
- Prior complaints regarding similar defects

New Mexico courts recognize spoliation sanctions and adverse inference instructions. Segura v. K-Mart Corp., 2003-NMCA-013. Destruction or alteration of evidence may result in severe sanctions.

III. THE DEFECTIVE PRODUCT

A. Product Identification

B. Chain of Distribution

The following entities are in the chain of distribution and may bear liability under New Mexico law:

IV. THE DEFECT

A. Nature of Defect

[DESIGN DEFECT / MANUFACTURING DEFECT / FAILURE TO WARN - Select applicable]

[Detailed description of the defect]:

The [Product Name] is defective because [describe specific defect]. This defect rendered the product unreasonably dangerous beyond what an ordinary consumer would expect and/or created risks that outweigh the design's benefits.

Consumer Expectation Analysis:

The product was dangerous to an extent beyond that which would be contemplated by an ordinary consumer because:
- [Describe why danger was unexpected]
- [Describe how product failed to perform as safely as expected]

Risk-Utility Analysis:

The design is defective because the risks outweigh the benefits:
- Gravity of danger: [Describe severity]
- Likelihood of danger: [Describe probability]
- Alternative design: [Describe safer alternative]
- Cost of alternative: [Describe economic feasibility]
- Impact on utility: [Describe minimal impact]

B. Alternative Safer Design

A feasible alternative design existed at the time of manufacture:

[Describe the alternative safer design that would have prevented injury]

This alternative design was:
- Technologically feasible
- Economically feasible
- Used by competitors or in subsequent models
- Would have prevented our client's injury

V. THE INCIDENT

A. How the Injury Occurred

On [Date], at approximately [Time], our client was [describe activity]:

[Detailed narrative of the incident]

B. Foreseeable Use

Our client was using the product in a manner that was intended or reasonably foreseeable by the manufacturer. Manufacturers are liable for injuries resulting from foreseeable uses and misuses under New Mexico law.

C. Causation

The defect in the [Product Name] was the actual and proximate cause of our client's injuries. Under New Mexico law, causation requires that the defect be a "substantial factor" in bringing about the harm.

VI. PRIOR KNOWLEDGE OF DEFECT

[If applicable - strengthens claim and supports punitive damages]

Your company knew or should have known of this defect prior to our client's injury:

• [Number] prior complaints regarding this defect
• [Number] prior injuries caused by this defect
• [Recall or service bulletin information]
• [Regulatory correspondence]
• Internal documents acknowledging the defect

This prior knowledge demonstrates reckless disregard for consumer safety and supports punitive damages under New Mexico law.

VII. INJURIES AND DAMAGES

A. Injuries Sustained

As a direct and proximate result of the defective product, our client sustained the following injuries:

• [Injury 1]
• [Injury 2]
• [Injury 3]
• [Permanent conditions, if any]

B. Medical Treatment

Emergency Treatment:
- Date: [Date]
- Facility: [Hospital Name]
- Treatment: [Description]

Surgical Treatment:
- Date(s): [Dates]
- Procedures: [Description]

Ongoing Treatment:
- [Current treatment needs]

C. Damages Summary

D. Punitive Damages

[If applicable:]

Your company's conduct demonstrates reckless disregard for consumer safety, warranting punitive damages under New Mexico law. We reserve the right to seek substantial punitive damages at trial.

VIII. SETTLEMENT DEMAND

A. Demand Amount

Based upon the clear liability under New Mexico products liability law, the severity of our client's injuries, and the substantial damages incurred, we hereby demand:

$[DEMAND AMOUNT]

B. Time for Response

This demand will remain open for forty-five (45) days from the date of this letter, expiring on [Expiration Date].

IX. DOCUMENTATION ENCLOSED

• Medical records and bills
• Photographs of the defective product
• Photographs of injuries
• Employment and wage records
• Expert reports (if available)
• Recall notices or safety bulletins (if applicable)
• [Other relevant documentation]

X. CONCLUSION

This case involves a defective product that caused serious injuries to an innocent consumer using the product in a foreseeable manner. Under New Mexico's adoption of strict products liability, your company is liable for these injuries.

We urge you to evaluate this claim seriously and respond with a reasonable settlement offer. If this matter cannot be resolved, we are prepared to file suit in the District Court of New Mexico and pursue this matter through trial.

Respectfully submitted,

[FIRM NAME]

By: _________________________________
[Attorney Name]
New Mexico State Bar No. [Number]
Attorney for [Client Name]

ENCLOSURES: As noted above

cc: [Client Name]
[Co-Counsel, if any]
File

NEW MEXICO PRODUCTS LIABILITY PRACTICE NOTES

• Restatement (Second) Section 402A: New Mexico adopted strict products liability through case law. Aalco Mfg. Co. v. City of Espanola, 95 N.M. 66 (1980).

• Hybrid Design Defect Test: New Mexico uses both consumer expectation and risk-utility tests for design defects. Smith v. Bryco Arms, 2001-NMCA-090.

• Pure Comparative Negligence: Recovery not barred regardless of plaintiff's fault, only reduced proportionally. Scott v. Rizzo, 96 N.M. 682 (1981).

• Several Liability: New Mexico abolished joint and several liability in most cases. Each defendant pays only their proportionate share. N.M. Stat. Ann. Section 41-3A-1.

• No Damage Caps: New Mexico does not cap compensatory damages for products liability claims.

• Punitive Damages: Require proof of reckless disregard or willful, wanton, or fraudulent conduct. No statutory cap.

• Learned Intermediary Doctrine: Applies to prescription drugs and medical devices. Serna v. Roche Labs., 101 N.M. 522 (Ct. App. 1984).

• Venue: File in county where defendant resides, where cause of action arose, or where plaintiff resides. N.M. Dist. Ct. R.Civ.P. 1-004.