HOUSE HEALTH AND GOVERNMENT AFFAIRS COMMITTEE SUBSTITUTE FOR

HOUSE BILL 1275

48th legislature - STATE OF NEW MEXICO - first session, 2007

AN ACT

RELATING TO THE UNIFORM COMMERCIAL CODE; PROVIDING FOR JURISDICTION AND FORUM TO GOVERN LEASE OR RENTAL CONTRACTS; LIMITING INDEMNIFICATION BY A PARTY OF A LEASE TO ANOTHER PARTY OF THAT LEASE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. Section 55-2A-106 NMSA 1978 (being Laws 1992, Chapter 114, Section 13) is amended to read:

     "55-2A-106. LIMITATION ON POWER OF PARTIES TO CONSUMER LEASE TO CHOOSE APPLICABLE LAW AND [JUDICIAL] FORUM.--

          (1) If the law chosen by the parties to a consumer lease is that of a jurisdiction other than a jurisdiction in which the lessee resides at the time the lease agreement becomes enforceable or within thirty days thereafter or in which the goods are to be used, the choice is not enforceable.

          (2) If the judicial forum chosen by the parties to a consumer lease is a forum that would not otherwise have jurisdiction over the lessee, the choice is not enforceable.

          (3) If the forum for an arbitration or mediation hearing chosen by the parties to a consumer lease is in a state or in a similar political subdivision in a foreign country other than the state or the similar subdivision in the foreign country in which the lessee resides at the time the lease agreement becomes enforceable or within thirty days thereafter or in which the goods are to be used, the choice is not enforceable."

     Section 2. A new section of Chapter 56, Article 7 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] COMMERCIAL INSTRUMENTS AND TRANSACTION.--

          A. A provision of a lease or rental contract for equipment that requires a party to the agreement to indemnify, hold harmless, insure or defend the other party to the agreement, including the other party's officers, employees or agents against liability, claims, damages, losses or expenses, including attorney fees, arising out of bodily injury to a person or damage to property caused by or resulting from, in whole or in part, the negligence, act or omission of the indemnitee, its officers, employees or agents, is void, unenforceable and against the public policy of this state.

          B. A lease or rental contract for equipment may contain a provision that requires one party to the contract to indemnify, hold harmless or insure the other party to the

contract, including its officers, employees or agents, against liability, claims, damages, losses or expenses, including attorney fees, only to the extent that the liability, damages, losses or expenses are caused by, or arise out of, the acts or omissions of the indemnitor or its officers, employees or agents.

          C. A lease or rental contract for equipment that does not contain a provision covered by this section shall be presumed to conform to Subsections A and B of this section.

          D. As used in this section, "lease or rental contract for equipment" means any public, private, foreign or domestic contract or agreement relating to the temporary use of equipment without transfer of ownership of the equipment from one party to the other.

          E. As used in this section, "indemnify" or "hold harmless" includes any requirement to name the indemnified party as an additional insured in the indemnitor's insurance coverage for the purpose of providing indemnification for any liability not otherwise allowed in this section. The provisions of this subsection shall not restrict the right of any remedy available to a claimant or plaintiff.

          F. Nothing in this section shall apply to a lease or rental contract for a motor vehicle, as "motor vehicle" is defined in Section 66-1-4.11 NMSA 1978 and that is designed and used primarily to transport persons or property on a public highway.

          G. Nothing in this section shall apply to a security agreement as defined in Section 55-9-102 NMSA 1978 or to a finance lease as defined in Section 55-2A-103 NMSA 1978 or to a lease by a repossessing lessor for equipment repossessed upon default under such a finance lease.

          H. Nothing in this section shall apply to a lease or rental contract for equipment for use in the production of motion pictures or television."

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