Rosales v. Taos ( 2019 )

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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 MAURO ROSALES,
3 Plaintiff-Appellant,
4 v. No. A-1-CA-37255
5 TOWN OF TAOS,
6 Defendant-Appellee.
7 APPEAL FROM THE DISTRICT COURT OF TAOS COUNTY
8 Jeff McElroy, District Judge
9 The Herrera Firm, P.C.
10 Samuel M. Herrera
11 Taos, NM
12 for Appellant
13 Agnes Fuentevilla Padilla
14 Albuquerque, NM
15 for Appellee
16 MEMORANDUM OPINION
17 VANZI, Chief Judge.
18 {1} Plaintiff appeals from the district court’s order granting summary judgment in
19 favor of Defendant on his claim for breach of the covenant of good faith and fair
1 dealing. This Court’s calendar notice proposed to summarily affirm. Defendant filed
2 a memorandum in opposition to the proposed disposition. Not persuaded by
3 Defendant’s arguments, we affirm.
4 {2} Plaintiff does not dispute the facts relied upon in the calendar notice, but does
5 seemingly dispute the legal standard applied. Initially, we address Plaintiff’s assertion
6 that the question at issue is whether he was reasonable in his election to believe the
7 Human Resource (HR) Director’s verbal statement over the written contract and that
8 such “reasonableness” is an issue of fact precluding summary judgment. [MIO 2-3]
9 The authorities relied upon by Plaintiff address the reasonableness of a party’s
10 interpretation of an ambiguous contract term. See Read v. W. Farm Bureau Mut. Ins.
11 Co., 1977-NMCA-039, ¶ 21, 90 N.M. 369, 563 P.2d 1162 (stating that “a word, a
12 phrase, or a provision in a contract of insurance is not what the insurer intended the
13 language to mean, but what a reasonable person in the position of the insured would
14 have understood them to mean”); see also Hinkle, Cox, Eaton, Coffield & Hensley v.
15 Cadle Co. of Ohio, Inc. 1993-NMSC-010, ¶ 22, 115 N.M. 152, 848 P.2d 107916 (determining whether movant presented a prima facie case of the reasonableness of
17 its attorney fees, terms not expressly agreed to by the parties to a contract). That is not
18 the issue here. We recognize that a breach of the covenant of good faith and fair
19 dealing claim could constitute a question of fact in some circumstances. However,
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1 when, like this case, “no facts are in dispute and the undisputed facts lend themselves
2 to only one conclusion, the issue may properly be decided as a matter of law.” Ovecka
3 v. Burlington N. Santa Fe Ry. Co., 2008-NMCA-140, ¶ 9, 145 N.M. 113, 194 P.3d
4 728.
5 {3} Turning to Plaintiff’s disputed issue of law, this Court’s calendar notice relied
6 on Sanders v. Fedex Ground Package Sys., Inc., 2008-NMSC-040, ¶ 10, 144 N.M.
7 449, 188 P.3d 1200, for the proposition that “the implied covenant of good faith and
8 fair dealing helps insure that both parties receive the benefit of their respective
9 bargains” and “acts to protect the parties to the contract by prohibiting one party from
10 obstructing the other party’s benefit, whether that benefit is express or implied.”
11 Plaintiff accuses this Court of “cherry picking” a term from Sanders, thereby radically
12 changing the legal standard for good faith and fair dealing. [MIO 4] That was not this
13 Court’s intention. We note that Plaintiff himself cites to Sanders in the docketing
14 statement and incorporates the term “obstruct” in his argument. [DS 4, 6, 8, 9, 10]
15 More importantly, Sanders and the legal standard applied in that case remains good
16 law.
17 {4} Nevertheless, we address Plaintiff’s contention that Sanders did not modify the
18 standard set forth in prior cases, on which it relied. In particular, Defendant urges the
19 use of the legal standard applied in other cases, including Azar v. Prudential Ins. Co.
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1 of Am., 2003-NMCA-062, ¶ 51, 133 N.M. 669, 68 P.3d 909, which provides that the
2 good faith covenant of a contract is breached “when a party seeks to prevent the
3 contract’s performance or to withhold its benefits from the other party.” [MIO 3-4]
4 Further, Bogle v. Summit Inv. Co., LLC states that the “implied covenant [of good faith
5 and fair dealing] requires that neither party do anything that will injure the rights of
6 the other party to receive the benefit of the agreement.” 2005-NMCA-024, ¶ 16, 137
7 N.M. 80, 107 P.3d 520. “This concept allows courts to award damages for breach of
8 contract when one party prevents another from getting the benefits of a contractual
9 arrangement.” Heimann v. Kinder-Morgan CO2 Co., L.P., 2006-NMCA-127, ¶ 18,
10 140 N.M. 552, 144 P.3d 111. And Bourgeous v. Horizon Healthcare Corp. concludes
11 that “[d]enying a party its rights to those benefits will breach the duty of good faith
12 implicit in the contract.” 1994-NMSC-038, ¶ 16, 117 N.M. 434, 872 P.2d 852.
13 {5} Applying these standards to the undisputed facts, we conclude that there was
14 no breach of good faith and fair dealing as a matter of law. See Ovecka, 2008-NMCA-
15 140, ¶ 9. The issue is whether the HR Director’s comments—that “the manager
16 already made a decision” to terminate Plaintiff and that an appeal would be
17 futile—denied Plaintiff his right to appeal the Notice of Final Action (Final Action).
18 The fact of the matter is that the Final Action served as a notice of Defendant’s final
19 decision terminating Plaintiff’s employment. As pointed out in the calendar notice, the
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1 prior Notice of Contemplated Disciplinary Action (Notice) explained the reasons for
2 Plaintiff’s contemplated termination and gave him an opportunity to respond. [1 RP
3 255; CN 3] The Final Action addressed Plaintiff’s contentions in response, refuted
4 them, and terminated his employment. [1 RP 257; CN 3] Hence, the HR Director’s
5 comment that “the manager already made a decision” was no more than a statement
6 of fact.
7 {6} Furthermore, as has been noted, the Final Action expressly informed Plaintiff
8 of the time limit to appeal, and to whom the written notice of appeal should be
9 submitted. [1 RP 257; CN 3, 5] Nonetheless, Plaintiff emphasizes the effects of the
10 HR Director’s statements to him after she gave him the Final Action. [MIO 2] Thus,
11 the question is whether the advertisement for Plaintiff’s position in the Taos News, in
12 combination with the HR Director’s comment to Plaintiff that an appeal would be
13 futile, served to prevent, injure, or deny Plaintiff his right to appeal the Final Action.
14 We conclude that Defendant did not breach the covenant of good faith and fair dealing
15 because it did not withhold from Plaintiff any of the benefits of submitting a written
16 appeal. See Smoot v. Physicians Life Ins. Co., 2004-NMCA-027, ¶¶ 13, 14, 135 N.M.
17 265, 87 P.3d 545 (stating that the covenant of good faith is not breached when a party
18 was given the product or service bargained for). While Defendant’s actions may have
19 lowered Plaintiff’s expectation of a positive outcome on appeal, we cannot say that
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1 they prevented, injured, or interfered with Plaintiff’s ability to appeal. See Gilmore v.
2 Duderstadt, 1998-NMCA-086, ¶ 24, 125 N.M. 330, 961 P.2d 175 (“A party breaches
3 the covenant of good faith and fair dealing when he or she interferes or fails to
4 cooperate in the other party’s performance.”). Accordingly, we agree with the district
5 court that Plaintiff’s breach of the covenant of good faith and fair dealing claim fails
6 as a matter of law.
7 {7} For these reasons, and those stated in the calendar notice, we affirm the district
8 court’s dismissal of Plaintiff’s claim for breach of the covenant of good faith and fair
9 dealing.
10 {8} IT IS SO ORDERED.
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12 LINDA M. VANZI, Chief Judge
13 WE CONCUR:
14
15 M. MONICA ZAMORA, Judge
16
17 J. MILES HANISEE, Judge
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