Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Beaudry v. Farmers Insurance Exchange

Supreme Court of New Mexico

January 22, 2018

CRAIG BEAUDRY, Plaintiff-Respondent,
v.
FARMERS INSURANCE EXCHANGE, TRUCK INSURANCE EXCHANGE, FIRE INSURANCE EXCHANGE, MID-CENTURY INSURANCE COMPANY, FARMERS NEW WORLD LIFE INSURANCE, COMPANY, FARMERS INSURANCE COMPANY OF ARIZONA, LANCE CARROLL, and CRAIG ALLIN, Defendants-Petitioners.

         ORIGINAL PROCEEDING ON CERTIORARI Sarah M. Singleton, District Judge.

          Lewis Roca Rothgerber Christie LLP Ross L. Crown Albuquerque, NM Steven J. Hulsman Kristina N. Holmstrom Phoenix, AZ, Skadden, Arps, Slate, Meagher & Flom LLP Raoul Kennedy James P. Schaefer Palo Alto, CA for Petitioners.

          Law Office of Jane B. Yohalem Jane B. Yohalem Santa Fe, NM O'Friel and Levy, P.C. Pierre Levy Aimee S. Bevan Santa Fe, NM Law Office of Barry Green Barry Green Santa Fe, NM for Respondent.

          Jarmie & Associates Mark D. Standridge Las Cruces, NM for Amicus Curiae New Mexico Defense Lawyers Association.

          Brownstein Hyatt Farber Schreck, LLP Eric R. Burris Nury H. Yoo Albuquerque, NM for Amicus Curiae Association of Commerce & Industry of New Mexico.

          David J. Stout Michael B. Browde Albuquerque, NM for Amicus Curiae New Mexico Trial Lawyers Association.

          OPINION

          EDWARD L. CHÁVEZ, JUSTICE.

         {1} Plaintiff and the corporate Defendants freely negotiated and entered into a clear and unambiguous contract for Plaintiff to sell their insurance policies. In the contract, Plaintiff consented to a provision allowing Defendants to immediately terminate the contract if he breached it in any one of five different specified ways. Plaintiff breached the contract in one of the specified ways, and Defendants exercised their right to terminate. Plaintiff sued Defendants under numerous theories of liability for terminating the contract, including under the doctrine of prima facie tort, asserting that Defendants had nefarious reasons for terminating the contract. We hold that when a contract is clear, unambiguous, and freely entered into, the public policy favoring freedom of contract precludes a cause of action for prima facie tort when the gravamen of the allegedly tortious action was the defendant's exercise of a contractual right. In this case, Defendants had the right to terminate the contract because of Plaintiff's breach.

         I. BACKGROUND

         {2} On December 16, 2000, Plaintiff entered into an agent appointment agreement (Agreement) with Defendant insurance companies to sell their insurance policies. Defendant Lance Carroll was the District Manager for the territory that included Plaintiff's agency. Defendant Craig Allin was the New Mexico Executive Director.

         {3} The Agreement required Plaintiff to "submit to the Companies every request or application for insurance for the classes and lines underwritten by the Companies and eligible in accordance with their published Rules and Manuals." In the event of a breach, the Agreement provided that it "may be terminated by the [non-breaching] party on thirty (30) days written notice." In addition, Defendants could immediately terminate the Agreement for five enumerated types of breach, including "[s]witching insurance from the Companies to another carrier."

         {4} In September 2010, Plaintiff's employee cancelled an insurance policy with Farmers, a defendant company, and switched the insured's service to a rival insurance carrier. Plaintiff does not dispute that the switching of the insurance policy occurred. However, Plaintiff argues that the breach did not cause any significant damage to Farmers; that the employee who switched the policy was new and acted without his authorization; and that at the time of the breach Plaintiff's wife, who normally served as the office operations manager, was seriously ill. In February 2011, Defendants notified Plaintiff that they were exercising their right to terminate the Agreement because of the breach.

         {5} Plaintiff asserts that his firing was orchestrated by Defendants Allin and Carroll as retaliation for his decision to go "up the chain of command" after they provided unsatisfactory responses to his allegations that a new Farmers agent, Tom Gutierrez, was "poaching" his clients. Plaintiff also claims that Defendant Carroll benefitted from Plaintiff's termination because his termination allowed Carroll to reassign half of Plaintiff's clients to Gutierrez. According to Plaintiff, if Gutierrez did not meet his quotas, while on probation, Carroll would have had to personally reimburse Farmers for "a portion of the subsidies fronted to Gutierrez."

         {6} Plaintiff's third amended complaint is the operative pleading, where he alleged eight causes of action: tortious interference with contract, tortious interference with prospective contractual relations, breach of contract, breach of the covenant of good faith and fair dealing, conspiracy, intentional infliction of emotional distress, prima facie tort, and violations of the New Mexico Insurance Code. Plaintiff also sought punitive damages. Through several motions for summary judgment, the district court dismissed all claims except tortious interference with contract, breach of the covenant of good faith and fair dealing, conspiracy, and prima facie tort. Specifically, with respect to the breach of contract claim, the district court determined "as a matter of law that Plaintiff was responsible for the acts of [his employee] even if they were contrary to his instructions." Plaintiff did not appeal the dismissal of his contract claim. Plaintiff also decided to forego the claims of tortious interference with an existing contract and breach of the covenant of good faith and fair dealing, believing that the district court's dismissal of the breach of contract claim precluded them.

         {7} After the court ruled in favor of Defendants on the breach of contract claim Defendants filed a renewed summary judgment motion on prima facie tort (Renewed Summary Judgment Motion). Defendants argued ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.