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Demente v. GEICO General Insurance Co.

United States District Court, D. New Mexico

February 15, 2018

JAMES O. DEMENTE, Plaintiff,
v.
GEICO GENERAL INSURANCE COMPANY; VICTORIA DILUCENTE; ANTHONY DILUCENTE; and DERICA DUNN-GROSS, Defendants.

          James P. Lyle Law Offices of James P. Lyle Albuquerque, New Mexico Attorneys for the Plaintiff

          Donna L. Chapman Jessica Singer Chapman and Priest, P.C. Albuquerque, New Mexico Attorney for the Defendant GEICO General Insurance Co.

          Kathleen M. Mixon Doughty, Alcaraz, & deGraauw PA Albuquerque, New Mexico Attorney for the Defendants Victoria Dilucente and Anthony Dilucente

          Daniel W. Lewis Allen, Shepard, Lewis & Syra, P.A. Albuquerque, New Mexico Attorney for the Defendant Derica Dunn-Gross

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on: (i) Defendant Derica Dunn-Gross' Second Motion to Dismiss for Insufficient Process, filed April 18, 2017 (Doc. 12) (“Service of Process MTD”); and (ii) Defendant GEICO General Insurance Company's Motion to Dismiss with Prejudice Under Rule 12(b) and Memorandum in Support Thereof, filed April 21, 2017 (Doc. 13)(“MTD”). The Court held a hearing on July 27, 2017. The primary issues are: (i) whether the Court should dismiss Plaintiff James Demente's claims against Defendant Derica Dunn-Gross, because Demente's summons on Dunn-Gross lacked the United States District Court of New Mexico's name, the time within which Dunn-Gross must appear and defend, the Clerk of the Court's signature, and the District of New Mexico's seal; and (ii) whether Demente's settlement with Defendants Victoria Dilucente and Anthony Dilucente precludes Demente's claims under the Unfair Insurance Practice Act (“UIPA”), N.M. Stat. Ann. §§ 59a-16-1 to 30, against GEICO Insurance. The Court concludes that Demente's summons on Dunn-Gross was defective under rule 4(a) of the Federal Rules of Civil Procedure. Nevertheless, the Court, in its discretion, may grant a party additional time to effect proper service and the Court does so here. The Court also concludes that, under Hovet v. Allstate Ins. Co., 2004-NMSC-010, ¶ 26, 89 P.3d 69, 76-77, Demente's UIPA claim is precluded. The Court, therefore, grants the MTD.

         FACTUAL BACKGROUND

         The Court takes the facts from the Complaint for Damages Resulting from Personal Injury, Insurance Bad Faith, Violations of the New Mexico Unfair Trade Practices Act and Punitive Damages, filed May 13, 2016, in Demente v. Dilucente, D-1329-CV-2016-00743, (Thirteenth Judicial District Court, County of Sandoval, State of New Mexico), filed in federal court on March 8, 2017 (Doc. 1)(“Complaint”). As the Court must, it accepts the Complaint's factual allegations as true for the purposes of a motion to dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The Court may also consider facts judicially noticed on a motion to dismiss without converting the motion into one for summary judgment. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 322 (2007)(“[C]ourts must consider the complaint in its entirety, as well as . . . matters of which a court may take judicial notice.”); S.E.C. v. Goldstone, 952 F.Supp.2d 1060, 1191 (D.N.M. 2013)(Browning, J.).

         On August 7, 2014, Demente was driving his vehicle in Rio Rancho, New Mexico. See Complaint ¶ 6, at 2. As he approached NM 528 from Sara Road, the intersection's light changed from green to yellow. See Complaint ¶ 7, at 2. Demente attempted to clear the intersection before the light turned red, but, before he could, A. Dilucente turned his 1993 Ford vehicle in front of Demente. See Complaint ¶¶ 3, 8, at 1-2. The two cars collided. See Complaint ¶ 8, at 2. At the scene, A. Dilucente accepted responsibility for driver inattention and failure to yield the right of way. See Complaint ¶ 10, at 2.

         Subsequently, Demente attempted several times to resolve an insurance claim against V. Dilucente -- the 1993 Ford vehicle's owner. See Complaint ¶¶ 2, 12, at 1-2. GEICO Insurance --V. Dilucente's insurance provider -- covers $100, 000.00 per occurrence in property damage and bodily injury for an accident involving V. Dilucente's vehicle. See Complaint ¶ 22, at 4. GEICO Insurance made several different requests for Demente's medical records and for other information to evaluate Demente's claim. See Complaint ¶ 13, 23 at 3-4. Demente promptly and accurately responded to each GEICO Insurance request. See Complaint ¶ 13, at 3.

         PROCEDURAL BACKGROUND

         Demente filed his complaint in the Thirteenth Judicial District Court, County of Sandoval, State of New Mexico. See Complaint ¶ 1, at 1. Demente sued the Dilucentes for negligence, and he sued GEICO Insurance and its agent, Dunn-Gross, under the UIPA. See Complaint ¶¶ 17-24, at 3-5.[1] GEICO Insurance moved to bifurcate the action and stay the suit as to it pursuant to Martinez v. Reid, 2002-NMSC-015, ¶ 29, 46 P.3d 1237, 1244. See Defendant Geico General Insurance Company's Unopposed Motion to Bifurcate and Stay, filed August 24, 2016, in Demente v. Dilucente, D-1329-CV-2016-00743 (Thirteenth Judicial District Court, County of Sandoval, State of New Mexico), filed in federal court on April 5, 2017 (Doc. 11)(“Stay and Bifurcation Motion”). The state court granted the Stay and Bifurcation Motion which would remain in effect until the underlying negligence cause of action against the Dilucentes was resolved. See Order Granting Defendant Geico General Insurance Company's Unopposed Motion to Bifurcate and Stay, filed September 7, 2016, in Demente v. Dilucente, D- 1329-CV-2016-00743 (Thirteenth Judicial District Court, County of Sandoval, State of New Mexico), filed in federal court on April 5, 2017 (Doc. 11).

         Dunn-Gross subsequently moved to dismiss Demente's claim for insufficiency of service of process. See Defendant Derica Dunn-Gross's Motion to Dismiss for Insufficiency of Service of Process, filed November 14, 2016, in Demente v. Dilucente, D-1329-CV-2016-00743 (Thirteenth Judicial District Court, County of Sandoval, State of New Mexico), filed in federal court on April 5, 2017 (Doc. 11)(“Dunn-Gross MTD”). Dunn-Gross argues that, under the New Mexico Rules of Civil Procedure, Demente failed to properly serve her, because: (i) Demente did not serve her at a location where she was found after she had refused to accept service personally; (ii) Demente did not serve her at her home; (iii) Demente did not mail her a copy of the summons and complaint via first class mail to her home or to her workplace; and (iv) Demente's attempt to serve her through an executive secretary at GEICO Insurance was insufficient, because GEICO Insurance's executive secretary was not authorized to accept service on Dunn-Gross' behalf. See Dunn-Gross MTD at 3.

         After Dunn-Gross filed the Dunn-Gross MTD, Demente settled his negligence claims against the Dilucentes. See MTD ¶ 6, at 2. The state court dismissed those claims with prejudice, but left unresolved those “claims filed against Geico General Insurance Company in relation to . . . insurance bad faith, unfair trade practices, unfair insurance practices, and punitive damages.” Stipulated Order of Partial Dismissal With Prejudice at 1, filed February 24, 2017, in Demente v. Dilucente, D-1329-CV-2016-00743 (Thirteenth Judicial District Court, County of Sandoval, State of New Mexico), filed in federal court on April 5, 2017 (Doc. 11)(“State Order”). GEICO Insurance subsequently removed the case to federal court. See Notice of Removal at 1, filed March 8, 2017 (Doc. 1)(“Notice of Removal”).[2]

         1. Service of Process MTD.

         Dunn-Gross argues that Demente's attempt to serve her after removal is defective, so the Court lacks personal jurisdiction over her. See Service of Process MTD at 3. She contends that the summons is defective in five ways. See Service of Process MTD at 3-4. First, the summons did not contain the federal court's name. See Service of Process MTD at 3-4 (citing Fed.R.Civ.P. 4(a)(1)(A); Fed.R.Civ.P. 12(b)(4)). Second, the summons does not refer to the Federal Rules of Civil Procedure. See Service of Process MTD at 4. Third, it does not contain the time that Dunn-Gross needs to appear to defend herself. See Service of Process MTD at 4. Fourth, the summons does not bear the District of New Mexico's seal. See Service of Process MTD at 4. Fifth, and finally, the Clerk of the Court did not sign the summons. See Service of Process MTD at 4.

         Dunn-Gross also argues that the Court should dismiss the Complaint, because Dunn-Gross was not served within ninety days of the Complaint's filing. See Service of Process MTD at 4 (citing Fed.R.Civ.P. 4(m)). According to Dunn-Gross, Demente first attempted to serve Dunn-Gross five months after he filed the Complaint -- albeit, while the Complaint was pending in state court -- and then attempted to serve Dunn-Gross once the case was removed to federal court -- eleven months after he filed his Complaint. See Service of Process MTD at 4. Dunn-Gross concludes that Demente has not shown good cause for his delay in serving Dunn-Gross, so the Court should dismiss the Complaint. See Service of Process MTD at 4-5.

         2. MTD.

         GEICO Insurance argues that the Court should dismiss the UIPA claims, because, under Hovet v. Allstate, 2004-NMSC-010, ¶ 26, 89 P.3d 69, 76-77, a third party claimant does not have a cause of action under N.M. Stat. Ann. 59A-16-20 “unless and until there has been a judicial determination of the insured's fault.” MTD at 4. According to GEICO Insurance, Hovet v. Allstate precludes Demente's claim, because “the parties settled.” MTD at 4 (citing Hovet v. Allstate, 2004-NMSC-010, ¶ 26, 89 P.3d at 76-77). Moreover, according to GEICO Insurance, the claim is precluded, because Demente stipulated to dismissal of those claims before a judicial determination of A. Dilucente's fault. See MTD at 5.

         3. MTD Response.

         Demente responds to the MTD. See Plaintiff's Response to Defendant's Geico's Motion to Dismiss with Prejudice Under Rule 12(b) and Request that Defendant be Compelled to Comply with the Terms of the Order it Submitted on September 7, 2016 for Bifurcation and Stay in the Thirteenth Judicial District Court (Document No. 13) at 1, filed May 12, 2017 (Doc. 15)(“MTD Response”). Demente argues that GEICO Insurance is liable under N.M. Stat. Ann. § 59A-16-20, which requires insurers to “attempt in good faith to effectuate prompt, fair and equitable settlements of an insured's claims in which liability has become reasonably clear.” MTD Response at 5 (citing N.M. Stat. Ann. § 59A-16-20(E)). Demente contends that he has a statutory right to sue for damages if an insurer violates N.M. Stat. Ann. § 59A-16-20(E). See MTD Response at 5-6 (citing N.M. Stat. Ann. § 59A-16-30). Demente adds that these laws' purposes are to “protect[] innocent accident victims from financial hardship.” MTD Response at 7-8 (citing Estep v. State Farm Mutual Automobile Insurance Co., 1985-NMSC-069, ¶ 17, 703 P.2d 882, 887).

         Demente concedes that a “third-party claimant will not even have an action under Section 59A-16-20(E), unless and until there has been a judicial determination of the insured's fault and the amount of damages awarded in the underlying negligence action.” MTD Response at 9. He argues, however, that the Court should enforce GEICO Insurance's Stay and Bifurcation motion. See MTD Response at 10. Demente argues that, by enforcing that Stay and Bifurcation motion, GEICO Insurance will remain liable under N.M. Stat. Ann. § 59A-16-20(E). See MTD Response at 10-12. Demente concludes that GEICO Insurance's attorney should be sanctioned or, at least, “chastised” for their “frivolous defense.” MTD Response at 12.

         4. Service of Process MTD Response.

         Demente also responds to Dunn-Gross' Service of Process MTD. See Plaintiff's Response to Defendant Dunn-Gross' Motion to Dismiss for Insufficient Process (Document No. 12), filed May 16, 2017 (Doc. 17)(“Service of Process MTD Response”). Demente argues that Dunn-Gross was aware of the lawsuit “as early as March, 2016, ” and was served not once, but four different times before GEICO Insurance removed the case to federal court. Service of Process MTD Response at 1. He argues that the process served on Dunn-Gross satisfies the New Mexico Rules of Civil Procedure. See Service of Process Response at 5 (citing N.M. Rules Ann. 1-004). First, he argues that process was proper, because it included the court's name, where he brought the action, the county, the docket number, the names of the parties, and the names of the person to whom process is directed. See Service of Process Response at 5 (citing N.M. Rules Ann. 1-004(A)-(B)). Second, he argues that service was made by mail and in person upon someone who was authorized to accept service. See Service of Process Response at 5. Third, Demente argues that he served Dunn-Gross several times “at her usual place of abode.” Service of Process MTD Response at 6. He contends that, because Dunn-Gross has a “mobile lifestyle and can be found in multiple locations, ” serving her in many locations satisfies New Mexico's service of process rules. Service of Process MTD Response at 6. Demente concludes that Dunn-Gross “has been dodging service, ” and he asks the Court to deny the Service of Process MTD and award fees. Service of Process MTD Response at 6.

         5. MTD Reply.

         GEICO Insurance replies. See Reply in Support of Motion to Dismiss with Prejudice Under Rule 12(b)(6), filed May 23, 2017 (Doc. 18)(“MTD Reply”). It reiterates its argument that Demente's UIPA claims fail, because there was no judicial determination of fault in the underlying negligence case against the Dilucentes. See Reply at 2-4. GEICO Insurance also argues that its payment of the entire available policy limit does not amount to a judicial fault determination. See Reply at 5. It concludes that Hovet v. Allstate Inc. Co., 2004-NMSC-010, ¶ 26 89 P.3d 69, 76-77 dictates that the Court should dismiss the Complaint. See Reply at 6.

         6. Service of Process Reply.

         Dunn-Gross replies. See Defendant Derica Dunn-Gross' Reply in Support of Her Second Motion to Dismiss for Insufficient Process, filed June 9, 2017 (Doc. 20)(“Service of Process Reply”). Dunn-Gross argues that Demente did not respond to any of her arguments. See Service of Process Reply at 1. She contends that there is no dispute that Demente attempted to serve her on March 31, 2017, but that the summons did not comply with the Federal Rules of Civil Procedure. See Service of Process Reply at 1-2. She adds that Demente did not argue that there was good cause for an extension under rule 4(m), so the Court should not allow Demente to amend his summons. See Service of Process Reply at 2-3. Dunn-Gross concludes that, for the foregoing reasons, the Court should dismiss Demente's Complaint. See Service of Process Reply at 3.

         7. The Hearing.

         The Court held a hearing. See Draft Transcript of Motion Proceedings (taken July 27, 2017)(“Tr.”).[3] Dunn-Gross first argued that service on her was improper. See Tr. at 3:5-12 (Lewis). She argued that, while the case was still pending in state court, service “was attempted at [Dunn-Gross'] place of employment in Richardson, Texas, ” Tr. at 3:10-11 (Lewis), and, in response to that service, Dunn-Gross filed a motion “point[ing] out the defects” in service, Tr. at 3:18-19 (Lewis). According to Dunn-Gross, the New Mexico rules allow for service of process on a person's place of employment, “but only after two other attempts or kinds of service have been attempted.” Tr. at 3:24-4:3 (Lewis). Dunn-Gross then argues that the service attempted at her place of employment was also defective, because it was served on a Laura Hernandez -- a GEICO Insurance executive secretary -- who was not authorized to accept service for Dunn-Gross; according to Dunn-Gross, Hernandez told the process server that she was not authorized to accept for Dunn-Gross. See Tr. at 4:11-24 (Lewis).

         Dunn-Gross also argued that the attempt to serve her after the case was removed to federal court is also defective. See Tr. at 5:11-13 (Lewis). Dunn-Gross conceded that she was served the second time at her home, see Tr. at 5:10-11 (Lewis), but contended that this service was defective, because the summons did not “put her on notice in any way, shape, or form that the matter is pending in this court, ” Tr. at 6:1-3 (Lewis). Dunn-Gross pressed, however, that “notice is not simply the test. Because that's essentially what plaintiff argues in the response.” Tr. at 6:5-7 (Lewis). Instead, Dunn-Gross argued, “technical compliance with rule 4 is required.” Tr. at 6:8-9 (Lewis). Dunn-Gross also contended that the service of process' timing is defective, see Tr. at 7:11-13 (Lewis), but she conceded that “maybe the removal complicates that somewhat, ” Tr. at 7:13-14 (Lewis).

         Despite those arguments, Dunn-Gross conceded that “the court[] has discretion to give plaintiff a time period in which to effect proper service, ” Tr. at 10:5-7 (Lewis), and agreed that she did not have an issue with the Court setting a time for Demente to serve Dunn-Gross, see Tr. at 10:16-11:1 (Lewis)(“[If] the court in its discretion wants to give a reasonable time period for them to effect proper service, . . . that's certainly allowable and I wouldn't object to that.”). Dunn-Gross suggested twenty or twenty-one days as a reasonable time frame. See Tr. at 11:5-7 (Lewis).

         Demente asserted that service of process was properly executed, but did not see “any reason to waste more time on this.” Tr. at 11:21-22 (Lyle). Demente proposed a sixty day window to re-execute proper service. See Tr. at 11:25-12:1 (Lyle). The Court, accordingly gave the “plaintiff 60 days” to properly serve Dunn-Gross. Tr. at 13:15-17 (Court).

         GEICO Insurance then argued the MTD. See Tr. at 14:5 (Singer). It reiterated its argument that the Court should dismiss Demente's UIPA claim, because “plaintiff has failed to obtain a judicial determination of liability.” Tr. at 14:8-10 (Singer). GEICO Insurance contends that the State Order dismissing Demente's negligence claims against the Dilucentes did not “indicate[] that a determination of liability or fault had been reached.” Tr. at 15:12-15 (Singer). According to GEICO Insurance, Demente's “claim did not become ripe nor will they ever do so because plaintiff chose to settle rather than litigate his claims.” Tr. at 16:1-3 (Singer). Dunn-Gross added that, although she had not yet been served, “as a practical effect, your ruling on this would have the same [ef]fect on her.” Tr. at 18:25-19:3 (Lewis).

         The Court asked whether there was “any way to settle with a judicial determination or do you have to go to a jury trial.” Tr. at 22:8-10 (Court). Dunn-Gross mused that it was “conceivable, ” but expressed that she is not sure why an “insurance company would agree to do that.” Tr. at 22:13-16 (Lewis). She argued that an insurance company's motivation for settling would be to “avoid this very kind of claim.” Tr. at 22:16-20 (Lewis). She argued that, for the Stay and Bifurcation Motion to have the effect of keeping the UIPA claims alive, the State Order dismissing the negligence claims would need explicit language to that effect. See Tr. at 23:16-24:1(Lewis).

         Demente rejoined that “[w]hat makes this situation unique is that GEICO . . . set the rules as to how things would happen. GEICO . . . drafted the orders that were approved in the state district court.” Tr. at 26:4-9 (Lyle). He contended that this situation is “not addressed in any New Mexico case law, ” and, therefore, that New Mexico precedent does not bind the Court. Tr. at 26:10-13. According to Demente, GEICO Insurance's low settlement offer is exactly why the “Insurance Practices Act” exists. Tr. at 29:7-8 (Lyle). Demente also argued that the Court could hold an evidentiary hearing on whether there was fault, so that the claims could proceed against GEICO Insurance. See Tr. at 29:21-30:8 (Lyle). Demente conceded again, as he did in his MTD Response, see MTD Response at 9, that there must be a judicial determination of fault before a plaintiff may proceed on an UIPA claim, see Tr. at 30:18 (Lyle), but reiterated that GEICO Insurance's control over the State Order dismissing Demente's claims allows Demente to proceed with his UIPA claim, see Tr. at 30:21-31:5 (Lyle). Demente also argued that New Mexico caselaw does not bind the Court, because GEICO Insurance had settled for the policy limits. See Tr. 33:13-18 (Lyle). Responding to whether the Court should dismiss Dunn-Gross on the same grounds if the Court dismisses GEICO Insurance, Demente noted that “it would seem to make se[nse], but there may be some other considerations.” Tr. at 41:15-16 (Lyle). The Court concluded by signaling its inclination to dismiss the UIPA claims. See Tr. at 43:2-4 (Court).

         LAW REGARDING RULE 12(B)(6)

         Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a court to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). The Complaint's sufficiency is a question of law, and, when considering a rule 12(b)(6) motion, a court must accept as true all well-pled factual allegations in the complaint, view those allegations in the light most favorable to the nonmoving party, and draw all reasonable inferences in the plaintiff's favor. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)(“[O]nly if a reasonable person could not draw . . . an inference [of plausibility] from the alleged facts would the defendant prevail on a motion to dismiss.”); Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)(“[F]or purposes of resolving a Rule 12(b)(6) motion, we accept as true all well-pled factual allegations in a complaint and view these allegations in the light most favorable to the plaintiff.”)(citing Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir. 2006)).

         A complaint need not set forth detailed factual allegations, yet a “pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action” is insufficient. Ashcroft v. Iqbal, 556 U.S. at 678 (2009)(citing Bell Atl. Corp. v. Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. at 678. “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. at 555.

         To survive a motion to dismiss, a plaintiff's complaint must contain sufficient facts that, if assumed to be true, state a claim to relief that is plausible on its face. See Bell Atl. Corp. v. Twombly, 550 U.S. at 570; Mink v. Knox, 613 F.3d 995, 1000 (10th Cir. 2010). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. at 556). “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complainant must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)(emphasis omitted). The United States Court of Appeals for the Tenth Circuit has stated:

“[P]lausibility” in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs “have not nudged their claims across the line from conceivable to plausible.” The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.

Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008)(citations omitted)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570). See Gallegos v. Bernalillo Cty. Board of Cty. Comm'rs, __ F.Supp.3d __, 2017 WL 4402422, at *9 (D.N.M. 2017)(Browning, J.).

         “When a party presents matters outside of the pleadings for consideration, as a general rule ‘the court must either exclude the material or treat the motion as one for summary judgment.'” Brokers' Choice of America, Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017)(quoting Alexander v. Oklahoma, 382 F.3d 1206, 1214 (10th Cir. 2004)). There are three limited exceptions to this general principle: (i) documents that the complaint incorporates by reference, see Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); (ii) “documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity, ” Jacobsen v. Deseret Book Co., 287 F.3d at 941; and (iii) “matters of which a court may take judicial notice, ” Tellabs, Inc. v. Makor Issues & Rights, Ltd. 551 U.S. at 322. See also Brokers' Choice of America, Inc. v. NBC Universal, Inc., 861 F.3d at 1103 (holding that the district court did not err by reviewing a seminar recording and a TV episode on a rule 12(b)(6) motion, which were “attached to or referenced in the amended complaint, ” central to the plaintiff's claim, and “undisputed as to their accuracy and authenticity”). “[T]he court is permitted to take judicial notice of its own files and records, as well as facts which are a matter of public record.” Van Woudenberg v. Gibson, 211 F.3d 560, 568 (10th Cir. 2000), abrogated on other grounds by McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001).

         In Gee v. Pacheco, 627 F.3d 1178 (10th Cir. 2010), the defendants “supported their motion with numerous documents, and the district court cited portions of those motions in granting the [motion to dismiss].” 627 F.3d at 1186. The Tenth Circuit held that “[s]uch reliance was improper” and that, even if “the district court did not err initially in reviewing the materials, the court improperly relied on them to refute Mr. Gee's factual assertions and effectively convert the motion to one for summary judgment.” 627 F.3d at 1186-87. In other cases, the Tenth Circuit has emphasized that, “[b]ecause the district court considered facts outside of the complaint, however, it is clear that the district court dismissed the claim under Rule 56(c) and not Rule 12(b)(6).” Nard v. City of Okla. City, 153 F. App'x 529, 534 n.4 (10th Cir. 2005)(unpublished).[4] In Douglas v. Norton, 167 F. App'x 698 (10th Cir. 2006)(unpublished), the Tenth Circuit addressed an untimely filed charge with the Equal Employment Opportunity Commission -- which the Tenth Circuit analogized to a statute of limitations -- and concluded that, because the requirement was not jurisdictional, the district court should have analyzed the question under rule 12(b)(6), and “because the district court considered evidentiary materials outside of Douglas' complaint, it should have treated Norton's motion as a motion for summary judgment.” 167 F. App'x at 704-05.

         The Court has previously ruled that, when a plaintiff references and summarizes statements from defendants in a complaint for the purpose of refuting the statements the Court cannot rely on documents the defendants attach to a motion to dismiss which contain their un-redacted statements. See Mocek v. City of Albuquerque, No. Civ. 11-1009, 2013 WL 312881, at *50-51 (D.N.M. Jan. 14, 2013)(Browning, J.). The Court reasoned that the statements were neither incorporated by reference nor central to the plaintiff's allegations in the complaint, because the plaintiff cited the statements only to attack their reliability and truthfulness. See 2013 WL 312881, at *50-51. The Court has also previously ruled that, when determining whether to toll a statute of limitations in an action alleging fraud and seeking subrogation from a defendant, the Court may not use interviews and letters attached to a motion to dismiss, which show that a plaintiff was aware of the defendant's alleged fraud before the statutory period expired. See Great Am. Co. v. Crabtree, No. 11-1129, 2012 WL 3656500, at *3, *22-23 (D.N.M. Aug. 23, 2012)(Browning, J.). The Court determined that the documents did not fall within any of the Tenth Circuit's exceptions to the general rule that a complaint must rest on the sufficiency of its contents alone, as the complaint did not incorporate the documents by reference or refer to the documents. See 2012 WL 3656500, at *22-23; Mocek v. City of Albuquerque, 2013 WL 312881, at *50 (refusing to consider statements that were not “central to [the plaintiff's] claims”).

         On the other hand, in a securities class action, the Court has ruled that a defendant's operating certification, to which plaintiffs refer in their complaint, and which is central to whether the plaintiffs' adequately alleged a loss, falls within an exception to the general rule, so the Court may consider the operating certification when ruling on the defendant's motion to dismiss without converting the motion into one for summary judgment. See Genesee Cty. Emps.' Retirement Sys. v. Thornburg Mortg. Secs. Trust 2006-3, 825 F.Supp.2d 1082, 1150-51 (D.N.M. 2011)(Browning, J.); Mata v. Anderson, 760 F.Supp.2d 1068, 1101 (D.N.M. 2009)(Browning, J.)(relying on documents outside of the complaint because they were “documents that a court can appropriately view as either part of the public record, or as documents upon which the Complaint relies, and the authenticity of which is not in dispute”); S.E.C. v. Goldstone, 952 F.Supp.2d 1060, 1217-18 (D.N.M. 2013)(Browning, J.)(considering, on a motion to dismiss, electronic mail transmissions referenced in the complaint as “documents referred to in the complaint, ” which are “central to the plaintiff's claim” and whose authenticity the plaintiff did not challenge).

         LAW REGARDING JUDICIAL NOTICE OF DOCUMENTS WHEN RULING ON A MOTION TO DISMISS

         Rule 201 of the Federal Rules of Evidence allows a court to, at any stage of the proceeding, take notice of “adjudicative” facts that fall into one of two categories: (i) facts that are “generally known within the territorial jurisdiction of the trial court”; or (ii) facts that are “capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b), (f). “Adjudicative facts are simply the facts of the particular case.” United States v. Wolny, 133 F.3d 758, 764 (10th Cir. 1998)(quoting Advisory Committee Notes to rule 201). A court has discretion to take judicial notice of such facts, regardless whether requested. See Fed.R.Evid. 201(c). On the other hand, if a party requests that the court take judicial notice of certain facts, and supplies the necessary information to the court, judicial notice is mandatory. See Fed.R.Evid. 201(d). Also, if the parties timely request an opportunity to be heard, the Court must grant such an opportunity “as to the propriety of taking judicial notice and the tenor of the matter noticed.” Fed.R.Evid. 201(e). That judicial notice may be taken during any stage of the judicial proceeding includes the motion to dismiss stage. See 21 B C. Wright & K. Graham, Jr., Fed. Prac. & Proc. Evid. § 5110, at 294 & n.17 (2d ed. 2005). Moreover, while ordinarily a motion to dismiss must be converted to a motion for summary judgment when the court considers matters outside the complaint, see Fed.R.Civ.P. 12(d), matters that are judicially noticeable do not have that effect, see Duprey v. Twelfth Judicial Dist. Court, No. 08-0756, 2009 WL 2482171, at *7 (D.N.M. July 27, 2009)(Browning, J.)(citing Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279 n.1 (10th Cir. 2004)). Also, when considering a motion to dismiss, “the court is permitted to take judicial notice of its own files and records, as well as facts which are a matter of public record.” Van Woudenberg v. Gibson, 211 F.3d 560, 568 (10th Cir. 2000), abrogated on other grounds by, McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001). The documents judicially noticed, however, should not be considered for the truth of the matters asserted therein. See Tal v. Hogan, 453 F.3d 1244, 1265 n.24 ...


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