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Raja v. Ohio Security Insurance Co.

United States District Court, D. New Mexico

March 31, 2018

NARESH RAJA d/b/a AMERICA'S BEST VALUE INN, Plaintiff,
v.
OHIO SECURITY INSURANCE COMPANY; LIBERTY MUTUAL INSURANCE COMPANY and JEFFERY ROBINSON, Defendants.

          Milad K. Farah Guerra & Farah, PLLC El Paso, Texas Attorneys for the Plaintiff

          Shannon A. Parden Ray, McChristian & Jeans, P.C. Albuquerque, New Mexico Attorneys for the Defendants

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on Defendants Ohio Security Insurance Company and Liberty Mutual Insurance Company's Motion to Dismiss and for Declaratory Judgment and Supporting Authority, filed August 22, 2017 (Doc. 6)(“MTD”). The primary issues are: (i) whether the Court should dismiss the Complaint (Third Judicial District Court, County of Doña Ana, State of New Mexico, filed May 22, 2017), filed in federal court August 15, 2017 (Doc. 1-4), because Plaintiff Naresh Raja[1] d/b/a America's Best Value Inn (“Value Inn”) failed to meet its contractual conditions precedent for filing suit against Defendants Ohio Security Insurance Company, Liberty Mutual Insurance Company, and Jeffery Robinson (“Liberty Mutual”); (ii) whether Value Inn states claims upon which the Court can grant relief under rule 12(b)(6) of the Federal Rules of Civil Procedure for breach of contract, insurance bad faith, violations of New Mexico's Unfair Insurance Practices Act, N.M. Stat. Ann. §§ 59A-16-1 to -30 (“UIPA”), violations of New Mexico's Unfair Practices Act, N.M. Stat. Ann. §§ 57-12-1 to -26 (“UPA”), and negligent misrepresentation; (iii) whether the Court should abate the action to allow the parties to complete appraisal on Value Inn's property damage claim; and (iv) whether to award attorneys' fees. The Court concludes that: (i) it will not dismiss the Complaint for Value Inn's failure to meet conditions precedent to filing suit, because there is a substantial likelihood that Value Inn will be time barred from filing a complaint alleging these claims again in the future; (ii) Value Inn states a claim for breach of contract, insurance bad faith, and some UIPA violations; (iii) Value Inn does not state a claim for UPA violations, negligent misrepresentation, or some UIPA violations, because Value Inn does not allege facts supporting those claims; (iii) the Court will not abate the action; and (iv) the Court will not award attorneys' fees because Value Inn's unsuccessful UIPA claims were not groundless and its UPA claims were not groundless. Accordingly, the Court grants in part and denies in part the MTD.

         FACTUAL BACKGROUND

         Value Inn purchased insurance from Liberty Mutual that covered wind and hail damage to its commercial property in Las Cruces, New Mexico. See Complaint ¶ 6, at 2. The Building and Personal Property Coverage Form and Commercial Property Conditions, filed August 22, 2017 (Doc. 6-1)(“Contract”) has an appraisal provision that states:

If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding.

Contract ¶ E(2), at 8 (“Appraisal Clause”). The Contract also lists several “Duties In The Event Of Loss Or Damage”:

a. You must see that the following are done in the event of loss or damage to Covered Property:
(5) At our request, give us complete inventories of the damaged and undamaged property. Include quantities, costs, values and amount of loss claimed.
(6) As often as may be reasonably required, permit us to inspect the property proving the loss or damage and examine your books and records. . . .
(7) Send us a signed, sworn proof of loss containing the information we request to investigate the claim. You must do this within 60 days after our request. We will supply you with the necessary forms.
(8) Cooperate with us in the investigation or settlement of the claim.
b. We may examine any insured under oath, while no in the presence of any other insured and at such times as may be reasonably required, about any matter relating to this insurance or the claim, including an insured's books and records. In the event of an examination, an insured's answers must be signed.

Contract ¶¶ 3(a)-(b), at 8. The Contract also states:

         No one may bring a legal action against us under this Coverage Part unless:

1. There has been full compliance with all the terms of this Coverage Part; and
2. The action is brought within 2 years after the date on which the direct physical loss or damage occurred.

Contract ¶ D, at 10.

         On or about October 23, 2015, the Value Inn's property sustained wind and hail damage. See Complaint ¶ 7, at 2-3. Value Inn filed a claim with Liberty Mutual, but Value Inn believed that the damage exceeded the $130, 301.56 estimate that Liberty Mutual's adjuster, Jeffery Robinson, provided. See Complaint ¶ 8-9, at 3. Value Inn requested a settlement conference with Liberty Mutual, and Liberty Mutual requested an Examination Under Oath (“EUO”) of Value Inn. Complaint ¶ 10, at 3.

         PROCEDURAL BACKGROUND

         On May 22, 2017, Value Inn filed the Complaint in state court alleging that Liberty Mutual breached its contract, see Complaint ¶¶ 15-18, at 6-7; acted in bad faith, see Complaint ¶¶ 19-20, at 7-8; violated New Mexico's UIPA; violated New Mexico's UPA, see Complaint ¶¶ 25-27, at 9-10; and made negligent misrepresentations, see Complaint ¶¶ 28-29, at 10-11. Value Inn also sought a court order declaring that an EUO “is not appropriate in this matter and that this claim proceed through the appraisal process in the policy.” Complaint ¶ 38(a), at 12. Liberty Mutual removed the case to federal court, asserting that the Court has diversity jurisdiction. See Notice of Removal ¶ 2, at 1-2.

         1. The Motion to Dismiss.

         In their MTD, Liberty Mutual asserts that, under their Contract, Value Inn may not bring a legal action against Liberty Mutual or request an appraisal unless Value Inn has fully complied with the Contract's terms. See MTD at 7-8. According to Liberty Mutual, Value Inn has not complied with the Contract's terms, because it has refused to give an EUO or provide certain requested documents. See MTD at 7-8. Liberty Mutual concludes that, because Value Inn has not met the “conditions precedent” to bringing a legal action or demanding an appraisal, Value Inn has failed to state a claim upon which relief may be granted. See MTD at 13.

         Next, Liberty Mutual argues that Value Inn's claims for breach of contract and bad faith do not state a plausible claim, because Value Inn makes conclusory allegations that recite UIPA provisions “without regard to applicability or any factual basis.” MTD at 13. Liberty Mutual also contends that Value Inn's recitations of UIPA provisions are irrelevant to the breach-of-contract and insurance bad-faith claims, because those claims arise out of contract. See MTD at 13-14. Liberty Mutual contends, moreover, that Value Inn's breach-of-contract and bad-faith claims are premature, “because Plaintiff refuses to allow Liberty Mutual to conduct its investigation.” MTD at 14.

         As for Value Inn's UIPA violation claim, Liberty Mutual argues Value Inn has not stated a claim upon which relief can be granted, because Value Inn does not allege any facts to support its conclusory allegations. See MTD at 16-17.

         Liberty Mutual next addresses Value Inn's UPA claim. See MTD at 17-21. Liberty Mutual argues that UPA claims require proving deceptive practices in the sale of a product, see MTD at 18-19, but Value Inn does not allege unfair practices relating to the insurance policy's sale, see MTD at 20. Liberty Mutual requests that the Court award Liberty Mutual attorneys' fees and costs for defending Value Inn's allegedly baseless UPA claims. See MTD at 21.

         Next, Liberty Mutual argues that Value Inn does not “set forth the elements” of its negligent misrepresentation claim. MTD at 21. Liberty Mutual contends that Value Inn appears to be alleging a simple negligence claim, but, nonetheless, does not allege simple negligence's elements. See MTD at 21. Moreover, Liberty Mutual contends that the Court previously made an Erie prediction under Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938) that “‘New Mexico does not recognize a cause of action for negligence or professional negligence against an insurance company.'” MTD at 21-22 (quoting Grasshopper Natural Medicine, LLC v. Hartford Cas. Ins. Co., 2016 WL 4009834, *29 (D.N.M. July 7, 2016)(Browning, J)). Liberty Mutual concludes that, because New Mexico does not recognize negligence claims against an insurer, Value Inn's negligence or negligent misrepresentation claim does not state a claim upon which relief can be granted. See MTD at 22.

         Liberty Mutual concludes by asking the Court to declare that Value Inn's legal action and request for appraisal are premature, dismiss Value Inn's Complaint in its entirety for failure to state a claim upon which relief can be granted, and award Liberty Mutual its fees for defending Value Inn's baseless UPA and UIPA claims. See MTD at 22-23.

         2. The Response.

         In the Plaintiff's Response to Defendants' Motion to Dismiss and Plaintiff's Plea in Abatement, filed August 28, 2017 (Doc. 9)(“Response”), Value Inn contends that it has agreed to submit to an EUO and that the EUO is set for September 1, 2017. See Response ¶ 5, at 2. Value Inn continues that Liberty Mutual's EUO request letter is “extremely broad and unduly burdensome and appears to be for the purpose of attempting to dissuade him from continuing with his claim, ” but, nonetheless, Value Inn asserts that it has agreed to “produce certain documents and proceed with the EUO, cooperating in document production to the full extent reasonably possible.” Response ¶ 5, at 2-3. Value Inn also contends that its appraisal demand is valid under the policy provisions, but that Liberty Mutual has “refused to engage in appraisal pending the EUO.” Response ¶ 5, at 3.

         Value Inn notes that the policy has a limitations provision barring legal action against Liberty Mutual after two years from the loss or damage date. See Response ¶ 8, at 4. Consequently, Value Inn contends, it had “no choice” but to file suit when it did. Response ¶ 8, at 4. Value Inn asserts that many courts have refused to uphold limitations provisions that are tied to the date of occurrence and not to the date on which the cause of action accrues. See Response ¶ 9, at 4. Value Inn concludes that the “limitations clause in the subject policy should be held void as against public policy.” Response ¶ 10, at 5 (citing Spicewood Summit Office Condominiums Ass'n, Inc. v. American First Lloyd's Ins. Co., 287 S.W.3d 461, 465 (Tex. App. 2009)).

         Value Inn concludes that the “proper remedy” at this point is for the Court to “abate the case pending the additional investigation requested by Defendant and the appraisal.” Response ¶ 11, at 5 (citing Vanguard v. Smith, 999 S.W.2d 448 (Tex. App. 1999)). Value Inn contends that allowing the EUO and appraisal processes to proceed will likely resolve many of the points of dispute in this case. See Response ¶ 12, at 5. Value Inn asserts that dismissing the case would “deprive Plaintiff to his right to Due Process and expose Plaintiff to a potential limitations argument” for its claims. Response ¶ 13, at 5. Value Inn next argues that awarding Liberty Mutual its attorneys' fees is not appropriate. See Response ¶ 15, at 5-6. Value Inn argues that, given the “wide disparity” between their damage estimates, there is a good-faith basis that Liberty Mutual violated the UIPA and the UPA. Response ¶ 15 at 6. Value Inn asserts that discovery “into the training and methods of the adjusters assigned to the claim and all information in their possession will be needed in order to garner evidence of these allegations.” Response ¶ 15 at 6. Value Inn also asks that, if the Court dismisses the suit, it do so without prejudice. See Response ¶ 16(c), at 6.

         3. The Reply.

         Liberty Mutual replies. See Ohio Security Insurance Company and Liberty Mutual Insurance Company's Reply in Support of Motion to Dismiss and for Declaratory Judgment (Doc. 6) and Response to Plaintiff's Plea for Abatement (Doc. 9), filed September 11, 2017 (Doc. 12)(“The Reply”). Liberty Mutual argues that Value Inn, in the Response, effectively concedes that its Complaint is premature, because Value Inn does not address Liberty Mutual's prematurity arguments. See Reply at 3. Liberty Mutual further contends that Value Inn's request for the Court to order Liberty Mutual to conduct an appraisal is moot, because, after Value Inn filed its Response, it submitted to an EUO and provided requested documents, and Liberty Mutual agreed to an appraisal. See Reply at 4. “Furthermore, in the absence of any appraisal award and any additional investigation relevant to appraisal, Plaintiff's claims remain premature and fail to state a claim.” Reply at 4.

         Next, Liberty Mutual revisits its argument that the Court should dismiss Value Inn's breach claims for breach of contract, insurance bad faith, and UPA and UIPA violations for failing to state a claim. See Reply at 5. Liberty Mutual adds that Value Inn's contract claims are premature not only because it has not met the conditions precedent for taking this legal action, but because its claims remain premature “as appraisal is now agreed to [but] has not been completed.” Reply at 5. Liberty Mutual asserts that Value Inn provides no authority for its argument that Liberty Mutual's refusal to engage in appraisal pending the EUO “is a violation of policy conditions and Liberty Mutual's duties after loss.” Reply at 6 (citing Response ¶ 5, at 2-3; D.N.M.LR-Civ. 7.3(a)).

         Liberty Mutual asserts that Value Inn's UIPA claim remains premature, because Value Inn “only recently gave his EUO and provided documentation, ” and Liberty Mutual has not yet completed an appraisal. Reply at 7. Liberty Mutual also contends that Value Inn's argument that the disparity in their loss estimates establishes a good-faith basis to assert UIPA and UPA violations lacks support in the law. See Reply at 7. According to Liberty Mutual, an insurer is entitled to dispute an issue “if it is fairly debatable or if it believes the claim is overvalued.” Reply at 7 (citing United Nuclear Corp. v. Allendale Mut. Ins. Co., 1985-NMSC-090, ¶ 17, 709 P.2d 649, 654).

         Liberty Mutual also asserts that Value Inn does not address the majority of its arguments against its UIPA and UPA violation claims, or the arguments against its negligent misrepresentation claim, and, therefore, concedes the arguments. See Reply at 7- 9.

         Next, Liberty Mutual requests that the Court deny Value Inn's plea for abatement and dismiss the case as premature and/or moot. See Reply at 10. Liberty Mutual argues that “filing a lawsuit ahead of a limitations period to preserve a claim that has not accrued” is not sufficient reason for the Court to determine that Value Inn has met the pleading standard in Bell Atlantic v. Twombly, 550 U.S. 544 (2007)(“Twombly”). Reply at 10. Liberty Mutual asserts:

Allowing a party to file a suit in anticipation of a breach of contract that may not even occur is a dangerous precedent that would promote the filing of any premature lawsuit, regardless of whether or not a cause of action has accrued. Filing premature lawsuits would weigh against the interests of judicial economy and is unfair and, therefore, prejudicial to a defendant.

         Reply at 10. Moreover, Liberty Mutual argues, “preserving a timely limitations defense is not a legal reason to decline to dismiss this case for failure to state a claim.” Reply at 11.

         LAW REGARDING RULE 12(b)(1)

         “Federal courts are courts of limited jurisdiction; they are empowered to hear only those cases authorized and defined in the Constitution which have been entrusted to them under a jurisdictional grant by Congress.” Henry v. Office of Thrift Supervision, 43 F.3d 507, 511 (10th Cir. 1994)(citations omitted). A plaintiff generally bears the burden of demonstrating the court's jurisdiction to hear his or her claims. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 104 (1998)(“[T]he party invoking federal jurisdiction bears the burden of establishing its existence.”). Rule 12(b)(1) allows a party to raise the defense of the court's “lack of jurisdiction over the subject matter” by motion. Fed.R.Civ.P. 12(b)(1). The Tenth Circuit has held that motions to dismiss for lack of subject-matter jurisdiction “generally take one of two forms: (1) a facial attack on the sufficiency of the complaint's allegations as to subject-matter jurisdiction; or (2) a challenge to the actual facts upon which subject matter jurisdiction is based.” Ruiz v. McDonnell, 299 F .3d 1173, 1180 (10th Cir. 2002).

On a facial attack, a plaintiff is afforded safeguards similar to those provided in opposing a rule 12(b)(6) motion: the court must consider the complaint's allegations to be true. See Ruiz v. McDonnell, 299 F.3d at 1180; Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir. 1981). But when the attack is aimed at the jurisdictional facts themselves, a district court may not presume the truthfulness of those allegations. A court has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1). In such instances, a court's reference to evidence outside the pleadings does not convert the motion to a Rule 56 motion.

Hill v. Vanderbilt Capital Advisors, LLC, No. CIV 10-0133, 2011 WL 6013025, at *8 (D.N.M. Sept. 30, 2011)(Browning, J.)(quoting Alto Eldorado Partners v. City of Santa Fe, 2009 WL 1312856, at *8-9). The United States Court of Appeals for the Fifth Circuit has stated:

[T]he trial court may proceed as it never could under 12(b)(6) or Fed.R.Civ.P. 56. Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction --its very power to hear the case -- there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.

Williamson v. Tucker, 645 F.2d 404, 412-13 (5th Cir. 1981)(quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)).

         When making a rule 12(b)(1) motion, a party may go beyond the allegations in the complaint to challenge the facts upon which jurisdiction depends, and may do so by relying on affidavits or other evidence properly before the court. See New Mexicans for Bill Richardson v. Gonzales, 64 F.3d 1495, 1499 (10th Cir. 1995); Holt v. United States, 46 F.3d 1000, 1003 (10th Cir. 1995). In those instances, a court's reference to evidence outside the pleadings does not necessarily convert the motion to a rule 56 motion for summary judgment. See Holt v. United States, 46 F.3d at 1003 (citing Wheeler v. Hurdman, 825 F.2d 257, 259 n.5 (10th Cir. 1987)).

         Where, however, the court determines that jurisdictional issues raised in a rule 12(b)(1) motion are intertwined with the case's merits, the court should resolve the motion under either rule 12(b)(6) of the Federal Rules of Civil Procedure or rule 56 of the Federal Rules of Civil Procedure. See Franklin Sav. Corp. v. United States, 180 F.3d 1124, 1129 (10th Cir. 1999); Tippett v. United States, 108 F.3d 1194, 1196 (10th Cir. 1997). “When deciding whether jurisdiction is intertwined with the merits of a particular dispute, ‘the underlying issue is whether resolution of the jurisdictional question requires resolution of an aspect of the substantive claim.'” Davis ex rel. Davis v. United States, 343 F.3d 1282, 1296 (10th Cir. 2003)(quoting Sizova v. Nat'l Inst. of Standards & Tech., 282 F.3d 1320, 1324 (10th Cir. 2002)).

         LAW REGARDING RULE 12(b)(6)

         Rule 12(b)(6) 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)(Brorby, J.). The sufficiency of a complaint 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 non-moving 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)(Briscoe, J.)(“[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)(McKay, J.)).

         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 (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 (citation omitted).

         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)(Kelly, J.)(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)(McConnell, J.)(citations omitted)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570).

         Although affirmative defenses must generally be pled in the defendant's answer, not argued on a motion to dismiss, see Fed.R.Civ.P. 8(c), there are exceptions. First, a defendant can argue an affirmative defense on a motion to dismiss where the defendant asserts an immunity defense -- the courts handle these cases differently than other motions to dismiss. See Glover v. Gartman, 899 F.Supp.2d 1115, 1137-39, 1141 (D.N.M. 2012)(Browning, J.)(citing Pearson v. Callahan, 555 U.S. 223 (2009)); Robbins v. Oklahoma, 519 F.3d at 1247. Second, the defendant can raise the defense on a motion to dismiss where the facts establishing the affirmative defense are apparent on the face of the complaint. See Miller v. Shell Oil Co., 345 F.2d 891, 893 (10th Cir. 1965)(Hill, J.)(“Under Rule 12(b), a defendant may raise an affirmative defense by a motion to dismiss for the failure to state a claim. If the defense appears plainly on the face of the complaint itself, the motion may be disposed of under this rule.”). The defense of limitations is the affirmative defense that the complaint's uncontroverted facts is most likely to establish. See 5 Charles Alan Wright et al., Federal Practice & Procedure: Civil § 1277, at 643 (3d ed. 2004). If the complaint sets forth dates that appear, in the first instance, to fall outside of the statutory limitations period, then the defendant may move for dismissal under rule 12(b)(6). See Rohner v. Union P. R. Co., 225 F.2d 272, 273-75 (10th Cir. 1955)(Wallace, J.); Gossard v. Gossard, 149 F.2d 111, 113 (10th Cir. 1945)(Phillips, J.); Andrew v. Schlumberger Tech. Co., 808 F.Supp.2d 1288, 1292 (D.N.M. 2011)(Browning, J.).

         The plaintiff may counter this motion with an assertion that a different statute of limitations or an equitable tolling doctrine applies to bring the suit within the statute. The Tenth Circuit has not clarified whether this assertion must be pled with supporting facts in the complaint or may be merely argued in response to the motion. Cf. Kincheloe v. Farmer, 214 F.2d 604 (7th Cir. 1954)(Major, J.)(holding that, once a plaintiff has pled facts in the complaint indicating that the statute of limitations is a complete or partial bar to an action, the plaintiff must plead facts establishing an exception to the affirmative defense). It appears that, from case law in several Courts of Appeals, the plaintiff may avoid this problem altogether -- at least at the motion-to-dismiss stage -- by refraining from pleading specific or identifiable dates. See Goodman v. Praxair, Inc., 494 F.3d 458, 465-66 (4th Cir. 2007)(Niemeyer, J.); Hollander v. Brown, 457 F.3d 688, 691 n.1 (7th Cir. 2006)(Ripple, J.). Although the Tenth Circuit has not squarely addressed this practice, the Court has permitted this practice. See Anderson Living Trust v. WPX Energy Prod., LLC, 27 F.Supp.3d 1188 (D.N.M. 2014)(Browning, J.).

         LAW REGARDING DIVERSITY JURISDICTION AND ERIE

         Under Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1983)(“Erie”), a federal district court sitting in diversity applies “state law with the objective of obtaining the result that would be reached in state court.” Butt v. Bank of Am., N.A., 477 F.3d 1171, 1179 (10th Cir. 2007). Accord Mem. Hosp. v. Healthcare Realty Trust Inc., 509 F.3d 1225, 1229 (10th Cir. 2007). The Court has held that if a district court exercising diversity jurisdiction cannot find a Supreme Court of New Mexico “opinion that [governs] a particular area of substantive law . . . [the district court] must . . . predict how the Supreme Court of New Mexico would [rule].” Guidance Endodontics, LLC v. Dentsply Int'l., Inc., 708 F.Supp.2d 1209, 1224-25 (D.N.M. 2010)(Browning, J.). “Just as a court engaging in statutory interpretation must always begin with the statute's text, a court formulating an Erie prediction should look first to the words of the state supreme court.” Peña v. Greffet, 110 F.Supp.3d 1103, 1132 (D.N.M. 2015)(Browning, J.).[2] If the Court finds only an opinion from the Court of Appeals of New Mexico, while “certainly [the Court] may and will consider the Court of Appeal[s'] decision in making its determination, the Court is not bound by the Court of Appeal[s'] decision in the same way that it would be bound by a Supreme Court decision.” Mosley v. Titus, 762 F.Supp.2d 1298, 1332 (D.N.M. 2010)(Browning, J.)(noting that, where the only opinion on point is “from the Court of Appeals, [] the Court's task, as a federal district court sitting in this district, is to predict what the Supreme Court of New Mexico would do if the case were presented to it”)(citing Wade v. EMCASCO Ins. Co., 483 F.3d 657, 666 (10th Cir. 2007)(explaining that, “[w]here no controlling state decision exists, the federal court must attempt to predict what the state's highest court would do, ” and that, “[i]n doing so, it may seek guidance from decisions rendered by lower courts in the relevant state”)).[3] The Court may also rely on Tenth Circuit decisions interpreting New Mexico law. See Anderson Living Trust v. WPX Energy Prod., LLC, 27 F.Supp.3d at 1243 & n.30.[4] Ultimately, “the Court's task is to predict what the state supreme court would do.” Wade v. EMCASCO Ins. Co., 483 F.3d at 666. Accord Mosley v. Titus, 762 F.Supp.2d at 1332 (citation omitted); Rimbert v. Eli Lilly & Co., 577 F.Supp.2d 1174, 1188-89 (D.N.M. 2008)(Browning, J.)(quoting Wade v. EMCASCO Ins. Co., 483 F.3d at 665-66).

         LAW REGARDING MOOTNESS

         “Article III, Section 2 of the United States Constitution limits the federal courts' jurisdiction to actual cases and controversies.” Salazar v. City of Albuquerque, 776 F.Supp.2d 1217, 1227 (D.N.M.2011)(Browning, J.). “Federal courts are without authority to decide questions that cannot affect the rights of litigants in the case before them.” Ford v. Sully, 773 F.Supp. 1457, 1464 (D.Kan.1991)(citing North Carolina v. Rice, 404 U.S. 244, 246 (1971)). See Johansen v. City of Bartlesville, 862 F.2d 1423, 1426 (10th Cir.1988); Johnson v. Riveland, 855 F.2d 1477, 1480 (10th Cir.1988)). “To qualify as a case fit for federal-court adjudication, an actual controversy must be extant at all stages of review, not merely at the time the complaint is filed.” Arizonans for Official English v. Arizona, 520 U.S. 43, 67 (1997). See Rio Grande Silvery Minnow v. Bureau of Reclamation, 601 F.3d 1096, 1121 (10th Cir.2010). Accordingly, if a case is moot, or becomes moot during any stage of the case, the court does not have jurisdiction to hear the case. A case becomes moot “when the issues presented are no longer ‘live' or the parties lack a legally cognizable interest in the outcome.” Cty. of L.A. v. Davis, 440 U.S. 625, 631 (1979)(citing Powell v. McCormack, 395 U.S. 486, 496 (1969)).

         A court should not be quick to dismiss a claim for lack of jurisdiction. “Before deciding that there is no jurisdiction, the district court must look at the way the complaint is drawn to see if it is drawn so as to claim a right to recover under the Constitution and the laws of the United States.” Bell v. Hood, 327 U.S. 678, 682 (1946). Jurisdiction is not dependent on whether the plaintiff will succeed in his cause of action; jurisdiction is determined before the details of the cause of action, both in law and fact, are considered. See Bell v. Hood, 327 U.S. at 682.

         LAW REGARDING SUMMARY JUDGMENT

         Rule 56(a) of the Federal Rules of Civil Procedure states: “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “The movant bears the initial burden of ‘show[ing] that there is an absence of evidence to support the nonmoving party's case.'” Herrera v. Santa Fe Pub. Sch., 956 F.Supp.2d 1191, 1221 (D.N.M. 2013) (Browning, J.)(quoting Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d at 891). See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “If the moving party will bear the burden of persuasion at trial, that party must support its motion with credible evidence -- using any of the materials specified in Rule 56(c) -- that would entitle it to a directed verdict if not controverted at trial.” Celotex Corp. v. Catrett, 477 U.S. at 331 (Brennan, J., dissenting)(emphasis in original).[5]

         The party opposing a motion for summary judgment must “set forth specific facts showing that there is a genuine issue for trial as to those dispositive matters for which it carries the burden of proof.” Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990). See Vitkus v. Beatrice Co., 11 F.3d 1535, 1539 (10th Cir. 1993) (“However, the nonmoving party may not rest on its pleadings but must set forth specific facts showing that there is a genuine issue for trial as to those dispositive matters for which it carries the burden of proof.”). Rule 56(c)(1) provides: “A party asserting that a fact . . . is genuinely disputed must support the assertion by . . . citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1). It is not enough for the party opposing a properly supported motion for summary judgment to “rest on mere allegations or denials of his pleadings.” Anderson v. Liberty Lobby, Inc., 477 U.S. at 256. See Abercrombie v. City of Catoosa, 896 F.2d 1228, 1231 (10th Cir. 1990); Otteson v. United States, 622 F.2d 516, 519 (10th Cir. 1980)(“However, once a properly supported summary judgment motion is made, the opposing party may not rest on the allegations contained in his complaint, but must respond with specific facts showing the existence of a genuine factual issue to be tried.”)(citation omitted). Nor can a party “avoid summary judgment by repeating conclusory opinions, allegations unsupported by specific facts, or speculation.” Colony Nat'l Ins. Co. v. Omer, 2008 U.S. Dist. LEXIS 45838, at *1 (D. Kan. 2008)(Robinson, J.)(citing Argo v. Blue Cross & Blue Shield of Kan., Inc., 452 F.3d 1193, 1199 (10th Cir. 2006); Fed.R.Civ.P. 56(e)).

         To deny a motion for summary judgment, genuine factual issues must exist that “can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. at 250. A mere “scintilla” of evidence will not avoid summary judgment. Vitkus v. Beatrice Co., 11 F.3d at 1539 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. at 248). Rather, there must be sufficient evidence on which the fact finder could reasonably find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 251 (quoting Schuylkill & Dauphin Improvement Co. v. Munson, 81 U.S. 442, 448 (1871)); Vitkus v. Beatrice Co., 11 F.3d at 1539. “[T]here is no evidence for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable . . . or is not significantly probative, . . . summary judgment may be granted.” Anderson v. Liberty Lobby, Inc., 477 U.S. at 249 (citations omitted).

         When reviewing a motion for summary judgment, the court should keep in mind certain principles. First, the court's role is not to weigh the evidence, but to assess the threshold issue whether a genuine issue exists as to material facts requiring a trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 249. Second, the ultimate standard of proof is relevant for purposes of ruling on a summary judgment, such that, when ruling on a summary judgment motion, the court must “bear in mind the actual quantum and quality of proof necessary to support liability.” Anderson v. Liberty Lobby, Inc., 477 U.S. at 254. Third, the court must resolve all reasonable inferences and doubts in the nonmoving party's favor, and construe all evidence in the light most favorable to the nonmoving party. See Hunt v. Cromartie, 526 U.S. 541, 550-55 (1999); Anderson v. Liberty Lobby, Inc., 477 U.S. at 255 (“The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.”). Fourth, the court cannot decide credibility issues. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 255.

         There are, however, limited circumstances in which the court may disregard a party's version of the facts. This doctrine developed most robustly in the qualified immunity arena. In Scott v. Harris, 550 U.S. 372 (2007), the Supreme Court of the United States of America concluded that summary judgment was appropriate where video evidence “quite clearly contradicted” the plaintiff's version of the facts. 550 U.S. at 378-81. The Supreme Court explained:

At the summary judgment stage, facts must be viewed in the light most favorable to the nonmoving party only if there is a “genuine” dispute as to those facts. Fed. Rule Civ. Proc. 56(c). As we have emphasized, “[w]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts . . . . Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.'” Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. [at] 586-587 . . . (footnote omitted). “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. [at] 247-248 . . . . When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.

Scott v. Harris, 550 U.S. at 380 (emphases in original). Applying these standards to a factual dispute over whether the plaintiff-respondent “was driving in such fashion as to endanger human life, ” the Supreme Court held that the plaintiff-respondent's “version of events is so utterly discredited by the record that no reasonable jury could have believed him.” 550 U.S. at 380.

         Thus, the Supreme Court concluded, “[t]he Court of Appeals should not have relied on such visible fiction; it should have viewed the facts in the light depicted by [a] videotape, ” which showed the plaintiff-respondent driving extremely dangerously. 550 U.S. at 381.

         The United States Court of Appeals for the Tenth Circuit applied this doctrine in Thomson v. Salt Lake County, 584 F.3d 1304 (10th Cir. 2009), and explained:

[B]ecause at summary judgment we are beyond the pleading phase of the litigation, a plaintiff's version of the facts must find support in the record: more specifically, “[a]s with any motion for summary judgment, when opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts.” York v. City of Las Cruces, 523 F.3d 1205, 1210 (10th Cir. 2008)(quoting Scott, 550 U.S. at 380); see also Estate of Larsen ex rel. Sturdivan v. Murr, 511 F.3d 1255, 1258 (10th Cir. 2008).

Thomson v. Salt Lake Cty., 584 F.3d at 1312 (brackets omitted). “The Tenth Circuit, in Rhoads v. Miller, [352 Fed.Appx. 289 (10th Cir. 2009)(Tymkovich, J.)(unpublished), [6] explained that the blatant contradictions of the record must be supported by more than other witnesses' testimony[.]” Lymon v. Aramark Corp., 728 F.Supp.2d 1222, 1249 (D.N.M. 2010)(Browning, J.)(citation omitted), aff'd, 499 Fed.Appx. 771 (2012).

In evaluating a motion for summary judgment based on qualified immunity, we take the facts “in the light most favorable to the party asserting the injury.” Scott v. Harris, 550 U.S. 372, 377 (2007). “[T]his usually means adopting . . . the plaintiff's version of the facts, ” id. at 378, unless that version “is so utterly discredited by the record that no reasonable jury could have believed him, ” id. at 380. In Scott, the plaintiff's testimony was discredited by a videotape that completely contradicted his version of the events. 550 U.S. at 379. Here, there is no videotape or similar evidence in the record to blatantly contradict Mr. Rhoads' testimony. There is only other witnesses' testimony to oppose his version of the facts, and our judicial system leaves credibility determinations to the jury. And given the undisputed fact of injury, Mr. Rhoads' alcoholism and memory problems go to the weight of his testimony, not its admissibility . . . . Mr. Rhoads alleges that his injuries resulted from a beating rendered without resistance or provocation. If believed by the jury, the events he describes are sufficient to support a claim of violation of clearly established law under Graham v. Connor, 490 U.S. 386, 395-96 (1989), and this court's precedent.

Rhoads v. Miller, 352 Fed.Appx. at 291-92. See Lymon v. Aramark Corp., 728 F.Supp.2d at 1249-50 (quoting Rhoads v. Miller, 352 Fed.Appx. at 291-92). In a concurring opinion in Thomson v. Salt Lake County, the Honorable Jerome A. Holmes, United States Circuit Judge for the Tenth Circuit, stated that courts must focus first on the legal question of qualified immunity and “determine whether plaintiff's factual allegations are sufficiently grounded in the record such that they may permissibly comprise the universe of facts that will serve as the foundation for answering the legal question before the court, ” before inquiring into whether there are genuine issues of material fact for resolution by the jury. 584 F.3d at 1326-27 (Holmes, J., concurring)(citing Goddard v. Urrea, 847 F.2d 765, 770 (11th Cir. 1988)(Johnson, J., dissenting))(observing that, even if factual disputes exist, “these disputes are irrelevant to the qualified immunity analysis because that analysis assumes the validity of the plaintiffs' facts”). See American Mechanical Solutions, L.L.C. v. Northland Process Piping, Inc., 184 F.Supp.3d 1030, 1078 (D.N.M. 2016)(Browning, J.)(granting summary judgment on a breach-of-the-implied-warranty-of-merchantability claim); Payne v. Tri-State Careflight, LLC, No. CIV 14-1044, 2016 WL 6396214, at *18 (D.N.M. 2016)(Browning, J.)(denying summary judgment because federal law did not preempt the Plaintiffs' claims in the field of wage and labor regulation for airline and railroad workers).

         LAW ...


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