United States District Court, D. New Mexico
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
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
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.
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
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
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
may bring a legal action against us under this Coverage Part
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.
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,
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.
The Motion to Dismiss.
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.
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
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
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.
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.
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.
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.
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)).
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.
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
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)).
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).
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.
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
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.
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.
REGARDING RULE 12(b)(1)
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.
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)).
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)).
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.
REGARDING RULE 12(b)(6)
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.
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
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
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).
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.).
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,
REGARDING DIVERSITY JURISDICTION AND ERIE
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,
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”)). 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. 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
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)).
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.
REGARDING SUMMARY JUDGMENT
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).
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)).
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
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.
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
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.
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),  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
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).