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Hernandez v. Grando's LLC

Court of Appeals of New Mexico

August 30, 2018

JOSE M. HERNANDEZ, Plaintiff-Appellant,
v.
GRANDO'S LLC, Defendant-Appellee.

          APPEAL FROM THE DISTRICT COURT OF EDDY COUNTY Lisa B. Riley, District Judge

          Riojas Law Firm, P.C. Robert E. Riojas El Paso, TX for Appellant.

          Lewis Brisbois Bisgaard & Smith, LLP Gregory L. Biehler Ryan Goodhue Albuquerque, NM for Appellee.

          OPINION

          HENRY M. BOHNHOFF, JUDGE

         {¶1} Plaintiff Jose M. Hernandez, an employee of Creed, Inc. (Creed), injured himself while exiting a commercial truck that Creed had leased from Defendant Grando's, LLC (Grando's). After Hernandez brought suit against Grando's based on theories of negligence, strict product liability, and breach of implied warranty, the district court granted summary judgment in favor of Grando's and dismissed Hernandez's complaint. On appeal, Hernandez argues that the district court erred in granting summary judgment on his negligence claim because (1) Grando's is bound by its admission in its answer to Hernandez's original complaint that it was a motor carrier and owed him a duty to maintain and repair the leased truck; (2) alternatively, Grando's is a motor carrier under federal and state law and therefore owed duties imposed on motor carriers by those laws; and (3) even assuming Grando's is not a motor carrier, as a lessor it still owed Hernandez a common law duty of care. Hernandez also argues that, because Grando's principal was aware of the condition of the truck at all times, the company is strictly liable for the defect. We reverse on the basis of Hernandez's third negligence argument. However, because the first and second negligence arguments and the strict liability argument would be likely to arise again on remand, we affirm as to them in the interest of judicial efficiency. See Medina v. Hunemuller Constr., Inc., 2005-NMCA-123, ¶16, 138 N.M. 472, 122 P.3d 839, overruled on other grounds by Hidalgo v. Ribble Contracting, 2008-NMSC-028, ¶22, 144 N.M. 117, 184 P.3d 429; Sena v. N.M. State Police, 1995-NMCA-003, ¶25, 119 N.M. 471, 892 P.2d 604.

         BACKGROUND

         {¶2} Hernandez worked for Creed in Loving, New Mexico, as a truck driver. On June 21, 2013, while at work, Hernandez attempted to exit from a Creed truck. The truck's sidestep had been kept in place with a wire and collapsed when Hernandez stepped on it. Hernandez sustained injuries to his knee and back from the fall. At the time of the incident, the truck was leased from Grando's to Creed pursuant to a written agreement. Adan "Sonny" Granados (Granados) was the sole and managing member of Grando's as well as the president of Creed, and signed the lease as both lessor and lessee.

         {¶3} Hernandez received workers' compensation benefits for his injuries. Hernandez subsequently filed a complaint in district court against Grando's alleging strict liability, negligence, and breach of warranty. In its answer, Grando's admitted the following allegations of the complaint: (1) "[Grando's] had a duty to comply with all statutory and regulatory provisions that pertain or apply to trucks to be used in interstate commerce"; (2) "[Grando's] owed a duty to all persons who used their [sic] trucks to inspect, repair, and maintain their [sic] trucks in a safe condition so that persons who used its trucks would not be injured"; (3) "[Grando's] as a provider of trucks to be used in intrastate and/or interstate commerce, was required to abide by state and/or federal laws, statutes, regulations, and safety codes, including Part 396 of the Federal Motor Carrier Safety Act, concerning systematic inspection, repair, and maintenance of its trucks by a qualified inspector." One month later, Grando's retained new counsel.

         {¶4} Grando's moved for summary judgment, arguing that (1) Grando's did not owe Hernandez any common law or statutory duty to maintain or repair the truck because it is not a motor carrier, did not employ Hernandez, and delegated all duties concerning the truck to Creed; (2) Hernandez could not establish a strict products liability claim because there was no evidence that the truck was defective at the time Grando's leased it to Creed; and (3) Hernandez could not establish a breach of implied warranty claim because Grando's disclaimed all implied warranties. In his response to Grando's motion Hernandez argued (1) Grando's was bound by its admissions in its answer; (2) Grando's had knowledge of the defective step and did not repair it; (3) Grando's is a motor carrier and subject to the statutory and regulatory duties of a motor carrier; and (4) Granados's affidavit submitted in support of Grando's motion was not enough evidence to disprove strict liability. In its reply Grando's further argued that (1) it is irrelevant whether Granados had knowledge of the broken step because the duty to repair fell exclusively on Creed; and (2) Grando's answer was filed by its previous attorney, the admissions in question were erroneous, and Grando's would seek leave to amend its answer and correct the erroneous admissions.

         {¶5} Following the filing of Hernandez's summary judgment response, Grando's moved to amend its answer and rescind the previous admissions. The district court never ruled on that motion and instead granted Grando's motion for summary judgment and dismissed the case.[1]

         DISCUSSION

         {¶6} Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 1-056(C) NMRA. After the moving party makes a prima facie showing that he or she is entitled to summary judgment, the party opposing the motion has the burden to show "by affidavit or other admissible evidence that there is a genuine issue of material fact." Associated Home &RV Sales, Inc. v. Bank of Belen, 2013-NMCA-018, ¶ 29, 294 P.3d 1276 (internal quotation marks and citation omitted). "An issue of fact is 'genuine' if the evidence before the court considering a motion for summary judgment would allow a hypothetical fair-minded fact[-]finder to return a verdict favorable to the non-movant on that particular issue of fact." Id. ¶ 23 (internal quotation marks and citation omitted). Courts reviewing a motion for summary judgment must review the facts and make all reasonable inferences in the light most favorable to the non-moving party. Phx. Funding, LLC v. Aurora Loan Servs., LLC, 2017-NMSC-010, ¶ 17, 390 P.3d 174. "Our review is conducted in light of our traditional disfavor of summary judgment and our preference for trials on the merits." Madrid v. Brinker Rest. Corp., 2016-NMSC-003, ¶ 16, 363 P.3d 1197.

         {¶7} "However, if no material issues of fact are in dispute and an appeal presents only a question of law, we apply de novo review and are not required to view the appeal in the light most favorable to the party opposing summary judgment." City of Albuquerque v. BPLW Architects & Eng'rs, Inc., 2009-NMCA-081, ¶ 7, 146 N.M. 717, 213 P.3d 1146. "We review questions of statutory interpretation denovo." Cobb v. State Canvassing Ed., 2006-NMSC-034, ¶ 33, 140 N.M. 77, 140 P.3d 498 (internal quotation marks and citation omitted). "Whether a duty exists is a question of law for the courts to decide." Herrera v. Quality Pontiac, 2003-NMSC-018, ¶ 6, 134 N.M. 43, 73 P.3d 181 (internal quotation marks and citation omitted).

         A. Grando's Admissions of Hernandez's Conclusions of Law in His Complaint Were Not Material to the District Court's Summary Judgment Analysis

         {¶8} Hernandez argues that the district court erred in granting summary judgment because Grando's admitted in its answer to Hernandez's complaint that it was a motor carrier and owed him duties to maintain its trucks in safe condition. Hernandez maintains that Grando's should be bound by its answer.

          {¶9} Under New Mexico law, parties are not bound by conclusions of law set forth in their pleadings. "[Summary judgment] shall be rendered ... if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 1-056(C). "[I]n ruling on a motion for summary judgment, a court is not wed to a party's assertion of conclusions of law whether in a petition, complaint, or motion for summary judgment, even if the conclusions are admitted by the opposing party." Vives v. Verzino, 2009-NMCA-083, ¶ 10, 146 N.M. 673, 213 P.3d 823; see also GCM, Inc. v. Ky. Cent. Life Ins. Co., 1997-NMSC-052, ¶ 13, 124 N.M. 186, 947P.2d 143 (holding that, when a party admits for purposes of summary judgment the veracity of the allegations in the complaint, the appellate courts "will accept the facts as alleged ... for purposes of this motion and determine whether, as a matter of law, [the defendant] is entitled to judgment").

         {¶10} Grando's admissions in its answer upon which Hernandez predicated his argument concerned its legal duties, i.e., were conclusions of law.[2] Under Rule 1-056(C), the district court was not obligated to accept them and, on the contrary, had an obligation independently to determine the accuracy of Hernandez's assertions of duty on the part of Grando's. Therefore, Grando's admissions as to its duty in its answer were not material to the district court's determination whether disputed issues of fact precluded summary judgment in favor of Grando's.

         B. Grando's Is Not a Motor Carrier and Is Not Subject to the Federal and State Statutory and Regulatory Duties of Maintenance and Repair Imposed on Motor Carriers

         {¶11} In an affidavit submitted in support of Grando's summary judgment motion, Granados averred that Grando's business was limited to leasing trucks to Creed. On that basis, Grando's argued that it was not a motor carrier; further, no statute or regulation imposes on the owner of a truck, solely on the basis of such ownership, the duties of inspection, maintenance, and repair to which motor carriers are subject. Hernandez does not dispute that Grando's business was limited to leasing trucks to Creed, i.e., he does not contend that Grando's was engaged in transportation of goods or services for compensation. Instead, in his complaint, summary judgment response, and on appeal, Hernandez maintains that, as an owner of a commercial vehicle, ...


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