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Morris v. Giant Four Corners, Inc.

United States District Court, D. New Mexico

March 27, 2019

FRANKLIN J. MORRIS, as Personal Representative of the Wrongful Death Estate of MARCELLINO MORRIS, JR., Deceased, Plaintiff,
GIANT FOUR CORNERS, INC. d/b/a GIANT #7251 and ANDY RAY DENNY, an Individual, Defendants.


         This matter is before the Court on Defendant Giant Four Corners, Inc. d/b/a Giant # 7251's Opposed Motion for Judgment on the Pleadings under Federal Rule of Civil Procedure 12(c) [ECF No. 90] and Defendant's Opposed Motion to Compel Election of Remedies or Dismiss for Improper Claim Splitting [ECF No. 91]. After carefully considering the motions, briefs, parties' arguments and relevant law, the Court rules as described herein.


         On December 30, 2011, Marcellino Morris, Jr. was tragically was killed in an automobile collision with Defendant Andy Ray Denny. Plaintiff Mr. Franklin J. Morris, Personal Representative of the Decedent's estate, contends that Defendant Giant is liable for Decedent's death under two theories of negligence - specifically, negligent entrustment based on Defendant's sale of gasoline to Mr. Denny, who was allegedly visibly intoxicated, and negligent hiring, training, and supervision of the employees who sold the gasoline to Mr. Denny.

         Plaintiff originally filed a lawsuit in the District Court of the Navajo Nation in Crownpoint, New Mexico. In that court, Defendant moved for and obtained summary judgment on the ground that Plaintiff's suit was time-barred under the Navajo Nation's two-year statute of limitations for personal injury claims, 7 N. N.C. § 602(A)(1). Plaintiff appealed the Navajo district court's decision to the Navajo Nation Supreme Court and that appeal is still pending. Before the Navajo district court issued its decision, Plaintiff filed an identical wrongful death complaint in New Mexico state district court against Defendant alleging vicarious liability for negligent entrustment of a chattel (Count I) and direct liability for negligent hiring, training, and supervision (Count II). Plaintiff also asserted a cause of action for negligence and negligence per se against Mr. Denny (Count III). However, Mr. Denny was dismissed as a party. See Dkt. No. 9. In January 2015, Defendant removed the state case to this Court based on the parties' diversity of citizenship under 28 U.S.C. § 1332.

         In November 2015, Defendant moved to dismiss Plaintiff's complaint under Federal Rule of Civil Procedure 12(b)(6), or, in the alternative to stay the case pending Plaintiff's exhaustion of tribal court remedies, arguing the case should be precluded under the doctrine of res judicata. During the same period, Plaintiff moved for partial summary judgment on Count I of his complaint (negligent entrustment), arguing that Plaintiff was entitled to judgment as a matter of law that Defendant negligently entrusted gasoline to Mr. Denny because he was intoxicated. The Court stayed the case for one-year - until November 29, 2016 - when, although the Navajo Nation Supreme Court had not yet issued a decision, the parties asked the Court to lift the stay and decide the pending Rule 12(b)(6) motion.

         In September 2017, the Court issued its ruling on the Rule 12(b)(6) motion against Defendant, concluding that the Navajo district court's dismissal on statute of limitations grounds had no preclusive effect on the federal case. See ECF No. 64. In March 2018, the Court denied Plaintiff's partial motion for summary judgment on negligent entrustment. See ECF No. 79. In that Memorandum Opinion and Order, the Court assumed without deciding that Defendant owed Plaintiff a duty of care to refrain from selling gasoline to an intoxicated Mr. Denny, but concluded that genuine disputes of material about whether Ms. Gloria Pine, Defendant's employee who sold Mr. Denny gasoline, knew Mr. Denny was intoxicated precluded entry of summary judgment in Plaintiff's favor.

         About two months later, in May 2018, Defendant filed the pending two motions now before the Court. In its motion for judgment on the pleadings on Plaintiff's negligent entrustment claim, Defendant argues that Plaintiff failed to state a claim upon which relief can be granted because New Mexico law imposes no duty of care on Defendant to refrain from selling gasoline to intoxicated third-persons. And in its motion to compel Plaintiff to elect remedies, or, alternatively to dismiss Plaintiff's complaint for improper claim splitting, Defendant contends that under the doctrine of election of remedies Plaintiff is barred from carrying this and the Navajo Nation lawsuits to judgment. Because Plaintiff has no right to “double recovery” of damages in two courts on two identical complaints, Defendant contends that “Plaintiff must elect the forum in which he will proceed.” Def.'s Mot. to Compel at 6. Alternatively, if the Court denies Defendant's motion to compel Plaintiff to elect remedies, then Defendant asks the Court to dismiss the federal complaint on the theory that Plaintiff has impermissibly engaged in “claim splitting” of his claims between federal and tribal courts.

         The Court will first address Defendant's motion for election of remedies, or, alternatively, to dismiss for improper claim-splitting and then analyze Defendant's motion for judgment on the pleadings regarding Plaintiff's claim for negligent entrustment.


         A. Election of Remedies

         According to Defendant, Plaintiff's tribal and federal complaints have both asserted “money damages … in an amount to be determined at trial to be both just and reasonable.” Def.'s Mot. to Compel at 2 (citing Plaintiff's complaint in the District Court of the Navajo Nation, ECF No. 38-1 at 15 ¶ 80 and Plaintiff's federal complaint, ECF No. 1-1 at 12 ¶ 76). Defendant contends that “[i]f Plaintiff is permitted to maintain both the present case and the pending Navajo Nation lawsuit and carry them both to judgment, then he would be attempting to secure two awards for the same wrong, ” and therefore asks the Court to “compel Plaintiff to choose the forum in which he intends to proceed.” Def.'s Mot. to Compel at 1, 3.

         The election of remedies doctrine “refers to situations where an individual pursues remedies that are legally or factually inconsistent, ” and operates to “prevent[] a party from obtaining double redress for a single wrong.” Alexander v. Gardner-Denver Co., 415 U.S. 36, 49 (1974), abrogated on other grounds by Law v. Siegel, 571 U.S. 415 (2014). New Mexico's election of remedies law governs this diversity jurisdiction dispute. See McKinney v. Gannett Co., 817 F.2d 659, 671 (10th Cir. 1987). Under New Mexico law “[t]he doctrine means if a party has two inconsistent existing remedies on his cause of action and makes choice of one, he is precluded from thereafter pursuing the other.” Romero v. J. W. Jones Const. Co., 1982-NMCA-140, ¶ 18, 98 N.M. 658, 661, 651 P.2d 1302, 1305 (citations and internal quotation marks omitted). Or as the New Mexico Supreme Court has described the doctrine in another case: “where two inconsistent or alternative rights or claims are presented to the choice of a party, by a person who manifests the clear intention that he should not enjoy both, then he must accept or reject one or the other; and so, in other words, that one cannot take a benefit under an instrument and then repudiate it.” Three Rivers Land Co. v. Maddoux, 1982-NMSC-111, ¶ 16, 98 N.M. 690, 693, 652 P.2d 240, 243, overruled on other grounds by Universal Life Church v. Coxon, 1986-NMSC-086, ¶ 16, 105 N.M. 57, 728 P.2d 467. The doctrine “exists to prevent double recovery for a single wrong.” Chavarria v. Fleetwood Retail Corp. of New Mexico, 2005-NMCA-082, ¶ 6, 137 N.M. 783, 789, 115 P.3d 799, 805, reversed in part on other grounds by Chavarria v. Fleetwood Retail Corp., 2006-NMSC-046, ¶ 6, 140 N.M. 478, 143 P.3d 717.

         For instance, under the doctrine a prevailing breach of contract plaintiff cannot receive both damages on the contract and the remedy of rescission because “to receive damages a plaintiff must affirm the contract, but in order to get a remedy of rescission, a plaintiff must disaffirm the contract.” Medcom Holding Co. v. Baxter Travenol Labs., Inc., 984 F.2d 223, 228 (7th Cir. 1993). “[T]he remedies are mutually exclusive, and the party seeking relief must elect one of them.” Chavarria, 2005-NMCA-082 at ¶ 6. See also Teutscher v. Woodson, 835 F.3d 936, 956 (9th Cir. 2016) (applying the doctrine where retaliatory discharge plaintiff sought alternative remedies for reinstatement and front pay); Medcom Holding Co., 984 F.2d at 229 (noting doctrine's application in property conversion case where the plaintiff may recover damages for converted property or to regain the property, but not both).

         Here, the doctrine finds no application to the facts. Plaintiff did not plead inconsistent theories or seek inconsistent remedies as between this lawsuit and the one pending in the Navajo district court. Rather, Plaintiff pleaded and sought identical theories of recovery and remedies in two different courts. Certainly, Defendant is correct that Plaintiff cannot receive double recovery for a single injury. See Chavarria, 2005-NMCA-082 at ¶ 6. But Plaintiff will not enjoy a double recovery because of the application of an entirely different legal doctrine: res judicata, which “prevents a party or its privies from repeatedly suing another party for the same cause of action when the first suit involving the parties resulted in a final judgment on the merits.” State ex rel. Balderas v. Bristol-Myers Squibb Co., No. A-1-CA-36906, 2018 WL 5291923, at *4 (N.M. Ct. App. Oct. 24, 2018). A judgment on the merits in either this Court or the Navajo district court will arguable preclude the pursuit of the other. See Taylor v. Burlington N. R. Co., 787 F.2d 1309, 1317 (9th Cir. 1986) (“A plaintiff may prosecute actions on the same set of facts against the same defendant in different courts, even though the remedies the plaintiff seeks may be inconsistent … [b]ut as soon as one of those actions reaches judgment, the other cases must be dismissed.”). Defendant is asking the Court to make Plaintiff choose between forums, not remedies. See Def.'s Mot. to Compel at 6 (stating that “[i]n order to avoid double recovery, Plaintiff must elect the forum in which he will proceed.”). However, the doctrine election of remedies has nothing to do with laying forum. As the Court will explain in the section below, parallel actions may proceed to judgment until one becomes preclusive of the other. Because the doctrine of election of remedies is irrelevant to this case, the Court will deny Defendant's motion to apply that doctrine.

         B. Claim Splitting

         In the alternative, Defendant says “this Court should dismiss the present action based on Plaintiff's impermissible claim-splitting” between tribal and federal courts. Def.'s Mot. to Compel at 1. “The rule against claim-splitting requires a plaintiff to assert all of its causes of action arising from a common set of facts in one lawsuit. By spreading claims around in multiple lawsuits in other courts or before other judges, parties waste scarce judicial resources and undermine the efficient and comprehensive disposition of cases.” Katz v. Gerardi, 655 F.3d 1212, 1217 (10th Cir. 2011) (citing Hartsel Springs Ranch of Colo., Inc. v. Bluegreen Corp., 296 F.3d 982, 985 (10th Cir.2002)). “For example, a district court may apply the rule against claim- splitting when a party files two identical-or nearly identical-complaints to get around a procedural rule.” Wyles v. Sussman, 661 Fed.Appx. 548, 550 (10th Cir. 2016). Claim splitting and res judicata are both concerned with “promoting judicial economy and shielding parties from vexatious concurrent or duplicative litigation.” Katz, 655 F.3d at 1218. “[T]he test for claim splitting is not whether there is finality of judgment, but whether the first suit, assuming it were final, would preclude the second suit.” Id.

         In Katz, the Tenth Circuit upheld a trial court's dismissal of the plaintiff's complaint where the plaintiff previously filed related claims that were pending in the same federal court against the same defendants. See id. at 1217-1219. But Katz did not implicate the “the general rule … that a pending state-court action ‘is no bar to proceedings concerning the same matter in the Federal court having jurisdiction.' Wyles, 661 Fed.Appx. at 551 (quoting Sprint Commc'ns, Inc. v. Jacobs, ___ U.S.___, 134 S.Ct. 584, 588, 187 L.Ed. .2d 505 (2013) (quoting Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976))); Carter v. City of Emporia, 815 F.2d 617, 621 (10th Cir. 1987) (plaintiff “may freely split a cause of action between federal and state courts and pursue both actions, ” though one action may preclude the other).

         Here, claim splitting is inapplicable because the previously filed case in this litigation was not filed “in the same [federal] district court, ” Katz, 655 F.3d at 1219, but in a tribal court. The Court recognizes that the Navajo district court is not a state court. However, no party has argued, and there is nothing to indicate, that any restriction exists on the tribal court's concurrent civil jurisdiction over Plaintiff's claims. Plaintiff therefore has not improperly engaged in claim splitting by filing duplicative suits in different court systems. See Wyles, 661 Fed.Appx. at 551. The Court certainly understands Defendant's assertions concerning the need for efficient justice. But the federal system tolerates pending parallel actions, “despite what may appear to result in a duplication of judicial resources.” McLaughlin v. Saudi Basic Indus. Corp., 955 F.3d 930, 934 (4th Cir. 1992). “[F]ederal courts have a virtually unflagging obligation ... to exercise the jurisdiction given them, ” ...

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