Andrade v. Lomas Auto Mall Inc.

• Citation: 716 F.Supp.2d 1031
• Decision Date: 30 April 2010
• Docket Number: No. CIV 07-0591 JB/RHS.,CIV 07-0591 JB/RHS.
• Parties: Delfino PEDROZA and Liliana Andrade, Plaintiffs, v. LOMAS AUTO MALL, INC.; M.D. Lohman d/b/a Lohman Motors; Western Surety Company; USAA Casualty Insurance Company d/b/a USAA; and Independent Auto Dealers Service Corporation, Ltd., Defendants. Lomas Auto Mall, Inc. and M.D. Lohman d/b/a Lohman Motors, Third Party Plaintiffs, v. Independent Dealers Service Corporation, Ltd. and New Mexico Independent Automobile Dealers' Association, Inc., Third Party Defendants.
• Court: United States District Courts. 10th Circuit. District of New Mexico

716 F.Supp.2d 1031

Delfino PEDROZA and Liliana Andrade, Plaintiffs,

v.LOMAS AUTO MALL, INC.; M.D. Lohman d/b/a Lohman Motors; Western Surety Company; USAA Casualty Insurance Company d/b/a USAA; and Independent Auto Dealers Service Corporation, Ltd., Defendants.

Lomas Auto Mall, Inc. and M.D. Lohman d/b/a Lohman Motors, Third Party Plaintiffs,

v.Independent Dealers Service Corporation, Ltd. and New Mexico Independent Automobile Dealers' Association, Inc., Third Party Defendants.

No. CIV 07-0591 JB/RHS.

United States District Court,D. New Mexico.

April 30, 2010.

Richard N. Feferman, Charles S. Parnall, Rob Treinen, Feferman & Warren, Albuquerque, NM, for Plaintiff.

William F. Davis, Albuquerque, NM, for Defendant Lomas Auto Mall and M.D. Lohman d/b/a Lohman Motors.

Judd C. West, Michael B. Neil, Doughty & West, P.A., Albuquerque, NM, for Defendant Western Surety Company.

Mark J. Klecan, Klecan & Childress, and Charles J. Vigil, Leslie McCarthy Apodaca, Rodey, Dickason, Sloan, Akin & Robb, P.A., Albuquerque, NM, and Jeffrey W. McElroy, John Paul Valdez, Ray, Valdez, McChristian & Jeans, P.C., El Paso, TX, and Robert E. Valdez, Ray, Valdez, McChristian & Jeans, P.C., San Antonio, TX, for Defendant USAA Casualty Insurance Company d/b/a USAA.

Michael L. Danoff, Michael L. Danoff & Associates, P.C., Albuquerque, NM, for Defendant and Third-Party Defendant Independent Automobile Dealers Service Corporation, Ltd. and New Mexico Independent Automobile Dealers Association, Inc.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on Defendant Western Surety Company's Motion for Summary Judgment on Its Cross-Claims, filed October 9, 2009 (Doc. 506). The Court held a hearing on March 26, 2010. The primary issue is whether Defendant Western Surety Company is entitled to indemnity by Defendants M.D. Lohman d/b/a Lohman Motors and Lomas Auto Mall, Inc. (“the Dealer Defendants”). Because the Court can find as a matter of law that Western Surety is entitled to indemnification from both Dealer Defendants, because such a claim for indemnification under New Mexico law entitles Western Surety to its reasonable attorneys' fees incurred in the underlying litigation, and because the Court finds that the fees that Western Surety seeks by this motion are reasonable, the Court will grant the motion. Because the Court's calculation of the total fees that Western Surety incurred, as reflected in its account statements, add up to less than the $68,046.83 that it requests, the Court will award it damages in an amount less than it seeks.

FACTUAL BACKGROUND

Dealer Defendants are car dealerships in Albuquerque, New Mexico. Under New Mexico law, to be licensed as a dealer, wholesaler, distributor, auto recycler, or title-service company, the person or entity must first “procure and file with the department a corporate surety bond in the amount of fifty thousand dollars ($50,000).” NMSA 1978, § 66-4-7A. Both Lohman Motors and Lomas Auto Mall sought such a surety bond from Western Surety. See Affidavit of Tom Snyder ¶¶ 2-3, at 1-2 (executed Oct. 9, 2009), filed October 9, 2009 (Doc. 506-5)(“Snyder Aff.”); id. at ¶¶ 8-10, at 2. In seeking those bonds, the Dealer Defendants filled out bond applications on Western Surety's Form 10. See Motion Exhibits B & E. ¹ Based on those applications, Western Surety, as surety, issued bonds to both Dealer Defendants. See Motion Exhibits A & C. ²

PROCEDURAL BACKGROUND

On June 19, 2007, Plaintiffs Delfino Pedroza and Liliana Andrade sued Lohman Motors, Lomas Auto Mall, and several other Defendants, asserting claims for fraud, violation of the New Mexico Unfair Practices Act, NMSA 1978, §§ 57-12-1 through 57-12-26 (“UPA”), violation of the New Mexico Motor Vehicle Dealers Franchising Act, NMSA 1978, §§ 57-16-1 through 57-16-16, breach of warranty, and civil conspiracy. See Complaint for Damages and for Declaratory Relief and Jury Demand, filed June 19, 2007 (Doc. 1). Western Surety was a named party to the lawsuit pursuant to NMSA 1978, § 66-4-7B. See Second Amended Complaint ¶ 82, at (Doc. 347). The case was ultimately tried to a jury starting on May 18, 2009. See Clerk's Minutes Before the Honorable James O. Browning, filed May 18, 2009 (Doc. 467). The jury returned a verdict on May 28, 2009, in which the jury found Lohman Motors liable for fraud and willful violation of the UPA, found Lomas Auto Mall liable for breach of warranty of title, and found both Dealer Defendants liable for civil conspiracy to violate the Motor Vehicle Information and Cost Savings Act, 49 U.S.C. § § 32701 through 32711. See Special Verdict Form at 2-6, filed May 28, 2009 (Doc. 461). The Court entered a judgment on the verdict on September 3, 2009, in which it found Western Surety jointly and severally liable with the Dealer Defendants as guarantor on the above-referenced surety bonds. See Judgment Order ¶¶ 4-6, at 2, filed September 3, 2009 (Doc. 489). The judgment against Western Surety arises from the Dealer Defendants' actions. See id.

1. Assertions in the Briefs.

Western Surety moves the Court for summary judgment on Western Surety's cross-claim for indemnification against Lomas Auto Mall and for summary judgment on its cross-claim for indemnification against M.D. Lohman. In this motion, Western Surety contends that, within the application for the surety bond, which Lohman signed, there is a clause providing that M.D. Lohman is a guarantor, and will personally hold harmless and indemnify Western Surety for liability, loss, cost, attorney's fees, and expenses which Western Surety sustains as surety or by reason of having been surety on the bond. See Motion at 2-8, Snyder Aff. ¶¶ 2-5, at 1-2; Motion Exhibit B. Lohman Motors contends that a genuine issue of material fact exists about this provision, contends that the exhibits upon which Western Surety relies do not prove that the language Western Surety asserts is in the application is truly present. Specifically, Lohman contends that the substantive provisions in the application are illegible.

Western Surety issued a Vehicle Dealer or Dismantler Bond to Lohman. See Snyder ¶ 6, at 2; Motion Exhibit A. The bond issued to Lohman was in effect as of February 6, 2004, and was in effect on the date of the sale of the vehicle to the Plaintiffs. See Snyder Aff. ¶ 7, at 2; Motion Exhibit A. Western Surety contends that Lohman is a guarantor of the bond, and agreed to personally hold harmless and indemnify Western Surety for liability, loss, cost, attorney's fees, and expenses that Western Surety sustains as surety or by reason of having been surety on the bond. See Snyder Aff. ¶ 3, at 1-2; Motion Exhibits B & E. Lohman again contends that a genuine issue of material fact exists as to the existence of a guarantee from Lohman. Lohman asserts that the documents which Western Surety references do not establish Lohman's guaranty liability. Lohman maintains that the application is illegible, and that Exhibit E is an unsigned form and has nothing to do with Lohman. Lohman asserts that it is incumbent on Western Surety to produce a legible signed document, especially where the original should be obtainable from Western Surety's agent. See Dealership Defendants' Response to Western Surety Company's Motion for Summary Judgment on its Cross-Claims at 2, filed January 11, 2010 (Doc. 528)(“Response”).

Western Surety maintains that every Vehicle Dealer or Dismantler Bond that it issues requires the applicant's personal guarantee. See Snyder Aff. ¶ 5, at 2. The Dealership Defendants maintain that a statement of ordinary business practice is insufficient to establish, as an undisputed fact, that the described practice was followed in this instance. See Response at 3. The Dealership Defendants did not, however, introduce any evidence to dispute Western Surety's factual assertion, thus the Court will accept the statement as true. The Dealer Defendants also assert that the bond documents themselves have no indemnity provision and that there is thus no evidence that there is indemnity agreement between Western Surety and the Dealer Defendants. See Response at 3 (citing Motion Exhibits A & C).

Western Surety issued a bond to “Donald W. Richesin d/b/a Lomas Auto Mall” and not to “Lohman Auto Mall.” Response at 3; Motion Exhibit C; Snyder Aff. ¶ 9, at 2. The bond issued to Richesin d/b/a Lomas Auto Mall was in effect as of April 1, 2003 and was in effect on the date of the sale of the vehicle to the Plaintiffs. See Snyder Aff. ¶ 10, at 2; Motion Exhibit C. The Dealer Defendants assert that Lomas Auto Mall, the Defendant in this matter, is a different entity than Richesin d/b/a Lomas Auto Mall, and thereby implicitly argue that the surety bond that Western Surety attached to its motion does not evidence a legal relationship between Western Surety and Lomas Auto Mall. See Response at 4. The Dealer Defendants also point out that the jury made no findings with respect to Richesin or Richesin d/b/a Lomas Auto Mall. See id.

Western Surety initially asserted that it is jointly and severally liable to the Plaintiffs for actual damages in the amount of $13,202.95 based on the jury's finding of liability and damages as to Lohman Motors, and jointly and severally liable to the Plaintiffs for $3,210.95 based on the jury's finding of liability and damages as to Lomas Auto Mall. See Motion at 7 (citing Judgment Order ¶¶ 4-5, at 2). It also asserts that, in defending this action, Western Surety incurred attorneys' fees and costs of $68,046.83. See Motion at 7 (citing Snyder Aff. ¶ 12, at 3). The Dealer Defendants respond that Western Surety is no longer liable to the Plaintiffs because Lohman Motors has satisfied the judgments against both Dealer Defendants, and that Western Surety has failed to provide the necessary documentation to prove that it incurred the attorneys' fees and costs that it seeks in its motion. See Response at 3. The Dealer Defendants...