Garcia v. Rodey, Dickason, Sloan, Akin & Robb, P.A.

• Decision Date: 09 February 1988
• Docket Number: No. 16667,16667
• Citation: 1988 NMSC 14,106 N.M. 757,750 P.2d 118
• Parties: , 45 Ed. Law Rep. 303 J. Placido GARCIA, Charles S. Solomon, Ronald J. Van Amberg, and Roth, Van Amberg, Gross, Amarant and Rogers, a New Mexico Partnership, Plaintiffs-Appellants, v. RODEY, DICKASON, SLOAN, AKIN & ROBB, P.A., a New Mexico Professional Association, Kenneth J. Ferguson and Jo Saxton Brayer, Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 118

750 P.2d 118

106 N.M. 757, 45 Ed. Law Rep. 303

J. Placido GARCIA, Charles S. Solomon, Ronald J. Van Amberg, and Roth, Van Amberg, Gross, Amarant and Rogers, a New Mexico Partnership, Plaintiffs-Appellants, v. RODEY, DICKASON, SLOAN, AKIN & ROBB, P.A., a New Mexico

Professional Association, Kenneth J. Ferguson and

Jo Saxton Brayer, Defendants-Appellees.

No. 16667.

Supreme Court of New Mexico.

Feb. 9, 1988.

[106 NM 758] Michael Schwarz, Santa Fe, for plaintiffs-appellants.

Modrall, Sperling, Roehl, Harris & Sisk, Kenneth L. Harrigan, Patrick J. Rogers, Albuquerque, for defendants-appellees.

[106 NM 759] ON MOTION FOR REHEARING

Appellants' motion for rehearing is granted. The Opinion filed November 23, 1987 is withdrawn and the following Opinion is substituted in lieu thereof:

OPINION

STOWERS, Justice.

Plaintiffs brought this action against defendant attorneys and their law firm which had successfully opposed plaintiff Garcia in a previous federal civil rights lawsuit. In the prior action Garcia sued the members of the Board of Education of the Socorro Consolidated School District under 42 U.S.C. Section 1983 (1982) alleging that the board had violated his civil rights by failing to renew his contract of employment. The school board members were represented by defendants.

Garcia in that case sued the school board members in both their individual and official capacities. Eleventh amendment immunity was raised as a defense to the official capacity claims in the board's Answer, First and Second Amended Answer and Pretrial Order, but apparently was not pursued or ruled on by the court.

On the second day of trial the court addressed Garcia's attorney and asked him whether he wanted a jury instruction for punitive damages. The judge suggested that explaining and distinguishing the claims against the board members in their individual and official capacities would confuse the jury. In essence the court recommended that Garcia drop one of the claims, preferably the claim against the board in its individual capacity. The court also pointed out that although this would result in the elimination of plaintiff's claim for punitive damages, it would also bar the board members' good faith immunity defense. The board's attorneys did not participate in this exchange. On the next day of trial the court again addressed plaintiff's attorney inquiring whether any decision had been made about dropping one of the claims. Garcia's attorney, noting that he had conferred with his client and with co-counsel, informed the court that plaintiff wanted to drop the claim against the board members in their individual capacities. Defendants stated that there was no problem with this decision. Then, in chambers when the trial judge and attorneys for both plaintiff and defendants discussed the final version of the jury instructions, the following conversation took place:

THE COURT: [T]he instructions are drafted as against the defendants strictly in their official capacities. I understood that's the way the plaintiff wanted it. Therefore, that takes out any issue of punitive damages and also any issue of good faith. So if there's no hooker--There's no problem; if the plaintiff is entitled to a verdict, it's recoverable. I assume that's true.

[Defense Counsel]: That's true, Your Honor.

[THE COURT]: I mean if the plaintiff were recovering, then all at once the school district will not respond or claim some kind of immunity or something.

[Defense Counsel]: No. They probably would not have the money, but there's no problem with that.

[Plaintiff's Counsel]: Of course, if there's nothing with the County, the Constitution provides for that.

Garcia v. Board of Educ. of Socorro Consol. School Dist., 777 F.2d 1403, 1406 (10th Cir.1985), cert. denied, 479 U.S. ----, 107 S.Ct. 66, 93 L.Ed.2d 24 (1986). This was the substance of the court's inquiry. It is unclear what the court meant by the statement, "the school board will not respond or claim some kind of immunity or something." Defense counsel's responses during this colloquy are at issue in the present lawsuit.

The federal trial judge then submitted to the jury the question of whether the board, acting in its official capacity, had deprived plaintiff of a constitutionally protected liberty interest without due process. The jury awarded plaintiff $180,000 and the board appealed the judgment.

On appeal to the United States Court of Appeals for the Tenth Circuit, the school board raised for the first time, since the inception of the trial, the issue of immunity from suit under the eleventh amendment. The opinion by the Tenth Circuit held that the eleventh amendment immunity is jurisdictional and, therefore, could have been raised at any time. In New Mexico sovereign immunity is limited to and governed by statute; thus, a school board's attorney does not have the authority to waive this immunity. NMSA 1978, Secs. 41-4-13 to -25 (Repl.Pamp.1986); Garcia, 777 F.2d at 1407. The court then concluded that since local school boards in New Mexico were "arms of the state," see Maestas v. Board of Educ. of the Mora Indep. School Dist., 749 F.2d 591 (10th Cir.1984); Martinez v. Board of Educ. of the Taos Mun. School Dist., 748 F.2d 1393 (10th Cir.1984), this suit was barred against the school board and its members in their official capacity. Garcia, 777 F.2d at 1407. The court also stated, "We sympathize with the trial court and the plaintiff when they have been 'sand bagged' as they were on this issue. However, the cases dictate this post-trial revision of the issues." Id. at 1406. Without additional analysis, the court of appeals reversed the judgment.

The statement by the court of appeals that the federal district court and plaintiff had been "sand bagged" was an interesting comment since the record indicates that the eleventh amendment immunity defense had been raised in defendants' Answer, First and Second Amended Answer and Pretrial Order. More importantly, as the appellate court itself recognized, this defense can be raised at any time regardless of whether the trial court addressed it.

In the present case, plaintiffs claim that they were deprived of a favorable jury verdict in the federal case because of the defendants' wrongful conduct in the defense of that case. In effect, plaintiffs argue that if they had known that their case against the board in its official capacity was barred by the eleventh amendment, they would not have dropped the claims against the board members in their individual capacities. Defendants moved to dismiss plaintiffs' complaint pursuant to SCRA 1986, 1-012(B)(6) for failure to state a claim upon which relief could be granted. From the granting of defendants' motion, plaintiffs have appealed. We affirm the judgment of the district court.

The issue before us on appeal is whether defendants' conduct in the previous federal lawsuit gives rise to a cause of action by plaintiffs. Specifically, plaintiffs allege that defendants' conduct constituted a duty by opposing counsel to plaintiffs and was not privileged, thereby resulting in an action in negligent misrepresentation; was a violation of the Code of Professional Responsibility and the Attorney's Oath; and gave rise to an action for constructive fraud, promissory estoppel and breach of contract. Whether any of these theories of liability state a cause of action against an attorney by a non-client adversary party is a case of first impression in New Mexico. We note at the outset that plaintiffs' claim of breach of contract between plaintiffs and defendants was not briefed to this Court; hence, we deem it to be abandoned. SCRA 1986, 12-216; State v. Sandoval, 90 N.M. 260, 261, 561 P.2d 1353, 1354 (Ct.App.), cert. denied, 90 N.M. 637, 567 P.2d 486 (1977).

A motion to dismiss tests the legal sufficiency of the complaint. SCRA 1986, 1-012. In considering a motion to dismiss for failure to state a claim for which relief can be granted, the applicable rule to be followed is to accept as true all facts well pleaded and question only whether the plaintiffs might prevail under any state of facts provable under the claim. Groendyke Transp. Inc. v. New Mexico State Corp. Comm'n, 85 N.M. 718, 721, 516 P.2d 689, 692 (1973); Gomez v. Board of Educ., 85 N.M. 708, 710, 516 P.2d 679, 681 (1973).

1. Duty of Care to a Third Party Non-Client.

Plaintiffs allege that defendants' conduct in the prior lawsuit in which certain statements were made and relied on by opposing counsel and the trial court created a duty of professional care even though plaintiff was an adversary of defendants' client. Plaintiffs contend that defendants represented in court that they would not raise the eleventh amendment immunity defense. Plaintiffs further maintain that the parties' agreement to this arrangement, which was approved by the court and thereby given the "effect of law" resulted in a duty of care owed to Garcia.

A majority of jurisdictions do not hold attorneys liable for professional negligence to third party non-clients. Annotation, Attorneys-Liability To Third Parties, 45 A.L.R.3d 1181 (1972 and Supp.1987). A duty of care toward non-clients has been found to exist only in those situations where the non-client was an intended beneficiary of the attorney's services, or where it was reasonably foreseeable that negligent service or advice to or on behalf of the client could cause harm to others. Id. The two situations most productive of third party claims have been will drafting and examination of titles, id.; see also Wisdom v. Neal, 568 F.Supp. 4, 8 (D.N.M.1982); neither of which aid the plaintiffs in their present action.

An attorney has no duty however to protect the interests of a non-client adverse party for the obvious reasons that the adverse party is not the intended beneficiary of the attorney's services and that the attorney's undivided loyalty belongs to the client. See Lewis v. Swenson, 126 Ariz. 561, 564, 617 P.2d 69, 72 (Ap...