Loper v. Jmar

• Decision Date: 21 August 2013
• Docket Number: No. 31,357.,31,357.
• Citation: 311 P.3d 1184
• Parties: Dan LOPER d/b/a Rio Leche Dairy Co., Plaintiff–Appellant, v. JMAR, a New Mexico General Partnership, Defendant–Appellee.
• Court: Court of Appeals of New Mexico

311 P.3d 1184

Dan LOPER d/b/a Rio Leche Dairy Co., Plaintiff–Appellant,

v.JMAR, a New Mexico General Partnership, Defendant–Appellee.

No. 31,357.

Court of Appeals of New Mexico.

July 3, 2013.

Certiorari Denied Aug. 21, 2013.

Felicia C. Weingartner, Law Offices of Felicia C. Weingartner, P.C., Albuquerque, NM, David A. Domina, Dominalaw Group PC LLO, Omaha, NE, for Appellant.

Gregory L. Biehler, Beall & Biehler, Albuquerque, NM, for Appellee.

OPINION

VIGIL, Judge.

{1} In this negligence case, the district court granted summary judgment to Defendant (JMAR) in two separate orders. First, the district court ruled that the doctrine of circuity of actions bars Plaintiff's claims. Secondly, the district court granted summary judgment when it ruled that the opinions of Plaintiff's expert on causation are not admissible as not being based on the facts of the case. We reverse both orders.

I. BACKGROUND

{2} Plaintiff, Dan Loper, d/b/a Rio Leche Dairy, hired JMAR, a contractor, to design, build, and deliver a new, turn-key fully operational dairy. JMAR subcontracted the electrical work on the dairy to Kyle Snider, d/b/a Snider Electric (Snider Electric). When the dairy was delivered, Plaintiff noticed problems with the milk production of his dairy cattle. After considering and eliminating other causes of low milk production, such as milking practices and nutritional needs of the cows, Plaintiff hired an electrician, Precision Electric, to conduct an electrical survey of the dairy. Precision Electric found electrical wiring defects in the dairy and corrected them. The opinion of Plaintiff's expert, LaVerne Stetson, is that the wiring defects resulted in stray voltage at the dairy which adversely affected the production of milk by cows in the herd.

{3} Plaintiff sued both JMAR and Snider Electric for losses in milk production he alleged occurred as a result of JMAR's negligence in its construction and design of the dairy and Snider Electric's failure to properly install the electrical system in the dairy. Plaintiff also brought breach of contract claims against JMAR, alleging that JMAR failed to supply contracted improvements at the dairy, such as additional buildings, sheds, and equipment.

{4} At the outset of the litigation, JMAR sent Snider Electric a letter, demanding indemnification for any liability imposed upon JMAR as a result of Snider Electric's negligent installation of the electrical system. Plaintiff and Snider Electric then settled their claims before trial, and Snider Electric was dismissed from the lawsuit. In relevant part, their agreement requires Plaintiff to indemnify Snider Electric as follows:

[Plaintiff] agrees to defend, indemnify, and hold Snider [Electric] and [its] insurer harmless from and against any claims, or judgment of liability for indemnity or contribution which arises by, through, or under JMAR ... which arises in any way from the circumstances and claims set forth in the lawsuit.

[Plaintiff] agrees to reduce any judgment which is obtained against JMAR ... to whatever extent is necessary to extinguish any claim which JMAR ... would otherwise have against Snider [Electric] for indemnity or contribution. It is the intent of the parties that neither Snider [Electric nor its] insurer have any liability to any person or entity as a result of the lawsuit beyond the payment ... described in ... this agreement.

{5} Based upon Plaintiff's agreement to indemnify Snider Electric, JMAR filed a motion for summary judgment, asserting that Plaintiff's agreement to indemnify Snider Electric created a circular chain of indemnification because of Snider's obligations to indemnify JMAR for its negligence and that Plaintiff's claims were therefore barred under the doctrine of circuity. The district court granted the motion, concluding that the doctrine of circuity prevented Plaintiff from asserting claims dealing with electrical matters against JMAR that arose “out of the conduct of Snider Electric.”

{6} The district court also granted JMAR's motion to exclude the testimony of Mr. Stetson. This resulted in a second order of summary judgment in JMAR's favor because without Mr. Stetson's testimony, Plaintiff was unable to prove that stray voltage caused the problems with milk production.

{7} Trial proceeded on Plaintiff's remaining contractual claims against JMAR. Judgment on the jury verdict in JMAR's favor was entered on the contractual claims, and Plaintiff now appeals from the summary judgment orders.

II. ANALYSIS

{8} Plaintiff raises two issues on appeal: (A) that the district court erred in granting summary judgment to JMAR on all claims related to the electrical issues at the Rio Leche Dairy based on the doctrine of circuity; and (B) that the district court erred in granting summary judgment due to its erroneous exclusion of the opinion of Mr. Stetson, Plaintiff's expert.

{9} Before addressing these issues, we resolve two arguments raised by JMAR that Plaintiff waived his right to argue them on appeal. JMAR argues that because Plaintiff went to trial on the issues not excluded by the summary judgment orders, he waived his argument regarding these claims because he did not raise the direct negligence claims against JMAR at the trial on the breach of contract claims. The summary judgment order with respect to the doctrine of circuity states: “The Court ... finds the motion [for summary judgment] is well taken as to claims arising out of the conduct of Snider Electric ... [, and t]he motion is granted with regard to any claims related to the electrical matters and denied as to any remaining claims.” In addition, summary judgment was granted with respect “to the stray voltage claims supported by the testimony of Mr. Stetson[,]” Plaintiff's expert. We conclude that these orders together were sufficiently broad to prevent Plaintiff from asserting its negligence causes of action against JMAR at the trial on the breach of contract claims. Thus, we conclude there was no waiver of the arguments Plaintiff now makes.

{10} JMAR also asserts that Plaintiff should have sought clarification from the district court on the scope of the orders so as to prevent waiver of these claims, and that because Plaintiff approved the orders as to form, it waived its opportunity to do so. We disagree that Plaintiff was required to raise ambiguity of the orders in the district court that JMAR now perceives and raises for the first time on appeal. We therefore proceed to consider Plaintiff's claims of error regarding JMAR's negligence.

{11} “Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” Self v. United Parcel Serv., Inc., 1998–NMSC–046, ¶ 6, 126 N.M. 396, 970 P.2d 582. “On appeal from the grant of summary judgment, we ordinarily review the whole record in the light most favorable to the party opposing summary judgment to determine if there is any evidence that places a genuine issue of material fact in dispute.” City of Albuquerque v. BPLW Architects & Eng'rs, Inc., 2009–NMCA–081, ¶ 7, 146 N.M. 717, 213 P.3d 1146. “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.” Id.

A. Doctrine of Circuity

{12} The doctrine of circuity of actions has been recognized in other jurisdictions and some federal courts to resolve lawsuits as a matter of law when a plaintiff has agreed to indemnify one defendant pursuant to a settlement while pursuing damages from another defendant who has a right of indemnity from the defendant that plaintiff has agreed to indemnify. A circular chain of indemnification results, in which the plaintiff ends up indemnifying a co-defendant for the claim that it recovered against another co-defendant. Thus, the doctrine was developed to prevent needless litigation and resolve such lawsuits as a matter of law. See Wal–Mart Stores, Inc. v. RLI Ins. Co., 292 F.3d 583, 594 (8th Cir.2002) (“Generally, courts will not allow parties to engage in circuitous action when the foreseeable end result is to put the parties back in the same position in which they began.”); Moore v. Sw. Elec. Power Co., 737 F.2d 496, 501 (5th Cir.1984) (“When such circular patterns of indemnity develop, ... courts resolve the matter by denying recovery to [the] plaintiffs.”); Ward v. IHC Health Servs., Inc., 2007 UT App 362, ¶ 14, 173 P.3d 186 (adopting the doctrine of circuity in the Utah courts and noting that although never recognized before, it likely has its roots in the same policies as the mootness doctrine). We have not yet considered whether the doctrine of circuity applies in New Mexico, and it is not necessary for us to do so in this case.

{13} Plaintiff has asserted negligence theories against JMAR arising from JMAR's alleged negligent design, negligent misrepresentation, negligent hiring, and negligent supervision in the construction of the dairy. JMAR argues that based on traditional indemnification rules set forth in Otero v. Jordan Restaurant Enterprises, it would be entitled to indemnification from Snider Electric on all of these claims because it was the passive actor and Snider Electric was actively negligent in failing to ground the wiring system. 1996–NMSC–047, ¶¶ 2–3, 14, 122 N.M. 187, 922 P.2d 569 (citing Restatement (Second) of Torts § 422(b) (1965), which states: “[a] possessor of land who entrusts to an independent contractor construction, repair, or other work on the land, or on a building or other structure upon it, is subject to the same liability as though he had retained the work in his own hands to others on or outside of the land for physical harm caused to them by the unsafe condition of the structure ... [if he has possession of the land while the work is being completed, or] after he has resumed possession of the land upon its...