Las Luminarias of the New Mexico Council of the Blind v. Isengard

• Decision Date: 07 November 1978
• Docket Number: No. 3459,3459
• Citation: 587 P.2d 444,92 N.M. 297,1978 NMCA 117
• Parties: LAS LUMINARIAS OF the NEW MEXICO COUNCIL OF THE BLIND, Plaintiff-Appellant, v. Chris S. ISENGARD, Kenneth L. Watkins, Leo Hollins, Barbara J. Thrash, Career Services for the Handicapped, Inc., City of Albuquerque, County of Bernalillo, Office of Comprehensive Employment and Training Administration, Orlando D. Sedillo, Community Development Administration, James J. Jaramillo, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

Page 444

587 P.2d 444

92 N.M. 297

LAS LUMINARIAS OF the NEW MEXICO COUNCIL OF THE BLIND, Plaintiff-Appellant, v. Chris S. ISENGARD, Kenneth L. Watkins, Leo Hollins, Barbara

J. Thrash, Career Services for the Handicapped, Inc., City

of Albuquerque, County of Bernalillo, Office of

Comprehensive Employment and Training Administration,

Orlando D. Sedillo, Community Development Administration,

James J. Jaramillo, Defendants-Appellees.

No. 3459.

Court of Appeals of New Mexico.

Nov. 7, 1978.

Narciso Garcia, Jr., Toulouse, Krehbiel & DeLayo, P.A., Albuquerque, for plaintiff-appellant

Albert Simms, Albuquerque, for defendants-appellees.

OPINION

LOPEZ, Judge.

Plaintiff-appellant filed a complaint containing four counts against defendants-appellees and other defendants not involved in this appeal. These latter defendants are the City of Albuquerque, the County of Bernalillo, the Office of Comprehensive Employment and Training Administration, Orlando D. Sedillo, Community Development Administration and James C. Jaramillo. Counts I, III and IV request injunctive and declaratory relief and an order of mandamus against certain of these defendants. Count II seeks damages from appellees based upon a theory of civil conspiracy. With respect to these four counts, the trial court granted appellees' motion for dismissal for failure to state a cause of action under Rule 12(b)(6) of the New Mexico Rules of Civil Procedure. Section 21-1-1(12)(b)(6), N.M.S.A.1953 (Repl. Vol. 4, 1970). Appellant appeals from this order of dismissal. We reverse and remand.

The issue presented on appeal is whether the trial court erred in dismissing appellant's complaint under Rule 12(b)(6). In determining this issue, we note that no argument is addressed to the trial court's dismissal of Counts I, III and IV for failure to state a cause of action. Accordingly, the order of the court is affirmed insofar as it relates to these counts. Section 21-2-1(15) (14)(d), N.M.S.A.1953 (Repl. Vol. 4, 1970); Perez v. Gallegos, 87 N.M. 161, 530 P.2d 1155 (1974); Petritsis v. Simpier, 82 N.M. 4, 474 P.2d 490 (1970).

In determining whether a complaint states a claim upon which relief can be granted, we assume as true all facts well pleaded. Ramsey v. Zeigner,79 N.M. 457, 444 P.2d 968 (1968); Jones v. International Union of Operating Engineers, 72 N.M. 322, 383 P.2d 571 (1963). In addition, a motion to dismiss a complaint is properly granted only when it appears that the plaintiff cannot recover or be entitled to relief under any state of facts provable under the claim. Hall v. Budagher, 76 N.M. 561, 417 P.2d 71 (1966); Jones v. International Union of Operating Engineers, supra. Only when there is a total failure to allege some matter which is essential to the relief sought should such a motion be granted. Pillsbury v. Blumenthal, 58 N.M. 422, 272 P.2d 326 (1954); Michelet v. Cole, 20 N.M. 357, 149 P. 310 (1915). Moreover, a motion to dismiss for failure to state a claim is granted infrequently. International Erectors, Inc. v. Wilhoit Steel Erectors & Rental Service, 400 F.2d 465 (5th Cir. 1968).

New Mexico adheres to the broad purposes of the Rules of Civil Procedure and construes the rules liberally, particularly as they apply to pleading. As the New Mexico Supreme Court stated in Carroll v. Bunt, 50 N.M. 127, 130, 172 P.2d 116, 118 (1946):

The general policy of the Rules requires that an adjudication on the merits rather than technicalities of procedure and form shall determine the rights of the litigants.

To constitute an actionable civil conspiracy, there must be a combination by two or more persons to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means. Bourland v. State, 528 S.W.2d 350 (Tex.Civ.App.1975); International Bankers Life Insurance Company v. Holloway, 368 S.W.2d 567 (Tex.1963); Boman v. Gibbs, 443 S.W.2d 267 (Tex.Civ.App.1969); 16 Am.Jur.2d Conspiracy § 43 (1964). Civil conspiracy is not of itself actionable; the gist of the action is the damage arising from the acts done pursuant to the conspiracy. Armijo v. National Surety Corp., 58 N.M. 166, 268 P.2d 339 (1954); Lindbeck v. Bendziunas, 84 N.M. 21, 498 P.2d 1364 (Ct.App.1972); Barber's Super Markets, Inc. v. Stryker, 84 N.M. 181, 500 P.2d 1304 (1972), Cert. denied, 84 N.M. 180, 500 P.2d 1303 (1972). Generally, to state a cause of action for conspiracy, the complaint must allege: (1) the existence of the conspiracy; (2) the wrongful act or acts done pursuant to the conspiracy; and (3) the damage resulting from such act or acts. James v. Herbert, 149 Cal.App.2d 741, 309 P.2d 91 (Ct.App.1957); See also Wu v. Keeney, 384 F.Supp. 1161 (D.D.C.1974), Aff'd mem. 174 U.S.App.D.C. 71, 527 F.2d 854 (1975); Black & Yates v. Mahogany Ass'n, Inc., 129 F.2d 227 (3d Cir. 1941), Cert. denied, 317 U.S. 672, 63 S.Ct. 76, 87 L.Ed. 539 (1942); Browning v. Blair, 169 Kan. 139, 218 P.2d 233 (1950). The existence of the conspiracy must be pled either by direct allegations or by allegation of circumstances from which a conclusion of the existence of a conspiracy may be reasonably inferred. 16 Am.Jur.2d Conspiracy § 58 (1964); Accord, Nardyz v. Fulton Fire Ins. Co., 151 Kan. 907, 101 P.2d 1045 (1940).

With respect to Count II, appellant in its complaint makes the following allegations: (1) plaintiff is a non-profit organization which provides training and job development services to the severely disabled of the Albuquerque-Bernalillo County area; (2) defendants, Chris S. Isengard, Kenneth L. Watkins, Leo Hollins and Barbara J. Thrash, are former employees of plaintiff; before the hiring of these defendants, plaintiff was a strong, healthy organization; (3) defendant, Office of Comprehensive Employment and Training Administration (OCETA), is a federally funded program of the United States Department of Labor and acts as the administrative support organization for the Albuquerque-Bernalillo County Manpower Programs; (4) defendants, the City of Albuquerque and Bernalillo County, formed a consortium to serve as prime sponsor of the Comprehensive Employment and Training Act (CETA) in the Albuquerque-Bernalillo County area; (5) defendant, Community Development Administration (CDA), is an agency created by the Council of the City of Albuquerque to supervise activities authorized by the Congress of the United States under Title I of the Housing and Community Development Act of 1974; (6) funds were made available by the federal government to the City of Albuquerque and County of Bernalillo as prime sponsor under the CETA program for fiscal year 1977-1978; $57,360.00 of such funds were channeled by the prime sponsor into OCETA to be used for services to the handicapped; (7) funds were also made available to the City of Albuquerque by the federal government under the Housing and Community Development Act for fiscal year 1977-1978; $30,000.00 of such funds were channeled by the City of Albuquerque into CDA to be used for services to the handicapped; (8) Joint Requests for Proposals (RFP) were delivered to applicants for these funds; (9) the resulting contract with the selected agency for delivery of services to the handicapped included the two categories of funding in one contract; (10) plaintiff received a RFP and began preparation of its proposal; defendants, Isengard, Watkins, Hollins and Thrash, were all employed by plaintiff during the preparation of plaintiff's proposal and all had access to plaintiff's corporate records and documents; (11) during the course of their employment, these defendants owed plaintiff a duty of loyalty, a duty to serve faithfully and be regardful of the interests of plaintiff, a duty to discharge carefully their duties to plaintiff, a duty to conduct themselves in such a manner as not to destroy or to threaten the financial existence of plaintiff and a duty to avoid competition with plaintiff through the use of confidential information obtained during the course of their employment; (12) these defendants were instrumental in the formation and incorporation of defendant, Career Services for the Handicapped, Inc., (hereinafter referred to as Career); this corporation was organized to apply for the same two categories of funding; (13) while employed by plaintiff, these defendants actively worked on the preparation of a proposal to be submitted on behalf of Career and used plaintiff's records and papers to prepare this competitive proposal; (14) in forming this new corporation and using plaintiff's records and papers to prepare Career's proposal, these defendants violated the duties they owed to the plaintiff; (15) plaintiff submitted its proposal to CDA and OCETA; (16) similarly, a proposal was submitted on behalf of Career; the proposal of Career included the resume of its proposed director, defendant Isengard; (17) it was the unanimous opinion of the Technical Review Panel of OCETA that the contract for services should be awarded to plaintiff; of all the proposals submitted, plaintiff's proposal received the highest points in three evaluations based upon points; (18) defendants, Isengard, Watkins, Hollins and Thrash, made it known to the OCETA and CDA staffs that if plaintiff were awarded the contract, they would resign from their employment with plaintiff, and if Career were funded, they would seek employment with it; (19) the Executive Task Force of the OCETA Planning Board recommended that the contract be awarded to Career; (20) the contract was awarded to Career; (21) defendants, Isengard, Watkins, Hollins and Thrash, conspired and combined among each other and with Career and others to prevent the award of the contract to plaintiff; (22) as a result of this conspiracy, the contract was awarded to Career and plaintiff's offices will have to be closed; (23) this conspiracy and combination was a willful and wanton violation of the duty of loyalty owed by these defendants to plaintiff; and (24) due to the actions of these defendants, plaintiff has been...