Martinez v. Cornejo

• Citation: 2009 NMCA 011,208 P.3d 443
• Decision Date: 14 November 2008
• Docket Number: No. 27,383.,No. 27,382.,27,382.,27,383.
• Parties: Roxanne MARTINEZ, Orlando Sena, Charlie Jimenez, Jr., Adan Carriaga, and Christa Okon, Plaintiffs-Appellants, v. Jose CORNEJO, Defendant-Appellee. and Ramon Gallegos, Plaintiff-Appellant, v. Allstate Insurance Company, Defendant-Appellee.
• Court: Court of Appeals of New Mexico

208 P.3d 443

2009 NMCA 011

Roxanne MARTINEZ, Orlando Sena, Charlie Jimenez, Jr., Adan Carriaga, and Christa Okon, Plaintiffs-Appellants, v. Jose CORNEJO, Defendant-Appellee. and Ramon Gallegos, Plaintiff-Appellant, v. Allstate Insurance Company, Defendant-Appellee.

No. 27,382.

No. 27,383.

Court of Appeals of New Mexico.

November 14, 2008.

Certiorari Denied, No. 31,448, January 5, 2009.

Berardinelli Law Firm, L.L.C., David J. Berardinelli, Santa Fe, NM, for Appellants.

Modrall, Sperling, Roehl, Harris & Sisk, P.A., Lisa Mann, Jennifer A. Noya, Albuquerque, NM, Steptoe & Johnson L.L.P., Bennett Evan Cooper, Phoenix, AZ, for Appellees.

OPINION

FRY, Judge.

{1} In this case, we resolve two questions that require us to interpret the Trade Practices and Frauds Act (the TPFA) of the Insurance Code, NMSA 1978, § 59A-16-1 to -30 (1984, as amended through 2007). First, we consider whether a manager of a group of insurance adjusters can be held personally liable for violations of the TPFA. We hold that such an employee is subject to the private right of action created by Section 59A-16-30 of the TPFA and therefore reverse, in part, the district court's dismissal of the TPFA claims against Defendant Jose Cornejo. Second, we consider what statute of limitations applies to the private right of action created by Section 59A-16-30. We affirm the district court and hold that NMSA 1978, § 37-1-4 (1880), the four-year "catch-all" statute of limitations for actions not otherwise provided for, applies to the private right of action provision of the TPFA.

BACKGROUND

{2} This case arises from a class action suit filed pursuant to the private right of action provision of the TPFA, Section 59A-16-30, which our Supreme Court, in Hovet v. Allstate Ins. Co., 2004-NMSC-010, 135 N.M. 397, 89 P.3d 69, construed to allow third-party claimants, like Plaintiffs, the right to bring a cause of action for alleged violations of the TPFA. Plaintiffs in this case, Roxanne Martinez, Orlando Sena, Ramon Gallegos, Charlie Jimenez, Jr., Adan Carriaga, and Christa Okon, were each injured by an Allstate insured, and all attempted to settle their personal injury claims without going to trial. Plaintiffs each ultimately went to trial and recovered an amount greater than the settlement offers made by Allstate in pre-trial negotiations. Plaintiffs then filed a class action suit on behalf of themselves and a class of similarly situated class members against Defendants Allstate Insurance Company, the insurance company responsible for the judgments Plaintiffs recovered in their underlying personal injury litigation, and Jose Cornejo, the manager of Allstate's Albuquerque claims office, alleging, among other things, that Defendants had violated the TPFA. Specifically, Plaintiffs alleged that Allstate and Cornejo had used unfair claims settlement and litigation practices, such as making unreasonably low settlement offers and refusing to negotiate, which forced claimants to litigate their personal injury claims, in violation of Section 59A-16-20(E) and (G) (requiring insurers and other persons to attempt to settle cases in good faith and precluding insurers and other persons from offering substantially less than what is ultimately recovered).

{3} Pursuant to Rule 1-012(B)(6) NMRA, Allstate and Cornejo filed a number of motions to dismiss the claims against them. Of the motions relevant to this appeal, Cornejo moved to dismiss the TPFA claims brought against him on the ground that the private right of action provision of the TPFA allows third parties to bring suit against only insurers and agents and that he is neither an insurer nor an agent. Allstate moved to dismiss all claims filed against it by Plaintiff Gallegos on the ground that Gallegos's claims were time-barred.

{4} The district court agreed with Cornejo and dismissed the claims brought against him, ruling that he was not subject to personal liability under the TPFA. The district court also agreed with Allstate and dismissed the claims brought by Plaintiff Gallegos, ruling that the statute of limitations applicable to claims brought pursuant to the TPFA is the four-year "catch-all" limitations period and that Gallegos's claims were therefore time-barred.

{5} Following the district court's rulings, two separate appeals were filed in this Court. In the first appeal, all of the Plaintiffs challenged the district court's dismissal of the claims against Defendant Cornejo. In the second appeal, Plaintiff Gallegos alone challenged the district court's determination that the four-year "catch-all" statute of limitations barred his claims against Allstate. For convenience, we address the two appeals together in this opinion.

STANDARD OF REVIEW

{6} On appeal from a dismissal pursuant to a Rule 1-012(B)(6) motion, this Court accepts all facts alleged in the complaint as true and resolves all doubts about the sufficiency of the complaint in favor of the plaintiff's right to proceed. Forest Guardians v. Powell, 2001-NMCA-028, ¶ 5, 130 N.M. 368, 24 P.3d 803. We do not decide whether Plaintiffs will ultimately recover, but only whether they have stated an actionable claim. In this case, determining whether Plaintiffs' complaint states a claim upon which relief can be granted requires us to interpret the meaning of the language in the TPFA and to determine which statute of limitations applies to the private right of action provision of the TPFA. Both of these issues are questions of law that we review de novo. See Jaramillo v. Gonzales, 2002-NMCA-072, ¶ 8, 132 N.M. 459, 50 P.3d 554 (noting that we "review de novo whether a particular statute of limitations applies"); Morgan Keegan Mortgage Co. v. Candelaria, 1998-NMCA-008, ¶ 5, 124 N.M. 405, 951 P.2d 1066 (explaining that statutory interpretation is a question of law that appellate courts review de novo).

DISCUSSION

I. "Persons" Are "Insurers" Who Are Subject to the Private Right of Action Provision of the TPFA

{7} Plaintiffs argue that the district court erred when it determined that Jose Cornejo is not an insurer or an agent who is subject to the private right of action provision of the TPFA. § 59A-16-30. In order to address this argument, we look first to the applicable provisions of the TPFA.

The Scope of the Trade Practices and Frauds Act

{8} The TPFA is a remedial statute that broadly governs the conduct of

insurers, fraternal benefit societies, nonprofit health care plans, health maintenance organizations, prepaid dental services organizations, motor clubs, agents, brokers, solicitors, adjusters, providers of services contracts pursuant to the Service Contract Regulation Act [NMSA 1978, 59A-58-1 to -18 (2001)] and all other persons engaged in any business which is now or hereafter subject to the superintendent's supervision under the Insurance Code ..., as well as all alien and foreign insurers delivering or issuing for delivery in New Mexico any certificate or other evidence of coverage.

§ 59A-16-1. Our Legislature enacted the TPFA "to regulate trade practices in the insurance business ... by defining, or providing for determination of, practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices so defined or determined." § 59A-16-2. The TPFA specifies a number of activities that will constitute unfair trade and claims practices and provides a mechanism by which the superintendent of insurance can enforce the provisions of the TPFA. See generally § 59A-16-1 to -30. Importantly, the TPFA also creates a private right of action, which provides that "[a]ny person covered by [the article] who has suffered damages as a result of a violation of that article by an insurer or agent is granted a right to bring an action in district court to recover actual damages." § 59A-16-30.

{9} Pursuant to Section 59A-16-30, a person covered by the TPFA is only entitled to bring a private cause of action against an "insurer or agent." Because Plaintiffs have not alleged that Cornejo is an "agent," the question of whether a private right of action is available against Cornejo depends on whether he is included within the meaning of the term "insurer." The general definitional section of the Insurance Code defines an "insurer" as "every person engaged as principal and as indemnitor, surety or contractor in the business of entering into contracts of insurance." NMSA 1978, § 59A-1-8(A) (1984). The TPFA, however, is a self-contained sub-part of the Insurance Code that modifies the definition of insurer and provides that "[f]or the purposes of [the TPFA], the societies, organizations, clubs and persons [mentioned in 59A-16-1] shall be included within the meaning of `insurer[,]' and contracts issued by them are included within the meaning of `policy[.]'" § 59A-16-1. Thus, under a plain reading of the statute, the Legislature has broadened the definition of "insurer," for purposes of the TPFA, to include entities and individuals that are not within the definition of insurer elsewhere in the Insurance Code.

{10} Cornejo argues that interpreting the term "insurer" to include persons such as himself for purposes of the TPFA would conflict with the Insurance Code's general definition of insurer in Section 59A-1-8, a violation of the rule that a statute whose construction is in question is to "be read in connection with other statutes concerning the same subject matter." Quantum Corp. v. State Taxation & Revenue Dep't, 1998-NMCA-050, ¶ 8, 125 N.M. 49, 956 P.2d 848. In determining the meaning of the term "insurer" in the TPFA, however, this rule is inapplicable because the Legislature has expressly limited the definition in question to apply only to the TPFA. See § 59A-16-1. Thus, looking solely at the meaning of "insurer" as defined in Section 59A-1-8 would require us to ignore the Legislature's clearly expressed intention that the term be defined differently for purposes of the TPFA. Because the definition of insurer in ...