Montoya v. Moore

• Decision Date: 03 January 1967
• Docket Number: No. 8010,8010
• Citation: 1967 NMSC 3,422 P.2d 363,77 N.M. 326
• Parties: Pete MONTOYA, Plaintiff-Appellee, v. H. C. MOORE and Mutual of Omaha Insurance Company, formerly known as Mutual Benefit Health & Accident Association of Omaha, Nebraska, a corporation, Defendants-Appellants.
• Court: New Mexico Supreme Court

Page 363

422 P.2d 363

77 N.M. 326

Pete MONTOYA, Plaintiff-Appellee, v. H. C. MOORE and Mutual of Omaha Insurance Company, formerly known as Mutual Benefit Health & Accident Association of Omaha, Nebraska, a corporation, Defendants-Appellants.

No. 8010.

Supreme Court of New Mexico.

Jan. 3, 1967.

O. R. Adams, Jr., Albuquerque, for plaintiff-appellee

Toulouse, Ruud, Gallagher & Walters, Albuquerque, for defendants-appellants.

Rodey, Dickason, Sloan, Akin & Robb, Modrall, Seymour, Sperling, Roehl & Harris, Leland S. Sedberry, Albuquerque, Savage, Gilbson, Benefield & Shelton, John A. Johnson, Oklahoma City, Okl., amici curiae.

OPINION

HENSLEY, Chief Judge, Court of Appeals.

This is an action to recover compensatory and punitive damages from an insurance company and its adjuster for the fraud practiced in obtaining a release from the plaintiff.

A jury verdict awarded the plaintiff compensatory damages against both defendants in the sum of $9,675.00 and punitive damages against the insurance company in the sum of $50,000.00. From a judgment consistent with the verdict both defendants have appealed.

The facts, although not particularly complicated, claimed four pages in the appellants' brief, the amici curiae devoted two pages in concurring with the appellants' statement, and the appellee further belabored the subject for twenty-five pages. A deflated statement would show that the plaintiff in 1954 received from the defendant insurance company a health and accident insurance policy. In 1955, when the plaintiff was fifty-nine years old, he was severely burned in a gas explosion and totally disabled. As a result of the injury he became entitled to receive $100.00 per month and all other benefits of the insurance contract for the remainder of his life or as long as the disability continued. Payments were made until August, 1962 when a release was given by the plaintiff to the defendant insurance company in exchange for $3,000.00. In September, 1963, the plaintiff filed his complaint in the district court. The medical reports showed the plaintiff to be completely and permanently disabled. The plaintiff had no formal education, could only write his name, and could read only simple words in English and Spanish. The plaintiff contended that he signed the release because:

A) His monthly checks had been unduly delayed,

B) He was told by the defendant adjuster that he, the plaintiff, would get into trouble with the law by taking money from the insurance company without being disabled,

C) He was told by the defendant adjuster that the company had investigated his case and that the was not disabled.

(D) He was told by defendant adjuster that if he saw a lawyer he might get into more trouble,

E) He was told by the defendant adjuster that if he didn't sign the release he would lose everything.

The jury heard these claims, heard the denials by the defendant adjuster, saw the plaintiff and examined the reports submitted by the doctors.

Appellants' first point is that it was error to permit the jury to measure compensatory damages on the basis of life expectancy. Appellant contends that the proper measure of damages is the value of the insurance contract which is the amount actually due at the filing of the law suit.

The general rule is that when fraud is discovered the defrauded party has several remedies from which to elect. Thrams v. Block, 43 N.M. 117, 86 P.2d 938. See also Honaker v. Ralph Pool's Albuquerque Auto Sales, Inc., 74 N.M. 458, 394 P.2d 978. In this case the plaintiff (appellee) elected to ratify the release, waive the contract and sue in tort. It is noted that actions for damages based on fraud are actions in tort. 24 Am.Jur. 21, Fraud and Deceit, § 200.

Argument was advanced by the appellant and amici curiae that the rule of Thrams v. Block, supra, is not applicable here because this case is based on fraud, or tort, whereas Thrams was an action to rescind a contract. We see no reason for applying different rules. See Gould v. Cayuga County National Bank of Auburn, 99 N.Y. 333, 2 N.E. 16; Urtz v. New York Central and Hudson River Railroad Company, 202 N.Y. 170, 95 N.E. 711.

The jury was instructed that in determining compensatory damages to consider the present value of future disability payments the insured could reasonably be expected to receive less the amount paid for the release and the present value of all other provisions of the policy with its riders and endorsements. The jury was further instructed that in determining the value of the expected payments the life expectancy of the insured could be considered.

We think that the instruction was proper and consistent with the applicable rule of damages to place the injured party in the same position that he would have occupied had he not been defrauded. Since the measure of damages was properly presented to the jury and there is no evidence of passion, prejudice, partiality, sympathy, undue influence or some corrupt cause or motive the jury's award of compensatory damages will not be disturbed. Hall v. Stiles, 57 N.M. 281, 258 P.2d 386; Asbury v. Yellow-Checker Cab Company, 64 N.M. 372, 328 P.2d 941.

The second point submitted by the appellant is the contention that punitive damages are not recoverable where no actual damage has been proved. It is a correct statement of the law. Grandi v. LeSage, 74 N.M. 799, 399 P.2d 285. In view of the verdict and judgment for compensatory damages the rule is not applicable here.

Next it is contended that the award of punitive damages is erroneous, or if not erroneous, is grossly excessive. Amici curiae urge that the award is erroneous because there was no evidence that the defendant insurance company was aware of the representations made by the defendant Moore, or...