Toscano v. Lovato
| Decision Date | 02 January 2002 |
| Docket Number | No. 22,150.,22,150. |
| Citation | 40 P.3d 1042,131 N.M. 585 |
| Parties | Judilia TOSCANO, Plaintiff-Appellee, v. Augustin LOVATO and Dairyland Insurance Company, Defendants-Appellants. |
| Court | Court of Appeals of New Mexico |
Narciso Garcia, Jr., Garcia Law Office, Albuquerque, NM, for Appellee.
Jeffrey E. Jones, Miller, Stratvert & Torgerson, P.A., Santa Fe, NM, for Appellants.
{1} In this case, we are asked to consider the implications, on the issue of venue, of Raskob v. Sanchez, 1998-NMSC-045, 126 N.M. 394, 970 P.2d 580, which held that a plaintiff may join a defendant's insurer in an action arising out of an automobile accident. After Plaintiff and Defendant Lovato, both residents of Bernalillo County, were involved in an automobile accident within that county, Plaintiff brought suit against Lovato and, pursuant to Raskob, Lovato's insurer, Dairyland Insurance Co. Plaintiff filed her action in Santa Fe County. Defendants moved to dismiss, arguing that venue would be proper only in Bernalillo County. The district court denied Defendants' motion, but permitted an interlocutory appeal pursuant to NMSA 1978, § 39-3-4(A) (1999), and we granted Defendant's application for appeal.
{2} Defendants argue that under our venue statute, NMSA 1978, § 38-3-1 (1988), Plaintiff could bring this action only in Bernalillo County. Defendants argue that, in accordance with Sunwest Bank v. Nelson, 1998-NMSC-012, ¶¶ 12-13, 125 N.M. 170, 958 P.2d 740, out-of-state insurance companies are not foreign corporations for the purposes of the venue statute. As a result, they argue, Plaintiff was required to base her venue selection on the options available under Subsection A of the venue statute, rather than Subsection F, which governs actions brought against foreign corporations. If Subsection A governs this action, then venue will be proper only in Bernalillo County. In the alternative, Defendants argue that Plaintiff cannot rely on the residency of an insurance company joined pursuant to Raskob in selecting venue, because the insurer is not a necessary and indispensable party to the action.
{3} Addressing Defendant's second argument first, we do not agree that venue must be based on a necessary and indispensable party, and instead hold that Plaintiff could base her venue decision on the residence of any proper party. Moving on to interpret the venue statute, we agree with Defendants that, under Sunwest Bank, out-of-state insurance companies are not foreign corporations for the purposes of the venue statute, and therefore the provisions of Subsection F relating to suits brought against foreign corporations do not apply. Nonetheless, we do not agree with Defendants that Plaintiff's venue selection is governed by Subsection A. Instead, we hold that foreign insurers are to be treated as nonresidents for the purposes of the venue statute, and therefore are subject to suit in any county within the state.
{4} In summary, we hold that (1) Plaintiff could base her venue decision on the residence of any proper party; (2) out-of-state insurance companies are not foreign corporations for the purposes of the venue statute, and therefore the provisions of Subsection F relating to suits brought against foreign corporations do not apply to actions against foreign insurers; and (3) foreign insurers are to be treated as nonresidents for the purposes of the venue statute, and therefore are subject to suit in any county within the state. Because Dairyland, as a nonresident, is subject to suit in any county, venue for this action was proper in Santa Fe County. We therefore affirm the decision of the district court denying Defendants' motion to dismiss for improper venue.
{5} Dairyland is an insurance company organized under the laws of the State of Wisconsin and certified to do business in New Mexico. Plaintiff brought her action in Santa Fe County on the theory that Dairyland is a foreign corporation, and therefore her venue options are governed by Subsection F of the venue statute, Section 38-3-1. Subsection F provides:
Suits may be brought against transient persons or non-residents in any county of this state, except that suits against foreign corporations admitted to do business and which designate and maintain a statutory agent in this state upon whom service of process may be had shall only be brought in the county where the plaintiff, or any one of them in case there is more than one, resides or in the county where the contract sued on was made or is to be performed or where the cause of action originated or indebtedness sued on was incurred or in the county where the statutory agent designated by the foreign corporation resides.
Plaintiff argues that, in this case, venue is proper in Santa Fe County because Dairyland, in compliance with NMSA 1978, § 59A-5-31(A) (1984), has appointed the Superintendent of Insurance as its statutory agent to receive service of process. Because the Superintendent of Insurance "resides" in Santa Fe County, Plaintiff argues that venue is proper there under Subsection F. There is no other basis for venue in Santa Fe County.
{6} In support of their motion to dismiss, Defendants argue that, under our Supreme Court's holding in Sunwest Bank, foreign insurers are not foreign corporations for the purposes of the venue statute. As a result, they argue, the provisions of Subsection F providing venue options for actions against foreign corporations do not apply. Defendants contend that Subsection A of the venue statute should govern this action. Subsection A provides that:
First, except as provided in Subsection F of this section relating to foreign corporations, all transitory actions shall be brought in the county where either the plaintiff or defendant, or any one of them in case there is more than one of either, resides; or second, in the county where the contract sued on was made or is to be performed or where the cause of action originated or indebtedness sued on was incurred; or third, in any county in which the defendant or either of them may be found in the judicial district where the defendant resides.
If Subsection A governs, then the action must be brought within Bernalillo County, because that is the place where both Plaintiff and Defendant Lovato reside and where the accident occurred. In the alternative, Defendants argued that Plaintiff cannot rely on the residence of Dairyland to determine venue because Dairyland is not a necessary and indispensable party to the action. The district court denied Defendants' motion on both grounds.
{7} A motion to dismiss for improper venue raises a question of law, which we review de novo. Williams v. Bd. of County Comm'rs, 1998-NMCA-090, ¶ 28, 125 N.M. 445, 963 P.2d 522. Our legislature has provided an expansive venue statute that gives plaintiffs wide latitude in choosing where to bring an action. Sunwest Bank, 1998-NMSC-012, ¶ 10, 125 N.M. 170, 958 P.2d 740. When there are multiple defendants, the residence of one defendant can determine the venue of the entire action. See Cooper v. Amerada Hess Corp., 2000-NMCA-100, ¶ 32, 129 N.M. 710, 13 P.3d 68, cert. granted, 130 N.M. 154, 20 P.3d 811 (2000) (citing Teaver v. Miller, 53 N.M. 345, 349, 208 P.2d 156, 159 (1949)).
{8} We address first Defendants' argument that venue can be based only on a necessary and indispensable party. If we agreed with Defendants' position on this issue, there would be no need to go on to discuss what venue is proper in suits involving Dairyland. However, we do not agree with Defendants' position.
{9} Defendants find support for their argument in Teaver. In that case, our Supreme Court stated that, "It is essential ... that the defendant whose residence is made determinative of the venue of the action be a necessary party to the action and not one joined solely to justify the bringing of the action in the county of his residence." Id. Defendants argue that Plaintiff cannot rely on the residence of Dairyland's statutory agent to select venue because Dairyland is not a necessary and indispensable party.
{10} A necessary and indispensable party is "one whose interests will necessarily be affected by the judgment so that complete and final justice cannot be done between the parties without affecting those rights." Jemko, Inc. v. Liaghat, 106 N.M. 50, 52, 738 P.2d 922, 924 (Ct.App.1987). Defendants acknowledge that Dairyland has an interest in the action, but they argue that judgment could be rendered without Dairyland being joined as a party. Prior to Raskob, they note, automobile accident cases were routinely litigated without insurance companies joined as parties. Clearly, then, judgment can be rendered without the presence of the insurance company.
{11} Defendants' logic is sound, but Defendants overstate the holding of Teaver, and apply too high a standard as a result. The Teaver Court held that venue must be based on necessary parties; it did not require those parties to be indispensable. See Teaver, 53 N.M. at 349, 208 P.2d at 158. For some time now, our courts have expressly drawn no distinction between necessary and indispensable parties. Sellman v. Haddock, 62 N.M. 391, 402, 310 P.2d 1045, 1052 (1957),overruled on other grounds by Safeco Ins. Co. v. United States Fidelity & Guar. Co., 101 N.M. 148, 150, 679 P.2d 816, 818 (1984). The Teaver Court, however, deciding its case a decade before Sellman, did draw such a distinction. See Teaver, 53 N.M. at 349, 208 P.2d at 158. The Teaver Court defined necessary parties as "[p]ersons having an interest in the controversy and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy, and do complete justice, by adjusting all the rights involved in it...." Id. (internal citation and quotation marks...
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