Wilson v. Berger Briggs Real Estate & Ins., Inc.

• Decision Date: 10 May 2021
• Docket Number: No. A-1-CA-38713,A-1-CA-38713
• Citation: 497 P.3d 654
• Parties: Edwin WILSON, Plaintiff-Appellee, v. BERGER BRIGGS REAL ESTATE & INSURANCE, INC. ; Pam Muzzi ; Trudy Best; and Mary Jo Dawson, Defendants-Appellants, and CSU Producer Resources, Inc. and Cincinnati Speciality Underwriters Insurance Company, Defendants.
• Court: Court of Appeals of New Mexico

497 P.3d 654

Edwin WILSON, Plaintiff-Appellee,

v. BERGER BRIGGS REAL ESTATE & INSURANCE, INC. ; Pam Muzzi ; Trudy Best; and Mary Jo Dawson, Defendants-Appellants,andCSU Producer Resources, Inc. and Cincinnati Speciality Underwriters Insurance Company, Defendants.

No. A-1-CA-38713

Court of Appeals of New Mexico.

Filing Date: May 10, 2021

Certiorari Denied, October 20, 2021, No. S-1-SC-38845

Law Office of Geoffrey R. Romero, Geoffrey R. Romero, Albuquerque, NM, Bencoe & Lacour Law P.C., Lori Bencoe, Cherie LaCour, Albuquerque, NM, Martinez, Hart, Thompson & Sanchez, P.C., Julio C. Romero, Bruce E. Thompson, Albuquerque, NM, for Appellee

Butt Thornton & Baehr PC, James H. Johansen, Jane A. Laflin, Felicia C. Boyd, Albuquerque, NM, Madison, Mroz, Steinman, Kenny & Olexy, P.A., Gregory D. Steinman, Albuquerque, NM, for Appellants

HANISEE, Chief Judge.

{1} In this interlocutory appeal, we are asked by Berger Briggs Real Estate & Insurance, Inc. (Berger Briggs) to resolve the validity of an assignment of claims arising from an agreement to procure general liability insurance on behalf of The Improved Benevolent Protective Order of the Elks of the World Albuquerque Navajo Lodge #863 (the Lodge). Berger Briggs appeals from the denial of its motion for summary judgment on all claims due to unassignability. Berger Briggs contends that Plaintiff Edwin Wilson (Wilson), to whom the Lodge assigned its claims against Berger Briggs, is precluded as a matter of New Mexico law and policy from asserting claims against Berger Briggs. We affirm.

BACKGROUND

{2} On February 14, 2015, Wilson attended a comedy show at the Lodge. During the performance, an altercation broke out between two patrons. A person with the performing group discharged a firearm at the crowd, striking Wilson and causing traumatic injury to his spine, which rendered him paralyzed below the waist.

{3} In August 2012, two-and-a-half years prior to the shooting, the Lodge's representative, L.C. Gray, approached Berger Briggs to procure a general liability policy. Gray met with Defendant Pam Muzzi, an employee of Berger Briggs, to discuss the Lodge's specific needs in its general liability policy. While Gray contends that she told Muzzi that the Lodge "needed coverage for anything that happened in the Lodge," Muzzi asserts that Gray told her that the Lodge could not afford an expensive policy and did not seek coverage for assaults and batteries that might take place at the Lodge. Muzzi procured a quote from Cincinnati Specialty Underwriters Insurance Company (Cincinnati Specialty) for $2,291.82 for general liability coverage, which contained exclusions for assault, battery, and firearm coverage. The Lodge entered into a general liability policy with Cincinnati Specialty with these exclusions, effective August 23, 2014.

{4} On May 26, 2015, Wilson filed a complaint for personal injuries and damages against the Lodge and others in the Second Judicial District Court for claims related to the shooting. On July 22, 2015, Cincinnati Specialty filed a declaratory action against the Lodge in federal district court. On November 23, 2015, that court issued a memorandum opinion and order finding that the policy procured by Berger Briggs did not provide coverage to the Lodge for Wilson's injuries and ordered default judgment against the Lodge. Back in state district court on February 22, 2016, the Lodge stipulated to liability and assigned to Wilson all claims it had against Berger Briggs and all related insuring entities, including commercial tort claims, statutory violations, and breaches of contract. On August 1, 2016, the state district court held an evidentiary hearing and entered a judgment, awarding damages in the amount of $14,502,807.69 to Wilson. Thereafter and pursuant to the assignment, Wilson filed suit against Berger Briggs, Cincinnati Specialty, and others, also in the Second Judicial District, alleging as to Berger Briggs negligent failures to procure insurance coverage and inform, negligent misrepresentation, along with breaches of contract, fiduciary duties, and the Unfair Trade Practices Act.

{5} On December 4, 2018, Berger Briggs filed its "Motion and Memorandum for Summary Judgment on All Claims Due to Unassignability," in which Berger Briggs asserted that the claims are unassignable because they are personal injury claims. On April 24, 2019, the district court held a hearing on the motion for summary judgment, and on July 16, 2019, entered an order denying Berger Briggs’ motion for summary judgment. Berger Briggs filed a motion to reconsider, which the district court denied, or alternatively a motion to certify the entire order denying Berger Briggs’ motion for summary judgment for interlocutory appeal. The district court attached the entirety of its July 16, 2019, order as Exhibit A to its order certifying questions of assignability for interlocutory appeal. On March 31, 2020, we granted Berger Briggs’ application for interlocutory appeal.

DISCUSSION

I. The Lodge's Commercial Tort, Breach of Contract, and Statutory Violation Claims Were Validly Assigned to Wilson

{6} On appeal, Berger Briggs requests that we reverse the denial of its motion for summary judgment and raises four issues. First, it asserts that the claims are personal and, therefore, the assignment is invalid as a matter of New Mexico law and policy. Second, it argues that there is no assignable contract between itself and the Lodge. Third, it asserts that the Unfair Practices Act (UPA) prohibits the claims from being assigned. Finally, Berger Briggs argues that, contrary to the district court's findings, the Uniform Commercial Code (UCC) does not demonstrate a policy in favor of the purported assignment. Wilson answers that the Lodge's claims against Berger Briggs, which included claims of negligent failure to procure the requested coverage, negligent misrepresentation, and breach of contract, are contract and commercial tort claims and thus assignable. For the reasons that follow, we hold that under New Mexico law, the claims at issue are commercial in nature, were validly assigned to Wilson, and therefore Wilson is not barred from asserting such claims against Berger Briggs.

Standard of Review

{7} Berger Briggs’ appeal from the "denial of a motion for summary judgment presents a question of law. We therefore review de novo the [district] court's denial of summary judgment." Bartlett v. Mirabal , 2000-NMCA-036, ¶ 4, 128 N.M. 830, 999 P.2d 1062. "Summary judgment is proper if there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law." Noice v. BNSF Ry. Co. , 2015-NMCA-054, ¶ 5, 348 P.3d 1043 (internal quotation marks and citation omitted). "The movant must make a prima facie showing of entitlement to summary judgment. Then, the burden shifts to the party opposing the motion to demonstrate the existence of specific evidentiary facts which would require trial on the merits." Id. (internal quotation marks and citations omitted). "If the facts are not in dispute, and only their legal effects remain to be determined, summary judgment is proper." Roth v. Thompson , 1992-NMSC-011, ¶ 17, 113 N.M. 331, 825 P.2d 1241.

A. The Lodge's Claims Against Berger Briggs Are Not Personal Tort Claims

{8} In New Mexico, personal injury claims are not assignable, yet our jurisprudence suggests commercial disputes are. See Quality Chiropractic, PC v. Farmers Ins. Co. of Ariz. , 2002-NMCA-080, ¶ 8, 132 N.M. 518, 51 P.3d 1172. In Quality Chiropractic , this Court explained the common law rationale behind this distinction to reflect concern that the "assignment of personal injury claims would lead to unscrupulous trafficking in litigation as a commodity." Id. ¶ 10. In disallowing assignment of a claim for personal injury, Quality Chiropractic agreed with the Indiana Supreme Court, which prohibited the assignment of tort suits growing more generally out of "wrongs done to the person, reputation, or feelings of the injured party" while recognizing that "[c]ontract-based choses in action have been deemed assignable, except for [those] which are purely personal in nature (like marriage contracts)." Picadilly, Inc. v. Raikos , 582 N.E.2d 338, 340 (Ind. 1991), abrogated on other grounds by Liggett v. Young , 877 N.E.2d 178, 183 (Ind. 2007). As yet, neither law nor jurisprudence in New Mexico has evolved to permit the assignment of personal causes of action or directly held that claims of a commercial nature are indeed assignable.¹ Berger Briggs asserts that "all of [the Lodge]’s claims are personal in nature and cannot be assigned to Wilson as a matter of law" because "[c]ontrary to the [d]istrict [c]ourt's finding, New Mexico law and public policy prevent the assignment of claims asserted in this case." Wilson answers that the district court correctly recognized Wilson's claims as "well settled claims arising in commercial tort and breach of contract" against insurance agents or brokers.

{9} We begin with Wilson's arguments, which are consistent with the district court's ruling. Wilson is first correct that New Mexico allows claims in tort against insurance agents or brokers, such as those at issue here. For instance, New Mexico law permits an insured to sue an agent for failing to obtain a requested policy. See Topmiller v. Cain , 1983-NMCA-005, ¶ 12, 99 N.M. 311, 657 P.2d 638 (stating that "[i]t seems to be well settled that an insurance agent or broker who undertakes to provide insurance for another, and through his own fault or neglect, fails to do so, is liable" (internal quotation marks and citation omitted)). "[L]iability may be predicated either upon the theory that [the] defendant is the agent of the insured and has breached a contract to procure a policy of insurance, or that he owes a duty to his principal to exercise reasonable skill, care, and diligence in securing the insurance requested and negligently failed to do so." Sanchez v. Martinez , 1982-NMCA-168, ¶ 14, 99 N.M....