January 7, 2019- Mauro Rosales v. Town of Taos, No. A-1-CA-37255

1 	IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 MAURO ROSALES,
3 	Plaintiff-Appellant,
4 v. 	No. 	A-1-CA-37255
5 TOWNOFTAOS,
6 	Defendant-Appellee.
7 APPEAL FROM THE DISTRICT COURT OF TAOS COUNTY
8 Jeff McElroy, District Judge
9 The Herrera Finn, P.C.
10 Samuel M. Herrera
11 	Taos, NM
12 for Appellant
13 	Agnes Fuentevilla Padilla
14 Albuquerque, NM
15 	for Appellee
16
17 VANZI, Chief Judge.
MEMORANDUM OPINION
18 {l} 	Plaintiff appeals from the district court's order granting summary judgment in
19 favor of Defendant on his claim for breach of the covenant of good faith and fair
20 dealing. This Court's calendar notice proposed to summarily affirm. Defendant filed
Court of Appeals of New Mexico
Filed 1/7/2019 8:49 AM
Mark Reynolds

1 a memorandum in opposition to the proposed disposition. 	Not persuaded by
2 Defendant's arguments, we affirm.
3 {2} 	Plaintiff does not dispute the facts relied upon in the calendar notice, but does
4 seemingly dispute the legal standard applied. Initially, we address Plaintiff's assertion
5 that the question at issue is whether he was reasonable in his election to believe the
6 Human Resource (HR) Director's verbal statement over the written contract and that
7 such "reasonableness" is an issue of fact precluding summary judgment. [MIO 2-3]
8 The authorities relied upon by Plaintiff address the reasonableness of a party's
9 interpretation of an ambiguous contract term. See Read v. W. Farm Bureau Mut. Ins.
10 	Co., 1977-NMCA-039, ,r 21, 90 N.M. 369, 563 P.2d 1162 (stating that "a word, a
11 	phrase, or a provision in a contract of insurance is not what the insurer intended the
12 language to mean, but what a reasonable person in the position of the insured would
13 	have understood them to mean"); see also Hinkle, Cox, Eaton, Coffield & Hensley v.
14 	Cadle Co. 	of Ohio, Inc. 	1993-NMSC-010, ,I 22, 115 N.M. 152, 848 P.2d 1079
15 	(determining whether movant presented a prima facie case of the reasonableness of
16 	its attorney fees, terms not expressly agreed to by the parties to a contract). That is not
17 the issue here. We recognize that a breach of the covenant of good faith and fair
18 	dealing claim could constitute a question of fact in some circumstances. However,
19 when, like this case, "no facts are in dispute and the undisputed facts lend themselves
2

1 to only one conclusion, the issue may properly be decided as a matter oflaw ." Ovecka
2 v. Burlington N. Santa Fe Ry. Co., 2008-NMCA-140, ~ 9, 145 N.M. 113, 194 P.3d
3 728.
4 {3} 	Turning to Plaintiffs disputed issue oflaw, this Court's calendar notice relied
5 on Sanders v. Fedex Ground Package Sys., Inc., 2008-NMSC-040, ~ 10, 144 N.M.
6 449, 188 P .3d 1200, for the proposition that "the implied covenant of good faith and
7 fair dealing helps insure that both parties receive the benefit of their respective
8 bargains" and "acts to protect the parties to the contract by prohibiting one party from
9 obstructing the other party's benefit, whether that benefit is express or implied."
10 Plaintiff accuses this Court of"cherry picking" a term from Sanders, thereby radically
11 	changing the legal standard for good faith and fair dealing. [MIO 4] That was not this
12 Court's intention. We note that Plaintiff himself cites to Sanders in the docketing
13 	statement and incorporates the term "obstruct" in his argument. [DS 4, 6, 8, 9, 10]
14 More importantly, Sanders and the legal standard applied in that case remains good
15 	law.
16 	{4} 	Nevertheless, we address Plaintiffs contention that Sanders did not modify the
17 standard set forth in prior cases, on which it relied. In particular, Defendant urges the
18 	use of the legal standard applied in other cases, including Azar v. Prudential Ins. Co.
19 ofAm., 2003-NMCA-062, ~ 51, 133 N.M. 669, 68 P.3d 909, which provides that the
3

1 good faith covenant of a contract is breached "when a party seeks to prevent the
2 contract's performance or to withhold its benefits from the other party." [MIO 3-4]
3 Further, Bogle v. Summit Inv. Co., LLC states that the "implied covenant [of good
4 faith and fair dealing] requires that neither party do anything that will injure the rights
5 of the other party to receive the benefit of the agreement." 2005-NMCA-024, ,r 16,
6 137N.M. 80, 107P.3d520. "Thisconceptallowscourtstoawarddamagesforbreach
7 of contract when one party prevents another from getting the benefits of a contractual
8 arrangement." Heimann v. Kinder-Morgan CO2 Co., L.P., 2006-NMCA-127, ,r 18,
9 	140N.M. 552, 144P.3d 111.AndBourgeousv. HorizonHealthcareCorp. concludes
10 that ~'[d]enying a party its rights to those benefits will breach the duty of good faith
11 	implicit in the contract." 1994-NMSC-038, ,r 16, 117 N.M. 434, 872 P.2d 852.
12 	{5} 	Applying these standards to the undisputed facts, we conclude that there was
13 	no breach of good faith and fair dealing as a matter oflaw. See Ovecka, 2008-NMCA-
14 	140, ,r 9. The issue is whether the HR Director's comments-that "the manager
15 	already made a decision" to terminate Plaintiff and that an appeal would be
16 futile-denied Plaintiff his right to appeal the Notice of Final Action (Final Action).
17 The fact of the matter is that the Final Action served as a notice of Defendant's final
18 decision terminating Plaintiffs employment. As pointed out in the calendar notice,
19 the prior Notice of Contemplated Disciplinary Action (Notice) explained the reasons
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1 for Plaintiffs contemplated termination and gave him an opportunity to respond. [ 1
2 RP 25 5; CN 3] The Final Action addressed Plaintiffs contentions in response, refuted
3 them, and terminated his employment. [1 RP 257; CN 3] Hence, the HR Director's
4 comment that "the manager already made a decision" was no more than a statement
5 offact.
6 	{6} 	Furthermore, as has been noted, the Final Action expressly informed Plaintiff
7 of the time limit to appeal, and to whom the written notice of appeal should be
8 submitted. [1 RP 257; CN 3, 5] Nonetheless, Plaintiff emphasizes the effects of the
9 HR Director's statements to him after she gave him the Final Action. [MIO 2] Thus,
10 the question is whether the advertisement for Plaintiffs position in the Taos News,
11 	in combination with the HR Director's comment to Plaintiff that an appeal would be
12 futile, served to prevent, injure, or deny Plaintiff his right to appeal the Final Action.
13 	We conclude that Defendant did not breach the covenant of good faith and fair
14 dealing because it did not withhold from Plaintiff any of the benefits of submitting
15 	a written appeal. See Smootv. Physicians Life Ins. Co., 2004-NMCA-027, ,r,r 13, 14,
16 	135 N.M. 265, 87 P.3d 545 (stating that the covenant of good faith is not breached
17 when a party was given the product or service bargained for). While Defendant's
18 	actions may have lowered Plaintiffs expectation of a positive outcome on appeal, we
19 cannot say that they prevented, injured, or interfered with Plaintiffs ability to appeal.
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l 	See Gilmorev. Duderstadt, 1998-NMCA-086, if 24,125 N.M. 330,961 P.2d 175 ("A
2 party breaches the covenant of good faith and fair dealing when he or she interferes
3 or fails to cooperate in the other party's performance."). Accordingly, we agree with
4 the district court that Plaintiffs breach of the covenant of good faith and fair dealing
5 claim fails as a matter of law.
6 {7} 	For these reasons, and those stated in the calendar notice, we affirm the district
7 court's dismissal of Plaintiffs claim for breach of the covenant of good faith and fair
8 dealing.
9 	{8} 	IT IS SO ORDERED.
10
11 	LI
12 WE CONCUR:
13 	\. 	L14 M. MONICA ZAMO
15 	!>·~
16 J. MILES HANISEE, Judge
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