JOE ROBERT ENCINIAS, Plaintiff-Petitioner, v. WHITENER LAW FIRM, P.A. and RUSSELL WHITENER, Defendants-Respondents.
Docket No. 33,874
IN THE SUPREME COURT OF THE STATE OF NEW MEXICO
September 12, 2013
Eugenio S. Mathis, District Judge
ORIGINAL PROCEEDING ON CERTIORARI
Opinion Number:
David M. Houliston
Albuquerque, NM
Roger V. Eaton
Albuquerque, NM
Sanders & Westbrook, P.C.
Maureen A. Sanders
Albuquerque, NM
Wray & Girard, P.C.
Katherine Wray
Albuquerque, NM
for Petitioner
Tax, Estate & Business Law, Ltd.
Barry D. Williams
James Reist
Albuquerque, NM
for Respondents
Coppler Law Firm, P.C.
Gerald A. Coppler
Thomas R. Logan
Santa Fe, NM
for Amicus Curiae New Mexico Public Schools Insurance Authority
OPINION
CHÁVEZ, Justice.
{1} This case concerns an action for legal malpractice based on the defendant law firm‘s failure to file suit within the statute of limitations. The viability of the malpractice suit hinges on whether the underlying cause of action, a claim against a school district for injuries inflicted on one student by another, would have been barred by sovereign immunity or permitted by the Tort Claims Act (TCA),
BACKGROUND
{2} The plaintiff, Joe Robert Encinias, claims that in late September of 2004, he was badly beaten by a classmate or classmates at Robertson High School in Las Vegas, New Mexico. The alleged attack itself took place outside of the school property, on a street that the school had cordoned off so that students could patronize food vendors there. Encinias claims that he lost consciousness during the attack, but he recalls waking up alone on the street. In early October, Encinias was treated at a hospital for severe internal injuries that he alleges were sustained during the beating.
{3} In January 2006, Encinias and his parents retained defendants Russell Whitener and the Whitener Law Firm (collectively Whitener) to represent Encinias in a possible suit against Robertson High School and the
to check on the status of the case. Whitener asked the family to re-submit its paperwork. Encinias alleges that Whitener lost the documents that Encinias had submitted earlier and had done no work on the case. In the fall of 2006, the Encinias family contacted Whitener over concerns that the statute of limitations would run out. In fact, the statute of limitations ran two years after the incident, in late September or early October 2006.2 See
{4} In October 2008, Encinias filed suit against Whitener for legal malpractice and misrepresentation, among other claims that have subsequently been abandoned. The district court granted summary judgment for Whitener on all claims. The Court of Appeals affirmed the grant of summary judgment, Encinias v. Whitener Law Firm, P.A., 2013-NMCA-003, ¶ 2, 294 P.3d 1245, and rejected Encinias‘s malpractice claim, concluding that the TCA did not waive the school district‘s immunity, id. ¶ 24. The Court also held that summary judgment was proper on Encinias‘s misrepresentation claim because Encinias did not establish that he suffered damages as a result of Whitener‘s misconduct. Id. ¶ 29.
{5} Encinias argues on appeal for reversal of summary judgment on both the legal malpractice and the misrepresentation claims. This Court granted certiorari.
DISCUSSION
{6} “Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” Self v. United Parcel Serv., Inc., 1998-NMSC-046, ¶ 6, 126 N.M. 396, 970 P.2d 582. This is a legal question that is reviewed de novo on appeal. Id.; Juneau v. Intel Corp., 2006-NMSC-002, ¶ 8, 139 N.M. 12, 127 P.3d 548. When we review a motion for summary judgment, we “view the facts in a light most favorable to the party opposing summary judgment and draw all reasonable inferences in support of a trial on the merits.” Romero v. Philip Morris Inc., 2010-NMSC-035, ¶ 7, 148 N.M. 713, 242 P.3d 280 (internal quotation marks and citation omitted). Courts in New Mexico “view summary judgment with disfavor,” id. ¶ 8, and consider it “a drastic remedy to be used with great caution.” Pharmaseal Labs., Inc. v. Goffe, 1977-NMSC-071, ¶ 9, 90 N.M. 753, 568 P.2d 589.
A. Malpractice claim
{7} Encinias argues that Robertson High School and the school district were negligent in failing to protect him from being attacked, and further negligent in failing to respond to the attack or notice that it had occurred.
{8} The elements of legal malpractice are: “(1) the employment of the defendant attorney; (2) the defendant attorney‘s neglect of a reasonable duty; and (3) the negligence resulted in and was the proximate cause of loss to the [client].” Sharts v. Natelson, 1994-NMSC-114, ¶ 10, 118 N.M. 721, 885 P.2d 642 (alteration in original) (internal quotation marks and citation omitted). The only issue before this Court is the third element, loss to the client. Under New Mexico law, the plaintiff in a legal malpractice suit must prove this loss by demonstrating by a preponderance of the evidence that he or she would have prevailed on the underlying claim. Richardson v. Glass, 1992-NMSC-046, ¶ 10, 114 N.M. 119, 835 P.2d 835 (“Plaintiff had the burden of not only proving her counsel‘s negligence, but also that she would have recovered at trial in the underlying action.“); George v. Caton, 1979-NMCA-028, ¶¶ 46-47, 93 N.M. 370, 600 P.2d 822 (“In a malpractice action . . . the measure of damages is the value of the lost claims, i.e., the amount that would have been recovered by the client except for the attorney‘s negligence.“); see also Andrews v. Saylor, 2003-NMCA-132, ¶ 15, 134 N.M. 545, 80 P.3d 482 (stating that the preponderance-of-the-evidence standard is applicable to legal actions). In this case, the Court of Appeals held that because sovereign immunity would have barred the underlying claim, the loss of the claim did not damage Encinias. See Encinias, 2013-NMCA-003, ¶ 24 (holding that school did not waive its immunity and affirming summary judgment in favor of Whitener).
{9} In general, the state is immune from tort suits.
{10} Like common-law premises liability, the waiver in
{11} Such a condition could take many forms. In Castillo, we held that wild dogs roaming the grounds of a housing project “could represent an unsafe condition upon the land” that would waive the defendant county‘s immunity under
{12} This Court has also made it clear that there are limits to the waiver of immunity in
{13} However, neither Espinoza nor Pemberton precludes recovery under the facts argued by Encinias. Whitener is correct that Pemberton states a general rule that schools are not liable for one student‘s battery of another. See 1987-NMCA-020, ¶ 3. Pemberton is based on a narrow reading of
{14} While one student‘s battery of another would not generally waive a school‘s immunity under
{15} In enacting the TCA, the Legislature expressed an intent to waive the state‘s immunity in situations that would subject a private party to liability under our common law. See
{16} New Mexico law imposes a duty on businesses to protect their patrons from “the harmful acts of third persons if, by the exercise of reasonable care, the proprietor could have discovered that such acts were being done or about to be done, and could have protected against the injury by controlling the conduct of the other patron.” Coca, 1962-NMSC-169, ¶ 7 (citing II Restatement of Torts § 348 (1934) (now covered by Restatement (Second) of Torts § 344 (1965)). It is well established that the owner of a business may be liable even for a third party‘s intentional criminal acts on its premises. In Reichert v. Atler, 1994-NMSC-056, ¶¶ 1, 3, 117 N.M. 623, 875 P.2d 379, this Court held that the owners of a bar reputed to be dangerous were liable for their proportion of fault in a wrongful death suit arising from a murder in the bar. The bar had “a reputation as being one of the most dangerous bars in Bernalillo County and [had] been . . . the scene of numerous shootings, stabbings, and assaults,” but the bar had no professional security personnel on staff. Id. ¶ 3. On the evening of the murder, a bar employee witnessed the victim and the perpetrator arguing, and the victim told the employee that he feared the perpetrator, the perpetrator carried a gun, and he had heard that the perpetrator had killed someone. Id. ¶ 2. The employee did not call the police or otherwise protect the victim, and the courts held that the owners of the bar “breached a duty to provide adequate security to protect patrons of the bar, including [the victim], who was specifically a foreseeable victim of harm.” Id. ¶¶ 2, 4, 12.
{17} The operative principle that justified holding business proprietors liable in Reichert, 1994-NMSC-056, and Coca, 1962-NMSC-169, is the same as the principle found in Espinoza, 1995-NMSC-070, ¶ 14, and Callaway, 1994-NMCA-049, ¶¶ 4, 19. Just as businesses must exercise reasonable care to discover and prevent dangerous conditions caused by people on their premises, Coca, 1962-NMSC-169, ¶ 7,
{18} In this case, Encinias has established a genuine issue of material fact as to whether there was a dangerous condition on the premises of the high school. The assistant principal‘s statement that the area where the attack occurred was a “hot zone” for student violence would not be enough, taken alone, to support a finding of liability, but it is enough to raise questions about the degree of student violence and the school‘s efforts to discover and prevent student violence in that area. See Upton, 2006-NMSC-040, ¶ 25 (holding that the plaintiffs’ claim would constitute a waiver of immunity under
B. Misrepresentation claim
{19} Encinias also appeals the summary judgment against him on his misrepresentation claim. Encinias describes three grounds for the misrepresentation claim: (1) Whitener failed to pursue the underlying claim in a timely fashion, (2) Whitener failed to inform Encinias that no work had been done on the case, and (3) Whitener failed to inform Encinias when it became clear that the statute of limitations had passed. The first theory was not set forth in Encinias‘s amended complaint, and we do not consider it here. See Albuquerque Prods. Credit Ass‘n v. Martinez, 1978-NMSC-003, ¶ 14, 91 N.M. 317, 573 P.2d 672 (“It is fundamental that matters not brought into issue by the pleadings and upon which no decision of the trial court has been sought, or fairly invoked, cannot be raised on appeal.“) (citing NMSA 1953, § 21-12-11 (1974), now codified as amended in Rule 12-216 NMRA). We consider the other two theories below.
{20} In New Mexico, “misrepresentation can be by either commission or omission.” In re Stein, 2008-NMSC-013, ¶ 35, 143 N.M. 462, 177 P.3d 513. The Court of Appeals acknowledged that the record suggests that Whitener might have improperly withheld information from Encinias. Encinias, 2013-NMCA-003, ¶ 29. However, the Court of Appeals also held that Encinias had failed to demonstrate that he suffered damages as a result of the misrepresentation, and affirmed summary judgment against him for that reason. Id. ¶¶ 29-30. We reverse the Court of Appeals for two reasons. First, with the malpractice claim reinstated, it is not necessarily accurate that Encinias “was not damaged by Whitener‘s misrepresentations.” Id. ¶ 30.
{21} Encinias argues that Whitener committed misrepresentation by failing to inform Encinias that the statute of limitations had passed. (It is not clear from the first amended complaint whether Encinias alleged negligent or fraudulent misrepresentation, but he clarified before the district court that he alleged both types.) Encinias‘s first amended complaint states that Whitener should have made this disclosure in July of 2007. However, the statute of limitations ran in the fall of 2006. Even if Whitener had informed Encinias of the problem during the summer of 2007, the suit would still have been barred. As the Court of Appeals observed, Encinias does not allege that he suffered any damages other than the loss of the underlying suit. Encinias, 2013-NMCA-003, ¶ 30. Therefore, compensatory damages are not available for misrepresentation under this theory. Without actual damages, Encinias cannot pursue a claim for negligent misrepresentation; nominal and punitive damages are not available in a negligence action absent proof of actual damages. Sanchez v. Clayton, 1994-NMSC-064, ¶ 14, 117 N.M. 761, 877 P.2d 567.
{22} However, nominal and punitive damages are available in suits for intentional torts, and Encinias can pursue both in a claim for fraudulent misrepresentation. Id. ¶ 15. To prove fraudulent misrepresentation, a plaintiff must demonstrate by clear and convincing evidence that (1) a representation of fact was made (either by commission or by omission) that was not true, (2) the defendant made the representation knowingly or recklessly, (3) the representation was made with the intent to induce the plaintiff to rely upon it, and (4) that the plaintiff relied on the representation. UJI 13-1633; see also Stein, 2008-NMSC-013, ¶ 35 (misrepresentation may be committed by omission). In this case, Whitener realized in the summer of 2007 that the case was barred, but Whitener did not disclose this fact to Encinias until the spring of 2008. Encinias has produced some evidence suggesting that by delaying this disclosure, Whitener made it more difficult for Encinias to collect evidence supporting his underlying claim for the malpractice suit. If the Whitener law firm knowingly or recklessly led Encinias to believe that his suit was still viable, then Encinias might be entitled to nominal or punitive damages. Encinias requested punitive damages in his complaint, so these damages should not come as a surprise to Whitener.
{23} Whitener‘s sole defense to the misrepresentation claim before this Court is that the Encinias family knew the statute of limitations, so they could not have been misled. However, Whitener specifically (and erroneously) assured the family in October 2006 that the statute of limitations had not run, and it is reasonable for clients to assume that they can rely on their attorneys’ legal advice. On this record, Encinias has raised a genuine issue of material fact about whether Whitener fraudulently misrepresented the viability of Encinias‘s underlying claim.
{24} Encinias also alleges that Whitener committed misrepresentation by failing to inform the Encinias family in May 2006 that the firm had not done any work on Encinias‘s case. Encinias‘s mother states in an affidavit that she approached Whitener in April 2006, several months after retaining Whitener, and asked what progress the firm had made on Encinias‘s case. Mrs. Encinias states that Whitener asked her to fill out new paperwork, including a new fee agreement. Encinias now alleges that the firm lost the family‘s paperwork and had done no work until after April 2006. Failure to inform Encinias that the firm had done no work on the case for three months could constitute fraudulent misrepresentation, if it was done knowingly or recklessly. See generally UJI 13-1633 (listing elements of fraudulent misrepresentation).
CONCLUSION
{26} We hold that Encinias has raised a genuine issue of material fact as to whether there was a dangerous condition on the premises of Robertson High School that would have waived immunity under
{27} IT IS SO ORDERED.
EDWARD L. CHÁVEZ, Justice
WE CONCUR:
PETRA JIMENEZ MAES, Chief Justice
RICHARD C. BOSSON, Justice
CHARLES W. DANIELS, Justice
TIMOTHY L. GARCIA, Judge
Sitting by designation