Morris v. Giant Four Corners, Inc. et al
Filing
112
MEMORANDUM OPINION AND ORDER by District Judge Judith C. Herrera granting 90 Defendant Giant Four Corners, Inc. d/b/a Giant # 7251's Opposed Motion for Judgment on the Pleadings and denying 91 Giant's Opposed Motion to Compel Election of Remedies or Dismiss for Improper Claim Splitting. (baw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
FRANKLIN J. MORRIS, as Personal
Representative of the Wrongful Death
Estate of MARCELLINO MORRIS, JR.,
(Deceased),
Plaintiff,
v.
No. 1:15-cv-00055-JCH-LF
GIANT FOUR CORNERS, INC. d/b/a
GIANT #7251 and ANDY RAY DENNY,
an Individual,
Defendants.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendant Giant Four Corners, Inc. d/b/a Giant #
7251’s Opposed Motion for Judgment on the Pleadings under Federal Rule of Civil Procedure
12(c) [ECF No. 90] and Defendant’s Opposed Motion to Compel Election of Remedies or
Dismiss for Improper Claim Splitting [ECF No. 91]. After carefully considering the motions,
briefs, parties’ arguments and relevant law, the Court rules as described herein.
I.
FACTUAL AND PROCEDURAL BACKGROUND
On December 30, 2011, Marcellino Morris, Jr. was tragically was killed in an automobile
collision with Defendant Andy Ray Denny. Plaintiff Mr. Franklin J. Morris, Personal
Representative of the Decedent’s estate, contends that Defendant Giant is liable for Decedent’s
death under two theories of negligence – specifically, negligent entrustment based on
Defendant’s sale of gasoline to Mr. Denny, who was allegedly visibly intoxicated, and negligent
hiring, training, and supervision of the employees who sold the gasoline to Mr. Denny.
Plaintiff originally filed a lawsuit in the District Court of the Navajo Nation in
Crownpoint, New Mexico. In that court, Defendant moved for and obtained summary judgment
on the ground that Plaintiff’s suit was time-barred under the Navajo Nation’s two-year statute of
limitations for personal injury claims, 7 N.N.C. § 602(A)(1). Plaintiff appealed the Navajo
district court’s decision to the Navajo Nation Supreme Court and that appeal is still pending.
Before the Navajo district court issued its decision, Plaintiff filed an identical wrongful death
complaint in New Mexico state district court against Defendant alleging vicarious liability for
negligent entrustment of a chattel (Count I) and direct liability for negligent hiring, training, and
supervision (Count II). Plaintiff also asserted a cause of action for negligence and negligence per
se against Mr. Denny (Count III). However, Mr. Denny was dismissed as a party. See Dkt. No. 9.
In January 2015, Defendant removed the state case to this Court based on the parties’ diversity of
citizenship under 28 U.S.C. § 1332.
In November 2015, Defendant moved to dismiss Plaintiff’s complaint under Federal Rule
of Civil Procedure 12(b)(6), or, in the alternative to stay the case pending Plaintiff’s exhaustion
of tribal court remedies, arguing the case should be precluded under the doctrine of res judicata.
During the same period, Plaintiff moved for partial summary judgment on Count I of his
complaint (negligent entrustment), arguing that Plaintiff was entitled to judgment as a matter of
law that Defendant negligently entrusted gasoline to Mr. Denny because he was intoxicated. The
Court stayed the case for one-year – until November 29, 2016 – when, although the Navajo
Nation Supreme Court had not yet issued a decision, the parties asked the Court to lift the stay
and decide the pending Rule 12(b)(6) motion.
In September 2017, the Court issued its ruling on the Rule 12(b)(6) motion against
Defendant, concluding that the Navajo district court’s dismissal on statute of limitations grounds
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had no preclusive effect on the federal case. See ECF No. 64. In March 2018, the Court denied
Plaintiff’s partial motion for summary judgment on negligent entrustment. See ECF No. 79. In
that Memorandum Opinion and Order, the Court assumed without deciding that Defendant owed
Plaintiff a duty of care to refrain from selling gasoline to an intoxicated Mr. Denny, but
concluded that genuine disputes of material about whether Ms. Gloria Pine, Defendant’s
employee who sold Mr. Denny gasoline, knew Mr. Denny was intoxicated precluded entry of
summary judgment in Plaintiff’s favor.
About two months later, in May 2018, Defendant filed the pending two motions now
before the Court. In its motion for judgment on the pleadings on Plaintiff’s negligent entrustment
claim, Defendant argues that Plaintiff failed to state a claim upon which relief can be granted
because New Mexico law imposes no duty of care on Defendant to refrain from selling gasoline
to intoxicated third-persons. And in its motion to compel Plaintiff to elect remedies, or,
alternatively to dismiss Plaintiff’s complaint for improper claim splitting, Defendant contends
that under the doctrine of election of remedies Plaintiff is barred from carrying this and the
Navajo Nation lawsuits to judgment. Because Plaintiff has no right to “double recovery” of
damages in two courts on two identical complaints, Defendant contends that “Plaintiff must elect
the forum in which he will proceed.” Def.’s Mot. to Compel at 6. Alternatively, if the Court
denies Defendant’s motion to compel Plaintiff to elect remedies, then Defendant asks the Court
to dismiss the federal complaint on the theory that Plaintiff has impermissibly engaged in “claim
splitting” of his claims between federal and tribal courts.
The Court will first address Defendant’s motion for election of remedies, or,
alternatively, to dismiss for improper claim-splitting and then analyze Defendant’s motion for
judgment on the pleadings regarding Plaintiff’s claim for negligent entrustment.
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II.
MOTION FOR ELECTION OF REMEDIES OR TO DISMISS FOR CLAIM
SPLITTING
A.
Election of Remedies
According to Defendant, Plaintiff’s tribal and federal complaints have both asserted
“money damages … in an amount to be determined at trial to be both just and reasonable.”
Def.’s Mot. to Compel at 2 (citing Plaintiff’s complaint in the District Court of the Navajo
Nation, ECF No. 38-1 at 15 ¶ 80 and Plaintiff’s federal complaint, ECF No. 1-1 at 12 ¶ 76).
Defendant contends that “[i]f Plaintiff is permitted to maintain both the present case and the
pending Navajo Nation lawsuit and carry them both to judgment, then he would be attempting to
secure two awards for the same wrong,” and therefore asks the Court to “compel Plaintiff to
choose the forum in which he intends to proceed.” Def.’s Mot. to Compel at 1, 3.
The election of remedies doctrine “refers to situations where an individual pursues
remedies that are legally or factually inconsistent,” and operates to “prevent[] a party from
obtaining double redress for a single wrong.” Alexander v. Gardner–Denver Co., 415 U.S. 36, 49
(1974), abrogated on other grounds by Law v. Siegel, 571 U.S. 415 (2014). New Mexico’s
election of remedies law governs this diversity jurisdiction dispute. See McKinney v. Gannett
Co., 817 F.2d 659, 671 (10th Cir. 1987). Under New Mexico law “[t]he doctrine means if a party
has two inconsistent existing remedies on his cause of action and makes choice of one, he is
precluded from thereafter pursuing the other.” Romero v. J. W. Jones Const. Co., 1982-NMCA140, ¶ 18, 98 N.M. 658, 661, 651 P.2d 1302, 1305 (citations and internal quotation marks
omitted). Or as the New Mexico Supreme Court has described the doctrine in another case:
“where two inconsistent or alternative rights or claims are presented to the choice of a party, by a
person who manifests the clear intention that he should not enjoy both, then he must accept or
reject one or the other; and so, in other words, that one cannot take a benefit under an instrument
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and then repudiate it.” Three Rivers Land Co. v. Maddoux, 1982-NMSC-111, ¶ 16, 98 N.M. 690,
693, 652 P.2d 240, 243, overruled on other grounds by Universal Life Church v. Coxon, 1986NMSC-086, ¶ 16, 105 N.M. 57, 728 P.2d 467. The doctrine “exists to prevent double recovery
for a single wrong.” Chavarria v. Fleetwood Retail Corp. of New Mexico, 2005-NMCA-082, ¶ 6,
137 N.M. 783, 789, 115 P.3d 799, 805, reversed in part on other grounds by Chavarria v.
Fleetwood Retail Corp., 2006-NMSC-046, ¶ 6, 140 N.M. 478, 143 P.3d 717.
For instance, under the doctrine a prevailing breach of contract plaintiff cannot receive
both damages on the contract and the remedy of rescission because “to receive damages a
plaintiff must affirm the contract, but in order to get a remedy of rescission, a plaintiff must
disaffirm the contract.” Medcom Holding Co. v. Baxter Travenol Labs., Inc., 984 F.2d 223, 228
(7th Cir. 1993). “[T]he remedies are mutually exclusive, and the party seeking relief must elect
one of them.” Chavarria, 2005-NMCA-082 at ¶ 6. See also Teutscher v. Woodson, 835 F.3d 936,
956 (9th Cir. 2016) (applying the doctrine where retaliatory discharge plaintiff sought alternative
remedies for reinstatement and front pay); Medcom Holding Co., 984 F.2d at 229 (noting
doctrine’s application in property conversion case where the plaintiff may recover damages for
converted property or to regain the property, but not both).
Here, the doctrine finds no application to the facts. Plaintiff did not plead inconsistent
theories or seek inconsistent remedies as between this lawsuit and the one pending in the Navajo
district court. Rather, Plaintiff pleaded and sought identical theories of recovery and remedies in
two different courts. Certainly, Defendant is correct that Plaintiff cannot receive double recovery
for a single injury. See Chavarria, 2005-NMCA-082 at ¶ 6. But Plaintiff will not enjoy a double
recovery because of the application of an entirely different legal doctrine: res judicata, which
“prevents a party or its privies from repeatedly suing another party for the same cause of action
5
when the first suit involving the parties resulted in a final judgment on the merits.” State ex rel.
Balderas v. Bristol-Myers Squibb Co., No. A-1-CA-36906, 2018 WL 5291923, at *4 (N.M. Ct.
App. Oct. 24, 2018). A judgment on the merits in either this Court or the Navajo district court
will arguable preclude the pursuit of the other. See Taylor v. Burlington N. R. Co., 787 F.2d
1309, 1317 (9th Cir. 1986) (“A plaintiff may prosecute actions on the same set of facts against
the same defendant in different courts, even though the remedies the plaintiff seeks may be
inconsistent … [b]ut as soon as one of those actions reaches judgment, the other cases must be
dismissed.”). Defendant is asking the Court to make Plaintiff choose between forums, not
remedies. See Def.’s Mot. to Compel at 6 (stating that “[i]n order to avoid double recovery,
Plaintiff must elect the forum in which he will proceed.”). However, the doctrine election of
remedies has nothing to do with laying forum. As the Court will explain in the section below,
parallel actions may proceed to judgment until one becomes preclusive of the other. Because the
doctrine of election of remedies is irrelevant to this case, the Court will deny Defendant’s motion
to apply that doctrine.
B.
Claim Splitting
In the alternative, Defendant says “this Court should dismiss the present action based on
Plaintiff’s impermissible claim-splitting” between tribal and federal courts. Def.’s Mot. to
Compel at 1. “The rule against claim-splitting requires a plaintiff to assert all of its causes of
action arising from a common set of facts in one lawsuit. By spreading claims around in multiple
lawsuits in other courts or before other judges, parties waste scarce judicial resources and
undermine the efficient and comprehensive disposition of cases.” Katz v. Gerardi, 655 F.3d
1212, 1217 (10th Cir. 2011) (citing Hartsel Springs Ranch of Colo., Inc. v. Bluegreen Corp., 296
F.3d 982, 985 (10th Cir.2002)). “For example, a district court may apply the rule against claim-
6
splitting when a party files two identical—or nearly identical—complaints to get around a
procedural rule.” Wyles v. Sussman, 661 F. App’x 548, 550 (10th Cir. 2016). Claim splitting and
res judicata are both concerned with “promoting judicial economy and shielding parties from
vexatious concurrent or duplicative litigation.” Katz, 655 F.3d at 1218. “[T]he test for claim
splitting is not whether there is finality of judgment, but whether the first suit, assuming it were
final, would preclude the second suit.” Id.
In Katz, the Tenth Circuit upheld a trial court’s dismissal of the plaintiff’s complaint
where the plaintiff previously filed related claims that were pending in the same federal court
against the same defendants. See id. at 1217-1219. But Katz did not implicate the “the general
rule … that a pending state-court action ‘is no bar to proceedings concerning the same matter in
the Federal court having jurisdiction.’ Wyles, 661 F.App’x at 551 (quoting Sprint Commc’ns, Inc.
v. Jacobs, ––– U.S. ––––, 134 S. Ct. 584, 588, 187 L. Ed .2d 505 (2013) (quoting Colo. River
Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S. Ct. 1236, 47 L. Ed. 2d 483
(1976))); Carter v. City of Emporia, 815 F.2d 617, 621 (10th Cir. 1987) (plaintiff “may freely
split a cause of action between federal and state courts and pursue both actions,” though one
action may preclude the other).
Here, claim splitting is inapplicable because the previously filed case in this litigation
was not filed “in the same [federal] district court,” Katz, 655 F.3d at 1219, but in a tribal court.
The Court recognizes that the Navajo district court is not a state court. However, no party has
argued, and there is nothing to indicate, that any restriction exists on the tribal court’s concurrent
civil jurisdiction over Plaintiff’s claims. Plaintiff therefore has not improperly engaged in claim
splitting by filing duplicative suits in different court systems. See Wyles, 661 F. App’x at 551.
The Court certainly understands Defendant’s assertions concerning the need for efficient justice.
7
But the federal system tolerates pending parallel actions, “despite what may appear to result in a
duplication of judicial resources.” McLaughlin v. Saudi Basic Indus. Corp., 955 F.3d 930, 934
(4th Cir. 1992). “[F]ederal courts have a virtually unflagging obligation ... to exercise the
jurisdiction given them,” and only under limited circumstances, none of which are present here,
may a court dismiss a federal suit due to the presence of concurrent proceedings. Moses H. Cone
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 15 (1983) (citations and internal quotations
omitted).
Defendant’s motion to compel Plaintiff to elect remedies or, alternatively, to dismiss
Plaintiff’s complaint for improper claim splitting is denied in its entirety because neither of those
doctrines apply to this case.
III.
MOTION FOR JUDGMENT ON THE PLEADINGS1
After describing the parties’ arguments and standard of review, the Court will conduct its
analysis of whether Defendant owed the Decedent a duty of care to refrain from selling gasoline
to an intoxicated person.
A.
The Parties’ Arguments
In Count I of Plaintiff’s Complaint, he contends that Defendant is vicariously liable for
negligent entrustment of chattel (the “chattel” at issue being the gasoline Defendant sold to Mr.
Denny) because Defendant “owed a duty of reasonable care to the motoring public, including
Decedent Morris, … to refrain from selling or supplying gasoline to an intoxicated person when
it is foreseeable that the intoxicated person is driving a vehicle or needs the gasoline to start an
immobile vehicle.” Pl.’s Compl., ECF No. 1-1, ¶ 47. According to Plaintiff, a number of factors
made it foreseeable that selling gasoline to Mr. Denny would put the motoring public at risk. Mr.
1
Defendant did not move to dismiss Count II, Plaintiff’s claim for negligent hiring, training, and
supervision.
8
Denny was visibly intoxicated when he arrived to the gas station on foot, he and his companion
purchased a single gallon of gasoline, making it obvious he was using it to start his car, and
Defendant’s gas station is located near a highway with a high speeding limit. See id. at ¶ 51.
Plaintiff says that Defendant breached its duty to not sell gasoline to Mr. Denny by doing so
anyway, see id. at ¶ 48, and that “but for” Defendant’s provision of gasoline to Mr. Denny, he
could not have driven and killed the Decedent. See id. at ¶¶ 49-50.
Defendant moved to dismiss Count I, contending that Plaintiff’s complaint fails to state a
claim for relief for negligent entrustment because Defendant owed no duty of care to the
Decedent or the motoring public in general to refrain from selling gasoline to an intoxicated
person. Citing the New Mexico courts’ statements that that the existence of a duty is policydriven analysis determined by the court as a matter of law “with reference to legal precedent,
statutes, and other principles comprising the law,” Oakey, Estate of Lucero v. May Maple
Pharmacy, Inc., 2017-NMCA-054, ¶ 22, 399 P.3d 939, 947 (citations omitted), Defendant
contends that not a single New Mexico legal precedent, statutes, or other legal principle has ever
imposed such a duty before.
As for legal precedent, Defendant cites the well-established rule that “a person does not
have a duty to act affirmatively to protect another person from harm,” Estate of Eric S. Haar v.
Ulwelling, 2007-NMCA-032, ¶ 14, 141 N.M. 252, 255, 154 P.3d 67, 70 (citations omitted),
unless a special relationship “legally obligates” a defendant to protect a plaintiff. Johnstone v
City of Albuquerque, 2006-NMCA-119, ¶ 7, 140 N.M. 596, 600, 145 P.3d 76, 80 (citations
omitted). Such relationships that give rise to a duty could include, for example, those between
common carriers and passengers, innkeepers and guests, landlords and tenants. See Grover v.
Stechel, 2002-NMCA-049, ¶ 11, 132 N.M. 140, 143, 45 P.3d 80, 83. Defendant points out that
9
no such special relationship exists as between the parties here, and therefore no judicial
precedent established a duty on Defendant to control Mr. Denny’s conduct in the context of
selling him gasoline, even if he was intoxicated.
As for statutes and regulations, Defendant asserts that the New Mexico Legislature has
never created a rule governing the liability of gasoline purveyors akin to the State’s dramshop
liability laws. See N.M. Stat. Ann. § 41-11-1; Mendoza v. Tamaya Enterprises, Inc., 2010NMCA-074, ¶ 8, 148 N.M. 534, 537, 238 P.3d 903, 906 (discussing the judicial and legislative
history of New Mexico’s dramshop laws). The New Mexico Legislature has made unlawful
drunk driving of a vehicle2 and motorboat,3 gaming while intoxicated,4 and selling fireworks to
an intoxicated person.5 In light of these deliberate enactments, Defendant believes that it is
unlikely that the State’s legislature would intend to impose liability on gasoline vendors to
refrain from selling gasoline to an intoxicated person since it has never legislated in this area.
Similarly, Defendant argues that no background legal principles support the imposition of
a duty in this case, especially since the duty imposed would be a new and original. Defendant
contends that such a duty could not adhere to clear “doctrinal lines” demarcating where the duty
begins and ends. Def.’s Mot. to Compel at 13. Defendant points to the Court of Appeals of
Indiana’s decision in Williams v. Cingular Wireless, 809 N.E.2d 473, 478, 479 (Ind. Ct. App.
2004) where the court held that makers of cellular phones owed no duty of care to a person
injured in a car accident caused by a driver who is driving and talking, even if a cellular phone
maker knows that the device can be used while operating a car. Defendant believes the Williams
court’s reasoning that a merchant should not be held for a third-party’s misuse of chattel should
2
N.M. Stat. Ann. § 66-8-102(A)
N.M. Stat. Ann. § 66-13-3(A)
4
N.M. Stat. Ann. § 17-2-29
5
N.M. Stat. Ann. § 60-2C-8(C)
3
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apply in this case. Otherwise, the “floodgates” would open to “lawsuits against drive-thru
restaurants for accidents caused when a driver gets distracted with eating while driving; hot
beverage providers for accidents caused when a driver becomes preoccupied with spillage or
drinking while driving; or drug stores that sell cosmetics for accidents caused when a driver is
inattentive when applying makeup while driving.” Def.’s Mot. to Compel at 12.
Turning to Plaintiff’s arguments, Plaintiff identifies no New Mexico caselaw specifically
establishing a duty owed by gasoline vendors to third-parties. But according to Plaintiff’s survey
of New Mexico negligent entrustment cases, the key idea gleaned from these cases is that
liability arises from the act of entrusting chattel to an intoxicated person – whether that chattel be
a car or gasoline. Because this Court previously made a predictive guess under Eerie Railroad
Co. v. Tompkins, 304 U.S. 64 (1938) that under § 390 of the Restatement, which New Mexico
follows, negligent entrustment could apply to sales of chattel, Plaintiff asks the Court to apply
that rule to the specific context of vendors selling gasoline.
As support for its position Plaintiff notes that vendors selling gasoline have been held
liable for negligently entrusting gasoline to drunk drivers in two cases. In West v. East Tennesse
Pioneer Oil Co., 172 S.W. 3d 545, 548 (Tenn. 2005) the Tennessee Supreme Court held that
employees of a convenience store had a duty of care to persons on the roadways not to sell
gasoline or to assist in providing gasoline to a person that the employee knows or ought to know
is intoxicated and a driver. And the California Court of Appeal in an unpublished case, O’Toole
v. Carlsbad Shell Serv. Station, 202 Cal. App. 3d 151, 247 Cal. Rptr. 663, 669 (Ct. App. 1988),
held that a gasoline station’s sale of gasoline an intoxicated driver was “the factual equivalent of
the key to the car, or repairing of the car with a needed part to put the drunk back on the road”
and thus could be held liable for negligent entrustment. Aside from these two cases, Plaintiff
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cites no binding or persuasive legal precedent concluding that negligent entrustment arises from
sales of gasoline.
Turning to legislative enactments and general principles of law that Plaintiff believes
create a duty, Plaintiff argues that the State’s drunk driving statute clearly evinces a policy of
keeping dangerous drunk drivers off the roadways and cites the New Mexico Court of Appeals’
statement that “the public’s interest in deterring individuals from driving while intoxicated is
compelling.” State v. Harrison, 1992-NMCA-139, ¶ 19, 115 N.M. 73, 77, 846 P.2d 1082, 1086.
Entrustment liability on gasoline vendors like Defendant dovetails with and even furthers this
policy, Plaintiff says, since the tort particularly applies in cases of intoxicated drivers. That the
New Mexico Legislature has not imposed dramshop-style liability on gasoline vendors does not
undercut the general idea that an owner of chattel has a duty to others to not give control of a
dangerous instrumentality to an incompetent person, says Plaintiff. Finally, Plaintiff argues that
if the Court were to find a duty on Defendant to refrain from selling alcohol to intoxicated
drivers, it would not open the courthouse doors to a “flood of lawsuits” or result in fault being
unfairly assigned to gasoline vendors because New Mexico’s pure comparative negligence
principles reduce a plaintiff’s proportionate recovery by his or her degree of fault. See Armenta,
2015-NMCA-092 at ¶ 19.
B.
Standard of Review
“Except as provided in Rule 12(h)(2) ... a party that makes a motion under [Rule 12] must
not make another motion under this rule raising a defense or objection that was available to the
party but omitted from its earlier motion.” Fed. R. Civ. P. 12(g)(2). Turning to the exception
provided in Rule 12(h)(2), it states: a motion for “[f]ailure to state a claim upon which relief can
be granted ... may be raised: ... by a motion under Rule 12(c).” As for the timing strictures of
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Rule 12(c) itself, a party may file a motion under that rule “[a]fter the pleadings are closed – but
early enough not to delay trial.” Fed. R. Civ. P. 12(c). “In other words, although Rule 12(g)(2)
precludes successive motions under Rule 12, it is expressly subject to Rule 12(h)(2), which
allows parties to raise certain defenses, including the failure to state a claim upon which relief
may be granted ... by a motion for judgment on the pleadings under Rule 12(c).” Brokers’ Choice
of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1101–02 (10th Cir. 2017).
In reviewing a Rule 12(c) motion, the Court applies the same standard of review that
applies to Rule 12(b)(6) dismissals. See Sanchez v. United States Dep’t of Energy, 870 F.3d
1185, 1199 (10th Cir. 2017). Thus, to establish a claim for relief, a “complaint must contain
sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Determining whether a complaint contains wellpleaded facts sufficient to state a claim is “a context-specific task that requires the reviewing
court to draw on its judicial experience and common sense.” Id. Though a complaint need not
provide “detailed factual allegations,” it must give just enough factual detail to provide “fair
notice of what the ... claim is and the grounds upon which it rests.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
“Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements do not count as well-pleaded facts.” Warnick v. Cooley, 895 F.3d 746, 751 (10th Cir.
2018) (quotations and citations omitted). “If, in the end, a plaintiff’s well-pleaded facts do not
permit the court to infer more than the mere possibility of misconduct, the complaint fails to state
a claim.” Id. (quotations and citations omitted). A reviewing court “accept[s] as true all wellpleaded factual allegations in the complaint and view them in the light most favorable to [the
non-movant].” Sanchez, 870 F.3d at 1199.
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C.
Elements of Negligent Entrustment
“General principles of negligence are relevant to the determination of negligent
entrustment.” McCarson v. Foreman, 1984-NMCA-129, ¶ 13, 102 N.M. 151, 155, 692 P.2d 537,
541. This includes the “(1) defendant’s duty to the plaintiff, (2) breach of that duty, typically
based on a reasonable standard of care, (3) injury to the plaintiff, and (4) the breach of duty as
cause of the injury.” Zamora v. St. Vincent Hosp., 2014-NMSC-035, ¶ 22, 335 P.3d 1243, 1249.
The general formulation of negligent entrustment is set forth in the Restatement (Second) of
Torts §§ 308 and 390 (Am. Law Inst. 1963 and 1964) (hereinafter “Restatement”), which the
New Mexico courts have cited with approval. See Armenta v. A.S. Horner, Inc., 2015-NMCA092, ¶ 10, 356 P.3d 17, 21-2 (“New Mexico has adopted the general definition of negligent
entrustment from the Restatement (Second) of Torts.”). Section 308 states that
[i]t is negligence to permit a third person to use a thing or to
engage in an activity which is under the control of the actor, if the
actor knows or should know that such person intends or is likely to
use the thing or to conduct himself in the activity in such a manner
as to create an unreasonable risk of harm to others.
Restatement § 308. Thus, under New Mexico law, “the plaintiff must show that the
defendant [1] entrusted his [chattel] to another [2] whom the defendant knew or should have
known was [] incompetent [], and [3] whose incompetence caused the plaintiff’s injuries.”
Hermosillo v. Leadingham, 2000-NMCA-096, ¶ 19, 129 N.M. 721, 726, 13 P.3d 79, 84
(describing negligent entrustment of a motor vehicle). In addition, § 390, which is a special
application of the rule stated in § 308, makes sellers of merchandise may be liable for negligent
entrustment, providing that
One who supplies directly or through a third person a chattel for
the use of another whom the supplier knows or has reason to know
to be likely because of his youth, inexperience, or otherwise, to use
it in a manner involving unreasonable risk of physical harm to
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himself and others whom the supplier should expect to share in or
be endangered by its use, is subject to liability for physical harm
resulting to them.
Armenta, 2015-NMCA-092 at ¶ 12.
In the context of negligent entrustment “[t]he defendant’s ownership or right to control
… chattels imposes upon him a duty to use reasonable care to control permissive users to prevent
them from negligently or intentionally inflicting harm.” Dobbs, et al., The Law of Torts § 422
(2d ed.) “The purpose of the negligent entrustment doctrine is to articulate a set of standards that
if met, establish the duty and breach elements of a negligence claim without the necessity for the
detailed analysis that often is required to determine the existence of a duty.” Peterson v. Halsted,
829 P.2d 373, 378 (Colo. 1992). An owner of chattel has a duty to others not to give control of a
dangerous instrumentality to a person incapable of using it carefully. See Casebolt v. Cowan, 829
P.2d 352, 358 (Colo. 1992). And the owner breaches that duty if the owner makes an entrustment
in light of known risks about the entrustee’s propensities. Id.
D.
Framework for Deciding Duty
“Under New Mexico law, Plaintiffs bear the burden of proving their negligence
allegations by demonstrating the existence of a duty.” Henderson v. Nat’l R.R. Passenger Corp.,
412 F. App’x 74, 84 (10th Cir. 2011). To sustain a negligence action (and negligent entrustment
is a type of negligence action), “[i]t is axiomatic that a negligence action requires that there be a
duty owed from the defendant to the plaintiff.” Paez v. Burlington N. Santa Fe Ry., 2015NMCA-112, ¶ 9, 362 P.3d 116, 120. “‘Duty’ is a requirement imposed by law to conform one’s
conduct to a certain ‘standard of care.’” In the absence of a legal duty, “there exists no general
duty to protect others from harm.” Johnstone v. City of Albuquerque, 2006-NMCA-119, ¶ 7, 140
N.M. 596, 600, 145 P.3d 76, 80. “The first step in determining whether a duty exists in a
15
particular case is to examine whether the legislature has spoken on the issue.” Chavez v. Desert
Eagle Distrib. Co. of N.M., 2007-NMCA-018, ¶ 8, 141 N.M. 116, 119–20, 151 P.3d 77, 80–81,
overruled on other grounds by Rodriguez v. Del Sol Shopping Ctr. Assocs., L.P., 2014-NMSC014, ¶ 8, 326 P.3d 465 (citations omitted); Torres v. State, 1995-NMSC-025, ¶ 10, 119 N.M.
609, 612, 894 P.2d 386, 389 (“With deference always to constitutional principles, it is the
particular domain of the legislature, as the voice of the people, to make public policy.”). As
especially relevant here, “[w]here the discussion of duty involves recognition of a new cause of
action, or as here, extension of a recognized theory to a new setting, the issue is better framed as
a question of policy.” Gabaldon v. Erisa Mortg. Co., 1997-NMCA-120, ¶ 21, 124 N.M. 296,
304, 949 P.2d 1193, 1201, reversed on other grounds by Gabaldon v. Erisa Mortg. Co., 1999NMSC-039, 128 N.M. 84, 990 P.2d 197.
In 2014, the New Mexico Supreme Court instructed courts that policy must be the only
consideration when determining whether a defendant owes a plaintiff a duty to exercise
reasonable care. See Rodriguez, 2014-NMSC-014, ¶ 1, 326 P.3d 465. “The existence of a duty is
a question of policy to be determined by the court as a matter of law with reference to legal
precedent, statutes, and other principles comprising the law.” Oakey, Estate of Lucero v. May
Maple Pharmacy, Inc., 2017-NMCA-054, ¶ 22, 399 P.3d 939, 947 (citations omitted). See Davis
v. Bd. of Cty. Comm’rs of Dona Ana Cty., 1999-NMCA-110, ¶ 14, 127 N.M. 785, 790, 987 P.2d
1172, 1177 (“For guidance on questions of policy, we look to general legal propositions we may
infer from legal precedent within our own state and from other jurisdictions, and we look as well
to any relevant statutes, learned articles, or other reliable indicators of community moral norms
and policy views[.]”) (citations and internal quotations omitted).
E.
Analysis
16
As a federal court sitting in diversity the Court must apply the law of New Mexico’s
highest court, the New Mexico Supreme Court in determining what duty Defendant owed
Plaintiff. See Wade v. EMCASCO Ins. Co., 483 F.3d 657, 665–66 (10th Cir. 2007). When “no
controlling state decision exists, the federal court must attempt to predict what the state’s highest
court would do.” Id. A court may rely on “decisions rendered by lower courts in the relevant
state, appellate decisions in other states with similar legal principles, district court decisions
interpreting the law of the state in question, and the general weight and trend of authority in the
relevant area of law.” Id.
The Court declines to find that Defendant owed to Plaintiff a duty of care to refrain from
selling gasoline to an allegedly intoxicated driver for the primary reason that Plaintiff has not
cited, and the Court has not found, one single New Mexico judicial case or legislative enactment
expressly holding that such a duty exists. In performing an Eerie analysis where New Mexico’s
laws are silent, due respect must be given to “appellate decisions in other states with similar legal
principles, district court decisions interpreting the law of the state in question, and general weight
and trend of authority in the relevant area of law.” Wade, 483 F.3d at 665–66. Here, Plaintiff
cites to two non-binding cases, East Tennesse Pioneer Oil Co. and O’Toole, for the proposition
that gasoline vendors must refrain from selling gasoline to intoxicated drivers. The Court has
already thoroughly analyzed East Tennessee Pioneer Oil Co. in its previous Memorandum
Opinion and Order and the Court need not duplicate its analysis herein. Suffice it to say, if East
Tennessee Pioneer Oil Co. provided the rule of decision in this case, then Defendant would
likely be liable for negligent entrustment.
The problem, though, is that East Tennessee Pioneer Oil Co.’s holding that vendors owe
a duty of care to not sell gasoline to intoxicated persons has not established roots in any other
17
jurisdiction’s law, including New Mexico’s. Similarly, the California case on which Plaintiff
relies, O’Toole, is unpublished and not entitled to precedential effect. It goes without saying that
these two non-binding cases do not represent the “general weight and trend of authority in the
relevant area of law.” Wade, 483 F.3d at 665–66. Perhaps more importantly, because of the
diversity nature of this case and its implication of federal-state relations, the Court must be
“reticent to expand state law without clear guidance from [the state’s] highest court for it is not a
federal court’s place to expand ... state law beyond the bounds set by the [highest court of the
state].” Amparan v. Lake Powell Car Rental Companies, 882 F.3d 943, 948 (10th Cir. 2018)
(citations and internal quotations omitted). The sheer dearth of caselaw on the issue clearly
supports the finding, on the current record, that Defendant had no duty of care to Plaintiff or the
decedent to avoid selling gasoline to an allegedly drunk driver.
Perhaps the absence of caselaw demonstrating a duty could be overcome if Plaintiff
identified relevant statutes imposing a duty. See Madrid v. Lincoln Cty. Med. Ctr., 1995-NMCA126, ¶ 21, 121 N.M. 133, 140, 909 P.2d 14, 21 (stating that policy questions of duty can be
answered by relevant statutes). Although Plaintiff has identified a strong public policy of
removing dangerous drunk drivers from the road as evidenced by the State’s drunk driving
statute, the DWI statute was enacted to protect the motoring public by imposing criminal liability
on offending drivers. Plaintiff has identified no policy making gasoline vendors civilly liable for
accomplishing that same interest. By way of contrast, New Mexico’s Liquor Liability Act, N.M.
Stat. Ann. § 41-11-1(E) evinces a public policy of creating tort liability for liquor licensees and
social hosts who sell, serve, or provide alcohol. See Delfino v. Griffo, 2011-NMSC-015, ¶ 13,
150 N.M. 97, 257 P.3d 917, 923. The Court recognizes that Defendant sold Mr. Denny gasoline,
not alcohol, and thus the Liquor Liability Act would not have applied to that transaction.
18
However, the Court cites the Liquor Liability Act to demonstrate that the legislature is capable of
imposing liability on parties for alcohol-related accidents, and that the legislature imposed no
liability on gasoline vendors. In the absence of a civil liability statute, Plaintiff effectively asks
this Court to impose judicially crafted liability on vendors for sales of gasoline to intoxicated
persons where neither the State’s courts, legislature, or even Plaintiff offer guidance on the scope
and nature of that duty. As Defendant correctly points out, its sale of gasoline to Mr. Denny
violated no law. If Mr. Denny legally purchased gasoline, then Defendant had no duty to refrain
from making that sale.
In sum, Plaintiff has failed to identify binding or persuasive legal precedent, statutes, and
other principles of law demonstrating that Defendant owed a duty of care to Plaintiff to refrain
from selling gasoline to an intoxicated person. Having determined that Defendant owed no duty
of care to Plaintiff in this case, the Court grants Defendant’s Rule 12(c) motion to dismiss
Plaintiff’s claim for negligent entrustment.
IV.
NOTICE TO PLAINTIFF OF POSSIBLE SUA SPONTE DISMISSAL OF COUNT
II
Defendant failed to move to dismiss Count II, Plaintiff’s claim for negligent hiring,
training, and supervision stemming from its employee’s sale of gasoline to Mr. Denny. In light of
the Court’s foregoing discussion of Plaintiff’s negligent entrustment claim, the Court is skeptical
about the viability of such a claim because presumably the two causes of action are predicated
upon the same legal duty that the Court found lacking as a matter of law on Plaintiff’s negligent
entrustment claim. In instances where a district court is contemplating dismissing a claim sua
sponte, the Tenth Circuit has said that “the preferred practice is to accord a plaintiff notice and an
opportunity to amend his complaint before acting upon a motion to dismiss for failure to state a
claim.” McKinney v. State of Okl., Dep’t of Human Servs., Shawnee OK, 925 F.2d 363, 365 (10th
19
Cir. 1991); see also Abbas v. Dixon, 480 F.3d 636, 640 (2d Cir. 2007) (stating that it is “bad
practice for a district court to dismiss without affording a plaintiff the opportunity to be heard in
opposition,” unless the complaint lacks merit.). But a trial court may dismiss a claim sua sponte
without notice to the plaintiff “when it is patently obvious that the plaintiff could not prevail on
the facts alleged and allowing [her] an opportunity to amend [her] complaint would be futile.”
Knight v. Mooring Capital Fund, LLC, 749 F.3d 1180, 1190 (10th Cir. 2014). The Court finds no
good cause to permit Plaintiff to amend his complaint at this late stage in the litigation. However,
the Court affords Plaintiff notice and an opportunity to submit an optional written response to the
Court’s contemplated dismissal of Count II. Plaintiff’s optional memorandum is due with 14days of entry of this Memorandum Opinion and Order. If Plaintiff files a memorandum, then
Defendant must reply to Plaintiff’s memorandum within 14-days of Plaintiff’s filing. If Plaintiff
files no response to this Memorandum Opinion and Order, the Court will dismiss with prejudice
all claims against Defendant and enter a final judgment in favor of Defendant on Plaintiff’s
claims. The parties’ briefs shall not exceed 12-pages.
V.
CONCLUSION
Defendant’s motion for election of remedies, or, in the alternative to dismiss Plaintiff’s
complaint for improper claim splitting is denied because neither of those doctrines apply to this
case. However, the Court grants Defendant’s Rule 12(c) motion because Defendant had no legal
duty to the motoring public to refrain from selling an intoxicated driver gasoline. Finally, the
Court is considering dismissing Plaintiff’s cause of action for negligent hiring, training, and
supervision (Count II). Plaintiff and Defendant are afforded an opportunity to respond to the
Court’s contemplated dismissal in the sequence described above.
20
IT IS THEREFORE ORDERED that Defendant Giant Four Corners, Inc. d/b/a Giant #
7251’s Opposed Motion for Judgment on the Pleadings [ECF No. 90] is GRANTED and that
Giant’s Opposed Motion to Compel Election of Remedies or Dismiss for Improper Claim
Splitting [ECF No. 91] is DENIED.
IT IS SO ORDERED.
______________________________
United States District Court Judge
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