{ "id": 2823331, "name": "STATE FARM GENERAL INSURANCE COMPANY, Plaintiff-Appellee, v. Doris M. CLIFTON, Defendant-Appellant", "name_abbreviation": "State Farm General Insurance v. Clifton", "decision_date": "1974-10-18", "docket_number": "No. 9931", "first_page": "757", "last_page": "760", "citations": [ { "type": "official", "cite": "86 N.M. 757" }, { "type": "parallel", "cite": "527 P.2d 798" } ], "court": { "name_abbreviation": "N.M.", "id": 8835, "name": "Supreme Court of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "63 N.M. 63", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2778052 ], "weight": 2, "year": 1957, "opinion_index": 0, "case_paths": [ "/nm/63/0063-01" ] }, { "cite": "76 N.M. 735", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 8504809 ], "weight": 2, "year": 1966, "opinion_index": 0, "case_paths": [ "/nm/76/0735-01" ] }, { "cite": "78 N.M. 170", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5322753 ], "weight": 2, "year": 1967, "opinion_index": 0, "case_paths": [ "/nm/78/0170-01" ] }, { "cite": "86 N.M. 94", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2826407 ], "weight": 2, "year": 1974, "opinion_index": 0, "case_paths": [ "/nm/86/0094-01" ] }, { "cite": "111 S.E.2d 773", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1959, "opinion_index": 0 }, { "cite": "100 Ga.App. 434", "category": "reporters:state", "reporter": "Ga. App.", "case_ids": [ 1587300 ], "year": 1959, "opinion_index": 0, "case_paths": [ "/ga-app/100/0434-01" ] }, { "cite": "301 F.Supp. 479", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 5440698 ], "opinion_index": 0, "case_paths": [ "/f-supp/301/0479-01" ] }, { "cite": "102 Cal.Rptr. 547", "category": "reporters:state", "reporter": "Cal. Rptr.", "year": 1972, "pin_cites": [ { "page": "552" } ], "opinion_index": 0 }, { "cite": "25 Cal.App.3d 232", "category": "reporters:state", "reporter": "Cal. App. 3d", "case_ids": [ 6036523 ], "year": 1972, "pin_cites": [ { "page": "239" } ], "opinion_index": 0, "case_paths": [ "/cal-app-3d/25/0232-01" ] }, { "cite": "58 S.E. 643", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1907, "opinion_index": 0 }, { "cite": "129 Ga. 111", "category": "reporters:state", "reporter": "Ga.", "case_ids": [ 449796 ], "year": 1907, "opinion_index": 0, "case_paths": [ "/ga/129/0111-01" ] }, { "cite": "47 A.L.R.3d 314", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "year": 1973, "opinion_index": 0 }, { "cite": "69 N.M. 150", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2788829 ], "weight": 4, "year": 1961, "opinion_index": 0, "case_paths": [ "/nm/69/0150-01" ] } ], "analysis": { "cardinality": 466, "char_count": 6756, "ocr_confidence": 0.812, "pagerank": { "raw": 4.893461898289705e-07, "percentile": 0.9335899506110201 }, "sha256": "99c8ab383a61fb13f0c7a096535ce61ba0b5d9f9994e7e146b537f9edbffd3fc", "simhash": "1:b1df7436183ad82e", "word_count": 1129 }, "last_updated": "2023-07-14T22:44:27.328252+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "OMAN and MARTINEZ, JJ., concur." ], "parties": [ "STATE FARM GENERAL INSURANCE COMPANY, Plaintiff-Appellee, v. Doris M. CLIFTON, Defendant-Appellant." ], "opinions": [ { "text": "OPINION\nMcMANUS, Chief Justice.\nThe plaintiff, State Farm General Insurance Company (hereinafter called \u201cthe Company\u201d), brought an interpleader action alleging that it was the insurer of a residence in the amount of five thousand dollars ($5,000), and requested a determination of entitlement to the proceeds of the policy between the contract sellers and the contract buyers under a real estate contract for the sale of said residence located in Albuquerque, New Mexico. The parties to the contract were Mr. and Mrs. Richard C. Clifton, as sellers, and Mr. and Mrs. Bensslow Baca, as buyers. Mrs. Clifton, then being divorced, filed a counterclaim against the Company for punitive and general damages alleging, in general, unreasonable delay in payment of the loss. The punitive claim was dismissed, and the claim for general damages proceeded to the jury.\nThe proceeds of the policy, in the sum of five thousand dollars ($5,000), were awarded to Mrs. Clifton.\nThe damaging fire occurred on April 25, 1970. The interpleader action was filed April 5, 1971. Mrs. Clifton obtained her husband\u2019s interest in the subject property by divorce decree and a quitclaim deed. The real estate contract in escrow between the Cliftons and the Bacas was terminated by default in payments. The documents recorded in the County Clerk\u2019s office in Bernalillo County on March 25, 1971, showed four parties with an interest in the property.\nThe appellants offer two points on appeal, the first of which reads:\n\u201cThe trial court erred in granting a directed verdict.\u201d\nAppellants claim entitlement to go to the jury on a theory of breach of contract or on a tort theory for unreasonable delay in paying the proceeds of the insurance contract. As to the aspect of recovery based on breach of contract, damages recoverable under this theory are those damages contemplated by the parties at the time of making the contract. Mitchell v. Intermountain Casualty Company, 69 N.M. 150, 364 P.2d 856 (1961); Annot. 47 A.L.R.3d 314 (1973). None of the claimed damages were the natural and foreseeable consequences of the claimed breach, and, thus were not within the contemplation of the parties. Therefore, we hold that an action based on breach of contract does not lie.\nThis leads us to decide whether or not an action in tort will lie, based on unreasonable delay by the Company in making payment. This tort, although not specifically recognized before in New Mexico, is alluded to in Mitchell, supra. In determining whether an action will lie in this instance, we rely on the guidelines set out in Mitchell, supra, where we quoted from Milledgeville Water Co. v. Fowler, 129 Ga. 111, 58 S.E. 643 (1907), stating, at 69 N.M. p. 154, at 364 P.2d p. 859:\n\u201c \u2018Mere breach of a contract cannot be converted into a tort by showing that failure to perform upon the part of the one committing the breach had resulted in great inconvenience, trouble, annoyance, and hardship to the other party to the contract.\u2019\n\u201cMere delay or failure of the insurer in making the repairs or disputing the extent of the insurer\u2019s obligation under its contract does not give rise to a tort action. * * * \u201d\nIn the cause before us, the insurance policy was assigned to the Bacas under the real estate contract with Richard Clifton as the named mortgagee. Between August 1, 1969, and March 25, 1971, the only records available reflect that four parties had an interest in the property by virtue of the real estate contract. No change in that status was shown until the latter date, when all of the deeds in escrow were recorded. To add to the confusion, there were recorded a special warranty deed from the Bacas to the Cliftons and, as well, a warranty deed from the Cliftons to the Bacas. In addition, the quitclaim deed from Clifton to Mrs. Clifton was also recorded.\nBaca asserted an equity interest in the property, thereby implying an interest in the proceeds, but he did not claim the proceeds. While the conclusion concerning the payment of the insurance policy proceeds took some time, the evidence was substantial in accounting for delay. The actions of the adjustor for the Company seem natural in the light of several claimants to the proceeds, the absence of Baca after his claimed interest in a portion thereof, and the failure to file the substantiating documents with the county clerk. In order to recover damages in a tort action under the facts in this case, there must be evidence of bad faith and/or a scheme to obtain some fraudulent purpose. Richardson v. Employers Liability Assurance Corp., 25 Cal.App.3d 232, 239, 102 Cal.Rptr. 547, 552 (1972); Merrin Jewelry Co. v. St. Paul Fire and Marine Ins. Co., 301 F.Supp. 479 (S.D.N.Y.1969), and Leonard v. Firemen\u2019s Insur. Co. of Newark, N. J., 100 Ga.App. 434, 111 S.E.2d 773 (1959). In 3 J. Appleman, Insurance Law and Practice, \u00a7 1612, \u201cbad faith\u201d has been defined as meaning, \u201cany frivolous or unfounded refusal to pay; it is not necessary that such refusal be fraudulent.\u201d The record here does not disclose any such type of evidence.\nViewing all evidence before us in the light most favorable to Mrs. Clifton, as is required under our recent opinion in Archuleta v. Pina, 86 N.M. 94, 519 P.2d 1175 (1974), we hold that the trial court was correct in granting the Company\u2019s motion for a directed verdict. Given the set of facts before us with the controversy over the entitlement to the proceeds of the policy, an insurance company is justified in taking reasonable time and measures necessary to establish which party is entitled to the proceeds. The Company\u2019s actions here were reasonable and proper under the circumstances.\nAppellants\u2019 second point states:\n\u201cThe trial court committed error in granting summary judgment on Mrs. Clifton\u2019s claim for punitive damages.\u201d\nPunitive damages can be awarded in a breach of contract action in New Mexico, but there must be a showing of malice or of reckless or wanton disregard of plaintiff\u2019s rights. Bank of New Mexico v. Rice, 78 N.M. 170, 429 P.2d 368 (1967); Loucks v. Albuquerque National Bank, 76 N.M. 735, 418 P.2d 191 (1966); Whitehead v. Allen, 63 N.M. 63, 313 P.2d 335 (1957).\nInasmuch as the moneys for the total proceeds of the fire insurance policy were eventually paid Mrs. Clifton and in view of our holding that bad faith or fraud were not present, it would be improper to assess punitive damages.\nThe judgment of the trial court is affirmed.\nIt is so ordered.\nOMAN and MARTINEZ, JJ., concur.", "type": "majority", "author": "McMANUS, Chief Justice." } ], "attorneys": [ "Gallagher & Ruud, Albuquerque, for defendant-appellant.", "Klecan & Roach, James T. Roach, Albuquerque, for plaintiff-appellee." ], "corrections": "", "head_matter": "527 P.2d 798\nSTATE FARM GENERAL INSURANCE COMPANY, Plaintiff-Appellee, v. Doris M. CLIFTON, Defendant-Appellant.\nNo. 9931.\nSupreme Court of New Mexico.\nOct. 18, 1974.\nGallagher & Ruud, Albuquerque, for defendant-appellant.\nKlecan & Roach, James T. Roach, Albuquerque, for plaintiff-appellee." }, "file_name": "0757-01", "first_page_order": 787, "last_page_order": 790 }