Foster v. Sun Healthcare Group, Inc.

2012 NMCA 072, 2 N.M. 187
New Mexico Court of Appeals·Decided June 29, 2012·No. No. 33,655; Docket No. 31,389·Published·Cited by 1 cases

Opinion

OPINION

VANZI, Judge.

{1} Plaintiff Samuel Foster filed suit against Defendants Sun Healthcare Group, Inc., Peak Medical Corporation, and Peak Medical NM Management Services, Inc. (collectively, Defendants) in state district court after a United States District Court for the district of New Mexico (federal court) dismissed his personal injury suit against Defendants for lack of subject matter jurisdiction. New Mexico has a saving statute that provides that “once a suit has been commenced, if it fails for any cause, except negligence in its prosecution, a second suit can be brought within six months and the second suit will be considered a continuation of the first suit.” Amica Mut. Ins. Co. v. McRostie, 2006-NMCA-046, ¶ 1, 139 N.M. 486, 134 P.3d 773 (alterations, internal quotation marks, and citation omitted); see NMSA 1978, § 37-1-14 (1880). After Foster refiled his case in New Mexico state district court (district court), Defendants filed a motion for summary judgment, arguing in part that Foster’s suit was untimely and could not be considered a continuation of his federal court suit under Section 37-1-14 because the federal suit failed due to negligence in its prosecution. The district court agreed and granted partial summary judgment in favor of Defendants.

{2} We hold that the district court erred in determining that Foster was negligent in the prosecution of his federal court case and that his personal injury claims were time-barred as a result. We reverse.

BACKGROUND

{3} This lawsuit arises from injuries that Foster suffered on July 18, 2006, while he was a resident at Bloomfield Nursing and Rehabilitation in Bloomfield, New Mexico. On July 1,2009, Foster filed a personal injury action in federal court and named five Defendants: (1) Sun Healthcare Group, Inc. (Sun Healthcare); (2) Peak Medical Corporation (PeakMedical); (3) PeakMedical NM Management Services, Inc. (Peak NM); (4) Bloomfield Nursing and Rehabilitation (Silverstone); and (5) William J. Krystopwicz. In the complaint, Foster asserted that the federal court had jurisdiction over the matter and that there was complete diversity of citizenship between himself and Defendants as required by the federal statute governing diversity jurisdiction. See 28 U.S.C. § 1332(a) (2005) (amended 2011). Three Defendants, Sun Healthcare, Peak Medical, and Peak NM, filed a motion to dismiss for lack of federal subject matter jurisdiction, alleging that Foster failed to demonstrate complete diversity of citizenship between himself and Defendants. See Fed. Rules Civ. Proc. Rule 12(b)(1). Foster responded that sufficient facts existed to support his assertion that complete diversity existed. The federal court disagreed.

{4} The federal court found that Foster did not properly plead the corporate citizenship of Defendants because he failed to state where Defendants were incorporated, the states where they had their principal places of business, and whether those states were different from the states of incorporation. After further review of the exhibits attached to Defendants’ motion to dismiss and the record, the federal court determined that Sun Healthcare and PeakNM were in fact citizens ofNew Mexico. Thus, complete diversity did not exist. On November 18, 2009, the federal court dismissed Foster’s case without prejudice for lack of subject matter jurisdiction.

{5} On December 7, 2009, Foster refiled his suit in district court and asserted it was a continuation of his federal court case pursuant to Section 37-1-14. In lieu of an answer, Defendants filed a motion to dismiss for failure to state a claim and, alternatively, a motion for summary judgment. Defendants argued that Foster’s claims were time-barred by the applicable statute of limitations. Defendants also asserted that Foster’s federal court case was dismissed “due to negligence in prosecution because diversity jurisdiction was clearly lacking” because, prior to filing his federal court case, Foster had admitted knowledge of the facts that destroyed diversity. According to Defendants, therefore, Section 37-1-14 did not apply, and Foster’s instant district court action could not be deemed a continuation of his federal court case. In response, Foster denied that he had previously admitted prior knowledge of Defendants’ citizenship, maintained that he filed his federal court action in good faith, and stated that the exhibits submitted by Defendants — several complaints and a court order — spoke for themselves. At a hearing on the matter, the district court noted that although it was clear that there was not diversity between Foster and Peak NM, Foster’s filing in federal court could have been due to confusion because Defendants’ locations did seem confusing. Nevertheless, the district court decided that diversity was lacking between Foster and PeakNM and that there was negligence in the prosecution of Foster’s federal court case. The district court therefore concluded that the protection of Section 37-1-14 was not available to save Foster’s suit and entered an order dismissing Foster’s personal injury claims as time-barred. Foster filed a motion for reconsideration, which was denied; however, the district court granted Foster’s request for leave to apply for an interlocutory appeal, which this Court granted.

DISCUSSION

Standard of Review

{6} As a preliminary matter, as we have noted, Defendants filed a motion to dismiss and, alternatively, a motion for summary judgment. The district court relied on the parties’ briefs as well as the exhibits attached to Defendants’ pleading in reaching its decision. “Where matters outside the pleadings are considered on a motion to dismiss for failure to state a claim, the motion becomes one for summary judgment[.]” Knippel v. N. Commc’ns, Inc., 97 N.M. 401, 402, 640 P.2d 507, 508 (Ct. App. 1982). We review a district court’s grant of summary judgment de novo. Romero v. Phillip Morris Inc., 2010-NMSC-035, ¶ 7, 148 N.M. 713, 242 P.3d 280. We construe all reasonable inferences in favor of the non-moving party and will uphold a grant of summary judgment where'there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. Id. The moving party has the initial burden of establishing a prima facie case for summary judgment. Id. ¶ 10. To make a prima facie showing, the moving party mustproduce “such evidence as is sufficient in law to raise a presumption of fact or establish the fact in question unless rebutted.” Id. (internal quotation marks and citation omitted). Once the moving party has established a prima facie case, “the burden shifts to the non-movant to demonstrate the existence of specific evidentiary facts [that] would require trial on the merits.” Id. (internal quotation marks and citation omitted). We look to the law governing the issue to determine whether the moving party has established a prima facie case for summary judgment. See Dunning v. Buending, 2011-NMCA-010, ¶¶ 12, 15, 149 N.M. 260, 247 P.3d 1145, cert. denied, 2011-NMCERT-001, 150 N.M. 558, 263 P.3d 900. Here, the substantive law under which the district court granted summary judgment is the New Mexico saving statute, Section 37-1-14. We begin our analysis with a review of Section 37-1-14 and relevant case law construing such statutes.

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Foster v. Sun Healthcare Group, Inc., 2012 NMCA 072, 2 N.M. 187 (N.M. Ct. App. 2012).

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