Garcia v. Coffman

1997 NMCA 092, 946 P.2d 216, 124 N.M. 12
CourtNew Mexico Court of Appeals
DecidedJune 17, 1997
Docket16713
StatusPublished
Cited by36 cases

This text of 1997 NMCA 092 (Garcia v. Coffman) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Garcia v. Coffman, 1997 NMCA 092, 946 P.2d 216, 124 N.M. 12 (N.M. Ct. App. 1997).

Opinions

OPINION

FLORES, Judge.

1. Defendants Ted Coffman (Coffman), Allied Physicians, P.C. (Allied), and Musculoskeletal Evaluation Diagnostic Services appeal from judgments awarding Plaintiff damages upon claims for fraudulent misrepresentation, breach of fiduciary duty, and attorney’s fees and costs. Defendants raise the following issues on appeal: (I) the complaint failed to state a cause of action for piercing the corporate veil and the evidence was insufficient to support that claim; (II) it was error to award Plaintiff nominal and punitive damages for breach of fiduciary duty; (III) the absence of actual damages constituted a failure to prove fraud and the jury’s award of punitive damages for fraud was error; (IV) the jury’s failure to award punitive damages against Allied precluded such an award against Cofñnan; (V) the punitive damages awards were excessive; and (VI) the award of attorney’s fees was error.

2. We reverse the jury’s award of nominal damages and punitive damages for fraudulent misrepresentation. We affirm the trial court’s award of nominal damages and punitive damages for breach of fiduciary duty and its award of attorney’s fees.

FACTS

3. Plaintiffs claims were tried both to a jury and to the bench. The claim for breach of fiduciary duty was tried to the court. Because Defendants have not challenged the sufficiency of the evidence to support the district court’s findings, we rely on those findings to provide the factual background for the legal issues raised by the appeal.

4. Plaintiff was involved in an automobile accident on February 25, 1991. Eight days later, Plaintiff sought chiropractic care from Allied, a corporation wholly owned by Coffman. Coffman never met or spoke with Plaintiff nor provided any direct diagnosis or treatment to him. However, Coffman, individually and through Allied and its employees, designed and implemented a treatment program for personal injury patients such as Plaintiff for the purpose of generating income for Coffman to the detriment of the patients.

5. Coffman made it a practice to hire inexperienced chiropractors and required them to follow his prescribed treatment and diagnostic protocol. He also required other employees to report any deviations from his protocol. Pursuant to Coffman’s protocol, unnecessary computerized muscle testing was performed on automobile accident patients by incompetent personnel, and x-rays were taken regardless of whether the treating physician judged the procedures to be appropriate. In Plaintiffs case an excessive number of x-rays were taken, the x-rays were marked up by an unqualified staff member, and the x-ray results were not used in treatment.

6. Dr. Berlin, an employee of Allied and Plaintiffs treating chiropractor, had no discretion to alter the treatment and diagnostic regimen established by Coffman or the communications that Coffman required be made to Allied’s patients. The length and frequency of visits and treatment modalities Dr. Berlin prescribed for Plaintiff had no relationship to Plaintiffs individual needs, and the modalities were administered by unqualified personnel on a rote basis. Dr. Berlin ordered blood tests, urinalysis, computer muscle testing, and follow-up x-rays for Plaintiff that were not necessary. Dr. Berlin referred Plaintiff to Dr. Weber for a second opinion without deciding whether such a referral was necessary. Dr. Weber, to whom Dr. Berlin made 50 to 100 referrals in one year, never once opined that a patient should not return to Allied for continued treatment. Dr. Berlin did not alter treatment of Plaintiff in response to Dr. Weber’s opinion regarding Plaintiff, even though the opinion in part did not confirm the correctness of the diagnosis and the efficacy of the treatment program.

7. The jury determined that Coffman dominated and controlled Allied for his own improper purposes and that such conduct caused damage to Plaintiff. The jury also found that Coffman and Allied engaged in unfair trade practices and made a fraudulent misrepresentation to Plaintiff. The jury awarded Plaintiff $1 in nominal damages each from Coffman and Allied and $25,000 from Coffman for punitive damages.

8. After the jury announced its verdict, the trial court decided the equitable issue of breach of fiduciary duty against Coffman and Allied. The trial court found that Coffman was personally liable for Plaintiffs actual damages, but that Plaintiff had failed to prove the amount of those damages. The trial court awarded Plaintiff $1 in nominal damages and $50,000 in punitive damages.

9. The trial court entered judgment against Coffman for $2 in nominal damages and $75,000 in punitive damages. Upon Plaintiffs election of remedies, a $300 statutory award under the Unfair Practices Act, NMSA 1978, §§ 57-12-1 to -22 (Repl. Pamp.1995), was not included. However, the trial court awarded Plaintiff attorney’s fees and costs under the Unfair Practices Act.

DISCUSSION

I. Piercing the Corporate Veil

10. Coffman claims both that Plaintiff did not plead a cause of action for piercing the corporate veil and that the evidence was insufficient to support an award of that extraordinary relief. The three requirements for piercing the corporate veil are: (1) instrumentality or domination; (2) improper purpose; and (3) proximate cause. Harlow v. Fibron Corp., 100 N.M. 379, 382, 671 P.2d 40, 43 (Ct.App.1983) (citing Cathy S. Krendl & James R. Krendl, Piercing the Corporate Veil: Focusing the Inquiry, 55 Denver L. J. 1 (1978) [hereinafter Krendl], as a source of identification of the three requirements).

A. Sufficiency of the Complaint

11. “Under our rules of ‘notice pleading,’ it is sufficient that defendants be given only a fair idea of the nature of the claim asserted against them sufficient to apprise them of the general basis of the claim[.]” Petty v. Bank of N.M. Holding Co., 109 N.M. 524, 526, 787 P.2d 443, 445 (1990). Plaintiffs second amended complaint may not have been artfully drafted. Nonetheless, the pleading was adequate to inform Coffman that Plaintiff sought to have Coffman held personally liable for the acts of Allied.

12. The caption of the complaint is styled Plaintiff versus “Ted Coffman, D.C., d/b/a Allied Physicians----” Allegations in the complaint speak in terms of Coffman as the entity that harmed Plaintiff. Plaintiff alleged that Coffman provided unnecessary procedures and treatments, over-billed for services, and otherwise acted improperly to enrich himself at Plaintiffs expense. Plaintiff also alleged that he experienced pain, suffering, and financial loss as a result of Coffman’s conduct. Furthermore, Coffman’s own pleadings manifest his awareness that Plaintiff sought to hold him personally liable for the acts of Allied. Coffman’s memorandum in support of his motion to dismiss the action against him in his personal capacity states that the allegations of the first amended complaint appear to try to state causes of action against him personally and that he never had any dealings with Plaintiff.

13. Coffman was clearly on notice that Plaintiff was seeking to “pierce the corporate veil” even if Plaintiff did not use that phrase. Thus, we hold that the trial court’s denial of Coffman’s motion to dismiss was not erroneous. See generally New Mexico Life Ins. Guar. Ass’n v. Quinn & Co., 111 N.M.

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Cite This Page — Counsel Stack

Bluebook (online)
1997 NMCA 092, 946 P.2d 216, 124 N.M. 12, Counsel Stack Legal Research, https://law.counselstack.com/opinion/garcia-v-coffman-nmctapp-1997.