October 17, 2016 – Beaudry v. Farmers Insurance Exchange

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: ___________
Filing Date: October 17, 2016
NO. 33,618
CRAIG BEAUDRY,
Plaintiff-Appellee,
v.
FARMERS INSURANCE EXCHANGE,
TRUCK INSURANCE EXCHANGE,
FIRE INSURANCE EXCHANGE,
MID-CENTURY INSURANCE COMPANY,
FARMERS NEW WORLD LIFE INSURANCE
COMPANY, FARMERS INSURANCE
COMPANY OF ARIZONA, LANCE CARROLL,
and CRAIG ALLIN,
Defendants-Appellants,
and
FARMERS GROUP, INC., TOM GUTIERREZ,
and CHRISTOPHER KERR,
Defendants.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Sarah M. Singleton, District Judge

Law Office of Jane B. Yohalem
Jane B. Yohalem
Santa Fe, NM
O’Friel and Levy, P.C.
Pierre Levy
Aimee Bevan
Santa Fe, NM
Law Office of Barry Green
Barry Green
Santa Fe, NM
for Appellee
Lewis Roca Rothgerber Christie LLP
Ross L. Crown
Albuquerque, NM
Lewis Roca Rothgerber Christie LLP
Steven J. Hulsman
Kristina N. Holmstrom
Phoenix, AZ
Skadden, Arps, Slate, Meagher & Flom LLP
Raoul D. Kennedy
James P. Schaefer
Palo Alto, CA
for Appellants
Brownstein Hyatt Farber Schreck, LLP
Eric R. Burris
Nury H. Yoo
Albuquerque, NM
for Amicus Curiae Association of Commerce and Industry of New Mexico

1 Farmers Insurance Exchange, Truck Insurance Exchange, Fire Insurance
Exchange, Mid-Century Insurance Company, Farmers New World Life Insurance
Company, and Farmers Insurance Company of Arizona.
OPINION
SUTIN, Judge.
{1} 	Plaintiff Craig Beaudry received substantial compensatory and punitive
damages jury verdicts on his claim of prima facie tort against various Farmers
Insurance companies (the Companies)1 and two Farmers employees, Lance Carroll
and Craig Allin (altogether, Defendants). At trial, Plaintiff proved that, in terminating
his insurance agent agreement (the Agreement), Defendants intended to harm and
actually harmed Plaintiff with malice and without justification. Defendants’ appeal
asserts that the district court erred as a matter of law in submitting prima facie tort to
the jury because termination of the Agreement was determined by the district court to
be lawful and authorized under the terms of the Agreement. Defendants also attack the
punitive damages award as unconstitutional.
{2} 	The approaches of the parties diverge significantly. Defendants treat the factual
detail of their proved malicious, intentionally harmful conduct in terminating the
Agreement as irrelevant as a matter of law, whereas Plaintiff focuses heavily on that
conduct as the underlying appropriate basis for application of prima facie tort.
Defendants represent that, based on their global legal research, “[u]pholding the

2
verdict [in this case] would make this Court the first appellate tribunal in America to
hold that prima facie tort can be used on a contract termination expressly authorized
by the contract itself.” Plaintiff interprets New Mexico case law as permitting the
application of prima facie tort in the circumstances under which Defendants’
termination of the Agreement was expressly authorized by a for-cause termination
provision in the Agreement.
{3} 	As this Opinion lays out, how this case was tried by the parties is a crucial and
compelling consideration in how the author of this Opinion (referred to hereafter in
the first person) decides Defendants’ issues on appeal. I hold that, under the particular
manner in which this case was tried, prima facie tort was properly sent to the jury, and
the majority affirms the judgment and the orders denying Defendants’ post-trial
motions for judgment as a matter of law. The majority also holds that the jury’s award
of punitive damages was not unconstitutional and affirms the award.
BACKGROUND
A. 	Defendants’ Presentation of Facts
{4} 	In conformity with their approach that purely legal issues are to be addressed
and decided, Defendants limit their presentation of the facts to the few that relate to
the Agreement and that bear upon the appellate issues, the majority of which I quote
here from Defendants’ brief in chief.

2 The record indicates that Plaintiff’s employee, April Granger, placed the
policy with CNA.
3
{5} 	“[Plaintiff] was an insurance agent who contracted to sell insurance policies on
behalf of the Companies under [the] . . . Agreement[.] . . . Lance Carroll contracted
with the Companies to be a District Manager for the territory that included [Plaintiff’s]
agency. . . . Craig Allin served as the Companies’ State Director in New Mexico.”
“The Agreement specified that [Plaintiff] was an ‘independent contractor.’ The
Agreement obligated [Plaintiff] to ‘submit to the Companies every request or
application for insurance for the classes and lines underwritten by the Companies and
eligible in accordance with their Rules and Manuals.’ It further provided that, ‘[a]ll
business acceptable to the Companies and written by the Agent will be placed with the
Companies,’ and that the Agent must ‘servic[e] all policyholders of the Companies in
such a manner as to advance the interests of the policyholders, the Agent and the
Companies.’ The Agreement was terminable upon three months[] written notice and
terminable for specified reasons on thirty days[] written notice. One of the specified
reasons was ‘[s]witching insurance from the Companies to another carrier.’ ”
{6} 	“From 2000 through 2011, [Plaintiff] operated an insurance agency in Taos,
[New Mexico,] selling policies to the Companies’ policyholders pursuant to the
Agreement. One of those policyholders was Moises Martinez. In September 2010,
[Plaintiff]2 placed one of Martinez’s policies with a rival carrier, i.e., CNA.

4
[Defendants] investigated and concluded that [Plaintiff’s] agency had breached the
Agreement. [Defendants] elected to terminate the Agreement in accordance with the
Companies’ policy of terminating agents who place eligible business outside the
Companies.” “By letter dated February 1, 2011, the Companies notified [Plaintiff] that
the Agreement would be terminated effective March 5, 2011. The termination date
was later changed to March 24, 2011. [Plaintiff], therefore, received [fifty-one] days[]
notice of his termination—well in excess of the [thirty] days required for termination
based on a breach of the Agreement.” “[Plaintiff’s] termination was considered by a
Termination Review Board and ultimately upheld by the Companies.”
B. 	Plaintiff’s Presentation of Facts
{7} 	In stark contrast, in his answer brief, Plaintiff recites approximately twenty-one
pages of facts covering, in detail, everything that went to the jury on his prima facie
tort claim, including proof of malicious intent to harm him, actual and significant
harm to him, improper, offensive, and unfair means employed by various Farmers’
employees, absence of justification, and compensatory damages. According to
Plaintiff, despite his stellar record as an agent, his contract was terminated after he
complained to his supervisor, Carroll, and his supervisor’s supervisors about a fellow
agent who was “poaching” clients. Additionally, Plaintiff states that by terminating
the Agreement, Carroll and Allin profited financially and in job security by
terminating Plaintiff and distributing the policies previously held at Plaintiff’s agency.

5
Among many other details, Plaintiff outlines broken promises Defendants made to
Plaintiff, including Defendants’ assurance that his hard work would pay off and that
only “deadbeat” agents were terminated. Plaintiff admits that his employee mistakenly
and temporarily transferred a Farmers policy to another company, but explains that
the error was quickly remedied. This error occurred at a time when the agency was
stressed due to the absence of Plaintiff’s wife, Dee, who handled operations at the
agency, but who had lost both kidneys and was forced to relocate to Denver for
intensive treatment. Despite his having corrected the mistake quickly, Plaintiff states
that he was ambushed, that his termination was engineered, and that he was never
given a full opportunity to explain the situation either before his termination or after.
He describes feelings of shock, betrayal, and depression. It is a given, based on the
jury verdict, that the facts Plaintiff presented showed the termination of Plaintiff’s
agency was based on unjustifiable motives, including actual and malicious intent to
harm Plaintiff, greed, personal self-interest, and retribution. In their reply brief,
Defendants characterize Plaintiff’s factual presentation as “irrelevant” and as “a
skewed version of the record in an attempt to garner sympathy and divert attention
from the fatal legal defects in his prima facie tort claim.”
{8} 	Based on the record, the majority treats the facts as provided in Plaintiff’s
answer brief as established and uncontrovertible. In considering the elements of prima

3 Although “tortuous” (i.e., complicated or complex) may be the proper term to
describe this case, it is clear Plaintiff meant “tortious” (i.e., causing a tort).
6
facie tort, the jury obviously believed enough of Plaintiff’s extensive factual detail to
conclude that the elements were satisfied.
C. 	Procedural
{9} 	Plaintiff’s operative complaint set out eight claims for relief sounding in
contract and tort: “tortuous[3] interference with contract”; “tortuous interference with
prospective contractual relations”; breach of contract; breach of the covenant of good
faith and fair dealing; conspiracy; intentional infliction of emotional distress; prima
facie tort; and violation of the New Mexico Insurance Code. Presumably, these claims
were set out because Plaintiff believed that each of the eight claims stated a claim
upon which relief could be granted. Plaintiff also sought punitive damages.
{10} 	During the course of litigation, Defendants filed numerous dispositive motions,
including a motion for summary judgment on what Defendants characterized as
Plaintiff’s claim for wrongful termination of the Agreement. In this motion,
Defendants sought a ruling that the termination of the Agreement was authorized
under the terms of the Agreement, and thus, Plaintiff’s claims for breach of contract,
breach of the implied covenant of good faith and fair dealing, and any other claim
“premised in whole or [in] part on wrongful termination of the Agreement” should be
dismissed. In response, Plaintiff argued that genuine issues of material fact existed as

7
to whether “Defendants legitimately fired [Plaintiff] for breach of contract.” Plaintiff’s
argument in opposition primarily focused on the question of whether he could be
found to have breached the Agreement, and thus be subject to termination, when his
employee switched an insured’s policy in violation of Plaintiff’s instructions. Plaintiff
also argued that there were “disputes of fact on whether Defendants actually fired
[Plaintiff] for breaching his contract” and that Defendants’ “inconsistent reasons” for
terminating Plaintiff created “a reasonable inference that the reasons were bogus[.]”
{11} 	The district court granted Defendants’ motion “on the issue of breach of
contract regarding the termination” and concluded that “the contract was properly
terminated” because it was undisputed that an existing insured’s policy was moved to
another insurer in violation of the Agreement and because the district court concluded
that Plaintiff bore the responsibility of his employee’s breach. Plaintiff did not appeal
the district court’s decision and order, and the parties appear to have agreed that, in
addition to dismissing the breach of contract claim, the decision and order also
dismissed the breach of the implied covenant of good faith and fair dealing claim.
{12} 	The only claims for relief ultimately presented to the jury were (1) conspiracy
by individual defendants to commit prima facie tort, and (2) prima facie tort
committed by all defendants as to the termination of the Agreement. The remainder
of the claims for relief were either dismissed by the district court based on the court’s
determination that the claims were not meritorious or were dismissed when Plaintiff

4 Although one of Defendants’ post-trial motions questioned the sufficiency of
the evidence to support Plaintiff’s prima facie tort claim and in the notice of appeal
Defendants purport to appeal the order denying that motion, in their briefs and during
oral argument on appeal Defendants focus primarily on their legal argument, and
Defendants explicitly stated during oral argument that their appeal is not a sufficiency
of the evidence appeal. Because Defendants chose to focus on legal arguments and did
8
chose not to pursue the claims because he felt those claims were not viable given
certain rulings by the court.
{13} 	The jury found against Plaintiff on the conspiracy claim but found in favor of
Plaintiff on the prima facie tort claim, awarding $1 million in compensatory damages
and $2.5 million in punitive damages. Post trial, Defendants filed a renewed motion
for judgment as a matter of law, on the ground that the prima facie tort claim was
legally deficient, and a renewed motion for judgment as a matter of law or for a new
trial because the prima facie tort claim was not supported by the evidence. In addition,
Defendants filed a motion to vacate or remit the punitive damages award. The district
court denied all three post-trial motions.
{14} 	Defendants appeal asserting that (1) the prima facie tort claim evaded the
stringent requirements of multiple established doctrines of law; (2) Plaintiff failed as
a matter of law to satisfy at least four of the five essential elements of prima facie tort;
(3) affirmance of the judgment would mean that parties who properly perform their
contracts face greater exposure than those who breach them; and (4) the punitive
damages award is unconstitutional.4

not continue to argue that there was insufficient evidence, I narrow the review
accordingly.
9
D. 	Prima Facie Tort Law in New Mexico
{15} 	I preface discussion of the issues and the analysis with a brief introduction to
pertinent prima facie tort law in New Mexico. These cases and some additional ones
will be discussed in this Opinion as needed and as I address the parties’ legal
arguments.
{16} 	Prima facie tort became part of our common law with its adoption in 1990 in
Schmitz v. Smentowski, 1990-NMSC-002, 109 N.M. 386, 785 P.2d 726. Schmitz sets
out the following four elements that are required to establish a prima facie tort claim:
(1) an intentional, lawful act by the defendant; (2) an intent to injure the plaintiff;
(3) injury to the plaintiff, and; (4) the absence of justification or insufficient
justification for the defendant’s acts. Id. ¶ 37. The Schmitz Court molded the doctrine
from mixtures of New York and Missouri case law and the Restatement (Second) of
Torts § 870 (Am. Law Inst. 1979). Schmitz, 1990-NMSC-002, ¶¶ 35-48. “To
constitute a prima facie tort, the tort-feasor must act maliciously, with the intent to
cause injury, and without justification or sufficient justification.” Id. ¶ 45; see also
Restatement (Second) of Torts § 870 cmt. e (indicating that “injury . . . means that the
harm must be to a legally protected interest of the plaintiff”). “[I]t need not be shown
that the act was solely intended to injure plaintiff.” Schmitz, 1990-NMSC-002, ¶ 47.

10
“[I]f a defendant offers a purpose other than the motivation to harm the plaintiff as
justification for his actions, that justification must be balanced to determine if it
outweighs the bad motive of the defendant in attempting to cause injury.” Id. ¶ 46. In
assessing that motive, “the intent [is to] be balanced to determine if the activity was
beyond the bounds of what society should tolerate.” Id. ¶ 57. This balancing test has
since been applied in a number of cases. See, e.g., Portales Nat’l Bank v. Ribble,
2003-NMCA-093, ¶¶ 3, 10, 134 N.M. 238, 75 P.3d 838 (employing the balancing test
and finding that there were genuine issues of material fact that precluded summary
judgment); Martinez v. N. Rio Arriba Elec. Coop., Inc., 2002-NMCA-083, ¶¶ 26-31,
132 N.M. 510, 51 P.3d 1164 (reversing a jury verdict based on prima facie tort after
considering the factors, concluding that none of the plaintiff’s proof taken alone or
together “[rose] to the level of both behavior and injury that is envisioned by the
theory of prima facie tort[,]” and holding that the plaintiff “did not have an actionable
claim for prima facie tort”); Beavers v. Johnson Controls World Servs., Inc. (Beavers
II), 1995-NMCA-070, ¶¶ 20-22, 120 N.M. 343, 901 P.2d 761 (balancing the factors
and determining that, under the facts, the plaintiff’s claim “passed the threshold of a
submissible prima facie tort” claim).
{17} 	Further, Schmitz states that “prima facie tort may be pleaded in the alternative;
however, if at the close of the evidence, [the] plaintiff’s proof is susceptible to
submission under one of the accepted categories of tort, the action should be

11
submitted to the jury on that cause and not under prima facie tort.” 1990-NMSC-
002, ¶ 48. This is because “double recovery may not be maintained, and the theory
underlying prima facie tort—to provide [a] remedy for intentionally committed acts
that do not fit within the contours of accepted torts—may be furthered, while
remaining consistent with modern pleading practice.” Id. In recognizing the limits of
prima facie tort, Schmitz states that “prima facie tort should not be used to evade
stringent requirements of other established doctrines of law.” Id. ¶ 63. This limitation
has been recognized, restated, and reformulated at various times by this Court. See,
e.g., Healthsource, Inc. v. X-Ray Assocs. of N.M., 2005-NMCA-097, ¶ 35, 138 N.M.
70, 116 P.3d 861 (stating that “prima facie tort should not lie when the pleaded factual
basis is within the scope of an established tort” and affirming the rationale that “a
prima facie tort claim may not be used as a means of avoiding the more stringent
requirements of other torts”); Bogle v. Summit Inv. Co., 2005-NMCA-024, ¶¶ 21-24,
137 N.M. 80, 107 P.3d 520 (reversing a prima facie tort judgment because, although
the plaintiff was unable to establish a claim under intentional interference with
contract, intentional interference with contract was the appropriate claim to bring, and
thus “existing causes of action provided reasonable avenues to a remedy for the
asserted wrongful conduct”); Ribble, 2003-NMCA-093, ¶¶ 11-12 (recognizing the
requirement that “prima facie tort should not be used to evade stringent requirements
of other established doctrines of law[,]” but determining that prima facie tort was

12
appropriate because no other accepted tort was pursued (alteration, internal quotation
marks, and citation omitted)); Stock v. Grantham, 1998-NMCA-081, ¶¶ 38-39, 125
N.M. 564, 964 P.2d 125 (holding that dismissal of the plaintiff’s prima facie tort claim
was proper because “[t]he only function of the claim of prima facie tort in [the
plaintiff’s] complaint [was] to escape possible restrictions imposed on the torts of
intentional infliction of emotional distress and interference with entitlement to
unemployment compensation”). Prima facie tort is not “a catch-all alternative for
every action that cannot stand on its own legs,” and courts must consider whether a
prima facie tort claim is “merely duplicative” of some other claim. Hagebak v. Stone,
2003-NMCA-007, ¶¶ 27, 29, 133 N.M. 75, 61 P.3d 201 (internal quotation marks and
citation omitted).
DISCUSSION
A. 	Standard of Review
{18} 	Under Defendants’ pure as-a-matter-of-law approach as to the propriety of
prima facie tort, de novo is the proper standard of review. Apodaca v. AAA Gas Co.,
2003-NMCA-085, ¶ 15, 134 N.M. 77, 73 P.3d 215 (“Questions of law require de novo
review.”). Additionally, the appellate courts review the punitive damages award de
novo. Aken v. Plains Elec. Generation & Transmission Coop., Inc., 2002-NMSC-021,
¶¶ 17-19, 132 N.M. 401, 49 P.3d 662 (stating that appellate courts review de novo the

13
constitutionality 	of 	a 	punitive 	damages 	award 	by 	“mak[ing] 	an 	independent
assessment of the record”).
B. 	Introductory Setting
{19} 	Before addressing Defendants’ specific arguments, it is important to underscore
the difficulty of this appeal both conceptually and under the particular circumstances
of this case. This appeal shows how the uncertainties and incongruities of prima facie
tort can create trial and appellate conundrums.
{20} 	First, under New Mexico law, an essential element of prima facie tort is that the
wrongdoer’s conduct must be lawful. See Schmitz, 1990-NMSC-002, ¶ 37. That
element was arguably proved in this case given that the district court concluded the
termination of the Agreement was proper under an express for-cause provision in the
Agreement. The “lawfulness” element exposes analytical tension between tort and
contract 	law—a 	tension 	that 	seems 	logically 	irreconcilable 	when 	a 	contract
termination, deemed lawful under contract principles, must necessarily at the same
time be an unlawful contract termination in prima facie tort. This case shows how
problematic a case can be when it involves termination of a contract that implicates
both contract and tort claims for relief.
{21} 	Second, how and when prima facie tort can properly be applied suffers from a
lack of clarity in our case law. There exists an inherent tension between the
recognition of prima facie tort as a valid tort claim that can be alternatively pleaded,

14
on the one hand, and the strict requirements imposed on application of the tort,
including that the tort cannot be used to evade established doctrines of law, on the
other hand. This tension, as to when prima facie tort ought to be submitted to a jury
and when it should not because it evades other established doctrines of law, is
highlighted and evidenced by the fact that the three panel members have significantly
different views on how this appeal should be decided. This tension is palpable in the
present case where Plaintiff may have had a viable contract claim had he properly
pleaded and pursued that claim, and where application of a prima facie tort claim
could have been shown to be evasive had the parties litigated the case differently.
Although not specifically highlighted by either party on appeal, that inherent tension
has been exacerbated by our case law, which does not clarify when and under what
circumstances (1) a doctrine of law is established, and (2) an established doctrine of
law is to be considered one that cannot be evaded by the application of prima facie
tort.
{22} 	For example, in one instance, this Court held that the existence of an
established, but ultimately unproved, claim prohibited submission of prima facie tort
to the jury. See Bogle, 2005-NMCA-024, ¶¶ 22-24 (concluding that prima facie tort
was prohibited because the plaintiff’s intentional interference with contract claim,
although ultimately not meritorious, was appropriate and thus “existing causes of
action provided reasonable avenues to a remedy for the asserted wrongful conduct”).

15
In another instance, this Court held that a plaintiff’s decision not to pursue an
established tort claim and the defendant’s failure to identify a duplicative claim under
an accepted category of tort claims, meant that prima facie tort could proceed to the
jury. See Ribble, 2003-NMCA-093, ¶¶ 11-12 (concluding that the plaintiff’s prima
facie tort claim was appropriate because no other accepted tort was pursued, although
another accepted tort claim was pleaded). The lack of clarity as to the parameters of
prima facie tort gives rise to a number of unanswered questions: Should a prima facie
tort claim be submitted to a jury if there is some established duplicative claim that
exists but was not pleaded? What if a duplicative claim was pleaded but dismissed?
Does it matter if the duplicative claim was pleaded but dismissed on the merits, as
opposed to dismissed for failure to state a claim upon which relief can be granted?
Although I do not address all of these questions in this Opinion, this case nevertheless
brings these tensions to the surface.
{23} 	Third, the manner in which this case was tried in district court, coupled with all
of the aforementioned tensions, forces a result with which I am not particularly
comfortable and results in an opinion that will likely be of little value to future parties
seeking to resolve whether prima facie tort is appropriate. As stated in the procedural
section of this Opinion, the district court dismissed many of Plaintiff’s tort and
contract claims, including Plaintiff’s breach of contract claim and breach of the
implied covenant of good faith and fair dealing claim based on the court’s ruling that

5 As stated in the procedural section of this Opinion, the parties apparently
agreed that the order, which concluded that the termination was authorized, dismissed
the breach of contract claim as well as the breach of the implied covenant of good
faith and fair dealing claim. I will explore this interpretation in more detail later in this
Opinion, however, for narrative clarity, it is noted here that the parties believe that the
court’s order disposed of both contract-related claims as they pertain to wrongful
termination, and neither party appealed that order.
16
the termination of the Agreement was proper and authorized.5 As a result of that order
regarding 	the 	appropriateness 	of 	the 	termination, 	and 	without 	objection 	by
Defendants, Plaintiff did not believe that his remaining contract-related or tort claims
were viable and decided not to pursue those claims. Thus, by the time the case went
to trial, there were no other tort or contract claims being pursued by or available to
Plaintiff that could address the malicious termination carried out by Defendants.
{24} 	I note that there exist differences within the panel in regard to the manner in
which this case was tried. The Dissent, which seeks reversal, says that the manner in
which the case was tried is “hardly the fault of Defendants.” Dissent infra ¶ 94. The
Special Concurrence “see[s] no reason to second-guess the parties’ litigation
strategy[,]” Sp. Con. infra ¶ 66, and concludes that “[t]here is nothing to be gained and
much to be lost” by second guessing the manner in which the case was tried. Sp. Con.
infra ¶ 81. In view of the differences within the panel as to the proper application of
prima 	facie 	tort 	and 	the 	unfortunate 	circumstance 	that 	viable, 	established
contract-related theories of unlawful termination escaped the attention of the parties
and apparently the court, I prefer to highlight the problems, uncertainties, and

17
ambiguities stemming from the application of prima facie tort, and prefer to pointedly
limit its application to the facts and circumstances of how this case was tried.
{25} 	Understanding 	that 	this 	case 	requires 	resolution 	despite 	the 	problems,
uncertainties, and incongruities in the application of prima facie tort, I proceed to
discuss why the majority affirms the district court’s submission of prima facie tort to
the jury under the circumstances here. I view this Opinion as laying the groundwork
for our Supreme Court to establish more clarity as to the appropriate application of
prima facie tort.
C. 	Defendants’ Approaches
{26} 	I see Defendants’ prima facie tort arguments on appeal as falling within three
categories: doctrinal, element-based, and policy-oriented, each presenting purely legal
issues. Defendants’ first argument—that Plaintiff’s prima facie tort claim evaded the
stringent requirements of multiple established doctrines of law—focuses on the
fundamental doctrinal differences between contract law and tort law. Defendants’
second argument focuses on the alleged inability of Plaintiff to meet the elements of
prima facie tort in light of the district court’s ruling that the contract was properly
terminated. Finally, Defendants’ third argument appeals to the practical and policy

6 Defendants’ arguments are supported by and expanded upon in an Amicus
Curiae brief filed by the Association of Commerce & Industry of New Mexico (ACI).
ACI states three points in its appellate brief as to application of prima facie tort:
(1) “creates ambiguity and unpredictability in contractual relations, upending long-
established business principles and expectations”; (2) “contradicts existing bodies of
substantive law”; and (3) “creates a hostile business environment in New Mexico for
individuals and businesses, and thereby stifles economic growth and investment[.]”
Because ACI’s points largely duplicate Defendants’ arguments on appeal, the points
are not addressed in this Opinion.
18
concerns associated with applying prima facie tort to conduct governed by and lawful
under contract law. Each argument is examined in turn. 6

19
1. 	Defendants’ Doctrinal Approach
{27} 	Defendants first attack the application of prima facie tort in this case on the
ground that allowing the claim impermissibly evades stringent requirements of
established doctrines of law, as warned against by Schmitz. Within this point,
Defendants contend Plaintiff evaded the following doctrines: (1) tort law is based on
instances of breach of a legal duty and not on breach of a contractual duty; (2) tort law
does not override the right not to contract with others, regardless of motive; (3) tort
law cannot be used to rewrite contracts; and (4) tort remedies are not available to
remedy the breach of the covenant of good faith and fair dealing. I do not find
Defendants’ arguments convincing given the circumstances of this case.
{28} 	First, Defendants assert that torts provide remedies for the breach of duties that
arise by law, but torts do not create legal duties. Defendants point out that this
“established doctrine” was alluded to in Schmitz, which stated that prima facie tort
“provides a remedy for plaintiffs who have been harmed by a defendant’s intentional
and malicious acts that fall outside of the rigid traditional intentional tort categories.”
Schmitz, 1990-NMSC-002, ¶ 35. Defendants further point to New Mexico case law
that “[c]ourts have long followed the rule that the difference between a tort and
contract action is that a breach of contract is a failure of performance of a duty arising
or imposed by agreement; whereas, a tort is a violation of a duty imposed by law.”
Kreischer v. Armijo, 1994-NMCA-118, ¶ 6, 118 N.M. 671, 884 P.2d 827 (alteration,

20
internal quotation marks, and citation omitted); see also Cottonwood Enters. v.
McAlpin, 1991-NMSC-044, ¶ 11, 111 N.M. 793, 810 P.2d 812 (stating that “the tort
of negligence must be based upon a duty other than one imposed by the contract”).
Based on the distinction between a legally imposed duty and a contractually imposed
duty, Defendants argue that the gravamen of Plaintiff’s prima facie tort claim was the
breach of a contractual duty by Defendants, namely, the wrongful termination of the
Agreement, not breach of a separate legal duty. Defendants note that the claim was
submitted to the jury based on Defendants’ termination of the Agreement, not on any
duty imposed by law separate from the obligations described in the Agreement. Thus,
Plaintiff “never identified—much less established—a duty created by law (as opposed
to one created solely by contract) that [Defendants] breached” with regard to the act
of terminating the Agreement.
{29} 	Defendants then turn to Schmitz. According to Defendants, nothing in Schmitz
suggests that prima facie tort applies to conduct that is authorized by contract.
Defendants argue that Schmitz instead stands for the propositions that the conduct
complained of cannot fit into any other established tort category, must fall outside of
the rigid traditional tort categories, and cannot be used to evade stringent requirements
of other established doctrines of law, including the employment at-will doctrine.
Defendants then argue that Schmitz was based on authority from jurisdictions that
have held that prima facie tort does not apply to conduct that is expressly authorized
by contract. Specifically, Defendants rely on cases from New York and Missouri that

7 With regard to Defendants’ argument that prima facie tort cannot, in the face
of wrongful termination claims, apply in at-will employment scenarios, the majority
21
have held that prima facie tort does not apply to wrongful termination claims in at-will
employment scenarios and argue that malicious exercise of a contractual right is
generally not an actionable claim. Defendants contend that Schmitz was formulated
from tracing the development of prima facie tort in New York and Missouri, see
Schmitz, 1990-NMSC-002, ¶¶ 35-48, and that the highest courts in these states have
held that prima facie tort does not apply to wrongful termination claims by at-will
employees. Defendants rely on Dake v. Tuell, 687 S.W.2d 191, 192 (Mo. 1985) (en
banc), which held that discharged at-will employees cannot sue for wrongful
discharge by “cloaking their claims in the misty shroud of prima facie tort.”
Defendants also rely on Murphy v. American Home Products Corp., 448 N.E.2d 86,
91 (N.Y. 1983), which held that the prima facie tort doctrine cannot be used to
circumvent the at-will employment doctrine.
{30} 	Defendants attempt to attach to this argument line a logical progression from
Vigil v. Arzola, 1983-NMCA-082, ¶ 17, 102 N.M. 682, 699 P.2d 613, rev’d on other
grounds by 1984-NMSC-090, 101 N.M. 687, 687 P.2d 1038, which held that the at-
will employment “rule rests upon the concept of freedom of contract” and has been
described “as permitting an employer to discharge, for good cause, for no cause[,] or
even for cause morally wrong, without thereby being guilty of legal wrong.” (Internal
quotation marks and citation omitted.)7 Defendants support this theme by tracing the

sees no application here. I agree with Plaintiff that Defendants tried their case on a
for-cause theory, willingly abandoned their at-will argument, and cannot now seek to
backpedal on their strategic decision. See Gracia v. Bittner, 1995-NMCA-064, ¶ 1,
120 N.M. 191, 900 P.2d 351. Likewise not compelling is Defendants’ attempt to
circumvent their decision to proceed on a for-cause theory by drawing a parallel
between this case and at-will cases, as opposed to arguing that the Agreement was at-
will. Defendants have not cited any authority that supports the proposition that parties
terminated “for cause” have no “legally protected interest” under prima facie tort.
Where a party provides no support for a proposition, the appellate courts assume that
none exists. See In re Adoption of Doe, 1984-NMSC-024, ¶ 2, 100 N.M. 764, 676
P.2d 1329 (stating that where a party cites no authority to support an argument, the
appellate courts may assume no such authority exists); ITT Educ. Servs., Inc. v. N.M.
Taxation & Revenue Dep’t, 1998-NMCA-078, ¶ 10, 125 N.M. 244, 959 P.2d 969
(stating that this Court will not consider propositions that are unsupported by citation
to authority).
22
Missouri cases of Lundberg v. Prudential Insurance Co. of America, 661 S.W.2d 667
(Mo. Ct. App. 1983), and Porter v. Crawford & Co., 611 S.W.2d 265 (Mo. Ct. App.
1980), relied on in Schmitz, to language in an early Missouri case, Loewenberg v. De
Voigne, 123 S.W. 99 (Mo. Ct. App. 1909). Defendants contend that, according to
Porter, 611 S.W.2d at 273, Loewenberg indicated “that no amount of bad intent can
render a lawful act actionable in damages” and that under Loewenberg, 123 S.W. at
99, even the “malicious” exercise of a contractual right is not actionable and “proof
that the thing done was done from the worst of motives will not make the matter
complained of actionable.”
{31} 	Connecting Schmitz to a later analysis by our Supreme Court in Beavers v.
Johnson Controls World Servs., Inc. (Beavers I), 1994-NMSC-094, ¶ 39, 118 N.M.
391, 881 P.2d 1376, as to whether its Schmitz rulings could be applied retroactively,

23
Defendants point to Beavers I’s analysis of the importance of reliance in analyzing
whether the Schmitz ruling was to be applied retroactively. Defendants read Beavers
I to hold that Schmitz applied retroactively because “prima facie tort does not apply
where parties rely on the terms of a contract to govern their conduct and to avoid
liability[,]” and according to Defendants, “[t]hat is precisely what happened in the
present case.”
{32} 	Listed as a separate sub-point, Defendants’ second doctrinal argument is
similarly based on freedom of contract. Defendants emphasize the significance of
freedom to contract by highlighting our Supreme Court’s public policy determination
in Tharp v. Allis-Chalmers Manufacturing Co., 1938-NMSC-044, ¶ 13, 42 N.M. 443,
81 P.2d 703, that is, “[I]f there is one thing which more than another public policy
requires it is that men of full age and competent understanding shall have the utmost
liberty of contracting, and that their contracts, when entered into freely and
voluntarily, shall be enforced[.]” (Internal quotation marks and citation omitted.)
Defendants also cite United Wholesale Liquor Co. v. Brown-Forman Distillers Corp.,
1989-NMSC-030, ¶¶ 8, 13-14, 108 N.M. 467, 775 P.2d 233, which expresses New
Mexico’s strong public policy of freedom of contract, stating that “[g]reat damage is
done where businesses cannot count on certainty in their legal relationships and strong
reasons must support a court when it interferes in a legal relationship voluntarily
assumed by the parties.” (Internal quotation marks and citation omitted.) In addition,
Defendants buttress their policy argument by citing to this Court’s opinion in

8 In their brief in chief and apparently as a sub-point to this argument,
Defendants include a footnote arguing that there is reversible error based on the
district court’s refusal to give a requested instruction on whether the Agreement was
terminable at will. As stated in the previous footnote, the majority declines to consider
Defendants’ argument. The record reflects that before trial Defendants sought a
determination that Plaintiff’s agency was or could have been terminated under an at-
will termination provision in the Agreement but that Defendants voluntarily dropped
the issue after the court ruled on Defendants’ legal right to terminate Plaintiff.
24
Quintana v. First Interstate Bank of Albuquerque, 1987-NMCA-062, ¶¶ 6, 12, 14, 105
N.M. 784, 737 P.2d 896, which held that “regardless of the motive for its decision[,]”
a party has the right “to refuse to do business with [another party,]” and the exercise
of that right will not give rise to a claim for tortious interference with contractual or
prospective contractual relations because “[t]he right to choose freely one’s business
relations has been described as a fundamental right[.]” Defendants then extend New
Mexico’s policy favoring freedom of contract to the present case by asserting that
courts interpreting New Mexico law have considered freedom of contract and the
appropriateness of prima facie tort in the context of termination of at-will employees
and independent contractors, and Defendants contend that these courts have properly
held that prima facie tort is inapplicable. See Schmitz, 1990-NMSC-002, ¶ 63 (citing
Lundberg, 661 S.W.2d at 671); see also Ewing v. State Farm Mut. Auto. Ins. Co., 6
F. Supp. 2d 1281, 1291 (D.N.M. 1998) (recognizing the holding in Schmitz that prima
facie tort cannot be used to avoid the employment-at-will doctrine and concluding that
“it is unlikely that [prima facie tort] was meant to interfere with a company’s
prerogative to select its employees or independent contractors”). 8

Defendants chose not to pursue their terminable-at-will angle at trial but, rather, based
their defense on their right to terminate the agency for cause as a result of Plaintiff’s
breach of the Agreement. The district court’s refusal to permit Defendants’ last minute
proffer of an instruction on at-will status was appropriate given that Defendants
willingly abandoned their at-will theory. Defendants’ last minute attempt to raise the
terminable-at-will instruction issue constitutes a case of too little too late, and the
matter will not be considered. See Gracia, 1995-NMCA-064, ¶ 17 (“[A]llegations of
error that were not preserved in a timely fashion to allow the trial court to correct the
error [will] not be the subject of reversal on appeal.”); Woolwine v. Furr’s, Inc., 1987-
NMCA-133, ¶ 20, 106 N.M. 492, 745 P.2d 717 (“To preserve an issue for review on
appeal, it must appear that [the] appellant fairly invoked a ruling of the trial court on
the same grounds argued in the appellate court.”).
25
{33} 	Defendants further rely on an unpublished Tenth Circuit Court of Appeals order
and judgment in Jackson v. Freightliner Corp., No. 94-2163, 1996 WL 500666, at *4-
5 (10th Cir. Sept. 5, 1996) (order), as holding, under New Mexico law, principally
Quintana, 1987-NMCA-062, ¶¶ 11-12, that a party is justified in its contractual
decisions and prima facie tort cannot be used to modify the absolute right of
businesses to choose with whom they want to do business. Defendants offer Smith v.
Price’s Creameries, 1982-NMSC-102, ¶¶ 23-24, 98 N.M. 541, 650 P.2d 825, in which
our Supreme Court determined that there was no need to inquire into the defendant’s
motives in seeking to terminate a distributorship contract because the Court had no
power to modify the “cancellation ‘for any reason[]’ ” provision and because the
plaintiff could not recover even if the defendant terminated the contract in bad faith.
Defendants acknowledge that there are some limitations on the freedom of contract

26
but deny that any such limitations apply in this case, and thus, Plaintiff evaded the
freedom of contract doctrine in pursuing his prima facie tort claim.
{34} 	Third, Defendants assert that “parties should not be allowed to use tort law to
alter or avoid the bargain struck in the contract” and that “[t]he law of contract
provides an adequate remedy.” AmRep Sw., Inc. v. Shollenbarger Wood Treating, Inc.,
1995-NMSC-020, ¶ 28, 119 N.M. 542, 893 P.2d 438. In addition, Defendants return
to Smith, 1982-NMSC-102, ¶¶ 24-26, in which the Court affirmed summary judgment
for the defendant and rejected the plaintiff’s claim that a question of fact existed as to
whether the contract had been terminated in good faith. Defendants argue from these
cases that “[t]he district court erred in using prima facie tort as the vehicle for
allowing the jury to rewrite the Agreement to impose a ‘proper motive’ limitation on
[Defendants’] termination rights.”
{35} 	Fourth and finally within their doctrinal attack, Defendants argue that a breach
of the implied covenant of good faith and fair dealing claim and remedies were evaded
by submitting prima facie tort to the jury. Defendants contend that New Mexico
recognizes a claim for breach of the implied covenant of good faith and fair dealing
with respect to contracts that are not terminable at will and that the claim sounds in
contract, and for that reason, such claims are not subject to tort remedies for the
breach. See Bourgeous v. Horizon Healthcare Corp., 1994-NMSC-038, ¶ 17, 117
N.M. 434, 872 P.2d 852 (stating that “tort remedies are not available for breach of the
implied covenant in an employment contract”).

27
{36} 	Additionally, Defendants point to United States ex rel. Custom Grading, Inc.
v. Great American Insurance Co., 952 F. Supp. 2d 1259, 1269-70 (D.N.M. 2013)
(mem.), in which the court dismissed the plaintiff’s prima facie tort claim because
“New Mexico law adheres to the economic-loss doctrine,” which “prevents plaintiffs
from recovering in tort economic losses to which their entitlement flows only from a
contract[.]” (Internal quotation marks and citations omitted.) Defendants argue that,
by permitting Plaintiff to proceed with his prima facie tort claim, the district court
erred in allowing Plaintiff’s claim “to evade both (i) his burden of proving a breach
of the implied covenant and (ii) the contract-damages-only limitation for a breach of
the implied covenant[,]” resulting in Plaintiff receiving substantial tort damages “for
the lawful exercise of a contractual right.”
{37} 	Defendants’ points regarding the differences between tort and contract doctrines
are solid reasons for requiring Plaintiff to have pleaded and pursued contract claims
based on a theory that his termination was wrongful, pretextual, and carried out with
the malicious intent to harm and without sufficient justification. And, in fact, the
Dissent looks to the doctrinal differences between tort and contract as providing
grounds for reversal. See generally Dissent infra ¶¶ 92, 104. As has been thematic
from start to finish in this Opinion, however, the manner in which this case was tried
leads to a result that disfavors Defendants’ and the Dissent’s positions. The fact that
the jury verdict favored Plaintiff in prima facie tort in effect shows that Defendants
chose their for-cause contract clause as a cover for their true intent. As highlighted

9 Although not raised as an issue on appeal, I question whether Plaintiff’s
breach of contract and breach of the implied covenant of good faith and fair dealing
claims actually sought recovery based on the alleged wrongful termination. Plaintiff’s
operative complaint alleged breach of contract based on Defendants’ conduct during
and after the termination (i.e., failure to pay Plaintiff contract value, failure to supply
a proper U5 form, and failure to provide meaningful review by the Termination
Review Board), not the termination itself.
28
earlier in the procedural section of this Opinion, Defendants urged and the district
court apparently agreed that Plaintiff’s conduct coupled with the plain language of the
Agreement allowed Defendants to terminate Plaintiff under the for-cause terms of the
Agreement. In deciding the merits of Plaintiff’s contract-related claims, I see no
indication that the district court took into consideration or that Plaintiff adequately
pleaded or in any way actually pursued 9 the argument that the reasons given for his
termination were “bogus” and, importantly, the parties apparently agreed that the
covenant generally requiring that the parties act in good faith did not apply given the
district court’s ruling on the express provision allowing termination. Although not
raised by either party, I seriously question whether the express language of the
Agreement allowing termination or a ruling that Defendants were authorized to
terminate pursuant to an express provision in the Agreement necessarily would have
prohibited contract-related claims based on pretext or ruse if they had been carefully
and clearly pursued.
{38} 	The district court and the parties seemed to believe that in finding that the
Agreement could be properly terminated under the facts of this case, as a logical

29
extension, there could be no breach of the implied covenant of good faith and fair
dealing. Although breach of the implied covenant cannot be used to negate an express
term in a contract, “every contract imposes a duty of good faith and fair dealing on the
parties with respect to the performance and enforcement of the terms of the contract.”
Sanders v. FedEx Ground Package Sys., Inc., 2008-NMSC-040, ¶ 7, 144 N.M. 449,
188 P.3d 1200; see Melnick v. State Farm Mut. Auto. Ins. Co., 1988-NMSC-012, ¶ 17,
106 N.M. 726, 749 P.2d 1105 (agreeing with “those courts that have refused to apply
an implied covenant of good faith and fair dealing to override express provisions
addressed by the terms of an integrated, written contract”). In the present case, I see
no definitive analysis from the district court that the breach of the implied covenant
claim was necessarily dismissed in light of any particular ruling. I am not wholly
convinced, given the facts supporting bad faith and that Defendants used the
Agreement to carry out their malicious motives, that the covenant was so easily
disposable absent some explicit determination that the covenant did not apply under
a contract theory of termination based on pretext or ruse. Had Plaintiff aggressively
pursued his “bogus” angle as to Defendants’ stated reasons for terminating Plaintiff
by arguing, based on the facts ultimately proved at trial, that Defendants’ true motive
was to harm Plaintiff without sufficient justification, we might be in a different
situation. I posit that Plaintiff could have pleaded and persuasively argued that his
termination was unlawful under breach of contract and/or breach of the implied
covenant of good faith and fair dealing on the ground that the termination was nothing

30
more than a pretext or ruse to accomplish the termination based on malicious intent
to harm that ends in harm, without sufficient justification. See, e.g., Hartnett v. Papa
John’s Pizza USA, Inc., 912 F. Supp. 2d 1066, 1114-15 (D.N.M. 2012) (mem.)
(denying a motion for summary judgment on the plaintiff’s breach of employment
contract claim because there were genuine issues of material fact as to whether the
defendant complied with its agreement to terminate the plaintiff for cause); Hunter v.
Bd. of Trs. of Broadlawns Med. Ctr., 481 N.W.2d 510, 516 (Iowa 1992) (holding that
“the jury was entitled to find that [the employer’s] stated reason for discharge—a staff
reduction—was pretextuous and thus constituted a breach of contract”); Cannon v.
Nat’l By-Products, Inc., 422 N.W.2d 638, 642 (Iowa 1988) (stating that, in the context
of a breach of an employment contract claim, “the jury could have found that the
stated reason for the employer’s termination of [the] plaintiff’s employment was not
sincere, and the reasons given were pretextuous” and that such findings “should not
be disturbed on appeal”); Kestenbaum v. Pennzoil Co., 1988-NMSC-092, ¶¶ 1, 15, 36,
108 N.M. 20, 766 P.2d 280 (upholding a jury verdict based on breach of an
employment contract in favor of the plaintiff who could only be terminated for cause
and who was not actually terminated for good cause); Kiedrowski v. Citizens Bank,
1995-NMCA-011, ¶¶ 14-15, 119 N.M. 572, 893 P.2d 468 (holding that there were
genuine issues of material fact that precluded summary judgment on the plaintiff’s
breach of contract claim because there were facts to suggest that the employer was
motivated by illegitimate and self-serving reasons and terminated the plaintiff under

31
the pretext of poor performance). Had Plaintiff pursued a contract theory that
Defendants’ termination of the Agreement was based on pretext and/or a ruse to cover
the true, malicious, and unjustified reasons for the termination, I doubt that a ruling
from the district court that Defendants were technically authorized to terminate the
Agreement pursuant to its express provisions would have been dispositive of
Plaintiff’s contract-related claims.
{39} 	I firmly believe that the manner in which this case was tried warrants a decision
that cautiously and narrowly affirms but limits the application of prima facie tort to
the 	circumstances 	in 	which 	the 	clearly 	viable, 	available, 	and 	established
contract-related doctrines of unlawful termination based on pretext, ruse, malice, and
lack of justification never came to light. The Special Concurrence disagrees, seeing
this to simply be a case in which the contract-related claims failed as viable, available,
and established contract-related doctrines, notwithstanding that those claims were
never based on a theory of an unlawful termination based on pretext, ruse, malice, and
lack of justification. See Sp. Con. infra ¶ 80. I believe that had this contract theory
been pleaded and pursued, the doctrine of prima facie tort, with its element of a lawful
termination instead of lack of such element, would necessarily have been eliminated.
The Special Concurrence mistakenly takes the view that a pretextual termination claim
and theory of Defendants’ unlawful conduct were before the district court. See Sp.
Con. infra ¶ 80. As indicated earlier in this Opinion, they were not. The Opinion’s
approach hardly partakes of guess work or musing. Its approach is to show that what

32
happened in this case, i.e., the manner in which this case was tried, centering only on
the lawfulness of termination based on Plaintiff’s technical breach, left established,
viable contract theories of unlawful pretextual termination unaddressed, thereby
leaving no alternative than to send prima facie tort to the jury. Any viable contract
theory of unlawful pretextual termination could have overridden any technically
“lawful” termination. As indicated earlier, because of the particular nature of this case,
no opinion in this case should be considered precedent or authority for any expansion
of prima facie tort.
{40} 	I do note that Defendants, in their fourth sub-point, now try to rely on the
existence of the covenant of good faith and fair dealing to argue that Plaintiff should
be prohibited from pursuing a prima facie tort claim. However, Defendants do not
provide a cite to the record where this argument regarding Plaintiff’s alleged attempt
to evade the requirements of a breach of the implied covenant and its remedies was
made before the district court. And based on a review of the record, it does not appear
that Defendants developed any argument that Plaintiff had, but failed to pursue, a
breach of the implied covenant claim based on a pretextual termination use of the for-
cause clause as a cover for the conduct ultimately proved under prima facie tort.
Therefore, the majority holds that the argument was not preserved. See In re T.B.,
1996-NMCA-035, ¶ 13, 121 N.M. 465, 913 P.2d 272 (“[W]e review the case litigated
below, not the case that is fleshed out for the first time on appeal.”); Gracia, 1995-
NMCA-064, ¶ 17 (“[A]llegations of error that were not preserved in a timely fashion

33
to allow the trial court to correct the error [will] not be the subject of reversal on
appeal.”); Woolwine, 1987-NMCA-133, ¶ 20 (“To preserve an issue for review on
appeal, it must appear that [the] appellant fairly invoked a ruling of the trial court on
the same grounds argued in the appellate court.”). Even were the majority to
determine that Defendants somehow barely preserved this argument by the broad note
that Plaintiff’s claim evaded the requirements of a contract claim, consistent with our
logic as earlier explained, because Defendants moved to dismiss the implied covenant
of good faith and fair dealing claim and were successful in ultimately getting a
dismissal of that claim, the majority likewise rejects Defendants’ argument that
Plaintiff’s use of prima facie tort allowed Plaintiff to evade his burden of proving
breach of the implied covenant and the “contract-damages-only” limitation.
{41} 	In addition to concerns with Defendants’ doctrinal position in light of the
particular circumstances of this case, the majority does not accept Defendants’
argument that contract law can generally provide an adequate remedy at law in
circumstances where a termination is carried out pursuant to an express provision in
an agreement and when breach of the implied covenant of good faith and fair dealing
is unavailable. Defendants sought and agreed to a dismissal of Plaintiff’s breach of the
implied covenant claim. Defendants’ position from the start and throughout was that
a termination effectuated pursuant to an express clause in a contract should be deemed
lawful and not subject to or in violation of the implied covenant of good faith and fair
dealing, while simultaneously taking the position that terminating a contract for

34
malicious and unjustifiable reasons is not punishable in tort. Accepting Defendants’
propositions would permit a party to maliciously and unjustifiably terminate a contract
under the guise of some technicality without restriction. In Defendants’ ideal world,
there would never be a way for a party to obtain relief in for-cause terminations that
are technically authorized but nevertheless pretextual and are actually carried out as
a ruse and cover for a termination based on malice with intent to harm the terminated
party and without justification.

35
2. 	Defendants’ Element-Based Approach
{42} 	Defendants’ second attack is that Plaintiff failed, as a matter of law, to satisfy
at least three of the four essential elements of prima facie tort outlined in Schmitz,
namely, intent to injure, injury, and absence of justification. See 1990-NMSC-002,
¶ 37. Defendants assert that Plaintiff also failed to satisfy a fifth “unique factual
allegations” requirement. Defendants rely on Carreon v. Goodtimes Wood Products,
Inc., No. CIV 09-161 BB/CEG, 2011 WL 9686895, *13 (D.N.M. Mar. 22, 2011)
(mem.), which states that “a plaintiff cannot simply base [a prima facie tort] claim on
the same allegations that support his other claims” and that “the prima facie tort cause
of action is useful only when there are factual allegations that are somehow unique,
that do not give rise to another tort or contracts claim, but that demand redress.” They
also rely on Healthsource, Inc., 2005-NMCA-097, ¶ 36, that affirmed a district court’s
dismissal of a prima facie tort claim when the plaintiff did “not assert any separate
factual basis to support its prima facie tort claim.”
{43} 	As to the intent to injure and injury requirements, Defendants focus on the
United States District Court of New Mexico’s ruling in Hill v. Cray Research, Inc.,
864 F. Supp. 1070, 1079-80 (D.N.M. 1991) (mem.), that dismissed the plaintiff’s
prima facie tort claim against his former employer either because the termination of
the plaintiff’s at-will employment was a breach of an implied contract or a wrongful
discharge, and therefore was unlawful and not subject to prima facie tort, or because
the plaintiff’s termination was lawful and thus there was no intent to injure him.

36
Defendants similarly argue that because they did not breach the Agreement, the intent
to injure and injury requirements could not be established given that the intent to
injure and injury only apply to a legally protected interest of Plaintiff as required by
the Restatement (Second) of Torts § 870, cmt. e, as adopted in Schmitz, 1990-NMSC-
002, ¶¶ 46-47. Defendants contend that Plaintiff, as a matter of law, had no legally
protected interest once the district court ruled that the Agreement was lawfully
terminated. Within this argument, Defendants take the opportunity to reassert their
positions (1) that prima facie tort cannot be used to avoid the employment-at-will
doctrine, and (2) that it is unlikely that prima facie tort was meant to interfere with a
company’s prerogative to select its employees or independent contractors. See id. ¶ 63
(recognizing that “prima facie tort cannot be used to avoid employment[-]at[-]will
doctrine”); see also Ewing, 6 F. Supp. 2d at 1291 (“[I]t is unlikely that [prima facie
tort] was meant to interfere with a company’s perogative to select its employees or
independent contractors.”); Yeitrakis v. Schering-Plough Corp., 804 F. Supp. 238,
247-49 (D.N.M. 1992) (mem.) (holding that “prima facie tort is unavailable to remedy
the termination of an at[-]will employee” (emphasis omitted)). Although Defendants
do not argue that this is an employment-at-will situation, they do argue that the same
rationale in Schmitz, Ewing, Yeitrakis, and Hill should apply.
{44} 	As to the absence of sufficient justification requirement, Defendants argue that
conduct that is authorized by contract is justified for purposes of prima facie tort. See
Carreon, 2011 WL 9686895, at *13 (stating that if there was no breach of contract,

10 Although Defendants represent that “[t]he jury was specifically instructed that
[Defendants’] termination of the Agreement was the only conduct that could constitute
prima facie tort[,]” the majority does not read the instruction so broadly. In fact, the
jury was instructed that “[i]n order to recover damages from any Defendant on this
37
the defendant’s “legal position was justified and cannot be the basis of a claim for
prima facie tort”); see also Jackson, 1996 WL 500666, at *5 (affirming dismissal of
a prima facie tort claim where the defendant “was justified in withholding consent
. . . because it had an absolute right to choose the individuals with whom it wished to
have contractual relations”).
{45} 	And as to the unique factual allegations requirement, Defendants reiterate that
a plaintiff cannot simply base a prima facie tort claim on the same allegations that
would support other claims available or asserted and that the prima facie tort
allegations must be unique and not give rise to another tort or contract claim.
Defendants argue that an actor’s lawful conduct cannot be brought within or overlap
other more traditional categories of liability and that the factual basis for the prima
facie tort claim cannot be identical to the factual basis for all of the other alleged
claims. Thus, Defendants argue, uniqueness was lacking given that, in setting out his
claims for relief, Plaintiff incorporated all of the averments in all of the preceding
paragraphs of his complaint, including allegations relating to breach of contract and
breach of the implied covenant of good faith and fair dealing, and that the district
court instructed the jury that Defendants’ termination of the Agreement was the only
conduct that could constitute prima facie tort. 10

claim, Plaintiff must show as to that Defendant: [t]hat Defendant intentionally
terminated or intentionally took actions that resulted in the termination of [the]
Agreement[.]”
38
{46} 	Defendants’ argument against the intent to injure and injury elements hinge on
Defendants’ employment-at-will-related argument made in their doctrinal appeal and
on the district court’s ruling that the termination of the Agreement was authorized.
Our rejection of Defendants’ use of the concept earlier in this Opinion likewise applies
here. See supra, notes 7-8. Defendants have provided no persuasive case law support
for their proposition that the limitation on prima facie tort claims in the employment-
at-will arena should apply in the present case. Nor have they for their proposition that
“[t]he district court’s ruling that the Agreement was lawfully terminated[] rendered
[Plaintiff’s] prima facie tort claim defective, as a matter of law, because he no longer
had the legally protected interest needed to satisfy the ‘intent to injure’ element.”
{47} 	The majority also disagrees that Plaintiff failed, as a matter of law, to satisfy the
absence of justification requirement. Defendants’ argument that they were justified
in terminating Plaintiff simply because the Agreement gave them discretion to
terminate is unavailing. The primary case cited by Defendants, Carreon, 2011 WL
9686895, is factually distinct. In Carreon, the court determined that there were triable
issues of fact under breach of contract that precluded submission of prima facie tort
to a jury. Id. at *13. In the present case, as I have emphasized throughout this Opinion,
as the case was tried, Plaintiff was left with no existing breach of contract claim or

39
contract-related claim. Moreover, Carreon did not conduct the balancing required by
Schmitz to determine whether there was sufficient justification. See Schmitz, 1990-
NMSC-002, ¶ 46.
{48} 	According to Schmitz, “if a defendant offers a purpose other than the motivation
to harm the plaintiff as justification for his actions, that justification must be balanced
to determine if it outweighs the bad motive of the defendant in attempting to cause
injury.” Id.; see Restatement (Second) of Torts § 870, cmt. c. In balancing the
justification offered by Defendants, a fact-finder is required to weigh “[t]he nature and
seriousness of the harm to the plaintiff; . . . [t]he fairness or unfairness of the means
used by the defendant[s]; . . . [the d]efendant[s’] motive or motives; and . . . [t]he
value to [the] defendant[s] or to society in general of the interests advanced by the
defendant[s’] conduct.” UJI 13-1631A NMRA. Importantly, the Schmitz Court
rejected a higher burden adopted by some jurisdictions that “conduct [must be] done
without any beneficial end[.]” Schmitz, 1990-NMSC-002, ¶¶ 45-46 (emphasis added).
Defendants have not attacked the sufficiency of Plaintiff’s evidence of lack of
justification proved in the eyes of the jury. Further, as a matter of law, merely
articulating a motivation to terminate the Agreement based on Plaintiff’s contract
breach, without weighing Defendants’ alleged bad motives, does not and cannot alone
disprove the justification element. Moreover, given that the appellate courts do not
reweigh the evidence when considering justification, see Beavers II, 1995-NMCA-
070, ¶ 19, and given that the jury was adequately instructed as to the balancing test,

40
the majority declines to hold that Plaintiff failed to satisfy the absence of justification
requirement.
{49} 	Also unavailing is Defendants’ argument that prima facie tort, although
typically articulated as having four elements, see UJI 13-1631 NMRA, must be
dismissed if Plaintiff fails to meet a fifth element—offering unique factual allegations
that do not give rise to other tort or contract claims. In support of their contention,
Defendants cite to Healthsource, 2005-NMCA-097, ¶ 36. Although Healthsource
does state that in prima facie tort the factual allegations must be unique, the majority
does not agree that this statement in Healthsource imposes an additional prima facie
tort element. Instead, Healthsource was elaborating on a rule found in many New
Mexico cases addressing prima facie tort—that “a prima facie tort claim may not be
used as a means of avoiding the more stringent requirements of other torts.” Id. ¶ 35;
see Stock, 1998-NMCA-081, ¶ 38 (“Prima facie tort should not be used to evade
stringent requirements of other established doctrines of law.” (alteration, internal
quotation marks, and citation omitted)); see also Ribble, 2003-NMCA-093, ¶ 11
(same); Hagebak, 2003-NMCA-007, ¶¶ 24, 27, 29 (same). Although pleading
identical facts may indicate that a claim is improperly duplicative, as in Healthsource,
2005-NMCA-097, ¶ 36, this Court has also “been willing to recognize a prima facie
tort claim, even though the conduct in question bore a resemblance to another cause
of action.” Hagebak, 2003-NMCA-007, ¶ 27.

41
{50} 	In the present case, although Plaintiff’s prima facie tort claim bore a
resemblance to his other claims in that virtually all of the claims in his complaint were
based on the same set of facts, Plaintiff’s prima facie tort claim, as it turned out, was
not used to evade stringent requirements of other established doctrines of law. Again,
as I have stressed throughout this Opinion’s discussion of the issues, given the way
in which the case was tried, there was no other claim available to Plaintiff besides
prima facie tort under which to pursue damages resulting from the termination that
was malicious and executed with the intent to harm. As expressed earlier, although I
am not convinced that Plaintiff, as a matter of law, was necessarily prevented from
asserting in contract that Defendants acted in bad faith despite Defendants’
acknowledged legal right to terminate Plaintiff under the contract, the parties’
approach left prima facie tort as the only claim that was susceptible to submission to
the jury.

42
3. 	Defendants’ Policy-Oriented Approach
{51} 	Finally, Defendants argue that affirming the judgment would mean that parties
who properly perform their contracts face greater exposure than those who breach
them. Defendants predict that “[i]f the judgment . . . is affirmed and becomes a part
of the law of this [s]tate, the certainty and predictability of contracts will be seriously
undermined.” According to Defendants, this is because “[n]o one entering a contract
will know whether some jury will later decide that they do not think the bargain struck
was fair or they do not feel a party enforced its contractual rights with the right frame
of mind.”
{52} 	Defendants argue that with the judgment standing, damages can be significantly
greater than those for breach of the Agreement’s termination-at-will provision that
limits compensatory damages for breach of the Agreement to three months of
commissions. Further, individuals, such as Carroll and Allin, who were not parties to
the Agreement can be subject, as they were here, to a million dollar judgment.
Defendants assert that “cautious individuals will need to hire their own independent
counsel to advise them of the consequences of discharging their job responsibilities
even when they scrupulously comply with all relevant contractual requirements.”
Defendants point out that, ironically, because contract damages are expressly limited,
the danger of being found liable for tort damages would only apply if a contract were
wholly complied with. Defendants then assert that “tortifying” contracts in this way
is not recognized by our courts and is bad law and bad policy.

11 The majority also notes that although Amicus’ arguments mostly overlapped
with Defendants’ arguments, Amicus did make additional policy-based arguments that
accepting Plaintiff’s interpretation of prima facie tort would hinder business in New
Mexico because it would produce a “chilling effect,” “create a vacuum of guidance,”
increase the cost of business in New Mexico, discourage economic investment, and
increase litigation. However, Amicus provides no support for its arguments. The
majority therefore declines to consider the merits of the arguments. See ITT Educ.
Servs. Inc., 1998-NMCA-078, ¶ 10 (stating that this Court will not consider
propositions that are unsupported by citation to authority).
43
{53} 	The majority rejects Defendants’ policy-based argument that affirmance of the
judgment would (1) mean that parties who properly perform their contracts face
greater exposure than those who breach them, and (2) negatively impact the certainty
and predictability of contracts in New Mexico.11 The majority does not agree that
upholding this prima facie tort verdict, under the peculiar circumstances in this case,
generally undermines “the certainty and predictability” of contracts. Because our
holding is shaped by the particular circumstances here, as has been explained
throughout this Opinion, a limited application of prima facie tort cannot be said to
generally threaten New Mexico businesses or their dependence on freedom of contract
given the absence at the parties’ insistence of contract claims, combined with
Defendants’ clearly egregious tortious conduct under the guise of a legitimate
business interest in terminating an agent’s contract. It is our sanguine expectation that
business activities do not rise to the egregious level of pretextual, ruse-filled conduct
such as that proved here. The proof required for a successful prima facie tort claim,
coupled with the requirement that prima facie tort not be used to evade stringent

44
requirements of other established doctrines of law, confines prima facie tort to a
narrow space.
THE PUNITIVE DAMAGES ISSUE
{54} 	The appellate courts review de novo the constitutionality of punitive damages,
making an independent assessment of the record in order to determine whether the
jury’s 	award 	of 	punitive 	damages 	is 	comparatively 	reasonable. 	Aken,
2002-NMSC-021, ¶¶ 17-19.
{55} 	Defendants argue two reasons why the punitive damages award violated the
Due Process Clause of the Fourteenth Amendment. The first is that, under several
United States Supreme Court cases, procedural safeguards were required but not
implemented. The cases, in the order cited and discussed by Defendants, are Pacific
Life Insurance Co. v. Haslip, 499 U.S. 1 (1991), State Farm Mutual Automobile
Insurance Co. v. Campbell, 538 U.S. 408 (2003), and TXO Production Corp. v.
Alliance Resources Corp., 509 U.S. 443 (1993). The second is that the award does not
comport with BMW of North America, Inc. v. Gore, 517 U.S. 559, 574 (1996).
{56} 	The procedural safeguards argument consists of the Haslip requirement that
procedural safeguards must be provided for due process purposes, 499 U.S. at 20-22,
23 n.11, combined with the ruling in Campbell, 538 U.S. at 417, that “defendants
subjected to punitive damages in civil cases have not been accorded the protections
applicable in a criminal proceeding[,]” even though punitive damages serve the same
purposes as criminal penalties. Defendants lay out the concerns expressed in Campbell

45
as to the wide discretion typically left in jury instructions in choosing amounts and
that “the presentation of evidence of a defendant’s net worth creates the potential that
juries will use their verdicts to express biases against big businesses, particularly those
without strong local presences.” Id. (internal quotation marks and citation omitted).
And, further, as TXO Products states, “emphasis on the wealth of the wrongdoer
increased the risk that the award may have been influenced by prejudice against large
corporations, a risk that is of special concern when the defendant is a nonresident.”
509 U.S. at 464.
{57} 	Defendants contend that the jury instructions did not adequately protect them.
They argue that a combination of factors led to the jury’s resulting prejudice: (1) the
court did not give a proffered instruction that provided further clarification in regard
to punitive damages insofar as it required the jury to “consider the punishment and
deterrent effect associated with an award of compensatory damages”; (2) the district
court allowed evidence of the Companies’ wealth to go to the jury; and (3) in closing
argument, Plaintiff’s counsel, “well aware that corporate wealth would poison the
jury,” emphasized the collective net worth of the Companies and urged the jury to
punish Farmers, a wealthy, out-of-state corporation. Defendants find support in
Campbell, 538 U.S. at 427, which states that “[t]he wealth of a defendant cannot
justify an otherwise unconstitutional punitive damages award.”
{58} 	The second basis for Defendants’ attack on the punitive damages award arises
from guideposts set out in both Gore and Campbell. These guideposts are (1) the

46
degree of reprehensibility of the defendant’s conduct, (2) the ratio between
compensatory and punitive damages, and (3) a comparison of the punitive damages
with criminal or civil penalties that can be imposed for similar conduct. Gore, 517
U.S. at 575-84. The Gore guideposts are to be considered within the context of
“[e]lementary notions of fairness enshrined in . . . constitutional jurisprudence . . . that
a person receive fair notice not only of the conduct that will subject him to
punishment, but also of the severity of the penalty that a [s]tate may impose.” Id. at
574.
{59} 	Defendants also list five factors for evaluating reprehensibility, taken from
Campbell, 538 U.S. at 419, all of which Defendants contend weigh against punitive
damages, and Defendants combine with each factor why it was not met.
1. 	Whether 	“the 	harm 	caused 	was 	physical 	as 	opposed 	to
economic[.]” [Campbell, 538 U.S. at 419. Plaintiff] presented no
evidence that he suffered physical harm.
2. 	Whether “the tortious conduct evinced an indifference to or a
reckless disregard of the health or safety of others[.]” 	Id.
[Plaintiff’s] Agreement was terminated, in accordance with its
terms, because he breached it. This does not implicate health or
safety issues for [Plaintiff] or anybody else.
3. 	Whether “the target of the conduct had financial vulnerability[.]”
Id. Again, [Plaintiff], a sophisticated and experienced insurance
agent, presented no evidence that he was uniquely vulnerable. To
the contrary, he established that he earned significant income as
a Farmers agent and [Plaintiff’s] own expert testified that 40
percent of his business was with companies other than Farmers
and therefore not impacted by his termination.

47
4. 	Whether “the conduct involved repeated actions or was an isolated
incident[.]” [Id.] The termination of [Plaintiff’s] Agreement was
a one-time occurrence, and [Plaintiff’s] evidence was limited to
his particular circumstances, and therefore the lawful but allegedly
tortious conduct here is incapable of repetition.
5. 	Whether “the harm was the result of intentional malice, trickery,
or deceit, or mere accident.” Id. [Plaintiff] never argued that the
termination of his Agreement involved trickery or deceit. And, . . .
[Plaintiff] failed to prove that [Defendants] bore any malice
toward [Plaintiff].
{60} 	Defendants emphasize Campbell’s statement that “[t]he existence of any one
of these factors weighing in favor of a plaintiff may not be sufficient to sustain a
punitive damages award; and the absence of all of them renders any award suspect.”
Id. And further, that there is a presumption that compensatory damages make a
plaintiff whole, “so punitive damages should only be awarded if the defendant’s
culpability, after having paid compensatory damages, is so reprehensible as to warrant
the imposition of further sanctions to achieve punishment or deterrence.” Id.
{61} 	Defendants also argue, in particular, that the ratio of 2.5 times the $1 million
compensatory damages award is unconstitutionally excessive, citing Campbell’s view
that “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only
equal to compensatory damages, can reach the outermost limit of the due process
guarantee.” Id. at 425. Defendants further argue that the district court’s having upheld
the award, in part, on the basis that seven of Plaintiff’s employees lost their jobs when
the Agreement was terminated, was contrary to the express holding in Philip Morris
USA v. Williams, 549 U.S. 346, 353-54 (2007), that the award violated due process in

48
punishing the defendant for harm to a non-party. And Defendants argue that there
exist no criminal or civil penalties with which to compare the punitive damages award
given that Defendants’ legal termination of the Agreement according to its terms
violated no law and was not punishable at all, and the district court erred in failing to
consider this factor.
{62} 	Although the particular facts of this case and the litigation decisions made again
give us pause, in light of our holding that prima facie tort was appropriate in this case,
the majority does not agree that the jury instructions regarding punitive damages
violated Defendants’ due process rights either by failing to provide procedural
safeguards or because the punitive damages award ran afoul of the Gore guideposts
or Campbell factors. First, as noted by Plaintiff, our Supreme Court has approved of
a punitive damages jury instruction that explains that (1) the jury “ ‘may’ award
punitive damages[,]” (2) “that the purpose of punitive damages is to punish and deter
wrongful conduct[,]” (3) “that the jury should act toward the ends of reason and
justice,” and (4) “that punitive damages must relate to actual damages and the injury
sustained.” Aken, 2002-NMSC-021, ¶ 13. The instruction given in this case fully
complied with 	Aken 	and, additionally, mirrored New Mexico’s Uniform Jury
Instruction regarding punitive damages. See UJI 13-1827 NMRA. The jury was
adequately instructed that it may award punitive damages if it found that the conduct
of Defendants was malicious. The jury was also instructed as to the nature of the jury
instruction—i.e., that the purpose of punitive damages is to punish and deter—and

49
that any award must be based on reason and justice. Finally, the jury was instructed
that any award must be reasonably related to the injury and other awarded damages.
Thus, the jury instruction provided adequate safeguards and did not violate
Defendants’ due process rights. Although presentation of a defendant’s worth may be
problematic and result in a large punitive damages award, Defendants have not shown
that this jury improperly acted on any prejudice against Defendants because they are
or are associated with a big business.
{63} 	Second, the jury’s award complies with the Gore guideposts. Although there
are no criminal or civil penalties that can be imposed for Defendants’ conduct, the first
two factors are applicable and weigh heavily in favor of Plaintiff. In this case, Plaintiff
presented evidence of reprehensible conduct regarding the malicious and intentional
treatment of and harm to him. The majority rejects Defendants’ argument that the
Campbell factors regarding reprehensibility weigh against a punitive damages award.
Defendants’ intentional and malicious behavior toward Plaintiff rightfully exposed
Defendants to liability. In light of Defendants’ actions and the damage to Plaintiff and
given our affirmance of submitting the underlying prima facie tort claim to the jury,
the majority holds that the evidence in this case supports a 2.5:1 ratio between the
punitive damages award and the compensatory award.
CONCLUSION
{64} 	The judgment and post-trial orders entered in the district court are affirmed.
{65} 	IT IS SO ORDERED.

50
__________________________________
JONATHAN B. SUTIN, Judge
I CONCUR:
MICHAEL D. BUSTAMANTE, Judge (specially concurring)
J. MILES HANISEE, Judge (dissenting)

51
BUSTAMANTE, Judge (specially concurring).
{66} 	I specially concur in Judge Sutin’s Opinion affirming the judgment. I write
separately because I see no reason to second-guess the parties’ litigation strategy
below. In my view, prima facie tort was invoked and litigated in this case just as our
Supreme Court envisioned in Schmitz. I also write to respond to the dissent’s concern
that allowing prima facie tort to operate in this context is a threat to freedom of
contract.
{67} 	Prima facie tort was not a new concept when our Supreme Court adopted it in
Schmitz, 1990-NMSC-002, ¶¶ 36-39. Its roots are found in the scholarly writings and
opinions of Justice Oliver Wendell Holmes, Jr. In an early article and a series of
lectures later gathered into his book, The Common Law, Holmes organized tort law
into the three categories recognized today: liability without fault, negligence based on
an objective standard of care, and intentional tort. Oliver Wendell Holmes, Jr., The
Theory of Torts, 7 Am. L. Rev. 652 (1872-1873); O.W. Holmes, The Common Law,
104-17 (M. Howe ed. 1963). Holmes’ early writing on intentional torts was marked
by an attempt to ground liability on a policy-based, objectively determined standard
akin to his general theory of negligence. See generally Kenneth J. Vandevelde, A
History of Prima Facie Tort: The Origins of a General Theory of Intentional Tort, 19
Hofstra L. Rev. 447, 471-76 (1990); Kenneth J. Vandevelde, The Modern Prima Facie
Tort Doctrine, 79 Ky. L.J. 519, 521-25 (1990/1991).

52
{68} 	Thirteen years after the publication of The Common Law, Holmes revisited the
topic of intentional torts. Oliver Wendell Holmes, Jr., Privilege, Malice, and Intent,
8 Harv. L. Rev. 1 (1894). Perhaps influenced by the writings of Frederick Pollock,
Holmes took an entirely new approach to the theory of intentional torts. See
Vandevelde, supra, at 522-25. Gone was the disjointed discussion of long-recognized
causes of action. Focusing on injury to economic interests caused by the trade union
movement and by business competitors, Holmes instead posited the “common-place”
general proposition that “the intentional infliction of temporal damage or the doing
of an act manifestly likely to inflict such damage and inflicting it, is actionable if done
without just cause.” Holmes, supra, at 3. Justification would most often be in the form
of a claim of privilege. Id. at 9. Claims of privilege would require careful review of
the particular circumstances of each case, but in the final analysis would be
determined as a matter of policy with courts consciously weighing the advantages to
the community in allowing recovery versus allowing the damage to be suffered with
no remedy. Id. In weighing claims of privilege, Holmes asserted that courts should
consider the nature of the defendant’s acts—including the motive—plus the nature of
the consequences and the closeness of the bond between motive and consequences.
Id. at 13.
{69} 	As Professor Vandevelde notes, the article marked a shift in Holmes’ thinking.
He embraced a general theory of intentional tort. As Holmes made clear, his object in
the article was “to make a little clearer the method to be followed in deciding [such

12 Holmes was not writing in a vacuum. The thought that infliction of injury
without justification was actionable was articulated in Dexter v. Cole, 6 Wis. 319
(1858) and Ricker v. Freeman, 50 N.H. 420 (1870), though neither case involved the
type of intentional tort Holmes was addressing. The first articulation of the principle
in a setting fitting Holmes’ theory was Walker v. Cronin, 107 Mass. 555 (1871).
Walker involved a claim arising from a labor dispute that the defendants induced
plaintiff’s employees to leave their job. The Massachusetts Supreme Judicial Court
reversed the trial court’s dismissal and remanded for trial noting that “[t]he intentional
causing of such loss to another, without justifiable cause, and with the malicious
purpose to inflict it, is of itself a wrong.” Id. at 562.
53
cases].” Holmes, supra, at 14. And, Holmes “decided that motive, including malice,
could be considered by the court in determining whether intentionally injurious
conduct was without justification, i.e., whether it was actionable.” Vandevelde, supra,
at 523 (emphasis omitted). Thus, in one fell swoop, Holmes proposed a new way of
analyzing liability for intentional acts.12
{70} 	It is likely that Holmes saw his idea as a true general theory of intentional torts;
an analytical approach which could support existing intentional torts as well as supply
a means of dealing with novel factual circumstances. On the Massachusetts bench, he
relied on his theory to dissent in two labor relations cases. See Vegelahn v. Guntner,
44 N.E. 1077, 1079-82 (Mass. 1896) (Holmes, J., dissenting); Plant v. Woods, 57 N.E.
1011, 1015-16 (Mass. 1900) (Holmes, C.J., dissenting). In each case, Holmes argued
that the injunctions entered against the unions were improper given the social
advantages to be potentially gained from their nonviolent acts. In Moran v. Dunphy,
59 N.E. 125 (Mass. 1901), a case involving a claim that the defendant had induced the

13 It is in my view unfortunate that this quote provided the common name for
the tort. Holmes had not used the term before. Perhaps it was the result of his feeling
that his approach had been fully accepted. If so, his hubris was misplaced.
54
plaintiff’s employee to leave, Holmes analyzed the case using only the theory he had
expounded in his articles. In addition, he asserted that the court’s prior cases—from
Walker through Plant—all agreed with and supported his analytical approach,
including the idea that “motives may determine the question of liability[.]” Moran, 59
N.E. at 126.
{71} 	Aikens v. Wisconsin, 195 U.S. 194 (1904), is the most enduring expression by
Holmes of his theory. “It has been considered that, prima facie, the intentional
infliction of temporal damages is a cause of action, which, as a matter of substantive
law, whatever may be the form of pleading, requires a justification if the defendant is
to escape.” Id. at 204.13 Aikens involved a constitutional challenge to a state statute
making it unlawful to “combine . . . for the purpose of willfully or maliciously
injuring another in his reputation, trade, business, or profession, by any means
whatever[.]” Id. at 201 (omission in original) (internal quotation marks and citation
omitted). Holmes decided the statute was constitutional, in part, by observing “that
such a combination, followed by damage, would be actionable even at common law.”
Id. at 204. He supported that assertion with an analysis grounded entirely on his
general theory.

14 It is possible that New York has now abandoned the requirement that the facts
asserted not fit within any other nominate tort. See Bd. of Educ. of Farmingdale Union
Free Sch. Dist. v. Farmingdale Classroom Teachers Ass’n, 343 N.E.2d 278, 284-85
(N.Y. 1975).
55
{72} 	If Holmes’ ambition for his general theory was that it would supplant the
established intentional torts, it was not to be. The cases prompting the discussions by
Holmes and others involved primarily injuries to economic interests caused by trade
unions or business competitors. Holmes’ formulation of a general intentional tort did
not find application much beyond that realm even in Massachusetts. Tuttle v. Buck,
119 N.W. 946, 948 (Minn. 1909) (holding that setting up a business not for the sake
of profit but for the sole purpose of driving another out of business was actionable);
see Vandevelde, supra, at 484-95 for a general discussion. New York, for a time,
seemed to accept Holmes’ formula and apply it as he might have. Advance Music
Corp. v. Am. Tobacco Co., 70 N.E.2d 401, 403 (N.Y. 1946) (explicitly agreeing with
Holmes’ formulation in Aikens and holding that an assertion that the defendant’s
misrepresentation as to the popularity of certain songs was made with intent to injure
the plaintiff stated a cause of action for “a prima facie tort”). But New York’s
definition of the tort has devolved into a specific tort so qualified, hemmed, and
limited as to make it a legal non-sequitur. See Morrison v. Nat’l Broad. Co., 266
N.Y.S.2d 406, 408-09 (App. Div. 1965) (holding that lying to a contestant in a rigged
quiz show, thus harming his academic reputation and prospects, did not fit within the
definition of prima facie tort), rev’d on other grounds by 19 N.Y.2d 453 (1967).14

56
{73} 	Missouri’s adoption of the Restatement version of Holmes’ formulation helped
to revive his vision, though not as a general theory of intentional tort. Porter, 611
S.W.2d at 272. The Restatement formulation echoes Holmes. It states:
One who intentionally causes injury to another is subject to liability to
the other for that injury, if his conduct is generally culpable and not
justifiable under the circumstances. This liability may be imposed
although the actor’s conduct does not come within a traditional category
of tort liability.
Restatement (Second) of Torts § 870. The comments to the section assert that the
section “purports to supply [a] unifying principle” for intentional torts and “to explain
the basis for the development of the more recently created intentional torts.”
Restatement (Second) of Torts § 870 cmt. a. The same comment indicates, however,
that the more important work of the section is to “serve as a guide for determining
when liability should be imposed for harm that was intentionally inflicted, even
though the conduct does not come within the requirements of one of the well
established and named intentional torts.” Id. This latter comment reflects the
preference courts have shown for discrete, specifically described torts. It also reflects
the commonplace that the field of compensable wrongs has not been—nor should it
be—closed.
{74} 	If Holmes’ general theory is now limited to considering unnamed intentional
wrongs, his most lasting contribution to the law in this area is his discussion of how
to consider a defendant’s claim of privilege and justification in the face of aggravated
conduct. And, in an age when the courts universally recognize the normative functions

57
of the law of torts, Holmes’ consideration of the character of the means used and the
subjective motives of the defendant looms especially large. See, e.g., Saiz v. Belen
Sch. Dist., 1992-NMSC-018, ¶ 26, 113 N.M. 387, 827 P.2d 102. The law can and
should consider the harm done, the means by which it was done, and the state of mind
that motivated the act in deciding whether, as a matter of policy, an injury should go
unremedied—whatever the context in which the acts occurred.
{75} 	The Supreme Court was aware of this history when it decided Schmitz. Its
discussion at paragraphs thirty-four through fifty-two make clear that it understood
the roots, approach, and utility of the tort it was adopting. It consciously adopted
Holmes’ analysis—as expressed in the Restatement—as the method New Mexico
courts would use to decide when redress is required for injury caused by insufficiently
justified, malicious, intentional conduct intended to cause injury.
{76} 	The uniform jury instructions guiding juries faithfully reflect the Supreme
Court’s adoption of the Restatement. They place a high burden of proof on the
plaintiff to prove intentional acts by the defendant intended to cause harm to the
plaintiff. UJI 13-1631. The defendant can plead justification but the plea is subject to
a balancing process to “determine if it outweighs any motive of [the] defendant to
injure [the] plaintiff.” UJI 13-1631A. The factors to weigh include (1) the nature and
gravity of the harm inflicted, (2) the fairness of the means used by the defendant, (3)
the defendant’s motives, and (4) the value to the defendant or society in general of the
interests advanced by the defendant’s conduct. Id. The weighing process allows the

15 A persuasive case that this limiter is not necessary has been made by
Professor Vandevelde. Vandevelde, supra, at 539-40. Even New York may have
abandoned this requirement. But it is not my place to question the Supreme Court’s
choice.
58
parties to argue the policies for and against allowing recovery in a given factual
context rather than in a vacuum. Obviously, malicious intent can work to vitiate social
utility.
{77} 	Understanding that the tort was intended to operate interstitially, the Supreme
Court cautiously limited its application to instances where the facts do not fit
crystallized torts, that is, where no other intentional tort provides a remedy. Schmitz,
1990-NMSC-002, ¶ 48.15 This limiter has been the source of some uncertainty, and
underlies much of Judge Sutin’s concerns. In my view, Schmitz provides a ready
answer for this case. Further, given how thoroughly the case was litigated, this is not
the appropriate case to address the concerns Judge Sutin raises.
{78} 	Under Schmitz, prima facie tort can be pleaded and litigated in the alternative.
But, when it comes to submitting the case to the jury, if the “plaintiff’s proof is
susceptible to submission under one of the accepted categories of tort, the action
should be submitted to the jury on that cause and not under prima facie tort.” Id. A
theory or cause of action is “susceptible to submission” to a jury only if it has escaped
dismissal by summary judgment, directed verdict, or Rule 1-012(B)(6) NMRA.
Schmitz, 1990-NMSC-002, ¶ 48.

59
{79} 	Here, all of Plaintiff’s causes of action other than prima facie tort were
dismissed by summary judgment on Defendants’ motions. The dismissed theories
were not “susceptible to submission” to the jury. Once the summary judgments were
granted, the dismissed causes were not available to Plaintiff as a matter of law.
Schmitz cannot be read to require more of litigants or trial courts.
{80} 	This is not a case in which a plaintiff tried to evade other potential causes of
action. Plaintiff pleaded all conceivable causes and proceeded to lose them to
dismissal at Defendants’ urging. One cause of action is the subject of much discussion
and merits response. Judge Sutin theorizes that Plaintiff should have pursued his
contract claims more assiduously by arguing that his termination was wrongful and
pretextual and thus contrary to the imposed covenant of good faith and fair dealing.
Judge Sutin relies on cases such as Kestenbaum, 1988-NMSC-092. The employment
termination cases were of no help to Plaintiff. The primary factual issue in those cases
was whether there had been a breach of the employee’s contract by the employer;
more specifically, whether the plaintiff was fired for actual good cause under their
contract. Breach by the employer is the context in which the idea of pretext arose in
Kestenbaum and the other wrongful termination cases. Here, there was undeniably a
breach of the agency contract—by Plaintiff. Plaintiff’s agency placed business with
another company, a terminable breach. Once that fact was found, summary judgment
on the breach of contract claim in favor of Defendants was inevitable. Using the
covenant of good faith and fair dealing to challenge a finding of breach in this context

60
runs the risk of morphing it into a tort-like adjunct to contract law. Perhaps it would
be a good idea to start crystallizing such a tort, but its potential impact is much
broader than the relatively narrow scope of prima facie tort. This case certainly does
not call for the effort or even the discussion.
{81} 	There is nothing to be gained and much to be lost in Judge Sutin’s second-
guessing approach. There is no hint in the record or argument by Defendants that
Plaintiff “threw the fight” in any of his motion practice. There is no reason for this
Court—or the district court—to engage in that inquiry. How is it to be done in any
event? Are courts to question motive? (“Did you mean to lose that motion counsel?”).
Are they to suggest litigation tactics and arguments to counsel? If so, should both
counsel be examined and “counseled,” or only the plaintiff’s attorney? To engage in
second-guessing at the appellate level is even more problematic. All we can do is
wonder at what was done and why. If the issue was preserved below, there is no need
to wonder in a vacuum because the arguments have been made and we can assess
them on the record. If the subject of our second-guessing was not preserved or even
argued—as is the case here—our musings are perforce of no avail. Absent a
miscarriage of justice, we will not disturb a jury verdict. There is certainly no
miscarriage here. This case involves aggravated facts and serious harm that
Defendants do not dispute. We are left to musing about how counsel should have been
smarter and worked harder, all to no discernible end.

16 It is notable, though not relevant here, that no one in Guest saw any difficulty
in allowing the plaintiffs’ contract claims and the prima facie tort claims to both go
to the jury.
61
{82} 	In sum, the case was vigorously litigated. There is no need or reason to revisit
how it was litigated. Subject to Defendants’ failed motion to dismiss prima facie tort,
all parties agreed at the end that only prima facie tort was left to be submitted to the
jury. The jury has spoken.
THE DISSENT
{83} 	I disagree with the dissent’s assertion that the factual circumstances here are
exempt from the purview of prima facie tort simply because they arose in the context
of a contractual relationship between the parties. The dissent argues for a categorical
exemption from tort liability, regardless of behavior and motive. The cases cited by
the dissent do not support such an exemption and its ipse dixit policy argument
ignores the lesson and point of Holmes’ work on which it purports to rely.
{84} 	First, the cases the dissent relies on simply do not support a categorical
exemption. Guest v. Allstate Insurance Co. did hold that an attorney could not claim
future, unearned fees as an item of damage from a former client. 2010-NMSC-047,
¶ 25, 149 N.M. 74, 244 P.3d 342; see Dissent infra ¶ 100. The basis for ruling—the
need to protect the attorney/client relationship—says nothing about the propriety of
immunizing an entire field of human activity from scrutiny for wrongdoing.16 And

17 It should be noted, however, that even the free use of land had its limits at
common law. It was subject to challenge as a nuisance. And the case of Fletcher v.
Rylands, 3 H. & C. 774, 159 Eng. Rep. 737 (1865)—the basis for strict liability for
hazardous activities—involved a water reservoir which failed, flooding a neighbor’s
mine.
62
Andrews v. Stallings, 1995-NMCA-015, 119 N.M. 478, 892 P.2d 611, is a run-of-the-
mill case in which the defamation claim was the appropriate tort to pursue. See
Dissent infra ¶ 101.
{85} 	Second, the dissent misconstrues Holmes’ theory in his article Privilege,
Malice, and Intent. Holmes’ effort in the article was to posit a general theory of
intentional tort useful as a method for analyzing claims for injury caused by
intentional acts. He did not posit any specific outcomes in cases. He did note that
some policies—such as the free use of land—were so ingrained in the law and society
that they were likely to provide justification no matter what motive an actor had for
use of land.17 But Holmes did not say that even such uses should be forever free from
scrutiny or liability. The dissent ignores its own quote from Holmes’ article “When
the question of policy is faced[,] it . . . cannot be answered by generalities, but must
be determined by the particular character of the case . . . plainly the worth of the
result, or the gain from allowing the act to be done, has to be compared with the loss
which it inflicts.” Holmes, supra, at 3.

18 Defendants’ position is Nixonian: “If the president does it, it’s legal.”
63
{86} 	Defendants and the dissent refuse to engage the “particular character of the
case” or to conduct a comparison of gain and loss in light of motive. The facts in this
case are egregious. After a very successful eleven-year career as a “stellar agent” for
Defendants, Plaintiff was summarily terminated after one mistake which was quickly
remedied. The motive for the termination could range from petty bureaucratic revenge
to unmitigated greed. As a result of his termination, Plaintiff lost all income from the
business. His clients and commissions were distributed to the persons who carried out
the termination. And all of this occurred while Plaintiff’s wife was away for an
extended time with a serious kidney disease. In effect, the jury found that the
individuals 	who 	effected 	the 	firing 	acted 	like 	corporate 	hyenas 	and 	jackals
cannibalizing their own. I see no reason to say that Plaintiff should “have expected as
much” when he signed his agency agreement.
{87} 	There is no question Defendants intended the firing and the harm. As to
justification, Defendants’ only response is “because we can.”18 But, as the court in
Plant noted, that “proposition is a mere truism.” 57 N.E. at 1014. Immunity for
intentional, harmful conduct requires an inquiry into motive. As Holmes noted in his
article, “It is entirely conceivable that motive, in some jurisdictions, should be held
to affect all, or nearly all, claims of privilege.” Holmes, supra, at 9. The jury found
Defendants’ motive to be malicious, and their conduct inexcusable. Defendants fail

64
to appreciate that the tort and verdict address that conduct and motive. The
termination itself works primarily to provide a measure of damages.
{88} 	Defendants’ argument that this verdict will undermine “freedom of contract”
may be addressed by the fourth factor under UJI 13-1631A: “The value to [the]
defendant or to society in general of the interests advanced by the defendant’s
conduct.” But Defendants do not—cannot—explain how allowing petty bureaucratic
revenge or greed to motivate and control their relationship with their agents is
necessary to its business model or its success. Defendants do not—cannot—explain
how shielding the egregious conduct present here is important to them or what value
it contributes to society in general. Defendants do not—cannot—explain how
immunizing hyena-like behavior is necessary to defend freedom of contract.
Defendants do not attempt to explain because any arguments made would be specious
on their face. In this context, Defendants’ assertion of “freedom of contract” is not just
a cliche; it is a shibboleth.
{89} 	More generally, Defendants’ assertion of freedom of contract fails to take into
account other developments in the law that are aimed at ameliorating the potential for
the law of contract to devolve into the law of the jungle. Internal to the world of
contract, the law imposes the implied covenant of good faith and fair dealings. Cont’l
Potash, Inc. v. Freeport-McMaron, Inc., 1993-NMSC-039, ¶ 64, 115 N.M. 690, 858
P.2d 66. The covenant makes subjective motive and “right conduct” part of the

19 One wonders how an insurer would fare in an action by one of its insureds
alleging the type of callous and cruel behavior visited on Plaintiff here.
65
conversation when assessing breaches of contract. This law has not destroyed freedom
of contract, though it probably humanizes it. Prima face tort can do the same.
{90} 	In the insurance field, the courts have created the tort of bad faith. See UJIs13-
1701 to -1705 NMRA. The obligations imposed on insurers by common law bad faith
concepts are much broader than anything that might be imposed by prima facie tort.19
The torts of economic duress and interferences with contractual relations have their
own potential to interfere with freedom of contract. But they were recognized in
response to inappropriate behavior in the economic realm. See Terrel v. Duke City
Lumber Co., 1974-NMCA-041, ¶ 97, 86 N.M. 405, 524 P.2d 1021 (recognizing tort
of economic duress), aff’d in part and rev’d in part on other grounds by 1975-NMSC-
041, 88 N.M. 299, 540 P.2d 229; see also Wolf v. Perry, 1959-NMSC-044, ¶ 15, 65
N.M. 457, 339 P.2d 679 (recognizing tortious interference with contract). They have
not destroyed freedom of contract and neither will this verdict.
MICHAEL D. BUSTAMANTE, Judge

66
HANISEE, Judge (dissenting).
{91} 	Today’s majority injects the specter of prima facie tort liability into commercial
relationships governed first by contracts and, when necessary, doctrinal contract law.
In upholding the jury’s verdict, the majority authors downplay the requirements of
existing and directly applicable causes of action—not only in contract but also in tort.
The end result is that Defendants’ right to enforce and terminate an indisputably
breached contract that neither violates public policy nor is a contract of adhesion is
negated.
{92} 	Confusingly, Judge Sutin agrees that there “are solid reasons for requiring
Plaintiff to have pleaded and pursued contract claims based on a theory that his
termination was wrongful, pretextual, and carried out with the malicious intent to
harm and without sufficient justification.” Op. supra ¶ 37. He also agrees that
“Plaintiff could have pleaded and persuasively argued that his termination was
unlawful [as a] breach of contract and/or breach of the implied covenant of good faith
and fair dealing[.]” Op. supra ¶ 38. And Judge Bustamante allows that our Supreme
Court “cautiously limited [prima facie tort’s] application to instances where the facts
do not fit crystallized torts[.]” Sp. Con. supra ¶ 77. Why, then, does the jury’s verdict
stand when it seems we agree that it is hornbook law that prima facie tort may not be
used to “evade stringent requirements of other established doctrines of law[?]”
Schmitz, 1990-NMSC-002, ¶ 63; see also Stock, 1998-NMCA-081, ¶ 38 (holding that

67
prima facie tort may not serve to “escape possible restrictions” to another tort’s
applicability).
{93} 	Judge Sutin suggests that the reason is “the particular manner in which this case
was tried,” Op. supra ¶ 3, and “the peculiar circumstances in this case[.]” Op. supra
¶ 53. While true that “there was no other claim available to Plaintiff besides prima
facie tort under which to pursue damages” from Defendants, Op. supra ¶ 50, such was
the circumstance only because, by the time of trial, Defendants had defeated Plaintiff’s
numerous directly applicable causes of action. So the only reason this case was tried
at all is because the district court denied Defendants’ motion for summary judgment
on Plaintiff’s prima facie tort claim. Hence, the lead opinion’s justification for the
occurrence of a trial on what was left of a disemboweled complaint—loudly
“sounding in contract and tort[,]” Op. supra ¶ 9—begs the question of whether the
district court erred in denying the last of an otherwise successful series of dispositive
motions filed by Defendants.
{94} 	The occurrence of such an atypical trial, however, is no reason to affirm its
outcome and in any event is hardly the fault of Defendants. To the contrary, Plaintiff
was “the master of [his] complaint,” Self v. United Parcel Serv., 1998-NMSC-046, ¶
17, 126 N.M. 396, 970 P.2d 582 (internal quotation marks and citation omitted), and
likewise possessed sole control over whether to appeal the district court’s dismissal
of his contract- and tort-based claims. Yet Plaintiff chose not to plead the claims that

68
Judge Sutin suggests he “could have pleaded and persuasively argued[,]” Op. supra
¶ 38, and did not appeal from the district court’s summary judgment in Defendants’
favor on the predicate claims he did choose to plead. To uphold Defendants’ liability
under a legal doctrine of such limited applicability rings hollow, particularly given
Judge Sutin’s additional observation that the “express language of the Agreement”
would not have necessarily “prohibited contract-related claims based on pretext or
ruse if they had been carefully and clearly pursued.” Op. supra ¶ 37 (emphasis
added). Yet by some kind of judicial alchemy, the majority today turns Defendants’
right to terminate the Agreement into liability for its exercise of that right, and
Plaintiff’s litigation failures (and his own breach of the Agreement) into a damages
bonanza paid for by Defendants.
{95} 	Even less availingly, Judge Bustamante appears to seek an independent, stand-
alone standard for application of prima facie tort: “egregious conduct[.]” Sp. Con.
supra ¶ 88 . He would declare corporate behaviors ranging from “petty bureaucratic
revenge to unmitigated greed[,]” Sp. Con. supra ¶ 86, to be damages-eligible, a zone
of liability into which Defendants’ “hyena-like” and “jackals cannibalizing their
own[,]” behaviors fall. Sp. Con. supra ¶¶ 86, 88. Under Judge Bustamante’s approach,
district courts are to undertake a free-ranging assessment of a defendant’s conduct in
deciding if a prima facie tort claim is to be submitted to a jury, even when
“crystalliz[ed,]” Sp. Con. supra ¶ 80, but element-rich causes of action fail on legal

69
grounds. Future plaintiffs might wonder why they should bother to plead on-point but
proof-onerous causes of action. Which is exactly why the application of prima facie
tort in New Mexico was tightly curtailed from the get-go, and has so remained. See
Stock, 1998-NMCA-081, ¶ 39 (“[T]he [plaintiff’s] claim of prima facie tort is
duplicative of her other claims. But to the extent that it is not, we hold that application
of that doctrine . . . would be an improper means of evading proof of essential, and
appropriate, elements of those other claims.”).
{96} 	Ultimately, the majority authors and I fundamentally disagree about prima facie
tort’s place in New Mexico law. The tort was not created, nor were its elements
designed, to serve as an infill upon which a plaintiff can erect a remedy when
otherwise applicable torts or contract law do not afford redress. Quite the opposite:
that a plaintiff is precluded from recovering under a different cause of action is often
itself sufficient to demonstrate the inapplicability of prima facie tort. This conclusion
flows from a proper historical understanding of the tort and the genesis of Schmitz’s
“evasion” requirement. See 1990-NMSC-002, ¶ 63; see also James P. Bieg, Prima
Facie Tort Comes to New Mexico: A Summary of Prima Facie Tort Law, 21 N.M. L.
Rev. 327, 371 (1991) (expressing caution that “prima facie tort has the potential of
eliminating the important policies and protections embodied in the elements of
traditional torts, many of which have been developed over centuries, and replacing
them with a nebulous, all-encompassing, and formless cause of action”).

70
{97} 	While Judge Bustamante rightly connects the origins of much of the framework
of existing tort law to the work of Justice Holmes, his perspective regarding prima
facie tort is incomplete. Indeed, Holmes rejected a formalist regime of tort liability
and set out a more general theory for deciding cases where a plaintiff alleges that he
has been injured by the defendant.
Actions of tort are brought for temporal damage. The law recognizes
temporal damage as an evil which its object is to prevent or to redress,
so far as is consistent with paramount considerations to be mentioned.
When it is shown that the defendant’s act has had temporal damage to
the plaintiff for its consequence, the next question is whether that
consequence was one which the defendant might have foreseen. If
common experience has shown that some such consequence was likely
to follow the act under the circumstances known to the actor, he is taken
to have acted with notice, and is held liable[.]
Holmes, Privilege, Malice, and Intent, supra at 1 (cited in Schmitz, 1990-NMSC-002,
¶ 36). To Holmes, the only question in determining whether to exempt a defendant
from liability for damages to the plaintiff caused by the defendant’s malicious acts is
whether 	the 	defendant’s 	actions, 	however 	malicious, 	may 	be 	justified 	or
“privilege[d].” Holmes, supra, at 9. And whether a defendant’s acts are privileged is
ultimately a question of “policy; and the advantages to the community, on the one side
and the other, are the only matters really entitled to be weighed.” Id. Under Holmes’
theory, the question of whether the defendant is privileged to inflict a harm “cannot
be answered by generalities, but must be determined by the particular character of the
case, even if everybody agrees what the answer should be. . . . [P]lainly the worth of

71
the result, or the gain from allowing the act to be done, has to be compared with the
loss which it inflicts.” Id. at 3.
{98} 	But “[i]t seems inevitable that a tort conceived on the principle of prima facie
liability for intentional infliction of harm would come to encroach upon bodies of law,
like contract, which have more limited principles of liability.” Mark P. Gergen,
Tortious Interference: How It Is Engulfing Commercial Law, Why This Is Not Entirely
Bad, and A Prudential Response, 38 Ariz. L. Rev. 1175, 1218 (1996). Hence the
import of Schmitz’s use of the phrase “established doctrines of law.” 1990-NMSC-
002, ¶ 63 (emphasis added). The elements of a claim merely express the requirements
of the underlying doctrine of substantive law that provides a remedy. It follows, then,
that Plaintiff’s inability to plead or prevail on a claim for breach of contract (or
tortious interference with the Agreement into which the parties entered) may itself be
a reason to question whether a claim for prima facie tort should be submitted to the
jury. In other words, the fact that a plaintiff cannot obtain relief for injuries caused by
the defendant in an action for breach of contract is evidence that the defendant was
justified or privileged to cause the plaintiff’s injuries. Gergen, supra, at 1221 (noting
that if a claim “[falls] deeply in the shadow of another body of law,” consideration
should be given to determining whether dismissal is necessary in order to “preserve
the priority of that other body of law”).

72
{99} 	Even Holmes evolved to limit his preferred generalized approach to tort liability
by use of the term “disinterested malevolence,” Am. Bank & Tr. Co. v. Federal Bank,
256 U.S. 350, 358 (1921), penned to mark the liability distinction between actions of
right that cause harm and actions undertaken solely to cause harm. That notion is
evident in Aikens itself, when Holmes addressed the unique state of mind that exists
when harm is inflicted “for the sake of the harm as an end in itself, and not merely as
a means to some further end legitimately desired.” Aikens, 195 U.S. at 203; see also
Marcella v. ARP Films, Inc., 778 F.2d 112, 119 (2d Cir. 1985) (“[W]hen there are
other motives, such as profit, self-interest, or business advantage, there is no recovery
under the doctrine of prima facie tort.”). Here, regarding Defendants’ termination of
the Agreement with Plaintiff, the trial record amply supports business, profit, and
associative motives far beyond disinterested malevolence.
{100} 	The historic limitation of prima facie tort’s application, intended by Schmitz,
finds support in our case law. In Guest, 2010-NMSC-047, ¶¶ 47-56, our Supreme
Court held on public policy grounds that a client is not liable to his lawyer for lost
future earnings when the client terminates the attorney-client relationship. The
attorney-plaintiff in Guest contended that even if lost future earnings were not
available in a breach of contract action, they were nonetheless available in an action
based on prima facie tort. Id. ¶ 57. Our Supreme Court disagreed, holding that “these
claims arose out of the same circumstances as [the attorney-plaintiff’s] contract

73
claim—her employment relationship with [the defendant]—[so the] reasoning applies
regardless of the theory of liability.” Id. This statement supports my view that if a
plaintiff cannot prevail on breach of contract or the covenant of good faith and fair
dealing for a good reason, then the plaintiff should not be allowed to prevail on a
prima facie tort claim for the same reason—even when the formal elements of a prima
facie tort claim are found by a jury to have been proven.
{101} 	This Court upheld the dismissal of a prima facie tort claim for similar reasons
in Andrews, 1995-NMCA-015. In that case, we upheld the district court’s dismissal
of the plaintiffs’ intentional infliction of emotional distress claim, reasoning that the
claim was an “attempt[] . . . to make an end-run around the obstacles posed by
defamation law’s harm to reputation element and its constitutional aspects.” Id. ¶ 48
(internal quotation marks and citation omitted). With respect to the plaintiffs’ prima
facie tort claim, we analyzed Schmitz’s “evasion” rule from a similar standpoint:
“[whether plaintiffs’] prima facie tort is being asserted merely to circumvent the
established defenses to defamation.” Id. ¶ 64. In other words, we looked at the
normative value of defamation (and its defenses) as the means of redress for harm
caused by written statements. And we concluded that it outweighed the need to
provide the plaintiffs with a secondary avenue by which liability might be established
premised upon the harm caused by the defendants’ acts. Id. ¶ 67.

74
{102} 	Holmes understood this issue as a question of privilege: when the benefits to
society of requiring a plaintiff to proceed (and lose) under an established theory of law
outweigh the benefits of allowing the plaintiff to recover for prima facie tort, we are
in essence recognizing that the defendant has a privilege to harm the plaintiff. The
example Holmes used is “the right to make changes upon or in a man’s land[.]”
Holmes, supra at 4. Even if a man makes changes to his own land with malicious
intent to harm his neighbor, Holmes reasoned that the need to compensate the
neighbor and punish the defendant for his malice would be outweighed by society’s
interest in encouraging landowners to invest in and develop their property. Id. “Were
it otherwise, and were the doctrine carried out to its logical conclusion, an expensive
warehouse might be pulled down on the finding of a jury that it was maintained
maliciously, and thus a large amount of labor might be wasted and lost.” Id.
{103} 	The straightforward question here is whether an existing and applicable doctrine
of law requires us to decide this case in Defendants’ favor, despite their concession
on appeal that they acted with an intent to (and did indeed) harm Plaintiff. As Judge
Sutin points out, Defendants’ argument on this issue boils down to a straightforward
contention that the jury’s verdict, if allowed to stand, would fatally undermine the
maxim of contract law that “public policy encourages freedom between competent
parties of the right to contract, and requires the enforcement of contracts, unless they
clearly contravene some positive law or rule of public morals.” General Elec. Credit

75
Corp. v. Tidenberg, 1967-NMSC-126, ¶ 14, 78 N.M. 59, 428 P.2d 33. Judge Sutin
dismisses this argument out of hand, concluding that Defendants’ argument paints an
“ideal[ized]” picture of a world in which there is “[no] way for a party to obtain relief
in for-cause terminations that are technically authorized but nevertheless pretextual[.]”
Op. supra ¶ 41. And the concurring opinion seems to prefer that freedom of contract
be vaguely “humanize[d.]” Sp. Con. supra ¶ 89. But this is just a preference that
applicable law incorporate considerations that it does not. Should we allow a plaintiff
to obtain damages for harm caused by the exercise of an express term in a contract
when that contract does not violate any public policy and is not one of adhesion? In
upholding the jury verdict in this case, the majority authors do not answer this difficult
(and to my mind, insurmountable) question.
{104} 	The public policy favoring the freedom of private parties to set the terms of
their commercial relationships should not be discarded if a defendant’s conduct, even
if both legal and expressly contemplated by the contract, is by judicial measure
sufficiently outrageous. The worn phrase “freedom of contract” may be cliché, but
that does not mean we should ignore its application in this case. Bad blood and failed
business ventures often keep close company. Courts should not sit in equity on claims
arising from commercial relationships that wouldn’t exist but for written contracts.
Where the terms of a contract are clear—as here—we enforce them as written. The
parties would have expected as much when they entered the Agreement. I would

76
reverse the district court’s denial of Defendants’ post-trial motion for a directed
verdict on Plaintiff’s prima facie tort claim. I therefore respectfully dissent.
__________________________________
J. MILES HANISEE, Judge