Court Opinion

ID: 9561694
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:14:17.565149+00
Date Added: 2024-06-11T09:14:14.256728
License: Public Domain

STOWERS, Justice, specially concurring in part and dissenting in part. I concur with the portions of the majority’s opinion holding that summary judgments were inappropriate on Counts I, III and V and with the majority’s decision to affirm the trial court’s summary judgments on Counts II and IV. However, I believe that the trial court properly could have concluded from the language of the Cillessen — All State contract alone that Cillessen made no promise that Valdez could enforce by bringing an action in contract against Cillessen. I therefore believe that the trial court did not err in granting summary judgment in favor of Cillessen on Count VI, and dissent from the majority’s disposition of that count. I agree with the majority that both the Cillessen — All State and Cillessen — Indian Housing Authority contracts are distinguishable from the contract at issue in McKinney v. Davis, 84 N.M. 352, 503 P.2d 332 (1972), because they do not explicitly describe the intended beneficiaries of their provisions regarding workmen’s compensation insurance. Under these circumstances, I agree that the third party may show by extrinsic evidence that the parties to the contract intended those provisions for his benefit. See Permian Basin Investment Corp. v. Lloyd, 63 N.M. 1, 7, 312 P.2d 533, 537 (1957); see also Stotlar v. Hester, 92 N.M. 26, 30, 582 P.2d 403, 407 (Ct.App.), cert. denied, 92 N.M. 180, 585 P.2d 324 (1978). However, the parties’ intention to benefit Valdez was not the issue determinative of Cillessen’s motion for summary judgment on Count VI. The trial court’s grant of summary judgment on Count VI was proper, I believe, because it is clear from the language of the contract itself that, although he may have had a right of action against All State, Valdez had no right of action against Cillessen as a third party beneficiary of the Cillessen — All State contract. This Court long has held that an action lies against the promisor by the third party to enforce the promise made for his benefit. See Johnson v. Armstrong & Armstrong, 41 N.M. 206, 210, 66 P.2d 992, 994 (1937); see also Restatement (Second) of Contracts §§ 304, 307 (1979); 4 A. Corbin, Corbin on Contracts §§ 773, 775, 782 (1951); 2 S. Williston, A Treatise on the Law of Contracts §§ 347, 356-359, 364A, 368 (3d ed. 1959). This right of action is premised upon a recognition that the third party who in fact suffers from the promisor’s breach of his contractual obligations has greater incentive to enforce the contract and to carry out the intentions of the promisee than does the promisee. See 4 A Corbin, supra, § 775, at 8; 2 S. Williston, supra, § 357, at 843-44. In paragraph 12 of the Cillessen — All State contract, the subcontractor, All State, promised to carry and pay for workmen’s compensation insurance and to furnish the contractor, Cillessen, with evidence of its insurance policies. Nowhere in the contract, however, did Cillessen promise to compel All State to perform its promises regarding workmen’s compensation insurance. Whether an agreement is ambiguous is a question of law for the trial court, as is the construction of an unambiguous contract. See Boatwright v. Howard, 102 N.M. 262, 264, 694 P.2d 518, 520 (1985); see also McKinney v. Davis, 84 N.M. at 353-54, 503 P.2d at 333-34. The trial court here properly could have concluded that the contract was unambiguous, and properly could have found in its language no promise by Cillessen to act for the benefit of Valdez. Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Westgate Families v. County Clerk, 100 N.M. 146, 148, 667 P.2d 453, 455 (1983); NMSA 1978, Civ. P.R. 56 (Repl.Pamp.1980). Because the construction of the Cillessen — All State contract presented a question of law, not fact, and because Valdez had no right of action against Cillessen to enforce promises made to, not by, Cillessen, I believe that the trial court did not err in granting a summary judgment in favor of Cillessen on Count VI. On the other hand, in paragraph 24 of the Cillessen — Indian Housing Authority contract, the contractor, Cillessen, promised to furnish the Indian Housing Authority with evidence that workmen’s compensation insurance was in force and would cover all operations under that contract. An action may lie against the promisor, Cillessen, to enforce this promise. Because the construction of this ambiguous contractual promise made by Cillessen and the intention of the parties to benefit Valdez raised material questions of fact, I agree with the majority that the trial court erred in granting a summary judgment in favor of Cillessen on Count V. For the foregoing reasons, I believe that the majority correctly disposed of Counts I through V but that the trial court’s ruling on Count VI should be affirmed. Therefore, I respectfully dissent in part.