AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

The plaintiffs purchased property in Torrance County in 1995 and obtained title insurance from the defendant for $68,818. A dispute arose regarding the coverage of the policy, leading the defendant to demand arbitration under a clause in the policy. The plaintiffs filed a complaint alleging breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and statutory claims for unfair insurance and trade practices (paras 2-3).

Procedural History

• Trial Court, January 20, 2000: The trial court denied the plaintiffs' motion for a preliminary injunction to prevent arbitration and stayed the claims pending arbitration. Later, it entered an order staying arbitration pending appeal (para 2).
• Lisanti v. Alamo Title Ins. of Tex., 2001-NMCA-100, 131 N.M. 334, 35 P.3d 989: The Court of Appeals reversed the trial court's order, holding that the mandatory arbitration clause violated the plaintiffs' constitutional right to a jury trial and conflicted with statutory provisions allowing judicial resolution of claims (paras 1, 7).

Parties' Submissions

• Defendant: Argued that the arbitration clause in the title insurance policy was enforceable, as it was mandated by state regulation. Claimed that the plaintiffs waived their right to a jury trial by purchasing the policy and that public policy favors arbitration. Also contended that the public rights doctrine justified mandatory arbitration in a heavily regulated industry (paras 6, 16-18).
• Plaintiffs: Asserted that the arbitration clause was not consensual, as it was mandated by law, and that it violated their constitutional right to a jury trial. They argued that their claims were of a type historically triable to a jury and that statutory provisions explicitly provided for judicial resolution (paras 3, 6-7).

Legal Issues

• Did the mandatory arbitration clause in the title insurance policy violate the plaintiffs' constitutional right to a jury trial?
• Were the plaintiffs' claims of a type historically triable to a jury under the New Mexico Constitution?
• Did the regulation mandating arbitration conflict with statutory provisions allowing judicial resolution of claims?
• Was the public rights doctrine applicable to justify mandatory arbitration in this case?

Disposition

• The Supreme Court of New Mexico affirmed the Court of Appeals' decision, holding that the mandatory arbitration clause violated the plaintiffs' right to a jury trial and was unenforceable. The case was remanded for further proceedings in district court (paras 8, 25-26).

Reasons

Per Minzner J. (Serna C.J., Franchini J., and Maes J. concurring):

• The Court held that the arbitration clause was not consensual because it was mandated by state regulation, and the plaintiffs did not voluntarily waive their right to a jury trial (paras 6, 16-17).
• The Court determined that the plaintiffs' non-statutory claims, such as breach of contract and breach of the covenant of good faith and fair dealing, were of a type historically triable to a jury at the time of statehood, as protected by Article II, Section 12 of the New Mexico Constitution (paras 10-15).
• The Court found that the regulation mandating arbitration conflicted with statutory provisions under the Insurance Code and the Unfair Practices Act, which explicitly provided for judicial resolution of claims (para 7).
• The Court rejected the defendant's reliance on the public rights doctrine, concluding that the plaintiffs' claims were private in nature and not closely intertwined with a public regulatory scheme (paras 18-23).
• The Court emphasized that public policy favoring arbitration applies only to consensual agreements and does not override constitutional rights to a jury trial (paras 17-18).