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 Plaintiff, a licensed physician, entered into a professional services agreement with the Defendant, a medical services provider contracted by the New Mexico Department of Corrections, to provide medical care to inmates. The agreement allowed either party to terminate the contract at will with 60 days' written notice. The Plaintiff alleged that he was terminated after reporting unsafe and unethical medical practices and cooperating with an investigation into deficiencies in inmate medical care. The Defendant provided no reason for the termination (paras 2-3).
Procedural History
- District Court of Santa Fe County: Granted summary judgment in favor of the Defendant, dismissing the Plaintiff's claim for breach of the implied covenant of good faith and fair dealing (para 4).
Parties' Submissions
- Plaintiff-Appellant: Argued that the Defendant violated the implied covenant of good faith and fair dealing by terminating him for reporting deficiencies in medical care and cooperating with an investigation, which he claimed was contrary to public policy (paras 3, 8).
- Defendant-Appellee: Contended that the termination was lawful under the express at-will termination provision in the contract and that New Mexico law does not recognize a claim for breach of the implied covenant of good faith and fair dealing in such circumstances (paras 1, 5-7).
Legal Issues
- Does New Mexico law allow a claim for breach of the implied covenant of good faith and fair dealing in the context of an at-will termination provision in a professional services contract? (paras 1, 4).
Disposition
- The Court of Appeals affirmed the district court's grant of summary judgment in favor of the Defendant (para 14).
Reasons
Per Wechsler J. (Armijo and Sutin JJ. concurring):
The Court reiterated that under New Mexico law, an implied covenant of good faith and fair dealing cannot override an express, unambiguous at-will termination provision in a written contract. The Court relied on the precedent set in Melnick v. State Farm Mutual Automobile Insurance Co., which held that such claims are not recognized in at-will employment or professional service agreements unless the termination violates a clear mandate of public policy, which would instead give rise to a tort claim for retaliatory discharge (paras 1, 5-7, 10-11).
The Plaintiff's contract contained a clear at-will termination clause, and the Court found no basis to distinguish it from the contract in Melnick. The Plaintiff's claims of improper motive and public policy violations were not actionable under the implied covenant but could only be pursued as a tort claim for retaliatory discharge, which had already been dismissed in a separate federal action due to statute of limitations issues (paras 12-13).
The Court concluded that enforcing the express terms of the contract was consistent with New Mexico's contractual principles and affirmed the district court's decision (paras 13-14).