Sunnyland Farms, Inc. v. Central N.M. Electric Cooperative, Inc.

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A fire destroyed a hydroponic tomato facility belonging to a new business, Sunnyland Farms, Inc. The day before the fire, Sunnyland's electricity had been shut off by its local utility, the Central New Mexico Electrical Cooperative (CNMEC), for nonpayment. Sunnyland's water pumps were powered by electricity, and without power, Sunnyland's facility had no water. Sunnyland sued CNMEC, alleging both that CNMEC had wrongfully suspended service, and if its electrical service had been in place, firefighters and Sunnyland employees would have been able to stop the fire from consuming the facility. After a bench trial, the court found CNMEC liable for negligence and breach of contract. The trial court awarded damages, including lost profits, of over $21 million in contract and tort, but reduced the tort damages by 80% for Sunnyland's comparative fault. It also awarded $100,000 in punitive damages. The parties cross-appealed to the Court of Appeals, which reversed the contract judgment, vacated the punitive damages, held that the lost profit damages were not supported by sufficient evidence, affirmed the trial court's offset of damages based on CNMEC's purchase of a subrogation lien, and affirmed the trial court's rulings on pre- and post-judgment interest. Sunnyland appealed. Upon review, the Supreme Court affirmed the Court of Appeals regarding the contract judgment, punitive damages, and interest, and reversed on the lost profit damages and the offset. The Court also took the opportunity of this case to re-examine the standard for consequential contract damages in New Mexico. View "Sunnyland Farms, Inc. v. Central N.M. Electric Cooperative, Inc." on Justia Law