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Williams v. Stewart3/22/2005
tress, such distress has not generally been recognized as an element of damage. Id. The Restatement of Torts comports with this general rule. See generally Restatement (Second) of Torts § 525 (1977). New Mexico has not addressed the issue. Our cases involving actionable fraud have been commercial in nature, and the damage awards have been calculated accordingly. See, e.g., Register v. Roberson Constr. Co., 106 N.M. 243, 246-47, 741 P.2d 1364, 1367-68 (1987) (observing that either benefit of the bargain or out-of-pocket losses may constitute appropriate measures of damages for fraud); Chromo Mountain Ranch P'ship v. Gonzales, 101 N.M. 298, 300-01, 681 P.2d 724, 726-27 (1984) (upholding contract reformation and awarding interest in a constructive fraud case).
{36} Plaintiffs urge that we make an exception to the general rule based on Flores. In Flores, our Supreme Court recognized a claim for emotional distress damages in connection with the breach of a funeral and burial services contract. Flores, 117 N.M. at 308, 871 P.2d at 964. The Court reasoned, quoting Dobbs, Law of Remedies, that contracts for funeral and burial services are entered to provide well-being for survivors such that "emotional distress damages would seem to be recoverable" as "contemplated damages for a loss of that well-being in the event of breach." Id. at 311, 871 P.2d at 967 (internal quotation marks and citation omitted). Plaintiffs urge that we extend this approach to include not only breach of contract, but also the tort of fraud.
{37} We are not inclined to do so in this case. First, the approach set forth by Professor Dobbs is reasonable. As accepted by our Supreme Court, when parties to a contract contemplate the emotional distress damages, the contract would be frustrated unless such damages could be awarded upon breach. Id. In the tortious circumstances of fraudulent concealment as alleged in this case, there is no meeting of the minds or expression of the parties' intent as with a contract. Second, this case points out the difficulty with recognizing emotional distress damages for fraudulent concealment. Because a funeral and burial services contract contemplates the mental well-being of the living, it is possible to address damages with clarity in discussing the family's rights as intended third-party beneficiaries of the contract. Id. at 310-11, 871 P.2d at 966-67. The claim in this case does not present such clarity. Rather, we agree with the approach of Professor Dobbs that, in this case, fraud that "amounts to or is a part of a dignitary invasion such as a battery, an outrageous infliction of emotional distress, or a libel," allows a plaintiff to "recover emotional harm damages on such a theory, with recovery of purely economic damages on the fraud theory." Dobbs, supra, § 9.2(4), at 562.
{38} We are supported in this view by our Supreme Court's limitations in cases involving emotional distress. The tort of negligent infliction of emotional distress is "extremely narrow" and is limited to bystander recovery. See Fernandez v. Walgreen Hastings Co., 1998-NMSC-039, 6, 126 N.M. 263, 968 P.2d 774. The tort of intentional infliction of emotional distress requires extreme or outrageous conduct and severe distress. See Trujillo v. N. Rio Arriba Elec. Coop., Inc., 2002-NMSC-004, 25, 131 N.M. 607, 41 P.3d 333. We agree with Professor Dobbs that many of the cases seeming to allow emotional distress damages for fraud are actually not cases supporting the proposition that emotional distress damages are awardable without more on a fraud theory or are cases that contain little analysis. See Dobbs, supra, § 9.2(4), at 560. Therefore, we are hesitant to rely on them to effect a change in an area of the law that ha
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