Office of the
New Mexico
Director Compilation
Commission
2024.06.27
'00'06- 08:18:30
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2024-NMCA-045
Filing Date: March 25, 2024
No. A-1-CA-40031
LYNN POLLOCK, as Trustee of the
Lewis G. and Lynn J. Pollock Revocable
Trust, dated December 3, 2001, as
amended,
Plaintiff-Appellant/Cross-Appellee,
v.
PAUL THOMPSON and PAUL
THOMPSON & ASSOCIATES, INC.,
Defendants-Appellees/Cross-Appellants.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Bryan Biedscheid and David K. Thomson, District Court Judges
Herdman MacGillivray Fullerton Cameron
Pumarejo Honeycutt, PC
Frank T. Herdman
David J. Pumarejo
Santa Fe, NM
for Appellant
Fuqua Law & Policy, P.C.
Scott Fuqua
Santa Fe, NM
for Appellees
OPINION
BUSTAMANTE, Judge, retired, sitting by designation.
{1} The issues in this case involve the meaning and effect of two one-page,
handwritten documents—a promissory note for money lent (the Note), and a profit
sharing agreement (the Agreement)—hastily negotiated, drafted and signed by the
parties in April 2007. After a bench trial, the district court ruled, in part, that the Note and
the Agreement comprised one contract enforceable against Defendants Paul Thompson
and Paul Thompson & Associates, Inc. (collectively, Defendants), but that the
Agreement terminated when the Note was paid in full. Plaintiff Lewis Pollock appeals
from this judgment. Thompson and Paul Thompson & Associates, Inc. (the Company)
defend the district court’s ruling in response to Pollock’s arguments, but cross-appeal,
arguing that the district court erred in concluding that there was a meeting of the minds
or sufficient consideration to support imposing any obligations on them under the
Agreement. In addition, Defendants appeal from the district court’s summary judgment
dismissing their counterclaim for malicious abuse of process against Pollock. We affirm,
though on different grounds than the district court’s rationale.
Factual and Procedural Background
{2} Drawn from the district court’s order, we provide a short summary of the
undisputed events leading up to and culminating in the creation of the Note and the
Agreement. Pollock and Thompson first met at the Eldorado Hotel in Santa Fe where
Thompson worked as a parking valet. Pollock and Thompson remained acquaintances
and became casual but not social friends. Thompson also ran a business driving
people—including Pollock and his family—to and from the airport in Albuquerque in their
cars.
{3} On April 19, 2007, Thompson telephoned Pollock asking to meet with him to
discuss a business matter. The following morning Thompson and Pollock met at
Pollock’s home. Thompson explained that he needed money quickly to buy a certain
1998 740 iL BMW (the BMW), so he could start a limousine/auto for hire business.
Thompson asked Pollock for a loan in the amount of $9,000 so he could buy the BMW.
Thompson asserted that the BMW was worth $11,000 and that he needed to act quickly
before it was sold to someone else. Pollock responded that he did not make loans to
anyone and suggested that Thompson look elsewhere. Thompson replied that Pollock
was his “only hope to get the money,” and suggested that he would be willing to share
the profits from the limousine/auto for hire business on a 50/50 basis.
{4} After further discussion, Thompson and Pollock agreed to an arrangement then
acceptable to both of them with regard to the repayment terms of the Note and the
percentage level of profit sharing under the Agreement. Pollock—a Harvard-educated
lawyer—drafted the handwritten Note and Agreement that morning. Thompson and
Pollock signed the Note and the Agreement immediately, and Pollock gave Thompson a
$9,000 check for purchase of the BMW. 1 Thompson paid the Note in full in early
October 2007.
{5} Pollock filed his first complaint in November 2015 alleging that Defendants had
breached their duty under the Agreement to share profits. Following a period of
discovery and motion practice, Pollock filed a first amended complaint broadening his
theories of recovery to include breach of the covenant of good faith and fair dealing,
1Copies of the Note and the Agreement are attached to this opinion.
unjust enrichment, and to request an accounting as well as punitive damages. Two
weeks later—following the depositions of Pollock and Thompson—Pollock submitted an
unopposed motion to file a second amended complaint deleting the counts requesting
damages and limiting the case to a declaratory judgment action addressing the “validity,
enforceability and interpretation of the Agreement,” which was granted. Thompson’s
answer to Pollock’s second amended complaint included a counterclaim for malicious
abuse of process.
{6} The district court held a bench trial limited to the issues raised in the second
amended complaint. The only witnesses at the trial were Pollock and Thompson.
Following the trial, the district court entered a detailed twenty-one page order. Following
additional motion practice and two failed attempts to perfect an appeal to this Court, the
parties agreed to a stipulated final order that summarized the district court’s order as
follows:
[The district court] entered that certain [o]rder on April 16, 2018 (“Order”)
after a one-day bench trial. The Order held that [Pollock] was entitled to a
share of profits, for the subject BMW only, from the date the original
parties to this action entered into an agreement, April 20, 2007, through
the date [the district court] determined such agreement was terminated,
October 3, 2007. [The district court] determined that . . . Plaintiff[’s] share
of the profits included information related to the sale of [the] BMW,
including how, where and to whom the BMW was sold.
{7} The stipulated order also noted the parties’ agreement that “no damages are to
be awarded to Plaintiff based on the accounting provided by Defendants” unless the
district court’s order “is reversed on appeal in whole or in part.”
DISCUSSION
Pollock’s Appeal
{8} On first review, the Note and the Agreement seem straightforward. But that
surface simplicity does not bear up under closer examination. The two documents
present a surprisingly slippery scenario for interpretation and construction that the
parties have litigated thoroughly here and in the district court. The parties disagree, for
example, as to whether the two documents comprise one “agreement,” or whether they
should be treated as two separate contracts. They disagree as to whether the contract
was solely for a loan. They disagree as to whether documents are ambiguous or not.
They disagree as to whether the profit sharing aspect of the Agreement covered only
profits from use of the BMW, or instead extends to all businesses Thompson has
developed over the seventeen years since it was signed. Assuming that the Agreement
can be interpreted to encompass all of Thompson’s businesses, they argue about
whether there was sufficient consideration to support a contract of that magnitude. They
disagree whether there was a “meeting of the minds” sufficient to support the creation of
a contract—in particular the expanded scope Pollock argues for.
{9} The district court’s order wrestled with these arguments with varying degrees of
success. Interesting as these issues might be, we do not need to address them all. The
district court concluded that the parties’ arrangement—whatever its content and
parameters might be—was terminated when the Note was paid in full on October 3,
2007. Affirming the district court on this point would as a practical matter resolve all of
the issues regarding the scope of the Agreement. It is necessary, however, to decide
whether any enforceable contract was created between the parties. The following
analysis addresses the contract formation issues first and then turns to assess the
district court’s ruling that payment of the Note ended the parties’ contract entirely.
I. The Parties Entered Into an Enforceable Contractual Arrangement
{10} The parties’ arguments on the issue of whether a contract was formed are at
extremes. Pollock maintains that Thompson agreed to share with him—and his
daughter after Pollock’s death—35 percent of “all profits” from “the limousine/auto for
hire business” for as long as Thompson maintained the business. Pollock also argues
that he is owed 35 percent of all profits represented in the proceeds of any sale or
liquidation of the business. Thompson’s position on appeal is more nuanced. In his
answer to Pollock’s appeal, he argues that the district court’s decision that the contract
was limited to profits from use of the BMW should be affirmed. In his cross-appeal
briefing, however, he argues that there was no contract formed at all.
{11} It is unclear how the district court resolved the issue. 2 The district court’s order
found as a matter of fact that “[t]here were not materially different understandings of the
parties concerning the obligation . . . Thompson would bear to [Pollock] under the
Agreement.” But the order does not explain what undergirds this finding. The district
court also found as a matter of fact that the Note and the Agreement “constitute the full
and complete extent of any contractual relationships” between Pollock and Defendants.
The district court thus rejected Pollock’s assertions and requested findings—supported
by testimony at trial—that the parties also entered into verbal side agreements that were
not reflected in the documents Pollock drafted. We note that this finding can also
function as a conclusion of law. Reading it as a conclusion of law helps explain the
district court’s decision to try and treat the Agreement as unambiguous. Jaramillo v.
Gonzales, 2002-NMCA-072, ¶ 31,
132 N.M. 459,
50 P.3d 554 (“We construe findings to
uphold, rather than defeat, a judgment.”).
{12} The district court also concluded as a matter of law that “[t]he Agreement does
not entitle [Pollock] to a 35[ percent] share of every business venture pursued by the
Company,” but rather that the share-of-profits language of the Agreement was limited to
profits generated from the use of the BMW. Again, it is unclear what factual background
the district court relied on for this conclusion. We find it significant that in this conclusion
of law the district court relied on concepts related to the interpretation of ambiguous
contracts to bolster its rationale even though it had previously concluded that the
2We note that neither party adequately addresses the internal conflicts in the district court’s order. Each
party instead relied on only the portions of the order that supported their position. This complicated our
review.
“contracts are not ambiguous.” Conclusion of Law No. 12 of the order states in pertinent
part:
The language [Pollock] used to describe the scope of . . . Thompson’s
obligations under the Agreement cannot reasonably be construed so
broadly. Assuming that the phrases “all profits” and “limousine/auto for
hire business” are ambiguous, that ambiguity is to be construed strictly
against [Pollock]. Consequently, the Agreement would entitle [Pollock] to a
35[ percent] share of all profits generated by the Company’s
“limousine/auto for hire business[,”] as used by the BMW.
{13} The portions of the district court’s order referenced above demonstrate cross
currents in the district court’s ruling that make it difficult to interpret and analyze.
Perhaps the most problematic aspect of the order is the district court’s apparent
decision to interpret the language of the Agreement without directly referencing any of
the testimony it heard at the trial. That approach is proper if the language of a writing is
actually unambiguous. See Benz v. Town Ctr. Land, LLC, 2013-NMCA-111, ¶ 31,
314
P.3d 688 (“The purpose, meaning, and intent of the parties to a contract is to be
deduced from the language employed by them; and where such language is not
ambiguous, it is conclusive.” (alteration, internal quotation marks, and citation omitted)).
Conversely, to rely purely on the language in a document is not appropriate if the
language is ambiguous. ConocoPhillips Co. v. Lyons,
2013-NMSC-009, ¶ 10,
299 P.3d
844 (“If the proffered evidence of surrounding facts and circumstances is in dispute,
turns on witness credibility, or is susceptible of conflicting inferences, the meaning must
be resolved by the appropriate fact-finder.” (alteration, internal quotation marks, and
citation omitted)).
{14} Ambiguity is a question this Court reviews de novo. Env’t Control, Inc. v. City of
Santa Fe, 2002-NMCA-003, ¶ 14,
131 N.M. 450,
38 P.3d 891 (“A contract is deemed
ambiguous only if it is reasonably and fairly susceptible of different constructions.
Whether ambiguity exists is a question of law; therefore, this Court reviews the district
court’s decision de novo.” (citation omitted)). We conclude that the Agreement is
ambiguous.
{15} The Agreement includes at least three provisions that are reasonably susceptible
to different constructions. Two are not directly at play in this appeal and we need not
discuss them further. 3 The meaning of and intent behind the phrase “the limousine/auto
for hire business,” however, is vexingly vague. On its face, there is no definitive way to
determine the scope of the obligation imposed on Thompson by the phrase. Viewed in
isolation—that is, as words without context—the phrase can be read to contemplate
3First, it is unclear how the payment obligation under the Note should be coordinated with the
requirement in the Agreement that Pollock would be owed $9,000 if the BMW was sold. In his testimony,
Pollock disclaimed any right he might have under the Agreement to the payment. Second the meaning of
“all profits” is not a material issue given the district court’s ruling that the profit sharing provision was
limited to profits from use of the BMW described in the Agreement. In the absence of that ruling, the
meaning of “all profits” would pose a vexing problem.
only a “limousine/auto for hire business” conducted solely through the BMW. But it could
also reasonably be construed more broadly to contemplate the continuing enterprise
that the Company has become. Both obviously fit within the abstract concept of the
phrase, and there are no other internal terms that help explain its scope. Thus, we
conclude that the phrase cannot reasonably be viewed as clearly and unambiguously
expressing the agreed upon intent of the parties. It is simply too broad and vague. As
such the Agreement is ambiguous. See id. (concluding that the settlement agreement at
issue there was not ambiguous because the meaning of “minimum” was elucidated by
the stated term of the contract itself).
{16} Broadly speaking, our case law recognizes two pathways for resolving
ambiguities in contract documents. If the parties do not offer evidence of the facts and
circumstances surrounding the execution of a document, courts may interpret—or
construe—documents memorializing agreements “using accepted canons of contract
construction and traditional rules of grammar and punctuation.” Mark V, Inc. v. Mellekas,
1993-NMSC-001, ¶¶ 11-13,
114 N.M. 778,
845 P.2d 1232. That route was not available
to the district court in this case because both parties introduced evidence—without
objection—as to the circumstances surrounding the genesis, negotiation, creation, and
signing of the Note and the Agreement. Given the plethora of evidence submitted, the
district court was bound to resolve the issue of the meaning of the phrase in the context
of the evidence. See ConocoPhillips,
2013-NMSC-009, ¶ 10.
{17} In attempting to interpret the Agreement on its face, the district court set itself an
impossible task. Without context provided by the evidence, there is no way to choose
between the parties’ interpretations. The order reflects this dilemma in that the district
court ultimately settled on an interpretation that necessarily relied on the parties’
testimony.
{18} As noted above, the district court’s order reflects two conclusions of law directly
addressing the meaning of the phrase “limousine/auto for hire business.” Conclusion of
Law No. 4 flatly states that the “contracts are not ambiguous” and that Thompson’s
obligation under the Agreement is to pay Pollock 35 percent of the profits generated by
operation of “a limousine/auto for hire business, using the BMW.” 4
{19} In Conclusion of Law No. 12, the district court first decided that the “Agreement
cannot reasonably be construed so broadly” as to encompass “every business venture
pursued by the Company.” But then—perhaps out of an abundance of caution—the
district court also concluded that “assuming” the phrase is ambiguous, the “ambiguity is
to be construed strictly against [Pollock]” and thus limited the reach of the phrase to
income derived from the BMW.
4Pollock makes much of the fact that the conclusion of law mistakenly includes the words “using the
BMW” when quoting the Agreement. There is no indication that the district court thought those words
were in the Agreement, and we ignore the mistake as a simple typographical error. See Jaramillo, 2002-
NMCA-072, ¶ 31.
{20} It is clear to this Court that in ruling as it did, the district court—consciously or
unconsciously—accepted Thompson’s version of the conversations and negotiations
that occurred at the parties’ meeting in April 2007. The ruling “fits” Thompson’s
testimony that the parties’ focus was on the BMW, that they talked only about the BMW,
and that they did not discuss future development of the “limousine/auto for hire
business.”
{21} Fortunately, the district court entered a finding of fact that supports that reading
of its ruling. Describing the conversation and negotiation leading up to the signing of the
Note and the Agreement, Finding of Fact No. 18 states, “Thompson proceeded to state
that if Pollock would loan the Company $9,000[] for the purchase of the BMW,
Thompson (who owned the Company) was willing to share a portion of profits arising
from the limousine/auto for hire business with Pollock, as it related to the use of the
BMW.” This is a clear finding that the district court credited Thompson’s testimony that
the parties only discussed profit sharing in connection with use of the BMW. It is also
noteworthy that Pollock did not provide any testimony contradicting Thompson’s
description of the conversation. Thompson’s testimony provides substantial evidence
supporting the district court’s findings of fact. See Las Cruces Pro. Fire Fighters v. City
of Las Cruces, 1997-NMCA-044, ¶ 12,
123 N.M. 329,
940 P.2d 177 (noting that in
reviewing a substantial evidence claim, “[t]he question is not whether substantial
evidence exists to support the opposite result, but rather whether such evidence
supports the result reached” and “we will not reweigh the evidence nor substitute our
judgment for that of the fact[-]finder”). And Finding of Fact No. 18 in turn supports the
district court’s ultimate ruling that the profit sharing arrangement was limited to use of
the BMW.
{22} The discussion above disposes of Pollock’s appeal in Thompson’s favor, though
on different grounds. In his cross-appeal, Thompson argues that there was no meeting
of the minds as to the scope of the arrangement between him and Pollock—that is,
whether the deal was limited to use of the BMW, or whether it was broader—and thus
no contract was created at all. For the sake of completeness we address his argument.
{23} “For an offer and acceptance to create a binding contract, there must be an
objective manifestation of mutual assent by the parties to the material terms of the
contract.” Pope v. Gap, Inc., 1998-NMCA-103, ¶ 11,
125 N.M. 376,
961 P.2d 1283.
Unexpressed intentions or understandings of the parties will not be given operative
effect in deciding what the parties agreed to. Id. ¶ 13. As such, misunderstandings
concerning the meaning of the terms in a written contract can result in a failure to form
an enforceable agreement. But, as our case law makes clear, misunderstandings
between the parties can be resolved depending on the evidence presented at trial
concerning the circumstances surrounding the parties’ interaction as they discussed
their arrangement. In Pope, this Court recognized that
[t]he manifestations of the parties are operative in accordance with the
meaning attached to them by one of the parties if
(a) that party does not know of any different meaning attached by
the other, and the other knows the meaning attached by the first
party; or
(b) that party has no reason to know of any different meaning
attached by the other, and the other has reason to know the
meaning attached by the first party.
Id. (citing Restatement (Second) of Contracts § 20(2) (1981)). Our discussion above
affirms the district court’s finding that Thompson described an arrangement involving
only use of the BMW, and that Pollock did not describe any other conversation in April
2007. In addition, the district court refused to accept Pollock’s assertion that Thompson
agreed to extend the profit sharing to Pollock’s daughter in the event of his death. Thus,
Pollock knew what Thompson thought he was agreeing to and Pollock did not express
any different understanding. Under Pope and the Restatement, that is sufficient to form
an enforceable agreement.
{24} We, of course, appreciate that we have diverged from the decisional path the
district court followed. Thus, we must consider whether our approach adheres to our
“right for any reason” case law. New Mexico cases make clear that “even if the district
court offered erroneous rationale for its decision, it will be affirmed if right for any
reason” so long as reliance on a new ground is not unfair to the appellant. Meiboom v.
Watson, 2000-NMSC-004, ¶ 20,
128 N.M. 536,
994 P.2d 1154. In this case, we need to
be mindful that our approach is fair to both parties given that we are presented with an
appeal and a cross-appeal.
{25} The primary source of potential unfairness when applying the right for any reason
approach involves factual issues. Appellate courts must be careful not to “delve into
fact-dependent inquires.” Id. (alteration, omission, internal quotation mark, and citation
omitted). We should not “look beyond the factual allegations raised and considered in
the district court.” TexasFile LLC v. Bd. of Cnty. Comm’rs,
2019-NMCA-038, ¶ 10,
446
P.3d 1173.
{26} We have not overstepped our bounds. The parties fully argued all of the factual
and legal issues we address—at times switching positions as they apparently deemed
their legal strategy to require. 5 And, the parties fully argued the legal effect of the
testimony provided by Pollock and Thompson in their proposed findings of fact and
conclusions of law as well as their written closing arguments to the district court. Our
resolution simply reframes and resolves the arguments in a more appropriate context.
II. The Note and the Agreement Formed One Contract
5Pollock argued to the district court that the Note and Agreement are ambiguous, whereas he argues the
opposite in the briefs to us. Similarly, Thompson argued that the documents were not to the district court,
and argues the opposite here.
{27} We agree with the district court’s analysis concerning the unitary nature of the
Note and the Agreement. It bears repeating that the two documents were negotiated,
created, and signed all in the same morning. The district court relied, in part, on an
Illinois case that stated the applicable principle succinctly. “The well-settled rule of
contract law is that when two or more written documents are executed by the same
contracting parties as part of the same transaction, those documents will be read and
considered together as one contract encompassing the entire agreement between the
parties, unless there is evidence that the parties intended for the documents to be read
separately.” Int’l Supply Co. v. Campbell, 907 N.E.2d 478, 486 (Ill. App. Ct. 2009). We
agree with the Illinois Court’s statement of the principle. We also note that New Mexico
case law agrees with this approach. Levenson v. Haynes,
1997-NMCA-020, ¶ 14,
123
N.M. 106,
934 P.2d 300; Master Builders, Inc. v. Cabbell, 1980 NMCA-178, ¶ 8,
95 N.M.
371,
622 P.2d 276. And, finally, there is no evidence contraindicating use of that
approach here.
III. Payment of the Note Terminated the Entire Contract
{28} The district court followed two independent paths to its termination decision. One
path involved a complicated exploration of the differences between debt and capital
contributions as a means of funding businesses. The district court first determined that
the two documents comprised one contract. The district then concluded that the
transaction most closely resembled debt, and as such, once the debt was satisfied, the
contract was ended. We note that neither party mentioned—much less argued—this
theory in their arguments to the district court. As such, it appears that the district court
undertook the inquiry sua sponte.
{29} The district court’s other path is more straightforward. Thompson testified that in
September 2007 his girlfriend read the Agreement and told him that it could be
interpreted to cover much more than the profits derived from just use of the BMW.
Alarmed, Thompson spoke with Pollock and asked him if he intended that broad a
reading. Pollock responded “yes.” Thompson testified that he told Pollock that was not
his understanding and asked how he could get out of the arrangement. Thompson
testified that Pollock told him he would release him from the obligation if the Note was
paid in full. Pollock provided Thompson an account number and Thompson paid the
Note in full within a few days by depositing $8,100 in the account. Pollock denied having
the conversation described by Thompson.
{30} The district court accepted Thompson’s version of the September meeting when
it concluded that
[t]he Agreement had been successfully formed and was supported by
adequate consideration and it terminated on October 3, 2007 when, in
accordance with [Pollock]’s instructions and agreement, . . . Thompson
deposited in an account owned or controlled by [Pollock] the $8,100[] still
outstanding on the . . . Note. Given that agreed termination, [Pollock] can
no longer claim any entitlement to any share of the profits of the
Company.
{31} We recognize that this language appears in the “Conclusions of Law” portion of
the district court’s order. The intermingling of findings of fact and conclusions of law is
not a preferred practice, but it is also not uncommon. This Court has observed in a few
cases that “the occasional intermixture of matters of fact and conclusions of law is not
reversible error.” Sheraden v. Black, 1988-NMCA-016, ¶ 10,
107 N.M. 76,
752 P.2d
791; see In re Estate of Hilton,
1982-NMCA-104, ¶ 17,
98 N.M. 420,
649 P.2d 488
(“Ultimate facts and conclusions of law are often indistinguishable, and their intermixture
in the court’s decision as written does not create reversible error where a fair
construction of them justifies the court’s judgment.”). In this case the combined findings
of fact and conclusions of law fit the testimony the district court heard. And, Thompson’s
testimony stands as substantial evidence supporting the district court’s decision. It
cannot be denied that Thompson’s testimony constitutes “evidence that a reasonable
mind would find adequate to support a conclusion” of law. See Weidler v. Big J. Enters.,
Inc.,
1998-NMCA-021, ¶ 30,
124 N.M. 591,
953 P.2d 1089.
{32} Pollock argues that Thompson had the burden to provide evidence that met the
“clear and convincing” rubric to adequately support the assertion that Pollock agreed to
terminate the Agreement. We are not aware of any authority in New Mexico requiring an
elevated standard of proof in this context, and Pollock does not cite to any. We thus
assume there is none. Pollock’s only citation is to 17A Am. Jur. 2d Contracts § 527
(2024). That section does not address, much less support, Pollock’s broad assertion.
17A Am. Jur. 2d Contracts § 527. In any event, we fail to see why Thompson’s
testimony does not—or could not—meet the standard. See Duke City Lumber Co. v.
Terrel, 1975-NMSC-041, ¶ 5,
88 N.M. 299,
540 P.2d 229.
{33} We recognize that termination of the Agreement as described requires “new”
consideration to support it. See Restatement (Second) of Contracts § 273 (1981).
Pollock argues that early payment in full of the Note cannot stand as consideration for
termination of the Agreement because payment simply took care of an existing
obligation. In making this argument Pollock ignores the fact that while the Note allowed
prepayment without penalty, it in no way required any early payment. By paying the
Note in full before it became due, Thompson undertook something he was not required
to do. And, the payment bestowed a real benefit on Pollock: he got his money back
early, with interest, and he was relieved of the risk he had undertaken in loaning the
money to a start-up operation with no track record. Reducing risk was an obvious and
real benefit to Pollock. As Pollock noted in his briefing to the district court, consideration
consists—or can consist—of a promise to do something that a person is under no
obligation to do. Luginbuhl v. City of Gallup, 2013-NMCA-053, ¶ 15,
302 P.3d 751.
Prepayment of the Note fits that description.
Thompson’s Cross-Appeal
{34} Thompson filed a counterclaim for malicious abuse of process as part of his
answer to Pollock’s second amended complaint. The parties agreed to bifurcate and try
the counterclaim after the trial on the second amended complaint. Nine and a half
months after entry of the order discussed above, Pollock filed a motion for summary
judgment on the counterclaim. Thompson responded within three weeks, and the district
court entered its order granting the motion five days after. The district court did not
provide any detailed explanation of its rationale in the order.
{35} On appeal, Thompson argues that summary judgment was improper because the
district court’s order following the declaratory action trial did not resolve the factual
question as to whether Pollock agreed to terminate the Agreement in September 2007.
If the district court were to find that Pollock did agree to terminate the Agreement,
Thompson argues, he would be in a strong position to prove one of the elements of his
malicious abuse of process claim: that Pollock did not have probable cause to file the
action. See Fleetwood Retail Corp. of N.M. v. LeDoux, 2007-NMSC-047, ¶¶ 12-13,
142
N.M. 150,
164 P.3d 31. 6 In response, Pollock appears to agree that the district court’s
order did not resolve the termination issue, but then—curiously—goes on to note that
the testimony on the issue at trial was essentially diametrically opposed. Comparing the
arguments would in most cases result in reversal because they highlight the existence
of factual questions. That result is not appropriate here because Pollock also argues
that under Fleetwood any recovery by Pollock provides an absolute defense on a
malicious abuse of process claim founded on lack of probable cause.
{36} In Fleetwood the Supreme Court answered two questions certified by this Court
concerning the contours of the new malicious abuse of process tort described in
Devaney v. Thriftway Marketing Corp., 1998-NMSC-001, ¶¶ 13-17, 24,
124 N.M. 512,
953 P.2d 277 (combining previously separate torts of “abuse of process” and “malicious
prosecution” and holding that the new tort could asserted as a counterclaim to the
original action). Fleetwood,
2007-NMSC-047, ¶ 19. The certified questions were:
(1) When a [malicious abuse of process] plaintiff relies on lack of probable
cause to demonstrate misuse of process, is the lack of probable cause
determined as to the underlying complaint generally, or as to each count
separately?
(2) Does a verdict for the [original proceeding plaintiff] on one or more
counts provide an absolute defense to the [malicious abuse of process]
plaintiff’s entire . . . claim even though other counts brought by the [original
proceeding plaintiff] were brought without probable cause or for an
improper purpose and even though the [malicious abuse of process]
plaintiff incurred substantial attorney’s fees in defending against the nonmeritorious claims?
6We note that this argument is contrary to Thompson’s briefing on appeal on the same subject. The
switch in position is interesting, but not dispositive of the summary judgment issue.
Id. ¶ 18.
{37} The Supreme Court concluded that lack of probable cause should be determined
taking into account the underlying complaint as a whole. Id. And, the Court also
reaffirmed that a “win” for the original proceeding plaintiff as to one or more counts of
their complaint provides an absolute defense against a claim of malicious abuse of
process. Id. ¶¶ 2, 19. As the Court phrased it, “the defendant must win the entire case
as a condition to proceeding with a malicious abuse of process counterclaim based on
lack of probable cause.” Id. ¶ 2. The Supreme Court’s ruling was based on traditional
concerns for safeguarding the right of access to the courts for honest litigants and
avoiding the multiplicity of suits that might be encouraged by a more lax rule. Id. ¶¶ 19,
21.
{38} We have affirmed the district court’s ruling based on Pollock’s argument that the
Note and the Agreement comprised one contractual arrangement that included an
aspect of profit sharing, and that Pollock was entitled to an accounting for the six month
period from April 2 to October 3, 2007. The conclusion that there was a contract
provides a complete defense under Fleetwood. 7
CONCLUSION
{39} For the reasons stated herein, we affirm the district court.
{40} IT IS SO ORDERED.
MICHAEL D. BUSTAMANTE, Judge,
retired, Sitting by designation.
WE CONCUR:
KRISTINA BOGARDUS, Judge
SHAMMARA H. HENDERSON, Judge
7We do not understand Thompson to make any argument that he founds his counterclaim on any
procedural impropriety. To the extent he might be attempting to do so, we would reject it as unpreserved
given that he did not make such an argument to the district court. See Benz, 2013-NMCA-111, ¶ 24 (“To
preserve an issue for review on appeal, it must appear that appellant fairly invoked a ruling of the trial
court on the same grounds argued in the appellate court.” (internal quotation marks and citation omitted)).
