Thi of New Mexico at Valle Norte, LLC v. Harvey ( 2013 )

FILED
United States Court of Appeals
Tenth Circuit
June 5, 2013
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
THI OF NEW MEXICO AT VALLE
NORTE, LLC, d/b/a Valle Norte
Caring Center,
Plaintiff - Appellant, No. 11-2176
(D.C. No. 1:10-CV-00873-WJ-LFG)
v. (D.N.M.)
DUSTI HARVEY; FELIZ RAEL;
HARVEY LAW FIRM, LLC,
Defendants - Appellees.
ORDER AND JUDGMENT *
Before LUCERO and HOLMES, Circuit Judges, and BRIMMER, District
Judge. **
THI of New Mexico at Valle Norte, LLC (“Valle Norte”) appeals from the
district court’s grant of summary judgment in favor of Dusti Harvey, Feliz Rael,
and the Harvey Law Firm, LLC (collectively, the “Harvey Firm”), on Valle
Norte’s malicious-abuse-of-process and attorney-deceit claims. This lawsuit
*
This order is not binding precedent, except under the doctrines of law
of the case, res judicata, and collateral estoppel. It may be cited, however, for its
persuasive value consistent with Federal Rule of Appellate Procedure 32.1 and
Tenth Circuit Rule 32.1.
**
The Honorable Philip A. Brimmer, United States District Judge for
the District of Colorado, sitting by designation.
arises out of an earlier action (the “Tracy lawsuit”) that the Harvey Firm brought
against Valle Norte on behalf of its then client, James Tracy. After prevailing at
the summary judgment stage in the Tracy lawsuit, Valle Norte initiated this action
against the Harvey Firm, bringing claims of malicious abuse of process, attorney
deceit, and civil conspiracy, all under New Mexico law. After discovery, the
district court granted the Harvey Firm’s motion for summary judgment as to all
three of Valle Norte’s claims. Valle Norte appeals, challenging the court’s
rulings only regarding its first two claims: malicious abuse of process and
attorney deceit. We affirm the district court’s grant of summary judgment in
favor of the Harvey Firm.
I
In April 2005, Mr. Tracy was a resident of Valle Norte Caring Center, a
long-term nursing facility that was owned and operated by Valle Norte. On the
morning of April 22, 2005, Mr. Tracy awoke with priapism—a painful, non-
sexual erection of the penis lasting more than four hours. Mr. Tracy eventually
received two different surgeries, at two different hospitals on April 22 and 23, to
treat his priapism. Once he was stabilized after the second surgery, Mr. Tracy
returned to Valle Norte, where he remained until the completion of antibiotic
therapy on May 1, 2005. While Mr. Tracy was at Valle Norte after his surgery,
Valle Norte provided him little assistance and guidance regarding significant
matters relating to his recovery. More specifically, Valle Norte expected Mr.
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Tracy to cover his own sutures, and provided him gauze for this purpose. And,
yet, the nurses there did not give Mr. Tracy instructions on how to dispose of the
gauze, monitor the surgical site, or address potential issues of discharge and
infection.
In initial discussions, Mr. Tracy told the Harvey Firm that he had suffered a
priapism while at Valle Norte, Valle Norte had delayed in treating him, he had
received two surgeries to treat the priapism, and as a result, he “had suffered an
‘amputation’ or ‘auto-amputation’ of his penis.” Aplt. App. at 80 (Aff. of Dusti
Harvey, dated Feb. 15, 2011). Based on this information, the Harvey Firm hired a
nurse-consultant to review Mr. Tracy’s medical files. The nurse-consultant’s
report indicated, inter alia, several concerns regarding Valle Norte’s care of Mr.
Tracy and its keeping of related medical records. After receiving the nurse-
consultant’s report, the Harvey Firm filed the Tracy lawsuit in June 2007. The
complaint in the Tracy lawsuit alleged that:
While in the care of [Valle Norte], Mr. Tracy suffered injuries
and harm including, but not limited to, the following:
a. severe delay in treatment for priapism resulting in a
loss of his penis;
b. failure to timely monitor penile wound for signs of
infection;
c. failure to timely complete dressing change of his
Percutaneously Inserted Central Catheter;
d. pain and suffering;
e. mental anguish; and
f. humiliation.
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Id. at 63 (Compl. for Negligence, filed June 18, 2007).
While it is now clear that part of the allegation in “a.”—regarding Mr.
Tracy’s loss of his penis—was not factually accurate (that is, not supported by the
facts), Ms. Harvey stated in an affidavit that the Harvey Firm’s “gradual
realization that [it] lacked actual documentation of [Mr. Tracy’s] ‘loss’” did not
occur until sometime during the spring of 2008. Id. at 80. As Ms. Harvey further
stated, however, at the time the Harvey Firm filed the complaint and throughout
the pendency of the Tracy lawsuit, she “had a good faith belief, based upon the
evaluation and opinion of an expert medical consultant, that the defendant nursing
home had been negligent in its care and treatment of Mr. Tracy in a number of
ways, proximately causing serious personal injuries, damages, and pain and
suffering to Mr. Tracy.” Id. at 81.
At a mediation conference in April 2008, the Harvey Firm asked for an
$850,000 settlement, which included damages for the loss of Mr. Tracy’s penis.
See id. at 505 (Letter from Dusti Harvey to William C. Madison, dated Apr. 7,
2008). However, Valle Norte refused the offer. Around this time, the Harvey
Firm learned that Mr. Tracy was dying of unrelated medical conditions and
subsequently decided to withdraw from the lawsuit. The state district court
granted the Harvey Firm’s motion to withdraw, and later entered an order
granting summary judgment in favor of Valle Norte, dismissing the complaint
with prejudice.
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Valle Norte filed the instant action in the United States District Court for
the District of New Mexico against the Harvey Firm, asserting claims of
malicious abuse of process, attorney deceit, and civil conspiracy, all under New
Mexico law, in relation to the Harvey Firm’s filing of, and participation in, the
Tracy lawsuit. After discovery, the district court granted summary judgment in
favor of the Harvey Firm.
With respect to Valle Norte’s malicious-abuse-of-process claim, the district
court found that even though the complaint could have been better drafted, the
underlying facts were enough to allege negligence against Valle Norte and thus
there was probable cause to bring the underlying suit. Additionally, the court
found that there were no procedural improprieties that would support a malicious-
abuse-of-process claim because Valle Norte only alleged one unfounded claim,
not a multitude of unfounded claims, and the misrepresentations that the Harvey
Firm made during settlement negotiations did not amount to extortion or fraud.
Finally, with respect to Valle Norte’s attorney-deceit claim, the district court
found that the claim must fail because recovery under the relevant statute required
a showing of fraud and Valle Norte had not presented enough evidence to support
such a showing. The court entered judgment in favor of the Harvey Firm, and this
appeal followed.
II
Valle Norte raises three issues on appeal. First, it alleges that the district
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court misinterpreted New Mexico law regarding the requisite proof necessary to
succeed on a malicious-abuse-of-process claim. Second, Valle Norte argues that
the district court misinterpreted New Mexico’s attorney-deceit statute and
violated Federal Rule of Civil Procedure 56(f) when it failed to give Valle Norte a
chance to respond to the district court’s interpretation of the statute. Finally,
Valle Norte asserts that the district court improperly credited testimony and
ignored other uncontested evidence regarding the Harvey Firm’s pre-filing
investigation and reasonable beliefs. Because Valle Norte’s first and third
arguments address the malicious-abuse-of-process claim, we turn first to those
two arguments, and then address Valle Norte’s arguments regarding its attorney-
deceit claim.
“In diversity cases, the laws of the forum state govern our analysis of the
underlying claims, while federal law determines the propriety of the district
court’s summary judgment.” Morris v. Travelers Indem. Co. of Am., 518 F.3d
755, 758 (10th Cir. 2008). “We review the district court’s determinations of state
law de novo.” Ayala v. United States, 49 F.3d 607, 611 (10th Cir. 1995). In
ascertaining the laws of the forum state, while we are not bound by the decisions
of New Mexico’s intermediate court, its considered judgments are not to be
disregarded unless we are persuaded by other means that the New Mexico
Supreme Court would reach a different outcome. See Rancho Lobo, Ltd. v.
Devargas, 303 F.3d 1195, 1202 n.2 (10th Cir. 2002) (“[W]here an intermediate
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appellate state court rests its considered judgment upon the rule of law which it
announces, that . . . is a datum for ascertaining state law which is not to be
disregarded by a federal court unless it is convinced by other persuasive data that
the highest court of the state would decide otherwise.” (quoting Webco Indus.,
Inc. v. Thermatool Corp., 278 F.3d 1120, 1132 (10th Cir. 2002)) (internal
quotation marks omitted)).
“We review a district court’s grant of summary judgment de novo, applying
the same standard as the district court.” Helm v. Kansas, 656 F.3d 1277, 1284
(10th Cir. 2011). Namely, summary judgment is appropriate “if the movant
shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “In reviewing a
motion for summary judgment, we consider the evidence in the light most
favorable to the non-moving party.” E.E.O.C. v. C.R. England, Inc., 644 F.3d
1028, 1037 (10th Cir. 2011) (quoting Duvall v. Ga.-Pac. Consumer Prods., L.P.,
607 F.3d 1255, 1259 (10th Cir. 2010)) (internal quotation marks omitted).
III
We begin by discussing the general contours and purposes of New
Mexico’s malicious-abuse-of-process tort. New Mexico law recognizes this tort
in order “to discourage the misuse of [its] judicial system.” LensCrafters, Inc. v.
Kehoe, 282 P.3d 758, 765 (N.M. 2012). “[T]he use of process for an illegitimate
purpose forms the basis of the tort.” Durham v. Guest, 204 P.3d 19, 26–27 (N.M.
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2009). However, the “tort is disfavored in the law [b]ecause of the potential
chilling effect on the right of access to the courts.” LensCrafters, 282 P.3d at
765–66 (alteration in original) (quoting Fleetwood Retail Corp. of N.M. v.
LeDoux, 164 P.3d 31, 37 (N.M. 2007)) (internal quotation marks omitted). As the
New Mexico Supreme Court noted in Fleetwood, “the litigation process must
allow plaintiffs room to frame the issues and make changes in their approach
when necessary.” 164 P.3d at 37. Indeed, the court
decline[d] to interpret [its past precedent] in a manner that would
expose plaintiffs, who are subject to statutes of limitations and
have not had the benefit of discovery when deciding what claims
to pursue, to malicious abuse of process attacks based on lack of
probable cause if it is later determined that one particular claim
of several was not supported.
Id.
To succeed on a malicious-abuse-of-process claim, a plaintiff must
establish three elements: “(1) the use of process in a judicial proceeding that
would be improper in the regular prosecution or defense of a claim or charge;
(2) a primary motive in the use of process to accomplish an illegitimate end; and
(3) damages.” LensCrafters, 282 P.3d at 766 (quoting Durham, 204 P.3d at 26)
(internal quotation marks omitted). In ruling against Valle Norte, the district
court focused its analysis on the first element—that is, the improper use of
process. Because we ultimately agree with the district court, and conclude that
Valle Norte’s failure to establish the first element is determinative, our analysis
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of its malicious-abuse-of-process claim need not proceed further.
“An improper use of process may be shown by (1) filing a complaint
without probable cause, or (2) ‘an irregularity or impropriety suggesting
extortion, delay, or harassment[,]’ or other conduct formerly actionable under the
tort of abuse of process.” Durham, 204 P.3d at 26 (alteration in original) (quoting
Fleetwood, 164 P.3d at 35). Valle Norte made arguments regarding both prongs
of this element and we address each prong in reverse order, as addressed by Valle
Norte. In doing so, we are mindful that “the two types of misuse of process—lack
of probable cause and procedural impropriety—require fundamentally different
approaches.” Fleetwood, 164 P.3d at 36.
A
In general, a legally sufficient procedural irregularity or impropriety can be
established by showing “‘an irregularity or impropriety suggesting extortion,
delay, or harassment[,]’ or other conduct formerly actionable under the tort of
abuse of process.” Durham, 204 P.3d at 26 (alteration in original) (quoting
Fleetwood, 164 P.3d at 35); see also DeVaney v. Thriftway Marketing Corp., 953
P.2d 277, 287 (N.M. 1997) (noting its earlier list of forms of abuse of process that
included “excessive execution on a judgment; attachment on property other than
that involved in the litigation or in an excessive amount; oppressive conduct in
connection with the arrest of a person or the seizure of property, such as illegal
detention and conversion of personal property pending suit; [and] extortion of
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excessive sums of money” (quoting Farmers Gin Co. v. Ward, 389 P.2d 9, 11
(N.M. 1964)) (internal quotation marks omitted)), overruled on other grounds by
Durham, 204 P.3d 19, abrogated on other grounds by Fleetwood, 164 P.3d 31.
Stated succinctly, “[a] use of process is deemed to be irregular or improper if it
(1) involves a procedural irregularity or a misuse of procedural devices such as
discovery, subpoenas, and attachments, or (2) indicates the wrongful use of
proceedings, such as an extortion attempt.” Durham, 204 P.3d at 26.
Valle Norte, however, has not alleged the misuse of any procedural devices
such as discovery, subpoenas, or attachments. Instead, its claim is focused on the
Harvey Firm’s allegedly wrongful use of proceedings, as allegedly evidenced by
the Harvey Firm’s proposal of an $850,000 settlement agreement in the mediation
conference and related failure to provide, during the mediation, a photograph
showing that Mr. Tracy had not lost his penis. In addition, in support of its claim,
Valle Norte points to the Harvey Firm’s alleged failure to disclose one of Mr.
Tracy’s medical reports.
But, as the Harvey Firm correctly argues, Valle Norte cannot rely on
mediation-related communications and non-disclosures as support for its claims
because the New Mexico Mediation Procedures Act (the “MPA”), N.M. Stat. Ann.
§§ 44-7B-1 to 44-7B-6 (2007), prohibits the use of statements made in connection
to the mediation—namely, the $850,000 settlement offer and non-disclosure of
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the photograph. 1 In short, we conclude that, as it relates to the settlement-related
communications, i.e., the “mediation communications,” we cannot consider these
communications as evidence before us.
Valle Norte does not contest that the act applies as a general matter and has
waived any argument that the MPA should not operate to exclude these statements
from our consideration. Moreover, even if we did not apply waiver, the Harvey
Firm wins on the merits of their arguments that such evidence is not admissible.
And, once the mediation communications are excluded from our consideration,
the other evidence offered by Valle Norte is not enough to establish a malicious-
abuse-of-process claim given the tort’s narrow construction. See Fleetwood, 164
F.3d at 37.
Under the MPA, unless one of the exceptions applies, “all mediation
communications are confidential, and not subject to disclosure and shall not be
used as evidence in any proceeding.” N.M. Stat. Ann. § 44-7B-4. The MPA
defines “mediation communication” to mean “a statement, whether oral or in a
record or verbal or nonverbal, that . . . is made for purposes of considering,
1
The district court assumed, without deciding, that it could consider
what came out of the mediation, because it found that even with such evidence
Valle Norte’s claims lacked merit. However, because we may affirm on any
ground supported by the record, we address the propriety of using the evidence
instead of assuming its admissibility. See D.A. Osguthorpe Family P’ship v. ASC
Utah, Inc., 705 F.3d 1223, 1231 (10th Cir. 2013); Wells v. City & Cnty. of
Denver, 257 F.3d 1132, 1149–50 (10th Cir. 2001).
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conducting, participating in, initiating, continuing or reconvening a mediation.”
Id. § 44-7B-2(B). The Harvey Firm argues that the statements that it made in
relation to the mediation—including its nonverbal statements that are evidenced
by its failure to provide the photograph—constitute “mediation communications”
and, as such, are not admissible.
In response, Valle Norte makes no arguments contesting the applicability of
section 44-7B-4 of the MPA to prohibit the use of these statements as evidence
before us. Indeed, in its briefing, Valle Norte makes no explicit arguments
regarding the MPA, choosing instead to attempt to incorporate by reference its
briefing before the district court. See Aplt. Reply Br. at 2 n.2 (“HLF’s assertion
that it should be permitted to bury some of its misconduct beneath New Mexico’s
mediation privilege is similarly unsupportable for the reasons Valle Norte
advanced below.”). However, it is well established that our court does not
approve of the practice of referring on appeal to previous district court filings
instead of setting forth arguments in one’s appellate briefing, and we are under no
obligation to consider such arguments. See In re Antrobus, 563 F.3d 1092, 1097
(10th Cir. 2009) (“[W]e have disapproved of parties adopting their previous
filings in lieu of fully setting forth their argument before this court.”); Concrete
Works of Colo., Inc. v. City & Cnty. of Denver, 321 F.3d 950, 979 n.14 (10th Cir.
2003) (“This court is under no obligation to consider arguments not fully set forth
in a party’s appellate brief, including arguments incorporated by reference to
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prior pleadings or other materials.”); see also 10th Cir. R. 28.4 (“Incorporating by
reference portions of lower court or agency briefs or pleadings is disapproved
. . . .”).
The appellate process is a winnowing process whereby the parties focus on
the arguments that they view as more likely to prevail. Cf. United States v.
Challoner, 583 F.3d 745, 749 (10th Cir. 2009) (“[The] process of winnowing out
weaker arguments on appeal and focusing on those more likely to prevail, . . . is
the hallmark of effective appellate advocacy.” (alteration in original) (quoting
Smith v. Murray, 477 U.S. 527, 536 (1986)) (internal quotation marks omitted)).
As we recently explained,
[u]nder Rule 28(a)(9)(A) of the Federal Rules of Appellate
Procedure, an appellant must present in his brief his ‘contentions
and reasons for them, with citations to the authorities and parts
of the record on which the appellant relies.’ Further, parties
appearing before this court cannot satisfy Rule 28 by
incorporating their claims by reference to . . . records from the
court below.
United States v. Patterson, 713 F.3d 1237, 1250 (10th Cir. 2013). “[A]llowing
litigants to adopt district court filings would provide an effective means of
circumventing the page limitations on briefs set forth in the appellate rules and
unnecessarily complicate the task of an appellate judge.” Id. (quoting Gaines-
Tabb v. ICI Explosives, USA, Inc., 160 F.3d 613, 624 (10th Cir. 1998)) (internal
quotation marks omitted). We conclude that through its inadequate briefing,
Valle Norte has waived any argument that the MPA should not preclude the
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admission of the mediation communications. See Gaines-Tabb, 160 F.3d at 624(“[W]e adhere to our rule that arguments not set forth fully in the opening brief
are waived . . . .” (citations omitted)); cf. United States v. Cooper, 654 F.3d 1104,
1128 (10th Cir. 2011) (“It is well-settled that ‘[a]rguments inadequately briefed in
the opening brief are waived.’” (alteration in original) (quoting Adler v. Wal-Mart
Stores, Inc., 144 F.3d 664, 679 (10th Cir. 1998))).
Moreover, even were we to not treat Valle Norte’s lack of response as a
waiver, the Harvey Firm still has the better of the argument. The parties do not
dispute the general applicability of the MPA to their mediation. The discussions
regarding the settlement amount and the non-disclosure of the photograph in
connection with the mediation, see N.M. Stat. Ann. § 44-7B-2(B) (including
“nonverbal” statements in the definition of “mediation communication”),
constitute “mediation communications” and are thus protected by the MPA.
Finally, none of the exceptions that make certain mediation communications
admissible apply. See id. § 44-7B-5 (listing exceptions).
Once the mediation communication evidence is properly excluded from our
consideration, the only evidence of procedural impropriety that Valle Norte sets
forth is the Harvey Firm’s alleged failure to disclose one of Mr. Tracy’s medical
reports. While we do not condone any such failure, non-disclosure of a medical
report is not the kind of “procedural irregularity,” “misuse of a procedural
device,” or the “wrongful use of proceedings” contemplated by DeVaney,
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Fleetwood, and Durham, especially given the narrow construction of the
“disfavored” tort. Cf. LensCrafters, 282 P.3d at 765–66 (“The tort is ‘disfavored
in the law [b]ecause of the potential chilling effect on the right of access to the
courts.’” (alteration in original) (quoting Fleetwood, 164 P.3d at 37) (internal
quotation marks omitted)). We therefore conclude that, standing alone, the
alleged failure to disclose one of Mr. Tracy’s medical reports does not amount to
a procedural impropriety of the level cognizable in a malicious-abuse-of-process
claim.
In sum, the question before the district court was whether Valle Norte
could establish a procedural impropriety that would be legally sufficient to satisfy
the improper-use-of-process element, and, while we reach the result by means of a
different path than the district court, we conclude that it correctly determined that
Valle Norte could not.
B
We now turn to Valle Norte’s arguments regarding the second manner in
which it tries to show an improper use of process by the Harvey Firm—viz.,
“filing a complaint without probable cause.” Durham, 204 P.3d at 26. These
arguments address the Harvey Firm’s pre-filing investigation, reasonable belief,
and probable cause. As set out above, even if malicious-abuse-of-prosecution
plaintiffs cannot establish a procedural impropriety, they may still succeed on
their claim if they can establish an absence of probable cause. In determining
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whether the Harvey Firm had probable cause, we ask “whether [they] had a
reasonable belief, founded on known facts established after a reasonable
pre-filing investigation, that a claim could be established to the satisfaction of a
court or a jury.” Guest v. Berardinelli, 195 P.3d 353, 357 (N.M. Ct. App. 2008).
In making this determination, “[w]e first inquire whether Defendants have made a
prima facie showing that they performed a reasonable pre-filing inquiry.” Id. If
we find that the Harvey Firm has made such a showing, we then ask “whether
[they] have made a prima facie showing that the knowledge arising from their
pre-filing inquiry supported a reasonable belief that they had grounds to bring
their claims against [Valle Norte].” Id. In the end, we conclude that the Harvey
Firm’s pre-filing inquiry—notably, the nurse-consultant’s report—gave them
knowledge that supported such a reasonable belief.
Valle Norte attempts to demonstrate that the Harvey Firm lacked probable
cause to file the Tracy suit by focusing on the nurse-consultant’s report and the
concerns it raised. Specifically, Valle Norte asserts that “[t]he district court
erroneously credited as uncontested Defendants’ testimony that they read [the]
nurse-consultant’s report and that it provided a basis, without the need for further
investigation, to sue Valle Norte for negligence.” Aplt. Opening Br. at 41.
Similarly, Valle Norte argues that the district court failed to draw all reasonable
inferences in favor of the non-movant, Valle Norte, when it credited Ms. Harvey
and Ms. Rael’s sworn statements that they had read the nurse-consultant’s report
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prior to filing the Tracy Lawsuit. Finally, Valle Norte makes much of the fact
that medical records, allegedly in the Harvey Firm’s possession prior to the filing
of the suit, indicated that Mr. Tracy had not suffered the loss of his penis and that
the nurse’s report alerted the Harvey Firm to a lack of evidence regarding
causation.
We agree with the district court that “the nurse-consultant’s report obtained
by [the Harvey Firm] outlined the direct evidence of negligence in the nursing
home.” 2 Aplt. App. at 758 (Mem. Op. & Order Granting Defs.’ Mot. for Summ.
J., filed Aug. 4, 2011). Keeping in mind that “[p]robable cause does not require
certainty,” Guest, 195 P.3d at 357 (alteration in original) (quoting S. Farm
Bureau Cas. Co. v. Hiner, 117 P.3d 960, 965–66 (N.M. Ct. App. 2005)) (internal
quotation marks omitted), we note that the nurse-consultant’s report established
several undisputed facts that support a reasonable belief that there were grounds
for a negligence claim against Valle Norte.
First, as the report correctly indicated, Mr. Tracy had a non-sexual erection
that lasted for more than four hours before Valle Norte provided him with
emergency medical care. Second, the nurse-consultant noted several issues with
2
Valle Norte’s challenge to the reasonableness of the Harvey Firm’s
pre-filing inquiry is intertwined with its challenges to the district court’s finding
that the nurse-consultant’s report supported a reasonable belief of probable cause.
We therefore consider the arguments together, and because we agree with the
district court’s finding regarding probable cause, we also conclude that the pre-
filing inquiry that led to that report was reasonable.
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Valle Norte’s records, including a lack of nursing care plans and a “pattern of
omission[s].” Aplt. App. at 116 (Case ReportBook, dated Feb. 19, 2007).
Finally, Valle Norte did not assist Mr. Tracy in his recovery from the priapism
and related surgeries. In sum, the nurse-consultant’s report established facts that
supported the vast majority of the injuries alleged in the complaint—e.g., failure
to timely monitor the penile wound, failure to timely complete dressing changes,
pain and suffering, mental anguish, and humiliation—and thus the reasonable pre-
filing investigation supported a reasonable belief that the negligence claim “could
be established to the satisfaction of a court or a jury.” Guest, 195 P.3d at 357.
Valle Norte argues that the nurse-consultant’s report was “based on
incomplete information and . . . raised ‘red flags’ about Mr. Tracy’s . . . story.”
Aplt. Opening Br. at 42. However, the “incomplete information” and “red flags”
relate to whether Mr. Tracy actually “lost” his penis, not to the general negligence
alleged against Valle Norte, and crucially, “lack of probable cause is not a
claim-by-claim inquiry, but, rather, is determined as to the lawsuit in its entirety.”
Fleetwood, 164 P.3d at 37. Any “incomplete information” or “red flags” do not
discount the undisputed facts, noted above, that the nurse-consultant’s report
established. Cf. Guest, 195 P.3d at 360 (“We hold that the determination by a
jury of any of the above facts would not negate Defendants’ probable cause to file
suit based upon the remaining undisputed facts before them at the time of
filing.”). In other words, these alleged flaws in the nurse-consultant’s report do
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not discount the general negligence that was clearly outlined by the report.
Apparent lack of probable cause in relation to the allegation that Mr. Tracy
suffered the loss of his penis—only one allegation among many lodged against
Valle Norte in the complaint—is not enough to subject the Harvey Firm to
liability on a claim for malicious abuse of prosecution.
Moreover, Valle Norte presents no actual evidence that the Harvey Firm
did not rely on the nurse-consultant’s report—a fact that both Ms. Harvey and Ms.
Rael swore to under oath, and that is supported by a pre-filing email from the
nurse-consultant, in which she sets out, in part, her belief that Valle Norte was
negligent. See Aplt. App. at 89 (Email from Rose Marie Harvey to Julie Canton,
et al., dated Mar. 9, 2007) (requesting records dating from the period after Mr.
Tracy was discharged from Valle Norte and explaining ways in which Valle Norte
was negligent).
Instead of directly challenging the Harvey Firm’s evidence, Valle Norte
presents us with circumstantial evidence that at most supports an inference that
the Harvey Firm was at times careless in reviewing documents. For example,
Valle Norte points us to an email from April 2008, almost a year after the case
was filed, with the subject “Tracy - pages from document production,” where Ms.
Rael commented to two members of the Harvey Firm who were working on the
case, “We get good stuff when we actually review the documents!” Id. at 620
(Email from Kim Hagan to Feliz Rael & Jennifer Foote, dated Apr. 28, 2008)
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(emphasis added). But this comment (which may have been a poor attempt at
humor), and the others like it that Valle Norte sets out, do not challenge the sworn
statements of the Harvey Firm’s lawyers that they relied on the nurse-consultant’s
report in filing the complaint in the Tracy lawsuit. Cf. Hernandez v. Valley View
Hosp. Ass’n, 684 F.3d 950, 956 n.3 (10th Cir. 2012) (rejecting the argument that
affidavits “should have been disregarded . . . as ‘sham affidavits’” because, to be
disregarded as such, “an affidavit must contradict prior sworn statements,” and
the affidavits at issue “did not contradict [the affiant’s] testimony”). All of the
Harvey Firm’s comments set out by Valle Norte were made nine months after
filing and in relation to documents that the Harvey Firm received after filing. 3
Given the subject matter and the timing of these comments, this evidence is not
responsive to the sworn statements of Ms. Harvey and Ms. Rael that the Harvey
Firm had a good faith belief, at the time of filing, that Valle Norte had been
3
We also note that—while the carelessness of the Harvey Firm is not
at issue here and thus any disputes of fact regarding the Harvey Firm’s
carelessness are not material—even the inference of carelessness is refuted by
comments in emails circulated among members of the Harvey Firm’s legal team
both before and after the filing of the complaint in the Tracy lawsuit.
Specifically, pre-filing emails indicate a knowledge of the medical records and
the nurse-consultant’s opinions. See Aplt. App. at 87 (Email from Dusti Harvey
to Julie Canton & Rose Marie Harvey, dated Mar. 2, 2007) (asking Ms. Canton to
send to the nurse-consultant the medical records that Ms. Canton describes and
which Ms. Canton had just received from Mr. Tracy and his father); id. at 89.
And in a post-filing email from early April 2008—a few weeks before the emails
that Valle Norte highlights were sent—Ms. Hagan referred to her recollection “of
the [medical records] we have.” Id. at 94 (Email from Kim Hagan to Feliz Rael,
Julie Canton, & Dusti Harvey, dated Apr. 1, 2008).
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negligent and that this belief was based on the nurse-consultant’s report. See
Aplt. App. at 81 (“At the time of the filing of the complaint in the [Tracy]
Lawsuit, . . . I had a good faith belief, based upon the evaluation and opinion of
an expert medical consultant, that [Valle Norte] had been negligent . . . .”); id. at
179 (Aff. of Feliz Angelica Rael, dated Feb. 9, 2011) (same). Thus, the
comments identified by Valle Norte do not create an actual dispute as to the
veracity of the sworn statements by members of the Harvey Firm, which are also
supported by the internal emails with the nurse-consultant.
In short, Valle Norte’s arguments fail under our necessarily narrow
construction of New Mexico’s malicious-abuse-of-process tort. See Fleetwood,
164 P.3d at 37 (“[T]he malicious abuse of process tort [must] be construed
narrowly in favor of the right of access to the courts.”). The district court was
correct in finding that the Harvey Firm had conducted a reasonable pre-filing
inquiry and that the inquiry “supported a reasonable belief that they had grounds
to bring their claims against [Valle Norte].” Guest, 195 P.3d at 357. Because the
district court—as discussed above—was also correct in finding that there were no
procedural improprieties, the district court did not err in dismissing Valle Norte’s
malicious-abuse-of-process claim. Accordingly, we conclude that Valle Norte did
not meet either prong necessary to establish an improper use of process by the
Harvey Firm and thus could not have shown a malicious abuse of process.
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IV
We now turn to Valle Norte’s attorney-deceit claim, which the district court
dismissed after finding that the attorney-deceit statute did not create a separate
cause of action and that Valle Norte had not established the requisite underlying
claim of common law fraud. Under New Mexico law, “[i]f an attorney is guilty
of deceit or collusion or consents thereto with intent to deceive the court, judge or
party, he shall forfeit to the injured party, treble damages to be recovered in a
civil action.” N.M. Stat. Ann. § 36-2-17. There is a paucity of New Mexico case
law interpreting this statute. 4 In response to the parties’ arguments urging the
district court to adopt alternatively restrictive and broad readings of the statute,
the district court found that neither side’s interpretation of the statute was correct
and instead found that “the attorney deceit statute is not an independent cause of
action, but merely provides treble damages where an attorney has committed
fraud otherwise actionable under the common law or statute.” Aplt. App. at 766.
The district court then relied on its earlier finding that Valle Norte had not shown
4
While one New Mexico Supreme Court case, Bennett v. Kisluk, 814
P.2d 89 (N.M. 1991), could be read to suggest that underlying claims are what
trigger or “warrant[]” treble damages for attorney deceit, see Bennett, 814 P.2d at
89 (“[Plaintiff] sued her former attorney . . . alleging malpractice, intentional
infliction of emotional suffering, and misrepresentations that warranted treble
damages under [§ 36-2-17].” (emphasis added)), this does not answer the question
regarding whether a plaintiff must rely on such underlying claims and, relatedly,
whether a plaintiff’s claim for treble damages must fail if (as here) the plaintiff
cannot establish an underlying claim.
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that the Harvey Firm committed fraud, and thus held that Valle Norte’s attorney-
deceit claim failed as a matter of law.
Valle Norte argues that we should reverse the district court for three
reasons: (1) the district court’s interpretation is contrary to the statute’s plain
meaning and improperly conflates “deceit” and “fraud”; (2) the district court’s
interpretation is contrary to “persuasive authority from New York”; and (3) the
district court never gave Valle Norte the opportunity to respond to its
interpretation, in contravention of Federal Rule of Civil Procedure 56(f). Aplt.
Opening Br. at 35. After looking to New Mexico law and interpreting the
attorney-deceit statute, we address Valle Norte’s first two arguments together, and
then address Valle Norte’s contention that the district court’s decision was made
in violation of Rule 56(f).
A
“If the state supreme court has not interpreted a provision of the state’s
statutory code, the federal court ‘must predict how the court would interpret the
code in light of [state] appellate court opinions, decisions from other
jurisdictions, statutes, and treatises.’” United States v. DeGasso, 369 F.3d 1139,
1145 (10th Cir. 2004) (alteration in original) (quoting United States v. Colin, 314
F.3d 439, 443 (9th Cir. 2002)). In making this prediction, “we are bound to
follow rules of statutory construction . . . embraced by the [New Mexico]
judiciary.” Id. at 1145–46. In New Mexico, “[t]he guiding principle of statutory
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construction is that a statute should be interpreted in a manner consistent with
legislative intent. To determine legislative intent, we look not only to the
language used in the statute, but also to the purpose to be achieved and the wrong
to be remedied.” Hovet v. Allstate Ins. Co., 89 P.3d 69, 72 (N.M. 2004) (citation
omitted).
However, neither the language of the statute, the purpose to be achieved,
nor the wrong to be remedied aids us in our interpretation. The language of the
attorney-deceit statute, “If an attorney is guilty of deceit or collusion or consents
thereto with intent to deceive . . . he shall forfeit to the injured party[] treble
damages,” N.M. Stat. Ann. § 36-2-17, does not answer the questions before
us—namely, whether the statute creates a private right of action for deceit, and, if
it does, whether one must prove common law fraud or deceit before being able to
recover under the statute. The apparent purpose of Article 2, the article of the
New Mexico Code in which the statute is found, is the regulation of attorneys.
See State Bar v. Guardian Abstract & Title Co., 575 P.2d 943, 947 (N.M. 1978)
(“The close regulation of those who practice law is to protect the unwary and the
uninformed from injury at the hands of persons unskilled or unlearned in the
law.”); cf. Hovet, 89 P.3d at 73 (determining what article the statute at issue was
part of and then looking to the purpose of that article to inform the meaning of the
statute at issue). But the fact that the purpose of the statute is to regulate
attorneys sheds little light on whether the legislature meant to create a new,
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distinct cause of action as part of that regulation or whether it only meant to
establish a treble-damages remedy for claims of fraud and deceit that could be
established against attorneys under the common law. Finally, “the wrong to be
remedied,” Hovet, 89 P.3d at 72, does not further our inquiry either. The wrong
here is deceit or collusion on the part of an attorney. See N.M. Stat. Ann.
§ 36-2-17. However, this wrong does not provide us with guidance regarding the
questions before us (that is, whether the statute creates a private right of action
for deceit, and, if it does, whether one must prove common law fraud or deceit
before being able to recover under the statute).
Recognizing the lack of guidance in New Mexico case law, Valle Norte
urged the district court, and now urges us, to follow New York’s approach to its
similar statute. Specifically, Valle Norte urges us to adopt the view articulated in
Amalfitano v. Rosenberg, 903 N.E.2d 265 (N.Y. 2009). In Amalfitano, New
York’s highest court interpreted New York’s similar attorney-deceit statute as
providing for a private cause of action without proof of common law fraud:
The operative language at issue—“guilty of any deceit”—focuses
on the attorney’s intent to deceive, not the deceit’s success. . . .
[T]o limit forfeiture under [the statute] to successful deceits
would run counter to the statute’s evident intent to enforce an
attorney’s special obligation to protect the integrity of the courts
and foster their truth-seeking function.
Id. at 268–69. But as the district court recognized here, Amalfitano “took the
attorney deceit doctrine in an entirely new direction”—one of expanding the
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attorney-deceit statute. Aplt. App. at 765; see Alex B. Long, Attorney Deceit
Statutes: Promoting Professionalism Through Criminal Prosecutions and Treble
Damages, 44 U.C. Davis L. Rev. 413, 449 (2010) (noting that “nearly all courts
have interpreted the statutory language [in their respective attorney-deceit
statutes] in a fairly restrictive fashion . . . [but] in 2009, . . . New York[] strayed
from the herd and interpreted its attorney deceit statute in a manner more likely to
lead to attorney liability”).
We believe that New Mexico would not likely traverse the same road as
New York. Instead, given the emphasis that the New Mexico Supreme Court has
placed on the “right of access to the courts,” Fleetwood, 164 P.3d at 37, it is
likely to read its own attorney-deceit statute restrictively. Cf. Richter v. Van
Amberg, 97 F. Supp. 2d 1255, 1260 (D.N.M. 2000) (“In my view, New Mexico
would give effect to the limitation contained in the statute’s language and follow
the majority view [that the attorney-deceit statute applies only in the context of
judicial proceedings].”). Thus, it is more likely that New Mexico would follow
the jurisdictions that have limited the reach of such statutes by holding that
section 36-2-17 does not create a new cause of action but instead provides a
treble-damages remedy for claims that can be established under common law
fraud. See, e.g., Bennett v. Jones, Waldo, Holbrook & McDonough, 70 P.3d 17,
33 (Utah 2003) (holding that its similar statute did “not create a separate and
distinct cause of action, but rather merely provides for recovery of treble damages
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for a cause of action for the common law tort of deceit in a civil action”); Loomis
v. Ameritech Corp., 764 N.E.2d 658, 666–67 (Ind. Ct. App. 2002) (“[T]he
attorney deceit statute ‘does not create a new cause of action but, instead, trebles
the damages recoverable in an action for deceit.’” (quoting Anderson v. Anderson,
399 N.E.2d 391, 403 (Ind. Ct. App. 1979))); see also Long, supra, at 449. Thus,
we agree with the district court’s reading of the statute and find that New
Mexico’s attorney deceit statute does not create an independent cause of action.
Moreover, we are not convinced by Valle Norte’s arguments that deceit in
this context is distinct from common law fraud. 5 These arguments focus on the
observation that fraud and deceit are sometimes used in the disjunctive in “other
New Mexico statutes and rules governing lawyer conduct.” Aplt. Opening Br.
at 36. However, these arguments ignore the New Mexico tort law referring to the
tort of common law fraud as “the tort of fraud or deceit.” See Sims v. Craig, 627
P.2d 875, 877 (N.M. 1981) (quoting Maxey v. Quintana, 499 P.2d 356, 359 (N.M.
Ct. App. 1972)) (internal quotation marks omitted); Hockett v. Winks, 485 P.2d
353, 354 (N.M. 1971) (discussing “the tort of deceit (or fraud and deceit as it is
sometimes called)”), overruled on other grounds by Duke City Lumber Co. v.
5
While the following reasoning was not articulated by the Harvey
Firm, nor relied on by the district court, the issues herein are clearly before us.
Furthermore, “[i]t is well-established that ‘we are free to affirm a district court
decision on any grounds for which there is a record sufficient to permit
conclusions of law, even grounds not relied upon by the district court.’” D.A.
Osguthorpe, 705 F.3d at 1231 (quoting Wells, 257 F.3d at 1149–50).
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Terrel, 540 P.2d 229, 301 (N.M. 1975). Indeed, the tort of deceit is commonly
understood to have the same elements as the “common law fraud” used by the
district court: “1. A false representation . . . of fact. 2. Knowledge or belief on the
part of the defendant that the representation is false . . . . 3. An intention to
induce the plaintiff to act or to refrain from action in reliance upon the
misrepresentation. 4. Justifiable reliance upon the representation on the part of the
plaintiff . . . . 5. Damage[s] . . . .” W. Page Keeton et al., Prosser and Keeton on
the Law of Torts § 105, at 728 (5th ed. 1984) (footnotes omitted).
As further support, Valle Norte points to New Mexico Supreme Court
disciplinary decisions where it claims the court “has made clear that under the
Professional Rules a lawyer need not actually commit fraud to engage in deceit.”
Aplt. Opening Br. at 37. But these decisions all address lawyer misconduct in the
context of disciplinary actions, not in the context of private causes of action.
Accordingly, in our view, they are essentially inapposite. Cf. Garcia v. Rodey,
Dickason, Sloan, Akin & Robb, P.A., 750 P.2d 118, 123–24 (N.M. 1988) (“[New
Mexico’s former Code of Professional Responsibility] was not intended to create
a private cause of action since its intended remedy is the imposition of
disbarment, suspension or reprimand of the offending attorneys. The public can
avail itself of other remedies against unprofessional lawyers.”); N.M. Code of
Prof’l Conduct Scope (“Violation of a rule should not give rise to a cause of
action nor should it create any presumption that a legal duty has been breached.
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The rules are designed to provide guidance to lawyers and to provide a structure
for regulating conduct through disciplinary agencies. They are not designed to be
a basis for civil liability.”).
In sum, we conclude that the district court’s interpretation of section
36-2-17 is not contrary to its plain meaning. 6
B
Turning now to Valle Norte’s final argument, that the district court violated
Rule 56(f) in adopting a construction of the statute that neither party had urged,
we conclude that there was no such violation. As relevant here, Rule 56(f)
provides that “[a]fter giving notice and a reasonable time to respond, the court
may . . . (2) grant the motion on grounds not raised by a party.” Fed. R. Civ. Pro.
56(f); see Gentry v. Harborage Cottages-Stuart, LLLP, 654 F.3d 1247, 1261 (11th
Cir. 2011) (reversing the district court’s grant of summary judgment because it
6
Valle Norte does not assert that the Harvey Firm committed common
law fraud or that the district court’s finding that it had not established as much
was in error, and instead focuses on the district court’s interpretation of the
statute and argues that it “never gave Valle Norte the chance to respond to this
erroneous interpretation.” Aplt. Opening Br. at 35. As the district court
explained, however, when analyzing whether Valle Norte had established
common law fraud as required under the proper interpretation of the statute, Valle
Norte “did not sufficiently present evidence to support its fraud allegation . . . for
purposes of the attorney deceit claim.” Aplt. App. at 767. Valle Norte does not
challenge this determination on appeal. Because we find that the district court
correctly interpreted the statute, we need not address the issue of whether the
Harvey Firm committed common law fraud because the district court’s decision
on that issue remains unchallenged before us.
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was not proper under Rule 56(f) where the district court had “entered judgment on
claims not identified by [the moving party] in [its] Rule 56 motion and without
advance notice”). Valle Norte argues that the district court erred because it failed
to give notice before relying on an interpretation of the New Mexico attorney-
deceit statute that was not advanced by either party. While Valle Norte is correct
that the specific interpretation of the attorney-deceit statute that the district court
based its decision on was not advanced by either party, Valle Norte asked the
district court to construe the statute. See Aplt. App. at 305 (Pl.’s Resp. in Opp. to
Defs.’ Mot. for Summ. J., filed May 31, 2011) (“Cases interpreting New Mexico’s
attorney deceit statute are scarce. But other States’ courts have interpreted
substantially similar deceit statutes which should be persuasive here.”). More
specifically, the ground that Valle Norte advanced was that the attorney-deceit
statute—properly construed—afforded it relief. In turn, the district court
interpreted the statute, and it ruled that the statute did not provide a basis for
relief. As such, the district court’s determination was directly responsive to the
ground for relief presented by Valle Norte. 7 Cf. Liberty Mut. Ins. Co. v. Pella
7
Valle Norte’s focus on the sua sponte nature of the district court’s
decision is understandable given the district court’s opinion itself, where it
characterized its grant of summary judgment as being “on grounds not raised in
[the Harvey Firm’s] motion.” Aplt. App. at 764. However, we decline to find
that the “grounds” referred to by the district court were the distinct type
contemplated by the drafters of the Federal Rules of Civil Procedure in Rule
56(f)(2).
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Corp., 650 F.3d 1161, 1177–78 (8th Cir. 2011) (finding that the district court’s
grant of summary judgment was not improper despite the non-prevailing party’s
argument that the decision had been based on a position “that neither party
briefed in its summary judgment motions” because “the critical issue necessarily
encompassed [the findings of the district court,]” in other words, “[t]he district
court did not grant summary judgment on an issue not raised by the parties
because the ultimate issue never changed” (emphases omitted)).
Valle Norte relies on the First Circuit’s decision in Baltodano v. Merck,
Sharp & Dohme (I.A.) Corp., 637 F.3d 38, 43–44 (1st Cir. 2011), where the First
Circuit reversed the district court’s sua sponte grant of summary judgment
because it was “procedurally premature.” But Valle Norte’s arguments here miss
the mark because they are incorrectly based on the premise that the district court
granted summary judgment sua sponte, which the district court did not do.
Instead, as discussed above, the district court granted summary judgment on a
ground that Valle Norte had clearly placed before it—viz., the interpretation of
the attorney-deceit statute. That this was not a sua sponte grant of summary
judgment is made even more apparent when examining the situation in Baltodano,
where the district court granted summary judgment sua sponte on a defamation
claim. See id. Specifically, the prevailing party below had “asked for summary
judgment only on ‘certain counts’ and didn’t list defamation as one of them.” Id.
at 43. In fact, the party appealing the sua sponte grant of summary judgment had
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“specifically pointed [this] out in his opposition brief,” and the prevailing party
“did not address the issue in its reply brief.” Id. Such a situation is clearly
distinct from the one before us, where the Harvey Firm moved for summary
judgment on the attorney-deceit claim and then both parties addressed the proper
construction of the statute (the ground the district court entered summary
judgment on) in their briefing.
Nor can Valle Norte claim any harm in not being able to respond to the
specific interpretation adopted by the district court. Having been placed on notice
by the Harvey Firm’s motion for summary judgment that the statute was at issue,
and by arguing itself about the proper construction of the statute, Valle Norte
“was obliged to marshal [all of its] arguments” relating to the statute. United
States v. Nacchio, 555 F.3d 1234, 1253 (10th Cir. 2009). “Our adversary system
of justice simply does not afford a respondent, like [Valle Norte], the luxury of
ignoring the ebb and flow of litigation and steadfastly adhering to the initial
framing of the issues.” Id. Moreover, Valle Norte has not indicated that there is
any additional evidence it could have marshaled that would have aided or been
necessary for the district court’s determination, and likely could not do so
because the proper interpretation of the statute is a pure issue of law. Finally,
Valle Norte has had the opportunity to be fully heard on appeal and to respond to
the interpretation of the statute, and we have found these responses to be wanting.
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V
For the foregoing reasons, we conclude that the district court properly
granted summary judgment in favor of the Harvey Firm on Valle Norte’s claims
of malicious abuse of process and attorney deceit. We therefore AFFIRM the
decision of the district court.
Entered for the Court
JEROME A. HOLMES
Circuit Judge
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