Meltzer v. Kruskal

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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 ALLAN MELTZER and LARRY MELTZER,
3 as Co-Personal Representatives of the Estate of
4 MARTIN J. MELTZER, Deceased,
5 Plaintiffs-Appellees,
6 v. NO. 30,326
7 KERRY KRUSKAL,
8 Defendant-Appellant.
9 APPEAL FROM THE DISTRICT COURT OF TAOS COUNTY
10 Abigail Aragon, District Judge
11 De Stefano Law Firm, P.C.
12 Richard De Stefano
13 Taos, NM
14 for Appellee
15 Law Offices of Brian A. Thomas, P.C.
16 Brian A. Thomas
17 Albuquerque, NM
18 for Appellant
19 MEMORANDUM OPINION
20 VANZI, Judge.
1 Defendant Kerry Kruskal appeals the district court’s judgment in favor of
2 Plaintiffs Allan and Larry Meltzer (the Meltzers). For the reasons that follow, we
3 affirm. Because the parties are familiar with the facts and proceedings, and because
4 this is a memorandum opinion, we provide only a brief discussion of this case’s
5 background. We include additional information as necessary in connection with each
6 issue raised.
7 BACKGROUND
8 The following facts are undisputed. The Meltzers are co-personal
9 representatives of the Estate of Martin J. Meltzer, deceased (Decedent). At the time
10 of his death, Decedent owned real property at 35 Burma Road in Taos County, New
11 Mexico. The property was subject to a mortgage dated August 18, 1993 (the
12 Mortgage), made by Decedent as mortgagor and in favor of Kruskal as mortgagee.
13 Payments on the note were made through Pioneer Escrow and later through Sunwest
14 Trust (Sunwest). The escrow agents received regular payments from Decedent and
15 paid the same to Kruskal less Sunwest’s agreed escrow charges. In December 2006,
16 the Meltzers, on behalf of the Estate, entered into an agreement to sell the property to
17 Paul Higdon for $325,000. The agreement required the normal, customary, and
18 standard payoff of the Mortgage. On January 12, 2007, the Meltzers sought a payoff
19 quote from Sunwest and, on January 17, 2007, they received a payoff calculation
2
1 amount of $12,033.19. The Meltzers wired the full payoff amount to Sunwest the
2 following day. The sale of the property to Higdon was set to close through an escrow
3 at First New Mexico Title on January 23, 2007. However, on November 12, 2006,
4 Kruskal had sent a letter to Sunwest asking it to “Red Flag the Meltzer Account” and
5 not to “release the deed to [them].” Kruskal did not release the Mortgage and, as a
6 result, the closing scheduled for January 23, 2007, did not occur.
7 On February 9, 2007, the Meltzers filed suit against Kruskal and Sunwest for
8 release of the mortgage lien, quiet title, and damages. The district court granted a
9 preliminary injunction in July 2007 compelling the release of the mortgage and, on
10 February 18, 2008, the Meltzers sold the property to another buyer for $264,000. The
11 district court subsequently granted partial summary judgment in favor of the Meltzers
12 as to the issue of liability (breach of contract, breach of statutory duty) and on
13 Defendant’s affirmative defenses. The court left for trial the issues of causation,
14 damages, failure to mitigate, and attorney fees. After a bench trial on May 14, 2009,
15 judgment was entered in favor of the Meltzers. Specifically, the district court found
16 that the Meltzers were damaged and that they attempted to mitigate their damages.
17 The court awarded the Meltzers, among other things, damages for diminution of value
18 of the property and attorney fees. This appeal followed.
19 DISCUSSION
3
1 Kruskal raises four issues on appeal. He contends that (1) the district court
2 erred in granting partial summary judgment in favor of the Meltzers, (2) the district
3 court erred in finding that the Meltzers mitigated their damages, (3) counsel for the
4 Meltzers should have been disqualified and the judgment voided, and (4) the district
5 court erred in awarding attorney fees. We take each of Kruskal’s arguments in turn.
6 Grant of Partial Summary Judgment on Liability
7 Orders granting or denying summary judgment are reviewed de novo. Romero
8 v. Philip Morris Inc., 2010-NMSC-035, ¶ 7, 148 N.M. 713, 242 P.3d 280. A motion
9 for summary judgment under Rule 1-056 NMRA is granted only when there are no
10 issues of material fact, with the facts viewed in the light most favorable to the
11 nonmoving party. Romero, 2010-NMSC-035, ¶ 7. The movant has the burden of
12 producing “such evidence as is sufficient in law to raise a presumption of fact or
13 establish the fact in question unless rebutted.” Id. ¶ 10 (internal quotation marks and
14 citation omitted). The nonmoving party then must “demonstrate the existence of
15 specific evidentiary facts which would require trial on the merits.” Id. (internal
16 quotation marks and citation omitted). In addition to being specific, these facts must
17 be material to the dispute, and the applicable substantive law determines whether a
18 fact is material. Id. ¶ 11.
4
1 At the outset, we note that Kruskal’s argument is less than clear. Although he
2 generally attacks certain facts in the Meltzers’ motion for summary judgment, the crux
3 of Kruskal’s argument is that the district court “erred in granting summary judgment
4 on issues relating to intent, motive, comparative fault or other reductions in damages.”
5 We also note that in his challenge to the entry of partial summary judgment, Kruskal
6 disputes certain facts by citing to testimony from the May 14, 2009 bench trial. To
7 the extent that he does so, we do not consider that evidence in our analysis here. The
8 district court made clear in its findings of fact and conclusions of law and the
9 judgment that it had already granted summary judgment to the Meltzers on the
10 liability issues. Therefore, our review is limited to determining whether summary
11 judgment was appropriate under Rule 1-056, regardless of any testimony presented
12 at trial or corresponding findings that the district court may have entered after trial.
13 We begin with whether sufficient disputes of fact should have precluded the grant of
14 partial summary judgment on the issue of liability and then turn to Kruskal’s
15 arguments that partial summary judgment was based on “implicit findings” on the
16 issues of intent, motive, bad faith, and comparative fault.
17 In their motion for summary judgment, the Meltzers argued that Kruskal
18 breached a contractual and statutory duty to release the Mortgage and that, as a result,
19 they suffered damages. On appeal, Kruskal does not dispute that there was a contract
5
1 between Decedent and Kruskal that arose from a property purchase transaction and
2 that a mortgage between the parties was secured by a promissory note payable to
3 Kruskal. He contends, however, that there existed five disputed facts material to the
4 motion for summary judgment. Kruskal challenges facts 11, 12, 14, 15, and 16, which
5 he characterizes as (1) allegedly conflicting instructions from Kruskal, (2) the
6 transmission and “recall” of the release of mortgage by Sunwest, (3) the nature of the
7 authority to act vested in the escrow company in the escrow agreement, (4) the
8 characterization of the factors contributing to the decision by Sunwest to transmit the
9 release of mortgage, and (5) the prompt withdrawal by Kruskal of any objections to
10 the release of the mortgage once the situation was understood.
11 The question here is whether Kruskal raised a genuine issue of material fact as
12 to each of the issues above sufficient to defeat summary judgment. We conclude that
13 he did not. Although Kruskal’s brief in chief cites to five allegedly disputed facts, it
14 fails to present any evidence demonstrating that a genuine issue of fact actually
15 existed. Instead, Kruskal merely argues that the above facts were disputed and
16 provides his version of the facts without citing to any evidence showing that partial
17 summary judgment was improperly granted with respect to liability on the contract
18 claim. For example, Kruskal states that, with regard to the “red flag letter,” there was
19 a genuine issue of fact as to the amount of the payoff of the note and mortgage
6
1 because “the note required complicated calculations and readjustments.” He also
2 contends that there was an ongoing concern about the septic system and that the
3 “[a]greement contributed to this confusion” and that there was a dispute as to “the
4 rights inherent in the [a]greement” because it “could not be amended unilaterally, but
5 it could be assigned.” These types of general assertions of the existence of a triable
6 issue are insufficient to overcome summary judgment on appeal. See Clough v.
7 Adventist Health Sys., Inc., 108 N.M. 801, 803, 780 P.2d 627, 629 (1989) (“[M]ere
8 argument or bare contentions of the existence of a material issue of fact is
9 insufficient.”); Spears v. Canon de Carnue Land Grant, 80 N.M. 766, 769, 461 P.2d
10 415, 418 (1969) (“The party opposing a motion for summary judgment cannot defeat
11 the motion . . . by the bare contention that an issue of fact exists, but must show that
12 evidence is available.”); Schmidt v. St. Joseph’s Hosp., 105 N.M. 681, 683, 736 P.2d
13 135, 137 (Ct. App. 1987) (stating that “a general allegation without an attempt to
14 show the existence of those factual elements comprising the claim or defense” is
15 insufficient to overcome a motion for summary judgment (internal quotation marks
16 and citation omitted)). Kruskal has failed to proffer any argument as to how the issues
17 above present a material dispute of fact warranting a trial on the merits, and he has
18 failed to present any evidence in support of the general arguments he has made. Our
19 rules of appellate briefing are clear: “[A]n argument which, with respect to each issue
7
1 presented, shall contain . . . the contentions of the appellant . . . with citations to
2 authorities, record proper, transcript of proceedings or exhibits relied on. . . . The
3 argument shall set forth a specific attack on any finding, or such finding shall be
4 deemed conclusive.” Rule 12-213(A)(4) NMRA; Truong v. Allstate Ins. Co., 2008-
5 NMCA-051, ¶ 7, 143 N.M. 831, 182 P.3d 814, rev’d on other grounds, 2010-NMSC-
6 009, 147 N.M. 583, 227 P.3d 73.
7 To the extent that Kruskal claims that the district court erred in granting partial
8 summary judgment in favor of the Meltzers because it made “implicit findings of fact
9 as to the intent of the parties,” we are not persuaded. Kruskal appears to argue that
10 the district court impliedly made findings of fact and conclusions of law, including
11 that no ambiguity existed in the contract, that Kruskal acted in bad faith, and that the
12 ultimate delivery of the release of mortgage into escrow was insufficient. However,
13 Kruskal points to no place in the record where the district court made findings of fact
14 on the summary judgment motion. It is not the responsibility of this Court to comb
15 the record to either understand or find support for an appellant’s contentions. Murken
16 v. Solv-Ex Corp., 2005-NMCA-137, ¶ 14, 138 N.M. 653, 124 P.3d 1192; In re Estate
17 of Heeter, 113 N.M. 691, 694, 831 P.2d 990, 993 (Ct. App. 1992). To the extent that
18 Kruskal does refer to the record in support of his argument, those record cites do not
19 reflect the district court’s ruling on the summary judgment motion. Rather, they refer
8
1 to the court’s findings of fact and conclusions of law entered after the bench trial on
2 the remaining issues in the case. As we have said, we do not consider those findings
3 in the context of the summary judgment motion. Because Kruskal has not
4 demonstrated on appeal that there existed a genuine issue of material fact requiring
5 trial on the issue of liability, we affirm the district court’s grant of partial summary
6 judgment in favor of the Meltzers.
7 Mitigation of Damages
8 The issue that we next address is whether substantial evidence exists to support
9 certain findings and conclusions made by the district court concerning mitigation of
10 damages. We note that Kruskal does not challenge the amount of damages awarded
11 but argues only that the district court erred in finding that the Meltzers mitigated their
12 damages. In accordance with our standard of review, the judgment of the district
13 court will not be disturbed on appeal if the findings of fact entered by the court are
14 supported by substantial evidence, are not clearly erroneous, and are sufficient to
15 support the judgment. See Mascarenas v. Jaramillo, 111 N.M. 410, 412, 806 P.2d 59,
16 61 (1991) (stating that it is the appellate court’s duty to interpret the district court’s
17 findings to determine whether they are sufficient to support the judgment). When
18 considering a claim of insufficient evidence, we resolve “all disputes of facts in favor
19 of the successful party and indulge[] all reasonable inferences in support of the
9
1 prevailing party.” Las Cruces Prof’l Fire Fighters v. City of Las Cruces, 1997-
2 NMCA-044, ¶ 12, 123 N.M. 329, 940 P.2d 177.
3 Kruskal challenges the district court’s conclusion that the Meltzers attempted
4 to mitigate their damages. Specifically, he challenges the district court’s finding that
5 [t]he [Meltzers] acted reasonably to mitigate their damages. The
6 [Meltzers] took affirmative steps to (1) attempt to keep the Higdon deal
7 open while they cleared up this cloud on their title; (2) remove the cloud
8 as soon as could be done; (3) keep the property maintained, insured, and
9 cleaned; (4) list the property with a new broker as soon as this lien was
10 released; (5) physically improve the property at their cost; and, (6) enter
11 into a new sale contract and close within a few months of removing this
12 cloud on the title.
13 “It is a well established principle in New Mexico that an injured party has a
14 responsibility to mitigate its damages, or run the risk that any award of damages will
15 be offset by the amount attributable to its own conduct.” Air Ruidoso, Ltd. v. Exec.
16 Aviation Ctr., Inc., 1996-NMSC-042, ¶ 14, 122 N.M. 71, 920 P.2d 1025.
17 “[M]itigation is designed to discourage persons . . . from passively suffering economic
18 loss which could [have been] averted by reasonable efforts[.]” Hickey v. Griggs, 106
19 N.M. 27, 30, 738 P.2d 899, 902 (1987). Here, the district court concluded that the
20 Meltzers reasonably mitigated their damages by attempting to timely remove the cloud
21 on the title, by keeping the property insured and maintained, by listing the property
22 as soon as the lien was released, by improving the property, and by entering a new
23 sale contract within months of removing the cloud on the title. We will uphold the
10
1 district court’s award of damages if its determination that these were reasonable
2 mitigation measures is supported by substantial evidence. See Chavarria v. Fleetwood
3 Retail Corp., 2006-NMSC-046, ¶ 12, 140 N.M. 478, 143 P.3d 717.
4 As a preliminary matter, we note that Kruskal has failed to provide a summary
5 of the proceedings supporting the district court’s determination that the Meltzers acted
6 reasonably to mitigate their damages. See Rule 12-213(A)(3) (stating an appellant’s
7 contention that a “finding of fact is not supported by substantial evidence shall be
8 deemed waived unless the summary of proceedings includes the substance of the
9 evidence bearing upon the proposition”). Instead, Kruskal puts forth his own counter
10 argument and states that the district court’s finding that the Meltzers attempted to
11 remove the cloud as soon as possible “misses the mark when there were other
12 possibilities, far cheaper, far easier, [and] just as available.” In addition, he
13 contends—without citation—that “[a]lthough an owner of property is not obliged to
14 maintain an in-force liability policy, it is very common to do so” and that
15 maintenance, insurance, and improvement of the property was irrelevant to the theory
16 of damages. Finally, with regard to the district court’s finding that the Meltzers
17 attempted to enter into a new sale contract as soon as possible after removing the
18 cloud on the title, Kruskal argues—again without citation—that the Meltzers may
19 have misrepresented the marketable uses for the home, they may have breached the
11
1 contract first, Kruskal may have been excused from issuing a release of mortgage, and
2 that the Meltzers “undertook a course of action intended to enhance their return on the
3 sale.” Kruskal fails to specifically challenge any of the district court’s findings
4 regarding mitigation and simply urges this Court to consider his alternative view of
5 the evidence. We decline to do so. As we have said repeatedly, “[t]he question is not
6 whether substantial evidence exists to support the opposite result, but rather whether
7 such evidence supports the result reached.” Las Cruces Prof’l Fire Fighters, 1997-
8 NMCA-044, ¶ 12. And “we will not reweigh the evidence nor substitute our judgment
9 for that of the fact finder.” Id. Without a showing to the contrary, we conclude that
10 substantial evidence supports each of the district court’s findings concerning
11 mitigation.
12 Conflict of Interest
13 Kruskal argues that this Court should determine that the judgment entered in
14 this case is void or voidable because an actual conflict of interest exists on the part of
15 the Meltzers’ counsel. He contends that the issue was raised in the district court “both
16 inferentially, insofar as exhibits relating to the prior representation were introduced
17 as exhibits in the matter,” and in his post-judgment motion for reconsideration. We
18 disagree. First, to the extent Kruskal argues that he raised the issue “inferentially,”
19 we conclude that he did not preserve the issue of disqualification for appeal. “To
12
1 preserve an issue for review on appeal, it must appear that appellant fairly invoked a
2 ruling of the trial court on the same grounds argued in the appellate court.” Woolwine
3 v. Furr’s, Inc., 106 N.M. 492, 496, 745 P.2d 717, 721 (Ct. App. 1987). Kruskal does
4 not indicate in his brief in chief where this issue was raised below prior to the entry
5 of judgment, and his reply brief does not address or dispute the Meltzers’ contention
6 that the issue was not preserved. Moreover, we have reviewed the record and find no
7 argument by Kruskal during the pendency of the case seeking to disqualify the
8 Meltzers’ counsel.
9 Further, we need not address Kruskal’s disqualification argument that was
10 raised in his motion to reconsider because that motion was untimely filed in the
11 district court. Our Supreme Court has clearly limited the ability of a district court to
12 act in a case before it after a notice of appeal is filed. In Kelly Inn No. 102, Inc. v.
13 Kapnison, 113 N.M. 231, 241, 824 P.2d 1033, 1043 (1992), the Court stated the
14 general rule that a district court “loses jurisdiction of the case upon the filing of the
15 notice of appeal, except for the purposes of perfecting such appeal, or of passing upon
16 a motion directed to the judgment pending at the time.” Id. (internal quotation marks
17 and citation omitted). In short, Kelly Inn provides that the district court cannot act on
18 a motion filed after a notice of appeal except to perfect the appeal or rule on a matter
19 collateral to the judgment or order on appeal. Id. at 244, 824 P.2d at 1046.
13
1 The district court entered judgment in this case on February 9, 2010. Kruskal
2 filed his notice of appeal on March 4, 2010. The next day, March 5, 2010, Kruskal
3 filed a motion to reconsider the grant of summary judgment and entry of judgment
4 and filed a supplemental exhibit relating to the disqualification matter on March 9,
5 2010. The district court denied the motion on the basis that it lacked jurisdiction to
6 reconsider the judgment because a notice of appeal had already been filed. We
7 conclude that the district court properly found that the pending appeal divested it of
8 jurisdiction to take further action because any action on the motion to reconsider
9 would affect the judgment on appeal. Kruskal does not challenge the basis of the
10 district court’s denial of the motion to reconsider nor does he address the preservation
11 issue in his reply brief. The issue concerning disqualification of the Meltzers’ counsel
12 was never properly before the district court and, as a result, we do not reach it here.
13 See In re Doe, 98 N.M. 540, 541, 650 P.2d 824, 825 (1982) (stating that an appellate
14 court should not reach issues that the parties have failed to raise).
15 Attorney Fees
16 Finally, we address Kruskal’s argument that the district court erred in awarding
17 attorney fees to the Meltzers. Kruskal does not attack the award of attorney fees as
18 unreasonable in amount, and his objection on appeal focuses on whether it was
19 appropriate to award any attorney fees to the Meltzers. Kruskal contends that this
14
1 issue was presented to the district court on the various summary judgment motions
2 and ultimately disposed of at the May 5, 2009 hearing. He also states that the issue
3 of attorney fees “was referenced at the conclusion of the May 14, 2009 hearing, but
4 not in the context of evidence or support for any finding” and that it was reargued in
5 the motion to reconsider. We disagree that Kruskal properly preserved the issue for
6 review. Kruskal’s version of the procedural history concerning the attorney fee issue
7 is neither complete nor entirely accurate, and we take the opportunity here to clarify
8 the proceedings below.
9 As Kruskal correctly notes, the Meltzers argued in their summary judgment
10 motion that they were entitled to recover their attorney fees both pursuant to the
11 escrow agreement and under NMSA 1978, Section 48-7-24 (1983). Contrary to
12 Kruskal’s assertion, however, his response to the motion for summary judgment
13 claimed only that Section 48-7-24 had no application to the lawsuit. He did not
14 respond to the issue of attorney fees raised in the Meltzers’ motion. Further, the
15 district court did not “ultimately dispose” of the issue at the May 5, 2009 hearing.
16 Instead, the court made clear that the issue of damages, including attorney fees, would
17 be determined at trial.
18 At the beginning of the trial on May 14, 2009, the Meltzers’ counsel argued that
19 the Meltzers were seeking attorney fees both under the contract and the statute.
15
1 Again, Kruskal did not object to this request or address the argument in any manner.
2 Nor did he object when the district court, at the close of the trial, found that the
3 Meltzers had suffered damages and instructed counsel to submit an affidavit of
4 attorney fees. On June 12, 2009, the Meltzers filed their proposed findings of fact and
5 conclusions of law. The proposed findings and conclusions specifically stated that the
6 Meltzers were entitled to recover attorney fees based on both the escrow agreement
7 and the statute. In addition, the Meltzers provided detailed argument, a fee affidavit,
8 and numerous invoices in support of their proposed conclusion. Four days later, on
9 June 16, 2009, Kruskal filed his requested findings of fact and conclusions of law.
10 This time, Kruskal not only failed to object to the Meltzer’s detailed request for fees,
11 but he proposed the following finding of fact:
12 [Kruskal] does not contest that attorney fees and costs have been
13 expended by the [Meltzers]. The reasonableness of those fees is best left
14 to the sound discretion of the [district c]ourt.
15 Ultimately, the district court awarded the Meltzers the full amount of attorney fees
16 they requested. The record shows that Kruskal had numerous chances to respond to
17 the propriety of awarding attorney fees throughout the course of the litigation, yet he
18 did not oppose or object to the Meltzers’ requests or the award of fees until he filed
19 his untimely motion to reconsider on March 5, 2010. As we have discussed above,
20 Kruskal’s motion to reconsider was filed after his notice of appeal thereby divesting
16
1 the district court of jurisdiction to take further action in this case. For the above
2 reasons, we hold that the issue of whether attorney fees should have been awarded to
3 the Meltzers has not been preserved. See State v. Wyman, 2008-NMCA-113, ¶ 10,
4 144 N.M. 701, 191 P.3d 559; Woolwine, 106 N.M. at 496, 745 P.2d at 721. We will
5 not address issues that were not preserved and are now raised for the first time on
6 appeal. State v. Ware, 118 N.M. 703, 705, 884 P.2d 1182, 1184 (Ct. App. 1994).
7 CONCLUSION
8 We affirm the district court on all of the issues raised in this appeal.
9 IT IS SO ORDERED.
10 __________________________________
11 LINDA M. VANZI, Judge
12 WE CONCUR:
13 _________________________________
14 CYNTHIA A. FRY, Judge
15 _________________________________
16 RODERICK T. KENNEDY, Judge
17