Mesa Steel, Inc. v. Dennis

This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date. 1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO 2 MESA STEEL, INC. and 3 DAVID MITTLE, 4 Plaintiffs/Counterdefendants-Appellants, 5 v. No. 34,546 6 STEPHEN DENNIS and JOYCE DENNIS, 7 Defendant/Counterplaintiffs-Appellees. 8 APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY 9 Sarah M. Singleton, District Judge 10 Law Office of David E. Mittle 11 David E. Mittle 12 Santa Fe, NM 13 for Appellants 14 Law Offices of Brian K. Branch 15 Brian K. Branch 16 Sean P. McAfee 17 Albuquerque, NM 18 for Appellees 19 MEMORANDUM OPINION 20 ZAMORA, Judge. 21 {1} Appellants Mesa Steel, Inc. and David Mittle (“Appellants”) appeal from the 1 district court’s order granting summary judgment in favor of Stephen and Joyce 2 Dennis (“Appellees”), and denying Appellants’ motion to compel. This Court issued 3 a calendar notice proposing to affirm. Appellants have filed a memorandum in 4 opposition, which this Court has duly considered. Unpersuaded, we affirm the district 5 court’s grant of summary judgment. Furthermore, because we conclude that 6 Appellants were barred from bringing the current claim, we do not address their claim 7 of error regarding the denial of their motion to compel. 8 {2} In this Court’s calendar notice, we pointed out that the district court granted 9 summary judgment in favor of Appellees on the basis that Appellants had not 10 established any claim to the settlement proceeds on the grounds of double recovery 11 given that the doctrine of double recovery only applies where a joint obligation exists. 12 [CN 2] We noted that Appellants had the burden of overcoming this Court’s 13 presumption of correctness in the district court’s rulings and demonstrating that the 14 district court’s ruling was in error. [CN 3 (citing Corona v. Corona, 2014-NMCA- 15 071, ¶ 26, 329 P.3d 701 (“The appellate court presumes that the district court is 16 correct, and the burden is on the appellant to clearly demonstrate that the district court 17 erred.”)] We pointed out that, while Appellants cited numerous cases, those cases did 18 not support the proposition that double recovery applies in circumstances where no 19 joint obligation exists. We also noted that the broad language of the Mutual Release [2] 1 and Settlement Agreement (“the Agreement”) covered any claims Appellants had 2 raised in the current litigation that were related to the purchase of Mesa Steel from 3 Appellees. [CN 4-5] On these bases, we proposed to affirm. 4 {3} In response to this Court’s proposed affirmance, Appellants contend that the 5 fact pattern presented by this case creates a novel circumstance and that we should 6 extend the general principle of law that a wrongdoer should not be entitled to double 7 recovery to circumstances where no joint obligation exists. [MIO 4, n. 6] In addition, 8 Appellants continue to argue that the release language in the Agreement “is limited 9 to those claims that could have been brought in the [original lawsuit between the 10 Dennises and Mittle]” and that the claim against Appellees for double recovery could 11 not be brought in the original litigation. [MIO 14] We remain unpersuaded by 12 Appellants’ argument that the release does not extend to the claims raised in this case 13 and, therefore, affirm. 14 {4} Appellants refer this Court to language contained in four sections of the 15 Agreement in support of their contention that the release is limited to those claims 16 “that could have been brought in the Lawsuit.” [MIO 14 (citing the Agreement at 17 ¶ I.B, ¶ II.A, ¶ II.B, and ¶ III)]. While we note that two of the provisions indicate that 18 the parties are releasing all claims that could have been brought in the original lawsuit [3] 1 [RP 141-42 ( ¶ II.A, ¶ II.B)], we also point out that there is much broader release 2 language contained elsewhere in the agreement. Specifically, Paragraph I.B provides: 3 Dennis, Mesa Steel, Inc., and Mittle desire to compromise and settle all 4 claims arising out of or related to the sale of Mesa Steel, Inc., including 5 all claims and counterclaims brought and which could have been brought 6 in the Lawsuit, and any other claims arising out of, related to or in any 7 manner concerning the matters set forth herein, absolutely and to the 8 fullest extent permitted by law or equity[.] 9 [RP 140-41 (emphasis added)] In addition, Paragraph III, titled “Further Description 10 of Claims Released,” provides: 11 With the exception of the covenants and agreements to be performed by 12 the parties in satisfaction of the terms of this . . . Agreement as further set 13 forth herein, which undertakings are expressly not released, the parties 14 hereto, respectively, by this Agreement, release, discharge and acquit the 15 parties that they are hereby releasing, respectively, of and from all 16 claims, actions, demands, causes of action, charges, expenses, costs, loss 17 and damage of every nature and description, known or unknown, past, 18 present or future, arising out of or related to the matters set forth in the 19 Litigation, including claims for reimbursement, payment of costs and 20 expert witness fees. 21 [RP 142 (emphasis added)] 22 {5} While Appellants focus on one portion of the Agreement, it appears Appellants 23 have disregarded the more general mutual release agreement language set forth above. 24 That language releases “all claims, actions, demands, causes of action, charges, 25 expenses, costs, loss and damage of every nature and description, known or unknown, 26 past, present or future, arising out of or related to the matters set forth in the [4] 1 Litigation, including claims for reimbursement, payment of costs and expert witness 2 fees.” [RP 142 (emphasis added)] The malpractice suit and Appellants’ resulting 3 declaratory judgment action and request for offset and reimbursement clearly arise out 4 of and are related to the matters set forth in the original litigation between Appellants 5 and the Dennises. Moreover, Appellants’ claim for reimbursement in this action 6 appears to have been specifically released in the language set out above. 7 {6} To the extent Appellants assert in their memorandum in opposition that 8 affidavits submitted in response to Appellees’ motion for summary judgment “clearly, 9 and unambiguously affirm that it was not the intent nor expectation of either Mittle 10 or Mesa Steel that the . . . Agreement would act as a release to the proceeds of an 11 attorney malpractice suit, if any[,]” [MIO 14] we disagree. The affidavits submitted 12 below by Appellants [RP 112-14, 115-16] merely assert that “[t]he provision in the 13 . . . Agreement . . . that I shall cooperate with counsel in any action or proceeding 14 against Hickey et[] al. is not a release of Hickey or his law firm or a release of any 15 judgment or settlement the Dennises might have obtained [from] Hickey or his law 16 firm.” [RP 113] The affidavit goes on to say that “[t]he provision means what it 17 says—I will cooperate and testify truthfully. To argue it is a release is a non sequitar 18 [sic].” [RP 113; see also RP 115, Affidavit of Mesa Steel (“The provision in the 19 . . . Agreement . . . that Mittle shall cooperate with counsel in any action or proceeding [5] 1 against Hickey et[] al. is not a release of Hickey or his law firm or a release of any 2 judgment or settlement the Dennises might have obtained [from] Hickey or his law 3 firm. The provision was never intended to be a release of Hickey or his law firm by 4 Mesa Steel or a release of any judgment or settlement the Dennises might obtain 5 against Hickey or his law firm either in law or equity.”)]. 6 {7} These affidavits create no genuine issue of material fact regarding whether the 7 language contained in Paragraph III—wherein Appellants release the Dennises from 8 “all claims . . . known or unknown, past, present or future, arising out of or related to 9 the matters set forth in the Litigation, including claims for reimbursement, payment 10 of costs and expert witness fees”—is ambiguous, as neither affidavit makes any 11 reference to this provision. [RP 142] Because the provision contained in Paragraph 12 III of the Agreement is clear and unambiguous on its face, and because Appellants 13 failed to establish any ambiguity arising from that specific provision, we conclude that 14 the district court did not err in determining that Appellants had released any claim to 15 reimbursement from the Appellees, given the broad language contained in Paragraph 16 III. See Hansen v. Ford Motor Co., 1995-NMSC-044 , ¶ 32, 120 N.M. 203 , 900 P.2d 17 952 (“A release is contractual in nature and as such our primary objective in 18 construing its terms is to give effect to the intent of the parties.”); H-B-S P’ship v. 19 Aircoa Hosp. Servs., Inc., 2005-NMCA-068, ¶ 19 , 137 N.M. 626 , 114 P.3d 306 [6] 1 (stating that contracts are interpreted consistently with their plain meaning, giving 2 meaning to each word or phrase within the context of the entire contract, and are given 3 a reasonable construction). 4 {8} Moreover, to the extent Appellants were asserting a claim against John Hickey, 5 Appellants specifically released Appellees’ attorney in Paragraph II.B of the 6 Agreement for all claims that were raised or could have been raised in the Litigation. 7 [RP 141-42 (stating that David Mittle and Mesa Steel “forever release and discharge 8 Stephen W. Dennis, Joyce N. Dennis, Sam Goldenerg & Associates, Inc., . . . and all 9 of their predecessors and successors, . . . employers, employees and insurers, attorneys 10 from any and all claims, demands, damages, suits or causes of action of whatsoever 11 kind or nature, which are or could have been the basis for a claim which was filed in 12 . . . Cause No. D-0101-CV-2008-01603”)] Thus, to the extent Appellants’ current suit 13 is premised on a claim against John Hickey, rather than the Appellees, our rules of 14 civil procedure would have permitted the inclusion of claims against John Hickey in 15 the original litigation, where the claims arose out of the same common nucleus of 16 facts. See Rule 1-013 NMRA; Rule 1-014 NMRA. Furthermore, to the extent that 17 Appellants wished to reserve a claim against John Hickey, no such express reservation 18 exists. See Hansen, 1995-NMSC-044 , ¶ 32 (indicating that potential tortfeasors that [7] 1 are not a party to the settlement may still be released where they are named or 2 identified in a release agreement). 3 {9} Also in response to this Court’s proposed affirmance, Appellants also argue that 4 public policy requires that injured persons should be benefitted, rather than 5 wrongdoers, and that wrongdoers should not enjoy “windfalls.” Appellants contend 6 that there are genuine issues of material fact as to whether Appellees are 7 “wrongdoers” and as to whether the recovery is a “windfall.” Although there are 8 ample contract-based reasons for affirming the district court’s ruling, we also note that 9 Appellants’ argument that there are genuine issues of material fact as to whether 10 Appellees are “wrongdoers” and as to whether the recovery is a “windfall” is not 11 compelling. First, because we agree that there is no joint obligation, those facts, even 12 if they existed, would not impact the disposition of this case because the doctrine of 13 double recovery only applies where a joint obligation exists. Second, simply asserting 14 that there are facts, without providing evidence of said facts, is insufficient to defeat 15 summary judgment. See Roth v. Thompson, 1992-NMSC-011 , ¶ 17, 113 N.M. 331 , [16] 825 P.2d 1241 (“Upon the movant making a prima facie showing, the burden shifts 17 to the party opposing the motion to demonstrate the existence of specific evidentiary 18 facts which would require trial on the merits.”); Dow v. Chilili Coop. Ass’n, 1986- 19 NMSC-084, ¶ 13, 105 N.M. 52 , 728 P.2d 462 (stating that “[a] party may not simply [8] 1 argue that such facts might exist, nor may it rest upon the allegations of the 2 complaint”). 3 {10} As a result, we conclude that summary judgment was proper. Accordingly, for 4 the reasons stated above, we affirm. 5 {11} IT IS SO ORDERED. [6] 7 M. MONICA ZAMORA, Judge 8 WE CONCUR: [9] 10 JONATHAN B. SUTIN, Judge [11] 12 RODERICK T. KENNEDY, Judge