Opinion Number: 2002-NMCA-086
Filing Date: June 27, 2002
Docket No. 21,813
ROSE L. GONZALES,
Personal Representative of the
Estate of Leonarda L. Lopez, Deceased,
Plaintiff-Appellee,
v.
LEROY LOPEZ, RUTHALENE P. LOPEZ,
and EDDIE PAUL LOPEZ,
Defendants-Appellants.
APPEAL FROM THE DISTRICT COURT OF TAOS COUNTY
Peggy J. Nelson, District Judge
Kelan Emery
Taos, NM
for Appellee
G. Holdt Garver
G. Holdt Garver, Chartered
Albuquerque, NM
for Appellants
CASTILLO, Judge.
{1}
In the final years of her life, Leonarda L. Lopez
(Mother) transferred the bulk of her estate to her sons Leeroy
and Eddie Paul Lopez and Leeroy's wife, Ruthalene (Peggy)
(together referred to as Defendants). Mother died in October
1996 at the age of ninety-two and was survived by her ten
children. Daughter Rose L. Gonzales, as personal
representative of Mother's estate (Estate), filed a complaint
against Defendants alleging undue influence, fraud,
misrepresentation, and breach of contract in obtaining
warranty deeds and real estate contracts to property
originally owned by Mother. Defendants appeal from the
district court judgment setting aside the deeds and real
estate contracts, awarding attorney fees, and assessing
punitive damages against them. We reverse the award of
attorney fees and affirm on all other issues.
BACKGROUND
{2}
Mother owned four tracts of real property in Taos County,
New Mexico identified as the Chamisal, Store, Ojito, and Home
Place properties. Concerned about her health, Mother
discussed with Leeroy and Peggy the potential sale of some of
her property in return for payment of monies, personal care,
and property maintenance. On May 8, 1990, Mother signed a
warranty deed transferring the Store property to Leeroy and
Peggy. Also on May 8, 1990, Mother entered into a real estate
contract with Leeroy and Peggy for the Chamisal property
(first Chamisal property contract). Sometime after executing
the first Chamisal property contract, Mother realized it did
not contain the terms she had agreed upon. In September 1991
Mother filed an affidavit of termination and later that year
sued Leeroy and Peggy for fraud, misrepresentation, and breach
of contract (1991 action). In 1992 the parties settled their
differences. They executed a settlement agreement and an
order of dismissal with prejudice was entered in the 1991
action.
{3}
In 1993, three more transactions occurred. On March 8,
1993, Mother signed a Contract of Purchase and Sale for the
sale of the Ojito property to Defendants (the Ojito property
contract). On March 30, 1993, Mother signed another contract
for the sale of the Chamisal property to Leeroy and Peggy
(second Chamisal property contract). On August 3, 1993,
Mother executed a warranty deed transferring the Home Place
property to Eddie Paul. Leeroy recorded the Home Place deed
without Eddie Paul's knowledge or consent. The Home Place
deed was not delivered to Eddie Paul during Mother's lifetime
and he was unaware that Mother had executed a deed to him
until after her death. We first address Defendants'
procedural issues and then turn to their remaining claims of
error. Other relevant facts and the district court's rulings
are included in the pertinent sections.
DISCUSSION
I. Procedural Issues
{4}
In its original complaint, the Estate alleged that
Defendants unduly influenced Mother into signing the contracts
and deeds , and made fraudulent representations regarding the
purchase price and descriptions of the property to be
conveyed. The Estate further alleged breach of contract for
failure to make the required contract payments and to provide
maintenance and care to Mother as agreed by the parties.
After discovery, the Estate filed an amended complaint
asserting a new claim that the conveyance of the Home Place
property to Eddie Paul should be set aside as an incomplete
gift, and deleting the allegations of undue influence by Eddie
Paul and Peggy as to this property only. In response to the
amended complaint, Defendants filed a jury demand requesting
a jury trial on all the issues or, in the alternative, on the
new issues raised by the amended complaint. In a separate
pleading Defendants also filed an answer to the amended complaint (second answer), a counterclaim, a third-party
complaint, and another jury demand as to the issues raised by
these pleadings. The district court struck both jury demands
as well as the counterclaim, third-party complaint, and a
portion of Defendants' second answer. Defendants claim
several errors relating to the district court's pretrial
rulings.
A. Striking Portions of the Answer to Amended
Complaint
{5}
Defendants claim that the district court erred in
striking their second answer because they were entitled to
respond to the new allegations in the amended pleading. In
analyzing this issue, we observe the following. When
preparing its amended complaint, the Estate was required to
reassert the allegations previously made in the original
complaint, or risk abandoning them. See Griego v. Roybal, 79
N.M. 273, 275, 442 P.2d 585, 587 (1968) (stating that "failure
to re-allege allegations of an original pleading constitutes
an abandonment of those allegations not re-alleged").
Consequently, the amended complaint contained almost all the
allegations of the original complaint plus the new theory
regarding the uncompleted gift of the Home Place property.
When Defendants responded to the amended complaint, they
denied allegations previously admitted in their answer to the
original complaint (first answer).
{6}
The district court ruled that Defendants could only make
admissions, denials, and affirmative defenses in response to
the new allegations. Thus, the district court struck those
portions of the second answer that related to the original
complaint and allowed Defendants' responses to the new
allegations. Defendants' answers to the original complaint
are found in the first answer, and their responses to the new
allegations are found in the second answer. We are not aware
of any rule or case law requiring the district court to accept
without some good cause shown an amended answer which changes
responses to identical allegations in the original complaint.
Defendants made no credible effort below to explain why
changes from responses in their first answer were required.
Further, at the hearing on the motion to strike the second
answer, the district court voiced a concern about the
potential for requiring discovery if previously admitted
allegations were now denied. Given that the trial was then
just days away, we believe these concerns were reasonable. We
conclude, therefore, that the district court did not abuse its
discretion in striking the portions of Defendants' second
answer relating to the original allegations. See Rule 1-012(F) NMRA 2002 (providing that district court may strike
from the pleadings any insufficient defense or redundant or
immaterial matters).
B. Right to Jury Trial on Amended Complaint
{7}
Defendants argue that by amending the complaint the
Estate created a new issue that entitled them to a jury trial.
The New Mexico Constitution continues the right to a jury
trial in those cases where it existed either at common law or
by statute at the time of the adoption of the constitution.
See N.M. Const. art. II, § 12 ("The right of trial by jury
as it has heretofore existed shall be secured to all and
remain inviolate."); see also Evans Fin. Corp. v. Strasser, 99
N.M. 788, 789, 664 P.2d 986, 987 (1983) ("The common law jury
trial existed in the Territory of New Mexico prior to adoption
of the Constitution."). The distinction between legal and
equitable issues has remained the test for determining whether
common law jurisdiction and the right to a jury trial exists.
See id. "If the remedy sought is legal, parties are entitled
to a jury trial; if the remedy sought is equitable, there is
no jury trial as of right." Id. In the amended complaint,
the Estate sought to have the Home Place property deed set
aside as an incomplete gift. A suit to set aside a deed on
this basis is one in equity, and an action for which a jury
trial as of right traditionally did not exist under common
law. Cf. Grandi v. LeSage, 74 N.M. 799, 806, 399 P.2d 285,
290 (1965) (distinguishing an action at law for damages from
a suit in equity to set aside a contract).
{8}
Moreover, there is no statute conferring a right to a
jury trial under these circumstances. Defendants rely on In
re Last Will & Testament of Ferrill, 97 N.M. 383, 389-90, 640
P.2d 489, 495-96 (Ct. App. 1981), a will contest case in which
this Court discussed the right to trial by jury under NMSA
1978, § 45-1-306 (1975) of the New Mexico Probate Code, which
provides:
If demanded, in the manner provided by the Rules of
Civil Procedure, a party is entitled to a trial by
jury in a formal testacy proceeding and in any
proceeding in which any controverted question of
fact arises as to which any party has a
constitutional right to trial by jury.
Ferrill is distinguishable. The present case is not a will
contest case, and is not governed as such by the Probate Code.
Further, as we stated before, there is no constitutional right
to a jury trial on equitable issues. In addition, Defendants'
reliance on Griego is misplaced. In Griego the counter-claimant converted a "suit in equity" to an "action at law" by
abandoning the claim to quiet title and pleading possession of
land. Here, nothing in the record suggests that the equitable
nature of the Estate's suit was converted to an action at law.
Cf. Griego, 79 N.M. at 276, 442 P.2d at 588.
C. Right to Jury Trial on Dismissed Counterclaim
{9}
Defendants also argue that they were entitled to a jury
trial on the legal issues raised by their counterclaim. It is established that parties to a suit in equity have a right to
a jury trial when their counterclaim raises a legal issue.
See Evans Fin. Corp., 99 N.M. at 791, 664 P.2d at 989.
When the applicable rule of procedure requires or
allows the defendant to assert as a counterclaim
any claim he has against the plaintiff if it arises
out of the subject matter of the original action,
the defendant is entitled to a jury trial of the
legal issues presented in the counterclaim.
In their counterclaim, Defendants alleged prima facie tort as
a result of willful false allegations made in the original
complaint, and requested compensatory and punitive damages.
Therefore, t he counterclaim, if allowed, presented a legal
issue entitling Defendants to a jury trial. For the following
reasons, however, we hold that the counterclaim was properly
dismissed.
{10}
The district court agreed with the Estate's argument
below and struck the counterclaim without prejudice on the
basis that the counterclaim was an unripe claim for malicious
prosecution. Prior case law required that a plaintiff await
the outcome of the underlying suit before filing an action for
malicious prosecution. See Westland Dev. Co. v. Romero, 117
N.M. 292, 294, 871 P.2d 388, 390 (Ct. App. 1994) ("To allow
such a [malicious prosecution] claim to be heard in the same
case in which the original complaint was filed would possibly
be confusing to a jury because a jury might decide that
because a plaintiff did not win, the complaint lacked probable
cause."). The Supreme Court has since held that a malicious
prosecution claim can be brought as a counterclaim in the same
action. DeVaney v. Thriftway Mktg. Corp., 1998-NMSC-001, ¶
20, 124 N.M. 512, 953 P.2d 277 ("[a]n improper act, or misuse
of process, need not occur subsequent to the filing of a
complaint and might, in fact, be found in the complaint
itself"). Therefore, the district court based its decision to
strike the counterclaim on an erroneous ground. The decision,
however, can be upheld on other grounds.
{11}
Defendants concede that their counterclaim did not arise
until after the filing of the original complaint. See Rule 1-013(E) NMRA 2002. We characterize the counterclaim as
permissive because it arose not from Defendants' conduct as
alleged in the complaint but from the filing of the complaint
itself. Rule 1-013(B) (defining a permissive counterclaim as
"any claim against an opposing party not arising out of the
transaction or occurrence that is the subject matter of the
opposing party's claim"). Rule 1-013(B) does not compel the
district court to entertain a permissive counterclaim, and
Rule 1-013(E) requires the district court's permission to file
a counterclaim maturing or acquired after pleading. Thus, in
either case, allowing the counterclaim was within the district
court's discretion. See Critical-Vac Filtration Corp. v. Minuteman Int'l, Inc., 233 F.3d 697, 702, 704 (2nd Cir. 2000)
(discussing counterclaims deemed as permissive under Rule 1-013(B) as being subject to the court's discretion). Allowing
addition of the counterclaim would complicate trial of the
basic estate claim, require additional discovery and
potentially delay an imminent trial. Under these
circumstances, it is not an abuse of discretion by the
district court to deny inclusion of a permissive counterclaim.
D. Third-Party Complaint
{12}
Leeroy and Peggy argue that their third-party complaint
was erroneously stricken and that they were entitled to a jury
trial on the issues raised by it. In the third-party
complaint, Leeroy and Peggy alleged that Rose Gonzales, prior
to Mother's death, deliberately attempted to interfere with
the contract between Leeroy, Peggy, and Mother, and that Rose
unduly influenced Mother to terminate the contract. The
third-party complaint asserted entirely new claims against
Rose in her individual capacity, not in her capacity as
personal representative of the Estate. Thus, the third-party
complaint in a sense attempted to name a new party to the
action with new theories of recovery. Allowing the third-party complaint eighteen months after filing of the Estate's
action, and within days of a trial setting, would have unduly
complicated the litigation and almost certainly would have
required continuation of the trial. Because the third-party
complaint was against Rose in her individual capacity, it is
even possible that she would have had to retain separate
counsel to defend her individual interests. Under these
circumstances, it was not an abuse of discretion by the trial
court to refuse to accept filing of a third-party complaint.
II. Application of Res Judicata to Chamisal Property
Deeds
{13}
Defendants assert that Mother's 1991 action against
Leeroy and Peggy barred the present action under the doctrine
of res judicata. The 1991 action involved the first Chamisal
property contract and was resolved out of court. After the
1991 action was dismissed, Mother, Leeroy, and Peggy entered
into the second Chamisal property contract in 1993. The
district court found that the Estate's claims against
Defendants based on the first Chamisal property contract were
barred by res judicata but that the second Chamisal property
contract constituted a new contract separate from the first
Chamisal property contract; therefore, res judicata did not
bar claims raised under the second contract.
{14}
The doctrine of res judicata "applies when the second
suit has the following relationship with the first suit: (1)
The parties must be the same, (2) the cause of action must be
the same, (3) there must have been a final decision in the
first suit, and (4) the first decision must have been on the
merits." Bennett v. Kisluk, 112 N.M. 221, 225, 814 P.2d 89, 93 (1991) (Franchini, J.,dissenting). We agree with the
district court that any causes of action the Estate had on
behalf of Mother that were based on the first Chamisal
property contract were barred by res judicata. See NMSA 1978,
§ 45-3-703(E) (1975) (stating that a personal representative
has "same standing to sue . . . as his decedent had
immediately prior to death"). We also agree with the district
court that the doctrine of res judicata does not bar claims
relating to the second Chamisal property contract. The second
requirement for res judicata is not met because the
allegations in the present action are based on conduct
occurring after settlement of the 1991 action.
{15}
Defendants' assertion that the second Chamisal property
contract had to be executed to effect the settlement of the
1991 action is unavailing. Further, any claims based on
Defendants' conduct in obtaining the second contract are not
barred by res judicata. Consequently, we affirm the district
court's judgment.
III. Notice of Default
{16}
Defendants argue that the district court erred in setting
aside the second Chamisal property contract and the Ojito
property contract because Defendants were not given notice of
default and an opportunity to cure the alleged breach before
the Estate filed its complaint, as required under the
contracts. The Estate contends Defendants did not raise this
issue below and, therefore, it was not preserved. The record
shows, however, that Defendants submitted findings of fact to
this effect. Cf. Cockrell v. Cockrell, 117 N.M. 321, 324, 871
P.2d 977, 980 (1994) (stating that evidence may not be
reviewed on appeal when the party seeking review has failed to
submit requested findings of fact and conclusions of law to
the district court and the appellant has otherwise failed to
object to the findings or call the district court's attention
to the insufficiency of the evidence). Therefore, we address
the merits.
{17}
Defendants assert that contract terms allowing for
reasonable time for notice and cure of a default prior to
forfeiture should be enforced. See Yu v. Paperchase P'ship,
114 N.M. 635, 636, 845 P.2d 158, 159 (1992); Martinez v.
Martinez, 101 N.M. 88, 91-92, 678 P.2d 1163, 1166-67 (1984);
Bishop v. Beecher, 67 N.M. 339, 340-41, 355 P.2d 277, 278
(1960). While Defendants' general proposition of law is
correct, it does not advance their appeal. The district court
set aside the second Chamisal contract and the Ojito contract
based on Defendants' "fraudulent conduct, undue influence,
lack of consideration and breaches of contract." Because the
district court based its decision in part on other grounds on
which Defendants do not appeal, any error based on lack of
notice of default would not affect the result. Cf. Swallows
v. Sierra, 68 N.M. 338, 338, 362 P.2d 391, 391 (1961) (stating
that unchallenged findings are conclusive on appeal). IV.
Award of Attorney Fees
{18}
The district court awarded the Estate its reasonable
attorney fees and costs, to be paid by Defendants. Defendants
argue that no statute, court rule, or contract authorizes the
award of attorney fees under these circumstances. The Estate
asserts that the district court awarded attorney fees based on
Defendants' conduct, specifically by breaching their fiduciary
duty to Mother. The district court found that: "By virtue of
their relationship and dealings with Mother, Lee[r]oy and
Peggy invited the Mother to rely upon them and to trust them
to deal with her fairly and in good faith, thus giving rise to
a fiduciary relationship." The district court concluded that
as a result of the fraudulent conduct, undue influence, lack
of consideration, and breaches of contract, the property
contracts and warranty deeds were set aside and declared void.
{19}
New Mexico follows the American Rule which "recognizes
the authority of statute, court rule, or contractual
agreement" in awarding attorney fees. See N.M. Right to
Choose/NARAL v. Johnson, 1999-NMSC-028, ¶ 9, 127 N.M. 654, 986
P.2d 450. The Estate argues that the district court relied on
"exceptions arising from certain exercises of a court's
equitable powers." Id. ¶ 15. This equitable exception has
been applied only in limited circumstances when litigants have
established their rights to a common fund, such as in cases
involving trusts, quasi-public corporations, estates, and
wrongful injunctions. Id. ¶¶ 19, 21. New Mexico has
recognized the equitable doctrine that authorizes "an award of
attorney fees for services rendered which confer a benefit
upon the estate." See In re Estate of Foster, 102 N.M. 707,
714, 699 P.2d 638, 645 (Ct. App. 1985) (affirming award of
attorney fees out of the estate). "A benefit to the estate
occurs when the action prevents or corrects an unlawful
distribution of the estate." In re Estate of Gardner, 114
N.M. 793, 804, 845 P.2d 1247, 1258 (Ct. App. 1992) (same).
The estate cases recognizing the equitable exception are
distinguishable because the present case does not involve an
unlawful distribution, and the award of attorney fees was
assessed against Defendants and not the Estate. See, e.g., In
re Estate of Foster, 102 N.M. at 713-14, 699 P.2d at 644-45
(discussing cases applying the equitable doctrine exception to
actions involving estates).
{20}
Moreover, awarding attorney fees in this context would be
contrary to the policies advanced by the American rule.
The equitable exception recognized in the common
fund cases is consistent with the American rule
[because a] losing litigant does not pay attorney
fees in addition to the amount of recovery. . . .
Thus, a losing litigant is no better or worse off
as a result of the [common fund] doctrine's
application.
See Johnson, 1999-NMSC-028, ¶ 20 (citation and internal
quotation marks omitted). The purpose of the rule is to
impose costs on the party benefitting from the suit, not to
burden the losing party with the cost of prosecuting or
defending a suit. Id. The district court ordered Defendants
to pay the fees, not the benefitting party, the Estate.
Consequently, we conclude that the district court abused its
discretion in awarding attorney fees. Id. ¶ 7 (stating that
we review the district court's decision for an abuse of
discretion and in doing so, "we may characterize as an abuse
of discretion a discretionary decision that [is] premised on
a misapprehension of the law") (citation and internal
quotation marks omitted).
V. Punitive Damages Against Eddie Paul
{21}
The district court awarded punitive damages against all
defendants in an amount equal to all amounts paid on the
various contracts. Until Mother's death, Eddie Paul made one-half of the monthly payments of $804.30 required by the terms
of the Ojito property contract.
{22}
Defendants argue that there was no basis for awarding
punitive damages against Eddie Paul because the personal
representative testified she had no knowledge that he exerted
undue influence on Mother. In addition, Defendants assert
that the personal representative stated under oath that Eddie
Paul was an unknowing, passive participant in the undue
influence exerted by Leeroy. We review the district court's
findings of fact to determine if there was sufficient evidence
of Eddie Paul's conduct to support an award of punitive
damages. See Sunwest Bank v. Daskalos, 120 N.M. 637, 639, 904
P.2d 1062, 1064 (Ct. App. 1995) (stating that the "standard of
review for an award of punitive damages is whether the award
is supported by substantial evidence").
{23}
We agree with Eddie Paul that an award of punitive
damages on a vicarious liability theory, as argued by the
Estate, is not supported by law. The Estate relies on cases
in which punitive damages were allowed against a principal
based on the conduct of an agent in the context of an
employment relationship. E.g., Abeita v. N. Rio Arriba Elec.
Coop., 1997-NMCA-097, ¶ 36, 124 N.M. 97, 946 P.2d 1108. Those
circumstances are not present here. Therefore, the cases
allowing punitive damages under a vicarious liability theory
are distinguishable. See Fernandez v. Farmers Ins. Co., 115
N.M. 622, 627, 857 P.2d 22, 27 (1993) ("cases are not
authority for propositions not considered") (quoting Sangre de
Cristo Dev. Corp. v. City of Santa Fe, 84 N.M. 343, 348, 503
P.2d 323, 328 (1972)).
{24}
Punitive damages are allowable upon a showing that the
breaching party acted with reckless disregard for the
interests of others. Gilmore v. Duderstadt, 1998-NMCA-086, ¶
28, 125 N.M. 330, 961 P.2d 175 (citation and internal quotation marks omitted). Punitive damages must be based on
"some evidence of a culpable mental state." Id. (citation and
internal quotation marks omitted). See also UJI 13-1827 NMRA
2002 (providing that punitive damages may be awarded if
defendant's conduct is found to be malicious, willful,
reckless, wanton, fraudulent or in bad faith).
A mental state sufficient to support an award of
punitive damages will exist when the defendant acts
with reckless disregard for the rights of the
plaintiff_i.e., when the defendant knows of
potential harm to the interests of the plaintiff
but nonetheless utterly fail[s] to exercise care to
avoid the harm.
Paiz v. State Farm Fire & Cas. Co., 118 N.M. 203, 211, 880
P.2d 300, 308 (1994) (citation and internal quotation marks
omitted). "[R]eckless is defined as the intentional doing of
an act with utter indifference to the consequences." Clay v.
Ferrellgas, Inc., 118 N.M. 266, 270, 881 P.2d 11, 15 (1994)
(citation and internal quotation marks omitted).
{25}
The district court found that Eddie Paul accompanied
Leeroy and Peggy to an attorney's office where Mother signed
the Last Will and Testament and Ojito property contract. The
district court found the circumstances surrounding the meeting
to be "suspicious, and indicative of the over-reaching, over-bearing manner in which Lee[r]oy and Peggy dealt with affairs
and property of [Mother]," and Defendants did not give "good
and valuable consideration for the substantial property rights
which were obtained under the Ojito Contract." Additionally,
there was a finding that despite letters being prepared at
that time to offer Mother's other children an opportunity to
purchase a share of the Ojito property, each of the heirs
testified they did not receive any such letter. There was
evidence to support these findings. Based on these findings,
the district court could reasonably infer that Eddie Paul knew
that Leeroy's conduct would deprive the siblings of any right
to purchase a portion of the property, and further, such
action would benefit Leeroy and would be in contravention of
Mother's intentions. Eddie Paul was present at the meeting
and did nothing to prevent Leeroy's wrongdoing in disregard of
the rights of Mother and the rights of his siblings. Eddie
Paul's culpable conduct was his knowing acquiescence in
Leeroy's wrongful conduct and his willingness to profit from
it.
{26}
Defendants argue that the personal representative's
testimony conflicts with the conclusion that Eddie Paul
exerted undue influence on Mother. This is irrelevant since
Eddie Paul did not have to play an active role but only fail
to act to avoid known potential harm to Mother. See Paiz, 118
N.M. at 211, 880 P.2d at 308 (stating that in awarding
punitive damages the inquiry should be on whether the wrongdoer acted in contravention of the victim's rights while
being consciously aware the conduct was wrongful). The
district court entered a finding of fact stating that "[e]ven
if Peggy and Eddie Paul did not play an active role in unduly
influencing the Mother, they were aware of the actions of
Lee[r]oy, and/or were the beneficiaries of the fraud and
misconduct of Lee[r]oy." The personal representative's
testimony that she had no knowledge of Eddie Paul exerting
undue influence on Mother is not dispositive. Insofar as the
evidence concerning Eddie Paul's role is conflicting, we defer
to the district court's decision. See Buckingham v. Ryan,
1998-NMCA-012, ¶ 10, 124 N.M. 498, 953 P.2d 33 ("[W]hen there
is a conflict in the testimony, we defer to the trier of
fact."); Las Cruces Prof'l Fire Fighters v. City of Las
Cruces, 1997-NMCA-044, ¶ 12, 123 N.M. 329, 940 P.2d 177
(stating that when considering a substantial evidence claim,
"we will not reweigh the evidence nor substitute our judgment
for that of the fact finder"). There was sufficient evidence
to support the trial court's award of punitive damages.
VI. Punitive Damages Against Leeroy and Peggy
{27}
Defendants first argue that the district court failed to
consider Leeroy and Peggy's willingness to restore the Ojito
and Store properties to the Estate. The district court
rejected Defendants' requested findings of fact on this issue.
See Landskroner v. McClure, 107 N.M. 773, 775, 765 P.2d 189,
191 (1988) (stating that failure of a district court to make
a finding of fact is regarded as a finding against the party
seeking to establish the affirmative). We do not agree that
the award of punitive damages against Leeroy and Peggy
necessarily implies that the district court failed to consider
their offer. See Farmers, Inc. v. Dal Machines & Fabricating,
Inc., 111 N.M. 6, 8, 800 P.2d 1063, 1065 (1990) (stating that
appellate court presumes the district court is correct and
burden is on appellant to clearly point out how the district
court allegedly erred). It was within the district court's
reasoned discretion to decide the actual impact of Leeroy and
Peggy's offer. It would have been well within the evidence
for the district court to decide that an offer made at trial
was not an adequate cure for the Defendants' actions in the
years prior to that time and that further punishment was yet
required. We will not second guess the court's weighing of
the evidence in that regard.
{28}
In addition, Defendants contend that in awarding punitive
damages the district court failed to limit the award to an
amount reasonably related to Leeroy and Peggy's ability to pay
and yet deter them from future misconduct. Specifically,
Defendants assert that the award of all monies paid on the
real estate contracts as punitive damages was excessive. We
disagree. Tying the punitive damage award to the amount paid
on the wrongful transactions is a reasonable_even
poetic_response to the improper intrafamily conduct the
district court found. In addition, Defendants do not indicate whether they raised the issue of financial condition or
presented evidence on the issue for the district court's
consideration. See Martinez v. Southwest Landfills, Inc., 115
N.M. 181, 184, 186, 848 P.2d 1108, 1111, 1113 (Ct. App. 1993)
(stating that where the appellant fails to "include[ ] the
substance of the evidence bearing upon the proposition," the
Court of Appeals will not consider an appellant's sufficiency
of the evidence challenge) (citation and internal quotation
marks omitted); In re Estate of Heeter, 113 N.M. 691, 694, 831
P.2d 990, 993 (Ct. App. 1992) ("This court will not search the
record to find evidence to support an appellant's claims.").
Defendants did not file any requested findings and conclusions
or a motion for reconsideration raising the issue below.
Thus, the issue was not preserved and we will not raise it sua
sponte. Our Supreme Court's decision in Aken v. Plains
Electric Generation & Transmission Coop., Inc., 2002-NMSC-021,
____ N.M. ____, ____ P.3d ____ [No. 26,730 (N.M. June 4,
2002)] does not require us to consider an unpreserved
challenge to a punitive damage award.
VII. Expert Opinion on Value of Property
{29} Defendants rely on Jones v. Lee, 1998-NMCA-008, 126 N.M. 467, 971 P.2d 858 for the proposition that the district court erred in finding the Ojito property transaction was for an unfair price when there was no expert opinion as to the actual value of the property compared to the contract price. Jones is distinguishable in that the present case involves issues distinct from the proper evidence needed to calculate damages in a breach of contract case. In the present case, the district court found that the Ojito property had been under contract previously at a purchase price of $122,000 and that the purchase price agreed to by Defendants was $80,000. Defendants refer to an exhibit regarding a market analysis and argue that evidence based on this exhibit is inadmissible: however, it does not appear that the district court relied on this exhibit to arrive at the $122,000 figure. Further, the district court's finding concerning the impropriety of the Ojito transaction encompasses more than just the purchase price. The district court also
VIII. Completion of Gift
{30}
Defendants argue that the district court erred in setting
aside the deed to Eddie Paul for the Home Place property
because the evidence was insufficient to overcome the
presumption of a completed gift by recording the deed. We
need not reach this issue. The incomplete gift was not the
sole basis for the district court's decision. The district
court set aside the deed on the basis that Leeroy exerted
undue influence on Mother in connection with the deed.
Defendants do not appeal this aspect of the district court
decision. See Crist v. Town of Gallup, 51 N.M. 286, 290, 183
P.2d 156, 158 (1947) (holding that appellate court need not
address questions unnecessary for a decision), rev'd on other
grounds by Hoover v. City of Albuquerque, 58 N.M. 250, 252,
270 P.2d 386, 387 (1954).
CONCLUSION
{31}
For these reasons, we reverse the award of attorney fees
and affirm the remainder of the district court's judgment.
{32}
IT IS SO ORDERED.
______________________________
CELIA FOY CASTILLO, Judge
WE CONCUR:
_____________________________________
MICHAEL D. BUSTAMANTE, Judge
_____________________________________
IRA ROBINSON, Judge