1 IN TH E COURT OF APPEALS O F THE ST ATE OF NEW MEXICO

2 O pin ionN um

be r: ___ ____ ____ ____ 3 Fi lin g D at e: O ct obe r 20, 201 4 4 N O. 32, 901 5 ROL AN D L UC ERO and R & L 6 ST R A IG HT LI N E T IL E, LL C a/k /a 7 R & L ST RA IGHTLIN E TILE, 8 Pl ai nti ff

s- Appe llants , 9 v
. 10 RICHARD SUTT EN, 11 De fendant-Appellee. 12 AP PE AL FR OM T HE D ISTRICT C OUR T OF BER NA LILLO C OUN TY 13 A lan M . M alo tt , D ist ri ctJu dg e 14 L awO ff

ic es of D ay m on B
. E ly 15 D ay m on B
. E ly 16 Albuquerque, N M 17 W illiam

Gilstrap 18 Albuquerque, N M 19 fo r Appe llants 20 Tucker

Law F irm , P .C. 21 Steven L . T ucker 22 Santa Fe , N M 23 for Appellee1 OPIN ION

2 VA NZ I, Jud ge. 3 { 1} T he Me m or an dum O pin ionf

ile d inthi s c as e on S ep te m be r 29, 201 4, is he re by 4 wit hd rawn , and th is Opi ni on is su bs ti tu te d i n i ts pl ace. 5 { 2} R o l a n dLu c e r o a n dh i s c o mp a n y, R & L S t r a i g h t l i n e Ti l e , ( c o l l e c t i v e l y, 6 Plai n t i ff

) appeal f

rom a j udgm ent entered in favor of De fendant Richard Sutten 7 following a bench trial on the issue of legal m alpractice
. The district court found that 8 De f e nd a nt n e gl i ge nt l y

f a i l e d t o app r i se P l a i nt i f

f o f t he d a ng e r s of

p r ov i di ng an 9 unsecured $300 ,000 loan to a Las V egas developm ent com pany . H owever , t

he d i st rict 10 co urt ap pl ie d th e doc tr ine of ind ep en de nt i nte rv en ing c au se , ade fe nse that ha d no t 11 been previousl y raised in D efendant’ s propos ed finding s prior to trial, and conclud ed 12 that the r ea l e state m ar ke t c oll ap se of

the m id- to- la te 200 0s s ev er ed the c onne ct ion 13 betwe en De fendant’ s professional negl igence and Plaintiff’ s dam ages claim ed 14 the re fr om . O n a

ppe al , P la int if

f ar gue s th at

the d istri ct

c ourt e rr ed

in ap ply ing the 15 doc tr ine of ind ep en de nt inte rv en ing ca use to the se fa ct s. W e ag re e. W e re ve rs e an d 16 re m an d f

or c onsi de ratio n of

da m ag es in lig ht o f thi s O pin ion
. 17 BACKGRO UND 18 { 3} The district court’s following findin gs of fact in this case ar e not challenged 19 on a ppe al
. P la int if

f w as ab le to am as s su

bst an tia l savin gs i n th e co ur se of his bus ine ss2

1 in the ti le ind

ustry . In Fe br

uary 2008 , Pl ai nti ff w as ap pr oa ch ed by Mark Br ady , a n ol d 2 fr ie nd, about

l o an i ng $ 300, 000 to a

de ve lop er

f or am ixe d- use r ea l e state de ve lop m en t 3 proje ct in La s Ve gas, Nevada. By the term s of t he proposed “ bridge loan,” Plaintiff 4 wa s to receive a $360 ,000 paym ent one m onth after m aking th e loan. B rady , who was 5 al s o t h e f

ri en d o f an o ff

i ce r o f t h e d ev el o p m en t co m p an y, s t o o d t o re ce i v e a “fi n d er ’s 6 fe e” of up t o $3 0, 000 fo r as sis tin g in the tr an sa ct ion
. T he se te rm s w er e co nta ine d in 7 a doc um en t en tit le d “ Se cure d Pr om iss or y N ote , ” (the N ote ) w hic h w as f or w ar de d to 8 Brad y by the de ve lo pe r. 9 { 4} Br ady

sug ge ste d to P la int if

f that D ef en dant, ali ce nse d a tt orne y , r ev ie wthe 10 doc um en t onP la int if

f’ s be ha lf
. D ef en dant re vie w ed an d m ad e m ino r ch an ge s to the 11 doc um en t w ith out

not if y ing P la int if

f that the pur

porte d th e N ote did

not , in fact, 12 cr eate a ny

se curi ty int er es t. N or did

D ef en dant a ppr ise P la int if

f of a ny of the inh er en t 13 ri sks inv olv ed

in en ga gin g insuc h atr an sa ct ion
. Ins te ad , D ef en dant r et

ur ne d th e 14 N ote w ithhis e dit s to Bra dy but did not c om m uni cate dir ec tly

w ithP la int if

f. S hortly 15 af te r m ak ing the loan, the r ea l e state m ar ke t i n L as V eg as , N ev ad a, suf fe re d a 16 “ catacly sm ic decline,” and the La s Vegas developer f il ed for bankruptcy . P laintiff 1 7 wa s n ev erre p ai dan y p o rt i o n o f t h e l o an h e h ad m ad e b ec au s e t h e s en i o r l i en h o l d er ’s 18 in te res ts ex ceed edth e v al ue of t he sec ur edpro pe rty afterth e m ark etco ll ap se .3

1 { 5} Plaintiff sued De fendant for professional m alpractice , and the district court 2 held a bench tr ial on the m erits. The district court found that the parties had entered 3 int o an a tto rn ey -c lie nt r el at ion shi p and tha t D ef en dant’ s a ct ion s fe ll be lowthe 4 standard

of c ar e an d w er e ne gli ge nt bec au se he fa ile d to ad equa te ly r ev ie wthe N ote 5 or a d v i s e P l a i n t i f

f ab o u tt h e n a tu r e a n dd a n g e r s o f t h e p r o p o s e dt r a n sa ct ion
. 6 N ev er the le ss, the dis tr ic t c ourt f oun d that the de cl ine in the L as V eg as r ea l e state 7 m ar ke t op er at ed

a s an in de pe nde nt i nte rv enin g cau se , se ve ri ng the c onne ct ion 8 betwee n Def

endant’ s professional negl i g en ce and Plaintiff’ s losses. This appeal 9 fo llo w ed
. 10 DISC US SION 11 Stand ard of R eview 12 { 6} A t the out se t, the part ie s di sa gr ee about the standard

of re vie w w e shou ld a

ppl y 1 3 in this c a s e . P l a i n t i f

f c o n t e n d s t h a tt h i s m a t t e r s h o u l db e r e v i e w e dd e n o v o , w h i le 14 D ef en dant arg ue s th at

P la int if f “ ge ts o ff

on the w ro ng f

oot w iththe standard

of 15 review ” a

nd tha t we shoul d instead determ ine whether the factual issues are supp orted 16 by subst antial evidence. W e agree with Plaintiff. While the determ ination of w hether 17 so m et hi ng is an in de pe nd en t in te rv en in g cau se is a qu es ti on of f act , G ov ic h v

. No rth 18 A m e ri c an S

y st e m s, I nc. , 199 1- N MS C- 061, ¶

24, 112 N
. M. 226 , 814 P
. 2d 9 4, thi s 19 ap pe al , inv olv ing und isp ute d f ac ts, pr es en ts a que sti on o f law : w he the r the doc tr ine4

1 of independent intervening cause sho uld have even been considered by the fac t finder 2 in the f ir st p la ce . W e ha ve pr evio us ly rev iew ed thi s is sue de nov o inc as es tr ie d by 3 juri es , se e, e . g. , Chamberland v. R oswell Osteopathic C linic, Inc. , 200 1- N MC A -0 45, 4 ¶ 11, 13 0 N. M. 532 , 27 P. 3d 1019 , and we see n o reason t o affor d a m ore defe rential 5 reviewwhen the f

act finding is cond ucted by a j udge. Jo hn so n v. Yates P etrol eu m 6 Co rp. , 1 9 9 9
- N M C A
- 0 6 6 , ¶ 3 , 1 2 7 N
. M
. 3 5 5 , 9 8 1 P
. 2 d 2 8 8 ( s t a t i n g t h a t w h e n th e 7 re le vant f

ac ts are undis puted , the le ga l i nte rp re ta tio n of tho se f ac ts i s r ev ie w ed

de 8 novo on a

ppe al ). W e the re fo re r ev ie wth e dis tr ic t c ourt’ s de ci sio n to appl y the 9 doc tr ine of

ind ep en de nt i nte rv en ing c au se de nov o. 10 The D octrine o f Inde pend ent Inter vening C ause Should Not Have Been 11 Conside red by the FactFin der 12 { 7} Pl ai nti ff

m ak es tw o arg um en ts o n ap pe al : (1 ) that the dis tr ic t co urt i nc or re ct ly 1 3 ap p l i ed t h e d o ct ri n e o f i n d ep en d en t i n t er v en i n g ca u s e a n d(2 ) t h at t h e d i s t ri ct co u rt ’s 1 4 d e c i s i o n c r e a t e s i mmu n i t y f o r ap e r s o n o r

e n t i t i e s w h o s e n e g l i g e n c e c au s e dh a rm. 15 Bec au se ou r rev ers al is ba se d o n t he is su e o f th e in de pe nd en t i nt erv en in g c au se , we 16 need not re ach Plaintiff’ s second argum ent. Before turning to our analy sis, however , 17 w e not e ag ai n on e curi ous as pe ct of the dis tr ic t c ourt’ s de ci sio n. O ur r ev ie wof

the 18 re co rd ind ic at es that De fe ndant did not ra ise the doc tr ine of ind ep en de nt i nte rv en ing 19 ca use in his pr e- tr ia l f

ind ings an d co nc lus ion s or dur ing the tr ia l, inc lud ing dur ing 20 cl osi ng arg um en t. I t w as onl y a ft er the dis tr ic t cour

t ra ise d the doc tr ine sua

spo nte in5

1 his letter decision that Defendant add ed to his post-trial finding s and conclusi ons th at 2 the “ m ar

ke t c oll ap se w as a n in de pe nde nt i nte rv en ing f or ce ” that se ve re d th e 3 co nne ct ionbe tw ee n D ef en dant’ s ne gli ge nc e an d P la int if f’ s lo sse s. A cc or din gly , the 4 doctrine, w hich then becam e part of the district c ourt’ s finding s and conclusi ons, wa s 5 ne ve r pr op erl y rai se d by Defen da nt or arg ue d by th e p art ie s b el ow. See Ch am be rla nd , 6 2001 -N MCA -045, ¶ 25 (noting th at it wa s the defendant’ s dutyto reques t an 7 instructio n and present the issu e of indep en dent intervenin g cause to the j ury ). 8 N otw ith st a n d i n g t h e l a c k o f a f u l l y d e v e l o p e d r e c o r d o n t h e i s s u e , w e p r o c e edto 9 ad dr es s t he di st ric t co ur t’s ru li ng . 10 { 8} “ T he el em en ts o f le ga l m al pr ac tic e ar e: ( 1) the e m plo ym en t of

the de fe ndant 11 attor ne y ; ( 2) the de fen da nt at tor ne y ’ s ne gle ct

of ar ea sona

ble duty ; and ( 3) the 12 negligence r esulted in and wa s the proxim ate cause of loss to the client.” Encinias v. 13 W hi te ne r La w Fir m, P.A

. , 2013-NMS C-045, ¶ 8, 310 P.3d 611 (alterat i o n, internal 14 quot at ionm ar

ks, a nd c itatio n om itt ed ). A t tri al , the dis tr ic t c ourt f ound that the f ir st 15 tw o e le m en ts of

r ep re se ntatio n and n eg lig en ce w er e m et , but it c onc lud ed

that the 16 co lla pse of the r ea l es ta te m ar

ke t in L as V eg as , N ev ad a, co nst itu te d an in de pe nde nt 17 int er ve nin g c au se , se ve ri ng D ef en dant’ s ne gli ge nc e fr om P la intiff ’s lo sse s. A s a 18 res ul t, t he so le is su e b efo re t hi s C o u r t i s th e th ird ele m en t, p ro xi m at e cau se . See 19 To rres v . E l Paso E le c. Co

. , 1 9 9 9
- N M S C
- 0 2 9 , ¶ 1 7 , 1 2 7 N
. M
. 7 2 9 , 9 8 7 P
. 2 d3 8 6 ( “A6

1 finding of an independ ent intervening cause represents a finding against the plaintiff 2 on pro xi m at e cau se [.]”), ov errul ed on o the r gr ound

s by H erre ra v. Q ual ityP ont iac , 3 20 13 -NMSC -0 18 , 13 4 N.M. 4 3, 7 3 P .3d18 1. 4 { 9} “ An independent int ervening cause is a cause which interrupts th e natu ral 5 se que nc e of ev en ts, tur ns as ide the ir

c au se , pr ev en ts the na tur al a nd p ro bable r es ult s 6 of the or igi na l a ct

or om iss ion , a nd p ro duc es adif fe re nt r es ult , that c oul d no t have 7 been reasonably

foresee n.” Id

. ¶ 12 ( internal quot ation m arks and citation om itted). 8 In Torres , our

S upr em e Co urt r ec ogni ze d that the doc tr ine is inc om pa tib le w ithour 9 sy stem of com parative negligence and potenti ally in conflict with our use of several 1 0 l i ab i l i t y. Se e id. ¶

¶ 18- 19. T hus, our ap pe llate co urts ha ve “ virtua lly el im inate d” the 11 doc tr ine ’ s a

ppl ic at ionin ca se s in vol vin g on ly ne gli ge nt, a s op pose d to int en tio na l, 12 co nd uc t. Silva v. L ovelace H ealth Sys., I

nc. , 2014 -N MC A -0 86, ¶ 14, 331 P. 3d 9 58, 13 cert. gran ted , 2 01 4- NMC E RT -0 08, 334 P
. 3d 4 25. Whil e the de fe nse m ay sti ll be 14 available in lim ited cases, for exam ple wher e th e alleged intervening cause is a “ force 15 of na tur e” —the sor

t of e ve nt tha t “ cannot

be pr ev en te d by

hum anc ar e, ski ll or 16 foresight”— Ch am be rla nd , 200 1- N MC A -0 45, ¶ 24 ( int er na l qu otatio n m ar

ks and 17 ci ta tio n om itt ed ), fo r the re as ons dis cu sse d belo w , w e fi nd i t un ne ce ssary to de ci de 18 whether “ m arket decline” c onsti tutes a force of nature in this case.7

1 { 10} When the intervening cause does not invo lve intentio nal conduct, Ne w Me xico 2 follows the rule that “ any harm which is in itself foresee able, as to which th e actor has 3 cr eate d or

inc re as ed

the r ec ogni za

ble r isk , is al w ay s p ro xi m ate , no m atte r howit is 4 brough t about.” A ndre ws v. Say lor , 2003 -N MC A -1 32, ¶ 22, 134 N
. M. 545 , 80 P
. 3d 5 482 (a lte ratio n, int er

na l quotatio n m ar

ks, a nd c itatio n om itt ed ). T hus, the doc tr ine is 6 inappli cable in Ne w Me xico in cases whe r e a n on - i nt e nt i onal intervening force causes 7 th e sa m e h a r m as th atris ke d b y th e act or ’s con du ct . See Collins ex rel. Collins v. 8 P er rin e , 1 9 8 9
- N M C A
- 0 4 6 , ¶ 1 9 , 1 0 8 N
. M
. 7 1 4 , 7 7 8 P
. 2 d9 1 2 ( “ A n i n d e p e n d en t 9 int erve n i n g c au s e i s a c au s e t h a t i n t e rr up t s t h e n a tu r a l s e qu e n c e o f e v e n t s a nd 10 pr oduces a dif

fe re nt r es ult that c oul d no t be r ea sona bly f or es ee n. ”)
. T he pr inc ipl e 11 ci te d in Andrews , Torres , a nd Co lli ns is ad opt ed f ro m the Re state m en t ( Se co nd) of 12 Torts, which applies equally to forces of nature : 13 If the a ctor’ s conduct h as cre ated or increa sed the risk that a particular 14 harm

to the pla int if

f w ill oc cur, . . . it

is im m at er ia l t o th e ac tor ’ s li ab ili ty 15 that the harm

is br ough t a

bout in a m an ne r w hic h no one in his pos iti on 16 co uld

pos sib ly ha ve be ene xpe ct ed

to fo re se e or

a nti ci pa te . T his is tr

ue 17 not

onl y w he re the r es ult

is pr oduc ed

by the dir ec t op er at ionof

the 18 actor’ s conduct u pon con ditio ns or circum stances existing at the tim e, 19 b u t also where it is broug ht about through the intervention of other 20 fo rces whi ch th e act or co ul d no t hav e ex pe ct ed , whether they be forces 21 of n atu re , or the actions of an im als, or those of t hird persons which are 22 not

int en tio na lly

tor tio us o r cr im ina l. 23 Section 442B cmt. b (1965) (em phasis add ed).8

1 { 11} O ur

appl ic at ionof

Re state m en t ( Se co nd) of

T orts S ec tio n 442B to ana lle ge dly 2 intervening force in the legal m alpractice context of Co lli ns is i nstru ct ive
. I n Co lli ns , 3 the de fe ndant- attor

ne y ne gli ge ntl y

se ttl ed ac om ple x m ed ic al m alpr ac tic e ca se 4 without pe rform ing a m inim um level of discovery . 1989-NMC A- 046, ¶ 13. A fter 5 settling with the original defendants, the plaintiffs sued Indi an He alth Services ( IH S) 6 i n fe d er al court and obtained a m uch larger j udgm ent, w ith dam ages apportioned 7 be twee n IHS an d t he ori gi na l d efen da nt s. Id

. ¶ 8. D es pit e the pr ev iou s se ttl em en t w ith 8 the original defendants, the plainti ff s ’ attorney

planned on collecting all dam ages 9 fro m IHS th ro ug h p r i n c i pl es of jo in t an d s ev eral li ab il it y . Id

. ¶ 16. H ow ev er , w hil e 10 the second sui t wa s pendin g, Ne w Mexico abolish ed the concept of j oint andseveral 11 li ab il it y . Id . ¶

17. T hus, as a result of the attorney ’ s negligence in settli ng the origin al 12 case, together with the change in state tort law, the plaintiffs w ere unable to collect 13 a su bs ta nt ia l p or ti on of t he da m ag es award edin th e fed eral jud gm en t. Id

. ¶ 8. 14 { 12} A t tri al f

or le ga l m al pr ac tic e an d on ap pe al , the de fe ndant- attor ne y in Co lli ns 15 ar gue d th at

the unf or es ee ab le c hange in the lawa ct ed a s an in de pe nde nt i nte rv en ing 16 cau se . Id
. ¶

¶ 16- 18. T his Co urt r ej ec te d th at a rg um en t, statin g: 17 The R estatem ent of Torts addresses this po int clearly . I n Section 442B, 18 the Re state m en t e xpl ai ns tha t w he re the ne gli ge nt con duc t of a n a ct or 19 create s o r i n cr eases the risk of a par ticular harm

and is a substan tial 20 fa ct or in ca

usi ng tha t harm , the f

ac t tha t the harm

is br ough t a

bout 21 thr oughthe int er ve nti on o f an oth er

f or ce doe s no t r el ie ve the a ct or of 2 2 l i ab i l i t y.9

1 Co lli ns , 198 9- N MC A -0 46, ¶ 20. Appl y ing Re state m en t ( Se co nd) of T orts S ec tio n 2 442B , w e re as one d th at the a tto rn ey ’ s ne gli ge nc e cr eate d apart ic ular ri sk—the r isk 3 that the plaintiffs w ould not be able to r ecover dam ages caused by th e o riginal 4 defendants. W e theref

ore held that the “ intervention of th e change in law ,” whether 5 fo re se ea

ble or not , b ro ug ht about

af or es ee ab le harm

a nd c oul d no t r el ie ve the 6 at to rn ey

of l iabi li ty. Co lli ns , 198 9- N MC A -0 46, ¶ ¶ 20- 21. 7 { 13} Inli ght

of the se au tho ri tie s, the dis tr ic t c ourt sh oul d no t have c onsi de re d th e 8 doctrine of independ ent intervening cause in this case. The district court f ound that 9 D ef en dant g av e the tr an sa ct ionthe a tto rn ey “ se al of ap pr ova l, ” ne gli ge ntl y c re at ing 10 or increasing the risk of the loss of Plaint iff’ s investm ent by failing to warn P laintiff 11 of t he dangers inherent in loani ng $3 00,000 to a L as Ve gas developer in an uns ecured 12 tr an sa ct ion
. I n th e ab se nc e of a ny a lle ga tio n th at

the int er ve nin g cau se w as the r es ult 13 of int en tio na l t ortio us co nduc t, the pr inc ipl es ar tic ulate d in R es ta te m en t ( Se co nd) of 1 4 T o rt s S e c t i o n 4 4 2 B a n d a d o p t e din Co llins ap ply
. A s di sc uss ed above , the se 15 pr in ci pl es ap pl y

whet he r or no t th e m ark etde cl in e is co ns id ered a “ fo rce o f na tu re.” 16 T he dis tr ic t c ourt sh oul d no t have dis m iss ed th is ca se but , ins te ad , it sho uld ha ve 1 7 d et er m i n ed wh et h erDe fe n d an t ’s n eg l i g en c e wa s t h e p ro x i m at e c au s e o f P l ai n t i ff ’s 18 los s and, if

appl ic ab le , e m

plo y ed astandard

c om parativ e fa

ult a na ly sis
.10

1 { 14} Citing to several out-of-state and federa l cases, De fendant asks us to consider 2 whether the collapse of the La s Ve gas real e state m arket w as foresee able. How ever, 3 Defen da nt ’s c ha ract eri zat io n o f th e is su e rel ie s o n t he same con te nt io n t ha t we 4 spe ci fi ca lly

r ej ec te d in Co lli ns : tha t the m an ne r in wh ic h the ha rm oc curs is som eh ow 5 rel ev an t t o t he an al y si s. Se e Co lli ns , 1989-NMC A- 046, ¶¶ 17-21. W e have m a de clear 6 that i n c as es not

inv olv ing int en tio na l i nte rv en ing co nduc t, w he n the ri sk of ha rm is 7 fo re se ea

ble , the m an ne r that the fo re se ea ble harm is br ough t a

bout ne ed not it se lf be 8 fo res eeab le
. Id

. ¶ 21 ( “Nor does it m atter whether [the attorney ] could have foreseen 9 the ch ange in law. ”). Ac cordingly , w e find De fendant’ s citations to extra10 j urisdictio nal opin ions evaluatin g the f oreseeability

of the 2008 real estate m arket 11 co lla pse ina ppos ite
. W e co nc lud e that the dis tr ic t c ourt e rr ed in ap ply ing the doc tr ine 12 of independent interveni n g ca u se to its factual determ ination that the parties had 13 en te red in to an a tto rn ey -c lie nt r el at ion shi p and tha t P la int if f m ad e the loan in 14 re lianc e, a t l ea st p ar

tia lly , on D ef

en dant’ s se al of

appr ova l. 15 CON CLU SION 16 { 15} W e re ve rs e the dis tr ic t c ourt’ s de ci sio n dis m iss ing Pl ai nti ff ’ s co m pla int w ith 17 pr ej udi ce a nd r em an d f or c onsi de ratio n and a

ppor tionm en t of

da m ag es usi ng a 18 co m parativ e fa

ult a na ly sis
.11

1 { 16} IT IS S O ORDERE D.
2

____ ____ ____ ____ ____ ____ ____ ____ __ 3 LI N D A M . V A N Z I, Ju dg e 4 WE CO NCUR:

5

____ ____ ____ ____ ____ ____ ____ ____ _ 6 M IC HA EL D . BU ST A M A N TE , Ju dg e

7

____ ____ ____ ____ ____ ____ ____ ____ _ 8 J. M IL ES HA N IS EE , Ju dg e 9