Opinion ID: 1195176
Heading Depth: 2
Heading Rank: 5

Heading: motion for reconsideration and the assignment

Text: 28. Nevertheless, this Court must also evaluate the effect of the purported assignment to GCM of the Joint Venture's chose in action. GCM attached the assignment to a motion for reconsideration. A district court has broad discretion in ruling upon a motion for reconsideration and will only be reversed for an abuse of that discretion. See Sun Country Sav. Bank v. McDowell, 108 N.M. 528, 532, 775 P.2d 730, 734 (1989) (discussing the standard of review for a motion under Rule 1-060(B) NMRA 1997). Under Rule 1-017(A), a district court also has discretion to allow a reasonable time for ratification, joinder, or substitution of parties if an honest mistake resulted in the prosecution of an action by a party other than the real party in interest. As a result, this Court will review the denial of GCM's motion for reconsideration based on the assignment under an abuse of discretion standard. An abuse of discretion may be found only where the judge has acted arbitrarily or unreasonably under the particular circumstances. United Salt Corp. v. McKee, 96 N.M. 65, 68, 628 P.2d 310, 313 (1981). Judge Hall stated that there were no good grounds to reconsider the decision previously made. On the record before us, we are unable to conclude that the judge's decision was either arbitrary or unreasonable. Therefore, we affirm the denial of the motion for reconsideration.
29. The purported assignment may be relevant in demonstrating a ratification by the Joint Venture if, as we assumed above, a partner may bring an action against a third party for the aiding and abetting of another partner's breach of fiduciary duty prior to dissolution. GCM alleged that Brown breached his fiduciary duty to the Limited Partnership and to the Joint Venture as a limited partner. In addition, GCM alleged that Kentucky Central knew of the fiduciary duty and intentionally induced Brown to breach that duty to the Joint Venture's detriment. GCM also has alleged a priority claim of the Joint Venture to the proceeds of a sale of the property by the Limited Partnership. Further, GCM has alleged that the Joint Venture is the only partner in the Limited Partnership to hold a priority claim on the property, making it a unique interest within the partnership. Finally, the gist of the complaint concerns a breach of fiduciary duty in connection with Brown's actions on behalf of the Limited Partnership and concerning the property over which the Joint Venture had a priority claim within the partnership. Thus, Brown's actions may have been within the scope of his fiduciary duty not only to the Limited Partnership but also to the Joint Venture, as a limited partner. [2] Assuming the Joint Venture has a cause of action as a limited partner, the Joint Venture would be the real party in interest to assert an action based on the Joint Venture's priority claim. As a result, the assignment would be relevant in determining whether GCM may pursue this action on behalf of the Joint Venture. 30. In order to assign the right to sue belonging to a partnership, all partners must agree to the assignment. Daniels Ins., 106 N.M. at 332, 742 P.2d at 544 (Where one partner makes an assignment of partnership property without the consent of the other partners, the assignment is void.). We assume that the same principle applies to an assignment by a joint venture. In this case, the assignment is signed by Ron Brown, General Partner of Guadalupe Plaza Joint Venture, but it is not signed by GCM or Elmer Sproul, the other joint venturers. However, [a]n invalid or ineffective assignment ... may be validated by ratification. Daniels Ins., 106 N.M. at 332, 742 P.2d at 544. Further, the issue of ratification is a question of fact. Daniels Ins., 106 N.M. at 333, 742 P.2d at 545. This Court, then, must determine whether the issue of ratification was properly raised in the district court to determine whether it was an abuse of discretion to deny reconsideration.
31. New Mexico's Rule 1-017(A) differs from its counterpart in the federal rules by granting discretion to the trial court in whether to allow ratification. Compare Rule 1-017(A) (Where it appears that an action, by reason of honest mistake, is not prosecuted in the name of the real party in interest, the court may allow a reasonable time for ratification of commencement of the action by, or joinder or substitution of, the real party in interest....) (emphasis added), with Fed.R.Civ.P. 17(a) ( No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest....) (emphasis added). This sentence in the federal rule was added in 1966 in order to avoid forfeiture and injustice when an understandable mistake has been made in selecting the party in whose name the action should be brought. 6A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1555, at 411-12 (1990). This purpose reflects the general goal of the federal rules to reduce the burden on parties at the pleading stage and to alleviate the risk of dismissal with prejudice based on an initial innocent miscalculation. Id. § 1555, at 412-14. While the federal rule is mandatory, courts have inferred a prerequisite of understandable mistake and a lack of prejudice to the defendant. Arabian Am. Oil Co. v. Scarfone, 939 F.2d 1472, 1477 (11th Cir. 1991). In addition, the purpose of this portion of Rule 17 must be viewed in context with the purpose of requiring prosecution by the real party in interest: to ensure res judicata effect of the judgment and to ensure that the interests involved otherwise are properly protected. Fed.R.Civ.P. 17(a) advisory committee's note (1966 Amendment). [R]atification has res judicata effect on ratifying parties and allows them an opportunity to protect their interests. ICON Group, Inc. v. Mahogany Run Dev. Corp., 829 F.2d 473, 477 (3d Cir.1987). 32. The manner in which Rule 1-017(A) differs from the mandatory nature of the federal rule implies a broader discretion over such matters in New Mexico trial courts. Nonetheless, New Mexico's Rules of Civil Procedure have a similar overall goal of making pleading less burdensome. See Rule 1-008(A) NMRA 1997 (requiring notice pleading); Las Luminarias of the N.M. Council of the Blind v. Isengard, 92 N.M. 297, 300, 587 P.2d 444, 447 (Ct.App.1978) (New Mexico adheres to the broad purposes of the Rules of Civil Procedure and construes the rules liberally, particularly as they apply to pleading.). We also have a similar specific goal in requiring prosecution by the real party in interest. See Daniels Ins., 106 N.M. at 331, 742 P.2d at 543; cf. United Nuclear Corp. v. Fort, 102 N.M. 756, 761, 700 P.2d 1005, 1010 (Ct.App.1985) (stating that the rule disfavoring the splitting of causes of action is grounded upon public policy designed to avoid a multiplicity of suits). Thus, New Mexico cases are consistent with the federal rule and federal cases in construing the policies served by providing an opportunity for ratification. See Chavez v. Regents of Univ. of N.M., 103 N.M. 606, 610, 711 P.2d 883, 887 (1985) (discussing Rule 1-017(A) and the principle that in the interests of justice and to promote the adjudication of a case upon its merits, amendments should be freely granted); cf. Rule 1-021 NMRA 1997 ( Misjoinder of parties is not ground for dismissal of an action.) (emphasis added). While decisions under Rule 1-017(A) typically will rest in the sound discretion of the trial court, the policies underlying the rule support a liberal interpretation in favor of the movant.
33. Under Rule 1-017(A), there is no clear direction as to the proper procedure for raising the issue of ratification. Neither the parties nor the district court discussed this rule either in the summary judgment proceeding or in the motion for reconsideration. In addition, the document GCM attached to its motion was labeled an assignment rather than a ratification. However, [i]f the trial court does consider ... new material [on reconsideration] and still grants summary judgment, `the appellate court may review all of the materials de novo. ' In re Estate of Keeney, 1995 NMCA 181, 121 N.M. 58, 61, 908 P.2d 751, 754 (quoting Fields v. City of S. Houston, Texas, 922 F.2d 1183, 1188 (5th Cir.1991)). We are unable to determine whether, in ruling on the motion for reconsideration, the district court considered the assignment or refused to consider it. Therefore, we will not review the assignment de novo. 34. Without further information regarding the basis of the district court's ruling, we cannot conclude that the district court abused its discretion in denying GCM's motion for reconsideration. The district court might have concluded that the assignment was invalid on its face as a ratification. Neither the assignment nor the motion to reconsider suggested the possible ratification by Elmer Sproul, a co-joint venturer, to a degree sufficient to create a factual question as to his assent. Cf. ICON Group, 829 F.2d at 478 (requiring the ratification of all parties with an interest in the action). Alternatively, the district court might have concluded that GCM's assertion of an individual claim was not based on an honest mistake. In fact, because GCM sought an equitable lien on the property of the Limited Partnership, the district court reasonably may have concluded that GCM understood that either the Joint Venture or the Limited Partnership was the real party in interest in this matter. GCM has not demonstrated that such conclusions would be unreasonable or arbitrary. Finally, it is possible that the district court understood the motion as simply a request to reconsider the propriety of the grant of summary judgment. While Rule 1-007(B)(1) NMRA 1997 (requiring particularity of grounds in motions), does not require citation to a specific rule supporting the motion, see Phelps Dodge Corp. v. Guerra, 92 N.M. 47, 50-51, 582 P.2d 819, 822-23 (1978); Century Bank v. Hymans, 1995 NMCA 146, 120 N.M. 684, 689, 905 P.2d 722, 727, the failure to clearly articulate the legal basis for a motion is relevant in reviewing a trial court's exercise of discretion. By not citing the rule, GCM may have failed to make clear to the district court that its motion raised a distinct, and yet unaddressed, issue. GCM has failed to demonstrate that the district court did not rely on any of the above reasonable grounds and, instead, relied on an unreasonable or arbitrary basis of fact or law. 35. On this record, GCM has not demonstrated that the trial judge's decision was either arbitrary or unreasonable. We conclude that the trial judge did not abuse his discretion.