Court Opinion

ID: 9578197
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:42:45.124006+00
Date Added: 2024-06-11T13:25:13.912080
License: Public Domain

SUTIN, Judge (concurring in part and dissenting in part). I concur in favor of entering judgment in favor of Shollenbarger and dissent in holding Lawless subject to trial on Count IV. A. Plaintiff’s complaint does not state a claim upon which relief can be granted. On January 30, 1979, plaintiff filed a complaint against defendants in five counts. Count One was based on breach of contract. It alleged that on June 17, 1975, plaintiff entered into a lease-purchase agreement with Shollenbarger and Lawless to purchase a house and lot. Shollenbarger was acting as administrator of an estate and Lawless was acting as the attorney of the estate by court order. Lawless and Shollenbarger offered to sell plaintiff the real estate on condition that plaintiff occupy the premises and begin making monthly payments of $313.00 and that 60% of these payments would be applied to the sales price of $40,-000.00, the agreed price. Shollenbarger and Lawless agreed to obtain a court order and an administrator’s deed conveying title to plaintiff when a damage suit pending against the estate had been concluded. However, on the same day, an order was obtained that Shollenbarger be allowed to rent to a lessee under the terms agreed upon. Shollenbarger and Lawless advised plaintiff that a mortgage company would foreclose if plaintiff did not move in and begin making monthly payments due to the fact that the estate did not have funds to make mortgage payments. Relying on the conditional agreement and statements, plaintiff moved into the house and began making monthly mortgage payments of $313.00 on June of 1975 and continued payments through November, 1978, a total of $12,-833.00, 60% of which to be applied on the purchase price ($7,699.80). On May 11, 1978, plaintiff filed his petition in the probate case asking for an order requiring a new administratrix to sell him the real estate pursuant to the agreement and on October 28, 1978, the petition was denied because the agreement was not binding on the estate. Plaintiff was always ready and willing to purchase the real estate pursuant to his agreement but Shollenbarger and Lawless refused or were unable to comply with the terms of the agreement and damages resulted. Count Two adopted “each and every allegation of Count One as if the same were set forth herein in full,” and alleged that Shollenbarger and Lawless were licensed attorneys and knew, or should have known, the necessary procedure and requirements in offering to sell and consummating the sale; that they failed to examine the standard of care and legal ability required and were guilty of legal malpractice by reason of which plaintiff was damaged. Count Two alleged an independent claim for breach of contract and legal malpractice. Count Three adopted “each and every allegation set forth in Count One and County Two as if the same were set forth herein in full,” and alleged that Shollenbarger and Lawless negligently handled the sale in failing to follow statutory requirements and failed “to obtain a Court Order specifically setting forth the terms of the settlement,” by reason of which plaintiff was damaged. Count Three alleged an independent claim for breach of contract, legal malpractice and negligence. Count Four adopted “each and every allegation set forth in Count One, Count Two and Count Three as if the same were set forth herein in full,” and alleged that Shollenbarger and Lawless falsely represented to plaintiff that they were going to obtain a court order to sell the real estate to plaintiff, when in fact, these defendants obtained a court order to rent the real estate to plaintiff; that plaintiff relied on these defendants’ representation that they were selling the real estate and based on this reliance plaintiff moved into the house and was damaged. Count Four alleged an independent claim for breach of contract, legal malpractice, negligence and false representation. Count Five adopted “each and every allegation set forth in Count One, Count Two, Count Three and Count Four, as if the same were set forth herein in full,” and alleged that Transamerica bonded Shollenbarger as administrator; that Shollenbarger was acting in a fiduciary capacity as administrator; that Shollenbarger violated his duties; that plaintiff was a beneficiary or third party beneficiary of the bond and Transamerica was liable on the bond. Count Five alleged an independent claim of breach of contract, legal malpractice, negligence, false representation and bond violation of Shollenbarger. This method of adoption of counts in blanket form was not attacked in the trial court proceedings by motion but defendants filed a host of affirmative defenses, one of which was, that plaintiff’s claim failed to state a claim upon which relief can be granted. Defendants also filed motions for summary judgment. On October 24, 1979, argument was held on defendants’ motions for summary judgment. On December 14, 1979, the trial court entered summary judgment in favor of Lawless. As to Count I, breach of contract, the court dismissed this count on the basis of res judicata. This ruling is not before us on appeal. As to‘Counts II, III and IV, judgment was granted for failure of each count “to state a claim for which relief can be granted and the Defendant is hereby granted summary judgment” as to each count. The majority opinion affirmed as to Lawless except as to Count IV on false representation. I would affirm on Counts II, III and IV because plaintiff’s complaint failed to state a claim upon which relief can be granted. Plaintiff’s complaint appears to be a matter of first impression under our Rules of Civil Procedure. To adopt separate counts in blanket form were not pleaded alternatively under Rule 8(e)(2) of the Rules of Civil Procedure. Neither does this type of pleading constitute adoption of statements in a pleading pursuant to rule 10(c). No case or authority has been found that accepts the adoption of one or more independent, not interdependent, claims for relief in one count. The only case approaching this subject matter is Hirshfield v. Briskin, 447 F.2d 694 (7th Cir. 1971). The trial court dismissed Counts I, II and III of plaintiff’s complaint for failure to state a claim. On appeal, defendants challenged the presence of averments in the alternative. Count I was based on a theory of constructive fraud. Count II incorporated all of the averments of Count I and added only an averment of wrongful purpose. Count III added an averment of negligence. In reversing, the court said: . .. The averments of wrongful purpose in Count II and of negligence in Count III are, in this complaint, so interdependent with the averments of conflict of interest in Count I that it is fruitless on this appeal to decide whether the averment of purpose in Count II would be formally sufficient to claim fraudulent intent if that were a necessary element of the claim or whether the law of Illinois would recognize negligence in management ... as a predicate for a shareholder’s derivative action. [Emphasis added.] [Id. 697, 698.] In the instant case, Counts II, III, IV and V are not interdependent with, but independent of, Count I on breach of contract. Rule 8(f) provides that “All pleadings shall be construed to do substantial justice.” “Substantial justice between the parties” “means justice to both parties.” Queeney v. Willi, 225 N.Y. 374, 122 N.E. 198, 200 (1919). But “substantial justice” alone means the fairness of this precise case under all its circumstances. Often justice and inflexible rules do not coincide. In this case, they do. We recognize that “substantial justice” rendered by a court is subjective in nature. To determine fairness, we search for rules of law which may be applied. We note that “The function of pleadings under these rules is to give fair notice of the claim asserted so as to enable the adverse party to answer and prepare for trial.” Las Luminarias of the N. M. Council v. Isengard, 92 N.M. 297, 304, 587 P.2d 444 (Ct.App.1978). Plaintiff’s complaint does not perform this function. “The rules of pleading cannot be totally disregarded if there is to be an orderly disposition of cases.” Wells v. Arch Hurley Conservancy District, 89 N.M. 516, 521, 554 P.2d 678 (Ct.App.1976), Hernandez, J., specially concurring. “[T]he purpose of pleading is to facilitate proper decisions on the merits.” Morrison v. Wyrsch, 93 N.M. 556, 559, 603 P.2d 295 (1979). Ordinarily, to render substantial justice, when one party totally disregards the function and purpose of pleadings, it is better to reverse the case, and order the complaint amended in accordance with the rules to put defendants on reasonable notice of plaintiff’s claims for relief. It has been held that the objection that the complaint fails to state a cause of action may be raised at any stage of the proceedings, even for the first time on appeal. Jernigan v. Clark and Day Exploration Company, 65 N.M. 355, 337 P.2d 614 (1959). It has also been held that a judgment rendered on an answer which clearly fails to state facts sufficient to constitute a defense to a good complaint is inherently and fatally defective and requires a reversal, Baca v. Perea, 25 N.M. 442, 184 P. 482 (1919), and a judgment rendered on a complaint that fails to state a claim for relief is inherently and fatally defective. We may recognize that fact for the first time on appeal. See, Sais v. City Elect. Co., 26 N.M. 66, 188 P. 1110 (1920). B. No genuine issue of material fact exists as to Count IV. The reason I do not suggest reversal to amend pleadings rests on the fact that Lawless, like Shollenbarger, was entitled to summary judgment on Count IV, false representation. Lawyers are clothed in coats of truth, honesty and high ideals in the practice of law. It is not our duty to protect them when their conduct falls below the standards adopted over the years. In my opinion summary judgment should be granted Lawless because Lawless did not deceive Holland who sought purchase of a residence under the circumstances of this case. Plaintiff alleged that Shollenbarger and Lawless falsely represented to plaintiff that they were going to obtain a court order to sell plaintiff the real estate when in fact these defendants obtained a court order to rent the real estate to plaintiff. An action for false representation involves a party who intentionally made a statement that was untrue. Household Finance Corp. v. Christian, 8 W3s.2d 53, 98 N.W.2d 390, 392 (1959) quotes the following definition of the elements of fraud based upon “false representation”: “To be actionable, the false representation must consist, first, of a statement of fact which is untrue; second, that it was made with intent to defraud and for the purpose of inducing the other party to act upon it; third, that he did in fact rely on it and was induced thereby to act, to his injury or damage.” [Emphasis added.] See also, Peterson v. Schaberg, 116 Neb. 346, 217 N.W. 586 (1928); Schoellhamer v. Rometsch, 26 Or. 394, 38 P. 344 (1894). The majority opinion states: [I]t is apparent that it is a factual issue as to whether the statements made by Lawless to the plaintiff constituted negligent misrepresentation. There is no doubt that Lawless made some statements to plaintiff; whether those statements were false, whether Lawless acted negligently, and the scope of any liability are all questions of fact to be resolved by the trier of facts. [Emphasis added.] Plaintiff did not claim that these representations were negligent. In Maxey v. Quintana, 84 N.M. 38, 42, 499 P.2d 356 (Ct.App.1972), this Court said: We hold that negligent misrepresentation is an action upon which relief can be granted, that it is a tort determined by the general principles of the law of negligence and that it is an action separate from the action of fraud or deceit. ... [Emphasis added.] An action for “negligent representation” involves a party who failed to exercise reasonable care in making a statement of fact that was untrue. “One of the elements of fraud is that the representation made ‘was made with intent to deceive and for the purpose of inducing the other party to act upon it.’ ” Delgado v. Costello, 91 N.M. 732, 580 P.2d 500 (Ct. App.1978). None of the elements essential to an action for fraud can be presumed and each must be shown by clear and convincing evidence. Sauter v. St. Michaels College, 70 N.M. 380, 374 P.2d 134 (1962). “Intent to deceive means intent to say something, that is expected to be relied on, that.is not believed to be true, or, if strictly true, is hoped will be understood in an untruthful sense.” Sec. & Exchange Com’n v. World Radio Mission, Inc., 544 F.2d 535, 540 (1st Cir. 1976). “The utterance of a known false statement made with intent to induce action ‘is equivalent to an intent to deceive.’ ” Wolfing v. Prudential Insurance Company of America, 417 S.W.2d 498, 499 (Tex.Civ.App.1967). A careful reading of the affidavit of Lawless and plaintiff, together with Lawless’ testimony in the probate case convinces me beyond any reasonable doubt that Lawless did not intend to deceive plaintiff, and that no genuine issue of material fact exists. Summary judgment for Lawless should be affirmed.