Court Opinion

ID: 4024370
Source: CourtListenerOpinion
Date Created: 2016-08-15 17:07:02.709787+00
Date Added: 2024-06-11T14:44:55.504627
License: Public Domain

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     Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum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 DENNIS O’BRIEN,

 3          Plaintiff-Appellee,

 4 v.                                                                                   NO. 34,287

 5 DENNIS W. MONTOYA,

 6          Defendant-Appellant.

 7 APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
 8 Raymond Z. Ortiz, District Judge

 9   O’Friel and Levy, P.C.
10   Daniel J. O’Friel
11   Pierre Levy
12   Aimee Bevan
13   Santa Fe, NM

14 for Appellee

15 Santiago Juarez Attorney at Law
16 Santiago E. Juarez
17 Albuquerque, NM

18 for Appellant

19                                 MEMORANDUM OPINION

20 KENNEDY, Judge.
 1   {1}   Numerous procedural inadequacies in a federal case’s filing and service of

 2 process have left Plaintiff, Dennis O’Brien (O’Brien) without decisive evidence

 3 regarding the accrual of a claim for statute of limitations purposes. O’Brien contends

 4 that the filing of a complaint in federal court gave rise to his claim for malicious abuse

 5 of process. Six years after that original complaint was filed, O’Brien brought suit

 6 against Defendant, Dennis Montoya (Montoya) in state district court, asserting

 7 malicious abuse of process, and seeking application of the discovery rule to toll the

 8 applicable four-year statute of limitations. Montoya objected, filing a motion for

 9 summary judgment in which he asserted that the cause of action accrued

10 approximately six years earlier, and insisted that the statute of limitations had run.

11 Through summary judgment proceedings, the district court determined that O’Brien’s

12 cause of action did not accrue until one year before he filed suit. The district court’s

13 determination on this issue was based on Montoya’s misspelling of O’Brien’s name

14 in the complaint, mistakenly naming the City of Santa Fe rather than Santa Fe County

15 as a defendant in the case, and various serious irregularities in the service of process.

16 The district court proceeded to grant summary judgment for O’Brien, entering a

17 judgment totaling over $500,000 in damages. Montoya appealed.

18   {2}   Conflicting evidence exists regarding O’Brien’s actual knowledge of the claim

19 and when he acquired it, and the application of the discovery rule therefore presents

20 a question of disputed material fact to be determined by a fact-finder. Because there

                                               2
 1 are disputed questions of material fact concerning when O’Brien became aware of the

 2 lawsuit, whether he was actually served, and if his suit is barred by the statute of

 3 limitations, we reverse the district court’s order denying Montoya’s second motion for

 4 summary judgment based on the statute of limitations, and granting O’Brien’s motion

 5 for summary judgment on his malicious abuse of process claim. We remand for

 6 further proceedings consistent with this Opinion.

 7 I.      BACKGROUND

 8   {3}   Walter Mitchell was involved in an altercation, during which he wielded a

 9 sword at O’Brien. At the time, O’Brien was a sergeant with the Santa Fe County

10 Sheriff’s Department. In response to Mitchell’s actions, O’Brien fired his weapon

11 three times, hitting Mitchell. Mitchell was indicted for aggravated assault against a

12 peace officer and aggravated assault with a deadly weapon and found “guilty but

13 mentally ill” with regard to both offenses in 2004.

14   {4}   On November 2, 2005, Montoya, representing Mitchell, filed a civil rights

15 action in the United States District Court for the District of New Mexico (hereinafter

16 Mitchell v. City of Santa Fe), listing O’Brien as a defendant. The complaint misspelled

17 O’Brien’s name and incorrectly listed the City of Santa Fe as a defendant, rather than

18 Santa Fe County. Montoya filed a return of service, alleging that personal service of

19 the summons and complaint were made on “the defendant” at the Santa Fe County

20 Sheriff’s Office on November 18, 2005. Which of the two defendants, or both, were

                                              3
 1 served was not specified in the document. It is not disputed that O’Brien was aware

 2 of the existence of this lawsuit, as he had read about it in a newspaper article.

 3 However, he took no further action in the matter.

 4   {5}   In April 2006, Montoya filed an amended complaint in Mitchell v. City of Santa

 5 Fe that corrected the spelling of O’Brien’s name, correctly identified the Santa Fe

 6 Sheriff’s Department as O’Brien’s employer, and substituted the Board of County

 7 Commissioners of Santa Fe for the City of Santa Fe. Montoya then submitted a notice

 8 of filing through the federal court’s e-filing system, in which he certified that a copy

 9 of the amended complaint would be served on Santa Fe County, and that O’Brien was

10 in default. It is undisputed that Montoya never served Santa Fe County or O’Brien

11 with a copy of this amended complaint.

12   {6}   Montoya applied for default judgment against O’Brien that the federal district

13 court granted on May 9, 2006. In December 2007, Montoya scheduled a trial in

14 federal district court on damages that resulted in a jury award to Mitchell of

15 $2,500,000 in compensatory damages and $500,000 in punitive damages against

16 O’Brien. Neither O’Brien nor Santa Fe County appeared at the trial. Montoya told the

17 Court that notice of the hearing had gone out via the e-filing system to all parties who

18 had entered appearances. Approximately two weeks after the damages trial concluded,

19 with a large judgment for Mitchell, Montoya dismissed Santa Fe County from

                                              4
 1 Mitchell v. City of Santa Fe, leaving O’Brien as the sole remaining defendant. On July

 2 29, 2009, Montoya filed a lis pendens against O’Brien’s property.

 3   {7}   On February 22, 2010, an Assistant United States Attorney informed O’Brien

 4 of the default judgment entered against him in Mitchell v. City of Santa Fe. Santa Fe

 5 County, as well as counsel for O’Brien, brought suit in federal court to set aside the

 6 default judgment (hereinafter O’Brien v. Mitchell).1 O’Brien v. Mitchell ended when

 7 the federal court entered an order vacating ab initio the final judgment in Mitchell v.

 8 City of Santa Fe and dissolving the lis pendens. That order was the result of the

 9 agreement and stipulation of the parties, and occurred prior to the scheduled jury trial

10 on the merits of O’Brien v. Mitchell.

11   {8}   On December 22, 2011, O’Brien filed this action (O’Brien v. Montoya),

12 alleging Montoya engaged in malicious abuse of process when he filed the complaint

13 in Mitchell v. City of Santa Fe. Montoya filed a motion to dismiss based on collateral

14 estoppel and res judicata. That motion was denied. Montoya then filed two motions

15 for summary judgment. We do not consider the first motion that requested partial

16 summary judgment on any actions arising from the lis pendens. The second motion

17 requested summary judgment on all claims arising from any act that occurred prior to

18 December 22, 2007, based on the theory that such claims would be barred by the

         1
19         By this time, Mitchell had died from causes unrelated to this matter. Thus,
20 O’Brien brought suit against Mitchell’s estate.

                                              5
 1 statute of limitations. O’Brien also filed a motion for summary judgment on his

 2 malicious abuse of process claim. Following briefing by the parties and a hearing on

 3 the motions for summary judgment, the district court granted O’Brien’s motion for

 4 summary judgment and denied both of Montoya’s motions for summary judgment.

 5 Montoya now appeals the district court’s order. We present additional facts as

 6 necessary to our discussion of the issues below.

 7 II.      DISCUSSION

 8   {9}    The district court denied Montoya’s motion for summary judgment based on

 9 the statute of limitations barring O’Brien’s claim, reasoning that no genuine issues of

10 material fact existed as to O’Brien first learning of the default judgment against him

11 on February 22, 2010, or Montoya’s fraudulent concealment of the federal lawsuit

12 against O’Brien. Concluding that the limitation period began when O’Brien first

13 learned of the default judgment against him on February 22, 2010, enabled the district

14 court to consider the merits of O’Brien’s motion for summary judgment on his

15 malicious abuse of process claim. Thus, in order to determine whether the district

16 court’s granting of O’Brien’s motion was proper, we first address Montoya’s

17 contention that O’Brien’s suit was barred by the statute of limitations.

18   {10}   “Summary judgment is appropriate where there are no genuine issues of

19 material fact and the movant is entitled to judgment as a matter of law.” Self v. United

20 Parcel Serv., Inc., 1998-NMSC-046, ¶ 6, 126 N.M. 396, 970 P.2d 582. On appeal, we

                                              6
 1 view the facts in the light most favorable to the non-moving party, and draw all

 2 reasonable inferences in support of a trial on the merits. See Romero v. Philip Morris

 3 Inc., 2010-NMSC-035, ¶¶ 7-8, 10, 148 N.M. 713, 242 P.3d 280 (defining an inference

 4 as “a logical deduction from facts proved” rather than guess work, conjecture, or

 5 supposition (internal quotation marks and citation omitted)). “Our review is conducted

 6 in light of our traditional disfavor of summary judgment and our preference for trials

 7 on the merits[,]” which is founded on the principle that summary judgment is “a

 8 drastic remedy to be used with great caution.” Madrid v. Brinker Rest. Corp., 2016-

 9 NMSC-003, ¶ 16, 363 P.3d 1197 (internal quotation marks and citation omitted);

10 Romero, 2010-NMSC-035, ¶ 9 (“Permitting trial courts a license to quantify or

11 analyze the evidence . . . would adversely impact our jury system and infringe on the

12 jury’s function as the trier of fact and the true arbiter of the credibility of witnesses.”

13 (internal quotation marks and citation omitted)).

14   {11}   Montoya contends that the district court erred in denying his motion. According

15 to Montoya, O’Brien’s malicious abuse of process claim, filed six years after

16 Mitchell’s initial claim against O’Brien, was filed outside the four-year statute of

17 limitations and therefore untimely. In response, O’Brien relies on the “discovery rule,”

18 asserting that he did not learn of the default judgment against him until February 22,

19 2010, and that his suit filed in December 2011 was therefore timely. See NMSA 1978,

20 § 37-1-7 (1880).

                                                7
 1   {12}   The parties agree that the applicable statute of limitations is four years. See

 2 NMSA 1978, § 37-1-4 (1880) (applying to actions brought for relief upon the ground

 3 of fraud and all other actions not otherwise provided for). Section 37-1-7 creates a

 4 discovery rule, which provides that a cause of action does not accrue for the purpose

 5 of calculating the statute of limitations period until the plaintiff discovers, or should

 6 have discovered, the facts that underlie his or her claim. Butler v. Deutsche Morgan

 7 Grenfell, Inc., 2006-NMCA-084, ¶ 26, 140 N.M. 111, 140 P.3d 532. Sometimes

 8 termed “inquiry notice,” the discovery rule’s standard requires “knowledge of facts,

 9 conditions, or circumstances which would cause a reasonable person to make an

10 inquiry leading to the discovery of the concealed cause of action.” Yurcic v. City of

11 Gallup, 2013-NMCA-039, ¶ 9, 298 P.3d 500 (internal quotation marks and citation

12 omitted). “The key consideration under the discovery rule is the factual, not the legal,

13 basis for the cause of action.” Slusser v. Vantage Builders, Inc., 2013-NMCA-073, ¶

14 8, 306 P.3d 524 (internal quotation marks and citation omitted). In other words, the

15 action accrues when the plaintiff knew or should have known the relevant facts,

16 regardless of whether he knew that those facts were enough to establish a legal cause

17 of action. See id. The discovery rule carries an affirmative inquiry obligation, which

18 requires a plaintiff to exercise “reasonable diligence” in discovering a claim. Williams

19 v. Stewart, 2005-NMCA-061, ¶ 14, 137 N.M. 420, 112 P.3d 281 (internal quotation

                                               8
 1 marks and citation omitted). This “reasonable diligence” standard is measured

 2 objectively. Id.

 3   {13}   Our courts have generally characterized the application of the discovery rule as

 4 a jury question, Yurcic, 2013-NMCA-039, ¶ 10, and whether a claim has been timely

 5 filed or whether good cause exists for delay in filing are questions of fact that become

 6 issues of law only when the relevant facts are undisputed. Id. ¶ 9. “[W]here there are

 7 disputed facts, it is generally the province of a jury to determine the date on which a

 8 plaintiff became aware or should have become aware of the facts underlying his or her

 9 claim.” Butler, 2006-NMCA-084, ¶ 27; see Medina v. Fuller, 1999-NMCA-011, ¶ 22,

10 126 N.M. 460, 971 P.2d 851 (stating the general rule that disputed questions of

11 material fact regarding whether a plaintiff is barred by the statute of limitations are to

12 be decided by a jury). Thus, whether O’Brien was put on inquiry notice prior to

13 February 22, 2010, is a question of fact that the district court could only resolve

14 through summary judgment if the facts associated therewith were undisputed.

15 A.       Inquiry Notice Through Newspaper Article

16   {14}   Montoya insists that the undisputed facts presented to the district court

17 demonstrated that O’Brien knew about the initial Mitchell v. City of Santa Fe action

18 in 2005. Montoya points to an article in the Albuquerque Journal that discussed the

19 shooting between of Mitchell by O’Brien, explained that O’Brien worked for the

20 Santa Fe County Sheriff’s Department, and explained that the Mitchell v. City of Santa

                                                9
 1 Fe suit incorrectly named the City of Santa Fe rather than the Santa Fe County

 2 Sheriff’s Department. The article also provided details of the shooting, describes an

 3 account of the shooting as given by the complaint, and correctly identified O’Brien.

 4 There is no dispute that O’Brien read the article the day it was published; O’Brien

 5 admits to having done so. The article appeared in the newspaper on November 7,

 6 2005, five days after Montoya filed Mitchell v. City of Santa Fe. The newspaper

 7 article’s explanation of the factual basis for the complaint in Mitchell v. City of Santa

 8 Fe likely ran contrary to O’Brien’s view of those facts. If the factual discrepancies

 9 between the actual events, and the complaint’s assertions were as drastic as O’Brien

10 now claims on appeal, they may have been reasonably adequate to trigger further

11 inquiry into the bases and grounds for such assertions, as well as the implications

12 thereof. It seems that irrespective of service of process, O’Brien could have known he

13 was involved in a lawsuit, what the claim was, and that there was a mistake in naming

14 a party involved in the suit.

15   {15}   Once a defendant makes a prima facie showing that a claim is barred by the

16 statute of limitations, “a plaintiff attempting to invoke the discovery rule has the

17 burden of ‘demonstrating that if he or she had diligently investigated the problem he

18 or she would have been unable to discover’ the facts underlying the claim.” Butler,

19 2006-NMCA-084, ¶ 28 (quoting Martinez v. Showa Denko, K.K., 1998-NMCA-111,

20 ¶ 22, 125 N.M. 615, 964 P.2d 176) (alterations omitted). Montoya proffered evidence

                                              10
 1 that the complaint in Mitchell v. City of Santa Fe was filed on November 2, 2005. On

 2 December 22, 2011, O’Brien filed his malicious abuse of process claim, O’Brien v.

 3 Montoya, which was based on Montoya’s filing of the complaint in Mitchell v. City

 4 of Santa Fe. Based on the November 2005 date of the complaint, the date of the

 5 newspaper article published five days later, O’Brien’s acknowledgment that he read

 6 the article, and O’Brien’s complaint filed in December 2011, Montoya met his burden

 7 of making a prima facie showing that O’Brien’s claim was outside the four years

 8 allowed by Section 37-1-4.

 9   {16}   To prevail, then, it was incumbent on O’Brien to demonstrate that, had he

10 diligently investigated his involvement in the Mitchell v. City of Santa Fe suit after

11 reading the newspaper article, he would have been unable to ascertain whether he was

12 listed in the lawsuit or whether the facts stated in the complaint were groundless.

13 O’Brien has failed to meet his burden. The two parties’ assertions on appeal as to the

14 accrual date of O’Brien’s cause of action are not mutually exclusive. While Montoya

15 credibly asserts O’Brien had knowledge of the lawsuit’s existence, O’Brien asserts

16 that he first discovered the default judgment against him in 2010. However, O’Brien’s

17 complaint alleges that it is the complaint in Mitchell v. City of Santa Fe that gives rise

18 to his malicious abuse of prosecution claim and not the outcome of those proceedings.

19 Therefore it is the lawsuit’s existence, rather than later proceedings that are relevant

20 to our statute of limitations considerations here.

                                               11
 1   {17}   O’Brien was certainly aware of the circumstances of the shooting. We conclude

 2 that this evidence regarding the additional knowledge that Mitchell v. City of Santa Fe

 3 had been filed, taken against O’Brien’s asserted lack of knowledge regarding his

 4 involvement in that case, leaves open a question of fact as to whether O’Brien had

 5 knowledge sufficient to constitute inquiry notice for purposes of the discovery rule.

 6 Butler, 2006-NMCA-084, ¶ 27 (“[W]here there are disputed facts, it is generally the

 7 province of a jury to determine the date on which a plaintiff became aware or should

 8 have become aware of the facts underlying his or her claim.”). It would therefore be

 9 improper for the district court to have granted summary judgment on the basis of

10 knowledge based on the newspaper article alone.

11 B.       Inquiry Notice Through Service of Process

12   {18}   Looking to the other means of discovery—service of process—we note that the

13 facts provided by the parties involve an incredible amount of uncertainty and

14 remarkable lack of clarity regarding service of process in Mitchell v. City of Santa Fe.

15 In addition, the parties’ manner of pleading below contains such selective disclosure

16 that it is difficult to parse any undisputed facts from the record, much less those that

17 are solidly at issue in this appeal. The summons accompanying the first complaint in

18 that case lists the City of Santa Fe, et al., as the defendants in the case. As such,

19 O’Brien’s name did not appear in the caption on the summons as a defendant. The

20 Summons stated that it was to be served on O’Brien and the Santa Fe County Sheriff’s

                                              12
 1 Department. However, O’Brien’s name was spelled incorrectly, and the Santa Fe

 2 Police Department, while initially listed, was subsequently deleted and “Santa Fe

 3 County Sheriff’s Dept.” was handwritten in its place.2 The Summons was dated

 4 November 15, 2005. On November 18, 2005, Montoya filed a return of service that

 5 stated that it had been personally served “upon the defendant” at the Santa Fe County

 6 Sheriff’s Office, without any clarification of which defendant was served. The return

 7 of service bore the signature of a Sergeant Johnson, whose deposition testimony

 8 revealed that he had no independent memory or recollection regarding the service of

 9 process in the case, including whether or not he served the documents on O’Brien.

10 The Santa Fe County Sheriff’s internal records of service lists the plaintiff in this case

11 as Paula Montoya, lists the defendant as the City of Santa Fe, lists the attorney as pro

12 se, and states that the individual served was Dennis O’Brien (spelled correctly this

13 time). It is impossible to tell if Montoya legally served the first complaint.

14   {19}   The essence of the summary judgment issues in this case are this: while

15 Montoya asserts something happened to trigger the statute of limitations in 2005,

16 O’Brien asserts that it did not. Both point to evidence that they assert proves a true and

17 undisputed set of facts. By virtue of their disagreement, however, a dispute exists. See

18 O’Brien v. Mitchell, 883 F. Supp. 2d 1055, 1064 n.9 (D.N.M. 2012). This dispute

            2
19           It appears that this change was made before the summons was served.

                                               13
 1 concerns facts material to a decision of whether the discovery rule applies in 2005 or

 2 2011. It is disturbingly likely that O’Brien was not served with Mitchell’s suit. It is

 3 equally conceivable, however, that he received the summons, but disregarded it

 4 because it did not explicitly list him as a defendant. The latter possibility is troubling

 5 in light of other evidence indicating his awareness of the suit through the newspaper

 6 article, giving rise to the inference that O’Brien knew that he was involved in

 7 Mitchell’s lawsuit. Given these factually disparate, yet equally possible scenarios, a

 8 dispute exists as to whether O’Brien knew or should have known facts sufficient to

 9 place him on inquiry notice.

10   {20}   Neither party has affirmatively demonstrated that inquiry notice existed in this

11 case. The facts do not clearly demonstrate whether O’Brien had enough knowledge

12 of the complaint and facts underlying the complaint to be placed on inquiry notice

13 sufficient to trigger the discovery rule in 2005. It is unclear from the evidence

14 presented during summary judgment whether O’Brien should be held to have actually

15 had knowledge or should have had knowledge of the suit against Santa Fe County.

16 Due to the conflicting testimony and evidence regarding the date on which the action

17 accrued, the issue of whether the discovery rule applies in this case is a question of

18 fact to be determined by the jury. See Butler, 2006-NMCA-084, ¶ 27. The district

19 court erred in making a factual determination on an issue that was disputed and

20 undeniably based on facts material to the case that were unproven. As such, we

                                               14
 1 reverse the district court’s order granting O’Brien’s motion for summary judgment

 2 and denying Montoya’s motion for summary judgment.

 3 B.       Equitable Tolling

 4   {21}   O’Brien asserts that, even if his complaint was untimely, his claim should be

 5 allowed to proceed either because the statute of limitations period was tolled by

 6 Montoya’s fraudulent concealment of the claims against O’Brien, or because Montoya

 7 should be equitably estopped from asserting the statute of limitations. O’Brien

 8 suggests that, by not naming O’Brien in the summons, by failing to serve the

 9 complaint and summons on the defendants, and by falsely representing that the

10 complaints and summons had been served, Montoya fraudulently concealed the claims

11 in Mitchell v. City of Santa Fe.

12   {22}   As O’Brien acknowledges in his brief, however, we need only address these

13 arguments if we conclude the district court erred in finding O’Brien’s complaint was

14 timely. We make no such conclusion here. Instead, we hold that there exist disputed

15 issues of material fact as to the date on which O’Brien’s claims accrued. We draw no

16 conclusion on the merits of Montoya’s assertion that O’Brien’s claims are untimely.

17 Thus, we do not address O’Brien’s equitable estoppel or fraudulent concealment

18 arguments. In fact, to do so would be improper, as it would require a factual

19 determination regarding when O’Brien discovered the existence of Mitchell v. City of

20 Santa Fe. See Cont’l Potash, Inc. v. Freeport-McMoran, Inc., 1993-NMSC-039, ¶ 30,

                                              15
 1 115 N.M. 690, 858 P.2d 66 (acknowledging that an element of fraudulent concealment

 2 is the “successful concealment [of the cause of action] from the injured party”

 3 (emphasis added), holding limited on other grounds by Davis v. Devon Energy Corp.,

 4 2009-NMSC-048, ¶¶ 34-35, 147 N.M. 157, 218 P.3d 75). Making that factual

 5 determination on appeal, in light of the disputes evident in the record, would be

 6 improper. See Roth v. Thompson, 1992-NMSC-011, ¶ 17, 113 N.M. 331, 825 P.2d
7 1241 (acknowledging that summary judgment is proper only where the facts are not

 8 disputed and the legal effects of the facts is all that remains to be determined). We

 9 reverse both the district court’s order denying Montoya’s motion for summary

10 judgment based on the theory that Plaintiff’s claims were barred by the statute of

11 limitations and also granting O’Brien’s motion for summary judgment on his

12 malicious abuse of process claim. We remand for further proceedings consistent with

13 this Opinion.

14   {23}   IT IS SO ORDERED.

15
16                                        RODERICK T. KENNEDY, Judge

17 WE CONCUR:

18 __________________________________
19 M. MONICA ZAMORA, Judge

                                            16
1 __________________________________
2 J. MILES HANISEE, Judge

                                  17