1997 -NMCA- 98, Halwood v. Cowboy Auto Sales, Inc.

• Decision Date: 20 May 1997
• Docket Number: No. 17566,17566
• Citation: 946 P.2d 1088,1997 NMCA 98,124 N.M. 77
• Parties: , 1997 -NMCA- 98 Wilson HALWOOD, Jr. and Lorena Halwood, Plaintiffs-Appellants, v. COWBOY AUTO SALES, INC. and Bruce Williams, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

Page 1088

946 P.2d 1088

124 N.M. 77, 1997 -NMCA- 98

Wilson HALWOOD, Jr. and Lorena Halwood, Plaintiffs-Appellants, v. COWBOY AUTO SALES, INC. and Bruce Williams, Defendants-Appellees.

No. 17566.

Court of Appeals of New Mexico.

May 20, 1997.

Certiorari Denied Sept. 24, 1997.

Richard N. Feferman, Susan Warren, Law Offices Of Richard N. Fererman, Albuquerque, for Plaintiffs-Appellants.

Lana E. Marcussen, Albuquerque, for Defendants-Appellees.

OPINION

PICKARD, Judge.

¶1 On motion for rehearing, the opinion filed April 30, 1997, is withdrawn, and the following opinion is substituted in its place. The motion for rehearing is otherwise denied, and the motion to strike is denied.

¶2 A Navajo Tribal Court (tribal court) granted Indian Plaintiffs a default judgment of compensatory, statutory, and punitive damages for non-Indian Defendants' wrongful repossession of Plaintiffs' car from the reservation. Plaintiffs then sought to enforce the judgment in the McKinley County District Court (district court). That court enforced the judgment, except for the punitive damages. Determining that the punitive damages were penal in nature, the district court reasoned that the Navajo court was without jurisdiction to award them against non-Indians. The question before us is whether New Mexico courts should recognize punitive damages awarded against non-Indian defendants in a Navajo tribal court for conduct on the Navajo reservation. We conclude that the punitive damages awarded in this case are not penal in the criminal sense and thus fall within the Navajo tribal court's jurisdiction. We hold that New Mexico courts should recognize such judgments from tribal courts under the doctrines of full faith and credit or comity. Accordingly, we reverse.

BACKGROUND/PROCEDURAL HISTORY

¶3 The following facts are taken from the Findings of Fact and Conclusions of Law and Judgement entered by default by the District Court of the Navajo Nation, Chinle, Arizona, on January 27, 1992, No. CH-CV-71-91. Plaintiffs are enrolled members of the Navajo Tribe. They bought a used car from Defendant Cowboy Auto Sales on November 2, 1989. Defendant Bruce Williams personally sold the car to the Plaintiffs. On November 30, 1990, Defendants repossessed the car from Plaintiffs' residence on the Navajo reservation near Chinle, Arizona, when Plaintiffs were not at home and removed it from Navajo territorial jurisdiction. Defendants repossessed the car without first receiving Plaintiffs' written consent or a valid Navajo tribal court order permitting the repossession. The Navajo Tribal Code allows repossession of Navajo Indians' personal property from tribal territory only if the buyer consents in writing or the creditor first obtains a valid tribal court order. Navajo Tribal Code tit. 7, § 607 (1977). Defendants entered Plaintiffs' realty without Plaintiffs' consent and against their will. Plaintiffs then requested the return of their vehicle, but Defendants refused, thereafter selling the vehicle and converting the proceeds.

¶4 Plaintiffs sued Defendants in the Chinle District Navajo Tribal Court, complaining of illegal repossession, trespass, and conversion. Plaintiffs claimed statutory damages for illegal repossession, compensatory damages for trespass to their realty and for conversion of their car, attorney fees, interest, and, most relevant to this appeal, punitive damages.

¶5 Each Defendant was properly served with the complaint and a summons to the tribal court. Defendants, however, failed to plead or answer Plaintiffs' complaint. Plaintiffs then moved for default judgment against Defendants and sent Defendants a notice of default. Defendants did not respond to this and later notices of default, and the tribal court eventually entered a default judgment against them in favor of Plaintiffs.

¶6 The tribal court judgment granted Plaintiffs approximately $5,000 in interest, costs, compensatory and statutory damages, and attorney fees. The tribal court also granted Plaintiffs $25,000 in punitive damages, finding that Defendants willfully chose to disregard Navajo law when they repossessed Plaintiffs' car, in willful, wanton, and deliberate violation of Plaintiffs' rights. The tribal court based the decision to award punitive damages on the fact that Defendants had illegally repossessed cars from other Navajos in the same way and had even suffered judgments in those other cases that included punitive damages. Those judgments were entered prior to Defendants' actions in this case. The tribal court concluded that Defendants undoubtedly knew Navajo Nation laws regarding repossession because of their litigation experience, and therefore knew this repossession was illegal, but Defendant chose instead to disregard Navajo law and the rights of Plaintiffs, as well as the rights of the people of the Navajo Nation.

¶7 Plaintiffs filed an action in the McKinley County District Court to enforce their judgment under the New Mexico Foreign Judgments Act, NMSA 1978, Section 39-4A-3 (Cum.Supp.1996). Defendants made no effort to declare the entire judgment void for lack of tribal court jurisdiction; Defendants offered no evidence to contradict the jurisdictional findings in the tribal court judgment. The district court issued an order granting full faith and credit to the judgment, but vacating the punitive damages. In deciding to vacate the punitive damages, the district court relied on Oliphant v. Suquamish Indian Tribe, 435 U.S. 191, 98 S.Ct. 1011, 55 L.Ed.2d 209 (1978), reasoning that due to the penal nature of punitive damages, the Navajo Nation lacked jurisdiction to impose punitive damages on nonmembers of the Navajo Tribe.

¶8 Plaintiffs appeal the order vacating the grant of punitive damages. Defendants did not cross-appeal from that part of the district court order enforcing the remainder of the tribal court judgment. We reverse.

DISCUSSION

Full Faith and Credit

¶9 Plaintiffs contend that the district court erred in holding that the Navajo Tribal Court lacked jurisdiction to impose punitive damages on a non-member who was otherwise subject to the Navajo court's jurisdiction. Defendants acknowledge that under present New Mexico case law, the power to award punitive damages may be within the Navajo Tribal Court's subject matter jurisdiction. If the Navajo Tribal Court has subject matter jurisdiction here, our precedents require granting full faith and credit to its judgment awarding punitive damages. In Jim v. CIT Financial Services Corp., 87 N.M. 362, 363, 533 P.2d 751, 752 (1975), the New Mexico Supreme Court held that "the laws of the Navajo Tribe of Indians are entitled by Federal Law, 28 U.S.C. § 1738, to full faith and credit in the Courts of New Mexico because the Navajo Nation is a 'territory' within the meaning of that statute."

¶10 Defendants answer that New Mexico recognition of punitive damages as being within the jurisdiction of the Navajo tribe would violate Defendants' federal due process and equal protection rights under Duro v. Reina, 495 U.S. 676, 110 S.Ct. 2053, 109 L.Ed.2d 693 (1990). Duro addressed the question of whether an Indian tribe had criminal jurisdiction over a nonmember Indian. The Supreme Court answered this question in the negative, holding that the dependent status of Indian tribes made their criminal prosecution of a non-member Indian inconsistent with the non-member's rights as a United States citizen. Id. at 697, 110 S.Ct. at 2065. Congress has subsequently superseded the holding in Duro and expanded the criminal authority of Indian tribes. See State v. Pena, 117 N.M. 528, 530, 873 P.2d 274, 276 (Ct.App.1994) (for a discussion of 25 U.S.C.A. § 1301(2)). That congressional action erodes Defendants' reliance on Duro.

¶11 Primarily however, Defendants' reliance on Duro is misplaced because Duro is a criminal case. This fact creates a large difference between the issues there and the issue present here, most notably the difference between imposing criminal penalties and imposing civil punitive damages. In Chischilly v. General Motors Acceptance Corp., 96 N.M. 264, 269, 629 P.2d 340, 345 (Ct.App.1980), rev'd on other grounds, 96 N.M. 113, 628 P.2d 683 (1981) (quoting Loucks v. Standard Oil Co., 224 N.Y. 99, 120 N.E. 198, 198-99 (1918)), we said:

A statute penal ... [within the rules of private international law] is one that awards a penalty to the state ... or to a member of the public, suing in the interest of the whole community to redress a public wrong. [Cites omitted] The purpose must be, not reparation to one aggrieved, but vindication of the public justice.... [T]he statute is not penal in the international sense ... [when] the purpose of the punishment is reparation to those aggrieved by his offense.

See also Svejcara v. Whitman, 82 N.M. 739, 741, 487 P.2d 167, 169 (Ct.App.1971) ("Punitive damage serves a civil end to an individual, while criminal sanctions serve a criminal end to the public."). In Chischilly, this Court held that 7 N.T.C. § 609, which provided statutory damages for wrongful repossessions, was not penal, and therefore was entitled to full faith and credit under Jim. Chischilly, 96 N.M. at 268-69, 629 P.2d at 344-45.

¶12 The analysis in Chischilly applies here. Granting punitive damages to Plaintiffs was not an imposition of criminal penalties upon Defendants by the Navajo Tribal Court. The punitive damages were reparation to Plaintiffs aggrieved by Defendants' wrongful repossession. In no way did granting the punitive damages to Plaintiffs amount to awarding a penalty to the Navajo tribe.

¶13 The district court based its decision to vacate the punitive damages award on Oliphant, 435 U.S. 191, 98 S.Ct. 1011, reasoning that the penal nature of punitive damages made the tribal court without jurisdiction to impose them on a non-member. In Oliphant, two non-Indian residents of the Suquamish Indian Tribe's Reservation in Port Madison, Washington, were arrested and charged with criminal offenses....