1998 -NMCA- 66, Garcia v. Herrera

• Decision Date: 09 February 1998
• Docket Number: No. 17942,17942
• Citation: 1998 NMCA 66,959 P.2d 533,125 N.M. 199
• Parties: , 1998 -NMCA- 66 Dennis R. GARCIA, Plaintiff, v. Rudolfo Abenicio HERRERA, Defendant/Third-Party Plaintiff-Appellee, v. Joe C. MARTINEZ and Lovie Martinez, Defendants/Third-Party Cross-Claimants-Appellants.
• Court: Court of Appeals of New Mexico

Page 533

959 P.2d 533

125 N.M. 199, 1998 -NMCA- 66

Dennis R. GARCIA, Plaintiff, v. Rudolfo Abenicio HERRERA, Defendant/Third-Party Plaintiff-Appellee, v. Joe C. MARTINEZ and Lovie Martinez, Defendants/Third-Party

Cross-Claimants-Appellants.

No. 17942.

Court of Appeals of New Mexico.

Feb. 9, 1998.

Certiorari Denied May 5, 1998.

Annie-Laurie Coogan, Espanola, for Appellee.

Ruben Rodriguez, Santa Fe, for Appellants.

OPINION

APODACA, Judge.

¶1 Third-Party Defendants (Grantors) appeal the trial court's judgment in favor of Defendant/Third-Party Plaintiff (Grantee) awarding damages, costs, and attorney fees for breach of warranty of title and failure to defend. Grantors argue five issues on appeal: (1) the trial court lost jurisdiction over the breach of warranty claims following Grantee's settlement with Plaintiff, (2) Grantee was required to defend title, (3) the settlement prevented Grantors from defending the title, (4) the trial court should have adopted Grantors' requested findings and conclusions, and (5) the trial court should have granted Grantors' recusal request. We hold that the judgment is supported by the law and evidence and therefore affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

¶2 Plaintiff filed a complaint in ejectment against Grantee seeking to have Grantee removed from certain property in Rio Arriba County. Grantee counterclaimed to quiet title in himself and filed a third-party complaint against Grantors for breach of warranty of title and attorney fees. The case was bifurcated by the trial court as follows: the ejectment and quiet title issues were first set for trial. The breach of warranty and attorney fees issues would be decided at a later hearing, if necessary.

¶3 On the trial date, the parties presented their exhibits and opening arguments. The trial court then asked if Plaintiff and Grantee would consider settling. It noted that each party risked losing everything because the court did not have the lawful authority to partition the property as a remedy. The trial court suggested that Plaintiff and Grantee split the property in two, reasoning that the evidence suggested each only had a half interest in the property based on their chain of title.

¶4 After a private discussion, Plaintiff and Grantee agreed to split the property. Grantee's only concern at the time was whether this agreement would prejudice his claim against Grantors. The trial court opined that it would not. Grantors agreed to the settlement, but in so doing maintained that Grantee gave up any right to recover attorney fees and damages for breach of warranty and failure to defend.

¶5 The trial court settled the claims between Plaintiff and Grantee by dividing the property in half. Grantee's claim against Grantors was then scheduled for hearing. That claim too was bifurcated. The trial court indicated it would initially consider whether there was a warranty and whether that warranty had been breached. If that question was decided affirmatively, there would be a separate hearing on damages. After the first hearing, the trial court determined that there was a warranty of title. The trial court also held that this warranty had not been waived and that Grantors had breached it. The trial court later held a hearing on damages. Grantee was awarded attorney fees and costs to defend his title and damages for the loss of the value of the property. Grantors appeal these rulings.

II. DISCUSSION

A. Standard Of Review

¶6 We review conclusions of law de novo, see Strata Prod Co. v. Mercury Exploration Co., 1996-NMSC-016, 121 N.M. 622, 627, 916 P.2d 822, 827, and consider substantial evidence claims with deference to the trial court. See Clovis Nat'l Bank v. Harmon, 102 N.M. 166, 168, 692 P.2d 1315

B. Jurisdiction

¶7 Initially, Grantors argue that, at the time of the settlement between Plaintiff and Grantee, the trial court lost jurisdiction over the remainder of the claims. This argument is based on the premise that Grantee voluntarily relinquished possession of the property. Grantor thus contends that Grantee either waived his claim for breach of warranty or was estopped from making the claim. We need not reach the issues of waiver or estoppel, however, because we hold that Grantee's title failed irrespective of the settlement. We also note that this is not a case where the trial court lost jurisdiction to hear certain matters. See Sundance Mechanical & Util. Corp. v. Atlas, 109 N.M. 683, 686-87, 789 P.2d 1250, 1253-54 (1990). Instead, it is simply a case where one claim has been settled, leaving others to be decided. See Johnson v. Aztec Well Servicing Co., 117 N.M. 697, 701, 875 P.2d 1128, 1132 (Ct.App.1994) (holding that a settlement between two parties does not discharge the liability of any other persons). The trial court did not lose jurisdiction to consider the breach of warranty claims.

¶8 In 1984, Grantee and Grantors exchanged two pieces of property. Grantee received 2.2 acres and Grantors received 4 acres. At the time of the exchange, both received warranty deeds for their respective properties. A transfer of property under a warranty deed means that:

"the grantor ... covenants with the grantee ... that he [or she] is lawfully seized in fee simple of the granted premises; that they are free from all former and other grants, ... and encumbrances of what kind and nature soever; that he [or she] has good right to sell and convey the same; and that he [or she] will ... warrant and defend the same to the grantee ... forever against the lawful claims and demands of all persons."

NMSA 1978, § 47-1-37 (1947). In a typical warranty deed, "the grantor covenants to warrant and defend the title conveyed by the deed against any lawful claim." Bloom v. Hendricks, 111 N.M. 250, 254, 804 P.2d 1069, 1073 (1991). Here, by giving Grantee a warranty deed, Grantors promised that they had good title and that they would defend it against any lawful claim.

¶9 As early as 1989, Plaintiff told Grantee that the property belonged to him. Grantee went to the Grantors about the problem. Nothing was done. Later in 1989, Plaintiff sent a letter to Grantee, again asserting that the property was his and that he wanted Grantee off the land. Grantee approached Grantors and asked them for help. They gave him some money to obtain an abstract of title. Plaintiff then filed suit and Grantee's attorney requested several times by letter that Grantors assume the defense of the title. They refused to do so. When the trial commenced, Grantee decided to settle for a portion of the property. As a result of that settlement, Grantors argue that Grantee gave up his right to claim a breach of warranty.

¶10 This argument is twofold. First, a breach of warranty deed exists only upon ejectment by a claimant with superior title, which according to Grantors was never established here. Second, Grantee himself failed to defend the title. Clearly, ejectment requires superior title. See NMSA 1978, § 42-4-1 (1907); see also Pacheco v. Martinez, 97 N.M. 37, 41-42, 636 P.2d 308, 312-13 (Ct.App.1981). Ejectment on superior title is a lawful claim against which the grantor of a warranty deed has agreed to defend. Ejectment on superior title is a breach of the warranty of good title. Knight v. Cox, 31 N.M. 325, 245 P. 250 (1926). We thus agree that a claim of breach of warranty of title may be supported by an ejectment. See 9 Thompson on Real Property § 82.10(c)(4) (David A. Thomas, Editor-in-Chief 1994).

¶11 Here, Grantee's settlement with Plaintiff ejected Grantee from one half of the property. The question is whether his ejection was by one with lawful, superior title. Grantors claim that there is no way to determine whether or not Plaintiff's claim was lawful because the matter was settled. We disagree. The trial court could and did evaluate the evidence of title and determined that the settlement was a reasonable one, based on the evidence. Thus, the trial court determined that the claim by Plaintiff was a lawful one. We believe that the evidence supported that determination.

¶12 The evidence showed that in 1956 the property was conveyed by quitclaim deed to Jose Baldonado. In 1961, an inscription was placed on the deed directing the inclusion of Antonita Baldonado, Jose's Baldonado's ex-wife, on the deed. In 1974, Antonita Baldonado conveyed the property by warranty deed, which was recorded, to Grantors. In 1975, there was an unrecorded deed from Jose Baldonado to Grantors for the same property. In 1976, Jose Baldonado conveyed the property by recorded quitclaim deed to Den-Gar Enterprises. In 1984, Grantors conveyed the property by warranty deed to Grantee. In 1989, Den-Gar conveyed the property to Plaintiff by quitclaim deed. Plaintiff had a lawful claim to the property based on his chain of title from Jose Baldonado.

¶13 The settlement ejecting Grantee from one half of the property resulted from a lawful claim by one with superior title. Consequently, there was a partial failure of Grantee's title entitling him to bring an action for breach of warranty. His title failed regardless of the fact that the failure was due to a settlement of the claims. Plaintiff filed suit against him, and there was a final judgment adverse to Grantee's title or right to possession of the property. This is sufficient to constitute an eviction. See Saint Paul Title Ins. Corp. v. Owen, 452 So.2d 482, 485 (Ala.1984). Our holding affirms denial of Grantors' motion for summary judgment. See Rummel v. Saint Paul Surplus Lines Ins. Co., 1997-NMSC-042, p 9, 123 N.M. 767, 945 P.2d 985 (holding that reviewing court considers whether summary judgment is appropriate under the law).

C. Defense Of Title

¶14 Grantors argue that Grantee made no effort to defend his title and, thus, may not bring an action for breach of warranty. We disagree. After evaluating Plaintiff's claim and the evidence supporting both Grantee's and Plaintiff's claims, Grantee decided to give up a portion of the...