Cottonwood Enterprises v. McAlpin
| Decision Date | 02 May 1991 |
| Docket Number | No. 19075,19075 |
| Citation | 111 N.M. 793,810 P.2d 812,1991 NMSC 44 |
| Parties | COTTONWOOD ENTERPRISES, a California limited partnership, Plaintiff-Appellant, v. Mark McALPIN, Barbara McAlpin and Territorial Abstract and Title Company, Defendants-Appellees. |
| Court | New Mexico Supreme Court |
The factual background of this case is set forth in Cottonwood Enterprises v. McAlpin, 109 N.M. 78, 781 P.2d 1156 (1989). In that opinion we reversed the district court's grant of a Rule 41(E) motion, which dismissed the cause with prejudice for inactivity, and remanded to the court for consideration of Territorial's Rule 12(B)(6) motion to dismiss and the McAlpins' Rule 12(B)(6) and (7) motions to dismiss.
On remand, the district court dismissed the first amended complaint against Territorial based upon two rulings: that it was barred by the four-year statute of limitation set forth in NMSA 1978, Section 37-1-4, and that it failed to state a cause of action. With regard to the McAlpins' motion 1, the court found that the first amended complaint stated causes of action for negligent or intentional misrepresentation and breach of contract. Cottonwood appeals the trial court's dismissal of its first amended complaint against Territorial. We reverse.
The original complaint filed in 1983 requested only injunctive relief against Territorial to prevent it from disbursing the purchase money held in escrow; no damages or other affirmative relief against Territorial were sought. After the original complaint was filed, the title defects were corrected. Defendants filed no answer. On February 29, 1984, Cottonwood, through its general partner, filed a pleading entitled "Amendment to Complaint," which set forth a negligence cause of action against Territorial, but failed to reassert the general allegations, causes of action, prayer for relief, and demand for judgment as set forth in the original complaint.
On August 6, 1986, attorney Barshov entered an appearance on behalf of Cottonwood and filed a motion to amend the original complaint. Subsequently, the defendants filed a response to that motion and a joint Rule 41(E) motion to dismiss. Approximately one year later the district court entered an order granting Cottonwood's motion to amend and denying the defendants' motion to dismiss. Cottonwood filed its first amended complaint on July 8, 1988, and Territorial moved to dismiss the complaint on October 6, 1988.
In its letter decision of February 2, 1990, ruling on Territorial's motion to dismiss, the district court stated:
The amendment to the complaint filed on February 4, 1989 [sic] was an improper amendment and is a nullity. This pleading was filed without leave of the court in violation of Rule 1-015(b) [sic] of the Rules of Civil Procedure. Further the filing of the 1984 amended complaint is in violation of Rule 1-015(D) [sic] which requires all claims for relief to be contained in a single pleading. The 1984 amended complaint could not be filed by the general parties [sic]. The subsequent amendment was not timely.
It is clear from a reading of Rule 15, however, that the district court was referring to Subsections A and E, which provide in pertinent part:
A. Amendments. A party may amend his pleading once as a matter of course at any time before a responsive pleading is served.... Otherwise a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.
....
E. All matters set forth in one pleading. In every complaint, answer or reply, amendatory or supplemental, the party shall set forth in one entire pleading all matters which, by the rules of pleading, may be set forth in such pleading, and which may be necessary to the proper determination of the action or defense.
Cottonwood relies upon the relation back doctrine to support the timeliness of the 1988 amended complaint, alleging the 1984 amendment tolled the four-year statute of limitation on its negligence claim. In the alternative, Cottonwood contends that, whether or not the filing of the 1984 amendment violated Rule 15, Territorial had fair notice of the claim. Cottonwood also submits that its complaint was sufficient to state a negligence claim against Territorial. Territorial asserted no grounds in its Rule 12(B)(6) motion to dismiss, but alleges in its answer brief that the claim should be dismissed because Territorial owes no duty to Cottonwood as a matter of law under the facts alleged in the 1988 amended complaint.
First, Cottonwood was not required to seek leave of the court to amend its pleading since no responsive pleading had been filed; nor was it improper for the general partner to act on behalf of the partnership. With regard to the court's other basis for its ruling--that all claims for relief shall be contained in a single pleading--we find that in this particular case, the court did not abuse its discretion by granting attorney Barshov's 1986 motion to amend the complaint. See New Mexico Feeding Co. v. Keck, 95 N.M. 615, 624 P.2d 1012 (1981) (). In effect, the court's action can be characterized as giving Cottonwood the opportunity to cure its defective pleading and permitting the 1984 amendment to toll the statute of limitation despite its technical defect. This ruling is consistent with our general policy favoring amendments to pleadings in the furtherance of justice. See Martinez v. Research Park, Inc., 75 N.M. 672, 410 P.2d 200 (1965). Accordingly, we hold that the 1984 amendment was timely filed despite its technical defect of not setting forth all matters in one entire pleading, and that it related back to the original complaint to toll the statute of limitation period, rendering the 1988 amended complaint timely.
The next issue concerns the district court's dismissal of Cottonwood's negligence claim based on Territorial's Rule 12(B)(6) motion. On review, we must determine the legal sufficiency of the claim. The test is whether Cottonwood might prevail under any state of facts provable under its claim. See Petty v. Bank of New Mexico Holding Co., 109 N.M. 524, 787 P.2d 443 (1990).
Under our rules of "notice pleading," it is sufficient that defendants be given only a fair idea of the nature of the claim asserted against them sufficient to apprise them of the general basis of the claim; specific evidentiary detail is not required at this stage of the pleadings.
The 1988 amended complaint states as its second cause of action the "negligent provision of title services" by Territorial. Cottonwood alleges it was insured under a policy of title insurance written through Territorial, and, that Territorial negligently performed the title work in connection with the policy. Specifically, Cottonwood claims that as a proximate result of the negligently performed services, it was compelled to take title to a single parcel subject to a recorded...
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