First Nat. Bank of Santa Fe v. Southwest Yacht & Marine Supply Corp.
| Decision Date | 23 July 1984 |
| Docket Number | Nos. 14961,14974,s. 14961 |
| Citation | 684 P.2d 517,1984 NMSC 75,101 N.M. 431 |
| Court | New Mexico Supreme Court |
| Parties | The FIRST NATIONAL BANK OF SANTA FE, Plaintiff-Appellant and Cross-Appellee, v. SOUTHWEST YACHT & MARINE SUPPLY CORP., et al., Defendants-Appellees and Cross-Appellants. |
The opinion of this Court heretofore filed on February 20, 1984 is withdrawn and the following opinion is substituted therefor.
The First National Bank of Santa Fe (Bank) brought this action in the District Court of Santa Fe County to collect amounts due pursuant to a promissory note and to replevy goods pledged as security for the payment of the promissory note. Southwest Yacht & Marine Supply Corporation (Southwest) filed a motion to dissolve the writ of replevin and an answer and counterclaim for damages for a wrongful replevin. The trial court found that the facts stated in the affidavit in replevin did not comply with the requirements of the New Mexico statutes and dissolved the writ of replevin.
The Bank filed an amended affidavit in replevin to correct the defects in the original affidavit. The Bank then filed a motion for partial summary judgment on two grounds: first, that the filing of the amended affidavit cured the defects in the original affidavit in replevin; and second, that the Bank was not liable to Southwest in damages for wrongful replevin because Southwest's exclusive remedy for wrongful replevin was through NMSA 1978, Section 42-8-11. The trial court held that the amended affidavit in replevin did not relate back to cure the defects in the affidavit in replevin and denied that portion of the motion for partial summary judgment. The trial court granted the remaining portion of the motion for partial summary judgment. We reverse.
We initially consider the constitutionality of New Mexico's replevin statute, NMSA 1978, Sections 42-8-1 to 22. New Mexico's present replevin statute reflects amendments adopted by the New Mexico State Legislature in 1975. 1975 N.M.Laws, ch. 249, Secs. 1 to 10. This Court had previously held that the law as it existed prior to these amendments, NMSA 1953, Sections 36-13-1 to 6 (Supp.1971), was unconstitutional. Montoya v. Blackhurst, 84 N.M. 91, 500 P.2d 176 (1972); Accord Sena v. Montoya, 346 F.Supp. 5 (D.N.M.1972). Our decision in Montoya v. Blackhurst was based on the United States Supreme Court's decision in Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972). In that case, replevin statutes which were substantially similar to New Mexico's were held to be unconstitutional insofar as they did not provide an opportunity for the party in possession of the chattels to be heard prior to the repossession. The Court stated that its holding was a narrow one, and it recognized the power of a state to seize goods before final judgment in certain circumstances. Id. at 96, 92 S.Ct. at 2002. Subsequent to its opinion in Fuentes, the United States Supreme Court in Mitchell v. W.T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974), established the minimum due process requirements that a replevin statute must meet in order to be constitutional. These requirements were set out by the Supreme Court of Florida as follows:
(1) the law requires plaintiffs to show facts indicating a right to the property sought to be replevied, and the allegations must be verified;
(2) an application for replevin without notice must be presented to a judge, as opposed to a ministerial court official;
(3) the facts alleged must show the necessity for replevin, which is sufficiently shown if the debtor is in possession of the property and the applicant establishes that there is a possibility of waste, concealment or transfer of the property, or that the debtor is in default on his payments;
(4) the plaintiff must post a bond to protect the debtor from mistaken repossession; and
(5) the debtor must be entitled to an immediate hearing on the issue of possession.
Gazil, Inc. v. Super Food Services, Inc., 356 So.2d 312 (Fla.1978).
The 1975 amendments to the New Mexico replevin statute incorporated into the statute the requirements articulated by the United States Supreme Court in Mitchell. New Mexico's replevin statute now complies with the Mitchell standards, and is therefore constitutional.
Any replevin action initiated pursuant to New Mexico's statute must comply strictly with the statutory requirements in order not to violate a defendant's due process rights. Cf. Lowery v. Garfield County, 122 Mont. 571, 208 P.2d 478 (1949). Before a writ of replevin is issued, an affidavit must be filed in district court stating, among other things, that the plaintiff has reason to believe that during the pendency of the action the defendant may conceal, dispose of, or waste the property or the revenues therefrom or remove the property from the jurisdiction. NMSA 1978, Sec. 42-8-5(C). The affidavit must also state specific facts from which it clearly appears that the allegations are justified. NMSA 1978, Sec. 42-8-5(E).
In this case, the original affidavit did not comply with the above requirements, and therefore the trial court correctly quashed the writ of replevin it had previously entered. The trial court did, however, grant the Bank leave to amend its affidavit. Such amendments are allowed by statute: "[W]here an original writ of * * * replevin has been quashed for defect in the affidavit * * * the court shall allow an amendment thereof to cure the defect, under such circumstances as amendments of ordinary pleadings are allowed by law and with like effect * * * * " NMSA 1978, Sec. 42-9-14. The issue presented is whether the amendment of an affidavit in replevin relates back to the date of the original affidavit. We hold that it does.
Our rules provide that "[w]henever the claim or defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading." NMSA 1978, Civ.P.R. 15 (Repl.Pamp.1980). Amendments to pleadings are favored, and should be liberally permitted in the furtherance of justice. Martinez v. Research Park, Inc., 75 N.M. 672, 410 P.2d 200 (1965). This liberality extends to replevin actions. Vigil v. Johnson, 60 N.M. 273, 291 P.2d 312 (1955). Applying the cited statutes and case law to the facts in the present case, we find that the amended affidavit did relate back to the time of the filing of the original affidavit in replevin. We therefore reverse the trial court on this issue.
On cross appeal, Southwest contends that the trial court erred in limiting damages recoverable for wrongful replevin to those set forth in NMSA 1978, Section 42-8-11. We agree. Southwest's counterclaim raised claims of conversion, fraud wrongful acceleration of a promissory note, breach of contract, negligence and negligent misrepresentation in addition to the wrongful replevin claim. All of these theories rely on the operative facts of the wrongful seizure of Southwest's property pursuant to the wrongfully issued writ of replevin. Southwest's remedies for wrongful replevin are limited by the replevin statute. The replevin statute does not, however, preclude other causes of action Southwest may have which arose independent of any wrongful replevin.
Two sections of New Mexico's replevin statute provide remedies for situations in which a wrongful replevin has occurred. Should the plaintiff in a replevin action fail to prosecute his suit with effect and without delay, the defendant may recover either the property taken, or its assessed value, and double damages for the use of the property from the time of its taking. NMSA 1978, Sec. 42-8-11. This section found its origin in the Code of Civil Procedure passed in 1847, appeared in the 1897 compilation of the laws of New Mexico, NMCL 1897, Section 2749, and has not since been amended.
A second remedy was added by the Legislature when it amended the replevin statute in order to meet constitutional due process requirements. 1975 NM Laws, ch. 249, Sec. 7. The added section provides, in part:
Upon the defendant's motion before trial, the district court shall determine the truth of the facts stated in the plaintiff's affidavit at a hearing, to be held without delay. If the plaintiff fails to prove the truth of the facts stated, the writ shall be dissolved, the plaintiff shall be ordered to return the property to the defendant and an order shall be entered for the defendant against the plaintiff and his sureties for the attorney's fees incurred in the dissolution of the writ and for double damages for the use of the property from the time of its delivery to the plaintiff.
The Bank contends that these two sections are mutually exclusive; that once Southwest chose not to accept the Bank's offer to return the wrongfully replevied property it limited its remedies to those available under Section 42-8-11. We disagree. Southwest is not limited to remedies found in only one section of the replevin statute. The two sections address two separate wrongs.
Section 42-8-19 addresses the specific failure of the plaintiff to prove the truth of the facts stated in his affidavit. The statute was enacted to avoid due process problems that arise when property is taken in an ex parte action based on an insufficient or unsubstantiated affidavit. The statute requires the district court to order the plaintiff to return the property to the defendant. The defendant is not obligated to accept the tender, and failure to so accept does not prevent the defendant from recovering...
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