Ruybalid v. Segura
| Decision Date | 29 September 1988 |
| Docket Number | No. 8357,8357 |
| Citation | 1988 NMCA 84,763 P.2d 369,107 N.M. 660 |
| Parties | Evelyn F. (Segura) RUYBALID, Petitioner-Appellee, v. David G. SEGURA, Respondent-Appellant, and Adela Segura, Intervenor-Appellant. |
| Court | Court of Appeals of New Mexico |
This appeal arises out of the divorce of Petitioner-Appellee, Evelyn (Segura) Ruybalid (Evelyn), from Respondent-Appellant, David Segura (David), which was granted in June 1982. The issues on appeal arise from the post-1984 judgment collection efforts of Evelyn against a piece of real property which the trial court found to be David's separate property. He received that property in 1977, by gift from his parents, prior to marriage. David's mother, Adela Segura (Adela) (Intervenor-Appellant), attempted to reform the deed granting the property to David, and attempted to intervene in the original divorce proceedings in order to accomplish that end. David declared bankruptcy in 1984, which precluded the enforcement of Evelyn's judgment against the property.
The original divorce decree and property judgment were affirmed on appeal to the supreme court and their validity is not at issue in the present appeal. David challenges the money judgment in Evelyn's favor on nine grounds. Adela challenges the trial court's denial of her motion to intervene. We consolidate into the following three issues:
1. Whether the trial court abused its discretion when it denied Adela Segura's motion to intervene.
2. Whether the trial court erred when it allowed Adela and David, at their own option, to reform the 1977 deed, but ruled that such reformation would have no effect upon Evelyn's position as a judgment lienholder.
3. Whether the trial court erred when it denied David's claim for a homestead exemption in the property located at 910 Dunlap Street in Santa Fe, New Mexico.
We affirm on issues one and two, and reverse and remand on issue three.
Given the protracted nature of this case, we find it necessary to provide a brief summary of the factual setting. The parties were married in May 1977. In April 1977, David's parents, Bernabe and Adela Segura, made a gift to David of the property at 910 Dunlap Street in Santa Fe by warranty deed. David did not record the deed at the county clerk's office. The parties resided at the same address until their marriage deteriorated in mid-1980. The property as described in the granting deed consisted of a main house and duplex to the rear of the house, located at 910- 1/2 Dunlap Street.
In July 1980, Evelyn filed a petition for dissolution of marriage. During the same month, her attorney filed the 1977 deed of public record with the Clerk of Santa Fe County. In August 1980, David attempted to reconvey the property to his parents. In the divorce proceeding, the trial court found the attempted conveyance to be void and fraudulent, and this ruling was subsequently upheld by the supreme court. The trial court also determined the Dunlap Street property to be David's separate property.
In June 1982, the trial court entered its judgment and decree of divorce, setting forth the final distribution of marital property which reflected a money judgment in favor of Evelyn in the amount of $47,145.50. In addition, the judgment specifically imposed a lien upon David's separate property as it was described in the 1977 deed. David appealed this judgment to the supreme court. Since David posted no supersedeas bond, Evelyn filed a complaint in foreclosure, seeking to enforce her judgment lien upon the real estate. David then filed his first claim for a homestead exemption. In a July 1983 decision, the supreme court remanded the case to the trial court with instructions to incorporate the negative valuation of a piece of community property.
In January 1984, the trial court, pursuant to the supreme court's instructions and after a rehearing, adjusted the judgment for Evelyn from $47,145.50 to $55,146.50, plus attorney fees and costs. In addition, the trial court issued a writ of execution against the duplex at 910- 1/2 Dunlap Street. Evelyn also filed several writs of garnishment after the adjusted judgment, in attempts to satisfy her judgment.
Soon after the entry of the adjusted judgment in March 1984, David filed a voluntary petition of bankruptcy under chapter seven of the Federal Bankruptcy Code in the Federal Bankruptcy Court for the District of New Mexico. The petition listed the Dunlap Street property, as described in the 1977 deed, as part of the bankrupt estate, and it also included a second claim for a homestead exemption. During the same month, Evelyn obtained an order from the trial court allowing the sale of David's separate property, but the Clerk of the Bankruptcy Court filed a notice of stay of any court proceedings to enforce a lien against any property in the custody of the Bankruptcy Court. In July 1984, David filed a third claim for a homestead exemption. In all three filings, the property described for the claim of homestead exemption was identical to the property described in the 1977 deed. In September 1984, David filed an amended claim of exemptions specifically stating that he was supporting his two children from a previous marriage, and that he was therefore entitled to hold exempt a homestead in the amount of $20,000, pursuant to NMSA 1978, Section 42-10-9 (Cum.Supp.1984).
In August 1984, despite the notice of stay, Evelyn further attempted to enforce her judgment and complaint in foreclosure by publishing, in the Santa Fe New Mexican, a notice of intent to sell at auction the Dunlap Street property. At this point, David and his mother, Adela, requested reformation of the deed by the trial court claiming that the description in the 1977 deed mistakenly included the duplex and the main house. Adela and her daughter, Lori, then filed a motion to intervene and a complaint in intervention asking the trial court to reform the deed to reflect the actual intention of the parties--to transfer only the duplex at 910- 1/2 Dunlap Street to David.
The trial court ruled that Adela and David could reform the deed as requested without the court's intervention or assistance. The court further ruled, however, that any reformation would be subject to Evelyn's prior judgment lien and to the rights of the trustee in bankruptcy. The court also ruled that David was not entitled to a homestead exemption, concluding that David did not have legal custody of his children. Alternatively, the trial court concluded that if David was entitled to an exemption at all, it would be for the tract he claimed to own at 910- 1/2 Dunlap Street. Additionally, the trial court denied, in its conclusions of law, Adela's and Lori's motion to intervene in the action.
David, Adela and the trustee in bankruptcy filed their notice of appeal on a timely basis in February 1985. After the filing of that notice of appeal, all claims of the trustee in bankruptcy were settled by stipulation, whereby Evelyn and the trustee agreed they would release and discharge each other from any and all claims arising out of the original divorce action. Evelyn also waived any right to make any claim as a secured or unsecured creditor against the bankrupt estate of David.
We first consider whether the trial court abused its discretion when it denied Adela's motion to intervene and her claim for relief. The denial of a motion to intervene will not be reversed absent a clear abuse of discretion by the trial court. See Richins v. Mayfield, 85 N.M. 578, 514 P.2d 854 (1973). We believe that the trial court essentially allowed Adela to intervene, since it heard her claims and allowed her to fully develop her case before the court. Although the trial court ultimately denied her proposed conclusion of law that her motion to intervene be granted, Adela did obtain a full hearing of her claims. The court concluded that her claim for reformation of the 1977 deed was allowed, as long as it did not effect the rights of Evelyn.
Intervention is an act or proceeding whereby a person is permitted to become a party in an action between other persons, after which the litigation proceeds with the original and intervening parties. State v. Reese, 78 N.M. 241, 430 P.2d 399 (1967). SCRA 1986, 1-024 provides for intervention of right and permissive intervention. Rule 1-024(A)(2) allows intervention of right upon timely application:
when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
Rule 1-024(B)(2) allows permissive intervention "when an applicant's claim or defense and the main action have a question of law or fact in common."
Adela argues that permissive intervention applies here. She relies upon Richins v. Mayfield to argue that intervention will be allowed, even after a final judgment, when it is necessary to preserve a right which cannot otherwise be protected. She further contends that the trial court found common questions of law and fact between the intervenors and the original parties to the action, but it erroneously rejected Adela's motion to intervene.
We do not find Adela's arguments to be persuasive. First, her reliance upon Richins is misplaced since there were not the exceptional circumstances of a final judgment here which the intervenors were attempting to re-open in order to intervene. Moreover, although there may well be common issues of law and fact between the intervenors and the original parties, we believe that Adela's interests were...
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