Adams v. Key

2008 NMCA 135, 193 P.3d 599, 145 N.M. 52
CourtNew Mexico Court of Appeals
DecidedAugust 19, 2008
Docket27,930
StatusPublished
Cited by5 cases

This text of 2008 NMCA 135 (Adams v. Key) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adams v. Key, 2008 NMCA 135, 193 P.3d 599, 145 N.M. 52 (N.M. Ct. App. 2008).

Opinion

OPINION

VIGIL, Judge.

{1} Plaintiff (Adams) appeals from the district court order dismissing Adams’ suit against Defendant (Key) with prejudice. The district court determined that the issues raised in this case by Adams’ complaint (the Adams complaint), should have been raised in prior litigation brought by Key against Adams (the Key complaint) as compulsory counterclaims under Rule 1-013 NMRA. We affirm.

FACTS AND PROCEDURAL BACKGROUND

I. The Key Complaint

{2} In January 2006, Key and his wife filed the Key complaint against Adams in the Chaves County District Court seeking a declaratory judgment to determine the ownership of livestock located on the Gramma Valley Ranch. The Key complaint was verified under oath by Key and his wife.

{3} The verified complaint states that in October 2002, Key leased the Gramma Valley Ranch from his father for the purpose of conducting a cattle ranching operation. In January 2003, Key obtained financing from Production Credit Association of Southern New Mexico (PCA) to purchase cattle to stock the ranch and granted PCA a security interest in the cattle. The total purchase price for the cattle Key bought to stock the ranch was approximately $260,000, and the cattle were branded on the right shoulder with the Key brand that Key had registered with the New Mexico Livestock Board. The following month, in February 2003, Key and Adams entered into an agreement (the Agreement) which was attached as an exhibit to the complaint. The Agreement is handwritten and in its entirety states:

Received from Jason Adams [$6700] cash monies to be used for operation of Gram-ma Valley Ranch in 2003 (Feed Cost). Cost of operation of Ranch is to be split equal between Jason Adams & Collins Key. Profits if any to be split equal between Jason Adams & Collins Key.

The complaint adds:

It was further anticipated between the parties that the parties would equally contribute the labor and financial resources necessary to operate the Gramma Valley Ranch in accordance with generally accepted ranching practices and that there would be no distributions between the parties for at least five (5) years.

The complaint alleges that Key and his wife used the proceeds from the sale of the 2003 and 2004 calf crop to pay the annual installment owed to PCA and for other operational expenses associated with the Gramma Valley Ranch, including the annual lease payment.

{4} In 2005, according to the Key complaint, without Key’s approval or consent, Adams branded a portion of the calf crop (approximately 165 head) on the left jaw with the Adams brand that Adams had registered with the New Mexico Livestock Board. These cattle were subsequently rebranded with the Key brand, and the remaining 2005 calf crop (approximately fifty head) remained unbranded. Further, according to the Key complaint, in late spring of 2005, Adams purchased ten head of Corriente cattle (the Corriente cattle), placed them at the ranch, and, without Key’s knowledge or consent, branded them with the Key brand. The Comente cattle were purchased for $6000, with Adams contributing $4500 and Key contributing $1500. According to the Key complaint, Adams advised employees at the New Mexico Livestock Board that Adams “is the owner of all or a portion of the cattle” situated at the ranch. “[A]s a result of the actions taken by ... Adams,” the Key complaint asserted that the “New Mexico Livestock Board is unwilling to issue a permit authorizing the transport of that portion of the 2005 calf crop which [Key] desire[s] to sell.”

{5} The Key complaint alleged that Adams “claims some right, title or interest in and to the cattle situated on the Gramma Valley Ranch, or some portion thereof’ and that “[t]here now exists a dispute between [Key] and Adams as to the ownership of the cattle located at the Gramma Valley Ranch.”

{6} Adams was properly served, but he failed to enter an appearance, file an answer, or otherwise respond to the Key complaint. Consequently, a default judgment was entered against Adams by the district court in March 2006. The judgment establishes (1) that Key and his wife are “the owners of an undivided one-fourth interest in and to the Corriente Cattle and their offspring, subject only to a purchase money security interest in favor of [PCA]”; (2) that Key and his wife “are the owners of all other cattle presently located at the Gramma Valley Ranch, subject only to a purchase money security interest in favor of [PCA]”; and (3) that “Adams has no ownership interest in any cattle located at the Gramma Valley Ranch, other than an undivided [three-fourths] ownership interest in the Corriente Cattle and the offspring of the Corriente Cattle.”

II. The Adams Complaint

{7} In December 2006, Adams filed the Adams complaint against Key in the Chaves County District Court. The Adams complaint alleged that in 2003, Adams and Key “entered into a Partnership agreement to manage and operate a ranch known as the Gramma Valley Ranch.” The “partnership agreement” referred to is the same handwritten Agreement that was the subject of the Key complaint, and a copy was attached to the complaint as Exhibit A.

{8} The Adams complaint asserts that “[t]he partners operated the Gramma Valley Ranch, buying and selling cattle as a partnership for the mutual benefit of the partners.” The complaint further asserts that “[Adams] contributed money as well as goods and services to the ranching endeavor for the benefit of the partnership.” Adams asks that “the partnership” be dissolved and the assets distributed; that Key account to the partnership for any property, profit, or benefit accruing to the partnership; that Key pay damages for breach of fiduciary duty to Adams for converting partnership assets and opportunities to his own use and benefit; and that Key compensate Adams and pay punitive damages for willful, intentional, and bad faith breach of the partnership agreement.

III. The Motion for Summary Judgment

{9} Key filed a motion for summary judgment in the Adams case. He attached a copy of the Key complaint which included the handwritten Agreement and a copy of the default judgment entered against Adams in the Key case. Key stated as an undisputed material fact that “[Adams] did not assert a counter claim in [the Key case] alleging a partnership or a right to an accounting or damages.” Key asserted he was entitled to summary judgment because “[i]n this case the doctrine of res judicata which includes [R]ule 1-013, mandates that all claims which were, or should have been litigated previously are barred.”

{10} Adams admitted that he did not assert a counterclaim to the Key complaint, stating that “the only relief sought in [the Key complaint] was a declaration of ownership of cattle not addressing the material issues raised by this claim.” Adams asserted that “the issues of accounting, dissolution of partnership, breach of fiduciary duty and breach of contract,” the “existence of a partnership,” and the extent and nature of the partnership were not decided in the prior action and therefore remain material issues of fact, precluding summary judgment.

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Cite This Page — Counsel Stack

Bluebook (online)
2008 NMCA 135, 193 P.3d 599, 145 N.M. 52, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adams-v-key-nmctapp-2008.