Rienhardt v. Kelly

917 P.2d 963, 121 N.M. 694
CourtNew Mexico Court of Appeals
DecidedMarch 7, 1996
Docket16347
StatusPublished
Cited by5 cases

This text of 917 P.2d 963 (Rienhardt v. Kelly) 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
Rienhardt v. Kelly, 917 P.2d 963, 121 N.M. 694 (N.M. Ct. App. 1996).

Opinion

OPINION

APOD ACA, Chief Judge.

1. Plaintiff William Arthur Rienhardt appeals from the trial court’s order dismissing him as an excessive plaintiff. Plaintiff and the New Mexico State University Foundation (the Foundation) had jointly filed a cause of action to set aside a lease/purchase contract. At a summary trial, the trial court dismissed Plaintiff as excessive and declared an agreement between Plaintiff and the Foundation to file the suit as champertous and thus void as against public policy. Plaintiff raises five issues on appeal: (1) whether Plaintiff was properly stricken as an excessive plaintiff, (2) whether the agreement between Plaintiff and the Foundation was champertous, (3) whether the trial court erred in its finding of fact that the Foundation had chosen not to pursue litigation independent of the agreement, (4) whether champerty could be raised as a defense if one of the parties to the agreement had an independent interest in the matter, and (5) whether the agreement was authorized and favored under New Mexico law. We hold that Plaintiff did have an interest independent of the agreement and thus conclude that he was a real party in interest and that the agreement was not champertous. We reverse the trial court’s dismissal of Plaintiff as a party to the suit.

I.FACTUAL AND PROCEDURAL BACKGROUND

2.Plaintiff is the legally adopted son of decedents William Arch Rienhardt (Arch) and Fay Walker Rienhardt (Fay). Before 1987, Arch and Fay executed several sets of wills, each of which included Plaintiff and the Foundation as devisees. In 1987, Arch and Fay executed virtually identical wills providing that (1) upon the death of the first spouse, the deceased spouse’s share would be held in trust for the surviving spouse and that (2) upon the death of the last spouse, Plaintiff would inherit all cash, vehicles, oil, gas, and mineral rights less $5000, with the Foundation having the right to the residuary. In 1990, Arch and Fay executed new wills providing that Plaintiff would receive $10,000 and, with the exception of some small gifts, the Foundation would receive the balance for scholarships as long as Hilda Kelly, Arch’s niece, did not veto any proposed scholarship program. Fay died later that year. In 1992, Arch entered into a lease/purchase contract with Defendants Hilda and Tom Kelly (the Kellys) regarding certain land known as the Rienhardt Ranch (the Ranch). The contract provided that the Kellys would be entitled to purchase the Ranch, valued at approximately $425,000, for a nominal sum after Arch’s death. Arch died later that year, but, before Arch’s death, the Kellys had already recorded a deed conveying the Ranch to them.

3. Legal counsel for the Foundation explained to its Board that the school would receive nothing from Arch’s estate unless the 1992 lease/purchase contract was set aside, but the Board, mindful of the potential for high litigation costs, decided not to pursue the matter. Plaintiff disputes the trial court’s finding that the Foundation ever decided to forego litigation. In any event, in 1993 Plaintiff contacted the Foundation, and the parties entered into a written agreement under which they would together file an action to set aside the 1992 lease/purchase contract. This agreement provided that Plaintiff would pay all legal costs incurred in the lawsuit and that, if the parties were successful in setting aside the 1992 documents, the Foundation would give its entitlement of the Ranch to Plaintiff for $125,000 plus twenty-five percent of the agreed value of the other assets received. Plaintiff and the Foundation then brought suit, charging that the 1992 lease/purchase contract was procured through the undue influence of the Kellys and that Arch lacked sufficient mental capacity to enter into the contract.

4. At the summary trial, the trial court determined that Plaintiff did not have “a genuine independent interest” in the matter and “but for the agreement would gain nothing if this litigation were successful.” Having also determined that the Foundation did have an interest in the matter, the trial court concluded that the agreement between Plaintiff and the Foundation was champertous on its face and thus void as against public policy. The court consequently dismissed Plaintiff as a party to the action.

II. DISCUSSION

5. Because we determine that Plaintiff did have a real party interest sufficient to pursue litigation independent of the Foundation and that the agreement between Plaintiff and the Foundation was not champertous, we need not address Plaintiffs issues three and four.

6. Concerning the issues we do address, Plaintiff disputes the trial court’s findings of fact that the Foundation was the only party plaintiff with an independent interest in the litigation, that the agreement between Plaintiff and the Foundation was champertous, and the two conclusions of law that restate those findings. Because the two findings of fact are actually conclusions that mirror the trial court’s conclusions of law, we believe the trial court erred in labeling them as findings. As a result, because only conclusions of law are challenged, our standard of review on appeal is whether the trial court correctly applied the law to the facts. Investment Co. of the Southwest v. Reese, 117 N.M. 655, 657, 875 P.2d 1086, 1088 (1994).

A. Real Party In Interest

7. Unless specifically provided to the contrary or inconsistent with its provisions, the Rules of Civil Procedure govern proceedings under New Mexico’s Probate Code. NMSA 1978, § 45-1-304 (Repl.Pamp.1995). 1 The trial court concluded that Plaintiff was not a real party in interest as defined by SCRA 1986, 1-021 (Repl.1992). That provision provides that “[p]arties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just.” SCRA 1-021, however, does not mention “real party in interest;” the term is instead introduced by SCRA 1986, 1-017(A) (Repl. 1992). Thus, whether or not Plaintiff was justly stricken as an excessive plaintiff depends on whether or not he was a real party in interest under SCRA 1-017(A), not SCRA 1-021.

8. SCRA 1-017(A) requires that “[ejvery action be prosecuted in the name of the real party in interest.” One is a real party in interest if (1) he is the owner of the right being enforced, and (2) he is in a position to discharge the defendants from the liability being asserted in the suit. Jesko v. Stauffer Chem. Co., 89 N.M. 786, 790, 558 P.2d 55, 59 (Ct.App.1976). We consider each of these requirements separately.

1. Owner Of The Right Being Enforced

9. To determine if Plaintiff in this case is the owner of the right being enforced, we must look to the Probate Code. An “interested person” for purposes of the Probate Code “includes heirs, devisees, children, spouses, creditors, beneficiaries and any others having a property right in or claim against a trust estate or the estate of a decedent.” NMSA 1978, § 45-l-201(A)(19) (Repl.Pamp.1989).

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Bluebook (online)
917 P.2d 963, 121 N.M. 694, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rienhardt-v-kelly-nmctapp-1996.