Salas v. Bolagh

747 P.2d 259, 106 N.M. 613
CourtNew Mexico Court of Appeals
DecidedNovember 10, 1987
Docket9385
StatusPublished
Cited by10 cases

This text of 747 P.2d 259 (Salas v. Bolagh) 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
Salas v. Bolagh, 747 P.2d 259, 106 N.M. 613 (N.M. Ct. App. 1987).

Opinion

OPINION

GARCIA, Judge.

Plaintiffs appeal from the dismissal of their amended complaint following a remand from this court. Following consideration of the briefs and oral arguments of the parties, we reverse.

ISSUES

Plaintiffs raise three issues on appeal: (1) whether defendants’ claim of res judicata was error because actions pursuant to an order of this court constitute a continuation of the original suit; (2) whether the trial court erred in attempting to release the notice of lis pendens; and (3) whether dismissal for lack of a supersedeas bond was error because no supersedeas bond was required to be posted by plaintiffs on the self-executing judgment. Although we reverse the trial court’s dismissal of plaintiffs’ amended complaint pursuant to issues 1 and 2, we will nonetheless discuss issue 3.

FACTS

In 1981, plaintiffs obtained a judgment against defendants Bolagh. Plaintiffs sought to foreclose on the judgment and subsequently filed suit against the Roberts and the Bolaghs, who had purchased real property pursuant to a real estate contract, from defendants Roberts. It was against this equitable interest that plaintiffs sought to foreclose the judgment lien. The Bolaghs subsequently defaulted under the terms of the real estate contract. Plaintiffs, however, were not notified of the default and, accordingly, the default was not cured. After the time to cure had lapsed, the Roberts moved to dismiss plaintiffs’ foreclosure action pursuant to NMSA 1978, Civ.P. Rule 12(B)(6) (Repl.Pamp.1980) (now codified as SCRA 1986, 1-012). In November 1983, the trial court entered judgment for the Roberts, releasing the notice of lis pendens and dismissing the Salases foreclosure suit. In December 1983, the Salases appealed that decision to this court. In March 1984, while the appeal was pending, the Roberts sold the property to a third party, the Kennedys.

Subsequently, in a memorandum opinion, Ct.App. No. 7642 (Filed August 9, 1984), this court reversed the trial court’s judgment and remanded with instructions to set aside the dismissal and allow a period of time within which plaintiffs could cure the default. In that opinion, we noted that plaintiffs’ right to cure the contract default was an uncontested finding by the trial court and, in light of that finding, plaintiffs were entitled to receive notice of the default before plaintiffs could be penalized for failing to cure.

Subsequently, in attempting to cure the default, plaintiffs discovered that the property had been sold. Thereafter, plaintiffs moved to require Roberts to convey the property to plaintiffs upon cure of the default or, in the alternative, for judgment against Roberts for damages plaintiffs suffered as a result of the conveyance. This motion was denied. Plaintiffs then sought and received permission to amend their original complaint to include the Kennedys.

Both the Roberts and Kennedys answered the amended complaint and moved to dismiss on separate grounds. Roberts claimed the action was barred by res judicata. Similarly, the Kennedys raised the affirmative defense that a lis pendens, previously filed by plaintiffs, was extinguished by the district court’s initial dismissal and that plaintiffs had failed to post a supersedeas bond. Thus, the Kennedys claimed they were bona fide purchasers in good faith. The trial court granted both motions. The present appeal is from the trial court’s dismissal of plaintiffs’ amended complaint.

DISCUSSION

Issue I

Plaintiffs complain that the trial court erred in granting defendants’ motion to dismiss plaintiffs’ amended complaint under the doctrine of res judicata. We find this argument persuasive.

The doctrine of res judicata applies only to final judgments. C & H Constr. & Paving Co. v. Citizens Bank, 93 N.M. 150, 597 P.2d 1190 (Ct.App.1979). A judgment is not operative as res judicata when it has been reversed by an appellate court. See 46 Am.Jur.2d Judgments § 465 (1969); Green v. Chaffee Ditch Co., 150 Colo. 91, 371 P.2d 775 (1962). The first trial of this case resulted in a reversal and remand. Thus, it was not a final judgment. The trial court’s judgment could not serve as a res judicata bar to plaintiffs’ amended complaint. Moreover, the trial court had not fully adjudicated the issues between the parties. Hence, the trial court erred in dismissing plaintiffs’ amended complaint on res judicata grounds.

When plaintiffs sought to cure the default, they learned of Roberts’ sale of the property. As a result, plaintiffs could not cure. They filed an amended complaint naming the Kennedys as additional party defendants. In light of the sale and plaintiffs’ entitlement to notice prior to default, plaintiffs had no other choice but to secure the property through the Kennedys via their mandate right to cure the default against the Roberts. Thus, the filing of the amended complaint was appropriate.

Issue 2

Roberts argue that the trial court’s release of the lis pendens enabled their vendees, Kennedys, to be bona fide purchasers without notice. We need only determine, however, whether the lis pendens was in effect at the time the Kennedys purchased the property. We believe it was.

A lis pendens is a vehicle for permitting an individual, involved in an action which affects title, to put subsequent purchasers on notice of pending claims involving the property. Superior Constr., Inc. v. Linnerooth, 103 N.M. 716, 712 P.2d 1378 (1986). The lis pendens is simply a republication of the pleadings filed in the pending judicial proceeding. Title Guaranty & Ins. Co. v. Campbell, 106 N.M. 272, 742 P.2d 8 (Ct.App.1987). In Title Guaranty we noted the split of authority on the question of whether a notice of lis pendens continues to be effective pending appellate review of a final judgment. In Title Guaranty we assumed, without deciding, that in a somewhat similar situation to the case at bar, where a court order sought to dissolve a lis pendens and an appeal had been taken, the lis pendens was deemed effective until the appellate process had come to an end. In that case, there was undisputed evidence that the trial court’s cancellation of the lis pendens was not in accordance with the requirements of NMSA 1978, Section 38-1-15 (Repl.Pamp.1987). In addition, the continued effectiveness of the notice of lis pendens in Title Guaranty was not a dis-positive issue. In this case, however, the issue is dispositive.

We believe that regardless of the validity of the cancellation, the lis pendens established by the suit continues until expiration of the time for appeal or until final disposition of the case by the appellate court. See MacKenzie v. A. Engelhard & Sons Co., 266 U.S. 131, 45 S.Ct. 68, 69 L.Ed. 205 (1924).

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747 P.2d 259, 106 N.M. 613, Counsel Stack Legal Research, https://law.counselstack.com/opinion/salas-v-bolagh-nmctapp-1987.