Weststar Mortgage Corp. v. Jackson

2003 NMSC 002, 61 P.3d 823, 133 N.M. 114
CourtNew Mexico Supreme Court
DecidedDecember 23, 2002
Docket27,270
StatusPublished
Cited by48 cases

This text of 2003 NMSC 002 (Weststar Mortgage Corp. v. Jackson) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Weststar Mortgage Corp. v. Jackson, 2003 NMSC 002, 61 P.3d 823, 133 N.M. 114 (N.M. 2002).

Opinion

OPINION

FRANCHINI, Justice.

{1} Plaintiff Weststar Mortgage Corporation (Weststar) appeals from a jury verdict granting compensatory and punitive damages to Defendant Ken Jackson (Jackson). Weststar, seeking to recover money from Jackson that belonged to Weststar, had filed an action against Jackson for unjust enrichment, fraud, constructive fraud, conversion, and promissory estoppel. In response, Jackson filed a counterclaim alleging malicious abuse of process. The trial court granted partial summary judgment for Weststar on the unjust enrichment claim and ordered Jackson to repay the money in question with interest. However, the trial court did not rule on Weststar’s motion for summary judgment on the counterclaim. It was subsequently tried before a jury which awarded Jackson $50,000 in compensatory damages and $150,000 in punitive damages; the trial court declined to award post-judgment interest on the punitive damages. Post-trial, the trial court denied Weststar’s motion for judgment as a matter of law, or, in the alternative, a new trial. Weststar appealed the judgment to the Court of Appeals, and Jackson filed a cross appeal challenging the denial of interest. In a divided opinion, the Court of Appeals affirmed the judgment against Weststar and reversed the trial court’s denial of post-judgment interest on the punitive damages. Weststar Mortgage Corp. v. Jackson, 2002-NMCA-009, 131 N.M. 493, 39 P.3d 710, cert. granted, 131 N.M. 564, 40 P.3d 1008, No. 27,270 (2002). We granted Weststar’s petition to this Court to issue a writ of certiorari to the Court of Appeals under NMSA1978, § 34-5-14(B) (1972). We reverse the Court of Appeals and the judgment in favor of Jackson.

I. FACTUAL AND PROCEDURAL BACKGROUND

{2} Weststar is an escrow company that provides services on escrow accounts, loans, and mortgages by holding real estate contracts, collecting payments, and disbursing proceeds. The corporation also purchases real estate contracts. In April 1998, Wests-tar purchased a real estate contract from Jackson, for whom they had been providing mortgage services. At that time, Jackson signed a closing statement with Weststar, and he received a copy of the closing statement. There is no dispute that the balance due to Jackson for his equity in the property was $2786.82. But, on May 1,1998, Norwest Bank mistakenly deposited the entire amount of the sales proceeds into Jackson’s account, including $12,927.26 due to Weststar. Jackson testified that when he learned that more than $15,000 had been deposited into his account, he knew that someone had made a mistake. He called Weststar to inquire whether the money transfer had been completed, but did not tell them about the excess funds in his account. On May 14, Jackson removed $12,000 from the account to purchase a certificate of deposit (CD). By July 5,1998, Weststar was aware of the error, and the employee who had handled the purchase of the real estate contract, Ms. Lynch, contacted Jackson. The first time they spoke, Jackson acted as though he did not understand what she was talking about. During the second call, he acknowledged that he had received the additional funds. Jackson told her about having used $12,000 of the funds to purchase the CD and that he did not have the remaining $972.26. He agreed to repay the $12,000 in August when the CD matured. In the meantime, Weststar, concerned that Jackson had kept the money for two months without notifying them and that his offer to repay the money was not in writing, sent a demand letter to Jackson on August 7 requesting payment of their money within thirty days. The letter also stated that, if necessary, Weststar would pursue legal remedies, including a civil lawsuit, to recover their funds. In response to the letter, Jackson and his wife met with his first attorney who told them that the mistaken transfer of funds to their account was Weststar’s loss and their gain. He advised them that the money was theirs to keep and that Jackson could not be arrested for keeping the money.

{3} When Ms. Lynch contacted Jackson in August to arrange for the repayment that they had discussed earlier, he told her that she would now have to speak with his attorney. When Ms. Lynch reported this information to Weststar, a senior vice-president, Mr. Inman, called Jackson’s attorney to clarify Jackson’s intent. The attorney responded that he and his client considered the mistaken transfer of funds to have been a “golden opportunity” and laughed at the question when Mr. Inman asked about repayment. W^hen Jackson’s attorney did respond to Weststar’s letter in mid-September, he stated that Jackson no longer had the full amount of $12,927.26, and offered to repay $3000 of the amount due to settle the matter in full. Mr. Inman testified that at this point he believed the money was gone and contacted the Carlsbad police to determine whether a criminal act had been committed. After that conversation, Ms. Lynch met with Detective Sergeant Boutelle of the Carlsbad Police Department on September 23, 1998, and took the documents involved with the contract purchase for his review. She testified that Weststar’s purpose in going to the police was to determine whether a crime had been committed and to make a record of the occurrence. The detective explained to her that all he could do was prosecute any criminal wrongdoing and that he was not a collection agent. She stated that she understood and that Weststar’s attorneys were preparing to begin civil proceedings for that purpose. Detective Boutelle responded that even if Jackson paid the money back, it would not change his pursuit of the criminal case. During this meeting with Ms. Lynch, the detective called Jackson’s attorney to advise him that Weststar had contacted the police about the actions of his client. The detective testified that the attorney had responded that he thought it was a civil matter. The detective disagreed with him and suggested that the attorney should talk to his client about returning the money. The attorney laughed at him. During his investigation, Detective Boutelle contacted Jackson to tell him that the police were investigating Weststar’s complaint. The detective also informed Jackson that he thought his attorney had given him bad advice with regard to his keeping Weststar’s money. He suggested that, if Jackson felt he was entitled to keep the money, he should return it to Weststar and then file a civil action to recover the funds. A similar suggestion to Jackson’s first attorney was also rebuffed.

{4} Detective Boutelle testified that he completed his investigation and gave it to an assistant district attorney for review. Upon determining that probable cause existed, the assistant district attorney issued a criminal complaint. The complaint was taken to a magistrate judge for approval, and an arrest warrant was issued for Jackson. After a preliminary hearing in December 1998 before a presiding magistrate judge, Jackson, who was then represented by his current attorney, was bound over for trial in district court. The assistant district attorney later dismissed the criminal charges when Norwest Bank failed to supply in a timely manner documentation that he would need to prosecute the case.

II. DISCUSSION

{5} In his counterclaim, Jackson alleged that Weststar initiated criminal proceedings against him for an improper purpose and without probable cause. He also claimed that their actions were intentional, willful, and in reckless disregard of his rights.

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Cite This Page — Counsel Stack

Bluebook (online)
2003 NMSC 002, 61 P.3d 823, 133 N.M. 114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weststar-mortgage-corp-v-jackson-nm-2002.