Weststar Mortgage Corp. v. Jackson

2002 NMCA 009, 39 P.3d 710, 131 N.M. 493
CourtNew Mexico Court of Appeals
DecidedJanuary 15, 2002
Docket21,179
StatusPublished
Cited by9 cases

This text of 2002 NMCA 009 (Weststar Mortgage Corp. v. Jackson) 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
Weststar Mortgage Corp. v. Jackson, 2002 NMCA 009, 39 P.3d 710, 131 N.M. 493 (N.M. Ct. App. 2002).

Opinions

OPINION

PICKARD, Judge.

{1} The question before us is whether the use of the criminal process to assist in the collection of money mistakenly deposited into the wrong account gives rise to civil liability under the tort of malicious abuse of process. See DeVaney v. Thriftway Mktg. Corp., 1998-NMSC-001, ¶ 17, 124 N.M. 512, 953 P.2d 277 (defining the elements of malicious abuse of process). In addition, we address whether NMSA 1978, § 56-8-4(A) (1993) requires a trial court to apply post-judgment interest to an award of punitive damages. Under the specific facts of this case, we answer both questions in the affirmative.

{2} Appellant Weststar Mortgage Company (Weststar) appeals from a judgment awarding Appellee Ken Jackson (Jackson) $50,000 in compensatory damages and $150,000 in punitive damages on Jackson’s claim for malicious abuse of process. Wests-tar challenges the jury’s verdict on every element of the malicious abuse of process claim and on the award of punitive damages. In particular, Weststar argues that (1) Weststar did not initiate or procure criminal proceedings against Jackson; (2) the trial court erred by failing to find, as a matter of law, that Weststar had probable cause to believe that a criminal claim could be established against Jackson; (3) the claim for malicious abuse of process was precluded by the facts that Jackson was guilty of larceny and the criminal proceedings did not terminate in Jackson’s favor; (4) Weststar did not misuse the criminal proceedings; (5) there was no evidence that Weststar had a primary improper motive in seeking the criminal prosecution; (6) the jury instructions were misleading; (7) the jury’s award of punitive damages was not supported by substantial evidence; and (8) the trial court erred in denying Weststar’s motion for a new trial given that Jackson failed to present evidence sufficient to support the jury’s findings. Jackson raises only one issue on cross-appeal, namely whether the trial court erred in failing to award post-judgment interest on Jackson’s punitive damages award. We affirm on the appeal, reverse on the cross-appeal, and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

{3} Weststar is an escrow company that provides escrow, loan, and mortgage servicing. Its services include holding real estate contracts, collecting payments, and disbursing proceeds. Weststar also purchases real estate contracts.

{4} In 1998, Jackson owned a real estate contract encumbered by a mortgage. Wests-tar held the contract and disbursed payments to Jackson and to the mortgage holder. In April 1998, Weststar and Jackson executed a contract for Jackson to sell his real estate contract to Weststar. Pursuant to this agreement, Weststar arranged to direct-deposit approximately $3,000 in Jackson’s account at Norwest Bank. However, Norwest misunderstood Weststar’s instructions and mistakenly transferred all of the sale proceeds, including $12,927.26 that should have gone into Weststar’s account, into Jackson’s account.

{5} Jackson and his wife discovered the error several days later. On his wife’s advice, Jackson called Weststar to ask whether the wire transfer had been made correctly. Jackson admits that he did not tell Weststar why he thought there may have been a mistake during this phone call. The Weststar representative, Lon Lynch, told Jackson that the wire transfer had been completed. Jackson then withdrew $12,000 from his account and purchased a certificate of deposit. Jackson testified that he bought the CD because he thought Weststar might eventually want the money returned and he wanted to ensure that he did not spend it.

{6} When Weststar discovered the bank error in July 1998, Lynch called Jackson. During this first telephone call, Jackson denied having any knowledge of the money. However, later that day, Jackson called Lynch and arranged to return the money when the CD matured in August. Lynch testified that she did not demand that Jackson immediately return the money: “At that point he seemed willing to find out what he could do about the CD and return the money to us, so we were allowing him some time to do that.”

{7} Shortly after Lynch and Jackson made arrangements for the repayment of the money, Weststar’s attorney sent a letter to Jackson, demanding return of the money and threatening legal action should Jackson fail to cooperate. Concerned by the tone of the letter, Jackson and his wife contacted an attorney. The attorney erroneously, if not recklessly, told Jackson that it was his “lucky day” and that he was entitled to keep the money. Based on this advice, Jackson cashed in the CD and deposited the proceeds into another account.

{8} As the CD maturity date approached, Lynch again called Jackson. Jackson told Lynch that he had retained counsel and directed her to communicate with him through his attorney. Lynch reported this conversation to her supervisor, Gary Inman. Inman then called Jackson’s attorney. Jackson’s attorney told Inman that he viewed the situation as a “golden opportunity” for Jackson and that he would be responding to Wests-tar’s demand letter in due time.

{9} Inman or another supervisor then directed Lynch to make a complaint with the Carlsbad Police Department. Lynch met with Detective Boutelle on September 23, 1998. Boutelle testified that Lynch told him, ‘We want to avoid going to criminal court, if we can. We are hoping we get cooperation, and can get this resolved where we can just close the whole matter out and go from there.” Boutelle explained that he was not a collection agent and asked if Weststar wanted to proceed with the prosecution of Jackson. Lynch responded that she lacked the authority to authorize the prosecution and that her purpose in contacting the police was to document the situation in the event that Weststar was unable to resolve the situation civilly.

{10} Based on Lynch’s representations that Weststar wanted to avoid a criminal prosecution if possible, Boutelle called Jackson’s attorney to attempt to resolve the situation. Lynch was in the room at the time Boutelle made the call. Boutelle testified that he told the attorney, “I’m asking that you might talk to your client and try to come up with a reasonable solution, so that I can be eliminated from this process and you-all handle it yourselves. Otherwise I will be compelled — I will have to do my job and pursue this further.” Jackson’s attorney laughed at Boutelle and told Boutelle that he did not believe the matter was a criminal issue.

{11} The following day, Inman called Boutelle and directed the detective to pursue the prosecution of Jackson. During this conversation, Inman told Boutelle that he had received a letter from Jackson’s attorney basically stating that Jackson would not be returning the money. In fact, the letter discussed a settlement offer. Nonetheless, Inman told Boutelle that the letter was not the answer he was hoping to get from Jackson and therefore that Weststar wished to proceed with the criminal case.

{12} Jackson did not return the money and was arrested. The district attorney eventually dismissed the prosecution because he was unable to get necessary records from Norwest Bank in order to carry through with the trial before a required deadline.

{13} Shortly after Jaekson’s arrest, Wests-tar filed a civil complaint alleging unjust enrichment, fraud, constructive fraud, conversion, and promissory estoppel.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Olmstead v. San Miguel Hospital
New Mexico Court of Appeals, 2012
State Ex Rel. Solsbury Hill v. Liberty Mut.
2012 NMCA 032 (New Mexico Court of Appeals, 2012)
State ex rel Solsbury Hill, LLC v. Liberty Mut. Ins. Co.
2012 NMCA 32 (New Mexico Court of Appeals, 2011)
Silva v. Chavez
New Mexico Court of Appeals, 2010
Nava v. City of Santa Fe
2004 NMSC 039 (New Mexico Supreme Court, 2004)
Weststar Mortgage Corp. v. Jackson
2003 NMSC 002 (New Mexico Supreme Court, 2002)
Dawley v. La Puerta Architectural Antiques, Inc.
2003 NMCA 029 (New Mexico Court of Appeals, 2002)
Toscano v. Lovato
2002 NMCA 022 (New Mexico Court of Appeals, 2002)

Cite This Page — Counsel Stack

Bluebook (online)
2002 NMCA 009, 39 P.3d 710, 131 N.M. 493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weststar-mortgage-corp-v-jackson-nmctapp-2002.