JERALD W. FREEMAN, THE TEA LEAF INC., THOMAS NYGARD, INC., Plaintiffs-Appellees,
PAUL W. FAIRCHILD, JR., Defendant/Cross-Claimant-Respondent,
RICHARD H. LOVE, R.H. LOVE GALLERIES, INC., Defendants-Petitioners.
PROCEEDING ON CERTIORARI Barbara J. Vigil, District Judge.
Coberly & Martinez, LLP Todd A. Coberly Santa Fe, NM For
Thompson, Hickey, Cunningham, Clow, April & Dolan, P.A.
David F. Cunningham Brenden J. Murphy Santa Fe, NM For
JIMENEZ MAES, Justice.
Paul W. Fairchild Jr. asked the district court to grant
summary judgment on his cross-claims against Defendants
Richard H. Love and R.H. Love Galleries, Inc. (collectively
Love) on the ground that Love failed to timely file a
response to Fairchild's motion for summary judgment and
was therefore "in default." Love, whose counsel had
withdrawn while the motion was pending, explained that he
lacked legal representation and had been experiencing health
problems, and he requested an opportunity to submit a late
response. The district court did not allow Love additional
time to respond and granted Fairchild's motion for
summary judgment without considering whether Fairchild had
established a prima facie case for summary judgment under
Rule 1-056 NMRA.
We hold that the district court erred by granting summary
judgment. A district court may not grant summary judgment
solely because the non-moving party has failed to file a
response. Prior to granting an uncontested motion for summary
judgment, the district court must assess whether the moving
party has demonstrated that no genuine issue of material fact
exists "and that the moving party is entitled to a
judgment as a matter of law." Rule 1-056(C). We also
hold that the Court of Appeals erred in its application of
the right for any reason doctrine to affirm the district
court. See Freeman v. Fairchild, 2015-NMCA-001,
¶ 32, 340 P.3d 610. We reverse the summary judgment
order and vacate the resulting award of damages, and we
remand to the district court with instructions to permit Love
to file a response to Fairchild's motion for summary
judgment and for further proceedings.
Jerald W. Freeman, The Tea Leaf, Inc., and Thomas Nygard,
Inc. (collectively Plaintiffs) jointly owned a painting by
Albert Bierstadt that they had purchased for $180, 000. In
October 2002, three transactions involving the Bierstadt
painting occurred in quick succession. First, Freeman agreed
on behalf of Plaintiffs to sell the painting to Paul Benisek
for $240, 000, to be paid in twelve monthly installments.
Second, Benisek agreed to sell the painting to Love for $300,
000, also to be paid in twelve monthly installments. Finally,
Love sold the painting to Fairchild for $375, 000, which
Fairchild paid in full with a combination of cash and the
trade-in of three other pieces of artwork.
In accordance with their respective agreements, Love made
several payments to Benisek, and Benisek made several
payments to Freeman. But in spring 2003, Love experienced
financial trouble and stopped making payments to Benisek, who
in turn stopped making payments to Freeman. Meanwhile,
Fairchild consigned the Bierstadt painting for sale at a
gallery in New York City. Freeman, who had not received full
payment from Benisek, became aware that the New York gallery
was attempting to sell the Bierstadt painting and asked the
gallery to ship the painting to Santa Fe for inspection.
Freeman obtained possession of the Bierstadt painting and
refused to return it to the gallery.
Freeman initiated this lawsuit in June 2005, seeking a
declaratory judgment to determine ownership of the Bierstadt
painting and asserting other claims against Benisek, Love,
and Fairchild. Freeman later amended his complaint to add the
other plaintiffs. In May 2006, Fairchild filed counterclaims
against Plaintiffs and cross-claims against Love for fraud,
negligent misrepresentation, and violation of the Illinois
Consumer Fraud and Deceptive Business Practices Act, 815 Ill.
Comp. Stat. Ann. 505/2 (1973) (Illinois Consumer Fraud Act).
Fairchild's cross-claims against Love are the only claims
at issue in the appeal before this Court. For over five
years, the only litigation that occurred between Fairchild
and Love beyond the pleadings consisted of Fairchild's
initial set of discovery requests, to which Love responded.
During this time, however, extensive litigation and discovery
occurred between Plaintiffs and Love and between Plaintiffs
and Fairchild, including numerous pretrial motions and
depositions in several states. Six different district court
judges presided over this case between 2005 and 2010.
On January 28, 2011, Love's New Mexico counsel, who had
represented Love in this case for over five years, filed a
motion to withdraw, stating that it would be
"impossible" to continue representing Love. The
district court granted the motion on February 24, 2011. On
April 19, 2011, a new attorney entered an appearance to
Several weeks later, on May 16, 2011, Fairchild filed a
motion for partial summary judgment on his cross-claims
against Love for fraud, negligent misrepresentation, and
violation of the Illinois Consumer Fraud Act. According to
the parties, Fairchild's counsel agreed to give
Love's new counsel a two-week extension of time to file a
response to Fairchild's motion for summary judgment, but
we find no indication in the record that Love's new
counsel requested an extension from the district court. In
any event, Love's new counsel did not file a response,
and on June 9, 2011, less than two months into the
representation, Love's new counsel moved to withdraw. The
motion to withdraw stated that continuing the representation
would risk a conflict of interest, that Love had violated
agreements with the attorney's law firm, and that Love
had "repeatedly failed to respond to emails,
correspondence, and telephone calls." The motion to
withdraw listed several upcoming court dates and stated that
Love had been informed "of the procedural status
of" the case, but the motion did not specifically refer
to Fairchild's pending motion for summary judgment. On
June 13, 2011, the district court issued an order that
granted the motion to withdraw. The order did not identify
the pending motion for summary judgment.
On July 12, 2011, Fairchild filed a request for an expedited
hearing on his motion for summary judgment against Love. The
district court held a hearing on August 2, 2011. At the
hearing, Fairchild's counsel asserted that Love had
failed to file a response and that the response deadline had
"passed by many weeks." Fairchild's counsel
offered to address the substance of the motion but argued
that Fairchild was entitled to summary judgment as a
procedural matter because Love was "in default."
Love did not retain counsel prior to the hearing and appeared
pro se by telephone from Illinois. Love informed the court
that he had not been fully aware of the proceedings because
he did not have legal representation and had been
experiencing health problems, including hospitalization. Love
asserted that his failure to respond had not been
intentional, apologized for his lack of awareness, and asked
the district court to consider giving him an opportunity to
respond. The district court denied Love's request for
more time to respond and granted Fairchild's motion for
summary judgment on procedural grounds without addressing the
substance of the motion, concluding that Fairchild's
motion should be granted because Love had failed to file a
In early October 2011, the district court held a two-day
bench trial to determine the amount of damages Love owed
Fairchild. Love had not yet retained counsel and participated
pro se by telephone from Illinois. The district court awarded
Fairchild $1, 942, 446 in compensatory damages, which
included Fairchild's attorney fees, costs, and
prejudgment interest. The district court also awarded
Fairchild $9, 712, 232 in punitive damages, an amount equal
to five times the compensatory damages.
Love retained appellate counsel and filed an appeal. The
Court of Appeals held "that it was error for the
district court to grant Fairchild's motion for summary
judgment solely on the basis of Love's failure to respond
to the motion." Freeman, 2015-NMCA-001, ¶
32. The Court of Appeals explained that "[t]he district
court should have deemed admitted the facts alleged in
Fairchild's motion and then determined whether those
facts made a prima facie showing of entitlement to summary
judgment." Id. Despite this error, the Court of
Appeals affirmed the district court by determining-in the
first instance on appeal-that Fairchild had established
"a prima facie case of entitlement to summary
judgment." Id. In doing so, the Court of
Appeals relied on the right for any reason doctrine.
Id. The Court of Appeals also affirmed the district
court's award of damages to Fairchild. Id.
¶ 47. The Court of Appeals observed that "it does
seem extraordinary that Fairchild should be awarded in excess
of $11 million for the fraudulent sale of a painting worth in
the neighborhood of $400, 000, " but the Court declined
to "analyze Love's arguments" because
"Love failed to preserve his arguments in the district
court." Id. ¶ 39.
Love filed a petition for writ of certiorari, asking this
Court to review two issues: (1) whether the Court of Appeals
erred by affirming summary judgment under the right for any
reason doctrine without addressing all of the elements of
Fairchild's cross-claims, which are grounded in Illinois
law; and (2) whether the district court committed fundamental
error by awarding Fairchild $11.6 million in a dispute over a
painting worth $375, 000 where the Illinois statute on which
the award was predicated did not allow the requested relief.
We granted certiorari under Article VI, Section 3 of the New
Mexico Constitution and NMSA 1978, Section 34-5-14(B) (1972).