September 10, 2014 – Jearld W. Freeman, The Tea Leaf, Inc, and Thomas Nygard, Inc. v. Paul W. Fairchild, Jr., v. Richard H. Love and R.H.Love Galleries, Inc., No. 32542

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number:

Filing Date: _ SEPTEMBER 10, 2014

NO. 32,542

JERALD W. FREEMAN, THE TEA LEAF,
INC., and THOMAS NYGARD, INC.,

Plaintiffs-A ppellees,
V.
PAUL W. FAIRCHILD, JR.,
Defendant/Cross-Claimant-A ppellee,
V.

RICHARD H. LOVE and R.H. LOVE
GALLERIES, INC.,

Defendants-A ppellants.

APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Barbara J. Vigil, District Judge

Keleher & McLeod, P.A.
Thomas C. Bird

Kurt Wihl

Christina Muscarella Gooch

Albuquerque, NM

for Plaintiffs-A ppellees Jerald W. Freeman, The Tea Leaf, Inc.,
and Thomas Nygard, Inc.

Thompson, Hickey, Cunningham, Clow, April & Dolan, P.A.
David F. Cunningham
Brenden J. Murphy
Santa Fe, NM
for Defendant/Cross-Claimant-Appellee Paul W. Fairchild, Jr.
Coberly & Attrep, LLLP
Todd A. Coberly
Santa Fe, NM
for Appellants

OPINION
FRY, Judge.
{1} 	The Opinion filed on July 30, 2014 is withdrawn, and the following is
substituted for it. Defendants’ motion for rehearing is denied.
{2} 	Plaintiffs Jerald W. Freeman, The Tea Leaf, Inc., and Thomas Nygard, Inc.,
owned a painting that they agreed to sell to Paul Benisek. Benisek, in turn, agreed to
sell the painting to Defendants R.H. Love Galleries, Inc., and Richard H. Love
(collectively referred to as Love). Love then sold the painting to Defendant Paul W.
Fairchild, Jr. Fairchild paid Love in full for the painting, but Love never completely
paid Benisek, and Benisek never completely paid Plaintiffs. In this controversy over
possession of the painting and amid the claims, cross-claims, and counterclaims
asserted, we reverse summary judgment entered in favor of Plaintiffs against Love
because they failed to make a prima facie showing of the elements necessary to
support their claims. 	Accordingly, we also reverse the district court’s award of
damages on Plaintiffs’ claims against Love. We affirm summary judgment in favor
of Fairchild against Love and the district court’s later award of damages on Fairchild’s
claims against Love.
BACKGROUND

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{3} 	Plaintiffs jointly owned a painting by Albert Bierstadt titled “Sunset Over the
Plains” (the painting). 	Freeman, on behalf of himself and the other Plaintiffs,
negotiated with Benisek and agreed to sell the painting to Benisek for $240,000. In
the written purchase agreement dated October 28, 2002, Benisek agreed to pay
Freeman for the painting in twelve monthly installments. 	He further agreed that
“[t]itle in the [painting] shall remain with [Freeman] until the [p]urchase [p]rice is paid
in full” and that he would execute “UCC or similar documents as [Freeman] may
reasonably require.” 	The agreement also provided that “[Benisek] shall be in
possession” of the painting.
{4} 	On the same day that Freeman and Benisek entered into their written agreement
(the Freeman/Benisek agreement), Benisek entered into a written agreement to sell the
painting 	to 	Love 	for 	$300,000 	(the 	Benisek/Love 	agreement). 	As 	in 	the
Freeman/Benisek agreement, the Benisek/Love agreement provided that Love would
pay for the painting in twelve monthly installments, but the due date for each payment
was scheduled to occur several days before each of Benisek’s corresponding payments
to Freeman. The remaining terms of the Benisek/Love agreement were similar to the
terms of the Freeman/Benisek agreement, including the provision that title to the
painting would remain with the seller (Benisek) until the purchase price had been paid
in full and the provision that the buyer (Love) would be in possession of the painting.

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Thus, the two agreements were in conflict as to who had title to and who would retain
possession of the painting. 	The other material difference between 	the two
agreements—apart from the names of the parties, the amounts of the purchase price
and the installment payments, and the due dates of payments—was the provision in
the Benisek/Love agreement that “[t]he [painting] constitutes security for payment of
the [p]urchase [p]rice.” In addition, the Benisek/Love agreement referred to Benisek
as “[s]eller’s [a]gent” rather than as “[s]eller,” which was the designation applied to
Freeman in the Freeman/Benisek agreement.
{5} 	Despite the express terms of the Freeman/Benisek agreement, Benisek had
orally agreed—prior to the execution of either agreement—to sell the painting to
Love, and he had also given possession of the painting to Love. 	Also prior to the
execution 	of 	the 	two 	agreements 	and 	contrary 	to 	the 	express 	terms 	of 	the
Benisek/Love agreement, Love had orally agreed to sell the painting to Fairchild for
$375,000 and had given Fairchild possession of the painting in exchange for cash and
three other paintings. The cash and three paintings constituted payment in full from
Fairchild to Love for the painting.
{6} 	In summary, Benisek agreed to purchase the painting from Freeman and sold
and delivered the painting to Love, who in turn sold and delivered the painting to
Fairchild, all before Benisek signed the written agreement with Freeman promising

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to retain possession of the painting and before Love signed a similar agreement with
Benisek also promising to retain possession of the painting. The only person who
paid for the painting in full was Fairchild.
{7} 	Love made the first four installment payments owed to Benisek, and Benisek
in turn made the first four installment payments to Freeman. Then, in April 2003,
Love told Benisek that he was declaring a moratorium on any further payments due
to financial troubles, and Love’s check for the fifth installment payment bounced.
Benisek had already made his fifth installment payment to Freeman, so he informed
Freeman about Love’s moratorium and asked Freeman to return the fifth payment to
him.
{8} 	Although the details are far from clear, Love and Freeman apparently made
contact at some point after this because Love sent a letter to Freeman’s attorney
explaining that he was experiencing financial difficulties. In the letter, Love proposed
to liquidate various assets and to allow creditors to assert liens on certain assets “in
amounts and on terms to be negotiated.” 	The letter further provided that creditors
would forebear enforcing their liens or claims for a period of time until Love could
reestablish his gallery. Finally, the letter stated that Love would make his financial
information available to Freeman if Freeman signed and returned a non-disclosure
agreement. 	Freeman did sign the non-disclosure agreement, which essentially

5
provided that Freeman would “enter discussions concerning past and potential
business transactions with [Love]” and that Freeman would “use best efforts to assure
that any confidential and/or proprietary information disclosed in connection with such
discussions will be kept confidential.” The record does not disclose any further details
about other discussions, if any, between Love and Freeman.
{9} 	In February 2004, Fairchild apparently placed the painting on consignment with
Owen Gallery, and Freeman saw an Owen Gallery catalog offering the painting for
sale. Freeman asked Owen Gallery if he could view the painting, and Owen Gallery
shipped the painting from New York to a gallery in Santa Fe, New Mexico, where
Freeman was located. Freeman then took possession of the painting and refused to
return it to Owen Gallery.
{10} 	Shortly after Freeman regained possession of the painting, he filed suit against
Benisek, Love, and Fairchild. Freeman sought (1) a declaratory judgment establishing
that his rights to possession of the painting were superior to the rights of Defendants,
and (2) damages for breach of contract, conversion, negligent misrepresentation,
fraud, prima facie tort, and breach of the implied covenant of good faith and fair
dealing. Freeman later amended his complaint to add the other Plaintiffs. Fairchild
then filed counterclaims against Plaintiffs for declaratory judgment, conversion, and
fraud, and cross-claims against Love for fraud, negligent misrepresentation, and

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violation of the Illinois Consumer Fraud and Deceptive Business Practices Act
(Illinois Act).
{11} 	After nearly six years of litigation, Plaintiffs filed a motion seeking partial
summary judgment against Love on their claims for breach of contract, negligent
misrepresentation, and fraud. 	Following a hearing, the district court granted the
motion, holding that there were no material issues of fact that (1) Love had breached
the contract with Benisek “as agent for Plaintiffs” by failing to maintain possession
of the painting, by failing to pay Benisek, and by failing to perfect a security interest
in the painting; (2) Love negligently represented that he would keep possession of the
painting and perfect a security interest in it; and (3) Love was guilty of fraud because
he 	intended 	that 	“Plaintiffs, 	through 	their 	agent 	Benisek,” 	rely 	on 	Love’s
misrepresentations and because he misrepresented to Plaintiffs, “through their agent
Benisek” that he would keep possession of the painting and perfect a security interest
in it while being aware that he had already sold and delivered the painting to Fairchild.
Thus, the district court’s summary judgment in favor of Plaintiffs depended on the
notion that Benisek was acting as Plaintiffs’ agent in his dealings with Love. 	The
district court ordered that damages would be determined at a subsequent trial.
{12} 	Meanwhile, Fairchild had filed his own motion seeking partial summary
judgment against Love. Instead of responding to the motion, Love’s counsel moved

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to withdraw, and the district court granted the motion and advised Love in its order
that Love would have twenty days in which to retain substitute counsel. Love did not
retain substitute counsel and appeared pro se by telephone at the hearing on
Fairchild’s motion a month and a half later. At the hearing, Fairchild’s counsel argued
only that Love had not responded to Fairchild’s motion for summary judgment, and
the district court announced that “[b]ecause there ha[d] not been a substantive
response to the motion, . . . the motion shall be granted.” The court concluded that it
would determine damages “at a later proceeding.”
{13} 	Plaintiffs and Fairchild settled their respective claims against one another.
Plaintiffs filed a motion for summary judgment on their claims against Benisek, which
the district court granted only as to the claim for breach of contract. Plaintiffs and
Benisek reached a settlement whereby Benisek agreed to pay Plaintiffs $38,000 for
the breach of contract, and Plaintiffs dismissed their other claims against Benisek.
{14} 	The issue of damages to be assessed against Love in favor of Plaintiffs and in
favor of Fairchild was tried to the district court over two days. Again, Love appeared
pro se by telephone. At the conclusion of the trial, the district court awarded Plaintiffs
$731,744 in compensatory damages and $4,390,645 in punitive damages. The court
awarded Fairchild $1,942,446 in compensatory damages and $9,712,232 in punitive
damages. 	Thus, the district court found Love liable for a total of $16,777,067 in

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damages. 	The district court denied Love’s motion for a new trial. 	This appeal
followed.
DISCUSSION
{15} 	Love argues that the district court erred in granting summary judgment to
Plaintiffs and Fairchild and in its assessment of damages. 	We conclude that the
district court erroneously entered summary judgment in favor of Plaintiffs. 	We
further conclude that summary judgment in favor of Fairchild was appropriate.
{16} 	We review summary judgment de novo. 	Self v. United Parcel Serv., Inc.,
1998-NMSC-046, ¶ 6, 126 N.M. 396, 970 P.2d 582. 	“Summary judgment is
appropriate where there are no genuine issues of material fact and the movant is
entitled to judgment as a matter of law.” See Rule 1-056(C) NMRA. The appellate
courts “view the facts in a light most favorable to the party opposing summary
judgment and draw all reasonable inferences in support of a trial on the merits.”
Romero v. Philip Morris Inc., 2010-NMSC-035, ¶ 7, 148 N.M. 713, 242 P.3d 280
(internal quotation marks and citation omitted). 	The party moving for summary
judgment must make a prima facie showing and come forward with “such evidence
as is sufficient in law to raise a presumption of fact or establish the fact in question
unless rebutted.” Rivera v. Brazos Lodge Corp., 1991-NMSC-030, ¶ 5, 111 N.M. 670,
808 P.2d 955.

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I. 	Summary Judgment in Favor of Plaintiffs
{17} 	Love maintains that Plaintiffs failed to make a prima facie showing that Benisek
was acting as their agent in his dealings with Love. Because Plaintiffs and Love had
no direct interaction with each other, Love contends, the only way Plaintiffs could
prove their claims of breach of contract, misrepresentation, and fraud was by
establishing an agency relationship between Plaintiffs and Benisek. We agree with
Love and, as a result, we need not address Love’s alternative arguments challenging
the summary judgment in favor of Plaintiffs.
{18} 	Before considering the substance of Plaintiffs’ motion for summary judgment,
it is useful to place the motion in context. When Freeman filed his initial complaint
against Defendants, he alleged, among other things, that “Benisek was introduced to
Freeman as a buyer for the [p]ainting . . . on or about October 28, 2002,” and that
Freeman entered into an agreement to sell the painting to Benisek. The complaint
went on to recite the details of the Freeman/Benisek agreement and that Benisek had
transferred possession of the painting to Love in violation of the agreement. 	The
complaint then alleged that “in purchasing the [p]ainting from Freeman, Benisek was
acting as agent for Love” and that Freeman “believe[d] that Defendants colluded to
defraud Freeman of the [p]ainting.” Nowhere in the initial complaint did Freeman
allege that Benisek was acting as his (Freeman’s) agent.

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{19} 	The first amended complaint added Thomas Nygard, Inc. and The Tea Leaf as
Plaintiffs and made allegations similar to those in the original complaint. Specifically,
the amended complaint alleged that “[a]t all times, Benisek was acting as agent and/or
partner for Defendants” and that “in purchasing the [p]ainting from Freeman, Benisek
was acting as agent for Love . . . and Fairchild.” 	The amended complaint further
alleged that “Defendants entered into a partnership to purchase the [p]ainting and to
defraud Plaintiffs of the [p]ainting.” 	Once again, the amended complaint never
alleged that Benisek was acting as Plaintiffs’ agent. Plaintiffs never amended their
complaint again in order to change their theory of the case.
{20} 	Plaintiffs’ next major undertaking in the case was their motion for partial
summary judgment against Benisek in which they alleged that Benisek was liable for
breach of contract, negligent misrepresentation, and fraud. As undisputed material
facts, Plaintiffs alleged that they had entered into an agreement to sell the painting to
Benisek, that Benisek had stopped making the payments required by the agreement,
and that Benisek had violated the agreement by failing to retain possession of the
painting. At no point in this motion did Plaintiffs suggest that Benisek was ever their
agent for any purpose. Indeed, in an excerpt from Freeman’s deposition attached to
the motion, counsel, noting that Benisek identified himself as “[s]eller’s [a]gent” in
several documents, asked Freeman if Benisek was Freeman’s agent. Thus, as of this

1We recognize that third-party beneficiaries may be able to recover for breach
of 	contract 	under 	some 	circumstances. 	See 	Fleet 	Mortg. 	Corp. 	v. 	Schuster,
1991-NMSC-046, ¶ 4, 112 N.M. 48, 811 P.2d 81 (stating that a third party may have
an enforceable right against an actual party to a contract if the third party is an
intended beneficiary of the contract). However, Plaintiffs do not argue that they are
third-party beneficiaries of the Benisek/Love agreement.
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point in the litigation—some six years after the suit was filed—the pleadings and
evidence had given no indication that Plaintiffs believed Benisek was their agent. Yet,
on the very same day that they filed their motion for summary judgment against
Benisek, Plaintiffs filed their motion for summary judgment against Love, in which
they rested their entire argument on the notion that Benisek was their agent. Against
this contextual backdrop, we turn now to the substantive aspects of that motion.
{21} 	It is undisputed that Plaintiffs did not have any direct contact or a direct
contractual relationship with Love at the relevant times when the painting was being
sold and possession was being transferred. 	Consequently, Plaintiffs could not
establish that Love breached a purported contract with them or that Love made any
misrepresentations to them unless they proved that Benisek was acting as their agent
when he entered into the Benisek/Love agreement and when Love allegedly
misrepresented to Benisek that he (Love) would keep possession of the painting.1 And,
as we have noted, Plaintiffs’ argument in their motion for summary judgment was
based on their contention that Benisek was their agent when he entered into the
Benisek/Love agreement.

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{22} 	“An agent is a person who, by agreement with another called the principal,
represents the principal in dealings with third persons or transacts some other
business, manages some affair, or does some service for the principal, with or without
compensation.” 	Barron v. Evangelical Lutheran Good Samaritan Soc’y, 2011-
NMCA-094, ¶ 16, 150 N.M. 669, 265 P.3d 720 (alteration, internal quotation marks,
and citation omitted). 	While the authority of an agent may be actual or apparent,
Plaintiffs do not argue that Benisek’s authority was anything other than actual.
“Actual authority is given to the agent by the principal in terms that are express, or in
terms that are implied from words or conduct of the principal to the agent or from the
circumstances of the relationship.” Id. (internal quotation marks and citation omitted).
An agency relationship does not arise until the principal “manifests assent to [the
agent] that the agent shall act on the principal’s behalf and subject to the principal’s
control, and the agent manifests assent or otherwise consents so to act.” Maes v.
Audubon Indem. Ins. Group, 2007-NMSC-046, ¶ 17, 142 N.M. 235, 164 P.3d 934
(internal quotation marks and citation omitted). 	Significantly, “[t]he existence of
agency is a question of fact.” 	Santa Fe Techs., Inc. v. Argus Networks, Inc., 2002-
NMCA-030, ¶ 26, 131 N.M. 772, 42 P.3d 1221. 	Therefore, in order to establish
entitlement to summary judgment, it was Plaintiffs’ burden to make a prima facie
showing of an agency relationship between themselves and Benisek. See id.

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{23} 	We pause to address Plaintiffs’ contention that Love never argued in response
to the motion for summary judgment that Plaintiffs failed to establish the existence of
an agency relationship with Benisek. This contention is unavailing because, even if
Love had not responded at all to Plaintiffs’ motion, we would still have to consider
whether Plaintiffs made a prima facie showing of entitlement to summary judgment.
See Brown v. Taylor, 1995-NMSC-050, ¶ 8, 120 N.M. 302, 901 P.2d 720 (explaining
that “[t]he moving party may not be entitled to judgment even if the non-moving party
totally fails to respond to the motion” because “until the moving party has made a
prima facie case that it is entitled to summary judgment, the non-moving party is not
required to make any showing with regard to factual issues” (internal quotation marks
and citation omitted)). 	Moreover, Love clearly argued at the summary judgment
hearing that Plaintiffs’ claim of agency was questionable.
{24} 	Plaintiffs asserted numerous allegedly undisputed material facts to support their
motion for summary judgment against Love, including the following:
• 	Plaintiffs owned the painting and, through Freeman, they began negotiating
with Benisek about selling the painting in October 2002.
• 	Freeman entered into the Freeman/Benisek agreement by which Benisek
purchased the painting and, on the same day, Love agreed to purchase the
painting from Benisek.

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• 	Love agreed to keep possession of the painting until Benisek was paid in full,
but Love did not do this because he sold it to Fairchild. In the Benisek/Love
agreement, Love agreed to execute UCC or similar documents, and the filing
of a “UCC Form 1” was “[a]n important part of the [Freeman/]Benisek
[a]greement.”
• 	“Freeman relied on the provision in the [Freeman/]Benisek [a]greement that
prohibited Benisek from alienating the [p]ainting before he had paid for it in
full.”
• 	Love did not pay Benisek as required by the Benisek/Love agreement and, as
a result, Benisek did not fully pay Plaintiffs.
• 	Love issued a moratorium by which he stopped paying his financial obligations.
{25} 	The above alleged material facts do not shed any light on whether there was an
agency relationship between Plaintiffs and Benisek. At most, they suggest that Love’s
only contractual relationship was with Benisek, and there is no material fact
suggesting that Plaintiffs and Benisek had any relationship other than as sellers and
buyer. 	No fact gives rise to any inference that Plaintiffs and Benisek explicitly or
implicitly manifested to each other the assent necessary to establish the relationship
of principal and agent.

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{26} 	The only alleged material facts that appear to even remotely address the
question of agency were as follows:
• 	Following 	Love’s 	issuance 	of 	his 	moratorium, 	“Love’s 	representative
negotiated directly with Freeman’s lawyer regarding Love’s indebtedness to .
. . Plaintiffs.”
• 	Freeman signed a non-disclosure agreement stating that “the individuals who
have signed as individual creditors . . . have agreed to enter discussions
concerning past . . . business transactions with Love.” (Alterations omitted and
omissions in original).
• 	“The [Benisek/]Love agreement provide[d] that Benisek was Plaintiffs’ agent
for selling the [p]ainting to Love.”
{27} 	These alleged material facts also fail to establish the existence of an agency
relationship between Plaintiffs and Benisek. 	The evidence that Love negotiated
directly with Freeman and that Freeman viewed himself to be Love’s creditor may be
indicative of a relationship Freeman and Love may have established after the various
sales of the painting. This evidence says nothing about whether Plaintiffs and Benisek
had an agency relationship at the time of the sales. 	As for the Benisek/Love
agreement’s alleged provision that Benisek was acting as Plaintiffs’ agent in the sale
to Love, the evidence offered in support of this allegation does not support the

16
proposition. The Benisek/Love agreement did nothing more than identify “Paul D.
Benisek (Seller’s Agent)” as a party to the agreement, and the body of the agreement
referred to Love as “Purchaser” and Benisek as “Seller’s Agent.” 	Again, this
nomenclature reveals nothing about whether Plaintiffs and Benisek manifested assent
to each other to enter into an agency relationship of any kind, and such assent is
essential to establishing the existence of agency. 	“[A]n agency relationship arises
only when the elements [of mutual assent, among other things,] are present. Whether
a relationship is characterized as agency in an agreement between parties or in the
context of industry or popular usage is not controlling.” 	Restatement (Third) of
Agency § 1.02 (2006) (emphasis added).
{28} 	Plaintiffs maintain that Love conceded the existence of an agency relationship
between Plaintiffs and Benisek because Love signed the agreement referring to
Benisek as “Seller’s Agent” and because he entered into negotiations with Freeman
directly after he stopped paying Benisek. We are not persuaded by either argument.
First, as we have already noted, Benisek’s label as “Seller’s Agent” is meaningless
without evidence that Plaintiffs and Benisek manifested assent to one another that an
agency existed. See Restatement (Third) of Agency § 1.02 cmt. c (“How the parties
characterized the relationship is not dispositive, nor is popular usage.”). 	Second,
whatever negotiations Love entered into with Plaintiffs after the sale from Benisek to

17
Love are irrelevant to the existence of a Plaintiffs/Benisek agency relationship.
Perhaps Love and Plaintiffs entered into their own direct agreement about payment
for the painting, but Plaintiffs did not present any evidence about the details of any
such purported agreement. 	To the extent Plaintiffs argue that Love “ratifi[ed]
Benisek’s agency for . . . Freeman,” an agent’s conduct can only be “ratified” by the
putative principal, which in this case would be Plaintiffs. See Restatement (Third) of
Agency § 4.03 (2006) (stating that “[a] person may ratify an act if the actor acted or
purported to act as an agent on the person’s behalf” (emphasis added)).
{29} 	We also decline Plaintiffs’ invitation to conclude that Plaintiffs ratified
Benisek’s sale agreement with Love. Apparently conceding that they did not make
this argument in the district court, Plaintiffs argue that we can affirm on this “right for
any reason” basis. An appellate court may “affirm the district court if it is right for
any reason and if affirmance is not unfair to the appellant.” Bd. of Cnty. Comm’rs v.
Chavez, 2008-NMCA-028, ¶ 12, 143 N.M. 543, 178 P.3d 828 (internal quotation
marks and citation omitted). We conclude that affirming on this basis would be unfair
to Love for two reasons. 	First, Love had no opportunity in the district court to
respond to the unasserted argument about ratification. 	Second, the question of
ratification is highly fact-dependent, and Plaintiffs did not present evidence sufficient
for the district court to determine whether Plaintiffs had made a prima facie showing

18
of ratification. See State v. Vargas, 2008-NMSC-019, ¶ 8, 143 N.M. 692, 181 P.3d
684 (“Under the ‘right for any reason’ doctrine, we may affirm the district court’s
order on grounds not relied upon by the district court if those grounds do not require
us to look beyond the factual allegations that were raised and considered below.”
(internal quotation marks and citation omitted)).
{30} 	In summary, we hold that Plaintiffs failed to make a prima facie showing of an
agency relationship between themselves and Benisek. Without the existence of such
a relationship, Plaintiffs could not establish that Love breached any contract with them
because Plaintiffs have not shown the existence of a contract between themselves and
Love. Plaintiffs further could not show that Love made any negligent or fraudulent
misrepresentations to them because all of Love’s relevant representations were made
only to Benisek. Therefore, summary judgment in favor of Plaintiffs against Love
was improper. Because summary judgment was improper, the award of damages to
Plaintiffs was also in error.
II. 	Summary Judgment in Favor of Fairchild
{31} 	Fairchild sought partial summary judgment against Love on the issues of
liability for fraud, negligent misrepresentation, and violation of the Illinois Act. Love,
whose counsel had withdrawn, filed no response to the motion. At the hearing on the
motion, which Love attended by phone, Fairchild’s counsel did not argue the merits

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of the motion but instead argued only that Love was “in default” and that Fairchild
was entitled to summary judgment. Love responded that he filed no response because
he had no counsel. He also contended that he was not at his office due to ill health
and did not often get his mail. He stated, “If there is some way to reconsider this, I
would like to.” The district court responded, “I find that there is not a sufficient basis
upon which to allow . . . Love additional time in which to respond. Because there has
not been a substantive response to the motion, under the Rules . . . I find that the
motion shall be granted.” 	And, as it did in connection with Plaintiffs’ summary
judgment, the district court reserved the issue of damages to be determined at a later
proceeding.
{32} 	We agree with Love 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. See Brown, 1995-NMSC-050, ¶ 8 (“The moving party may not be entitled
to judgment even if the non-moving party totally fails to respond to the motion.”). The
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. See id. (explaining that “until the moving party has made a prima
facie case that it is entitled to summary judgment, the non-moving party is not
required to make any showing with regard to factual issues” (internal quotation marks

20
and citation omitted)). Because our review is de novo, we undertake this task and
conclude that Fairchild did establish a prima facie case of entitlement to summary
judgment, and we affirm on the ground that the district court was right for another
reason. See Vargas, 2008-NMSC-019, ¶ 8.
A. 	Negligent Misrepresentation
{33} 	In order to prevail on his claim of negligent misrepresentation, Fairchild had to
make a prima facie showing that (1) Love made a material misrepresentation of fact
to Fairchild, (2) Fairchild relied upon the representation, (3) Love knew the
representation was false at the time it was made or he made it recklessly, and (4) Love
intended to induce Fairchild to rely on the representation. 	See Saylor v. Valles,
2003-NMCA-037, ¶ 17, 133 N.M. 432, 63 P.3d 1152. A misrepresentation can be
made by either commission or omission. 	In re Stein, 2008-NMSC-013, ¶ 35, 143
N.M. 462, 177 P.3d 513.
{34} 	Fairchild alleged in his motion for summary judgment that Love did not own
the painting, had not paid for it, had no bill of sale showing ownership when he sold
the painting to Fairchild, and that Love knew these facts and did not disclose them to
Fairchild when he sold the painting. Fairchild further alleged that he would not have
bought the painting or paid the purchase price had he known that Love did not own
the painting and had not paid for it and that he relied on Love’s misrepresentations by

21
omission. In addition, Fairchild alleged that Love knew Fairchild was relying on him
to be honest. 	Fairchild presented evidence supporting these allegations. 	Thus,
Fairchild 	established 	a 	prima 	facie 	case 	of 	Love’s 	liability 	for 	negligent
misrepresentation.
B. 	Fraud
{35} 	The elements of fraudulent representation are virtually the same as the elements
of negligent misrepresentation except that the elements must be proved with clear and
convincing evidence. 	See Encinias v. Whitener Law Firm, P.A., 2013-NMSC-045,
¶ 22, 310 P.3d 611. Under the procedural posture of this case, the heightened burden
of proof should have no impact. 	Fairchild supported his allegations of fact with
evidence establishing each element. Therefore, we conclude that Fairchild established
the prima facie liability of Love on the claim of fraudulent misrepresentation.
C. 	Illinois Act
{36} 	In order to prove a private claim under the Illinois Act, a claimant must
establish “(1) a deceptive act or practice by the defendant, (2) the defendant’s intent
that the plaintiff rely on the deception, (3) the occurrence of the deception in the
course of conduct involving trade or commerce, and (4) actual damage to the plaintiff
(5) proximately caused by the deception.” Avery v. State Farm Mut. Auto. Ins. Co.,
835 N.E.2d 801, 850 (Ill. 2005). 	These elements are similar to the elements of

22
negligent and fraudulent misrepresentation discussed above. 	The only additional
element is that the deception must occur “in the course of conduct involving trade or
commerce.” Id. The Illinois Act defines the terms “trade” and “commerce” as “the
advertising, offering for sale, sale, or distribution of any services and any property,
tangible or intangible, real, personal or mixed, and any other article, commodity, or
thing of value . . . and shall include any trade or commerce directly or indirectly
affecting the people of this [s]tate.” 815 Ill. Comp. Stat. 505/1(f) (2007). Given the
evidence Fairchild submitted in support of his claims for negligent and fraudulent
misrepresentation, plus evidence that Love’s alleged deception occurred in the course
of his sale of the painting to Fairchild, it is clear that Fairchild also made a prima facie
showing of entitlement to judgment on the claim under the Illinois Act.
{37} 	Because Fairchild established prima facie entitlement to judgment under all of
his claims against Love, we conclude that the district court’s entry of summary
judgment in favor of Fairchild was proper for a reason other than Love’s failure to file
a response to Fairchild’s motion. It is not unfair to Love to employ this “right for any
reason” analysis because Love had the opportunity to respond to Fairchild’s prima
facie showing and failed to do so. We therefore turn to the question of whether the
district court’s award of damages to Fairchild was proper.
III. 	Damages Awarded to Fairchild

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{38} 	As previously mentioned, the district court conducted a hearing on damages and
awarded Fairchild $1,942,446 in compensatory damages and $9,712,232 in punitive
damages. Love argues that the damages awards were erroneous because (1) part of
the compensatory damages were awarded for Fairchild’s loss of the “use of the
money” he had spent to purchase the painting, which is simply prejudgment interest
in disguise, and Illinois law does not permit the recovery of prejudgment interest; (2)
the award of attorney fees, costs, and interest was contrary to Illinois law and, even
if such damages were compensable, the district court failed to exclude fees and costs
attributable to work unrelated to this case; (3) nothing in the Illinois Act permitted the
district court to award Fairchild compensation for his own time expended in the course
of the litigation; and (4) the punitive damages award was insupportable because it was
based on the grossly erroneous award of compensatory damages and because it was
based in part on evidence of Love’s “bad acts” that were unrelated to his conduct in
connection with the sale of the painting.
{39} 	At first blush, 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 we need not analyze Love’s arguments attacking the damages
awards because, as Fairchild contends, Love failed to preserve his arguments in the
district court.

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{40} 	Fairchild presented the testimony of several witnesses, both live and by
deposition, as well as documentary evidence on the question of damages. Love cross-
examined some of the witnesses. Love introduced no evidence of his own apart from
a very short direct examination of Fairchild. At no point did Love make any of the
arguments challenging the damages award that he now makes on appeal.
{41} 	Love maintains that he preserved his arguments in his motion for a new trial,
which he filed after the district court entered judgment in favor of Fairchild. We are
not persuaded. The motion for a new trial argued that “the [j]udgment is excessive,
that [it] violated [Love’s] rights to due process of law, and for error in evidentiary
rulings.” The motion provided no elaboration on these points. More importantly, a
motion for new trial cannot make up for the failure to preserve issues at trial. 	See
Goodloe v. Bookout, 1999-NMCA-061, ¶ 13, 127 N.M. 327, 980 P.2d 652 (“Raising
the matter in [the] motion for a new trial came too late; objections must be raised in
time for the [district] judge to correct the error to prevent prejudice.”), superseded by
rule on other grounds as stated in Acosta v. Shell W. Exploration & Prod., Inc., 2013-
NMCA-009, 293 P.3d 917.
{42} 	Love next argues that we should exercise our discretion to review the
unpreserved arguments for fundamental error. See Rule 12-216(B) NMRA (stating
that the appellate court may, in its discretion, review questions that were not preserved

25
in the district court if they involve jurisdiction, general public interest, or fundamental
error or fundamental rights of a party). Our Supreme Court has observed that it “has
applied the doctrine [of fundamental error] in civil cases under the most extraordinary
and limited circumstances.” 	Estate of Gutierrez ex rel. Jaramillo v. Meteor
Monument, L.L.C., 2012-NMSC-004, ¶ 33, 274 P.3d 97. The Court pointed to two
cases that applied the doctrine. 	In one case, the Court in its discretion considered
unpreserved arguments related to jury instructions on the theory of successive
tortfeasors because, at the time, there was very little case law on the theory, and there
were no applicable uniform jury instructions. Payne v. Hall, 2006-NMSC-029, ¶ 37,
139 N.M. 659, 137 P.3d 599. In the other case, the Court considered an argument
made for the first time on appeal because the factual basis for the argument did not
even occur until after the initial appeal was filed. Rivera v. Am. Gen. Fin. Servs., Inc.,
2011-NMSC-033, ¶¶ 9, 19-20, 150 N.M. 398, 259 P.3d 803. However, in Estate of
Gutierrez, the Court declined to consider an unpreserved argument regarding jury
instructions even though there were no uniform jury instructions because established
case 	law 	provided 	the 	necessary 	guidance. 	2012-NMSC-004, 	¶ 	34. 	The
circumstances in the present case bear no resemblance to those in Payne and Rivera.
{43} 	Along similar lines, this Court has noted that “the common element in civil
cases that have been reversed for unpreserved error has been the total absence of

26
anything in the record of the case showing a right to relief in the person granted
relief.” Gracia v. Bittner, 1995-NMCA-064, ¶ 25, 120 N.M. 191, 900 P.2d 351. In
the present case, we cannot say that the record is devoid of evidence supplying a basis
for the damages awarded to Fairchild; indeed, Love does not argue that the evidence
was insufficient to support the award.
{44} 	In response to Fairchild’s argument that Love failed to preserve the damages
issues raised on appeal, Love relies on a statement in Gracia in urging us to consider
the arguments made for the first time on appeal. We stated in Gracia that “[w]hen a
statute does not grant a right to relief in a particular situation, it is fundamental error
to grant relief based on the statute.” 	Id. ¶ 26. 	Thus, Love contends, it was
fundamental error for the district court to award damages not allowed under the
Illinois Act.
{45} 	We have difficulty with Love’s contention. The portions of the transcript Love
relies on to demonstrate the district court’s alleged error comprise arguments of
Fairchild’s counsel or the testimony of Fairchild’s original attorney. These portions
of the transcript are meaningless in the absence of legal argument by Love to the
district court to provide context. Love made no attempt below to relate the testimony
to the legal argument he makes for the first time on appeal. In addition, the exhibits
Love points to in support of his argument show total attorney fees charged and

27
itemized attorney fee statements, but these documents shed no light on which charges
may or may not be permitted by the Illinois Act.
{46} 	As a result, we fail to see a valid basis for exercising our discretion to consider
Love’s arguments that were not brought to the district court’s attention in the first
place. As we noted in Gracia, “[w]here there exist theories of recovery that are both
within the pleadings and within the evidence, we should not reverse on an issue raised
for the first time on appeal after the opportunity has passed to timely correct any error
presented by the issue.” 1995-NMCA-064, ¶ 28. To reverse in these circumstances
“would countenance sandbagging by trial attorneys” and a “waste of resources by both
our trial and appellate courts.” Id.
{47} 	We recognize that Love may have been at a disadvantage during the damages
trial because he was not represented by counsel. However, “a pro se litigant, having
chosen to represent himself, is held to the same standard of conduct and compliance
with court rules, procedures, and orders as are members of the bar.” 	Woodhull v.
Meinel, 2009-NMCA-015, ¶ 30, 145 N.M. 533, 202 P.3d 126. It was incumbent upon
Love, as it is upon any attorney, to raise his arguments challenging the claimed
damages at a time when the district court had the opportunity to consider them and
correct any error. 	Kilgore v. Fuji Heavy Indus. Ltd., 2009-NMCA-078, ¶ 50, 146
N.M. 698, 213 P.3d 1127 (“The primary purposes for the preservation rule are: (1) to

28
specifically alert the district court to a claim of error so that any mistake can be
corrected at that time, (2) to allow the opposing party a fair opportunity to respond to
the claim of error and to show why the district court should rule against that claim,
and (3) to create a record sufficient to allow this Court to make an informed decision
regarding the contested issue.”). 	Love did not do this, and we do not consider his
arguments to rise to the level of extraordinary circumstances triggering our discretion
to address them under the doctrine of fundamental error. 	See Estate of Gutierrez,
2012-NMSC-004, ¶ 33 (explaining that the doctrine should be applied in civil cases
only “under the most extraordinary and limited circumstances”). We therefore affirm
the district court’s award of damages to Fairchild.
CONCLUSION
{48} 	For the foregoing reasons, we reverse summary judgment and the resulting
damages award entered in favor of Plaintiffs against Love. We affirm the judgment
in favor of Fairchild.
{49} 	IT IS SO ORDERED.
____________________________________
CYNTHIA A. FRY, Judge
WE CONCUR:
_________________________________

JONATHANB. SUTIN, Judge

LINDA M. VANZI, Judge

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