August 22, 2019- Paul Rogers v. Board of County Commissioners of Torrance County, No. A-1-CA-36284

1
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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 Opinion Number: ______ _
3 Filing Date: August 22, 2019
4 No. A-1-CA-36284
5 PAUL ROGERS,
6 	Plaintiff-Appellant,
7 v.
8 BOARD OF COUNTY COMMISSIONERS.
9 	OF TORRANCE COUNTY, MARTIN RIVERA,
10 ERWIN YOUNG, and RON SAAVEDRA,
11 	Defendants-Appellees.
12 APPEAL FROM THE DISTRICT COURT OF TORRANCE COUNTY
13 	Mercedes C. Murphy, District Judge
14 Rothstein Donatelli LLP
15 	Marc M. Lowry
16 Alicia C. Lopez
17 Albuquerque, NM
18 	for Appellant
19 New Mexico Association of Counties
20 Brandon Huss
21 ·Grace Philips
22 Santa Fe, NM
23 	for Appellees
Court of Appeals of New Mexico
Filed 8/22/2019 11:12 AM

1 	OPINION
2 HANISEE, Judge.
3 	{1} 	In this appeal, we resolve whether a lawyer's mistaken action that had the
4 unintended effect of terminating litigation warrants relief under Rule 1-060(B)(l)
5 NMRA, when that action was undertaken without client authority. Concluding so,
6 we reverse the district court's denial of Plaintiffs limited Rule 1-060(B) motion.
7 BACKGROUND
8 	{2} 	On January 6, 2014, Plaintiff filed a complaint for damages under the New
9 Mexico Tort Claims Act and common law in the Seventh Judicial District Court in
10 Torrance County, New Mexico (state case). Plaintiff filed a second lawsuit in United
11 	States District Court (federal case) a year later, on January 5, 2015, asserting Fourth
12 Amendment claims based on the same events as underpinned the state case. In May
13 	2016 Plaintiff and his attorney (Plaintiffs counsel) discussed dismissing Plaintiffs
14 	state case. Sometime after the discussion, Plaintiff sent an e-mail to Plaintiffs
15 	counsel stating "[p]er our telephone conversation today, I agree to drop the state case
16 	in order to better position ourselves in our ongoing federal case."
17 	{3} 	Plaintiffs counsel contacted Defendants by telephone to report Plaintiffs
18 	wish to dismiss the state case without prejudice. Defendants opposed the proposed
19 dismissal because trial in the state case was then imminent and "significant costs and

1 expenses had been and were being incurred to prepare for trial." Either too ill 1 to
2 understand or simply unaware that such a dismissal would have preclusive effect in
3 federal court based upon established principles of res judicata, Plaintiffs counsel
4 filed the opposed motion seeking dismissal with prejudice "as a show of good faith
5 to Defendants that the state case would be terminated forever." Plaintiff explained
6 in his motion that dismissal would not be prejudicial to Defendants since their trial
7 preparation to date on the state case would be "applicable in the parallel federal
8 proceeding" and that by dismissing the case after expiration of the applicable statute
9 of limitations, Plaintiff would forgo his municipal liability and property damage
10 claims, adding specifically that Plaintiff would only pursue his federal case. After
11 	viewing 	Plaintiffs 	filed 	motion 	containing 	new 	dismissal 	"with 	prejudice"
12 language, Defendants reversed course, consented to dismissal and submitted to
13 	Plaintiffs counsel a proposed order of dismissal. Subsequently, Defendants filed a
14 response clarifying that they "only opposed dismissal without prejudice[,]" and that
15 	although they 	"disagree 	with most 	of the 	basis 	and 	argument 	contained 	in
16 	[P]laintiffs motion[,]" they no longer oppose dismissal with prejudice. The district
17 court entered an order granting dismissal of the state case with prejudice on June 3,
18 	2016.
1
Plaintiffs counsel later explained that when he filed Plaintiffs motion to
dismiss "with prejudice," he was recovering from a gallstone attack.
2

1 {4} 	Two months later, Defendants filed a motion for summary judgment in the
2 federal case arguing it should be terminated on res judicata grounds. The motion-
3 which was eventually granted by the federal court-rested exclusively on the fact
4 that the state case was dismissed with prejudice. As a result, approximately two
5 months after the summary judgment motion was filed in the federal case, Plaintiff
6 moved, under Rule l-060(B), to reopen the state case for the limited purpose of
7 recharacterizing Plaintiffs motion to dismiss, along with the stipulated order of
8 dismissal, as "without prejudice." Among several grounds identified as a basis for
9 Rule 	1-060(B) 	relief, 	Plaintiff posits 	that 	Plaintiffs 	counsel 	acted 	without
10 authorization because his actions unwittingly terminated litigation in both the state
11 	and federal cases. Defendants opposed the motion, arguing that Plaintiffs decision
12 to dismiss the case with prejudice was a failed strategy decision instead of a mistake
13 	and that Plaintiff is not entitled to relief because his counsel did not understand the
14 	legal consequences of his deliberate acts. In reply, Plaintiff submitted an affidavit
15 	that he had "never directed [his] legal counsel to do anything that would have
16 jeopardized [his] federal case."
17 {5} 	After a hearing, the district court entered an order denying Plaintiffs motion.
18 	Although the district court found that it was Plaintiffs decision to "drop the state
19 case in order to better position [himself] in [the] ongoing federal case[,]" and that it
20 was Plaintiffs understanding that dismissing the state case would not affect his
3

1 federal claims, it also found that "Rule [1-060(B)](l) relief is not available for a
2 party who simply misunderstands the legal consequences of his deliberate acts." The
3 district court then found that "the decision to pursue the case only in federal court
4 was a strategic decision made by counsel with the consent of the Plaintiff."
5 DISCUSSION
6 {6} 	Plaintiff makes many of the same arguments on appeal as he did before the
7 district court, and in addition, argues that the distrfot court applied an incorrect legal
8 standard when it concluded, based upon Jacobs v. Electronic Data Systems Corp.,
9 240 F.R.D. 595, 601 (M.D. Ala. 2007), that "[c]lients retain counsel and entrust him
10 or her with the fiduciary duty to make certain strategic and tactical litigation
11 	decisions which bind the client, even if made without express authorization or
12 approval, and even if they are bad decisions." Defendants again argue that Plaintiffs
13 	decision to dismiss the state case was strategic and therefore the district court
14 correctly denied relief to Plaintiff under Rule 1-060(B)(l).
15 	Standard of Review
16 {7} 	"We generally review the district court's grant of relief under Rule 1-060(B)
17 for an abuse of discretion except in those instances where the issue is one of pure
18 	law." Kinder Morgan CO2 Co., L.P. v. 	State Taxation & Revenue Dept., 2009-
19 NMCA-019, 19, 145 N.M. 579, 203 P.3d 110 (alteration, internal quotation marks,
20 and citation omitted). "The scope of Rule 1-060(B)(l) and application of the rule to
4

1 the facts involve questions oflaw which we review de novo." Kinder Morgan, 2009-
2 NMCA-019, 19. A reviewing court may reverse the district court under an abuse-
3 of-discretion standard if it is determined that the district court's decision was
4 "arbitrary, fanciful, or unreasonable." Id. 	(internal quotation marks and citation
5 omitted). Our review is de novo as we must interpret the meaning and applicability
6 	ofRule 1-060(8)(1).
7 Relief is Proper Due to Mistake Under Rule 1-060(B)(l)
8 {8} 	Rule 1-060(8)(1) states "[ o ]n motion and on such terms as are just, the court
9 	may relieve a party or the party's legal representative from a final judgment, order,
10 or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or
11 	excusable neglect." A motion under Rule 1-060 "shall be made within a reasonable
12 time and for reasons" under Rule 1-060(8)(1), "not more than one (1) year after the
13 judgment, order, or proceeding was entered or taken." Rule 1-060(8)(6). Courts are
14 required to balance "interests of finality versus relief from unjust judgments" when
15 	applying Rule 1-060(8). Kinder Morgan, 2009-NMCA-019, 110.
16 {9} 	As an initial matter, we note that Plaintiff filed his Rule 1-060(8) motion a
17 little less than four months after the district court entered the order dismissing the
18 	state case with prejudice, well within the one year deadline required by Subsection
19 (8)(6) for Subsection (8)(1)-based Rule 1-060 motions, and only a few months after
20 Defendants filed their summary judgment motion in the federal case. Plaintiffs
5

1 motion was thus timely filed in the district court below and is now properly before
2 us on appeal.
3 	{10} 	Few New Mexico cases discuss mistake under Rule l-060(B)(l), and no New
4 Mexico case discusses mistake associated with an attorney's action lacking client
5 authority. However, "[t]he New Mexico Rules of Civil Procedure are modeled after
6 the Federal Rules of Civil Procedure, and the substance of Rule 1-060(B) is virtually
7 identical to its federal counterpart, Federal Rule of Civil Procedure 60(b ). " Marquez
8 v. 	Frank Larrabee and Larrabee, Inc., 	2016-NMCA-087, ,r 12, 382 P.3d 968
9 (internal quotation marks and citation omitted). Thus, the federal construction of
10 Federal Rule of Civil Procedure 60(b) "is persuasive authority for the construction
11 	of Rule l-060(B)" because the language in our rule tracks the language in the federal
12 rule so closely. Marquez, 2016-NMCA-087, .if 12 (internal quotation marks and
13 	citation omitted). Therefore, we analyze federal case law regarding whether an
14 attorney's unauthorized dismissal with prejudice, effectively terminating a client's
15 	separate action on a same case, qualifies for relief due to mistake under Rule 1-
16 	060(B)(l). See Marquez, 2016-NMCA-087, ,r 12.
17 	{11} 	We first observe that, on one occasion, the United States District Court for the
18 District of New Mexico predicted how New Mexico state courts would address this
19 	issue under New Mexico law. In the unreported opinion of Wilson v. Jara, 2012 WL
20 	1684595, at *1 (D.N.M. May 10, 2012) the United States District Court for the
6

1 District of New Mexico addressed whether counsel for the plaintiff "committed
2 excusable neglect in dismissing his claims with prejudice[.]" Id. 	In 	Wilson, 	a
3 deprivation of civil rights lawsuit, one of two plaintiffs in the case elected to cease
4 pursuit of his federal claims with the intention of pursuing them at a later time. Id.
5 at *4. The plaintiffs attorney informed the court that the plaintiff would no longer
6 pursue his claims, did not proceed to trial, and based thereon the court dismissed the
7 plaintiffs claims with prejudice. Id. at *2. In his objections to the magistrate judge's
8 proposed findings and recommended disposition, finding that dismissal 	of the
9 plaintiffs claims with prejudice was harmless error, the plaintiff argued under Rule
10 	60(b)(l) that the federal court should have considered his attorney's actions as
11 	excusable neglect because he never discussed with his attorney that he "would not
12 be able to come back and file on his own." Id. at **4-5 (internal quotation marks and
13 	citation omitted). The plaintiff submitted his own affidavit, a letter he wrote to his
14 attorney, and an affidavit from the other plaintiff in the case to show that he intended
15 	to reassert his claims at a later time. Id. at *4. As a result, the Wilson Court found
16 "that the affidavits, statement, and letter that [the plaintiff] submitted are affirmative
17 proof that [the plaintiffs attorney] did not act within his authority when he agreed
18 to a dismissal with prejudice[,]" and that the finding was "sufficient to establish
19 excusable neglect under [R]ule 60(b)(l) of the Federal Rules of Civil Procedure."
20 Id. When addressing the other plaintiffs allegations of her own attorney's separate
7

1 excusable neglect, the Wilson Court noted, "[t]here is a tension between how the law
2 treats attorney actions that are without authority, thus permitting relief under [R]ule
3 60(b), 	and 	how 	the 	law 	treats 	those 	attorney 	actions 	which 	are 	inexcusable
4 litigation[] decisions, thus failing to qualify for reliefl.]" Id. 	at *7. In a detailed
5 footnote, the court explained that there is a distinction between litigation mistakes
6 and attorneys acting without consent "when the client is aware that the attorney is
7 acting on his or her behalfl. ]" Id. *n. 7. The distinction lies "between decisions which
8 dispose of the case and ordinarily require client consent, and other routine attorney
9 decisions which take place over the course of the case." Id. (emphasis added).
10 	{12} 	Similarly, in Federated Towing & Recovery, LLC v. Praetorian Ins. Co., the
11 	same federal district court expounded upon the same issue, this time in conjunction
12 with its conclusion that a party's attorney had authority to agree to dismiss the case
13 	without prejudice because "[t]here is no indication that [the attorney] in any way
14 barred his clients from litigating_the merits of the claims brought against them." 283
15 	F.R.D. 644, 663 (D.N.M. 2012). Directly discussing mistake under Rule 60(b)(l),
16 the court explained that mistake can entail "either acting without the client's consent
17 or making a litigation mistake." Id. at661; see Yapp v. Excel Corp., 186 F.3d 1222,
18 	1231 (10th Cir. 1999) ("Rule 60(b)(1) motions premised upon mistake are intended
19 to provide relief to a party . . . when the party has made an excusable litigation
20 mistake or an attorney in the litigation has acted without authority[.]"). Again, the
8

1 Federated Towing Court stated that it was not able to "locate a New Mexico case
2 addressing whether an attorney has implied authority to dismiss or to agree to
3 dismissal of a client's case without prejudice[,]" and then analyzed relevant New
4 Mexico and federal case law in an attempt to predict what a New Mexico court would
5 hold. 283 F.R.D.at 662. Looking to the New Mexico state .court cases discussing an
6 attorney's authority to compromise a client's claims, the Federated Towing Court
7 noted that New Mexico courts "are most concerned with an attorney's actions
8 precluding a client from litigating the merits of the case[,]" citing case law that
9 requires attorneys to have specific authority to compromise a client's cause of action.
10 Id. at 662 (citing Bolles v. Smith, 1979-NMSC-019,, 11, 92 N.M. 524,591 P.2d 278
11 	(stating that an attorney must have specific authority to bind a client to a settlement
12 agreement, "unless there is an emergency or some overriding reason for enforcing
13 	the settlement despite the attorney's lack of specific authority")); see Diversified
14 Dev. & Inv., Inc. v. Heil, 1995-NMSC-005, , 	22, 119 N.M. 290, 889 P.2d 1212
15 	(stating an "attorney does not have implied authority to compromise [a] client's
16 cause of action"); Augustus v. John Williams & Assocs., Inc., 1979-NMSC-002,, 9,
17 92 N.M. 437, 589 P.2d 1028 (stating any authority a client gives to an attorney to
18 	compromise or settle his or her cause of action must be "clear and unequivocal" and
19 that "[t]he mere employment of an attorney does not of itself give the attorney the
20 implied or apparent authority to compromise his client's cause of action"). The
9

1 federal district court again expressed its belief that under New Mexico law, decisions
2 to terminate litigation, "such as settlement or a stipulation of dismissal," are different
3 from 	other 	litigation 	decisions 	not 	warranting 	Rule 	60(b )(1) 	relief "because
4 decisions to terminate the litigation are ordinarily left to the client." Federated
5 	Towing, 283 F .R.D at 661 (internal quotation marks and citation omitted).
6 {13} 	We agree with the rationale set out in Wilson and Federated Towing. In line
7 with previously established New Mexico case law finding that an attorney lacks
8 implied authority to compromise his or her client's cause of action, we hold that
9 mistake occurs under Rule 1-060(8)(1) whe~an attorney acts without authority and
10 the result of such action bars the client henceforth from litigating the merits of his or
11 	her claims on the same cause. Such actions are distinct from routine attorney
12 decisions made during the course of litigation, and therefore require client authority.
13 	We conclude that when an attorney lacks client authority to dismiss a case with
14 prejudice, yet does so, whether intentionally or inadvertently, in a manner that
15 	terminates litigation, that attorney has committed a mistake under Rule 1-060(8)( 1).
16 	{14} 	Finally, our holding today conforms with historic and current analysis on this
17 topic in other jurisdictions. See C.R. Mccorkle, Annotation, Authority of Attorney
18 	to Dismiss or Otherwise Terminate Action, 56 A.L.R.2d 1290 § 2[a](1957) (stating
19 that "[t]he rule prevailing in most jurisdictions is that an attorney employed to
20 prosecute an action has implied authority, by virtue of such employment, to have the
10

1 action discontinued or dismissed where such discontinuance or dismissal will not
2 operate as a bar to the institution of a new action on the same cause, or, as expressed
3 in some cases, where the dismissal or other termination is 'without prejudice.' ")
4 (footnote omitted)); Id. n.4 (compiling supportive decisions from Georgia, Illinois,
5 Indiana, Kentucky, Minnesota, Missouri, New York, and Texas); see also Saxton v.
6 Splettstoezer, 	557 P.2d 1126, 1127 (Alaska 1976) ("The authority to terminate
7 litigation must be explicit or ratified by subsequent conduct of the client."); Lovelace
8 v. Lovelace, 177 S.E. 685, 687 (Ga. 1934) (stating that defendant's counsel had
9 general authority "to bind their client by any agreement in relation to the conduct of
10 the suit, not amounting to a retraxit"); Cory v. Howard, 164 N.E. 639, 639 (Ind. Ct.
11 	App 1929) (in bane) (stating "[a]s the dismissal of a suit does not bar the bringing
12 	of another for the same cause of action, the attorney of record has the implied
13 	authority to discontinue the action if he sees fit"); City of San Benito v. Rio Grande
14 	Valley Gas Co., 109 S.W.3d 750, 758 (Tex. 2003) ("Texas courts have held that an
15 	attorney has implied authority to nonsuit a client's claim when the nonsuit does not
16 affect a substantial right or bar the bringing of another suit based on the same cause
17 	of action.").
18 	{15} 	Given our conclusion under Rule 	1-060(B)(l), we next tum to whether
19 Plaintiffs counsel had authority to dismiss the state case with prejudice when the
20 effect of the dismissal was to dismiss Plaintiffs claims in the federal case as a result
11

1 of claim preclusion. Our review of the record establishes that Plaintiff only gave his
2 counsel permission to "drop the state case in order to better position ourselves in our
3 ongoing federal case." Indeed, Plaintiff and his counsel discussed terminating
4 Plaintiffs state case so that they could focus their efforts on the federal case. There
5 being no evidence to the contrary, we conclude Plaintiff did not give his counsel
6 permission to dismiss the state case in such a way that the dismissal would operate
7 as a bar to his claims in the federal case. Stated differently, Plaintiffs counsel did
8 not have implied authority to dismiss the state case with prejudice and most certainly
9 did not have authority dismiss the state case in such a way that would negatively
10 affect Plaintiffs federal case. Thus, the dismissal of Plaintiffs state case with
11 	prejudice and without explicit client authority, thereby causing the dismissal of
12 Plaintiffs federal claims on the same cause of action, constitutes mistake under Rule
13 	l-060(B)(l). Even the district court, in denying Plaintiffs motion, stated that
14 Plaintiff only had authority to dismiss the state case in order "to pursue the case only
15 	in federal court." Our determination today under Rule 1-060(B) ."is consistent with
16 the need to carefully balance the competing principles of finality on the one hand,
17 while permitting relief from unjust judgments on the other." Curliss v. B & C Auto
18 Parts, 1993-NMCA-139, ,r 16, 116 N.M. 668, 866 P.2d 396. Relief from unjust
19 judgment is proper where Plaintiffs counsel's unauthorized actions resulted in the
20 permanent preclusion of Plaintiffs claims in a separate but related cause of action.
12

1 CONCLUSION
2 	{16} 	Based upon the foregoing, we reverse the district court's denial of Plaintiffs
3 motion to substitute order granting dismissal·and remand for proceedings consistent
4 with this decision.
5 {17} 	IT IS SO ORDERED.
6 	J..~	_.....;......;;...:.:....__________ _
7 	J. MILES HANISEE, Judge
. 8 WE CONCUR:
11 	171~i?~12 MEG NP. nuFFY,Jude
13