{ "id": 1584674, "name": "Arthur HEFFERN, Individually and as President of Sure-Lock Homes, and Sure-Lock Homes, a New Mexico Corporation, Plaintiffs-Appellants, v. FIRST INTERSTATE BANK, Formerly known as Bank of New Mexico, a New Mexico Banking Corporation, Defendant-Appellee", "name_abbreviation": "Heffern v. First Interstate Bank", "decision_date": "1983-03-01", "docket_number": "No. 5909", "first_page": "531", "last_page": "534", "citations": [ { "type": "official", "cite": "99 N.M. 531" }, { "type": "parallel", "cite": "660 P.2d 621" } ], "court": { "name_abbreviation": "N.M. Ct. App.", "id": 9025, "name": "Court of Appeals of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "84 Mont. 238", "category": "reporters:state", "reporter": "Mont.", "case_ids": [ 4903190 ], "weight": 2, "year": 1929, "opinion_index": 0, "case_paths": [ "/mont/84/0238-01" ] }, { "cite": "550 P.2d 350", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1976, "opinion_index": 0 }, { "cite": "37 Colo. App. 460", "category": "reporters:state", "reporter": "Colo. App.", "year": 1976, "opinion_index": 0 }, { "cite": "598 F.2d 1357", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 494250 ], "opinion_index": 0, "case_paths": [ "/f2d/598/1357-01" ] }, { "cite": "270 U.S. 593", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6142763 ], "weight": 4, "year": 1926, "opinion_index": 0, "case_paths": [ "/us/270/0593-01" ] }, { "cite": "451 F.2d 1", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 787632 ], "opinion_index": 0, "case_paths": [ "/f2d/451/0001-01" ] }, { "cite": "52 F.R.D. 194", "category": "reporters:specialty", "reporter": "F.R.D.", "case_ids": [ 3763456 ], "weight": 2, "pin_cites": [ { "page": "199" } ], "opinion_index": 0, "case_paths": [ "/frd/52/0194-01" ] }, { "cite": "250 Iowa 918", "category": "reporters:state", "reporter": "Iowa", "case_ids": [ 4444129 ], "weight": 2, "year": 1959, "opinion_index": 0, "case_paths": [ "/iowa/250/0918-01" ] }, { "cite": "362 Mo. 919", "category": "reporters:state", "reporter": "Mo.", "case_ids": [ 1907211 ], "weight": 2, "year": 1951, "opinion_index": 0, "case_paths": [ "/mo/362/0919-01" ] }, { "cite": "404 S.W.2d 349", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 10128480 ], "opinion_index": 0, "case_paths": [ "/sw2d/404/0349-01" ] }, { "cite": "158 A.2d 675", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 8129726 ], "opinion_index": 0, "case_paths": [ "/a2d/158/0675-01" ] }, { "cite": "103 Ariz. 450", "category": "reporters:state", "reporter": "Ariz.", "case_ids": [ 631148 ], "weight": 2, "year": 1968, "opinion_index": 0, "case_paths": [ "/ariz/103/0450-01" ] }, { "cite": "503 F.2d 1193", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 104211 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/f2d/503/1193-01" ] }, { "cite": "173 Ct.Cl. 650", "category": "reporters:specialty", "reporter": "Ct.Cl.", "case_ids": [ 10816685 ], "year": 1965, "opinion_index": 0, "case_paths": [ "/us-ct-cl/173/0650-01" ] }, { "cite": "354 F.2d 292", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 845627, 10816685 ], "year": 1965, "opinion_index": 0, "case_paths": [ "/f2d/354/0292-01", "/us-ct-cl/173/0650-01" ] }, { "cite": "93 N.M. 135", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1568815 ], "weight": 2, "year": 1979, "opinion_index": 0, "case_paths": [ "/nm/93/0135-01" ] }, { "cite": "371 U.S. 57", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 451407 ], "weight": 3, "year": 1962, "opinion_index": 0, "case_paths": [ "/us/371/0057-01" ] }, { "cite": "598 F.2d 1079", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 494212 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/f2d/598/1079-01" ] } ], "analysis": { "cardinality": 621, "char_count": 9774, "ocr_confidence": 0.814, "pagerank": { "raw": 1.474067649931392e-07, "percentile": 0.6598100893140875 }, "sha256": "dfc57f2f17034e4376bab33db0a2ad7f63c04d4129da5f663faf1f8bff77776a", "simhash": "1:fc882807ea963e1d", "word_count": 1597 }, "last_updated": "2023-07-14T20:36:40.875408+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "WOOD and LOPEZ, JJ., concur." ], "parties": [ "Arthur HEFFERN, Individually and as President of Sure-Lock Homes, and Sure-Lock Homes, a New Mexico Corporation, Plaintiffs-Appellants, v. FIRST INTERSTATE BANK, Formerly known as Bank of New Mexico, a New Mexico Banking Corporation, Defendant-Appellee." ], "opinions": [ { "text": "OPINION\nNEAL, Judge.\nThis case deals with our compulsory counterclaim rule, N.M.R.Civ.P. 13(a), N.M.S.A. 1978 (1980 Repl.Pamph.). The precise issue is whether the plaintiffs\u2019 tort claim against the defendant is a compulsory counterclaim, lost when it was not raised in four prior foreclosure actions. The district court held that plaintiffs\u2019 complaint was a compulsory counterclaim, and dismissed.\nWe affirm.\nArthur Heffern, president of Sure-Lock Homes, took out several loans from the defendant, First Interstate Bank. These loans were secured by mortgages on construction projects. The loans were not repaid and the Bank filed four foreclosure suits. In one of the suits the Bank received a default judgment on December 15, 1981. In the other three suits the Bank received stipulated judgments on March 19 and 20, 1981, and May 20, 1981.\nOn November 30, 1981, plaintiffs filed this five-count complaint. The counts are:\nCount I \u2014 The Bank, through its agent Carl Rose, extorted money.\nCount II \u2014 Conversion.\nCount III \u2014 Wrongful hiring of Rose.\nCount IV \u2014 Unconscionable trade practices.\nCount V- \u2014 Intentional misconduct; prays for five million dollars in \u201cpunitive and exemplary damages.\u201d\nOn December 28, 1981, the Bank moved to dismiss arguing that under Rule 13 the complaint was a compulsory counterclaim in the prior foreclosure actions. The trial court granted the Bank\u2019s motion.\nRule 13 states:\n(a) Compulsory counterclaims. A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party\u2019s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. But the pleader need not state the claim if (1) at the time the action was commenced the claim was the subject of another pending action, or (2) the opposing party brought suit upon his claim by attachment or other process by which the court did not acquire jurisdiction to render a personal judgment on that claim, and the pleader is not stating any counterclaim under this Rule 13. (Emphasis added.)\nWe divide our discussion into two parts. First, does Rule 13 apply when no pleading has been filed? Second, is plaintiffs\u2019 complaint a compulsory counterclaim?\n1. Rule 13 applies even where no pleading has been filed.\nThe plaintiffs, pointing out that a default judgment and three stipulated judgments were entered against them in the four prior foreclosure actions, contend that Rule 13 does not apply because no pleading was ever filed. They rely on Martino v. McDonald\u2019s System, Inc., 598 F.2d 1079 (7th Cir.1979).\nIn Martino a contract action against Martino ended in a consent judgment in favor of McDonald\u2019s. In a second action Martino sued McDonald\u2019s claiming that the contract provision he breached, which was the basis of the first action, violated antitrust law. Although Martino stated that Rule 13- did not apply because no pleading was filed, it held that res judicata barred the second action. We do not agree with Martino\u2019s treatment of Rule 13.\nThe purpose of the rule is \u201cto prevent multiplicity of actions and to achieve resolution in a single lawsuit of all disputes arising out of common matters.\u201d Southern Const. Co., Inc. v. Pickard, 371 U.S. 57, 83 S.Ct. 108, 9 L.Ed.2d 31 (1962). In Ortega, Snead, Dixon & Hanna v. Gennitti, 93 N.M. 135, 597 P.2d 745 (1979) our Supreme Court, quoting Scott v. United States, 354 F.2d 292, 173 Ct.Cl. 650 (1965), stated:\nThe overriding emphasis is on consolidation and the expeditious resolution (where that is fair) of all the claims between the parties in one proceeding. * * The controlling philosophy is that, so far as fairness and convenience permit, the various parties should be allowed and encouraged to resolve all their pending disputes within the bounds of the one litigation.\nUnder 13(a) failure to plead a compulsory counterclaim bars a later action on that claim. Martino, supra; Pipeliners Local Union No. 798, Tulsa, Okl. v. Ellerd, 503 F.2d 1193 (10th Cir.1974); Wright and Miller, Federal Practice and Procedure \u00a7 1417 (1971). We hold that Rule 13(a) also applies to the present case.\nIn holding that, under the circumstances here, Rule 13(a) applies where the prior action ended in a default judgment, or a stipulated judgment, we find support from other jurisdictions. The rule has been applied where the first action ended in a default judgment in Technical Air Products, Inc. v. Sheridan-Gray, Inc., 103 Ariz. 450, 445 P.2d 426 (1968); and Firemen\u2019s Ins. Co. of Newark v. L.P. Steuart & Bro., Inc., 158 A.2d 675 (D.C.Mun.App.1960). As stated in Technical Air Products:\nWe would circumvent the purpose of Rule 13(a) if we were to rule that a claim which was the subject of a compulsory counterclaim is not barred in a subsequent suit merely because judgment was taken by default rather than on the merits. Such a rule would allow a litigant to default and then bring a separate action on a claim that would have been compulsory in the first action had he filed an answer.\nRule 13 has also been applied to stipulated judgments. Harris v. Jones, 404 S.W.2d 349 (Tex.Civ.App.1966); Keller v. Keklikian, 362 Mo. 919, 244 S.W.2d 1001 (1951); Mensing v. Sturgeon, 250 Iowa 918, 97 N.W.2d 145 (1959); Dindo v. Whitney, 52 F.R.D. 194, (D.N.H.1971), aff\u2019d, 451 F.2d 1 (1st Cir.1971).\nIn Dindo the plaintiff claimed that Rule 13 did not bar his suit against Whitney because a prior action ended in a settlement. This argument was rejected:\nTo hold that Rule 13(a) does not apply when the prior action is settled would completely subvert the Rule\u2019s purpose of bringing about a just and speedy resolution of all the claims between the parties arising out of the same transaction or occurrence.\n52 F.R.D. at 199.\nWe hold that Rule 13 applies to this case even though no pleading was filed. Any other rule would frustrate the purpose behind Rule 13.\n2. Plaintiff\u2019s complaint is a compulsory counterclaim.\nDoes the plaintiffs\u2019 claim \u201carise out of the transaction or occurrence that is the subject matter of the opposing party\u2019s claim?\u201d We hold that it does.\nIn Moore v. N.Y. Cotton Exchange, 270 U.S. 593, 46 S.Ct. 367, 70 L.Ed. 750 (1926), the Supreme Court, dealing with compulsory counterclaims, stated:\n\u201cTransaction\u201d is a word of flexible meaning. It may comprehend a series of many occurrences, depending not so much upon the immediateness of their connection as upon their logical relationship.\nAlthough Moore deals with Equity Rule 30, the predecessor of Rule 13(a), it is on point because 13(a) is broader in scope than old Equity Rule 30. 3 Moore, Federal Practice \u00b6 13.13 at 298-299 (1982). Moore further stated that the claim and the counterclaim need not be precisely identical.\nFederal courts dealing with Rule 13 have adopted the \u201clogical relationship\u201d test to determine compulsoriness. Pipeliners Local Union No. 798, Tulsa, Okl. supra; Plant v. Blazer Financial Services, Inc. of Ga., 598 F.2d 1357 (5th Cir.1979); 1A Barron & Holtzoff Federal Practice and Procedure \u00a7 394 (Wright ed. 1960). Our rule is similar to Federal Rule 13, and we adopt the \u201clogical relationship\u201d test.\nIs there a logical relationship between the plaintiffs\u2019 claim and the foreclosure actions brought by the Bank? Yes. Both have a common origin and subject matter \u2014 the loans. This is the one circumstance without which neither party would have found it necessary to seek relief. Moore, supra. Both concern operative facts which occurred in roughly the same time span. The Bank\u2019s foreclosure suits arose out of Heffern\u2019s failure to make payments due on notes executed between May 4, 1979 and July 23, 1980, and payable in 1980. The conduct plaintiffs complain of occurred between August 9, 1979 and July 7, 1980, a period which falls roughly within the time the notes were due. Also, in Count I plaintiffs allege:\nAs a direct and proximate result of the malicious and intentional actions of Defendant Bank as described above, Plaintiff Sure-Lock was unable to meet its financial obligations and was forced to cease doing business, and as a consequence lost property exceeding $800,-000.00 in value through foreclosure.\nThe common subject matter of the claim and the counterclaim, the proximity in time between the operative facts giving rise to each, and the cause and effect relationship between the claim and the counterclaim all support our conclusion that a \u201clogical relationship\u201d exists between the plaintiffs\u2019 claim and the prior foreclosure suits.\nIn holding that, under the circumstances of this case, a tort claim is a compulsory counterclaim to a foreclosure action, we find support from other jurisdictions. Allegations of creditor misconduct have been held to be compulsory counterclaims in foreclosure suits in Torbit v. Griffith, 37 Colo. App. 460, 550 P.2d 350 (1976); and Friedrichsen v. Cobb, 84 Mont. 238, 275 P. 267 (1929). In each of these cases the failure to raise the compulsory counterclaim in the first action barred the second action based on creditor misconduct.\nThe district court\u2019s order of dismissal is affirmed.\nIT IS SO ORDERED.\nWOOD and LOPEZ, JJ., concur.", "type": "majority", "author": "NEAL, Judge." } ], "attorneys": [ "John E. Farrow, Query, Fairfield, Reecer, Strotz & Stribling, P.C. Albuquerque, for plaintiffs-appellants.", "John M. Kulikowski, Thomas C. Bird, Keleher & McLeod, P.A., Albuquerque, for defendant-appellee." ], "corrections": "", "head_matter": "660 P.2d 621\nArthur HEFFERN, Individually and as President of Sure-Lock Homes, and Sure-Lock Homes, a New Mexico Corporation, Plaintiffs-Appellants, v. FIRST INTERSTATE BANK, Formerly known as Bank of New Mexico, a New Mexico Banking Corporation, Defendant-Appellee.\nNo. 5909.\nCourt of Appeals of New Mexico.\nMarch 1, 1983.\nJohn E. Farrow, Query, Fairfield, Reecer, Strotz & Stribling, P.C. Albuquerque, for plaintiffs-appellants.\nJohn M. Kulikowski, Thomas C. Bird, Keleher & McLeod, P.A., Albuquerque, for defendant-appellee." }, "file_name": "0531-01", "first_page_order": 563, "last_page_order": 566 }