This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
A manufactured housing company filed lawsuits against a decorator it had hired, alleging her involvement in a fraudulent scheme orchestrated by other employees. The decorator denied involvement, claiming she was wrongfully included in the lawsuits. The company pursued claims in both federal and state courts, including racketeering and fraud, but later dismissed the federal case. The decorator counterclaimed for malicious abuse of process, alleging lack of probable cause and procedural impropriety in the lawsuits (paras 3-11).
Procedural History
- Federal Court: Fleetwood filed a RICO claim and state law claims against the decorator and others. The case was voluntarily dismissed by Fleetwood after the decorator filed a motion to dismiss (paras 7-9).
- State Court: Fleetwood refiled the state law claims, and the decorator counterclaimed for malicious abuse of process. The jury awarded damages to both parties (paras 9-11).
Parties' Submissions
- Appellant (Fleetwood): Argued that its partial success on fraud and conversion claims in state court provided an absolute defense to the malicious abuse of process counterclaim based on lack of probable cause (paras 1-2, 18-20).
- Appellee (Decorator): Contended that Fleetwood lacked probable cause for the RICO claim and engaged in procedural impropriety by refusing to consider evidence of her innocence and maintaining baseless claims to coerce her cooperation (paras 8, 31-32).
Legal Issues
- Whether lack of probable cause for a malicious abuse of process claim should be determined for the entire complaint or for each individual claim (para 18).
- Whether a verdict in favor of the original plaintiff on one or more claims provides an absolute defense to a malicious abuse of process claim, even if other claims lacked probable cause or were procedurally improper (para 18).
Disposition
- The Supreme Court of New Mexico reversed the judgment in favor of the decorator on her malicious abuse of process counterclaim (para 34).
Reasons
Per Bosson J. (Chávez CJ., Serna, Maes JJ., and Pickard J. concurring):
Lack of Probable Cause: The Court held that probable cause must be assessed for the lawsuit as a whole, not on a claim-by-claim basis. A partial recovery by the original plaintiff, as in this case, serves as an absolute defense to a malicious abuse of process claim based on lack of probable cause. This approach avoids discouraging access to the courts and aligns with the principles established in DeVaney (paras 19-21, 24).
Procedural Impropriety: The Court acknowledged that procedural impropriety, such as using litigation to harass or coerce, could support a malicious abuse of process claim even if some claims were successful. However, the decorator waived this theory by failing to request jury instructions on procedural impropriety (paras 22, 31-33).
Clarifications on DeVaney: The Court addressed procedural challenges in malicious abuse of process claims, suggesting bifurcation or special verdict forms to resolve conflicts between the court's determination of probable cause and the jury's role in deciding the merits of underlying claims. The Court also questioned the necessity of the heightened burden of proof for counterclaims established in DeVaney (paras 25-30).
Application to the Case: Fleetwood's partial success on its fraud and conversion claims barred the malicious abuse of process counterclaim based on lack of probable cause. The procedural impropriety theory was not preserved for appeal, leaving no basis to sustain the jury's verdict in favor of the decorator (paras 24, 33).