This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The Resolution Trust Corporation (RTC), acting as a receiver for Security Federal Savings and Loan Association, filed a legal malpractice suit against an attorney for failing to properly represent Security Federal in bankruptcy proceedings and an adverse foreclosure. The attorney also failed to submit a timely claim on Security Federal's title insurance policy, which covered the property in question. These failures allegedly caused financial losses to Security Federal (paras 1-2, 8).
Procedural History
- District Court of Bernalillo County: The trial court found the attorney negligent but concluded that his negligence was not the proximate cause of Security Federal's losses. It also found Security Federal contributorily negligent in failing to protect its rights under the title insurance policy (paras 1, 11).
Parties' Submissions
- Plaintiff-Appellant (RTC): Argued that the trial court erred in finding that the attorney's negligence was not the proximate cause of damages and in refusing to award damages. RTC contended that the attorney's failures directly caused Security Federal's financial losses (para 1).
- Defendant-Appellee (Attorney): Cross-appealed, arguing that the trial court erred in finding him negligent and that the findings of negligence were not supported by substantial evidence. He also claimed he acted under instructions from Security Federal not to proceed in the bankruptcy and foreclosure matters (paras 1, 13-14).
Legal Issues
- Was the attorney negligent in failing to represent Security Federal in the adverse foreclosure proceeding and in failing to notify the title insurance company of the adverse claim?
- Was the attorney's negligence the proximate cause of Security Federal's damages?
- Should liability for damages be apportioned between the attorney and Security Federal?
Disposition
- The court affirmed the finding that the attorney was negligent.
- The court reversed the finding that the attorney's negligence was not the proximate cause of damages.
- The case was remanded for the entry of a judgment in favor of RTC for damages related to the foreclosure proceeding and for further findings on the apportionment of liability regarding the title insurance claim (paras 2, 30-31).
Reasons
Per Bivins J. (Minzner C.J. and Apodaca J. concurring):
Negligence: The court upheld the trial court's finding that the attorney was negligent in failing to represent Security Federal in the foreclosure proceeding and in failing to notify the title insurance company of the adverse claim. Substantial evidence supported these findings, including testimony from multiple witnesses and the attorney's failure to document alleged instructions not to act (paras 13-16).
Proximate Cause (Foreclosure Proceeding): The court determined that the attorney's negligence in failing to represent Security Federal in the foreclosure proceeding proximately caused damages. Security Federal could have successfully defended its priority lien under the doctrine of equitable reinstatement of liens, which would have prevented financial losses (paras 17-26).
Proximate Cause (Title Insurance Claim): The attorney's failure to notify the title insurance company prejudiced the insurer, barring Security Federal from recovering under the policy. This failure caused damages, but the trial court's findings on Security Federal's contributory negligence were unclear. The case was remanded for further findings and apportionment of liability (paras 27-29).
Remand Instructions: The court ordered the trial court to enter a judgment for RTC for damages related to the foreclosure proceeding and to determine the basis of Security Federal's negligence, if any, in the title insurance matter. Liability should then be apportioned accordingly (paras 30-31).