Freeman v. Fairchild

Paul Fairchild Jr. asked the district court to grant summary judgment on his cross-claims against Defendants Richard Love and R.H. Love Galleries, Inc. (collectively Love) on the ground that Love failed to timely file a response to Fairchild’s motion for summary judgment and was therefore “in default.” Jerald Freeman, The Tea Leaf, Inc., and Thomas Nygard, Inc. (collectively Plaintiffs) jointly owned a painting by Albert Bierstadt they purchased for $180,000. In October 2002, three transactions involving the Bierstadt painting occurred in quick succession: (1) Freeman agreed on behalf of Plaintiffs to sell the painting to Paul Benisek for $240,000, to be paid in twelve monthly installments; (2) Benisek agreed to sell the painting to Love for $300,000, also to be paid in twelve monthly installments; and (3) Love sold the painting to Fairchild for $375,000, which Fairchild paid in full with a combination of cash and the trade-in of three other pieces of artwork. In accordance with their respective agreements, Love made several payments to Benisek, and Benisek made several payments to Freeman. But in spring 2003, Love experienced financial trouble and stopped making payments to Benisek, who in turn stopped making payments to Freeman. Meanwhile, Fairchild consigned the Bierstadt painting for sale at a gallery in New York City. Freeman, who had not received full payment from Benisek, became aware that the New York gallery was attempting to sell the Bierstadt painting and asked the gallery to ship the painting to Santa Fe for inspection. Freeman obtained possession of the Bierstadt painting and refused to return it to the gallery. Love, whose counsel had withdrawn while his motion was pending, explained that he lacked legal representation and had been experiencing health problems, and he requested an opportunity to submit a late response. The district court did not allow Love additional time to respond and granted Fairchild’s motion for summary judgment without considering whether Fairchild had established a prima facie case for summary judgment under Rule 1-056 NMRA. After review, the New Mexico Supreme Court held the district court erred by granting summary judgment: “Prior to granting an uncontested motion for summary judgment, the district court must assess whether the moving party has demonstrated that no genuine issue of material fact exists ‘and that the moving party is entitled to a judgment as a matter of law.’” The Court of Appeals erred in its application of the right-for-any-reason doctrine to affirm the district court. The Supreme Court reversed the summary judgment order and vacated the resulting award of damages, and the case was remanded to the district court with instructions to permit Love to file a response to Fairchild’s motion for summary judgment and for further proceedings. View "Freeman v. Fairchild" on Justia Law