282 P.3d 758
N.M.2012Background
- LensCrafters subleased space to Kehoe from 1997–2001 under successive agreements containing a noncompete.
- The 1999 contract’s noncompete would survive termination only under specific conditions tied to renewal or default.
- LensCrafters sent a May 29, 2001 nonrenewal letter more than 120 days before the contract ended, inviting a new sublease; Kehoe did not sign it.
- Kehoe sent a June 30, 2001 letter stating he would not renew; LensCrafters replied that it acknowledged his decision not to renew.
- Kehoe began practicing near LensCrafters after expiry; LensCrafters demanded discontinuation or liquidated damages and filed suit.
- Kehoe counterclaimed for malicious abuse of process and tortious interference with contract, among others, which the district court later granted summary judgment against.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether nonrenewal terminated the contract and thus the noncompete. | LensCrafters argues the 2001 letter was a renewal offer. | Kehoe argues the letter terminated the 1999 contract, extinguishing the noncompete. | Nonrenewal letter terminated contract; noncompete unenforceable. |
| Whether the district court abused its discretion in denying Kehoe's motion to supplement pleadings. | Kehoe sought to add new claims after trial date prejudice ensued. | Kehoe contends late supplementation should be allowed to prove novel theories. | No abuse of discretion; denial upheld. |
| Whether the district court properly dismissed Kehoe's malicious abuse of process claim. | LensCrafters filed suit to enforce a potentially unenforceable noncompete. | Kehoe asserts improper use of process without probable cause. | Summary judgment proper; probable cause existed. |
| Whether the district court properly dismissed Kehoe's tortious interference with contract claims. | LensCrafters interfered with existing and prospective contracts and patient relationships. | Kehoe claims LensCrafters caused or induced breaches for improper motive. | Summary judgment proper; no genuine issues of material fact on intentional interference. |
Key Cases Cited
- Durham v. Guest, 145 N.M. 694, 204 P.3d 19 (2009-NMSC-007) (malicious abuse of process requires improper purpose and improper use of process)
- Fleetwood Retail Corp. of N.M. v. LeDoux, 142 N.M. 150, 164 P.3d 31 (2007-NMSC-047) (probable-cause standard and chilling effect on access to courts)
- DeVaney v. Thriftway Mktg. Corp., 124 N.M. 512, 953 P.2d 277 (1998-NMSC-001) (probable cause requirement for malicious abuse of process; motive alone insufficient)
- Smith v. Price’s Creameries, Div. of Creamland Dairies, Inc., 98 N.M. 541, 650 P.2d 825 (1982) (contract termination terms interpreted strictly where provision controls)
- Wendenburg v. Allen Roofing Co., 104 N.M. 231, 719 P.2d 809 (1986) (cannot unilaterally change contract terms)
- Kirkpatrick v. Introspect Healthcare Corp., 114 N.M. 706, 845 P.2d 800 (1992) (contract interpretation where language is unambiguous)
- Lee v. Lee (In re Adoption of Doe), 100 N.M. 764, 676 P.2d 1329 (1984) (course of dealing evidence does not override clear contract terms)
- Cont’l Potash, Inc. v. Freeport-McMoran, Inc., 115 N.M. 690, 858 P.2d 66 (1993) (contract terms control unless ambiguous)
- Allsup’s Convenience Stores, Inc. v. North River Ins. Co., 1999-NMSC-006 (1999-NMSC-006) (contract ambiguity assessment and construction)