Cruz v. FTS Construction, Inc.Cruz v. FTS Construction, Inc.
OPINION
{1} This ease involves two lawsuits — one that is presently pending before the district court on de novo appeal from the magistrate court and one (the action on appeal here) that was originally filed in the district court. We examine a doctrine most recently articulated in Valdez v. Ballenger,
FACTS AND PROCEDURAL BACKGROUND
{2} Plaintiff entered into a contract to purchase a newly constructed house from Defendants. In 2001, Plaintiff filed a pro se complaint in magistrate court, alleging that Defendants had failed to “repair major cracks” in the house and had failed to finish a block wall on the premises. Plaintiff prevailed in magistrate court and was awarded a judgment of $7,500 plus costs, which was the largest amount the magistrate court had jurisdiction to award at that time. See NMSA 1978, § 35-3-3(A) (amended effective July 1, 2001, to raise jurisdictional limit from $7,500 to $10,000). Defendants then filed a notice of appeal, invoking their right to a de novo trial in the district court. See N.M. Const, art. VI, § 27 (providing for de novo appeal to the district court from inferior courts). That appeal is still pending in the district court.
{3} Nine months after Defendants appealed to the district court, Plaintiff filed a separate action — the case on appeal here — in district court. The new case was assigned to a different division of the Valencia County District Court. The new complaint also related to Defendants’ construction of Plaintiffs house and alleged negligence, negligent misrepresentation, fraud, unfair trade practices, breach of the duty of good faith, prima facie tort, and emotional distress. Plaintiffs position is that the house has developed new problems, which she was unaware of at the time she filed the complaint in magistrate court, and that these problems will be far more costly to repair than she could have anticipated at that time. Defendants strongly disagree with this assertion.
{4} After more than two years of litigation, Defendants filed a “Motion to Dismiss and for Summary Judgment.” In that motion, Defendants argued that the complaint should be dismissed under a doctrine that they termed “prior exclusive jurisdiction.” Alternatively, Defendants argued on the merits that Plaintiffs claims failed as a matter of law. The district court denied the “summary judgment portion” of Defendants’ motion as untimely. The court determined that Defendants’ argument regarding “prior exclusive jurisdiction” raised jurisdictional issues that should be addressed despite the untimeliness of the motion.
{5} After briefing and argument, the district court dismissed the complaint and entered the following four conclusions of law:
1. A judgment entered by the Magistrate Court is final even if appealed.
2. The fact that the District Court is rendering an independent decision on an appeal from a judgment entered by the Magistrate Court does not mean that the matter is not an appeal, as the District Court is still bound by the jurisdiction of the magistrate court.
3. It is in the same manner that the Court of Appeals reviews matters of law de novo from the District Court, that the District Court reviews matters de novo from the Magistrate Court.
4. The Defendants^] position that this cause of action must be abated and dismissed in favor of Defendants’ appeal from the judgment entered by the ... Magistrate Court ... is well taken.
{6} On appeal, Plaintiff makes four arguments: (1) the district court misapplied the doctrine of “prior exclusive jurisdiction” because its elements were not satisfied in this case; (2) the district court erred in dismissing the complaint because Sanchez v. Reilly,
DISCUSSION
1. The District Court Did Not Err in Dismissing the Complaint Under the Doctrine of Priority Jurisdiction
{7} Plaintiff argues that the district court erred in dismissing the complaint because the elements of the doctrine that the court applied were not satisfied. Because the case was disposed of on a motion to dismiss, we will accept all of Plaintiffs facts as true, and we will review de novo the question of whether the district court properly applied the law to those facts. See R & R Deli Inc. v. Santa Ana Star Casino,
{8} In their motion to dismiss, Defendants asserted that Plaintiffs complaint should be dismissed under the doctrine of “prior exclusive jurisdiction.” Defendants cited Valdez,
Generally, a second suit based on the same cause of action as a suit already on file will be abated where the first suit is entered in a court of competent jurisdiction in the same state between the same parties and involving the same subject matter or cause of action, if the rights of the parties can be adjudged in the first action.
Id. (internal quotation marks and citation omitted).
{9} For the sake of clarity, we begin by noting that Valdez does not use the term “prior exclusive jurisdiction.” In fact, we have found no published New Mexico case that uses that term. “Prior exclusive jurisdiction” appears to be a doctrine that would not be applicable in this case because it applies only to in rem actions. See Black’s Law Dictionary 1231 (8th ed.2004) (defining the doctrine as “[t]he rule that a court will not assume in rem jurisdiction over property that is already under the jurisdiction of another court of concurrent jurisdiction”); see also State Eng’r of Nev. v. S. Fork Band of the Te-Moak Tribe of W. Shoshone Indians of New.,
{10} Rather, the rule stated in Valdez refers to the doctrine of “priority jurisdiction.” See, e.g., Long v. McKinney,
{11} This doctrine is not well developed in New Mexico, and we have found only three New Mexico eases that discuss it in any more than passing fashion. See Valdez,
{12} Valdez, which is the only New Mexico ease to actually apply the doctrine, arose out of a car accident where numerous people were injured.
{13} The elements of priority jurisdiction as articulated in Valdez can be broken down as follows: (1) the two suits must involve the same subject matter or the same cause of action, (2) the two suits must involve the same parties, (3) the first suit must have been filed in a court of competent jurisdiction in the same state, and (4) the rights of the parties must be capable of adjudication in the first-filed action. Id. at 786,
{14} With regard to the first element, Plaintiff argues that the subject matter of the present case is different from the subject matter of the first case because new claims and new “theories of law” were added in the present action. We disagree with this argument, and instead we agree with courts from other jurisdictions that have chosen to ask whether the two suits arise out of the same transaction. See, e.g., Plant Insulation Co.,
{15} It makes sense to use the same standard for priority jurisdiction that we use for res judicata because the policy rationales behind the two doctrines are so similar. The policy rationales behind the doctrine of priority jurisdiction are to “avoid[] conflicts that might arise between courts if they were free to make contradictory decisions or awards relating to the same controversy, and [to] prevent[ ] vexatious litigation and multiplicity of suits.” Plant Insulation Co.,
{16} We now evaluate the two cases pursuant to the transactional analysis. First, we do not agree with Plaintiff that mere changes in legal theory sufficiently distinguish this case from the previous case. See Apodaca v. AAA Gas Co.,
{17} Second, in the recent case of Brooks Trucking Co. v. Bull Rogers, Inc.,
{18} With regard to the second element, that the two eases involve the same parties, Plaintiff argues that the parties in this case are different because three defendants have been added. Plaintiffs original suit named only FTS Construction. In this case, Plaintiff added FTS Construction, Inc., Fred Sanchez, and Nathan Sanchez. In response to Plaintiffs argument that this case involves different parties, Defendants argue that all of the new defendants are in privity with the original defendant. Plaintiff does not dispute this statement in her reply brief and does not provide any additional argument with regard to the question of whether the two actions involve the same parties. See Delta Automatic Sys., Inc., v. Bingham,
{19} With regard to the third element of priority jurisdiction, that the first suit was filed in a court of “competent jurisdiction,” Plaintiff argues that the present action should not be dismissed in favor of the first ease (which is presently on de novo appeal in the district court), because the magistrate court was not a “court of competent jurisdiction” and thus the district court sitting on appeal is also not “competent.” Plaintiff argues that both courts are “without subject matter jurisdiction over [Pjlaintiffs new damages and new claims.” We agree with Plaintiff that a district court hearing an appeal from the magistrate court is bound by the lower court’s jurisdictional limits and that, if the magistrate court lacked jurisdiction, the district court would also lack jurisdiction. See State v. Hoar,
{20} At the time that Plaintiff commenced her action in magistrate court, that court had jurisdiction “in civil actions in which the debt or sum claimed does not exceed seven thousand five hundred dollars ($7,500), exclusive of interest and costs.” See § 35-3-3 (amended effective July 1, 2001 to raise jurisdictional limit from $7,500 to $10,000). Plaintiffs argument appears to be that, because she now believes her damages to exceed $7,500, the magistrate court and the district court sitting on appeal lack subject matter jurisdiction over her first action. We disagree.
{21} We find this issue to be similar to the issue of federal diversity jurisdiction under 28 U.S.C. § 1332 (2000). This statute permits diversity jurisdiction where the statute’s “amount in controversy” and citizenship requirements are satisfied. It is well established that these requirements are measured at the time the suit is filed:
Satisfaction of the [28 U.S.C.] § 1332(a) diversity requirements (amount in controversy and citizenship) is determined as of the date that suit is filed — the “time-of-filing” rule. Events occurring subsequent to the institution of suit which reduce the amount recoverable below the statutory limit do not oust jurisdiction.... Federal diversity jurisdiction is not lost by post-filing events that change or disturb the state of affairs on which diversity was properly laid at the outset.
Wolde-Meskel v. Vocational Instruction Project,
{22} We think that, as with diversity jurisdiction, the magistrate court’s jurisdiction must be measured at the time of filing. The primary reason for our holding is the concern that it would prove unworkable to adopt a rule that could cause jurisdiction to come and go during the course of a lawsuit, based on the dollar amount that the plaintiff happened to be claiming at the time. Cf. 13B Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 3608, at 452 (1984) (noting that the diversity jurisdiction time-of-filing rule is a “policy decision” that provides stability and minimizes abuses of jurisdictional rules and repeated challenges to subject matter jurisdiction).
{23} While we are aware of the general rule that parties cannot create or confer subject matter jurisdiction by consent, see, e.g., Chavez v. County of Valencia,
{24} We understand Plaintiffs argument that due to later-discovered damages, she cannot obtain complete recovery if she is left with only the de novo appeal, in which the district court will be bound by the magistrate court’s jurisdictional limit. We are not persuaded by this argument. We are again informed by the analogous doctrine of res judicata. A plaintiff cannot avoid the application of res judicata where he or she brought a prior suit on the same cause of action in a court with a jurisdictional limit. See Anaya v. City of Albuquerque,
{25} We also note that the cases Plaintiff appears to cite in support of her argument that the magistrate court and the district court sitting on appeal lack jurisdiction are not on point. Rather, these cases for the most part recite the familiar rule that a district court hearing a de novo appeal is bound by the jurisdictional limits of the inferior court that rendered the judgment from which appeal was taken. See Rojas v. Kimble,
{26} With regard to the last element of priority jurisdiction, that “the rights of the parties can be adjudged in the first action,” Plaintiff merely reiterates her argument that the district court on appeal lacks subject matter jurisdiction and cannot make her “whole.” We have already rejected this argument and, in the absence of any additional arguments by Plaintiff on this point, we need not speculate as to what circumstances might defeat this element of priority jurisdiction. We hold that the final element of the doctrine is satisfied in this case. See Robertson v. Carmel Builders Real Estate,
{27} Having determined that all the elements of priority jurisdiction are satisfied in this ease, we hold that the district court did not err in dismissing the complaint under that doctrine. Because the district court’s order does not specify whether the dismissal is -with or without prejudice, we clarify that the dismissal should be considered without prejudice to Plaintiffs right to recover in the de novo appeal that is currently pending before the district court. See Valdez,
{28} Before we reach Plaintiffs remaining arguments, we wish to clarify two issues regarding priority jurisdiction that were not properly addressed by the parties in this case. First, it appears from the record that Defendants argued, and the district court believed, that the doctrine was jurisdictional. Contrary to Defendants’ arguments, the doctrine is not jurisdictional in New Mexico. See Burroughs,
{29} Second, because the doctrine is not jurisdictional, it may be an affirmative defense that could be waived if not timely raised, although we expressly do not decide the point. Cf. People ex rel. Garamendi v. Am. Autoplan, Inc.,
2. Sanchez Does Not Permit Plaintiff to Re-file Her Case in District Court
{30} Plaintiff next argues that Sanchez,
{31} In Sanchez, the plaintiff brought a forcible entry and detainer action in the justice of the peace court. Id. at 265,
{32} Our Supreme Court held that a district court hearing a de novo appeal of an inferior court judgment is bound by the jurisdictional limits of the inferior court. Id. at 266,
[T]he district court can render judgment for no greater amount than could the justice of the peace. If a plaintiff desires, he may sue in the justice court for possession alone and, where the damages at the beginning, or later through delay in trial, seem likely to exceed jurisdiction of the justice of the peace, sue separately for such damages in the district court.
Id. at 267,
{33} We think Plaintiff reads too much into Sanchez. The dicta on which Plaintiff relies, referring as it does to an initial suit for “possession alone,” specifically contemplates a suit for forcible entry and detainer, which is significantly different from Plaintiffs suit. There is a special statutory procedure for bringing suits for forcible entry and detainer in the magistrate court and appealing to the district court. See NMSA 1978, §§ 35-10-1 to -6 (1968, as amended through 1975). Moreover, the nature of such a suit is that damages will continue to accrue as long as the defendant is wrongfully in possession of the property. See § 35 — 10—5(A)(1) (stating that the measure of damages on appeal to the district court is “the actual value of the rent due until entry of judgment by the magistrate court and double the value of all rent accrued thereafter until entry of judgment in the district court”). Thus, it makes sense that our Supreme Court would clarify the method by which a plaintiff can get compensation for damages that accrue “through delay in trial.”
{34} We think the dicta on which Plaintiff relies is limited to suits for forcible entry and detainer. While Plaintiff does allege either newly occurring or newly discovered damages, her suit is not analogous to a suit for forcible entry and detainer, where damages necessarily continue to accrue as long as the defendant remains in wrongful possession. Thus, we disagree with Plaintiff that the dicta in Sanchez can be read to encompass any situation where additional damages become apparent after a suit has been commenced or litigated in an inferior court.
{35} In addition, we do not think that the dicta in Sanchez can be used to overcome the doctrine of priority jurisdiction. We note that Larrazolo,
3. The District Court’s Dismissal of Plaintiffs Complaint Did Not Deprive Her of Due Process or Equal Protection
{36} Plaintiff next argues that the district court violated her constitutional rights in dismissing her complaint. Plaintiff appears to rest this argument on her contention that the district court was the only court that could make her whole and that she thus has a constitutional right to “full and fair litigation” of all her “claims and damages” before the district court. The eases cited by Plaintiff do not support her argument. See Boddie v. Connecticut,
{37} Plaintiff has not cited any case that would support her argument that a litigant has a constitutional right to have her claims heard for a second time in a different court, after fully litigating her case in the forum of her choice and obtaining a favorable judgment, simply because she now claims more damages. Accordingly, we reject Plaintiff’s constitutional arguments.
4. The Finality or Lack Thereof of the Magistrate Court Judgment Does Not Change the Result
{38} Finally, Plaintiff disputes the district court’s conclusion that the magistrate court judgment was final despite the pending de novo appeal. However, Plaintiff does not explain how this conclusion prejudiced her, what effect (if any) it has on the district court’s dismissal of the present case on the ground of priority jurisdiction, or how the decision otherwise constitutes reversible error. Thus, we need not address Plaintiff’s argument. See Deaton v. Gutierrez,
{39} Moreover, we do not see how the finality or non-finality of the magistrate court judgment would make any difference to the outcome of this appeal. As we stated previously, a final judgment triggers res judicata analysis, while a pending case is subject to priority jurisdiction analysis. In either case, the result is the same: Plaintiffs complaint was properly dismissed.
CONCLUSION
{40} We affirm the district court’s dismissal of Plaintiff’s complaint. We reiterate that the dismissal should be considered without prejudice to Plaintiff’s right to proceed in the other action currently pending in the district court.
{41} IT IS SO ORDERED.