Defendant Trinity Land Company (Trinity) appeals from the trial court’s award of $25,000.00 in damages in favor of plaintiff Kenneth Nosker (Nosker) based upon a determination that Nosker owned certain irrigation equipment which Trinity wrongfully converted to its own use. We discuss: (1) whether Nosker’s claim was barred by res judicatа; (2) whether the items of irrigation equipment were fixtures; and (3) whether the trial court’s finding of conversion is supported by substantial evidence.
This case has been submitted for decision by the court following its submission to an advisory panel pursuant to an experimental plan. See Patterson v. Environmental Imрrovement Div.,
Nosker was the owner of “Three Rivers Farm” in Otero County, New Mexico. In 1975, Trans Union Leasing Corporation (Trans Union) leased irrigation equipment to Nosker, Jаmes L. Wimberly, and James L. Wimberly Enterprises, Inc. Shortly thereafter, the irrigation equipment was installed on the property. In March 1977, Nosker sold the farm to Don and Jacquelyn Maddoux (Maddoux) by real estate contract. Nosker and Wimberly executed an assignment of their interest in the equipment lease. Mаddoux then took possession of the irrigation equipment. Neither the lease nor any notice under the Uniform Commercial Code has ever been filed with the Otero County Clerk.
In Februаry 1979, Maddoux entered into a contract to sell the farm and all associated equipment to Three Rivers Land Company, Inc. (Three Rivers) and Marvel Engineering (Marvel). When Maddoux refused to close the contract, Three Rivers and Marvel sued and obtained a preliminary injunction compеlling conveyance of the property. Warranty deeds to the farm and a bill of sale purporting to convey the irrigation system and personal property on the farm, to the purchasers, were executed. Thereafter, the district court dissolved the preliminary injunction and revoked the deeds because specific performance was rendered impossible by the foreclosure proceedings initiated by Crocker. No appeal was taken from the judgment in the foreclosure action.
In October 1979, Crocker purchased the farm at the foreclоsure sale, and then sold it to Trinity. When Trans Union failed to receive payments under the equipment lease entered into with Nosker and Wimberly, Trans Union terminated the lease and sued Nosker for the unpaid balance of monies due under the equipment lease. In settlement of that lawsuit, on December 3, 1981, Trans Union executed a quitclaim bill of sale for the irrigation equipment to Nosker in exchange for certain monies. Nosker then brought this suit against Trinity, claiming Trinity wrongfully converted the irrigation equipment to its own use. Trinity defended, arguing that Nosker’s claim was barred by res judicata through Trans Union’s loss of title to thе irrigation equipment in the foreclosure suit, and claiming that it had obtained title to the irrigation equipment pursuant to the foreclosure sale. The 'trial judge found that Nosker’s claim was not barred by res judicata and that Trinity had converted the irrigation equipment. The trial judge awarded Nosker $25,000.00 in damages but denied interest on the damage award and denied attorney fees.
I. CLAIM OF RES JUDICATA
Trinity argues on appeal that the trial court erred in concluding that Nosker’s claim was not barred by res judicata. Specifically, Trinity claims that the prior foreclosure proceeding precludes this action bеcause the parties are in privity, the cause of action is the same, and because there was a final decision on the merits in the prior foreclosure action adjudicating the matters involved herein. Nosker responds that his claim was not barred by res judicata because thе subject matter of the two suits differed. Nosker maintains that the present action concerns irrigation equipment which was outside the subject matter involved in the foreclosure action. We agree.
Under the doctrine of res judicata, a prior judgment on the merits bars a subsequent suit involving the samе parties or privies based on the same cause of action. Myers v. Olson,
Here, there is no dispute that the parties were in privity and that there was a final decision rendered on the merits in the foreclosure action. The main point of contention,
In addressing the issue concerning whether or not there is an identity of the two causes of action, we look to the Restatement (Second) of Judgments (1982). Under the rule set forth in Section 24 1 thereof, a cause of action is examined in light of the underlying transaction which gave rise to the litigation, without regard to the various legal theories that may be available to the parties. Accordingly, a claim is essentially equated with the transaction from which it springs. Id.'
Applying the factors specified in Section 24, we agree that the suit herein is not barred by principles of res judicata. The trial court found, in part:
45. [Trinity] did not purchase the Equipment at the Crocker foreclosure sale. The notice of foreclosure and the special master’s bill of sale obtained by [Trinity] pursuant to the Crocker foreclosure sale * * *, though lists similar equipment, does not include the Equipment to [Nosker].
46. The Equipment did not become part of the real estate that was the subject matter of the Crocker foreclosure suit.
In its appeal herein, Trinity failed to specifically challenge the above key findings of fact. These findings are supported by substantial evidence. Findings of fact adopted by the trial court and not directly attacked on appeal must be accepted as true by the reviewing court. City of Roswell v. Reynolds,
The doctrine of res judicata does not bar Nosker’s claim because the unchallenged findings are conclusive in determining that Trinity did not purchase the equipment at the foreclosure sale, either as a fixture to the real property or as personal property. Thus, the causes оf action in this suit and the foreclosure suit are not the same because the subject matter is not the same.
II. CLAIM OF CONVERSION
We jointly discuss the second and third issues raised by Trinity on appeal.
Trinity argues that the trial court’s determination that it converted the irrigation equipment is not supported by substantial evidencе. Specifically, Trinity contends that an action for conversion will not lie because any exercise of dominion and control or use of the equipment by Trinity occurred at a time when Nosker no longer had a possessory interest in the property. Trinity also maintains that an action for conversion based upon Nosker’s interest in the equipment lease with Trans Union could not exist because Nosker had previously assigned his interest to Maddoux and because Trans Union had terminated the equipment lease in 1980. Trinity also asserts that there was no conversion based upon Nosker’s interest under the bill of sale executed by Trans Union because Nosker failed to make a timely demand upon Trinity thereafter for a return of the equipment. We agree.
Conversion is defined as the unlawful exercise of dominion and control over personal property belonging to another in exclusion or defiance of the owner’s rights, or acts CQnstituting an unauthorized
At the outset we note that the failure to challenge the trial court’s finding of fact no. 46 establishes, for purposes on appeal, that the irrigation equipment did not become part of the real estate that was the subject matter of the foreclosure suit; the irrigation equipment remained personal property and was not a fixture, and hence, was not subject to foreclosure under the real estate mortgage. See First Nat’l Bank of Aberdeen v. Jacobs,
On appeal, this court views the evidence in the light most favorable to the trial court’s decision and disregards all evidence and inferences to the contrary. See Clovis Nat’l Bank v. Harmon,
In order to recover damages for conversion, a plaintiff must have a right to immediate possession of the property. Such a right is generally based on some form of ownership interest. See Stephen v. Phillips,
The evidence reveals, and the trial court found, that Nosker assigned his interest in the equipment lease to Maddoux. If Nosker obtained any right of possession subsequent to this assignment, it was not until he received a quitclaim bill of sale from Trans Union in December 1981.
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Since Nosker did not have a right to possess the irrigation equipment between March 1977 (time of assignment) and December 1981 (time of quitclaim bill of sale), any use or disposition of the irrigation equipment during this time by Trinity did not give rise to a valid cause of action in Nosker. See O’Dell v. Garrett,
Moreover, Nosker failed to mаke a timely demand upon Trinity for the return of the equipment. In order to be sufficient, a demand for return of personal property must be made after plaintiffs right of possession has accrued, and while plaintiff has the right of immediate possession. See McCartney v. Foster,
The judgment of the trial court awarding Nosker damages is reversed and remanded for dismissal of the cause of action against Trinity. The cross-appeal is denied. In view of our disposition, we do not reach the other issues raised on appeal. Trinity is awarded its costs on appeal. We deem oral argument unnecessary. See Garcia v. Genuine Parts Co.,
The court acknowledges the aid of attorneys Thomas B. Stribling, III, Chris Key, and Geoffrey Rieder in the preparation of this opinion. These attorneys constituted an advisory committee selected by the chief judge of this court, and we express our gratitude to them for volunteering their services.
IT IS SO ORDERED.
Notes
. Section 24 provides:
(1) When a valid and final judgment rendered in an action extinguishes the plaintiff’s claim pursuant to the rules of merger or bar ..., the claim extinguished includes all rights of the plaintiff to remedies against the defendant with resрect to all or any part of the transaction, or series of connected transactions, out of which the action arose.
(2) What factual grouping constitutes a “transaction", and what groupings constitute a “series", are to be determined pragmatically, giving weight to such considеrations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage.
. We do not discuss the interest Nosker received upon execution of the quitclaim bill of sale.