AI Generated Opinion Summaries

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 case involves Beneficiaries of two testamentary trusts appealing a district court's decision regarding the payment of mortgage interest from the trust principal as requested by the Trustee, Bank of America, N.A. The core issue revolves around whether the mortgage interest and loan fees, which profited the Bank, were properly accounted for in the calculation of damages due to the Bank's breach of fiduciary duties in administering the trusts (paras 2-4).

Procedural History

• Miller v. Bank of Am., N.A., 2014-NMCA-053, ¶ 1, 326 P.3d 20, rev’d on other grounds by, 2015-NMSC-022, ¶ 1: The New Mexico Supreme Court held that Beneficiaries were entitled to recover damages for both the restoration of the trusts’ value and disgorgement of the Bank’s self-dealing profits, remanding the case for further proceedings to determine the appropriate amount of damages and whether mortgage interest and fees profiting the Bank were accounted for in the diminution of the trust principal's value.

Parties' Submissions

• Beneficiaries: Argued that the district court’s finding that mortgage interest was paid from trust principal was not supported by substantial evidence. They maintained that the Bank invaded the principal by borrowing against trust assets for an improper purpose, irrespective of how interest payments were made (paras 5, 10).
• Bank of America, N.A.: Contended that Beneficiaries were precluded from seeking a finding that mortgage interest and loan fees were paid from trust income based on theories of law of the case, judicial estoppel, invited error, and judicial admission. The Bank emphasized that the Beneficiaries had previously argued, and the court had found, that the Bank invaded the trust principal by borrowing against the principal assets of the trusts (paras 9, 11).

Legal Issues

• Whether the district court’s finding that mortgage interest payments were made from the trust principal is supported by substantial evidence (para 5).
• Whether equitable principles such as the law of the case, judicial estoppel, invited error, and judicial admission are applicable in determining the source of mortgage interest payments (para 18).

Disposition

• The judgment of the district court is reversed and remanded for further evidentiary proceedings consistent with the Supreme Court mandate in the previous appeal (para 21).

Reasons

• The Court of Appeals found that the district court’s conclusion that mortgage interest was paid from the trust principal was not supported by substantial evidence. The Supreme Court had previously noted the insufficiency of the record to resolve whether damages representing disgorgement were included in the calculation of the restoration award. On remand, the district court relied solely on the existing trial record without reviewing additional evidence, which was deemed insufficient to resolve the issue. The Court of Appeals also found the Bank’s equitable "admission theories" inapplicable, as they exceeded the scope of the district court’s jurisdiction on remand, which was limited to determining whether mortgage interest and loan fees were paid out of trust principal or income. The Court of Appeals emphasized that the district court on remand was to consider the question of disgorgement damages based on the Supreme Court's instructions, and any other consideration would exceed the scope of the remand (paras 5-20).