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

• Plaintiff and Defendants were partners in New Mexico Development and Consulting, LLC (NMDC), each owning fifty percent. Plaintiff filed a petition alleging Defendant Christian Williams misappropriated NMDC funds, refused to provide copies of leases, access to NMDC's bank account, and any accounting of NMDC's operations. Plaintiff claimed Defendants' mismanagement led to tenant dissatisfaction and sought an accounting, damages, punitive damages, costs, attorney fees, and other appropriate relief (paras 2-3).

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Plaintiff: Argued that Defendant Christian Williams appropriated NMDC funds for personal use, refused to provide lease copies, bank account access, and any accounting of NMDC's operations. Plaintiff sought an accounting, damages, punitive damages, costs, attorney fees, and other appropriate relief (para 2).
• Defendants: Did not timely respond to the petition, nor to Plaintiff's motions for a preliminary injunction and appointment of receiver. Defendants also failed to respond to Plaintiff's first and second interrogatories and requests for production, leading to motions to compel by Plaintiff (paras 3-4).

Legal Issues

• Whether the district court erred in not holding an evidentiary hearing on the amount of Plaintiff’s damages before ordering forfeiture of Defendants' interest in NMDC (para 1).

Disposition

• The Court of Appeals reversed the damages award and remanded for a hearing on Plaintiff’s damages (para 1).

Reasons

• The Court of Appeals, with Judge Michael D. Bustamante authoring the opinion, and concurrence from Chief Judge Michael E. Vigil and Judge J. Miles Hanisee, found that the district court erred by not holding an evidentiary hearing on the amount of Plaintiff's damages before ordering forfeiture of Defendants' interest in NMDC. The court emphasized that Defendants did not challenge the propriety of the district court’s discovery orders, the imposition of sanctions, or even the entry of default judgment against them but only the amount of damages awarded. The court concluded that Plaintiff was required to prove his damages after entry of the default judgment and that Defendants were entitled to contest such damages or submit mitigating evidence. The court reversed the damages award and remanded to the district court for a hearing on Plaintiff’s damages, citing the necessity of a hearing to determine the amount of damages when the claim for damages is unliquidated (paras 14-27).