Summary
The New Mexico Supreme Court held that a defendant need not have initiated the underlying judicial proceeding to be liable for malicious abuse of process. It further held that an arbitration proceeding qualifies as a judicial proceeding for purposes of the tort. The court reversed dismissal of the plaintiffs’ claim based on alleged misuse of subpoenas for an illegitimate purpose during arbitration.
Topics
Practice areas
Questions Presented
- Whether a malicious abuse of process claim requires that the defendant have initiated the underlying judicial proceeding against the plaintiff.
- Whether an arbitration proceeding is a judicial proceeding for purposes of the tort of malicious abuse of process.
- Whether the Durhams adequately stated a malicious abuse of process claim based on Guest's alleged issuance of subpoenas for an illegitimate purpose during arbitration.
Holdings
- A defendant need not have initiated the underlying judicial proceeding against the plaintiff to state or be liable for malicious abuse of process.
- An arbitration proceeding is a judicial proceeding for purposes of the tort of malicious abuse of process.
- The tort requires: (1) use of process in a judicial proceeding that would be improper in the regular prosecution or defense of a claim or charge; (2) a primary motive to accomplish an illegitimate end; and (3) damages.
Key quotations
“For these reasons, we overrule DeVaney with respect to its holding that all malicious abuse of process claims require the defendant to have initiated a judicial proceeding against the plaintiff.” (204 P.3d at 26)
“Therefore, we hold that for the purpose of the tort of malicious abuse of process, arbitration proceedings are judicial proceedings, and the improper use of process in an arbitration proceeding to accomplish an illegitimate end may form the basis of a malicious abuse of process claim.” (204 P.3d at 27-28)
Factual background
The Durhams were injured in an accident with an uninsured motorist and made uninsured-motorist claims under Jamie Durham's Allstate policy. Allstate retained Guest to represent it in arbitration of the claims, and the arbitrators awarded the Durhams $45,000 plus arbitration costs. In a later action, the Durhams alleged that Guest improperly issued subpoenas for their employment and medical records in violation of an arbitral protective order and for purposes including harassment, reputational harm, invasion of privacy, and coercion.
Procedural history
The Durhams sued Guest in connection with subpoenas allegedly issued for an illegitimate purpose during arbitration of their uninsured-motorist claims. The district court dismissed the claims against Guest for failure to state a claim. The Court of Appeals affirmed, concluding that Guest had not initiated the arbitration and that arbitration was not a judicial proceeding for purposes of malicious abuse of process. The Supreme Court of New Mexico granted review on the malicious abuse of process issue, reversed, and remanded for reinstatement of the claim.
Remand instructions
The district court must reinstate the Durhams' malicious abuse of process claim on its docket. The Supreme Court's denial of Guest's sanctions motion without prejudice did not preclude the district court from considering a sanctions motion on remand.