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Valencia County
STATE OF NEW MEXICO 12/28/2018 8:28 PM


Limited Liability Company;
LEGION IRON, LLC, a New Mexico
Limited Liability Company; and

v. D-1314-CV-2018-01280




Plaintiff Simon Otero, by and through his undersigned counsel, respectfully moves to

dismiss Counts I (Malicious Abuse of Process); Count II (Negligent Misrepresentation); Count V

(as to Injunctive Relief); Count VI (Embezzlement); and Count VI (sic) (Punitive Damages) of

Defendant Gonzales’ Counterclaim, under Rule 1-012(B)(6) NMRA, on the grounds that

Defendant fails to state a claim upon which relief can be granted.


Dismissal is proper under Rule 1-012(B)(6) NMRA when a Counterclaim “fails to state a

claim upon which relief can be granted”; and when “the law does not support the claim under any

set of facts subject to proof.” Derringer v. State, 2003-NMCA-073, ¶ 5, 133 N.M. 721.

A complaint can be dismissed on a motion if it is “without any merit, and the want of merit

may consist of an absence of law to support a claim of the sort made, or of facts sufficient to make

a good claim.” Saenz v. Morris, 1987-NMCA-134, ¶ 6, 106 N.M. 530.

For purposes of the motion, the well-pleaded material allegations of the complaint are taken

as admitted, but conclusions of law or unwarranted deductions of fact are not admitted. Id. ¶ 6.

To survive dismissal, the “pleadings must tell a story” from which “the essential elements

prerequisite to the granting of the relief sought can be found or reasonably inferred.”

Duran v. New Mexico Monitored Treatment Program, 2000-NMCA-023, ¶ 19, 128 N.M. 659.

The Counterclaim fails to satisfy this standard. See Nass-Romero v. Visa U.S.A. Inc., 2012-

NMCA-058, ¶ 7 (“Dismissals under Rule 1–012(B)(6) are proper when the claim asserted is

legally deficient.”) (internal quotations omitted).

I. Malicious Abuse of Process.

The elements of a malicious-abuse-of-process action are: (i) the use of process in a judicial

proceeding that would be improper in the regular prosecution or defense of a claim or charge;

(ii) a primary motive in the use of process to accomplish an illegitimate end; and (iii)

damages. See Durham v. Guest, 2009-NMSC-007, 145 N.M. 694.

An improper use of process may be shown by: (i) filing a complaint without probable

cause; or (ii) an irregularity or impropriety suggesting extortion, delay or harassment, or other

conduct formerly actionable under the tort of abuse of process. See id.

A. Unsupported and Conclusory Statements Claiming a Lack of Probable Cause

Cannot be Reconciled with Defendant’s Own Allegations.

The law in New Mexico is clear: “the filing of a proper complaint with probable cause,

and without any overt misuse of process, will not subject a litigant to liability for malicious

abuse of process, even if it is the result of a malicious motive.” See DeVaney v. Thriftway

Mktg. Corp., 1998-NMSC-001, ¶ 20, 124 N.M. 512, overruled by Durham, 2009-NMSC-007, ¶

25, and abrogated by Fleetwood Retail Corp. of N.M. v. LeDoux, 2007-NMSC-047, ¶ 25.

The lack of probable cause must be “very clearly proven” or “very palpable.” Prosser

& Keaton on the Law of Torts, §120 at 893. Importantly, probable cause does not require

certainty. Guest v. Berardinelli, 2008-NMCA-144, ¶ l3, 145 N.M. 186. A determination of

probable cause cannot be made on a claim-by-claim basis. Rather, it is to be determined by

reviewing the lawsuit in its entirety. Fleetwood Retail Corp. v. Le Doux,

2007-NMSC-047, ¶ 21, 142 N.M. 150. Defendant Gonzales makes statements that:

“Mr. Otero, unlawfully, and on false premises, obtained a temporary restraining order preventing

Mr. Gonzales from entering Legion Iron’s gym (Counterclaim ¶ 47); and that there “was no

probable cause or reasonable basis for Mr. Otero to initiate judicial proceedings against

Mr. Gonzales…,” (id. ¶ 63), but those are not well-pled facts. They are conclusory statements, and,

even if they were facts accepted as true, they fail to establish a lack of probable cause in the

filing of the claim. Moreover, in the same pleading, Defendant Gonzales alleges that:

• Around 2013, Mr. Gonzales and Mr. Otero were social acquaintances who
decided to go into business together. Id. ¶2.

• The parties created two separate entities, “Massthetics, LLC, and Legion
Iron, LLC.” Id. ¶ 3.

• In 2018, the parties started the process of locating investors and a facility
for the Legion Iron gym. Id. ¶ 6.

• On July 6, 2018, Mr. Otero agreed to be removed as a member of Legion

Iron by signing the purported “Amendment.” See id. ¶¶ 25-29.

• There is a legitimate dispute between the parties under the “Amendment.”

See Counterclaim ¶ 87 (“One of the clarifications necessary from this Court
is that the Amendment referenced herein is valid and enforceable and
extinguishes any purported rights or ownership interest that Mr. Otero
claims to have in Legion Iron.”).

How Defendant Gonzales can, in good-faith, claim that Mr. Otero has maliciously abused

the legal process by instituting this lawsuit against him when Defendant Gonzales’ own request

for a declaratory judgment establishes that judicial intervention in the parties’ dispute is necessary

and desired, by both parties, beggars belief. His Counterclaim should be dismissed.

B. No Facts Were Alleged to Support the Claim of “Improprieties” and the

Improprieties Cannot Substantiate a Finding of Improper Purpose Any Way.

Defendant Gonzales does not allege that the filing of this “claim” was done for an improper

purpose. Rather, he merely alleges that: “irregularities or improprieties in the prosecution of

[Mr. Otero’s] claim suggest that the claim was filed for an improper purpose such as extortion,

delay, or harassment. Counterclaim ¶ 63 (emphasis added).

Simply stated, the prosecution or alleged “irregularities” in this case have nothing to do

with the purpose of the filing of the lawsuit against Defendant Gonzales in the first place.

Defendant Gonzales’ inartful pleading attempts to turn New Mexico law on its head. See DeVaney

v. Thriftway Mktg. Corp., 1998-NMSC-001, ¶ 20 124 N.M. 512 (the filing of a proper complaint

with probable cause, and without any overt misuse of process, will not subject a litigant to

liability for malicious abuse of process, even if it is the result of a malicious motive.”).


[T]here is no abuse of process when [an] action is filed to intimidate

and embarrass the defendant knowing there is no entitlement to recover
the full amount of damages sought." Lyons v. Midwest Glazing, LLC,
235 F.Supp. 2d 1030, 1043 (N.D. Iowa 2002) (quoted with approval in Hatch
[v. Davis}, 102 P.3d 774, 2004 UT App 378, ¶ 35); see also W. Keeton, Prosser
and Keeton on Torts, § 121 at 897 (5th ed. 1984) (explaining that "even a pure
spite motive is not sufficient [to state a claim for abuse of process] where
process is used only to accomplish the result for which it was created").
Likewise, complicating the course of litigation and increasing the costs of
defense do not qualify as a collateral advantage or ulterior purpose for the claim
of abuse of process.

*** ***

Footnote No. 3: In so ruling, we do not condone improper litigation tactics. We

merely acknowledge that such actions, alone, do not rise to the level of abuse
of process. Other means, such as Rule 11 or discovery sanctions, are available
to address such misbehavior.

Puttuck v. Gendron, 2008 UT App 362, ¶16, 199 P.3d 971 (Utah App. 2008).

The position of the Utah courts is precisely the same as that taken by our courts. In

DeVaney, the Supreme Court concluded: “it is insufficient that the malicious-abuse-of-

process defendant acted with ill will or spite.” 1998-NMSC-001, ¶ 29. Instead, “[t]here must

be a purpose to accomplish an illegitimate end.” Id.

Defendant Gonzales’ allegations in support of his “malicious abuse of process claim”

illustrate the line that must be drawn between actionable conduct and one’s right to access the

courts. See Saenz v. Morris, 1987-NMCA-134, ¶ 6 (quoting Kisella v. Dunn, 58 N.M. 695, 700,

275 P.2d 181, 184 (1954) (“[W]ith all of the rules of liberality prevailing in favor of a pleader,

[t]he pleading still must state a cause of action in the sense that it must show that the pleader is

entitled to relief.” Further, “[i]t is not enough to indicate merely that the plaintiff has a grievance,

but sufficient detail must be given so that the defendant, and the court, can obtain a fair idea of

what the plaintiff is complaining, and can see that there is some legal basis for recovery.”) (internal

citations omitted). See also DeVaney, 1998-NMSC-001, ¶ l9 (stating that “[m]eaningful access to

the courts is a right of fundamental importance in our system of justice[,]” and because this cause

of action has a potential chilling effect on that right of access, “the tort of malicious abuse of

process is disfavored in the law.”).

The second element requires a showing the primary motive for the suit was to

accomplish an illegitimate end. The Supreme Court has been careful to note that ill will or

spite is not a sufficient basis to establish this third element. DeVaney, 1998-NMSC-001, ¶ 29

(citing W. Page Keaton et al., §121 at 897) (“Even a pure spite motive is not sufficient where

process is used only to accomplish the result for which it was created.”)). Moreover,

“Malice...may be inferred by the jury from the want of probable cause. But the want of

probable cause cannot be inferred from any degree of even expressed malice...” DeVaney, ¶ 3.

There are no factual allegations of an improper motive, only conclusory statements;

and the filing of Defendant Gonzales’ declaratory judgment establishes there is a proper

purpose and motive for the initial lawsuit.

II. Claims of Fraud or Misrepresentation are Not Actionable.

A fraudulent misrepresentation claim requires that the injured party show that the other

party (1) made a misrepresentation of fact intentionally or with reckless disregard for the truth,

(2) with the intent to deceive and to induce the injured party to act upon it, (3) and upon which the

injured party actually and detrimentally relies. Saylor v. Valles, 2003-NMCA-037, 133 N.M. 432.

A complaint alleging fraud must “set forth the time, place and contents of the false

representation, the identity of the party making the false statements and the consequences thereof.”

Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246, 1252 (10th Cir.1997). Although the Court

of Appeals of New Mexico has recognized that “a pleading of fraud is sufficient if the facts alleged

are facts from which fraud will necessarily be implied,” the allegations still “should leave no doubt

in defendants’ mind as to the claim asserted.” Delgado v. Costello, 91 N.M. 732, 734, 580 P.2d

500, 502 (Ct. App. 1971).

Further, the purpose of the pleading requirement is to protect “defendants’ reputations from

the harm attendant to accusations of fraud,” to provide “defendants notice of the allegedly

fraudulent conduct” to formulate a defense, and to prevent “plaintiff’s from tagging on specious

fraud claims to their pleadings to induce advantageous settlements.” S2 Automation LLC v. Micron

Tech., Inc., No. CIV 11-0884 JB/WDS, 281 F.R.D. 487, 494 (D.N.M. Mar. 5, 2012).

Count II, though titled “negligent misrepresentation,” contain no mention of negligent

representations and sounds more in fraud (see, e.g., Counterclaim ¶ 67-71); and Defendant

Gonzales’ Affirmative Defense No. 5 alleges that Plaintiffs’ claims “are barred…by the doctrine[]

of…fraud.” Id. at 3. Defendant Gonzales is making allegations of fraudulent conduct at the

expense of Mr. Otero’s reputation and does not aver the grounds of the fraudulent behavior to give

Mr. Otero a chance to defend himself against such harmful claims. Defendant Gonzales does not

even allege when the fraudulent conduct was discovered.

In addition to the failure to identify the statement made that was allegedly false, the

Counterclaim does not set forth any facts in which fraud can be necessarily implied. While the

Counterclaim briefly sets forth facts about discussions between the two parties, it cannot be

determined what, if any, statement Mr. Otero made that was false at the time or turned out to be

false at a later time. Thus, contrary to the rule, the allegations leave a substantial amount of doubt

in the Mr. Otero’s mind as to the claim of fraud and misrepresentation.

The well-pleaded facts also fail to set forth the time and place that the alleged false

representation was made. Under Rule 1-009(F) such averments are material. Because courts are

limited to the four corners of the complaint and because a plaintiff may not overcome the pleading

deficiency by relying on arguments extending beyond the allegations of the complaint, it cannot

be determined when and where the false statement was made. See Bronstein v. Biava, 1992-

NMSC-053, ¶ 7 (rejecting purported fraud claim under Rule 9B where party sought to state

allegations in summary judgment papers rather than in the pleading itself); Saylor, 2003-NMCA-

037, ¶ 22 (rejecting fraud claim under Rule 9B for failing to plead the required element of reliance).

In addition, the Counterclaim does not identify the factual predicate upon which any

misrepresentation claims are grounded. See Counterclaim, generally. Courts have consistently

held that the failure to meet these minimum requirements for pleading warrants dismissal.

See Electro-Jet Tool Mfg. Co. v. City of Albuquerque, 1992-NMSC-060, 114 N.M. 676 (“we

believe that some allegation of the factual predicate for [Plaintiffs] [] claim should have been

provided in the complaint”); Credit Inst., 2003-NMCA-010, 133 N.M. 248 (“we believe that at

least some factual predicate for unjust enrichment must be set forth in the complaint to give Buyer

fair notice of the claim”); Yumukoglu v. Provident Life & Acc. Ins. Co., 131 F. Supp. 2d 1215,

1228 (D.N.M. 2001) (“At the very least, [Plaintiff] has failed to comply with the pleading

requirements of Federal Rule of Civil Procedure 8(a)(2). Rule 8(a)(2) requires that a civil

complaint set forth “a short and plain statement of the claim showing that the pleader is entitled to

relief.” Here, it is not clear either what [Plaintiff] is claiming or to what relief he is entitled….”).

Defendant Gonzales is merely leveling conclusory allegations and providing insufficient

information surrounding Mr. Otero’s alleged false representations. The claim should be dismissed.

III. Defendant Gonzales is Not Entitled to Injunctive Relief.

Count V of the Counterclaim is titled “Declaratory and injunctive relief.”

See Counterclaim at 11.1 Within it, Defendant Gonzales alleges Mr. Otero has interfered with

business operations (id. ¶ 88-90) and asks for an injunction (id. 91), but nowhere in his

Counterclaim does he allege or even intimate that the damage purportedly caused by Mr. Otero is

irreparable. See Counterclaim, generally. In fact, he alleges the opposite. He claims Mr. Otero

has not returned a cash box to him (Counterclaim ¶ 55); and that “Mr. Otero’s actions have caused

Mr. Gonzales to incur substantial damages for which he is entitled…” Id. ¶ 60.

“Injunctions are harsh and drastic remedies which should issue only...where there is a

showing of irreparable injury for which there is no adequate and complete remedy at law.”

State ex rel. State Highway & Transp. Dep't of N.M. v. City of Sunland Park, 2000-NMCA-044,

129 N.M. 151 (citations omitted).

“The phrases “irreparable injury” and “no adequate and complete remedy at law” tend to

overlap.” Id. “An injury that is irreparable is without adequate remedy at law.” Id. To be

“irreparable,” an injury must be “actual and substantial, or an affirmative prospect thereof, and not

a mere possibility of harm.” City of Sunland Park, 2000-NMCA-044, ¶ 19 (citations omitted).

An injury is not irreparable under New Mexico law if there is an adequate remedy at law.

Id. Accordingly, any request for injunctive relief should be dismissed. See Cooper v. Chevron

U.S.A., Inc., 2002–NMSC–020, ¶ 9, 132 N.M. 382, 49 P.3d 61 (concluding that reference to

1Plaintiffs agree that the Court should declare the rights and obligations of the Parties, which is why Defendant
Gonzales’ “malicious abuse of process” claim should be dismissed as meritless.

injunctive relief in the conclusion of the complaint was not enough to determine that the complaint

involved an actual claim for injunctive relief); Valdez v. Metro. Prop. & Cas. Ins. Co., No. CIV

11-0507 JB/KBM, 2012 WL 1132414, at *27 (D.N.M. Mar. 31, 2012) (dismissing Plaintiffs’ UPA

claims for injunctive relief for failure to plead irreparable harm without an adequate remedy).

IV. There is No Such Claim as Embezzlement.

Defendant Gonzales seems to assert a violation of NMSA 1978, § 30–16–8

(embezzlement) as a civil cause of action. There is no case law in New Mexico that recognizes

embezzlement as a civil claim. Defendant Gonzales’ “embezzlement” claim is without merit, and

it should be dismissed. See Saenz, 1987-NMCA-134, ¶ 6 (a complaint can be dismissed on a

motion if it is “without any merit, and the want of merit may consist of an absence of law to support

a claim of the sort made, or of facts sufficient to make a good claim.”).

V. Punitive Damages is Not an Independent Claim.

Punitive damages are a remedy, and do not constitute a claim against Mr. Otero.

See Mason v. Texaco, Inc., 948 F.2d 1546, 1554 (10th Cir. 1991) (holding punitive damage claim

is not independent cause of action but part and parcel of a liability determination); Sussex Drug

Products v. Kanasco, Ltd., 920 F.2d 1150, 1155 (3d Cir. 1990) (count seeking punitive damages,

based upon same transaction or set of transactions, is not a separate claim). If any Counterclaim

survives and can be proved by Defendant, any damages he can prove will be governed by the facts

and law. Asserted apart from any conduct or substantive claim, no claim for punitive damages

exists, and this count should be dismissed. Butt v. Wright Medical Technology, Inc.,

No. 14-CV-3208-WJM-MEH, 2015 WL 4162576, at *2 (D. Colo. 2015) (dismissing claim for

punitive damages because punitive damages is not an independent cause of action).


WHEREFORE, for the reasons set forth above, Mr. Otero respectfully requests that the

Court dismiss Defendant Gonzales’ Counterclaims against Mr. Otero as set forth above, and for

such other and further relief as the Court deems appropriate.

Respectfully submitted,


By: /s/ Jonathan A. Garcia

Jonathan A. Garcia
P.O. Box 94898
Albuquerque, NM 87199
Tel: (505) 297-1222
Fax: (505) 318-1721

I HEREBY CERTIFY that on the 28thth day

of December 2018, a copy of the foregoing
pleading was filed and served upon all
service contacts on the Court’s e-filing

/s/ Jonathan A. Garcia

Jonathan A. Garcia