B & W Construction Co. v. N.C. Ribble Co.

734 P.2d 226, 105 N.M. 448
CourtNew Mexico Supreme Court
DecidedMarch 5, 1987
Docket16066
StatusPublished
Cited by13 cases

This text of 734 P.2d 226 (B & W Construction Co. v. N.C. Ribble Co.) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
B & W Construction Co. v. N.C. Ribble Co., 734 P.2d 226, 105 N.M. 448 (N.M. 1987).

Opinions

OPINION

SOSA, Senior Justice.

This appeal arises out of a dispute over the rental of rock crushing machinery for highway construction. The jury found in favor of defendant N.C. Ribble Company (NCR) against B & W Construction Company (B & W) on the basic contract questions, but against NCR's effort to enforce a personal guarantee allegedly executed by plaintiffs-counterdefendants, Robert Bowers (Bowers) and Donald Paul Wood (Wood). NCR contends that three errors of the trial court led to the verdict in favor of Bowers and Wood. We affirm the trial court.

NCR raises three issues:

I. Whether the trial court erred in submitting the question of economic duress to the jury;
II. Whether the trial court erred in admitting the testimony of a polygrapher; and
III. Whether the trial court erred in refusing to give an instruction requested by NCR and a clarification when asked by the jury.

BACKGROUND

The facts pertinent to this appeal are that B & W is a corporation, owned by Bowers and Woods, which subcontracted with a general contractor, Herzog Contracting Corporation (Herzog), to crush rock for construction of a highway near Alamogordo. B & W rented the necessary equipment from NCR and began working on September, 1981. On previous jobs, the parties had entered into lease agreements which provided that rental payments could contribute to the purchase price of the equipment. Apparently B & W anticipated a similar deal on the rock crushers at issue here.

From the outset, however, the agreement foundered. B & W failed to tender installment payments, while some of the machinery did not perform as promised. By January 7, 1982, B & W was approximately $700,000 in arrears on its lease, maintenance and parts payments. On that date the president of NCR, Norman Ribble (Ribble), notified B & W that NCR would exercise its lien rights and shut the job down unless other arrangements could be made to secure the present and future indebtedness. At this time Herzog, too, became impatient with the performance of B & W and threatened to terminate the subcontract. It appeared that the impasse could best be avoided by keeping B & W on the job so as to assure payment by Herzog, provided that such payment would ultimately come to NCR.

Ribble went to the offices of B & W on the morning of January 20, 1982 to present a proposal that the leasing would continue only if Bowers and Wood executed a personal guaranty covering the indebtedness. Bowers refused.1 Ribble returned in the afternoon, but the testimony differs as to the agreement arrived at orally. Bowers maintains that he suggested instead that he would guarantee B & W’s payment to NCR only after Herzog had paid B & W and after the bank’s first assignment had been satisfied. Bowers also insisted on a provision to cover refinancing on a purchase rather than a lease basis. Ribble’s attorney had drafted a document, which Wood’s secretary retyped supposedly to incorporate Bowers’ suggestions. Wood signed one page and Bowers the other. Bowers’ secretary notarized the signatures the next morning.

B & W kept the equipment and finished the job, but never paid NCR. Instead B & W filed this suit, alleging numerous deficiencies in NCR’s performance of the rental contract. NCR counterclaimed against B & W for the amount owed, and against Bowers and Wood personally on the guaranty they had signed.

At trial, Bowers and Wood claimed that they had not signed the guaranty, or, if they had, it was as a result of economic duress and coercion. The jury found for NCR and against B & W on the debts, but in favor of Bowers and Wood individually. On appeal, NCR argues that the trial court should have directed a verdict for NCR on the personal guaranty. We address each component of the argument raised by NCR.

I. Economic Duress

The jury instruction stating the case indicated that Bowers and Wood denied liability on the personal guaranty because:

(1) It was obtained under economic coercion or duress; or
(2) It was forged or altered from the document that they signed.

It cannot now be determined upon which ground the jury based its verdict. NCR maintains that reversal is required if it would be improper to base a verdict on one of the alternative theories, citing Perfetti v. McGhan Medical, 99 N.M. 645, 662 P.2d 646 (Ct.App.), cert. denied, 99 N.M. 644, 662 P.2d 645 (1983).

NCR contends that the trial court erred in submitting this issue to the jury instead of directing a verdict in NCR’s favor, arguing that there is no basis in law for giving the instruction on economic duress because economic duress cannot result from the exercise of a legal right. Terrel v. Duke City Lumber Co., 86 N.M. 405, 524 P.2d 1021 (Ct.App.1974), aff'd in part, rev’d in part, 88 N.M. 299, 540 P.2d 229 (1975). There is no question that NCR had the legal right to request security for the indebtedness.

Bowers and Wood counter this authority with the contention that NCR’s legal rights extended only to B & W as a corporation and not to themselves as individuals. In First National Bank v. Wood, 93 N.M. 467, 601 P.2d 437 (Ct.App.1979), the court did find economic duress where the bank refused to continue defendant’s line of credit unless he signed a guaranty on the separate account of his son.

NCR responds that it had the right to repossess the equipment or impose a lien on the job, both of which options it abandoned as consideration for Bowers and Wood executing the personal guaranty. Thus it would distinguish the facts of this case from those in First National Bank v. Wood, where the lending party gave up nothing as it insisted on an additional promise from the borrower. We point out, however, that the holding in Wood rests on the principle that duress can be found if the party in the superior bargaining position uses its power to deny the weaker party a reasonable choice of alternatives. Id. at 469, 601 P.2d at 439.

In the case at bar, NCR was the party possessing superior power. Bowers’ theory throughout was that he never intended to sign any guaranty of B & W’s indebtedness without a provision that Herzog would first have to pay B & W. A factual question was thus raised by the evidence as to whether NCR’s actions were coercive or not. NCR does not challenge the instructions given to the jury on the elements of economic duress. These properly stated that duress cannot result from the exercise of a legal right, as well as that proof of duress must be made by clear and convincing evidence.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Lucarell v. Nationwide Mut. Ins. Co. (Slip Opinion)
2018 Ohio 15 (Ohio Supreme Court, 2018)
De-Grimaldi v. Eaton
New Mexico Court of Appeals, 2017
State v. Cordova
1999 NMCA 144 (New Mexico Court of Appeals, 1999)
State v. Aragon
861 P.2d 972 (New Mexico Court of Appeals, 1993)
F.D.I.C. v. Blankinship
986 F.2d 1427 (Tenth Circuit, 1992)
Sunwest Bank of Clovis, N.A. v. Garrett
823 P.2d 912 (New Mexico Supreme Court, 1992)
FIRST NAT. BANK IN ALBUQUERQUE v. Sanchez
815 P.2d 613 (New Mexico Supreme Court, 1991)
Baum v. Orosco
742 P.2d 1 (New Mexico Court of Appeals, 1987)
Western Bank v. Aqua Leisure, Ltd.
737 P.2d 537 (New Mexico Supreme Court, 1987)
B & W Construction Co. v. N.C. Ribble Co.
734 P.2d 226 (New Mexico Supreme Court, 1987)

Cite This Page — Counsel Stack

Bluebook (online)
734 P.2d 226, 105 N.M. 448, Counsel Stack Legal Research, https://law.counselstack.com/opinion/b-w-construction-co-v-nc-ribble-co-nm-1987.