Bellet v. Grynberg

845 P.2d 784, 114 N.M. 690
CourtNew Mexico Supreme Court
DecidedNovember 16, 1992
Docket20374
StatusPublished
Cited by14 cases

This text of 845 P.2d 784 (Bellet v. Grynberg) 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
Bellet v. Grynberg, 845 P.2d 784, 114 N.M. 690 (N.M. 1992).

Opinion

OPINION

FROST, Justice.

On August 15, 1991, the trial court ordered the Appellee working interest owners, Marilyn Bellet, Ruth Levanthal, Audrey Merves, and the estate of Victor Roberts, to pay the oil well operator Jack Grynberg, Appellant, their proportionate shares of the oil well operation costs from November 1982 through December 1985. The trial court denied Grynberg’s request for prejudgment interest, however, and further concluded that the Appellees were not responsible for operation costs after January 1986. Grynberg appeals and challenges these findings and conclusions by the trial court. We reverse the trial court’s decision on the issue of prejudgment interest and remand to the trial court so that it may include the interest at the statutory rate. We affirm the trial court’s decision denying operation costs as personal obligations of the Appellees after January 1986.

I.

By 1974, Grynberg was operating the six Eagle Creek oil wells GR-1 through GR-6 in Eddy County, New Mexico that are at the center of this dispute. From 1974 through November 1982, Navajo Crude Oil Purchasing Company (Navajo) purchased all of the oil from the six wells and made regular payments directly to the working interest owners. In 1977, Grynberg filed a claim against the Appellees alleging they had not paid their share of the operating costs from 1975 through 1982. In 1983, in a prior case numbered CV-77-377, the trial court ordered the Appellees to pay their shares of the operating costs and “continue to pay such operating costs and the operator’s fee that has been charged by the Plaintiff in the past for operation in the future until such time as the parties enter into an operating agreement covering the said wells.”

Contrary to the expectations of the trial court, the parties never signed an operating agreement, and contrary to the order of the trial court, the Appellees did not pay their share of the operating costs accrued after November 1982. In September 1985, the Appellees brought suit to obtain from Grynberg an accounting of operating costs on the six oil wells that they alleged were operating at a loss. Grynberg counterclaimed to recover the operating expenses unpaid since November 1982. Grynberg now attacks specific findings and conclusions made by the trial court on August 15, 1991.

II.

First, Grynberg attacks the findings and conclusions on the prejudgment interest issue. The trial court found that Grynberg “intended to collect interest at the rate of 15% compounded monthly, which is in excess of the statutory rate of 15% simple interest allowed in cases where interest is not specified by written contract.” The trial court concluded that the judgment “shall not bear pre-judgment interest by reason of Defendant Grynberg’s attempt to impose and collect interest in excess of the rate allowed by law.”

The trial court’s finding, without so saying, is based on the affirmative defense of usury. See generally Maulsby v. Magnuson, 107 N.M. 223, 224, 755 P.2d 67, 68 (1988) (defendants properly raised the affirmative defense of usury). The Appellees did not include the defense of usury in their pleadings. Apparently, the trial court considered the issue of usury to have been tried with Grynberg’s implied consent and deemed the pleadings amended in accordance with SCRA 1986, 1-015(B) (Repl.Pamp.1992) to reflect that perception. Grynberg contends that this amendment was an abuse of discretion. We agree.

“Amendments are within the trial court’s discretion and will be reversed on appeal only for abuse of discretion.” Schmitz v. Smentowski, 109 N.M. 386, 390, 785 P.2d 726, 730 (1990). Finding an abuse of discretion is appropriate when the opposing party has been prejudiced by the amendment. Laurie R. v. New Mexico Human Servs. Dep’t, 107 N.M. 529, 533, 760 P.2d 1295, 1299 (Ct.App.1988). Prejudice occurred if the party did not have a fair opportunity to defend the theory or could have offered additional evidence on the new theory. Schmitz, 109 N.M. at 391, 785 P.2d at 731.

“The theory of pleadings is to give the parties fair notice of the claims and defenses against them, and the grounds upon which they are based.” Id. at 389, 785 P.2d at 729. Even if a theory was not pleaded, if it was tried by implied consent it indicates that the party was aware of the unpleaded theory being alleged and had the opportunity to defend against it, thereby preventing a finding of prejudice. However, implied consent to a theory is not indicated when unobjected-to-evidence is relevant to other pleaded theories. Id. at 390, 785 P.2d at 730.

While Grynberg did testify that he intended to charge 15% interest compounded monthly, this miscalculation did not per se indicate usury. The seminal case on the issue in New Mexico mandates that a specific intent to violate the usury law must be shown to prevail on that defense. Maulsby, 107 N.M. at 225, 755 P.2d at 69. The word “usury” did not come up during the trial and the testimony cited by the Appellees as dealing with usury was, when considered in context, addressed to the issue of determining the proper amount of prejudgment interest. For this reason, usury was not tried with Grynberg’s implied consent.

Furthermore, we believe Grynberg could have defended the usury theory had he known it to be an issue. For example, he could have introduced evidence indicating his lack of intent to violate the usury law. By the time the Appellees raised the defense of usury in their requested findings of fact and conclusions of law, Grynberg to his prejudice was precluded from introducing this additional evidence.

The Appellees note that even had Grynberg objected, the issue of usury could have been argued, “if ‘the presentation of the merits of the action would have been subserved thereby.’ ” George M. Morris Constr. Co. v. Four Seasons Motor Inn, Inc., 90 N.M. 654, 658, 567 P.2d 965, 969 (1977) (quoting an earlier version of Rule 1-015(B)). This is true only if no prejudice would result from the amendment. If prejudice would result, then allowing the unpleaded theory to be argued, and granting an amendment, would be an abuse of discretion. Here, Grynberg did not even have the opportunity to object because he was unaware that the defense of usury was at issue.

Because the affirmative defense of usury was not properly pleaded and because the resulting prejudice should have prevented the trial court from deeming those pleadings amended, the issue of usury was waived. “[I]t is well settled that an affirmative defense not pleaded or otherwise properly raised is waived” and may not be considered on appeal. Xorbox v. Naturita Supply Co., 101 N.M. 337, 339, 681 P.2d 1114, 1116 (1984).

Thus, we must resolve the issue of prejudgment interest without considering the defense of usury. In Ranch World of New Mexico, Inc. v. Berry Land & Cattle Co., 110 N.M.

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Bluebook (online)
845 P.2d 784, 114 N.M. 690, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bellet-v-grynberg-nm-1992.