Cheesecake Factory, Inc. v. Baines

1998 NMCA 120, 964 P.2d 183, 125 N.M. 622
CourtNew Mexico Court of Appeals
DecidedJuly 22, 1998
Docket18122
StatusPublished
Cited by8 cases

This text of 1998 NMCA 120 (Cheesecake Factory, Inc. v. Baines) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cheesecake Factory, Inc. v. Baines, 1998 NMCA 120, 964 P.2d 183, 125 N.M. 622 (N.M. Ct. App. 1998).

Opinion

OPINION

HARTZ, Chief Judge.

{1} John R. Baines appeals a judgment entered against him in favor of Cheesecake Factory, Inc. The claim against Baines arose out of deliveries of goods to Triples American Grill, an Albuquerque sports bar and restaurant owned by Triple Threat, Inc. Cheesecake Factory contended that it did not know that the business was owned by a corporation and that it extended credit because it believed that the business was owned by a partnership that included Baines as a member. Applying the New Mexico statute on partnership by estoppel, the district court entered judgment against Baines. Baines paid the judgment and appealed. We affirm.

I. WAIVER OF RIGHT TO APPEAL

{2} First, we address a procedural issue. Cheesecake Factory contends that Baines waived his right to appeal by paying the judgment, because such payment constituted acquiescence in the judgment. As movant on the issue, Cheesecake Factory has the burden of proving waiver. See In re T.B., 121 N.M. 465, 467, 913 P.2d 272, 274 (Ct.App.1996). It relies on a footnote in Richardson v. Rutherford, 109 N.M. 495, 787 P.2d 414 (1990), which states as follows:

[W]e note that in some instances, but by no means in all instances, satisfaction of the judgment by an appellant may operate to cut off that party’s right of appeal. The majority rule appears to be that voluntary satisfaction of judgment renders an appeal moot.... In Culp v. Sandoval, 22 N.M. 71, 159 P. 956 (1916), this Court held that satisfaction of a judgment subsequent to posting of a supersedeas bond by appellant showed that appellant had acquiesced in the judgment and thus precluded the appeal. We concluded that since the filing of the supersedeas bond effectively removed the possibility of any legal compulsion on the appellant to satisfy the judgment pending appeal, the appellant’s subsequent satisfaction of the judgment was voluntary. Culp, 22 N.M. at 83, 159 P. at 960-61. We reaffirm our holding in Culp that certain circumstances exist in which an appellant’s satisfaction of the judgment demonstrates an acquiescence in that judgment that is inconsistent with the right of appeal. Additionally, equities may intervene after satisfaction of the judgment, militating against the maintenance of an appeal. However, absent proper presentation of this issue by the parties, we decline to address this point further.

Id. at 498 n. 2, 787 P.2d at 417 n. 2.

{3} We reject the contention of Cheesecake Factory. Culp is distinguishable because Baines did not file a supersedeas bond. As pointed out in the Richardson footnote, the court in Culp found a voluntary acquiescence in the judgment — and thus a waiver of the right to appeal — because the appellant paid the full amount of the judgment even though its supersedeas bond precluded the appellee from executing on the judgment. The language of Culp makes clear that absent the bond, the appellant’s payment would not have been considered voluntary, so there would have been no waiver of the right to appeal. Our Supreme Court wrote:

We believe, from an examination of the authorities, that the correct determination of the question depends upon whether the payment of the judgment is under legal compulsion; that is, assuming that payment is made prior to the issuance of execution, that such payment is regarded as having been compulsory by reason of the right existing in the judgment creditor to have issued execution and to have enforced payment at the time payment is made____
The reason for the majority rule which recognizes the right of appeal, even though the judgment be paid without execution, is that, the judgment debtor having the power to coerce payment, the payment by the judgment creditor without execution is not a voluntary acquiescence in, or recognition of, the judgment.

Culp, 22 N.M. at 83, 159 P. at 960. Although this language could be characterized as dictum, we are content to follow it. Involuntary payment of a judgment does not foreclose the payor’s right to appeal, and payment to avoid execution on a judgment is involuntary. We add only a few words regarding involuntariness and the policy behind the Culp rule.

{4} No New Mexico statute or court rule requires a judgment debtor to file a supersedeas bond as a condition to appealing the judgment. Cf. Rule 1-062 NMRA 1998 (stay of proceedings to enforce a judgment). When there is no such bond, however, the judgment creditor can proceed to execute on the judgment. Thus, the judgment debtor/appellant faces three options: filing a supersedeas bond, risking execution on the judgment, or paying the judgment. The most attractive one may be payment of the judgment. Such payment eliminates (a) the cost of a bond, (b) the possibility of paying interest on the judgment at a rate above that at which the appellant could borrow money to pay the judgment, and (c) a judgment lien on the appellant’s property. But the fact that payment of the judgment may be the option most attractive to the appellant does not make that option a voluntary one. All three options result from the compulsion of the judgment entered against the appellant. Thus, in our view, payment of the judgment debt when no supersedeas bond has been filed is ordinarily an involuntary payment. (We note, however, that a payment may be voluntary if it is the result of a settlement agreement between the parties. See Franzen v. Dubinok, 290 Md. 65, 427 A.2d 1002, 1005-06 (1981).)

{5} This result would seem to us to be sound public policy. We should refrain from embracing a rule that would discourage payment of a judgment debt pending appeal. For one thing, such payment would eliminate economic pressure that could force an appellee to compromise a strong case on appeal.

{6} Nor do we perceive any purpose to be served by denying the right to appeal. Contrast the situation in which the judgment debtor has paid the judgment voluntarily. One reason to deny such a judgment debtor the right to appeal is that the appeal would serve no purpose. Even if the judgment debtor prevailed on appeal, the court could not compel the judgment creditor to return the payment. This follows from the general rule that one who makes a voluntary payment to another has no right to restitution. See Restatement of Restitution § 112 (1937). Thus, if a judgment debtor voluntarily paid the judgment, appealed the judgment, and obtained a reversal, it would have no cause of action in restitution to reclaim the money paid to the judgment creditor, and the appeal would accomplish nothing except wasting time and money. See Franzen, 427 A.2d at 1006, 1007-08; cf. Turner v. Mountain Eng’g and Constr., Inc., 276 Mont. 55, 915 P.2d 799, 802-05 (1996) (discussing waiver of right to appeal and mootness arising from unavailability of a remedy despite a successful appeal). When the payment of the judgment debt is involuntary, however, a judgment debtor who prevails on appeal has a right to restitution of any excess amount paid. See Culp, 22 N.M.

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1998 NMCA 120, 964 P.2d 183, 125 N.M. 622, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cheesecake-factory-inc-v-baines-nmctapp-1998.