FIRST NAT. BANK IN ALBUQUERQUE v. Sanchez

815 P.2d 613, 112 N.M. 317
CourtNew Mexico Supreme Court
DecidedJuly 9, 1991
Docket18236
StatusPublished
Cited by44 cases

This text of 815 P.2d 613 (FIRST NAT. BANK IN ALBUQUERQUE v. Sanchez) 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
FIRST NAT. BANK IN ALBUQUERQUE v. Sanchez, 815 P.2d 613, 112 N.M. 317 (N.M. 1991).

Opinion

OPINION

RANSOM, Justice.

The First National Bank in Albuquerque appeals from a judgment awarding damages to counterclaimants in the bank’s action to collect a promissory note. The bank’s collection action had been resolved by a stipulated judgment in its favor for the principal balance owing on the promissory note ($342,080), plus interest, and foreclosure on undeveloped lots securing the debt. First National waived any deficiency judgment. Pat and Susan Sanchez (together Sanchez) and Anthony Tafoya were adjudged jointly and severally liable under the stipulated judgment. Sanchez, doing business as P-S Construction Company, then pursued to judgment a counterclaim against First National. Sanchez and Tafoya were the principals in P-S Construction Company, a partnership.

Tafoya dismissed with prejudice his own counterclaim against First National, 1 but he has filed an amicus brief in support of the cross-appeal taken by Sanchez from a judgment n.o.v. in favor of Sanchez on the latter’s counterclaim. By that judgment n.o.v. the trial court reduced the compensatory damages ($1,053,000) by one-half because the court determined that the award was to the partnership and that Tafoya, an equal (50%) partner, had dismissed with prejudice his claim representing a one-half interest in the judgment. Punitive damages of $125,243 also were awarded on the counterclaim, but the award of punitive damages was not reduced by the trial court. Tafoya claims and intends to pursue an interest in the award to the partnership. 2

The counterclaim was founded upon First National’s withholding of $125,243 from a total of $400,000 loaned under the promissory note. The $274,757 in proceeds paid out under the note were disbursed to Sanchez and Tafoya for real estate development purposes in connection with sixty-one undeveloped residential lots. 3 When the partners sought the remaining $125,243 needed to complete the development, First National demanded additional financial information as might be required under an “acquisition and development” loan. The partners never complied with the bank’s demand. The $125,243 was not forthcoming, and the partnership could not complete the project.

Having been joined in this suit by the bank to collect the promissory note, Sanchez and Tafoya made separate counterclaims for damages under theories of breach of contract and negligent misrepresentation. An additional counterclaim by Sanchez asserted that First National had intentionally interfered with Sanchez’ business expectancy. At trial this claim went to the jury under a theory of economic duress or compulsion.

First National appeals on the following grounds: (1) lack of substantial evidence on duress; (2) error in the presentation of damages to the jury; (3) error in allowing a witness qualified as an expert in banking law to testify that because the loan was not in fact an “acquisition and development” loan First National had “no legal right” to withhold the $125,243; (4) the compensatory award was excessive as a matter of law; and (5) lack of substantial evidence to support an award of punitive damages. We address only issues (1) and (2), and we hold that a new trial is required due to inadequate proof of damages upon which the jury was instructed. We also comment on issue (3). Because we remand for a new trial, issue (4) is moot. Issue (5) was not preserved for appeal, but is nonetheless rendered moot. Additionally, in a cross-appeal Sanchez argues that the trial court erred in reducing the compensatory damage award by one-half. We address this issue because it raises important questions of partnership law likely to be present on remand.

Whether the issue of sufficiency of evidence to show economic duress was preserved for review. Sanchez asserts First National did not preserve the issue of sufficiency of evidence to show economic duress because it failed to make a motion for a directed verdict on this point. We note that since the adoption of the Federal Rules of Civil Procedure, federal courts uniformly have held that, with certain narrow exceptions, the sufficiency of the evidence to support a jury verdict is not reviewable on appeal in the absence of a motion for directed verdict at the close of all the evidence. 5A J. Moore & J. Lucas, Moore’s Federal Practice ¶ 50.05[1] (2d ed. 1991). 4 The New Mexico Rules of Civil Procedure are modeled after the federal rules, and our own decisions regarding the necessity for making a motion for directed verdict have been consistent with federal practice. E.g., Nally v. Texas-Arizona Motor Freight, Inc., 69 N.M. 491, 368 P.2d 806 (1962); P.V. v. L.W., 93 N.M. 577, 603 P.2d 316 (Ct.App.1980); see also SCRA 1986, l-r050 (New Mexico counterpart to Fed.R.Civ.P. 50).

In this case, First National did not move for a directed verdict on the claim of duress. It appears from the transcript of the proceedings that, while at the close of all the evidence the bank was prepared to move for a directed verdict of some sort, the court stopped counsel for the bank from making the motion, dismissed the jury from the courtroom, and then retired with counsel to the judge’s chambers to confer on jury instructions. The next day, in chambers, the court allowed counsel to make their objections to the instructions that were to be given, and First National objected to the instruction on duress on the grounds that no evidence had been introduced to support such a finding. We think this objection was sufficient to preserve for review the question of the legal sufficiency of the evidence on duress and to keep open the possibility of reversal and grant of a new trial in the event submission of the claim to the jury was in error.

Our earlier case law suggests that, in raising the question of the sufficiency of the evidence, the attention of the trial court must be called to the fact that it is committing error in allowing a claim to go to the jury. See Blacklock v. Fox, 25 N.M. 391, 183 P. 402 (1919). Before the claim is submitted to the jury, the opposing party still has an opportunity to cure any defect in proof that has been brought to that party’s attention. In this case, both the trial judge and opposing counsel recognized that First National’s objection to the instruction went to the sufficiency of the evidence on the issue of duress. The objection was made prior to closing arguments and opposing counsel yet may have sought to correct the asserted insufficiency. Thus, in this case the objection was the functional equivalent of a motion for directed verdict on the issue of duress. This result comports with federal decisions that have taken a liberal view of what constitutes a motion for a directed verdict to support a later motion for judgment n.o.v. E.g., Villanueva v. McInnis, 723 F.2d 414 (5th Cir.1984) (objection to proposed jury instruction on grounds of evidentiary insufficiency treated as sufficient approximation of renewed motion for directed verdict).

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Bluebook (online)
815 P.2d 613, 112 N.M. 317, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-nat-bank-in-albuquerque-v-sanchez-nm-1991.