Pucci Distributing Co. v. Stephens

741 P.2d 831, 106 N.M. 228
CourtNew Mexico Supreme Court
DecidedAugust 27, 1987
DocketNo. 16938
StatusPublished
Cited by2 cases

This text of 741 P.2d 831 (Pucci Distributing Co. v. Stephens) 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
Pucci Distributing Co. v. Stephens, 741 P.2d 831, 106 N.M. 228 (N.M. 1987).

Opinions

OPINION

STOWERS, Justice.

Pucci Distributing Company and Richard Distributing Company (plaintiffs), licensed New Mexico liquor wholesalers, brought this action to recover amounts due for merchandise sold on open account to Gary L. Stephens and David M. Stevens (defendants), licensed New Mexico liquor retailers. Plaintiffs filed a motion for summary judgment, and defendants filed a response and a cross-motion for summary judgment. Defendants alleged that NMSA 1978, Section 60-8A-5 (Repl.Pamp.1981) barred plaintiffs from bringing this collection action because the debts at issue arose from unlawful extensions of credit under NMSA 1978, Section 60-7A-9 (Repl.Pamp.1981) (icodified as amended at NMSA 1978, § 60-7A-9 (Cum.Supp.1986)). Section 60-7A-9 prohibits wholesalers from extending credit for more than thirty calendar days from the date of the invoice accompanying each delivery, and in this case plaintiffs continued to make credit sales after defendants fell more than thirty days behind in payments on open account. The district court granted defendants’ motion and dismissed the complaint with prejudice. Plaintiffs appeal, and we reverse in part.

This case presents the following issues for our determination:

(1) Did the district court err in entering summary judgment in favor of defendants for debts incurred before any invoice had gone unpaid for more than thirty days?

(2) Were plaintiffs entitled to summary judgment for the amounts due for merchandise sold to defendants during the initial thirty-day period of sales to each plaintiff?

(3) Did the district court err in entering summary judgment in favor of defendants for the amounts of checks issued by defendants to plaintiffs and returned because of insufficient funds, and were plaintiffs entitled to summary judgment for those amounts?

First, we hold that a liquor wholesaler does not “extend credit” within the meaning of Section 60-7A-9 by delivering merchandise on credit terms authorized by that section unless he does so while a prior invoice has gone unpaid for more than thirty days. Credit sales authorized by Section 60-7A-9 made within the initial thirty-day period before the retailer falls behind in payments on his account are not declared violations of the Liquor Control Act by Section 60-7A-9, and Section 60-8A-5 does not bar a wholesaler from bringing an action to collect debts arising from such credit sales. The district court therefore erred in granting defendants’ cross-motion for summary judgment and dismissing plaintiffs’ complaint insofar as it sought to collect debts incurred during the initial thirty-day period of sales to each plaintiff. Second, Section 60-7A-9 by its terms makes it a violation of the Liquor Control Act for a wholesaler to “agree to extend credit” for more than thirty calendar days from the date of the invoice, and Section 60-8A-5 bars any action to collect debts arising from sales made under such an agreement to extend credit. We conclude that the evidence in the record of this case raises a genuine issue of material fact regarding whether plaintiffs agreed to extend credit unlawfully when they sold merchandise on specified credit terms during the first thirty-days periods. Therefore, the district court correctly denied plaintiffs’ motion for summary judgment. Finally, we hold that the evidence raises genuine issues of material fact regarding the plaintiffs’ right to recover the amounts represented by various checks returned for insufficient funds. The district court therefore erred in granting summary judgment in favor of defendants on those claims. Accordingly, we reverse in part the summary judgment entered by the district court and remand this case to it for further proceedings.

In 1981 and 1982, wholesaler plaintiffs sold alcoholic beverages to retailer defendants on open account. Plaintiff Pucci Distributing Company alleges that the first unpaid sale in its account was made on September 24, 1981; plaintiff Richard Distributing Company alleges that the first unpaid sale in its account occurred on January 16, 1982. Each plaintiff continued to sell defendants alcoholic beverages on open account in subsequent days and months, and neither brought an action to recover unpaid debts until they filed this complaint for debt on August 5, 1983.

Section 60-7A-9 at that time in pertinent part provided that “[i]t is a violation of the Liquor Control Act for any wholesaler to extend credit or to agree to extend credit for the sale of alcoholic beverages to any retailer ... for any period more than thirty calendar days from the date of the invoice____” Section 60-8A-5 further provides that “[n]o action shall be maintained ... to collect any debt for merchandise sold, served or delivered in violation of the Liquor Control Act.” The district court ruled that all the debts sued upon represented unlawful extensions of credit for more than thirty days under Section 60-7A-9 and granted defendants’ motion for summary judgment.

I. Enforceability of Debts Incurred During First Thirty Days.

In New Mexico Beverage Co. v. Blything, 102 N.M. 533, 697 P.2d 952 (1985), we rejected the contention that a wholesaler had complied with Section 60-7A-9 by marking its deliveries “C.O.D.” when it in fact had not collected payment at the time of delivery. We held that the wholesaler had extended credit in violation of the statute “[b]y failing to bring an action promptly when an invoice went unpaid for more than 30 days, and continuing to deliver liquor without receiving immediate payment.” Id., 102 N.M. at 534, 697 P.2d at 953. In accordance with that holding, plaintiffs concede that they cannot maintain an action to collect debts for credit sales made after any invoice in their respective accounts had gone unpaid for more than thirty days. On appeal, however, they contend that the rule of New Mexico Beverage Co. v. Blything does not reach credit sales made during the initial thirty-day periods, and that such sales are lawful and enforceable in an action to collect debts.

We believe that New Mexico Beverage Co. v. Blything correctly held that unlawful extensions of credit under Section 60-7A-9 occur when a wholesaler makes credit sales of alcoholic beverages to a retailer who has not paid for any prior deliv-, ery from the wholesaler within thirty days of its invoice. New Mexico Beverage Co. v. Blything did not hold that lawful credit sales made during the initial thirty-day period are rendered unlawful and unenforceable by the retailer’s subsequent failure to make timely payment on its account, for all the debts sued upon in that case arose from deliveries of alcoholic beverages made after the retailer had failed to pay prior invoices for more than thirty days. See id., 102 N.M. at 534, 697 P.2d at 953.

Whether credit sales made during the initial thirty-day period constitute unlawful extensions of credit under Section 60-7A-9 therefore is a question of first impression for this Court. By expressly proscribing sales in which credit is extended for more than thirty days, Section 60-7A-9 implicitly authorizes sales in which credit is extended for thirty days or less. New Mexico Beverage Co. v.

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

Related

Velasquez v. Regents of Northern N.M. Coll.
2021 NMCA 007 (New Mexico Court of Appeals, 2020)
Pucci Distributing Co. v. Nellos
796 P.2d 595 (New Mexico Supreme Court, 1990)

Cite This Page — Counsel Stack

Bluebook (online)
741 P.2d 831, 106 N.M. 228, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pucci-distributing-co-v-stephens-nm-1987.