BENZ V. TOWN CTR. LAND, L.L.C., 2013-NMCA-111,
314 P.3d 688
ICEK BENZ a/k/a IKE BENZ and LAUREN
BENZ, Plaintiffs-Appellants,
v.
TOWN CENTER LAND, LLC a New Mexico Limited Liability
Company, CENTRAL MILLENNIUM PARTNERSHIP, a New Mexico Non-Profit Corporation,
CENTRAL CORRIDOR INVESTORS, LLC, a New Mexico Limited Liability Company, MARTIN
D. BLANC and DAVID BLANC, Defendants-Appellees.
Docket No. 31,669 (consolidated with
32,031)
COURT OF APPEALS OF NEW MEXICO
2013-NMCA-111, 314 P.3d 688
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY, C.
Shannon Bacon, District Judge.
Released for Publication December 23,
2013.
Hunt & Davis, P.C., Catherine F.
Davis, Albuquerque, NM, for Appellants.
Cadigan Law Firm, P.C., Michal J.
Cadigan, Albuquerque, NM, for Appellees.
MICHAEL E. VIGIL, Judge. WE CONCUR:
JONATHAN B. SUTIN, Judge, TIMOTHY L. GARCIA, Judge.
AUTHOR: MICHAEL E. VIGIL.
{1} In settlement of an
unrelated dispute, Plaintiff Icek Benz executed a final agreement and release,
which discharged “any and all known and unknown claims and causes of action”
against Defendant David Blanc. At the trial in this case, Defendants argued,
and the district court agreed, that the release included Plaintiffs’ claims in
the current dispute. Judgment was entered in favor of Defendants and Plaintiffs
appeal. We conclude that the language of the release is unambiguous and that
the district court erred. We therefore reverse and remand.
{2} In 2002, Plaintiffs
Icek Benz (Benz) and Lauren Benz, and Defendants David Blanc (Blanc), Martin
Blanc, Central Millennium Partnership, and Central Corridor Investors, LLC,
created Town Center Land, LLC, to acquire, own, operate, and hold for investment
property known as the Gas Light Motel. Prior to the creation of Town Center,
Benz and Blanc were involved in two other businesses together, Central Market,
Ltd., and Baptist Convention Building, LLC. All three businesses were created
to acquire, own, operate, and hold specific real estate in Albuquerque, New
Mexico for investment.
{3} In 2006, Benz
notified Blanc that he no longer wanted to be involved in either Central
Market, Baptist Convention, or Town Center. In settling the Central Market dispute,
Benz received payment and signed the final agreement and release (Release or
Central Market Release), which is the subject of this appeal. Benz and Blanc
also came to a separate settlement regarding Baptist Convention, which resulted
in a second payment and release signed by Benz.
{4} This case centers
on a dispute involving Town Center. Plaintiffs sued Defendants alleging fraud,
misrepresentation, and breach of fiduciary duty, and sought an accounting and
dissolution of Town Center. Following discovery and entry of a pretrial order,
the case was set for a nonjury trial. At trial, Plaintiffs objected to
admission of the Release into evidence. In part, Plaintiffs argued that the
Central Market Release was not relevant to the Town Center dispute before the
court and that neither the pleadings nor the pretrial order set forth an
affirmative defense of release. Over Plaintiffs’ objection, the Release was
admitted into evidence. Extrinsic evidence was also admitted about the meaning
of the Release, which the district court ultimately refused to consider.
{5} Following trial,
the district court found, and concluded in pertinent part, that “[o]n June 16,
2006, Benz executed [the Central Market R]elease, releasing Blanc and other
released parties . . . ‘from any and all known and unknown claims and causes of
action of every nature, character and description which Benz has or may have
against the released parties’” and that “[b]y signing the [Central Market]
Release, Benz released all the claims he later raised in [the Town Center]
matter, except for the request for dissolution of Town Center.” The district
court entered judgment in favor of Defendants and, in a separate order, awarded
Defendants’ attorney fees.
{6} Plaintiffs
separately appealed from the judgment of the district court and the order for
Defendants’ attorney fees, and we have consolidated the appeals. Additional
pertinent facts are discussed below.
{7} Plaintiffs argue
that the district court erred by (1) admitting the Central Market Release into
evidence and amending the pretrial order to include Defendants’ release
defense; and (2) concluding that the Central Market Release barred Plaintiffs’
claims relating to Town Center. Plaintiffs further contend that the district
court erred in failing to dissolve Town Center and awarding Defendants’
attorney fees. Because we reverse the district court’s conclusion that the
Central Market Release released Plaintiffs’ claims in the Town Center dispute,
we do not address these additional arguments regarding dissolution of the LLC
and Defendants’ attorney fees.
A. Admission
of the Central Market Release Into Evidence and Amendment of the Pleadings
{8} We first examine
Plaintiffs’ arguments regarding admissibility of the Release into evidence and
amendment of the pleadings to include Defendants’ release defense.
Specifically, Plaintiffs argue that the district court erred in (1) admitting
the Release into evidence despite its untimely disclosure by Defendants; (2)
amending the pleadings to include a release defense; and (3) allowing
Defendants to present their release defense when they did not affirmatively
plead the defense prior to trial. These arguments arise under the following
circumstances.
{9} Defendants waited
until the weekend before trial to identify the Central Market Release as a
trial exhibit. In response, Plaintiffs made an oral motion in limine prior to
the start of trial to exclude it from evidence. Plaintiffs argued that the
Release had not been disclosed as a potential exhibit, Defendants’ release
argument was not pled as an affirmative defense, and the Release only related
to Central Market, an entity unrelated to the Town Center dispute being tried.
Defense counsel admitted to the late disclosure, stating that he only recently
realized that it was a general release, and he further contended that a release
is not an affirmative defense that must be pled pursuant to Rule
1-012 NMRA.
Finally, counsel argued that the late disclosure did not result in unfair
surprise or prejudice because Plaintiffs were aware of the Release prior to
trial. The district court denied Plaintiffs’ motion to exclude and permitted
Defendants to admit the Release into evidence because, although “[Defendants’
counsel] didn’t disclose his intention to use the exhibit until very late in
the game, it’s not a situation where the exhibit had not been produced or
wasn’t known to the parties.” The district court requested that Plaintiffs
renew their objections when the Release was offered into evidence to see “if there’s
any other reasons or concerns for its exclusion.”
{10} Defendants offered
the Release into evidence during Blanc’s testimony and Plaintiffs renewed their
objections that Defendants had failed to assert the release defense in their
answer or the pretrial order and that the Central Market Release was irrelevant
to the Town Center dispute. The district court admitted the Release into
evidence as well as testimony concerning its meaning. By entering judgment
against Plaintiffs based on the Central Market Release, the district court
effectively amended the pleadings to include Defendants’ release defense.
{11} This is a close
case, but we conclude that the district court did not abuse its discretion by
admitting the Central Market Release into evidence or amending the pleadings to
include Defendants’ release defense. “We review the admission of evidence for
an abuse of discretion.”
State v. Branch,
2010-NMSC-042, ¶ 9,
148 N.M.
601,
241 P.3d 602,
overruled on other grounds by State v. Tollardo,
2012-NMSC-008,
275 P.3d 110. Similarly, the decision to modify the pretrial
order rests within the sound discretion of the district court.
Fahrbach v.
Diamond Shamrock, Inc.,
1996-NMSC-063, ¶ 25,
122 N.M. 543,
928 P.2d 269.
“An abuse of discretion occurs when a ruling is clearly contrary to the logical
conclusions demanded by the facts and circumstances of the case.”
Sims v.
Sims,
1996-NMSC-078, ¶ 65,
122 N.M. 618,
930 P.2d 153.
{12} Here, Defendants had
nearly two years after Plaintiffs produced the Release to disclose their intent
to use it as evidence and a defense, yet they waited until the weekend prior to
the start of trial to notify Plaintiffs of their intentions. As the district
court observed in denying Plaintiffs’ motion in limine, “[this was] not a
situation where the exhibit had not been produced or wasn’t known to the
parties[.]”
{13} Further, Plaintiffs
fail to demonstrate how the decision of the district court was prejudicial to
them.
See Blacker v. U-Haul Co. of N.M., Inc.,
1992-NMCA-001, ¶ 10,
113
N.M. 542,
828 P.2d 975 (“Generalized allegations of prejudice are not
sufficient to establish an abuse of discretion on the part of the trial court.”
(internal quotation marks and citation omitted)). On the day of trial,
Plaintiffs’ counsel stated that admission of the Release would “prejudice[] my
client . . . in having to present that evidence and having that particular
issue come up when it’s never been raised before.” However, Plaintiffs had
ample opportunity to present evidence on the Release and questioned both Benz
and Blanc about their intentions concerning it. Plaintiffs also acknowledged at
oral argument before this Court that there was no evidence related to the
Release that they were unable to present. In addition, Plaintiffs did not ask
for a continuance following the decision of the district court to allow
Defendants to present evidence on the Release.
See Rule
1-015(B) NMRA
(“The court may grant a continuance to enable the objecting party to meet such
evidence.”).
{14} Despite Defendants’
untimely disclosure, the high deference afforded to the decision by the
district court under the appropriate standard of review and the lack of
prejudice compels us to conclude that there was no abuse of discretion by the
district court. Thus, we find no error in the decision of the district court to
admit the Central Market Release or to amend the pleadings to include
Defendants’ release defense. The foregoing discussion also answers Plaintiffs’
argument that Defendants waived the release defense argument by failing to
affirmatively plead it as a defense.
See Lewis v. Samson,
1999-NMCA-145,
¶ 26,
128 N.M. 269,
992 P.2d 282 (“The pretrial order is ‘the law of the
case.’”),
overruled on other grounds by Lewis ex rel. Lewis v. Samson,
2001-NMSC-035,
131 N.M. 317,
35 P.3d 972.
B. Application
of the Central Market Release to the Town Center Dispute
{15} Plaintiffs’ central
contention on appeal is that the district court erred in interpreting the
Central Market Release to bar Plaintiffs’ claims related to Town Center. Specifically,
Plaintiffs challenge the district court’s determination that the Central Market
Release unambiguously discharged liability of Defendants not named in the
Release and that the unambiguous language of the Central Market Release bars
Plaintiffs’ Town Center claims. Defendants respond that Plaintiffs failed to
preserve their argument about the unnamed Defendants and then contend that the
district court properly determined that the Central Market Release is
unambiguous and that the language on its face bars all claims brought by
Plaintiffs in this case. Resolution of these issues also requires us to examine
the relevant facts.
{16} When Benz notified
Blanc that he no longer wished to be involved in Central Market, Baptist
Convention, or Town Center, he made three demands: (1) immediate payment of
$60,870 for the remaining interest on his initial promissory note investment in
Central Market; (2) Blanc’s purchase of Benz’s interest in both Baptist
Convention and Town Center or sale of the real estate to a third party and
termination of these LLCs; and (3) access to “all the books and records” of
Baptist Convention and Town Center to allow a “certified public accountant to
examine and audit the financial records of the[se] two LLCs, and to determine the
actual membership interests in the LLCs and the underlying real estate.”
{17} Two weeks later,
Blanc responded to Benz’s request for payment on the promissory note with a
counteroffer labeled “Re: Central Market, Ltd. Promissory Note of 10/31/98[.]”
Blanc offered $34,200 to settle the debt on the promissory note, but did not
address Benz’s other demands regarding Baptist Convention or Town Center.
{18} That same month,
Benz signed the Central Market Release resolving that dispute. The Central
Market Release states:
In
consideration of [past payments] and the receipt of $34,200, Icek Benz, a
married man (“Benz”), for and on behalf of himself and his heirs, successors
and assigns, acknowledges receipt of payment in full of all amounts due and
owing under the Promissory Note dated October 31, 1998 in the original amount
of $554,600 and hereby fully releases and discharges Central Market, Ltd., a
New Mexico corporation (“Central Market”) and David W. Blanc (“Blanc”), and
their predecessors and successors in interest, heirs, agents, employees,
officers, directors, partners and assigns, (collectively “the released
parties”) from any and all known and unknown claims and causes of action of
every nature, character and description which Benz has or may have against the
released parties, including claims arising out of the prior or present
construction, development, financing, refinancing, management, leasing,
ownership or operation of the real estate re- development project known as
“Central Market” and located at 301-307 Central Ave., N.W., Albuquerque, New
Mexico (the “Project”), or any representations which were or may have been made
to Benz at any time concerning the Project, including all claims which Benz has
or may have in the future.
Benz
further agrees that he has no interest, as lender, owner or otherwise in the
Project or in Central Market, Ltd., or Central Market, LLC.
The
released parties have made no warranties, representations, promises or
statements to Benz regarding the Project.
{19} At trial,
Plaintiffs’ counsel asked Benz and Blanc about their intentions concerning the
Central Market Release and whether they understood it to apply to the Town
Center dispute. Defendants’ counsel objected, arguing that because the language
of the Release is clear, the testimony was irrelevant. The district court
overruled Defendants’ objections, stating that the testimony by Benz and Blanc
concerning their intentions was fair, “because I think [the R]elease is subject
to interpretation” and that “[q]uestions about the ultimate [meaning] of the
[Central Market Release] and how I am to interpret [it], whether we’re looking
at the four corners, extrinsic evidence, things of that nature are all going to
be arguments of Counsel.”
{20} Benz then testified
that “I was releasing Central Market” and that it was never his “understanding
that [he was] releasing claims other than Central Market[.]” Blanc in turn
testified that “Central Market, Limited was included in that release” and that
“[i]t had to do with everything, but I don’t know—I didn’t know at that time,
in 2006, that there was going to be a lawsuit by Mr. Benz or anybody else.”
Defendants’ counsel asked Blanc “[i]s that the release by which you resolved
the dispute involving Central Market, among other things?” and Blanc responded,
“Yes, but it was later.” Blanc also acknowledged that he did not believe his
counsel had raised the Central Market Release during settlement of the
subsequent Baptist Convention dispute.
{21} Following trial, the
district court found that “[b]y signing the [Central Market] Release, Benz
released all the claims he later raised in this matter, except for the request
for dissolution of Town Center.” The district court stated that, in coming to
this conclusion, it had determined “[t]he release language is not ambiguous and
therefore parole evidence regarding the Release is not admissible.”
{22} Having examined the
relevant facts, we now address Defendants’ preservation argument and
Plaintiffs’ contentions about the district court’s interpretation of the
Central Market Release.
{23} Under the language
of the Central Market Release, Benz fully released “Central Market, Ltd., a New
Mexico corporation (‘Central Market’) and David W. Blanc (‘Blanc’), and their
predecessors and successors in interest, heirs, agents, employees, officers,
directors, partners and assigns[.]” After the district court filed its findings
of fact and conclusions of law that the Release barred all of Plaintiffs’
claims, Plaintiffs filed supplemental requested findings of fact and
conclusions of law as well as a motion to amend the findings of fact and
conclusions of law of the district court. Plaintiffs moved that the district
court find and conclude “[t]he [Central Market] Release . . . does not mention
Town Center Land LLC, Central Millennium Partnership (‘Central Millennium’),
Central Corridor Investors LLC (‘Central Corridor’), or Martin Blanc by name
and does not release those entities from the claims raised in this lawsuit.”
The district court denied Plaintiffs’ motion. On appeal, Plaintiffs contend the
district court erred in concluding that the Central Market Release also
released Plaintiffs’ claims against Town Center, Central Millennium, and
Central Corridor in this case.
1
The basis for Plaintiffs’ contention is that none of these parties are named in
the language of the Release.
{24} Defendants argue
that Plaintiffs failed to preserve their argument by not challenging
application of the Central Market Release to Town Center, Central Millennium,
and Central Corridor until after the district court had entered its post-trial
findings and conclusions. “To preserve an issue for review on appeal, it must
appear that appellant fairly invoked a ruling of the trial court on the same
grounds argued in the appellate court.”
Woolwine v. Furr’s, Inc.,
1987-NMCA-133, ¶ 20,
106 N.M. 492,
745 P.2d 717.
{25} In support of their
contention, Defendants cite to
Gutierrez v. City of Albuquerque,
1995-NMCA-139, ¶¶ 5-7,
121 N.M. 172,
909 P.2d 732,
rev’d on other grounds by
1998-NMSC-027,
125 N.M. 643,
964 P.2d 807. In
Gutierrez, we held
that an employer had not preserved its argument that a worker’s benefits claim
was barred by a release signed by the worker in settlement of an earlier
dispute because “[t]he [employer] did not argue this point at trial or invoke a
ruling from the judge on this issue until it filed its requested findings of
fact and conclusions of law.”
1995-NMCA-139, ¶ 6. We determined that “[b]ecause
the issue of whether the release would bar relief against the [employer] is one
that raises factual issues concerning the intent of the parties, we believe
that the [employer] acted too late in first raising the issue after the trial
was over and the evidence closed.”
Id. (citation omitted). In
particular, we noted that “[t]he [employer] did not introduce specific evidence
on this issue, apart from introducing the release as an exhibit at trial.”
Id.
{26} We are unconvinced
that
Gutierrez is applicable here. Unlike
Gutierrez, the issue of
the scope of the Central Market Release appears to have been before the
district court. The district court here specifically stated that “[t]he
arguments raised by Plaintiffs [in their supplemental requested findings of
fact and conclusions of law] were already considered and implicitly rejected at
trial and in the [district c]ourt’s original Findings and Conclusions.” Thus,
we conclude that Plaintiffs preserved their argument concerning the unnamed
corporate defendants.
2. Interpretation
of the Central Market Release
{27} Concluding that
Plaintiffs’ arguments are preserved, we now turn to the district court’s
interpretation of the Release. Because releases are contractual in nature, they
are governed by contract law.
McNeill v. Rice Eng’g & Operating, Inc.,
2003-NMCA-078, ¶ 13,
133 N.M. 804,
70 P.3d 794. “[O]ur primary objective in
construing its terms is to give effect to the intent of the parties.”
Hansen
v. Ford Motor Co.,
1995-NMSC-044, ¶ 32,
120 N.M. 203,
900 P.2d 952.
{28} Prior to 1991,
contract interpretation in New Mexico subscribed to the four-corners or plain
meaning standard.
Mark V, Inc. v. Mellekas,
1993-NMSC-001, ¶ 10,
114
N.M. 778, 845. P.2d 1232. The four-corners standard restricts courts solely to
considering the words of the contract to determine if the language is
ambiguous.
See C.R. Anthony Co. v. Loretto Mall Partners,
1991-NMSC-070,
¶ 13,
112 N.M. 504,
817 P.2d 238 (“Ambiguity is determined by the court without
the admission of evidence of surrounding circumstances to explain the purposes
and context of the contract.”); 5 Margaret N. Kniffin,
Corbin on Contracts
§ 24.7, at 33 (rev. ed. 1998) (“Courts that subscribe to the ‘plain meaning
rule’ hold that if a ‘clear, unambiguous’ meaning is discernible in the
language of the contract, no extrinsic evidence of surrounding circumstances
may be admitted to challenge this interpretation. The decision as to whether
ambiguity exists must be made without reference to any source other than the
contract itself.”). Only after a preliminary determination that the language on
its face was ambiguous could a court consider extrinsic evidence to “aid in
interpreting the parties’ expressions.”
C.R. Anthony,
1991-NMSC-070, ¶
12.
{29} Our Supreme Court
abandoned the four-corners standard in recognition of “the difficulty of
ascribing meaning and content to terms and expressions in the absence of
contextual understanding[.]”
Id. ¶ 14;
see Kniffin,
supra,
at 30 (“There is in fact no ‘one correct’ meaning of a word or expression; and
the party choosing the expression, or the party assenting to its use, may not
even have attached a clear meaning to it, or the two parties may have attached
different meanings.”). In its place, our Supreme Court established that “in
determining whether a term or expression to which the parties have agreed [to]
is unclear, a court may hear evidence of the circumstances surrounding the
making of the contract and of any relevant usage of trade, course of dealing,
and course of performance.”
C.R. Anthony,
1991-NMSC-070, ¶ 15 (footnote
omitted);
see Mark V,
1993-NMSC-001, ¶ 12 (“The court may
consider collateral evidence of the circumstances surrounding the execution of
the agreement in determining whether the language of the agreement is
unclear.”). “The court is no longer restricted to the bare words of the
agreement in interpreting the intent of the parties to a contract, but may also
consider the context in which the agreement was made to determine whether the
party’s words are ambiguous.”
Mark V,
1993-NMSC-001, ¶ 11. This
determination of “whether an agreement contains an ambiguity is a matter of law
to be decided by the trial court.”
Id. ¶ 12.
{30} If the extrinsic
evidence presented to the court for consideration on a question of ambiguity is
“so plain that no reasonable person could hold any way but one, then the court
may interpret the meaning as a matter of law.”
Id.;
see Montoya v.
Villa Linda Mall, Ltd.,
1990-NMSC-053, ¶ 8,
110 N.M. 128,
793 P.2d 258 (“It
is black letter law that, absent an ambiguity, a court is bound to interpret
and enforce a contract’s clear language and cannot create a new agreement for
the parties.”). However, “[i]f the court determines that the contract is
reasonably and fairly susceptible of different constructions, an ambiguity
exists.”
Mark V,
1993-NMSC-001, ¶ 12. “Ambiguity . . . is best
understood as a proxy for describing lack of clarity in the parties’
expressions of mutual assent. The term, as it has been employed, incorporates a
variety of conceptual problems including the distinctive notions of ambiguous
syntax, ambiguous terms, vagueness, and general lack of clarity.”
C.R.
Anthony,
1991-NMSC-070, ¶ 15 n.2. If the contract presents an ambiguity,
the fact finder may interpret the contract other than as indicated by the
language if extrinsic evidence establishes that the parties intended the
ambiguous language to have an alternative meaning.
See Mark V,
1993-NMSC-001, ¶ 13 (“In order to determine the meaning of the ambiguous terms,
the fact finder may consider extrinsic evidence of the language and conduct of
the parties and the circumstances surrounding the agreement, as well as oral
evidence of the parties’ intent.”).
{31} “We review a
district court’s interpretation of an unambiguous contract de novo.”
Smith
& Marrs, Inc. v. Osborn,
2008-NMCA-043, ¶ 10,
143 N.M. 684,
180 P.3d
1183 (internal quotation marks and citation omitted). “[W]e view the contract
as a harmonious whole, give meaning to every provision, and accord each part of
the contract its significance in light of other provisions.”
Pub. Serv. Co.
of N.M. v. Diamond D Constr. Co.,
2001-NMCA-082, ¶ 19,
131 N.M. 100,
33
P.3d 651. “The purpose, meaning[,] and intent of the parties to a contract is
to be deduced from the language employed by them; and where such language is
not ambiguous, it is conclusive.”
ConocoPhillips Co. v. Lyons,
2013-NMSC-009, ¶ 23,
299 P.3d 844 (internal quotation marks and citation omitted).
“When discerning the purpose, meaning, and intent of the parties to a contract,
the court’s duty is confined to interpreting the contract that the parties made
for themselves, and absent any ambiguity, the court may not alter or fabricate
a new agreement for the parties.”
CC Hous. Corp. v. Ryder Truck Rental, Inc.,
1987-NMSC-117, ¶ 6,
106 N.M. 577,
746 P.2d 1109.
{32} We determine that no
evidence exists to conclude that the Central Market Release applies or was
intended to apply to the unnamed corporate defendants in the Town Center
dispute, and we conclude as well, that as to this issue, the Central Market
Release is unambiguous. “[A] general release raises a rebuttable presumption
that only those persons specifically designated by name or by some other
specific identifying terminology are discharged.”
Hansen,
1995-NMSC-044,
¶ 33. “In the absence of such specific terminology, the person seeking to be
discharged must prove by extrinsic evidence that the parties to the agreement
actually intended to discharge him or her from liability.”
Id. Here,
neither Town Center, Central Millennium, nor Central Corridor is designated by
name as a released party. Nor are the corporate defendants designated under the
language identifying the released parties as Central Market, Blanc, and “their
predecessors and successors in interest, heirs, agents, employees, officers,
directors, partners and assigns.”
{33} Without specific
terminology identifying the corporate defendants, Defendants had the burden to
establish through extrinsic evidence that Benz and Blanc intended to discharge
the corporate defendants from liability in the Release.
See id. (holding
that “[i]n the absence of such specific terminology, the person seeking to be
discharged must prove by extrinsic evidence that the parties to the agreement
actually intended to discharge him or her from liability”). Defendants fail to
meet their burden. There is no extrinsic evidence in the record to support
Defendants’ argument that Benz and Blanc intended for the Central Market
Release to release the corporate defendants from liability in the Town Center
dispute. Nor is there evidence to support Defendants’ argument that the parties
understood that Blanc was acting pursuant to his role as an employee, owner,
agent, and/or servant of Town Center, Central Millennium, or Central Corridor
when Benz signed the Release. Consequently, we conclude that Defendants failed
to demonstrate that Blanc and Benz intended the Central Market Release to
discharge Town Center, Central Millennium, and Central Corridor from liability
on Benz’s claims related to Town Center. Because the district court determined
otherwise in entering judgment against Plaintiffs, we reverse and remand with
regard to their claims against the corporate defendants.
{34} We further determine
that no evidence exists to conclude that the Central Market Release applies or
was intended to apply to Benz’s claims against Blanc in the Town Center
dispute, and we conclude as well, that to this issue, the Central Market
Release is unambiguous. The words of the Release and the extrinsic evidence
presented in detail above establish that there is only one reasonable
construction of the language at issue: it is an agreement whereby Benz
relinquished his interest in Central Market and any claims he had or may have
in the future in exchange for payment of the remaining balance on the Central
Market promissory note. Neither the words, extrinsic evidence, nor the
arguments of the parties establish that the language, including the reference
to “any and all known and unknown claims,” is ambiguous.
See C.R. Anthony,
1991-NMSC-070, ¶ 21 (finding that the language of a real property lease was not
ambiguous because the extrinsic evidence did not “reveal any ambiguity in the
sense that the terms . . . [might] be understood to be vague, uncertain, or
reasonably susceptible to more than one interpretation”);
cf. McNeill,
2003-NMCA-078, ¶ 21 (finding a release to be ambiguous because it “is
susceptible to two reasonable but inconsistent interpretations . . . . [and]
reasonable jurors could find either interpretation correct”).
{35} Applying the
foregoing principles of contract interpretation, we conclude that the Central
Market Release did not discharge Blanc from liability in the Town Center
dispute. The district court focused on the language “from any and all known and
unknown claims and causes of action of every nature, character and description
which Benz has or may have against the released parties” as determinative in
its interpretation. However, immediately following the section quoted by the
district court is language relating solely to Central Market: “including claims
arising out of the prior or present construction, development, financing,
refinancing, management, leasing, ownership or operation of the real estate
re-development project known as ‘Central Market’ and located at 301-307 Central
Ave., N.W., Albuquerque, New Mexico (the ‘Project’)[.]” We are not convinced,
as Defendants argue, that the word “including” established that the Central
Market Release served to encompass Benz’s claims regarding both Central Market
and Town Center. Rather than modifying the phrase “any and all claims” to
include unnamed disputes, we conclude that the language serves to include any
claims relating to unnamed aspects of the Central Market project and dispute.
See
State v. Foulenfont,
1995-NMCA-028, ¶ 9,
119 N.M. 788,
895 P.2d 1329
(discussing
ejusdem generis which “requir[es] that where general words
follow an enumeration of persons or things of a particular and specific
meaning, the general words are not construed in their widest extent but are
instead construed as applying to persons or things of the same kind or class as
those specifically mentioned” (internal quotation marks and citation omitted)).
We also note that each subsequent clause in the Release is limited by a similar
reference to Central Market.
Cf. Medina v. Holguin,
2008-NMCA-161, ¶ 14,
145 N.M. 303,
197 P.3d 1085 (discussing
noscitur a sociis which
establishes that “a court must look to the neighboring words in a statute to
construe contextual meaning”).
{36} Thus, we conclude
that the district court erred in interpreting the Central Market Release to bar
Benz’s claims in the Town Center dispute. The Central Market Release makes no
reference to Town Center, Plaintiffs’ monetary contribution to Town Center,
Plaintiffs’ interest in Town Center, or Town Center, Central Millennium,
Central Corridor, Martin Blanc, and Lauren Benz as parties to this action.
Despite Defendants’ contention to the contrary, language that the Central
Market Release purports to include “any and all known and unknown claims” alone
is insufficient to establish that it was the intent of Benz and Blanc to
release Blanc of liability in the Town Center dispute.
See Lujan v. Healthsouth
Rehab. Corp.,
1995-NMSC-057, ¶¶ 20, 25, 28,
120 N.M. 422,
902 P.2d 1025
(holding that release language purporting to release “any and all other persons
. . . who together with [the other driver] may be . . . liable . . . for
damages . . . arising out of an accident” is “simply insufficient to alert [the
plaintiff] that [the other driver] was bargaining for the release of [the
hospital] in addition to her own release” and that “it is incumbent on [a]
releasee [who is bargaining for the release of another] to make this intention
very clear in the language of the release” (first alteration in original)
(emphasis and internal quotation marks omitted)). For the foregoing reasons, we
conclude that the district court erred in interpreting the Central Market
Release to bar Benz’s claims in the instant matter.
{37} The judgment of the
district court is reversed and the case is remanded for proceedings consistent
with this Opinion.
Topic Index for Benz v.
Town Ctr. Land, L.L.C., Nos.
31,669/32,031
Preservation of Issue for Appeal
Admissibility of Evidence