OWEN V. BURN CONSTR. CO., 1977-NMSC-029,
90 N.M. 297, 563 P.2d 91 (S. Ct. 1977)
A. A. OWEN and Rubye N. Owen, his wife,
Petitioners,
vs.
BURN CONSTRUCTION COMPANY, Respondent.
SUPREME COURT OF NEW MEXICO
1977-NMSC-029, 90 N.M. 297, 563 P.2d 91
Motion for Rehearing Denied May 4, 1977
Martin, Martin & Lutz, James T.
Martin, Jr., Michael L. Winchester, Las Cruces, for petitioners.
Edward E. Triviz, Keith S. Burn, Las
Cruces, for respondent.
EASLEY, J., wrote the opinion. McMANUS,
C.J., and SOSA and PAYNE, JJ., concur.
{1} Plaintiffs A. A. Owen and
his wife, Rubye, (Owen), owners of a restaurant building in Las Cruces, sued
Burn Construction Company, Inc. (Burn) in damages for the negligent destruction
of the building. The jury returned a verdict of $3500.00 in favor of Owen. Both
parties filed motions for judgment notwithstanding the verdict and both motions
were denied by the trial court. Both parties appealed to the Court of Appeals
and that court reversed the trial court, directing that judgment be entered in
favor of defendant notwithstanding the verdict. Owen petitioned for certiorari.
We reverse the Court of Appeals and the trial court.
{2} Burn held a contract with
Las Cruces Urban Renewal Agency (Agency) to demolish a two-story hotel building
immediately adjacent to Owen's restaurant building. While the work was in
progress part of the second story of the hotel toppled onto Owen's structure,
completely destroying its usefulness. The Agency agreed to complete the
demolition of the Owen building and to remove the debris. Part of the agreement
was that the action of the Agency in clearing Owen's lot would not prejudice
Owen's right to seek damages against Burn for the destruction of the building.
{3} Two months after the
hotel collapsed on the Owen structure and after the debris had been removed,
the Agency filed suit to condemn the vacant lot. The Agency and Owen stipulated
to the entry of judgment whereby Owen would receive $59,072.00 for the vacant
lot. The judgment signed by the court specifically set forth that the
settlement was based on the value of the lot at the time the condemnation
action was filed, i.e. without the building, and that the settlement would in
no way affect any claim which Owen might have against Burn for the prior damage
to the building.
{4} Owen later filed this
case against Burn to recover $26,000.00 in damages for the total destruction of
the building. It was undisputed that the damage to the building was the fault
of Burn. The evidence was also uncontested that the value of Owen's building at
the time the damage occurred was $26,000.00.
{5} On the theory that Owen
had already been fully compensated by the Agency for both the lot and the
building, Burn induced the trial court to take judicial notice of the entire
file in the prior condemnation action. Over Owen's objections and in derogation
of the express terms of the judgment entered pursuant to the stipulation of the
parties, testimony and written opinions of the court-appointed appraisers were
admitted into evidence to attempt to prove that the $59,072.00 appraised value
included both the building and the land.
{6} The jury returned a
verdict for Owen in the inexplicable amount of $3500.00. Both parties moved for
judgment n. o. v., which motions were denied; judgment was entered; both
parties appealed.
{7} The Court of Appeals held
that the trial court should have entered judgment n. o. v. in favor of Burn,
and remanded with instructions to set aside the $3500.00 judgment
{*299} for Owen and to enter judgment for
Burn. This court granted Owen's petition for writ of certiorari.
{8} Owen makes three
contentions: (1) the judgment in the condemnation matter was clear and unambiguous;
therefore, it was error for the trial court to permit evidence which varied and
contradicted the judgment and it was error for the court to refuse an
instruction that the building had not been paid for in the condemnation case;
(2) the admission of written appraisals made by persons who were not called as
witnesses and were not subject to cross-examination was violative of N.M.R.
Evid. 802 [§ 20-4-802, N.M.S.A. 1953 (Supp.1975)]; and (3) the Court of
Appeals' direction of a verdict for Burn was improper because the record shows
that Owen was entitled to that relief.
{9} (1) Owen first contends
that the two lower courts were in error in deciding that evidence of the
condemnation suit and the appraisals made in conjunction therewith were
admissible in this cause for the purpose of proving that Owen had already been
paid for his building.
{10} The consent judgment
entered by stipulation of the Agency and Owen was in no way ambiguous. It
provided:
The compensation is based upon the value of the premises...
on the date of the commencement of this action, and such award is not intended
to affect any claim which the defendants may have against any person, firm or
corporation who may have damaged said premises prior to the commencement of
this proceeding, and the stipulation on file herein and this judgment shall not
constitute a settlement or release of any claim which the defendants may have
by reason of damage that may have occurred to the condemned premises prior to
the commencement of this action;...
{11} The written stipulation
that was filed was even more explicit as to the parties' intent that the
$59,072.00 be considered payment for the vacant lot.
{12} However, the trial court
permitted testimony and written opinions from the appraisers that their
evaluations in the condemnation suit included both the land and the building.
The Court of Appeals held that the consent judgment was binding on the Agency
and Owen but was not binding on Burn, that since the appraisers considered the
value of the land and the building in arriving at their evaluations that Owen
had already been justly compensated, that assessment of damages is the
exclusive function of the jury and that "duplication of damages is not
proper." We disagree that these principles of law are dispositive of the
case.
{13} It is true, as pointed
out by the Court of Appeals, that a stipulated judgment is not considered to be
a judicial determination; "rather it is a contract between the
parties,"
State v. Clark, 79 N.M. 29,
439 P.2d 547 (1968); but this
legal principle is not controlling and does not diminish the legitimacy of the
claim or preclude the relief prayed for by Owen.
{14} The rules to be followed
in arriving at the meaning of judgments and decrees are not dissimilar to those
relating to other written documents. Where the decree is clear and unambiguous,
neither pleadings, findings nor matters dehors the record may be used to change
or even to construe its meaning.
Chavez v. Chavez, 82 N.M. 624,
485 P.2d
735 (1971).
{15} Considering this consent
judgment as a mere contract between Owen and the Agency affords no comfort to
Burn. "It is well settled in New Mexico that where the language of a
contract is clear and unambiguous, the intent of the parties must be
ascertained from the language and terms of the agreement."
Hondo Oil
& Gas Co. v. Pan American Petroleum Corp., 73 N.M. 241, 245,
387 P.2d
342, 345 (1963). In accord,
Brown v. American Bank of Commerce, 79 N.M.
222,
441 P.2d 751 (1968). It is not the province of the court to amend or alter
the contract by construction and the court must interpret and enforce the
contract which the parties made for themselves.
Rubenstein v. Weil, 75
N.M. 562,
408 P.2d 140 (1965);
Boylin v. United Western Minerals Company,
72 N.M. 242,
382 P.2d 717 (1963);
Davis v. Merrick, 66 N.M. 226,
345
P.2d 1042 (1959).
{*300}
{16} The case of
Vaca v.
Whitaker, 86 N.M. 79,
519 P.2d 315 (Ct. App.1974) involved a malpractice
suit in which there had been a prior judgment entered and satisfied and a new
claim later filed for additional damages against a second party. The opinion
states (86 N.M. at 83-84, 519 P.2d at 319-20):
... This involves an examination of the pertinent portions of
the record in the prior case. The fact of "prior satisfaction" is to
be determined from the record, and not from oral testimony.1
See also Lemon v. Morrison-Knudsen Co., 58 N.M. 830,
277 P.2d 542 (1954); 2 Black on Judgments §§ 624-625 (2d ed. 1902).
{17} The Court of Appeals in
Vaca,
supra, ruled that medical expenses incurred subsequent to the judgment in the
prior case were not included among the issues litigated and the subsequent
claim was not barred by satisfaction of the prior judgment.
Seven Rivers
Farm, Inc. v. Reynolds, 84 N.M. 789,
508 P.2d 1276 (1973);
Hollingsworth
v. Hicks, 57 N.M. 336,
258 P.2d 724 (1953);
Dunham v. Stitzberg, 53
N.M. 81,
201 P.2d 1000 (1948);
Westbrook v. Lea General Hospital, 85
N.M. 191,
510 P.2d 515 (Ct. App.), cert. denied,
85 N.M. 228,
511 P.2d 554 (1973).
{18} Lemon, supra, holds that
where the question is determinable by inspection of the record alone, without
the aid of extrinsic evidence, it is then a matter of law and is for the court.
See
Metzger v. Ellis, 65 N.M. 347,
337 P.2d 609 (1959);
In re
McMillan's Estate, 38 N.M. 347,
33 P.2d 369 (1934).
{19} In this case the words
cannot be misconstrued; they spell out clearly that the parties intended that
Owen should have the right to preserve this action against Burn for damages.
There can be no legitimate claim of ambiguity; therefore, there was no need for
the court to resort to evidence extrinsic to the agreement.
{20} We are confronted with
the specious reasoning of Burn, which corporation was not a party to the suit,
that we should go behind the judgment and the specific stipulation signed by
the parties and adopt unsworn testimony to emasculate these solemn documents.
Who would know what was bought and sold and at what price better than the buyer
and seller; and how much better can the bargain be sealed than by a lucid
stipulation and judgment?
{21} We hold that it was
error to admit the evidence dehors the record to vary the terms of the judgment
in condemnation; and, as a necessary corollary, we hold that it was error for
the court to refuse Owen's instruction that he had not received compensation
for his building in the first suit.
{22} (2) Owen claims that the
trial court was in error in admitting into evidence written appraisals of the
property in question without the appraisers being present for
cross-examination. The trial court held that the evidence was admissible under
N.M.R. Evid. 803(6), [§ 20-4-803(6), N.M.S.A. 1953 (Supp.1975)] as an exception
to the hearsay rule because it was a record of a regularly-conducted activity.
The rule provides that a report setting forth an opinion in the course of a
regularly-conducted activity, "as shown by the testimony of the custodian
or other qualified witness," is admissible even though the declarant is
not available.
{23} The evidence shows that
the written appraisals were prepared for use in the condemnation proceedings,
i.e., for purposes of litigation. The Agency did not prepare them but engaged
outside parties, whom they did not supervise, to make the appraisals. The
Agency would not vouch for the accuracy of the reports and did not know what
factors were considered by the appraisers. The evaluation of one of the
appraisers was based on the erroneous assumption that the building was forty
years
{*301} old rather than ten years
old. There was no opportunity for Owen to cross-examine, the appraisers not
being present at the trial.
{24} Owen claims that the
circumstances under which the appraisals were prepared and presented provide
none of the circumstantial guarantees of trustworthiness which are normally
required to justify an exception to the hearsay rule. We agree.
{25} N.M.R. Evid. 801(c), [§
20-4-801(c), N.M.S.A. 1953 (Supp.1975)] defines "hearsay" as "a
statement, other than one made by the declarant while testifying at the trial
or hearing, offered in evidence to prove the truth of the matter
asserted." Unless the written appraisals fall within the protection of the
exception asserted by Burn, the evidence is patently hearsay, since the plain
object of offering the evidence was to prove the truth of the assertions in the
written opinions that both the building and the land were included in the
evaluation.
{26} In
Lahr v. Lahr,
82 N.M. 223,
478 P.2d 551 (1970) this court held that a husband's opinion as to
the value of community real estate was admissible in evidence; however, the
court ruled that the accountant employed by the husband could not testify by
deposition regarding statements by the husband to the accountant as to the
husband's opinion regarding the value of community realty. The court stated (82
N.M. at 225, 478 P.2d at 553):
... Even if these values are those of the defendant as well
as of the appraiser, the accountant's deposition testimony remains hearsay
because it is the testimony of a witness as to out-of-court statements of a
declarant who was not a witness as to that specific subject matter. Chiordi
v. Jernigan, 46 N.M. 396, 129 P.2d 640 (1942).
In Chiordi this court explained the basis of its
exclusion of certain testimony as hearsay by stating (46 N.M. at 402, 129 P.2d
at 644):
... That it is not subject to the tests which ordinarily can
be applied to ascertain its truthfulness by cross-examination of the declarant;
and because not given under the sanctity of an oath, and because the declarant
is not subject to the penalties of perjury.
{27} The prejudice inherent
in the admission of such hearsay evidence is readily apparent. It is even
questionable, although we need not decide, that the evidence qualifies as a
"record of a regularly conducted activity." See
Palmer v. Hoffman,
318 U.S. 109, 63 S. Ct. 477, 87 L. Ed. 645 (1943), affirming
Hoffman v.
Palmer, 129 F.2d 976, 991 (2d Cir. 1942); McCormick, Evidence § 308 (2d ed.
1972).
{28} Therefore, even if Burn
had the legal right to challenge the efficacy of the judgment in question, the
entire evidentiary basis of his challenge was inadmissible hearsay. The trial
court and the Court of Appeals were in error in holding otherwise.
{29} (3) Owen's third issue
on appeal is that the two lower courts were in error in failing to hold that
Owen's motion for judgment n. o. v. should have been granted, and was in error
in giving the same relief to Burn. We agree. The issues as to Burn are
heretofore set forth. There is no rational basis to support the $3500.00
verdict awarded by the jury. Furthermore, as to Burn's liability and the amount
of $26,000.00 as the damages suffered by Owen there are no issues of material
fact disclosed by the record.
{30} In a case such as this
where the evidence on an issue of fact is undisputed, and the inferences to be
drawn therefrom are plain and not open to doubt by reasonable men, the issue is
no longer one of fact to be submitted to the jury, but becomes a question of
law.
Griego v. Roybal, 81 N.M. 202,
465 P.2d 85 (1970);
Loucks v.
Albuquerque National Bank, 76 N.M. 735,
418 P.2d 191 (1966);
Mantz v.
Follingstad, 84 N.M. 473,
505 P.2d 68 (Ct. App.1972). If reasonable minds
cannot differ, then a directed
{*302} verdict
is not only proper but the court has a duty to direct a verdict. N.M.R. Civ.P.
56(c) [§ 21-1-56(c), N.M.S.A. 1953 (Repl. Vol. 4, 1970)];
Goldenberg v.
Village of Capitan, 53 N.M. 137,
203 P.2d 370 (1948).
{31} We have no hesitancy in
holding that reasonable minds could not differ as to the liability of Burn or
as to the amount of damages, since there literally is no evidence disputing
either of these factual issues. The same holding pertains to the
wholly-unsubstantiated award of damages in the verdict of the jury.
{32} It necessarily follows
that we dismiss the cross-appeal of Burn, reverse the Court of Appeals and the
trial court on issues above indicated, affirm the Court of Appeals' decision
ordering that the award to Owen of $3500.00 be set aside, and direct that
judgment be entered, notwithstanding the verdict, awarding Owen $26,000.00 in
damages plus his costs.
McMANUS, C.J., and SOSA and PAYNE, JJ., concur.
1.
When the record in the prior action is silent or ambiguous, so that the record
does not show the injuries for which recovery was obtained, we recognized that
oral testimony may be introduced. The oral testimony may properly be introduced
only to explain the prior record; the oral testimony may not go beyond that
record.