This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The case involves a dispute over the liability of personal guarantors for corporate debt. A family-owned corporation, Curry County Grain & Elevator Co., borrowed money from Sunwest Bank, with personal guarantees signed by the defendants. After a partial repayment plan was devised, Sunwest mistakenly issued a release document that appeared to discharge the corporate debt. The defendants argued that the debt was fully satisfied and raised defenses of release, accord and satisfaction, and economic coercion (paras 2-5).
Procedural History
- District Court of Roosevelt County: Granted a directed verdict in favor of Sunwest Bank, holding the defendants liable for the corporate debt under their personal guarantees.
Parties' Submissions
- Appellants (Defendants): Argued that the corporate debt had been fully satisfied, the release document was valid, and they were entitled to a jury trial on their defenses and counterclaim of economic coercion. They also contended that the release of co-guarantors should proportionately reduce their liability (paras 6-8, 14-18).
- Appellee (Sunwest Bank): Asserted that the release of the corporate debt was a clerical error, the debt was only partially satisfied, and the defendants failed to present sufficient evidence to create factual disputes. Sunwest also argued that the guaranty contract allowed the release of co-guarantors without affecting the defendants' liability (paras 8-11, 18-22).
Legal Issues
- Did the trial court err in directing a verdict in favor of Sunwest Bank?
- Did the trial court err in awarding Sunwest Bank a judgment for the full debt despite the release of co-guarantors?
Disposition
- The Supreme Court of New Mexico affirmed the trial court's decision, upholding the directed verdict in favor of Sunwest Bank and the judgment for the full debt (paras 1, 23-24).
Reasons
Per Baca J. (Montgomery and Franchini JJ. concurring):
Directed Verdict: The court held that a directed verdict is appropriate when no genuine issues of fact exist. The evidence, including letters and testimony, demonstrated that the corporate debt was only partially satisfied and that the release document was issued by mistake. The defendants failed to present evidence to refute the existence of the debt or create a factual dispute (paras 8-11).
Jury Trial on Defenses: The court found that the defendants were not entitled to a jury trial on the existence of the corporate debt, as this issue was incidental to the foreclosure action. Additionally, their counterclaim of economic coercion failed because it was contingent on the corporate debt being fully satisfied, which was not the case (paras 12-15).
Release of Co-Guarantors: The court ruled that the guaranty contract explicitly allowed Sunwest to release co-guarantors without affecting the liability of the remaining guarantors. The defendants had waived their right to claim a proportional reduction in liability through the terms of the guaranty, which were upheld as valid and enforceable (paras 18-22).