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 Defendants executed a promissory note in 1988, agreeing to pay $73,725 with 12% annual interest. They assigned three other notes as collateral to cover payments on the promissory note. After the original lender failed, the Federal Deposit Insurance Corporation (FDIC) became the successor-in-interest. The Plaintiff later purchased the promissory note and filed suit in 1999, claiming an unpaid balance of over $25,000. The Defendants argued that the statute of limitations barred the claim and that payments from the assigned notes were not voluntary and could not revive the debt (paras 2-5).
Procedural History
- District Court of San Miguel County: Granted summary judgment in favor of the Defendants, ruling that the statute of limitations barred the Plaintiff's claim and that no payments were made that revived the cause of action (para 1).
Parties' Submissions
- Plaintiff: Argued that payments made on the three assigned notes constituted partial payments under the revival statute, thereby tolling the statute of limitations and allowing the claim to proceed (para 5).
- Defendants: Contended that the statute of limitations barred the claim and that payments from the assigned notes were not voluntary, thus failing to revive the debt under the revival statute (para 5).
Legal Issues
- Did the payments made on the three assigned notes constitute partial payments under the revival statute, thereby tolling the statute of limitations? (para 5)
Disposition
- The Court of Appeals affirmed the District Court's decision, holding that the payments from the assigned notes were not voluntary and did not revive the Plaintiff's cause of action (para 19).
Reasons
Per Fry J. (Alarid and Sutin JJ. concurring):
The Court held that under New Mexico's revival statute, a partial payment must be voluntary to revive a cause of action. The payments made on the three assigned notes were not voluntary because the Defendants had relinquished all control over the notes when they assigned them in 1988. The payments were made by third parties, not the Defendants, and there was no evidence of the Defendants' consent or authorization for these payments after the assignment. Consequently, the payments did not constitute an acknowledgment of the debt or a willingness to pay, as required to toll the statute of limitations (paras 10-19).
Per Sutin J. (specially concurring):
Sutin J. agreed with the majority but emphasized that the key issue was the lack of control by the Defendants over the payments at the time they were made. Without such control, no inference could be drawn that the Defendants acknowledged the debt or intended to pay it. Sutin J. also noted that the Plaintiff could have pursued an alternative theory regarding the accrual of the cause of action but failed to do so (paras 22-24).