Case Name: Jimmy and Elizabeth NEZ, husband and wife, Plaintiffs-Appellants, v. Max FORNEY, d/b/a Albuquerque Recovery Bureau, and "M" Bank, formerly known as State National Bank, Defendants-Appellees
Court: Supreme Court of New Mexico
Jurisdiction: New Mexico
Decision Date: 1989-12-05
Citations: 109 N.M. 161
Docket Number: No. 18228
Parties: Jimmy and Elizabeth NEZ, husband and wife, Plaintiffs-Appellants, v. Max FORNEY, d/b/a Albuquerque Recovery Bureau, and “M” Bank, formerly known as State National Bank, Defendants-Appellees.
Judges: RANSOM, J., concurs.
Reporter: New Mexico Reports
Volume: 109
Pages: 161–165

Head Matter:
783 P.2d 471
Jimmy and Elizabeth NEZ, husband and wife, Plaintiffs-Appellants, v. Max FORNEY, d/b/a Albuquerque Recovery Bureau, and “M” Bank, formerly known as State National Bank, Defendants-Appellees.
No. 18228.
Supreme Court of New Mexico.
Dec. 5, 1989.
Robert Finkelstein, San Juan County Legal Services, Farmington, for plaintiffs-appellants.
Celia F. Rankin, Albuquerque, for defendants-appellees.

Opinion:
OPINION
BACA, Justice.
Plaintiffs, Jimmy and Elizabeth Nez (Nez), appeal the district court's order granting summary judgment in favor of defendants M Bank and Max Forney. M Bank is a Texas corporation with its principal place of business in El Paso, Texas. Max Forney does business as Albuquerque Recovery Bureau. Nez raises two issues on appeal: (1) whether the district court should apply the New Mexico or Texas statutes of limitation in the instant case; (2) if the Texas statutes of limitation are applicable, whether the two-year or four-year statute of limitations should be used. We reverse.
In 1982, Nez entered into a retail installment contract with Kemp Ford, Inc., in El Paso, Texas, to purchase a Ford truck and listed an El Paso address below the buyer's signature line. Kemp Ford assigned the contract to M Bank. This contract contained a clause stating: "This contract shall be governed by the laws of the State of Texas." Subsequently, Nez moved to New Mexico and resided within the territorial jurisdiction of the Navajo Nation. On September 25, 1985, Bradford Clement, an agent of M Bank, repossessed Nez' truck from their house on the Navajo reservation. M Bank denies that Bradford Clement was its agent.
On April 26,1988, approximately two and one-half years after the repossession, Nez filed a complaint in district court alleging conversion, wrongful repossession, an unfair trade practice violation, and violation of Navajo Tribal Code Section 607. Nez sought actual and punitive damages under the conversion count; various statutory damages under NMSA 1978, Sections 55-9-502 and 55-9-504 to 55-9-507 (Repl.Pamp. 1987) of the Uniform Commercial Code; $300 or three times actual damages under NMSA 1978, Section 57-12-10 (Repl.Pamp. 1987) of the Unfair Practices Act; and statutory damages under the Navajo Tribal Code Section 609. Defendants then moved for summary judgment against Nez with a supporting brief. In their brief, defendants argued summary judgment was proper on all claims because Nez brought suit after the time expired under a Texas statute of limitations. Defendants also asserted that Nez could not base his claims on violations of New Mexico law because New Mexico had no connection with the transaction at issue. Defendants contended that Texas law should apply, and the parties' choice of law provision should be honored. We do not reach this second argument. This opinion only turns on the question of the applicability of the statute of limitations. The court granted defendants' motion, and Nez appealed.
We first address defendants' argument in its brief-in-chief that, as the parties chose to be governed by Texas substantive and remedial law pursuant to the choice of law provision, application of Texas statutes of limitation barring Nez' claims was appropriate. Nez correctly asserts that we have viewed statutes of limitation as procedural for choice of law purposes. In Sierra Life Ins. Co. v. First National Life Ins. Co., 85 N.M. 409, 512 P.2d 1245 (1973), plaintiff Sierra Life, a New Mexico corporation, brought an action for breach of contract or, alternatively, for specific performance, against defendant First National, an Arizona corporation, in a New Mexico district court. First National argued to the trial court that Arizona's four-year statute of limitations was applicable, and therefore, plaintiff's claims were barred. On appeal, we ruled that under New Mexico law statutes of limitation are procedural and that the law of the forum governs matters of procedure. Thus, we held that plaintiff's claims were not barred, applying a six-year New Mexico statute of limitations. See also Slade v. Slade, 81 N.M. 462, 468 P.2d 627 (1970) (statutes of limitation are not substantive in nature, and the law favors the right of action, not the right of limitation). Texas courts also view statutes of limitation as procedural for choice of law purposes. See, e.g., Los Angeles Airways, Inc. v. Lummis, 603 S.W.2d 246, 248 (Tex.Civ.App.1980), cert. denied, 455 U.S. 988, 102 S.Ct. 1610, 71 L.Ed.2d 847 (1982). Finally, our holdings are consistent with a recent Supreme Court opinion, Sun Oil Co. v. Wortman, 486 U.S. 717, 108 S.Ct. 2117, 100 L.Ed.2d 743 (1988). In Sun Oil, the Supreme Court held that traditionally statutes of limitation are procedural; therefore, a Kansas forum did not violate the Due Process and Full Faith and Credit clauses by applying its own longer statute of limitations to a claim governed by the substantive law of other states.
Defendants also assert that New Mexico recognizes parties may include remedial law in their choice of law agreement, citing to Jim v. CIT Financial Services Corp., 87 N.M. 362, 533 P.2d 751 (1975). We faced facts similar to the instant case in Jim. Jim, a Navajo, purchased a truck in Farmington, New Mexico, and CIT financed the purchase. Later, Jim defaulted on his payments. While Jim resided on the Navajo reservation in New Mexico, two agents of CIT repossessed the truck on the reservation without Jim's written consent. Subsequently, Jim brought suit in the district court for violations of Navajo Tribal Code Sections 307 and 309 (now Sections 607 and 609). CIT responded, filing a motion for failure to state a claim upon which relief can be granted, which was apparently based on the theory that New Mexico, not Navajo law, applied and under NMSA 1953, Section 50A-9-503 of the Uniform Commercial Code, CIT had the right to self help repossession without breach of the peace. The court, treating the defense as a motion to dismiss, dismissed the case with prejudice.
We held in Jim that parties can choose by contract a law to govern the performance and enforcement of contractual arrangements between them, quoting from NMSA 1953, Section 50A-1-105 of the Uniform Commercial Code for support. Unfortunately, this court did not have either a copy of the conditional sales contract between Jim and CIT before it, or any other evidence indicating the parties' choice as to the applicable law governing the contract. We, therefore, held the court erred in dismissing Jim's complaint and remanded with the following directions:
Perhaps the contract will conclusively answer the question as to whether the parties made a choice, not only as to the law governing the validity and interpretation of the contract, but also as to that governing the remedies for an admitted breach of an admittedly valid contract. Failing such provision in the contract, it is only then that a choice of law analysis, would come into play.
Id. at 364, 533 P.2d at 753.
We recognized in Jim that parties may include a time to sue provision in a contract. In other words, parties can put their own statute of limitations period in a contract, and our courts will honor it. See Electric Gin Co. v. Firemen's Fund Ins. Co., 39 N.M. 73, 39 P.2d 1024 (1935) (fire insurance policy contained a provision that a suit must be commenced within twelve months after loss, which this court upheld); Turner v. New Brunswick Fire Ins. Co., 45 N.M. 126, 112 P.2d 511 (1941) (insurance policy provision stipulating a one-year limitation period is not void when it shortens a general six-year contract statute of limitations period); Wiseman v. Arrow Freightways, Inc., 89 N.M. 392, 552 P.2d 1240 (Ct.App.), cert. denied, 90 N.M. 9, 558 P.2d 621 (1976) (trial court erred in failing to give effect to a time to sue provision found in an insurance policy). However, in Sandoval v. Valdez, 91 N.M. 705, 580 P.2d 131 (Ct.App.1978), our court of appeals held that a one-year limitation period in an insurance contract was not controlling when it conflicted with New Mexico public policy set forth in our uninsured motorist statute. Therefore, in Sandoval, without deciding if the applicable time limitation should be based on the personal injury or contract statute of limitations, the court of appeals concluded that the plaintiff's personal injury suit was not barred.
Here, we observe that the choice of law provision only stated that the retail installment contract would be governed by Texas law. It failed, however, to include a statute of limitations/time to sue provision. In line with Jim and time to sue cases, we believe a choice of law provision must specifically describe remedial limitations, if such aspects are to be covered in addition to substantive aspects of the contract. The choice of law provision in the instant case should be limited only to substantive matters, such as contractual interpretation. We conclude that the district court erred as a matter of law in not applying a New Mexico statute of limitations here, because New Mexico courts should apply the forum state's statute of limitations.
Having found that the district court should have applied a New Mexico statute of limitations, we must determine which statute is appropriate. This action is primarily one for wrongful repossession, which arises from plaintiffs' and defendants' execution of a security agreement creating a security interest in the sellers. The Nezes granted sellers a purchase money security interest. In Bank of New Mexico v. Sholer, 102 N.M. 78, 691 P.2d 465 (1984), we implicitly interpreted a security agreement to be a contract. See First City Bank-Farmers Branch, Texas v. Guex, 677 S.W.2d 25 (Tex.1984); Texas Nat'l Bank v. Karnes, 717 S.W.2d 901 (Tex.1986) (actions seeking recovery for wrongful repossession and other repossession-related U.C.C. violations sound in contract). Nez, in his docketing statement and brief-in-chief, argued that the New Mexico contractual statute of limitations, NMSA 1978, Section 37-1-3 or 37-1-4 should be applied. Because we find that Nez brought claims within the applicable New Mexico statute of limitations period under either statute, we do not decide which statute the district court should have applied. We simply hold that Nez' claims were not barred under either statute. We, therefore, do not reach the issue of which Texas statute of limitations is applicable here.
IT IS SO ORDERED.
RANSOM, J., concurs.
MONTGOMERY, J., specially concurs.