Opinion ID: 1358920
Heading Depth: 2
Heading Rank: 2

Heading: Willful Breach of Contract

Text: The Anayas ask us to reinstate the jury verdict awarding damages for willful breach of contract against GMAC and GMC, as supported by substantial evidence. We agree that the trial court properly entered j.n.o.v. with respect to GMAC. Even if GMAC had a duty to independently investigate the claims and defenses raised by the Anayas (a dubious proposition in light of NMSA 1978, § 55-9-503 and the terms of the Installment Sales Contract between the parties), the mere fact that GMAC exercised its rights and instituted a replevin action before undertaking such investigation does not constitute evidence of willful breach. Nothing was presented to show that GMAC in any way prevented or hindered the Anayas from asserting their claims and defenses. In sum, there is no support for a finding of willful breach or for assessment of punitive damages against GMAC. Since we have determined that recovery under the theory of revocation of acceptance automatically renders inconsistent recovery under a claim for breach of warranty, recovery for willful breach of contract against GMC is similarly inconsistent. We do not dispute that the Code imposes an obligation of good faith in commercial dealings, Celebrity, Inc. v. Kemper, 96 N.M. 508, 509, 632 P.2d 743, 744 (1981) (citing § 55-1-102), and that the good faith of a party is generally a question of fact. McKay v. Farmers and Stockmens Bank of Clayton, 92 N.M. 181, 585 P.2d 325 (Ct.App.), cert. quashed, 92 N.M. 79, 582 P.2d 1292 (1978). We fail to see, however, and the Anayas have not convinced us, that a claim for willful breach of contract can exist when the underlying breach of warranty claim has been precluded. Thus it is not necessary for us to review what the Anayas claim to be evidence of bad faith and malicious conduct of appellees. The trial court correctly entered j.n.o.v. on grounds of inconsistency.