Opinion ID: 1154750
Heading Depth: 4
Heading Rank: 3

Heading: The Absence of Fraudulent Concealment.

Text: As stated above, the plaintiffs were aware of certain material facts upon which to base their breach of contract claim in the early 1960s. Their argument that the defendants misrepresented those facts to them, therefore, fails to support the application of equitable estoppel. In addition to claiming that the defendants affirmatively misrepresented facts to them, the plaintiffs claim that the defendants failed to disclose certain other material facts, which also constituted fraudulent concealment. To invoke the doctrine of equitable estoppel by silence, the party must first establish that there was a duty to speak, and he must show that the silent party knew that he was relying upon that silence. Capo, 94 N.M. at 377, 610 P.2d at 1206. If there is a confidential or fiduciary relationship between the parties, the failure to disclose material facts or the suppression of material facts when required to disclose them, which induces detrimental reliance, may constitute fraudulent concealment giving rise to equitable estoppel. Keithley, 102 N.M. at 570, 698 P.2d at 440. Absent a fiduciary duty to speak on the part of the defendants, however, silence, nondisclosure, or denials of alleged fraudulent conduct are insufficient to constitute fraudulent concealment so as to toll a statute of limitations. Capo, 94 N.M. at 377, 610 P.2d at 1206. The plaintiffs confuse the issue here by claiming that an implied covenant of good faith, which the trial court found existed, imposed a duty upon National to disclose material information. National's systematic failure to disclose material information in breach of its implied covenant of good faith, the plaintiffs argue, constitutes fraudulent concealment, thereby tolling the statutes of limitations. The issue of implied covenants in this case, however, goes to whether a breach of contract existed, not to whether National had a duty to disclose material information, the breach of which might have constituted fraudulent concealment. Unlike fiduciary duties, covenants of good faith do not require an exclusive operator to subordinate its interest to that of the royalty holders. Murdock v. Pure-Lively Energy 1981-A, Ltd., 108 N.M. 575, 579, 775 P.2d 1292, 1296 (1989). Even though the defendants owed contractual duties to the plaintiffs and also owed them a duty of good faith and fair dealing, a fiduciary relationship did not automatically arise from these circumstances in which the defendants were essentially handling their own property. See Garfield v. True Oil Co., 667 F.2d 942, 945 (10th Cir.1982). Given the type of agreement at issue here and the legal relationship between the parties, albeit heavily tilted in favor of National, no fiduciary duty existed, and the trial court so found. Without a fiduciary duty, no duty to disclose or speak existed. Thus, silence or failure to disclose certain information to the plaintiffs here could not operate to toll the statutes of limitations. Notwithstanding our holding that no duty to disclose existed, the record does not demonstrate that throughout the relationship between the parties from 1948 to 1982, the defendants intentionally and deliberately concealed facts with the hope that the plaintiffs would forego bringing legal action. As has been demonstrated, the plaintiffs contemplated legal action in the 1960s predicated upon the Central Farmers agreement, and any issues presented in their 1982 lawsuit based upon nonsurrender were apparent to them in 1968 when National shut the Lea County mine down, but in any event before 1976. Defendants' conduct and representations, therefore, cannot be characterized as concealing facts material to a determination by the plaintiffs about whether to file suit. The trial court, therefore, erred in applying the doctrine of equitable estoppel in light of the terms of the contract, the duties and obligations attendant thereto, and the knowledge demonstrated by the plaintiffs in the 1960s.