Opinion ID: 1188744
Heading Depth: 2
Heading Rank: 2

Heading: Whether the evidence warranted the award of $10,000.00 punitive damages; and

Text: III. Whether the trial court erred in finding the January 14, 1975 purchase agreement and supplement with its covenants, conditions and restrictions to be the operative agreement between PPI and Lujan. In June 1972, PPI purchased a sub-division known as Pendaries Village from Leon to develop a recreational community. The court found that PPI assured Leon that it would continue to develop Pendaries Village and construct certain amenities for the project, including the creation of an equestrian area offering both boarding and riding privileges to potential lot buyers and current property owners at Pendaries Village. PPI intended to develop and revitalize an approximately five-acre parcel, containing then run-down and poorly maintained barns, shed, and corrals, to create the equestrian unit. On December 27, 1972, Lujan, then a salesman for PPI at Pendaries Village, purchased from PPI the five-acre equestrian area under an installment land sales contract. The agreement provided for the delivery of a deed to Lujan upon payment of the entire contract price. To insure that an adequate equestrian unit was developed on the five acres, PPI agreed to construct and did construct $23,000.00 of improvements on the property. Lujan agreed to restrict the property's future use to the operation of an equestrian unit for the benefit of prospective buyers and property owners at Pendaries Village, and agreed to provide horses for that purpose. On September 26, 1973, PPI granted Lujan an option to purchase a 14.45 acre parcel adjacent to the five-acre equestrian area for $27,500.00. On July 10, 1974, Lujan and PPI agreed through correspondence that Lujan would sell the equity in 19 lots in Pendaries Village, which he was purchasing, to PPI for, the following considerations, among others; (a) A thirty-acre parcel of land at Pendaries Village known as the alfalfa patch, and (b) Water rights to the alfalfa patch. On July 18, 1974, PPI and Lujan, by supplement to the July 10, 1974 letter agreement, agreed to substitute a four-inch water line to the alfalfa patch to be constructed by PPI in lieu of PPI's conveying the water rights to said parcel. Lujan received all consideration promised in the July 10, 1974 agreement, as amended on July 18, 1974, except the four-inch water line. On December 19, 1974, PPI and Lujan executed a memorandum of understanding. In return for a release by Lujan of PPI's obligation to construct the four-inch water line, PPI agreed to pay Lujan $1,500.00 for the purpose of drilling a well on the alfalfa patch. PPI further agreed to sell Lujan the 14.45 acre parcel adjacent to the equestrian area, on which he had an option, for $1,000 per acre rather than the option price of $27,500.00. The parties agreed that PPI would prepare and forward a more definitive agreement to cover the memorandum of understanding. Lujan and PPI met again on January 14, 1975. Lujan then requested further consideration for his release of PPI's obligation to provide water for the alfalfa patch. PPI agreed to sell Lujan the five-acre equestrian area and the 14.45 acres for a total of $41,742.72, the previous price for the equestrian area alone. Lujan and PPI executed a real estate purchase agreement, together with supplement, superceding the parties' memorandum of understanding. PPI also delivered to Lujan the $1,500.00 check for the purpose of drilling a well on the alfalfa patch as previously agreed. To effect the agreement, Lujan executed a separate release relieving PPI of its obligation to construct the four-inch water line to the alfalfa patch, and releasing Lujan's claims for water rights. PPI assigned its interest in the real estate purchase agreement to DMI. In May 1976, the balance due DMI for the land in question was $41,600.20. DMI agreed to give Lujan a 10% discount if he paid the contract off in full. The trial court found that in reliance upon DMI's offer, Lujan, on or about May 27, 1976, tendered to DMI the discounted price whereupon DMI forwarded a warranty deed to the escrow agent. Demand was then made on the trustee, First National Bank of Santa Fe, under the Leon-PPI deed of trust to release the property from the lien imposed by the deed of trust. Upon instructions from Leon, the trustee refused to grant a release and as a result Lujan was unable to take advantage of the 10% discount ($4,160.00) offered by DMI.