Opinion ID: 1151193
Heading Depth: 3
Heading Rank: 1

Heading: Did the trial court err in directing a verdict for Sunwest?

Text: Appellants offer three arguments that we consider in determining if the trial court erred when it directed a verdict in favor of Sunwest. First, whether appellants' defense of payment of the corporate debt raised an issue of fact that entitled them to a jury trial. Second, whether appellants were entitled to a jury determination of their liability on their personal guarantees. Third, whether appellants were entitled to a jury on their counterclaim of economic coercion. Appellants argue that by granting a directed verdict on these issues, the trial court took upon itself the task of the fact finder and eliminated the jury's function. Appellants conclude that the trial court erred in awarding judgment to Sunwest. Appellants first contend that whether the corporate debt had been completely satisfied raises a question of fact that must be determined by a jury. Sunwest contends that the corporate debt was not fully paid and the release of total corporate indebtedness was inadvertent. Sunwest argues that appellants failed to present sufficient evidence to create an issue of fact and that appellants were not entitled to a jury determination on this issue. We agree with Sunwest. A directed verdict is appropriate only when there are no true issues of fact to be presented to a jury. Melnick v. State Farm Mut. Auto. Ins. Co., 106 N.M. 726, 729, 749 P.2d 1105, 1108, cert. denied, 488 U.S. 822, 109 S.Ct. 67, 102 L.Ed.2d 44 (1988). All evidence, including the evidence presented by the party moving for the directed verdict, must be considered. Id. at 728-29, 749 P.2d at 1107-08. Any conflicts in the evidence or reasonable interpretations of the evidence are viewed in favor of the party resisting the directed verdict. Id. The sufficiency of evidence presented to support a legal claim or defense is a question of law for the trial court to decide. American Employers' Ins. Co. v. Crawford, 87 N.M. 375, 376, 533 P.2d 1203, 1204 (1975); Loucks v. Albuquerque Nat'l Bank, 76 N.M. 735, 740, 418 P.2d 191, 195 (1966). A release of an instrument is ineffective if it is done unintentionally or by mistake. Los Alamos Credit Union v. Bowling, 108 N.M. 113, 114, 767 P.2d 352, 353 (1989). In Los Alamos Credit Union, the lender inadvertently marked a note as paid and released the accompanying mortgage even though the note was not paid. The borrowers refused the lender's request to reaffirm the note and to have the mortgage reinstated. After the borrowers failed to make a payment due under the original note, the lender brought a foreclosure suit, alleging that the release was a clerical error. The borrowers asserted that the lender could not avoid a properly executed, unambiguous release of the mortgage. In upholding the trial court's grant of summary judgment in favor of the lender, we held that the borrowers failed to present evidence sufficient to create a genuine issue of fact denying the existence of the obligation and that therefore, summary judgment was appropriate. Id. As in Los Alamos Credit Union, appellants in the instant case have failed to present a genuine issue of fact concerning the existence of the obligation. Three letters exchanged among Curry County Grain, Sunwest, and Citizens Bank were introduced into evidence regarding satisfaction of the Curry County Grain debt and release of the debt and mortgages. These letters indicated that the corporate debt was only partially satisfied. Randy Harris, President of Sunwest, testified that the form that purportedly released the debt was used by mistake and that the intent in using the form was to release the mortgages and not the debt. Testimony established that Michael Garrett continued to negotiate on behalf of Curry County Grain after the purported release was issued. This evidence establishes that the Curry County Grain debt was only partially satisfied and that the mortgages, and not the underlying debt, were released. Like the borrowers in Los Alamos Credit Union, appellants here have in effect asserted that an unambiguous release cannot be avoided. Appellants have presented no evidence refuting the existence of the underlying corporate debt and thus, have not created an issue of fact. The trial court did not err in granting a directed verdict on this issue. Appellants next contend that they are entitled to a jury to determine whether they are liable on their personal guarantees of the Curry County Grain debt. A party in a foreclosure action is entitled to a jury trial on legal issues that are independent of the foreclosure suit. State ex rel. McAdams v. District Court, 105 N.M. 95, 96, 728 P.2d 1364, 1365 (1986). Whether a party is liable as a guarantor is a legal issue independent of the foreclosure action that entitles the party to a jury trial. Id. at 97, 728 P.2d at 1366. However, the party is not entitled to a jury trial on issues that are incidental to the foreclosure suit such as the existence or amount of the underlying debt. Id. In the instant case, appellants do not contest their liability as guarantors; rather, they contest the existence of the corporate debt. Under McAdams, the existence of the debt is an issue incidental to the foreclosure suit that does not entitle appellants to a jury trial. Therefore, the trial court did not err in granting a directed verdict on this issue. Appellants' final argument regarding their entitlement to a jury trial is that their counterclaim of economic coercion presented an issue of fact. Appellants contend that Sunwest refused to refinance their personal debt unless the Curry County Grain debt was satisfied. Appellants argue that if the Curry County Grain debt had previously been satisfied, Sunwest's actions constitute economic coercion because appellants would be forced to satisfy a debt for which they previously had not been liable. See B & W Constr. Co. v. N.C. Ribble Co., 105 N.M. 448, 734 P.2d 226 (1987); First Nat'l Bank v. Wood, 93 N.M. 467, 469, 601 P.2d 437, 439 (Ct.App. 1979). As appellants recognize, however, their claim of economic coercion is contingent on a finding that the corporate indebtedness had been fully satisfied. As discussed above, the corporate indebtedness was not completely satisfied. Thus, the cases cited by appellant are distinguishable from the instant case. For instance, in Wood, the bank forced the borrower to guarantee a loan on which he was not previously liable and thus, he could assert a claim of economic coercion. 93 N.M. at 469, 601 P.2d at 439. Similarly in B & W Construction, shareholders were forced to sign individual guarantees of corporate indebtedness to avoid repossession of their equipment. This constituted economic coercion because the shareholders had no individual liability prior to the threats of repossession. 105 N.M. at 449-50, 734 P.2d at 227-28. In contrast, appellants in the instant case were already liable on the Curry County Grain debt when they attempted to renegotiate their personal debt. Sunwest had an existing right to require appellants to satisfy the corporate debt. Thus, appellants' counterclaim fails to present an issue of fact sufficient to avoid a directed verdict.