Opinion ID: 1369418
Heading Depth: 3
Heading Rank: 1

Heading: Claim of Equitable and Affirmative Defenses.

Text: KAC has asserted numerous challenges to the trial court's findings and the court's ruling that ARE was entitled to forfeiture of the contract. (1) We address first KAC's claim that the retention of its tendered check for $3,132.00 amounted to an acceptance of the terms and conditions of its letter requesting an extension of time for making the first installment payment. KAC points out that although ARE did not cash the check, it did not return it and continued to retain the instrument. KAC relies upon Warren v. New York Life Ins. Co., 40 N.M. 253, 58 P.2d 1175 (1936) and Miller v. Montgomery, 77 N.M. 766, 427 P.2d 275 (1967), for the principle that under the doctrine of accord and satisfaction retention of a tendered check for an unreasonable period of time amounts to an acceptance of those conditions because the creditor has a duty either to notify the debtor of his rejection of the tender or to return the check. Although KAC has correctly cited precedent indicating that retention of a tendered check for an unreasonable time without notice to an offeree may constitute an acceptance thereof, under the facts herein an accord and satisfaction did not exist. KAC's letter dated May 27 seeking extension did not constitute an accord and satisfaction because the check tendered did not purport to be in full satisfaction of KAC's obligations under the contract, but instead it was tendered as an addtional payment for modification of the time for making the annual installment payment. See Smith Const. Co. v. Knights of Columbus, Coun., 86 N.M. 50, 519 P.2d 286 (1974). Moreover, the actions of ARE in retaining the check cannot be construed to amount to an agreement between the parties to grant an extension of time for payment because KAC failed to comply with other terms proposed by it in its letter. KAC failed to make the required payment on or before the date of July 31, 1980  the last day of the proposed period of extension. KAC did not make the full payment due until more than two and one-half weeks following July 31, 1980. Under these circumstances, ARE's retention of the check cannot be deemed an agreement to the requested extension. (2) KAC argues further that the trial court erred in refusing to rule favorably upon its defenses of estoppel, waiver, laches, mistake of fact and unjust enrichment. Each of these affirmative defenses necessarily must stand or fall upon the evidence before the trial court. The evidence adduced at trial, although conflicting in part, was sufficient to sustain the findings of the trial court. Although on this same evidence the trial court could have reached a decision validating KAC's affirmative defenses and sustaining appellant's requested findings of fact and conclusions of law, the existence of conflicting evidence is not grounds for reversal so long as the findings which were made are supported by substantial evidence. Lucas v. Lucas, 95 N.M. 283, 621 P.2d 500 (1980); State ex rel., Etc. v. Natural Father, 93 N.M. 222, 598 P.2d 1182 (Ct.App. 1979). The trial court adopted numerous key findings of fact contrary to the position asserted by appellants, including a finding that [a]t no time did [KAC] and [ARE] agree to an extension of the time within which to make the April 15, 1980 payment due under the real estate contract. The court further found that KAC knew that ARE's letter of May 19 was a notice of default and demand for payment under the contract and that KAC was aware of the time within which it was required to cure the default. The court found additionally that KAC and Tract C's failure to pay the 1980 annual payment to ARE in a timely manner was made with knowledge of the fact of default ... and of the legal consequences of a failure to cure the default within the time provided by the contract. The trial court concluded with respect to KAC's equitable defenses that: The defenses of waiver, equitable estoppel, and mistake of fact are affirmative defenses, and the burden of proving them rests upon the party asserting them. Tract C and KAC, Inc. failed to prove by a preponderance of the evidence the defenses of equitable estoppel, waiver and mistake of fact.... In order to establish a claim of equitable estoppel the party asserting such defense must establish each of the factors set forth in Capo v. Century Life Ins. Co., 94 N.M. 373, 377, 610 P.2d 1202, 1206 (1980). These are: [A]s related to the party estopped    (1) conduct which amounts to a false representation or concealment of material facts, or, at least, which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) intention that such conduct shall be acted upon by the other party    and (3) knowledge, actual or constructive, of the real facts   . As related to [the party claiming] estoppel, the essentials are: (1) lack of knowledge and of means of knowledge of the truth as to the facts in question    (2) reliance upon the conduct of the party estopped    and (3) action based thereon of such a character as to change its position prejudically. (Cite omitted.) Significantly, here, KAC has conceded that it did not make the installment payment until after the date of expiration of its requested extension. Under the circumstances, KAC cannot be heard to assert that it relied upon the conduct of ARE in delaying its tender of the delinquent payment beyond even the date of July 31, 1980. Similarly, KAC's assertion of the defense of waiver was decided adversely to appellant. A waiver is the intentional relinquishment of a known right or such conduct as warrants an inference of the relinquishment of the right, resulting from an express agreement between the parties or which is inferred from circumstances indicating an intention to waive. Moss Theatres, Inc. v. Turner, 94 N.M. 742, 616 P.2d 1127 (Ct.App. 1980) ( quoting Bastanchury v. Times-Mirror Co., 68 Cal. App.2d 217, 156 P.2d 488 (1945)). Since KAC's claim of waiver was asserted as an affirmative defense, whether the defense has been proven becomes a question of fact for determination by the trial judge. The trial judge, based upon conflicts in the testimony, determined KAC had failed in its burden of proof. In light of the existence of substantial evidence to support the trial court's findings upon this issue, we find no error. The existence of waiver is a factual issue and which must be determined under the facts of each case. Peoples State Bank v. Ohio Cas. Ins. Co., 96 N.M. 751, 635 P.2d 306 (1981). A court may grant relief in appropriate cases from the consequences of a material mistake of fact. Rabbit Ear Cattle Company v. Frieze, 80 N.M. 203, 453 P.2d 373 (1969). To entitle a party to relief on the basis of a mistake of fact, the party must establish that he was ignorant of a material existing fact or acted under the erroneous belief that some essential fact supposed to exist really does not exist. Id., Springdale Gayfer's Store Co. v. D.H. Holmes Co., 281 Ala. 267, 201 So.2d 855 (1967). Generally, however, where the mistake of fact is attributable to a party's own negligence in failing to exercise reasonable diligence in ascertaining the true facts and he had available the opportunity to ascertain the truth, equity will not grant relief. United States v. Ames, 99 U.S. 35, 25 L.Ed. 295 (1878); Schreier v. Chicago and Northwestern Railway Co., 96 Ill. App.2d 425, 239 N.E.2d 281 (1968). A party seeking such relief must show that his ignorance was excusable. The equitable defense of mistake of fact is not available where the alleged mistake was occasioned by a party's own negligence and against one who was free from fault. United States v. Ames, supra . The trial court's denial of KAC's equitable defenses was supported by substantial evidence. (3) KAC argues that forfeiture of its rights under the purchase agreement will result in an unjust enrichment to ARE and that it would be inequitable to enforce the termination provisions of the contract. KAC contends that it has already paid almost $90,000.00 under the contract to Tract C. Equity will utilize its powers to prevent a party from unjustly enriching himself at the expense of another where the circumstances indicate that such result would be harsh and inequitable. American University v. Forbes, 88 N.H. 17, 183 A. 860 (1936); see generally Annot., 134 A.L.R. 1064 (1941). Determination of whether a forfeiture provision of a real estate contract should be enforced is a matter within the sound discretion of the trial court based on the evidence before it, and its decision will not be set aside unless manifestly against the clear weight of the evidence. Standard Fashion Co. v. Siegel-Cooper Co., 157 N.Y. 60, 51 N.E. 408 (1898); see also Citizens Bank of Clovis v. Williams, 96 N.M. 373, 630 P.2d 1228 (1981). Equity denotes a spirit of fairness and justness between parties whose rights or claims are in conflict. Demers v. Gerety, 92 N.M. 749, 595 P.2d 387 (Ct.App.) rev'd on other grounds 92 N.M. 396, 589 P.2d 180 (1978). Although equity abhors forfeitures, Stamm v. Buchanan, 55 N.M. 127, 227 P.2d 633 (1951), the decision whether under the existing facts and equitable factors present before the court a forfeiture or termination should be permitted is a matter for determination by the trial judge. See Smith v. Price's Creameries, Div. Etc., 98 N.M. 541, 650 P.2d 825 (1982). As testified by Allyn, an agent for KAC, the reason KAC did not make the installment payment was that the corporation at the outset decided to try and see what we could do about delaying ... these payments. Considering that an installment payment was due on April 15, 1980, and that when the payment was finally tendered it was more than four months overdue, the trial court's denial of KAC's claims of unjust enrichment and its refusal to recognize KAC's equitable defenses was not error.