Opinion ID: 2637904
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Heading: Validity of the Modified Loan Agreement

Text: [¶ 14] The fundamental question concerning the validity of the modified loan agreement is whether the agreement is supported by any consideration. Did Ms. Woodcock receive anything of value in exchange for her supposed agreement five months after the last loan to substantially reduce the interest rate, eliminate joint and several liability, and alter other terms of the loans? Without valid consideration, the agreement is invalid. Prudential Preferred Properties v. J and J Ventures, Inc., 859 P.2d 1267, 1272 (Wyo.1993); see also Brodie v. General Chemical Corporation, 934 P.2d 1263, 1268 (Wyo.1997); Idaho Migrant Council, Inc. v. Warila, 890 P.2d 39, 41 (Wyo.1995). Consideration may take a variety of forms including the performance of some act, a forbearance, or the creation, modification, or destruction of a legal relationship. Prudential Preferred Properties, 859 P.2d at 1272; Moorcroft State Bank v. Morel, 701 P.2d 1159, 1161-62 (Wyo.1985). The problem Ms. Schlesinger's argument faces is, the performance or promise offered as consideration cannot be for an obligation the promisor is already legally required to perform. It is well recognized that the performance of a duty imposed by law is insufficient consideration to support a contract. See, e.g., Hale v. Brewster, 81 N.M. 342, 467 P.2d 8, 11 (1970) (court-appointed attorney had duty to accept payment from court for representation as sole compensation; if client's note was given to attorney as fee for services, attorney was already bound to perform and client had a valid defense to action by attorney on the note); Gragg v. James, 452 P.2d 579, 587 (Okla. 1969) (oral modification to contract relieving defendant of responsibility must be supported by additional consideration to be enforceable); Walden v. Backus, 81 Nev. 634, 408 P.2d 712, 714 (1965) (buyer's relinquishment of premises insufficient to support accord where buyer was already bound under sale agreement to return premises); Restatement (Second) of Contracts § 73 (1981). Prows v. State, 822 P.2d 764, 768 (Utah 1991). Payment of a debt which is due and undisputed does not constitute consideration for a promise. 17A Am.Jur.2d Contracts § 145 (1991). Likewise, a mere promise to pay a debt for which the promisor is already legally bound does not constitute a consideration sufficient to support a new contract. Id; see also Przylepa v. Przylepa, 77 Ohio App.3d 808, 603 N.E.2d 1083, 1085 (1991); Shannon v. Universal Mortgage & Discount Co., 116 Ohio St. 609, 157 N.E. 478, 481 (1927). Specifically, the promise to pay a debt already due is not sufficient consideration for a creditor's promise to forbear the time of payment. O'Brien v. General Motors Acceptance Corporation, 362 P.2d 455, 458 (Wyo.1961). [¶ 15] Ms. Schlesinger has argued the modified loan agreement provided protection to assure payment of the outstanding loans over and above the protection Ms. Woodcock already had under the notes and oral agreements. However, if the terms of the oral agreements were known through the parties' course of conduct, no further protection was provided by the modified loan agreement. Certainly, the modified loan agreement provided no security or collateral which might have been adequate consideration. At bottom, the validity of the modified loan agreement and the enforceability of the oral agreements are mutually exclusive. If the oral agreements are enforceable, the loan agreement offers Ms. Woodcock nothing but substantially less attractive loan terms. If the oral agreements are not enforceable, the modified loan agreement is of value to Ms. Woodcock, or at least it was prior to CSR's filing for bankruptcy. [¶ 16] We agree with the trial court that the terms of the oral loan agreements are knowable and certain given the parties' clear course of conduct over a year's time with fourteen different loans and four different lenders. After hearing all the evidence, the trial court made factual findings that the terms of Ms. Woodcock's agreement to loan money to Ms. Schlesinger and CSR included twenty-five percent interest, a term of forty days at most, joint and several liability, a one percent late fee, and payment by the debtor of all reasonable attorney's fees and costs of collection. We give great deference to the trier of fact and find adequate evidence in the record to support these findings. Raymond v. Raymond, 956 P.2d 329, 332 (Wyo. 1998); Brown v. State, 944 P.2d 1168, 1170 (Wyo.1997). [¶ 17] Given those facts, Ms. Woodcock had an enforceable contract, and the post hoc modified loan agreement provided her with no greater security than that to which she was already entitled by law. To suggest, as Ms. Schlesinger does, that, because Ms. Woodcock, an elderly person not represented by counsel in the review of the loan agreement, was thankful to see the agreement somehow provided consideration for giving up a bargained for twenty-five percent interest rate, joint and several liability, and costs of collection is inherently suspect. As noted in the comment to Restatement (Second) of Contracts: A claim that the performance of a legal duty furnished consideration for a promise often raises a suspicion that the transaction was gratuitous or mistaken or unconscionable.... Because of the likelihood that the promise was obtained by an express or implied threat to withhold performance of a legal duty, the promise does not have the presumptive social utility normally found in a bargain. Restatement (Second) of Contracts § 73 cmt. a at 179-80 (1981). Ms. Schlesinger's contention the modified loan agreement benefited Ms. Woodcock by the mere fact that it documented the previous loans misses the mark. It appears much more likely Ms. Schlesinger, in an attempt to avoid the admittedly onerous loan terms, took advantage of Mr. Dixon's impairment which left Ms. Woodcock vulnerable to the suggestion the modified loan agreement was in her interest. Quite the opposite is true; the agreement removed the only protection Ms. Woodcock had for repayment of the loans Ms. Schlesinger's personal liability. [¶ 18] Ms. Schlesinger further argues to this court that, even if the modified loan agreement lacked consideration, pursuant to the Uniform Commercial Code provisions Wyo. Stat. Ann. §§ 34.1-1-107 [1] and 34.1-2-209(a) [2] (LexisNexis 2001), it is not invalid. These UCC contentions were never presented to the trial court. Excepting appeals involving issues of jurisdiction or fundamental rights, we customarily will not consider issues raised for the first time on appeal. Robinson v. Pacificorp, 10 P.3d 1133, 1136 (Wyo.2000); WW Enterprises, Inc. v. City of Cheyenne, 956 P.2d 353, 356 (Wyo.1998); see also Rowan v. Rowan, 786 P.2d 886, 889 (Wyo.1990); Dennis v. Dennis, 675 P.2d 265, 266 (Wyo.1984). On this well established principle, we decline to address these newly presented UCC contentions. [¶ 19] Ms. Schlesinger also complains, without providing any supporting authority, that, if the loan agreement is invalid, the court erred when it considered language in the agreement evidencing her knowledge and agreement that the loans carried a twenty-five percent interest rate. Simply because the agreement was invalid and not binding on Ms. Woodcock does not require the court to ignore the facts and circumstances surrounding the drafting of the agreement as they pertain to other issues in the case. Generally, relevant evidence is admissible. W.R.E. 402. `Relevant evidence' means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. W.R.E. 401. Admission of evidence...is within the sound discretion of the trial court; we will not disturb evidentiary rulings unless the appellant demonstrates a clear abuse of discretion. Young v. HAC, LLC, 2001 WY 50, ¶ 6, 24 P.3d 1142, ¶ 6 (2001); see also Brown v. Michael Pryor, M.D., P.C., 954 P.2d 1349, 1350 (Wyo.1998). Ms. Schlesinger's bald assertion does not establish abuse of discretion, and we will not disturb the trial court's determination on this basis.