Court Opinion

ID: 163960
Source: CourtListenerOpinion
Date Created: 2010-08-14 08:08:06+00
Date Added: 2024-06-11T17:17:28.314722
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                          OCT 16 2003
                              FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                               Clerk

    In re:

    PHYLLIS L. CROWDER,

                Debtor.                                   No. 01-2363
                                                (D.C. No. CIV-00-1210 BB/DJS)
                                                           (D. N.M.)
    CATALINA DEVELOPMENT, INC.;
    SANTA TERESA COUNTRY CLUB,
    LLC,

                Appellants,

    v.

    BERNARD R. GIVEN, II, Trustee,

                Appellee.

                              ORDER AND JUDGMENT          *

Before SEYMOUR , BRISCOE , and LUCERO , Circuit Judges.

         After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of

*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.

       In this bankruptcy appeal, appellants Catalina Development, Inc. (Catalina)

and Santa Teresa Country Club, LLC (Country Club) challenge the bankruptcy

court’s decision to exclude parol evidence, after concluding Catalina’s agreement

with debtor Phyllis Crowder to settle its claims against her bankruptcy estate was

not ambiguous. Reviewing the bankruptcy court’s legal conclusions       de novo ,

see, e.g., Connolly v. Harris Trust Co. (In re Miniscribe Corp.)   , 309 F.3d 1234,

1240 (10th Cir. 2002), we affirm.

       In the letter agreement between Catalina and Crowder, Catalina agreed to

assume “all accounts payable now on the books of Santa Teresa Country [Club]

which were contracted in the ordinary course of business.” Aplt. App. at 9.

The parties do not dispute that the Country Club’s books clearly indicated that the

Club owed El Paso Electric Company $951,387, and that this was a debt incurred

through the ordinary course of business. Catalina, however, asserts that it did not

intend to assume liability for that debt but, instead, intended only to assume the

$134,787 accounts payable listed in Crowder’s bankruptcy schedules, separate

from the electric bill.   See id. at 15, 16.

       The parties agree that New Mexico contract law governs this dispute.

New Mexico’s parol evidence rule precludes a party from introducing evidence

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extrinsic to the contract “for the purpose of construing the contract in a manner

that varies or contradicts the clear and unambiguous language of the writing.”

C.R. Anthony Co. v. Loretto Mall Partners     , 817 P.2d 238, 241 (N.M. 1991).

Nonetheless, “in determining whether a term or expression to which the parties

have agreed is unclear, a court may hear evidence of the circumstances

surrounding the making of the contract and of any relevant usage of trade, course

of dealing, and course of performance.”     Id. at 242-43 (footnote omitted).

Contrary to appellants’ assertion, however, the bankruptcy court here did consider

their extrinsic evidence for the preliminary purpose of determining whether the

contract’s language was ambiguous.

       Nonetheless, after hearing this extrinsic evidence, the bankruptcy court

concluded that the letter agreement’s language was not ambiguous. That decision

is a legal conclusion, see id. at 243, with which we agree. We will consider an

agreement’s language to be ambiguous if “the contract is reasonably and fairly

susceptible of different constructions.”    Mark V, Inc. v. Mellekas , 845 P.2d 1232,

1235 (N.M. 1993).

       In determining the existence of an ambiguity, the language at issue
       should be considered not from the viewpoint of a lawyer, . . . but
       from the standpoint of a reasonably intelligent lay[person], viewing
       the matter fairly and reasonably, in accordance with the usual and
       natural meaning of the words, and in the light of existing
       circumstances, prior to and contemporaneous with the making of the
       [contract].

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Rummel v. Lexington Ins. Co. , 945 P.2d 970, 976 (N.M. 1997) (quotation

omitted). Here, the letter agreement’s language clearly linked the relevant

accounts payable to those shown on the Country Club’s books. Although

Catalina’s president testified that he was, instead, relying on the Country Club’s

accounts payable listed on Crowder’s bankruptcy schedules, separate from the

electric bill, “a party’s statements of unilateral, subjective intent, without more,

are insufficient to establish ambiguity in light of clear contract language,”    Ponder

v. State Farm Mut. Auto. Ins. Co.    , 12 P.3d 960, 965 (N.M. 2000).

       The bankruptcy court, therefore, properly considered appellants’ extrinsic

evidence in determining the letter agreement was not ambiguous, and then

appropriately declined to admit that extrinsic evidence to the extent it

contradicted that agreement.     See C.R. Anthony Co. , 817 P.2d at 243 n.4.

The judgment of the district court, upholding the bankruptcy court’s ruling, is,

therefore, AFFIRMED.

                                                         Entered for the Court

                                                         Mary Beck Briscoe
                                                         Circuit Judge

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