Icek Benz v. Town Ctr. Land, LLC

• Decision Date: 29 August 2013
• Docket Number: Nos. 31,669,32,031.,s. 31,669
• Citation: 314 P.3d 688
• Parties: Icek BENZ a/k/a Ike Benz and Lauren Benz, Plaintiffs–Appellants, v. TOWN CENTER LAND, LLC a New Mexico Limited Liability Company, Central Millennium Partnership, a New Mexico Non–Profit Corporation, Central Corridor Investors, LLC, a New Mexico Limited Liability Company, Martin D. Blanc and David Blanc, Defendants–Appellees.
• Court: Court of Appeals of New Mexico

314 P.3d 688

Icek BENZ a/k/a Ike Benz and Lauren Benz, Plaintiffs–Appellants,

v.TOWN CENTER LAND, LLC a New Mexico Limited Liability Company, Central Millennium Partnership, a New Mexico Non–Profit Corporation, Central Corridor Investors, LLC, a New Mexico Limited Liability Company, Martin D. Blanc and David Blanc, Defendants–Appellees.

Nos. 31,669, 32,031.

Court of Appeals of New Mexico.

Aug. 29, 2013.

Catherine F. Davis, Hunt & Davis, P.C., Albuquerque, NM, for Appellants.

Michal J. Cadigan, Cadigan Law Firm, P.C., Albuquerque, NM, for Appellees.

OPINION

VIGIL, Judge.

{1} In settlement of an unrelated dispute, Plaintiff Icek Benz executed a final agreement and release, which discharged “any and all known and unknown claims and causes of action” against Defendant David Blanc. At the trial in this case, Defendants argued, and the district court agreed, that the release included Plaintiffs' claims in the current dispute. Judgment was entered in favor of Defendants and Plaintiffs appeal. We conclude that the language of the release is unambiguous and that the district court erred. We therefore reverse and remand.

I. BACKGROUND

{2} In 2002, Plaintiffs Icek Benz (Benz) and Lauren Benz, and Defendants David Blanc (Blanc), Martin Blanc, Central Millennium Partnership, and Central Corridor Investors, LLC, created Town Center Land, LLC, to acquire, own, operate, and hold for investment property known as the Gas Light Motel. Prior to the creation of Town Center, Benz and Blanc were involved in two other businesses together, Central Market, Ltd., and Baptist Convention Building, LLC. All three businesses were created to acquire, own, operate, and hold specific real estate in Albuquerque, New Mexico for investment.

{3} In 2006, Benz notified Blanc that he no longer wanted to be involved in either Central Market, Baptist Convention, or Town Center. In settling the Central Market dispute, Benz received payment and signed the final agreement and release (Release or Central Market Release), which is the subject of this appeal. Benz and Blanc also came to a separate settlement regarding Baptist Convention, which resulted in a second payment and release signed by Benz.

{4} This case centers on a dispute involving Town Center. Plaintiffs sued Defendants alleging fraud, misrepresentation, and breach of fiduciary duty, and sought an accounting and dissolution of Town Center. Following discovery and entry of a pretrial order, the case was set for a nonjury trial. At trial, Plaintiffs objected to admission of the Release into evidence. In part, Plaintiffs argued that the Central Market Release was not relevant to the Town Center dispute before the court and that neither the pleadings nor the pretrial order set forth an affirmative defense of release. Over Plaintiffs' objection, the Release was admitted into evidence. Extrinsic evidence was also admitted about the meaning of the Release, which the district court ultimately refused to consider.

{5} Following trial, the district court found, and concluded in pertinent part, that “[o]n June 16, 2006, Benz executed [the Central Market R]elease, releasing Blanc and other released parties ... ‘from any and all known and unknown claims and causes of action of every nature, character and description which Benz has or may have against the released parties' ” and that “[b]y signing the [Central Market] Release, Benz released all the claims he later raised in [the Town Center] matter, except for the request for dissolution of Town Center.” The district court entered judgment in favor of Defendants and, in a separate order, awarded Defendants' attorney fees.

{6} Plaintiffs separately appealed from the judgment of the district court and the order for Defendants' attorney fees, and we have consolidated the appeals. Additional pertinent facts are discussed below.

II. DISCUSSION

{7} Plaintiffs argue that the district court erred by (1) admitting the Central Market Release into evidence and amending the pretrial order to include Defendants' release defense; and (2) concluding that the Central Market Release barred Plaintiffs' claims relating to Town Center. Plaintiffs further contend that the district court erred in failing to dissolve Town Center and awarding Defendants' attorney fees. Because we reverse the district court's conclusion that the Central Market Release released Plaintiffs' claims in the Town Center dispute, we do not address these additional arguments regarding dissolution of the LLC and Defendants' attorney fees.

A. Admission of the Central Market Release Into Evidence and Amendment of the Pleadings

{8} We first examine Plaintiffs' arguments regarding admissibility of the Release into evidence and amendment of the pleadings to include Defendants' release defense. Specifically, Plaintiffs argue that the district court erred in (1) admitting the Release into evidence despite its untimely disclosure by Defendants; (2) amending the pleadings to include a release defense; and (3) allowing Defendants to present their release defense when they did not affirmatively plead the defense prior to trial. These arguments arise under the following circumstances.

{9} Defendants waited until the weekend before trial to identify the Central Market Release as a trial exhibit. In response, Plaintiffs made an oral motion in limine prior to the start of trial to exclude it from evidence. Plaintiffs argued that the Release had not been disclosed as a potential exhibit, Defendants' release argument was not pled as an affirmative defense, and the Release only related to Central Market, an entity unrelated to the Town Center dispute being tried. Defense counsel admitted to the late disclosure, stating that he only recently realized that it was a general release, and he further contended that a release is not an affirmative defense that must be pled pursuant to Rule 1–012 NMRA. Finally, counsel argued that the late disclosure did not result in unfair surprise or prejudice because Plaintiffs were aware of the Release prior to trial. The district court denied Plaintiffs' motion to exclude and permitted Defendants to admit the Release into evidence because, although “[Defendants' counsel] didn't disclose his intention to use the exhibit until very late in the game, it's not a situation where the exhibit had not been produced or wasn't known to the parties.” The district court requested that Plaintiffs renew their objections when the Release was offered into evidence to see “if there's any other reasons or concerns for its exclusion.”

{10} Defendants offered the Release into evidence during Blanc's testimony and Plaintiffs renewed their objections that Defendants had failed to assert the release defense in their answer or the pretrial order and that the Central Market Release was irrelevant to the Town Center dispute. The district court admitted the Release into evidence as well as testimony concerning its meaning. By entering judgment against Plaintiffs based on the Central Market Release, the district court effectively amended the pleadings to include Defendants' release defense.

{11} This is a close case, but we conclude that the district court did not abuse its discretion by admitting the Central Market Release into evidence or amending the pleadings to include Defendants' release defense. “We review the admission of evidence for an abuse of discretion.” State v. Branch, 2010–NMSC–042, ¶ 9, 148 N.M. 601, 241 P.3d 602,overruled on other grounds by State v. Tollardo, 2012–NMSC–008, 275 P.3d 110. Similarly, the decision to modify the pretrial order rests within the sound discretion of the district court. Fahrbach v. Diamond Shamrock, Inc., 1996–NMSC–063, ¶ 25, 122 N.M. 543, 928 P.2d 269. “An abuse of discretion occurs when a ruling is clearly contrary to the logical conclusions demanded by the facts and circumstances of the case.” Sims v. Sims, 1996–NMSC–078, ¶ 65, 122 N.M. 618, 930 P.2d 153.

{12} Here, Defendants had nearly two years after Plaintiffs produced the Release to disclose their intent to use it as evidence and a defense, yet they waited until the weekend prior to the start of trial to notify Plaintiffs of their intentions. As the district court observed in denying Plaintiffs' motion in limine, “[this was] not a situation where the exhibit had not been produced or wasn't known to the parties[.]”

{13} Further, Plaintiffs fail to demonstrate how the decision of the district court was prejudicial to them. See Blacker v. U–Haul Co. of N.M., Inc., 1992–NMCA–001, ¶ 10, 113 N.M. 542, 828 P.2d 975 (“Generalized allegations of prejudice are not sufficient to establish an abuse of discretion on the part of the trial court.” (internal quotation marks and citation omitted)). On the day of trial, Plaintiffs' counsel stated that admission of the Release would “prejudice[ ] my client ... in having to present that evidence and having that particular issue come up when it's never been raised before.” However, Plaintiffs had ample opportunity to present evidence on the Release and questioned both Benz and Blanc about their intentions concerning it. Plaintiffs also acknowledged at oral argument before this Court that there was no evidence related to the Release that they were unable to present. In addition, Plaintiffs did not ask for a continuance following the decision of the district court to allow Defendants to present evidence on the Release. SeeRule 1–015(B) NMRA (“The court may grant a continuance to enable the objecting party to meet such evidence.”).

{14} Despite Defendants' untimely disclosure, the high deference afforded to the decision by the district court under the appropriate standard of review and the lack of prejudice compels us to conclude that there was no abuse of discretion by the district court. Thus, we find no error in the decision of the district court to admit the Central Market Release or to amend the pleadings to include Defendants' release defense. The foregoing discussion...