Mayfield Smithson Enterprises v. Com-Quip, Inc.
| Decision Date | 15 May 1995 |
| Docket Number | No. 22323,COM-QUI,INC,22323 |
| Citation | 1995 NMSC 34,896 P.2d 1156,120 N.M. 9 |
| Parties | MAYFIELD SMITHSON ENTERPRISES, a New Mexico general partnership, Plaintiff-Appellee, v., a foreign corporation, Defendant-Appellant. |
| Court | New Mexico Supreme Court |
Defendant Com-Quip, Inc. (Com-Quip) appeals from a district court's decision granting Plaintiff Mayfield Smithson Enterprises (Mayfield Smithson) summary judgment on its complaint to quiet title. Com-Quip asserts on appeal that the trial court erred in rejecting its claim of a lien against the disputed real estate. Com-Quip also appeals from the trial court's decision granting Mayfield Smithson summary judgment on Com-Quip's counterclaims for conversion and unjust enrichment. We affirm the trial court's disposition of all claims and counterclaims.
Com-Quip has advanced various alternative theories on appeal. Essentially, these theories fall into two groupings--those relating to claims against real property and those relating to claims against personal property. These theories share a common thread in that they all arise out of a debt owed to Com-Quip by Hol-Inns, Inc. (Hol-Inns), which is not a party to this appeal. Com-Quip's efforts notwithstanding, we conclude that none of its contentions has any merit. Com-Quip is in the unfortunate position of a creditor whose debtor is bankrupt. Com-Quip's attempts to resurrect extinct obligations lack support in both the record and applicable case law.
In 1966 Hazel and Ernest Terry (the Terrys) entered into a written lease contract, as lessors, with Southwest Inns, Ltd., predecessor-in-interest of Hol-Inns, for a term of sixty-five years. Under the provisions of this agreement, the lessees agreed to build and operate a motel on the Terrys' property and to invest at least $100,000 of their own money above the sums to be borrowed for construction. The lease contract also provided that the Terrys would execute a mortgage on the property in order to enable the lessees to obtain a construction loan. Southwest Inns assigned its rights under the contract to Hol-Inns, and in 1971 the Terrys and Hol-Inns, as co-mortgagors, executed a mortgage against the property to secure an $800,000 construction debt.1 Construction was completed in 1972, and Hol-Inns continued to operate the motel until it filed bankruptcy in 1988.
In September 1983 Hol-Inns executed a written lease agreement with Defendant-Appellant Com-Quip, a communications leasing firm, whereby Hol-Inns obtained the use of motel communications equipment for a term of seven years. An express provision of this agreement granted to Com-Quip "a lien on the real estate" where the equipment was installed. Pursuant to that contract, Com-Quip installed communications equipment throughout the motel that had been built on the leasehold property. Com-Quip recorded the lien shortly after executing the lease, but the Terrys were unaware of either the equipment lease or the lien that it purported to create until after Hol-Inns filed for bankruptcy in 1988.
Almost immediately after its installation, Hol-Inns began to experience technical problems with the communications equipment. In July 1984 Hol-Inns notified Com-Quip of its intention to terminate the equipment lease, and in November 1985 Com-Quip picked up most of the equipment. Com-Quip then brought a breach of contract action against Hol-Inns in the state district court in Deming. In September 1988, following a bench trial, the trial court concluded that Hol-Inns had breached the equipment lease contract and entered judgment in favor of Com-Quip for $54,430. Two months later Com-Quip filed a transcript of this judgment with the Luna County Clerk.
Com-Quip's attempts to execute its judgment against Hol-Inns apparently forced the latter into bankruptcy. Hol-Inns filed a bankruptcy petition on December 8, 1988, one day after the sheriff levied against selected items of Hol-Inns' personal property. During the pendency of the bankruptcy proceedings, the Terrys sought to have the lease rejected so that they could acquire the hotel. After receiving assurances from the Terrys' attorney, the precise nature of which is in dispute, Com-Quip joined the Terrys in their efforts to get the leasehold terminated. In June 1990 the Bankruptcy Court for the District of New Mexico "rejected" the lease that arose out of the 1966 contract between the Terrys and Hol-Inns' predecessors. This rejection had the effect of terminating the lease and vesting all of the property's legal and equitable interests in the Terrys. The Terrys subsequently conveyed the property to Mayfield Smithson Enterprises. Bobby Mayfield (Mayfield) is an officer and shareholder in Mayfield Smithson, and he and his partner William Webber (Webber) served as counsel to the Terrys during the Hol-Inns bankruptcy.
Com-Quip sets forth two alternative theories to support its claim that it has a lien against the motel property that Mayfield Smithson purchased from the Terrys. Com-Quip asserts that a lien arose directly against the Terrys' fee interest as a result of provisions in the 1966 contract between the Terrys and Hol-Inns' predecessors. Alternatively, Com-Quip argues that a lien encumbered the Hol-Inns' leasehold interest and survived Hol-Inns' bankruptcy to encumber the Terrys' and eventually Mayfield Smithson's property interests. Before considering each of these theories, we address as a preliminary matter Com-Quip's assertion that the principle of equitable estoppel bars Mayfield Smithson from denying the existence of a lien.
Com-Quip argues that the trial court committed error when it rejected Com-Quip's affirmative defense of equitable estoppel. In support of this position, Com-Quip asserts that it received and relied upon the representations of the Terrys' attorney, Webber. According to Com-Quip, Webber stated that Com-Quip's lien would be "protected" if Com-Quip joined in the Terrys' efforts to get the lease rejected. In its response to Mayfield Smithson's motion for summary judgment, Com-Quip made the following argument to the trial court on this matter:
[A]s is reflected in the Affidavit of Bob McAnally and the corresponding letters from Sherman and Webber, it is clear that a logical adversarial situation between Terrys and Com-Quip that would arise out of Terrys [sic] attempts to terminate the lease and then attempt to circumvent Com-Quips [sic] liens was transformed into a cooperative arrangement where Webbers [sic] represented that Com-Quip's liens would be paid. Webbers [sic] used Com-Quip's liens in their efforts to try to terminate the lease of Hol-Inns.
... Plaintiff should be estopped to claim the benefits of their representations, to get cooperation for [sic] Com-Quip and then turn around and deny what they previously took advantage of....
(Citations omitted.) Com-Quip makes a similar argument on appeal.2
The essential elements of equitable estoppel are (1) knowing misrepresentation or concealment of a material fact or facts; (2) made by the party to be estopped with the intention or expectation that the other party will act thereon; and (3) detrimental reliance without knowledge of the true facts by the party asserting estoppel. Capo v. Century Life Ins. Co., 94 N.M. 373, 377, 610 P.2d 1202, 1206 (1980). A party moving for summary judgment has the burden of demonstrating that no genuine issue of material fact exists regarding affirmative defenses set forth by the non-moving party. See Fidelity Nat'l Bank v. Tommy L. Goff, Inc., 92 N.M. 106, 108, 583 P.2d 470, 472 (1978). Once the moving party has made a prima facie showing of entitlement to summary judgment, however, the non-moving party has the burden of showing that a question of fact exists regarding each element of an affirmative defense. Id. Generalized conclusory allegations without factual support in the record will not meet this burden. See Galef v. Buena Vista Dairy, 117 N.M. 701, 706, 875 P.2d 1132, 1137 (Ct.App.1994).
After considering Com-Quip's arguments and the record before us, we cannot say that the trial court's rejection of Com-Quip's equitable estoppel defense was error. Com-Quip did not indicate to the trial court what fact or facts were misrepresented nor what words or representations constituted the alleged misrepresentation. Nor did Com-Quip specify what actions on its part amounted to reliance. As discussed in the remainder of this opinion, we conclude that Mayfield Smithson made a prima facie showing of entitlement to summary judgment. Cf. Ruiz v. Garcia, 115 N.M. 269, 272, 850 P.2d 972, 975 (1993) (). Because Com-Quip's vague allegations failed to show the existence of questions of fact regarding each element of equitable estoppel, summary judgment was proper. See Galef, 117 N.M. at 706, 875 P.2d at 1137.
We also reject Com-Quip's argument that Webber and Mayfield owed it a fiduciary duty. In Garcia v. Rodey, Dickason, Sloan, Akin & Robb, P.A., 106 N.M. 757, 761, 750 P.2d 118, 122 (1988), we said that an attorney owes no duty to an adverse party of his client. Com-Quip concedes that during the bankruptcy its interests were adverse to those of the Terrys. Com-Quip argues, however, that this adversarial relationship evolved into a cooperative relationship that gave rise to a fiduciary duty. Adverse parties frequently cooperate with one another in order to resolve legal disputes. We do not agree with Com-Quip that such cooperation should give rise to a duty that, as we said in Garcia, ordinarily does not exist. Accordingly, we hold that neither Webber...
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