Nashan v. Nashan

• Decision Date: 24 February 1995
• Docket Number: No. 15687,15687
• Citation: 119 N.M. 625,1995 NMCA 21,894 P.2d 402
• Parties: Joy Ortiz NASHAN, Petitioner, v. Charles L. NASHAN, Jr., Respondent-Appellant, v. Willie V. ORTIZ, individually, and Willie V. Ortiz, Trustee of the Willie V. and Edith June Ortiz Revocable Trust, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

Page 402

894 P.2d 402

119 N.M. 625

Joy Ortiz NASHAN, Petitioner, v. Charles L. NASHAN, Jr., Respondent-Appellant, v. Willie V. ORTIZ, individually, and Willie V. Ortiz, Trustee

of the Willie V. and Edith June Ortiz Revocable

Trust, Defendants-Appellees.

No. 15687.

Court of Appeals of New Mexico.

Feb. 24, 1995.

Certiorari Denied April 5, 1995.

Paul D. Gerber, Gerber, Ahern & Aikin, P.A., Santa Fe, for respondent-appellant.

Gregory D. Huffaker, Jr., Bradley C. Barron, Huffaker & Barnes, P.C., Santa Fe, for defendants-appellees.

OPINION

FLORES, Judge.

This case concerns an alleged breach of an oral agreement to exchange services for real property and an ownership interest in a business. The case originally began as a divorce proceeding between Joy Ortiz Nashan (Joy) and Charles Nashan, Jr. (Nashan). Nashan brought Joy's father, Willie Ortiz (Ortiz), into the case because Ortiz refused to acknowledge that the marital community owned a house and a one-half ownership interest in the family business, and refused to transfer to the community legal title to the house and shares of stock in the business. Nashan alleged that the house and ownership interest were given to the marital community in exchange for his agreement to move to Santa Fe and work in the family business, and asked for a declaratory judgment establishing the marital community's rights to the house and a portion of the business. In effect, Nashan's pleadings requested specific performance of the alleged oral agreement. Since that agreement was oral, Ortiz moved for summary judgment on the ground that enforcement of the agreement was barred under the statute of frauds. Ortiz also maintained that the statute of limitations had run on Nashan's cause of action for breach of contract. The district court granted Ortiz's motion for summary judgment without specifying the basis for its decision. Nashan appeals from that judgment, and we reverse.

STANDARD OF REVIEW

Since this is a summary judgment case, Nashan argues that we must view the facts in the light most favorable to him, and that we must make all reasonable inferences from the evidence in his favor. See Knapp v. Fraternal Order of Eagles, 106 N.M. 11, 12-13, 738 P.2d 129, 130-31 (Ct.App.1987). Ortiz acknowledges that this is the appropriate standard for most summary judgment cases. In this case, however, since the statute of frauds is involved, he maintains that a different standard applies. According to Ortiz, in cases involving an oral agreement and, as here, an alleged part performance of that agreement that takes the case out of the statute of frauds, the performance must be "unequivocally referable" to the alleged agreement. Since that is the case, Ortiz argues, even in reviewing the summary judgment this Court may determine whether any inference could be drawn from the evidence that would contradict the claim that an oral agreement existed. In other words, we need not draw all inferences from the evidence in favor of Nashan, but should only determine whether inferences contrary to Nashan could be made from the evidence.

As we discuss below, we agree that the "unequivocally referable" test is one means courts have used to decide whether an oral agreement existed and should be enforced. The existence of this test, however, does not change the standard of review for summary judgment in cases such as this one. See Hubbard v. Mathis, 72 N.M. 270, 383 P.2d 240 (1963) (in reviewing summary judgment granted to a defendant where the plaintiff claimed an oral agreement to exchange services for an interest in real estate, Supreme Court stated that the pleadings, depositions, affidavits, and admissions must be viewed in the most favorable aspect they will bear in support of the party opposing the motion). Thus, we must view the facts presented below in the light most favorable to Nashan and, drawing all inferences in his favor, determine whether he has raised a genuine issue of material fact regarding both the statute of frauds issue and the statute of limitations issue. If so, summary judgment should have been denied. See Knapp, 106 N.M. at 13, 738 P.2d at 131.

FACTS

According to Nashan, the formation of the oral contract and the terms of that contract were as follows. In 1973, Nashan and Joy were living in Chicago, and Nashan was working for his father, earning $14,000 per year. Ortiz asked Nashan to return to Santa Fe, where Nashan had gone to college and had met Joy, to become general manager of two new businesses that Ortiz and his wife (June) were just starting. As compensation for moving from Chicago, leaving his current employment, and working in the newly started family business, Nashan and, through him, the marital community, would receive a house in Santa Fe, would become equal partners in the new family business, and would In attempting to prove that the alleged oral agreement existed and should be enforced, Nashan introduced evidence by way of depositions, affidavits, and exhibits. We recite that evidence in the light most favorable to Nashan's position. At the time Nashan was approached by Ortiz with the idea of moving the Nashan family to Santa Fe, Nashan had been offered a different job in Chicago paying $16,000 to $18,000 per year. Nashan turned down the offer and agreed to accept Ortiz's offer, taking a lower salary in reliance on the other portions of the compensation package offered by Ortiz. Upon moving to Santa Fe in 1973, Nashan became general manager of the family businesses, the primary focus of which was the operation of La Tertulia Restaurant in Santa Fe (the Ortizes had also started a corporation called Mercado Hispano Del Norte, Inc.--the two businesses were subsequently merged into the same corporation). At the time Nashan arrived to take the general manager position, the businesses were not doing well financially. For twenty years, Nashan regularly worked sixty-five hours per week in the restaurant and the other businesses, often putting in as much as eighty hours or more per week. Joy admitted in her deposition that the effort and time her husband put into the operation of the businesses was consistent with ownership, or the assumption of ownership, of the businesses. Throughout the twenty years that he worked as general manager, Nashan was paid a salary that was below market rates for such a position. In fact, he was approached several times about accepting similar positions in the food industry at substantially higher salaries, but rebuffed these approaches by saying he did not want to leave his position as part owner of the family-run business. In addition to his below-market salary, Nashan did receive other compensation that was in the nature of the benefits one derives from owning a business. He and Joy participated equally with Ortiz and June in dividing all the profits derived from the business. The two families took equal cash distributions from the business on a weekly basis during the year, and at the end of the year both families received equal cash bonuses. Both families had cars provided by the business, and the business paid for expenses such as accounting and tax preparation expenses and entertainment expenses for both families. Due at least in part to Nashan's time and efforts, the family business became quite successful and profitable for both families.

[119 N.M. 628] have their moving expenses paid for the move from Chicago to Santa Fe. He was originally offered $14,000 per year as salary, but after he arrived in Santa Fe he agreed to accept $10,000 per year as his beginning salary.

Throughout the twenty-year period in which Nashan was general manager of the business, the Ortizes made frequent representations to other people and to the Nashans to the effect that the Nashans were co-owners of the family business. In 1975, when La Tertulia was merged into the corporation and became a corporate possession, the Ortizes issued a notice and policy statement to La Tertulia's employees identifying the owners of the restaurant as Willie and June Ortiz and their children, Chuck and Joy Nashan. Later, as late as 1990, Nashan and Joy were identified as shareholders of the corporation in minutes of the corporation's annual meeting. June provided information to a national publication, Who's Who in America's Restaurants, identifying both the Ortizes and the Nashans as owners of La Tertulia. In discussions with employees, customers, and other people, the Ortizes consistently identified the Nashans as co-owners of the family business.

In addition to receiving benefits similar to those received by the Ortizes, and to being identified as co-owners of the business, the Nashans incurred risks and shared hardships with the Ortizes. When Nashan first assumed his position with the business, and the restaurant had not yet begun doing well financially, Nashan agreed to delay depositing his paycheck until there was enough money in the bank to cover it, to ensure that the employees' paychecks would be honored. Nashan, on several occasions, provided personal guarantees for credit that had been extended to the business, to ensure that the business could obtain the credit it needed in order to operate. Nashan and Joy (who also worked for the business, as a hostess at the Regarding the portion of the agreement involving the house, the facts most favorable to Nashan include the following. The Ortizes initially gave the Nashans earnest money with which to purchase a house, but that sale fell through. A year or two after the Nashans moved, the Ortizes remodeled and provided a house to the Nashans that was located in the family compound in Santa Fe. Over the years, the Nashans have spent approximately $200,000 in remodeling the house and building an addition to it. They have also expended considerable personal effort and time in improving the house. The Ortizes have never asked for rent or for any monetary compensation for the use of the house.

[119 N.M. 629] restaurant)...