Stanton v. Gordon Jewelry Corp.

• Decision Date: 15 February 1989
• Docket Number: No. 17812,17812
• Citation: 768 P.2d 888,1989 NMSC 5,108 N.M. 160
• Parties: Bernice STANTON, Plaintiff-Appellee, v. GORDON JEWELRY CORPORATION, a Delaware corporation, and Gordon's Quality Jewelers of New Mexico, Defendants-Appellants.
• Court: New Mexico Supreme Court

Page 888

768 P.2d 888

108 N.M. 160

Bernice STANTON, Plaintiff-Appellee, v. GORDON JEWELRY CORPORATION, a Delaware corporation, and Gordon's Quality Jewelers of New Mexico,

Defendants-Appellants.

No. 17812.

Supreme Court of New Mexico.

Feb. 15, 1989.

Rehearings Denied March 10, 1989.

[108 NM 160] Rodey, Dickason, Sloan, Akin & Robb, Rex D. Throckmorton, Scott D. Gordon, Albuquerque, for defendants-appellants.

Paine, Blenden & Diamond, Dick A. Blenden, Carlsbad, for plaintiff-appellee.

OPINION

SCARBOROUGH, Justice.

Plaintiff-appellee, Bernice Stanton (Stanton), and defendants-appellants, Gordon Jewelry Corporation, a Delaware corporation, and Gordon's Quality Jewelers of New Mexico (Gordon Jewelry), entered into a series of transactions between June and September 1983, at the Gordon Jewelry retail store in Carlsbad, New Mexico. Stanton purchased five pieces of jewelry, and as consideration traded in some jewelry and paid some cash in down payment, leaving an amount due on an open account. The exact amount due on the open account was later disputed in the lawsuit which is now before us on appeal.

Toward the end of September 1983, Gordon Jewelry began an investigation of the Carlsbad store because they suspected the store manager of embezzlement. A security consultant employed by Gordon Jewelry contacted Stanton about her transactions with the Carlsbad store. Stanton cooperated with Gordon Jewelry in their investigation of the Carlsbad store manager. She also cooperated in an investigation by local law enforcement agencies and testified as a witness for the prosecution in criminal proceedings against the Carlsbad manager.

After she was contacted by the Gordon Jewelry investigator, Stanton became increasingly concerned that she had been defrauded in her transactions with the Carlsbad store. She asked that she be permitted to return the jewelry she had purchased and that Gordon Jewelry return the jewelry she had traded in and the money she had paid to Gordon Jewelry. Gordon Jewelry instead offered to pay for an independent appraisal of the jewelry Stanton had purchased.

Stanton returned the jewelry to Gordon Jewelry for the appraisal which concluded that the jewelry was valued at the purchase price. Stanton, nevertheless, persisted in her demand that her contract with Gordon Jewelry be rescinded. Gordon Jewelry could not locate the jewelry traded in by Stanton and refused to rescind the contract. There followed a series of demands by Stanton and Gordon Jewelry respectively.

Stanton sued Gordon Jewelry, alleging fraud and bad faith breach of contract. Stanton sought damages of $10,792.34, which was the purchase price of $13,015.50 less $2,223.16 which she admitted owing on her account. Stanton also sought her attorney's fees and $10,000,000 in punitive damages for fraud and/or bad faith breach of contract by Gordon Jewelry. Gordon Jewelry answered Stanton and counterclaimed for $5,050.32 which they alleged Stanton owed on her account at the Carlsbad store.

The lawsuit was tried without a jury before the Fifth Judicial District Court in Eddy County. After hearing the evidence and argument by the parties, the trial court entered judgment and ordered that the jewelry Stanton purchased from Gordon Jewelry be returned to her and that Gordon Jewelry pay her $50,000 in punitive damages, less the $2,223.16 which Stanton admitted owing on her account with the Carlsbad store. Gordon Jewelry appeals.

We affirm that part of the judgment ordering Gordon Jewelry to...