Valerio v. San Mateo Enterprises, Inc.

1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 Opinion Number: _______________
3 Filing Date: April 24, 2017
4 NO. 34,576
5 ARTURO VALERIO,
6 Plaintiff-Appellant,
7 v.
8 SAN MATEO ENTERPRISES, INC.,
9 Defendant-Appellee.
10 APPEAL FROM THE DISTRICT COURT OF DOÑA ANA COUNTY
11 James T. Martin, District Judge
12 Frederick H. Sherman
13 Deming, NM
14 for Appellant
15 Holt Mynatt Martìnez P.C.
16 Casey B. Fitch
17 Las Cruces, NM
18 for Appellee
1 OPINION
2 VANZI, Chief Judge.
3 {1} Plaintiff Arturo Valerio appeals from the district court’s final order dismissing
4 his complaint pursuant to Rule 1-041(B) NMRA. Valerio raises six issues on appeal:
5 (1) whether the district court erred in denying his motion to withdraw an admission
6 he made in discovery; (2) whether the district court erred in denying joinder of real
7 parties in interest and therefore lacked jurisdiction over the matter; (3) whether the
8 district court erred in granting partial summary judgment on three of Valerio’s claims;
9 (4) whether the district court erred by dismissing claims not raised in Defendant San
10 Mateo Enterprises, Inc.’s (San Mateo) motion for summary judgment; (5) whether the
11 district court erred in excluding certain evidence during trial; and (6) whether the
12 district court erred in not modifying the scheduling order so as to permit Valerio to
13 amend his complaint. We affirm.
14 BACKGROUND
15 {2} This lawsuit stems from the parties’ 2012 contract for the purchase and sale of
16 one million pounds of dehydrated chile peppers. Valerio grows and harvests chile
17 peppers. San Mateo is a dehydration chile plant that purchases, processes, and
18 dehydrates different varieties of chile. Pursuant to the parties’ contract and practice,
1 Valerio would deliver raw chile peppers to San Mateo, which would then wash,
2 dehydrate, weigh, and pay for them.
3 {3} It is San Mateo’s practice to issue truck tickets to every incoming load of chile.
4 The ticket records the “name of the grower, type of chile, the number of full boxes
5 received, and empty boxes sent to the grower.” San Mateo provides each grower with
6 specialized empty boxes for the transportation of the chile peppers, which it tracks
7 on paperwork titled “In/Out Log.” The In/Out Log records “the ticket numbers and
8 dates of deliveries received by [the] drivers, the number of empty boxes sent with the
9 drivers, number of full boxes received . . . , and the type of [chile] peppers delivered.”
10 After processing and dehydration, San Mateo provides the grower an estimated per-
11 box dehydrated weight for prior deliveries. This latter weight is an estimate provided
12 as a courtesy to help growers track picking costs. Because the cost of transportation
13 is borne by each grower, it is in the grower’s financial interest to transport the chile
14 peppers contracted for in as few trips as possible.
15 {4} According to Valerio, he was told that the weights listed on the In/Out Logs
16 after the chile peppers were dehydrated were accurate, rather than merely estimates
17 as claimed by San Mateo. In 2012 Valerio provided chile seeds to farmers to grow the
18 chile peppers; he then returned at harvest time to pick, transport, and deliver the chile.
19 Throughout the 2012 picking season, Valerio made periodic payments to the farmers
2
1 based on the weights indicated on the In/Out Logs. Valerio contends that San Mateo
2 knew that he was relying on these weights in order to pay his debts to the farmers.
3 {5} San Mateo’s records reflect that, prior to the beginning of the 2012 season,
4 Valerio received advance payments totaling $90,250. Valerio did not dispute below
5 that he received these advance payments. San Mateo’s records further reflect that
6 these advance payments were subtracted from the last payment it made to Valerio on
7 December 26, 2012, reducing that payment in half.
8 {6} Toward the end of the 2012 season, Valerio’s harvest ran out and he started
9 purchasing chile peppers grown and picked by other farmers. Those chile peppers
10 were delivered to Valerio in sacks at a weigh station in Mexico, where he was able
11 to obtain weight slips indicating their raw weight. The weighing process was as
12 follows: a truck would be weighed with San Mateo’s empty boxes already on it, the
13 truck would then drive off the scale, the boxes on it would be filled with chile peppers
14 delivered to the weigh station by the farmers who grew and picked them, and the
15 truck would then be weighed again.
16 {7} The Mexican weight tickets were the only records of raw weight for any of the
17 chile peppers Valerio delivered to San Mateo. Valerio did not weigh any of his own
18 harvest because the chile peppers were loaded onto the trucks in the fields and into
19 empty boxes as they were picked. San Mateo also did not weigh any of the raw chile
3
1 peppers it received because payment was to be determined based on dehydrated
2 weights only. The parties disagreed as to whether or not dehydrated weight can be
3 determined from raw weight.
4 {8} Also toward the end of the 2012 season, San Mateo stopped providing Valerio
5 with weights on the In/Out Logs. Valerio asserts that he called San Mateo because he
6 needed this information in order to pay some of his farmers and that he told San
7 Mateo the boxes were averaging over 200 pounds each. When he received the last
8 payment, Valerio’s bookkeeper—who was unaware of the advance payments—
9 calculated that the amount paid actually translated to an average of 81 pounds per box
10 instead of 200 pounds per box. This lawsuit resulted from that discrepancy.
11 {9} Valerio’s complaint alleged debt and money due, breach of contract, breach of
12 the covenant of good faith and fair dealing, fraud, and unconscionable trade practices.
13 Valerio voluntarily dismissed the unconscionable trade practices claim. The district
14 court subsequently granted San Mateo’s motion for summary judgment on all but the
15 breach of contract claim, which was tried to the bench in October 2014. At the
16 conclusion of Valerio’s case, San Mateo moved for judgment on the merits pursuant
17 to Rule 1-041(B). The district court granted San Mateo’s motion, finding that Valerio
18 did not admit any contract into evidence or otherwise establish the elements of an
4
1 enforceable agreement, and that he had not shown any evidence of damages entitling
2 him to relief. This appeal followed.
3 DISCUSSION
4 {10} As a preliminary matter, San Mateo argues that Valerio waived appellate
5 review of any and all issues in this case because Valerio does not challenge the
6 district court’s dismissal of his complaint under Rule 1-041(B). Rule 1-041(B)
7 provides, in relevant part, as follows:
8 After the plaintiff, in an action tried by the court without a jury, has
9 completed the presentation of evidence, the defendant, without waiving
10 the right to offer evidence in the event the motion is not granted, may
11 move for a dismissal on the ground that upon the facts and the law the
12 plaintiff has shown no right to relief. The court as trier of the facts may
13 then determine them and render judgment against the plaintiff or may
14 decline to render any judgment until the close of all the evidence. If the
15 court renders judgment on the merits against the plaintiff, the court shall
16 make findings as provided in Rule 1-052 NMRA.
17 {11} At the close of Valerio’s case in chief, San Mateo moved for dismissal and the
18 motion was granted. San Mateo now asserts that waiver occurred because “[n]owhere
19 in his brief does Valerio seek review of the [d]istrict [c]ourt’s final ruling dismissing
20 the case with prejudice under Rule 1-041[.]”
21 {12} San Mateo misunderstands the role that reversible error plays in our appellate
22 review process. A party is not required to challenge the merits of the lower court’s
23 ultimate decision for this Court to address alleged reversible errors along the way; if
5
1 this Court finds that reversible error occurred at any point, we will set aside the
2 judgment. See Anderson v. Welsh, 1974-NMCA-120, ¶ 28, 86 N.M. 767, 527 P.2d
3 1079 (“All error is not reversible. Reversible error occurs where the substantial rights
4 of the adverse party have been affected. Otherwise no judgment shall be reversed by
5 reason of such error.” (citation omitted)). Here, Valerio asserts that, leading up to and
6 during the trial, the district court committed various reversible errors as stated above.
7 Under these circumstances, with regard to the district court’s dismissal of the action,
8 our rules of appellate procedure merely require that the brief in chief include “a
9 precise statement of the relief sought[,]” which it does. Rule 12-213(A)(5) NMRA
10 (current version at Rule 12-318(A)(5) NMRA). Consequently, we proceed to address
11 the issues raised by Valerio on appeal.
12 Motion to Withdraw Admission
13 {13} Valerio’s first argument on appeal is that the district court erred in denying his
14 motion to withdraw an admission he made in response to a written discovery request.
15 Specifically, San Mateo’s request for admission number two asked Valerio to either
16 admit or deny whether “all payments from San Mateo . . . to . . . Valerio in the year
17 2012 accurately reflect the amounts owed to . . . Valerio based upon the weight of the
18 chile delivered after dehydration with 3%-7% moisture.” Valerio responded to this
19 request for admission by placing an “X” next to the option for “Admit” and further
6
1 stating that “[t]he last payment failed to account for approximately 14 loads of chile
2 that . . . Valerio delivered.” More than a year later and after the close of discovery,
3 Valerio filed a motion seeking the court’s permission to withdraw this admission as
4 “improvident” and to allow an amended “truthful response” to the request. In
5 particular, Valerio sought to withdraw the admission “in order to allow [Valerio] to
6 prove that [San Mateo had] not accounted for the chile purchased and [had] underpaid
7 [Valerio.]” In other words, Valerio sought to change his admission from the 14 loads
8 to challenging the amount paid for the full one million pounds of chile peppers that
9 the parties had contracted for. After a hearing, the district court denied Valerio’s
10 motion. At trial, the district court accepted the original admission as established and
11 limited Valerio’s claim to the 14 loads of chile alleged in the admission not to have
12 been paid for.
13 {14} Under Rule 1-036(B) NMRA, the district court “may permit withdrawal or
14 amendment [of an admission] when the presentation of the merits of the action will
15 be subserved thereby and the party who obtained the admission fails to satisfy the
16 court that withdrawal or amendment will prejudice him in maintaining his action or
17 defense on the merits.” As the language of the rule makes clear, the burden is on the
18 party opposing withdrawal—in this case San Mateo—to “satisfy the court” that it
19 would be prejudiced by the amendment. Id. Moreover, when interpreting the federal
7
1 counterpart to our rule, federal courts have held that the prejudice contemplated is not
2 simply that the party would have to prove the fact previously admitted, but that it
3 “relates to the difficulty a party may face in proving its case, e.g., caused by the
4 unavailability of key witnesses, because of the sudden need to obtain evidence with
5 respect to the questions previously answered by the admissions.” Brook Vill. N.
6 Assocs. v. Gen. Elec. Co., 686 F.2d 66, 70 (1st Cir. 1982).
7 {15} In its oral ruling denying Valerio’s motion, the district court held that San
8 Mateo would be prejudiced if withdrawal was allowed. The court noted that the case
9 was already on a trial docket, discovery was closed, and the prejudice to San Mateo
10 would be too great as it would have to conduct burdensome last-minute discovery
11 with respect to the Mexican weight tickets, including deposing foreign witnesses. We
12 review this decision for abuse of discretion. See 999 v. C.I.T. Corp., 776 F.2d 866,
13 869 (9th Cir. 1985) (holding that the denial of a motion to withdraw or amend an
14 admission under the substantially identical Fed. R. Civ. P. 36(b) is reviewed for abuse
15 of discretion); Century Bank v. Hymans, 1995-NMCA-095, ¶ 12, 120 N.M. 684, 905
16 P.2d 722 (holding that authority interpreting a “substantially identical” federal rule
17 of civil procedure “can be persuasive in the absence of contrary New Mexico
18 precedent”).
8
1 {16} “An abuse of discretion occurs when the ruling is clearly against the logic and
2 effect of the facts and circumstances of the case. We cannot say the [district] court
3 abused its discretion by its ruling unless we can characterize [the ruling] as clearly
4 untenable or not justified by reason.” State v. Rojo, 1999-NMSC-001, ¶ 41, 126 N.M.
5 438, 971 P.2d 829 (internal quotation marks and citation omitted). Here, the district
6 court’s ruling that San Mateo would be prejudiced was supported by the fact that the
7 trial was two weeks away, discovery was closed and, more importantly, that the
8 discovery would have to be conducted in a foreign country. Even if San Mateo would
9 not have suffered prejudice, however, reversal on this issue is not warranted because
10 any alleged error was harmless.
11 In civil litigation, error is not grounds for setting aside a verdict unless
12 it is inconsistent with substantial justice or affects the substantial rights
13 of the parties. An error is harmless unless the complaining party can
14 show that it created prejudice. We compel the reversal of errors for
15 which the complaining party provides the slightest evidence of prejudice
16 and resolve all doubt in favor of the complaining party. [At the same
17 time, w]e will not set aside a judgment based on mere speculation that
18 [the error] influenced the outcome of the case.
19 Kennedy v. Dexter Consol. Sch., 2000-NMSC-025, ¶¶ 26-27, 129 N.M. 436, 10 P.3d
20 115 (internal quotation marks and citations omitted). In his brief in chief, Valerio
21 claims that he was prejudiced by the denial of his motion because “thereafter [San
22 Mateo’s] motion for summary judgment was granted as to all but one issue as
23 supported largely by [Valerio’s] admissions.” Our review of the record on appeal
9
1 reveals that this assertion is incorrect and misconstrues the district court’s rulings
2 with regard to San Mateo’s summary judgment motion. While the district court relied
3 on various other admissions made by Valerio, it did not rely on the admission here
4 at issue, i.e., Valerio’s response to request for admission number two, for the simple
5 fact that San Mateo itself did not rely on that admission in its motion for summary
6 judgment. The district court granted summary judgment on Valerio’s claims for debt
7 and money due, breach of the covenant of good faith and fair dealing, and fraud as
8 a matter of law, and denied summary judgment as to the breach of contract claim
9 because there existed a question of fact as to how much chile was delivered and how
10 much was paid for. Valerio offers no argument as to how the dismissed claims would
11 have survived summary judgment as a matter of law had he been allowed to withdraw
12 this particular admission, which was based solely on the specific number of loads of
13 chile peppers Valerio delivered to San Mateo in 2012. Accordingly, the district
14 court’s order denying Valerio’s motion to withdraw his admission, thereby limiting
15 the dispute to the last 14 loads, was of no consequence to its decision to grant in part
16 San Mateo’s motion for summary judgment.
17 {17} In his reply brief, Valerio further argues that he was prejudiced because his
18 “admissions conceded and limited the core elements and extent of damages[,]” and
19 that “[a]llowing the admissions to be withdrawn[] would have permitted for the action
10
1 to be resolved on the merits for more than just the 14 loads of chile.” However,
2 Valerio presents no argument as to how he would have been able to prove breach of
3 contract and damages with respect to all loads delivered in 2012 when he was unable
4 to do so with respect to the last 14 loads, and Valerio has directed this Court to no
5 evidence in the record on appeal to suggest that he would have been able to contradict
6 San Mateo’s evidence of the dehydrated weight of any of his chile in 2012. See In re
7 Ernesto M., Jr., 1996-NMCA-039, ¶ 10, 121 N.M. 562, 915 P.2d 318 (“An assertion
8 of prejudice is not a showing of prejudice.”); see also Headley v. Morgan Mgmt.
9 Corp., 2005-NMCA-045, ¶ 15, 137 N.M. 339, 110 P.3d 1076 (“We will not review
10 unclear arguments, or guess at what [a party’s] arguments might be.”). We refuse to
11 speculate on the issue of prejudice, Kennedy, 2000-NMSC-025, ¶ 27, and hold that
12 Valerio has failed to demonstrate reversible error on appeal in this context.
13 Lack of Jurisdiction
14 {18} Valerio next argues that the district court’s dismissal should be reversed for
15 lack of jurisdiction because it denied joinder of real parties in interest. Specifically,
16 Valerio claims that his business partner and bookkeeper, Elisabet Sanchez, and the
17 several farmers who raised the crops of chile peppers here at issue were indispensable
18 parties who should have been joined by San Mateo. Valerio offers virtually no
19 support for this argument. Additionally, more than twenty-five years ago, our
11
1 Supreme Court held that “the test of indispensability [is not] jurisdictional” and
2 overruled precedent to the contrary. C.E. Alexander & Sons, Inc. v. DEC Int’l, Inc,
3 1991-NMSC-049, ¶ 8, 112 N.M. 89, 811 P.2d 899; see also Sims v. Sims, 1996-
4 NMSC-078, ¶ 53, 122 N.M. 618, 930 P.2d 153 (“The absence of an indispensable
5 party in New Mexico is no longer considered . . . a jurisdictional defect.”). The
6 district court did not lack jurisdiction in this matter.
7 Partial Summary Judgment
8 {19} Valerio’s third argument on appeal is that the district court “erred in granting
9 summary judgment where facts were disputed.” Valerio argues that the district court
10 erred (1) in failing to recognize a fiduciary relationship between the parties, and (2)
11 in failing to hold that there were genuine issues of material fact as to whether San
12 Mateo’s records were accurate. We construe these arguments as challenges of the
13 district court’s summary dismissal of his claims for debt and money due and breach
14 of the implied covenant of good faith and fair dealing.
15 {20} Valerio also asserts that there were genuine issues of material fact with regard
16 to “detrimental reliance on [San Mateo’s] representations as to the weights before and
17 after dehydration[.]” Although unclear, we construe this argument as a claim for
18 equitable estoppel and decline to address it because it was not raised below. See Capo
19 v. Century Life Ins. Co., 1980-NMSC-058, ¶ 16, 94 N.M. 373, 610 P.2d 1202 (listing
12
1 the essential elements of equitable estoppel, including “reliance upon the conduct of
2 the party estopped . . . and . . . action based thereon of such a character as to change
3 [one’s] position prejudicially”); McCauley v. Tom McCauley & Son, Inc., 1986-
4 NMCA-065, ¶ 73, 104 N.M. 523, 724 P.2d 232 (holding that the plaintiff was barred
5 from raising equitable estoppel for the first time on appeal).
6 {21} Valerio further appears to argue that there were genuine issues of material fact
7 as to “the meanings of terms of the contract, specifically the accounting practices and
8 dehydration process.” Given that Valerio’s breach of contract claim survived
9 summary judgment, there is no adverse ruling to review or actual relief that can be
10 afforded, so we decline to address this issue. See Pernell v. Pernell, 1979-NMCA-
11 008, ¶ 6, 92 N.M. 490, 590 P.2d 638 (noting that New Mexico appellate courts do not
12 decide questions if no actual relief can be afforded).
13 {22} “On appeal from the grant of summary judgment, we ordinarily review the
14 whole record in the light most favorable to the party opposing summary judgment to
15 determine if there is any evidence that places a genuine issue of material fact in
16 dispute.” City of Albuquerque v. BPLW Architects & Eng’rs, Inc., 2009-NMCA-081,
17 ¶ 7, 146 N.M. 717, 213 P.3d 1146. “However, if no material issues of fact are in
18 dispute and an appeal presents only a question of law, we apply de novo review and
19 are not required to view the appeal in the light most favorable to the party opposing
13
1 summary judgment.” Id. “The movant need only make a prima facie showing that he
2 is entitled to summary judgment. Upon the movant making a prima facie showing, the
3 burden shifts to the party opposing the motion to demonstrate the existence of
4 specific evidentiary facts which would require trial on the merits.” Roth v. Thompson,
5 1992-NMSC-011, ¶ 17, 113 N.M. 331, 825 P.2d 1241 (citation omitted). “[T]he party
6 opposing summary judgment has the burden to show at least a reasonable doubt,
7 rather than a slight doubt, as to the existence of a genuine issue of fact.” Eisert v.
8 Archdiocese of Santa Fe, 2009-NMCA-042, ¶ 10, 146 N.M. 179, 207 P.3d 1156
9 (internal quotation marks and citation omitted).
10 1. Fiduciary Duty
11 {23} With respect to Valerio’s argument that the district court erred in granting
12 summary judgment to San Mateo on the fiduciary duty claim, we disagree. The
13 complaint alleged that Valerio had been “unable to determine the debt and money due
14 without a proper accounting of actual delivery weights by [San Mateo].” The
15 complaint further alleged that Valerio had requested but had been denied such an
16 accounting. In his response to San Mateo’s motion for summary judgment, Valerio
17 argued that San Mateo had “admitted [that it] was acting as a fiduciary for [Valerio]”
18 and had an “obligation . . . to account as plead.” Although unclear, we construe
19 Valerio’s claim for debt and money due as a claim for breach of fiduciary duty. See
14
1 Fate v. Owens, 2001-NMCA-040, ¶ 25, 130 N.M. 503, 27 P.3d 990 (“[A] fiduciary[]
2 is required to fully disclose material facts and information relating to [the fiduciary
3 relationship] . . . even if the [one to whom the duty is owed] ha[s] not asked for the
4 information. . . . The duty of disclosure is a hallmark of a fiduciary relationship.”
5 (internal quotation marks and citations omitted)).
6 We determine whether a particular defendant owes a [fiduciary]
7 duty to a particular plaintiff as a question of law, and as such, de novo.
8 . . . [A] fiduciary relationship exists in all cases where there has been a
9 special confidence reposed in one who in equity and good conscience is
10 bound to act in good faith and with due regard to the interests of one
11 reposing the confidence.
12 Moody v. Stribling, 1999-NMCA-094, ¶¶ 17-18, 127 N.M. 630, 985 P.2d 1210
13 (internal quotation marks and citations omitted). Relationships where a fiduciary duty
14 has been recognized include those between insurer and insured, testator and
15 beneficiary, investment advisor and client, physician and patient, attorney and client,
16 real estate broker and principal, and business partners. See id. ¶ 17. “Because a
17 fiduciary owes the highest degree of loyalty to those who are entrusted to him or her,
18 contracts entered into between a fiduciary and beneficiary are suspect.” Id. ¶ 33.
19 {24} On the other hand, “a buyer-seller relationship [ordinarily] is not fiduciary in
20 nature[.] . . . An essential feature and consequence of a fiduciary relationship is that
21 the fiduciary becomes bound to act in the interests of its beneficiary and not itself.
22 Obviously, this dynamic does not inhere in the ordinary buyer-seller relationship.”
15
1 Azar v. Prudential Ins. Co. of Am., 2003-NMCA-062, ¶ 56, 133 N.M. 669, 68 P.3d
2 909 (alterations, internal quotation marks, and citation omitted); see Cont’l Potash,
3 Inc. v. Freeport-McMoran, Inc., 1993-NMSC-039, ¶ 44, 115 N.M. 690, 858 P.2d 66
4 (holding that a commercial agreement, “albeit heavily tilted in favor of [the
5 defendant],” does not by itself give rise to a fiduciary relationship), limited on other
6 grounds by Davis v. Devon Energy Corp., 2009-NMSC-048, ¶ 2, 147 N.M. 157, 218
7 P.3d 75.
8 {25} Valerio’s only argument as to why the contract at issue in this case should be
9 treated as creating a fiduciary duty on the part of San Mateo is that he had to trust San
10 Mateo to accurately record and report the dehydrated weights of the chile peppers he
11 delivered. Valerio cites no authority recognizing a fiduciary relationship under similar
12 circumstances, and we assume that none exists. See In re Adoption of Doe, 1984-
13 NMSC-024, ¶ 2, 100 N.M. 764, 676 P.2d 1329 (stating that, absent cited authority to
14 support an argument, we assume that no such authority exists).
15 {26} We further agree with the California Supreme Court that one party to a
16 contract’s inability to monitor the other party’s performance of its contractual
17 obligations and the resultant need to trust that the same will be performed as agreed
18 are insufficient, without more, to create a fiduciary relationship. In City of Hope
19 National Medical Center v. Genentech, Inc., for example, the court declined to find
16
1 a fiduciary relationship between a biotech company and a medical research center
2 premised on the center’s need to rely on the truth of the company’s representations
3 regarding royalty payments in exchange for exclusive rights of the center’s patents
4 and other property. 181 P.3d 142, 149-50 (Cal. 2008). The court observed that a car
5 owner “must rely on the truth of the garage operator’s representations about what
6 repairs are needed and how they should be done . . . [but that] no court has ever held
7 or suggested, as far as we know, that in this situation the garage operator owes
8 fiduciary duties to the car owner.” Id. at 152. Similarly, in Wolf v. Superior Court, the
9 court refused to recognize a fiduciary relationship between an author and a company
10 where the author had assigned the rights to a novel to the company in exchange for
11 contingent compensation from its commercial exploitation, while the company
12 retained exclusive control over all financial records and information pertaining to any
13 revenue received therefrom. 130 Cal. Rptr. 2d 860, 864 (2003) (“Every contract
14 requires one party to repose an element of trust and confidence in the other to
15 perform.”). Likewise, without more we decline to impose the onerous duties of a
16 fiduciary relationship in the typical buyer-seller context.
17 {27} In a similar vein, Valerio argues that San Mateo was his fiduciary because it
18 acted as a bailee with regard to the chile peppers he delivered. This argument was not
19 preserved in the district court and was made for the first time in Valerio’s reply brief.
17
1 As such, we refuse to address it on appeal. See Spectron Dev. Lab. v. Am. Hollow
2 Boring Co., 1997-NMCA-025, ¶ 30, 123 N.M. 170, 936 P.2d 852 (rejecting liability
3 theories not presented to the district court in response to the defendant’s motion for
4 summary judgment and raised for the first time in the plaintiffs’ reply brief).
5 2. Good Faith and Fair Dealing
6 {28} We turn next to whether the district court erred in granting summary judgment
7 to San Mateo on Valerio’s claim for breach of the implied covenant of good faith and
8 fair dealing. “The breach of [the implied covenant of good faith and fair dealing]
9 requires a showing of bad faith or that one party wrongfully and intentionally used
10 the contract to the detriment of the other party.” Cont’l Potash, Inc., 1993-NMSC-
11 039, ¶ 64 (emphasis added). Negligent conduct is insufficient to constitute breach of
12 the covenant; rather, the requisite showing is of “wrongful and intentional affronts
13 to the other party’s rights, or at least affronts where the breaching party is consciously
14 aware of, and proceeds with deliberate disregard for, the potential of harm to the other
15 party.” Paiz v. State Farm Fire & Cas. Co., 1994-NMSC-079, ¶ 31, 118 N.M. 203,
16 880 P.2d 300, limited on other grounds by Sloan v. State Farm Mut. Auto. Ins. Co.,
17 2004-NMSC-004, ¶ 7, 135 N.M. 106, 85 P.3d 230. Therefore, in order to defeat
18 summary judgment on this count, Valerio had to present some evidence that the
19 weights San Mateo reported to him either prior to or at the time of payment were not
18
1 only wrong, but intentionally so. Based on the evidence discussed below, we
2 conclude that Valerio did not meet this burden on summary judgment.
3 {29} Before Valerio had to make any showing as to factual issues, San Mateo, as the
4 movant, had the burden of establishing the absence of a material issue of fact and
5 making a prima facie showing that it was entitled to summary judgment as a matter
6 of law. See Goodman v. Brock, 1972-NMSC-043, ¶ 8, 83 N.M. 789, 498 P.2d 676.
7 “By a prima facie showing is meant such evidence as is sufficient in law to raise a
8 presumption of fact or establish the fact in question unless rebutted.” Id.
9 {30} San Mateo’s motion for summary judgment asserted that there was no evidence
10 of bad faith on its part or that it made any misrepresentations to Valerio. The motion
11 was supported by documentary evidence demonstrating that during 2012, (1) the
12 parties had a contract for one million pounds of dehydrated chile; (2) Valerio
13 delivered a total of 5,170 boxes of raw chile; (3) the total dehydrated weight of the
14 chile delivered equaled 941,772 pounds; (4) Valerio’s average dehydrated weight per
15 box was 182 pounds; (5) prior to the beginning of the season, Valerio received
16 advances in the amount of $90,250; (6) Valerio was paid within 30 days of each
17 delivery for all chile peppers delivered through December 20, 2012; and (7) the last
18 payment he received on December 26, 2012, equaled the remaining amount owed to
19 him minus the amount of the advances he had previously received.
19
1 {31} San Mateo further provided the affidavit of its secretary and shareholder of
2 more than twenty years, Rosie Lack, who stated that she had personal knowledge of
3 its operations; that San Mateo does not weigh raw chile as raw weight is immaterial;
4 that each grower’s dehydrated chile is weighed in 1000-pound batches on scales
5 certified by the New Mexico Department of Agriculture; that these weights are
6 recorded in its documentation; and that Valerio was paid accordingly. Lack’s affidavit
7 further provided that, in addition to providing growers with exact dehydrated weights
8 at the time of payment, San Mateo tries to provide estimated average box weights on
9 the paperwork it uses to track its boxes throughout the season as a courtesy to help
10 growers estimate picking costs. San Mateo’s motion also included Valerio’s
11 responses to requests for admissions and answers to interrogatories, in which he
12 admitted that he did not know—and had no independent records of—the dehydrated
13 weight of the chile peppers he delivered to San Mateo in 2012. This evidence was
14 sufficient for San Mateo to meet its burden of making a prima facie showing of no
15 misrepresentation on its part, intentional or otherwise.
16 {32} In his response, Valerio produced documentary evidence of the raw weight of
17 some of the chile peppers he delivered to San Mateo, which the district court accepted
18 as sufficient to raise a factual issue with respect to dehydrated weight as evidenced
19 by its denial of summary judgment on Valerio’s breach of contract claim. Relevant
20
1 to the issue of bad faith, Valerio asserted that Lack verbally told Valerio that the last
2 14 loads averaged over 200 pounds per box after dehydration, but the payment
3 Valerio received for these boxes translated to an average of 81 pounds per box; the
4 apparent implication being that, given the great disparity in weights, San Mateo must
5 have intentionally misrepresented the dehydrated weight of these loads of chile
6 peppers. In support of these assertions, Valerio provided the affidavit of Sanchez, in
7 which she offered no explanation as to how she reached the number of 81 pounds per
8 box, such as whether or not the deduction of $90,250 in advances was taken into
9 account. Without some evidence that her calculation was correct, Valerio was not
10 entitled to any inference based on this number. See Goodman, 1972-NMSC-043, ¶ 10
11 (“The inferences, which the party opposing the motion for summary judgment is
12 entitled to have drawn from all the matters properly before and considered by the trial
13 court, must be reasonable inferences.”).
14 {33} Further, in his response to San Mateo’s request for admission number nineteen,
15 which was included with the motion for summary judgment, Valerio stated, consistent
16 with San Mateo’s documentation, that he was paid based on an average dehydrated
17 weight of 182 pounds per box for all boxes delivered in 2012. Valerio’s response
18 offered no argument or evidence to support the inference that Lack’s alleged
19 statement that the last 14 loads averaged 200 pounds per box was inconsistent with
21
1 an ultimate average of 182 pounds per box when all 5,170 boxes were taken into
2 account. As such, Valerio’s evidence did not support an inference of bad faith by San
3 Mateo. See id.; see also Associated Home & RV Sales, Inc. v. Bank of Belen, 2013-
4 NMCA-018, ¶ 29, 294 P.3d 1276 (“To survive a motion for summary judgment, the
5 non-moving party may not rely upon mere allegations, but rather must set forth
6 specific facts showing that there is a genuine issue for trial.” (internal quotation
7 marks and citation omitted)).
8 {34} In her affidavit, Sanchez further stated that Lack told Valerio that the weights
9 provided on the paperwork for tracking San Mateo’s boxes were accurate rather than
10 estimates with the understanding that Valerio would use these weights to pay the
11 farmers who produced the chile peppers he delivered to San Mateo, the apparent
12 implication being that Lack knowingly caused him financial harm. This testimony
13 likewise does not support an inference of bad faith. During the hearing on San
14 Mateo’s motion, Valerio argued that Lack’s estimates understated the weight of the
15 chile peppers received. Therefore, even if Valerio relied on these numbers to pay the
16 farmers, doing so was not to his financial detriment, as his payments were lower—not
17 higher—than what was due.
18 {35} Lastly, during the hearing on the motion, Valerio argued that San Mateo should
19 have either utilized a weight scale with a printer and produced a ticket demonstrating
22
1 the dehydrated weight of his product, or taken a picture of the screen of its weight
2 scale each time it weighed his product. However, “[m]erely asserting that [San Mateo]
3 failed to take action that might have been beneficial to [Valerio] does not show bad
4 faith.” Cont’l Potash, Inc., 1993-NMSC-039, ¶ 66.
5 {36} As the non-moving party, the burden was on Valerio to come forward with
6 admissible evidence showing that a material disputed factual issue existed with
7 respect to bad faith. See Archunde v. Int’l Surplus Lines Ins. Co., 1995-NMCA-110,
8 ¶ 22, 120 N.M. 724, 905 P.2d 1128. Finding no evidence in the record on appeal from
9 which to reasonably infer bad faith, we affirm the district court’s partial grant of
10 summary judgment on this issue.
11 Summary Judgment Regarding Claims Not Challenged in Motion
12 {37} Valerio contends that the district court erred in granting summary judgment on
13 issues that were not addressed in San Mateo’s motion. Specifically, Valerio asserts
14 that the district court summarily dismissed a claim of unconscionability/adhesion and
15 a claim of conversion. There is nothing in the record on appeal, however, to support
16 Valerio’s assertion; rather, the record establishes that these claims were not before the
17 district court, and thus no summary judgment could have been, or was, entered with
18 respect to them.
23
1 {38} Specifically, during docket call held two days before the hearing on the motion
2 for summary judgment, the district court rejected Valerio’s draft pretrial order
3 because it contained these two new theories of liability. In so doing, the court
4 unequivocally stated that the time for amending the pleadings had passed and that no
5 new or additional theories would be permitted (as discussed in more detail below, this
6 ruling was not error). Contrary to the court’s clear directive, the next day Valerio filed
7 a motion to amend the complaint seeking to add these two theories. The court orally
8 denied this motion on the day of trial, stating that it had previously held that no
9 amendments would be permitted. It follows that the court had not previously
10 dismissed these claims on summary judgment.
11 Exclusion of Evidence
12 {39} Valerio’s fifth claim on appeal is that the district court erred in excluding
13 Lack’s deposition testimony, taken in her capacity as San Mateo’s corporate designee
14 under Rule 1-030(B)(6) NMRA, and the Mexican weight tickets. While the brief in
15 chief also states that the weight tickets from the United States customs scales were
16 erroneously excluded, Valerio offers no argument or authority in support of this
17 assertion; therefore, we do not address it. Corona v. Corona, 2014-NMCA-071, ¶ 28,
18 329 P.3d 701 (“This Court has no duty to review an argument that is not adequately
19 developed.”).
24
1 {40} At trial, Valerio moved into evidence portions of Lack’s deposition, and San
2 Mateo objected in part because Lack was present and available to testify. The district
3 court ruled that the objection would be sustained unless Valerio waited until Lack
4 testified. Rather than call Lack as his next witness, however, Valerio rested his case.
5 {41} Pursuant to Rule 1-032(A) NMRA,
6 [a]t the trial . . . any part or all of a deposition, so far as admissible under
7 the Rules of Evidence applied as though the witness were then present
8 and testifying, may be used against any party who was present or
9 represented at the taking of the deposition or who had reasonable notice
10 thereof, in accordance with any of the following provisions: . . . (2) the
11 deposition of . . . a person designated under Subparagraph (6) of
12 Paragraph B of Rule 1-030 . . . to testify on behalf of a public or private
13 corporation, partnership or association . . . which is a party may be used
14 by an adverse party for any purpose[.]
15 (Emphasis added.) Given the plain language of the rule that at trial an adverse party
16 may use the deposition of a corporate party’s Rule 1-030(B)(6) designee for any
17 purpose and “as though the witness were then present and testifying,” the district
18 court’s ruling was clearly erroneous. Rule 1-032(A); see Crimm v. Missouri Pac. Ry.
19 Co., 750 F.2d 703, 708-09 (8th Cir. 1984) (holding that, under the substantially
20 identical language of Fed. R. Civ. P. 32(a)(2), the trial court erred in excluding the
21 deposition of the opposing party’s managing agent because the deponent “was to be
22 called later in the trial”).
25
1 {42} On appeal, San Mateo argues that the error was harmless. We have previously
2 held that “the complaining party on appeal must show the erroneous . . . exclusion of
3 evidence was prejudicial in order to obtain a reversal.” Cumming v. Nielson’s, Inc.,
4 1988-NMCA-095, ¶ 28, 108 N.M. 198, 769 P.2d 732. In response, Valerio asserts
5 that he was forced to wait to use the deposition testimony until Lack “was called to
6 testify. . . . However, when she was not called to testify, her deposition was not
7 permitted to be admitted, to the substantial injustice of [Valerio’s] case.” Valerio fails
8 to explain why he did not call Lack to the stand in his case in chief. To the extent his
9 position is that he was precluded from doing so by the district court, there is nothing
10 in the record on appeal to support this suggestion.
11 {43} In interpreting the parallel Fed. R. Civ. P. 32(a)(2), “[f]ederal appellate courts
12 have held that the exclusion of deposition evidence is harmless if the material matters
13 covered in the deposition are covered, or could have been covered, at trial.” Crimm,
14 750 F.2d at 709 (emphasis added). We are persuaded by this precedent. See Hymans,
15 1995-NMCA-095, ¶ 12 (holding that authority interpreting a “substantially identical”
16 federal rule of civil procedure “can be persuasive in the absence of contrary New
17 Mexico precedent”). Therefore, we hold that, because (1) Valerio could have covered
18 the excluded testimony by calling Lack to the stand and questioning her about it, and
26
1 (2) he could have introduced the deposition testimony at issue at that time per the
2 court’s ruling, the error was harmless, and reversal on this ground is not warranted.
3 {44} As to the Mexican weight tickets, Valerio argues that they should have been
4 admitted as his business records. San Mateo contends that this issue was not
5 preserved for appellate review. Our review of the record reveals that at trial, Valerio
6 argued unsuccessfully that these weight tickets should be admitted because they were
7 kept in the regular course of his business by Sanchez, their custodian. Therefore, we
8 hold that the issue was preserved and review for abuse of discretion. Roark v.
9 Farmers Grp., Inc., 2007-NMCA-074, ¶ 20, 142 N.M. 59, 162 P.3d 896.
10 {45} It is undisputed that the Mexican weight tickets were not generated or created
11 by Valerio’s business; rather, they were issued by a different entity—a weigh station
12 located in Mexico and used by Valerio to weigh some of the chile peppers he
13 delivered to San Mateo in 2012. Valerio cites several cases for the proposition that
14 the witness testifying for the purpose of laying a foundation for the business records
15 exception need not have created the record at issue. However, Valerio offers no
16 authority to support his position that the business records exception applies to records
17 not created by the business to which the exception is sought to be applied. “We
18 assume where arguments in briefs are unsupported by cited authority, counsel after
19 diligent search, was unable to find any supporting authority.” In re Adoption of Doe,
27
1 1984-NMSC-024, ¶ 2. Rule 11-803(6) NMRA states that both keeping and making
2 the records at issue must be a regular practice of the same business. As such was not
3 the case with respect to the Mexican weight tickets, we hold that the district court did
4 not abuse its discretion in excluding these documents.
5 Scheduling Order
6 {46} Valerio’s final argument on appeal is that “the district court committed
7 reversible error in allowing manifest injustice by refusing to modify the scheduling
8 order to promote fairness.” San Mateo takes the position that this issue was not
9 preserved below. “To preserve an issue for review on appeal, it must appear that
10 appellant fairly invoked a ruling of the [district] court on the same grounds argued in
11 the appellate court.” Woolwine v. Furr’s, Inc., 1987-NMCA-133, ¶ 20, 106 N.M. 492,
12 745 P.2d 717. Our review of the record on appeal reveals that Valerio preserved this
13 issue when he raised it during docket call on October 6, 2014, at which time Valerio
14 argued that he should be permitted to amend the complaint to add claims revealed
15 during discovery. Valerio argued to the district court that, because the deadline for
16 amendments of the pleadings was shorter than the discovery deadline, the scheduling
17 order unreasonably precluded any claims discovered during that process. The district
18 court rejected this argument as “misleading” because discovery had closed two
19 months prior, stating that Valerio should not have waited until docket call to seek
28
1 amendment. We review this denial of Valerio’s oral motion to modify the scheduling
2 order for abuse of discretion. See Buke, LLC v. Cross Country Auto Sales, LLC, 2014-
3 NMCA-078, ¶ 62, 331 P.3d 942.
4 {47} Pursuant to Rule 1-016(B) NMRA, “[a] scheduling order shall not be modified
5 except by order of the court upon a showing of good cause.” Valerio’s counsel argued
6 below that, by the time he was retained in this matter, while discovery was still open,
7 the deadline to amend the pleadings had already passed, partly due to the court’s
8 delay in ruling on his previous counsel’s motion to withdraw. Counsel offered no
9 explanation, however, as to why he then waited until two months after the close of
10 discovery and only fifteen days before the trial date to seek modification. Given that
11 the district court was offered no cause—good or otherwise—for this delay, we hold
12 that it did not abuse its discretion in refusing to modify its scheduling order only days
13 before trial. See Reaves v. Bergsrud, 1999-NMCA-075, ¶ 13, 127 N.M. 446, 982 P.2d
14 497 (“An abuse of discretion occurs when the [district] court’s ruling is against the
15 facts, logic, and circumstances of the case or is untenable or unjustified by reason.”).
16 {48} We are mindful of the fact that, in effect, the district court’s ruling was a denial
17 of a request to amend the complaint, as well as of our prior holding that, “even if a
18 party does not consent to amendment, the [district] court is required to allow it freely
19 if the objecting party fails to show he or she will be prejudiced.” Crumpacker v.
29
1 DeNaples, 1998-NMCA-169, ¶ 17, 126 N.M. 288, 968 P.2d 799. In the present case,
2 San Mateo did not consent to the amendment below, but the district court did not
3 explicitly require a showing of prejudice. We nevertheless affirm because
4 Crumpacker further held that a denial may be premised on an “apparent . . .
5 reason—such as undue delay,” id. ¶ 18 (internal quotation marks and citation
6 omitted), and Valerio does not develop on appeal a challenge to the district court’s
7 decision on this basis.
8 CONCLUSION
9 {49} For the foregoing reasons, we affirm the district court’s ruling in favor of San
10 Mateo.
11 {50} IT IS SO ORDERED.
12 _______________________________
13 LINDA M. VANZI, Chief Judge
14 WE CONCUR:
15 _________________________________
16 JAMES J. WECHSLER, Judge
17 _________________________________
18 M. MONICA ZAMORA, Judge
30