Valerio v. San Mateo Enterprises, Inc.
2017 NMCA 59
N.M. Ct. App.2017Background
- Valerio (grower) contracted with San Mateo (dehydrator) in 2012 to sell one million pounds of dehydrated chile; San Mateo processed, dehydrated, weighed, and paid growers.
- San Mateo issued truck tickets and maintained an In/Out Log and provided growers estimated per-box dehydrated weights as a courtesy; Valerio relied on those weights to pay farmers.
- Valerio received $90,250 in advance payments that San Mateo later deducted from the final payment on Dec. 26, 2012; Valerio did not dispute receipt of the advances.
- Dispute arose when the last payment produced an apparent average of ~81 lbs/box (per Valerio’s bookkeeper) versus the estimates Valerio alleged (over 200 lbs/box for the last 14 loads); Mexican weigh-station raw-weight tickets were the only records of raw weight.
- Valerio sued for debt/money due, breach of contract, breach of implied covenant of good faith and fair dealing, fraud, and unconscionable trade practices (later dismissed); district court granted partial summary judgment for San Mateo and, after a bench trial on the contract claim, granted defendant’s Rule 1-041(B) dismissal.
Issues
| Issue | Valerio’s Argument | San Mateo’s Argument | Held |
|---|---|---|---|
| Motion to withdraw a discovery admission (admitted that only ~14 loads unpaid) | Admission was improvident; should be withdrawn to permit proof of underpayment for all deliveries in 2012 | Withdrawal would prejudice San Mateo because discovery was closed and foreign evidence (Mexican tickets) would require last-minute burdensome discovery | Denial affirmed: court did not abuse discretion and any error was harmless because admission did not drive summary judgment rulings |
| Joinder / jurisdiction (indispensable parties: bookkeeper, farmers) | Sanchez and growers were indispensable and their absence deprived court of jurisdiction | Indispensability is not a jurisdictional bar under controlling NM law | Denied: absence of those parties did not deprive the court of jurisdiction |
| Partial summary judgment (fiduciary duty; implied covenant of good faith and fair dealing) | San Mateo owed fiduciary duties/acted as bailee and acted in bad faith by misreporting weights | Relationship was ordinary buyer-seller; San Mateo showed documentary evidence of dehydrated weights, certified scales, payments, and Valerio had no independent dehydrated-weight records; no evidence of intentional misconduct | Affirmed: no fiduciary duty as a matter of law; no evidence of bad faith to defeat summary judgment on covenant claim |
| Exclusion of deposition of corporate designee | Deposition (Lack) and Mexican weight tickets should have been admitted; exclusion prejudiced Valerio | Court ruled deposition use should wait until the witness testified; Mexican tickets not business records of Valerio’s business | Deposition exclusion erroneous under rule but harmless because Valerio could have called Lack at trial; Mexican weight tickets properly excluded under business-records rule (not created/kept by Valerio’s business) |
| Scheduling order / motion to amend pleadings | Scheduling order unfairly prevented amendment to add claims revealed during discovery | Plaintiff delayed seeking amendment and offered no good cause; amendment sought days before trial | Denial of modification affirmed: no abuse of discretion given undue delay and lack of good cause |
Key Cases Cited
- Brook Vill. N. Assocs. v. Gen. Elec. Co., 686 F.2d 66 (1st Cir. 1982) (prejudice for denying withdrawal of admissions relates to practical difficulty of proving case due to lost/unavailable evidence)
- 999 v. C.I.T. Corp., 776 F.2d 866 (9th Cir. 1985) (denial of motion to withdraw admissions reviewed for abuse of discretion)
- Crimm v. Missouri Pac. Ry. Co., 750 F.2d 703 (8th Cir. 1984) (deposition of opposing party’s managing agent should not be excluded under a rule permitting use of a party’s deposition at trial)
- Cont’l Potash, Inc. v. Freeport-McMoran, Inc., 858 P.2d 66 (N.M. 1993) (buyer-seller commercial agreements ordinarily do not create fiduciary duties; negligent conduct insufficient for breach of implied covenant)
- City of Hope Nat’l Med. Ctr. v. Genentech, Inc., 181 P.3d 142 (Cal. 2008) (reliance in commercial dealings alone does not create fiduciary duties)