AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The case involves three promissory notes between Lea County State Bank (the Bank) and Markum Ranch Partnership (the Ranch) and its partners, including a non-partner guarantor. The Ranch defaulted on all notes. The Bank's claims on two of the notes were contested on the grounds of the statute of limitations, while the claim on the third note was not disputed due to its maturity date. The Ranch sold real property in 2006 and 2008, directing the proceeds to the Bank, which applied them to the debts. The Bank filed a lawsuit in 2011 to collect the remaining balances (paras 1-5).

Procedural History

• District Court of Lea County, Mark T. Sanchez, District Judge: Granted summary judgment in favor of the Bank. The basis for the decision was not clearly stated, but it involved the statute of limitations and the application of payments from property sales in 2006 and 2008 (para 2).

Parties' Submissions

• Appellants: Argued that the statute of limitations barred the Bank's claims against them regarding two of the promissory notes. They did not dispute the Bank's claim on the third note due to its maturity date (para 3).
• Appellee (the Bank): Contended that the statute of limitations for its claims was revived when the Ranch sold its real property in 2006 and 2008 and paid the proceeds to the Bank (para 1).

Legal Issues

• Whether the Ranch's partial payments to the Bank from the 2006 and 2008 sales of the Ranch’s real property restarted the statute of limitations on the Bank’s claims against the Ranch and its three partners.
• Whether the 2006 and 2008 payments also revived the statute of limitations on the Bank’s right to enforce Kathryn’s guaranty (para 7).

Disposition

• Summary judgment in favor of the Bank was affirmed regarding its claims against the Ranch and its three partners.
• Summary judgment against Kathryn regarding the two disputed promissory notes was reversed, and the matter was remanded to the district court for further proceedings regarding Kathryn’s personal guaranty (para 24).

Reasons

• TIMOTHY L. GARCIA, Judge (MICHAEL D. BUSTAMANTE, Judge, LINDA M. VANZI, Judge concurring): The court concluded that the 2006 and 2008 payments were voluntary partial payments by the Ranch, which revived the statute of limitations against the Ranch and its three partners. However, these payments did not automatically revive the Bank’s claims against Kathryn due to the lack of evidence that she consented to these payments. The court emphasized that only voluntary payments can trigger the revival statute and that the debtor's failure to direct the application of a payment allows the creditor to apply it as they choose, thus suspending the statute of limitations as to all related debts. The court also noted that a guarantor's liability is not automatically revived by payments made by the principal obligor without the guarantor's consent (paras 9-23).