Venaglia v. Kropinak
New Mexico Court of Appeals
35 U.C.C. Rep. Serv. 2d 556 (1998)
- Written by Sean Carroll, JD
Facts
Downtown Business Center, Inc. (DBC) executed a promissory note to Frank, Ann, and Roy Venaglia (plaintiffs) in connection with DBC’s purchase of the Venaglias’ property. Roy Kropinak (defendant) guaranteed the note and thus was DBC’s accommodation party. After DBC defaulted on the note and Kropinak and the other guarantors did not pay, the Venaglias brought suit. During the pendency of the litigation, the Venaglias and DBC entered into a settlement agreement under which DBC relinquished any right to the property and the Venaglias released DBC from any liability. Kropinak, however, was not part of that settlement. Kropinak argued, among other things, that (1) under state law, the settlement’s discharge of DBC also discharged Kropinak; (2) under state law, Kropinak’s obligation was materially modified by the settlement and thus was discharged; and (3) under common law, Kropinak’s recourse against DBC was impaired by the settlement agreement. The trial court granted Kropinak summary judgment. The Venaglias appealed.
Rule of Law
Issue
Holding and Reasoning (Hartz, C.J.)
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