J.R. Hale Contracting Company v. United New Mexico Bank at Albuquerque
Supreme Court of New Mexico
799 P.2d 581 (1990)
United (defendant) extended credit to Hale (plaintiff) over 11 years, routinely accepting late payments without declaring default. On a specific $400,000 loan requiring an interest payment by March 1, 1983, with a right to accelerate the full balance without notice upon any late payment, Hale missed that single payment; over subsequent meetings about additional borrowing, United never reminded Hale of the overdue amount, then suddenly demanded immediate payment of the entire balance on March 24, citing both the missed payment and general concerns about Hale's ability to pay. Hale sued for wrongful acceleration, arguing United's conduct — including its 11-year history of accepting late payments and its silence during their recent meetings — had waived its right to accelerate; the trial court granted United a directed verdict based on the note's explicit terms, and Hale appealed.
Whether, under state commercial law, a secured creditor's failure to promptly assert its right to acceleration may be deemed a waiver of that right.