Bank of America v. LaHave
Danny Lahave and Top Terraces, Inc. (Guarantors), appeal from a court trial on stipulated facts after the trial court entered a judgment in favor of “Bank of America, National Association, as successor by merger with LaSalle Bank National Association†(Noteholder) in the amount of $377,438.82. We are asked to determine whether a late fee consisting of 5 percent of the balance of a note constitutes a penalty unenforceable as a matter of public policy under New Mexico law against Guarantors, notwithstanding their purported waiver of any invalidity, illegality, or unenforceability of the note. We conclude the waiver is ineffective because the late fee constitutes a penalty in violation of New Mexico public policy and therefore is unenforceable. We reverse the judgment of the trial court.
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