City of Sunland Park v. Harris News, Inc.

2005 NMCA 128, 124 P.3d 566, 138 N.M. 588
CourtNew Mexico Court of Appeals
DecidedAugust 24, 2005
DocketNo. 23,593
StatusPublished
Cited by14 cases

This text of 2005 NMCA 128 (City of Sunland Park v. Harris News, Inc.) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Sunland Park v. Harris News, Inc., 2005 NMCA 128, 124 P.3d 566, 138 N.M. 588 (N.M. Ct. App. 2005).

Opinion

OPINION

KENNEDY, Judge.

{1} Defendant Harris News, Inc. (the Bookstore) appeals a district court order holding that it breached a settlement agreement (the Agreement) and engaged in statutory and common law nuisance, ordering the Bookstore to remove its truck sign and to cease operating an adult bookstore in its current location. The court further imposed a statutory penalty, and awarded damages. The Bookstore raises five arguments on appeal. First, it argues that the district court erred by considering parol evidence of the circumstances of the Agreement and that even if the court properly considered testimony in this regard, it erred by concluding that the Agreement was ambiguous. Second, the Bookstore contends that the district court misinterpreted the Agreement to prohibit the truck sign and nude dancing. Third, the Bookstore argues that the district court’s ruling on statutory or common law nuisance is not supported by substantial evidence. Fourth, the Bookstore claims that the district court improperly applied the doctrines of res judicata and collateral estoppel to bar consideration of the Bookstore’s constitutional defenses. Fifth and last, the Bookstore argues, even if it did breach the Agreement with Plaintiff City of Sunland Park (Sunland Park), create a nuisance, or both, it was an abuse of discretion to close the Bookstore’s business.

{2} We reverse in part and affirm in part. In the matter of the Agreement that Sunland Park and the Bookstore had entered into prior to this litigation, we hold that the district court improperly construed it to incorporate Sunland Park’s ordinances. As a result, we reverse the remedies that flowed from any alleged violation of the ordinances, including the statutory penalties imposed and the closure of the Bookstore. We further hold that the district court properly construed the Agreement to limit the Bookstore to displaying the one sign described in the Agreement and properly heard extrinsic evidence to clarify the Agreement’s ambiguity in this regard. Therefore, we affirm the district court’s conclusion that the Bookstore breached the Agreement by displaying an additional sign than provided for in the Agreement and affirm its injunction ordering its removal. We reverse the monetary damages awarded to Sunland Park for breach of the Agreement for lack of supporting evidence. As a result of our holdings on the construction of the Agreement, we do not reach the application of res judicata and collateral estoppel. Last, we reverse the district court’s nuisance rulings for lack of supporting evidence and the absence of statutes or common law declaring the Bookstore’s activities nuisances. As a result, we do not address whether the district court erred by closing down the Bookstore’s operations to abate the nuisance.

FACTUAL AND PROCEDURAL BACKGROUND

{3} On December 3, 1998, the Bookstore filed suit in federal district court against Sunland Park seeking to prevent Sunland Park from enforcing its zoning ordinances. In that suit, the Bookstore asserted first amendment rights in the operation of an adult bookstore and video store located in Sunland Park less than one thousand feet from a residentially zoned district and less than five hundred feet from a liquor establishment. The federal district court issued a temporary restraining order against Sunland Park. It appears that the parties agreed on December 7,1998, to postpone the hearing in federal court and further that, pending such a hearing, Sunland Park would allow the Bookstore to remain open and operating. The Bookstore agreed that it would not post any signage visible from the road or advertise the sale of adult materials on the building, in the parking lot, or the surrounding area, and that it would apply for a permit for the sign in an expedited application process.

{4} After further negotiations, on May 4, 1999, the parties entered into the Agreement whereby the Bookstore agreed to dismiss its federal lawsuit and any potential claims against Sunland Park officials related to the lawsuit. In turn, Sunland Park agreed not to enforce its ordinances that would prohibit the Bookstore’s operations and its advertisement of adult material. Subsequently, the Bookstore displayed a truck in its parking lot with the words “Adult Video” illuminated on its side (the truck sign). The Bookstore also advertised and provided nude dancing on its premises.

{5} Sunland Park initiated the action that is the subject of this appeal on May 26, 2000, by filing suit in the New Mexico district court alleging breach of contract and violation of its ordinances. It sought a temporary restraining order and a hearing to obtain a preliminary and permanent injunction against the Bookstore to cease its operations. The Bookstore failed to appear at the hearing, and the district court issued a preliminary injunction enforcing the Agreement by enjoining the Bookstore from allowing nude dancing and from displaying the truck sign on its premises. The Bookstore filed a motion to vacate the injunction on the grounds of improper notice, which the district court granted on April 2, 2001.

{6} On July 5, 2000, while Sunland Park’s suit was pending in the New Mexico district court, the Bookstore filed a complaint in the United States District Court for the Western District of Texas, El Paso Division, seeking declaratory and injunctive relief, arguing that Sunland Park was inappropriately attempting to enforce its ordinances to preclude the truck sign that was allegedly located in Texas. On July 6, 2000, the federal court granted a temporary restraining order enjoining Sunland Park from enforcing its ordinance against the Bookstore or any vehicle parked in any portion of the lot that is located in Texas. After an evidentiary hearing, the federal court concluded that an injunction was not warranted, dissolved the temporary restraining order, and dismissed the case.

{7} In this case, still pending in the New Mexico district court, Sunland Park amended its complaint to add nuisance claims to its breach of contract claims. Sunland Park also moved for partial summary judgment on the grounds that the Bookstore’s constitutional defenses should be barred by the doctrines of res judicata and collateral estoppel based on the Texas federal district court’s decision that the Bookstore had waived its constitutional claims by entering into the Agreement. The district court granted Sun-land Park’s motion for partial summary judgment, ruling that the federal decision precluded the relitigation of the Bookstore’s constitutional claims. In addition to its request that the Bookstore’s operations as an adult bookstore and video store be permanently enjoined, Sunland Park requested unspecified amounts of punitive damages for the Bookstore’s breach of the Agreement and of the covenant of good faith and fair dealing and for nuisance per se. Sunland Park also requested damages for violation of its sign ordinance or nuisance per se, asserting that it set a maximum penalty of $500 and that each day in which the Bookstore was in violation of its sign ordinance constituted a separate offense. Sunland Park requested damages totaling $398,500 for the 797 days of the Bookstore’s violation of the sign ordinance.

{8} The district court concluded that the Bookstore’s truck sign and the nude dancing permitted on its premises breached the parties’ Agreement. The district court further concluded that, as a result of the breach, Sunland Park could enforce its ordinances against the Bookstore to cease its operations in the sale of adult material.

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Cite This Page — Counsel Stack

Bluebook (online)
2005 NMCA 128, 124 P.3d 566, 138 N.M. 588, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-sunland-park-v-harris-news-inc-nmctapp-2005.