O'HARE v. Valley Utilities, Inc.

547 P.2d 1147, 89 N.M. 105
CourtNew Mexico Court of Appeals
DecidedFebruary 18, 1976
Docket1843
StatusPublished
Cited by12 cases

This text of 547 P.2d 1147 (O'HARE v. Valley Utilities, 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
O'HARE v. Valley Utilities, Inc., 547 P.2d 1147, 89 N.M. 105 (N.M. Ct. App. 1976).

Opinions

OPINION

LOPEZ, Judge.

This appeal grows out of a suit by water users in the Adobe Acres Subdivision in Albuquerque against the utility which supplied their water, Valley Utilities, Inc.

The action was brought by five individual plaintiffs and the Adobe Acres Improvement Association on behalf of themselves and 475 water users in the subdivision. The plaintiffs asked tort and contract damages by reason of the utility’s failure to supply water meeting certain minimum standards of quality. Following a jury verdict for the plaintiffs, the defendant has appealed raising numerous issues of law.

I. Class Action

The defendant’s first point of error is that the case should never have been permitted to proceed as a class action. The defendant asks that the judgment be affirmed only with respect to the individual named plaintiffs. The defendant raises a number of arguments with respect to this point, but rather than specifically enumerating all of them we shall refer to them in the course of the opinion.

The Adobe Acres Subdivision contained 475 homes which subscribed to the defendant’s service. Of these homes 272 households belonged to the Adobe Acres Improvement Association. This Association is a nonprofit corporation. Prior to the start of the trial, the plaintiffs attempted in two different ways to inform residents of the subdivision of the pendency of the suit. One way was the distribution of a one page notice which was addressed to “Resident of Adobe Acres” and which stated that a suit had been filed against Valley Utilities, Inc. It warned that all residents would be bound by the judgment unless they notified the court or the plaintiffs’ attorneys that they wished to be excluded. This notice was delivered by eleven adult residents of the subdivision; the distribution committee chairman testified the method of delivery was to give the notice to the resident personally, or if the resident was not home, to put it in the screen door or the mailbox. Secondly, the Association published a newsletter which was also distributed to all residents of the subdivision; the method of distribution is unclear from the record. The newsletter did not inform the residents that the suit was binding, or that they could intervene.

The defendant objected throughout the proceedings to allowing the case to proceed as a class action. Nonetheless, the case was presented as a class action and the jury was so instructed. The jury verdict was for 475 members of the class in the amount of $1,000.00 apiece. The trial judge entered judgment for the 272 persons who were members of the Association, deeming them members of a “true” class. He directed that notice be given to the other residents of the subdivision and that they be permitted to intervene upon application. These nonmember residents were said to constitute a spurious class.

A major source of confusion in the case has been created by the distinctions between “old” Rule 23 and “new” Rule 23 of the Rules of Civil Procedure. Section 21-1-1(23), N.M.S.A.1953 (Repl. Vol. 4), and Rule 23, Fed. Rules of Civ.P., respectively.

New Mexico’s Rule 23 reads as follows:

"Rule 23. Class actions.
“(a) Representation. If persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one [1] or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued, when the character of the right sought to be enforced for or against the class is
“(1) joint, or common, or secondary in the sense that the owner of a primary right refuses to enforce that right and a member of the class thereby becomes entitled to enforce it;
“(2) several, and the object of the action is the adjudication of claims which do or may affect specific property involved in the action; or
“(3) several, and there is a common question of law or fact affecting the several rights and a common relief is sought.”

New Mexico has not adopted the amendment to this rule which was implemented in the federal system in 1966.

Under our Rule 23 the crucial question is the species of class. This determination requires an examination “of the abstract nature of the rights involved”. Committee Note of 1966 accompanying amendment to Rule 23, Fed. Rules of Civ. P.

Once the classification is determined, the question of whether the judgment is binding on absent parties is resolved. This process of categorization has been assailed as irrelevant to the criteria which should determine whether absent parties are bound (Developments in the Law-Multiparty Litigation in, the Federal Courts, 71 Harv.L. Rev. 874, at 936 (1958)) and it is such criticism which led to the substantial amendment of this rule. Nonetheless, we shall accord the traditional interpretation to our rule, since it has not been amended.

The threshold question is whether the subdivision members form a true or spurious class. Rule 23 directs attention to the nature of the rights which the class seeks to enforce. In order to form a true class, the rights must be “joint” or “common” to the class. In order to form a spurious class, the rights must be “several” and there must be common questions of law and fact. “Joint” has a well accepted meaning in the law,, and has not proved difficult to apply. Moore, in his Treatise, says a right is joint if, in the absence of the class action device, joinder would be essential. 3B Moore’s Federal Practice jj 2308 (2d Ed. 1975); Tunstall v. Brotherhood of Locomotive Firemen and Enginemen, 148 F.2d 403 (4th Cir. 1945). The right involved here is not joint. The concept of a “common” right has caused more difficulties. See, Chafee, Some Problems of Equity, 255-57 (1950); 7 Wright and Miller, Federal Practice and Procedure: Civil, § 1752 at 516 (1972). It acquires meaning when contrasted to the rights asserted by a spurious class.

In this case a persuasive argument can be made that all plaintiffs have been injured by the same breach of duty by the defendant and in this sense claim a common right. However, the plaintiffs are asserting that the defendant owes them duties as individuals. In addition, the residents might have been damaged in varying degrees, and since our true class action does not provide for “opting out” of a class, all class members would be bound by the common judgment and unable to receive their individual damages. We conclude that the subdivision residents do not form a true class since they are not enforcing a right held in common. They do form a spurious class, in that common questions of law and fact relating to the defendant’s actions are raised by their claims.

Decisional law, although admittedly far from consistent, lends support to our conclusion. In Rank v. (Krug) United States, 142 F.Supp. 1 (S.D.Cal.1956), various landowners were permitted to sue as a true class when they sought injunctive relief against the government’s interference with riparian rights. The court noted that the right sought to be enforced was a common one to water from a common source, and distinguished it from the situation where the parties were seeking an adjudication of their individual rights to water.

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O'HARE v. Valley Utilities, Inc.
547 P.2d 1147 (New Mexico Court of Appeals, 1976)

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Bluebook (online)
547 P.2d 1147, 89 N.M. 105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ohare-v-valley-utilities-inc-nmctapp-1976.