Smith v. American Pride Home

New Mexico Court of Appeals·Decided October 19, 2009·No. 29,598·Unpublished

Opinion

1 This memorandum opinion was not selected for publication in the New Mexico Reports. Please 2 see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. 3 Please also note that this electronic memorandum opinion may contain computer-generated 4 errors or other deviations from the official paper version filed by the Court of Appeals and does 5 not include the filing date.

6 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

7 DAVID and KARIN SMITH 8 Husband and Wife,

9 Plaintiffs-Appellants, 10 v. NO. 29,598

11 AMERICAN PRIDE HOMES, L.L.C., 12 and PIEDMONT GENERAL CONSTRUCTION, INC.,

13 Defendants-Appellees.

14 APPEAL FROM THE DISTRICT COURT OF LINCOLN COUNTY 15 Karen L. Parsons, District Judge

16 Adam D. Rafkin, P.C. 17 Adam D. Rafkin 18 Ruidoso, NM

19 for Appellants

20 Charles E. Hawthorne 21 Ruidoso, NM

22 for Appellees 23 MEMORANDUM OPINION

1 WECHSLER, Judge. 2 Plaintiffs David and Karen Smith appeal from a judgment in favor of 3 Defendants American Pride Homes, L.L.C. (APH), and Piedmont General 4 Construction, Inc. (Piedmont). We issued a notice of proposed summary disposition, 5 proposing to uphold the judgment. Plaintiffs have filed a memorandum in opposition, 6 which we have duly considered. Because we remain unpersuaded, we affirm. 7 The underlying dispute arose out of a residential construction project. To 8 briefly reiterate, Plaintiffs entered a contract with APH to purchase a lot and a home. 9 [DS 2; RP 6-15] Throughout the process, Plaintiffs appear to have dealt with Rick 10 and Mary Jo Riddle, who own and operate APH. [DS 3-4] After the construction was 11 substantially complete, a dispute arose between Plaintiffs and APH. [DS 2] APH 12 asserted that the general contractor for the construction project was Piedmont, an 13 entity licensed in New Mexico with its principal place of business in Arizona. [DS 14 3-4] Both in the district court and on appeal Plaintiffs have disputed this assertion, 15 taking the position that APH acted as the general contractor throughout the 16 construction process. [DS 3, fn. 1] Insofar as APH was unlicensed, Plaintiffs contend 17 that APH could pursue no claims of any kind and should be required to disgorge 18 monies paid by Plaintiffs. [DS 3, fn. 1] See Gamboa v. Urena, 2004-NMCA-053, ¶

1 15, 135 N.M. 515, 90 P.3d 534 (“[C]ontracts entered into by unlicensed contractors 2 are contrary to public policy and unenforceable. . . . If a consumer has already paid 3 an unlicensed contractor, the consumer may recover the amounts paid, . . . even if the 4 contractor’s work was satisfactory.” (citations omitted)). 5 In the notice of proposed summary disposition, we explained that we 6 understand the central issue on appeal to be the identity of the general contractor and 7 the status of its licensure. [CN 3] To the extent that Piedmont genuinely acted as the 8 general contractor, it was duly licensed, and consequently Plaintiffs could not avoid 9 their contractual obligations. Conversely, to the extent that APH genuinely acted as 10 the general contractor, it is unlicensed, and Plaintiffs would be entitled to recover 11 amounts paid. 12 Previously, we noted that Plaintiffs’ contention that APH acted as the general 13 contractor appeared chiefly to be based on the fact that one of the owners and 14 operators of APH, Mary Jo Riddle, handled many of the day-to-day activities 15 associated with the construction. [DS 4-5; RP 337, 339, 522, 526] To the extent that 16 her activities fulfilled the functions of a general contractor, and to the extent that she 17 undertook those activities in her capacity as an owner and operator of APH, we 18 understand Plaintiffs to argue that APH should properly have been identified as the

1 general contractor, rather than Piedmont. 2 As we observed in the notice of proposed summary disposition, the problem 3 with Plaintiffs’ argument is that Mary Jo Riddle claimed to be an employee of 4 Piedmont. [RP 336] To the extent that Mary Jo Riddle’s activities were undertaken 5 in her capacity as a Piedmont employee, her activities could not be said to have 6 rendered APH the general contractor. Moreover, as a Piedmont employee, she was 7 not required to maintain a separate license—she could simply act as Piedmont’s agent. 8 See Reule Sun Corp. v. Valles, 2008-NMCA-115, ¶ 11, 144 N.M. 736, 191 P.3d 1197 9 (“[A]n employee is not a contractor and is therefore not required to obtain a 10 contractor’s license.”), cert. granted, 2008-NMCERT-008, 145 N.M. 255, 195 P.3d 11 1267; Fowler Bros., Inc. v. Bounds, 2008-NMCA-091, ¶ 28, 144 N.M. 510, 188 P.3d 12 1261 (“Employees are not subject to the licensing requirements for contractors in . . . 13 New Mexico.”). This was the determination ultimately reached by the district court 14 below. [RP 522, 526] 15 In their memorandum in opposition, Plaintiffs attack the characterization of 16 Mary Jo Riddle as a Piedmont employee. [MIO 3-5] There are numerous factors that 17 may be taken into consideration when determining whether an individual is acting as 18 an employee or as an independent contractor. See Reule, 2008-NMCA-115, ¶ 13;

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