State Ex Rel. Udall v. Cresswell

1998 NMCA 072, 960 P.2d 818, 125 N.M. 276
CourtNew Mexico Court of Appeals
DecidedMarch 11, 1998
Docket17740
StatusPublished
Cited by5 cases

This text of 1998 NMCA 072 (State Ex Rel. Udall v. Cresswell) 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
State Ex Rel. Udall v. Cresswell, 1998 NMCA 072, 960 P.2d 818, 125 N.M. 276 (N.M. Ct. App. 1998).

Opinion

OPINION

BOSSON, Judge.

{1} This case involves disputed liability under the 1973 New Mexico Subdivision Act before it was amended in 1995. See NMSA 1978, §§ 47-6-1 to -29 (1973, as amended through 1995). Specifically, we address the question whether a seller, who divides land for the purpose of creating a security interest to finance a sale, escapes responsibility as a “subdivider” under the Act solely because he does not intend thereby to create a subdivision. After analyzing this transaction, as characterized by Defendants and the district court and in light of the public purpose of the Act, we conclude as a matter of law that Defendants created a subdivision under the Act. The district court having concluded to the contrary, we reverse and remand for further proceedings.

BACKGROUND

{2} The Subdivision Act requires that “an area of land within New Mexico, the surface of which has been divided by a subdivider into five or more parcels within three years for the purpose of sale or lease[,]” must be developed to comply with the requirements of the Subdivision Act. Section 47-6-2(1) (1981). Under the Act, those who subdivide the land are required to provide, and pay for, the platting and basic infrastructure needed for a community to survive. See §§ 47-6-3 to -14. Without such amenities, communities can become health hazards and a burden on taxpayers. See generally Nancy L. Simmons, Memories and Miracles—Housing the Rural Poor Along the United States-Mexico Border: A Comparative Discussion of Colonia Formation and Remediation in El Paso County, Texas, and Doña Ana County, New Mexico, 27 N.M.L.Rev. 33, 34 (1997) (observing that “illegal subdivisions without roads or water or sanitation, sold mostly to new immigrants” are commonly referred to as colonias, a term first used in Lyndon Baines Johnson Sch. of Pub. Affairs, Univ. of Tex (Austin), Policy Research Project Report No. 18, Colonias in the Lower Rio Grande Valley of South Texas: A Summary Report 5 (1977)).

{3} The number of parcels into which land is divided over the course of three years is a pivotal issue. If landowners restrict their land divisions to four or fewer during any three year period, then the Act appears to allow them to avoid much of the heavy responsibility that is placed on a subdivider for creating a “subdivision.” However, if the land is divided into five or more parcels, for the purpose of sale or lease, the owner becomes a subdivider, willingly or unwillingly, who must accept responsibility for the improvements and infrastructure that the Act requires as a threshold minimum. It is no surprise that this is not the first time our appellate courts have addressed similar issues, although not the exact issue in the context presented today. See, e.g., Sandoval County Bd. of Comm’rs v. Ruiz, 119 N.M. 586, 893 P.2d 482 (Ct.App.1995); State ex rel. Stratton v. Alto Land & Cattle Co., 113 N.M. 276, 824 P.2d 1078 (Ct.App.1991); State v. Heck, 112 N.M. 513, 817 P.2d 247 (Ct.App. 1991); State ex rel. Anaya v. Select Western Lands, Inc., 94 N.M. 555, 613 P.2d 425 (Ct. App.1979).

{4} This matter began in 1989. Defendants owned a forty-five acre tract of land that had come into their possession by virtue of their successful practice of law in Doña Ana County. Although they preferred to sell the land intact, they later decided to sell it in parcels, and it is undisputed that three separate sales took place between January 1990 and February 1992, conveying twenty-five acres to three separate buyers. Defendants contracted to sell the remaining twenty acres to Anderson in December 1989. Whether those twenty acres were sold as one parcel or two is the subject of this dispute, and it is the key to deciding whether the community protections of the Subdivision Act apply. If the Anderson transaction created two parcels, “for the purpose of sale or lease,” as characterized in the Subdivision Act, then Defendants put themselves in the “five or more” category and are obligated under the Act. If, however, that transaction did not divide the twenty acres into more than one parcel, or if the division was not “for the purpose of sale or lease” within the meaning of the statute, then Defendants remained under the “five or more” ceiling, and avoided the Act. To answer this question, we must examine the details of the transaction with some care.

{5} Before doing so, we set forth our standard of review. We accept the findings of the trial court when supported by substantial evidence. See Strata Prod. Co. v. Mercury Exploration Co., 1996-NMSC-016, 121 N.M. 622, 627, 916 P.2d 822, 827. However we review the legal conclusions of the court, based upon these facts, de novo. Id. Additionally, findings by the trial judge which are induced by an incorrect interpretation of the law cannot stand on appeal. Garcia v. Mora Painting & Decorating, 112 N.M. 596, 603, 817 P.2d 1238, 1245 (Ct.App. 1991). We also note that in cases such as this, in which the “evidence bearing on the issue is substantially all documentary,” this Court is “as well positioned as the district court to consider the evidence[.]” Brooks v. Tanner, 101 N.M. 203, 205, 680 P.2d 343, 345 (1984).

{6} The State’s characterization of what occurred is straightforward. Although Anderson contracted with Defendants to buy all twenty acres of land, the contract did not describe one twenty-acre tract but rather two separate, ten-acre parcels, specifically identified as Tract 1 and Tract 2. Under the terms of the contract, Defendants paid for a survey of the twenty acres, showing the property as two, separately-surveyed and - platted, ten-acre tracts. Taxes on the two tracts were treated separately. Under the terms of the contract, Defendants were to pay taxes on both tracts for 1989, but would pay taxes on Tract 2 for 1990 as well. The two tracts were covered by separate title insurance policies, and the policy on Tract 2 was not to issue until Anderson made a separate down payment on Tract 2.

{7} The contract provided for the deed to Tract 1 to be recorded at the time of closing in January 1990, while the recording of the deed for Tract 2 was contingent upon Anderson’s making a $7,500 down payment by January 15, 1991. The contract specified that if Anderson failed to make the required payment on Tract 2, he would forfeit only his right to Tract 2. His default would have no effect on ownership of Tract 1 which was protected by a partial release. The financing of Tract 2 was non-recourse, which meant that in the event of default, Defendants could not hold Anderson personally liable but could only regain possession of Tract 2 and resell it to someone else. To the State, the combined effect of the non-recourse nature of the agreement for Tract 2 and the partial release of Tract 1, made it easier for Anderson to default, and thus, it became more probable that the two tracts would end up in the hands of different owners.

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Bluebook (online)
1998 NMCA 072, 960 P.2d 818, 125 N.M. 276, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-udall-v-cresswell-nmctapp-1998.