Tierra Realty Trust, L.L.C. v. Vill. of Ruidoso

2013 NMCA 30, 2013 NMCA 030, 3 N.M. 485
CourtNew Mexico Court of Appeals
DecidedJanuary 8, 2013
DocketDocket 31,190
StatusPublished
Cited by1 cases

This text of 2013 NMCA 30 (Tierra Realty Trust, L.L.C. v. Vill. of Ruidoso) 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
Tierra Realty Trust, L.L.C. v. Vill. of Ruidoso, 2013 NMCA 30, 2013 NMCA 030, 3 N.M. 485 (N.M. Ct. App. 2013).

Opinion

OPINION

HANISEE, Judge.

{1} In this interlocutory appeal, we review the district court’s denial of class certification for monetary damages pursuant to Rule 1-023 NMRA. While the district court certified the proposed class of Ruidoso residential sewage and wastewater users for injunctive and declaratory relief under Rule 1-023(B)(2), it barred certification under both Rules 1-023(B)(1)(a) and (B)(3) with respect to monetary damages. We hold that the district court abused its discretion because its decision to deny full class status was not supported by substantial evidence. We therefore reverse and remand for further proceedings consistent with this Opinion.

I. BACKGROUND

{2} The Village of Ruidoso (Defendant) entered into a consent judgment in federal court pursuant to alleged violations of the Federal Water Pollution Control Act. The judgment required Defendant to construct a new “$3 5 million” wastewater treatment plant in order to comply with federal pollution guidelines for wastewater discharge. In an effort to procure funding for the plant, Defendant passed legislation increasing its wastewater rates for residential users. The first rate increases were incorporated into Defendant’s fee structure on November 27, 2007.

{3} In response, Tierra Realty Trust, LLC (Plaintiff), a sixty-unit apartment complex for senior citizens, contacted Defendant in April 2008, to protest the rate increases. In May 2008, those discussions resulted in an informal agreement that Plaintiff deposit funds into an interest-bearing escrow account, in lieu of paying the utility fees, until a settlement or court order could be reached. Plaintiff did not deposit funds according to the agreement, and instead continued paying the disputed utility bills to Defendant until August 2009, when it timely filed the complaint in the current case. Plaintiff filed suit on behalf of itself and all other similarly situated residential wastewater and sewer customers, alleging that the rate increases were unreasonable contrary to NMSA 1978, Section 3-18-l(H) (1972) (stating that a municipality may “establish rates for services provided by municipal utilities and revenue-producing projects, including amounts which the governing body determines to be reasonable and consistent with amounts received by private enterprise in the operation of similar facilities”), and discriminatory under the equal protection clause. Plaintiff sought injunctive relief, declaratory judgment, and monetary damages.

{4} Thereafter, Plaintiff filed a motion for class certification on all grounds of relief sought, which Defendant opposed, raising the affirmative defenses of voluntary payment, laches, and estoppel. Plaintiff replied that the proposed class acted under duress when it continued to make payments to Defendant after the rate change. After a hearing on the matter, the district court certified the class for injunctive and declaratory relief, but denied class certification for monetary damages. In denying certification, it concluded that although “there are numerous common issues of both fact and law[,]” “[ijndividual issues regarding voluntary payment and the related issue of duress will predominate over the common issues,” such that “the damage[s] claim will be very difficult to manage. Plaintiff filed an application for interlocutory appeal seeking review of the district court’s order, which we granted pursuant to Rule 12-203(A) NMRA.

II. DISCUSSION

{5} In order to obtain certification of a class action, Plaintiff must first establish that all four prerequisites of Rule 1-023 (A), commonly referred to as numerosity, commonality, typicality, and adequacy, are satisfied. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613 (1997); Armijo v. Walmart Stores, Inc., 2007-NMCA-120, ¶¶ 25-26, 142 N.M. 557, 168 P.3d 129. Then, Plaintiff must show that the class is maintainable under one of several criteria set forth in Rule 1-023(B). See Amchem Prods., 521 U.S. at 614; Armijo, 2007-NMCA-120, ¶¶ 25-26. In district court, Plaintiff specifically argued that the proposed class met the criteria of Rule l-023(B)(l)(a) or (B)(3), contending either that separate causes of action would result in inconsistent or varying adjudications establishing incompatible standards of conduct for Defendant, or that common questions predominate to such a degree that a class action was superior to other methods of adjudication. With respect to damages certification, the district court determined that Plaintiff failed to satisfy both Rule 1-023(A) and (B), and therefore denied class status.

{6} “We review the district court’s decision to certify or not certify a class action for an abuse of discretion.” Davis v. Devon Energy Corp., 2009-NMSC-048, ¶ 12, 147 N.M. 157, 218 P.3d 75. “[A] district court abuses its discretion when it misapprehends the law or if the decision is not supported by substantial evidence.” Brooks v. Norwest Corp., 2004-NMCA-134, ¶ 7, 136 N.M. 599, 103 P.3d 39. Substantial evidence is defined as “relevant evidence that a reasonable mind could accept as adequate to support a conclusion.” Sims v. Sims, 1996-NMSC-078, ¶ 65, 122 N.M. 618, 930 P.2d 153. We resolve all disputed facts and indulge all reasonable inferences in favor of the district court’s findings. Id. “[T]he district court’s interpretation of Rule 1-023 is a question of law that is reviewed de novo, as are other questions of law.” Davis, 2009-NMSC-048, ¶ 12 (citation omitted).

A. Plaintiff Met the Prerequisites of Rule 1-023(A)

{7} The district court found that Plaintiff failed to meet two of the initial prerequisites under Rule 1-023(A): commonality under Rule 1-023 (A)(2) and typicality under Rule 1-023(A)(3). We address each in turn, and for reasons stated below, we reverse.

1. Commonality

{8} To satisfy the commonality requirement under Rule 1-023(A)(2), Plaintiff must establish that “there are questions of law or fact common to the class[.]” Despite finding that “[Plaintiff] has demonstrated that there are numerous common issues of both fact and law,” the district court determined that commonality was not present. In so ruling, it found that “the ramifications o f the affirmative defense of voluntary payment and the related issue of duress” rendered “[t]he class regarding the damage claim . . . very difficult to manage.” We agree with Plaintiffs contention that the district court “applied an incorrect legal standard[,] requiring] reversal.” In this regard, we note that Defendant does not argue otherwise on appeal. See Santa Fe Pac. Gold Corp. v. United Nuclear Corp., 2007-NMCA-133, ¶ 41, 143 N.M. 215, 175 P.3d 309 (stating that where a party declines to address an issue in its answer brief, we treat the party’s silence as a concession on the issue).

{9} In ruling as it did, it appears that the district court interjected the criteria under Rule 1-023(B)(3) into the commonality prerequisite ofRule 1-023(A) by considering issues of management and predominance. Romero v. Philip Morris Inc., 2005-NMCA-035, ¶ 9, 137 N.M.

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Bluebook (online)
2013 NMCA 30, 2013 NMCA 030, 3 N.M. 485, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tierra-realty-trust-llc-v-vill-of-ruidoso-nmctapp-2013.