Tunis v. Country Club Estates

CourtNew Mexico Court of Appeals
DecidedFebruary 7, 2019
DocketA-1-CA-35931
StatusUnpublished

This text of Tunis v. Country Club Estates (Tunis v. Country Club Estates) 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
Tunis v. Country Club Estates, (N.M. Ct. App. 2019).

Opinion

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 Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions.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

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

2 JOE TUNIS, SHIRLEY WHEELER, 3 JOHN EWERT, and PATTY SALESSES,

4 Plaintiffs-Appellants,

5 v. No. A-1-CA-35931

6 COUNTRY CLUB ESTATES 7 HOMEOWNERS ASSOCIATIONS, INC.,

8 Defendant-Appellee.

9 APPEAL FROM THE DISTRICT COURT OF LUNA COUNTY 10 Daniel Viramontes, District Judge

11 Scott Hulse P.C. 12 R. Glenn Davis 13 Las Cruces, NM

14 Henry J. Paoli 15 El Paso, TX

16 for Appellants

17 Cervantes Scherr Legate 18 K. Joseph Cervantes 19 Las Cruces, NM

20 L. Helen Bennett, P.C. 21 L. Helen Bennett 1 Albuquerque, NM

2 for Appellee

3 MEMORANDUM OPINION

4 ZAMORA, Chief Judge.

5 {1} This is the second time that this case has been appealed to this Court. See

6 Tunis v. Country Club Estates Homeowners Ass’n Inc., 2014-NMCA-025, 318

7 P.3d 713 (Tunis I). In this second appeal, we address whether the district court

8 erred in denying Plaintiffs’ attorney fees incurred in pursuing their indemnification

9 claim, sometimes called “fees on fees,” and whether Plaintiffs are entitled to

10 attorney fees on appeal. We reverse the district court’s order precluding Plaintiffs’

11 claim for attorney fees incurred in prosecuting their claim for indemnity and

12 remand this issue to the district court for its consideration and determination of

13 such attorney fees. In light of our holding, we also remand to the district court for

14 its consideration and determination of Plaintiffs’ attorney fees on appeal. Last,

15 Plaintiffs’ request for exemption for any potential future assessment of attorney

16 fees imposed by Defendant is not ripe and we therefore decline to address it.

17 BACKGROUND

18 {2} Because of the complex procedural background, we first set forth that

19 background as those previous proceedings lay the rippling foundation that has

20 given rise to the appellate issues at hand.

2 1 Declaratory Judgment Action

2 {3} In December 2007 the Defendant Country Club Estates Homeowners

3 Association (the Association) by its then-President, John Ewert, filed a complaint

4 for declaratory judgment to determine which of the two competing boards was the

5 duly elected board. The Association, a non-profit corporation, by its then president,

6 Ewert, sought a declaration that the Association’s governing board was the board

7 headed by Ewert (the Ewert Board), rather than a purportedly newly elected board

8 headed by Pamela Fletcher (the Fletcher Board). Id. ¶¶ 2, 6. The Ewert Board was

9 unsuccessful and the Fletcher Board was determined to be the governing board. In

10 the same action, the Fletcher Board requested attorney fees against the individual

11 members of the Ewert Board. Id. ¶¶ 2, 7. Although the district court initially

12 entered an order imposing personal liability on the Ewert Board, it subsequently

13 entered an order relieving the individual members of the Ewert Board of personal

14 liability and ordered the Association to pay the Fletcher Board’s attorney fees. Id. ¶

15 8. Neither party appealed this order. Id. We refer to this as the “declaratory

16 judgment action.”

17 Tunis I

18 {4} Following the conclusion of the declaratory judgment action, Plaintiffs, who

19 are some of the former members of the Ewert Board, filed an action against the

20 Association for money damages to compensate them for attorney fees they

3 1 incurred in the declaratory judgment action. Tunis I, 2014-NMCA-025, ¶ 2.

2 Specifically, pursuant to the indemnification clause contained in the Association’s

3 bylaws, Plaintiffs sought $28,724.72 in attorney fees incurred to defend themselves

4 against the Fletcher Board’s pursuit of fees against them. Id. ¶ 9. The Association

5 moved to dismiss Plaintiffs’ complaint claiming it was barred by the doctrine of res

6 judicata. Id. ¶ 1. The district court agreed and dismissed Plaintiffs’ complaint. Id.

7 ¶¶ 1, 14. Plaintiffs appealed.

8 {5} This Court in Tunis I limited its review to the interpretation and application

9 of the indemnification provision of the bylaws, concluding there were issues of fact

10 that defeated the Fletcher Board’s motion for summary judgment. Id. ¶¶ 29, 30.

11 This Court remanded the matter to the district court for further proceedings.

12 District Court Proceeding Following Tunis I Remand

13 {6} On remand, Plaintiffs filed an amended complaint alleging breach of

14 contract and promissory estoppel, and seeking indemnification for the attorney fees

15 they incurred in defending against the attorney fees claim made by the Fletcher

16 Board in the declaratory judgment action. Plaintiffs contended that, pursuant to the

17 provision in the Association’s bylaws, the Association must pay Plaintiffs’ attorney

18 fees incurred not only in the declaratory judgment action but also for the appeal in

19 Tunis I and subsequent trial on remand. Following a bench trial, the district court

20 found Plaintiffs were entitled to attorney fees incurred only in the declaratory

4 1 judgment action totaling $28,724.72. The district court found that as of June 18,

2 2008 and on remand, it had entered an order confirming the declaration that the

3 Fletcher Board members were the duly elected and governing board members of

4 the Association and Plaintiffs were no longer board members performing as

5 directors or officers of the Association. The district court also found that because

6 Plaintiffs did not appeal this 2008 determination, they were no longer performing

7 in their capacities as directors or officers of the Association; therefore, they could

8 not be indemnified for any actions after June 18, 2008. We refer to this stage of the

9 case as the “remand proceeding.”

10 Appeal

11 {7} In this appeal, Plaintiffs argue that the Association is obligated under the

12 indemnity provision of its bylaws to indemnify them for attorney fees incurred in

13 the declaratory judgment action, Tunis I, and the remand proceeding based on their

14 roles as former members of the Association’s Board of Directors. We agree.

15 {8} Plaintiffs also contend that the district court erred in failing to exempt them

16 from any potential assessments by the Association to pay for the attorney fees

17 owed by the Association to Plaintiffs. We conclude that the Plaintiffs’ potential

18 assessment exemption is premature. As a result, this issue is not ripe and we

19 decline to address it.

20 DISCUSSION

5 1 I. Plaintiffs Can Recover Attorney Fees for Bringing Their 2 Indemnification Claim in Tunis I and the Remand Proceeding

3 A. Standard of Review

4 {9} Our review in this case is a matter of contract interpretation. In the absence

5 of ambiguity, which the parties here do not assert, “the interpretation of language

6 in a contract is an issue of law which we review de novo.” Krieger v. Wilson

7 Corp., 2006-NMCA-034, ¶ 12, 139 N.M. 274, 131 P.3d 661. We review the award

8 or denial of attorney fees for an abuse of discretion. N.M.

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