Twin Forks Ranch, Inc. v. Brooks

907 P.2d 1013, 120 N.M. 832
CourtNew Mexico Court of Appeals
DecidedOctober 10, 1995
Docket15974
StatusPublished
Cited by20 cases

This text of 907 P.2d 1013 (Twin Forks Ranch, Inc. v. Brooks) 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
Twin Forks Ranch, Inc. v. Brooks, 907 P.2d 1013, 120 N.M. 832 (N.M. Ct. App. 1995).

Opinion

OPINION

PICKARD, Judge.

1. Twin Forks Ranch, Inc. (Twin Foi’ks) and the Twin Forks Mutual Domestic Water Consumers Association (Water Association) (collectively referred to as Plaintiffs) appeal from a summary judgment granted to the Brookses on Plaintiffs’ claim to reform or rescind two deeds. Twin Forks deeded fifteen acres of land to the Brookses without a reservation of water rights. The district court ruled as a matter of law that the water rights appurtenant to the land passed to the Brookses with the deeds of sale and that no issues of fact requiring a trial were present.

2. During oral argument on appeal, the Brookses conceded that any language in the judgment attempting to quantify the water rights that passed with the deed was a mistake subject to correction under SCRA1986, 1-060(A) (Repl.1992). The parties agreed that the intent of the judgment was simply to adjudicate the claim between the Plaintiffs and the Brookses to whatever water rights were appurtenant to the land. Accordingly, we order the trial court to correct the judgment to reflect, instead of an adjudication “of all water rights produced by Slough Spring ... N.M.P.M.,” an adjudication “of all water rights appurtenant to the fifteen acres sold by Twin Forks to the Brookses.” Further, any related errors flowing from this error should also be corrected.

3. This correction has two important consequences for this appeal. First, the correction renders immaterial any unresolved facts about the existence and the amount of water rights appurtenant to the land, facts that Plaintiffs assert should have precluded summary judgment. The trial court did not intend to adjudicate Slough Spring water rights on summary judgment. .Second, the correction mandates denial of Plaintiffs’ motion to vacate the judgment and dismiss the appeal on jurisdictional grounds when all lot owners and members of the Water Association, who may have competing claims to Slough Spring, were not parties to the action. See La Madera Community Ditch Ass’n v. Sandia Peak Ski Co., 119 N.M. 591, 592-93, 893 P.2d 487, 488-89 (Ct.App.1995) (priority of water rights between two competing users may be adjudicated without joinder of all other water users in system).

4. We address serially Plaintiffs’ remaining issues that challenge the summary judgment because genuine issues of material fact were allegedly present with regard to: (1) the doctrine of unilateral mistake; (2) the doctrine of mutual mistake; and (3) a variety of other equitable doctrines. We hold that there are genuine issues of material fact only on the doctrine of mutual mistake. Accordingly, we reverse and remand.

FACTS

5. In 1960, Twin Forks purchased and subdivided into a number of units property in the Sacramento Mountains collectively referred to as Twin Forks Ranch. The Ranch included a 160-acre homestead that had used wooden troughs before 1900 to divert water from Slough Spring for irrigation on the homestead. Beginning in 1962, Twin Forks dedicated Slough Spring water to a community water system that supplies approximately two hundred and four families in subdivision units one, two, three, and six. Included within the Ranch, but excluded from the subdivision, was the fifteen-acre parcel at issue that contained the old farmhouse which, at the time of sale, was in disrepair and had been vacant for several years.

6. Twin Forks offered the acreage to Robert Brooks, and on October 24, 1988, Robert, his brother, and their wives bought for $50,000 the property, which Twin Forks subdivided into two 7.5-acre parcels. The contracts of sale provided each parcel with three water taps to the community water system. The deed to Robert Brooks reserved for Twin Forks a right of ingress and egress along an existing road to the water tank and the Spring. Neither deed reserved water rights or stated the right to water taps.

7. The Water Association was organized in early 1989 to take control of the community water system. The controversy behind this suit arose when the Brookses claimed Slough Spring by virtue of their deeds and began to interfere with the Water Association’s use of Slough Spring for the community water system.

DISCUSSION

Unilateral Mistake

8. Plaintiffs sought to rescind the deeds pursuant to the Restatement (Second) of Contracts § 153 (1981), which provides for rescission if: (1) unilateral mistake is established; (2) the party requesting relief does not bear the risk of mistake; and (3) among other grounds, enforcement of the contract would be unconscionable. Because we find the second element to be dispositive, we restrict our analysis to a discussion of the allocation of risk. See Blauwkamp v. University of N.M. Hosp., 114 N.M. 228, 232, 836 P.2d 1249, 1253 (Ct.App.) (once party makes prima facie showing of entitlement to summary judgment, burden shifts to opposing party to come forward with admissible evidence tending to establish all required elements of a claim), cert. denied, 114 N.M. 82, 835 P.2d 80 (1992).

9. Plaintiffs concede that they bore the risk of mistake only if the trial court’s allocation of the risk to them was reasonable under the circumstances. See Restatement, supra, § 154 (applicable determination of burden of risk). Plaintiffs contend that the trial court acted unreasonably under the circumstances to allocate the risk to them, given the expectations of the parties, the bargained-for consideration, the events surrounding the declaration of water rights that brought the dispute into fruition, and the good faith and fair dealing by Twin Forks. However, when questioned by the trial court during the hearing on why Plaintiffs should not bear the risk of their own mistake, Plaintiffs could furnish no reason for the court to allocate the risk to the Brookses who were not responsible for the mistake.

10. Given the absence of a reason to allocate the risk to the Brookses, we conclude that the trial court acted properly to allocate the risk to Plaintiffs. Where the risk of mistake was properly allocated to Plaintiffs, the deed cannot be rescinded by Plaintiffs for unilateral mistake under Restatement Sections 153 and 154 as a matter of law. See State ex rel. State Highway & Transp. Dep’t v. Garley, 111 N.M. 383, 387, 806 P.2d 32, 36 (1991) (allocation of risk of mistake analyzed in the context of rescission for mutual mistake on appeal from summary judgment). Therefore, we need not reach Plaintiffs’ remaining challenges to this issue. See In re Estate of Heater, 113 N.M. 691, 695, 831 P.2d 990, 994 (Ct.App.) (on appeal, error not corrected if it would not change result), cert. denied, 113 N.M. 690, 831 P.2d 989 (1992).

Mutual Mistake

11. Plaintiffs also sought relief for mutual mistake. A mutual mistake occurs when the parties have reached an agreement, but the writing either does not express what was really intended, Sierra Blanca Sales Co. v. Newco Indus., Inc., 84 N.M.

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Bluebook (online)
907 P.2d 1013, 120 N.M. 832, Counsel Stack Legal Research, https://law.counselstack.com/opinion/twin-forks-ranch-inc-v-brooks-nmctapp-1995.