City of Sunland Park v. PUBLIC REGULATION

Decision Date22 December 2003
Docket NumberNo. 23,238.,23,238.
PartiesCITY OF SUNLAND PARK, Plaintiff-Appellant, v. The NEW MEXICO PUBLIC REGULATION COMMISSION, Defendant-Appellee.
CourtCourt of Appeals of New Mexico

Christopher P. Bauman, Molly B. McIntosh, Darci Carroll, Bauman, Dow, McIntosh & León, P.C., Albuquerque, NM, for Appellant.

Lee W. Huffman, Associate General Counsel, NM Public Regulation Commission, Santa Fe, NM, for Appellee.

Certiorari Denied, No. 28,475, February 17, 2004.

OPINION

BUSTAMANTE, Judge.

{1} The City of Sunland Park (City) appeals a district court Order Vacating Alternate Writ of Mandamus and granting the Public Regulation Commission (PRC) jurisdiction to regulate a utility which the City had condemned in an earlier action.1 We reverse the district court, insofar as the Order held that an automatic stay in the condemnation appeal operated to prevent title in the utility from passing to the City, thereby allowing the PRC to retain rate-making jurisdiction over the utility.

FACTUAL AND PROCEDURAL BACKGROUND

{2} Following the condemnation of the Santa Teresa Services Company (Utility) by the City, the City twice sought to increase the utility rates it charged customers. The first rate increase occurred after the City took possession of the Utility. The customers (Petitioners) filed a petition with the PRC to oppose the rate increase. The PRC subsequently issued an Order Docketing Declaratory Order, in which the PRC concluded that the City had not yet met the "owned and operated" requirements of NMSA 1978, Section 62-6-4(A) (2003) (providing the PRC with exclusive jurisdiction to regulate and supervise public utilities, except utilities "owned and operated" by a municipal corporation), and therefore any rate increases required PRC approval. According to the PRC, although the City was in possession of the Utility, it was not yet the owner because it had not yet paid for the Utility's assets pursuant to NMSA 1978, Section 42A-1-27 (1981) (vesting title in the condemnor after the condemnation payment is deposited in the district court registry and the certification of deposit is recorded). Hence, the PRC concluded that until the City paid for the Utility's assets, the PRC retained jurisdiction to regulate rates. Complying with the PRC order, the City refunded Petitioners the excess amount charged over PRC-approved rates.

{3} On May 24, 2001, the City deposited the condemnation payment in the court registry pursuant to the Amended Condemnation Judgment and a stipulated order modifying the judgment. Payment was recorded in the district court registry on June 11, 2001. Although the record does not give any detail, the payment was initially made subject to a constructive trust at the City's request. The district court ordered the funds to be disbursed to the condemnee on July 5, thereby dissolving the constructive trust. The money was never disbursed, however, because the County obtained an automatic stay on the disbursement when the Intervenors appealed the condemnation action on July 9, 2001. Rule 1-062(E) NMRA 2003; NMSA 1978, § 39-3-23 (1966). On July 24, the City filed notice with the PRC that it intended to increase rates.

{4} In response to the second rate increase, the PRC issued an order requiring the City to comply with the previously issued Declaratory Order, refund any money collected in excess of the PRC-approved rate, and show cause why it should not be sanctioned. The City applied for and received an Alternate Writ of Mandamus in the district court to quash the order on the ground that the PRC lacked jurisdiction to control rates because the City "owned and operated" the Utility. However, after considering the PRC's answer and oral arguments, the district court entered an Order Vacating Alternate Writ of Mandamus, concluding that because of the stay on the disbursement of funds, the City did not yet own the Utility and the utility rates were, therefore, subject to PRC approval. It is from this Order which the City appeals. We first address a few preliminary procedural issues before turning to the merits of the appeal.

I. Mootness

{5} After the appeal was taken in this matter, this Court affirmed the district court decision in the condemnation action. City of Sunland Park v. Santa Teresa Servs. Co., 2003-NMCA-106, ¶ 96, 134 N.M. 243, 75 P.3d 843. Certiorari was denied by the Supreme Court on August 18, 2003, at which time the automatic stay expired. Thereafter, this Court requested oral argument and briefs from the parties to address the issue of mootness. In response, the PRC concedes that it has "permanently lost jurisdiction to proceed in [this matter]" and represents that it "will not entertain any matter attempting to invoke that jurisdiction." Despite these representations, the City opposes a dismissal for the simple reason that the Petitioners in the declaratory action have not abandoned their claims. Thus, the City argues that the underlying dispute over whether the PRC had jurisdiction during the two year, one month period in which the stay was in effect, and necessarily by implication, whether the City owes a substantial refund to the petitioners for the rate increase in effect during that time, is alive.

{6} We agree that the retroactivity issue is not moot. If the district court's order that the PRC had jurisdiction to prevent the City from increasing rates during the stay was left standing, it could affect the City's obligation to the Petitioners during that period. See Atchison, Topeka & Santa Fe Ry. Co. v. State Corp. Comm'n, 79 N.M. 793, 794, 450 P.2d 431, 432 (1969); Massengill v. City of Clovis, 33 N.M. 394, 396, 268 P. 786, 786 (1928) (holding that where appellant has material question left unresolved in the litigation, the appeal will not be dismissed as moot); Littlefield v. N.M. Taxation & Revenue Dep't, 114 N.M. 390, 392, 839 P.2d 134, 136 (Ct.App.1992). Principles of res judicata could also affect the City's rights and liabilities in other proceedings in which title during this time period is at issue. Since the City and other persons have a clear stake in the outcome of this appeal, we will not dismiss this action as moot.

II. Procedural Issues

{7} The PRC argues that the district court decision to vacate the writ was proper, because the City did not meet the technical requirements for obtaining an alternative writ of mandamus. The PRC contends first that the writ was legally insufficient because it did not contain any factual allegations necessary to authorize relief, as required by NMSA 1978, Section 44-2-6 (1953). Ordinarily, when an alternative writ is granted, "the application is functus officio, and the alternative [writ] becomes the initial pleading in the case and should state a cause of action within itself." State ex rel. Burg v. City of Albuquerque, 31 N.M. 576, 579-80, 249 P. 242, 244 (1926). Together, the writ and the answer form the issues that are before the court. State ex rel. State Highway Comm'n v. Quesenberry, 72 N.M. 291, 295, 383 P.2d 255, 257 (1963) ("The issues in mandamus are created solely by and are limited to the allegations of the writ and the answer thereto."). As a general rule, the "allegations of fact in the [application] form no part of the writ and cannot be considered in determining the legal sufficiency of a writ." Brantley Farms v. Carlsbad Irrigation Dist., 1998-NMCA-023, ¶ 20, 124 N.M. 698, 954 P.2d 763.

{8} The legal sufficiency of an alternative writ, however, is properly raised in the respondent's answer. See Quesenberry, 72 N.M. at 295, 383 P.2d at 257-58 (reviewing court will not consider defenses or objections that are not pled in respondent's answer to a writ of mandamus); State ex rel. Burg, 31 N.M. at 580, 249 P. at 244. Even where the legal sufficiency of the writ is challenged by the respondent, defects in the pleadings can be waived, and the allegations in the application may be considered, where the respondent answers the allegations as if they were set forth in the writ. Brantley Farms, 1998-NMCA-023, ¶ 20, 124 N.M. 698, 954 P.2d 763; State ex rel. Burg, 31 N.M. at 582, 249 P. at 245.

{9} The PRC did not raise the legal sufficiency of the writ in its answer below. Therefore, the district court did not consider its legal sufficiency and the City did not have an opportunity to amend it. Moreover, the answer does not deny the factual allegations set forth in the application, except to deny the City's interpretation of our Order on Motion for Clarification regarding the stay. See Quesenberry, 72 N.M. at 294, 383 P.2d at 257 (deeming admitted, any factual allegations that were not denied in answer to the alternative writ of mandamus). Rather, the answer addresses, and hence preserves, the legal issue regarding the effect of the stay on the City's legal right to hold title. Since the factual allegations were not contested, either below or for that matter, on appeal, we conclude that the PRC admitted the factual allegations and waived its right to any defects in the writ. Hence, we decline to affirm the district court's decision on the sufficiency of the writ, and we will consider the allegations in the application and the attachments that were submitted in the record proper.

{10} The PRC next argues that the City had an adequate remedy at law since it enjoyed the right to appeal the Commission's order directly to our Supreme Court. Ordinarily, this is true when a party appeals a final order issued by the PRC. NMSA 1978, § 62-11-1 (1993); 17 NMAC § 1.2.39(H) (2001). However, where it is alleged, as it is here, that the PRC is acting outside the scope of its jurisdiction or refusing to perform under the Public Utility Act, NMSA 1978, Section 62-12-2 (1953) expressly allows any interested party to "bring suit by mandamus, prohibition, injunction or other appropriate remedy against the ... commission... in the district court of the county in which the...

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