Premier Trust of Nev., Inc. v. City of Albuquerque

• Citation: 482 P.3d 1261
• Decision Date: 01 October 2020
• Docket Number: No. A-1-CA-34784,A-1-CA-34784
• Parties: PREMIER TRUST OF NEVADA, INC., AS TRUSTEE OF MURTAGH NEVADA TRUST, and Murtagh Nevada, LLC, a Nevada limited liability company, Petitioners-Appellants, v. CITY OF ALBUQUERQUE, a New Mexico municipal corporation, and Albuquerque City Council, as its final voting authority, Respondents-Appellees.
• Court: Court of Appeals of New Mexico

482 P.3d 1261

PREMIER TRUST OF NEVADA, INC., AS TRUSTEE OF MURTAGH NEVADA TRUST, and Murtagh Nevada, LLC, a Nevada limited liability company, Petitioners-Appellants,

v.CITY OF ALBUQUERQUE, a New Mexico municipal corporation, and Albuquerque City Council, as its final voting authority, Respondents-Appellees.

No. A-1-CA-34784

Court of Appeals of New Mexico.

Filing Date: October 1, 2020

Hamm French, PLLC, Jason B. Hamm, Midland, TX, for Appellants

Esteban A. Aguilar, Jr., City Attorney, Kevin A. Morrow, Assistant City, Attorney, Albuquerque, NM, for Appellees

ATTREP, Judge.

{1} Premier Trust of Nevada, Inc., as trustee of Murtagh Nevada Trust, and Murtagh Nevada, LLC (collectively, Premier) sued the City of Albuquerque (the City) for takings and contract claims relating to a change in the City's impact fee ordinance. Generally speaking, impact fees are assessed against developers of new construction. These assessments may be fulfilled by, among other ways, purchasing excess impact fee credits from excess credit holders, like Premier. Due to the changed city ordinance, fewer impact fees were assessed on new construction, the result of which, Premier alleges, was a diminished demand for its excess credits and a corresponding decrease in value of those credits. This, Premier asserts, amounted to a taking of private property without just compensation and gave rise to various contract claims against the City. On the City's motion, the district court dismissed Premier's claims for failure to state a claim upon which relief can be granted. For the reasons that follow, we affirm.

BACKGROUND

{2} We derive our background from the well-pleaded facts contained in Premier's first amended complaint, which we take as true, and our independent review of the city ordinances at issue in this matter. See Env't Control, Inc. v. City of Santa Fe , 2002-NMCA-003, ¶ 6, 131 N.M. 450, 38 P.3d 891 ("In reviewing a motion to dismiss for failure to state a claim under Rule 1-012(B)(6) NMRA ..., we take the well-pleaded facts alleged in the complaint as true and test the legal sufficiency of the claims."); see also City of Aztec v. Gurule , 2010-NMSC-006, ¶ 21, 147 N.M. 693, 228 P.3d 477 ("[M]unicipal ordinances are properly categorized as law which may be judicially noticed by all courts in New Mexico."). To the extent Premier's allegations are legal constructions of the ordinances, we disregard them—as we do any unwarranted deductions of fact. See C & H Constr. & Paving, Inc. v. Found. Reserve Ins. Co. , 1973-NMSC-076, ¶ 9, 85 N.M. 374, 512 P.2d 947 ("For purposes of the motion, the well-pleaded material allegations of the complaint are taken as admitted; but conclusions of law or unwarranted deductions of fact are not admitted." (internal quotation marks and citation omitted)).

{3} Consistent with the Development Fees Act (the Act), NMSA 1978, §§ 5-8-1 to -43 (1993, as amended through 2003), the City in 2004 adopted a series of ordinances that took effect in 2005 (collectively, the 2005 Ordinance). The 2005 Ordinance permitted the City to assess impact fees against developers in order to offset the costs of four categories of public infrastructure improvements: (1) public safety facilities, Albuquerque, N.M., Ordinance 2004-051 (Nov. 15, 2004); (2) roadway facilities, Albuquerque, N.M., Ordinance 2004-052 (Nov. 15, 2004); (3) drainage facilities, Albuquerque, N.M., Ordinance 2004-053 (Nov. 15, 2004); and (4) park, recreation, trails, and open space facilities, Albuquerque, N.M., Ordinance 2004-054 (Nov. 15, 2004). The rates the City charged for impact fees, included in schedules attached to the 2005 Ordinance, were based on various land use assumptions and depended on the category of improvement for which the fee was being assessed and the area of Albuquerque (the service area) in which the development was to occur. The 2005 Ordinance provided that the land use assumptions and impact fees would be reviewed and, if necessary, updated every five years. See, e.g. , Ordinance 2004-051, §§ 9(C), 26.

{4} In order to fulfill the City's impact fee assessments, a developer could pay money, construct improvements, or convey property in exchange for impact fee credits. See, e.g. , id. § 21(A), (D). If the value of the credits exceeded the amount of impact fees due, the 2005 Ordinance provided that the developer would receive excess credits. See, e.g. , id. § 21(J)(2). The developer could then use these excess credits to pay for impact fees later assessed by the City, within the same category of improvements and service area, or seek reimbursement under certain conditions.

See, e.g. , id. § 21(J)(6)(a), (c). A developer could also sell or otherwise assign the excess credits to another entity, subject to the same rights and restrictions. See, e.g. , id. § 21(J)(6)(b). If not used within seven years of issuance, the excess credits would expire. See, e.g. , id. § 21(J)(7)(f).

{5} Between 2007 and 2011, the City entered into various written agreements with The Trails LLC (Trails) and Curb, Inc. (Curb) (collectively, the Developers), in which the City conveyed over $1.7 million in excess credits to the Developers in exchange for public infrastructure improvements or real property. Premier ultimately obtained these excess credits either directly from the Developers or by way of an intermediary. In addition, the City and Trails entered into a settlement agreement on November 28, 2012, in which the City agreed to convey to Trails over $600,000 worth of impact fee credits. Trails later assigned these credits to Premier sometime in 2013. In sum, the City conveyed over $2.3 million worth of impact fee credits to the Developers, with Premier ultimately obtaining these credits (either directly or indirectly) from the Developers. According to Premier, it regularly sold or assigned these excess credits for value.

{6} On November 30, 2012, the City repealed the 2005 Ordinance and replaced it with another ordinance (the 2012 Ordinance). See Albuquerque, N.M., Rev. Ordinances ch. 14, art. 19 (ARO), §§ 14-19-1 to -24, -98 to -99 (2012). In the 2012 Ordinance, excess credit holders, like Premier, retained their rights to transfer or sell the excess credits, apply the excess credits to offset impact fees assessed on new development, and request reimbursement from the City for all or part of the amount of the excess credits. See id. § 14-19-19(J)(6)(a)-(c). Further, although not mentioned by Premier in its amended complaint, the 2012 Ordinance extended the amount of time in which excess credits issued pursuant to the 2005 Ordinance could be used or redeemed from seven years after issuance to fifteen years after adoption of the 2012 Ordinance. Id. § 14-19-19(J)(7)(f). Thus, Premier's excess credits at issue here are valid until at least sometime in late 2027—i.e., fifteen years after adoption of the 2012 Ordinance. The 2012 Ordinance also, by and large, geographically expanded the service areas applicable to each category of improvement and provided that holders of excess credits generated within the old, smaller service areas could use those credits within the new, geographically-expanded service areas.¹ See id. § 14-19-10 (establishing new service areas); id. § 14-19-19(J)(3) (providing that "credits can be applied within new service areas if the improvement generating that credit is within that new service area").

{7} But the change of which Premier complains is the 2012 Ordinance's reduction of the impact fee rates assessed on new development going forward. Compare, e.g. , Ordinance 2004-052, app. B, with ARO, § 14-19-13(A). This rate reduction was combined with an additional, temporary rate cut set out in a phase-in schedule. The phase-in schedule assessed impact fees at twenty percent of the rates set by the 2012 Ordinance in 2013, increasing to forty percent in 2014, sixty percent in 2015, eighty percent in 2016, and one hundred percent in 2017 and onward. See ARO, § 14-19-13. As an example, the amended complaint alleges that, prior to the 2012 Ordinance, a roadway impact fee was due in the amount of $1,800 per permit. Premier then alleges that, after enactment of the 2012 Ordinance, this same fee was due in the amount of $279 per permit in 2013, and $559 in 2014. Consistent with the allegations and the 2012 Ordinance, the current roadway impact fee would be approximately $1,395, equating to a twenty-two and one-half percent reduction of the rate set by the 2005 Ordinance.

{8} Because fewer impact fees were assessed under the reduced impact fee rates in the 2012 Ordinance, the result of the 2012 Ordinance, according to Premier, has been a diminished demand for excess credits and a substantial reduction in the value of the credits it holds. Premier, however, does not allege that it has been unable to sell or assign for value excess credits since enactment of the 2012 Ordinance; rather it alleges it has "sold or assigned for value substantially less impact fee credits" since the 2012 Ordinance took effect.² As of the filing of its amended complaint, Premier retained approximately $1.5 million worth of excess credits.

{9} Premier filed suit against the City, asserting that the 2012 Ordinance constitutes an unlawful taking under the New Mexico Takings Clause. N.M. Const. art. II, § 20. Premier also brought two contract claims—one based on promissory estoppel and the other on illusory promise—as well as a claim for a refund of the excess credits it holds.³ The City moved to dismiss the complaint on the ground that Premier failed to state a claim upon which relief can be granted. See Rule 1-012(B)(6). In a memorandum opinion and order, the district court granted the motion in its entirety. Premier abandons its promissory estoppel and refund claims on appeal, but challenges the district court's dismissal of its takings and illusory promise claims. We affirm.

DISCUSSION

{10} Our review of the district court's dismissal of Premier's amended complaint is de novo. Env't Control , 2...