Register v. Roberson Const. Co., Inc.

Decision Date19 August 1987
Docket NumberNo. 16723,16723
Citation741 P.2d 1364,106 N.M. 243,1987 NMSC 72
PartiesLevon REGISTER and Elmaise T. Register, Plaintiffs-Appellees, v. ROBERSON CONSTRUCTION COMPANY, INC., Defendant-Appellant.
CourtNew Mexico Supreme Court
OPINION

SOSA, Senior Justice.

Defendant-Appellant, Roberson Construction Co., Inc. (Roberson) appeals from the judgment granted to plaintiffs-appellees, Levon and Elmaise Register (the Registers). The cause of action had been initiated by ten plaintiffs, including the Registers, against four defendants. Eventually a settlement removed all parties from the case except the parties to this appeal. After a trial without jury on a seven-count complaint which, for purposes of this appeal may be considered an action for fraud, the trial court entered judgment in favor of the Registers. We affirm.

FACTS

In April 1979, Roberson began to subdivide certain property which it owned in Albuquerque, known as the Carson-Grande Addition, for the purpose of building and selling residential townhomes. Roberson's intention was to establish seventy such homes in the subdivision, but by 1980 only ten units had been completed, and several residents, who eventually became plaintiffs in the action against Roberson and the other defendants, were beginning to express doubt that Roberson had the intention of completing the subdivision as promised.

In accordance with NMSA 1978, Sections 47-7-1 through 47-7-28 (Repl.Pamp.1982), the "Building Unit Ownership Act," and pursuant to Section 47-7-11, Roberson prepared a "Declaration of Covenants, Conditions, and Restrictions Relative to Carson-Grande Addition." Among other stipulations the declaration stated:

The areas designated on the plan as 'pool' and the areas shown adjacent to the lots are designated common areas * * *.

Every person or entity who is a record owner of a fee * * * interest in any living unit will be a member of Carson-Grande Homeowners Association * * *.

Builder will transfer the Common Areas to the Association, free from encumbrances, not later than July 1, 1984 * * *.

The provisions of the Declaration are 'covenants running with the land,' will run with and bind the land, and will bind, inure to the benefit of, and be enforceable by, the Association, or any member, and their respective legal representatives * * * for a term of twenty (20) years from the date this Declaration is recorded * * *.

In spite of the four stipulations set forth above, Roberson never constructed a pool; never activated the homeowners association; did not transfer the common areas to the association, and amended the declaration so as to eliminate the planned construction of a pool.

In August 1981, the Registers (husband and wife) came from out of state and began looking for a home to purchase in Albuquerque. In September 1981, prior to purchasing a home in the subdivision, the Registers were given a Roberson brochure by a Roberson sales representative. Portions of the brochure provided, "In the spirit of Old Town, the essence of the comfortable Southwestern lifestyle has been captured in Villa De Los Castillos [the name given to the subdivision].... Villa De Los Castillos--the perfect marriage of traditional beauty and contemporary comfort. To live at the Villas is to truly understand the meaning of living the comfortable life." Included in the brochure was a site plan showing some sixty-nine numbered units, a pool complex which appears roughly five times the size of each living unit, and a large area designated "future art gallery."

The Registers testified at trial that Roberson's sales agent told them that the pool would be completed; that it would be a large, Olympic-sized pool; that Mrs. Register testified that the pool was a crucial item in her decision to buy the house because of her arthritic condition; that the agent further told the Registers that the subdivision would be completed according to the general description on the site plan; that a security wall would be completed and security services provided; and that only well-established persons would be interested in purchasing homes in Villa De Los Castillos, owing to the superior construction of the homes and the various amenities to be provided. Another agent of Roberson told the Registers that when the subdivision was completed according to plan, their house (purchased for $131,000) would likely have a value of $250,000. Finally, Roberson's agents told the Registers that no homes would be built in the subdivision of a lesser quality or price, so that the exclusivity of the environment and the socio-economic status of the owners would be preserved.

In actuality, none of the promises made to the Registers were realized. The pool was never built and grading was never done, with the result that large "ponds" of rainwater collected in the yards of the homes. Further, rainwater leaked though the Registers' roof, ruining their carpet. Insulation was not installed--at least not until the Registers threatened to contact federal officials. Two weight-bearing beams in their home showed cracks; weeds collected in the subdivision and were not cut down; the subdivision became a gathering place for people who sat in their cars, drank alcoholic beverages, and threw their refuse into the uncompleted area of the subdivision; a woman was beaten; people crossed over the Registers' property; and two years after the Registers moved in, during which time Roberson had not completed any further units, Roberson sold the subdivision to another company, which proceeded to offer homes for sale advertised in the local newspaper, "From $72,900."

The Issue of Fraud

We conclude that the testimony at trial, the depositions on file, and the exhibits of record, especially the photographic and artistic exhibits, are sufficient to support the trial court's findings of fact and conclusions of law establishing a pattern of commission and omission amounting to fraud. Insofar as omission is concerned, the trial court found that the following information was withheld from the Registers: Roberson did not have sufficient funds to complete the project as promised; at the time of sale Roberson had no intention of completing the project as promised; Roberson had no intention of building the promised swimming pool, and there was no significant resale market for the home purchased by the Registers. Generally speaking, the court's findings of fact are perhaps...

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