Smith v. City of Santa Fe, 29,712.

Citation2007 NMSC 055, 171 P.3d 300
Case DateSeptember 28, 2007
CourtSupreme Court of New Mexico
171 P.3d 300
2007 NMSC 055
Peter SMITH, Barbara Smith, deceased, Patricia Stillman Trust and Guy Stillman Trust, and GWP Investments, Inc., a New Mexico corporation, Plaintiffs-Petitioners,
CITY OF SANTA FE, a Municipal Corporation, Defendant-Respondent.
No. 29,712.
Supreme Court of New Mexico.
September 28, 2007.

[171 P.3d 302]

Karl H. Sommer & Associates, P.A., Karl H. Sommer, Santa Fe, NM, for Petitioners.

Office of the City Attorney, Frank D. Katz, Bruce Thompson, A. Kyle Harwood, Sutin, Thayer & Browne, P.C., Germaine R. Chappelle, Santa Fe, NM, for Respondents.

Office of the State Engineer, D.L. Sanders, Arianne Singer, Santa Fe, NM, Simons & Slattery, L.L.P., Thomas A. Simons, IV, Daniel H. Friedman, Faith Lesley Kalman Reyes, Santa Fe, NM, for Amicus Curiae State Engineer.


MAES, Justice.

{1} In this case we must determine whether a declaratory judgment action is an appropriate method for challenging a municipality's authority to deny permits to drill domestic water wells on private property within the municipality. For the reasons that follow, we conclude that a declaratory judgment action may be used to challenge a municipality's authority to regulate the drilling of wells within city limits, provided that the declaratory judgment action is not used to circumvent established procedures for seeking judicial review of a municipality's administrative decisions.


{2} As noted in the Court of Appeals' opinion in this case, see Smith v. City of Santa Fe, 2006-NMCA-048, 139 N.M. 410, 133 P.3d 866, the material facts of this case are undisputed. In 1999, the City of Santa Fe passed an ordinance that required any person wishing to drill a well within the City's municipal water service area to apply for a domestic well permit. See Ordinance No. 1999-3, codified at Santa Fe, N.M., Code, ch. XXV, § 1.10 (1999). The ordinance also prohibited the drilling of any new domestic wells if the applicant's property boundary was located within 200 feet of a City water distribution line.

{3} Prior to applying for a City permit, Plaintiffs, Peter and Barbara Smith, and GWP Investments, Inc. (the Smiths) and the Patricia E. Stillman Family Trust u/a dated June 12, 1986, and Guy Stillman Family Trust u/a dated May 16, 1985 (the Stillmans) separately obtained domestic well permits from the Office of the State Engineer (the OSE) to drill wells on properties they owned within the City's municipal limits. After receiving notice from the OSE of the permits issued to Plaintiffs, the City wrote letters informing the Smiths and the Stillmans that they were also required to obtain permits from the City. Each letter also stated that if the boundary of the property was within 200 feet of a City water distribution line, the City would not grant a permit to drill a well.

{4} The Stillmans did not apply for a city permit because they were informed by their legal representative that their application would be denied. However, the Smiths did apply for permits from the City. The Smiths subsequently received a letter from the City informing them that their permits were denied because the boundary of their property was located within 200 feet of the City's water distribution lines. Attached to the letter was a copy of the complaint process for City water customers, which contained the appeals process that the Smiths should follow. The origin of the appeals process attachment is not clear from the record, but it appears it was adopted by city ordinance. See Santa Fe, N.M., Code §§ 15-1.8, 25-1.10, 25-4.1 Exhibit A, Rule 22(A), (B) and (C) (1999). In any event, the Smiths appealed first to the City Manager, then to the Public Utilities Committee, and finally to the City Council. The City Council upheld the decision of the City Manager and denied the Smiths' application on September 19, 2001. Neither the appeals process attached to the Smiths' letter nor the city ordinance that adopted the appeals process contain a provision for judicial review of the City's decision to deny well permits.

{5} Nevertheless, on January 7, 2002, the Smiths and the Stillmans jointly filed a complaint for declaratory relief in district court. In their complaint, the Smiths and the Stillmans asked the court to declare that the City had no authority to deny their applications or to prohibit them from drilling domestic wells on their properties. The City filed a motion for summary judgment, arguing that (1) the

171 P.3d 303

Stillmans failed to exhaust administrative remedies, and thus, did not demonstrate any actual controversy as required when seeking a declaratory judgment, and (2) the Smiths failed to comply with the time limits of Rule 1-075 NMRA, thereby precluding the court from granting a declaratory judgment. Plaintiffs also filed a motion for summary judgment, arguing that only the State Engineer has the authority to grant or deny permits for the use of underground waters, pursuant to NMSA 1978, Section 72-12-1 (1998), and that the Stillmans had standing to seek a declaratory judgment action and were not required to exhaust administrative remedies, because doing so would be futile. After a hearing on the parties' motions for summary judgment, the district court granted Plaintiffs' motion and denied the City's motion. The district court ruled that it had jurisdiction to hear Plaintiffs' declaratory judgment action, that the City had no authority to prohibit the drilling of wells within the City's limits, and that the Stillmans were not required to exhaust administrative remedies because it would have been futile to do so. The City appealed to the Court of Appeals.

{6} The Court of Appeals determined that it need not decide the jurisdictional issues raised by this case, "because however we decide them will make no difference to the outcome of this appeal . . . ." Smith v. City of Santa Fe, 2006-NMCA-048, ¶ 5, 139 N.M. 410, 133 P.3d 866. In this regard, the Court held that the City had authority under home rule powers to prohibit the drilling of domestic wells within municipal boundaries and that this authority was not preempted by state law. Id. ¶¶ 5, 26. The Court of Appeals, therefore, reversed the district court and held the City did have the authority to prohibit the drilling of the wells by the Smiths and Stillmans.

{7} We granted certiorari to review both the jurisdictional and substantive issues raised in this case. We hold that the district court did not have jurisdiction to grant the Smith's declaratory relief. And while we hold that the district court did have jurisdiction to address the Stillmans' claim for declaratory relief, we nevertheless agree with the Court of Appeals' conclusion that the City had the authority to prohibit the Stillmans from drilling wells. We therefore affirm the Court of Appeals' decision to reverse the district court's declaratory judgment.


{8} We first address the Court of Appeals' decision to reach the merits of this case without deciding the jurisdictional issue. Cognizant of the difficult jurisdictional issue posed by this case, the Court stated that, "[w]hile the question of jurisdiction is debatable, a full analysis of this issue is not necessary because our disposition on the merits fully resolves the case. Accordingly, we assume, without deciding, that the district court had jurisdiction to entertain Plaintiffs' declaratory judgment action . . . ." Id. ¶ 5 (citation omitted). To support its decision to avoid the question of jurisdiction, the Court relied on Taos Municipal Schools Charter School v. Davis, 2004-NMCA-129, 136 N.M. 543, 102 P.3d 102. However, for the reasons that follow, we do not believe Taos supports the approach taken by the Court of Appeals in this case.

{9} In Taos, the State raised a jurisdictional issue for the first time on appeal. Id. ¶ 6. Noting that neither party had thoroughly briefed the issue, the Court of Appeals decided to reach the merits of the case without addressing the jurisdictional issue. Id. In contrast, in the present case, the question of jurisdiction was raised and argued thoroughly in the district court. Taos, therefore, does not support the Court of Appeals' decision to avoid the issue of jurisdiction in this case. While the Court of Appeals was understandably reluctant to address a difficult jurisdictional question that would not alter the ultimate outcome of the case, judicial economy cannot outweigh the need to address a threshold jurisdictional question that is squarely presented for review.

{10} The dissent in the present Court of Appeals' opinion correctly noted that when the Court does not decide a jurisdictional issue, it "leaves the impression that our courts are able to pick and choose when they have jurisdiction over an administrative appeal depending on whether they wish to

171 P.3d 304

address the merits." Smith, 2006-NMCA-048, ¶ 34, 139 N.M. 410, 133 P.3d 866 (Vigil, J., specially concurring and dissenting). We agree. "[T]he question of jurisdiction compels an answer." State ex rel. Overton v. N.M. State Tax Comm'n, 81 N.M. 28, 31, 462 P.2d 613, 616 (1969). Therefore, when a jurisdictional claim is raised, the issue must be decided before a court can review the case. See State v. Doe, 91 N.M. 356, 357, 573 P.2d 1211, 1212 (Ct.App.1977) ("`[L]ack of jurisdiction at any stage of the proceedings is a controlling consideration which must be resolved before going further and an appellate court may raise the question of jurisdiction on its own motion.'") (quoting In re Doe III, 87 N.M. 170, 171, 531 P.2d 218, 219 (Ct.App.1975)). To the extent that Taos could be read to suggest otherwise, it should not be followed. Because the question of whether a trial court has jurisdiction in a particular case is a question of law that we review de novo, see Ottino v. Ottino, 2001-NMCA-012, ¶ 6, 130 N.M. 168, 21 P.3d 37, jurisdictional issues should always be resolved even if not preserved...

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