Sunland Park v. Santa Teresa Services, 22,435.

• Citation: 134 N.M. 243,75 P.3d 843
• Decision Date: 02 June 2003
• Docket Number: No. 22,435.,22,435.
• Parties: CITY OF SUNLAND PARK, Petitioner-Appellee, v. SANTA TERESA SERVICES COMPANY, a New Mexico corporation, Charles Crowder and Phyllis Crowder, Defendants-Appellees, v. Doña Ana County; The Board of County Commissioners of Doña Ana County; Catalina Development, Inc.; Paseo Del Norte Limited Partnership; Mesilla Bolson Properties; Checkpoint Limited Partnership; Santa Teresa Land Co.; Santa Teresa Limited Partnership and George B. Powell, individually and on behalf of the Class of Customers of Santa Teresa Services Company, Defendants-in-Intervention-Appellants.
• Court: Court of Appeals of New Mexico

75 P.3d 843

134 N.M. 243

CITY OF SUNLAND PARK, Petitioner-Appellee, v. SANTA TERESA SERVICES COMPANY, a New Mexico corporation, Charles Crowder and Phyllis Crowder, Defendants-Appellees, v. Doña Ana County; The Board of County Commissioners of Doña Ana County; Catalina Development, Inc.; Paseo Del Norte Limited Partnership; Mesilla Bolson Properties; Checkpoint Limited Partnership; Santa Teresa Land Co.; Santa Teresa Limited Partnership and George B. Powell, individually and on behalf of the Class of Customers of Santa Teresa Services Company, Defendants-in-Intervention-Appellants.

No. 22,435.

Court of Appeals of New Mexico.

June 2, 2003.

Certiorari Denied August 18, 2003.

Christopher P. Bauman, Mark C. Dow, Molly B. McIntosh, Bauman, Dow, McIntosh & Leon, P.C., Albuquerque, NM, for Petitioner-Appellee.

Tim J. De Young, Douglas R. Vadnais, Thomas Smidt, III, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, NM, for Defendants-Appellee Santa Teresa Services Company.

Thomas R. Figart, Las Cruces, NM, for Defendants-in-Intervention Appellants Doña Ana County and The Board of County Commissioners of Doña Ana County.

William R. Babington, Jr., Mila Allen Maturan, Holt & Babington, P.C., Las Cruces, NM, Frank S. Ainsa, Jr., Ainsa Partners, LLP, El Paso, TX, for Defendants-in-Intervention Appellants Mesilla Bolson Properties; Catalina Development, Inc.; El Mirador Limited Partnership; and Santa Teresa Associates Limited Partnership.

Donald M. Salazar, Brenden J. Murphy, Rubin, Katz, Salazar, Alley, Rouse & Herdman, P.C., Santa Fe, NM, for Defendants-in-Intervention Appellants Checkpoint Limited Partnership; Santa Teresa Limited Partnership; Paseo Del Norte Limited Partnership; Santa Teresa Land Company; George B. Powell, individually and on behalf of the Class of Customers.

Certiorari Denied, No. 28,166, August 18, 2003.

OPINION

BUSTAMANTE, Judge.

{1} Originally filed in 1996, this vigorously litigated eminent domain case arrives on this Court's doorstep laden with potentially difficult substantive and procedural issues surrounding condemnation actions in New Mexico. We affirm, finding that the Appellants are not "condemnees" within the meaning of the Eminent Domain Code, and therefore do not have standing to argue the issues raised on appeal.

THE PARTIES

{2} The condemning authority is the City of Sunland Park (the City), a New Mexico municipal corporation located at the southern end of Doña Ana County on the border with Mexico. The City prevailed below as to the condemnation and appears before us as an Appellee.

{3} The City sought to condemn certain physical assets and contract rights belonging to Santa Teresa Services Corporation (the Utility). The Utility provides water and sewer services in an unincorporated area of Doña Ana County abutting the City and commonly known as Santa Teresa. The Utility never contested the City's condemnation effort in the district court except with regard to valuation of the assets taken. The Utility has not appealed the valuation judgment and appears in this Court aligned with the City against the Appellants working to preserve the judgment. We thus treat the Utility as an Appellee. We reject the assertion by some Appellants that the Utility is not a proper party to this appeal. The Utility obviously has a direct interest in protecting the judgment awarding Utility an amount that it views as fair compensation for the assets taken by the City. Further, the notice of appeal filed by the majority of the Appellants generally challenged the district court's orders and did not attempt to limit the appeal process to the City's interests.

{4} The Utility appears jointly with Bernard R. Given, the Chapter 7 Trustee for the bankruptcy estate of Phyllis Crowder, (the Trustee). It is undisputed that Phyllis and Charles Crowder at one time owned all of the shares of stock of the Utility as community property. Phyllis filed for bankruptcy in January 1996, and Charles filed for bankruptcy in April 1997. Phyllis' bankruptcy case was converted to a Chapter 7 proceeding prior to the trial on the merits. As a result of the bankruptcies, the Trustee became the sole shareholder in the Utility.

{5} As a privately owned entity, the Utility was subject to the regulatory jurisdiction of the Public Utility Commission (PUC), NMSA 1978, Sections 62-6-4 to -26.1 (2003) and its successor, the Public Regulation Commission (PRC), NMSA 1978, Sections 8-8-1 to -21 (1998, as amended through 2001). The PRC intervened in the district court action and participated somewhat sporadically, finally withdrawing from the condemnation portion of the case on February 18, 2000, prior to trial. PRC has not appealed and is not a party before us in this case.

{6} Appellant, Board of County Commissioners of Doña Ana County (the County) is, of course, a political subdivision of the State of New Mexico. The City and the physical property subject to condemnation are located within the County's boundaries. The County intervened in the district court action asserting a tax lien against the Utility in the sum of $124,000.

{7} The other Appellants can be fruitfully organized in relation to their claims against the Utility. To the extent possible we will refer to them collectively as the Landowners, the Customer Class and the Catalina Group. As clarity demands, we will use individual entity names.

{8} The Landowners are development entities with land holdings in the Santa Teresa area. The Landowners entered into service agreements with the Utility in which the Utility agreed to provide water and sewer service to their properties when development actually began. The Landowners include Paseo Del Norte Limited Partnership (Paseo), Checkpoint Limited Partnership (Checkpoint), Santa Teresa Land Company (STLC), and Santa Teresa Limited Partnership (STLP).

{9} The Customer Class consists of customers of the Utility who had paid utility expansion charges (UEC) deposits to the Utility and claimed a right to reimbursement. The Customer Class was certified pursuant to Rule 1-023(B) NMRA 2003, early in the litigation. The class consisted of approximately 300 customers. The current class representative is George Powell.

{10} The final group of Appellants will be commonly referred to as the Catalina Group, though its interests are not as homogenous as the Landowners. The Catalina Group includes Catalina Development, Inc. (Catalina); Mesilla Bolson Properties, LLC (Mesilla); El Mirador Limited Partnership (El Mirador); and Santa Teresa Associates Limited Partnership (Santa Teresa Associates). El Mirador and Santa Teresa Associates originally entered the litigation separately from Catalina and Mesilla. Apparently having acquired their interests, however, Catalina later moved to substitute itself for El Mirador and Santa Teresa Associates as the real party in interest. In this Court, Catalina and Mesilla call themselves successors-in-interest to the claims of El Mirador and Santa Teresa Associates. The Catalina Group claims ownership of two wells taken by the City in the condemnation.

FACTUAL AND PROCEDURAL POSTURE

{11} On August 16, 1996, the City filed a "Petition for Condemnation and Request for Court Order Permitting Entry for Suitability Studies" (the Petition). The Petition named as defendants the Utility, Catalina, the County, and a number of other persons who are not parties on appeal. The Petition described three categories of Utility property to be condemned: (1) the "Water Utility," (2) the "Sewer Utility," and (3) the "Purchased Water Agreement." The sewer and water assets described were items of real and personal property used in the normal course of business by the Utility. The items were more particularly described in exhibits to the Petition, including specific references to Well Nos. 6, 8, 19, 30, and 31. The Purchased Water Agreement was the Utility's contractual arrangement with Charles and Phyllis Crowder for the purchase of water, and consisted of a basic agreement dated January 1987 and two subsequent amendments. At the time the Purchased Water Agreement was signed, Charles and Phyllis Crowder owned all of the shares of stock of the Utility.

{12} The Utility filed its answer to the Petition on August 26, 1996, generally denying the allegations, asserting that the description of assets was incomplete and inaccurate, and requiring that fair market value be established. At the same time, the Utility filed a motion to strike seeking to dismiss all of the other named defendants from the case, asserting that no one other than the Utility owned, occupied or had recorded a claim against the property described in the Petition. An order granting the motion to strike was entered the same day.

{13} Also on August 26, 1996, City and Utility signed, submitted and had entered a stipulated judgment and decree. The stipulated judgment broadly provided that the City would receive the property described in the Petition, plus certain accounts receivable in the sum of $74,416 plus UEC payments "received and receivable." In exchange, the City would pay the Utility's indebtedness in the amount of $297,746. The indebtedness excluded the UEC liability. In addition, the City agreed to assume the Utility's obligations under eight agreements with various entities to provide water and sewer service in the future.

{14} Within a few days after entry of the stipulated judgment, Appellants began filing motions to intervene, challenging the judgment specifically, and the condemnation generally. El Mirador and Santa Teresa Associates (now part of the Catalina Group) were the first to file their joint motion to intervene. Their motion and attached proposed counterclaim in intervention asserted:

a. The stipulated judgment was illegal and a sham because it was no more than a voluntary sale by the Utility without notice to or the permission of the PUC, contrary to Sections 62-6-4, 62-6-5, 62-6-12(A)(4), 62-6-13, 62-6-19, and NMSA...