Univ. Of Police off. Ass'n v. Univ. Of Nm

• Decision Date: 16 August 2005
• Docket Number: No. 28,559.,28,559.
• Citation: 2005 NMSC 030,120 P.3d 442
• Parties: UNIVERSITY OF NEW MEXICO POLICE OFFICER'S ASSOCIATION, Plaintiff-Respondent, v. The UNIVERSITY OF NEW MEXICO and The University of New Mexico Police Department, Defendants-Petitioners.
• Court: New Mexico Supreme Court

120 P.3d 442

2005 NMSC 030

UNIVERSITY OF NEW MEXICO POLICE OFFICER'S ASSOCIATION, Plaintiff-Respondent, v. The UNIVERSITY OF NEW MEXICO and The University of New Mexico Police Department, Defendants-Petitioners.

No. 28,559.

Supreme Court of New Mexico.

August 16, 2005.

Charles N. Estes, Jr., Rodey, Dickason, Sloan, Akin & Robb, P.A., Edward Ricco, Albuquerque, for Petitioners.

Sanchez, Mowrer & Desiderio, P.C., Frederick M. Mowrer, Albuquerque, for Respondent.

OPINION

BOSSON, Chief Justice.

{1} We decide whether NMSA 1978, Section 37-1-23(A) (1976), granting governmental immunity from contract actions not based upon a "valid written contract," allows an ambiguous term of a written collective bargaining agreement, in this instance wages, to be defined by oral representations extrinsic to the contract. The district court and the Court of Appeals, the latter with each panel member writing separately, concluded that the contract was enforceable notwithstanding statutory governmental immunity. Under the facts of this case we agree, and hold that the governmental employer is not immune from the present lawsuit.

BACKGROUND

{2} In 1996, the University of New Mexico (University) and the University of New Mexico Police Officer's Association (Association), representing the campus police officers, entered into negotiations over their first collective bargaining agreement. The parties reached a point where they could not agree on wages for campus police officers. At the time of the impasse, the University was conducting a study, ultimately called UNMPact, to aid in restructuring the University's job classification and compensation system, so as to place the University's wages on a parity with comparable markets.

{3} On October 26, 1996, Susan Carkeek, Associate Vice President of the University and Director of the Human Resources Department, gave a presentation concerning the UNMPact study, which had not yet been completed, to officials of the Association. According to witnesses, Carkeek told the Association that the University would base its minimum wage rate for campus police officers on a blend of the average starting wages of the Albuquerque Police Department and the Bernalillo County Sheriff's Department as indicated by the UNMPact study. During the meeting, Association members asked whether the comparable wage study would include wages paid by smaller police departments, presumably paying less than Albuquerque and Bernalillo County. In direct response, Carkeek assured the Association members that the marketplace used for the analysis would be confined to those two, higher-paying entities.

{4} The Association presented to its membership the proposed collective bargaining agreement, as supplemented by Carkeek's oral representations regarding the anticipated UNMPact study and comparable wages. Relying on these representations regarding wages, the members voted to accept the contract. The final collective bargaining agreement made written reference to the yet-unfinished UNMPact study, stating that "[t]he parties agree to participate in and fully implement the UNMPact classification and compensation study." After the parties executed the collective bargaining agreement and after the UNMPact study was completed, the University sent letters to Association members detailing their new wages. Contrary to prior representations, however, those wages were not based solely upon comparable wages for the Albuquerque Police Department and the Bernalillo County Sheriff's Department, but included a broader base of comparison. As a result, the new wages were around two dollars per hour lower than what had previously been discussed.

{5} The Association filed a lawsuit against the University for breach of the collective bargaining agreement, asking for the difference between what they were promised and what they were being paid. During a bench trial, the University presented evidence regarding the terms of the UNMPact study. In that testimony, the University denied making any representations to the Association membership regarding its proposed wages, and particularly that its wages would be in parity with the two Albuquerque-based law enforcement agencies.

{6} The University lost this evidentiary debate. The district court made a finding that Carkeek had in fact made representations to Association members limiting the comparable marketplace to the Albuquerque Police Department and the Bernalillo County Sheriff's Department. New employees were to receive the average wage of those two departments, and current employees were to receive raises in subsequent years to bring their wages near parity with those same departments. The district court further found that the Association had ratified the collective bargaining agreement in reliance upon those same representations. To the district court, failure to comply with those representations constituted adequate legal grounds for the Association to prove a breach of contract.

{7} On appeal, the University did not dispute these factual findings below. Instead, the University took the position that Section 37-1-23(A), providing for governmental immunity from civil lawsuits not based upon a valid written contract, precluded enforcement of those same oral representations. In three separate opinions, the Court of Appeals affirmed the district court, although it struggled to develop a consensus as to the rationale. See UNM Police Officer's Ass'n v. UNM, 2004-NMCA-050, 135 N.M. 655, 92 P.3d 667. We granted certiorari to address whether statutorily created sovereign immunity applies in this case.

DISCUSSION

{8} Section 37-1-23(A) states, "[g]overnmental entities are granted immunity from actions based on contract, except actions based on a valid written contract." In analyzing the application of the statute to the facts of this case, we are faced with a question of law, subject to de novo review. Campos de Suenos, Ltd. v. County of Bernalillo, 2001-NMCA-043, ¶ 10, 130 N.M. 563, 28 P.3d 1104. Section 37-1-23(A) was created in response to this Court's opinion abolishing common-law sovereign immunity. See Hicks v. State, 88 N.M. 588, 544 P.2d 1153 (1975), superseded by statute as stated in, Electro-Jet Tool Mfg. Co. v. City of Albuquerque, 114 N.M. 676, 845 P.2d 770 (1992); see also Hydro Conduit Corp. v. Kemble, 110 N.M. 173, 177-79, 793 P.2d 855, 859-61 (1990) (outlining the legislative history of the statute).

{9} On certiorari, the University does not argue the evidence was insufficient to support the trial court's findings about either Carkeek's representations or the Association's reliance. During oral argument, the University further conceded that the parties had agreed upon and executed a written collective bargaining agreement which had been fully implemented over the years. Because that written agreement omitted any explicit determination of wages, however, the University argues that we cannot allow the courts to define a major term of the contract by resort to extrinsic oral representations.

{10} It is unclear whether the University argues that the entire contract is invalid in its formation because wages were not adequately defined in writing, or whether the immunity statute bars just the interpretation of the wage term through oral representations. Part of the reason this is unclear is because this case does not fall cleanly into either contract interpretation or formation. "Analytically, this case falls in the gap between cases such as Campos de Suenos and Trujillo v. Gonzales, 106 N.M. 620, 747 P.2d 915 (1987), on the one hand[,] and Garcia v. Middle Rio Grande Conservancy Dist., [1996-NMSC-029,] 121 N.M. 728, 918 P.2d 7 (1996), and Handmaker [v. Henney, 1999-NMSC-043, 128 N.M. 328, 992 P.2d 879] on the other." UNM Police Officer's Ass'n, 2004-NMCA-050, ¶ 31, 135 N.M. 655, 92 P.3d 667 (Bustamante, J., specially concurring). "Broadly speaking, Trujillo and Campos de Suenos address issues surrounding the creation of new contractual relationships whereas Garcia and Handmaker involve disagreements about the details of an existing employment relationship evidenced by a writing." Id. ¶ 37 (Bustamante, J., specially concurring).

{11} On the surface, it is difficult to take seriously any argument that NMSA 1978, Section 37-1-23(A) (1976) renders the entire collective bargaining agreement invalid, or makes the University immune from a lawsuit for a breach of that agreement. The collective bargaining agreement is a lengthy, twenty-eight page document detailing many areas of the employment relationship. Clearly, the collective bargaining agreement constitutes a "valid written contract" within the meaning of Section 37-1-23(A). Although the contract did not specify a wage term, it made written reference to the "UNMPact classification and study," a written document about comparable wages, which the parties contractually agreed in writing to "participate in and fully implement." Furthermore, the University did implement the collective bargaining agreement and enjoyed its benefits for all the years it was in force.

{12} Conceding the improbability of any successful challenge to the contract's existence, the University nonetheless draws an analogy between Section 37-1-23(A) and the common-law statute of frauds. The University argues broadly that if all essential terms are not in writing, then like the statute of frauds, Section 37-1-23(A) renders any government contract unenforceable in a court of law.

{13} We acknowledge the general principle, applicable to certain contracts to which the statute of frauds applies, that major terms must be supplied in writing without resort to parol evidence. See, e.g., Rhodes v. Wilkins, 83 N.M. 782, 783, 498 P.2d 311, 312 (1972) (discussing under statute of frauds that "the writing identify with reasonable certainty the property to which the contract relates" without resort to parol evidence). See generally 10 Samuel Williston, A Treatise on the Law...