Kipnis v. Jusbasche, 35,249

In 2003 William and Marci Kipnis and Michael and Rebecca Jusbasche formed an LLC to redevelop a hotel; the Jusbasches held majority control and later dissolved the LLC in 2010 after losses.
Plaintiffs sued the Jusbasches for fraud, misrepresentation, and related torts, alleging Defendants failed to disclose Michael Jusbasche’s 1984 Texas nolo contendere plea to theft of trade secrets when forming the business.
Michael’s 1984 nolo plea resulted in deferred adjudication, probation, and no conviction on the merits; Plaintiffs relied on the plea itself as proof they would not have entered the business relationship had they known.
Defendants moved for summary judgment arguing New Mexico Rule of Evidence 11-410(A)(2) bars admission of a nolo plea against the pleader in subsequent civil proceedings.
The district court granted summary judgment for Defendants; the Court of Appeals reversed, admitting the plea as evidence of nondisclosure (not as proof of guilt). The New Mexico Supreme Court granted certiorari.
The Supreme Court held Rule 11-410(A)(2) bars admission of the nolo plea itself in this civil suit because admitting it would invite inference of wrongdoing and undermine the plea-negotiation policy the rule protects; it reversed the Court of Appeals and affirmed summary judgment for Defendants.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether evidence of a nolo contendere plea is admissible in a civil fraud/misrepresentation suit to prove nondisclosure	Kipnis: The plea is admissible to show what Defendants failed to disclose and would have deterred Plaintiffs from contracting; not offered to prove guilt	Jusbasche: Rule 11-410(A)(2) categorically excludes nolo pleas and surrounding plea discussions from admissibility against the pleader	Held: Rule 11-410(A)(2) bars admission of the nolo plea itself in this context; admission would implicitly invite inference of guilt and frustrate plea-negotiation policy

State v. Trujillo, 93 N.M. 724, 605 P.2d 232 (N.M. 1980) (interpreting Rule 11-410 to exclude statements made in plea negotiations in subsequent proceedings to protect plea bargaining)
State v. Baca, 101 N.M. 415, 683 P.2d 970 (N.M. Ct. App. 1984) (nolo plea is not a conviction and cannot serve alone to revoke probation; underscores plea-bargaining policy)
Olsen v. Correiro, 189 F.3d 52 (1st Cir. 1999) (distinguishing use of a conviction based on a nolo plea when offered for collateral purposes, not to prove guilt)
United States v. Adedoyin, 369 F.3d 337 (3d Cir. 2004) (convictions based on nolo pleas may be admissible to prove the fact of conviction when that fact has independent relevance)
Kipnis v. Jusbasche, 352 P.3d 687 (N.M. Ct. App. 2015) (Court of Appeals decision admitting the nolo plea as evidence of nondisclosure, later reversed)