Kipnis v. Jusbasche, 2017 NMSC 6

In 2003 William and Marci Kipnis and Michael and Rebecca Jusbasche formed an LLC to redevelop Hotel Edelweiss; the Kipnises contributed the property and liquor license, defendants retained majority control and later dissolved the LLC in 2010.
The Kipnises sued the Jusbasches for fraud, constructive fraud, intentional misrepresentation, and conversion, alleging defendants answered “no” when asked in 2003 whether there was anything in their histories the Kipnises should know before partnering.
Plaintiffs sought to introduce evidence that Michael Jusbasche pleaded nolo contendere in Texas in 1984 to theft of trade secrets (deferred adjudication; no conviction recorded after successful completion).
Defendants moved for summary judgment arguing Rule 11-410(A)(2) (New Mexico Rules of Evidence) bars admission of a nolo plea in civil proceedings against the pleader.
The district court granted summary judgment for defendants on that ground; the Court of Appeals reversed, holding the nolo plea could be admitted where not used to prove guilt.
The Supreme Court granted certiorari and affirmed the district court: Rule 11-410(A)(2) bars admission of the nolo plea itself in this civil fraud/misrepresentation suit because admitting it would undermine the rule’s plea-bargaining policy.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether evidence of a nolo contendere plea is admissible in a civil fraud/misrepresentation suit against the pleader	Kipnis: The plea is admissible to show a material omission — knowledge of the plea would have prevented contracting; not offered to prove guilt	Jusbasche: Rule 11-410(A)(2) categorically bars admission of a nolo plea or plea discussions against the pleader in any subsequent civil proceeding	Admitted: No — Rule 11-410(A)(2) bars admission of the nolo plea itself here; its probative effect necessarily invites an inference of wrongdoing and would undermine plea negotiation policy

State v. Trujillo, 605 P.2d 232 (N.M. 1980) (interpreting Rule 410 broadly to exclude plea negotiation statements and nolo pleas in subsequent proceedings to protect plea bargaining)
State v. Baca, 683 P.2d 970 (N.M. Ct. App. 1984) (nolo plea does not constitute a conviction for purposes such as revocation of probation)
Kipnis v. Jusbasche, 352 P.3d 687 (N.M. Ct. App. 2015) (court of appeals decision holding nolo plea admissible when not offered to prove guilt — reversed here)
Olsen v. Correiro, 189 F.3d 52 (1st Cir. 1999) (admission of conviction based on nolo plea permissible when used to refute damages claim, not to prove guilt)
North Carolina v. Alford, 400 U.S. 25 (U.S. 1970) (nolo plea viewed as consenting to punishment without admitting factual guilt)