S & H Development LLC v. Parker
34,647
| N.M. Ct. App. | Jul 11, 2017Background
- S&H Development hired unlicensed contractor John Ortega to perform commercial remodel work; Ortega used licensed contractor Cairol Parker’s GB-98 license to pull the permit with Parker’s knowledge.
- S&H sued Ortega and Parker for negligence, negligence per se, violation of the Unfair Practices Act (UPA), and asserted causes tied to aiding and abetting, conspiracy, and a private right of action under the Construction Industries Licensing Act (the Act).
- The district court entered judgment on the pleadings against Ortega (no appeal). After trial, the court found for Parker, dismissing S&H’s claims for lack of proximate cause, inadequate proof of damages, and because no private right of action existed under the Act for the alleged theories.
- The district court also awarded Parker attorney fees under the UPA, finding S&H’s UPA claim groundless and its counsel acted in bad faith (relying in part on counsel’s involvement in Kreischer v. Armijo).
- On appeal, the Court of Appeals affirmed dismissal of the liability claims but reversed the attorney-fee award, holding S&H’s UPA claim was not groundless and Kreischer did not preclude bringing the UPA claim asserted here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a private right of action exists under the Construction Industries Licensing Act (for aiding/abetting, conspiracy, etc.) | The Act and public policy support implying a private remedy against a license-holder who enables unlicensed contracting. | No implied private right exists; Act provides civil and criminal remedies and no legislative intent to create additional private causes. | No private right of action under the Act was implied; dismissal affirmed. |
| Whether Parker can be held liable in tort (negligence / negligence per se / aiding and abetting) for Ortega’s deficient work | Parker breached statutory and common-law duties by loaning his license and thus is liable (including negligence per se under §60-13-23). | Plaintiff failed to prove proximate cause, intent, or specific damages tied to Parker’s acts; theories were not an appropriate basis for separate tort liability. | Court credited district findings that S&H failed to prove proximate cause and damages; tort claims dismissed and affirmed. |
| Whether the UPA claim against Parker was groundless (basis for awarding attorney fees to Parker under §57-12-10(C)) | UPA applies to broad commercial relationships and provides a private remedy; claim was not frivolous. | Claim was groundless; bringing it was inconsistent with precedent (Kreischer), and fee award was appropriate. | The Court reversed the fee award: S&H’s UPA claim was not groundless and Kreischer did not foreclose the UPA theory pleaded here. |
Key Cases Cited
- Mascarenas v. Jaramillo, 111 N.M. 410, 806 P.2d 59 (N.M. 1991) (Act’s purpose is to protect consumers and distinguish licensed from unlicensed contractors)
- Yedidag v. Roswell Clinic Corp., 2015-NMSC-012, 346 P.3d 1136 (N.M. 2015) (sets test for implying private causes of action from statutes)
- Kreischer v. Armijo, 118 N.M. 671, 884 P.2d 827 (N.M. Ct. App. 1994) (declines to impose contract liability on licensed agent for disclosed principal’s unlicensed contracting; limited to contract claim context)
- Chavarria v. Fleetwood Retail Corp. of New Mexico, 137 N.M. 783, 115 P.3d 799 (N.M. Ct. App. 2005) (discusses fee allocation when claims overlap under the UPA)
- National Trust for Historic Preservation v. City of Albuquerque, 117 N.M. 590, 874 P.2d 798 (N.M. Ct. App. 1994) (examines implied private rights in statutory contexts)
- Maese v. Garrett, 329 P.3d 713 (N.M. Ct. App. 2014) (UPA applies broadly to commercial relationships and need not involve a direct defendant-to-plaintiff representation)