GANDYDANCER, LLC, Plaintiff-Appellee, v. ROCK HOUSE CGM, LLC, and KARL G. PERGOLA, Defendants-Appellants.
NO. A-1-CA-35930
IN THE COURT OF APPEALS STATE OF NEW MEXICO
July 30, 2018
Clay Campbell, District Judge
Opinion Number: __________________ APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
The New Mexico Law Group PC
Robert Neil Singer
Albuquerque, NM
Adams Corporate Law, Inc.
Addison K. Adams
Santa Ana, CA
for Appellee
Butt, Thornton & Baehr, P.C.
Michael P. Clemens
Rodney L. Schlagel
Rheba Rutkowski
Albuquerque, NM
for Appellants
VARGAS, Judge.
{1} In this interlocutory appeal, we consider whether the language in
BACKGROUND
{2} Plaintiff Gandydancer, LLC and Defendant Rock House CGM, LLC are both construction companies providing railroad contracting services to BNSF Railway Company (BNSF). In the spring of 2015, Plaintiff submitted a complaint to the New Mexico Construction Industries Division (CID), alleging Defendant had performed unlicensed construction work in violation of the Construction Industries Licensing Act (CILA),
{3} Defendant filed a motion to dismiss, asserting Plaintiff had no standing to bring the UPA claim and failed to state any claims upon which relief could be granted. Following a hearing, the district court denied Defendant‘s motion to dismiss Plaintiff‘s UPA claim and certified the question of “whether the [UPA] affords private-party standing to business competitors who are both sellers of services, or only to buyers of goods and services” to this Court for interlocutory review. Defendant then filed an application for interlocutory appeal, which this Court granted pursuant to
DISCUSSION
{4} Defendant raises three issues on appeal. First, Defendant contends that our prior decisions and the legislative intent of the UPA to protect consumers limits its grant of standing to “a person who purchased goods or services[,]” notwithstanding the broad language of
A. Standard of Review
{5} A business competitor‘s standing to bring a private right of action under the provisions of the UPA is an issue of first impression in New Mexico. See First Nat‘l Bancorp Inc. v. Alley, 76 F. Supp. 3d 1261, 1263 (D.N.M. 2014) (acknowledging no New Mexico court had directly decided the issue of competitor standing under the UPA); Navajo Nation v. Urban Outfitters, Inc., 935 F. Supp. 2d 1147, 1174 (D.N.M. 2013) (acknowledging undecided nature of competitor standing). Statutory interpretation, as well as a party‘s standing to litigate a particular issue are both questions of law we review de novo. Town of Silver City v. Scartaccini, 2006-NMCA-009, ¶ 11, 138 N.M. 813, 126 P.3d 1177.
B. Plaintiff‘s Standing to Bring a Claim
{6} Defendant effectively makes two arguments as to why Plaintiff cannot bring a claim under the plain language of the UPA. First, Defendant argues that the provision in
1. Rules Governing Statutory Construction
{7} When interpreting a statute, a court‘s primary goal is to facilitate and promote the Legislature‘s purpose. United Rentals Nw., Inc. v. Yearout Mech., Inc., 2010-NMSC-030, ¶ 17, 148 N.M. 426, 237 P.3d 728. In discerning that purpose, “we look first to the plain language of the statute, giving the words their ordinary meaning, unless the Legislature indicates a different one was intended.” Flores v. Herrera, 2016-NMSC-033, ¶ 8, 384 P.3d 1070 (internal quotation marks and citation omitted). While the plain meaning rule provides that “statutes are to be given effect as written and, where they are free from ambiguity, there is no room for construction[,]” this rule must be applied with caution, as “a statute, apparently clear and unambiguous on its face, may for one reason or another give rise to legitimate (i.e., nonfrivolous) differences of opinion concerning the statute‘s meaning.” State ex rel. Helman v. Gallegos, 1994-NMSC-023, ¶¶ 2, 23, 117 N.M. 346, 871 P.2d 1352. Consequently, courts will reject the literal language of the statute if doing so is necessary to “conform to the obvious intent of the [L]egislature, or to prevent its being absurd.” Id. ¶ 3; see also Baker v. Hedstrom, 2013-NMSC-043, ¶ 15, 309 P.3d 1047 (indicating that the statute must be interpreted in the context of the statute as a whole with an eye toward its purposes and consequences). Finally, we note that “a statute with a remedial purpose must be liberally construed to implement its purpose, and any exception will be strictly construed.” N.M. Dep‘t. of Labor v. A.C. Elec., Inc., 1998-NMCA-141, ¶ 13, 125 N.M. 779, 965 P.2d 363; see Regents of the Univ. of N.M. v. N.M. Fed‘n of Teachers, 1998-NMSC-020, ¶ 27, 125 N.M. 401, 962 P.2d 1236 (recognizing that when “resolving statutory ambiguities, courts will favor a general provision over an exception. This is especially true when a statute promotes the public welfare” (citation omitted)).
2. The UPA
{8} The UPA makes it unlawful to employ “[u]nfair or deceptive trade practices . . . in the conduct of any trade or commerce.”
a. “Any Person”
{9} Defendant contends that, while the language of the UPA allowing “any person who suffers any loss” appears to confer standing on Plaintiff, the legislative intent that the UPA serve as a mechanism to protect consumers excludes Plaintiff from the class of persons entitled to bring a claim under the Act. Plaintiff, by contrast, urges us to look exclusively to the plain language of the Act. We agree with Defendant that, notwithstanding that the plain language of the UPA appears to confer standing to Plaintiff and other similarly situated business competitors, we must consider whether our literal interpretation of the statute is contrary to its obvious intent or renders it absurd. See Helman, 1994-NMSC-023, ¶ 2. For this, we look to the public policy behind the UPA. See First Baptist Church of Roswell v. Yates Petroleum Corp., 2015-NMSC-004, ¶ 12, 345 P.3d 310 (“Every statute is a manifestation of some public policy.“).
{10} The UPA represents New Mexico‘s public policy favoring the resolution of consumer claims and prevention of consumer harm. See Fiser v. Dell Comput. Corp., 2008-NMSC-046, ¶¶ 9, 10, 144 N.M. 464, 188 P.3d 1215 (recognizing that UPA represents “[t]he fundamental New Mexico policy of providing consumers a mechanism for dispute resolution“). Its fundamental purpose is to protect consumers from unscrupulous business practices regardless of whether those consumers are directly or indirectly affected. See
{11} Because “the UPA constitutes remedial legislation, we interpret the provisions of [the] Act liberally to facilitate and accomplish its purposes and intent.” Quynh Truong v. Allstate Ins. Co., 2010-NMSC-009, ¶ 30, 147 N.M. 583, 227 P.3d 73 (internal quotation marks and citation omitted); see Maese v. Garrett, 2014-NMCA-072, ¶ 18, 329 P.3d 713 (acknowledging liberal interpretation of UPA provisions in this Court‘s prior decisions); State ex rel. Stratton v. Gurley Motor Co., 1987-NMCA-063, ¶ 27, 105 N.M. 803, 737 P.2d 1180 (favoring liberal construction to accomplish legislative intent). The UPA‘s position in New Mexico as a consumer protection statute entitles it to the broadest possible application, and “[i]t is the task of the courts to ensure that the [UPA] lends the protection of its broad application to innocent consumers.” State ex rel. King v. B & B Inv. Grp., Inc., 2014-NMSC-024, ¶ 48, 329 P.3d 658 (internal quotation marks and citation omitted).
{12} Taking into consideration the plain language of the statute and its remedial consumer protection purpose, we reject both parties’ proposed interpretations of
{13} Our holding is also consistent with our decision in Lohman in which we considered the plaintiff‘s UPA claim against a seatbelt manufacturer for its deceptive representations to a distributor to facilitate car sales to consumers at large. 2007-NMCA-100, ¶ 25. Notwithstanding the attenuated relationship between the manufacturer and consumers, we concluded that “the language of the UPA is capable of encompassing a broad array of commercial relationships, and nothing expressly limits its scope to communications directed at the plaintiff or at the public.” Id. “[T]he definition of unfair or deceptive trade practice[,]” we noted, “makes no mention of transactions between a claimant and a defendant.” Id. ¶ 30 (internal quotation marks and citations omitted). Furthermore, it does not “require a misrepresentation in the course of a sale between [the] plaintiff and [the] defendant[.]” Id. Instead, “it merely requires that a misrepresentation be made in connection with the sale . . . of goods generally.” Id. (internal quotation marks and citations omitted). The term “in connection with” is “designed to encompass a broad array of commercial relationships” that “[do] not suggest that a direct representation, by the defendant to the plaintiff, is a prerequisite.” Id. ¶ 21. “[B]oth the plain language of the act and the underlying policies suggest that a commercial transaction between a claimant and a defendant need not be alleged in order to sustain a UPA claim.” Id. ¶ 33. Indeed, the remedial purpose of the legislation as a consumer protection measure is consistent with this broadest possible application. Id. ¶ 21.
{14} Relying primarily on our decisions in Santa Fe Custom Shutters & Doors, Inc. v. Home Depot U.S.A., Inc. (hereinafter, SFCS), 2005-NMCA-051, ¶¶ 17-18, 137 N.M. 524, 113 P.3d 347 and Hicks v. Eller, 2012-NMCA-061, ¶ 20, 280 P.3d 304, Defendant argues that our law is clear that only buyers and not business competitors have standing to bring claims under the UPA. SFCS and Hicks, however, are factually distinguishable because they addressed standing in the limited context of disputes between buyers and sellers and did not require us to consider the role of business competitors in the context of the UPA and its policy of preventing “[u]nfair or deceptive trade practices . . . in the conduct of any trade or commerce[.]”
{15} In SFCS we were asked to determine whether a company who supplied custom shutters and installation services to Home Depot could bring a claim under the UPA against Home Depot when Home Depot failed to market and sell the shutters as promised. 2005-NMCA-051, ¶¶ 3-7. Noting that the Legislature treats buyers and sellers differently under the provisions of the UPA, we held, that, “[c]onsistent with its purpose as consumer protection legislation, the UPA gives standing only to buyers of goods or services.” Id. ¶¶ 14, 17 (citation omitted).
{16} Similarly, in Hicks, the seller of certain pieces of art brought a UPA claim against an art appraiser who purchased several paintings from the seller after the seller declined to retain the appraisers services to value the art. 2012-NMCA-061, ¶¶ 4-9, 20. Emphasizing the UPA‘s purpose as a consumer protection statute, we stated that the UPA requires that “somewhere along the purchasing chain, the claimant did purchase an item that was at some point sold by the defendant[,]” and concluded that the seller of the art had no standing to bring a UPA claim against the appraiser who
{17} Taking into consideration the plain language and legislative intent of the statute and our holding in Lohman, however, we conclude that the statements from SFCS and Hicks limiting standing to buyers of goods and services merely disqualifies the seller, as between a buyer and seller, from bringing suit rather than precludes “any person” whose claim raises consumer protection concerns or trade practices addressed to the market generally. Because neither case addressed business competitor standing under the UPA, neither case controls our analysis here.
{18} Further, courts in other jurisdictions have also used legislative intent paired with statutory interpretation principles, including the liberal construction of remedial statutes, to interpret statutory language authorizing “any person” to bring a state consumer protection claim. See Eder Bros., Inc. v. Wine Merchs. of Conn., Inc., 880 A.2d 138, 149 (Conn. 2005) (holding that a business had standing to sue competitor in unfair practices suit, reasoning that the statute was remedial in character and must be liberally construed to provide protection to both businesses and consumers); see also S. Serv. Corp. v. Excel Bldg. Servs., Inc., 617 F. Supp. 2d 1097, 1099-1100 (D.Nev. 2007) (construing Nevada law granting standing to “any person who is a victim” of consumer fraud and concluding business had standing to sue competitor for consumer fraud). Interpreting a consumer protection statute with language similar to the UPA‘s grant of standing to “any person” who suffers damages, the Illinois Court of Appeals held, “where the dispute involves two businesses who are not consumers, the proper test is . . . whether the alleged conduct involves trade practices addressed to the market generally or otherwise implicates consumer protection concerns” and noted that the statute was aimed at redressing the injuries suffered when businesses deceive customers. Downers Grove Volkswagen, Inc. v. Wigglesworth Imps., Inc., 546 N.E.2d 33, 40-41 (Ill. App. Ct. 1989).
{19} Similarly, in John Labatt Ltd. v. Molson Breweries, (Mem and Order) 853 F. Supp. 965, (E.D. Mich. 1994), the court considered whether a business competitor had standing to sue under the Michigan Consumer Protection Act, (MCPA) §§19.418(1) to -.418(22) (recompiled at
{20} Because Plaintiff‘s claims offend neither the plain language nor the legislative intent of the UPA, we hold that a business competitor is among the persons allowed to bring an action pursuant to
b. Unfair Competition Claims
{21} Defendant next contends that Plaintiff‘s claim fails because the UPA makes no mention of unfair competition practices. Plaintiff alleges in its complaint that Defendant‘s unfair competition practices consist of its knowingly making false and misleading statements when it sold its services to BNSF by failing to disclose that it lacked licenses required under CILA to perform the work that was the subject of the BNSF contracts, that Defendant was awarded BNSF contracts as a result of its intentional omissions regarding licensure, and that Plaintiff sustained
For example, relief under [Section 57-12-10(A) allowing “any person to obtain injunctive relief] might be had by one commercial enterprise from the deceptive advertising campaign of another. A competitor might complain that their company could suffer loss of market share and profits because the public might be deceived. . . . In contrast, recovery of damages [under Section 57-12-10(B)] . . . might be suffered either by a consumer of goods or services, or the commercial competitor of an enterprise engaged in deceptive trade practices.
Solomon, 1990-NMSC-063, ¶¶ 21-22 (emphasis added) (citations omitted).
{22} While not binding, we find it difficult to ignore our Supreme Court‘s acknowledgment that recovery of damages might be had by a business whose competitor engaged in deceptive trade practices. Taking this language into consideration along with our mandate to interpret the UPA broadly, we conclude that, notwithstanding the UPA‘s failure to mention unfair competition practices, the misrepresentations of which Plaintiff complains are among those contemplated by the UPA.
3. Plaintiff‘s Claim
{23} In light of our conclusion that a business competitor is among the class of persons entitled to bring a claim under
{24} New Mexico statutes, as well as the case law interpreting those statutes, make it clear that New Mexico recognizes a strong public policy against unlicensed contractors. See Little v. Jacobs, 2014-NMCA-105, ¶ 12, 336 P.3d 398 (acknowledging that the statute indicates “the [L]egislature casts a harsh eye on contracting without a license” and that caselaw “highlight[s] the [L]egislature‘s complete intolerance of unlicensed contractors” (internal quotation marks and citation omitted)); Gamboa v. Urena, 2004-NMCA-053, ¶ 14, 135 N.M. 515, 90 P.3d 534. CILA is reflective of this policy, as its purpose is to create “a healthy, ordered market in which consumers may contract with competent, reliable construction contractors[,]” to avoid “exploitation of the public by incompetent and unscrupulous contractors who are unable or unwilling to obtain a license[,]” as well as to prevent unlicensed contractors from profiting at the expense of the public. Mascarenas v. Jaramillo, 1991-NMSC-014, ¶ 14, 111 N.M. 410, 806 P.2d 59 (emphasis added); see also
C. CILA Enforcement
{25} Defendant next argues that a violation of CILA and its potential for sanctions and monetary penalties preclude recovery under the UPA for the same violations. Consequently, Defendant contends, a UPA claim undermines CILA and threatens its application and enforcement. See
{26} Initially, we note that Defendant has failed to point us to any authority that supports its argument that CILA regulatory enforcement is the only recourse available where a contractor performs unlicensed work. See Muse v. Muse, 2009-NMCA-003, ¶ 72, 145 N.M. 451, 200 P.3d 104 (“We will not search the record for facts, arguments, and rulings in order to support generalized arguments.“). Further, to allow CILA enforcement to infringe upon claims under the UPA is contrary to New Mexico policy favoring the resolution of consumer claims. See Fiser, 2008-NMSC-046, ¶¶ 9-10 (recognizing that UPA represents “[t]he fundamental New Mexico policy of providing consumers a mechanism for dispute resolution“). Absent authority providing for CILA‘s displacement of the provisions of the UPA, we will not interfere with the authority of either statute.
D. Motion to Dismiss
{27} Finally, Defendant seeks dismissal with prejudice of Plaintiff‘s UPA claim based on a failure to plead facts sufficient to meet all the required elements. Defendant did not, however, request such relief or present this issue in its application for interlocutory appeal. Defendant therefore has not satisfied the requirements of
CONCLUSION
{28} We affirm the district court‘s denial of Defendant‘s motion to dismiss Plaintiff‘s UPA claim.
{29} IT IS SO ORDERED.
JULIE J. VARGAS, Judge
WE CONCUR:
J. MILES HANISEE, Judge
STEPHEN G. FRENCH, Judge