Trubow v. N.M. Real Est. Comm'n

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: ________________
Filing Date: May 2, 2022
No. A-1-CA-38429
ADAM TRUBOW and PATRICK
MCBRIDE,
Appellants-Petitioners,
v.
NEW MEXICO REAL ESTATE
COMMISSION,
Appellee-Respondent.
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Valerie A. Huling, District Judge
Marrs Griebel Law, Ltd.
Clinton W. Marrs
Albuquerque, NM
Rodey, Dickason, Sloan, Akin & Robb, P.A.
Edward Ricco
Albuquerque, NM
for Petitioners
Hector H. Balderas, Attorney General
Santa Fe, NM
Lori Chavez, Assistant Attorney General
Albuquerque, NM
for Respondent
OPINION
BACA, Judge.
{1} A licensing board, subject to the Uniform Licensing Act (ULA), cannot take
disciplinary action against a party later than two years after the improper conduct is
discovered by the board. See NMSA 1978, § 61-1-3.1(A) (2003). On appeal, Adam
Trubow and Patrick McBride (Petitioners) argue (1) the statute of limitations under
the ULA barred the New Mexico Real Estate Commission (NMREC) from bringing
disciplinary action against them, and (2) substantial evidence did not support
NMREC’s disciplinary action. Agreeing with Petitioners, we conclude that the
disciplinary action brought by NMREC was barred by the statute of limitations.
Consequently, we do not address Petitioner’s substantial evidence claim.
BACKGROUND
{2} On December 6, 2017, NMREC revoked Petitioners’ real estate broker
licenses and issued a fine after determining that Petitioners made false statements
regarding their business relationship with Ms. Lisa Donham and acted in bad faith
regarding negotiations for the short sale of her home. It is undisputed that the
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disciplinary action was based on allegations made in a letter from Ms. Donham dated
April 6, 2011 (2011 Letter). 1
{3} On January 15, 2014, Ms. Donham submitted a complaint against Petitioners,
along with the 2011 Letter, to the Consumer Protection Division of the New Mexico
Attorney General’s Office (NMAG). On July 2, 2014, NMREC received an email
setting forth Ms. Donham’s complaints against Petitioners from the NMAG. Eight
days later, on July 10, 2014, NMREC opened the email from the NMAG and opened
a case for investigation.
{4} On July 8, 2016, two years and six days after it received the email from the
NMAG alerting it to Ms. Donham’s complaints, NMREC issued a notice of
contemplated action (NCA) indicating formal action against Petitioners for the
denial, suspension, restriction, or revocation of Petitioners’ real estate licenses.
Petitioners argue that the statute of limitations, Section 61-1-3.1(A), barred NMREC
from bringing disciplinary action against them.
DISCUSSION
{5} Before we discuss the merits of this appeal, we briefly address NMREC’s
challenge that Petitioners failed to preserve their time-barred argument on appeal.
NMREC argues that Petitioners neglected to raise the issue of whether NMREC,
1
In addition to the time-barred arguments, Petitioners also argue that the 2011
Letter was unverified. We do not address the merits of these arguments because we
dispose of this claim as being time-barred.
3
with reasonable diligence, should have discovered the claim against them before July
10, 2014. We disagree.
{6} “To preserve an issue for review on appeal, it must appear that [the] appellant
fairly invoked a ruling of the trial court on the same grounds argued in the appellate
court.” Benz v. Town Ctr. Land, LLC, 2013-NMCA-111, ¶ 24, 314 P.3d 688 (internal
quotation marks and citation omitted). “The primary purposes for the preservation
rule are: (1) to specifically alert the district court to a claim of error so that any
mistake can be corrected at that time, (2) to allow the opposing party a fair
opportunity to respond to the claim of error and to show why the court should rule
against that claim, and (3) to create a record sufficient to allow this Court to make
an informed decision regarding the contested issue.” Sandoval v. Baker Hughes
Oilfield Operations, Inc., 2009-NMCA-095, ¶ 56, 146 N.M. 853, 215 P.3d 791.
{7} Here, the record reveals that Petitioners filed a motion seeking dismissal with
NMREC and argued that the action was time-barred due to the statute of limitations.
The motion laid out its objections to NMREC and created an adequate record for
purposes of appeal. NMREC addressed Petitioners’ argument that the NCA was
issued past the statute of limitations, denied Petitioners’ motion to dismiss, and
found no evidence to confirm whether NMREC opened the email prior to July 10,
2014, the stamped date on which the email was opened. Additionally, Petitioners
renewed the statute of limitations argument to the district court in a statement of
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appellate issues. The district court also rejected Petitioners’ argument and agreed
with NMREC that, despite receiving the email on July 2, 2014, the contents therein
were not discovered until July 10, 2014, when the email was opened.
{8} The record thus plainly establishes that Petitioners alerted both NMREC and
the district court to its argument against the timeliness of NMREC’s NCA in the
form of written pleadings, allowing both adjudicative bodies to make an informed
decision as to the issue raised. Considering the preservation requirements and their
purposes, we conclude Petitioners properly preserved their statute of limitations
argument and turn now to the issues raised on appeal.
I. The Discovery Rule Applies to the ULA
{9} The ULA provides professional licensing boards with a means for “protecting
the public by enforcing professional standards with respect to the conduct of its
licensees.” N.M. Bd. of Psych. Exam’rs v. Land, 2003-NMCA-034, ¶ 26, 133 N.M.
362, 62 P.3d 1244. In addition, the ULA “reflect[s] a legislative decision regarding
the balance to be struck between the public’s need to be protected and the licensee’s
individual property right to earn a livelihood under a state-conferred license.” Varoz
v. N.M. Bd. of Podiatry, 1986-NMSC-051, ¶ 12, 104 N.M. 454, 722 P.2d 1176.
Within the ULA, Section 61-1-3.1(A) states:
An action that would have any of the effects specified in Subsections D
through N of [NMSA 1978,] Section 61-1-3 [(1993, amended 2020)] or
an action related to unlicensed activity shall not be initiated by a board
later than two years after the discovery by the board of the conduct that
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would be the basis for the action, except as provided in Subsection C2
of this section.
(Emphasis added.) Here, the parties agree that under Section 61-1-3.1(A), the
applicable statute of limitations is two years. Therefore, because NMREC issued the
NCA on July 8, 2016, the issue before this Court is whether NMREC “discovered”—
within the meaning of the ULA—the conduct on which the discipline was based
before or after July 8, 2014. The answer depends on the meaning of the phrase
“discovery by the board” in Section 61-1-3.1(A). Consequently, we must interpret
Section 61-1-3.1(A).
{10} Generally, there are two basic standards that trigger the beginning of the
statute of limitations period: the discovery rule and the occurrence rule. See
Cummings v. X-Ray Assocs. of N.M., P.C., 1996-NMSC-035, ¶ 47, 121 N.M. 821,
918 P.2d 1321 (describing the two standards in the context of medical malpractice
claims, “[o]ne is sometimes called the ‘discovery rule,’ . . . [and t]he other standard
is sometimes called the ‘occurrence rule’”). While the discovery rule focuses on the
date the injury was discovered, or, importantly, reasonably should have been
discovered, the occurrence rule fixes the accrual date on the occurrence of a given
act. Id. Accordingly, in order to resolve this appeal, we first determine which rule
governs the application of Section 61-1-3.1(A) to these circumstances.
Subsection (C) applies to the New Mexico state board of psychologist
2
examiners and is inapplicable here. See § 61-1-3.1(C).
6
{11} “The meaning of language used in a statute is a question of law that we review
de novo.” Cooper v. Chevron U.S.A., Inc., 2002-NMSC-020, ¶ 16, 132 N.M. 382,
49 P.3d 61. “[W]hen presented with a question of statutory construction, we begin
our analysis by examining the language utilized by the Legislature, as the text of the
statute is the primary indicator of legislative intent.” Bishop v. Evangelical Good
Samaritan Soc’y, 2009-NMSC-036, ¶ 11, 146 N.M. 473, 212 P.3d 361. “In
furtherance of this goal, we examine the plain language of the statute as well as the
context in which it was promulgated, including the history of the statute and the
object and purpose the Legislature sought to accomplish.” Leger v. Gerety, 2022-
NMSC-007, ¶ 26, 503 P.3d 349 (internal quotation marks and citation omitted). The
plain meaning rule requires a court to give effect to the statute’s language and refrain
from further interpretation when the language is clear and unambiguous. Sims v.
Sims, 1996-NMSC-078, ¶ 17, 122 N.M. 618, 930 P.2d 153 (“The plain meaning rule
of statutory construction states that when a statute contains language which is clear
and unambiguous, we must give effect to that language and refrain from further
statutory interpretation.” (alteration, internal quotation marks, and citation omitted)).
“However, if ‘adherence to the literal use of the words would lead to injustice,
absurdity or contradiction, we will reject the plain meaning in favor of an
interpretation driven by the statute’s obvious spirit or reason.’” Cordova v. Cline,
2021-NMCA-022, ¶ 7, 489 P.3d 957 (quoting State v. Trujillo, 2009-NMSC-012,
7
¶ 21, 146 N.M. 14, 206 P.3d 125). “We also consider the statutory subsection in
reference to the statute as a whole and read the several sections together so that all
parts are given effect.” Bishop, 2009-NMSC-036, ¶ 11. In addition to the statutory
language, we examine “the context in which it was promulgated, including the
history of the statute and the object and purpose the Legislature sought to
accomplish.” Maes v. Audubon Indem. Ins. Grp., 2007-NMSC-046, ¶ 11, 142 N.M.
235, 164 P.3d 934; see State v. Rivera, 2004-NMSC-001, ¶ 13, 134 N.M. 768, 82
P.3d 939 (“In other words, a statutory subsection may not be considered in a
vacuum.” (internal quotation marks and citation omitted)). “The guiding principle
of statutory construction is that a statute should be interpreted in a manner consistent
with legislative intent.” Hovet v. Allstate Ins. Co., 2004-NMSC-010, ¶ 10, 135 N.M.
397, 89 P.3d 69. We now apply these principles of statutory construction to the issue
before us.
{12} As stated above, in this case, our inquiry begins with ascertaining the meaning
of the phrase “discovery by the board” contained within Section 61-1-3.1(A). We
hold it to mean that the statute of limitations begins when a licensing board—subject
to the ULA—discovered or with reasonable diligence should have discovered that a
disciplinary action exists. See Williams v. Stewart, 2005-NMCA-061, ¶ 12, 137
N.M. 420, 112 P.3d 281.
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{13} In its original form, Section 61-1-3.1(A) (1981)3 was an occurrence statute
without a provision “tying the running of the limitations period to discovery of the
underlying conduct.” N.M. Real Est. Comm’n v. Barger, 2012-NMCA-081, ¶ 11,
284 P.3d 1112. That changed, however, when “[i]n 1993, the Legislature amended
the statute to bar board action initiated later than two years after the discovery of the
conduct.” Id. ¶ 11 (internal quotation marks and citation omitted). While the most
current version of Section 61-1-3.1(A)—applicable in this case—was last amended
in 2003 to bar any action “initiated by a board later than two years after the discovery
by the board of the conduct,” § 61-1-3.1(A) (emphasis added), our focus remains on
the 1993 addition of the term “discovery” as relevant to the Legislature’s intention
to extend the discovery rule to the ULA. See Barger, 2012-NMCA-081, ¶ 22 (“The
2003 amendment clarifies that the Legislature intended the triggering event in
Section 61-1-3.1(A) to be a licensing board’s discovery of the conduct underlying
an NCA.”). 4 Unquestionably, Barger clarified that the 1993 amendment added a
discovery element which made Section 61-1-3.1(A) “[a] discovery statute of
limitations.” Barger, 2012-NMCA-081, ¶ 14.
3
Under the 1981 version, Section 61-1-3.1 barred any action initiated by a
licensing board “later than two years after the conduct that would be the basis for
the action.” Section 61-1-3.1(A) (1981) (internal quotation marks omitted).
4
We note that neither party argues that Section 61-1-3.1 remained an
occurrence statute after the amendment of 1993.
9
{14} In Barger we recognized that NMREC brings actions against licensees similar
to the way plaintiffs bring actions against other parties. See id. ¶ 10 (“[I]t is a board’s
discovery that triggers the limitations period because, generally speaking, statutes of
limitations encourage plaintiffs to bring their actions while the evidence is still
available and fresh.” (alteration, internal quotation marks, and citation omitted)).
Given the discovery rule’s frequent application in other areas of law in which
prescriptive periods exist, the Legislature’s addition of a discovery element
regarding a statute of limitations supports the proposition that the standard discovery
rule applies.
{15} Just prior to the 1993 amendment of Section 61-1-3.1(A), our New Mexico
Supreme Court held in Roberts v. Southwest Community Health Services, 1992-
NMSC-042, ¶¶ 25-27, 114 N.M. 248, 837 P.2d 442, that in medical malpractice
cases, the discovery rule controls, and “the cause of action accrues when the plaintiff
knows or with reasonable diligence should have known of the injury and its cause.”
Central to our Supreme Court’s holding was its appreciation of the development and
expansion of the application of the discovery rule with respect to statutes of
limitations. As to this issue, the Court stated that “[t]he great weight of authority,
both in decisions and commentary, today recognizes some form of the ‘discovery
rule,’ i.e., that the cause of action accrues when the plaintiff discovers or with
reasonable diligence should have discovered that a claim exists.” Id. ¶ 24. Thus, the
10
Legislature’s use of the term “discovery” in Section 61-1-3.1(A), coupled with the
meaning of that term at the time, supports our conclusion that the discovery rule
applies to Section 61-1-3.1(A). “We presume that the Legislature [i]s aware of
existing law . . . at the time it enact[s new law].” PNM Gas Servs. v. N.M. Pub. Util.
Comm’n, 2000-NMSC-012, ¶ 73, 129 N.M. 1, 1 P.3d 383.
{16} Therefore, consistent with the discovery rule, the statute of limitations under
Section 61-1-3.1(A) begins when a licensing board discovers or with reasonable
diligence should have discovered the conduct upon which the disciplinary action is
based. See Williams, 2005-NMCA-061, ¶ 12. We now turn to the application of this
rule to the facts of the case before us.
II. The NMREC’s Claim Against Petitioners Was Untimely
{17} Where there are undisputed facts that show that the plaintiff knew or should
have become aware of the facts underlying his or her claim by a specific date, the
reviewing court may decide the issue as a matter of law. See, e.g., Brunacini v.
Kavanagh, 1993-NMCA-157, ¶ 29, 117 N.M. 122, 869 P.2d 821 (“Although the
time when a party is deemed to have discovered, or reasonably should be held to
have discovered the malpractice of an attorney, is generally a question of fact[;]
nevertheless, where the undisputed facts show that [the p]laintiffs knew, or should
have been aware of the negligent conduct on or before a specific date, the issue may
be decided as a matter of law.”).
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{18} Having held that the discovery rule applies in this case, the limitation period
began when NMREC “discover[ed], or should have discovered in the exercise of
reasonable diligence, the facts that underlie [the] claim.” Butler v. Deutsche Morgan
Grenfell, Inc., 2006-NMCA-084, ¶ 26, 140 N.M. 111, 140 P.3d 532. Thus,
Petitioners contend that NMREC “should have discovered” Ms. Donham’s
complaints against Petitioners on July 2, 2014, when the email was received.
NMREC does not dispute that the email from the NMAG was received by it on July
2, 2014. However, NMREC contends that discovery occurred, in this instance, when
the email was opened and processed. In support of their argument that the limitation
period begins upon opening and processing of the email, NMREC, citing Barger,
2012-NMCA-081, ¶ 10, states discovery is “knowledge of the conduct that triggers
the statute of limitations.” Thus, NMREC contends that in this case, because the
opening and processing of the email gave it knowledge of the claim, the limitations
period began at that moment. We disagree. If we were to adopt NMREC’s argument,
NMREC would then define the parameters by which something is discovered for
purposes of triggering the statute of limitations period. This would be contrary to the
purpose of a statute of limitations. “[A] statute of limitations seeks to further basic
fairness to the defendant by encouraging promptness in instituting a claim,
suppressing stale or fraudulent claims, and avoiding inconvenience.” Id. ¶ 16
(omission, internal quotation marks, and citation omitted). The statute “should
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reflect a policy decision regarding what constitutes an adequate period of time for a
person of ordinary diligence to pursue his claim.” Id. (internal quotation marks and
citation omitted). If NMREC can control the triggering event for the statute of
limitations by deciding when to open an email and initially review a complaint, then
the board’s opportunity to pursue the claim, and the licensee’s ability to defend the
claim, are substantially impaired. Thus, NMREC’s proposition is untenable.
{19} Instead, we hold that in cases subject to the ULA, when a party facing
disciplinary action proves that an email was delivered on a specific date, see Little
v. Baigas, 2017-NMCA-027, ¶ 32, 390 P.3d 201 (recognizing that “[t]he statute of
limitations is an affirmative defense”), we presume that the board became aware or
should have become aware of its contents on the date of delivery. See Ball v. Kotter,
723 F.3d 813, 830 (7th Cir. 2013) (presuming that letters and emails were properly
received and read). However, the board may rebut that presumption by showing that
the delay in opening the email was reasonable under the circumstances. Applying
our holding to these facts, we conclude that NMREC, in the exercise of reasonable
diligence and without any evidence to the contrary, should have discovered the
complaint on July 2, 2014, when the email was sent. Thus, NMREC was time-barred
from bringing the action against Petitioners. We explain.
{20} The transcripts of NMREC’s hearing, exhibits submitted to NMREC and the
district court, together with general stipulations by the parties, establish four
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undisputed facts: (1) on July 2, 2014, an NMREC investigator received an email
setting forth Ms. Donham’s complaints against Petitioners from the NMAG; (2) on
July 10, 2014, the NMREC investigator opened the email and read its contents; (3)
NMREC did not provide any reason or justification for not opening the email until
July 10, 2014; and (4) on July 8, 2016, NMREC issued an NCA against Petitioners.
{21} Importantly, NMREC gave no reasons to justify why the email was not
opened until July 10, 2014. In fact, NMREC conceded that it did not offer any reason
to justify this delay. The only testimony offered by NMREC on this point is that of
the investigator who received the email and subsequently opened it. She stated, “I
opened it up, printed it, reviewed it, made my handwritten notations, and then I
carried it to the front desk and stamped it in.” While this testimony establishes what
was done with the information in the email once it was opened, it does not provide
any explanation or justification for the delay in opening the email. Consequently,
without any evidence showing that the delay was reasonable under the
circumstances, we presume that NMREC should have known of the email’s contents
once the email was received on July 2, 2014.
{22} NMREC’s remaining arguments are unpersuasive. First, NMREC blames the
NMAG for the delay in issuing the NCA. NMREC argues that because the NMAG
prepared the NCA and sent it to NMREC for issuance, it has no control over when
the NCA is issued. It states that this is because it does not control how long the
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NMAG will take to prepare and send an NCA to it for issuance. We disagree.
NMREC has two years to bring a disciplinary action under the ULA. It is
undoubtedly aware of this limitation. If the NMAG is taking an extraordinarily long
time to prepare the NCA, NMREC can take whatever action it deems necessary to
have the NCA issued within the time limits of the ULA.
{23} Second, NMREC argues that it exercised ordinary diligence to comply with
Section 61-1-3.1(A) when it established internal policies and procedures for
submitting complaints to the NMREC. However, the only evidence in the record was
that the NMREC investigator received complaints directly from the NMAG on
occasion, and had the complaint been received by mail, she would not have been the
one initially to receive the complaint. These facts do not address whether the delay
in opening the email was reasonable under the circumstances. NMREC’s remaining
contentions regarding the NMREC’s internal procedures are merely arguments of
counsel, not evidence, 5 and we therefore decline to rely on them. See Muse v. Muse,
2009-NMCA-003, ¶ 51, 145 N.M. 451, 200 P.3d 104 (“It is not our practice to rely
on assertions of counsel unaccompanied by support in the record. The mere
assertions and arguments of counsel are not evidence.”).
5
In its answer brief, NMREC explains its internal procedures for receiving
complaints and equates it to similar procedures, pursuant to the Inspection of Public
Records Act (IPRA). NMREC, however, provides no citations to the record where
this evidence was established.
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{24} All told, NMREC tendered no evidence explaining why NMREC, exercising
reasonable diligence, took so long to discover the contents of the email of July 2,
2014. Consequently, we presume that had NMREC exercised reasonable diligence
in this instance, as it is obligated to do under the discovery rule, it would have
discovered the complaint against Petitioners in the email sent on July 2, 2014, before
July 8, 2014, and would have issued the NCA within the time limits of the ULA.
Accordingly, NMREC’s action against Petitioners was outside the applicable statute
of limitations and is, therefore, barred. As a result, we reverse the district court’s
judgment in favor of NMREC and vacate the actions against Petitioners as barred by
the statute of limitations.
CONCLUSION
{25} For the reasons stated above, we reverse and vacate.
{26} IT IS SO ORDERED.
______________________________
GERALD E. BACA, Judge
WE CONCUR:
______________________________
J. MILES HANISEE, Chief Judge
______________________________
ZACHARY A. IVES, Judge
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