Summers v. New Mexico Water Quality Control Commission

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integrity of this document
New Mexico Compilation
Commission, Santa Fe, NM
'00'04- 14:15:57 2011.10.10
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2011-NMCA-097Filing Date: August 17, 2011
Docket No. 29,753
IN THE MATTER OF THE APPEAL OF
FINAL ORDER IN THE ALTA VISTA
SUBDIVISION DP #1498
WQCC 07-11 (A)
LINK SUMMERS, CAROL RICHMAN,
MICHAEL FREEBOURN, and SHEILA
SHEPHERD,
Plaintiffs-Appellants,
v.
NEW MEXICO WATER QUALITY
CONTROL COMMISSION,
Defendant-Appellee,
SARA EDELMAN,
Real-Party-in-Interest-Appellee.
APPEAL FROM THE WATER QUALITY CONTROL COMMISSION
Felicia Orth, Hearing Officer
The Law Offices of Nancy L. Simmons, P.C.
Nancy L. Simmons
Albuquerque, NM
for Appellants
Gary K. King, Attorney General
Zachary Shandler, Assistant Attorney General
Santa Fe, NM
for Appellee
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OPINION
VANZI, Judge.
{1} This case requires us to consider the discharge permitting scheme of the Water
Quality Act (WQA), NMSA 1978, Sections 74-6-1 to -17 (1967, as amended through 2009).
Specifically, we must determine whether a knowing misrepresentation of material fact on
a permit application is presumed to have occurred “within the ten years immediately
preceding” submission of that application for purposes of Section 74-6-5(E)(4)(a). Because
we conclude that the Legislature intended that a knowing misrepresentation of material fact
made during the application process comes within the above statutory period, we reverse the
New Mexico Water Quality Control Commission’s (Commission) order granting a discharge
permit to Sara Edelman.
BACKGROUND
{2} On August 16, 2004, Edelman filed an application for a septic waste discharge permit
pursuant to the WQA, Sections 74-6-1 to -17, and the New Mexico Water Quality Ground
and Surface Water Protection regulations, 20.6.2 NMAC (12/01/95) (amended 1/15/01).
Edelman filed the application in anticipation of creating the Alta Vista Subdivision, an area
for ten mobile home units located on a 1.78-acre lot in Taos, New Mexico. Pursuant to the
application, Edelman proposed to discharge an estimated 3,750 gallons of wastewater per
day to two conventional septic tank leachfield systems located on the lot. Because of the
large amount of effluent to be discharged, the regulations required that Edelman provide site-
specific information that demonstrates the lithography below the site if such information was
available.
{3} Between August 2004 and September 2007, the New Mexico Environment
Department (NMED), Ground Water Bureau (Bureau), and a hearing officer appointed by
the NMED, reviewed Edelman’s application and the proposed discharge site.
Representatives from the Bureau visited and inspected the site, ran tests, and created models
of the expected site lithology, and the hearing officer held hearings and accepted comments
from the public. During the 2005-2006 time period, the Bureau twice requested that
Edelman supplement her application with additional information. In her initial application,
Edelman had only provided information about the lithological description of the Concha
Torres well, which was located 1,100 feet from the proposed discharge site. The Bureau’s
first letter, in September 2005, asked Edelman to provide information about other wells that
were located closer to the site than the Concha Torres well and requested “[s]pecific
information on the underlying geology at the site, including all well logs from adjacent
properties.” In response to the Bureau’s letter, Edelman supplemented her application with
information from a well that we refer to as the Edelman well, which is on an adjacent
property that she owns, and which she claimed was drilled in 2005. After the Bureau
received comments from neighbors that no well had been drilled on the adjacent property
in 2005, it conducted further inquiry into the matter. In a letter dated July 25, 2006, the
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Bureau advised Edelman of the discrepancy and asked for “a well log showing well
construction and lithological information” for that supply well. Edelman then admitted to
the Bureau that the Edelman well was actually drilled without a permit in 1996 and that
Edelman had not applied for a permit for that well until 2005. The consultant that Edelman
hired to assist her with her application told the Bureau that he had requested information
about the Edelman well from the driller and that he had asked the driller to create a well log
from memory so that Edelman could respond to the Bureau’s inquiry. Edelman submitted
the Edelman well log. Several months later, the Bureau discovered that the log had been
fabricated; and the information in it could not be verified.
{4} The hearing officer reviewed the application and other materials, considered public
comments, and issued a 53-page report to the NMED Secretary. The hearing officer
summarized the evidence, made detailed findings of fact, and ultimately recommended
granting the permit application with certain conditions, including the installation of an
advanced treatment unit. In addressing the fabricated well log, the hearing officer stated that
“[t]he material misrepresentation made here was to the State Engineer’s Office” and that
“[a]lthough the submission [of the log] to the Bureau might have ultimately made a
difference in its determination on the approvability of the [a]pplication, it did not.”
Nevertheless, the report “encourage[d] the Secretary to carefully review the related
documents in the file, and . . . make an express finding on this subject as part of his final
order.”
{5} Upon receipt of the hearing officer’s report, the Secretary considered the
administrative record and the hearing officer’s recommendations. The Secretary adopted all
of the regulatory analysis and conclusions contained in the report with the exception of “the
misrepresentation of a material fact in the permit application.” Based on the information
provided, the Secretary determined that Edelman knowingly misrepresented material facts
in her application when she provided a well log for the Concha Torres well as evidence of
the proposed site’s lithology, when information about the closer Edelman well was available
to her. The Secretary denied the permit application in accordance with Section 74-6-
5(E)(4)(a), which provides:
E. The constituent agency shall deny any application for a permit
or deny the certification of a federal water quality permit if:
....
(4) the applicant has, within the ten years immediately
preceding the date of submission of the permit application:
(a) knowingly misrepresented a material fact in an
application for a permit[.]
{6} Edelman appealed the Secretary’s final order denying the discharge permit to the
Commission, arguing that she had not knowingly misrepresented any material facts in her
application. Shortly thereafter, Link Summers, Carol Richman, Michael Freebourn, and
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Sheila Shepherd (collectively, Appellants) successfully intervened in the appeal to the
Commission, expressing their support for the Secretary’s decision.
{7} The Commission reviewed the record, heard closing arguments, and ultimately
entered a final order in July 2009. It sustained the Secretary’s adoption of the hearing
officer’s findings with regard to the regulatory analysis and conclusions contained in the
report. In addition, the Commission adopted the hearing officer’s findings in their entirety,
thereby explicitly adopting the hearing officer’s finding that Edelman had made a material
misrepresentation to the State Engineer’s office. The Commission nevertheless concluded
that the record did not demonstrate by substantial evidence that Edelman knowingly
misrepresented a material fact in her application “in violation of existing regulatory
requirements.” Deciding that the Secretary mistakenly relied on the mandatory denial
language in Section 74-6-5(E)(4)(a), a non-unanimous Commission ordered NMED “to issue
the permit with all requirements and conditions provided by the [h]earing [o]fficer’s
[r]eport.” The Commission also concluded as a matter of law, however, that Edelman had
failed to fully disclose all information in her permit application and suggested that the
Secretary could instead terminate or modify Edelman’s permit under Section 74-6-5(M) of
the WQA. That provision provides:
M. A permit may be terminated or modified by the constituent
agency that issued the permit prior to its date of expiration for any of the
following causes:
....
(2) obtaining the permit by misrepresentation or failure to
disclose fully all relevant facts[.]
{8} Appellants timely appealed to this Court the order of the Commission approving
Edelman’s discharge permit application.
DISCUSSION
{9} On appeal, Appellants argue that (1) the Commission erred in rejecting the
Secretary’s finding that Edelman misrepresented a material fact and that the Commission
misapplied the law, (2) there is not substantial evidence that Edelman met her burden under
the regulations to demonstrate that public health and groundwater quality will be protected,
and (3) procedural errors by the hearing officer mandate reversal. Because we agree with
Appellants on the first issue and reverse the Commission’s order granting the permit, we do
not reach Appellants’ second and third arguments.
Standard of Review
{10} On appeal, we will only set aside the Commission’s order if it is “(1) arbitrary,
capricious or an abuse of discretion; (2) not supported by substantial evidence in the record;
or (3) otherwise not in accordance with law.” Section 74-6-7(B) (setting forth the standard
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of review for appeals arising out of administrative actions under the WQA). Ultimately, our
review in this case is based on whether, under Section 74-6-5(E)(4)(a), a knowing
misrepresentation of material fact on a permit application is deemed to have occurred
“within the ten years immediately preceding” submission of that application. A ruling that
is not in accordance with law should be reversed “if the agency unreasonably or unlawfully
misinterprets or misapplies the law[.]” Archuleta v. Santa Fe Police Dep’t,
2005-NMSC-006, ¶ 18, 137 N.M. 161, 108 P.3d 1019. We are not bound by the
Commission’s interpretation of the statute, as this is a matter of law that we review de novo.
Rio Grande Chapter of Sierra Club v. N.M. Mining Comm’n, 2003-NMSC-005, ¶ 17, 133
N.M. 97, 61 P.3d 806.
Edelman Knowingly Misrepresented a Material Fact in Her Permit Application
{11} Appellants argue that the Commission erred when it determined that Edelman did not
knowingly misrepresent a material fact in her application for a discharge permit. At the
outset, we note that the Commission appears to have confused the factual and legal issues
before it in this case. On one hand, the Commission adopted the hearing officer’s findings
in their entirety, including that Edelman made a material misrepresentation to the State
Engineer’s office. And it concluded that substantial evidence supported a finding that
Edelman “failed to fully disclose all relevant facts in obtaining the permit.” On the other
hand, however, the Commission determined that the record did not “demonstrate support by
substantial evidence . . . the Secretary’s decision to deny the permit on grounds of [a]
knowing[] misrepresentation of material submitted in this matter in violation of existing
regulatory requirements.” Finally, on appeal, the Commission contends that if we conclude
that the Secretary properly construed the statutory period, it will concede that Edelman
knowingly misrepresented a material fact in her application materials and will not defend
her actions in this matter. Edelman has not filed a brief in this Court. Given the seemingly
contradictory determinations concerning whether there was a material misrepresentation and
because we are not bound by the Commission’s concession on appeal in that regard, we
conduct our own analysis of the issue in order to provide clarity. See State v. Caldwell,
2008-NMCA-049, ¶ 8, 143 N.M. 792, 182 P.3d 775 (stating that we are not bound by a
party’s concession on an issue on appeal).
{12} We review the Commission’s finding that Edelman did not knowingly misrepresent
a material fact in her permit application for an abuse of discretion. The first part of the issue,
whether there was a knowing misrepresentation, is a question of fact that we review for
substantial evidence. See Durham v. Sw. Developers Joint Venture, 2000-NMCA-010, ¶ 39,
128 N.M. 648, 996 P.2d 911 (stating that issues involving intent or knowledge are generally
questions of fact). The second inquiry, whether that knowing misrepresentation was
material, is a mixed question of law and fact. See State v. Benavidez, 1999-NMCA-053, ¶
16, 127 N.M. 189, 979 P.2d 234 (adopting a standard that materiality of a false statement is
generally a mixed question of law and fact), vacated in part on other grounds, 1999-NMSC-
041, ¶ 5, 128 N.M. 261, 992 P.2d 274.
{13} We begin with whether Edelman made a knowing misrepresentation in her
application. The record establishes that when Edelman initially filed her application with
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NMED, she provided information relating only to the Concha Torres well in order to satisfy
the regulatory requirement that an applicant provide the “[d]epth to and lithological
description of rock at base of alluvium below the discharge site if such information is
available[.]” 20.6.2.3106(C)(6) NMAC (09/15/02). The Concha Torres well was located
approximately 1,100 feet from the proposed discharge site, and the log listed a 60-foot basalt
layer underlain by a 140-foot clay layer. This information might have satisfied the
regulation’s requirement had it been the only information available to Edelman and had it
been representative of the site. See 20.6.2.3106(C)(6) NMAC. It was neither. When
Edelman first filed her application, she had already drilled the Edelman well, which was
located a mere 100 feet from the proposed discharge site. Rather than submit information
about that well, which was available to her and which she had a duty to provide under the
regulation, Edelman did not furnish the information until the Bureau pressed her for it in a
letter stating that it needed clarification and specific information about all the wells located
on properties adjacent to the proposed discharge site. See 20.6.2.3106(C)(6) NMAC (stating
that an applicant shall provide lithological information “if such information is available”
(emphasis added)). Even then, she concealed facts about the date and circumstances
surrounding how the Edelman well had been drilled, which caused the Bureau confusion
about which well her first supplemental information was referencing and whether that
information addressed their request for information about all wells on adjacent properties.
As a result, the Bureau had to again ask for additional information. This time, Edelman
submitted a well log, however, it contained fabricated information that could not be verified.
While there is evidence that Edelman may have inadvertently failed to apply for a permit for
the Edelman well in 1996 when it was first drilled, there is no evidence in the record that
Edelman had forgotten that this well existed or that she could not have obtained and
provided the necessary information to the Bureau at an earlier point in the application
process. Thus, we conclude that there is no evidence in the record to support the
Commission’s determination that Edelman did not knowingly misrepresent information in
her permit application when she initially failed to disclose the information regarding the
Edelman well and impliedly represented that information about the Concha Torres well was
the only relevant information available.
{14} The second question we address is whether Edelman’s knowing misrepresentation
about the site lithology was a “material fact.” See § 74-6-5(E)(4)(a). “A fact is material if
such fact may affect the outcome of the case.” Lopez v. Kline, 1998-NMCA-016, ¶ 8, 124
N.M. 539, 953 P.2d 304. Because the regulations require an applicant to provide the
lithological description of the proposed site if that information is available, it is clear that
such information could affect the outcome of any particular permitting decision. Thus, the
lithological information was material to the Commission’s decision. See 20.6.2.3106(C)(6)
NMAC. Here, Edelman initially did not produce a well log for the Edelman well, and when
she did eventually provide one, the Bureau discovered that the drilling date on the well log
was incorrect, the integrity of the log was called into question, and the log was later
determined to be a fabrication. Therefore, to the extent that the Commission concluded there
was not substantial evidence that Edelman knowingly misrepresented a material fact in her
permit application, we disagree and hold that the Commission erred in so finding.
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Edelman’s Misrepresentation During the Application Process Required Denial of the
Permit
{15} Because there was unambiguous and uncontroverted evidence that Edelman
knowingly misrepresented a material fact in her application for a discharge permit, and
because the Commission so concedes this point on appeal, we next determine whether the
Commission abused its discretion in granting the permit. Appellants contend that the
Commission was required to deny the permit application pursuant to Section 74-6-5(E)(4)(a)
because the misrepresentation occurred “within the ten years immediately preceding the date
of submission of the permit application.” See id. The Commission, on the other hand,
contends that the misrepresentation did not occur within the statutory period and, therefore,
the permit was properly granted. The critical question in this case is whether Edelman’s
misrepresentation made during the application process was within the ten years immediately
preceding the date of submission of her application. For the reasons that follow, we
conclude that it was.
{16} First, we decide when Edelman’s misrepresentation about the Edelman well
occurred. We then ask whether this date “preceded” the “date of the submission” of the
application, such that the permit should have been denied pursuant to Section 74-6-
5(E)(4)(a). As we have noted, Section 74-6-5(E)(4)(a) provides that “[t]he constituent
agency shall deny any application for a permit . . . if . . . the applicant has, within the ten
years immediately preceding the date of submission of the permit application . . . knowingly
misrepresented a material fact in an application for a permit[.]” (Emphasis added). We
interpret the provisions of Section 74-6-5(E)(4)(a) to “give effect to the intent of the
[L]egislature.” Wilson v. Denver, 1998-NMSC-016, ¶ 36, 125 N.M. 308, 961 P.2d 153. We
begin by considering the plain language of the statute and “assume that the ordinary meaning
of the words expresses the legislative purpose.” N.M. Mining Ass’n v. N.M. Water Quality
Control Comm’n, 2007-NMCA-010, ¶ 12, 141 N.M. 41, 150 P.3d 991. However, “[w]e must
also consider the practical implications and the legislative purpose of a statute, and when the
literal meaning of a statute would be absurd, unreasonable, or otherwise inappropriate in
application, we go beyond the mere text of the statute.” Bishop v. Evangelical Good
Samaritan Soc’y, 2009-NMSC-036, ¶ 11, 146 N.M. 473, 212 P.3d 361, cert. denied, 2010-
NMCERT-004, 148 N.M. 572, 240 P.3d 659.
{17} Turning to the first question, we note that there is no separate definition or
clarification in the statute of when a misrepresentation occurs. We turn, therefore, to the
plain meaning of the words. Black’s Law Dictionary defines a misrepresentation as “[t]he
act of making a false or misleading assertion about something.” Black’s Law Dictionary
1091 (9th ed. 2009). It encompasses an element of communication about something to some
audience. See Eckhardt v. Charter Hosp. of Albuquerque, Inc., 1998-NMCA-017, ¶ 55, 124
N.M. 549, 953 P.2d 722 (explaining that a misrepresentation is a statement that is
communicated). Because a misrepresentation does not occur until it has been communicated
to another person, we conclude that under the WQA, a misrepresentation occurs when
materials containing a misrepresentation are conveyed to the Bureau. Consequently, in this
case, Edelman’s misrepresentation occurred on August 19, 2004, when she conveyed
information about the Concha Torres well and failed to include information about the yet
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more proximate Edelman well to the Bureau in her initial application. The Commission does
not dispute that this is the relevant date.
{18} With regard to the second question, however, the Commission argues that under a
plain meaning interpretation of the statute, Edelman’s misrepresentation does not precede
the “date of submission of [her] permit application.” Under the Commission’s theory,
Edelman’s application was originally filed on August 19, 2004, and it was therefore
“submitted” on that date. Thus, according to the Commission, the statutory period ran from
August 18, 1994, to August 18, 2004. Because Edelman’s misrepresentation occurred
simultaneously with the submission of the application, and not “within the ten years
immediately preceding the date of submission of the permit application,” the Commission
contends that it did not misconstrue the requirement for denial of the permit under Section
74-6-5(E)(4)(a). We are not persuaded.
{19} We observe that the plain meaning interpretation of Section 74-6-5(E)(4)(a) proposed
by the Commission in this case leads to an unreasonable gap in the statutory scheme. See
Bishop, 2009-NMSC-036, ¶ 11 (“We must also consider the practical implications and the
legislative purpose of a statute, and when the literal meaning of a statute would be absurd,
unreasonable, or otherwise inappropriate in application, we go beyond the mere text of the
statute.”). The Commission’s interpretation of the statute would require the agency to deny
applications for permits only in those situations where the applicant knowingly
misrepresented material facts in earlier permit applications, and which therefore clearly
precede the submission of a current application. Conversely, according to the Commission,
if a deliberate misrepresentation occurs in an application currently before the agency, the
agency would be limited to—at the most—granting the permit and then terminating or
modifying it pursuant to Section 74-6-5(M). Section 74-6-5(M)(2) states that “[a] permit
may be terminated or modified by the constituent agency that issued the permit . . . for . . .
obtaining the permit by misrepresentation.” This statutory provision, however, expressly
deals only with those cases in which the permit has already been issued, which is not the
case here. We acknowledge that Section 74-6-5(E)(4) provides no guidance for those
circumstances in which a knowing misrepresentation is revealed or discovered in an on-
going permitting process, but we do not believe that the Legislature intended the result
suggested by the Commission.
{20} Accordingly, we look beyond the plain language to determine legislative intent. We
begin by considering the meaning of “submit.” Black’s Law Dictionary defines “submit”
as “[t]o end the presentation of further evidence in (a case) and tender a legal position for
decision.” Black’s Law Dictionary 1562 (9th ed. 2009). Although this definition is
ordinarily used when submitting a case to the fact finder at the close of trial, we conclude
that its use is appropriate in this context as well. When we apply this definition to the
statute, the date of submission of an application and discharge plan to NMED occurs once
the agency has received all of the information that it needs to consider the application, which
necessarily includes all of the information that an applicant must include in their discharge
plan pursuant to 20.2.6.3106(C) NMAC. We clarify that the date of submission of the
application could be the date that an applicant initially files an application and discharge plan
with NMED, or some later point if the applicant fails to provide necessary information in the
8
initial filing, and the agency determines that it needs that information in order to consider
the application. See In re Rates & Charges of U.S. W. Commc’ns, Inc. v. N.M. State Corp.
Comm’n, 116 N.M. 548, 549, 865 P.2d 1192, 1193 (1993) (concluding that the six-month
period the agency had to consider an application did not begin on the date the application
was initially filed because the application was missing critical information, so the six-month
period began after the applicant provided all the information in its application that the
agency needed to consider the application).
{21} Here, in July 2006, the Bureau requested additional information from Edelman in
order to fully evaluate her permit discharge application. Edelman provided the additional
information on July 28, 2006, and as a result, that is the date we determine her application
was actually submitted. Edelman’s material misrepresentation of fact to the Bureau
therefore occurred in the relevant period of time “immediately preceding the date of
submission of the permit application.”
{22} The facts of this case, however, are not the sole basis for our decision, and we take
the opportunity to provide guidance in other factual situations that require the denial of an
application. As we have noted, we must take care to avoid adoption of a construction of a
statute that would render its application absurd or unreasonable or lead to injustice or
contradiction. State v. Nick R., 2009-NMSC-050, ¶ 11, 147 N.M. 182, 218 P.3d 868. The
Legislature’s obvious concern for safeguarding our groundwater from pollution and
contamination is made clear by the fact that making a false representation of fact is a fourth
degree felony. See § 74-6-10.2(A), (B). Consistent with the Legislature’s intent, it is
reasonable to assume that mandatory denial of a discharge permit is required for those cases
in which an application conveys a material misrepresentation of fact when the application
is submitted. A logical extension of this interpretation requires a denial of permits in
situations where a misrepresentation is made in an initial application and no further
information is requested by the agency, as well as in those cases in which an applicant might
not misrepresent any information in the initial application but may convey a material
misrepresentation of fact in supplemental information requested by the agency.
{23} In conclusion, we believe that to interpret the statute as the Commission requests
would create an absurd result as an applicant who knowingly misrepresents a material fact
in a current application for a discharge permit could effectively escape any sanction during
the permitting process. At most, the applicant would be subject to the possibility of
termination or modification of their permit at the Secretary’s discretion after the permit had
already been issued, thereby eliminating any incentive to fully and honestly disclose all
material facts on the application form. We do not believe that this comports with the spirit
of the WQA. Therefore, we interpret the “immediately preceding the date of submission of
the application” language in the statute to apply to all applicants who knowingly
misrepresent a material fact in both current and prior applications for discharge permits.
This interpretation is both reasonable and consistent with the Legislature’s intent, and it
allows the entire permitting scheme to be covered. Finally, we observe that a knowing
misrepresentation of a material fact that is revealed or disclosed during the application
process necessarily prevents a waste of the agency’s time and resources on applicants that
have violated an important aspect of the permitting process.
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{24} In this case, Edelman knowingly misrepresented a material fact in her application for
a discharge permit before the application was submitted to the agency for review. As a
result, the Commission was required to deny her permit application under Section 74-6-
5(E)(4)(a).
CONCLUSION
{25} For the reasons set forth above, we set aside the Commission’s order because it is not
in accordance with law. Pursuant to Section 74-6-5(E)(4)(a), the Edelman application for
a discharge permit must be denied.
{26} IT IS SO ORDERED.
_____________________________________
LINDA M. VANZI, Judge
WE CONCUR:
____________________________________
MICHAEL D. BUSTAMANTE, Judge
____________________________________
RODERICK T. KENNEDY, Judge
Topic Index for Summers v. NM Water Quality Control Commission, No. 29,753
AL ADMINISTRATIVE LAW AND PROCEDURE
AL-AA Administrative Appeal
AL-HR Hearings
AL-IN I Investigations
AL-JR Judicial Review
AL-LI Legislative Intent
AL-SE Sufficiency of Evidence
AE APPEAL AND ERROR
AE-SR Standard of Review
AE-SB Substantial or Sufficient Evidence
NR NATURAL RESOURCES
NR-PO Pollution
NR-WL Water Law
ST STATUTES
ST-IP Interpretation
ST-LI Legislative Intent
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