Lopez v. Municipal Council

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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 JACINTO LOPEZ,
3 Plaintiff-Appellant,
4 v. NO. 31,347
5 MUNICIPAL COUNCIL and MAYOR
6 OF THE CITY OF ARTESIA, NEW MEXICO,
7 Defendants-Appellees.
8 APPEAL FROM THE DISTRICT COURT OF EDDY COUNTY
9 Jane Shuler-Gray, District Judge
10 Ramon I. Garcia
11 Roswell, NM
12 for Appellant
13 Montgomery & Andrews, PA
14 Stephen S. Hamilton
15 Jaime R. Kennedy
16 Santa Fe, NM
17 McCormick, Caraway, Tabor & Byers, L.L.P.
18 John M. Caraway
19 Carlsbad, NM
20 for Appellees
2
1 MEMORANDUM OPINION
2 BUSTAMANTE, Judge.
3 The City of Artesia (the City) resolved that Plaintiff Jacinto Lopez’s property
4 at 911 West Dallas, Artesia, New Mexico, should be condemned as a public menace.
5 Pursuant to Artesia, N.M., City Code § 5-5-4 (2004), Lopez sought de novo review
6 of the City’s resolution in district court. The court affirmed the condemnation. Lopez
7 now argues that the ordinance exceeds the authority granted to the City by NMSA
8 1978, Section 3-18-5 (1977), that the ordinance was improperly applied retroactively,
9 that the district court’s ruling was not supported by substantial evidence, and that his
10 request for a jury trial was improperly denied. We agree that Ordinance 5-5-4 exceeds
11 the municipality’s authority by imposing a clearly erroneous standard of review on the
12 district court. Because the district court held a de novo trial but then applied the
13 incorrect standard, we remand for the district court to enter its findings of facts and
14 render judgment based on those findings.
15 I. BACKGROUND
16 In 2004 the City adopted Ordinances 5-5-1 through 5-5-5 relating to dangerous
17 buildings and premises. Under certain circumstances, these ordinances allowed the
18 City Council to determine by resolution that a property was a menace to the public.
19 Within ten days of service of such a resolution upon the property owner, the owner
3
1 is required to either begin removing the “building, structure, ruins, rubbish, wreckage
2 or debris” that created the menace, or to request a hearing before the City Council.
3 The ordinances also provide that an adverse City Council decision may be appealed
4 de novo to the district court.
5 Lopez purchased the property at 911 West Dallas in Artesia over twenty years
6 ago. For several years, he lived and practiced medicine in the building. In 1985 or
7 1986, Lopez moved to California. During the time when he resided in California, the
8 building was vacant. Lopez returned about once a year to maintain the building,
9 usually in response to a notice from the City requesting that he remove weeds from
10 the property.
11 On June 22, 2010, the City notified Lopez that it was contemplating
12 condemnation of Lopez’s building. The letter identified Sections 5-5-1 through 5-5-5
13 of the City of Artesia’s Municipal Code as authority for the condemnation. On
14 August 10, 2010, the City passed a resolution finding that Lopez’s property “is
15 damaged and dilapidated or covered with ruins, rubbish, wreckage, debris or weeds
16 to the extent that it is a menace to the public comfort, health, peace and safety.” The
17 City again identified Sections 5-5-1 through 5-5-5 as authority for the resolution.
18 After Lopez objected, a hearing was held, and the City Council determined that the
19 resolution should be enforced.
4
1 Lopez appealed to the district court. A de novo trial was held at which exhibits
2 were entered into evidence and witnesses were examined. At the conclusion of this
3 trial, the district court orally observed that, according to the evidence presented,
4 Lopez’s property was dilapidated and the City Council’s action of condemnation was
5 appropriate. However, the written judgment entered by the court made no such
6 findings. Instead, it concluded that the City’s ruling was not clearly erroneous. It is
7 from this judgment that Lopez now appeals.
8 II. DISCUSSION
9 Lopez argues that Building Code Section 117.1 was improperly applied against
10 him retroactively, that the district court’s ruling was not supported by substantial
11 evidence, that Ordinance 5-5-4 exceeds the authority granted to the City by Section
12 3-18-5, and that his request for a jury trial was improperly denied. In order to clarify
13 the standard of review applicable to this proceeding, we begin with Lopez’s argument
14 that the city ordinances exceed the authority granted by Section 3-18-5.
15 A. Standard of Review
16 Lopez argues that Ordinance 5-5-4 exceeds the authority granted to
17 municipalities by Section 3-18-5 because the ordinance imposes a higher standard of
18 proof on his appeal to the district court than the standard of appeal under Section 3-
19 18-5. The City contends that this argument is irrelevant because the district court did
5
1 not apply the standard from Ordinance 5-5-4, but instead conducted a de novo trial on
2 the merits. The City also argues that Lopez failed to preserve this argument and that
3 the Ordinance does not exceed the City’s authority under Section 3-18-5.
4 Pursuant to NMSA 1978, Section 3-17-1 (1993), municipalities may enact
5 ordinances to provide for the health and safety of their inhabitants so long as the
6 ordinances do not conflict with the laws of the State of New Mexico. The City
7 enacted an ordinance allowing it to condemn buildings that, in its judgment, were a
8 menace to the public comfort, health, peace, or safety. Artesia, N.M., City Code § 5-
9 5-1 (2004). A separate ordinance provided for review by the district court:
10 Any person aggrieved by the determination of the city council may
11 appeal to the district court . . . . The district court shall hear the matter de
12 novo and enter judgment in accordance with its findings. The burden of
13 persuasion shall be upon the party taking the appeal to show that the
14 decision of the city council is clearly erroneous.
15 Artesia, N.M., City Code § 5-5-4. Both of these ordinances closely follow the
16 language of Section 3-18-5. However, Ordinance 5-5-4 departs from the language of
17 Section 3-18-5(E) by adding a final sentence purporting to impose a “clearly
18 erroneous” standard of review on the district court.
19 Administrative decisions are subject to two categories of review in the district
20 courts. In most cases the review is deferential, looking to the whole record to
21 determine “whether the agency acted arbitrarily or capriciously, whether the agency
6
1 decision was supported by substantial evidence, and whether the agency acted within
2 the scope of its authority.” See Clayton v. Farmington City Council, 120 N.M. 448,
3 453, 902 P.2d 1051, 1056 (Ct. App. 1995); see also NMSA 1978, § 39-3-1.1 (1999);
4 Rule 1-074(R) NMRA. In whole record review cases, this Court applies the same
5 standard of review as the district court. However, this process does not apply “when
6 the statute controlling appeal [allows] some form of de novo review” by the district
7 court. Clayton, 120 N.M. at 453, 902 P.2d at 1056.
8 Clayton identified two factors which must be present in order to conclude that
9 a statute allows de novo review of administrative decisions. Id. First, the statute must
10 “contemplate[] additional evidentiary presentation beyond the record created in front
11 of the administrative agency.” Id. Second, the statute must “allow[] the district court
12 more discretion in its judgment than simply reversal of the agency’s decision and
13 remand for further proceedings.” Id. Review by trial de novo means that the initial
14 reviewing court—generally, the district court—“considers the issues presented on its
15 own, not bound, controlled or necessarily influenced, in any way by the action of the
16 inferior tribunal.” Id. at 454, 902 P.2d at 1057 (internal quotation marks and citation
17 omitted).
18 The Clayton Court applied these rules to analyze NMSA 1978, Section 3-19-8
19 (1965) (amended 1999). Regarding the first requirement, the Court concluded that the
7
1 provision that the trial shall be “de novo and shall be governed by the rules of civil
2 procedure of the district court” allowed or required “an entirely new evidentiary
3 inquiry.” Clayton, 120 N.M. at 454, 902 P.2d at 1057. The parties also agreed that
4 the district court was required to accept new evidence and, in light of the “de novo”
5 language in the statute, the court accepted this contention. Id. at 455, 902 P.2d at
6 1058. As to the second requirement, the statutory language implied that the remedy
7 could be broader than mere reversal. Although the statute discussed actions “to vacate
8 and set aside” the agency’s order, it also contemplated the district court granting relief
9 “by injunction, mandamus or any other extraordinary remedy.” Id. at 454, 902 P.2d
10 at 1057. Clayton concluded that the district court was required to exercise its own
11 judgment based on the agency ruling and the evidence presented at trial. Id. at 455,
12 902 P.2d at 1058 Accordingly, the Court in Clayton did not perform a whole record
13 review of the agency’s decision, but instead reviewed the district court’s ruling for
14 substantial evidence and mistakes of law. Id.
15 Subsequently, Section 3-19-8 was modified to provide that appeals from
16 municipal planning commission decisions would be governed by Section 39-3-1.1.
17 1999 N.M. Laws, ch. 265, § 5. Section 39-3-1.1 provides a framework for
18 administrative appeals that applies the deferential whole record approach discussed
19 above. See § 39-3-1.1(D). It applies only when explicitly adopted. § 39-3-1.1(A).
8
1 Dozens of statutes have adopted Section 39-3-1.1; however, the Legislature has
2 chosen not to replace the appeal procedure in Section 3-18-5 with a reference to
3 Section 39-3-1.1. We therefore now apply Clayton’s reasoning to determine the
4 standard of review applicable to district court review under Section 3-18-5.
5 Section 3-18-5 provides that on appeal from a municipality’s decision, the
6 “district court shall hear the matter de novo and enter judgment in accordance with its
7 findings.” Section 3-18-5(E)(2). This language contemplates that the district court
8 will hear additional evidence. Like the statute in Clayton, it provides for de novo
9 review. Additionally, it instructs the district court to make findings, an instruction that
10 is incompatible with the deferential whole record review described in Section 39-3-1.1
11 and Rule 1-074. See Cadena v. Bernalillo Cnty. Bd. of Cnty. Comm’rs, 2006-NMCA-
12 036, ¶ 18, 139 N.M. 300, 131 P.3d 687 (holding that a district court may not make
13 findings of fact when reviewing under Section 39-1-1.1). The language also allows
14 the district court to do more than simply reverse and remand—the court must enter a
15 judgment based on its findings. We therefore conclude that Section 3-18-5 requires
16 de novo review of decisions by municipalities in the district courts.
17 Ordinance 5-5-4 attempts to restrict review, not just to the deferential review
18 of Section 39-3-1.1 and Rule 1-074, but to review under a clearly erroneous standard,
19 which is only a small portion of whole record review. Because this purported
9
1 restriction conflicts with Section 3-18-5, the City had no authority to pass it. See § 3-
2 17-1. The correct procedure was for the court to conduct a de novo proceeding,
3 hearing new evidence and entering its judgment based on its findings. If the district
4 court has applied the correct standard, we will not apply whole record review to the
5 City Council’s resolution, but will instead view the proceedings in the district court
6 through the lenses of our traditional standards of review.
7 B. Substantial Evidence
8 We now turn our attention to the proceedings before the district court. In doing
9 so, we also examine Lopez’s argument that the district court’s conclusion that his
10 property violated Ordinance 5-5-1 is not supported by substantial evidence.
11 Ordinance 5-5-1 provides that
12 Whenever any building or structure is ruined, damaged and dilapidated,
13 or any premises is covered with ruins, rubbish, wreckage or debris, the
14 city council may, by resolution, find that the ruined, damaged and
15 dilapidated building or structure or premises is a menace to the public
16 comfort, health, peace or safety and require the removal from the city of
17 the building, structure, ruins, rubbish, wreckage or debris.
18 The City made such a resolution, and the district court determined that the resolution
19 was not clearly erroneous.
10
1 “Substantial evidence is such relevant evidence that a reasonable mind would
2 find adequate to support a conclusion.” Salazar v. D.W.B.H., Inc., 2008-NMSC-054,
3 ¶ 6, 144 N.M. 828, 192 P.3d 1205 (internal quotation marks and citation omitted).
4 [W]hen considering a claim of insufficiency of the evidence, the
5 appellate court resolves all disputes of facts in favor of the successful
6 party and indulges all reasonable inferences in support of the prevailing
7 party. Additionally we will not reweigh the evidence nor substitute our
8 judgment for that of the fact finder. The question is not whether
9 substantial evidence exists to support the opposite result, but rather
10 whether such evidence supports the result reached.
11 Las Cruces Prof’l Fire Fighters v. City of Las Cruces, 1997-NMCA-044, ¶ 12, 123
12 N.M. 329, 940 P.2d 177 (citations omitted).
13 The district court held a hearing at which it heard evidence regarding the state
14 of Lopez’s property. Ms. Hinkle testified that the property was run down, boarded up,
15 and covered in trash and debris. Photographs were introduced into evidence showing
16 evidence of structural problems, leaks, filth, and possibly mold. At the hearing, the
17 district court stated its opinion that no objective observer of the photographs would
18 conclude that the building was not dilapidated. We agree with the district court that
19 the photographs and testimony are relevant evidence from which a reasonable mind
20 could conclude that the property was dilapidated and covered with rubbish and debris.
21 Although the district court correctly conducted a de novo trial, hearing new
22 evidence and drawing its own conclusions from the evidence, there is nevertheless one
11
1 problem that prevents us from simply affirming its result. The order filed by the court
2 did not set forth the findings and conclusions the court made orally at the hearing.
3 Instead, the order stated that “[a]fter hearing the matter de novo, the [c]ourt [f]inds that
4 Plaintiff has failed to meet its burden of persuasion to show that the decision made by
5 the Artesia City Council is clearly erroneous.” The court also made it clear that this
6 conclusion was based on Ordinance 5-5-4. However, as we have discussed, the City
7 was without authority to impose a clearly erroneous standard of review on the district
8 court.
9 The error is significant because the clearly erroneous standard is more difficult
10 for Lopez to overcome than the standard–presumably a preponderance of the
11 evidence–which would apply at a de novo trial on the merits. The error also prevents
12 us from simply affirming, as it is possible that the district court believed that Lopez
13 would have prevailed under the lower standard, but did not prevail under the clearly
14 erroneous standard. We therefore remand for the district court to make findings and
15 enter its judgment in accordance with the valid portion of Section 5-5-4 and the
16 discussion in this Opinion.
12
1 C. Retroactivity
2 Having discussed the areas in which there was error, we proceed to the issues
3 in which there was not. Lopez argues that the city improperly applied Section 117.1
4 of its building code against him retroactively. Relying on Howell v. Heim, 118 N.M.
5 500, 506, 882 P.2d 541, 547 (1994), the City argues that an ordinance is not
6 retroactively construed when it is applied to a condition existing on its effective date.
7 Alternatively, the City argues that its actions were also authorized by Section 3-18-5.
8 We presume that a statute applies prospectively unless the Legislature clearly
9 intends to give it retroactive effect. State v. Morales, 2010-NMSC-026, ¶ 8, 148 N.M.
10 305, 236 P.3d 24. Because the ordinances at issue here do not explicitly declare that
11 the Legislature intended them to apply retroactively, “we must interpret [them] to
12 apply prospectively and ensure that there is no retroactive effect.” GEA Integrated
13 Cooling Tech. v. State of N.M. Taxation & Revenue Dep’t, 2012-NMCA-010, ¶ 17,
14 , N.M. , P.3d . Whether a statute operates retroactively is a question
15 of statutory construction that we review de novo. See id. ¶ 5.
16 “A statute or regulation is considered retroactive if it impairs vested rights
17 acquired under prior law or requires new obligations, imposes new duties, or affixes
18 new disabilities to past transactions.” Howell, 118 N.M. at 506, 882 P.2d at 547.
19 “Thus, to determine whether a statutory amendment is retroactive the court must ask
13
1 whether the new provision attaches new legal consequences to events completed
2 before its enactment.” Morales, 2010-NMSC-026, ¶ 9 (internal quotation marks and
3 citation omitted). “[A] statute does not operate retroactively merely because some of
4 the facts or conditions which are relied upon existed prior to the enactment.” Howell,
5 118 N.M. at 506, 882 P.2d at 547 (internal quotation marks and citation omitted).
6 We discern no retroactive application of ordinances in this case. As an initial
7 matter, we note that although Lopez directs his argument at Section 117.1 of the
8 building code, the City actually exercised its powers under Ordinance 5-5-1, and we
9 will treat Lopez’s argument as applying to that ordinance. Furthermore, we agree with
10 the City that Section 3-18-5, which predates Lopez’s purchase of the property and
11 which confers upon the City the powers identical to Ordinance 5-5-1, applies
12 prospectively here and justifies affirmance under a right for any reason theory. But
13 in any event, no ordinance was applied retroactively here because the City has not
14 sought to penalize Lopez for a condition that existed and was terminated prior to the
15 ordinance’s adoption. Instead, the City based its resolution on a condition that existed
16 prior to the ordinances in question and which continued to exist despite years of
17 efforts to get Lopez to comply. We therefore conclude that the City did not
18 impermissibly apply any ordinance retroactively.
14
1 D. No Right to Jury Trial
2 Lopez contends that the district court wrongfully denied his request for a trial
3 by jury. His argument appears to rest on a distinction between administrative appeals,
4 which he implies do not require a jury, and trials de novo, which he suggests do.
5 “The right of trial by jury as it has heretofore existed shall be secured to all and
6 remain inviolate.” N.M. Const. art. II, § 12. “It was the purpose of the Constitution
7 framers to retain the right to trial by jury as it heretofore existed in the Territory of
8 New Mexico except in special proceedings unless express provision for jury trial was
9 included therein.” El Paso Elec. v. Real Estate Mart, Inc., 98 N.M. 490, 495, 650
10 P.2d 12, 17 (Ct. App. 1982). “Article II, Section 12 of the New Mexico Constitution
11 has been interpreted so as to preserve the right to a jury trial as it existed at the time
12 the constitution was adopted.” Smith v. First Alamogordo Bancorp, Inc., 114 N.M.
13 340, 342, 838 P.2d 494, 496 (Ct. App. 1992).
14 At the time the New Mexico Constitution was adopted, no provision existed for
15 trial by jury in a proceeding of this type because no proceeding of this type existed.
16 Authority for a municipality to condemn property is currently granted by Section 3-
17 18-5, which was originally enacted in 1965. 1965 N.M. Laws, ch. 300. The statute
18 does not explicitly grant the right to trial by jury. See § 3-18-5(E) (contemplating that
19 the court will enter judgment based on its findings, not on a jury’s verdict).
15
1 Furthermore, Lopez has not identified any analogous action that existed at the time the
2 New Mexico Constitution was adopted in which there was a right to a jury. See In re
3 Adoption of Doe, 100 N.M. 764, 765, 676 P.2d 1329, 1330 (1984). Lopez’s only
4 citation is to rule 1-072(F) NMRA, which does not govern administrative appeals. As
5 Lopez has not pointed us to any error in the district court’s denial of his jury request,
6 we decline to reverse the district court’s decision on this basis. See Farmers, Inc. v.
7 Dal Mach. & Fabricating, Inc., 111 N.M. 6, 8, 800 P.2d 1063, 1065 (1990)
8 (“Appellant must affirmatively demonstrate its assertion of error.”).
9 III. CONCLUSION
10 For the foregoing reasons, we vacate the district court’s judgment of dismissal
11 and remand for further proceedings consistent with this Opinion.
12 IT IS SO ORDERED.
13
14 MICHAEL D. BUSTAMANTE, Judge
15 WE CONCUR:
16
17 CYNTHIA A. FRY, Judge
18
19 LINDA M. VANZI, Judge
16
17