{ "id": 1592804, "name": "YATES EXPLORATION, INC., a New Mexico corporation, Cibola Energy Corporation, a New Mexico corporation, OTEC, a California corporation, Lynn Lucas, Thomas N. Jones, Roger V. Eaton, Charles M. Saggio, Amy N. Saggio, Raymond L. Surrette, Agnes A. Surrette, Raymond L. Surrette, Jr., and May T. Missec, on behalf of themselves and all others similarly situated, Plaintiffs, v. VALLEY IMPROVEMENT ASSOCIATION, INC., a New Mexico corporation, formerly known as Horizon Communities Improvement Association of New Mexico, Inc., Defendant; VALLEY IMPROVEMENT ASSOCIATION, INC., a New Mexico corporation, Third-Party-Plaintiff-Appellant, v. HORIZON CORPORATION, Third-Party-Defendant-Appellee, v. Weldon BURRIS, Third-Party Defendant", "name_abbreviation": "Yates Exploration, Inc. v. Valley Improvement Ass'n", "decision_date": "1989-05-04", "docket_number": "No. 17790", "first_page": "405", "last_page": "410", "citations": [ { "type": "official", "cite": "108 N.M. 405" }, { "type": "parallel", "cite": "773 P.2d 350" } ], "court": { "name_abbreviation": "N.M.", "id": 8835, "name": "Supreme Court of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "356 N.E.2d 207", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1976, "pin_cites": [ { "parenthetical": "preferring to call such a dismissal \"clear error\" outside the court's discretionary power" } ], "opinion_index": 0 }, { "cite": "265 Ind. 514", "category": "reporters:state", "reporter": "Ind.", "case_ids": [ 1812933 ], "year": 1976, "pin_cites": [ { "parenthetical": "preferring to call such a dismissal \"clear error\" outside the court's discretionary power" } ], "opinion_index": 0, "case_paths": [ "/ind/265/0514-01" ] }, { "cite": "339 F.2d 560", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 883877 ], "year": 1964, "opinion_index": 0, "case_paths": [ "/f2d/339/0560-01" ] }, { "cite": "157 Ariz. 256", "category": "reporters:state", "reporter": "Ariz.", "case_ids": [ 1522453 ], "weight": 2, "year": 1988, "opinion_index": 0, "case_paths": [ "/ariz/157/0256-01" ] }, { "cite": "96 N.M. 92", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1577340 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/96/0092-01" ] }, { "cite": "735 F.2d 986", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 580975 ], "opinion_index": 0, "case_paths": [ "/f2d/735/0986-01" ] }, { "cite": "88 N.M. 162", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2840624 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/88/0162-01" ] }, { "cite": "85 N.M. 374", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2776413 ], "weight": 2, "year": 1973, "opinion_index": 0, "case_paths": [ "/nm/85/0374-01" ] }, { "cite": "80 N.M. 432", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5358958 ], "weight": 2, "year": 1969, "pin_cites": [ { "parenthetical": "\"A common example [of the right to indemnity] is a case where a blameless employer recovers from a negligent employee, after the employer has been held liable to the injured third person upon the theory of respondeat superior\"" }, { "parenthetical": "\"A common example [of the right to indemnity] is a case where a blameless employer recovers from a negligent employee, after the employer has been held liable to the injured third person upon the theory of respondeat superior\"" } ], "opinion_index": 0, "case_paths": [ "/nm/80/0432-01" ] }, { "cite": "77 N.M. 730", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2809639 ], "weight": 2, "year": 1967, "opinion_index": 0, "case_paths": [ "/nm/77/0730-01" ] }, { "cite": "106 N.M. 243", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 708805 ], "weight": 2, "year": 1987, "pin_cites": [ { "parenthetical": "homeowner's suit for developer's failure to complete project as promised" }, { "parenthetical": "homeowner's suit for developer's failure to complete project as promised" } ], "opinion_index": 0, "case_paths": [ "/nm/106/0243-01" ] }, { "cite": "586 P.2d 1207", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1978, "opinion_index": 0 }, { "cite": "21 Wash.App. 886", "category": "reporters:state", "reporter": "Wash. App.", "case_ids": [ 469108 ], "year": 1978, "opinion_index": 0, "case_paths": [ "/wash-app/21/0886-01" ] }, { "cite": "237 S.E.2d 120", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "opinion_index": 0 }, { "cite": "218 Va. 257", "category": "reporters:state", "reporter": "Va.", "case_ids": [ 2130567 ], "year": 1977, "opinion_index": 0, "case_paths": [ "/va/218/0257-01" ] }, { "cite": "95 N.M. 20", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1575469 ], "weight": 5, "year": 1980, "pin_cites": [ { "parenthetical": "dismissal proper where third-party complaint introduced only collateral issues not dependent upon resolution of issues in main claim" }, { "parenthetical": "dismissal proper where third-party complaint introduced only collateral issues not dependent upon resolution of issues in main claim" }, { "page": "21" }, { "page": "365" } ], "opinion_index": 0, "case_paths": [ "/nm/95/0020-01" ] }, { "cite": "103 N.M. 689", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 711392 ], "weight": 2, "year": 1985, "pin_cites": [ { "parenthetical": "allocation of comparative negligence among concurrent tortfeasors assures the complete disposition of the underlying suit" }, { "parenthetical": "allocation of comparative negligence among concurrent tortfeasors assures the complete disposition of the underlying suit" } ], "opinion_index": 0, "case_paths": [ "/nm/103/0689-01" ] }, { "cite": "105 N.M. 586", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1598915 ], "weight": 8, "year": 1987, "pin_cites": [ { "page": "587" }, { "page": "1271" }, { "page": "587" }, { "page": "1270" } ], "opinion_index": 0, "case_paths": [ "/nm/105/0586-01" ] }, { "cite": "514 F.2d 747", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 553357 ], "opinion_index": 0, "case_paths": [ "/f2d/514/0747-01" ] }, { "cite": "812 F.2d 640", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1694813 ], "opinion_index": 0, "case_paths": [ "/f2d/812/0640-01" ] } ], "analysis": { "cardinality": 866, "char_count": 15876, "ocr_confidence": 0.762, "pagerank": { "raw": 8.513099474442512e-08, "percentile": 0.48687568271354814 }, "sha256": "67ffd5d4b10aead10ab1b41a1a2211fbc018dfd5dce731fc0bd2d7e6c1f1bb86", "simhash": "1:97e2723d6d731b67", "word_count": 2525 }, "last_updated": "2023-07-14T16:06:26.206257+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "STOWERS and BACA, JJ., concur." ], "parties": [ "YATES EXPLORATION, INC., a New Mexico corporation, Cibola Energy Corporation, a New Mexico corporation, OTEC, a California corporation, Lynn Lucas, Thomas N. Jones, Roger V. Eaton, Charles M. Saggio, Amy N. Saggio, Raymond L. Surrette, Agnes A. Surrette, Raymond L. Surrette, Jr., and May T. Missec, on behalf of themselves and all others similarly situated, Plaintiffs, v. VALLEY IMPROVEMENT ASSOCIATION, INC., a New Mexico corporation, formerly known as Horizon Communities Improvement Association of New Mexico, Inc., Defendant. VALLEY IMPROVEMENT ASSOCIATION, INC., a New Mexico corporation, Third-Party-Plaintiff-Appellant, v. HORIZON CORPORATION, Third-Party-Defendant-Appellee, v. Weldon BURRIS, Third-Party Defendant." ], "opinions": [ { "text": "OPINION\nSCARBOROUGH, Justice.\nThis suit involves a dispute between a group of persons owning certain subdivision lots, the civic association organized to represent them and the development corporation associated with the subdivisions. The lots were purchased in anticipation of rising residential and commercial development in an area which remains essentially unimproved and unoccupied. Defendant and third-party plaintiff, Valley Improvement Association, Inc. (VIA) appeals from the district court the dismissal of its third-party complaint against appellee Horizon Corporation (Horizon). We affirm.\nFactual Background. Plaintiffs in the underlying class action lawsuit are past and present owners of lots in two subdivisions located in Valencia County, New Mexico. The lots were platted and promoted by Horizon, a land development corporation. VIA is the successor in interest to Horizon Communities Improvement Association (HCIA), a New Mexico nonprofit corporation formed in 1969, with Horizon\u2019s involvement, and intended to be a civic organization representing the lot owners. HCIA was charged with \u201cpromotpng] the common good and social welfare\u201d of the subdivision landowners. Until about 1983 one or more Horizon officers or representatives served as members of the HCIA/VIA board of directors.\nAfter the formation of HCIA, Horizon deeded all of the subdivision lots to HCIA who in turn deeded the properties back to Horizon subject to certain indentures. Then, between 1969 and 1981, Horizon sold thousands of individual lots subject to the indentures which empowered HCIA/VIA to assess and collect annual charges on each lot. The collected funds were to be used for the benefit of the subdivisions.\nPlaintiffs in the underlying suit allege that while funds in excess of $15,000,000 have been collected by HCIA/VIA, only negligible amounts have actually been used to benefit the properties. Apparently little or no utility services, buildings, or improved roads exist within the two subdivisions which remain undeveloped. The directors of HCIA/VIA are said to have used the funds unlawfully. The assessment methods themselves are said to be irrational and arbitrary. Enforcement action by HCIA/VIA is said to be selective.\nAt the same time HCIA/VIA has filed foreclosure actions upon hundreds of landowners for nonpayment of the assessments. Also, a large number of the lots have been sold by the State of New Mexico for unpaid taxes. The plaintiffs claim there is little, if any, market for the resale of these lots due, in large part, to the continued existence of the indentures. The plaintiffs allege the directors of VIA have so manipulated the association meetings and elections that the voting power of the membership is illusory leaving the members with no effective way to eliminate or change the assessments other than legal action.\nIn their complaint against VIA, the plaintiffs listed a number of potential remedies including: the dissolution of VIA; an accounting for all of the assessments VIA has received; the invalidation of the indentures; turning over the assessment funds to the plaintiffs, to a trustee, or to another nonprofit corporation formed under the direction of the court; the return of foreclosed upon properties to their former owners; and enjoining VIA from paying the attorney fees of its officers and directors in this or related suits.\nThe plaintiffs did not join the original development corporation, Horizon, in this suit. In a separate action, the Federal Trade Commission (FTC) in May 1981, found that Horizon\u2019s representations to the public that its land was an excellent, financially risk-free, short-term investment were false, misleading and deceptive, and in violation of federal law. The FTC severely restricted further promotion and sales by Horizon and ordered that Horizon spend not less than $45,000,000 for improvements in the subdivisions within twenty years. In calling for the dissolution of VIA in the present suit, the plaintiffs restate the findings of the FTC, recall the central role of HCIA and the indentures in Horizon\u2019s sales program, and make the statement that Horizon\u2019s actions are attributable \u201cby operation of law\u201d to HCIA/VIA. Dissolution is also requested on the basis of VIA\u2019s failure of purpose, and due to changed circumstances.\nThe district court denied VIA\u2019s motion to join Horizon as a necessary party to this action. Later VIA proceeded to name Horizon as a defendant in a third-party complaint seeking contribution, indemnity, and any other available form of relief from Horizon. The third-party complaint was dismissed on Horizon\u2019s motion.\nImpleader under SCRA 1986, 1-014(A). The issue on appeal is whether VIA stated a third-party claim against Horizon under Rule 1-014(A) of the New Mexico Rules of Civil Procedure. Rule 1-014(A) permits a defendant to implead a person \u201cwho is or may be liable to him for all or part of the plaintiff's claim against him.\u201d SCRA 1986, 1-014(A). To come within the scope of Rule 1-014(A), the third-party\u2019s potential liability must in some way be dependent upon the outcome of the main claim against the defendant. 6 C. Wright & A. Miller, Federal Practice and Procedure \u00a7 1446 (1971) (discussing Fed.R.Civ.P. 14, the federal counterpart to SCRA 1986, 1-014); United States v. Olavarrieta, 812 F.2d 640 (11th Cir.1987); Southeast Mortgage Co. v. Mullins, 514 F.2d 747 (5th Cir.1975). Traditionally, derivative or secondary liability to the defendant, on the basis of indemnity, contribution, or some other theory, is considered to be essential. Grain Dealers Mutual Insurance Co. v. Reed, 105 N.M. 586, 734 P.2d 1269 (1987); see also 6 C. Wright & A. Miller, Federal Practice and Procedure \u00a7 1446 (1971). We have, however, relaxed the traditional rule in negligence suits in order to allow the continued impleader of concurrent tortfeasors whose liability for contribution was abolished with the adoption of comparative negligence. Tipton v. Texaco, Inc., 103 N.M. 689, 712 P.2d 1351 (1985) (allocation of comparative negligence among concurrent tortfeasors assures the complete disposition of the underlying suit).\nStill, the requirement that the third-party\u2019s potential liability be dependent upon the outcome of the main claim remains the general rule and the central concept involved in third-party practice. The rule was not intended to be used to resolve every controversy between the defendant and a third-party which may have some relationship with the transaction at issue in the original complaint. Grain Dealers, 105 N.M. at 587, 734 P.2d at 1271; see also First Nat\u2019l Bank of Santa Fe v. Espinoza, 95 N.M. 20, 618 P.2d 364 (1980) (dismissal proper where third-party complaint introduced only collateral issues not dependent upon resolution of issues in main claim). Nor does the rule create any new right of action. Impleader is only a procedural device. In the event that the plaintiff\u2019s suit is successful, the right to relief in favor of a third-party plaintiff must exist under principles of substantive law. 6 C. Wright & A. Miller, Federal Practice and Procedure, \u00a7\u00a7 1442, 1446 (1971). But whether a third-party claim is predicated upon express or implied indemnity, contribution, breach of warranty, subrogation, negligence or some other theory is irrelevant. Id. at \u00a7 1446. However, if there is no right to relief under the substantive law, impleader is improper. Id.; see also Valley Landscape Co. v. Rolland, 218 Va. 257, 237 S.E.2d 120 (1977); Brown v. Spokane County Fire Protection Dist. No. 1, 21 Wash.App. 886, 586 P.2d 1207 (1978).\nLack of a substantive basis for relief. The trial court dismissed the third-party complaint concluding that the plaintiffs \u201cdo not seek any relief against [VIA] for which a claim for contribution or indemnity exists.\u201d These two legal theories were the only ones argued to the trial court. We are not persuaded on appeal that VIA has shown that in the event the plaintiffs\u2019 suit is successful, VIA has a right to relief from Horizon.\nVIA argues that had the plaintiffs sued Horizon directly, they would have had little trouble in stating a claim, see, e.g., Register v. Roberson Constr. Co., 106 N.M. 243, 741 P.2d 1364 (1987) (homeowner\u2019s suit for developer\u2019s failure to complete project as promised), and, at the same time, VIA has standing to assert such a claim on behalf of the association membership. See, e.g., Ute Park Summer Homes Ass\u2019n v. Maxwell Land Grant Co., 77 N.M. 730, 427 P.2d 249 (1967). However, neither of these factors establishes the secondary liability required under the rules of impleader. The third-party\u2019s potential liability to the plaintiff, or his potential liability to the defendant which is not dependent upon the resolution of the main claim, do not form the basis for impleader. See Grain Dealers, 105 N.M. at 587, 734 P.2d at 1270; Espinosa, 95 N.M. at 21, 618 P.2d at 365.\nNext, VIA characterizes the plaintiffs\u2019 complaint as largely a recitation of the plaintiffs\u2019 grievances against Horizon, and makes much of the charge in the plaintiffs\u2019 complaint that Horizon\u2019s misdeeds are attributable to HCIA/VIA \u201cby operation of law.\u201d VIA\u2019s argument on this point seems to be that since the plaintiffs seek to impute Horizon\u2019s supposed liability to VIA, VIA is entitled to implead Horizon, the actual wrongdoer, under principles of indemnification. See Rio Grande Gas Co. v. Stahmann Farms, Inc., 80 N.M. 432, 457 P.2d 364 (1969) (\u201cA common example [of the right to indemnity] is a case where a blameless employer recovers from a negligent employee, after the employer has been held liable to the injured third person upon the theory of respondeat superior\u201d). However, neither the plaintiffs nor VIA have ever articulated a legal theory by which VIA can be made liable for Horizon\u2019s misdeeds. Unsupported legal conclusions need not be accepted by this Court. See C & H Constr. & Paving, Inc. v. Foundation Reserve Ins. Co., 85 N.M. 374, 512 P.2d 947 (1973); McNutt v. New Mexico State Tribune Co., 88 N.M. 162, 538 P.2d 804 (Ct.App.1975). Since there is no basis for claiming that the plaintiffs can impute liability to VIA, this argument in support of the third-party claim must fail.\nFinally, the relief the plaintiffs have requested is significant: the dissolution of VIA, the invalidation of the indentures, or the return of the assessment funds. VIA asserts that if it is enjoined from collecting the assessments, or ordered to turn them over to another person, Horizon should be required to compensate VIA with money damages. The substantive basis for this asserted right, however, has not been articulated by VIA. For instance, we have been cited to no authority to show that the termination of a nonprofit corporation for its failure of purpose, changed circumstances, or the role it may have independently played in the machinations of third persons who caused its incorporation, gives rise to a claim for relief against those third persons. Perhaps VIA may later establish the basis for such a claim. Cf. Tate v. Frey, 735 F.2d 986 (6th Cir.1984) (Third party action against state corrections officials proper in a civil rights suit against county officials by prison inmates seeking injunctive relief against overcrowding, where the responsibility under state law for the incarceration of felons rests with the state, and where without joinder of state officials complete relief would be impossible to grant). The dismissal of the third-party claim has no effect on VIA\u2019s right to bring such a suit. We conclude here simply that VIA, at this point, has not presented this Court with any legal theory which would form the basis of a right to relief under the substantive law. Impleader should be denied when the substantive basis for relief appears doubtful to the court, and where the presence of a third party would complicate rather than simplify the determination of the case. See 6 C. Wright & A. Miller, Federal Practice and Procedure \u00a7\u00a7 1443, 1446, 1451 (1971); 3 J. Moore, Moore\u2019s Federal Practice \u00b6\u00b6 14.05, 14.10 (2d ed. 1988). The acknowledged impact on this suit of impleading Horizon would be to further complicate and confuse already protracted and complex multiparty litigation.\nWe wish to emphasize that the justification offered for the relief which the plaintiffs have requested is based almost entirely on the active misconduct of HCIA/VIA and its board of directors. And neither VIA, nor the plaintiffs in their complaint, allege that Horizon actually controlled HCIA or VIA, that HCIA or VIA acted as Horizon\u2019s agent in these matters. It seems that whatever role HCIA/VIA may have played in Horizon\u2019s development scheme, it still played that role as an independent nonprofit corporation for which Horizon bore no responsibility. Even if the relationship between Horizon and HCIA/VIA can be said to be one of principal and agent (a matter we do not decide), an agent has no claim for indemnity where he is the party primarily at fault. See Dessauer v. Memorial Gen. Hosp., 96 N.M. 92, 628 P.2d 337 (Ct.App.1981); see also, 42 C.J.S. Indemnity \u00a7 20 (1944).\nDiscretion to dismiss a third-party claim. VIA also asserts that since the third-party claim was filed within 10 days after VIA served its original answer, the trial court was without discretion to dismiss the claim. It is true that the filing of third-party complaint is a matter of right, not dependent upon the leave of court, if accomplished within the time specified in Rule 1-014. The provision was intended to encourage the defendant to implead third parties as early as possible. However, any party may move to strike the third-party claim, SCRA 1986, 1-014, and whether or not to dismiss an otherwise proper third-party complaint timely filed continues to be a question addressed to the sound discretion of the trial court. See 6 C. Wright & A. Miller, Federal Practice and Procedure, \u00a7 1443 (discussing grounds for dismissal or severence of valid third-party claims); see also Nikolous v. Superior Court, 157 Ariz. 256, 756 P.2d 925 (1988). To refuse to dismiss a third-party complaint which did not meet the standards of Rule 1-014, however, would be an abuse of discretion, Grain Dealers Mutual Ins. Co. v. Reed, 105 N.M. 586, 734 P.2d 1269 (1987), as would be a dismissal based upon an erroneous view of the substantive law. Southern Ry. v. Fox, 339 F.2d 560 (1964); see also City of Elkhart v. Middleton, 265 Ind. 514, 356 N.E.2d 207 (1976) (preferring to call such a dismissal \u201cclear error\u201d outside the court\u2019s discretionary power).\nFor the above reasons, we hold that the trial court did not abuse its discretion in dismissing the third-party complaint. The judgment of the trial court is affirmed.\nIT IS SO ORDERED.\nSTOWERS and BACA, JJ., concur.", "type": "majority", "author": "SCARBOROUGH, Justice." } ], "attorneys": [ "Lanphere, McBride & Gross, Eric D. Lanphere, Rodey, Dickason, Sloan, Akin & Robb, William S. Dixon, James O. Browning, Charles K. Purcell, Albuquerque, for third-party-plaintiff-appellant.", "Modrall, Sperling, Roehl, Harris & Sisk, Kevin T. Riedel, J. Douglas Foster, Albuquerque, for third-party-defendant-appellee Horizon." ], "corrections": "", "head_matter": "773 P.2d 350\nYATES EXPLORATION, INC., a New Mexico corporation, Cibola Energy Corporation, a New Mexico corporation, OTEC, a California corporation, Lynn Lucas, Thomas N. Jones, Roger V. Eaton, Charles M. Saggio, Amy N. Saggio, Raymond L. Surrette, Agnes A. Surrette, Raymond L. Surrette, Jr., and May T. Missec, on behalf of themselves and all others similarly situated, Plaintiffs, v. VALLEY IMPROVEMENT ASSOCIATION, INC., a New Mexico corporation, formerly known as Horizon Communities Improvement Association of New Mexico, Inc., Defendant. VALLEY IMPROVEMENT ASSOCIATION, INC., a New Mexico corporation, Third-Party-Plaintiff-Appellant, v. HORIZON CORPORATION, Third-Party-Defendant-Appellee, v. Weldon BURRIS, Third-Party Defendant.\nNo. 17790.\nSupreme Court of New Mexico.\nMay 4, 1989.\nLanphere, McBride & Gross, Eric D. Lanphere, Rodey, Dickason, Sloan, Akin & Robb, William S. Dixon, James O. Browning, Charles K. Purcell, Albuquerque, for third-party-plaintiff-appellant.\nModrall, Sperling, Roehl, Harris & Sisk, Kevin T. Riedel, J. Douglas Foster, Albuquerque, for third-party-defendant-appellee Horizon." }, "file_name": "0405-01", "first_page_order": 443, "last_page_order": 448 }