December 19, 2022- LM Insurance Corporation v. I Do Albuquerque, No. A-1-CA-39214

Corrections to this opinion/decision not affecting the outcome, at the Court's discretion, can occur up to the time of publication
with NM Compilation Commission. The Court will ensure that the electronic version of this opinion/decision is updated accordingly
in Odyssey.
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO	1
Opinion Number: ________________	2
Filing Date: December 19, 2022	3
LM INSURANCE CORPORATION, a	4
foreign corporation; DENNIS HEAVNER,	5
an individual; and BETH HEAVNER, an	6
individual,	7
Plaintiffs-Appellees,	8
v. 	No. A-1-CA-39214	9
I DO ALBUQUERQUE d/b/a KELLER	10
WILLIAMS ALBUQUERQUE, a foreign	11
limited partnership; CLAY TRAFTON,	12
an individual; and JOHN DOE	13
CORPORATION,	14
Defendants-Appellants.	15
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY	16
Nancy J. Franchini, District Judge	17
Stalter Law LLC	18
Kenneth H. Stalter	19
Albuquerque, NM	20
Marrs Griebel Law, Ltd.	21
Patrick Griebel	22
Albuquerque, NM	23
for Appellees Dennis and Beth Heavner	24
Court of Appeals of New Mexico
Filed 12/19/2022 10:19 AM

Cozen O’Connor	1
John K. Daly	2
Benjamin J. Migliorino	3
Denver, CO	4
for Appellee LM Insurance Corporation	5
Law Offices of Linnsey M. Amores	6
Kristin L. Groman	7
Linnsey M. Amores	8
Scottsdale, AZ	9
for Appellants	10

OPINION	1
BOGARDUS, Judge.	2
{1} 	Defendants I Do Albuquerque d/b/a Keller Williams Albuquerque (Keller	3
Williams) and Clay Trafton appeal the district court’s judgment in favor of Plaintiffs	4
LM Insurance Corporation, Dennis Heavner, and Beth Heavner (collectively,	5
Plaintiffs), concluding that Defendants breached statutory duties of care and	6
awarding damages as well as attorney fees and prejudgment interest. Defendants	7
argue (1) the district court erred in finding that Defendants owed a duty to confirm	8
the licensing status of the contractors Defendants recommend; (2) there was no	9
evidence of causation between Defendants’ failure to confirm the licensing status of	10
the contractor and the fire; (3) the district court erred in awarding attorney fees based	11
on 	the 	listing 	agreement; 	and 	(4) 	the 	district 	court 	improperly 	considered	12
confidential 	settlement 	offers 	made 	during 	mediation 	as 	the 	basis 	to 	award	13
prejudgment interest. We affirm.	14
BACKGROUND	15
{2} 	Defendant Trafton, employed by Keller Williams, signed a listing agreement	16
(the Listing Agreement) with Plaintiffs Dennis and Beth Heavner (collectively, the	17
Heavners) to be their transaction broker for the sale of their home, insured by	18
Plaintiff LM Insurance. The Heavners entered into a contract for the sale of the	19
home, but a home inspection revealed problems with portions of the roof. After	20

2
Dennis Heavner was unable to find a roofer available to address the problems,	1
Trafton volunteered to “take care of it.” Trafton did his own search for a roofer and	2
vouched for Ramon Perez, without confirming whether he was licensed or insured	3
as a roofer. Mr. Perez performed the work negligently, causing a fire that destroyed	4
the home. Plaintiffs filed a complaint for damages against Defendants that included	5
claims for breach of contract and negligence.	6
{3} 	After a bench trial, the district court concluded that Defendants owed statutory	7
duties independent of the Listing Agreement regarding the recommendation and	8
procurement of Mr. Perez, found Defendants 45 percent at fault, and awarded	9
damages, as well as attorney fees plus prejudgment interest to Plaintiffs. Defendants	10
appeal.	11
DISCUSSION	12
{4} 	On appeal, Defendants take issue with a number of the district court’s legal	13
conclusions as well as the lack of factual evidence supporting the district court’s	14
conclusion regarding causation. The district court’s legal conclusions must each be	15
supported by one or more findings of fact. McDonald v. Zimmer Inc., 2020-NMCA-	16
020, ¶ 23, 461 P.3d 930. We review the district court’s factual findings for	17
substantial evidence and its application of law to the facts de novo. Id.	18

3
I. 	The District Court Did Not Err in Concluding That Defendants Owed a	1
Duty of Care to Disclose the Licensing Status of Mr. Perez	2
{5} 	Defendants argue that they did not owe Plaintiffs a duty of care to investigate	3
whether Mr. Perez was properly licensed because Defendants did not enter into an	4
agency relationship with Plaintiffs, and because the Listing Agreement placed the	5
duty to investigate contractors solely on Plaintiffs. We disagree.	6
{6} 	“[T]he existence of a duty is a question of law, which we review de novo.”	7
Salas v. Mountain States Mut. Cas. Co., 2009-NMSC-005, ¶ 12, 145 N.M. 542, 202	8
P.3d 801. We must consider New Mexico’s legal precedent, statutes, or other	9
principles of law to determine whether transaction brokers—who are not agents and	10
owe no fiduciary duty—separately owe a duty of reasonable care regarding the	11
licensing status of contractors they recommend. See Azar v. Prudential Ins. Co. of	12
Am., 2003-NMCA-062, ¶ 43, 133 N.M. 669, 68 P.3d 909 (“The existence of a duty	13
. . . is answered by reference to legal precedent, statutes, and other principles	14
comprising the law.”). Thus, expert testimony purporting to address the professional	15
standard of care must account for statutes, regulations, and/or court rules that apply	16
to the conduct of transaction brokers. See Oakey v. May Maple Pharmacy, Inc.,	17
2017-NMCA-054, ¶ 27, 399 P.3d 939 (stating that a professional’s common law	18
duty to meet the standard of care must be measured against statutes, regulations, or	19
ethical rules that apply to a professional’s conduct).	20

4
{7} 	Transaction brokers provide real estate services without entering into an	1
agency or fiduciary relationship. 	See 	NMSA 1978, § 61-29-2(A)(16) (2014,	2
amended 2021); 16.61.19.9(A) NMAC (“The transaction broker relationship is a	3
non-fiduciary relationship.”). Even without the existence of an agency relationship,	4
however, transaction brokers are licensees who must perform all duties established	5
by the New Mexico Real Estate Commission (the Commission). NMSA 1978, § 61-	6
29-10.2(B) (2005). The Commission established reasonable care as a duty for	7
transaction brokers, defined as “conduct that a reasonable person would understand	8
to meet standards of professionalism and ethical conduct within a profession,	9
including but not limited to good faith, competence, trustworthiness, diligence, and	10
lawful 	behavior.” 	16.61.1.7(EE) 	NMAC 	(defining 	“reasonable 	care”); 1
11
16.61.19.8(A)(1) 	NMAC 	(establishing 	reasonable 	care 	as 	a 	broker 	duty);	12
16.61.19.9(A) NMAC (explaining that a transaction broker is a type of broker). To	13
meet this standard of reasonable care, Defendants must “apply the knowledge, care,	14
and 	skill 	of 	reasonably 	well-qualified 	professionals 	practicing 	under 	similar	15
circumstances.” 	Oakey, 	2017-NMCA-054, ¶ 25 (internal quotation marks and	16
citation omitted). “The professional standard of care generally must be established	17
by expert testimony.” Id.	18
1The Listing Agreement specifically incorporated the Commission Rules as
part of the agreement.

5
{8} 	Defendants and Plaintiffs each presented an expert witness. Defendants’	1
expert witness testified that there is no statute, code, regulation, or standard that	2
requires New Mexico transaction brokers to research the license or insurance status	3
of a potential vendor. Plaintiffs’ expert witness testified to the contrary, explaining	4
that recommending qualified people who are licensed and insured is a universal	5
standard in the real estate business. Plaintiffs’ expert additionally testified that the	6
standard of care in the industry was for a broker who has no information about	7
whether a vendor is licensed to disclose that lack of knowledge and to disclose	8
adverse information. Furthermore, a company representative for Keller Williams	9
testified that the company had an expectation to only recommend vendors who were	10
licensed and insured. After considering both lay and expert testimony, the district	11
court 	found 	that 	Trafton 	breached 	his 	professional 	duty 	of 	care 	in 	his	12
recommendation and procurement of Mr. Perez. New Mexico law imposes a duty of	13
reasonable care on transaction brokers, and the district court relied on expert and lay	14
testimony to determine that this duty includes disclosing the licensing status for	15
recommended contractors. We defer to the fact-finder on this determination. See	16
Sunnyland Farms, Inc. v. Cent. N.M. Elec. Coop., Inc., 2013-NMSC-017, ¶ 37, 301	17
P.3d 387 (“When there is a conflict in the testimony, we defer to the trier of fact.”	18
(alteration, internal quotation marks, and citation omitted)).	19

6
{9} 	Defendants 	first 	contend 	that 	“by 	requiring 	the 	transaction 	broker 	to	1
investigate and evaluate suggested vendors, the [district c]ourt’s ruling circumvents	2
[the L]egislature and the New Mexico Real Estate Commission Rules by turning	3
every transaction broker into a fiduciary.” We disagree. Defendants fail to provide	4
New Mexico authority supporting this contention. Instead, Defendants rely on a	5
federal district court case for the general proposition that the duties owed as a	6
transaction broker are those set forth in statute or regulation. In Sussman v. Stoner,	7
the district court for the District of Colorado held that Colorado law did not establish	8
a duty for a transaction broker to inform the seller of the rising value of their property	9
or the advantages of refusing a particular offer. 143 F. Supp. 2d 1232, 1238-39 (D.	10
Colo. 2001). The governing “statute clearly state[d] that the transaction-broker is not	11
an agent for either party” or “an advocate for the interests of any party.” Id. at 1238	12
(emphasis, internal quotation marks, and citation omitted). The court therefore	13
reasoned that such a duty would “effectively remove the transaction-broker from his	14
role as intermediary, and put him in the position of advocate for the seller.” Id. at	15
1239.	16
{10} 	Here, the district court applied the duty of reasonable care established by the	17
Commission’s Rules, which does not affect the transaction broker’s role as an	18
intermediary. The duty to confirm licensing in this case does not provide an	19
advantage to one party over the other in a real estate transaction, as was the case in	20

7
Sussman. See id. Rather, this duty is beneficial to both parties by encouraging the	1
reliance on licensed contractors who will not, presumably, cause damage to the	2
property. The purpose of removing fiduciary duties and agency status from	3
transaction brokers is not to eliminate standards of reasonable care, but rather to	4
avoid conflicts of interest that arise when a broker is an agent for both parties to the	5
transaction. See 16.61.19.8(A)(1) NMAC (establishing a duty of reasonable care on	6
transaction brokers); see also 16.61.19.8(B)(7) NMAC (prohibiting the broker from	7
disclosing certain information that would give either side a negotiation advantage).	8
The lack of an agency relationship does not alter the duty of reasonable care for	9
transaction brokers, and the district court did not err by finding that transaction	10
brokers have a duty of care to disclose the licensing status of contractors they	11
recommend.	12
{11} 	Defendants next contend that the Listing Agreement identified Plaintiffs as	13
the sole party with the duty to investigate and evaluate vendors. We disagree that the	14
Listing Agreement’s language supports this contention. The Listing Agreement	15
states that if a transaction broker “recommends a . . . contractor . . . to [Plaintiffs] for	16
any 	purpose, 	such 	recommendation 	shall 	be 	independently 	investigated 	and	17
evaluated by [Plaintiffs.]” The Listing Agreement clearly creates an obligation for	18
Plaintiffs 	to 	independently 	investigate 	and 	evaluate 	a 	contractor 	Defendants	19
recommend, a contractual duty accounted for by the district court’s determination	20

8
that Plaintiffs bore 5 percent of the fault. The Listing Agreement, however, is silent	1
as 	to 	Defendants’ 	duties 	when 	recommending 	contractors; 	it 	does 	not 	limit	2
Defendants’ duty of reasonable care, nor does it change Defendants’ duty to disclose	3
the licensing of recommended contractors. Concluding that the Listing Agreement	4
relieves Defendants of their reasonable care duty established by the Commission	5
Rules would create a new agreement for the parties, which we cannot do. See Ponder	6
v. State Farm Mut. Auto. Ins. Co., 2000-NMSC-033, ¶ 11, 129 N.M. 698, 12 P.3d	7
960 (noting that “absent an ambiguity, a court is bound to interpret and enforce a	8
contract’s clear language and cannot create a new agreement for the parties” (internal	9
quotation marks and citation omitted)). We find no error, therefore, in the district	10
court’s ruling on this issue.	11
II. 	The District Court Did Not Err in Finding Causation	12
{12} 	Defendants next argue “[t]here was no evidence at trial that connected the	13
alleged lack of insurance and licensing to the negligence.” However, Defendants	14
failed to set forth a specific attack on any finding of facts and failed to challenge any	15
specific evidence the district court relied on for its conclusion on causation. See	16
Lopez v. N.M. Dep’t of Tax’n & Revenue, 1997-NMCA-115, ¶ 5, 124 N.M. 270, 949	17
P.2d 284 (“Unchallenged findings of fact are binding on appeal.”); see also Headley	18
v. Morgan Mgmt. Corp., 2005-NMCA-045, ¶ 15, 137 N.M. 339, 110 P.3d 1076	19
(“We will not review unclear arguments, or guess at what [a party’s] arguments	20

9
might be.”). We therefore rely on the district court’s factual findings and disagree	1
with Defendants’ argument that the element of causation was not supported by the	2
evidence.	3
{13} 	“An act or omission may be deemed a ‘proximate cause’ of an injury if it	4
contributes to bringing about the injury, if the injury would not have occurred	5
without it, and if it is reasonably connected as a significant link to the injury.” Talbott	6
v. Roswell Hosp. Corp., 2005-NMCA-109, ¶ 34, 138 N.M. 189, 118 P.3d 194; see	7
UJI 13-305 NMRA (defining causation). “Unless reasonable minds cannot differ,	8
issues of negligence and causation are generally questions for the fact[-]finder.”	9
Reichert v. Atler, 1992-NMCA-134, ¶ 19, 117 N.M. 628, 875 P.2d 384, aff’d, 1994-	10
NMSC-056, 117 N.M. 623, 875 P.2d 379.	11
{14} 	The district court found, based on Defendants’ expert’s testimony, that	12
“licensure to perform roofing work is a reasonable proxy for basic competence on	13
the part of a vendor to perform work . . . safely.” Defendants’ expert also testified,	14
and the district court found, that a vendor having insurance provides a remedy for	15
property owners if the vendor causes harm to the property. The parties stipulated	16
that instead Plaintiffs’ insurer paid significant sums resulting from the fire caused	17
by the contractor, and Plaintiffs testified that they additionally paid more than	18
$60,000 out of pocket. Further, Plaintiffs testified that had they known that the	19
contractor was not licensed or insured, they would not have hired him. This evidence	20

10
was supported by the record and was sufficient for the district court, as the fact-	1
finder, to reasonably conclude that the fire and Plaintiffs’ damages were a natural	2
and continuous result from Defendants’ recommendation of an unqualified roofer.	3
See Cross v. City of Clovis, 1988-NMSC-045, ¶ 18, 107 N.M. 251, 755 P.2d 589 (“A	4
proximate cause requires only a result that proceeds in a natural and continuous	5
sequence from the act or omission in question.”). We will not substitute our	6
judgment for that of the district court. See Las Cruces Pro. Fire Fighters v. City of	7
Las Cruces, 1997-NMCA-044, ¶ 12, 123 N.M. 329, 940 P.2d 177 (stating that “we	8
will 	not 	reweigh 	the 	evidence 	nor 	substitute 	our 	judgment 	for 	that 	of 	the	9
fact[-]finder”).	10
III. 	The District Court Did Not Err in Awarding Attorney Fees	11
{15} 	Defendants contend that the language of the Listing Agreement does not	12
include attorney fees for litigation based on Defendants’ negligence. Again, we	13
disagree with Defendants’ argument.	14
{16} 	“While a [district] court has broad discretion when awarding attorney fees,	15
that discretion is limited by any applicable contract provision.” Fort Knox Self	16
Storage, Inc. v. W. Techs., Inc., 2006-NMCA-096, ¶ 29, 140 N.M. 233, 142 P.3d 1.	17
We, therefore, examine the language of the contract to determine the parties’	18
intentions. See id. The meaning of a contract is an issue of law that we review de	19

11
novo. Aspen Landscaping, Inc. v. Longford Homes of N.M., Inc., 2004-NMCA-063,	1
¶ 21, 135 N.M. 607, 92 P.3d 53.	2
{17} 	The Listing Agreement states, “Should any aspect of this Agreement result in	3
arbitration or litigation, the prevailing party of such action, shall be entitled to an	4
award of reasonable attorney[] fees and court costs.” Therefore, the issue in this case	5
is whether “any aspect of this Agreement” includes Defendants’ negligence.	6
{18} 	New Mexico courts interpreted similar contractual language in Montoya v.	7
Villa Linda Mall, Ltd., 1990-NMSC-053, ¶ 7, 110 N.M. 128, 793 P.2d 258	8
(interpreting “relating to the provisions of this lease, or any default hereunder”	9
(internal quotation marks omitted)), and Fort Knox Self Storage, Inc., 2006-NMCA-	10
096, ¶ 28 (interpreting “in connection with this [a]greement” (internal quotation	11
marks omitted)). In both cases, our courts interpreted the contract language to be	12
“broad enough” to include tort claims. Montoya, 1990-NMSC-053, ¶ 8; Fort Knox	13
Self Storage, Inc., 2006-NMCA-096, ¶ 32. Similarly, we have previously found that	14
the contractual language “any aspect of th[e listing] agreement” is broad enough to	15
include tort claims, if the claims were brought “in connection with the parties’	16
agreement.” Varga v. Ferrell, 2014-NMCA-005, ¶¶ 3, 15, 509 P.3d 610 (alteration,	17
internal quotation marks, and citation omitted) (concluding that negligence and fraud	18
claims can be “aspects” of a contractual agreement).	19

12
{19} 	The district court properly found that	1
[b]ut for the Listing Agreement, there would not have been litigation	2
between these parties. If there had not been [the L]sting agreement,	3
Plaintiffs Heavner and Defendant Trafton would have no reason to	4
work together to get the Soula home sold. If there had not been [the	5
L]isting agreement, Defendant Trafton would have no reason to take	6
the lead in searching for a contractor to complete the roofing work. This	7
litigation was tied to, related to, and in connection with many aspects	8
of the Listing Agreement.	9
Thus, the evidence supported a connection between the claims and “an aspect of”	10
the Listing Agreement. As we have noted, one aspect of the Listing Agreement	11
specifically 	incorporated 	the 	Commission 	rules, 	which 	included 	the 	duty 	of	12
reasonable care that the district court determined Defendants breached. Just as in	13
Montoya, this provision “sets forth the obligations and rights of the parties as they	14
pertain to” an aspect of the contract. 1990-NMSC-053, ¶ 8. We agree with the district	15
count’s findings and conclude that Plaintiffs’ negligence claims are related to the	16
parties’ Listing Agreement and resulted in litigation, as contemplated by the attorney	17
fees provision. Thus, we find no error in the district court’s award of attorney fees.	18
IV. 	Defendants Failed to Preserve the Issue Regarding the District Court	19
Using Confidential Mediation Information	20
{20} 	Finally, Defendants argue that the district court improperly considered	21
confidential 	settlement 	offers 	made 	during 	mediation 	as 	the 	basis 	to 	award	22
prejudgment interest. However, Defendants failed to preserve this issue in the	23
district court, see Rule 12-321(A) NMRA (requiring that, for preservation, “it must	24

13
appear that a ruling or decision by the [district] court was fairly invoked”), and even	1
if the issue was preserved, Defendants fail to develop how Plaintiffs’ disclosure of	2
settlement offers in the context of a request for prejudgment interest falls within the	3
scope of the Mediation Procedures Act, NMSA 1978, §§ 44-7B-1 to -6 (2007).	4
{21} 	Defendants did not raise the issue of confidentiality in their response to	5
Plaintiffs’ 	motion 	for 	prejudgment 	interest. 	Instead, 	Defendants 	restated 	the	6
settlement offers in their response and conceded that the settlement offers described	7
in Plaintiffs’ motion were accurate. Defendants raised the issue of confidentiality	8
only later in a request to seal Plaintiffs’ motion for attorney fees, a request included	9
as part of their response to Plaintiffs’ motion. The district court, however, did not	10
consider the request to seal because Defendants violated Rule 1-007.1(E) NMRA by	11
failing to file the request to seal separately from their response to the motion for	12
attorney 	fees. 	Defendants’ 	failure 	to 	raise 	the 	issue 	in 	the 	district 	court 	is	13
unsurprising, given that the district court must consider the settlement offers that	14
were exchanged in order to exercise its discretion to award prejudgment interest. See	15
NMSA 1978, § 56-8-4(B)(2) (2004) (giving court discretion to award interest from	16
the date the complaint is served upon consideration of, among other things, “a	17
reasonable and timely offer of settlement” by the defendant).Thus, Defendants failed	18
to preserve this issue, first by not timely raising it in response to Plaintiffs’ motion	19
for prejudgment interest, and again, by failing to comply with Rule 1-007.1(E) and	20

14
filing a separate motion for the district court to consider. Thus, Defendants failed to	1
make a timely and proper objection regarding this issue, and the district court did	2
not have an opportunity to rule on it. See Murken v. Deutsche Morgan Grenfell, Inc.,	3
2006-NMCA-080, ¶ 10, 140 N.M. 68, 139 P.3d 864 (requiring parties to “make a	4
timely objection that specifically apprises the trial court of the nature of the claimed	5
error and invokes an intelligent ruling thereon” in order to preserve an issue for	6
appeal (internal quotation marks and citation omitted)). “Issues not properly raised	7
in the [district] court and on which a ruling by the [district] court was not properly	8
invoked will not be considered on appeal.” In re Last Will & Testament of Skarda,	9
1975-NMSC-031, ¶ 30, 88 N.M. 130, 537 P.2d 1392.	10
{22} 	Even if the issue was preserved, Defendants fail to develop an argument to	11
explain how their settlement offer falls within the scope of the Mediation Procedures	12
Act. Under the Mediation Procedures Act, only “mediation communications” are	13
confidential. 	See 	§ 	44-7B-4. 	“[M]ediation 	communication” 	is 	defined 	as 	“a	14
statement, whether oral or in a record or verbal or nonverbal, that occurs during a	15
mediation or is made for purposes of considering, conducting, participating in,	16
initiating, continuing or reconvening a mediation or retaining a mediator.” Section	17
44-7B-2(B). Defendants cite no evidence for their contention that their settlement	18
offer in response to the mediator’s number was a “mediation communication.”	19
Defendants point to no signed mediation agreement nor to an order requiring the	20

15
parties to mediate. See § 44-7B-3(A) (stating that the Mediation Procedures Act	1
applies to mediations required by “statute or court or administrative agency rule,” or	2
by party agreement evidenced by a signed mediation agreement). Although the	3
district court found that Defendants’ settlement offer was “apparently in response to	4
a mediator’s number of $164,000,” Defendants do not explain how this finding alone	5
would establish that the settlement offer was confidential pursuant to the Mediation	6
Procedures Act. Defendants’ argument on this issue is completely undeveloped, and	7
we will not consider it further. See Elane Photography, LLC v. Willock, 2013-	8
NMSC-040, ¶ 70, 309 P.3d 53. We therefore find no error in the district court’s	9
award of prejudgment interest.	10
CONCLUSION	11
{23} 	For the foregoing reasons, we affirm.	12
{24} 	IT IS SO ORDERED.	13
_________________________________	14
KRISTINA BOGARDUS, Judge	15
WE CONCUR:	16
_________________________________	17
JACQUELINE R. MEDINA, Judge	18
_________________________________	19
KATHERINE A. WRAY, Judge	20