April 22, 2020- High Desert Bicycles, Inc. v. New Mexico Taxation & Revenue Department, No. A-1-CA-37580

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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 HIGH DESERT BICYCLES, INC.,
3 Protestant-Appellee,
4 v. No. A-1-CA-37580
5 NEW MEXICO TAXATION AND
6 REVENUE DEPARTMENT,
7 Respondent-Appellant.
8 APPEAL FROM THE ADMINISTRATIVE HEARINGS OFFICE
9 Ignacio V. Gallegos, Hearing Officer
10 Betzer, Roybal & Eisenberg, P.C.
11 Benjamin C. Roybal
12 Albuquerque, NM
13 Sanchez, Mowrer & Desiderio
14 Robert J. Desiderio
15 Issac Emmanuel
16 Albuquerque, NM
17 for Appellee
18 Hector H. Balderas, Attorney General
19 Cordelia Anna Friedman, Special Assistant Attorney General
20 Santa Fe, NM
21 for Appellant
Court of Appeals of New Mexico
Filed 4/22/2020 11:50 AM

2
1 MEMORANDUM OPINION
2 VARGAS, Judge.
3 {1} The New Mexico Taxation and Revenue Department (the Department) appeals
4 a decision and order of a hearing officer granting a taxpayer protest. This Court
5 issued a calendar notice proposing to affirm. In its memorandum in opposition, the
6 Department continues to assert the issues raised in its docketing statement and also
7 seeks to amend that docketing statement to assert a new issue. Having duly
8 considered the Department’s memorandum and motion to amend, we now deny the
9 motion to amend and affirm.
10 {2} The Department’s motion to amend seeks to raise a question regarding whether
11 its trial showing regarding its own procedures for handling telephone calls from
12 taxpayers could be overcome by “Taxpayer’s self-serving hearsay testimony that
13 Department personnel did not follow that protocol.” [MIO 3] This issue is directly
14 relevant to the asserted defense that Taxpayer “was affirmatively misled by a
15 department employee.” See 3.1.11.11(A) NMAC (discussing indicators of non-
16 negligence). To the extent the Department is suggesting that its own evidence was
17 more credible that Taxpayer’s, we point out that questions of the weight of the

3
1 evidence are beyond the scope of this Court’s review. See Bustos v. Hyundai Motor
2 Co., 2010-NMCA-090, ¶ 34, 149 N.M. 1, 243 P.3d 440.
3 {3} The Department’s primary argument, however, is that although hearsay
4 evidence may be considered in administrative proceedings, inadmissible hearsay
5 cannot be the sole basis of a factual finding. See Young v. Bd. of Pharmacy, 1969-
6 NMSC-168, ¶¶ 15-17, 81 N.M. 5, 462 P.2d 139 (adopting the legal residuum rule).
7 The Department, however, does not assess or explain how the relevant testimony was
8 hearsay. Generally, hearsay is a statement, other than one made by the declarant while
9 testifying at the trial or hearing, offered in evidence to prove the truth of the matter
10 asserted. Rule 11-801(C) NMRA.
11 {4} Based upon the decision and order on appeal, it appears that the relevant
12 testimony involved Taxpayer’s witness’s recollection of what happened when he
13 called the Department’s help line. [RP 55] The testimony seems to have been
14 something to the effect that when he sought help, an employee of the Department
15 “walked him through the process of making a payment without logging in” without
16 mentioning the need to do anything else, and that the witness “felt comfortable that
17 he was given enough information to report correctly.” [Id.; MIO 13-14]

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1 {5} We understand the Department to now be arguing that some statement of its
2 employee was received in evidence, and that statement was hearsay. [MIO 14] It is
3 unclear what statement that might have been or how it could have been offered for the
4 truth of the matter asserted, since the primary thrust of Taxpayer’s defense was that
5 he was misled by the employee’s failure to disclose that Taxpayer was also required
6 to file a return to comply with NMSA 1978, Section 7-1-13 (2019), leaving Taxpayer
7 with the impression that it had satisfied its obligation when he made his payment
8 online. Instead, it seems that the testimony, even to the extent it related what that
9 employee said on the telephone, was offered for the non-hearsay purpose of
10 establishing an effect upon the listener. See State v. Johnson, 1983-NMSC-043, ¶ 17,
11 99 N.M. 682, 662 P.2d 1349 (affirming the “longstanding rule” that such evidence
12 is admissible non-hearsay).
13 {6} The Department’s motion to amend its docketing statement, however, is
14 premised upon the hearing officer having relied upon hearsay. [MIO 3, 10] Because
15 we are unpersuaded of that premise, we conclude that the appellate issue the
16 Department seeks to raise is not viable and deny the motion to amend. See State v.
17 Munoz, 1990-NMCA-109, ¶ 19, 111 N.M. 118, 802 P.2d 23 (denying a motion to
18 amend a docketing statement where the issue sought to be raised was not viable).

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1 {7} With regard to the three issues originally raised in its docketing statement, the
2 Department now asks us to reconsider our proposed disposition in light of the hearsay
3 received at the hearing. [MIO 17, 18, 19] Because we are not persuaded that the
4 decision and order relied upon hearsay, we are unpersuaded that our proposed
5 disposition is inappropriate. See Hennessy v. Duryea, 1998-NMCA-036, ¶ 24, 124
6 N.M. 754, 955 P.2d 683 (noting that “in summary calendar cases, the burden is on the
7 party opposing the proposed disposition to clearly point out errors in fact or law”).
8 {8} For the foregoing reasons, as well as those contained in our proposed summary
9 disposition, we affirm the district court.
10 {9} IT IS SO ORDERED.
11 ______________________________
12 JULIE J. VARGAS, Judge
13 WE CONCUR:
14 _______________________________
15 LINDA M. VANZI, Judge
16 _______________________________
17 MEGAN P. DUFFY, Judge