March 31, 2022- Gabriel M. Vigil v. New Mexico Taxation & Revenue Department, No. A-1-CA-38317

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO	1
Opinion Number: ________________	2
Filing Date: March 31, 2022	3
No. A-1-CA-38317	4
GABRIEL M. VIGIL and ELAUTERIO	5
VIGIL,	6
Protestants-Appellants,	7
v.	8
NEW MEXICO TAXATION & REVENUE	9
DEPARTMENT,	10
Respondent-Appellee,	11
IN THE MATTER OF THE PROTEST	12
TO ASSESSMENT ISSUED ON	13
MARCH 14, 2018.	14
APPEAL FROM THE ADMINISTRATIVE HEARINGS OFFICE	15
Chris Romero, Hearing Officer	16
Sanchez, Mowrer & Desiderio, P.C.	17
Robert J. Desiderio	18
Albuquerque, NM	19
Anthony B. Jeffries	20
Albuquerque, NM	21
for Appellants	22
Hector H. Balderas, Attorney General	23
Cordelia Friedman, Special Assistant Attorney General	24
Santa Fe, NM	25
for Appellee	26
OPINION	27
Court of Appeals of New Mexico
Filed 3/31/2022 1:22 PM

2
WRAY, Judge.	1
{1} 	Taxpayers Elauterio Vigil and Gabriel Vigil1 appeal the assessments of taxes	2
for tax years 2008, 2009, 2010, and 2011, arising from the operation of Prestige	3
Towing & Recovery, Inc. (Prestige). The administrative hearing officer (Hearing	4
Officer) determined that the ten-year statute of limitation applied to the assessments,	5
based on a finding that Taxpayers filed fraudulent returns. See NMSA 1978, § 7-	6
1-18(B) (2021).2 The Hearing Officer additionally concluded that the New Mexico	7
Taxation and Revenue Department (the Department) was not precluded from	8
personally assessing taxes against Taxpayers for their operation of Prestige by the	9
Department’s earlier proceeding against a related, later-formed entity, Platinum	10
Performance, LLC (Platinum).	11
{2} 	Taxpayers appeal. We reverse in part, and hold that (1) the seven-year	12
limitation period applies to bar the Department from assessing gross receipts tax	13
liability against Elauterio and Gabriel personally for 2008, 2009, and 2010; (2)	14
estoppel principles do not preclude the Department from assessing Prestige’s	15
liability against Elauterio and Gabriel for 2011; and (3) contrary to Taxpayers’	16
1 Because of the common surname, we refer to individuals by their first names
or as Taxpayers.
2 The 2021 amendments to Section 7-1-18 do not impact the issues raised by
this appeal, so we cite the current version of the statute.

3
argument, the Hearing Officer properly assessed liability against Elauterio for his	1
actions related to Prestige.	2
BACKGROUND	3
{3} 	In 1997, Gabriel decided to establish his own automotive technician business,	4
Prestige. On October 24, 1997, Prestige received a certificate of incorporation from	5
the state regulatory agency. Prestige’s 1997 articles of incorporation identify	6
Elauterio and Gabriel as directors and incorporators. Elauterio, Gabriel’s father,	7
provided significant financial support and helped to construct the building that	8
housed Prestige.	9
{4} 	Prestige reported gross receipts taxes sporadically between January 2000 and	10
December 2004. In 2007, Prestige submitted to the Public Regulation Commission	11
(PRC) biennial reports for the years ending December 31, 2004, and December 31,	12
2006. On April 5, 2007, Prestige received notice from the PRC that the biennial	13
reports required corrections. The parties dispute whether Prestige corrected the	14
errors, but regardless, the PRC issued a certificate of cancellation of corporate status	15
on August 7, 2007, which Prestige claims it did not receive.	16
{5} 	On September 21, 2011, the PRC issued a second certificate of incorporation	17
to Prestige. The 2011 certificate of incorporation showed a different corporation	18
number and listed only Gabriel as an incorporator and director. In 2011, Prestige	19
began to file late corporate tax returns. Prestige filed a 2008 New Mexico income	20

4
tax return for “Pass-Through Entities” (PTE return) on April 16, 2011. After that,	1
Prestige filed the 2009 PTE return on April 24, 2012, the 2010 PTE return on April	2
12, 2012, and the 2011 PTE return on January 23, 2015. Between January 2008 and	3
October 2011 Prestige did not report or remit any gross receipts to the State, but	4
invoices established that Prestige charged the tax to its customers. Prestige began to	5
file Combined Reporting System (CRS) returns in January 2011 and reported	6
withholding taxes, but not gross receipts. Prestige filed no CRS returns for any other	7
relevant period.	8
{6} 	The Department conducted an audit and on July 1, 2015, issued a notice of	9
assessment for taxes owed by Prestige. On July 17, 2015, Gabriel and his wife, Lori,	10
organized Platinum. Prestige sold its assets to Platinum, which notified Prestige’s	11
customers and immediately began operating at the same location, with the same	12
phone number, and with most of the same employees. In 2016, the Department	13
assessed Platinum as a successor in business to Prestige (Platinum Proceeding).	14
After Platinum filed a formal protest of the assessment, a hearing officer (Platinum	15
hearing officer) determined that Platinum was a successor in business to Prestige	16
and that Platinum was liable for the full assessment of tax principal, but not penalties	17
or interest. Platinum subsequently filed for bankruptcy. On January 18, 2019, the	18
bankruptcy court entered a stipulated plan for reorganization, which included a	19

5
payment plan for Platinum to pay to the Department the assessed and owed gross	1
receipts tax.	2
{7} 	In March 2018, after the Platinum hearing officer’s decision but before the	3
Platinum 	bankruptcy 	stipulated 	plan, 	the 	Department 	issued 	two 	additional	4
assessments against Gabriel and Elauterio, personally. The assessment notices	5
explained that the Department did not recognize Prestige as a legal entity for the	6
2008 through 2011 assessment period, because the “business has failed to comply	7
with the registration requirements of the Secretary of State for corporations.”	8
Taxpayers protested these assessments, which is the subject of this appeal. The	9
Department argued in response that Taxpayers were personally liable because they	10
continued to operate as a corporation after its cancellation, contrary to NMSA 1978,	11
Section 53-18-9 (1967) (providing that “[a]ll persons who assume to act as a	12
corporation without authority to do so are jointly and severally liable for all debts	13
and liabilities incurred or arising as a result thereof”). The Hearing Officer agreed	14
with the Department and denied Taxpayers’ protest. Taxpayers appeal.	15
STANDARD OF REVIEW	16
{8} 	The Department’s assessments of tax owing and demands for payment are	17
presumed to be correct. NMSA 1978, § 7-1-17(C) (2007). The “taxpayer has the	18
burden of coming forward with some countervailing evidence tending to dispute the	19
factual correctness of the assessment made by the secretary.” N.M. Tax’n & Revenue	20

6
Dep’t v. Casias Trucking, 2014-NMCA-099, ¶ 8, 336 P.3d 436 (internal quotation	1
marks and citation omitted). If the taxpayer rebuts the presumption of correctness,	2
“the burden shifts to the [d]epartment to demonstrate the correctness of the tax	3
assessment.” Id.	4
{9} 	This Court sets aside the decision of a hearing officer “only if we find [it] to	5
be (1) arbitrary, capricious or an abuse of discretion; (2) not supported by substantial	6
evidence in the record; or (3) otherwise not in accordance with the law.” Team	7
Specialty Prods. v. N.M Tax’n & Revenue Dep’t, 2005-NMCA-020, ¶ 8, 137 N.M.	8
50, 107 P.3d 4 (internal quotation marks and citation omitted); accord NMSA 1978,	9
§ 7-1-25(C) (2015). To determine whether substantial evidence supports the Hearing	10
Officer’s decision, we view “the evidence in a light most favorable to the agency’s	11
decision.” See Casias Trucking, 2014-NMCA-099, ¶ 19 (internal quotation marks	12
and citation omitted). “The question is not whether substantial evidence exists to	13
support the opposite result, but rather whether such evidence supports the result	14
reached.” Id. ¶ 20 (internal quotation marks and citation omitted). We review de	15
novo questions of law and the application of the law to the facts. TPL, Inc. v. N.M.	16
Tax’n & Revenue Dep’t, 2003-NMSC-007, ¶ 10, 133 N.M. 447, 64 P.3d 474.	17
DISCUSSION	18
{10} 	Taxpayers make three arguments on appeal. Taxpayers first maintain that the	19
Hearing Officer incorrectly applied a ten-year, rather than a seven-year statute of	20

7
limitations to their failure to file gross receipts tax returns for 2008, 2009, and 2010.	1
Relying on three forms of estoppel, Taxpayers next contend that the findings and	2
arguments in the Platinum Proceeding estopped the Department from arguing in the	3
present case that Prestige was not a corporation. Taxpayers last argue that Elauterio	4
cannot be jointly and severally liable for the assessed taxes, because he did not	5
participate in the operations and management of Prestige. We address each argument	6
in turn.	7
I. 	The Seven-Year Statute of Limitation Bars the Assessments Prior to 2011	8
{11} 	The parties dispute which limitations period from Section 7-1-18 applies in	9
this case. “We review de novo whether a particular statute of limitations applies.”	10
Hess Corp. v. N.M. Tax’n & Revenue Dep’t, 2011-NMCA-043, ¶ 22, 149 N.M. 257,	11
252 P.3d 751 (internal quotation marks and citation omitted). To the extent	12
Taxpayers contend insufficient evidence supports the Hearing Officer’s findings	13
relating to the limitations period, our review is for substantial evidence. See Casias	14
Trucking, 2014-NMCA-099, ¶ 20.	15
{12} 	Generally, the limitation period for tax assessment is three years. Section 7-1-	16
18(A). The limitation period is extended to ten years under Section 7-1-18(B) “[i]n	17
case of a false or fraudulent return made by a taxpayer with intent to evade tax.” To	18
apply the ten-year limitation period set forth in Section 7-1-18(B), as the Hearing	19
Officer did in this case, three requirements must be met: (1) a false or fraudulent	20

8
return (2) made by the taxpayer (3) with intent to evade the tax. See N.M. Tax’n &	1
Revenue Dep’t v. Bien Mur Indian Mkt. Ctr., 1989-NMSC-015, ¶ 6, 108 N.M. 228,	2
770 P.2d 873 (explaining that Section 7-1-18(B) “provides the [d]epartment may go	3
back ten years from the end of the year in which the taxes were due when a taxpayer	4
files a fraudulent return”). Alternatively, if a taxpayer fails “to complete and file any	5
required return,” the limitation period is “seven years from the end of the calendar	6
year in which the tax was due.” Section 7-1-18(C).	7
{13} 	The Hearing Officer applied the ten-year limitation period as provided in	8
Section 7-1-18(B), based on his finding that Taxpayers filed false CRS returns with	9
“intent to evade tax.” Specifically, the Hearing Officer found that (1) Taxpayers filed	10
no CRS returns for any relevant period other than January 2011 to October 2011;	11
and (2) Taxpayer filed federal and PTE returns that reported gross receipts for the	12
years 2008, 2009, and 2010, which showed that Taxpayers were aware they had	13
earned gross receipts and had an obligation to report and pay gross receipts taxes.	14
{14} 	Taxpayers do not seek review of the evidence supporting the Hearing	15
Officer’s determination that they intended to evade the tax and argue only that the	16
seven-year limitation period applied, because they did not file any gross receipts	17
returns between 2008 and 2010. Our review is therefore limited to whether the	18
evidence supported the Hearing Officer’s finding that Taxpayers filed false and	19
fraudulent returns. The Hearing Officer explicitly found, however, that Taxpayers	20

9
filed CRS returns only for the period between January 2011 and October 2011 and	1
no CRS returns were filed for 2008, 2009, or 2010. To the extent Taxpayers filed	2
federal and PTE returns for the years 2008, 2009, and 2010, 3 which revealed	3
“significant sums of gross receipts,” those returns do not trigger the ten-year statute	4
of limitations for 2008, 2009, and 2010. The evidence did not demonstrate that the	5
filed federal and PTE returns were false or fraudulent. To the contrary, the Hearing	6
Officer found that the federal and PTE returns reflected that gross receipts were	7
earned and show a post-2011 understanding that CRS returns should have been filed	8
for earlier years. The only false CRS returns were filed in 2011. No evidence	9
demonstrates that the PTE returns filed for 2008, 2009, and 2010 were false or	10
fraudulent. As a result, the ten-year limitation period for filing false or fraudulent	11
returns does not apply to those years. 	See Bien Mur, 1989-NMSC-015, ¶ 6	12
(requiring, inter alia, that a false or fraudulent return be made by the taxpayer for the	13
ten-year limitation period in Section 7-1-18(B) to apply). Instead, the seven-year	14
limitation period found in Section 7-1-18(C), relating to the failure to file a return,	15
applies and in the present case, bars the Department from assessing Taxpayers	16
personally for the years 2008, 2009, and 2010.	17
3 The parties dispute whether the filing of federal and PTE returns, as opposed
to CRS returns, triggers the application of Section 7-1-18(B) and the ten-year
limitation period in this case. Because the evidence does not demonstrate that the
filed federal and PTE returns were false or fraudulent, we need not resolve this
question.

10
{15} 	As Taxpayers acknowledge, the Department timely assessed the 2011 debt,	1
and we therefore must further consider Taxpayers’ remaining arguments as they	2
relate to 2011.	3
II. 	The Department, in Its 2018 Assessments, Is Not Precluded on Estoppel	4
Grounds From Personally Assessing Unpaid 2011 Gross Receipts Tax	5
Against Taxpayers	6
{16} 	Taxpayers invoke three forms of estoppel to support their position that the	7
Platinum 	Proceeding 	precludes 	the 	Department’s 	March 	2018 	assessments.	8
Taxpayers acknowledge that each form of estoppel has different elements, but they	9
argue that each doctrine precludes the personal assessments based on a single fact.	10
Taxpayers contend that for Platinum to be liable as a successor in business to	11
Prestige, there must have been an implicit finding by the Platinum hearing officer or	12
a recognition by the Department in the Platinum Proceeding that Prestige was a	13
corporation for the relevant years. Taxpayers maintain that as a result of such an	14
implicit finding or recognition, the Department should be estopped from arguing in	15
the present proceeding that Taxpayers were personally liable based on the revocation	16
of Prestige’s corporate status between 2007 and 2011.	17
{17} 	We observe that “[g]enerally, principles of equitable estoppel will only be	18
applied against the state when a statute so provides or when right and justice demand	19
it.” Bien Mur, 1989-NMSC-015, ¶ 9 (internal quotation marks and citation omitted).	20
“[I]n cases involving assessment and collection of taxes, the state will be held	21

11
estopped only rarely.” Id. We conclude that the Department is not precluded from	1
assessing personal liability under these circumstances and address each asserted	2
form of estoppel separately.4
3
A. 	Collateral Estoppel	4
{18} 	We first consider Taxpayers’ collateral estoppel argument. A party seeking to	5
apply collateral estoppel must first establish four elements:	6
(1) the party to be estopped was a party to the prior proceeding, (2) the	7
cause of action in the case presently before the court is different from	8
the cause of action in the prior adjudication, (3) the issue was actually	9
litigated in the prior adjudication, and (4) the issue was necessarily	10
determined in the prior litigation.	11
Shovelin v. Cent. N.M. Elec. Co-op., Inc., 1993-NMSC-015, ¶ 10, 115 N.M. 293,	12
850 P.2d 996. Taxpayers contend that Prestige’s corporate status was actually	13
litigated and necessarily determined in the Platinum Proceeding. To evaluate	14
Taxpayers’ contention, we consider the purpose and nature of the Platinum	15
Proceeding.	16
{19} 	In the Platinum Proceeding, the issue to be decided was whether Platinum was	17
“liable under the assessment as a successor in business to [Prestige].” Taxpayers	18
argue that “the existence of Prestige as a corporation had to be fully litigated in order	19
4 The Hearing Officer (1) expressed concerns that an administrative hearing
officer might not have authority to apply estoppel principles, and (2) questioned
whether the State could ever be estopped from assessing taxes. We do not address
these issues because, assuming the equitable doctrines identified by Taxpayers are
generally applicable in this context, none of them apply in this case.

12
for the Department to pursue the tax liability against Platinum and for the [Platinum]	1
hearing officer to make a final ruling regarding the liability of Platinum.” The	2
Platinum hearing officer, however, did not need to determine that Prestige was a	3
corporation in order to decide whether Platinum was a successor in business to	4
Prestige’s gross receipts tax liability. We explain.	5
{20} 	The Legislature has declared: “For the privilege of engaging in business, an	6
excise tax equal to five and one-eighth percent of gross receipts is imposed on any	7
person engaging in business in New Mexico.” NMSA 1978, § 7-9-4(A) (2010). The	8
term “person” includes	9
an individual, estate, trust, receiver, cooperative association, club,	10
corporation, company, firm, partnership, limited liability company,	11
limited liability partnership, joint venture, syndicate or other entity,	12
including any gas, water or electric utility owned or operated by a	13
county, municipality or other political subdivision of the state; or . . . a	14
national, 	federal, 	state, 	Indian 	or 	other 	governmental 	unit 	or	15
subdivision, or an agency, department or instrumentality of any of the	16
foregoing[.]	17
NMSA 1978, § 7-9-3(N) (2021). 5 The Legislature has defined “engaging in	18
business” without reference to corporate status or form but simply as “carrying on	19
or causing to be carried on any activity with the purpose of direct or indirect benefit.”	20
NMSA 1978, § 7-9-3.3 (2019).6 If a business is transferred to a successor, “any tax	21
5 In 2021 and 2019, the Legislature amended Section 7-9-3 in a manner that
does not impact the present analysis, so we cite the current version of the statute.
6 In 2019, the Legislature amended Section 7-9-3.3 in a manner that does not
impact the present analysis, so we cite the current version of the statute.

13
from operating the business for which the former owner is liable remains due [and]	1
the successor shall pay the amount due.” NMSA 1978, § 7-1-63(A) (1997). The	2
successor in business determination involves weighing a number of factors—none	3
of which involve comparing the corporate forms of the initial and successor	4
businesses. See 3.1.10.16(A) NMAC (outlining eight factors to determine successor	5
in business status).	6
{21} 	The Platinum hearing officer did not need to decide whether Prestige was a	7
corporation in order to determine whether Prestige had outstanding tax liability to	8
which Platinum was a successor. Prestige would have been liable to remit gross	9
receipts taxes for engaging in business, regardless of its corporate status—as an	10
individual, a corporation, “or other entity.” See § 7-9-4(A) (imposing gross receipts	11
tax on any person engaging in business); § 7-9-3(N) (defining “person”); § 7-9-3.3	12
(defining “engaging in business”). As a result, if Platinum were a successor in	13
business to Prestige, Prestige would also be liable for taxes that were due, even if	14
Prestige were not an active corporation. See § 7-1-63(A). The Department was	15
therefore not required to argue in the Platinum Proceeding, and the Platinum hearing	16
officer was not required to determine, that Prestige was a “corporation” at the time	17
the taxes were incurred in order to later assess Platinum for Prestige’s tax liability.	18
{22} 	The limited record available from the Platinum Proceeding supports a	19
conclusion that Prestige’s corporate status was not litigated or decided. To determine	20

14
whether Platinum was a successor in business to Prestige, the Platinum hearing	1
officer appropriately focused on the 2015 transition between Prestige and Platinum.	2
See 3.1.10.16(A) NMAC (outlining factors related to the transfer of business	3
enterprises). The Platinum Proceeding findings do not refer to Prestige’s corporate	4
status between 2008 and 2011. While the Platinum hearing officer referred to	5
Prestige as “the corporation,” these references do not require application of estoppel	6
in the absence of any other evidence that the matter was raised or litigated. Cf. Keith	7
v. ManorCare, Inc., 2009-NMCA-119, ¶ 39, 147 N.M. 209, 218 P.3d 1257 (refusing	8
to apply judicial estoppel based on a party’s colloquial references).	9
{23} 	Taxpayers have failed to demonstrate that the question of Prestige’s corporate	10
status was actually litigated and necessarily determined in the Platinum Proceeding.	11
The Hearing Officer therefore correctly determined that the Department’s 2018	12
assessments against Taxpayers were not precluded by collateral estoppel.	13
B. 	Corporation by Estoppel	14
{24} 	Taxpayers argue that “corporation by estoppel” precludes the Department	15
from arguing in the present proceeding that Prestige was not a corporation between	16
2007 and 2011. Taxpayers point to Timberline Equipment Co. v. Davenport, 514	17
P.2d 1109, 1111-12 (Or. 1973) (en banc), to define the doctrine of “corporation by	18
estoppel” as preventing “a party from denying corporate existence if that party has	19
in the past recognized the entity’s existence as a corporation even if the entity failed	20

15
to incorporate or incorporated defectively.” The New Mexico Supreme Court has	1
similarly held that defendants who “dealt with” the plaintiffs as a corporation are	2
“estopped to deny its legal existence.” Palatine Ins. Co. v. Santa Fe Mercantile Co.,	3
1905-NMSC-026, ¶ 15, 13 N.M. 241, 82 P. 363.7 While the traditional elements of	4
equitable estoppel—reliance, misrepresentation, change of position—might not be	5
required to establish corporation by estoppel, see Timberline Equip. Co., 514 P.2d	6
at 1111-12, the corporation by estoppel doctrine applies only “when it [would] be	7
inequitable not to apply it.” Montoya v. Hubbell, 1922-NMSC-054, ¶¶ 5-7, 28 N.M.	8
250, 210 P. 227; see also 8 Fletcher Cyc. Corp. § 3889 (2021) (“The corporation by	9
estoppel doctrine rests upon equitable principles, and should only be applied when	10
equity requires it.”).	11
{25} 	In Timberline Equipment Co., the Court explained that in order to properly	12
apply the corporation by estoppel doctrine, “the cases must be classified according	13
to who is being charged with estoppel.” 514 P.2d at 1112. Specifically, “[w]hen a	14
defendant seeks to escape liability to a corporation plaintiff by contending that the	15
plaintiff is not a lawful corporate entity, courts readily apply the doctrine of	16
corporation by estoppel.” Id. Courts are “more reluctant” to apply the doctrine when	17
7 Taxpayers contend that the Hearing Officer erroneously concluded that
Section 53-18-9 “eliminates the doctrine of corporation by estoppel.” We address
Taxpayers’ arguments assuming the doctrine of corporation by estoppel remains
viable in New Mexico.

16
individuals “seek to escape liability by contending that the debtor is a corporation,	1
rather than the individual who purported to act as a corporation.” Id. Taxpayers	2
admittedly fall into the second category but nevertheless contend that because the	3
Department treated Prestige as a corporation in the Platinum Proceeding in order to	4
assess Prestige’s tax liability against Platinum, the Department is now estopped from	5
denying Prestige’s corporate status to assess liability against Taxpayers. We	6
disagree.	7
{26} 	Taxpayers 	acknowledge 	that 	the 	Department 	engaged 	in 	the 	Platinum	8
Proceeding believing that Prestige had been a corporation. As explained in relation	9
to collateral estoppel, the Department did not “deal with” Platinum or Prestige	10
specifically as a corporation, but instead, as taxpayers. Taxpayers point to no	11
particular conduct of the Department that demonstrates the Department dealt with	12
Prestige or Platinum “on a corporate basis.” See Cranson v. Int’l Bus. Machs. Corp.,	13
200 A.2d 33, 38 (Md. 1964) (describing the application of “the estoppel doctrine	14
when there had been substantial dealings between them on a corporate basis”). In	15
Cranson, the defendant relied on the plaintiff’s corporate status and “relied on its	16
credit” rather than on the credit of the individual defendant. Id. at 39. In this case,	17
the Department did not rely on the corporate status or any corporate aspect of either	18
Platinum or Prestige to assess taxes due or to argue that Platinum was a “successor	19

17
in business.” Taxpayers identify no particular aspect of the stipulated bankruptcy	1
plan that relies on Prestige’s corporate status.	2
{27} 	New Mexico courts have recognized that the principle of corporation by	3
estoppel applies “only in the interest of justice, or when it will be inequitable not to	4
apply it.” Montoya, 1922-NMSC-054, ¶¶ 5-6 (estopping a corporate officer and	5
director 	from 	denying 	“the 	proper 	organization 	of 	the 	corporation”). 	The	6
Department’s references to Prestige as a corporation in the Platinum Proceeding are	7
unremarkable under the circumstances, and the Department did not rely on Prestige’s	8
status as a corporation to assess tax liability. Cf. Keith, 2009-NMCA-119, ¶¶ 39-41	9
(determining that a “casual reference” does not “rise to the level required to invoke	10
judicial estoppel” unless the “use of the phrase in any way affected the resolution”	11
of a successful motion). We therefore decline to apply corporation by estoppel to	12
preclude the Department from assessing personal liability against Taxpayers for tax	13
year 2011. See Lopez v. State, 1996-NMSC-071, ¶ 20, 122 N.M. 611, 930 P.2d 146	14
(observing that New Mexico courts are “reluctant to apply estoppel against the state	15
and its agencies”).	16
C. 	Judicial Estoppel	17
{28} 	Taxpayers additionally contend that the Department should be judicially	18
estopped from arguing Prestige was not a valid corporation during the assessment	19
period, because Taxpayers maintain that the Department took the position in the	20

18
Platinum Proceeding that Prestige was a corporation to argue Platinum was a	1
successor in business. “Judicial estoppel prevents a party who has successfully	2
assumed 	a 	certain 	position 	in 	judicial 	proceedings 	from 	then 	assuming 	an	3
inconsistent position, especially if doing so prejudices a party who had acquiesced	4
in the former position.” Guzman v. Laguna Dev. Corp., 2009-NMCA-116, ¶ 12, 147	5
N.M. 244, 219 P.3d 12 (internal quotation marks and citation omitted). The record	6
does not demonstrate that the Department assumed inconsistent positions between	7
the Platinum Proceeding and in the present case.	8
{29} 	Taxpayers 	point 	to 	no 	evidence 	to 	establish 	that 	during 	the Platinum	9
Proceeding, the Department “successfully argued” the position that Prestige was a	10
valid corporation during the assessment period. See Keith, 2009-NMCA-119, ¶ 39.	11
In Keith, the plaintiff argued that the defendant should be judicially estopped from	12
contradicting language previously used in successful motions. Id. ¶¶ 38-40. This	13
Court disagreed and explained that the plaintiff failed to demonstrate that the	14
particular language used in the motions affected the outcome. Id. ¶ 40. Because the	15
matter to be estopped “was not at issue in any of the motions or hearings” on which	16
the plaintiff relied, and the defendant could therefore not have “successfully argued”	17
that position, judicial estoppel did not apply. Id. Similarly, as we have discussed,	18
Taxpayers have not shown that Prestige’s corporate status was at issue in the	19
Platinum Proceeding, the Department therefore did not successfully argue or assume	20

19
a position on Prestige’s corporate status, and judicial estoppel therefore does not	1
apply.	2
{30} 	Further, the Department’s positions in the Platinum Proceeding and in the	3
present case are not inconsistent. The Department’s position in the Platinum	4
Proceeding was that Prestige owed gross receipts taxes and that Platinum, as a	5
successor in business, was obligated to pay Prestige’s liability. The Department’s	6
position in the present case is that pursuant to Section 53-18-9, Taxpayers are	7
personally and jointly and severally liable for Prestige’s liability—because they	8
assumed to act as a corporation without authority to do so between 2008 and 2011.	9
As discussed, Prestige could be liable for gross receipts tax even if it were not a valid	10
corporation, and Platinum could be a successor in business and liable for the unpaid	11
tax even if Prestige were not a valid corporation. Gabriel and Elauterio could also	12
be personally—and jointly and severally—responsible for Prestige’s tax liability	13
because of their own actions. See § 53-18-9 (providing for joint and several liability	14
for debts incurred as a result of acting as corporation without authority). The	15
Department’s assertions that both Platinum and Taxpayers are liable for Prestige’s	16
taxes are not inconsistent but instead, represent the separate application of Section	17
7-1-63 (successor in business assessments) and Section 53-18-9 (joint and several	18
liability for unauthorized assumption of corporate powers).	19

20
{31} 	Under these circumstances, the Department “cannot be said to have been	1
playing fast and loose” in the present case so as to warrant applying judicial estoppel.	2
See Keith, 2009-NMCA-119, ¶ 40 (internal quotation marks and citation omitted);	3
id. (holding that judicial estoppel did not apply, because employment status was not	4
at issue in the hearings and motions cited); see also Bien Mur, 1989-NMSC-015, ¶ 9	5
(applying estoppel against the state only rarely in the matter of tax assessment).	6
Judicial estoppel is therefore inapplicable in the present case.	7
III. 	The Evidence Supports the Department’s Personal Assessment Against	8
Elauterio for Prestige’s 2011 Tax Liability	9
{32} 	Taxpayers last challenge the Hearing Officer’s conclusion that Elauterio is	10
personally liable for gross receipts taxes owed by Prestige and contend that Elauterio	11
did not participate in the operations of or manage Prestige. The Hearing Officer	12
made a number of factual findings related to Elauterio’s activities and subsequently	13
concluded that Taxpayers, including Elauterio, were personally liable under Section	14
53-18-9. We affirm.	15
{33} 	Section 53-18-9 provides, “All persons who assume to act as a corporation	16
without authority to do so are jointly and severally liable for all debts and liabilities	17
incurred or arising as a result thereof.” Taxpayers argue this Court should adopt the	18
definition of the Supreme Court of Oregon in Timberline Equipment Co. to construe	19
the term “assume to act as a corporation,” as set forth in Section 53-18-9. The	20
Timberline court rejected an argument that a person’s investment in a business would	21

21
alone be sufficient to establish that the person assumed to act as a corporation and	1
explained that the phrase “should be interpreted to include those persons who have	2
an investment in the organization and who actively participate in the policy and	3
operational decisions of the organization.” Id. at 1113-14. We see no reason in the	4
present case to specifically adopt the Timberline definition of “assume to act as a	5
corporation” to construe that phrase in Section 53-18-9, considering that unlike in	6
Timberline, the Hearing Officer did not rely on a financial investment alone. See id.	7
{34} 	The Hearing Officer found that, by his conduct, Elauterio held himself out as	8
a corporation. Beginning in 1997, Elauterio contributed approximately $100,000 to	9
Prestige. Elauterio was an initial director and incorporator, and he was president of	10
Prestige when it incorporated in 1997. He remained a director and incorporator until	11
2011, when Prestige filed articles of incorporation for the second time. Between	12
2001 and 2006, Elauterio signed financing statements and purchased and registered	13
vehicles for Prestige. Elauterio’s credit was used by Prestige, Elauterio made	14
payments for property and equipment, and he guaranteed loans. From Prestige’s	15
inception, 	Elauterio’s 	course 	of 	conduct 	in 	relation 	to 	Prestige 	reasonably	16
demonstrates that he assumed to act as a corporation.	17

22
{35} 	Elauterio continued to act as the corporation after Prestige’s corporate status	1
was cancelled.8 For tax year 2008, Prestige reported loss distributions on a corporate	2
tax return and distributed 80 percent of the loss to Elauterio and 20 percent of the	3
loss 	to 	Gabriel. 	The 	2008 	tax 	document 	identifies 	Elauterio 	as 	a	4
“shareholder/partner.” The 2008 tax return was filed in April 2011, several months	5
before the September 2011 incorporation date for the second Prestige. The 2008 tax	6
return is relevant in two ways. First, Elauterio accepted the corporate loss for a tax	7
year in which Prestige was not a corporation. Second, Elauterio acquiesced to the	8
filing of the tax return in April 2011—a time when Prestige’s corporate status	9
remained 	cancelled. 	Throughout 	Prestige’s 	existence, 	Elauterio 	additionally	10
provided his professional services to help construct and maintain the approximately	11
10,000 square foot shop facility.	12
{36} 	Taxpayers essentially ask this Court to reweigh the evidence regarding	13
Elauterio’s involvement and draw the inferences favorable to them. This we will not	14
do. See Casias Trucking, 2014-NMCA-099, ¶ 24 (“We do not place ourselves in the	15
position of the fact finder and reweigh the evidence.”). This Court has explained that	16
Section 53-18-9 “provides that one who holds himself out as a corporation is	17
personally liable for his acts if, in fact, there is no corporation.” Smith v. Halliburton	18
8 Neither party argues that Elatuerio’s knowledge about the cancellation of
Prestige’s corporate status is relevant under Section 53-18-9, and we therefore do
not address the question.

23
Co., 1994-NMCA-055, ¶ 29, 118 N.M. 179, 879 P.2d 1198. Considering Elauterio’s	1
entire course of conduct, including acts that occurred during the period that Prestige	2
was not a corporation, we affirm the Hearing Officer’s determination that Elauterio	3
was personally liable for Prestige’s collectable tax debt.	4
CONCLUSION	5
{37} 	We hold that (1) the 2018 assessments are untimely for tax years 2008, 2009,	6
and 2010; (2) the 2018 assessments for 2011 are not barred by any estoppel doctrine;	7
and (3) the Hearing Officer appropriately found Elauterio personally liable for	8
Prestige’s 2011 gross receipts tax liability. We therefore remand the matter for	9
recalculation of the personal liability of Gabriel and Elauterio for the gross receipts	10
tax debt of Prestige for the tax year 2011.	11
{38} 	IT IS SO ORDERED.	12
______________________________	13
KATHERINE A. WRAY, Judge	14
WE CONCUR:	15
_________________________________	16
JENNIFER L. ATTREP, Judge	17
_________________________________	18
JACQUELINE R. MEDINA, Judge	19