March 25, 2010 – Village of Angel Fire, a municipality of the State of New Mexico v. Board of County Commissioners of Colfax County, a county of the State of New Mexico, No. 28,227

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: __________
Filing Date: March 25, 2010
NO. 28,227
VILLAGE OF ANGEL FIRE,
a municipality of the State of
New Mexico,
Plaintiff-Appellant,
v.
BOARD OF COUNTY COMMISSONERS,
OF COLFAX COUNTY, a county of the
State of New Mexico,
Defendant-Appellee.
APPEAL FROM THE DISTRICT COURT OF COLFAX COUNTY
Eugenio S. Mathis, District Judge
Canepa & Vidal, P.A.
Joseph F. Canepa
Patricia J. Turner
Santa Fe, NM
for Appellant
Robin C. Blair
Raton, NM
for Appellee

OPINION
KENNEDY, Judge.
{1} 	This case results from the disintegration of an agreement between the Village
of Angel Fire (Village) and the Board of County Commissioners of Colfax County
(County). In 2001, the parties executed a Joint Powers Agreement (JPA) in which the
Village promised to collect the trash of certain county residents in consideration for
the sum of $50,000, paid semi-annually in payments of $25,000 each. The County
made scheduled payments until around July 15, 2004. 	After it stopped making
payments, the Village states, the County made no further payments but repeatedly
promised it would as it restructured its finances. Based on these representations, the
Village claims that it refrained from filing suit and continued to collect garbage for the
County.
{2} 	On April 10, 2007, the Village filed a complaint against the County in which
it made claims for breach of contract, equitable estoppel, and quantum meruit, each
based on the JPA. Upon being sued, the County argued that the Village’s claims were
barred by the statute of limitations prescribed by NMSA 1978, Section 37-1-23(B)
(1976). On that basis, the district court granted the County’s motion for judgment on
the pleadings. The Village appeals, and we affirm.
{3} 	The Village also claimed in its complaint that the County should be estopped

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from asserting the statute of limitations. The Village alleges that the County strung
them along with no intention of paying for garbage service and that the County had
itself engineered a defect in the contract. Alternatively, the Village argued the right
to payment in quantum meruit. On appeal, the Village claims that the JPA creates an
installment contract that essentially provides a right to sue after any number of
payments were missed.
{4} 	After reviewing the pleadings and the district court’s order, we make the
following holdings. First, the Village did not argue with sufficient specificity below
its assertion that the JPA was an installment contract for which the statute of
limitations re-starts each time an installment goes unpaid. As a result, that argument
is not preserved for our review, and we hold that the statute of limitations began to run
when the County first failed to pay. 	This application of the statute of limitations
prevents the Village’s contract claim even if we assume the validity of the JPA.
Second, the Village failed to establish a claim for equitable estoppel. Last, sovereign
immunity provides the County with an absolute barrier to suit in quantum meruit.
While fully recognizing that the County has received a great deal of valuable trash
removal for free in the face of the JPA, we nevertheless affirm the order of the district
court.

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STANDARD OF REVIEW
{5} 	We review judgments on the pleadings made pursuant to Rule 1-012(C) NMRA
according to the same standard as motions for failure to state a claim under Rule 1-
012(B)(6) NMRA. Dunn v. McFeeley, 1999-NMCA-084, ¶¶ 10-11, 127 N.M. 513,
984 P.2d 760; see, e.g., Sanders v. Estate of Sanders, 1996-NMCA-102, ¶¶ 6-7, 122
N.M. 468, 927 P.2d 23. We “accept as true all facts well pleaded and question only
whether the plaintiffs might prevail under any state of facts provable under the claim.”
Garcia v. Rodey, Dickason, Sloan, Akin & Robb, P.A., 106 N.M. 757, 760, 750 P.2d
118, 121 (1988). All interpretations of law made by the district court are subject to
a de novo standard. Klinksiek v. Klinksiek, 2005-NMCA-008, ¶ 4, 136 N.M. 693, 104
P.3d 559 (filed 2004).
BACKGROUND
{6} 	The 	JPA 	provides, 	“the 	Village 	and 	County 	wish 	to 	enter 	into 	an
agreement . . . for the collection and disposal of refuse from real property located
within the county boundaries.” The Village promises to furnish “solid waste disposal”
to the County in consideration for “two installments of $25,000[] each; which
installments shall be due and payable commencing April 15, 2001[,] and continuing
on July 15[] and April 15[] of each year that this contract is in place.” Paragraph XV
of the contract makes it “subject to the approval of the secretary of the New Mexico

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Department of Finance and Administration” (DFA) and indicates that the contract
“shall not become valid and binding upon the parties until approval of . . . [DFA] has
been obtained.” Neither party disputes that the other is a political subdivision of the
state of New Mexico.
{7} 	The agreement was executed by officials of both the County and the Village.
On April 3, 2001, the County sent a letter transmitting the JPA to the Village for
signature, indicating that it would get the agreement to DFA for its approval following
the Village’s executing the required signatures. DFA approval was never obtained,
but the parties performed on the contract until April 15, 2004, when the County ceased
making payments to the Village. 	The Village continued to collect the County’s
garbage until after suit was filed, another three years.
{8} 	The Village’s complaint asked the district court to recognize the validity of the
contract and require the County to make all back payments. By failing to pay under
the terms of the contract, the County breached its obligations, and notwithstanding the
contract’s validity, the Village claimed that quantum meruit required the County to
pay. As the complaint stated, the County “has benefitted by the Village’s provision
of refuse collection and disposal system services,” and the County’s continued failure
to pay is both inequitable and unjust.
{9} 	The Village’s complaint also asserted equitable estoppel. It claimed that the

5
County encouraged the Village to enter into the contract, that the County falsely told
the Village it was seeking the approval of DFA, and that the County falsely promised
to pay unpaid installments on the contract. These acts were done, the Village claimed,
with the intent “to receive the Village’s refuse collection and disposal system services
for which the County did not intend to pay the Village.” 	As a result of these
representations, the Village stated that it continued to perform under the contract and
detrimentally changed its position.
{10} 	The County answered the complaint on May 16, 2007. It argued that it was the
Village that had failed to procure DFA approval and stated that, without it, the
contract was invalid. It also asserted sovereign immunity under Section 37-1-23 as
a defense. That section provides
A. 	Governmental entities are granted immunity from actions based
on contract, except actions based on a valid written contract.
B. 	Every claim permitted by this section shall be forever barred
unless brought within two years from the time of accural.
The County also filed motions to dismiss for failure to state a claim and judgment on
the pleadings. 	Those motions likewise raised Section 37-1-23 as a defense and
disputed the validity of the contract.
{11} 	The district court heard the motions on October 30, 2007. The County repeated
its previous arguments, stating the contract was invalid and that the Village’s claims

6
were barred by both the statute of limitations and sovereign immunity. The Village
reasserted the doctrine of equitable estoppel and stated that its claim accrued under
Section 37-1-23 at the moment the County expressed doubt concerning the contract’s
validity. The County disagreed. It argued that the Village’s claim accrued, if at all,
when the County stopped paying on the contract, at the point of breach. Ruling from
the bench, the district court denied the County’s motion to dismiss for failure to state
a claim and granted its motion for judgment on the pleadings. The court held that
under Section 37-1-23, the Village’s cause of action accrued, at the latest, in July
2004. Even if the disputed JPA is presumed to be valid, the district court ruled that
because a two-year statute of limitations is absolute in this case, the Village’s cause
of action was barred.
{12} 	The Village now appeals. It argues: first, that the statute of limitations accrued
as to each payment at the time each became due; second, that equitable estoppel
should prevent the County from asserting the statute of limitations as a defense; and
third, that the County should be required to pay regardless of the contract’s validity
pursuant to the doctrine of quantum meruit.
DISCUSSION
I. 	The Statute of Limitations
{13} 	The Village claims that the district court incorrectly applied the statute of

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limitations to its contract claim. 	It urges us to reverse for two reasons. 	First, the
Village argues that because the contract was one payable in installments, the statute
of limitations accrued differently than it would on a non-installment contract. Second,
the Village argues that it relied on the County’s continued promises to pay, and such
reliance creates a case of equitable estoppel. 	Thus, the Village contends that the
County should be prohibited from asserting the statute of limitations as a defense. We
recognize that the parties disputed the validity of the JPA below. However, in this
appeal it is unnecessary for us to consider that issue. Even if we presume without
deciding that the JPA is valid, our conclusion concerning the district court’s
application of the statute of limitations is dispositive and requires affirmance. We
likewise note that although the JPA contains an arbitration clause, neither party
invoked it below, and we therefore consider it waived. See Wood v. Millers Nat. Ins.
Co., 96 N.M. 525, 527-28, 632 P.2d 1163, 1165-66 (1981) (holding that parties reach
a “point of no return” and waive arbitration at the moment they “invoke[] the court’s
discretionary power, prior to demanding arbitration, on a question other than 	. . .
arbitration[]”).
A. 	Preservation of the Village’s Installment Contract Argument
{14} 	In its brief, the Village claims that its agreement with the County was an
installment contract. 	As such, the statute of limitations found in Section 37-1-23

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accrued as to each payment at the time each became due. The Village cites Tull v.
City of Albuquerque, 120 N.M. 829, 830-31, 907 P.2d 1010, 1011-12 (Ct. App. 1995),
and Plaatje v. Plaatje, 95 N.M. 789, 790-91, 626 P.2d 1286, 1287-88 (1981), in
support of this proposition. Those cases discuss differing application of statutes of
limitations on contracts involving installment payments as opposed to others. Those
cases also introduce discrete legal terms of art, namely a “continuing-wrong theory”
which tolls the statute each time an obligation goes unfulfilled, Tull, 120 N.M. at 830,
907 P.2d at 1011, and a “single-wrong approach” that applies to most other contracts
and tolls the statute of limitations beginning the first time an obligation goes
unfulfilled. Id. at 830-31, 907 P.2d at 1011-12. Applying the installment/continuing-
wrong theory to the facts of this case, as the Village asserts, would result in “a new
breach of contract . . . with each default in payment” and would allow the Village to
sue on any non-payment occurring within the two-year statutory period. See § 37-1-
23.
{15} 	We will not review arguments that were not preserved in the district court. Rio
Grande Kennel Club v. City of Albuquerque, 2008-NMCA-093, ¶ 31, 144 N.M. 636,
190 P.3d 1131. This rule serves two purposes. First, it allows the district court an
opportunity to cure errors, thereby dispensing with the need for an appeal, and second,
it creates a reviewable record. Lopez v. Las Cruces Police Dep’t, 2006-NMCA-074,

9
¶ 6, 139 N.M. 730, 137 P.3d 670. 	In order to properly preserve an issue, “it must
appear that [the party] fairly invoked a ruling of the [district] court on the same
grounds argued in the appellate court.” Woolwine v. Furr’s, Inc., 106 N.M. 492, 496,
745 P.2d 717, 721 (Ct. App. 1987). 	In its briefs, the Village directs us to various
points in the record where it claims this issue was preserved. The Village argues that
its complaint, its response to the County’s motion for judgment on the pleadings, and
its oral statements before the district court were each sufficient to preserve the
argument. After close examination of each, we disagree.
{16} 	First, the assertions contained in the Village’s complaint are insufficient to
preserve the issue. The complaint never uses the phrase installment contract. Instead,
it describes the contract as one payable “in two equal payments . . . each year.” The
contract was attached to the Village’s complaint, and although that document does
describe the County’s responsibilities as “installments,” it is silent as to how non-
payments should be treated or, specifically, how the statute of limitations should be
applied. Neither document presents the district court with an opportunity to rule on
this issue on the same grounds as presented here.
{17} 	Second, the Village’s response to the County’s motion for judgment on the
pleadings, though somewhat more specific, likewise fails to properly place the issue
before the district court. 	In it, the Village defends against the County’s statute of

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limitations argument and claims “[t]hat the County did not timely pay one installment
does not relieve the County of its obligation to do so at any time for any reason,
including not by the application of a limitations statute.” Such a general statement,
without more, does not fulfill the Village’s obligation to “fairly invoke[] a ruling of
the [district] court on the same grounds argued” on appeal, Woolwine, 106 N.M. at
496, 745 P.2d at 721, especially because the Village never revisited this notion at the
hearing. 	Even if we could reliably say that this statement constitutes “the same
grounds” as the Village’s argument on appeal, the Village’s failure to raise it later, at
the hearing, results in a failure to “fairly invoke [] a ruling of the [district] court.” Id.
As our Supreme Court has stated, “[a] litigant . . . has a duty” to establish a record “of
the proceedings he desires reviewed; otherwise the correctness of such ruling cannot
be questioned.” Barnett v. Cal M, Inc., 79 N.M. 553, 556, 445 P.2d 974, 977 (1968).
Issues “not called to the attention of the [district] court . . . cannot be raised for the
first time on appeal.” Id. (citation omitted).
{18} 	The pertinent portion of the hearing begins during the County’s argument. The
County discusses the two-year statute of limitations and argues that it absolutely bars
the Village’s claim. When the County concludes, the district court asks the Village
to respond. The Village then stakes its argument to the theory of equitable estoppel
and describes the promises made by the County. At no point does the Village argue

11
that an installment contract accrues differently than another type of contract. Below,
the Village argued that the contract, which had no ending date, continued irrespective
of the County’s failed payments and obligated the County until the rights of the parties
were adjudicated. The distinction between a continuing wrong and a single wrong
with continuing effects, as explained in Tull, 120 N.M. at 830, 907 P.2d at 1011, was
never mentioned. 	Neither did the Village advance any theory invoking, or even
analogous to, the one at issue in Plaatje, nor did it ever argue that installment
contracts should be treated differently. See 95 N.M. at 791, 626 P.2d at 1288. The
word installment, used by the Village in referring to a payment due under the JPA, is
not associated with these legal distinctions, and we hold that this argument, applying
a different calculation of the statute of limitations for installment payments, went
unpreserved. The Village never discussed the theories of “continuing wrong” versus
“single wrong,” nor did it discuss Tull or Plaatje. A review of the hearing makes clear
that this argument was neither considered by the district court nor presented on the
same grounds as argued here. We hold that the statute of limitations began to run at
the time the first payment was missed by the County.
B. 	Effect of Equitable Estoppel on the Statute of Limitations
{19} 	The Village’s second statute of limitations argument centers on a theory of
equitable estoppel. 	The Village claims that after becoming aware of the County’s

12
failure to pay, it refrained from filing suit against the County during the two-year
statute of limitations period because of its reliance on the County’s promises to
provide “payment to cover payments in default” and to “seek and acquire the approval
of DFA.”
{20} 	As a result, the Village urges us to reverse the district court’s application of the
statute of limitations and remand in order to allow discovery of additional facts
relevant to the issue of equitable estoppel. 	Based on the facts asserted in the
pleadings, we hold that the Village has failed to establish a claim for equitable
estoppel. 	And absent a new agreement, such a request for forbearance from the
County would not operate to toll the statute of limitations, because at the time the
County made its alleged promises to the Village, it had already breached the contract.
Any mere promise of payment thereafter would not slow the inexorable march of the
statute. See, e.g., Wilson v. Black, 49 N.M. 309, 312, 163 P.2d 267, 270 (1945).
{21} 	To prevail on a claim of equitable estoppel, the plaintiff must prove that the
defendant: (1) concealed material facts, falsely represented material facts, or made
representations of fact different or inconsistent with later assertions in court; (2) had
an intent or “expectation[] that such conduct” would “be acted upon by the” plaintiff;
and (3) possessed either actual or constructive knowledge of the real facts. Lopez v.
State, 1996-NMSC-071, ¶ 18, 122 N.M. 611, 930 P.2d 146. Next, the plaintiff must

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prove that it: (1) lacked both the knowledge and the means of acquiring knowledge
of the “truth as to the facts in question”; (2) relied on the defendant’s conduct; and (3)
acted upon that conduct in a way that prejudicially altered its position. Id.; see Mem’l
Med. Ctr., Inc. v. Tatsch Constr., Inc., 2000-NMSC-030, ¶ 9, 129 N.M. 677, 12 P.3d
431.
{22} 	The Village alleges that after the County ceased to make payments on the
contract, the County promised it would pay when it had no intention of doing so. We
presume the truth of this allegation. However, as mentioned above, no estoppel arises
from the fact because at the time any promise was made, the Village knew that the
JPA was in breach for the County’s failure to pay, and absent more, a mere request for
forbearance will not block assertion of the statute of limitations. Wilson, 49 N.M. at
312, 163 P.2d at 270. Certainly, Wilson recognizes “that a promise to pay a debt . .
. may be made in such a manner, and under such circumstances, that if relied upon,
it may” estop a defendant from asserting a statute of limitations defense. 	Id. 	We
suspect that the County may have acted so as to conceal facts or to make
misrepresentations of fact which it intended the Village to act upon. 	However, as
noted below, the Village has not sufficiently averred facts sufficient for a claim of
equitable estoppel.
{23} 	The Village alleged that the County intentionally failed to have the JPA

14
approved by DFA, intending to later assert the invalidity of the contract owing to the
lack of such approval. However, Attachment B to the complaint consists of a letter
dated April 3, 2001, in which the County asks the Village to execute the original
copies of JPA and return them to the County “so [it] can be forwarded to DFA.” The
letter continues, “A fully executed original will be sent to the Village once DFA has
approved the [JPA].” Later, the County asserted that the contract was invalid for lack
of DFA approval and that payments were made based on a “mistaken belief” that the
Village secured DFA approval. 	Taking the Village’s allegations as true under our
standard of review, we infer that the County was responsible for securing DFA
approval for the JPA and did not do so, later asserting that: (a) approval was not their
responsibility to begin with, and (b) that the JPA was void for the very lack of
approval the County told the Village it would obtain.
{24} 	We note that nowhere in the Village’s complaint is there an allegation that it
complied with the County’s April 3 letter. 	We also note that the copy of the JPA
attached to the complaint is conspicuously executed by representatives of both the
Village and the County but lacks the required DFA approval. The complaint does not
allege that the Village sent the copies back for DFA approval, that the County
represented falsely that approval was obtained, or that the Village relied on such a
representation. It is not alleged that the County sent back DFA-approved copies to the

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Village as it stated it would. We thus consider it fair to believe that the Village knew
the JPA had not been approved from the very face of the copy it attached to its
complaint. Estoppel requires that a plaintiff lack both the “knowledge and . . . the
means of [acquiring] knowledge of the ‘truth as to the facts in question,” and that the
plaintiff prove prejudicial reliance on the defendant’s conduct. 	Id. ¶ 9 (internal
quotation marks and citation omitted). We cannot see that these elements are pled in
the complaint. We may never know if the County nefariously intended to acquire free
garbage pickup at the Village’s expense. We similarly do not know if the Village was
led astray or simply failed to return the executed documents to the County by
oversight or inertia. 	Nonetheless, the Village continued to provide services after
payment stopped rather than terminate services because the County promised to make
good on the agreement. Unfortunately, the inability to plead the elements of estoppel
forecloses this claim, and the Village cannot recover the value of those continued
services. We are instructed to employ estoppel against a government entity “where
there is a shocking degree of aggravated and overreaching conduct or where right and
justice demand it.” Mem’l Med. Ctr., Inc., 2000-NMSC-030, ¶ 10 (internal quotation
marks and citation omitted).
{25} 	The actions of the County stringing along the Village and taking its services for
free are neither honest nor ethical. Perhaps the County might have followed up on

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DFA approval if the Village had not responded, and perhaps the Village might have
seen that DFA approval had not been obtained as required in 2004 when the County
breached the JPA. In the absence of necessary facts, we cannot consider the County’s
actions consistent with a mode of shocking, aggravated, or overreaching conduct. Nor
can we consider this a case deserving of our discretion under the “right and justice”
standard. 	Id. 	The asserted factual scenario does not constitute “one of those
exceptional circumstances in which estoppel can be used” against a state actor. Id. ¶
14. For this reason, we affirm the district court.
II. 	Applicability of Quantum Meruit
{26} 	Finally, the Village argues that the County is liable in quantum meruit. The
language of Section 37-1-23(A) explicitly bars such a claim, stating “[g]overnmental
entities are granted immunity from actions based on contract, except actions based on
a valid written contract.” Hydro Conduit Corp. v. Kemble, 110 N.M. 173, 174, 793
P.2d 855, 856 (1990), illustrates the principle. In that case, a sub-contractor on a state
public works project brought suit against the state in quantum meruit. 	The state
asserted Section 37-1-23(A) as a defense, arguing that the statute established its
sovereign immunity to such claims. The district court dismissed the supplier’s claim
on that basis, and the supplier appealed. Hydro Conduit Corp., 110 N.M. at 174, P.2d
at 856. 	Our Supreme Court affirmed the dismissal and held that the Legislature

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intended Section 37-1-23(A) “to reinstate . . . sovereign immunity” as a result of that
doctrine’s abolishment under prior case law. Hydro Conduit Corp., 110 N.M. at 177,
793 P.2d at 859. 	The language of Section 37-1-23(B) provides an exception. 	It
allows “claims based on valid written contracts” to proceed. Hydro Conduit Corp.,
110 N.M. at 177, 793 P.2d at 859. The supplier argued that claims in quantum meruit
are fundamentally different than those which sound in either tort or contract; and
while the Supreme Court agreed, it held that Section 37-1-23(A) still bars such a
claim. “[E]ven though an action for [quantum meruit] is not based on contract in a
strict theoretical sense, it is so closely related to an action which is so based that the
immunity statute . . . should be construed to extend immunity to an unjust enrichment
claim as well as to a claim founded on a true, but unwritten, contract.” Hydro Conduit
Corp., 110 N.M. at 179, 793 P.2d at 861 (emphasis in original) (internal quotation
marks omitted). Thus, by operation of the sovereign immunity statute, the Village’s
claim in quantum meruit is barred. Under Section 37-1-23, claims for contract and
quantum meruit must stand and fall together.
{27} 	Nevertheless, the Village distinguishes these facts from those in Hydro. That
case involved a private litigant’s claim against the state, whereas this case involves the
claim of one sovereign state actor against another equally sovereign state actor. Thus,
as the argument goes, sovereign immunity is inapplicable. We are unpersuaded. The

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Village cites no case law to support it, and we will not consider propositions
unsupported by citation to authority. ITT Educ. Servs., Inc. v. Taxation & Revenue
Dep’t, 1998-NMCA-078, ¶ 10, 125 N.M. 244, 959 P.2d 969; Wilburn v. Stewart, 110
N.M. 268, 272, 794 P.2d 1197, 1201 (1990) (“Issues raised in appellate briefs that are
unsupported by cited authority will not be reviewed . . . on appeal.”).
CONCLUSION
{28} 	Based on the foregoing analysis, we affirm the judgment on the pleadings
granted to the County by the district court.
{29} 	IT IS SO ORDERED.
___________________________________
RODERICK T. KENNEDY, Judge
WE CONCUR:
_____________________________
CYNTHIA A. FRY, Chief Judge
_____________________________
LINDA M. VANZI, Judge