December 09, 2015 – Santa Fe Water Resource Alliance, LLC v. John D’Antonio, New Mexico State Engineer, No. 33,704

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number:

Filing Date: December 9, 2015

NO. 33,704

SANTA FE WATER RESOURCE
ALLIANCE, LLC,

Applicant/A ppellant-A ppellee,
V.

JOHN D’ANTONIO, NEW MEXICO
STATE ENGINEER,

Appellee/A ppellant.

APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Franais J. Mathew, District Judge

Law & Resource Planning Associates
Tanya L. Scott
Charles T. Dumars

Albuquerque, NM

for Applicant/A ppellant- A ppellee

Office of the State Engineer

DL Sanders, General Counsel

Gregory C. Ridgley, Special Assistant Attomey General
Santa Fe, NM

for Appellee-A ppellant

OPINION
HANISEE, Judge.
{1} 	Applicant Santa Fe Water Resource Alliance, LLC petitioned the State Engineer
(the Engineer) to change the point of diversion for a declared water right from
farmland in Socorro County to a point north of the City of Santa Fe and for a change
of use from agricultural to municipal. The Engineer granted the application but for
much less water than Applicant argued it was entitled to under the declared right.
Applicant appealed to the district court, and after extensive litigation, prevailed in all
respects. Applicant moved the district court to tax its costs against the Engineer, and
the district court granted Applicant’s motion. The Engineer appeals the district court’s
order taxing costs, arguing that (1) the district court had no statutory authority to tax
Applicant’s costs against the Engineer; and (2) even if the district court had such
authority, it abused its discretion in awarding costs in this case.
BACKGROUND
{2} 	In 1999, Augustine and Arlene Wagner (the Wagners) filed a declaration of
ownership of a pre-1907 water right. See NMSA 1978, § 72-1-3 (1961) (“Any person,
firm or corporation claiming to be an owner of a water right which was vested prior
to the passage of Chapter 49, Laws 1907, . . . may make and file in the office of the
state engineer a declaration . . . setting forth the beneficial use to which said water has
been applied, the date of first application to beneficial use, the continuity thereof, the

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location of the source of said water and if such water has been used for irrigation
purposes, the description of the land upon which such water has been so used and the
name of the owner thereof.”). In 2001, the Engineer issued to the Wagners a permit
to draw the amount of their declared right from a supplemental well for irrigation uses.
{3} 	Applicant purchased the Wagners’ water rights and petitioned the Engineer to
change the point of diversion of the Wagners’ declared right from the Wagners’ land
in Socorro to a point north of Santa Fe. See NMSA 1978, § 72-5-24 (1985) (stating
that “[a]n appropriator of water may, with the approval of the state engineer, . . .
change the place of diversion, storage or use in the manner and under the conditions
prescribed” for applications to appropriate water); see also Laura Paskus, Death by
a Thousand Cuts: Will Santa Fe’s Campaign to Buy Up Water Rights Kill the Rio
Grande?, 	Santa 	Fe 	Reporter, 	June 	27, 	2012, 	available 	at
http://www.sfreporter.com/santafe/article-6807-death-by-a-thousand-cuts.html (last
visited October 13, 2015) (discussing the potential environmental impact of Santa Fe’s
policy of purchasing declared water rights in the Middle Rio Grande Valley to satisfy
growing municipal demand)). Applicant also sought to change the approved use of the
Wagners’ right from agricultural to municipal.
{4} 	The Engineer designated a hearing examiner, see NMSA 1978, § 72-2-12
(1965), who held a two-day hearing to take evidence and address various objections

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to Applicant’s petition. The main issue at the hearing was the validity of the Wagners’
claimed right. The hearing examiner rejected Applicant’s contentions that the
Wagners held a right to 292.005 acre-feet per annum of water, and instead found that
Applicant had only demonstrated that the Wagners held a right to 61.236 acre-feet per
annum. Accordingly, the hearing examiner held that Applicant was entitled to change
the point of diversion for that quantity of water, and no more.
{5} 	Applicant appealed the Engineer’s decision to the district court. See NMSA
1978, § 72-7-1(A) (1971) (“Any applicant or other party dissatisfied with any
decision, act or refusal to act of the state engineer may appeal to the district court of
the county in which the work or point of desired appropriation is situated.”). The
district court held a bench trial in June 2013, and afterward the court issued its own
detailed findings of fact and conclusions of law reversing the hearing examiner’s
decision and granting Applicant’s petition in whole.
{6} 	Afterward, Applicant submitted a bill of costs to the clerk of the district court.
See Rule 1-054(D)(1) NMRA (“Except when express provision therefor is made either
in a statute or in these rules, costs, other than attorney fees, shall be allowed to the
prevailing party unless the court otherwise directs[.]”). The Engineer filed objections
to Applicant’s bill of costs. See Rule 1-054(D)(4) (setting out the procedure for the
prevailing party to move to tax costs and for the non-prevailing party to object to a bill

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of costs). The district court overruled the Engineer’s objections and taxed Applicant’s
costs against the Engineer. The Engineer appealed the district court’s order taxing
costs.
DISCUSSION
Section 72-7-1(D) Gives District Courts the Authority to Tax Costs Against the
Engineer
{7} 	The Engineer argues that the water code does not allow district courts to tax
costs against the Engineer when a party appeals a decision it makes to the district
court and wins. The Engineer’s argument is as follows: under Rule 1-054(D), “costs
against the state, its officers and agencies shall be imposed only to the extent
permitted by law.” The Engineer contends that because Section 72-7-1(D), which
governs the taxation of costs in appeals from the Engineer’s office to the district court,
makes no express provision for the taxation of costs against the Engineer, Rule 1-
054(D) bars district courts from awarding costs to prevailing appellants.
{8} 	As an initial matter, Applicant maintains we should decline to address this
argument because the Engineer failed to raise it with the district court. We agree that
the issue was not preserved, meaning also that the district court did not have an
opportunity to rule on it. See Rule 12-216(A) NMRA (“To preserve a question for
review it must appear that a ruling or decision by the district court was fairly
invoked[.]”).

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{9} 	Despite the Engineer’s failure to preserve the issue, we will address the
Engineer’s argument because it raises a question of general public importance. See
Rule 12-216(B)(1). “[W]e have invoked the general public interest exception to the
preservation rule where review of the appellate issue is likely to settle a question of
law affecting the public at large or a great number of cases and litigants in the near
future.” Azar v. Prudential Ins. Co. of Am., 2003-NMCA-062, ¶ 28, 133 N.M. 669, 68
P.3d 909 (citing cases). In this case, whether costs may be taxed against the Engineer
is a pure question of law that will apply (barring legislative intervention) to every
appeal of the Engineer’s decisions to district court. Moreover, the issue has been
raised and briefed before the district court in other pending appeals from the
Engineer’s office. Accordingly, we address the merits of the issue raised by the
Engineer for the first time on appeal.
{10} 	“Our primary task in construing statutory language is to effect legislative
intent.” Benny v. Moberg Welding, 2007-NMCA-124, ¶ 5, 142 N.M. 501, 167 P.3d
949.
We start with the language [of the statute] itself, giving effect to its plain
meaning where appropriate while being careful not to be misled by
simplicity of language when the other portions of a statute call its
meaning into question, or the language of a section of an act conflicts
with an overall legislative purpose.
Id. (internal quotation marks and citations omitted).

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{11} 	We begin with the text of Section 72-7-1(A), (D), which states that in an appeal
to a district court from a “decision, act or refusal to act of the state engineer . . . [c]osts
shall be taxed in the same manner as in cases brought in the district court and bond for
costs may be required upon proper application.” Id. Section 72-7-1(D) gives district
courts the ability to tax costs, but it does not allow or prohibit the taxation of costs
against the state or the Engineer. Rather, it incorporates by reference the “manner”
that costs are taxed in district courts generally.
{12} 	Our Supreme Court considered an analogous question of statutory construction
in In re Heiman’s Will, 1931-NMSC-041, 35 N.M. 522, 2 P.2d 982. In that case, a
probate court sustained the appellees’ claims against an estate, a ruling that the
executor appealed to the district court. Id. ¶ 1. The district court dismissed the appeal
on two grounds: “(1) [the executor’s f]ailure to issue and serve citation on the
claimants; [and] (2) the failure to file with the clerk of the probate court written
directions as to papers and records to be transmitted to the district court, pursuant to
the provisions of [C]hapter 99, Sess. Laws 1915, 1929 Comp. §§ 34-420 and 34-421.”
In re Heiman’s Will, 1931-NMSC-041, ¶ 5.
{13} 	The appellant did not challenge the district court’s conclusion that it had failed
to comply with Sections 34-420 and 34-421. Instead, the appellant cited 1929 Comp.
§ 34-419, a section of the Kearny Code predating Sections 34-420 and 34-421, which

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stated that “[a]ppeals from the judgment of the probate court shall be allowed to the
district court in the same manner, and subject to the same restriction as in case of
appeals from the district to the [S]upreme [C]ourt.” In re Heiman’s Will, 1931-NMSC-
041, ¶ 8 (internal quotation marks and citation omitted).Our Supreme Court held that
the district court’s dismissal of the appeal was improper because it did not follow the
Supreme Court’s rules of appellate procedure, to the extent that those rules did not
conflict with the express terms of the statutes governing appeals from probate courts.
Id. ¶¶ 12-15.
{14} 	The 	Heiman’s 	Will 	Court 	adopted 	the 	following 	rule: 	when 	a 	statute
incorporates by reference the “law generally which governs a particular subject[,]”
courts must read the statute to incorporate “the law as it exists from time to time or at
the time the exigency arises to which the law is to be applied” to the extent that it does
not conflict with the express terms of other statutes governing the subject. Id. ¶¶ 9-10
(internal quotation marks and citation omitted). Since a Supreme Court rule requiring
the Court to find prejudice to the moving party in order to justify granting a motion
to dismiss an appeal on non-jurisdictional grounds was in effect at the time the
petition for leave to appeal the probate court’s order was filed, our Supreme Court
held that the district court erred in granting the appellees’ motion to dismiss without
making any findings as to prejudice. Id. ¶¶ 12-13.

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{15} 	In order to resolve the meaning of the phrase “manner as in cases brought in the
district court” in Section 72-7-1(D), then, Heiman’s Will counsels us to consult
statutes and other relevant court rules that would apply to cases brought in district
court at the time an appeal is made. NMSA 1978, Section 39-3-30 (1966) and Rule
1-054 govern the taxation of costs in district court. Section 39-3-30 provides in
relevant part: “In all civil actions or proceedings of any kind, the party prevailing shall
recover his costs against the other party unless the court orders otherwise for good
cause shown.” But Rule 1-054(D)(1) provides:
Except when express provision therefor is made either in a statute or in
these rules, costs, other than attorney fees, shall be allowed to the
prevailing party unless the court otherwise directs; but costs against the
state, its officers and agencies shall be imposed only to the extent
permitted by law.
{16} 	In Kirby v. New Mexico State Highway Department, 1982-NMCA-014, 97 N.M.
692, 643 P.2d 256, the state appealed the district court’s award of costs to the plaintiff,
who prevailed against the state on claims arising under the Tort Claims Act, NMSA
1978, Section 41-4-1 to -30 (1976, as amended through 2015). Kirby, 1982-NMCA-
014, ¶ 1. In Kirby, the state made an argument indistinguishable from the one the
Engineer makes here: Since neither the Tort Claims Act nor Section 39-3-30 made
express provision for the taxation of costs against the state, Rule 1-054(D) precludes
an award of costs to the party prevailing against the state in a civil action. Kirby,

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1982-NMCA-014, ¶ 20.
{17} 	This Court rejected the state’s argument in Kirby and read Section 39-3-30 to
allow district courts to tax a prevailing party’s costs against the State. First, we noted
that Section 39-3-30
originated in the Kearny Code of 1846 under the division entitled Costs,
§ 1. It was subsequently codified in C.L. 1865, ch. 45, § 1, and
recodified, amended, compiled and recompiled over the intervening
years until omitted by the compilers of the 1943 compilation of the New
Mexico statutes because they felt it had been superseded by Supreme
Court Rule 54(d) (now R.C.P. 54(d), N.M.S.A.1978). In Laws 1966, ch.
28, § 58, the section was amended and recompiled . . . . In expressly
reinstating this statute and overriding the compiler’s assumption that
Rule 54(d) (first adopted in its present form, effective August 1, 1942,
pursuant to Supreme Court order of March 20, 1942) was “deemed to
supersede” the forerunners of [Section] 21-10-27, the [L]egislature gave
express authority, without exception, to recovery of costs against any
losing party.
Kirby, 1982-NMCA-014, ¶ 21. We went on to hold that even though the Tort Claims
Act makes no express provision for the taxation of costs against the State,
we are not impressed that the [L]egislature’s silence, in that Act, is
indicative of its intent to deny a successful complainant the recovery of
his costs in a [t]ort [c]laims suit. In our view, the [L]egislature as easily
could have expressed such a limitation, if it intended to do so, as it did
in providing in the [T]ort Claims Act that no exemplary or punitive
damages, or interest prior to judgment, could be included in any award.
We must assume that the [L]egislature was aware of existing
statutory and common law, including Rule 54(d), supra, and [Section]
39-3-30, when the Tort Claims Act was passed. We must also assume
that the 1966 [L]egislature was familiar with the compiler’s annotation
to Rule 54(d) when it deliberately returned [Section] 39-3-30 (then §

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21-10-27, 1953 Comp.) to the statute books. Section 39-3-30 provides
the statutory basis upon which Rule 54’s reference to costs against the
[s]tate may be allowed. The trial court’s order in that respect was not
error.
Kirby, 1982-NMCA-014, ¶¶ 22-23 (citations omitted).
{18} 	Taken 	together, 	Heiman’s 	Will 	and 	Kirby 	provide 	the 	framework 	for
understanding the plain meaning of Section 72-7-1(D). First, under Heiman’s Will,
Section 72-7-1(D)’s incorporation of the law that generally governs cost awards in
district courts requires us to apply the law governing costs in “cases brought in the
district 	court,” 	including 	Section 	39-3-30. 	Section 	72-7-1(D). 	Second, 	Kirby
recognizes that under Rule 1-054(D) NMRA, some express provision of law must
authorize the taxation of costs against the state. Because the Legislature was aware of
Rule 1-054 when it passed Section 39-3-30, Kirby concluded that the phrase “the
part[y] prevailing shall recover his costs against the other party” includes the state by
its plain terms. Kirby, 1982-NMCA-014, ¶ 21 (internal quotation marks and citation
omitted). Applying Heiman’s Will and Kirby to this case, the plain meaning of Section
72-7-1(D) allows district courts to tax costs in the same way and against anyone
subject to a cost award in “cases brought in the district court.” Section 72-7-1(D). And
since state entities are subject to cost awards in such cases under Kirby, Sections 72-7-
1(D) and 39-3-30 allowed the district court to tax Applicant’s costs against the
Engineer in this case.

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{19} 	The Engineer argues that our interpretation of the plain meaning of Section 72-
7-1 cannot be squared with our Supreme Court’s statement in Lion’s Gate Water v.
D’Antonio, 2009-NMSC-057, 147 N.M. 523, 226 P.3d 622 that Section 72-7-1 did not
“give the judiciary de facto original jurisdiction over water rights applications.” Lion’s
Gate, 2009-NMSC-057, ¶ 30. The Engineer concludes that since Section 72-7-1 does
not give district courts original jurisdiction over water rights applications, an appeal
from the Engineer’s decision is not a “civil action[] or proceeding[] of any kind”
under Section 39-3-30, but instead a special proceeding to enforce statutory rights.
{20} 	Even if we assume that in Lion’s Gate our Supreme Court intended the phrase
“de facto original jurisdiction” to mean “actual original jurisdiction,” the Engineer’s
argument depends on an additional premise: that any proceeding that is not within the
district court’s original jurisdiction is not a “civil action[] or proceeding[] of any kind”
under Section 39-3-30. Id. Even if we were to assume the Engineer’s contention that
appeals from the Engineer’s decisions are not “civil actions or proceedings of any
kind” and therefore not subject to Section 39-3-30, a deeper problem remains: if
Section 39-3-30 does not apply to appeals of the Engineer’s decisions because they
are special statutory proceedings and not “civil actions or proceedings of any kind,”
how are we to interpret Section 72-7-1(D)’s reference to “the . . . manner [costs are
taxed] in cases brought in the district court?” (Emphasis added.) In short, the

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Engineer’s argument renders the text of Section 72-7-1(D) superfluous. See Consol.
Freightways, Inc. v. Subsequent Injury Fund, 1990-NMCA-058, ¶ 15, 110 N.M. 201,
793 P.2d 1354 (“Courts assume that the [L]egislature will not enact useless statutes
or amendments.”).
{21} 	To be sure, other elements of Section 72-7-1 appear to be in tension with our
reading of Section 72-7-1(D). Section 72-7-1(B) states that if an appeal is not taken,
the Engineer’s decision “is conclusive.” And Section 72-7-1(E) refers to “[e]vidence
taken in a hearing before the state engineer.” Taken together, Sections 72-7-1(B) and
(E) suggest that the Engineer acts in the capacity of an adjudicator in deciding an
application to change the point of diversion of a water right, and our rules of
procedure do not contemplate the taxation of costs against a lower court when it is
reversed on appeal. The Engineer contends that it would make no sense to allow the
taxation of costs against the Engineer when the water code does not allow the
Engineer to appeal his own decisions; in every case, the applicant initiates the
Engineer’s review of a given water right and appeals the Engineer’s decision to the
district court if the applicant is dissatisfied with the Engineer’s review.
{22} 	Whatever tension our reading of Section 72-7-1(D) has with other provisions
of the water code stems not from our understanding of the plain meaning of Section
72-7-1(D), 	but 	from 	the 	tension 	between 	the 	multiple, 	at 	times 	conflicting,

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responsibilities the water code imposes on the Engineer. As our Supreme Court noted
in Plummer v. Johnson, 1956-NMSC-077, 61 N.M. 423, 301 P.2d 529, the Engineer
is a “necessary, or at least a proper, party” to appeals from proceedings in his office,
who must defend his own decision in the district court. Id. ¶ 8 (internal quotation
marks and citation omitted). Thus, unlike an administrative adjudicator or trial court,
which does not normally advocate on behalf of its judgment when it is appealed, the
Legislature has tasked the Engineer with “general supervision of waters of the state[,]”
NMSA 1978, § 72-2-1 (1982), and “adopt[ing] rules for priority administration to
ensure that [his] authority is exercised” in a manner that does not interfere with
adjudications of water rights, impair existing rights, or cause increased depletions of
New Mexico’s water supply. NMSA 1978, § 72-2-9.1(B)(1)-(3) (2003).
{23} 	Importantly, the water code does not require hearings on applications to
appropriate water to be conducted by a neutral hearing examiner; instead, the hearing
examiner acts as a proxy for the Engineer, and it is the Engineer who ultimately
decides whether to grant an application to appropriate waters based on the hearing
examiner’s report. See § 72-2-12 (“The state engineer shall base his decision rendered
in any matter heard by an examiner upon the record made by or under the supervision
of 	the 	examiner 	in 	connection 	with 	such 	proceeding 	and 	the 	report 	and
recommendation of the examiner; and his decision shall have the same force and

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effect as if said hearing had been conducted by the state engineer.”).
{24} 	In this role, the Engineer is more akin to a private litigant who incurs his own
and causes others to similarly incur costs in order to allow the district court to decide
a case. Section 72-7-1(D) by its terms applies to proceedings in the district court,
where the Engineer exercises his role as administrator of New Mexico’s waters and
must defend his judgment against attack. Since Section 72-7-1(D) relates to the
Engineer’s exercise of this duty, as opposed to his other duty as an adjudicator of
claims, we do not think our interpretation of Section 72-7-1(D) puts it in tension with
provisions of the water code relating to the Engineer’s adjudication of applications
concerning water rights.
{25} 	As the Engineer concedes, he vigorously opposed Applicant’s appeal. By
tasking the Engineer with both deciding claims and defending his own decision on
appeal, the Legislature must have been aware that the Engineer would cause the
parties against whom it litigates to incur costs and that the Engineer would incur his
own costs defending his decision in the district court. By making express provision
for the taxation of costs in Section 72-7-1(D), the Legislature allows parties to recoup
costs incurred in correcting an erroneous decision by the Engineer; by the same token,
it provides the Engineer with a means of recovering resources expended defending the
correctness of his decision on appeal.

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{26} 	The purpose of the water code’s appeals process also supports our interpretation
of Section 72-7-1(D). Article XVI, Section 5 of the New Mexico Constitution, which
was adopted by referendum in 1967 and codified by the Legislature in Section 72-7-
1(D) in 1971, was meant to overrule our Supreme Court’s holding in Kelley v.
Carlsbad Irrigation Dist., 1963-NMSC-049, 71 N.M. 464, 379 P.2d 763, superseded
by statute as stated in Lion’s Gate, 2009-NMSC-057, ¶ 21, that the district court’s
review on appeal of the Engineer’s decisions is deferential and limited to the evidence
considered by the Engineer below. Lion’s Gate, 2009-NMSC-057, ¶ 34. Thus, while
the water code provides a comprehensive administrative scheme that limits the scope
of a district court’s review in crucial respects, id. ¶ 36, the overall intent of Article
XVI, Section 5 of the State constitution and Section 72-7-1 was to make clear that the
Engineer’s decision is entitled to no deference whatsoever. By making express
provision for the district court to take new evidence, the Legislature intended Section
72-7-1 to place the Engineer in the same position as the appellant; the Engineer must
participate in the district court proceedings, challenge the appellant’s evidence and
argument, and even offer his own evidence and argument in defense of his decision
below. Given this purpose and the Legislature’s express provision for taxation of costs
in the same way costs are to be taxed in civil actions, we infer a legislative intent to
deter both unsupportable decisions by the Engineer and frivolous appeals by

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applicants in much the same way Rule 1-054 is designed to deter the bringing of
frivolous claims and the imposition of meritless defenses in civil actions. Given the
overall purpose of the water code’s appeal provisions and the purpose of cost-shifting
in civil actions, the natural import of Section 72-7-1(D) is to assign the taxation of
costs against the party who loses the appeal, regardless of the party’s identity.
{27} 	Although ancillary to our construction of Section 72-7-1(D), its legislative
history additionally supports our conclusion that the district courts may tax the
prevailing party’s costs against the Engineer. When the Legislature first adopted a
provision allowing taxation of costs by reference to the district court rule in 1907,
New Mexico district courts, as federal territorial courts, were bound by federal law.
See Organic Act of 1850 establishing the Territory of New Mexico, Ch. 49, § 17, 9
Stat. 446 (1850). At that time, the consensus in federal courts was that absent
government consent, the doctrine of sovereign immunity barred the taxation of costs
against the state. See 10 Charles A. Wright et al., Federal Practice & Procedure §
2672.1 (3d ed. 2015). This explains a provision in New Mexico territorial law
explicitly allowing the taxation of costs against the territory. See § 3, C.L. 1884, § 541
(“In all cases in which costs are adjudged against the Territory or any county, they
shall be taxed and charged the same as in other cases and no more.”).
{28} 	Section 541 was later repealed and replaced by a provision outlawing the

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taxation of costs against the territorial government unless “absolutely fixed by specific
law[.]” 1889 N.M. Laws, ch. 32, § 18 (repealing C.L. 1884, § 541). The language
requiring costs incurred during appeals of the Engineer’s decisions to be taxed in the
same fashion as costs are taxed in district courts dates to 1907, when Chapter 32,
Section 18 of New Mexico Laws was still in force. See 1907 N.M. Laws, ch. 49, § 66
(“The costs in [appeals from the board of water commissioners are] to be taxed the
same as costs in cases in the district court and at the same rates and that the same shall
be paid in accordance with the judgment of the board or [the] court in each case.”).
Thus, at the time it was adopted, the Legislature would have understood the provision
allowing for the taxation of costs in water appeals to not apply to the territory itself
because laws applicable at the time would have required an explicit statement
subjecting the territory to the taxation of costs.
{29} 	But two intervening developments changed the law in ways that are important
to understanding Section 72-7-1(D)’s application in this case: first, the Legislature
adopted Section 39-3-30 in 1966. As Kirby explains, the effect of Section 39-3-30 was
to supersede Rule 1-054’s prohibition of the taxation of costs against state entities
absent express statutory authorization. Kirby, 1982-NMCA-014, ¶ 21. Then, in 1971,
the Legislature substantially amended and recompiled Section 72-7-1(D). As we noted
in Kirby, when the Legislature recompiles or amends a statute, it is presumed to be

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aware of other relevant statutes and court holdings at the time of the recompilation or
amendment. 1982-NMCA-014, ¶¶ 20-21. By leaving intact the language allowing the
taxation of costs in the same manner as costs are taxed in cases brought in district
court, the Legislature was presumptively aware Section 72-7-1(D)’s incorporation of
the law governing costs in cases brought in district court would incorporate Section
39-3-30.
{30} 	We note that the Legislature is free to revise Section 72-7-1(D) in order to
exempt the Engineer from taxation of costs on appeals in district court. But given our
interpretation of Section 39-3-30 in Kirby and Section 72-7-1(D)’s broad and
unqualified incorporation of the law governing taxation of costs in civil actions, we
must reject the Engineer’s arguments that Section 72-7-1(D) should not be construed
to apply to all parties to an appeal from the Engineer’s office, including the Engineer
himself.
{31} 	In sum, the plain meaning of Section 72-7-1(D) subjects the Engineer to the
taxation of costs in the same way that state entities are subject to cost awards in civil
actions. We therefore conclude that the district court did not act outside its authority
in taxing Applicant’s costs against the Engineer.
The District Court Did Not Abuse its Discretion in Awarding Costs in This Case
{32} 	We review a district court’s grant or denial of a motion for an award of costs

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for an abuse of discretion. Pioneer Sav. & Trust, F.A. v. Rue, 1989-NMSC-079, ¶ 12,
109 N.M. 228, 784 P.2d 415. The Engineer argues that the district court abused its
discretion by taxing costs against the Engineer because it misapprehended the legal
standard that applies to motions to tax costs and it rejected the Engineer’s policy
arguments against an award of costs in this case.
{33} 	The Engineer first argues that the district court abused its discretion by applying
an incorrect legal standard to Applicant’s motion for costs. The Engineer points to oral
statements by the district court that it “appears there is a directive” in Rule 1-054 and
Section 39-3-30 that required the district court to tax Applicant’s costs against the
Engineer. The Engineer argues that this statement indicates that the district court
granted Applicant’s motion for costs because it was laboring under the mistaken belief
that it had no discretion to deny the motion.
The district court’s statement was as follows:
In amending [Section 72-7-1], these state engineer cases . . . could come
to the court as a case that might well be litigated with new evidence and
new costs . . . . When I read [Section 72-7-1] and look at Rule [1-054]
concerning costs . . . I’m having a hard time with the . . . Engineer’s
position that costs shouldn’t be awarded. It appears that there is a
directive to me.
{34} 	We disagree with the Engineer’s assertion that this statement proves that the
district court was laboring under an incorrect apprehension of the law. Rather, the
district court was expressing its general agreement with Applicant’s argument that

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under Section 72-7-1(D), the prevailing party is presumptively entitled to an award
of costs in all appeals of the Engineer’s decisions. See In re Stailey, 1994-NMCA-015,
¶ 21, 117 N.M. 199, 870 P.2d 161 (noting that “a presumption exists that a prevailing
party normally is entitled to costs as a matter of course and liability for costs is a
normal incident of defeat”). Since we have already held that Section 72-7-1(D)
imports this presumption into appeals from the Engineer’s office, the district court’s
statement 	was 	legally 	sound 	insofar 	as 	it 	implied 	that 	the 	district 	court 	is
presumptively required to award the prevailing party its costs. To the extent that the
district court’s statement can be characterized to suggest the court was not aware that
it could deny Applicant’s motion for costs as a matter of discretion, we are unwilling
to infer such an unawareness based solely on the court’s use of the word “directive.”
{35} 	The Engineer next argues that because the district judge who granted
Applicant’s motion for an award of costs (Judge Mathew) was not the same district
judge who presided over the trial and entered judgment in the case (Judge Pfeffer),
“[i]t would have been difficult for Judge Mathew to exercise any discretion over some
of the equitable factors raised by the State Engineer in his objections to the Cost Bill.”
We note first that Applicant moved to recuse Judge Mathew, and the Engineer
opposed Applicant’s motion. Now the Engineer takes a different position altogether:
Judge Mathew should have sustained the Engineer’s objections to Applicant’s bill of

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costs because he lacked familiarity with the case as a whole.
{36} 	But Judge Mathew’s order granting Applicant’s motion for costs stated that he
had “considered the briefs filed by both parties and the oral arguments of both parties”
before deciding to grant the motion. To the extent that the Engineer argues that a
district judge has an independent obligation to evaluate the entire record of a case (as
opposed to those portions pointed out in briefing by the parties) in deciding whether
to tax costs, we disagree. First, we note that a district court need only give reasons for
denying a motion for costs; otherwise there is a rebuttable presumption that costs
should be awarded to the prevailing party.
{37} 	Second, the text and structure of Rule 1-054(D) make clear that the judge who
awards costs to the prevailing party need not be intimately familiar with the
proceedings before judgment. When a court enters judgment, the prevailing party
submits a bill of costs to the clerk of court, not the district judge who presided over
the case. Rule 1-054(D)(4). If the losing party fails to object to the prevailing party’s
bill of costs, then the clerk of court “shall tax the claimed costs which are allowable
by law.” Id. (emphasis added). Thus, Rule 1-054 tasks the clerk of court with the
responsibility of determining whether a specific cost is allowed by law and then
creates a presumption that those costs are to be taxed against the losing party. A
district judge only becomes involved when the losing party files objections to the

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prevailing party’s bill of costs. Id. Thus, under Rule 1-054, it is the losing party’s
responsibility to identify aspects of the record and any other considerations that would
justify disallowing costs; given the presumption in favor of awarding costs, it would
make little sense to adopt the Engineer’s argument that a district judge should consider
the propriety of a cost award even without objections from the losing party.
{38} 	The Engineer next argues that the district judge’s decision to tax costs against
the Engineer was an abuse of discretion in light of the equities impacting this case.
The Engineer argues that in opposing Applicant’s claim, the Engineer was merely
“act[ing] within the statutory mandate of the Water Code” by “tak[ing] reasonable and
appropriate action to protect and administer the water laws of New Mexico.” The
Engineer also argues that awarding costs in this case will cause the Engineer to change
its standing practice of refusing to seek an award of costs when it prevails in appeals
to district court.
{39} 	The district court did not abuse its discretion in rejecting these contentions for
two reasons. First, Section 72-7-1(D) cannot permit the taxation of costs against the
Engineer as a general matter but render an award of costs an abuse of discretion when
the Engineer merely acts within his statutory mandate in defending the appeal; if that
were so, every award of costs against the Engineer would be an abuse of discretion.
{40} 	Second, we are not persuaded that the Engineer’s threat to seek costs when it

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prevails dictates a conclusion that the district court abused its discretion. We note that
the Engineer’s threat to seek cost awards against the “farmers with small holdings,
acequia parciantes, and concerned citizens” in other cases depending on the outcome
of this case, seems retaliatory.
{41} 	In sum, we see no abuse of discretion in the district court’s decision to tax
Applicant’s costs against the Engineer.
CONCLUSION
{42} 	Section 72-7-1(D) permits the taxation of the prevailing party’s costs against
the Engineer. The district court did not abuse its discretion in awarding costs against
the Engineer in this case.
{43} 	Affirmed.
{44} 	IT IS SO ORDERED.
_________________________________
J. MILES HANISEE, Judge

WE CONCUR:

CYNTHIA A. FRY, Judge

RODERICK T. KENNEDY, Judge

24.