January 29, 2020- Gyros, Inc. v. Mal Mahon, No. A-1-CA-37067

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Court of Appeals of New Mexico

GYROS, INC., Filed 1/29/2020 11:15 AM

Plaintiff-Appellee, A. ~£e4
Mark Reynolds

v. No. A-1-CA-37067
MAL MAHON,
Defendant-Appellant,
and
DENNIS PESCE, Individually,
Defendant.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Beatrice J. Brickhouse, District Judge

The Turner Law Firm, LLC
Scott E. Turner
Albuquerque, NM

for Appellee

Crowley & Gribble, P.C.
Clayton E. Crowley
Albuquerque, NM

for Appellant

2
MEMORANDUM OPINION	1
M. ZAMORA, Judge.	2
{1} 	Plaintiff hired Defendant and his now-deceased Codefendant 1 to supply	3
equipment and construction services in connection with the build-out of Plaintiff’s	4
restaurant space. Defendant misrepresented himself as a licensed contractor and	5
performed the duties of a contractor. Plaintiff prevailed at trial on his claim that	6
Defendant’s knowing and intentional misrepresentation concerning his licensure	7
violated the New Mexico Unfair Practices Act (UPA), NMSA 1978, §§ 57-12-1	8
to -26 (1967, as amended through 2019).	9
{2} 	Defendant argues on appeal that the construction project in this case was not	10
subject 	to 	the 	UPA 	since 	the 	contemplated 	construction 	work 	involved	11
improvements to what Defendant characterizes as “realty.” He contends that because	12
he supplied equipment and performed work that was later “incorporated into real	13
estate,” he furnished to Plaintiff neither “goods” nor “services” as contemplated by	14
the plain language of the UPA. As such, Defendant argues the UPA does not apply	15
to this case under McElhannon v. Ford, 2003-NMCA-091, ¶ 17, 134 N.M. 124, 73	16
P.3d 827 (“To the extent goods and services are combined to create a structure that	17
is permanently affixed to realty, they are understood to have been ‘converted’ to	18
realty.”). Unpersuaded by Defendant’s argument, we affirm.	19
1Defendant Dennis Pesce died prior to trial and is not a party to this appeal.

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Standard of Review	1
{3} 	The district court entered findings of fact and conclusions of law. Defendant	2
does not challenge the sufficiency of the evidence supporting any of the court’s	3
findings of fact. “An unchallenged finding of the trial court is binding on appeal.”	4
Seipert v. Johnson, 2003-NMCA-119, ¶ 26, 134 N.M. 394, 77 P.3d 298; see also	5
Cockrell v. Cockrell, 1994-NMSC-026, ¶ 9, 117 N.M. 321, 871 P.2d 977 (holding a	6
party may preserve questions as to the sufficiency of the evidence if the party timely	7
submits findings of fact and conclusions of law or “otherwise call[s] the [district]	8
court’s attention to a problem with the sufficiency of the evidence”).	9
{4} 	Defendant’s challenge to the applicability of the UPA is an issue of statutory	10
interpretation. “[T]he meaning of language used in a statute is a question of law . . .	11
we review de novo.” Truong v. Allstate Ins. Co., 2010-NMSC-009, ¶ 22, 147 N.M.	12
583, 227 P.3d 73 (internal quotation marks and citation omitted). “Our primary goal	13
in interpreting statutes is to give effect to the [L]egislature’s intent.” Pub. Serv. Co.	14
of N.M. v. Diamond D Constr. Co., 2001-NMCA-082, ¶ 48, 131 N.M. 100, 33 P.3d	15
651. In doing so, we “look to the plain language of the statute.” Carrillo v. My Way	16
Holdings, LLC, 2017-NMCA-024, ¶ 22, 389 P.3d 1087. “When statutory language	17
is clear and unambiguous, this Court must give effect to that language and refrain	18
from further statutory interpretation.” Id. (internal quotation marks and citation	19
omitted).	20

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The UPA Applies to the Sale of “Goods” and “Services”	1
{5} 	The UPA “prohibits misrepresentations made in connection with the sale of	2
goods or services by a person in the regular course of his trade or commerce.”	3
Lohman v. Daimler-Chrysler Corp., 2007-NMCA-100, ¶ 21, 142 N.M. 437, 166	4
P.3d 1091 (alteration, omissions, internal quotation marks, and citation omitted).	5
The UPA makes unlawful any “unfair or deceptive trade practice,” which it defines	6
in pertinent part as	7
a false or misleading oral or written statement, visual description or	8
other representation of any kind knowingly made in connection with	9
the sale, lease, rental or loan of goods or services . . . by a person in the	10
regular course of the person’s trade or commerce, that may, tends to or	11
does deceive or mislead any person.	12
Section 57-12-2(D). Section 57-12-2(D) also provides a “nonexhaustive list” of	13
nineteen such practices. Gandydancer, LLC v. Rock House CGM, LLC, 2019-	14
NMSC-021, ¶ 11, 453 P.3d 434.	15
{6} 	Our Supreme Court has directed New Mexico courts to “ensure that the [UPA]	16
lends the protection of its broad application to innocent consumers.” State ex rel.	17
King v. B & B Inv. Grp., Inc., 2014-NMSC-024, ¶ 48, 329 P.3d 658 (internal	18
quotation marks and citation omitted). The Legislature intended the UPA to serve as	19
remedial legislation for consumer protection, and “we interpret the provisions of this	20
Act liberally to facilitate and accomplish its purposes and intent.” Truong, 2010-	21
NMSC-009, ¶ 30 (internal quotation marks and citation omitted).	22

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{7} 	In the present case, Plaintiff contracted with Defendant to construct tenant	1
improvements and supply equipment in connection with a restaurant remodel. The	2
work performed by Defendant was the type of work that could only be performed	3
by a licensed contractor. Defendant misrepresented himself to Plaintiff as a licensed	4
contractor and performed the duties of a contractor. Defendant was not, however, a	5
licensed contractor either at the time of execution of the contract or while he was	6
constructing 	tenant 	improvements 	and 	supplying 	equipment 	associated 	with	7
Plaintiff’s restaurant. The totality of the evidence demonstrated Defendant misled	8
and deceived Plaintiff into believing he was a licensed contractor. The district court	9
also found Defendant’s work was of poor workmanship and was defective.	10
{8} 	The district court therefore found a violation of the UPA, concluding “the	11
evidence that [Defendant] misrepresented himself as a licensed contractor and	12
performed the duties of a contractor when he was not a licensed contractor is	13
sufficient evidence” thereof. See § 57-12-2(D)(17) (“failing to deliver the quality . .	14
. of . . . services contracted for”); see also § 57-12-2(D)(7) (“representing that . . .	15
services are of a particular standard, quality or grade”), § 57-12-2(D)(14) (“using	16
exaggeration, innuendo or ambiguity as to a material fact or failing to state a material	17
fact if doing so deceives or tends to deceive”).	18
{9} 	On appeal, Defendant seeks to avoid UPA liability by arguing the statute does	19
not apply to the construction work he performed for Plaintiff. The contract between	20

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the parties was limited to the construction of tenant improvements and the provision	1
of equipment. Defendant nonetheless contends he did not furnish to Plaintiff either	2
“goods” or “services” as those terms are contemplated by the UPA. We disagree.	3
{10} 	This 	Court 	has 	previously 	defined 	“goods” 	as 	“personal 	estate 	as	4
distinguished 	from 	realty.” 	McElhannon, 	2003-NMCA-091, 	¶ 	17 	(emphasis	5
omitted). We have defined “services” as “work done by one person at the request of	6
another.” Id. (internal quotation marks and citation omitted). We limit our analysis	7
in this case to whether the findings of the district court meet the plain language of	8
the UPA, when viewed through the lens of liberal construction. See Carrillo, 2017-	9
NMCA-024, ¶ 22 (looking to the plain language of the statute to discern legislative	10
intent); B & B Inv. Grp., Inc., 2014-NMSC-024, ¶ 48 (charging our courts with	11
ensuring 	the 	UPA 	lends 	the 	protection 	of 	its 	broad 	application 	to 	innocent	12
consumers).	13
{11} 	Plaintiff hired Defendant to renovate a restaurant space. There was no finding	14
below that Defendant constructed for Plaintiff any form of “realty” or that the parties	15
entered into any contract for the sale of real estate. Instead, Defendant testified he	16
supplied equipment in connection with the restaurant renovation and the district	17
court found the same. We conclude Defendant supplied “personal estate”—as	18
opposed to “realty”—in the form of equipment needed for the restaurant to operate.	19

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As such, Defendant furnished to Plaintiff “goods” under the plain language of the	1
UPA. See McElhannon, 2003-NMCA-091, ¶ 17.	2
{12} 	Further, the district court found Defendant acted as a contractor by engaging	3
in activities such as building a foundation for a freezer building, installing telephone	4
wire, constructing walls, and routing electrical wiring. Defendant coordinated	5
laborers, performed physical labor, and was present for the entire project on a near-	6
daily basis. We conclude Defendant furnished “services” to Plaintiff—work done by	7
one person at the request of another—within the contemplation of the UPA. Under	8
the plain language of the UPA and McElhannon, 2003-NMCA-091, ¶ 17, therefore,	9
Defendant provided both “goods” and “services” to Plaintiff. We affirm the district	10
court’s conclusion that Defendant committed an “unfair or deceptive trade practice”	11
in violation of the plain language of the UPA.	12
Defendant’s Authority Is Inapposite	13
{13} 	Defendant argues recent New Mexico case law in an effort to avoid the plain	14
language construction set forth above. We find no basis for reversal in Defendant’s	15
authority. We address McElhannon, Fogelson v. Wallace, 2017-NMCA-089, ¶ 77,	16
406 P.3d 1012, and Lenscrafters, Inc. v. Kehoe, No. 28,145, mem. op. (N.M. Ct.	17
App. Oct. 15, 2010) (non-precedential), aff’d in part and rev’d in part, 2012-NMSC-	18
020, 282 P.3d 758, in turn.	19

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{14} 	McElhannon involved a contract for sale of completed residence. 2003-	1
NMCA-091, ¶¶ 2-6. The plaintiffs purchased a home from the defendants after	2
construction had been completed. Id. ¶ 3. After purchasing and occupying the home,	3
the plaintiffs found various defects. Id. ¶ 5. Upon investigation, they learned the	4
home had been constructed without the proper permits. Id. The plaintiffs filed suit,	5
including in their complaint a UPA claim alleging that defective “goods and	6
services” provided during the construction of the home, prior to the plaintiffs’	7
purchase of the completed realty, constituted a UPA violation. Id. ¶ 16. This Court	8
disagreed.	9
{15} 	Employing a plain language analysis, we concluded the UPA does not apply	10
to a sale of completed real estate. Id. ¶¶ 16-17. “To the extent goods and services are	11
combined to create a structure that is permanently affixed to realty, they are	12
understood to have been ‘converted’ to realty.” Id. ¶ 17. “[I]n ordinary usage a	13
completed house, as a form of realty, cannot be ‘goods,’ ” and “[a]s tangible	14
property, a house cannot constitute ‘services.’ ” Id. As such, the sale of a completed	15
house is not a sale of “goods or services” for purposes of Section 57-12-2(D).	16
McElhannon, 2003-NMCA-091, ¶ 17.	17
{16} 	Defendant contends McElhannon relieves him of UPA liability because the	18
goods and services he provided to Plaintiff later converted to realty and thereafter	19
fell outside the contemplation of the UPA. We do not read McElhannon to be	20

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protective of Defendant in this case. In McElhannon, the contract between the parties	1
was for the sale of a completed dwelling. See id. The plaintiffs were neither	2
contractually nor otherwise involved in the construction of the subject home. See id.	3
Our analysis in McElhannon was predicated “upon the fact that the house at issue	4
was ‘completed,’ such that, in context, the definitions of goods and services are	5
‘combined’ rather than viewed independently.” Fogelson, 2017-NMCA-089, ¶ 77;	6
see also 73 C.J.S. Property § 23, at 203 (1983) (noting where goods and services are	7
combined to create a structure that is permanently affixed to realty, the goods and	8
services are understood to have been “converted” to realty).	9
{17} 	Defendant in the instant case did not sell Plaintiff completed realty. There was	10
neither argument nor a finding below that Defendant either contracted to sell to	11
Plaintiff a completed piece of real estate, or in fact did so. Instead, the parties	12
contracted “for the construction of tenant improvements required in order for	13
[Plaintiff] to open for business.” As such, Defendant specifically contracted with	14
Plaintiff for the provision of goods—i.e., “personal estate as distinguished from	15
realty”—and services—i.e., “work done by one person at the request of another” in	16
connection with certain leasehold improvements. See McElhannon, 2003-NMCA-	17
091, 	¶ 	17 	(emphasis, 	internal 	quotation 	marks, 	and 	citation 	omitted). 	The	18
“combined” analysis set forth in McElhannon does not apply to the facts found by	19
the district court in the present case.	20

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{18} 	Defendant relies on Fogelson, in which the parties entered into a purchase	1
agreement for the construction and purchase of a home to be built on a vacant lot.	2
2017-NMCA-089, 	¶ 	9. 	The 	home 	was 	never 	completed 	by 	the 	defendant,	3
distinguishing Fogelson from McElhannon. See id. ¶ 10. The plaintiffs sued under	4
various theories, and their UPA claim was dismissed below. Id. ¶¶ 12-13. On cross-	5
appeal this Court reversed, reasoning that because the plaintiffs never received a	6
completed 	house, 	the 	“combined” 	view 	of 	goods 	and 	services 	expressed 	in	7
McElhannon did not apply to deprive the plaintiffs of their UPA claim. Id. ¶ 78.	8
Instead, we considered—as we do here—the plain meaning of the language of the	9
UPA. We concluded the construction services provided by the defendant prior to	10
completion of the project “were undoubtedly ‘work done by one person at the request	11
of another.’ ” Id. ¶ 81 (quoting McElhannon, 2003-NMCA-091, ¶ 17). In reversing	12
the district court, we concluded “[i]n the absence of language [in the UPA] expressly	13
including or excluding construction services, construction services rendered prior to	14
the completion of a residential home are ‘any services’ as defined in Section 57-12-	15
2.” Fogelson, 2017-NMCA-089, ¶ 81.	16
{19} 	Following Fogelson, we likewise conclude in the instant case the “combined”	17
view of goods and services expressed in McElhannon does not apply to the facts	18
found by the district court. Again, this case does not involve the sale of completed	19
real estate. The parties in our case instead contracted for “construction services	20

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rendered prior to completion” of a leasehold restaurant space. See Fogelson, 2017-	1
NMCA-089, ¶ 78. We find no basis in either McElhannon or Fogelson to relieve	2
Defendant of liability for the provision of defective goods or services in connection	3
with the contemplated construction project.	4
{20} 	In sum, Defendant’s specious argument that “the merger of the improvements	5
with the real estate appears to remove the UPA from any such transaction regardless	6
of the quality of the work” fails for at least two reasons. First, there was neither	7
argument nor evidence nor any finding entered below concerning merger of	8
Defendant’s ostensible improvements with real estate. “It is not our practice to rely	9
on assertions of counsel unaccompanied by support in the record. The mere	10
assertions and arguments of counsel are not evidence.” Chan v. Montoya, 2011-	11
NMCA-072, ¶ 9, 150 N.M. 44, 256 P.3d 987 (internal quotation marks and citation	12
omitted). Second, Defendant seeks to defeat the remedial purposes of the UPA. If	13
we were to credit Defendant’s argument in this case, we would essentially make	14
lawful the provision of defective goods and shoddy services in connection with New	15
Mexico construction projects, so long as the goods and services in question are	16
eventually incorporated into a completed piece of saleable real estate. According to	17
Defendant, any unfair or deceptive trade practice committed by a construction	18
contractor during the course of construction “merges” with the completed realty, the	19
contractor escapes UPA liability, and someone else becomes liable for any problems	20

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found with the defectively constructed real estate. This is an untenable position	1
under our broad, remedial UPA. See Truong, 2010-NMSC-009, ¶ 30. In our view,	2
Defendant’s conduct in this case is exactly what the UPA is intended to proscribe.	3
We decline to apply a theory of merger drawn from inapplicable case law to save	4
Defendant from his own conduct.	5
{21} 	Defendant also seems to rely upon Lenscrafters, No. 28,145, mem. op. In	6
Lenscrafters, a defendant optometrist subleased space from the plaintiff. Id. at *1.	7
After the defendant vacated the subleased space and moved his practice less than a	8
mile away, the plaintiff sued to enforce a non-compete provision in the parties’	9
sublease agreement. Id. The defendant counterclaimed, alleging among other things	10
the plaintiff’s actions violated the UPA. Id. The district court dismissed this claim,	11
and on appeal this Court decided the sublease agreement upon which the defendant’s	12
counterclaim was based was not subject to the UPA. Id. at *8.2 We noted “the UPA	13
applies only to goods and services and not to the rental of real property such as office	14
space” and found the defendant did not present any material evidence at trial to	15
support his UPA counterclaim. Id. As such, we concluded the UPA did not fit the	16
facts in that case. Id.	17
2 Defendant 	did 	not 	pursue 	his 	UPA 	claims 	in 	the 	Supreme 	Court.
Lenscrafters, Inc., 2012-NMSC-020, ¶ 28.

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{22} 	We fail to see how this unpublished case helps Defendant, and his briefing	1
does little to explain. See Corona v. Corona, 2014-NMCA-071, ¶ 28, 329 P.3d 701	2
(“This Court has no duty to review an argument that is not adequately developed.”).	3
If Lenscrafters stands for anything in the context of the instant case, it stands for the	4
well-settled proposition that the UPA applies only to goods and services. This much	5
we can ascertain, however, from the plain language of the statute. See § 57-12-2(D).	6
Lenscrafters does nothing to persuade us to Defendant’s position.	7
{23} 	We are satisfied in this case that the unchallenged facts found by the district	8
court describe a UPA violation. Defendant furnished to Plaintiff, in connection with	9
the contemplated construction project, both “goods” and “services” as those terms	10
are defined under New Mexico law. Further, because the parties contracted for	11
construction goods and services, rather than for the sale of completed realty, we find	12
no basis in Defendant’s authority to deviate from our plain language analysis. We	13
hold the UPA applies to Defendant’s conduct.	14
CONCLUSION	15
{24} 	For the foregoing reasons, we affirm.	16
{25} 	IT IS SO ORDERED.	17
_________________________________	18
M. MONICA ZAMORA, Judge	19

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WE CONCUR:
Chie 4. Vargar
2 3
JULIE J. VARGAS, Judge
4 5
Jacqueline KR. Medina
JACQUELINE R. MEDINA, Judge
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