June 30, 2021- Joanne Bachmann v. Regents of the University of New Mexico, No. A-1-CA-37884

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO	1
Opinion Number:	2
Filing Date: June 30, 2021	3
No. A-1-CA-37884	4
JOANNE BACHMANN,	5
Plaintiff-Appellant,	6
v.	7
REGENTS OF THE UNIVERSITY	8
OF NEW MEXICO,	9
Defendant-Appellee.	10
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY	11
Carl J. Butkus, District Judge	12
Steven Granberg, Attorney at Law, P.A.	13
Steven Granberg	14
Laurel Nesbitt	15
Albuquerque, NM	16
for Appellant	17
Stelzner, Winter, Warburton, Flores, Sanchez & Dawes, P.A.	18
Quentin Smith	19
Albuquerque, NM	20
Garcia Law Group, LLC	21
Lara White Davis	22
Bryan C. Garcia	23
Meghan S. Nicholson	24
Albuquerque, NM	25
for Appellee	26
Court of Appeals of New Mexico
Filed 6/30/2021 11:22 AM

OPINION	1
YOHALEM, Judge.	2
{1} 	Joanne Bachmann appeals from the district court’s judgment dismissing her	3
breach of contract and covenant of good faith and fair dealing claims against her	4
former 	employer, 	the 	Regents 	of 	the 	University 	of 	New 	Mexico 	(UNM). 1
5
Bachmann’s claims arose out of the elimination of her position at the public	6
television station KNME and her layoff in October 2009. Following a bench trial,	7
the district court dismissed all of Bachmann’s claims, ruling, in relevant part, that	8
UNM had not breached the terms of Bachmann’s implied contract of employment,	9
and that UNM had not breached the covenant of good faith and fair dealing when it	10
failed to reinstate her to her former position eighteen months after her layoff.	11
{2} 	As to Bachmann’s claim of breach of contract, although we conclude that the	12
district court erred when it construed the ambiguous terms of Bachmann’s implied	13
contract of employment without considering the evidence introduced at trial of the	14
parties’ intent, our analysis does not change the result in this case. We therefore	15
affirm the district court under the right for the wrong reasons doctrine. See State v.	16
Vargas, 2008-NMSC-019, ¶ 8, 143 N.M. 692, 181 P.3d 684. We hold that UNM did	17
1Bachmann does not appeal the dismissal of her Whistleblower Protection Act
claim, pursuant to NMSA 1978, Section 10-16C-1 to -6 (2010). The district court
held that UNM had not eliminated her job in retaliation against her for protected
communications

2
not 	breach 	Bachmann’s 	contract 	of 	employment 	when 	it 	failed 	to 	reinstate	1
Bachmann to her old position eighteen months after she was laid off.	2
{3} 	We also agree with the district court that UNM’s failure to reinstate Bachmann	3
did not breach the covenant of good faith and fair dealing. When the district court’s	4
findings of fact are read together as a whole, as they must be, see Robey v. Parnell,	5
2017-NMCA-038, ¶ 41, 392 P.3d 642 (stating that “findings are sufficient if a fair	6
construction of all of them, taken together, justifies the trial court’s judgment”	7
(alteration, internal quotation marks, and citation omitted)), it is apparent that the	8
district court found that there was no bad faith by UNM, no retaliation by UNM for	9
Bachmann’s protected communications, and no intent by UNM to harm Bachmann	10
by avoiding the contract terms. Bachmann does not challenge the sufficiency of the	11
evidence supporting the district court’s findings of fact. We, therefore, affirm the	12
district court’s decision that there was no breach of the covenant of good faith and	13
fair dealing.	14
{4} 	Finally, given our decision that there was no breach of the covenant of good	15
faith and fair dealing, we do not address UNM’s alternative contention that UNM,	16
as a state entity, is immune from a claim for breach of the implied covenant of good	17
faith and fair dealing, pursuant to NMSA 1978, Section 37-1-23(A) (1976).	18

3
I. 	BACKGROUND	1
{5} 	We briefly discuss Bachmann’s employment with KNME and review the	2
relevant provisions of the UNM Business Policy and Procedures Manual (UNM	3
Employment Manual), which is UNM’s implied contract of employment with its	4
employees. We reserve discussion of other facts for the discussion portion of this	5
opinion.	6
A. 	Bachmann’s Employment With KNME	7
{6} 	Bachmann worked for KNME. KNME staff are employees of UNM. The	8
parties do not dispute that Bachmann’s employment was governed by the terms of	9
an implied contract of public employment created by the UNM Employment	10
Manual. See Garcia v. Middle Rio Grande Conservancy Dist., 1996-NMSC-029,	11
¶ 11, 121 N.M. 728, 918 P.2d 7 (holding that a public employer personnel manual	12
“gives rise to an implied contract if it controlled the employer-employee relationship	13
and an employee could reasonably expect his employer to conform to the procedures	14
it outlines.” (internal quotation marks and citation omitted)).	15
{7} 	Bachmann was hired by KNME in February 2001. She assumed the role of	16
Director of Development for KNME in the fall of that same year. Four years later,	17
in April 2005, Bachmann was promoted to Associate General Manager at KNME,	18
the 	second 	highest 	paid 	position 	at 	KNME. 	Bachmann 	continued 	to 	direct	19
development, along with assuming additional duties as Associate General Manager.	20

4
B. 	Bachmann’s Layoff	1
{8} 	In October 2009 Bachmann’s position at KNME was eliminated, and she was	2
laid off. Although Bachmann’s title remained Associate General Manager, by the	3
time she was laid off, her primary, indeed perhaps her only duties, were as Director	4
of Development.	5
{9} 	Bachmann’s breach of contract claim challenging the elimination of her	6
position and her layoff relied on Policy 3225 of the UNM Employment Manual,	7
which 	addresses 	separation 	from 	employment. 	Section 	5 	of 	separation 	from	8
employment Policy 3225,2 the provision at issue in this case, is entitled, “Layoff.”	9
Subsection 5.1 addresses both the substantive and procedural requirements, which	10
must be met by an administrator to obtain UNM’s approval to eliminate a position.	11
The introductory paragraph of Section 5 limits layoff to situations where program	12
demands have changed, or where there has been a loss of funding for programs or	13
services. Section 5’s introductory paragraph states in relevant part as follows:	14
From time to time it may be necessary for [UNM], or any unit within	15
[UNM], to restructure its programs and services in response to changing	16
demands, or loss of funding for the programs or services. When there	17
is a loss of funding or a unit is restructured, it may be necessary to	18
eliminate one (1) or more staff positions.	19
2The contract provisions referred to hereinafter are part of Policy 3225. For
the sake of simplicity, we refer to them solely by their section or subsection number,
without reference to the policy number.

5
{10} 	Bachmann challenged the reason for her layoff in the district court, contending	1
that her position was eliminated in retaliation for protected communications about	2
potential misuse of KNME funds by UNM, and that the loss of funds claimed by	3
UNM to justify her layoff was a pretext. UNM contended that Bachmann’s position	4
was eliminated “solely as a cost-saving measure during a severe budget crisis[,]”	5
which was consistent with Section 5 of the UNM Employee Manual. The district	6
court agreed with UNM. After a bench trial, the district court found that Bachmann’s	7
position was eliminated “as a cost[-]saving measure as a result of operating losses,	8
a budget crisis and economic downturn[,]” and not in avoidance of contract	9
provisions or in retaliation for protected communications. On appeal, Bachmann	10
does not challenge the district court’s findings relating to the justification for her	11
layoff, or the legal conclusions drawn by the district court from the findings: that	12
there was no violation of the Whistleblower Protection Act, no breach of contract,	13
and no breach of the covenant of good faith and fair dealing by UNM.	14
C. 	UNM’s Failure to Hire Bachmann for Her Restored Former Position	15
Eighteen Months After Her Layoff	16
{11} 	In April 2011 approximately eighteen months after Bachmann’s position was	17
eliminated, KNME, with additional funding available, restructured its staff and	18
obtained permission from UNM to restore the Director of Development position.	19
KNME did not offer the position to Bachmann, and instead posted a national search	20
for applicants, and ultimately filled the position approximately two years after	21

6
Bachmann’s layoff. Bachmann claimed in the district court that KNME’s failure to	1
reinstate her to the Director of Development position when that position was restored	2
breached the terms of Subsection 5.1.4 of her employment contract, or, in the	3
alternative, breached the covenant of good faith and fair dealing by depriving her of	4
the benefits of Subsection 5.1.4 in bad faith.	5
{12} 	Subsection 5.1.4 is one of a list of six requirements (See Subsections 5.1.1	6
through Subsection 5.1.6), which must be met by an administrator in order to obtain	7
UNM approval to eliminate a position and lay off an employee. In its first paragraph,	8
Subsection 5.1.4 provides that the administrator must agree that “the eliminated	9
position will not be reinstated for at least one (1) year from the date of elimination.”	10
The first paragraph of Subsection 5.1.4 states as follows:	11
The administrator must agree that the eliminated position will not be	12
reinstated for at least one (1) year from the date of elimination. During	13
this time period a position may not be reclassified to take the place of	14
the position eliminated. Reinstatement of the position must be approved	15
be the Provost, executive vice president, or vice president responsible	16
for the organization.	17
{13} 	The second paragraph of Subsection 5.1.4 provides that if the position was	18
eliminated due to a loss of funding, and additional funding is received resulting in	19
reinstatement of the position, the reinstated position must be offered to the individual	20
who was laid off. This paragraph does not include a time period for reinstatement; it	21
reads as follows:	22

7
If the position was eliminated due to a loss of funding and additional	1
funding is received resulting in reinstatement of the position, the hiring	2
officer must first offer the position to the individual laid off due to the	3
funding loss.	4
II. 	DISCUSSION	5
A. 	UNM Did Not Breach Bachmann’s Contract of Employment When It	6
Failed to Reinstate Her to the Director of Development Position Eighteen	7
Months After Her Layoff	8
{14} 	Although we agree with the district court’s conclusion that UNM did not	9
breach Bachmann’s implied contract of employment by failing to reinstate her to the	10
Director of Development position eighteen months after she was laid off, we arrive	11
at this conclusion by a different route than the district court. We first address, in	12
Section B below, whether Subsection 5.1.4 is ambiguous as to the time period during	13
which a laid-off employee has a right to be reinstated if funding and the position are	14
restored. We conclude that Subsection 5.1.4 is capable of multiple constructions,	15
leading to different conclusions about the intended time period. We therefore agree	16
with the district court that this provision is ambiguous as a matter of law.3
17
{15} 	We next turn, in Section C below, to the uncontroverted evidence at trial of	18
the parties’ intended construction of Subsection 5.1.4. Neither party points to any	19
evidence in the record that supports the district court’s decision that a six-month	20
3Although the district court did not explicitly conclude that the provision was
ambiguous, we infer that the district court found the provision ambiguous based on
the court’s denial of summary judgment because of a dispute of fact.

8
period applies to reinstatement, pursuant to Subsection 5.1.4, nor have we found any	1
such evidence in the record. Because New Mexico law requires that the terms of a	2
contract be construed as a matter of fact, and in accordance with the intent of the	3
parties to the contract, we conclude that the district court erred in applying a six-	4
month period for reinstatement. The uncontroverted evidence at trial shows that the	5
parties’ intent is to impose a maximum time period of one year, drawn from the first	6
paragraph of Subsection 5.1.4. This construction of the contract does not change the	7
result in this case. Whether the time limit was six months or one year, Bachmann	8
was not entitled to reinstatement eighteen months after her layoff. We therefore	9
agree with the district court’s conclusion that UNM did not breach Bachmann’s	10
contract of employment when it failed to reinstate her to her former position.	11
B. 	The Terms of the Contract Are Ambiguous	12
{16} 	We first determine whether Subsection 5.1.4 of the UNM Employment	13
Manual, governing separation from employment, is ambiguous.	14
{17} 	Whether a contract contains an ambiguity is a matter of law is reviewed by	15
this Court de novo. ConocoPhillips Co. v. Lyons, 2013-NMSC-009, ¶ 23, 299 P.3d	16
844. “An ambiguity exists in an agreement when the parties’ expressions of mutual	17
assent lack clarity.” Mark V, Inc. v. Mellekas, 1993-NMSC-001, ¶ 12, 114 N.M. 778,	18
845 P.2d 1232. This Court has described a contract as ambiguous “if different	19
sections conflict or if the language is capable of more than one meaning.” Thompson	20

9
v. Potter, 2012-NMCA-014, ¶ 12, 268 P.3d 57. In determining whether a provision	1
is ambiguous, “[w]e view the contract as a harmonious whole, give meaning to every	2
provision, and accord each part of the contract its significance in light of other	3
provisions.” Benz v. Town Ctr. Land, LLC, 2013-NMCA-111, ¶ 31, 314 P.3d 688.	4
(internal quotation marks and citation omitted).	5
{18} 	Applying these standards to Subsection 5.1.4, we agree with the district	6
court’s determination that the provision at issue is capable of more than one	7
meaning. The second paragraph of Subsection 5.1.4 plainly provides for the	8
reinstatement of a laid-off employee if funding is restored. What is less than clear is	9
the time period for reinstatement. We see at least three ways of construing this	10
provision, any of which could reasonably reflect the parties’ actual intent.	11
{19} 	The first way of interpreting Subsection 5.1.4 is to read the second paragraph,	12
the paragraph imposing the requirement to reinstate the laid-off employee if funding	13
is restored, according to the plain meaning of its words. Under this construction,	14
advocated by Bachmann, the failure to mention a time period shows that the	15
provision’s intent is that the laid-off employee’s right to reinstatement will continue	16
indefinitely, whenever funding is received and a position reinstated. Bachmann	17
supports this construction by reading the requirement in the first paragraph, that an	18
administrator agree that a position will be eliminated for a full year when instituting	19
a layoff, as absolutely prohibiting restoration of a position in less than one year, even	20

10
if 	funding 	is 	unexpectedly 	restored. 	Bachmann 	points 	out 	that, 	under 	her	1
construction of Subsection 5.1.4, reinstatement eighteen months after a layoff is	2
really only six months after the expiration of that one-year period. Finally, she	3
contends that, if an indefinite period beginning a year after a layoff is viewed as	4
unreasonable, then this Court should treat the failure to specify a time period as an	5
omitted term, and should supply a reasonable time period as a matter of law.	6
{20} 	A second possible construction of Subsection 5.1.4 begins by looking at the	7
placement of the second paragraph, a paragraph seemingly addressing the right of	8
an employee to reinstatement, in what is otherwise a list of the steps an administrator	9
must take to obtain approval from UNM to eliminate a position. The second	10
paragraph appears out of place in a provision directing an administrator on how to	11
complete an application to eliminate a position, including a requirement that the	12
application include an agreement to not restore the position for one year. If, however,	13
the second paragraph is read as creating an exception to the one-year period,	14
intended 	to 	allow 	an 	administrator 	to 	reinstate 	a 	position 	if 	lost 	funds 	are	15
unexpectedly restored, placement in this section makes much more sense. Relying	16
on this construction of Subsection 5.1.4, UNM contends that the second paragraph	17
allows an administrator who receives unexpected funds during the one-year period	18
following the elimination of a position to effectively reverse the elimination of the	19

11
position, including reversing the layoff and reinstating the laid-off employee to his	1
or her former position.	2
{21} 	The third possible construction, the one adopted by the district court, relies on	3
the assumption that the second paragraph of Subsection 5.1.4 generally addresses	4
the rights of employees who are subject to layoff. Finding the second paragraph out	5
of place in a subsection addressing administrative procedures, the district court reads	6
the second paragraph of Subsection 5.1.4 as if it were part of Subsection 5.2, a	7
provision squarely addressing the rights of employees after a layoff by creating a	8
“layoff roster” giving employees laid off in the previous six months priority in hiring	9
for open positions at the same or lower classification level university-wide. The	10
district court concluded that it is logical and reasonable to borrow the six-month	11
period an employee is permitted to remain on the layoff roster and apply that same	12
period to reinstatement under Subsection 5.1.4.	13
{22} 	None of these three constructions is so inherently unreasonable as to allow us	14
to say, as a matter of law, that it is inconsistent with the meaning intended by the	15
parties. All of the constructions give “meaning and significance to each word or	16
phrase” and take some account of the “context of the entire contract,” as required by	17
the canons of contract construction. See H-B-S P’ship v. Aircoa Hosp. Servs., Inc.,	18
2005-NMCA-068, ¶ 19, 137 N.M. 626, 114 P.3d 306. Because the contractual	19
provision at issue is susceptible to reasonable but conflicting meanings when the	20

12
cannons of construction are applied, we conclude that it is ambiguous as a matter of	1
law. See C.R. Anthony Co. v. Loretto Mall Partners, 1991-NMSC-070, ¶ 17, 112	2
N.M. 504, 817 P.2d 238.	3
C. 	The District Court Construction of Subsection 5.1.4 Conflicts With the	4
Unchallenged Evidence in the Record of the Parties’ Intent	5
{23} 	Having determined that Subsection 5.1.4 is ambiguous, we must next consider	6
whether the district court properly construed this provision following trial. We	7
conclude that the district court misapplied the principles of law governing contract	8
construction, disregarding undisputed evidence of the meaning intended by the	9
parties, and instead construing Subsection 5.1.4 as a matter of law, based solely on	10
logic and reason, unsupported by the evidence of the parties’ intent.	11
{24} 	It is settled law that “[w]hen interpreting a contract, we give force and effect	12
to the intent of the parties.” Medina v. Sunstate Realty, Inc., 1995-NMSC-002, ¶ 8,	13
119 N.M. 136, 889 P.2d 171. Our Supreme Court has held that “the construction of	14
a contract adopted by the parties, as evidenced by their conduct and practices, is	15
entitled to great weight, if not the controlling weight, in ascertaining their intention	16
and their understanding of the contract.” Schultz & Lindsay Constr. Co. v. State,	17
1972-NMSC-013, ¶ 5, 83 N.M. 534, 494 P.2d 612. Once a contract term is found to	18
be ambiguous, the meaning to be given to the words of the contract is a question of	19
fact. See Mark V, Inc., 1993-NMSC-001, ¶ 13 (holding that, in determining the	20
meaning of ambiguous terms, “the fact[-]finder may consider extrinsic evidence of	21

13
the language and conduct of the parties and the circumstances surrounding the	1
agreement, as well as oral evidence of the parties’ intent”). Only if the parties do not	2
offer evidence of either the circumstances surrounding the agreement or the course	3
of conduct or course of performance of the contract may the court “resolve any	4
ambiguity as a matter of law by interpreting the contract using accepted canons of	5
contract construction and traditional rules of grammar and punctuation.” Id.	6
{25} 	We apply these principles to the evidence in the trial record. At the bench trial	7
in this matter, the district court heard the testimony of UNM’s vice president of	8
human resources, Helen Gonzales. Gonzales had been employed in the UNM	9
Human Resources Department since 1992, thus serving there during the entire period	10
of Bachmann’s employment at KNME. Gonzales testified that Subsection 5.1.4 is	11
administered by her department, as is Subsection 5.2. She explained that, in addition	12
to overseeing the implementation of Subsections 5.1. and 5.2, the human resources	13
department was also responsible, during her tenure, for periodically reviewing and	14
amending the provisions of the UNM Employment Manual.	15
{26} 	Gonzales testified that the human resources department has construed the	16
second paragraph of Subsection 5.1.4, over many years, to require reinstatement of	17
a laid-off employee if the funding is received and the position restored during the	18
one-year period set out in the first paragraph of that subsection. She explained that	19
it has been the human resources department’s practice to review the conduct of the	20

14
various departments or units for compliance with Subsection 5.1.4 for a one-year	1
period following a layoff, and to require reinstatement of a laid-off employee only	2
if funding for the position is unexpectedly restored within that year. She agreed with	3
Bachmann’s counsel’s hypothetical that Bachmann would have been entitled to be	4
reinstated if the position she occupied before her layoff had been posted less than	5
one year after she was laid off.	6
{27} 	Bachmann did not provide any evidence through testimony or otherwise,	7
showing that Subsection 5.1.4 had ever been applied during her employment at	8
UNM to reinstate a former employee to a position restored after a one-year period.	9
Nor did she identify any past practice or conduct of UNM to support her	10
interpretation of the provision as either not applying until a year had passed or as	11
having no time limit. As a result, the record contains no evidence contradicting the	12
evidence presented by Gonzales regarding the intent of the employer in adopting	13
Subsection 5.1.4.	14
{28} 	Gonzales and Bachmann both testified about Subsection 5.2, the layoff roster	15
provision, in the context of a claim to be rehired into a lower-classified position, not	16
before us on appeal. They agreed that the provision gave an employee who had been	17
laid off a right to be rehired to a different position at UNM, classified the same or	18
lower than their previous position, for a six-month period after layoff. Neither	19
Gonzales nor Bachmann testified to an intent to apply the six-month time period	20

15
found in Subsection 5.2 to reinstatement under Subsection 5.1.4. Both viewed the	1
provisions as independent of one another.	2
{29} 	Given the uncontradicted evidence in the record regarding the construction	3
and past practice of UNM, and the absence of any evidence supporting the district	4
court’s interpretation of Subsections 5.1.4 and 5.2, we conclude that the district court	5
applied the wrong standard of contract interpretation, asserting its own view of what	6
was “reasonable and practical,” instead of ascertaining the intent of the contracting	7
parties based on the evidence at trial, as our contract law requires. See Schultz &	8
Lindsay Constr. Co., 1972-NMSC-013, ¶ 5.	9
{30} 	Although we conclude that the district court erred in its application of the law	10
governing construction of the implied contract of employment, we nonetheless	11
affirm the district court’s dismissal of Bachmann’s claim for breach of contract.	12
Although Bachmann’s right to reinstatement extended for a one-year period, and not	13
six months, as the district court found, she was not entitled to reinstatement and there	14
was no breach of contract by UNM. See Vargas, 2008-NMSC-019, ¶ 8 (“Under the	15
right for any reason doctrine, we may affirm the district court’s order on grounds not	16
relied upon by the district court if those grounds do not require us to look beyond	17
the factual allegations that were raised and considered below.” (internal quotation	18
marks and citation omitted)). The district court failed to give effect to the undisputed	19
testimony of the parties’ intent, but it was correct in its dismissal of Bachmann’s	20

16
breach of contract claim. Because Bachmann’s position was not restored and posted	1
until eighteen months after her layoff, UNM had no contractual obligation to	2
reinstate her, and did not breach her contract of employment by hiring someone else.	3
D. 	KNME and UNM Did Not Breach the Covenant of Good Faith and Fair	4
Dealing	5
{31} 	Finally, Bachmann objects on appeal to what she claims is the district court’s	6
failure to address her covenant of good faith and fair dealing claim separately from	7
her breach of contract claim. We construe the district court’s comment that it need	8
not separately address the covenant of good faith and fair dealing as a recognition	9
that the court had already found against Bachmann on her claims of bad faith,	10
retaliation, and pretext. The district court’s unchallenged findings of fact, that UNM	11
did not act in bad faith in laying her off, but had laid her off solely because of a loss	12
of funds, and did not retaliate against her for protected communications, are	13
dispositive of Bachmann’s claim for breach of the covenant of good faith and fair	14
dealing. Bachmann relied in the district court on a single course of conduct by	15
KNME and UNM, which she alleged was motivated by a bad faith desire to fire her	16
in retaliation for protected communications. The district court adopted findings of	17
fact rejecting her allegations, affirmatively finding no improper motivation by UNM.	18
Without a showing of bad faith or improper motivation, Bachmann’s claim for	19
breach of the covenant of good faith and fair dealing fails. See Jaynes v. Strong-	20
Thorne Mortuary, Inc., 1998-NMSC-004, ¶ 13, 124 N.M. 613, 954 P.2d 45	21

17
(recognizing that “[t]he breach of this covenant requires a showing of bad faith or	1
that one party wrongfully and intentionally used the contract to the detriment of the	2
other party” (internal quotation marks and citation omitted)). We therefore affirm	3
the district court’s dismissal of Bachmann’s claim of breach of the covenant of good	4
faith and fair dealing.	5
CONCLUSION	6
{32} 	We affirm the district court’s dismissal of Bachmann’s claims as challenged	7
on appeal and the entry of judgment for UNM.	8
{33} 	IT IS SO ORDERED.	9
__________________________________	10
JANE B. YOHALEM, Judge	11
WE CONCUR:	12
_________________________________	13
JACQUELINE R. MEDINA, Judge	14
_________________________________	15
BRIANA H. ZAMORA, Judge	16