July 31, 2013 – Elizabeth Behrens v. Gateway Court, LLC, No. 31,439

CORRECTION PAGE: Behrens v. Gateway Court (No. 31,439); WGS; filed 07/31/13; cover page (replaced “RECEIVED” endorsement
stamp with “FILED” endorsement stamp
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 	__________
Filing Date: July 31, 2013
NO. 31,439
ELIZABETH BEHRENS,
Plaintiff-Appellant,
v.
GATEWAY COURT, LLC,
Defendant-Appellee.
APPEAL FROM THE DISTRICT COURT OF OTERO COUNTY
James Waylon Counts, District Judge
Law Office of Barry Green
Barry Green
Santa Fe, NM
for Appellant
Riley, Shane & Keller, P.A.
Courtenay L. Keller
Albuquerque, NM
for Appellee

OPINION
WECHSLER, Judge.
{1} 	Plaintiff Elizabeth Behrens appeals from a judgment entered in her favor against
Defendant Gateway Court, LLC, following a jury trial held on the issue of damages.
The jury awarded Plaintiff compensatory damages for the fair market value of
personal property destroyed in a fire that occurred at her home. 	We hold that the
district court (1) did not err in determining that Plaintiff could not seek loss of use
damages for completely destroyed property; (2) did not err in determining that
Plaintiff was not entitled to punitive damages; and (3) did not abuse its discretion in
not awarding prejudgment interest to Plaintiff. Accordingly, we affirm the district
court on these issues. 	However, the district court did abuse its discretion by not
utilizing the lodestar method or any objective analysis of the facts to determine
Plaintiff’s reasonable attorney fees. Accordingly, we reverse the district court’s award
of attorney fees and remand for recalculation.
BACKGROUND
{2} 	Plaintiff appeals from a judgment entered in her favor against Defendant
following a jury trial held on the issue of damages. 	The jury awarded Plaintiff
$25,000 in compensatory damages. 	This case arose from a fire that destroyed a
mobile home that Plaintiff rented from Defendant.

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{3} 	Defendant owns and operates a mobile home park. 	Plaintiff began renting
mobile home units from Defendant in 2003, and, in 2007, she signed a new one-year
lease for one of the units. On March 2, 2008, Plaintiff left her mobile home to go to
a friend’s home. While there, Plaintiff received a telephone call informing her that her
mobile home was on fire. Plaintiff rushed back to her home and found that the fire
had destroyed the home and its contents. 	The Alamogordo Department of Public
Safety investigated the fire and determined that it was caused by an electrical short in
the wiring of an old air conditioner that had been left under the porch of the mobile
home when Defendant installed or had a new air conditioner installed in the mobile
home.
{4} 	Plaintiff filed a complaint against Defendant, alleging five violations of the
Uniform Owner-Resident Relations Act (UORRA), NMSA 1978, Sections 47-8-1 to
-52 (1975, as amended through 2007). 	In her complaint, Plaintiff alleged that
Defendant breached several provisions of the UORRA: (a) failing to substantially
comply with the requirements of the applicable minimum housing codes materially
affecting health and safety; (b) failing to make repairs and do whatever was necessary
to put and keep the premises in a safe condition as provided by applicable law and
rules and regulations; (c) failing to keep common areas of the premises in a safe
condition; (d) failing to maintain in good and safe working order and condition
electrical, plumbing, heating, ventilation, air conditioning, and other facilities and

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appliances; and (e) refusing to provide a written rental agreement upon request. In
addition to compensatory damages, Plaintiff alleged that Defendant’s conduct was
willful, wanton, malicious, reckless, oppressive, grossly negligent, fraudulent, in bad
faith, and done with utter disregard for the rights of Plaintiff, and, therefore, she
sought punitive damages.
{5} 	Defendant originally filed a motion to dismiss Plaintiff’s punitive damages
claim, arguing that the complaint alleged only negligent conduct on Defendant’s part
in causing the fire and that the punitive damages claim was based on deceptive post-
fire conduct regarding a cover up of the cause of the fire, an event that was not
directly related to the harm suffered by Plaintiff in this case. Plaintiff argued that the
motion to dismiss was untimely under Rule 1-012(B) NMRA because Defendant had
already filed a responsive pleading to the complaint, that the complaint stated a claim
under New Mexico notice pleading standards, or, in the alternative, that the motion
should be treated as a motion for summary judgment and that it was premature
because Plaintiff was still conducting discovery regarding the cause of the fire. The
district court granted the motion, dismissing Plaintiff’s punitive damages claim, but
did so without prejudice.
{6} 	Plaintiff filed a motion for reconsideration. 	Along with her motion for
reconsideration, Plaintiff submitted an affidavit and curriculum vitae of a proposed
expert witness, William C. Richardson, an electrical contractor and journeyman

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electrician, as well as deposition testimony from the owner/manager Shirley
Fambrough. 	Plaintiff proposed that Richardson would testify that: 	(1) his
investigation of the fire was hampered by Defendant’s destruction of evidence; (2) he
concluded that Defendant violated eight provisions of the New Mexico electrical code
and the mobile home’s electrical wiring did not conform to the specific article relating
to mobile homes; (3) any licensed electrician working on the mobile home would have
recognized the safety violations and would have corrected the electrical problems and
prevented the fire; (4) a licensed electrician was required to install the new air
conditioner under the electrical code; and (5) if a licensed electrician would have
installed the new air conditioner, the electrician would have disconnected the old air
conditioner and would have prevented the fire that destroyed Plaintiff’s property.
Plaintiff claims that Fambrough’s deposition testimony showed a “cavalier attitude”
toward Plaintiff’s safety and compliance with the electrical code. 	Plaintiff cited
deposition testimony from Fambrough that she (1) knew that electricians had to be
licensed in New Mexico but did not believe that New Mexico law required a licensed
electrician to install the new air conditioner because “it’s not that complicated”; (2)
did not ask anyone whether New Mexico law required a licensed electrician to install
the new air conditioner; (3) did not know which of Defendant’s employees installed
the new air conditioner or whether they were licensed electricians; and (4) misled
Plaintiff’s counsel about who installed the new air conditioner and the cause of the fire

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and then failed to retract her statements concerning the identity of this person when
she became aware of this misinformation. Plaintiff contended that these facts
uncovered 	during 	discovery 	presented 	issues 	of 	material 	fact 	as 	to 	whether
Defendant’s actions in causing the fire were malicious, willful, reckless, wanton,
fraudulent, or in bad faith. The district court denied the motion for reconsideration.
{7} 	Additionally, Defendant filed a motion for summary judgment asking that the
district court grant judgment against itself on the issue of liability and stipulating to
two of Plaintiff’s UORRA counts. In its motion, Defendant admitted that it installed
a new air conditioner on the mobile home in January 2005, it failed to disconnect the
electrical wiring on the old air conditioner from the breaker, and left the old air
conditioner under the porch of the mobile home. Defendant further admitted that its
failure to disconnect the wiring was a breach of ordinary care and that it breached its
duty to keep the premises in a safe condition and to maintain the premises in a good
and safe working condition pursuant to Section 47-8-20(A)(2), (4). 	Defendant
therefore stipulated that it was liable for damages caused by the fire that are
recoverable under New Mexico law, including the fair market value of Plaintiff’s
personal property lost in the fire. The district court granted the motion for summary
judgment on liability and entered a finding of liability against Defendant. The only
issue left for trial was the amount of Plaintiff’s damages.

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{8} 	Prior to the trial, Defendant filed an objection to Plaintiff’s exhibits, arguing
that Plaintiff seemed to be seeking the rental costs for temporary replacement of
personal possessions and that allowing such loss of use damages would be a
duplication of her damages. 	Defendant’s motion noted that Plaintiff’s proposed
exhibits included print-outs from a rental company’s website for renting personal
property, including items such as a television, a desktop computer, a stove, a
refrigerator, a dining table, chairs, a television console, a mattress set, a washer/dryer,
a recliner, coffee and end tables, and a surround sound system. Defendant argued that
Plaintiff’s claim for loss of use damages is not supported by New Mexico law.
Defendant also argued that Plaintiff had not pled or previously indicated that she
would be seeking loss of use damages for her personal property contained in the
mobile home, noting that the complaint only states a claim for the “loss of use of
[Plaintiff’s] rental home and the costs of securing comparable housing.” The district
court ruled in Defendant’s favor, determining that loss of use damages are only
available for reparable property and not wholly damaged property under New Mexico
law.
{9} 	After a jury trial, the jury awarded Plaintiff $25,000 in compensatory damages.
Plaintiff appeals, arguing that the district court erred in (1) denying Plaintiff’s claim
for loss of use damages, (2) granting Defendant’s motion to dismiss Plaintiff’s claim

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for punitive damages, (3) refusing to award prejudgment interest, and (4) determining
the amount of attorney fees awarded to Plaintiff.
LOSS OF USE DAMAGES
{10} 	Plaintiff argues that the district court committed reversible error by denying her
proposed jury instruction and claims for loss of use damages. Plaintiff notes that the
uniform jury instructions and New Mexico case law allow for loss of use damages for
reparable property and asserts that no distinction should be made whether the property
is lost or destroyed in allowing loss of use damages. 	In Plaintiff’s view, “the
overwhelming trend is to allow loss of use damages for destroyed property.”
Plaintiff’s arguments present a question of law that we review de novo. See McNeill
v. Burlington Res. Oil & Gas Co., 2008-NMSC-022, ¶ 12, 143 N.M. 740, 182 P.3d
121 (stating that the “proper measure of damages” for a claim is a matter of law,
which is reviewed de novo).
{11} 	We begin by discussing current New Mexico law regarding loss of use
damages. Our New Mexico appellate cases have long recognized that a plaintiff may
make a claim for loss of use damages arising from the tortious conduct of a defendant
where personal property is damaged, but reparable. See Indus. Supply Co. v. Goen,
58 N.M. 738, 744, 276 P.2d 509, 513 (1954). “The measure of damages for the loss
of use sustained is the rental value of property similar to that damaged for the time
reasonably necessary to make repairs[.]” Fredenburgh v. Allied Van Lines, Inc., 79

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N.M. 593, 600, 446 P.2d 868, 875 (1968). In Cress v. Scott, 117 N.M. 3, 6, 868 P.2d
648, 651 (1994), our Supreme Court held that when loss of use damages are
appropriate, the appropriate measure of the damages is the reasonable rental value of
the substitute property, even in the absence of actual rental. Our uniform jury
instructions reflect these holdings. The uniform jury instruction for loss of use states
that the measure of damages is “[t]he reasonable rental value of similar property
during the period reasonably required for the repair of the damaged property.” UJI 13-
1818 NMRA. On the other hand, UJI 13-1812 NMRA, entitled “Personal property;
no salvage value” states that “[i]n determining property damages, if any, you may
award the fair market value of the property immediately before the occurrence.”
{12} 	Regarding completely destroyed property, there is a split of authority in other
jurisdictions as to whether loss of use damages are available or are limited to
situations in which the property is reparable. 	Compare Long v. McAllister, 319
N.W.2d 256, 258-61 (Iowa 1982) (holding that loss of use damages are available for
a totally destroyed vehicle to the same extent as available for a damaged but reparable
vehicle), with MCI Worldcom Network Servs., Inc. v. Mastec, Inc., 995 So. 2d 221,
223 	(Fla. 	2008) 	(stating 	that 	“loss[]of[]use 	damages 	can 	be 	an 	element 	of
compensatory damages when the damage is to personal property and the damage
amounts to less than total destruction of the property”). 	Historically, courts have
distinguished the underlying rationale for denying loss of use damages when property

9
is completely destroyed. Some courts have reasoned that compensatory damages for
personal property are limited by the fair market value of the destroyed property. 	See
1 Dan B. Dobbs, Law of Remedies § 5:15(2) at 891 (2d ed. 1993). Other courts have
reasoned that loss of use damages are not available for destroyed property because the
defendant is not the proximate cause of the loss of use; the plaintiff’s inability to
immediately replace the property is the proximate cause. 	See 22 Am. Jur. 2d.
Damages § 297, 271-72 (2003, current through 2012 supplement) (“Some courts have
suggested that recovery for loss of use is not to be allowed where the chattel is
destroyed, because it is the owner’s inability to replace it—and not defendant’s
negligence—which is the proximate cause of the loss.”). 	This rationale has been
rejected in other jurisdictions that have abolished the historical distinction between
reparable and totally destroyed property, allowing loss of use damages in both
situations. See, e.g., DTS Tank Serv., Inc. v. Vanderveen, 683 P.2d 1345, 1346 (Okla.
1984) (“There appears to be no logical or practical reason why a distinction should be
drawn between cases in which the property is totally destroyed and those in which it
has been injured but is repairable[.]” (internal quotation marks and citation omitted)).
{13} 	Plaintiff contends that there “are no reported cases in New Mexico indicating
whether loss of use damages are available when property is destroyed.” However,
Plaintiff overlooks our Supreme Court’s decision in Curtis v. Schwartzman Packing
Co., 61 N.M. 305, 299 P.2d 776 (1956). In Curtis, the plaintiff attempted to pass a

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truck operated by the defendant. Id. at 306, 299 P.2d at 777. The defendant’s truck
made a left turn and collided with the plaintiff’s vehicle, and the plaintiff filed a
complaint seeking compensatory damages for personal injury, damage to his vehicle,
and loss of use of his vehicle. Id. at 306-07, 299 P.2d at 777. After the jury returned
a verdict in favor of the plaintiff, the defendant appealed, arguing that the testimony
and a jury instruction regarding total loss, rental value, and loss of use of the
plaintiff’s car led to jury confusion. Id. at 307-08, 299 P.2d at 777-78. The plaintiff
presented evidence in which the “jury could have found total loss, less salvage, or, if
the damage to the car was reparable, cost on account of repairs and the value of the
loss of use of the car.” Id. at 309, 299 P.2d at 778-79 (emphasis added). Reflecting
the plaintiff’s evidence, the court instructed the jury that
if the car after the collision had no value except for salvage, in that event
[the] plaintiff would be entitled to the difference between the reasonable
market value of the car immediately before the collision and its
reasonable value immediately after the collision, but that if it should be
found that the plaintiff’s car could have been restored to its former
condition by repairs, and if the jury should find for plaintiff, then his
damages should be in such amount as would afford the plaintiff the
reasonable cost of repairs and a reasonable amount for the loss of use of
the car during the time necessary to make the repairs.
Id. at 309, 299 P.2d at 779. Our Supreme Court held that the instruction was proper
because “there is nothing about [the instruction] which could have led the jury to
believe that it might award the plaintiff damages for practically total loss and also for
loss of any other amount.” Id. at 309-10, 299 P.2d at 779 (emphasis added). Implicit

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in this holding is that a jury cannot award damages exceeding the value of total loss
when property cannot be restored to its former condition by means of making
reasonable repairs.
{14} 	In Robb v. Universal Constructors, Inc., 665 F.2d 998, 1001 (10th Cir. 1981),
the Tenth Circuit examined Curtis and held that under New Mexico law “there cannot
be a recovery for loss of use if the personal property is totally destroyed.” 	Citing
Curtis and the version of UJI 13-1818 in effect at the time, the Tenth Circuit stated
that “[t]his proposition of inability to recover for loss of use where the property is
destroyed is fairly well cemented into New Mexico law.” Robb, 665 F.2d at 1001-02.
The court also relied on previous committee commentary to UJI 13-1818, citing
Curtis, which provided that:
Damages for loss of use are not recoverable unless, in fact, it was
reasonably necessary for the plaintiff to rent other property and he did,
in fact, rent other property. No recovery can be made above the rental
actually paid out or incurred. If the property is totally destroyed, then
damages for loss of use are not recoverable. Citing [Curtis, 61 N.M. 305,
306, 299 P.2d 776]
Robb, 665 F.2d at 1002. This commentary is no longer part of UJI 13-1818 and was
removed after our Supreme Court’s decision in Cress, 117 N.M. 3, 868 P.2d 648.
However, Cress does not conflict with the last sentence of the committee commentary
and the holding in Curtis, recognizing that loss of use damages are not available for
totally destroyed property. Cress held that loss of use damages may be measured by

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the reasonable rental value of a substitute vehicle, even in the absence of actual rental.
117 N.M. at 6, 868 P.2d at 651. 	In so holding, our Supreme Court disavowed the
committee commentary in the previous version of UJI 13-1818 discussed by the Tenth
Circuit in Robb that required actual rental to recover loss of use. 	In Cress, our
Supreme Court addressed Curtis and held that it “approved a jury instruction that
would allow an award of damages for [(1)] total loss of a vehicle or [(2)] repair costs
plus loss of use, but not both.” 117 N.M. at 5, 868 P.2d at 650 (emphasis added).
{15} 	Plaintiff does not directly cite or respond to Defendant’s assertion that Curtis
controls this case. 	Instead, Plaintiff argues that the overwhelming trend in other
jurisdictions is to allow loss of use damages for destroyed property. 	Indeed,
Plaintiff’s position that loss of use damages are available for destroyed property to the
same extent as reparable property does seem to be the trending modern rule. As stated
in 22 American Jurisprudence, Second Edition, Damages § 297,
[r]ecognizing the weakness of the distinction between the “reparable”
and the “irreparable” chattel as a basis for the rule regarding damages for
loss of use, recent cases have allowed recovery for loss of use even
though the chattel is destroyed. 	In these jurisdictions, loss of use has
become a separate item of damages for which compensation is allowed.
(Footnote omitted.) See also Alaska Constr. Equip., Inc. v. Star Trucking, Inc., 128
P.3d 164, 168 (Alaska 2006) (“We begin by noting that the general trend in other
jurisdictions has been to allow loss of use damages in these cases.”). However, the
“older rule,” allowing loss of use damages for reparable property but not for

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completely destroyed property, “still has some support[.]” 22 Am. Jur. 2d Damages
supra § 297, at 271; see, e.g., MCI Commc’n Servs., Inc. v. CMES, Inc., 728 S.E.2d
649, 652 (Ga. 2012) (holding that “loss of use damages are only recoverable if the
personal property was impaired but not destroyed” based on the rationale that the
ceiling for damages for destroyed property is the reasonable full market value).
{16} 	Despite the trend that may be developing in other jurisdictions, this Court is
bound by our Supreme Court’s precedent. See Aguilera v. Palm Harbor Homes, Inc.,
2002-NMSC-029, ¶ 6, 132 N.M. 715, 54 P.3d 993 (stating that the Court of Appeals
is bound by Supreme Court precedent); see also State ex rel. Martinez v. City of Las
Vegas, 2004-NMSC-009, ¶ 21, 135 N.M. 375, 89 P.3d 47 (“Our decisions remain
binding precedent until we see fit to reconsider them, regardless of whether
subsequent cases have raised doubts about their continuing vitality.” (internal
quotation marks and citation omitted)). 	Although this Court has the authority to
review uniform jury instructions presenting issues not ruled upon by our Supreme
Court, UJI 13-1818 is based upon and consistent with Curtis, which is binding on this
Court. See State ex rel. Martinez, 2004-NMSC-009, ¶¶ 18, 20 (stating that this Court
can “question uniform jury instructions that had not yet been addressed by [our
Supreme] Court,” but that this Court “remains bound by Supreme Court precedent”
(internal quotation marks and citation omitted)). Accordingly, Curtis controls in this
case and under New Mexico law, loss of use damages are available for reparable

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property but not for completely destroyed property. 	Our Supreme Court has the
exclusive province to revisit Curtis in light of the modern trend toward allowing
damages for loss of use in cases in which personal property is destroyed and not
reparable. The district court did not err in denying Plaintiff’s loss of use damages
claim for the destroyed personal property.
PUNITIVE DAMAGES
{17} 	Plaintiff next argues that the district court erred by granting Defendant’s motion
to dismiss Plaintiff’s punitive damages claim. As an initial matter, Plaintiff contends
that the motion to dismiss was actually a motion for summary judgment because the
district court considered matters outside of the pleadings. As a result, Plaintiff argues
that Defendant’s motion should have, but did not, comply with Rule 1-056 NMRA.
However, Defendant’s motion to dismiss argued that punitive damages were not
supported by the conduct as pled that led to the fire or subsequent post-fire conduct.
Thus, Defendant contends that the district court did not rely on facts outside of the
pleadings when it originally dismissed the punitive damage claim.
{18} 	Defendant also emphasizes that the district court granted the motion to dismiss
without prejudice, and Plaintiff filed a motion for reconsideration after conducting
discovery. Plaintiff then argued that Defendant’s failure to hire a licensed electrician
to install the new air conditioner supported a claim for punitive damages. 	This new
argument at the reconsideration stage of the proceedings was based on the facts

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Plaintiff uncovered during discovery. 	Although Plaintiff contends that the district
court’s original grant of Defendant’s motion to dismiss was in error because it
should have been treated as a motion for summary judgment and that the ruling was
premature because she had not finished conducting discovery on the cause of the fire,
Plaintiff now concedes that she conducted discovery on her theory to support punitive
damages and provided the district court “all the evidence necessary to show there were
genuine issues of material fact in order to avoid summary judgment” at the time she
filed her motion for reconsideration. Any error in the district court’s initial grant of
the motion to dismiss was therefore harmless. We do agree with Plaintiff to the extent
that she argues that the correct standard for the district court to apply to the motion for
reconsideration was the standard for summary judgment. 	First Sw. Fin. Servs. v.
Pulliam, 1996-NMCA-032, ¶ 4, 121 N.M. 436, 912 P.2d 828 (stating that we review
motions to dismiss as motions for summary judgment when the district court
considered matters outside the pleadings in making its ruling).
{19} 	Generally, we review a district court’s grant of summary judgment under de
novo review. Vill. of Wagon Mound v. Mora Trust, 2003-NMCA-035, ¶ 57, 133 N.M.
373, 62 P.3d 1255. “Summary judgment is proper if there are no genuine issues of
material fact and the movant is entitled to judgment as a matter of law.” Roth v.
Thompson, 113 N.M. 331, 334, 825 P.2d 1241, 1244 (1992). Summary judgment is

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generally disfavored and should be used with caution. Pollock v. State Highway &
Transp. Dep’t, 1999-NMCA-083, ¶ 5, 127 N.M. 521, 984 P.2d 768.
{20} 	“The purpose of punitive damages is to punish the wrongdoer and to deter the
wrongdoer and others in a similar position from such misconduct in the future.”
Conant v. Rodriguez, 113 N.M. 513, 517, 828 P.2d 425, 429 (Ct. App. 1992). Thus,
“[t]o be liable for punitive damages, a wrongdoer must have some culpable mental
state, and the wrongdoer’s conduct must rise to a willful, wanton, malicious, reckless,
oppressive, or fraudulent level[.]” Clay v. Ferrellgas, Inc., 118 N.M. 266, 269, 881
P.2d 11, 14 (1994) (citation omitted).
{21} 	Plaintiff argues that the facts as indicated by Richardson and Fambrough
establish that Defendant’s conduct in causing the fire fit the definition of willful,
reckless, or wanton conduct.
Willful conduct has been defined as the intentional doing of an act
with knowledge that harm may result. Reckless conduct, by contrast, is
defined as the intentional doing of an act with utter indifference to the
consequences. Finally, wanton conduct is defined as the doing of an act
with utter indifference to or conscious disregard for a person’s rights [or]
safety.
Pub. Serv. Co. of N.M. v. Diamond D Constr. Co., 2001-NMCA-082, ¶ 59, 131 N.M.
100, 33 P.3d 651 (alterations, internal quotation marks, and citations omitted).
{22} 	Plaintiff likens this case to Abeita v. Northern Rio Arriba Electric Coop, 1997-
NMCA-097, 124 N.M. 97, 946 P.2d 1108. In Abeita, the plaintiff owned a company

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hired to build a garage attachment to a mobile home. 	Id. ¶ 2. 	The plaintiff began
construction of the garage, which was to be located under a power line owned and
maintained by the defendant. Id. ¶¶ 2-3. The defendant learned of the garage addition
after two employees went to fix a transformer on the power line and noticed a concrete
foundation on which the plaintiff was going to build the garage. 	Id. ¶ 3. The
defendant told the mobile home owners to delay any further construction because of
the danger posed by the power line until the power line could be relocated, and the
mobile home owner passed on the information to the plaintiff. 	Id. ¶¶ 4, 6. 	The
plaintiff continued to work on the garage until it was practically complete. Id. ¶¶ 6-7.
The plaintiff presented evidence that an employee of the defendant went to the mobile
home and left the site without de-energizing the line or halting construction. Id. ¶ 8.
The parties presented conflicting evidence as to whether the defendant’s employee
warned the plaintiff to stop construction or whether the employee was “flippant” to
the dangers. 	Id. 	The plaintiff continued to work on the garage and suffered fatal
injuries after getting electrocuted when a metal broom handle in his hand came into
contact with the power line. 	Id. ¶ 9. 	The jury awarded punitive damages and the
defendant appealed, arguing in part that an omission or failure to act is insufficient to
sustain a punitive damages award. 	Id. 	¶ 35. This Court upheld the award,
characterizing the defendant’s conduct as the “improper distribution of electrical
power.” Id. ¶ 41.

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{23} 	This case is distinguishable. The arguments in Abeita focused on whether the
defendant’s conduct was an act or omission and whether the distinction matters. In
this case, the parties focus their arguments on whether an issue of material fact existed
as to whether Defendant acted or failed to act with the requisite mental state to support
punitive damages. 	Looking at the facts most favorable to Plaintiff’s position,
Richardson’s affidavit and Fambrough’s deposition testimony establish that (1) the
New Mexico electrical code required a licensed electrician to repair the old air
conditioner or install the new air conditioner in the mobile home; (2) a licensed
electrician would have uncovered the wiring problems on the old air conditioner and
prevented the fire; (3) Fambrough did not know whether a licensed electrician was
required to repair the old air conditioner or install the new air conditioner and did not
take any steps to find out; and (4) Fambrough misled Plaintiff’s counsel on the cause
of the fire and failed to retract incorrect statements on who installed the new air
conditioner. These facts do not establish that Defendant acted with knowledge that
harm may occur, with utter indifference to the consequences, or with utter indifference
to or conscious disregard for a person’s safety. 	Although Richardson’s affidavit
created a material fact as to whether a licensed electrician was required to repair the
old air conditioner or install a new air conditioner, Fambrough stated that she did not
believe that a licensed electrician was needed because she viewed it as a simple task.
This evidence simply does not create a material fact that Defendant’s failure to hire

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a licensed electrician was the result of a culpable state of mind above ordinary
negligence. See Couch v. Astec Indus., Inc., 2002-NMCA-084, ¶ 60, 132 N.M. 631,
53 P.3d 398 (holding that “unsafe features in [the d]efendant’s plant do not give rise
to an inference [of] reckless[ness]” when the plaintiff did not provide any additional
evidence “to show that the safety problems arose from or reflected a reckless
indifference, a culpable mind, actual malice, a conscious disregard for workers’ safety,
or that [the d]efendant simply disregarded applicable safety features”). 	Indeed,
Plaintiff stated in her deposition that she did not believe that Defendant intentionally
set the fire or allowed any unsafe conditions in the mobile home, and there were no
signs or indicators that Defendant ignored that something was wrong with Plaintiff’s
mobile home.
{24} 	Plaintiff argues, in addition or alternatively, that Defendant’s actions after the
fire evidence a culpable state of mind. In particular, Plaintiff points to evidence in the
record that Fambrough “insist[ed] on several different theories on the cause of the
fire,” blamed a plumber for the installation, and then failed to retract her statement
even after learning that the plumber did not work on the wiring of the air conditioner.
However, as this Court has stated the “conduct giving rise to the punitive damages
claim must be the same conduct for which actual or compensatory damages were
allowed.” Gonzales v. Sansoy, 103 N.M. 127, 129, 703 P.2d 904, 906 (Ct. App. 1984)
(internal quotation marks and citation omitted). Plaintiff’s compensatory damages

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claim was based solely on Defendant’s liability for causing the fire that destroyed
Plaintiff’s mobile home and personal possessions. The compensatory damages claim
therefore 	does 	not 	support 	a 	punitive 	damages 	award 	for 	post-fire 	conduct.
Accordingly, the district court did not err in granting Defendant’s motion to dismiss
Plaintiff’s punitive damages claim and by denying Plaintiff’s motion to reconsider.
PREJUDGMENT INTEREST
{25} 	Plaintiff next argues that the district court erred in refusing to award
prejudgment interest under NMSA 1978, Section 56-8-4(B) (2004). 	Awarding
prejudgment interest is left to the sound discretion of the district court. See Abeita,
1997-NMCA-097, ¶ 44. 	We will reverse a district court’s failure to award
prejudgment interest only upon an abuse of that discretion. 	Martinez v. Pojoaque
Gaming, Inc., 2011-NMCA-103, ¶ 20, 150 N.M. 629, 264 P.3d 725, cert. denied
2011-NMCERT-009, 269 P.3d 903. A district court does not abuse its discretion if
its reasons are supported by logic and not contrary to reason. Id. ¶ 21.
{26} 	Prejudgment interest is governed by statute. Section 56-8-4(B) provides that
[u]less the judgment is based on unpaid child support, the court in its
discretion may allow interest of up to ten percent from the date the
complaint is served upon the defendant after considering, among other
things:
(1) 	if the plaintiff was the cause of unreasonable delay in the
adjudication of the plaintiff's claims; and

21
(2) 	if the defendant had previously made a reasonable and timely
offer of settlement to the plaintiff.
Section 56-8-4(B) is designed to facilitate settlement and prevent delay. 	Lucero v.
Aladdin Beauty Colleges Inc., 117 N.M. 269, 272, 871 P.2d 365, 368 (1994).
Additionally, the “two factors listed in Section 56-8-4(B) are not exclusive; the
[district] court should take into account all relevant equitable considerations that
further the goals of Section 56-8-4(B).” Gonzales v. Surgidev Corp., 120 N.M. 133,
150, 899 P.2d 576, 593 (1995).
{27} 	The district court found that Defendant “made a number of offers of judgment
each of which met or exceeded the $25,000 jury award [and that] left the issue of
attorney[] fees to be decided by the [district court].” 	Further, the district court’s
factual findings state that Plaintiff’s damages were for household goods and personal
effects and that the receipts for the items were either not retained by Plaintiff or
destroyed in the fire. Further, the district court found that “[b]oth sides of the case
aggressively litigated the case and there was extensive motions practice.” The district
court concluded that “Defendant did not unduly delay resolution of the case and
awarding pre-judgment interest will not serve the interests of justice.”
{28} 	Plaintiff contends that the district court incorrectly applied Section 56-8-4(B)
to Defendant’s settlement offers and that the offers were unreasonable and untimely.
To support her position that Defendant’s offers were untimely, Plaintiff states that (1)

22
Defendant denied liability and did not offer to settle the case until nine months after
Plaintiff filed suit, and (2) Defendant contested liability for two and one half years
after the accident before changing its position and stipulating to liability. Plaintiff also
contends that Defendant did not make reasonable settlement offers, although she
acknowledges that Defendant made settlement offers of (1) $25,000, with no
additional amounts for attorney fees; (2) $30,001 exclusive of costs recoverable under
Rule 1-054(D)(2) NMRA; (3) $30,001; (4) $30,001 exclusive of costs and attorney
fees that Defendant stated it would allow the district court to determine; and (5)
$21,180 exclusive of costs and attorney fees that Defendant stated it would allow the
district court to determine.
{29} 	Under these circumstances, the district court did not abuse its discretion in not
awarding prejudgment interest to Plaintiff. As Plaintiff acknowledges, Defendant’s
settlement offers exceeded the amount that the jury ultimately awarded. We therefore
cannot say that the offers were unreasonable. Although Plaintiff argues that if this
Court reverses the district court’s denial of loss of use damages or punitive damages,
the amount awarded would have exceeded the settlement offers, we have affirmed the
district court on these issues. Additionally, even if the district court allowed the jury
to award punitive damages or loss of use damages, it is speculative as to whether the
jury would have awarded any additional damages. 	We therefore cannot say that
Defendant’s settlement offers were unreasonable.

23
{30} 	Regarding the timing of the settlement offers, nothing in the record indicates
that Defendant’s settlement offers were untimely. Plaintiff primarily contends that the
nine-month period between the filing of the suit and Defendant’s settlement offer was
unreasonable because Plaintiff lost all her possessions in the fire and could not afford
to replace the property. 	While we sympathize with Plaintiff’s position, the record
indicates that the parties were engaged in discovery and motions practice from the
time Plaintiff filed the claim through December 2009. Additionally, the district court
did not rule on Defendant’s motion to dismiss Plaintiff’s punitive damages claim until
December 10, 2009. Defendant made its first offer for settlement six days later on
December 16, 2009. Under these circumstances, Defendant’s settlement offers were
not untimely and do not indicate that the district court abused its discretion in not
awarding prejudgment interest. To hold otherwise would compel a defendant to make
a settlement offer before all the facts are gathered in discovery.
ATTORNEY FEES	1
{31} 	Lastly, Plaintiff argues that the district court erred as a matter of law by	2
applying a proportional test in determining the amount of attorney fees to award her	3
pursuant to Section 47-8-48(A). 	A district court “has broad discretion in setting	4
attorney[] fees, and an award will not be reversed unless there is an abuse of	5
discretion.” Miller v. Johnson, 1998-NMCA-059, ¶ 34, 125 N.M. 175, 958 P.2d 745.	6
When a district court makes a discretionary decision based on a misapprehension of	7

24
the law, it is an abuse of discretion. 	See Rio Grande Sun v. Jemez Mountains Pub.	1
Sch. Dist., 2012-NMCA-091, ¶ 10, 287 P.3d 318 (stating that, although attorney fees	2
are reviewed for an abuse of discretion, “[a] discretionary decision based on a	3
misapprehension of the law is an abuse of discretion that must be reviewed de novo”	4
(alteration in original) (internal quotation marks and citation omitted)), cert. denied,	5
2012-NMCERT-008, 296 P.3d 490.	6
{32} 	Section 47-8-48(A) provides that “[i]f suit is brought by any party to the rental	7
agreement to enforce the terms and conditions of the rental agreement or to enforce	8
any provisions of the [UORRA], the prevailing party shall be entitled to reasonable	9
attorney[] fees and court costs to be assessed by the court.” 	After trial, Plaintiff	10
sought $70,318.09 in attorney fees. The amount sought by Plaintiff was based on a	11
lodestar calculation provided to the district court that detailed the time spent on the	12
case and the hourly rate charged by Plaintiff’s counsel. The district court found that	13
an “award of attorney[] fees in an amount of nearly three times the jury verdict is not	14
reasonable in a case that involves property damage only and no broader public policy	15
issues. Reasonable attorney[] fees for Plaintiff would be $10,000[]. The $10,000[]	16
is subject to an offset of 50% for Defendant’s successful defense of Plaintiff’s non-	17
meritorious claims.” The district court based the offset of the award on Defendant’s	18
successful defense “against claims for punitive damages, emotional distress damages,	19
and civil penalty damages.”	20

25
{33} 	Plaintiff contends that the district court erred as a matter of law by failing to	1
apply a lodestar analysis in awarding attorney fees, and particularly, by failing to	2
consider evidence submitted by affidavit regarding the time Plaintiff’s counsel spent	3
on the case, his twenty years of experience, his hourly rate that is below the normal	4
hourly rates charged by an attorney with the same experience, the complexity of the	5
case, and the variety of legal issues that required extensive motions practice and	6
research. 	Plaintiff is correct in asserting that the lodestar method is accepted as a	7
method for determining attorney fees in statutory fee-shifting cases. See Rio Grande	8
Sun, 2012-NMCA-091, ¶¶ 20-21 (stating that the district court abused its discretion	9
by not applying a lodestar analysis and that “[t]he district court should utilize the	10
lodestar method as a starting point for its calculation, and . . . tak[e] into account” any	11
other additional relevant factors). 	Following a lodestar calculation, New Mexico	12
courts also apply a variety of other factors in determining the reasonableness of	13
attorney fees, including	14
(1) 	the time and labor required, the novelty and difficulty of the	15
questions involved, and the skill requisite to perform the legal service	16
properly;	17
(2) 	the 	likelihood 	that 	the 	acceptance 	of 	the 	particular	18
employment will preclude other employment by the lawyer;	19
(3) 	the fee customarily charged in the locality for similar legal	20
services;	21
(4) 	the amount involved and the results obtained;	22
(5) 	the time limitations imposed by the client or by the	23
circumstances;	24

26
(6) 	the nature and length of the professional relationship with	1
the client;	2
(7) 	the 	experience, 	reputation, 	and 	ability 	of 	the 	lawyer	3
performing the services; and	4
(8) 	whether the fee is fixed or contingent.	5
In re N.M. Indirect Purchasers Microsoft Corp., 2007-NMCA-007, ¶¶ 77-78, 140	6
N.M. 879, 149 P.3d 976 (omission, internal quotation marks, and citation omitted).	7
A court need not consider all factors or give all the factors equal weight. Id. ¶ 78.	8
{34} 	In its minute order awarding Plaintiff attorney fees, the district 	court	9
acknowledged Plaintiff’s $70,318.09 lodestar calculation that Plaintiff sought to	10
recover in attorney fees. However, the district court declined to award the full amount	11
of Plaintiff’s request determining that the requested fees cannot be supported using	12
a lodestar analysis under the facts in this case. The district court gave two reasons to	13
justify its reduction of attorney fees to $5,000. First, the district court stated that this	14
case involved “property damage only and no broader public policy issues.” Second,	15
the district court considered the “amount involved and the results obtained[.]” Lenz	16
v. Chalamidas, 109 N.M. 113, 118, 782 P.2d 85, 90 (1989). 	While an award of	17
attorney fees is discretionary, “the exercise of that discretion must be reasonable when	18
measured against objective standards and criteria.” 	Id. 	We do not believe that the	19
district court properly exercised its discretion.	20
{35} 	First, the district court failed to consider the fact that this is a case under the	21
UORRA that embodies distinct public policy goals that must be considered when fees	22

27
are awarded in accordance with that statutory scheme. 	See Rio Grande Sun, 2012-	1
NMCA-091, ¶ 18 (stating that the district court should have considered the public	2
policy goals of the statute in awarding attorney fees). The UORRA provides that its	3
policy is to “simplify, clarify, modernize and revise the law governing the rental of	4
dwelling units and the rights and obligations of owner and resident, and to encourage	5
the owners and the residents to maintain and improve the quality of housing in New	6
Mexico.” Section 47-8-2. The provision requiring an award of attorney fees to the	7
prevailing party is one of the statutory remedies to encourage compliance and	8
facilitate the public policy aspects of the UORRA.	9
{36} 	Second, the district court failed to consider a lodestar analysis as the starting	10
point for its calculation of attorney fees. “In statutory fee-shifting cases like this one,	11
the lodestar method . . . provides adequate fees to attorneys who undertake litigation	12
that is socially beneficial, irrespective of the pecuniary value to the claimant.” 	Rio	13
Grande Sun, 2012-NMCA-091, ¶ 20 (alteration, internal quotation marks, and citation	14
omitted). “A lodestar is determined by multiplying counsel’s total hours reasonably	15
spent on the case by a reasonable hourly rate.” 	Id. 	(internal quotation marks and	16
citation omitted). “The lodestar provides an objective basis for valuing the attorney’s	17
services.” Id. (alteration, internal quotation marks, and citation omitted).	18
{37} 	We recognize that the district court acknowledged Plaintiff’s $70,318.09	19
lodestar calculation, but contrary to Rio Grande Sun, chose to reduce attorney fees to	20

28
$10,000 because of the $25,000 amount of actual damages Plaintiff incurred. See id.	1
The district court further reduced this amount by $5,000 because Defendant	2
successfully defended against Plaintiff’s other claims for punitive damages, emotional	3
distress damages, and civil penalty damages. Again, under the terms of the statute,	4
parties are entitled to reasonable attorney fees for prevailing on the various claims	5
presented. Thus, to the extent that Defendant prevailed against Plaintiff, it was proper	6
for the district court to offset the attorney fee award. Lenz v. Chalamidas, 113 N.M.	7
17, 19, 821 P.2d 355, 357 (1991). However, the district court must “determine the	8
time reasonably necessary to provide the services required.” Id. Instead of attempting	9
to assess the time involved in each claim or defense, the district court awarded	10
Plaintiff an arbitrary fee of $10,000 that was then reduced by $5,000 without any	11
analysis of the actual factual circumstances and time involved to support these	12
calculations.	13
{38} 	In summary, the district court abused its discretion because it did not utilize the	14
lodestar method or any objective analysis of the facts in order to determine Plaintiff’s	15
reasonable attorney fees. We reverse the district court’s award of attorney fees and	16
remand for recalculation. 	The district court shall utilize the lodestar or other	17
reasonable method as a starting point for its calculation, and it should enter findings	18
of fact and conclusions of law based on the evidence, taking into account the factors	19
listed in Microsoft and the policies underlying the UORRA. 	We leave the exact	20

29
apportionment to the sound discretion and redetermination of the district court on	1
remand.	2
CONCLUSION	3
{39} 	We hold that the district court (1) did not err in determining that Plaintiff could	4
not seek loss of use damages for completely destroyed property; (2) did not err in	5
determining that Plaintiff was not entitled to punitive damages; and (3) did not abuse	6
its discretion in not awarding prejudgment interest to Plaintiff. 	Accordingly, we	7
affirm the district court on these issues. 	However, the district court did abuse its	8
discretion by not utilizing the lodestar method or any objective analysis of the facts	9
to determine Plaintiff’s reasonable attorney fees. Accordingly, we reverse the district	10
court’s award of attorney fees and remand for recalculation.	11
{40} 	IT IS SO ORDERED.	12
__________________________________	13
JAMES J. WECHSLER, Judge	14
WE CONCUR:	15
_____________________________	16
JONATHAN B. SUTIN, Judge	17
_____________________________	18
TIMOTHY L. GARCIA, Judge	19