July 24, 2012 – Loren Lyndoe v. D.R. Horton Inc., No. 30,663

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:
Filing Date: 	JULY 24, 2012
NO. 30,663
LOREN LYNDOE, PHYLLIS LYNDOE,
MANUEL TOLEDO, ISABEL TOLEDO,
GLENDA COUNCIL, ROBERT COUNCIL,
RON ARMSTRONG, LAURA ARMSTRONG,
PATRICIA SANCHEZ, FRANCISCA CABRIALES,
JAKE LAMFERS, MARTA LAMFERS,
CAL PALMER, VERONICA PALMER,
HEATHER JAMES, HAAMID HAKAM,
BAXTER BACKER, CAROLYN BACKER,
JARED HUNTER, JACQUELINE HUNTER,
SILVINO SUAREZ, JOHANNA DUNCAN,
RICHARD HOEHNE, ANABEL NAJERA,
JEANNETTE PAZ, ROBERT BRUHN,
JAKE NUTTALL, DIANE NUTTALL,
RON STONE, STELLA STONE,
YVONNE BALDONADO, ROBERT ROBLES,
TINA ROBLES, JOSEPH CRAIG, ALISA SHTROMBERG,
JESSE MAGALLANEZ, PAMELA TAFOYA,
ROBERT BONILLA, ALICIA BONILLA,
RUBEN VALENZUELA, YVETTE VALENZUELA,
IGNACIO SANCHEZ, WENDY SCHMIDT,
MARCUS DECLOUETTE, DANIELLE DECLOUETTE,
MADELEINE R. MANI, SANJAY CHANDRAN,
PATRICK YOKOYAMA, ROSEANNE YOKOYAMA,
TREVOR BRASEL, KRISTI BRASEL,
JOSE CARTER, EMILY CARTER,
CALVIN LUCERO, ERIN GARCIA, and
LAKANA SANGADEJ,

Plaintiffs-Appellees,
and
ELIZABETH FERNANDEZ, GERARDO LOPEZ,
JAMES CORWELL, and KERRI CORWELL,
Plaintiffs,
v.
D.R. HORTON, INC., and
DRH SOUTHWEST CONSTRUCTION, INC.,
Defendants-Appellants,
and
CURB SOUTH, LLC,
Defendant.
APPEAL FROM THE DISTRICT COURT OF VALENCIA COUNTY
JOHN W. POPE, District Judge
Guebert Bruckner P.C.
Terry R. Guebert
Don Bruckner
Albuquerque, NM
for Appellees
Collins & Collins, P.C.
Alysan Boothe Collins
Albuquerque, NM
for Appellees Lucero & Erin Garcia

Crowley & Gribble, P.C.
Clayton E. Crowley
Albuquerque, NM
for Appellee Lakana Sangedej
Landry & Ludewig, L.L.P.
Stephanie Landry
Margaret C. Ludewig
Albuquerque, NM
Saucedo Chavez PC
Christopher T. Saucedo
Iris L. Marshall
Albuquerque, NM
for Appellants

OPINION
FRY, Judge.
{1} 	The district court ordered the consolidation of all arbitrations between
Defendants D.R. Horton, Inc. and DRH Southwest Construction, Inc. (collectively,
Horton) and Plaintiffs, who are owners of homes built and sold by Horton in the
Sagebrush Subdivision at Huning Ranch in Los Lunas, New Mexico. We conclude
that Plaintiffs satisfied all of the elements required for consolidation by NMSA 1978,
Section 44-7A-11 (2001), of New Mexico’s Uniform Arbitration Act (UAA), NMSA
1978, §§ 44-7A-1 to -32 (2001). Therefore, we affirm the district court’s order.
I. 	BACKGROUND
{2} 	In November 2009, Plaintiffs sued Horton and other defendants seeking
damages and rescission, alleging that they had experienced various deficiencies in
their Horton-built homes, many of which were caused by the settlement of subsurface
soils. Plaintiffs also alleged that their purchase agreements with Horton contained
arbitration agreements, and they asked the district court to compel Horton to litigate
their claims in a consolidated arbitration in accordance with Section 44-7A-11 of the
UAA.
{3} 	In pleadings filed with the court, Horton acknowledged that the parties’ dispute
was subject to the purchase agreements’ arbitration clause. However, Horton opposed

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consolidation of all of the claims into one arbitration and instead proposed a separate
arbitration with each household. Consequently, Plaintiffs filed a motion to compel a
consolidated arbitration between Horton and Plaintiffs who had signed purchase
agreements with Horton. Plaintiffs argued that Section 44-7A-11 of the UAA permits
consolidation of separate arbitration proceedings if certain requirements are met.
Section 44-7A-11 states:
(a) 	Except as otherwise provided in Subsection (c), upon
motion of a party to an agreement to arbitrate or to an arbitration
proceeding, the court may order consolidation of separate arbitration
proceedings as to all or some of the claims if:
(1) 	there are separate agreements to arbitrate or separate
arbitration proceedings between the same persons or one of them is a
party to a separate agreement to arbitrate or a separate arbitration
proceeding with a third person;
(2) 	the claims subject to the agreements to arbitrate arise
in substantial part from the same transaction or series of related
transactions;
(3) 	the existence of a common issue of law or fact creates
the possibility of conflicting decisions in the separate arbitration
proceedings; and
(4) 	prejudice resulting from a failure to consolidate is not
outweighed by the risk of undue delay or prejudice to the rights of or
hardship to parties opposing consolidation.
(b) 	The court may order consolidation of separate arbitration
proceedings as to some claims and allow other claims to be resolved in
separate arbitration proceedings.

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(c) 	The court may not order consolidation of the claims of a
party 	to 	an 	agreement 	to 	arbitrate 	if 	the 	agreement 	prohibits
consolidation.
{4} 	Plaintiffs argued that all of the statutory elements supporting consolidation
existed because the arbitration agreements were entered into with Horton; Plaintiffs’
claims arose from the same series of home sales by Horton in the Sagebrush
Subdivision since 2006; all of Plaintiffs’ homes experienced similar problems; and
Horton would not be prejudiced by a consolidated arbitration because such a
proceeding would likely be more efficient than separate proceedings. 	Horton
responded that Plaintiffs failed to establish (1) the statutory element requiring related
transactions because Plaintiffs were not part of the same series of contractual
negotiations; (2) the element requiring common issues of law or fact creating the
possibility of conflicting decisions; and (3) the element related to prejudice because
a consolidated arbitration would result in undue delay due to the widely varying
claims of individual Plaintiffs.
{5} 	Following a hearing, the district court announced in a letter decision that it
would grant Plaintiffs’ motion and order a consolidated arbitration before a single
arbitrator. The district court later denied Horton’s motion for reconsideration, found
that the order compelling consolidation was final for purposes of appeal, and stayed
the proceedings pending appeal. This appeal followed.

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II. 	DISCUSSION
{6} 	The parties agree that Plaintiffs’ claims against Horton are subject to arbitration,
and the only dispute is whether the district court properly ordered the consolidated
arbitration. 	Horton challenges the district court’s order based on three arguments,
which we combine into two. First, Horton contends that the district court did not have
jurisdiction to order a consolidated arbitration because there were no arbitration
proceedings pending at the time of the order. Second, it argues that consolidation was
improper because Plaintiffs failed to satisfy the statutory factors necessary for
consolidation and because permitting consolidation would thwart federally established
policy and improperly allow the arbitrator to dictate public policy.
A. 	Standard of Review
{7} 	Horton argues that all of its arguments are subject to de novo review. 	We
disagree in part. First, as we clarify below, Horton’s argument regarding the district
court’s alleged lack of jurisdiction is misplaced. Horton’s argument has nothing to
do with jurisdiction; instead, Horton’s contention is that a statutory prerequisite for
consolidation of the arbitrations was not met. This involves a question of statutory
construction, which we review de novo. 	Estate of Nauert v. Morgan-Nauert,
2012-NMCA-037, ¶ 8, 274 P.3d 799.

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{8} 	Second, we disagree with Horton’s contention that the propriety of the district
court’s order requiring consolidated arbitrations is subject to de novo review. The
statutory provision permitting consolidation uses language associated with discretion.
It provides that a court “may order consolidation of separate arbitration proceedings”
under certain circumstances. Section 44-7A-11(a) (emphasis added). In addition, the
commentary to the uniform law on which our UAA is modeled clarifies that the
provision permitting consolidation “gives courts discretion to consolidate separate
arbitration proceedings.” 	Unif. Arbitration Act § 10 cmt. 3, 7 U.L.A. 42 (2000)
(emphasis added); see Cummings v. Budget Tank Removal & Envtl. Servs, LLC, 260
P.3d 220, ¶ 14 (Wash. Ct. App. 2011) (explaining that “[b]ecause the statute says the
court ‘may’ order consolidation, [the court] review[s] the decision for an abuse of
discretion”). 	Consequently, we review the district court’s order compelling the
consolidated arbitration for abuse of discretion.
B. 	Jurisdiction to Order Consolidated Arbitration
{9} 	Horton claims that the consolidation provision of the UAA, Section 44-7A-11,
requires that there be pending separate arbitration proceedings before a court has the
power to order a consolidated arbitration. In support, Horton relies on the title of the
statute, which reads “Consolidation of separate arbitration proceedings,” and a Hawaii

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case, In re United Public Workers, AFSCME, Local 646, AFL-CIO, 244 P.3d 609, 613
(Haw. Ct. App. 2010).
{10} 	We are not persuaded. Despite the title of Section 44-7A-11, the body of the
statute clearly states that a court “may order consolidation of separate arbitration
proceedings” pursuant to a motion “of a party to an agreement to arbitrate or to an
arbitration proceeding.” Section 44-7A-11(a) (emphasis added). A common sense
reading of this language establishes that consolidation may be ordered even if no
arbitration proceeding is pending, providing there are agreements to arbitrate. Here,
Plaintiffs were parties to virtually identical arbitration agreements with Horton, and
the statutory requirement was satisfied. We reject Horton’s contrary, overly technical
interpretation of Section 44-7A-11.
{11} 	Given our interpretation of Section 44-7A-11, we are also unpersuaded by the
Hawaii court’s decision in United Public Workers. 	In interpreting a statutory
provision nearly identical to Section 44-7A-11, that court employed the same hyper-
technical reading urged by Horton. 	It stated that “[w]here there are no separate
proceedings to consolidate, a fundamental prerequisite is not met, and this provision
is inapplicable.” United Pub. Workers, 244 P.3d at 614. The court relied on what it
considered to be the plain language of the statute permitting consolidation “of
separate arbitration proceedings.” Id. Apart from this reliance on only a portion of

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the 	statute’s 	language, 	the 	court 	gave 	no 	persuasive 	reason 	for 	prohibiting
consolidation of not-yet-pending arbitrations when, as in the present case, there is no
dispute among the parties that arbitration is the proper forum for resolution of the
claims at issue. Requiring the initiation of each separate arbitration before permitting
consolidation is inefficient and unnecessary.
{12} 	We also clarify that, contrary to Horton’s argument, satisfaction of the statutory
requirements has nothing to do with the district court’s jurisdiction. Subject matter
jurisdiction is defined as the power of a court to hear and determine cases. Mares v.
Kool, 51 N.M. 36, 41, 177 P.2d 532, 535 (1946). 	That power is conferred by the
sovereign authority that organizes the courts. Id. The subject matter jurisdiction of
New Mexico district courts is established by the New Mexico Constitution. 	N.M.
Const. art. VI, § 13. 	New Mexico district courts are courts of general jurisdiction
having the power to hear all matters not excepted by the constitution and those matters
conferred by law. See ACLU of N.M. v. City of Albuquerque, 2008-NMSC-045, ¶ 7,
144 N.M. 471, 188 P.3d 1222. In the present case, the UAA confers jurisdiction on
the district court to hear motions for consolidation of arbitration proceedings as well
as many other matters pertaining to arbitrations. 	Therefore, the district court had
subject matter jurisdiction to hear and rule on the motion for consolidation filed by
Plaintiffs.

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C. 	Propriety of Consolidation
1. 	Statutory Elements Supporting Consolidation
{13} 	Section 44-7A-11 permits the consolidation of separate arbitrations when four
factors are satisfied. Horton challenges Plaintiffs’ showing in connection with only
three of the four factors. It claims that Plaintiffs failed to establish (1) that their claims
arose “in substantial part from the same transaction or series of related transactions”
as required by Subsection (a)(2); (2) that “a common issue of law or fact create[d] the
possibility of conflicting decisions in the separate arbitration proceedings” as required
by Subsection (a)(3); and (3) that the prejudice from a failure to consolidate
outweighed any potential prejudice to Horton, as required by Subsection (a)(4).
{14} 	With respect 	to 	the element requiring the same transaction or related
transactions, Plaintiffs alleged that all of their claims arise from their purchase of
homes built and sold by Horton in the same subdivision since 2006. Horton based the
subdivision’s site development plan on a geotechnical report prepared by Vinyard &
Associates, Inc., and, since purchasing their homes, Plaintiffs experienced deficiencies
in their residences, many of which appear to be caused by soil settlement as evidenced
by reports prepared by Horton’s expert engineer. Thus, although the underlying cause
of the soil settlement is in dispute, Plaintiffs nonetheless have demonstrated that their

1In its brief in chief, Horton states that 38 homes are involved while Plaintiffs
state in their brief that 37 homes are the subject of their claims.
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claims arise out of the series of purchase transactions between themselves and Horton
and the series of homes constructed by Horton in reliance on the Vinyard report.
{15} 	Horton argues that Plaintiffs have not satisfied the related-transaction element
because their claims arise from thirteen different form purchase agreements for 37 or
38 home sales that proceeded to closing on different dates.1 We fail to see how
different form agreements and different closing dates would remove this series of
sales from the statutory category of “related transactions.” 	Plaintiffs have alleged
sufficient facts to satisfy this element supporting consolidation.
{16} 	The consolidation statute also requires “a common issue of law or fact” that
“creates the possibility of conflicting decisions” if the arbitrations proceed separately.
Section 44-7A-1(a)(3). 	Plaintiffs argue that their claims share common issues
involving the settlement of their respective homes and similar resulting damage,
including cracks and separation. They maintain that multiple separate arbitrations, as
opposed to one consolidated arbitration, could result in conflicting decisions. 	For
example, one Plaintiff could be awarded rescission or damages while another Plaintiff
with similar home deficiencies could receive no recovery.
{17} 	Horton contends that Plaintiffs have failed to satisfy this element because they
presented no evidence supporting this element and because Horton’s engineer opined

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that some deficiencies were caused by something other than negligent construction.
Horton is incorrect. 	Plaintiffs presented considerable evidence of deficiencies
common to their homes, including photographs and engineering reports attributing the
deficiencies to soil settlement. 	While it is true that Plaintiffs did not present an
engineering report for every home and that some engineering reports attribute some
home deficiencies to over-watering or causes other than negligent construction, these
issues do not result in failure to satisfy the common-issue element of Section 44-7A-
11(a)(3). The question of whether to consolidate separate arbitrations is a threshold
question for the district court and does not require definitive proof. 	The statute
requires only common issues of law or fact, not common established facts. Plaintiffs
have satisfied this element.
{18} 	Finally, Plaintiffs have satisfied Section 44-7A-11(a)(4)’s element because they
have demonstrated that any prejudice to Horton does not outweigh the potential
prejudice of conflicting outcomes that could result from failure to consolidate. As the
district court noted in its decision letter, “having one arbitrator will be able to facilitate
the arbitrations and move the case along as opposed to [multiple] arbitrators . . .
making inconsistent rulings.”
{19} 	Horton argues that “its contractual rights would be compromised with
consolidation” because Horton had no expectation when it entered into the arbitration

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agreements that there was the possibility of a consolidated arbitration. This argument
is not persuasive because it was Horton that drafted the arbitration agreements, and
it could have easily included a provision prohibiting consolidation. Section 44-7A-
11(c) provides that “[a] court may not order consolidation of the claims of a party to
an agreement to arbitrate if the agreement prohibits consolidation.” Moreover, “the
mere desire to have one’s dispute heard in a separate proceeding is not in and of itself
the kind of proof sufficient to prevent consolidation.” Unif. Arbitration Act § 10 cmt.
3, 7 U.L.A. at 43. The type of prejudice contemplated by Section 44-7A-11(a)(4) as
overriding the prejudice from non-consolidation includes the existence of conflicting
provisions in the separate arbitration agreements regarding “arbitrator selection
procedures, standards for the admission of evidence and rendition of the award, and
other express terms of the arbitration agreement.” Unif. Arbitration Act § 10 cmt. 3,
7 U.L.A. at 43. Horton does not argue that any of the express terms of the arbitration
agreements are in conflict. Therefore, Plaintiffs have satisfied the element in Section
44-7A-11(a)(4).
{20} 	Horton also argues that Plaintiffs were required to establish the existence of all
statutory elements supporting consolidation through the introduction of evidence and
that the district court should have entered findings of fact and conclusions of law in
support of its order requiring consolidation. We disagree. As previously noted, the

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question of consolidation is a threshold question answered by the district court based
on allegations or evidence satisfying it that the elements supporting consolidation
exist. Horton has cited no authority for the proposition that the consolidation question
requires an evidentiary hearing. 	See ITT Educ. Servs., Inc. v. Taxation & Revenue
Dep’t, 1998-NMCA-078, ¶ 10, 125 N.M. 244, 959 P.2d 969 (explaining that appellate
courts will not consider propositions that are unsupported by citation to authority).
In addition, Rule 1-052 NMRA, which governs the necessity for findings and
conclusions, provides that “[f]indings of fact and conclusions of law are unnecessary
in decisions on motions under Rule 1-012, 1-050 or 1-056 NMRA or any other motion
except as provided in Paragraph B of Rule 1-041 NMRA.” 	The motion for
consolidation in this case is not an excepted motion and, as a result, findings and
conclusions were not required.
{21} 	In our view, Plaintiffs’ satisfaction of all of the statutory elements supporting
consolidation leads to the conclusion that the district court did not abuse its discretion
in ordering a single, consolidated arbitration. 	However, Horton also claims that
considerations beyond the statutory elements mandate reversal of the district court’s
decision. We now turn to those arguments.
2. 	Horton’s Other Arguments

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{22} 	Horton 	appears 	to 	parse 	Plaintiffs’ 	single 	motion 	into 	two 	separate
motions—one to compel arbitration and one to compel a consolidated arbitration.
With respect to the motion to compel arbitration, Horton argues that the motion should
have been denied as a matter of law because Horton agrees to arbitration. We fail to
see how Horton’s approach would make sense or further the case’s progress. Because
the parties agreed that arbitration was the appropriate method for resolving Plaintiffs’
claims, it would make no sense to deny the motion to compel arbitration.
{23} 	As to the order requiring the arbitrations to be consolidated, Horton’s argument
is somewhat difficult to follow. 	It appears that Horton asserts two reasons—other
than 	Plaintiffs’ 	alleged 	failure 	to 	satisfy 	the 	statutory 	elements 	for
consolidation—supporting 	its 	contention 	that 	the 	order 	of 	consolidation 	was
erroneous: (1) federal law regarding class action arbitrations establishes public policy
requiring denial of consolidation as a matter of law; and (2) allowing consolidation
permits the arbitrator to create public policy.
a. 	Federal Law Regarding Class Action Arbitrations
{24} 	Horton argues that the district court, by ordering consolidation, “has created
something akin to a class action without subjecting . . . Plaintiffs to the class action
standards.” As a result, Horton maintains, “the district court fundamentally changed
the nature of the arbitration to such a degree that it cannot be presumed the parties

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consented to it.” In support of this argument, Horton relies primarily on Stolt-Nielsen
S.A. v. AnimalFeeds International Corp., which held that “a party may not be
compelled under the [Federal Arbitration Act] to submit to class arbitration unless
there is a contractual basis for concluding that the party agreed to do so.” 130 S. Ct.
1758, 1775 (2010). This argument is not persuasive for two reasons.
{25} 	First, in Stolt-Nielsen there was no statutory provision governing the availability
of class arbitration while in the present case, Section 44-7A-11 expressly provides for
consolidated arbitration under certain circumstances. 	Stolt-Nielsen involved the
United States Supreme Court’s reversal of an arbitration panel’s decision to imply an
agreement to permit class arbitration when the arbitration agreement itself was silent
on the subject. 	130 S. Ct. at 1766, 1777. 	Notably, the Federal Arbitration Act,
maritime law, and state law did not answer the question of whether class arbitration
was available in the absence of express consent. Id. at 1768-69. These circumstances
are not analogous to those in the present case, given the existence of Section 44-7A-
11.
{26} 	Second, we fail to see how a consolidated arbitration involving specific, named
parties is the same as a class arbitration. As the Court noted in Stolt-Nielsen, in a class
arbitration, the arbitrator’s award may “adjudicate[] the rights of absent parties” as
well as the rights of named parties. 	130 S. Ct. at 1776. 	This cannot occur in the

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consolidated arbitration ordered in this case by the district court because only named
parties with arbitration agreements will participate. In addition, the rules governing
class arbitrations, presumably derived from the rules governing class litigation, are
quite different from the statutory elements required for consolidated arbitration. For
example, prerequisites for class arbitration would include numerosity so great that
joinder of all class members is impracticable, common issues of law or fact
predominating over issues affecting individual class members, and certification of the
class. See generally Rule 1-023 NMRA.
b. 	Risk of Arbitrator Creating Public Policy
{27} 	Horton argues that “[t]he district court’s misinterpretation of [the consolidation
statute] must be addressed by this Court to prevent the creation of public policy by the
arbitrator.” 	Horton maintains that “allow[ing] consolidation of similarly situated
plaintiffs rather than requiring that the arbitration agreements . . . arise from the same
transaction or related transaction allows the arbitrator too much discretion” in the
resolution of discovery disputes and of questions regarding the consolidation of
evidentiary hearings involving more than one home.
{28} 	We fail to see how an arbitrator’s control over the procedural aspects of the
consolidated arbitration will result in the creation of public policy. 	Instead, the
arbitrator can reasonably orchestrate the arbitration to streamline the process, avoid

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duplication of effort, and resolve the individual claims in a consistent manner. In our
view, consolidation of the individual homeowners’ arbitrations is consistent with the
purpose of arbitration, which is “to further judicial economy by providing a quick,
informal, and less costly alternative to judicial resolution of disputes.” 	K.R.
Swerdfeger Constr., Inc. v. UNM Bd. of Regents, 2006-NMCA-117, ¶ 26, 140 N.M.
374, 142 P.3d 962 (internal quotation marks and citation omitted). The district court
did not abuse its discretion by ordering consolidation of Plaintiffs’ arbitrations.
CONCLUSION
{29} 	For the foregoing reasons, we affirm the district court’s order consolidating the
arbitrations between Plaintiffs and Horton.
{30} 	IT IS SO ORDERED.
CYNTHIA A. FRY, Judge
WE CONCUR:
JONATHAN B. SUTIN, Judge
J. MILES HANISEE, Judge