MONTANO V. NEW MEXICO REAL ESTATE
APPRAISER'S BD., 2009-NMCA-009, 145 N.M. 494, 200 P.3d 544
SALOMON MONTANO,
Petitioner-Appellee,
v.
NEW MEXICO REAL ESTATE APPRAISER’S BOARD,
REGULATION AND LICENSING DEPARTMENT,
Respondent-Appellant.
COURT OF APPEALS OF NEW MEXICO
2009-NMCA-009, 145 N.M. 494, 200 P.3d 544
APPEAL FROM THE DISTRICT COURT OF VALENCIA COUNTY,
William A. Sanchez, District Judge
Released for publication February 10,
2009.
Tibo J. Chavez,
Jr., Belen, NM, for Appellee
Gary K. King,
Attorney General, Corliss Thalley, Assistant Attorney General, Santa Fe, NM,
for Appellant
RODERICK T. KENNEDY, Judge. WE CONCUR:
CYNTHIA A. FRY, Judge, MICHAEL E. VIGIL, Judge
AUTHOR: RODERICK T. KENNEDY
{1} This case arises
from an administrative appeal of the decision of the New Mexico Real Estate
Appraiser’s Board (the Board) to suspend the license of Petitioner/Appellee
(Licensee) for two years. Licensee appealed to the district court, which
reversed.
{2} The Board makes
several arguments on appeal to this Court. We aggregate the Board’s arguments
for convenience, as follows: (1) the district court failed to limit its review
to the proper appellate standard of review and instead considered additional
evidence; (2) a settlement agreement between the Board and Licensee, including
its enforcement provisions, was a valid contract which the district court
should have enforced; and (3) the Board’s findings were supported by
substantial evidence. Persuaded by the Board’s arguments, we reverse and remand
to the district court.
FACTS AND PROCEDURAL HISTORY
{3} The Board is an
administrative agency created pursuant to the Real Estate Appraisers Act (the
Act), NMSA 1978, §§
61-30-1 to -24 (1990, as amended through 2005) with the
purpose of regulating persons who develop and communicate appraisals to the
public. §§ 61-30-2(B), -4(A). The Board is vested with the responsibility of
holding hearings to determine whether an appraiser has violated a provision of
the Act. If so, the Board may suspend or revoke the appraiser’s license. §
61-30-15.
{4} Licensee is a
licensed real estate appraiser, subject to the provisions of the Act. Licensee
became the subject of a series of complaints, the substance of which is
irrelevant to this case, prompting the Board to initiate disciplinary action in
2004. The parties entered into a settlement agreement (the Settlement
Agreement) whereby Licensee would fulfill various requirements in exchange for
probation. Licensee agreed, among other things, to a one-year probationary
period during which he would pay costs and a penalty, successfully complete 42
approved hours of continuing education, and submit to monitoring for at least
four hours per quarter.
{5} The effective date
of the Settlement Agreement was specifically identified in the agreement as the
date upon which the Board approved the agreement. Although the Board approved
the agreement on November 4, 2004, formal notice was not personally served upon
Licensee. The Board relies upon evidence of Licensee’s communications through
his attorney and his behavior (in the form of partial compliance with
provisions of the Settlement Agreement) to infer that Licensee had actual
notice of the Board’s approval no later than November 15, 2004. Additionally,
the Board provided Licensee with a list of approved courses for continuing
education and with the name of a monitor.
{6} It is undisputed
that Licensee failed in the eyes of the Board to fulfill his obligations under
the Settlement Agreement prior to November 15, 2005, the deadline for
compliance. Consequently, on November 21, 2005, the Board summarily suspended
his license as per the Settlement Agreement, which states:
[I]f the Board receives credible
information that [Licensee] has violated . . . this Settlement Agreement, after
it has been approved by the Board, the Board may summarily suspend [Licensee’s]
license pending a hearing which shall (a) be held at the earliest practicable
date and (b) shall be conducted pursuant to the Uniform Licensing Act. If the
Board finds that [Licensee] has violated this Settlement Agreement, the Board
may revoke or suspend [Licensee’s] license, impose a fine, and/or take any
other disciplinary action described in the Uniform Licensing Act.
A hearing was held on December 14, 2005, in front of a
hearing officer, as per the Uniform Licensing Act, NMSA 1978, §§ 61-1-1 to -33
(1957, as amended through 2003).
{7} After considering
the testimony and evidence, the Board suspended Licensee’s license for two
years. Licensee appealed to the district court, which reversed the Board’s
decision.
{8} The district court
and this Court both sit as appellate courts in reviewing a decision of the
Board. Accordingly, the same standard of review is applicable. We both review
an administrative order to determine whether the order is arbitrary,
capricious, or an abuse of discretion; not supported by substantial evidence in
the record; or otherwise not in accordance with the law.
See NMSA 1978,
§
39-3-1.1(D) (1999); Rule
1-074(Q) NMRA;
Rio Grande Chapter of the Sierra
Club v. N.M. Mining Comm’n,
2003-NMSC-005, ¶ 17,
133 N.M. 97,
61 P.3d 806.
A review of an administrative agency’s decision is not a trial de novo.
Rio
Grande Chapter of the Sierra Club,
2003-NMSC-005, ¶ 17. We will not disturb
the agency’s factual findings if supported by substantial evidence, although we
engage in a whole record review.
Herman v. Miners’ Hosp.,
111 N.M. 550,
552,
807 P.2d 734, 736 (1991). In our review of an agency’s decision, we are
limited to consideration only of the facts presented to the agency.
See
Zamora v. Vill. of Ruidoso Downs,
120 N.M. 778, 783,
907 P.2d 182, 187
(1995). We do not, however, defer to the agency’s or district court’s
conclusions of law, which are reviewed de novo.
Rio Grande Chapter of the
Sierra Club,
2003-NMSC-005, ¶ 17.
{9} “‘Substantial
evidence’ is evidence that a reasonable mind would regard as adequate to
support a conclusion.”
Regents of the Univ. of N.M. v. N.M. Fed’n of
Teachers,
1998-NMSC-020, ¶ 17,
125 N.M. 401,
962 P.2d 1236 (citation
omitted). It is only “[i]f the agency’s factual findings are not supported by
substantial evidence, [that] the [reviewing] court may adopt its own findings
and conclusions based upon the information in the agency’s record.”
Id.
{10} Licensee argues that
the Board went outside of its authority when it issued its decision to “suspend
[Licensee’s] license” because nothing in the Board’s findings indicates that
Licensee committed any of the thirteen violations under Sections 61-30-15(A)
and (B) that require such suspension. We hold, however, that Licensee waived
this objection by voluntarily agreeing to the Board’s authority in this matter.
{11} The Settlement
Agreement permits the Board to determine whether Licensee violated the
agreement and, if Licensee did violate the agreement, to revoke or suspend
Licensee’s license, impose a fine, and/or take other disciplinary action
described in the Uniform Licensing Act. Licensee therefore specifically agreed
to the Board’s authority and was represented by counsel when he did so.
{12} It is well settled
law that this Court generally enforces settlement agreements.
See Envtl.
Control, Inc. v. City of Santa Fe,
2002-NMCA-003, ¶ 19,
131 N.M. 450,
38
P.3d 891;
Bd. of Educ. for the Carlsbad Mun. Sch. v. State Dep’t of Pub.
Educ.,
1999-NMCA-156, ¶ 14,
128 N.M. 398,
993 P.2d 112. An agreement of
settlement will not be set aside just because it later proves to have been
unwise or unfortunate for one party to enter into the agreement.
Envtl.
Control, Inc.,
2002-NMCA-003, ¶ 19. Instead, we have consistently held that
in negotiating a settlement contract, the parties are bound by its provisions
and must accept both the burdens and benefits of the contract.
Cortez v.
Cortez,
2007-NMCA-154, ¶ 14,
143 N.M. 66,
172 P.3d 615,
cert. granted,
2007-NMCERT-011, 143 N.M. 157, 173 P.3d 764. As we have pointed out,
[o]ur duty is to enforce the terms
of the contract which the parties made for themselves. Because of their favored
status, there must be a compelling basis to set aside a settlement agreement.
We will allow equity to interfere with enforcing clear contractual obligations
only when well-defined equitable exceptions, such as unconscionability,
mistake, fraud, or illegality justify deviation from the parties’ contract.
Id. ¶ 14 (internal
quotations marks and citations omitted).
{13} We have not been
presented with any evidence in this case intimating that the Settlement
Agreement falls within any exception to our policy of upholding these types of
contracts. It appears that both parties negotiated in good faith, were
represented by counsel, and received some benefit from entering into the
agreement. We therefore accept the validity of the Settlement Agreement and
hence the Board’s authority to hold a hearing in this matter. We limit our
discussion to the Board’s decision, which was to suspend Licensee’s license
because Licensee violated the Settlement Agreement.
{14} At the hearing in
December 2005, Licensee took the position that because he had not received
notice of the Board’s approval of the Settlement Agreement until January 2005,
his one-year probationary period should have run through January 2006. By the
end of either December 2005 or January 2006, Licensee appears to have made the
requisite payments, obtained the necessary continuing education credits, and
otherwise satisfied the terms of his probation. Accordingly, Licensee argued
that he complied with the terms of the Settlement Agreement such that there was
no basis for the suspension of his license.
{15} The hearing officer
disagreed and held that the twelve months commenced no later than November 15,
2004. Licensee’s compliance with the requirements of the Settlement Agreement
would therefore have had to occur no later than November 15, 2005. As it was
undisputed that Licensee failed to fulfill the requirements by November 15,
2005, the Board found that Licensee failed to meet the requirements set out in
the Settlement Agreement.
THE DISTRICT COURT DECISION
{16} At a January 2007
hearing prior to its decision, the district court permitted lengthy argument.
Licensee argued political motivation and bias, failure of notice, inept
monitoring, substantial compliance with payment, breach by the Board,
compliance with course requirements, and constitutional protection for a
license as property. The district court ultimately found that the Board had
acted capriciously and unreasonably in suspending Licensee. It reversed the
Board’s decision suspending Licensee’s license and further ordered Licensee to
be removed from probationary status.
{17} This Court has long
held that district courts engaged in administrative appeals are limited to the
record created at the agency level.
See, e.g.,
Zamora, 120 N.M.
at 782-83, 907 P.2d at 186-87 (observing that the scope of review in
administrative appeals is generally limited to the record created before the
agency, and rejecting an invitation to abandon or limit that principle);
Rowley
v. Murray,
106 N.M. 676, 679,
748 P.2d 973, 976 (Ct. App. 1987) (stating
that, absent a specific statutory provision, the court is confined to the
record made in the course of the administrative proceeding). If the record
proves inadequate for some reason, remand is the appropriate avenue.
See
Lewis v. City of Santa Fe,
2005-NMCA-032, ¶ 20,
137 N.M. 152,
108 P.3d 558
(“[T]he district court is at liberty to remand for the purpose of creating a
record that is adequate for review.”). It is not appropriate for the district
court itself to consider new evidence.
Martinez v. N.M. State Eng’r Office,
2000-NMCA-074, ¶ 48,
129 N.M. 413,
9 P.3d 657.
{18} In this case, the
district court appears to have inappropriately considered evidence beyond what
was presented to the Board. At a minimum, this included evidence of Licensee’s
compliance efforts subsequent to the mid-November 2005 deadline and after the
December 2005 hearing with regard to payment of fees. The district court’s
final judgment states:
2. Upon review
of the Settlement Agreement it is fairly clear to the [district c]ourt, upon
review of the record, that [Licensee] did comply to some extent.
7. [Licensee]
has served out the terms of the Settlement Agreement by being on probation, he
has paid the fees, he has complied with the course requirements, and he shall
no longer be under any restriction or probationary status[.]
It is clear from the record, however, that Licensee had
neither complied with the course requirements nor paid the fees in their
entirety by November 15, 2005, or even by the commencement of the December 2005
hearing.
{19} While a letter from
Licensee’s counsel dated the day of the administrative hearing informs the
Board’s chair of Licensee’s intent to complete the requirements, the letter
specifically states he would only actually complete the educational
requirements after the commencement of the December 14, 2005, administrative
hearing. The letter states that the courses Licensee proposed to enroll in
would take place between December 17, 2005, and March 12, 2006, well after both
the November 15 deadline and the December 14 suspension hearing.
{20} Moreover, while it
appears that Licensee may eventually have taken the required number of course
hours by the time of the January 2007 hearing in the district court, some hours
may not have been approved by the Board as required by the Settlement
Agreement. Nor had Licensee made payment of all the assessed fees by the time
of the December 2005 hearing. The district court must therefore have considered
evidence not previously before the Board when it concluded that Licensee had
indeed completed all of the requirements in the Settlement Agreement. As
previously discussed, such consideration of additional facts is improper where
a district court engages in appellate review as in this case.
{21} Furthermore, even
had the district court not considered new facts, it also failed to afford the
proper deference to the Board’s decision. Where a court addresses a question of
fact determined by an agency, the agency decision is accorded deference,
especially where the factual issue concerns matters in which the agency has
specialized expertise.
Morningstar Water Users Ass’n v. N.M. Pub. Util.
Comm’n,
120 N.M. 579, 583,
904 P.2d 28, 32 (1995);
Pueblos of Picuris v.
N.M. Energy, Minerals & Natural Res. Dep’t,
2001-NMCA-084, ¶ 21,
131
N.M. 166,
33 P.3d 916 (noting that courts defer to administrative review when
the issues are fact-intensive or abstruse). The district court may not
substitute its judgment for that of the agency; it must “evaluate whether the
record supports the result reached, not whether a different result could have
been reached.”
N.M. State Bd. of Psychologist Exam’rs v. Land,
2003-NMCA-034, ¶ 5,
133 N.M. 362,
62 P.3d 1244.
{22} While we may agree
with the district court that the evidence suggests that Licensee at least
partially complied with the Settlement Agreement, we also do not substitute our
judgment for that of the Board.
See Herman, 111 N.M. at 552, 807 P.2d at
736. Instead, we view the evidence in a light most favorable to the decision
when reviewing agency factual determinations.
Muckey v. N.M. Dep’t of Human
Servs., Income Support Div.,
102 N.M. 265, 268,
694 P.2d 521, 524 (Ct. App.
1985). Viewed in such a light, we do not agree with the district court that the
Board’s decision was capricious or unreasonable in this case. Sufficient
evidence was presented such that the hearing officer could conclude that
Licensee had violated the terms of the Settlement Agreement.
{23} The approach taken
at the district court level therefore conflicts with well established
principles of law in that it improperly considers additional evidence and fails
to properly apply the substantial evidence standard.
{24} We reverse the
district court’s decision. Consequently, we need not consider additional issues
at this time. We remand to the district court for proceedings in accordance
with this opinion and, at the district court’s discretion, for further
consideration of the other issues presented by Licensee, including notice and
bias.
RODERICK T. KENNEDY, Judge
Topic Index for Montano v. NM Real Estate Appraiser’s
Bd., No. 27,374
AL-AA Administrative
Appeal
AL-SE Sufficiency of
Evidence
AE-SB Substantial or
Sufficient Evidence
CP-SE Settlement
Agreement
MS Miscellaneous
Statutes
MS-RA Real Estate
Appraisal Act