AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

The State of New Mexico contracted with a general contractor, CRW Development Corporation, for disaster relief projects in Taos and Socorro Counties. Hydro Conduit Corporation, a subcontractor, supplied materials for the projects but was not paid by CRW, which became defunct. The State recovered some funds from fidelity bonds due to fraudulent conduct by CRW and state officials but did not compensate Hydro Conduit. Hydro Conduit alleged unjust enrichment, claiming the State retained the materials without payment (paras 2-3).

Procedural History

• District Court of Santa Fe County: The court dismissed Hydro Conduit's complaint, holding that sovereign immunity under NMSA 1978 Section 37-1-23 barred the unjust enrichment claim (para 1).

Parties' Submissions

• Plaintiff-Appellant (Hydro Conduit Corporation): Argued that unjust enrichment is not a claim "based on contract" and thus not barred by sovereign immunity. It also contended that the State was unjustly enriched by retaining the materials and receiving compensation from fidelity bonds (paras 5, 11).
• Defendants-Appellees (State of New Mexico and County Commissioners): Asserted that unjust enrichment claims are "based on contract" and barred by sovereign immunity. They also argued that the State had paid CRW for the materials, negating any unjust enrichment (paras 4-5, 10).

Legal Issues

• Does sovereign immunity under NMSA 1978 Section 37-1-23 bar a claim for unjust enrichment against the State?
• Is a claim for unjust enrichment "based on contract" within the meaning of the statute?

Disposition

• The Supreme Court of New Mexico affirmed the dismissal of Hydro Conduit's complaint, holding that sovereign immunity barred the unjust enrichment claim (para 24).

Reasons

Per Montgomery J. (Sosa CJ. and Ransom J. concurring):

• The court held that sovereign immunity under NMSA 1978 Section 37-1-23 applies to claims "based on contract," including claims for unjust enrichment. Although unjust enrichment is distinct from contract in theory, it is closely related to contract law and historically treated as such (paras 19-22).
• The legislature's intent in enacting Section 37-1-23 was to reinstate sovereign immunity for claims not based on valid written contracts. Allowing unjust enrichment claims would undermine this purpose (paras 17, 22).
• The court noted that the State had paid CRW for the materials, and Hydro Conduit could not establish unjust enrichment without further factual development. However, the sovereign immunity bar rendered this issue moot (paras 10-12, 23).
• The court emphasized the policy of protecting public funds and requiring contractors to assume the risk of nonpayment in the absence of a valid written contract (para 23).