This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
A real estate developer entered into a contract with a public utility company to construct water facilities for a development project. The contract included a rebate provision allowing the developer to recoup costs through connection fees collected by the utility from third-party users. Disputes arose over the calculation of costs, collection of fees, and the utility's sale of the facilities to a municipality, which allegedly impacted the developer's ability to recover its investment (paras 2-7).
Procedural History
- District Court of Santa Fe County: The trial court awarded damages to the developer for breach of contract and violations of the Unfair Practices Act (UPA) but granted the utility an offset based on the developer's settlement with the municipality (headnotes, para 1).
Parties' Submissions
- Appellant (Public Utility Company): Argued that the trial court lacked jurisdiction as the Public Service Commission had exclusive authority over the contract and connection fees. Claimed the UPA claims were barred and that post-sale liability was precluded by abandonment, novation, and impracticability defenses (para 7).
- Appellee (Real Estate Developer): Contended that the utility breached the contract by miscalculating costs, failing to collect fees, and allowing unauthorized connections. Opposed the offset of damages, asserting the settlement with the municipality was for attorney fees, not damages (paras 5-7, 44-50).
Legal Issues
- Did the trial court have jurisdiction over the breach of contract and UPA claims, or was jurisdiction exclusive to the Public Service Commission?
- Were the UPA claims barred as a matter of law?
- Did the defenses of abandonment, novation, and impracticability/impossibility preclude the utility's post-sale liability?
- Was the trial court correct in granting an offset of the damages award based on the settlement with the municipality?
Disposition
- The Court of Appeals affirmed the trial court's decision on all issues (para 52).
Reasons
Per Pickard J. (Fry and Kennedy JJ. concurring):
Jurisdiction: The court held that the Public Service Commission did not have exclusive jurisdiction over the contract dispute. The claims were private in nature and did not challenge the reasonableness of rates or service regulations. The filed-rate doctrine was inapplicable as the connection fees were not approved by the Commission (paras 8-20).
UPA Claims: The court found that post-sale UPA claims were not exempt under Section 57-12-7 because the Commission no longer had authority over the utility's actions after the sale. The reasonableness of the utility's conduct was a factual issue properly decided by the jury (paras 38-43).
Defenses: The court rejected the defenses of abandonment, novation, and impracticability/impossibility. There was no evidence of mutual intent to abandon the contract, no clear agreement for novation, and the utility could not rely on impracticability as it voluntarily created the conditions leading to its inability to perform (paras 23-37).
Offset: The court upheld the offset of the damages award, reasoning that the settlement with the municipality was not a collateral source and was duplicative of the damages awarded by the jury. The agreement to characterize the settlement as attorney fees was an attempt to circumvent the rule against double recovery (paras 44-51).