AMY AVALOS, CHELSIE CARTER, SHELBY HUGHES, MARCELLA MADRID, MARGARITA MELENDEZ, FRANCINE SIMMS, JEAN SMITH, and ANGELA CAVENDER, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,
THE BOARD OF REGENTS OF NEW MEXICO STATE UNIVERSITY, in its capacity as the body politic for NEW MEXICO STATE UNIVERSITY and DOÑA ANA COMMUNITY COLLEGE, Defendant-Appellant.
FROM THE DISTRICT COURT OF DOÑA ANA COUNTY Jerry H.
Ritter Jr., District Judge
Treinen Law Office PC, Rob Treinen Albuquerque, NM, Almanzar
& Youngers PA, Joleen K. Youngers, Las Cruces, NM, The
Pickett Law Firm LLC, Lawrence M. Pickett, Las Cruces, NM for
Stratvert P.A. Cody R. Rogers Luke A. Salganek Las Cruces, NM
JONATHAN B. SUTIN, Judge
Plaintiffs are a group of former students who were enrolled
in Doña Ana Community College's associate's
degree nursing program (the program) in 2012. When Plaintiffs
enrolled in the program, written documents provided by the
Doña Ana Community College stated that the program was
nationally accredited by, among others, the National League
of Nursing Accrediting Commission (the Commission). Before
the students completed their studies, the Doña Ana
Community College lost its Commission accreditation and
Plaintiffs sued. They brought an action that included a claim
for breach of contract against the Board of Regents of New
Mexico State University in its capacity as the body politic
for the university and Doña Ana Community College
(collectively, Defendant). Defendant sought summary judgment as to
Plaintiffs' breach of contract claim, arguing that it was
immune under NMSA 1978, Section 37-1-23(A) (1976), because
Plaintiffs' claim was not based on a "valid written
contract." The district court denied Defendant's
motion for summary judgment, Defendant filed a petition for
writ of error, and this Court granted the petition to review
Defendant's immunity claim. See Handmaker v.
Henney, 1999-NMSC-043, ¶¶ 14-15, 128 N.M. 328,
992 P.2d 879 (stating that determinations of immunity under
Section 37-1-23(A) can, in general, be reviewed by writ of
error). We hold that the written documents regarding
accreditation relied upon by Plaintiffs do not constitute a
valid written contract under Section 37-1-23(A).
Plaintiffs' breach of contract claim alleged that
"[a] written agreement existed between Plaintiffs . . .
and [Defendant] . . . whereby [Defendant] agreed that it
would provide a nationally accredited education in nursing in
exchange for [Plaintiffs'] enrollment and tuition."
Plaintiffs asserted that they entered into a valid written
contract with Defendant for a nationally accredited nursing
program as evidenced by (1) the offer letter that they
received from Defendant that offered admission to the program
and required a written response accepting or declining a
position in the program; (2) a student handbook that included
a statement that information about accreditation of the
program could be obtained from the Commission and included a
ledger that stated, in relevant part, that the program was
accredited by the Commission; and (3) a student handbook
acknowledgment form that Plaintiffs were required to sign.
Section 37-1-23(A) states that "[g]overnmental entities
are granted immunity from actions based on contract, except
actions based on a valid written contract." Underlying
the Section 37-1-23(A) grant of immunity is an overarching
policy to "protect the public purse" by requiring
that "parties seeking recovery from the state for
benefits conferred on it have valid written
contracts[.]" Hydro Conduit Corp. v.
Kemble, 1990-NMSC-061, ¶ 23, 110 N.M. 173, 793 P.2d
855 (internal quotation marks omitted). This Court has
determined that "[b]y limiting lawsuits to valid written
contracts, the [L]egislature placed the risk of loss on a
party who transacts business with a governmental entity
without a valid written contract." Campos de Suenos,
Ltd. v. Cty. of Bernalillo, 2001-NMCA-043, ¶ 14,
130 N.M. 563, 28 P.3d 1104. Our standard of review is de
novo. See Univ. of N.M. Police Officer's Ass'n v.
Univ. of N.M., 2005-NMSC-030, ¶ 8, 138 N.M. 360,
120 P.3d 442; see also Ruegsegger v. Bd. of Regents of W.
N.M. Univ., 2007-NMCA-030, ¶ 22, 141 N.M. 306, 154
P.3d 681 ("We apply a de novo review to the application
of Section 37-1-23(A) to the facts[.]").
The parties discuss several cases in which our appellate
courts have considered the application of Section 37-1-23(A).
We discuss these cases for legal background relating to the
issue at hand.
In Garcia v. Middle Rio Grande Conservancy District,
1996-NMSC-029, 121 N.M. 728, 918 P.2d 7, our Supreme Court
considered whether a personnel policy that set forth
"certain rights, expectations, obligations, and other
promises between the [employer] and its employees"
constituted a valid written contract such that the plaintiffs
governmental employer could be held liable for breach of an
employment contract. Id. ¶¶ 1, 3. The
plaintiff sued for breach of an employment contract after he
was demoted, which resulted in a reduction in pay. Id.
¶¶ 1-2. In analyzing the case, our Supreme
Court first noted that although an employment contract for an
indefinite period of time is terminable at will, New Mexico
recognizes implied contracts as an exception to the at-will
rule. Id. ¶ 10. The Court determined that the
employer's personnel policy contained "provisions
relating to most every aspect of an employment relationship,
including job description, compensation (including salary on
promotion, demotion, or transfer), overtime, compensatory
time, time clock violations, tardiness, sick leave and annual
leave, and holidays." Id. ¶ 12. And the
Court recognized that the policy was part of an implied
employment contract because "it controlled the
employer-employee relationship and [the plaintiff] could
reasonably expect [the] employer to conform to the procedures
it outline[d]." Id. ¶¶ 11-13
(internal quotation marks and citation omitted). The Court
then held that, under the particular facts of
Garcia, the implied employment contract, which was
based on terms set forth in a personnel policy, constituted a
"valid written contract[, ]" and thus immunity was
waived for such claims under Section 37-1-23(A).
Garcia, 1996-NMSC-029, ¶¶ 14, 20 (internal
quotation marks omitted).
In Espinoza v. Town of Taos, 1995-NMSC-070, ¶
1, 120 N.M. 680, 905 P.2d 718, the plaintiffs sued the
defendant for breach of contract after the plaintiffs'
child was injured at the defendant's day camp. Our
Supreme Court considered whether the breach of contract claim
based on the plaintiffs' written application to the day
camp was a valid written contract that waived governmental
immunity under Section 37-1-23(A). Espinoza,
1995-NMSC-070, ¶¶ 1, 15. Ultimately, the Court
rejected the claim, stating that the town "did not
undertake a contractual obligation for liability in the event
of injury to a child attending its . . . day camp[, ]"
and "[a]t most, the terms of the application merely
ensured that space would be provided in the day camp program
for children who registered and paid the applicable
fee." Id. ¶ 15.
In Ruegsegger, 2007-NMCA-030, ¶¶ 4, 17,
21-22, this Court considered whether athletic scholarship
agreements and a student handbook created a valid written
contract under Section 37-1-23(A) between the defendants and
the plaintiff. In Ruegsegger, the plaintiff filed a
breach of contract claim against the defendants after she was
allegedly raped by two school-affiliated athletes.
2007-NMCA-030, ¶ 2. According to the plaintiff, the
defendants "breached their contractual obligations by
deliberately failing to follow . . . policies and procedures
in investigating the sexual attack, failing to provide a
school free from harassment and hostility, and failing to
provide reasonable support for [the plaintiff] following the
assault." Id. The plaintiff was a student
athlete and claimed that her athletic scholarship agreements
constituted an enforceable, written contract and that she had
an implied contract based on the student handbook.
Id. ¶ 4. Specifically, the plaintiff
highlighted the defendants' failure to assemble a crisis
intervention team as required by the student handbook and
alleged that the defendants subjected the plaintiff "to
humiliation and unfair treatment by deliberately failing to
follow . . . policies and procedures after the rape" and
failed to "provide reasonable support following the
assault." Id. ¶ 14 (internal quotation
In Ruegsegger, this Court first analyzed the
scholarship agreements and held that the scholarship
agreements required the plaintiff to maintain acceptable
academic performance, play basketball, and comply with
university regulations, and in exchange, the university was
obligated to provide the plaintiff with scholarship
assistance for her education. Id. ¶ 19.
According to this Court, the scholarship agreements made
"no reference to any duty on the part of [the
university] to comply with any . . . regulations or to
investigate claims of harassment, sexual assaults, or any
other misbehavior by other students[, ]" and thus, the
agreements could not form the basis for the plaintiff's
breach of contract claim. Id. ¶¶ 18-20.
The Ruegsegger Court next analyzed the provisions in
the student handbook to determine whether there was a claim
for breach of implied contract. Id. ¶¶
21-37. In analyzing the handbook, this Court assumed without
deciding that Section 37-1-23(A) did not bar the
plaintiff's claim and ultimately held that the plaintiff
"failed to state a valid claim for breach of contract
based upon the language of the [s]tudent [h]andbook."
Ruegsegger, 2007-NMCA-030, ¶ 22. We noted that
"[t]o establish a claim for breach of implied contract
based upon the terms of the [s]tudent [h]andbook, [the
p]laintiff was required to demonstrate that those terms
created a reasonable expectation of contractual rights. The