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Scarborough v. Angel Fire Resort Operations, LLC

Court of Appeals of New Mexico

September 6, 2017

TRUETT L. SCARBOROUGH, Plaintiff-Appellee,
ANGEL FIRE RESORT OPERATIONS, LLC, a New Mexico Limited Liability Company, Defendant-Appellant.

         APPEAL FROM THE DISTRICT COURT OF COLFAX COUNTY John M. Paternoster, District Judge

          Stephen C.M. Long Albuquerque, NM Jeffery L. Thomason Angel Fire, NM for Appellee

          Rose L. Brand & Associates, P.C. Karla K. Poe Albuquerque, NM Rodey, Dickason, Sloan, Akin & Robb, P.A. Edward Ricco Albuquerque, NM for Appellant

          Carol Neelley, P.C. Carol A. Neelley Santa Fe, NM for Amicus Curiae Association of Angel Fire Property Owners



         {1} Defendant has filed a motion for rehearing in this matter, which has been considered by the original panel, and is hereby granted. The opinion filed July 28, 2017, is hereby withdrawn and this opinion is filed in its stead.

         {2} Defendant Angel Fire Resort Operations, L.L.C. (the Resort), appeals the district court's orders granting summary judgment to Truett L. Scarborough (Plaintiff), and denying summary judgment to the Resort. We affirm in part, reverse in part, and remand for further proceedings.


         {3} We are presented with yet another opportunity to review, evaluate, and interpret the bankruptcy-related documents of the Resort and its right to collect annual assessment fees for the maintenance of amenities. See Home & Land Owners, Inc. v. Angel Fire Resort Operations, L.L.C. (HALO), 2003-NMCA-070, 133 N.M. 733, 69 P.3d 243; see also Angel Fire Resort Operations, L.L.C. v. Corda, 2005-NMCA-084, 138 N.M. 50, 116 P.3d 841. The dispute here is between the Resort, located in Colfax County, New Mexico, and Plaintiff, who owns Lots 2, 3, and 4 in the Monte Verde "V" Subdivision Unit 1 (Monte Verde Subdivision), which is also located in Colfax County. The Resort claims that Plaintiff is required to pay the annual assessment fees. Plaintiff claims that he is not obligated to pay the assessment fees.

         {4} In 1966 the LeBus family owned four ski lifts located at the Angel Fire ski resort at the south end of the Moreno Valley outside of Eagle Nest, New Mexico. See Riblet Tramway Co. v. Monte Verde Corp., 453 F.2d 313, 314-15 (10th Cir. 1972). In addition, Roy LeBus (LeBus) purchased Monte Verde Ranch and was developing the Resort with a plan to include ski areas, a golf course, and other amenities. LeBus was the original developer of the Resort. In 1966 and 1967 Monte Verde Subdivision was platted and dedicated by Roy H. LeBus & Sons, Inc. In 1967 Plaintiff purchased Monte Verde Subdivision Lot 3 from Monte Verde Corporation. The deed to Lot 3 was signed by LeBus and stated that the property was "[s]ubject to easements and restrictions of record."

         {5} The ownership of the assets of the Resort changed over the years. In 1993 the five corporations or partnerships operating or related to the Resort filed for Chapter 11 bankruptcy. A Property Owners' Committee (POC) was appointed and participated in the bankruptcy case on behalf of the property owners in the Resort. In a disclosure statement filed during the bankruptcy proceedings, the POC sought to retain the rights of property owners to use the Resort's amenities. The POC made a request for a negative easement running with the land in order to preserve those rights.

         {6} The bankruptcy proceedings resulted in a reorganization plan (Plan) containing provisions regarding annual assessment fees to be paid by property owners for use of the Resort's amenities as well as a Supplemental Declaration providing that the assessment fees may be changed over time for new homesites and for existing homesites sold or transferred after September 1996. See HALO, 2003-NMCA-070, ¶¶ 4-5. The Plan was confirmed on May 31, 1995. The negative easement was included in the Supplemental Declaration and was recorded on September 27, 1995. "The Plan was accepted by a majority of all classes of claimants required to vote on it, including the property owners." Id. ¶ 3. The Plan and the Supplemental Declaration required that the property owner of each homesite pay an annual assessment fee "for the improvement, maintenance, upkeep, repair and operation of and additions to the [a]menities, " with payment not being dependent on the owner's use of the amenities. Many years after the Plan was confirmed and the Supplemental Declaration was recorded, Plaintiff purchased Monte Verde Subdivision Lots 2 and 4. Lots 2 and 4, like Lot 3, were originally purchased from Monte Verde Corporation.

         {7} Plaintiff argues that he never agreed that he was subject to the annual assessments and that he has consistently maintained that he does not use and has never used the amenities. Plaintiff initially attempted to reopen the bankruptcy proceedings to obtain a legal ruling concerning this obligation to pay yearly assessments; however, his attempts were unsuccessful because the bankruptcy estate was closed and the court ruled it had no jurisdiction to revisit the Plan. Plaintiff was directed to state court for any possible relief. See In re Angel Fire Corp., No. 93-12176-3a11, 2013 WL 1856350 (D.N.M. May 2, 2013).

         {8} Plaintiff subsequently filed a complaint for declaratory judgment and quiet title asking the district court to find that he and his lots are not liable for membership in the Resort and to quiet title to his property against claims made by the Resort. The Resort filed a counterclaim for money due based on past due assessments connected to Plaintiff's lots. The parties filed cross-motions for summary judgment. On January 16, 2015, the district court denied the Resort's motions for summary judgment as to Lots 2, 3, and 4. On April 2, 2015, the district court granted Plaintiff's motion for summary judgment on all three lots, finding that the exhibits and evidence show that Monte Verde Subdivision "is not part of any of [the Resort's] subdivisions, developments, properties, or ownership interests." Accordingly, the district court found that Plaintiff's lots are not subject to membership fees, and any person to whom Plaintiff conveys or devises his lots will not be subject to membership fees. In a letter decision filed on February 24, 2015, the district court indicated that it had re-examined the pleadings and exhibits and came to the conclusion that Monte Verde Subdivision, which includes ...

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