United States District Court, D. New Mexico
COURT'S FINDINGS OF FACT AND CONCLUSIONS OF
MATTER came before the Court on a bench trial held December
3-4, 2018. Attorneys Alan Wilson and Alexandra Jones appeared
for Plaintiff Midway Leasing, Inc. (“Midway”),
and Attorneys Elizabeth Heaphy and Robert Muehlenweg appeared
for Defendant Wagner Equipment Company
(“Wagner”). The Court has given due consideration
to the testimony received and the admitted exhibits and has
reviewed the transcript of the proceedings (Docs. 60 &
61), the proposed findings of fact and conclusions of law
submitted by the parties (Docs. 63 & 64), and relevant
authorities. Having further heard the arguments of counsel on
February 20, 2019, the Court now sets forth its Findings of
Fact and Conclusions of Law.
Plaintiff Midway is a New Mexico corporation, with its
principal place of business in Bernalillo County, New Mexico,
and its sole owner and president is Mr. D. McCall.
Undisputed; McCall Testimony, Trial Transcript (“Trial
Tr.”), Vol. I, 45:10-14.
Midway owns, leases, finances and develops commercial real
estate as well as provides consulting services in all aspects
of real estate development. McCall Testimony, Trial Tr.,
Vol. I, 45:10-14.
Defendant Wagner is a heavy equipment dealer based in
Colorado that has transacted business in New Mexico since
2002 when it purchased Rust Tractor, the Caterpillar
dealership then owned by Jack Rust. Wagner Testimony,
Trial Tr., Vol. II, 398:22-399:13.
Bruce Wagner has served as Wagner's president and chief
operating officer for at least twelve years. Wagner
Testimony, Trial Tr., Vol. II, 398:14-21.
Wagner Engages Midway's Services for South Valley
The Consulting Agreement
instant dispute involves the development of real estate
located at Rio Bravo Blvd N.W. and I-25 in the South Valley
of Albuquerque in Bernalillo County. Undisputed.
many years, Wagner has maintained its Albuquerque-area
headquarters at a facility on Osuna Road (4000 Osuna Road
NE). Wagner Testimony, Trial Tr., Vol. II,
2015, Wagner had acquired the South Valley property on which
it planned to construct a new facility for conducting its
Albuquerque-based operations. Wagner Testimony, Trial
Tr., Vol. II, 399:17-400:1.
the spring of 2015, Wagner was also building a new facility
in Bloomfield, New Mexico and two of its employees - Kevin
Pomeroy and Chris Foster - were tied up with the development
of that project. Thus, Wagner needed outside assistance to
get the South Valley development project moving. Wagner
Testimony, Trial Tr., Vol. II, 400:23-401:11.
Bruce Wagner and McCall met in about 2010 when both were
involved in helping young people show livestock at various
competitions, and they developed a friendship. McCall
Testimony, Trial Tr., Vol. I, 53:8-19; Wagner Testimony,
Trial Tr., Vol. II, 400:6-15.
early 2015, Bruce Wagner informally requested, and received,
some assistance from McCall with that South Valley
development because McCall has extensive experience in
commercial real estate development and management. McCall
Testimony, Trial Tr., Vol. I, 54:2-55:18.
spring 2015, McCall insisted on a written contract with
Midway setting forth compensation if Defendant wanted McCall
to continue to assist in those development efforts, and a
“Consulting Agreement” was executed in June 2015.
McCall Testimony, Trial Tr., Vol. I, 55:19-56:4; Exhibit
Pursuant to the written Consulting Agreement, Midway's
compensation for McCall's development services was based
on 1½% of the construction costs for the South Valley
project. Exhibit S.
Work on Getting the Industrial Revenue Bonds
During the time it was considering buying the South Valley
property, Wagner employees discussed with Bernalillo County
representatives, including Mayling Armijo, the director of
its Economic Development Department, economic incentives
including the potential availability of IRBs. Pomeroy
Testimony, Trial Tr., Vol. II, 291:20-23; 292:20-293:12.
IRB program is designed to encourage and incentivize
businesses to undertake industrial projects in Bernalillo
County. Businesses that build and equip facilities under the
auspices of the program can obtain certain benefits,
including property tax exemptions. No public
financing was involved in Wagner's South Valley project.
Perry Bendicksen Testimony, Trial Tr., Vol. I,
181:25-182:10; McCall Testimony, Trial Tr., Vol. I,
Wagner decided in about July 2015 that it should look more
closely at whether to apply to participate in the
County's IRB program, and Wagner employees asked McCall
to look into the IRB application process. Pomeroy
Testimony, Trial Tr., Vol. II, 321:1-321:18; 332:6-24.
McCall had previously worked on only one other IRB
application involving Moncor, but it was unsuccessful.
Although he did not consider himself to be an expert on IRBs
in July 2015, he certainly was familiar at that time with
such entitlements as well as other discretionary programs and
economic incentives. He also had negotiation experience and
regularly worked with County and State entities and elected
officials in the area of real estate development. McCall
Testimony, Trial Tr., Vol. I, 135:20-136:9; Trial TR., Vol.
July 28, 2015, McCall sent an email about IRBs to Kevin
Pomeroy, Wagner's Facilities & Maintenance Manager.
The email stated, in part:
I have scheduled a meeting at 1:30 at Art De La Cruz County
Commissioner's office [on July 29], if there is any way
possible can you see if [Wagner's CEO, Bruce Wagner]
would consider going. I think this is a meeting where we can
get on the table what they can offer for the IRB's such
as property tax exemptions, gross receipts on construction
and whatever else they may have available. This would be a
great kickoff start.
McCall Testimony, Trial Tr., Vol. I, 141:16-25; Exhibit
McCall arranged a July 29, 2015 “kickoff” meeting
with Commissioner De La Cruz and other County representatives
at which Bruce Wagner, Kevin Pomeroy and McCall also
attended. Pomeroy Testimony, Trial Tr., Vol. II,
333:6-13; Wagner Testimony, Trial Tr., Vol. II,
Until July 29, 2015, the day of the kickoff meeting, Wagner
had assumed McCall's work on the IRB project would be
included as part of Midway's services under the
Consulting Agreement. On the day of the “kickoff”
meeting, McCall informed Bruce Wagner that he believed that
the IRB services were outside the scope of Midway's
Consulting Agreement with Wagner. Wagner Testimony, Trial
Tr., Vol. II, 404:17-22; Pomeroy Testimony, Trial Tr., Vol.
that time, Bruce Wagner responded that he was unsure if the
services were outside the scope of the Consulting Agreement,
that he would look into it and that he would treat McCall
fairly. There was no discussion of compensation methodology
if the IRB services be found to fall outside the scope of the
Consulting Agreement. Wagner Testimony, Trial Tr., Vol.
parties have since stipulated that the compensation that is
owed to Midway for the IRB work performed by McCall is
separate, apart and distinct from the written Consulting
There were no further discussions regarding compensation for
work performed by Midway in obtaining the IRBs until October
15, 2015. Undisputed.
Wagner Equipment authorized McCall to represent Wagner in
communications with professional staff and elected officials
of the County, with the objective of obtaining the
County's approval of the IRBs for its proposed new