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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
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7TH JUDICIAL DISTRICT
SIERRA
COU
FILED
IN MY
1W1l2U5 1:40
DISTRICT COURT
/s/ Lindsey Huston 10/
SEYENTH JUDICIAL
DISTRICT
COURT
COUNTY
OF
SIERRA
STATE
OF
NEW
MEXICO
IIOT
SPRINGS LAND DEVELOPMENT, LLC,
A New
Mexico
Limited Liability
Company, and
HOT
SPRINGS
MOTORPLEX DEYELOPMENT, LLC,
A
New
Mexico
Limited
Liability
Company,
Plaintiffs,
Y.
No.
D-721-CV-2014-00073
CITY
OF
TRUTH
OR
CONSEQUENCES,
A
New
Mexico
Municipality,
Defendant.
DEF'ENDANT,S
MOTION foT
SUMMARY JUDGMENT
on
COUI{TS
I
and
tr
and
MEMORANDUM
in
SUPPORT
COMES
NOW
Defendant,
the City
of
Truth
or
Consequences
("the
City"),
through
undersigned
counsel, and
hereby
moves
for
summary
judgment
pursuant
to
Rule 1-056(8),
NMRA
on
Counts
I
and tr
of
Plaintiffs'
Complaint
for
Damages. The
grounds
for
this
motion
are that the Option Agreement
for
Purchase
and Sale
of
Rights referenced in
Counts
I
and
II
terminated by
its
own terms, and
Plaintiff
Hot
Springs
Motorplex
Development,
LLC
("Hot
Springs")
failed
to exercise
its option
under the agreement. Therefore,
no
breach
of
contract
occurred.
Plaintiff Hot
Springs Land Development,
LLC
is not
a
party
to
the
agreement.
I.INTRODUCTION
The
Option
Agreementwhich is
the
subject of these claims
related
to a
grant
of
sole and
exclusive option by
the City to
Hot
Springs
Motorplex Development,LLC
to
purchase
water and
sewer capacity
at
set
prices
for
a
set
duration. Plaintiff
paid
two
hundred
thousand
dollars
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($200,000)
under
the
Agreement,
and the
City held the water and sewer
capacity
for
the benefit
of Hot
Springs
for
the
entire
period
of
the
Agreement. Plaintiff
never
exercised any option
pursuant
to the agreement.
The
Option
Agreement expired under
its durational terms,
and
each
party
received
the benefit of
its
bargain.
The
Option
Agreement
for
Purchase and Sale of
Rights
is
attached as
Exhibit
1
to this
motion. The
Option
Agreement
was amended once
to
extend the
duration
of
the
option
to
purchase
for ninety
(90)
days
from February
73,2011
until
August 13,
2011.
The
First Amendment to Option
Agreement for Purchase
and
Sale of Rights
is
attached
as
Exhibit 2.
Count
I
of
Plaintiffs'
Complaint
alleges
Breach
of
Option
Agreement as
a
claim for
money
damages. Complaint,
p.
12. Count
tr alleges
Breach
of
Option
Agreement
and asks
for
the equitable
relief
of
rescission. Complaint,
pp.
l4-15.
Neither remedy
is
available to
Plaintiff
because
the City was
in full compliance with the
Agreement
terms, and the options
expired under
the durational term of the
Agreement.
Additionally,
Plaintiff
irrevocably
waived
any
right
to
damages
in
the event of a default
by the
City,
absent
strict compliance
with
procedures
under the
agreement,
which
procedures were not
followed. Ex.
1,
fl9.
Hot
Springs
Motorplex
Development,
LLC
notified
the
City
on or about
August
9, 2011
that
it
wanted to exercise
a
partial
option under the
Agreement. However,
for
numerous reasons
described
below, the August
g,
2Ol1
letter
was
not effective
to
exercise
any option
under the
terms of
the
Agreement;
and,
therefore,
the
options
to
purchase
sewer and
water capacity expired
on
August
13,2011. Plaintiffs
correspondence of August
9,2A11 is attached as
Exhibit
3. The
City's
response
to this
letter
from
the City
Attorney
denying
the
purported
exercise
of
an option
is
attached
as
Exhibit
4.
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The
Affidavit
of
the
City
Manager and
the Affidavit
of
the City
Water/lVastewater
Director in
support of this
motion
are attached
as
Exhibits 5
and
6,
respectively.
Other claims
in the
Complaint
have been dismissed based
upon
the
expiration
of the
statute
of
limitations. The instant motion
only
addresses the two counts
which
are
not
barred by
the three
year
statute
of
limitations.
Standard
for
Summary Judsment
"A party
against whom a claim
...
is
asserted ...
may move
with or without supporting
ffidavits
for
a summary
judgment
as
to all
or any
part
thereof."
Rule 1-056(8),
NMRA.
"Summary
judgment
is
appropriate where there
are
no genuine
issues
of material fact
and
the
movant is
entitled to
judgment
as a
matter
of
law.
Where
reasonable minds
will
not
differ
as
to an
issue
of
material fact,
the courl
may
properly gmnt
summary
judgment.
All reasonable inferences
are construed
in
favor
of the
non-moving
party."
Montsomery
v.
Lomos Altos. Inc., 2007-NMSC-2,
fl8,
141
N.M
21, 150 P.3d 97 I.
1.
II.
STATEMENT
OF UNDISPUTED
MATERIAL FACTS
Hot
Springs
Motorplex
Development,
LLC ("Hot
Springs") and
the
City of
Truth
or
Consequences entered
into
an
Option
Agreement for Purchase
or
Sale
of Rights
("Option
Agreement"
or
"the
contract") on August 77
,2007
. Complaint,
l2l.
Exhibit I hereto.
The Option Agreement
granted
an option to
Hot
Springs to
purchase
available sewer
capacity, a
right of first
refusal
to
purchase
future sewer capacity and available
water
capacity,
and a
right
of
refusal
to
purchase
future
water
capacity
from
the City
for
prices
set
in
the agreement,
paragraph
3,
and
more
specifically delineated
in Ex. B
to the Option
Agreement.
Ex.
l,
and Ex.
B
thereto.
As
consideration
for the Option
Agreement, the
City
agreed
to hold the
current
sewer and
water
capacity
and
future
capacities
off
the
market for
the
period
of the
agreement,
unless
2.
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,:
Hot
Springs
gave
written
permission
to
release
any
portion
of
the
capacities covered
by
the Option
Agreement.
Ex. I,
ll
l.
4.
As
consideration
for
the
Option
Agreement,
Hot
Springs
paid
two hundred thousand
dollars
($200,000)
to the
City.
Ex. l,
fl2;
Ex. 5,
fl7
,
Affidnvit
of
Juan
A.
Fuentes.
5. The
Option
Agreement
set
the
purchase
price
for
available sewer
capacity at
two
million
seven
hundred fifty-five thousand seven
hundred twenty-eight dollars
($2,755,728.00).
Fx.l,
n3.A.
6. The
Option
Agreement set the
purchase price
for
available
water capacity at
four
million
eighty-thousand
dollars
($4,080,000.00).
Er.
I,
n3.8.
7.
The right
to
purchase
available sewer capacity
is
defined
in
Exhibits
A and
B
to the
agreement.
Ex. l,
Recital A;
Ex.
A
and
Ex. B
to
Ex. 1.
8. The right
to
purchase
water capacity
granted
under the Option
Agreement is
the
right
to
purchase
eighty
percent (80%)
of the existing
annual
capacity of
the
municipal water
utility
system.
fu. A.13
to Ex. l.
9.
The
water
capacity
reserved
under the
Option
Agreement amounted
to
six
hundred
eighty
(680)
acre
feet
per year
at
a
price
of
six
thousand
dollars
($6,000.00) per
acre
foot
per
year.
Ex. B to fu. l.
10.
The
contract states that
"This
Agreement shall expire and shall be deemed terminated
if
Hot
Springs
fails
to exercise
its
option, or
any
part
thereof, on or before
February
13,
2011
." Ex.
l,
Jl5.
11. The
parties
agreed
to
an extension
of
the
contract
until
August i3,
2011 in
the
First
Amendment to Option
Agreement for Purchase and Sale of
Rights. Ex. 2,
\Lb
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12. The First Amendment
to
the Option
Agreement
states
"Any
failure
by either
Party at any
point
in
time during the term
of the Option
Agreement,
as
amended,
to
insist
upon strict
and
timely
compliance
with the
terms and
provisions
of such
document shall
not
be
deemed
a waiver
either expressly
or
impliedly
by
either
Party
or
[sic]
any
of
their
respective rights
under
any such document
nor
shall the same
excuse
the
other
Parly's
obligation
to strictly
and
timely
perform
its obligation
hereunder
and
therein."
b.
2,
n4.
13.
The contract
states
that
"This
Agreement,
including Exhibits
A
and
B
attached
hereto,
contains
the
entire
Agreement
between the City
and
Hot
Springs and a1l other
representations,
negotiations and
agreements,
written
and
oral, including
any letters
of
intent which
pre-date
the
Effective Date hereof,
with
respect to
Rights
or
any
portion
thereof, are superseded by
this
Agreement
and are of no
force
and effect.
This
Agreement
may
be
amended and
modified
only by
instrument, in writing, executed by all
parties
hereto." Ex. l,
\16.
14. The contract specifies the
manner in
which
Hot
Springs exercises
any option under the
agreement
in
paragraph
4.
It
requires 1)
written
notice given
within
the
time
of
the
Agreement,2)by U.S.
Mail,
facsimile,
or
hand delivery 3) to the City
Manager 4)
with a
copy to Jay
Rubin,
EsO, 5)
specifying
the
number
and
nature
of
rights
to
which
the
option
is
being exercised,
6) indicatin
g
a
datefor closing within
10
to sixty days of the
notice.
Ex. l,
n14,
24.
15. The
"closing"
of
a
purchase
of
rights requires
payment
of
"good
funds"
to
the
City
Utilities
Departinent,
which
are
defined
as
"immediately availa.ble U.S.
federal funds."
Ex.
t, T.]T3.C and 6.
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15.
Greg
Neal,
on
behalf
of
Hot
Springs, sent a
letter
to
the
then
City
Manager
on or
about
August 9,2011
that
"Hot
Springs
wishes to
purchase
$200,000
worth of
non-adjudicated
transferable water"
"pursuant
to Section
4
of the Option
Agreement
.-
Ex.
3.
17.
This letter
did
not
contain the
information required to be specified
in
a
notice
of
exercise
of
option: specifically
the number and
nature
of
the
rights
being
exercised, and a date
for
closing.
Er.
3.
18. This leuer indicated that Hot Springs wished to
purchase
$200,000
worth of
non-
adjudicated
water.
The
Option
Agreement
was
for
eighty
percent (80%)
of
the City's
available
water
capacity,
and has
no reference
to "non-adjudicated"
water.
Ex.
3; Ex.
A
to
Fx. l.
19. The
Option
Agreement
states
that
"All
Deposits
shall apply
to
and
be credited
against the
Purchase
Price, and shall be equally divided between the Sewer
Purchase Price
and the
Water
Purchase Price at the exercise
of
the
Seventh
Option
(as
these terms are defined
below;."E
Ex. I,12.D. The"Purchase Price" is
defined
as the
"Sewer
Purchase
Price,
the
Future
Sewer Purchase
Price
(if
any), the
Water
Purchase
Price,
and
the
Future Water
Purchase Price
(if
any)."
Ex. 1,
n3.C.
20. The
Option
Agreement indicates that the "Purchase
Price" is
the sum of the
purchase
prices
for
water and sewer capacities, or six
million
eight-hundred
thirty-five thousand
seven hundred twenty-eight
dollars
($6,835,728.00).
Ex.
1,l3.A; See
also Ex.
C
to Fx. l.
21. The
Option
Agreement requires
the
payment
of
a
"Purchase
Price"
relating
to
water
capacity and/or sewer capacity
in
order
for
any deposit
to
be
credited
against a
"purchase
price,'
and
the deposits
"are
nonrefundable
to
Hot Springs
unless
the
City
defaults
I
The
Option
Agreement
does
not contain
any
definition
or
reference to the
"seventh
Option"
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hereunder
or cannot
deliver
any
or all of
the
Rights
pursuant
to the
fOption
Agreement]."
Ex.
t,
12.D.
22.Hot
Springs
did
not
pay
or
agree
to
pay
to
the
City
"the
Purchase Price
for
the Rights
then being
purchased,
in
certified
United
States
funds...."
as
required
by the contract.
Ex.
l,
n2.C.;
Ex. 5,
nl1,
Affidqvit
of
Juan A.
Fuentes.
23.Hot Springs
never
extended any
water
or sewer
transmission
lines from
its
property
to
connect to
City
water or sewer
lines
as
required by the contract to
receive
City
services.
Ex. l,110.C;
Ex. 5,
n1^3,
Afrtdavit of
Juan
A. Fuentes.
24.The
Option Agreement
expires
and
is
deemed
terminated
if
Hot
Springs
fails
to
exercise
its
option,
or any
part
thereof on or before
August 13,2011. Ex.
l,
n5;
Ex.
2,
nl.b
[extends
date
/rom
February
] 3,
20
I
I until August
I 3, 201
il.
25.The
contract
requires Hot
Springs
to
give
the
City
"a
reasonably
detailed
notice
specifying...breach," and
a thirty day
period
to cure.
Ex.
l,
\9.
26. The City did not
receive
a
notice
of a breach of the Option
Agreement
or an opporfunity
to
cure
the
alleged breach.
27
.
The contract
provides
that the City
has
thirty
(30)
days
to cure
a
breach.
If
the City
does
not
do
so,
Hot
Springs
must
give
the
City
notice of
its
election
of
remedies, either
specific
performance
or
return
of
the
"deposit"
within
thirfy
(30)
days
of
the
City's
default.
If
Hot
Springs does
not
give
notice
of
its
election of
remedies
to
the
City,
it
cannot demand specific
performance
and
"Hot
Springs
agrees
that
it
irrevocably
waives
any
right
to
damages."
Ex.
l,
fl9.
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28.
At all
times
of
the duration
of
the
Option
Agreement,
the
City
possessed
the water
and
sewer capacity
indicated in Exhibits
A
and
B
to
the
Option
Agreemenl and
reserved
the
same
to the benefit of
Hot
Springs.
Ex. 6,
18,
Affidavit of
Jesus
A.
Salayandia.
29. The
Option
Agreement
provides
that the
prevailing
party
in litigation regarding the
enforcement
of the
Agreement
shall be awarded
attorney's
fees
and costs
of
suit.
Ex.
l,
12s.
III.
MEMORANDUM
of
POINTS
and
AUTHORITIES
A.
Law
Resardins
Ontion
Contracts
This
case
requires
the
interpretation
of
an
option
contract.
"An
option
is
a
contract
whereby one
party
agrees
to
keep an
offer
open
for
a stated
period
of time upon
specified terms
and
conditions,
and
may
become
binding upon both
parties,
depending on
whether the
optionee
exercises
his
right."
Zobel
v.
Bellamah Land
Co..
1967-NMSC-269,fl9,78
N.M
586, 435 P. 2d
205, citing Hoffmann v. McCanlies. 76 N.M. 2I8,220,
413
P.2d
697
,
698
(1996).
"An
option
is
'a
continuing and
irrevocable
offer which the optionor cannot
withdraw
during a stated
period.
It
vests
the
optionee
with
a
power
of
acceptance, and
when the optionee
accepts
the offer
in
the
prescribed
manner, the option
is
deemed to
have
been exercised
as to
create
a
binding bilateral
contract."'
Fru-Con
Construction Com. v.
KFX.
Inc., 153 F.3d 1150, 1157-1158
(1Oth
Cir
1998)
(citation
omitted).
"To
be valid,
an option
must
be supported by consideration, and'the
consideration
for
the
option
[must
be]
a
thing
apart
from
the consideration
for
the
[underlying]
sale."'
Id.,
p.
1158,
citing lo Ragan
v.
Schreffler"
306
S
W.2d
494,499
(Mo.
1957).
To be legally enforceable, a contract
requires
consideration exchanged
between the
parties.
See
Garcia v.
Middle
Rio
Grande Conservanclz
Dist., 1996-NMSC-029,
'lT
9, 121
N.M.
728,978P.zd7.
Consideration sufficientto support a contract
may
be
money
payment
or cafl
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"be
either a detriment
incurred
by
promise
or a benefit
to the
promisor."
Fru-Con
Construction
Corp.,
ll58
(citations
omitted).
In
order to exercise
an option
granted pursuant
to
an option contract,
the optionee
must
give
an
"unequivocal
and unqualified
expression
of
intention
to
exercise
an
option and
affirmative
performance
of the expressed
method
of exercising
it.''
Northcutt
v.
McPherson,
1970-NMSC-099,
fl
9,
81
N.M.
743,473 P.2d357,
(citations
amitted).
"The
language
of the
agreement
itself
controls
as
to what act or acts constitute
an
election to exercise an
option."
Id.
B.
Hot
Sprinss
Did
Not
Exercise
its
Ontion Under the
Contract
and so the
Option
Agreement
Expired
Under
its Own
Terms.
Hot
Springs
required the assurance
of
certain
utility
services
in
order to
proceed
with
development
plans
for
real
property
in
Sierra County.
Therefore,
Hot
Springs
requested
and
obtained the sole and
exclusive
rights
to connect to City water and sewer services
in
an amount
equal
to
a
portion
of
the available
supply.
The full
and complete agreement
for
these option
rights
is
contained
in
the Option
Agreement for Purchase
and Sale of
Rights, Exhibit 1. Fact 13.
As
consideration
for
the
contract,
the
City agreed to
hold the
agreed
upon cuffent
and
future
sewer and water capacities off the
market for
the
four
(4)
years
of
the agreement,
for
the
sole and
exclusive benefit
of
Hot
Springs.
Er. l; Facts 2-3. The First Amendment
to
Option
Agreement for Purchase and Sale of
Rights
extended the option contract
for
an
additional
ninety
(90)
day
period,
until
August 13,2011.
Ex.
2,
T.b;
Fact
11.
As
consideration
for
the contract,
Hot
Springs
paid
the City two
hundred thousand dollars.
Fact 4. This
payment
is referenced in
the
contract
as
"Deposits."
Ex.
Ir12.
The contract calls
forpayments of
"purchase
prices"
for
available sewer connections and available water capacity
in
U.S.
federal
funds. Fact
15. The
contract allows
for Hot
Springs
to
exercise
purchase
options in increments, or
portions.
Ex. l,
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nn4,
5;Fact24. If Hot
Springs
fails
to exercise
its
options by the termination date of the option
contract, the contract expires and
is
deemed terminated.
Ffr. 1,
fl5;
Fact 24.
1. Hot
Sprinss'
letter
of
August 9" 2011 is invalid
to exercise anv
option
under
the
contract.
Although
Plaintiffs
allege that
Hot
Springs
attempted to exercise
its
options under the
contract on August 9,2071
(Complaint,
n6n,
the
letter
by Greg Neal to the then City Manager,
Ellen Lindsey on
that date,
(Ey.
3)
does
not
comply with the terms
for
exercise
of
an
option
to
purchase
water
under the
contract.
Although
the
leuer
specifically
references
Section
4
of the
Option
Agreement, Mr.
Neal
failed
to comply
with
that
paragraph
in
several
respects. The letter
refers
to
"non-adjudicated,
transferable
water."
The
water
rights
capacity
refers
to
increments
of
water
owned by
the
City
in
units
of "AFY'
(acre
feet
per year),
at the
price
of
six
thousand
dollars
per
acre foot. Er. B
to
Ftx.
l. There is no reference
in
the contract
to
"non-adjudicated"
water.
F'act
18. The
only
manner
in
which water
is
sold under the contract is
through water
transmission
lines,
which
lines
are the responsibility
of
Hot
Springs to construct.
Fx. 1,110
C;
Bact
23. No
such
lines have
been constructed. Fact 23. Thus,
the
letter fails
to
specify the
"nature
of
rights"
required under the notice
provision
of the contract. Ex. I
,
14;
Fact 14.
The letter failed
to
specify
"the
number"
of
the
rights
sought.to be exercised,
but
merely
statedthe desire
to
"purchase
$200,000
worth"
of water.
Fact
16.
The
letterfailed
to
specify a
"closing"
date
for
the
purported purchase
as
required
by
the
contract.
Ex.
I,
\4;
Fact
17.
A
"closing"
is required for
the
purchase
of
rights,
which
requires
payment
of
"good
funds" to the
City's
Utilify
Department,
on
a
date stipulated
in
the
notice
of
exercise
of
an
option
.
Ex.
l,
J1J13-
7; Facts 14
and
15. The August
9,
2011
letter did not reference
any
payment
of
funds
to the
City
for
a
"purchase
price."
Fx. 3;Facts 17,
2l and22.
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The Option
Agreement
expressly
grants
the
parties
the
right
to
insist upon
strict
and
timely
compliance
with
the
contract
terms.
Ex.
2,
14;
Fact
12. The City
is
entitled
to the
affirmative
performance
of
the expressed
method of
the
exercise
of an option
by
Hot Springs.
Northcutt
v.
McPherson.
Hot
Springs
failed
to
timely
comply
with the
notice
requirements of
the contract
in
order
to exercise
an
option to
purchase
water under
the
agreement.
The
Option
Agreement
provides
that
if
Hot
Springs
fails to
exercise
any option,
the
contract
terminates
or
expires
on the agreed
upon
date,
August
13,2011.
Ex.
I
15;
Ex.
2,
fll.b;
Fact
24.
Because the
letter of
August
9,
2011 was
not
a
valid exercise
of any
option,
the Option
Agreement
terminated
by
its
own
terms,
both
parties received the benefit
of their
bargain,
and
neither
party
has
liability to the
other
party.
C.
Even if the
August
9, 2011
Letter
Were
a
Valid
Exercise
of
a
Partial
Option
Under
the Contract.
Hot
Sprines
is
l{ot
Entitled
to
Anv
Damases
From
the
Citv
Pursuant
to the
Express
Contract
Terms.
The
City
Attorney,
Jaime
F.
Rubin,
responded
to the
Hot
Springs
letter on or
about
August
29,2077.
Ex.
4.
His
letter explained
the
multiple
grounds
as
to why
Hot Springs
did
not
comply
with
the Option Agreement terms,
and an
implied
attempt
to
convert the
"deposif' to
a
purchase
price
was
invalid.
Plaintiffs'
Complaint
alleges
that the City
breached
the Option
Agreement
by
rejecting
Hot Springs
attempt
to
exercise
its
options.
Complaint,
llBB.
However,
the Complaint
fails to
allege
that
Plaintiff
provided
the City with
a
reasonably
detailed
notice of
a
breach
of
the
contract,
nor
the
opportunity
to
cure
a
breach, as
required under
the
agreem
ent.
Ex. l,
119;
Facts
25-26.
No such
notice was
received, and
this contract
provision
works
to
prohibit
any
claim
for
damages,
or
specific
perlormance under
the
contract.
Facts
26-27.
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D.
Hot
Sprinqs is Not
Entitled
to
Rescission
of the Contract.
Counts I and tr
of the Complaint
allege that
"[u]pon
information
and
belief'
the
City
did
not
have
ability or
authority to
provide
Plaintiffs
with
eighty
percent
of the
City's
current
excess
water and
sewer capacity and
ninety-five percent
of
the
City's
future water
and sewer capacity.
Complaint,'ulT 100,
107.
The
Complaint fails
to
specify the source
of this
information
or belief,
and
Defendant
is
unaware of any basis for it. Fact
28. Because
the
City
reserved
the water
and
sewer connection
availability
for
Hot
Springs during the
period
of the
Agreement,
its forbearance
of allocating
these
utilities
to
other developers constituted
sufficient
consideration
under
the
contract. Plaintiffs
are,
therefore,
not
entitled
to
the remedy
of
rescission
as
requested
in
Count
II
because
they
have received
the
full
benefit of their
bargain.
E. The
Citv
is
Entitled
to Pavment
of
its
Attorneys'
Fees
bv Hot
Springs.
The
Option
Agreement
provides
that
the
prevailing
parly
in
litigation
to enforce the
contract
shall be
awarded reasonable
attorneys' fees. Ex.
1,
fl
25; Fact 29.
Should the
Court
grant
this Motion
for
Summary
Judgment on Counts I
and
tr relating
to disputed claims
under the
Option
Agreement, Defendant
asks
for
an award
of
its
reasonable
attorneys'
fees
and expenses
incurred.
Where
a contact contains
an
unambiguous
provision
for
attorneys'
fees to
the
prevailing
party,
the
failure
to enforce
it
is
an abuse
of
discretion. Dennison
v.
Marlowe,
1989-
NMSC-041,
flfl6,
8,
108
N.M.
524,755
p.2d726.
IV.
CONCLUSION
Count I
of the Complaint
asks
for money
damages for
breach
of
the
Option Agreement
based
upon
Plaintiffs'
claim
that
the City
falsely
warranted
that
it
could
provide
the option
for
designated
sewer and
water
capacity,
and that
it
breached
the agreement by refusing
to honor
an
attempted exercise
of
its
option.
There is no factual
basis
for
the allegation
that the City
did
not
L2
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
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have
ability
and
authority
to
provide
the utilities
to
Hot
Springs
under the terms of
the
Agreement.
Therefore,
the
City
provided good
and sufficient consideration
under
the Option
Agreement
and
no
breach
is
stated.
Fufiher,
Hot
Springs did
not
strictly
comply
with
the
requirements to exercise any option
for
water
service, and because
the
parties
and
the
case
law require strict compliance
with contract
terms to
exercise
an option,
this
claim
for
breach
against the
City
also
fails. Even if
the
City
were
in
breach,
the Option
Agreement
has
strict
notice
provisions,
requiring an opportunity
to
cure, and
timely election of a
remedy against the
City
in
event
of default.
These
provisions
were
not followed
by Hot
Springs,
and so
the
very
terms
of
the
contract
prohibit
any
award
of
damages or
return
of
its
deposit
to
Hot
Springs.
Hot
Springs claims
this
remedy
of
rescission
on the
basis
of
alleged
failure
of
consideration.
However, this
remedy
is
based upon an allegation
that the City
did
not
have
the
ability
to
deliver
the available excess sewer
and
water capacity
referenced
in
the contract.
Hot
Springs
has
provided
no factual
support
for
this allegation,
made
"upon
information
and
belief."
Hot
Springs
has
the
burden
to
demonstrate
specific
evidentiary facts
to
require
a
trial
on this
claim,
and
cannot
merely rest
on
the
Complaint
allegations.
Romero
v.
Philip
Monis
Inc..
2010-NMSC-
035,
fll0,
148
N.M
713, 242P.3d280.
(Citations
omitted).
Therefore,
on the
basis
of
undisputed
facts,
the
City
is
entitled
to
summary
judgment
in
its favor on Counts
I
and
tr
of
the Complaint.
WHEREFORE
Defendant
respectfully requests that this Court
grant
its
Motion
for
Summary
Judgment on Counts
I and
II,
for
its
attorneys'
fees
and
expenses
in
connection
with
this
motion, and
for
such other and
further relief
that the
Court
deems
just
and
proper.
13
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
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Resp
ectfully sub
mitted,
By.
/s/ Robvn Hoffinan
Robyn Hoffman, Esq.
ROBYNHOFFMAN,
Post
Office
Box 836
Tijeras,
New
Mexico
Esq. LLC
87059
James
P.
Sullivan,
Esq.
BRENNAN
&
SIILryAN,
P.A.
128 East DeVargas
Salta Fe,
New
Mexico 87501
(s0s)
ees-8s14
CERTIFICATE OB SBRVICE
The undersigned hereby
certifies that
on
this
1't day
of
October, 2015,
the foregoing
was
served
electronically through
the Seventh
Judicial
District
Court's
electronic
file
and serve
system to the
following:
Luis
G. Stelzner,
Esq.
Jaime
L.
Dawes, Esq.
Stelzner, Winter, Warburton
Flores,
Sanchez,
Dawes, P.A.
Post
Office
Box 528
Albuquerque,
NM
87103
505-938-7770
505-938-7781
FAX
idrEstelzner.com
Attorneysfor
Plaintffi
/s/ Robvn Hoffinan
Robyn
Hoffman
AND
Attorney s
for
Defendant
By:
't4
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
15/36
THIS
OyrrON
AGREEIffiNT'FOR
PURCHASE
AND
SALE OF
RI0I{TS
(lA$eemeat}
is
rnade
by. aud
berween
the CITI{
0F
TRtm{
OR CONSEQUENCES, 8ry"rt,
f,vlelco
m-Untoipal
*rporatirn
(hereinafter
refened
to
a*
ihe
'Cili')
at{
Hot,spriqgs
Motorplex_Develorpment,
tti,
u
N**
iM+xico
timitsd
}iahility
conrpaay
ftereinafter
referted to
as
"HEt
Sp:ing$
')'
RECITAI-S
A.
The
City is
the
orvher
of certain
right$
putainTg
lo
fr:
Cityt
municipal
utility
systeus'
lhese
rSlghts't
flr
defmed
and
more
particularly described an
Exhibit
A,
B.
Tte
Cigy
is desirous
of:granting
to
Hat
Springs,
and
Hot Sl"try
is desirous
of
purchasing
*a
oUhj"i*g
ilom
the City,
the exc.lusive
optior
to
Flrrchase
the
Right*
from
the
City
as
set
forth
below.
AffREEI\.ENI
NOW
TIIEREFOE{E,
i[ consideration
of the
mutual
covenants
hereinafter
set forth,
the
parties
hereto
agree
as
follows:
1,
OmION,
Ihe
Cif-y
granls
to
Hot Springs
the
sole
and
exclusiw
optioa
irevocable
witfrU
Opfo:r Period
defined
below,
to
purchase tlre Righlsi
suljr,ct to
the
terms
and
conditions
of this
Aglcement.
The
option hereby
granted
shall
be exercisable
dt
any
ti&e'
and
from
tt*.
to
tiue,
in-*hole
Or in
part,
dUring
the
Option
Period
defined
below.
2,
.OP'IIOND.ryOsrr:
A,
hitial
Dpposit
On
or
before
August
22,2007, Hot
Springs
slall
gay.tg
the
Cfiy
rhe
su:u
,)f T.wEhry
ffious+ad
Dsllars
($20,000.00) as
a
initial
_d+otit
(the
'lloitial
G?"rirf-
within
its
possas*ioi
tsHst
Springs
concerningrthe
quaufity,
oatwe,
and.
quality
of
the
Rights,
B,
Seco,nd
DeEsit.
Hot Spritrgs
shall
pay
the
City
the tum.
of
One
Hundred
Eighty
Thousaurd
pottars
($1S0;000-00)
on
or
before
(i)
Fchntqy
,ry,
2l#8
oJ
(1)
fi've
(5)
tulines*
days after
rhe
clo_$ing
dare:cf,
Hot
Spriugs's
caotempllted
gi$ticlf$v$e
land
exchange
hetrxeen
Uot
Spr;ag$ and
tne Nelv
lvlexico
State
Land
Offit+
('l$ecpud
l.and
Exqhaq$e"),
w.hicheqer
occurr firtt.
C,,
Extension.of
Secoad
Deposits.
Jf
the
Second
Lmd
Exchaoge
does
not
occur
withln ttr"
time
period
d.*ignated io
tnis patagraph
?
due
io
del*ys
ca-ujed
by.
eithe
the
initiallaud
exchange
bet*nesn
the
Bureau
of
Land
Management
and
tle
New
Mexico Statetrarid
Office
t
@),
which
is
projected
.t9
b1[*neml*t
2ry1'
:'
to:
*
ltt--y
eausrd
Ufttitq"*
Mexico
[;ad
Office
in the Second
I"and Exchaage,
whieh
is
pmjected
to
be
in
December
200?,
Hot
Spring$
may
extend
pnymtnt
+f
the' Seti)trd
Dgfglit
by
purchasing
up,
to
Gi*
**t-**ion
periodr.
Hot
Sprhg$ mfly
puritrase
an
exteu*ion
period
by
providing notice
in
EXHIB]T
1
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
16/36
the
manner
for
giving'notice
provided
ra this Agreement
within
ten
(10)
days
of
the
second
n.po*itt
due
d*tl
togither
with
paytn*t of the
following
extension
fees:
(ii
FirstExtension: $2,000.00
(ir)
Second
Exteasion:
$2,000'00
(iii)
ThirdExtensioul
$2,000-00
Any
such
extension
period
shall
last either
(i)
ninely
(90]
days or
{ii)
uutil
the closing
date
of
the
Second
l-and
Exchange,
whichever
oceurs
first.
D,
the
First
Deposit,
Second
Deposit,
and all
extension
fees,
if
any'
shall be
ref+rred
to
colleetively
as
"Dpg0E{q.u
,{ll
Depositi
shatl
apply
to
and
be oedited
against
the
purchase
price,
and
snaU
ue
divided
equally
berwesn
ths
Sewer Purchase
Price
and
the Water
purchase
price
at
exercjse
of
the
scheduted
Seveath
Option
(as
these
teuns
are defioed
below).
The
City
need
not separately
ilccount
for
the
Deposits,
of,
pay intereq
thereo:r.
Except
as
otheri,iise
expressly
piovided-herein,
thc
Depositl. at-e_nog$rnAable
to
Hot
Springs
rurless
the
cioy
AJ*rtr-n
*r*i*r
or
cannct
deliver
*y
or all
of
,rh:
Ri8hts
pwsulT
to
the
terns
hereof'
If
the
Deposits
flre
not
paid
by
Hot
springi
in
Good
Fmds
(defiued belorv)
when
due,
this
Apeement
shall
be null
and
void.
3,
PURCTIASE
PRICE
A,
purchase.-Price
Relating to
SewS,I.
Tte
purchase
price
for Available
Sewer
capacrty
shall
be
$2,?55,?28"00
(lhu
l'sewu
Purdaqg-Eigq")'
The sewer
Purqhase
Price
*rirorfy
inclu,rles
u
ifghi of
first
refiisat
to
ptxchas-e
-f.umt"
Sewer'Capacity
as it
becomes
available
for
Connecti#s
after
the
Effective
bate
of
fhis
Agreeme.l:t
at
a
pricre
equal
to
the
p"tfirn*
price
for
such
Ccnnections'kp
or hoakup
fees
(the
"Future
Sewff
Euchage
Erige").
B.
pu$chase
Price
Relajing
to
.Water.
The
purchaseprice_for
Available'Water
capacity
shall
be
$+,@
as may
bi
deteminecl
in
accorilanace
with
e.tibii A
*A f*riUit
g'(thu
'@').
the Water
Purshase
Price
expressly
ilil;
a right
of
first
refirsal
to
purcn*"
nutore
Water
Capaeity
at d-ptice
*-4tq
the actual
pJ*
pxa
fi
tl*
purchase
of waier
rights
added
to the
City's lYater
Riehu
Portfolio
after
the
Eff."iu"
Date
of r}is
Ageement,
as
su"h
price
is
evideaced
by
*
purchase agteement
("Fu ue
lVuerPurp,b$ePrice").
C,
,,purchase
lltipe''
De.frlqd
The
Sewer Purchase
Price,,
the Future
Sewer
Rrrchase
price
(if
*yi,
rfrc
Wut*r
f*.nuil-Prh",
andthe
Funre
Water
Purchase
Price
(if
any)
are
referred
to
in this Agre+meut
collectively
as
the
*'Pulchaie
Pnce."
On
any.
closing
Date
(as
hereinafter,defined)
andla
accordance
with
Paragraph*
4
and
5
hereto,
Hot
Springs
aErees to
pay
t,
tl"
City
the
purchase
Pnce
for
the Rights then
legg_purchased,
in
certified United
States
fuod*,
Uy
wire
transfer
or
other
irymediately
available
ll'Saj{erat
funds
{"gqqdl$rnd$")'
The
neposits
*trall
be
credited
against
the
Purchase
Pnce
at
the Fina[ Closing'
4.
E)CER.CISE
pF
OPTION.
Hot
Springs
may
exergise
its
option
in
wholeor
in
part
by
grving
*itter*otGEe-r*of
o
the Crty at
anytime
on
or
before
the
expilation
or lermination
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
17/36
i
I
of fhis Agreement
in
the
:lranser
for
giving
notice
provided,i* this
Agreernent.
such
aotice
shall
*p*ify
tf,e
auurber
aud nature
of
Rights
io
which
the
option is
being
exercised
and
a date
for
.,'r,o*iof
on
the
purchase
(a
''e-lggi:rg"
or
"Clssing
Date'),
which
date shaIl
not
be
lsss
thar
ten
(10)
Jor
*or"
-th*
sixty
(60)
days
after
the
date of
the nodce
of
exffcise
of
option.
Upon
i"iir".y
of
*ch
notice,
tiis
Agreemeat
and
the notise
of exercise
of
option
shall constitutq
in its
entirety,
the
conkact
for
sale
of the
Rights b+ing
purchased'
5.
FINAL
CLpSING.
No
iater
than
Febraary
73,2Ll7,notwithstaflding
Closings
otr any
po.tioo
of th*
option
previorqly-exercisefl
Hot
Springs
shall
Close
on its
option
fot
any
.**Jitig
Sewer
Purcdase
Price
and
Water
Purchase
Price
("Final-ebdgg').
If
no
po$iofl-
of
the
optioi
is exercised
inpartprior
to February 13,
2011,
Hot
ftnings
will
pay
$6,635,728.00
at
the Ffual
Closrng.
fhis agreement
shall terminate
upon
the
Fiaal
Closing.
This
Agreement
shall
expire
flftil sha1
be deemed
terrninated
if Hot Springs
fails
to
exercise
its option, or
any
part
thereof,
on
orbefore
February
13'
2011.
6"
CLOSINS.
Closing
shaE
be
haudled througlr
the City's
Utilities
Deparfment.
parries
need
noibe
proseat at
Ciosing
so
long
as
Good
Funds are
timely
received
by the Citls
Utilities
Departrnent.
For
a1l
purpo*ts
herein,
the "Closi g-tr4 c" or
"el@g"
shall
bs the
date
that is
pop;dy
specified
by H*
Springs
in the
r*pectivlgotice
of exercise.
After
Closing
on
*y
Righte
iucluaing
tut
not
limited to
the
Final
Closing,
Hot Springs
may,
in its
sole
discretion,
use
such
Rigfuts
or
allow
others
to use suehRights'
7.
cLosING
PROCEpURES.
At
each
closing, the Rights
thgn being
purchryjd
shatl
hg*11rr*yETy
th"
Ciry
to Hot
Springs
by a bill
of
sale, whi+h
shali be
prepared
by Hot
Springs.
g.
HOT
SPRINGS'S
DEFAULT.
Nohroithstanding
anything
to
the
contrary
contained
in t1l*
ggreemsf,t,
Hot Springs
shall not
be
in
lrreach
or
default
hereuader
udess
the
City
is not
in defauli
hereunder,
and
within
20
days
aftu H$
Springs's
receipt of lotice
(ii
Hot
Springs
fails
to
cure any
material
breaeh
of
any
obligation
of Hot
Springs under
this Agreement
*ni*ii*
set
forth
in sulh notice
or
(ii)
Hot
Springs
fails
or refrrsfl.s
to complete
the
punchase
of
auy
Rights
as
to which
Hot
Springs
has exercieed
its option
to
purchase herouuder.
If
any
such
failure-contiaues
beyond
sucbcw"
period,
rhe
Ciry
may
terminate
this
Agreernent,
and
retain the
Deposits
as the
ugried-upo,
liquidired
damages.
The-pmties
agree
an{
slipulate that
as
of
the
Edective
D*te
of-this
Agreement,
the
exact
amount
of
darnages
for
hotding
the
Rights
off
the
market
rpould
be
exueilely
dfficult
to
ascerlain
aad
that
1trs
lsffiaining
uneamed Deposits
'
constituts
a
reasonable
andiair
approximation
of sudr
damages
alrd
is not
a
penalty'
The
City
agrees
that
it
irtevocably
waives
any other
dght
to darnages'
g.
TIEJCIIY'S
DEFAULT.
Notwithstandirg
anythine
to
the
c0Etary
coiltained_
iil
thi*
Agr*e*"rrg
6"Effiuil
oot be
ia ilefault
hereunder
and
Hot
Springs
shall
rot
be
entitled to
o*r"iir
*y
remedies hereuuder unless
Hot
Springs
ny
rytl*flrlted
hereunder,
md
the
City
(il
has
howledge
that
eny
repre$effation
or
warranly
made
by
the
Crty
herein
is
or beco:nes
false in
any
mrterial
respect;
tir
(ii)
fam
to
eure
its
breeih
of
a
material
coye.nant
or
obligation
made or
.,rriertak*o
by
tie
Ciry here*rder
withirr thirty
(30)
days
of the City's
receipt
of
a
reascrably
detailed
toti+e
specifying
surfo
breach;
or
(iii)
refuees t9 colvey
aly Rights
in
accordance
herewirh, within
rhirry-(3g)
aays
of
the
Cilfs
receipr
of notice
of such
breach.
Any
Closing
shall
)
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
18/36
auromatically
by
extended
to allorv
the
City
to
effect
the
abov+
referenced
cures,
After
ths expiration
of the
cure
period
provided
above,
atd
within
thirry
(30)
day$
J
the
City's
defaulr,
HoiSprings
shall
givc
iU"
Ci*
rvritten
flotice
of
Hot
Spryq1s
gtecti.on
of
one
of
the
folto.xdng
,"miai#
(il
to
ieek
specific
perfomrance
of
thecitt's
obligations
hereunder'
or
(ii)
to
termirlate
this
Agreement
and
thereupon receive
aretum
of
theDeposit'
if
Hot Sprirrgs
fails
to
cause
the
City
to
receive
sueh
election
within
such
thirty
(30)
day
period,
ffJSp*rg*Ihil
huu*
no further
right
to demand
specific
perforrrance.
Hot
Springs agress
th*t
it inroo*utiy
waives
any right
to
damages.
Notwithstanding
the foregoing
rights,
if
following
a
d* City a*tiuu,
tue
citylai
cr:red
thsbreach
priorto
the City's exercise
any
remedy
provided
in
&i*
egr*r**ot,
tfr"
Ciry shall
have
no further
rig$tto
exercise
any
temedy
for the cwed
default'
A
Authoritv.
The
parties hereby
reprEsflnt
aucl
ruauant
to
ons
anoth+r
that
each
has capacity
to eoil
ioto-thrs
Agreement
and that
the
person
signing
below. on
behalf
af
rfoi
spriog, o,
ti*
ciry
represents
rhfl
l*
or
she
is
duiy
authorized
to
executs
this
Agreement
and
tobind
the
party
for which
he
or she
is
simi:rg'
B.
The
City's.'Wmrailty.
The
City
r#arrailt$
that it
is
fhe
owner
of the
Rights
identified
in
Exhibit
B
wldch-"vrflership
is unencumbered.
The
Ciry
flrrfher
.wanatrt
that it has
no
knowledge
of
any material
defestive
condition
of
such
Rights, Bor
any
viulation of
*ny
1aw
or
regulation
affecting
such
Righis
C,
Mutual
Acknowledement.
The
paties
agree
and
acknowled-ge
that it
is
Hot
Spring*,s
,*spoosibility
io
ext"od
the
sewer
anil
water
tsn$mission
system
lines
to
Hot
tp"**rt
froperty*om
rhJclosest
point
that
the
Cify
has its sewer
and
water
transmission
iines
at the
time
that
Hot
Sprinp
elects
io
establish
those
Connecrions.
It
is frrrther
understood
that
the
City
may
participuL
irim*
cost
of
the
sewer
and
water
Eansmission
liaes
iJ the extension
of
those
line$
Uenents
itre
city.
Further,
Hot
Spdngs
will
be
entitled to
reiubursement
from
other
pnoplrty
o*"*rs
that
connect
to the
selvsr
und
water
tensmission
liaes
imtalled
by
l{ot
Spnngs'
L
uAaiiioo,
the
City:rill
provide
ss\rer
and
water
service
to
Hot Spriugs
as
long
as
Hot
Spriugs
A*
c"mp5rd
wirh
att *ppii.aht*.tate
and
local
regulations
related to such
consftuction.
D.
No
Waiver
of
Dcvelopment.Fees.
The
parties agrec.
and
acl
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
19/36
lL.
CONFmENTIALITY.
The
City
and
Hot Springs
hereby
agree
to
treat
(and shall
**
gofi
f*itn
&-.rt*
to
raus*
its RelatedParties
to so
treal} this Agreement
as
con{idential.
pJoi
ro
executiofi
of
&is Agreement
and
any
Closing
theforegoing
$ontetrce
will
noJ
be
consar*A
to
prohibit
auy ofthe
undersigned
from
disclosing
to its
respective
Related
Parties
such
terms of
the
Agreernentor
Closingor
information
about
the
Ri$ts
as are
neeessary
to be
disclosed
ta them
iaorder
to
consurmate
the
Agreement
or
Closing
includirrg,
without
limitation,
the
City's
obligations
to
reveal
the
tertrs
of
such agreemeats
to its
governing
body
and
*iai*"fo*re
obligaticnl
mandated
by
the New
Mexico
Inspection
of
Public
Recotds
Act
aad
aay
other
applicable
laws,
rules
or
regulations.
13.
SURRENDEts.
IIot
Springs
may surrender
all
or
part of
the
Rights
to the
City at
any
time
p,io,
to[Gffioo
*och
Rights.-For
any
Riglris
so
su:=Endered,
Hot
Springs
shallhave
"o'ouiisutioo
,o
Clo**in
*och
surieadered
Rights
nor
to
p|{
the
respective
Sewer
Purchase
Frice
or"Water
Furchase
pricB
relating
to
such
surrendered
Rights,
and the
Purehase
Price
shall
be
teduced
accordingly.
Hoi
Springs
may
deduct such
leduced
amounts
from
the
ffiinimum
Closing
requirements
of
subsequelrt
siheddea
Closings at
Hot Springs's
sole
discretion.
14.
RELEASE
Upon
written
reque$t
of
the
City,
providing
+vidence
to Hot Springs
of the
need
of futur*
out*.
capacrty
or
future
sewer capacity
for
developments
within-the
City
of
Truth
or Consequences
that
me
unrelated
to Hot
Springs
s_ptoporty,
IIot
Springs
shall
release
to
the
City,
at
no
cost
to the
City, its
right
of flrst
refusal with
respect
to
the aEouflt
ot
amounts of
the
total
Future
Sewer
Capacity
anO/or
the
total Future
Watm Capaciry
re_quested by
ihe
CitS
at
u
"oo**pording
reductioo-io
*oy
Hrhue
Sewer
Purchase
Price
or
Future
Wate{
Pruchase
Price.
15.
gAPTION$.
The captions
contained
herein
are
for
coRvetience
only
and are not
a
part
of
this
Agreement.
16,
ENTIRE
AGREEMENT.
Ttjs Agreement,
including
Exhibits
A
and-B
attached
hereto,
cootrios
th*
"otirc
Agr.em"nt
benreen
the
City and
Hot
Springs
and all otler
representatiorls,
negotiations
arrd
agreemrnts,
rvrifien
and
oral, iecluding any letters
of
intent
*ti"n
prr.datethe
Effective
Date
fereof,
witlt
respect
t9 the
$Shts
or any
portion.thereof'
are
supersedea
by
this
Agreement
and are
of
no force
afld
effect.
This
Agreement
may be
amended
and
modifiedonly
hy
insUurnent
in
writing,
executed
by all
parties hereto'
ll, ASSIGNMENT.
Except
for
an
assignment
to an
afflrliate thereof,
no
pariy
hereto
shall
have
tU"
ttght
to
assign
this
Agreement
or
any
of
its rights
or obligations
her+urrder
to
auy
p*r*o*,
*rporalio*
o, olth*,
entifi
without
the
writteu
approval
of the
other
parties'
which
approval
shall
not
be
unreasouably
withheld-
lg.
PARTIES
BOIIND.
This
Agfeement
shall be binding
upon
the^parties,
their
sucsessor$
*nd
**igns,
subj**t
ta
the
provisions
and
limirations
on
assignment
set
forth
above
.
19,
APPLIC.ABLE
I,AH.
This
Agreement
shall
te
consEued
by and
eontrolleil
uuder
the iaws
of
the State
of Nsw
Mexico'
20.
PARTIAL
IFWAL4)ruY.
Lr
the event
that any
paragraph
or-portion
of
ths
Agreemeut
ir
Uet*in"a
to U*
unconstitrrtional,
urmfiforceable
or invalid,
such
paragraph or
)
-
7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
20/36
)
?ortion
of this A$eement
sball
bs sEicken
ftom
and
construedfor all
purpotes not
to.tortstitute
a
i,urt
*f
thie
Agrirnent,
Bod
the remaiuing
portion
of
this-Agreement
shall
rerrain
ilr
full force
und effect
and
shall,
for
all
pqposes,
coE$titute
this
eatire
Agreement.
Zl.
gONSTRUCTION OF AGRFEh,iENT.
All
parties
hertto acknowledgo
thatthey
have
had
tt
"
t*o"tit of
ind"prodeut
counsel
with
regmd
to
this
Agreernent
and
that
this
Agrr"**ot
has been
prepared
as a resrrlt
af
the
joint
efforts
of
all
parties and
their
respective
;;;i,
gccordingly,
^a1l
prntio
agee
that the
provisions
of
this Agreement
shall
not
be
consilued
or intqpreted
for
or
agairst
any
party
hereto
based
upoa
authorship'
22. COUNTERPARTS.
This
Agreement
may
be
executed
in any
number
of
csunterpa*s,
J"tr
of
which
when
executed
and
delivered
shall
be ur
original,
but
all
suc'h
counterparts
shall
constitutE
one andthe
same
instrnment.
23.
TE{E
Time
is
of
the
esse'nce
of
this Agreeme'tt'
24,
NOTICES.
Notices
hereunder
shall
he
given
to
the
partres set
forth_telow
and
shall
be
*.d.Ilffid-de1iroy,
facsimile,
overnight delivery
or
by
regular
rnail
ff
grven
by
i*g.l*
mail,
thelotice
shall
be rleemed
to
have
beer
givenwithin
a
reEu-red
time if
deposited
in
tnIU,S.
Mail,
postage
prepaid,
within
the
tine
limit.
For
the
purpory
of
calculating
time
limits
whieh
run
ftom
tne
gifing of
a
particular
notice
the
time
shall
be calculated
from
actual
receipt
of
the
notice.
Notices
shall
be addressed
as follows:
If to
the
CitY:
Mr.
Jaime
Aguilera
City
Managor
City
of
Truttr or
Consequences
505
Sims
Street
Ttuth
or
Consequences,
New
Mexico
87901
Tet
505-89466?3
Fax:
505-894-7767
'With
a
copy to
(rvhich
will not
constihrte
notice)
Jay Rubin,
Esquire
P.O.
Drawer
151
Truth
or Consequences,
NM
87901
TeL
505-894-3031
Fax
505-894'3282
ff
tc
Hot sPrffii"
***ory
B.
Nea1,
c.E.o.
Hot Springs
Motoqplex
Development,
LLC
3E16 W.
Linebaug
Aveuue
SuitE
210
Tampa,
FL 33618
Te1: 813-961-8400
-
7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
21/36
)
-'
Fax:813'96i'8410
Wiih
a eopy
io
(which
will
not constitute
notice)
Michelle
lIenrie,
Esquire
Brownstein,
IIyatt,
Farber
&
Schreck
201
Thtud StreetNW
Suite
1700
Albuquerque,
NM
87L42
Tel;
505-244'0??0
Fax:505-24+9266
25.
ATTORNtrY'S
FEES.
In the
event litigation
or
arbi*ation
is required
by
either
pafiy to enforce
the terms
of this Agreemeut,
the
prevailins
pffiy
iu
such action
or
proceeding,
it
uti,
io
addition
to all
other
relief
panted
or awarded
by
the
coud
or
arbittator,
reeover
its
reasonabie
attomeyis'
fees
incurred
by
reason
of such
action
or proce,eding
md
all
costs
of suit or
arbiuation
and
thoie
ineuned in
prepmation thereof
at
both
the
trial
and
appellate
levels.
26.
FEES.
DEpqSiTS,
REBATES
AND
REFUNDJ.
Notwithrtaniling
any contrary
provision of
this
Agreement,
all utility
and other
sircilar
refuuds and
relate$
of
eosts,
fees
or
'Atpo*it*
having
beei
paid
by the Cify,
shall
be th+ sole
property
of
and shall
be rehuned
to the
City.
7|7.
NONBUSINESS
DAY.
If
a Closing
Date
hereir is to
occur
on a holiday
or
other
nonbusiness
dan
or
any
period of time
set
forih
in
this
Conhact
expires
on a
holiday
or other
nonbusiness;day,
ilren such
Closing
Date
or expiration
date
shall
be the
next
business
day.
E*r"pt
as
$t*iedin
this Pmagraph,
"d*,"
as
used
in
this
Agreement,
,oeafi$
a
calendar
day,
28.
FORCE
B,IAJEURE.
In &e
event
that either
party is
rendered
whotly or
in
parE
by
forc+ majeue
unable
to caffy out
its obligations
under
this
Agreemen
it
is
ageed that on
such
party's
Siri"g
rictics
and
fu]l
particulars
of
such
force majeure
to
the other
parfy as soofl
as
io**iUf*-rtt*.*tf.*
occlrrrence
of
the
causes
relied
ol, ihen
the obligations
of
thp
prytq
rying
such
'"oir*,
so far
as
they
are
a.ffected by
such
force
majerua
shall
be suspended
during the
cantinuance
of
any
inatitity
sc caused,
but for
ao longer
perlod,
and
such
cause shall,
so far
as
possiblg
be
rernedied
with
atl
reasonable
dispatch.
Tle
te_1n
"force ruaj.qlfg"
as
used
hereln
it utt
111"*
acts
of
God, strikes.
lockouts
or
other
industrial
disturbarrces,
acts
of
the public
enemy, rvars,
blockades,
insurrections,
riot$,
epidemics,
landslides,liglrtning,
earthquakes,
fires,
stonns,
floods,
vrashouts,
arrest and.resilaint
of
mltrs
aad
peoples,
eivil disturbaaces,
enplosion$,
Ur*aUlu
or
aicident
to
m.achinery,
failwe
to
obtain
materials
and supplies
due to
governmeatal
regutatlom
and
causes
of
Like
or
similat
kind, whether
herein
eflumerated
orrot,
and not
within
thJ
connol
of
the
party
claiming
suspension,
and why
by
the
exercise
of
due
diligence
such party
is unable
to
ovsrco.Ee.
29.
EFFECTI\E
DATE
The
"EffEgiire_Date"
or
the
"dAte,hgICQfu
shall be Augusi
L7,20W.
IN WffNESS
WHEREOF,
the
said
parties have
exe+uted
this
irstnrment as of
the
Effective
.)
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
22/36
Date
of this
Agreement'
CITY:
crrY
OF
TRUTIT
OR
CONSEQUENCES
By:
Date:
IIOT
SPRING$:
HOT SPRINGS
MOTORPLH(
DEVELOPIyIENT,LLC,
a
New
Mexico
limited
liability
company
)
-
7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
23/36
Eshi-bitA
nRi#s"
7.
RiBhJ
to
Purchase
Se-,ver
CapacilY. As
used in
this
Agrcemeut,
"Al3iiabtg-Sewet
ee&Agiry,"
rneans
eighty
perceot (S0%)
of
the existing
daily
capacity
of
the
City's.'Wastewaier
friitmj"t
Plmt
("Efug[").
As descrihed
on
Exhibit
B,
the
Available
Sewer Capacity
is
918.57
sewf,
Connectian
uuits.
A
"epurEgl&g"
meaxs
a
billing
unit
(whether
residerttial,
commercial,
or othenvise)
for
which
the
City
comrnits
to
provide
sewer servics fiom
the
Plant.
Connections
also
are
cororrronly called
"tap$"
or
n$errice
agreelnests,"
2.
Rieht
to
Purchq$p
Future
Sew.er
Capaciry.
As used
in
this
Agreement"
"Futurg
Sgr,ryer
Capaclty"
ffieans
uinety five
percerrt
(95%)
of
the
futrue
expanded
daily
capacity
of
the
Plaot reached
at
any time before
the
expiration
or
termination
of this
Ageement.
3.
RiE&t
to
P.urctrase.Water
Capacity.
As
used in
this
Agreement,
"Av@le-5la{ed
.&p$ciry"
meaos eighty
percent
(809o) of
the
existing
annual capacity
of
the
Ciry's
'Watet
Rights
Portfolio-
The City's
"H$ter,
Rishts
Portfolio"
is
the
collectiou
of
all
water
rigfrts
owned or
leased
by
ihe
City for
rnunicipal
purposes that
are
distributed througfu
a
water
utility
system.
As
dascribed ou
Exhibit B,
the
Available
Water Capacity
is approximately
850
acre
feet
per
year.
If
the
City
determines that
thp
Available
Water
Capacity
was greater than or
less than
the estimated
850 acre feet
per
year ar
of
the
Effective
Date
of
this Agreement,
the
Riglits
identified
herein
sha]I
include
(a)
the
right to
purcLase
809o
of
the
actual
Avaiiable
Watr
Capacity at the
price
Fer
affe
foot
of
capacity
established
in Exhibit B,
and
O)
the
right
to
adjust
the
Water
Putchase
Price accordingly.
4.
Risht to
Pffchase
Fuhre
Water Capgc-its.
As
used
in this
Agreernent,
"Erhrq
Water
Cgpacity" flsans
uinety
five
perceirt
(9580)
of
the
urnual
capaclty
of the
City's
Water
Righrs Porfolioheld
at
anytimebefore
the expiration
or
termiilation
of
this Agreement.
)
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
24/36
Exhibit.B.
The
below-described
"eggggb
Cgp4i$
'
relates
to the treatment capacify of
the City of
Truth or
Consequences
Waste Waler Treatmsnt
pi*at
("Plant')
ard
the
estimated
number
of
fnwsr
Connections
that rhe Plant
can
procsss
it
a ?4
hour
period.
The
Plant is
rated
as
a
1,000,000
gallon per day Plant, The
curtenr number
of
active
Connections
use
appraximateiy
?50,000
galions
per
day of the
rated capacity. The remaining
250,0il0
gallons per
day
that
the
Flant can
proce$s
equate
approximately to 1,148.22
Cormections.
100?oofcurrerfsewerConnectionCapacity-....
.,,.7,148,22
80fo
of
crurent
sewer
ConnectionCapaciry.....
.,,...,..918.576
$3,000
per
tap,.......
.....x
$.3.000.00
Total
purchase
price......., .......,"...$2,755,?28.0O
The
"lVaierlRil#E
Be$erse C3qap.ily"
reiate.s
to
the
amount
of
ressrye
capacity of
water that
the
Seller
cunentiy owns.
The is
presently
unused Water
Right$
Reserve Capacity is approximateiy
850
acre feet
per year
(AFY).
100% of cuffent
Watff Rights Reserve
Capacity..................850 AFY
80flo of current Water Rights
Reserve
Capacity......,,...........680 AFy
Price
per
acre
foot of capacity..
..............x
$6.000.00
Total
purchase price........ .$4,080,000.00
)
)
10
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Exhibit C
Summery
of Key Dates
fJ$der
this Aqrm.en[
tlhis
Sunwery
is
for
convenietwe
anly
and
does nat
sutrErede
the
termt
o
thi*
Agreemenr,)
Effective
Date
of
fiis
Agreerneot.,
........,.......August
1?,
?007
OptionDerosit
ff2)
Initial Deposiil
..
$20,0S0...
...,....,........August
22,
2007
SecondDepe$it
..,.-.....
.......+$180.000.
................February 13,2008
Total
Deposit
(wir&out
extensions].".........$200,000
Purchase
Bics
(qt3]
Total
Sewer
Purchase
Price................
...
fi2.7
55,7
28
Total Water huchase
Pries......,,.........
+14,080S90
Total,
PurchasePriee.....
..
$6,835J28
Paylne+t
of
Pur&aselti*
ft[5)
)
puymeetatFinal
Closingr
$6.635.728.
...........February
13,2011
'
PIus TotalDeposits
......-............
...
.
.
...S200S00
Total
Paid..
.,......
$dS35JZe
11
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
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)
*r.r**u
or**,ffi*
oriu
ou***:
(Ihis
Sammary
is
for
convenienee
only and does
not
supercede
the
terms of
thls
Agreement.)
1.
Hot
Springs will
pay
a
fee
for the exelusive
option
to acquire
certain
'*rights."
2.
This
fee is payable in two
installments
totaling
$200,000.
3.
The
option
expires after
a
rnaximum
of 210 days,
uuless
extended
(for
additionat
feas).
4,
Before the
option
expires.
Hot
$prings must decide
whether
to
forfeit
the
option
or
exercise
the option.
5, If
Hot
Springs
forfeits
the
option,
it lcses
all
fees
paid'to
date.
6.
If
IIot
Springs
exercises the
option, it
must pay
more
in
order
to receive
the
"rights.',
7.
The
'tights"
are
come*tiors
to the
Citt's
water and
$ewer system,
also calied
"laps,,
01.
"sefyice
agf
gelheflts.
"
B,
HotSprings
is notbuying
the
City's
waterrights
or
its
sewereffluent.
?.
Hot Spriugs
S
payfig
up
ftont to
raserve
capacity
in
the City's
water
and
sewer
sy$terr
for
IIot Springo'future
use
in
its project.
10.
Hot Sptings
is
not buying
atl
of
the
capacity
rn the City'e
water and sewer
systern.
ft
is
buytng
oniy
patt
of the
capacity.
The City
can
do whatever
it
wants
with the
reuaining
capacity,
11.
If
the City
expands
its
capacity,
Hot Springs
would have
a reseryation
for
a
share
of tle
expruded
capacity
udess
the
CitynqIls
ir.
12. Hot Spriags
is
paying
fair market
value
for these
taps:
$3000
per
seuror
tap
and
$d000
per
ac.re
foot of
water connecticns.
y.
For the
optioned
$Fu*
of
&e
City's
current
capacity,
Hot
Springs.would
pay
a
total
of
$2,755,728
for
sewer
and
$4,080,0S0
for
water.
74.
The
purchase
price
can
be
paid
over
a three-year period.
Hot Springs
cao
use
only
the
anrount
of
tap#cannectiors
that
ithas
paid
for.
15.
Hot
Sprinp
must pay
its
finai
payment of the
full
purch*se
priceby
February
13,
20L1.
T2
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7/23/2019 Hot Springs Land Development MOTION for Summary Judgement 2015
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@
rlfi$T
AA.{E}{DSTET.ITT.O
OPTISX
AGREEIYIE}TI
FOR.
PURCITASB A}ID
SALE
OF
RIGTITE
ltis FIR$T
Affi{Ehl$ff
r{
OPfiO},.i
FOR
FUR#HASE
A}.ID
SAI.E OF
RISIrrS
(lhe
Tiffit .Am&Ed1
ic' eateqed
tirtq
Es of.
ISIIfS
(lhe
Tiffit
im&EdJ
id eateued
ihto ry
d
WE
--_-X&11
by aud btfwem
&e Cigr
of