{"id":893017,"date":"2017-10-10T10:19:10","date_gmt":"2017-10-10T16:19:10","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=893017"},"modified":"2017-10-10T10:19:10","modified_gmt":"2017-10-10T16:19:10","slug":"appellate-court-holds-new-mexico-unfair-practices-act-applies-services-contract-construction-home-not-apply-sales-contract","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/appellate-court-holds-new-mexico-unfair-practices-act-applies-services-contract-construction-home-not-apply-sales-contract\/","title":{"rendered":"Appellate Court Holds That the New Mexico Unfair Practices Act Applies to a \u201cServices\u201d Contract for the Construction of a Home, But Does Not Apply to a \u201cSales\u201d Contract for the Sale of a Completed Home"},"content":{"rendered":"<p>Kristopher Berr | <a href=\"https:\/\/www.lexology.com\/library\/detail.aspx?g=eaf54041-3f4f-4ca6-bf91-745379b06fcc&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2017-10-09&amp;utm_term=\" target=\"_blank\">Pepper Hamilton LLP<\/a> | October 5, 2017<\/p>\n<p><strong><em>Fogelson v. Bozzone<\/em>, 2017 N.M. App. LEXIS 58 (July 26, 2017)<\/strong><\/p>\n<p>In May of 2008, Wallen Development, LLC (\u201cWallen\u201d) entered into a written agreement to construct and sell a new home to David and Corinne Fogelson (\u201cFogelson\u201d). But, after Fogelson paid Wallen in excess of $165,111 under the agreement, Wallen went out of business as a result of financial difficulties.<\/p>\n<p>Fogelson filed an arbitration action against Wallen and ultimately obtained a default judgment after Wallen failed to appear. Thereafter, Fogelson filed a complaint in court against various individuals affiliated with Wallen. As relevant here, Fogelson asserted a claim under New Mexico\u2019s Unfair Practices Act, NMSA 1978 \u00a7\u00a7 57-12-1 to -26 against one of Wallen\u2019s owners, Mark Bozzone (\u201cBozzone\u201d). Bozzone filed a motion to dismiss on the basis that \u201cconstruction services\u201d, such as those provided by Wallen, do not fall within the scope of the Unfair Practices Act. The trial court granted Bozzone\u2019s motion.<\/p>\n<p>The major issue on appeal was whether the doctrine of res judicata applied to an arbitration proceeding. After a very lengthy discussion covering over half of the opinion, the Court of Appeals ruled the res judicata did apply to the arbitration result against Wallen.<\/p>\n<p>With respect to the Unfair Trade Practices issue, the Court recited that the Unfair Practices Act \u201cprohibits misrepresentation made in connection with the sale of goods or services by a person in the regular course of his trade or commerce.\u201d To determine the scope of the Unfair Practice Act\u2019s coverage under the present circumstances, the Court needed to consider\u00a0<em>McElhannon v, Ford<\/em>, 134 N.M. 124 (Ct. App. 2003), in which the court had previously discussed the Act\u2019s coverage in the context of real estate sales transactions.<\/p>\n<p>In\u00a0<em>McElhannon<\/em>, the plaintiff alleged violations of the Unfair Practices Act arising from the sale of a completed house. There, the court reasoned that the term \u201cgoods,\u201d \u201cis generally understood to mean personal estate\u00a0<em>as distinguished from realty<\/em>.\u201d While acknowledging that \u201cservices\u201d means \u201cwork done by one person at the request of another,\u201d the\u00a0<em>McElhannon<\/em>\u00a0Court stated that \u201cto the extent goods and services are combined to create a structure that is permanently affixed to realty, they are understood to have been \u2018converted\u2019 to realty.\u201d\u00a0<em>Id.<\/em>\u00a0Consequently, the court held that \u201ca sale of a completed house is not a sale of goods or services\u201d for purposes of the Unfair Practices Act.\u00a0<em>Id.<\/em><\/p>\n<p>Distinguishing\u00a0<em>McElhannon<\/em>\u00a0from the case before it, the\u00a0<em>Fogelson\u00a0<\/em>Court noted that Fogelson\u2019s unfair trade claim arose from an agreement to perform construction services on a vacant lot, rather than the sale of a completed home. Therefore, the \u201c\u2018combined\u2019 view of goods and services expressed in\u00a0<em>McElhannon<\/em>\u00a0does not apply.\u201d Instead, the court concluded that the construction services performed by Wallen are \u201cundoubtedly \u2018work done by one person at the request of another,\u2019\u201d and are therefore \u201cservices\u201d within the meaning of the Unfair Practices Act.<\/p>\n<p>Therefore, absent any indication from the legislature that \u201cconstruction services\u201d are excluded from the type of \u201cservices\u201d covered by the Act, the Court held that the Unfair Practices Act applies.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kristopher Berr | Pepper Hamilton LLP | October 5, 2017 Fogelson v. Bozzone, 2017 N.M. App. LEXIS 58 (July 26, 2017) In May of 2008, Wallen Development, LLC (\u201cWallen\u201d) entered into a written agreement to construct and sell a new home to David and Corinne Fogelson (\u201cFogelson\u201d). But, after Fogelson paid Wallen in excess of&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/appellate-court-holds-new-mexico-unfair-practices-act-applies-services-contract-construction-home-not-apply-sales-contract\/\">Continue reading <span class=\"screen-reader-text\">Appellate Court Holds That the New Mexico Unfair Practices Act Applies to a \u201cServices\u201d Contract for the Construction of a Home, But Does Not Apply to a \u201cSales\u201d Contract for the Sale of a Completed Home<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41,172],"tags":[9895,42,27,154,10278,10277],"class_list":["post-893017","post","type-post","status-publish","format-standard","hentry","category-arbitration","category-construction-law-2","tag-advise-consult","tag-arbitration-2","tag-construction-law","tag-new-mexico","tag-res-judicata","tag-unfair-practices-act","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Appellate Court Holds That the New Mexico Unfair Practices Act Applies to a \u201cServices\u201d Contract for the Construction of a Home, But Does Not Apply to a \u201cSales\u201d Contract for the Sale of a Completed Home - Advise &amp; 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