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IN THE SUPREME COURT OF THE STATE OF NEW MEXICO

Opinion Number:______________

Filing Date: September 8, 2014

Docket No. 34,366

LIVING CROSS AMBULANCE SERVICE, INC.,

Appellant,

v.

NEW MEXICO PUBLIC REGULATION COMMISSION

and AMERICAN MEDICAL RESPONSE AMBULANCE 

SERVICE, INC., d/b/a AMERICAN MEDICAL RESPONSE,

EMERGICARE,

Appellees.

APPEAL FROM THE NEW MEXICO PUBLIC REGULATION COMMISSION

Joseph E. Earnest

Tesuque, NM

for Appellant

New Mexico Public Regulation Commission

Margaret Kendall Caffey-Moquin

Lisa Adelman 

Santa Fe, NM

for Appellee New Mexico Public Regulation Commission

Miller Stratvert, P.A.

Jennifer Davis Hall

Stephen B. Waller

Albuquerque, NM

for Appellee American Medical Response Ambulance Service, Inc.

OPINION

CHÁVEZ, Justice.
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{1} This case is a direct appeal from a final order of the Public Regulation Commission

(PRC) granting a permanent certificate to American Medical Response Ambulance Service,

Inc. d/b/a American Medical Response, Emergicare (AMR) for both emergency and nonemergency ambulance service in Valencia County. Living Cross Ambulance Service, Inc.

(Living Cross) asks this Court to vacate the final order of the PRC, claiming that the PRC

acted arbitrarily and capriciously by granting AMR’s certificate because there was no

evidence of need for non-emergency ambulance service in Valencia County, and because

there was insufficient evidence of need for additional emergency ambulance service. Living

Cross also claims that the PRC abused its discretion by allowing Living Cross’s former

attorney to represent AMR in an initial hearing before ruling on its motion to disqualify the

attorney. AMR and the PRC ask this Court to affirm, alleging that there was a sufficient

showing of public need, and that evidence of need for non-emergency service is not required.

Additionally, they contend that any error in allowing Living Cross’s former attorney to

represent AMR in the initial hearing was harmless, and that Living Cross waived its

objections. We hold that the PRC decision to allow the former Living Cross attorney to

appear for AMR during the hearing for the temporary permit was contrary to law, and that

the wholesale admission of the record from that hearing as evidence in the hearing for the

permanent certificate was plain error, requiring reversal. Because we determine that the

attorney disqualification issue is dispositive, we do not reach the other issues in this case.

I. BACKGROUND

{2} There is no hospital in Valencia County. People in Valencia County who are faced

with a medical emergency must (1) deal with the emergency itself, and (2) find a way to

travel twenty to thirty-five miles to an Albuquerque hospital. Ambulances coming from

Valencia County can take two hours or longer to transport a patient to the nearest hospital,

process the patient, and return. The long turnaround times mean that ambulance companies

sometimes run at full capacity, or “zero status,” and cannot respond to calls from new

patients because all available ambulances are in use.

{3} Since 1987, Living Cross has been the only ambulance company in Valencia County

operating under a permanent certificate from the PRC. Living Cross has been at zero status

and unavailable to transport patients for less than one percent of ambulance service requests.

When Living Cross is at zero status, dispatch requests mutual aid from a nearby ambulance

company, and if those mutual aid ambulances are also unavailable, the municipality whose

EMTs first responded to the scene must transport the patients at the municipality’s expense.

{4} AMR is the largest private ambulance company in America. On March 13, 2013,

AMR petitioned the PRC for both temporary authority and a permanent certificate to operate

from points in Valencia County. AMR alleged that Living Cross was providing deficient

service, and that there was an urgent and immediate public need for another ambulance

company to fill that void in service. AMR filed affidavits in support of its petition from five

people, all of whom were Valencia County EMTs and fire department employees, stating

that there had been “numerous times” when Living Cross ambulances were unavailable.
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AMR also provided responder documentation of particular occasions when Living Cross was

unavailable or the response times were too long.

{5} Living Cross moved to intervene in the PRC hearings on AMR’s application,

maintaining that it was not providing deficient service and emphasizing that its ambulance

service was unavailable for less than one percent of calls received. It maintained that a lessthan-one-percent rate of unavailability is consistent with rates of unavailability that the PRC

has previously found to be compliant with regulations for other ambulance companies, and

therefore AMR could not show a public need for additional ambulance service. Living Cross

further argued that it should be allowed to try to remedy any problems before another

company steps in to the Valencia County ambulance services market, potentially driving

Living Cross out of business.

{6} Living Cross also moved to disqualify AMR’s attorney, W. Ann Maggiore, stating

that she had previously represented Living Cross in proceedings before the PRC, before this

Court, and in a private lawsuit, and that her current representation of AMR in opposition to

Living Cross involved “precisely the same issues involved” in those previous matters when

she represented Living Cross. In addition, Living Cross pointed out that one year earlier,

during a dispute over an operating certificate in Bernalillo County, a PRC hearing examiner

disqualified Maggiore from representing AMR against Living Cross because she had been

Living Cross’s attorney in previous matters, and because the potential that she had learned

confidential information she could use against Living Cross created a conflict of interest. In

this case, Living Cross requested that the PRC either stay the proceedings on AMR’s

certification application pending the resolution of the disqualification issue or grant Living

Cross an interlocutory appeal to this Court.

{7} The PRC neither stayed the proceedings nor granted Living Cross an interlocutory

appeal. Instead, the five PRC commissioners held a public hearing on April 3, 2013, during

which they decided the application for temporary authority, but postponed consideration of

the motion to disqualify. During the day-long hearing, they allowed Maggiore to appear on

behalf of AMR, give an opening statement, direct the examination of five AMR witnesses,

and cross-examine the Living Cross witnesses. After the hearing, the PRC granted AMR

temporary authority and appointed a hearing examiner to determine whether AMR’s attorney

should be disqualified.

{8} On April 15, the appointed hearing examiner recommended Maggiore’s

disqualification, finding that this proceeding and prior proceedings in which Maggiore

represented Living Cross “are substantially related matters within the meaning of Rule 16-

109 [NMRA] of the Rules of Professional Conduct. The matters involve the same provider

(Living Cross), the same issues (the adequacy of Living Cross’s service), the same service

area (Valencia County) and certain of the same individuals . . . .” However, the hearing

examiner recommended denying Living Cross’s motion to strike all materials prepared by

or in consultation with Maggiore because Living Cross did not identify specific materials

prepared by Maggiore, and because “Living Cross will have the opportunity to object to any
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incompetent evidence at an appropriate time.”

{9} On May 1, the PRC adopted the hearing examiner’s recommendations on

disqualification and ordered that Maggiore be disqualified. The PRC found that AMR’s

exceptions—that counsel had not used confidential information, that the parties were not

adverse, and that disqualification would be extremely prejudicial to AMR—were “not

sufficient to overcome the analysis set forth in great detail in the Recommended Order on

the conflict of interest presented by the representation of this counsel for [AMR] in the

remainder of this proceeding.” However, it also denied both Living Cross’s motion to stay

and Living Cross’s motion to strike the materials prepared by Maggiore. By adopting the

hearing examiner’s recommendations in full, the PRC incorporated the hearing examiner’s

reasoning for denying Living Cross’s motion to strike.

{10} The final hearing on the grant of a permanent certificate was held before a hearing

examiner on June 27, 2013. The transcript of the entire April 3 hearing was admitted into

evidence at the final hearing, as well as written testimony from various witnesses that was

taken virtually verbatim from what Maggiore had elicited in the April 3 hearing before the

commission. Living Cross did not object to the admission of this evidence. After the final

hearing, the hearing examiner recommended that the PRC grant the permanent certificate to

AMR, and the PRC again adopted the hearing examiner’s recommendations. Living Cross

appeals from the final order of the PRC granting the permanent certificate to AMR to operate

in Valencia County, NMPRC Docket No. 13-00079-TR-M, September 20, 2013.

II. STANDARD OF REVIEW

{11} A final order of the PRC under the Motor Carrier Act, NMSA 1978, §§ 65-2A-1 to

-41 (2003, as amended through 2013), will be overturned on appeal only if it is arbitrary,

capricious, an abuse of discretion, unsupported by substantial evidence, or otherwise not in

accordance with law. Section 65-2A-35(C). A decision that is plainly erroneous is not in

accordance with law. United States v. Lujan, 268 F.3d 965, 967 (10th Cir. 2001) (citations

omitted). “In general, we review [a tribunal’s] evidentiary rulings for an abuse of discretion

when they are properly preserved for appellate review.” State v. Allen, 2000-NMSC-002, ¶

17, 128 N.M. 482, 994 P.2d 728 (citation omitted). To preserve an error for appellate review,

a party must fairly invoke a ruling from the tribunal. Rule 12-216(A) NMRA (“To preserve

a question for [appellate] review it must appear that a ruling or decision by the [tribunal] was

fairly invoked.”). If an evidentiary issue is not properly preserved, this Court may review for

plain error. Rule 11-103(E) NMRA. Plain error will be determined where the error affected

a party’s substantial rights. Rule 11-103(A); see also City of Albuquerque v.

PCA-Albuquerque #19, 1993-NMCA-043, ¶ 17, 115 N.M. 739, 858 P.2d 406 (setting aside

the judgment because there was a high probability that improper admission of expert

testimony influenced the jury’s verdict, which affected a “substantial right” of the city

(internal quotation marks omitted)). A party is entitled to relief when plain error “seriously

affect[s] the fairness, integrity or public reputation of judicial proceedings.” Lujan, 268 F.3d
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Review of unpreserved error under appellate preservation Rule 12-216(B)(2) does

“not preclude the appellate court from considering . . . , in its discretion, questions involving

. . . fundamental error or fundamental rights of a party.” However, fundamental error applies

“solely to prevent a miscarriage of justice,” while “review [of unpreserved error] on the basis

of plain error is less stringent.” State v. Lucero,1993-NMSC-064, ¶¶ 12-13, 116 N.M. 450,

863 P.2d 1071 (internal quotation marks and citation omitted). “Plain error, however, applies

only to evidentiary matters.” Id. ¶ 13.

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at 967 (alteration in original) (internal quotation marks and citations omitted).1

III. DISCUSSION

{12} The PRC erred by allowing Maggiore to represent AMR in a day-long hearing

despite Living Cross’s pending motion to disqualify her. Living Cross’s motion to disqualify

was timely. Living Cross moved to disqualify Maggiore on March 25, 2013, shortly after

receiving notice of AMR’s initial application, and specifically requested that the PRC rule

on the motion “prior to taking any substantive action” on AMR’s application. The PRC

should have stayed the proceedings while it or a hearing examiner determined whether

AMR’s counsel was disqualified. This failure is especially egregious in light of the fact that

the PRC was aware that one of its own hearing examiners had already disqualified Maggiore

from representing AMR when Living Cross was an adverse party in another proceeding only

eight months earlier.

{13} “In the practice of law, there is no higher duty than one’s loyalty to a client.” Roy D.

Mercer, LLC v. Reynolds, 2013-NMSC-002, ¶ 1, 292 P.3d 466. As such, our Rules of

Professional Conduct prohibit attorneys from representing clients where a conflict of interest

exists. See, e.g., Rule 16-107(A)(1) NMRA (stating that attorneys cannot represent a client

if the representation would be “directly adverse to another client”); see also Rule 16-110

NMRA (the conflicts of interest of a single attorney are imputed to the entire firm). The

Rules of Professional Conduct place an affirmative duty on attorneys to protect their clients,

even after the representation of a client has ended, by not working on cases that are

materially adverse to the interests of a former client. Rule 16-109(A) (proscribing an

attorney’s representation of a client “in the same or a substantially related matter” if the

client’s interests are “materially adverse” to those of a former client); Mercer, 2013-NMSC002, ¶ 14 (“Clients must be secure in their understanding that attorneys will maintain their

confidences, even after the termination of an attorney-client relationship.”). We have

previously indicated that disqualification based on a conflict of interest should take place

before a hearing on the merits under Rule 16-110. See Mercer, 2013-NMSC-002, ¶ 39 (“In

failing to disqualify the . . . firm, the district court misapplied the plain language of Rule 16-

110(C) mandating disqualification. [The client] would have been forced to go through a trial

on the merits with the potential of a breach of client confidences. That potential breach is

simply unacceptable.”).
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{14} Other courts have also held that disqualification must be determined prior to moving

forward with substantive proceedings. “[W]hen counsel is disqualified, a court should not

reach the other questions or motions presented to it through the disqualified counsel.”

Bowers v. Ophthalmology Grp., 733 F.3d 647, 654 (6th Cir. 2013). In Bowers, the Sixth

Circuit Court of Appeals vacated the district court’s summary judgment in favor of a

defendant where the plaintiff had moved to disqualify the defendant’s attorney because

another attorney at the firm of the defendant’s attorney had previously represented the

plaintiff. Id. at 649. The court reasoned as follows:

A district court must rule on a motion for disqualification of counsel

prior to ruling on a dispositive motion because the success of a

disqualification motion has the potential to change the proceedings

entirely. . . . The reason is simple: if counsel has a conflict from previously

representing the party seeking disqualification . . . there is a risk that

confidential information could be used in preparing or defending the

[dispositive] motion. . . . In other words, a potentially conflicted counsel’s

confidential information could infect the evidence presented to the district

court. Therefore, a district court must reach the merits of a disqualification

motion before ruling on a dispositive motion.

Id. at 654-55 (citation omitted). Thus, once a party moves to disqualify an adverse party’s

counsel based on counsel’s former representation of the movant, all substantive proceedings

must cease until the tribunal determines whether counsel is disqualified.

{15} In this case, after a thorough record review, the hearing examiner correctly

determined that Maggiore was disqualified because she had previously represented Living

Cross in “substantially related matters.” The hearing examiner discussed a series of

substantially related prior proceedings in which either Maggiore or her law firm represented

Living Cross, stemming “from an incident in Valencia County . . . [in which] a minor child

died at a scene to which a Living Cross ambulance had been dispatched and provided

emergency services.” First, Maggiore’s law firm defended Living Cross in a wrongful death

action in which the child’s family alleged that a contributing cause of the child’s death was

Living Cross’s delay in arriving on scene. Second, a year after the child’s death, PRC staff

initiated an investigation of Living Cross, and the PRC ordered Living Cross to show cause

why it should not be fined for violations of the Motor Carrier Act because of the child’s

death. Maggiore defended Living Cross against the show cause order, and her law firm

represented Living Cross in the subsequent appeal from those proceedings in this Court. The

hearing examiner explained that Maggiore and her law firm “were involved in the discovery

and investigation by [PRC] Staff in the Show Cause investigation and proceeding, the

discussions related to that investigation, and the wrongful death claim . . . . [T]he issues

addressed in those matters encompassed every aspect of Living Cross operations.”

{16} The hearing examiner quoted Rule 16-109 and correctly characterized the legal

standard to be applied to these facts. “Matters are ‘substantially related’ for purposes of
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[Rule 16-109] if . . . there . . . is a substantial risk that confidential factual information as

would normally have been obtained in the prior representation would materially advance the

client’s position in the subsequent matter.” Rule 16-109 cmt 3. The hearing examiner

recognized that not only does the rule require disqualification when factual information was

actually disclosed, but that “the prohibition should also be extended to the ‘appearance’ that

confidential information might have been given to the attorney in the prior representation.”

See State v. Barnett, 1998-NMCA-105, ¶¶ 18, 24, 125 N.M. 739, 965 P.2d 323 (“[W]hether

there is a substantial relationship turns on the . . . appearance thereof.” (internal quotation

marks and citations omitted)).

{17} Once the tribunal determines that there was a substantial relationship between the

former representation and the current proceedings, “an irrebuttable presumption arises that

the former client revealed facts requiring the attorney’s disqualification.” Koch v. Koch

Indus., 798 F. Supp. 1525, 1536 (D. Kan. 1992). “The court need not inquire into whether

the confidential information was actually revealed or whether the attorney would be likely

to use the information to the disadvantage of the former client. To conduct such an inquiry

would frustrate the former client’s interest in the confidential information.” Id. (citations

omitted). “Doubts as to whether a substantial relationship exists should be resolved in favor

of disqualification.” Id. at 1537.

{18} Despite the hearing examiner’s finding that ample grounds for disqualification

existed in this case, the hearing examiner did not craft an adequate remedy because he put

the burden on Living Cross to object to “specific materials” that were prepared by Maggiore.

Objecting to specific materials would not have cured the defect because the PRC had already

ignored the conflict of interest issue that Living Cross raised and allowed Maggiore to

appear on behalf of AMR, give an opening statement, direct the examination of five

witnesses, and cross-examine Living Cross’s witnesses. On the basis of Maggiore’s

representation, AMR was granted temporary authority and began operating in Valencia

County. Had proper procedures been followed, AMR would have had to procure other

counsel before the hearing on temporary authority, and it could not have received the benefit

of Maggiore’s knowledge of confidential information regarding Living Cross. In this case,

objecting piecemeal to evidence that Living Cross believed was tainted by the conflict would

in no way vindicate the underlying interests protected by Rule 16-109: preserving client

confidences and the fairness of hearings. We must presume that confidential information was

used against Living Cross in the first hearing, see Koch, 798 F. Supp. at 1536, and that AMR

had already gained an advantage by using that impermissible information. Objection at the

permanent certification hearing would not change that fact.

{19} Another troubling aspect of the procedure in this case is that our review of the record

reveals no justification for why the PRC allowed Maggiore to represent AMR at the April

3 hearing in the face of a motion to disqualify her. Commission Chairman Ben Hall stated

at the very beginning of the hearing, “the motion to disqualify the counsel filed by Living

Cross will not be addressed in this public hearing. Due to the emergency of this proceeding,

decision on the motion will be addressed by the Commission during the regular agenda later
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on today.” The PRC did not state any reasons for its characterization of the hearing as an

emergency, either in that initial statement or at any time during the proceeding, nor did the

PRC explain why the hearing had been conducted on an emergency basis in its written order

granting temporary authority issued the following day. The parties did not ask the PRC to

hold an emergency hearing. AMR’s original application does not appear to include a request

to expedite the hearing or to grant temporary authority on an emergency basis, nor did

testimony at the hearing establish a need for the hearing to be conducted on an emergency

basis. To the contrary, AMR’s only two witnesses to address the subject both stated that

there were no life-threatening emergencies to date due to Living Cross’s alleged failures.

Commissioner Espinoza asked AMR’s first witness, Valencia County Fire Chief Steven

Gonzales, whether he could talk about any life-threatening incidents that had resulted from

Living Cross’s unavailability. Chief Gonzales responded that “we don’t have any that were

life-threatening or critical, per se.” Division Chief Nicholas Moya of the Valencia County

Fire Department also stated, “[l]uckily, for the majority of the part there haven’t been too

many life-threatening injuries, but it’s only going to take that one where we have nobody to

respond that’s going to make a difference.” On this record, it is not possible to discern why

the PRC maintained that it was acting in an emergency situation such that the Rules of

Professional Conduct should suddenly cease to apply. This procedure was entirely

inadequate in protecting the integrity of the judicial process.

{20} After Maggiore was disqualified, AMR submitted pre-filed testimony as exhibits in

support of its application for permanent authority. That testimony was nearly a word-forword transcription of the direct examinations Maggiore conducted at the April 3 hearing. At

the opening of the final hearing, AMR moved into evidence a complete transcript of the

entire April 3 hearing. The pre-filed testimony was separately admitted into evidence during

the final hearing as well, although the substance of that testimony consisted of the questions

Maggiore posed to witnesses in the April 3 hearing and the answers the witnesses gave to

her questions.

{21} Living Cross objected neither to the admission of the pre-filed testimony nor to the

admission of the entire contents of the April 3 hearing, arguing in this appeal that such

objection would have been pointless before a hearing examiner who has no independent

power to exclude testimony that the PRC had already allowed. Living Cross did raise the

objection again in its exceptions to the recommended decision after the hearing examiner

issued her recommended decision, which was filed with the PRC. AMR contends that Living

Cross’s failure to make a timely objection waived the objection. Nevertheless, the PRC’s

error in failing to disqualify Maggiore prior to conducting substantive proceedings is an error

that runs directly contrary to the procedure mandated by case precedent and the mandates

of our Rules of Professional Conduct. Indeed, the PRC had the benefit of our December

2012 opinion in Mercer, in which we instructed tribunals not to proceed with any substantive

matters until it decided the merits of a pending motion to disqualify counsel. 2013-NMSC002, ¶ 39.

{22} Failing to stay the proceedings until a determination of whether counsel was
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disqualified was “simply unacceptable,” id., and we accordingly hold that the PRC

committed reversible error when it allowed a potentially disqualified attorney to conduct a

hearing over the objection of opposing counsel. We take this opportunity to stress the

absolute importance of the conflict of interest provisions of the Rules of Professional

Conduct. It is essential that a tribunal determine whether an attorney or a law firm is

disqualified from a case immediately upon being alerted to a potential conflict of interest.

Until that determination is made, no further proceedings may take place. Conflicts of

interest, left unchecked, could taint an entire case and call into question the integrity of the

attorney-client relationship. A potentially conflicted attorney has a duty to step down from

the case immediately upon discovering the conflict of interest. If the attorney flouts his or

her professional duty to do so, the tribunal has a duty to immediately stay the proceedings

to determine whether a conflict exists. Failing to stay the proceedings was error that

seriously affected the fairness, integrity, or public reputation of the proceedings. Living

Cross should have persisted in its objection to the admission of any evidence elicited by

Maggiore, even before the hearing examiner. Nevertheless, because the PRC ultimately

concluded that Maggiore did have a conflict of interest, it was plain error for the PRC to

admit the pre-filed testimony and the entire contents of the April 3 hearing as evidence in

the permanency hearing. We reverse and vacate the grant of temporary authority and the

permanent certificate to AMR without prejudice to AMR’s right to file a new application

under current law for temporary authority and/or a permanent certificate.

IV. CONCLUSION

{23} The PRC erred when it allowed an attorney to represent a party in a day-long hearing,

including direct and cross-examination of eight witnesses, when opposing counsel had

previously moved to disqualify that attorney for a conflict of interest. The wholesale

admission of the record from the hearing for a temporary permit as evidence in the hearing

for a permanent certificate was plain error. Accordingly, we vacate the grant of temporary

authority and the permanent certificate to AMR. AMR may file a new application for a

permanent certificate to operate in Valencia County according to the laws in effect at the

time of the new application.

{24} IT IS SO ORDERED.

________________________________

EDWARD L. CHÁVEZ, Justice

WE CONCUR:

___________________________________

BARBARA J. VIGIL, Chief Justice

___________________________________

PETRA JIMENEZ MAES, Senior Justice
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___________________________________

RICHARD C. BOSSON, Justice

___________________________________

CHARLES W. DANIELS, Justice