1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

2 Opinion Number: _______________

3 Filing Date: August 2, 2017 

4 NO. 34,655

5 BLUE CANYON WELL ASSOCIATION,

6 Plaintiff-Appellee,

7 v.

8 DENISE JEVNE,

9 Defendant-Appellant.

10 APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY

11 Francis J. Mathew, District Judge

12 Sommer, Karnes & Associates, LLP

13 Karl H. Sommer

14 Santa Fe, NM

15 for Appellee

16 Graeser & McQueen, LLC

17 Christopher L. Graeser

18 Santa Fe, NM

19 for Appellant
1 OPINION

2 VARGAS, Judge.

3 {1} In this appeal we address whether Plaintiff Blue Canyon Well Association

4 (Blue Canyon) was a legal entity with capacity to sue Defendant Denise Jevne.

5 Specifically, we consider the applicability of NMSA 1978, Section 53-10-1 (1937)

6 to Blue Canyon’s claim that it was entitled to bring the suit as an unincorporated

7 association. We hold that Blue Canyon’s legal capacity to sue Jevne as an

8 unincorporated association is dependent on its compliance with statutory

9 requirements, and because it failed to comply with the statutory requirements, Blue

10 Canyon lacked the capacity to sue Jevne. We reverse the judgment of the district

11 court and remand the case for further proceedings. 

12 I. BACKGROUND

13 {2} The members of Blue Canyon and Jevne are all owners of real property in

14 Santa Fe County that claim to be parties to a well sharing and easement agreement

15 (the Agreement).Blue Canyon was formed to maintain and manage the well pursuant

16 to the Agreement. Some years later, a dispute arose between Jevne and the other

17 owners regarding Jevne’s unpaid water well expenses. As a result, Blue Canyon

18 brought a claim against Jevne in magistrate court, seeking $7,651.50 for past due

19 bills, costs associated with well use, and attorney fees and charges. The complaint
2

1 was signed, “Blue Canyon Well Ass’n: Anna & Joe Durr, Frank & Billie Martinez,

2 Lesley King, President[.]” After a trial on the merits, the magistrate court entered

3 judgment awarding Blue Canyon $2,600.00 in damages and $6,697.02 in attorney

4 fees. Jevne appealed that judgment to the district court.

5 {3} Shortly after Jevne appealed the judgment, the individuals who signed the

6 complaint on behalf of Blue Canyon (collectively, Movants) filed a motion in district

7 court, seeking to amend the caption of the case in order to “properly identify

8 Plaintiffs” by substituting their names for Blue Canyon. In the motion to amend,

9 Movants pointed out that they had each signed the complaint as individuals on behalf

10 of Blue Canyon, but stated that “while there is a Well Agreement in the matter, there

11 is no Blue Canyon Well Association per se.” They therefore requested that they be

12 identified as Plaintiffs in Blue Canyon’s place.In opposing the motion, Jevne saw the

13 motion as an improper attempt to establish the Durrs’ right to use the well. Jevne

14 claimed that the Durrs were not a part of the Agreement and were not valid users

15 without first filing a declaratory judgment action to establish their status. Jevne

16 recognized Blue Canyon’s status as an unincorporated association and its power to

17 sue and collect judgments, but requested that the appeal be dismissed in light of

18 Movants’ denial of Blue Canyon’s existence.
3

1 {4} The district court held a hearing on Movants’ motion to amend and ordered the

2 parties to provide supplemental briefing. In Movants’ supplemental brief, they again

3 asserted that Blue Canyon was “not a legal entity properly formed under Section 53-

4 10-1[,]” and as such, they, individually, were the proper real parties in interest in the

5 case. Having retained new counsel, Jevne changed positions in her supplemental

6 response, arguing that Blue Canyon was a non-existent entity. Jevne also asserted that

7 Movants’ motion was actually a motion to substitute parties without complying with

8 Rule 1-025 NMRA and that the casemust be dismissed because the judgment in favor

9 of a non-existent entity was “uncollectible.”

10 {5} The district court denied Movants’ motion to amend the caption and rejected

11 Movants’ claim that Blue Canyon did not exist as a legal entity because it had not

12 complied with the filing requirement of Section 53-10-1 for the creation of an

13 unincorporated association. The district court held that the use of the word “may” in

14 Section 53-10-1 indicated that filing statements and other documents referenced in

15 the statute to create an unincorporated association is permissive. Following a de novo

16 trial on the merits, the district court entered judgment in favor of Blue Canyon and

17 entered findings of fact and conclusions of law that the Agreement was created in

18 March 1991, that Blue Canyon was formed to carry out the requirements of the
4

1 Agreement, and that Blue Canyon “is an unincorporated association with the capacity

2 to sue and be sued.”

3 {6} Jevne filed a motion to amend the judgment and a motion for new trial, both

4 attacking the district court’s judgment. The district court held a hearing on Jevne’s

5 post-judgment motions, denying both. Jevne appeals, challenging the district court’s

6 judgment in Blue Canyon’s favor, as well as its denial of those two motions. 

7 II. DISCUSSION

8 {7} On appeal, Jevne claims that the district court erred when it held that Blue

9 Canyon was authorized to maintain this action as an unincorporated association

10 notwithstanding that Blue Canyon had not filed the documents described in Section

11 53-10-1 (statutory documents) with the county clerk. Now forced to argue a position

12 contrary to the position they took in the district court, Blue Canyon first contends that

13 the district court correctly held that the use of the word “may” in the statute renders

14 the filing of any statutory documents by Blue Canyon to be permissive. Furthermore,

15 Blue Canyon argues, because unincorporated associations are recognized by both

16 statute and common law, it is not required to comply with the statutory requirements

17 to be a common law unincorporated association and sue in the name of the

18 association. We are not persuaded by either argument. 
5

1 A. Section 53-10-1 Requires the Filing of Statutory Documents to Form an

2 Unincorporated Association

3 {8} Statutory interpretation is an issue of law that we review de novo. Moongate

4 Water Co. v. City of Las Cruces, 2013-NMSC-018, ¶ 6, 302 P.3d 405. The text of a

5 statute is the “primary, essential source of its meaning[,]” and where a statute’s

6 language is clear and unambiguous, we are required to “give effect to that language

7 and refrain from further statutory interpretation.” NMSA 1978, § 12-2A-19 (1997);

8 Nat’l Educ. Ass’n of N.M. v. Santa Fe Pub. Schs., 2016-NMCA-009, ¶ 6, 365 P.3d 1

9 (internal quotation marks and citation omitted).

10 {9} A court’s “primary goal when interpreting a statute is to give effect to the

11 Legislature’s intent[,]” which “is to be determined primarily by the language of the

12 act, and words used in a statute are to be given their ordinary and usual meaning

13 unless a different intent is clearly indicated.” N.M. Bldg. & Constr. Trades Council

14 v. Dean, 2015-NMSC-023, ¶ 11, 353 P.3d 1212 (internal quotation marks and citation

15 omitted);see State ex rel. Helman v. Gallegos, 1994-NMSC-023, ¶ 23, 117 N.M. 346,

16 871 P.2d 1352. “Whether words of statutes are mandatory or discretionary is a matter

17 of legislative intent to be determined by consideration of the purpose sought to be

18 accomplished.” State ex rel. Robinson v. King, 1974-NMSC-028, ¶ 10, 86 N.M. 231,

19 522 P.2d 83. We interpret statutes “to avoid rendering the Legislature’s language

20 superfluous.” Baker v. Hedstrom, 2013-NMSC-043, ¶ 24, 309 P.3d 1047. We
6

1 consider all parts of the statute together, “read[ing] the statute in its entirety and

2 constru[ing] each part in connection with every other part to produce a harmonious

3 whole.” Key v. Chrysler Motors Corp., 1996-NMSC-038, ¶ 14, 121 N.M. 764, 918

4 P.2d 350.

5 {10} Section 53-10-1, authorizing the formation of unincorporated associations

6 provides: 

7 Whenever two or more persons shall desire to form an association

8 for the promotion of their mutual pleasure or recreation . . . or an

9 association not for the individual profit of the members thereof, and

10 without incorporating the same as a corporation, or maintaining title of

11 its property in trust . . .[, t]he said persons or members desiring to form

12 such an association . . . may file in the office of the county clerk . . . a

13 statement containing the name of such association, its objects and

14 purposes, the names and residences of the persons forming such

15 association, together with a copy of its articles of association and any

16 rules and/or regulations governing the transactions of its objects and

17 purposes and prescribing the terms by which its members may maintain

18 or cease their membership therein.

19 (Emphasis added.) We acknowledge, and the parties are quick to point out, that

20 generally, the words “shall” and “must” express a “duty, obligation, requirement or

21 condition precedent” while “may” confers a “power, authority, privilege or right.”

22 NMSA 1978, § 12-2A-4(A), (B) (1997). However, in this instance, the power,

23 authority, privilege or right signaled by the use of the word “may” in the statute is not

24 the power, authority, privilege, or right to file documents. Instead, it is the right to

25 form an association as opposed to a corporation, trust, or other legally viable entity.
7

1 The plain language of Section 53-10-1 clearly sets out that whenever two or more

2 persons wish to form an association for the limited purposes described therein

3 without incorporating or maintaining title to its property in trust, then those persons

4 may do so by filing statutory documents with the county clerk. For those intending

5 to create an association under Section 53-10-1, the filing of statutory documents is

6 mandatory. 

7 {11} This interpretation is consistent with the purpose of Section 53-10-1. While

8 avoiding some of the burdens and complexities associated with the formation of a

9 corporation or a trust, Sections 53-10-1 to -8 (1937, as amended through 1959) (the

10 Act), allow those involved in the limited activities described to enjoy the benefits of

11 acting as a single unit rather than a group of individuals, and limit any recovery of a

12 judgment against the association to its joint or common property, provided they

13 satisfy its abbreviated requirements. 

14 {12} Other sections of the Act confirm the mandatory nature of statutory document

15 filing. First, unless the filing of statutory documents to create an unincorporated

16 association is mandatory, the detailed list of information to be included in the

17 statutory documents set out in Section 53-10-1 would be unnecessary surplusage.

18 Even more persuasive of the mandatory nature of the statute is the language in

19 Section 53-10-7, which provides, “[a]ny association or club formed under the

20 provisions of [the A]ct . . . may exist for such period of time not exceeding twenty
8

1 years as may be fixed in the statement required to be filed by Section [53-10-1].”

2 (Emphasis added.) Were we to interpret the language related to the filing of statutory

3 documents to be permissive, our interpretation would render Section 53-10-1 at odds

4 with Section 53-10-7 describing the document filing as “required.” “If statutes appear

5 to conflict, they must be construed, if possible, to give effect to each.” NMSA 1978,

6 § 12-2A-10(A) (1997). By interpreting the statutory document filing as mandatory,

7 we avoid a conflict and give effect to the provisions of both Section 53-10-1 and

8 Section 53-10-7. 

9 {13} Blue Canyon nevertheless argues that the Act is intended to be generally

10 permissive and that equity requires us to interpret Section 53-10-1 to authorize

11 permissive filing. We are not persuaded. Blue Canyon’s argument in this regard is

12 largely based on an alternative reading of the plain language in Section 53-10-1. Blue

13 Canyon argues that we should interpret Section 53-10-1 so that the “required to be

14 filed” language is rendered functionally superfluous, reasoning that the word

15 “required” simply “does not carry the same weight or measure of authority” as words

16 like “shall” and “may.” Because “we refrain from reading statutes in a way that

17 renders provisions superfluous[,]” we decline to follow Blue Canyon’s interpretation,

18 particularly because an interpretation that filing statutory documents is mandatory

19 gives meaning and effect to each term used in the Act. State ex rel. E. N.M. Univ.
9

1 Regents v. Baca, 2008-NMSC-047, ¶ 10, 144 N.M. 530, 189 P.3d 663 (declining to

2 interpret statute as permissive where doing so would render it superfluous).

3 B. Common Law Unincorporated Associations Have No Capacity to Sue

4 {14} Blue Canyon argues that it was the proper party to file suit against Jevne

5 because New Mexico law recognizes common law unincorporated associations. New

6 Mexico law, Blue Canyon contends, permits the formation of unincorporated

7 associations either by common law or under the Act, and Section 53-10-5, conferring

8 a right to sue upon unincorporated associations, applies to both statutorily created and

9 common law associations.

10 {15} Our Supreme Court, however, long ago resolved the legal viability of

11 unincorporated associations that were not statutorily created. In Flanagan v. Benvie,

12 1954-NMSC-074, ¶ 7, 58 N.M. 525, 273 P.2d 381, the court unequivocally held,

13 “unincorporated associations, clubs and societies, unless recognized by statute, have

14 no legal existence[.]” (Emphasis added.) In Flanagan, the Court explained that the

15 association’s failure to organize in accordance with the statute precluded it from

16 taking advantage of the right conferred by the Act to hold property in the name of the

17 association. Id. ¶ 11. Similarly, in State ex rel. Overton v. N.M. Tax Comm’n, 1969-

18 NMSC-140, ¶ 14, 81 N.M. 28, 462 P.2d 613, our Supreme Court found that a

19 common law unincorporated association formed to advocate for tax equity was not
10

1 a legal entity and had no right to bring an action unless its members were permitted

2 to do so as members of a class under Rule 1-023 NMRA.

3 {16} The Act grants unincorporated associations formed under Section 53-10-1 a

4 series of rights, including the right to “hold and acquire real or personal property by

5 deed, lease or otherwise, in the name of [the] association,” pursuant to Section 53-10-

6 2; the right to mortgage or sell such property, conveying it by deed signed by an

7 officer of the association, pursuant to Section 53-10-3; and the right to sue or be sued

8 in the name of the association, with the collection of any money judgment against the

9 association limited to its joint or common property, pursuant to Section 53-10-6.

10 Implicit in both the Flanagan and Overton decisions is the fact that an association

11 wishing to take advantage of the rights conferred upon unincorporated associations

12 by the Legislature, including the right to bring suit in the name of the association, can

13 only do so by complying with the requirements of Section 53-10-1. 

14 {17} Arguing that the Act distinguishes between common law associations and

15 statutorily created associations, Blue Canyon points out that some sections of the Act

16 refer to an “association or club formed under the provisions of th[e] act,” while

17 Section 53-10-6, conferring associations with the right to sue in their own names,

18 does not. Compare § 53-10-7, with § 53-10-6. Because Section 53-10-6 does not refer

19 to associations or clubs formed under the provisions of the Act, Blue Canyon

20 concludes that the right to sue is statutorily conferred on all unincorporated
11

1 associations, whether formed at common law or by statute. Legislative silence,

2 however, “is at best a tenuous guide to determining legislative intent.” Swink v.

3 Fingado, 1993-NMSC-013, ¶ 29, 115 N.M. 275, 850 P.2d 978. We see no reason to

4 allow the absence of the language to outweigh its explicit language that filing

5 statutory documents with the county clerk is required to create an unincorporated

6 association. To do so would be to disregard our canons of statutory interpretation.

7 {18} On appeal, the parties do not dispute that neither Movants nor their

8 predecessors in interest ever filed the statutory documents required by Section 53-10-

9 1 to forman unincorporated association. Instead, Blue Canyon’s formation was based

10 on an unrecorded well sharing and easement agreement that did that did not satisfy

11 the requirements of Section 53-10-1. Absent such a filing, Blue Canyon cannot avail

12 itself of the rights conferred by the Act, including the right to sue granted by Section

13 53-10-5.

14 {19} In sum, in order to become an incorporated association entitled to exercise the

15 right to sue, Blue Canyon was required to file the documents delineated in Section

16 53-10-1. Having failed to do so, we hold that Blue Canyon was not an unincorporated

17 association under Section 53-10-1 and had no legal capacity to sue and to obtain

18 judgment against Jevne. As Blue Canyon’s lack of capacity to sue is sufficient for

19 reversal, we need not reach Jevne’s argument that Blue Canyon is not the real party
12

1 in interest. The judgment in favor of Blue Canyon against Jevne was improperly

2 entered, is of no effect, and must be vacated. 

3 III. CONCLUSION

4 {20} We reverse the decision of the district court insofar as it grants relief in favor

5 of Blue Canyon against Jevne, and we remand this matter for proceedings consistent

6 with this opinion. 

7 {21} IT IS SO ORDERED.

8 ____________________________________

9 JULIE J. VARGAS, Judge

10 WE CONCUR:

11 ___________________________

12 JONATHAN B. SUTIN, Judge

13 ___________________________

14 J. MILES HANISEE, Judge