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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 Opinion Number: __________
3 Filing Date: October 23, 2024
4 No. A-1-CA-41416
5 RYAN STODGELL and KATHARINE 6 STODGELL,
7 Plaintiffs-Appellants,
8 v.
9 LINDA OAK WEISSMAN and BLACK 10 OAK LLC,
11 Defendants-Appellees.
12 APPEAL FROM THE DISTRICT COURT OF TAOS COUNTY 13 Emilio Chavez, District Court Judge
14 Robert Richards 15 Santa Fe, NM
16 for Appellants
17 The Simons Firm, LLP 18 Frieda Scott Simons 19 Santa Fe, NM
20 for Appellees
1 OPINION
2 HANISEE, Judge.
3 {1} This case arises from a dispute over damage deposit funds between tenants
4 Ryan and Katharine Stodgell (Tenants), their former landlord, Linda Oak Weissman
5 (Landlord), and the company Landlord owned that held the subject property, Black
6 Oak, LLC. We write formally to address whether a landlord who timely complies
7 with the requirements of NMSA 1978, Section 47-8-18 (1989) (governing damage
8 deposits) may subsequently file suit for harms to the rented property not previously
9 identified and deducted from the damage deposit within the statute’s thirty-day
10 window. We must also address whether the district court correctly determined
11 Landlord to be the “prevailing party” in the underlying lawsuit as contemplated by
12 NMSA 1978, Section 47-8-48(A) (1995) such that she may be awarded attorney fees
13 and court costs. The district court concluded that Landlord timely complied with
14 Section 47-8-18 and is not prohibited from filing a subsequent action for previously
15 unidentified damages to the rental property. It further found Landlord to be the
16 prevailing party. We affirm.
17 BACKGROUND
18 {2} On March 8, 2021, Tenants signed a lease agreement with Landlord to rent
19 the subject property for a term of sixteen months. Rent was set at $1,600 per month
20 and the total initial deposit for future damages was $2,600. The parties subsequently
1 agreed to end the lease several months early, and Tenants departed the residence on
2 June 30, 2022. On July 9, 2022, Landlord sent Tenants an accounting that itemized
3 her deductions from their damage deposit, which totaled $832.62, and a check for
4 the remaining balance, $1,776.38. 1 A final note on the accounting provided by
5 Landlord stated, “By cashing [the] check . . . you acknowledge all monies due have
6 been satisfied.” Tenants, however, disputed $672.92 of the deductions, leaving only
7 $159.70 undisputed. 2 They feared, based on the statement in the accounting sheet,
8 that if they cashed the check with their refund, they would lose any right to dispute
9 the deducted amount. Landlord notified Tenants in writing that she would issue a
10 “stop payment” on the check containing their refund on August 1, 2022, and after
11 such date passed, did so. Tenants then filed the underlying action in magistrate court
12 contesting the amount Landlord deducted from their damage deposit.
[1] We note that there appears to be a mathematical error in the accounting in which Landlord states the total damages to the property amount to $832.62, but then deducts $823.62 from Tenants’ damage deposit, resulting in the $1,776.38 refund. Such an error is not discussed by the parties on appeal and only prejudices Landlord, who apparently deducted nine dollars less than she intended from Tenants’ deposit. Because Landlord does not address this discrepancy on appeal, and because it is clear from the record that Tenants did not dispute $159.70 of the deductions, we do not discuss it further. For clarity, however, and because this discrepancy affects other figures pertinent to this appeal, such as whether Tenants disputed $663.92 or $672.92 of itemized deductions from their deposit, we note that we rely on the $832.62 and $672.92 figures throughout this opinion.
[2] See supra note 1, for explanation regarding the mathematical discrepancy relating to the undisputed amount of Landlord’s deductions.
[2] 1 {3} In response, Landlord filed a cross-claim stating that she was entitled to
2 additional damages beyond those itemized in the deductions. Tenants repeatedly
3 argued to the district court, as they do now on appeal, that Section 47-8-18(C), (D)
4 requires a landlord to “provide a tenant with an itemized listing of all damages to
5 property within thirty days of the date the lease ends,” and any claim for damages
6 not then identified is forfeited. The district court rejected this argument and
7 concluded that the plain meaning of Section 47-8-18 only prohibits a landlord from
8 filing an independent claim for damages if the landlord failed to comply with the
9 statute’s terms regarding return of the damage deposit, which the district court ruled
10 was not the case here. The case went to trial, and Tenants were found liable to
11 Landlord for $2,249.07 in property damage. 3 However, because Tenants never
12 cashed Landlord’s check refunding a portion of their damage deposit, the district
13 court deducted this amount from the damage deposit, $2,600, and ordered Landlord
14 to refund Tenants the remaining balance of their deposit, $350.93.
15 {4} The district court concluded that Landlord was the prevailing party in the case,
16 stating that Tenants sought, unsuccessfully, the return of their entire deposit, minus
17 $159.70 in undisputed damages. As such, the district court determined that Landlord
18 was entitled to reasonable attorney fees and court costs. See § 47-8-48(A) (stating
This figure includes $2,325 in damages to the property less $75.93 in interest
[3] that was previously due to Tenants.
[3] 1 that “the prevailing party shall be entitled to reasonable attorney[] fees and court
2 costs”); Rule 1-054(D)(1) NMRA (same). Landlord then moved for an award of such
3 attorney fees and court costs, which, despite the initial dispute in this case pertaining
4 to less than $700, were determined by the district court to be $26,266.55. The district
5 court awarded Landlord the requested costs and fees and set Tenants’ supersedeas
6 bond at $39,399.83, which it reasoned was “1.5 times the amount of the total
7 judgment including costs and attorney fees” and was “sufficient to cover the amount
8 of the judgment, costs, and interest during the pendency of appeal.”
9 {5} On appeal, Tenants present the same argument they did before the district
10 court: Section 47-8-18(D) requires a landlord to identify all damages to the rented
11 property within thirty days and any claim for damages not then identified is forfeited.
12 Tenants have further filed a motion with this Court, contending that they are the
13 prevailing party because, according to them, their $350.93 award is 51 percent of the
14 $672.92 they originally disputed whereas Landlord sought over $10,000 in damages
15 at trial, but only obtained an award for $2,249.07. We address each argument in turn.
16 DISCUSSION
17 I. Section 47-8-18(C), (D)
18 {6} Tenants’ argument that Section 47-8-18 requires identification of all damages
19 to a rental property by a landlord within thirty days presents an issue of statutory
20 interpretation we review de novo. See Roser v. Hufstedler, 2023-NMCA-040 , ¶ 6,
[1] 531 P.3d 615 . “The first and most obvious guide to statutory interpretation is the
2 wording of the statutes themselves.” Quynh Truong v. Allstate Ins. Co., 2010-
3 NMSC-009, ¶ 37, 147 N.M. 583 , 227 P.3d 73 (internal quotation marks and citation
4 omitted). Appellate courts have consistently adhered to this principle “through
5 application of the plain meaning rule, recognizing that when a statute contains
6 language which is clear and unambiguous, we must give effect to that language and
7 refrain from further statutory interpretation.” Id. (alteration, internal quotation
8 marks, and citation omitted).
9 {7} We, thus, begin with the plain language of Section 47-8-18(C), (D), which
10 states:
11 C. Upon termination of the residency, property or money held 12 by the owner as deposits may be applied by the owner to the payment 13 of rent and the amount of damages which the owner has suffered by 14 reason of the resident’s noncompliance with the rental agreement. . . . 15 In the event actual cause exists for retaining any portion of the deposit, 16 the owner shall provide the resident with an itemized written list of the 17 deductions from the deposit and the balance of the deposit, if any, 18 within thirty days of the date of termination of the rental agreement or 19 resident departure, whichever is later. The owner is deemed to have 20 complied with this section by mailing the statement and any payment 21 required to the last known address of the resident. . . .
22 D. If the owner fails to provide the resident with a written 23 statement of deductions from the deposit and the balance shown by the 24 statement to be due, within thirty days of the termination of the tenancy, 25 the owner:
26 (1) shall forfeit the right to withhold any portion of the 27 deposit;
[5] 1 (2) shall forfeit the right to assert any counterclaim in 2 any action brought to recover that deposit;
3 (3) shall be liable to the resident for court costs and 4 reasonable attorney[] fees; and
5 (4) shall forfeit the right to assert an independent action 6 against the resident for damages to the rental property.
7 Section 47-8-18(C) unambiguously requires a landlord to provide an itemized list of
8 the deductions from a tenant’s deposit, and the remaining balance of such deposit,
9 within thirty days of “termination of the residency.” Section 47-8-18(D) then
10 provides a tenant relief if a landlord fails to comply with these terms. In other words,
11 Section 47-8-18(D), by its own clear and unambiguous language, is only triggered
12 by a landlord’s failure to comply with Section 47-8-18(C). Tenants’ primary
13 argument that Landlord was required to identify all damages to the property within
14 thirty days of lease termination, and that failure to do so forfeited Landlord’s rights
15 to assert any counterclaim in the future under Section 47-8-18(D)(2), is not reflected
16 in the plain language of the statute. See State v. Greenwood, 2012-NMCA-017, ¶ 38 ,
[17] 271 P.3d 753 (“The Legislature knows how to include language in a statute if it so
18 desires.” (alteration, internal quotation marks, and citation omitted)).
19 {8} Tenants present various arguments that such a reading of the statute nullifies
20 Section 47-8-18(C)’s thirty-day deadline. However, as we have stated before, “the
21 purpose of Section 47-8-18 is to prevent the unexplained retention of security
22 deposits to pay for alleged damages to the property.” Bruce v. Attaway, 1996-
[6] 1 NMSC-030, ¶ 9, 121 N.M. 755 , 918 P.2d 341 (emphasis added). As we explained in
2 Attaway, a case on which Tenants rely in their briefing, the thirty-day time limit in
3 Section 47-8-18(C) prevents a landlord, who has sole control over the premises after
4 a tenant departs, from making “excessive improvements at the tenant’s expense,”
5 i.e., using the tenant’s damage deposit money to pay for damages not caused by
6 tenants or other property improvements unrelated to the tenancy. Attaway, 1996-
7 NMSC-030, ¶ 9. Tenants contend that the district court ignored Attaway in its ruling,
8 but nothing in that case stands for the proposition that Section 47-8-18(C), (D)
9 requires a landlord to identify all damages to the property, including undiscovered
10 latent defects, within thirty days or the landlord otherwise forfeits their right to make
11 a future claim for such damages. See Attaway, 1996-NMSC-030 , ¶ 9 (stating “that
12 failure to comply with Section 47-8-18(C) results in forfeiture of any right to
13 withhold any portion of the deposit or to file suit for the alleged damages to the
14 property” (internal quotation marks and citation omitted)).
15 {9} Tenants further rely on another case, Garcia v. Thong, 1995-NMSC-030 , 119
16 N.M. 704 , 895 P.2d 226 , to suggest that a landlord must identify all damages to a
17 property within thirty days. Garcia, however, stands for substantially the same
18 proposition as Attaway and does not support Tenants’ argument. See id. ¶ 8 (“We
19 hold therefore that since [the landlord] failed to comply with Section 47-8-18(C),
20 she forfeited her right to withhold any portion of the deposit or to file suit for the
[7] 1 alleged damages as provided by Section 47-8-18(D).” (emphasis added)); see also
2 Attaway, 1996-NMSC-030 , ¶ 9 (expressly embracing and relying on Garcia). As
3 stated above, the meaning of Section 47-8-18(C), (D) is clear: a landlord must
4 identify and itemize all deductions from a tenant’s damage deposit and send the
5 remaining balance, if any, to the tenant within thirty days. Only if a landlord fails to
6 comply with these requirements do they forfeit “the right to assert any counterclaim
7 in any action brought to recover the deposit.” See § 47-8-18(D)(2).
8 {10} Here, Landlord sent Tenants an itemized list of deductions from their damage
9 deposit and a check for the remaining balance, $1,776.38, on July 9, 2022, well
10 within Section 47-8-18(C)’s thirty-day time limit. As such, Landlord complied with
11 the statute and was not prohibited from advancing a counterclaim for further
12 damages she had not previously identified. Tenants offer us no authority, and we can
13 find none, that otherwise prohibits Landlord from filing a claim for damages to her
14 property within the applicable statute of limitations. See NMSA 1978, § 37-1-4
15 (1880) (providing a limitation period of four years for claims alleging “injuries to
16 property”).
17 {11} Tenants argue that the “stop payment” Landlord issued on her refund check,
18 or Landlord’s final admonishment in the accounting she sent them, which stated that
19 “[b]y cashing [the] check . . . you acknowledge all monies due have been satisfied,”
20 acted as unlawful conditions on the refund and that it, therefore, does not satisfy the
[8] 1 requirements of Section 47-8-18(C). We find this argument similarly contradicted
2 by the statute’s text and, therefore, decline to accept it. Section 47-8-18(C) expressly
3 states that a landlord is “deemed to have complied with this section by mailing the
4 statement and any payment required to the last known address of the resident.”
5 Landlord mailed her accounting of the relevant deductions and a check for the
6 remainder of Tenants’ deposit as required by the statute. The Legislature, by
7 including the above language, seems to have gone out of its way to specifically
8 identify what constitutes compliance with the section, and Tenants have again failed
9 to provide us with any authority supporting their argument. See Curry v. Great Nw.
10 Ins. Co., 2014-NMCA-031, ¶ 28 , 320 P.3d 482 (“Where a party cites no authority to
11 support an argument, we may assume no such authority exists.”). For the above
12 reasons, we conclude that Landlord fully and completely complied with Section 47-
13 8-18(C), (D) and, therefore, was not prohibited from filing the instant cross-claim
14 for damages to her property.
15 {12} Tenants advance several other arguments in this appeal that all essentially turn
16 on their suggested reading of Section 47-8-18(C), (D): that it requires landlords to
17 identify all damages to a property within thirty-days of termination of residency. As
18 we determine the plain language of the statute addresses this issue, we need not
19 address these arguments.
[9] 1 II. Prevailing Party
2 {13} Tenants have filed a motion with this Court pursuant to Rule 12-207 NMRA
3 seeking modification of the amount of the supersedeas bond entered against them in
4 which the district court included attorney fees and costs related to the proceedings
5 in district court. The current amount of the bond, including Landlord’s attorney fees
6 and costs for litigation in both district and magistrate courts, is $39,399.83. Tenants
7 contend that the district court erred in determining Landlord, rather than Tenants,
8 was the prevailing party under Section 47-8-48. As a result, Landlord is not entitled
9 to an award of attorney fees and court costs, and inclusion of these amounts in the
10 bond is improper. We disagree and deny Tenants’ second application for order to
11 modify the supersedeas bond.
12 {14} A district court’s decision regarding the amount and application of a
13 supersedeas bond “shall be set aside only if it . . . (1) is arbitrary, capricious or
14 reflects an abuse of discretion; (2) is not supported by substantial evidence; or (3) is
15 otherwise not in accordance with law.” Rule 12-207(D). While we have previously
16 applied de novo review to the meaning of “prevailing party” in Section 47-8-48, see
17 Hedicke v. Gunville, 2003-NMCA-032, ¶¶ 25-26 , 133 N.M. 335 , 62 P.3d 1217 , a
18 district court’s decision regarding who the prevailing party is, and thus who is
19 entitled to attorney fees, is reviewed for abuse of discretion. See Fort Knox Self
20 Storage, Inc. v. W. Technologies., Inc., 2006-NMCA-096, ¶ 35 , 140 N.M. 233 , 142
[10] 1 P.3d 1 (concluding that “the trial court did not abuse its discretion in determining
2 [the appellee] was the prevailing party”). “An abuse of discretion occurs when a
3 ruling is clearly contrary to the logical conclusions demanded by the facts and
4 circumstances of the case.” Benz v. Town Ctr. Land, LLC, 2013-NMCA-111, ¶ 11 ,
[5] 314 P.3d 688 (internal quotation marks and citation omitted).
6 {15} The prevailing party is “the party to a suit who successfully prosecutes the
7 action or successfully defends against it, prevailing on the main issue, even though
8 not necessarily to the extent of his original contention.” Hedicke, 2003-NMCA-032 ,
9 ¶ 26 (alteration, internal quotation marks, and citation omitted). Tenants claim, in
10 various ways, that they were the prevailing party in this case because they were
11 awarded “$350.93, or 51[ percent of] the amount requested in their [c]omplaint of
12 $672.92.” This argument mischaracterizes the record before us and ignores the fact
13 that Tenants’ “award” is actually a refund of a portion of their damage deposit—a
14 portion significantly smaller than Tenants sought in their lawsuit. Tenants originally
15 disputed $672.92 of the $832.62 deducted from their damage deposit, which, if they
16 were successful, would have resulted in a return of $2,440.30 out of their $2,600
17 deposit. Instead, the district court found that “not only was the $[672.92] properly
18 withheld by . . . [L]andlord, but . . . [L]andlord was entitled to an additional
19 $[1,652.08].”
[11] 1 {16} Put simply, Tenants did not prevail in obtaining 51 percent of the amount they
2 sought. Nor were they successful in proving any other part of their claims. Tenants
3 sought the return of almost their entire damage deposit, less $159.70, but instead
4 were found liable for over $2,300 in damages to Landlord’s property. Tenants argue
5 that Landlord was only awarded “21 [percent] of [her] claim” because she initially
6 claimed that Tenants were responsible for over $10,000 in damage to her property.
7 However, given the fact that Tenants had no success at all in their claim disputing
8 $672.92 worth of damages, we cannot conclude that the district court’s
9 determination that Landlord was the prevailing party was an abuse of discretion.
10 Landlord prevailed on the “main issue” in her cross-claim, even if “not necessarily
11 to the extent of [her] original contention,” and the district court, therefore, properly
12 considered her to be the prevailing party. See Hedicke, 2003-NMCA-032 , ¶ 26
13 (alteration, internal quotation marks, and citation omitted). Thus, we deny Tenants’
14 application to modify the supersedeas bond at issue.
15 CONCLUSION
16 {17} For the reasons set forth, we affirm.
17 {18} IT IS SO ORDERED.
18 _____________________________ 19 J. MILES HANISEE, Judge
[12] 1 WE CONCUR:
2 _________________________________ 3 KRISTINA BOGARDUS, Judge
4 _________________________________ 5 JACQUELINE R. MEDINA, Judge
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