Questa Independent School v. Artesanos

1 This memorandum opinion was not selected for publication in the New Mexico Reports. Please 2 see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. 3 Please also note that this electronic memorandum opinion may contain computer-generated 4 errors or other deviations from the official paper version filed by the Court of Appeals and does 5 not include the filing date. 6 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO 7 BOARD OF EDUCATION FOR THE 8 QUESTA INDEPENDENT SCHOOL 9 DISTRICT, 10 Plaintiff-Appellant, 11 v. NO. 29,911 & 30,069 12 (Consolidated) 13 ARTESANOS DE QUESTA, a non profit 14 corporation, and NANCY GONZALES, 15 in her individual capacity as owner and 16 operator of the Cariños Day Care Center, 17 her private business, 18 Defendants-Appellees. 19 APPEAL FROM THE DISTRICT COURT OF TAOS COUNTY 20 Sam B. Sanchez, District Judge 21 Narvaez Law Firm, P.A. 22 Martin R. Esquivel 23 Albuquerque, NM 24 for Appellant 25 Rudy Martín 26 Espanola, NM 27 for Appellees 1 MEMORANDUM OPINION 2 VANZI, Judge. 3 The Board of Education for the Questa Independent School District (School 4 Board) appeals the district court’s judgment in favor of Artesanos de Questa 5 (Artesanos), and from the district court’s imposition of sanctions under Rule 1-011 6 NMRA. The district court ruled that equity barred the School Board from challenging 7 the validity of a lease between the School Board and Artesanos and that the School 8 Board could not bring an action for forcible entry or unlawful detainer against 9 Artesanos and alleged sublessor, Nancy Gonzales (collectively, Defendants). On 10 appeal, the School Board contends that approval of the lease by the State Board of 11 Finance was mandatory, and lack of that approval renders the lease invalid. Thus, the 12 School Board argues, the district court erred by failing to find the lease invalid as a 13 matter of law and in applying equitable doctrines to bar the School Board’s suit. The 14 School Board also asserts that the district court erred in granting Rule 1-011 attorney 15 fees in favor of Defendants because (1) the School Board did not violate the “good 16 ground” provision of Rule 1-011, and (2) the district court failed to provide any [2] 1 factual or legal basis for the award. We agree and reverse the district court’s 2 judgment in favor of Artesanos and the award of attorney fees. 3 BACKGROUND 4 The following facts are undisputed. Questa Independent School District 5 (QISD) owns the La Cienega Elementary School (La Cienega) building in Questa, 6 New Mexico. In 2000, the School Board and Artesanos, a non-profit corporation, 7 entered into a lease for La Cienega. Artesanos agreed to pay one dollar a month for 8 a total annual lease payment of twelve dollars. In addition, QISD would accept in- 9 kind contributions in the amount of $1200 per month to satisfy a rental fee. Pursuant 10 to the lease agreement, Artesanos was entitled to possession of the property for a term 11 of twenty-four years. The State Department of Education reviewed and approved the 12 lease. The School Board also approved the lease by vote. The lease was signed by 13 both parties, and Artesanos entered and occupied the property. 14 In 2007, School Board secretary, Nancy Gonzales, opened Cariños Day Care 15 Center (Cariños) at La Cienega. Artesanos and Gonzales entered into a “rent 16 agreement” for that space and required Cariños to pay monthly rent. For a period of 17 time Cariños operated as a private business. Although the lease contains a clause 18 requiring School Board approval of subleases, the sublease between Gonzales and [3] 1 Artesanos had not been submitted for School Board approval. Several School Board 2 members raised concerns about Gonzales operating a private business at the district- 3 owned property and initiated an investigation. 4 The investigation focused in part on the lease between the School Board and 5 Artesanos. The investigator determined that NMSA 1978, Section 13-6-2.1(A) (1989) 6 (amended 2011), requiring board of finance approval of certain leases of public 7 property, applied to the lease between the School Board and Artesanos. The 8 investigator determined that because neither the School Board nor Artesanos could 9 provide evidence that the board of finance approved the lease, it was likely invalid. 10 The investigator also concluded that Artesanos was in violation of the lease and listed 11 the violations. After receiving the results of the investigation, the School Board voted 12 that the lease with Artesanos would be of no further effect and that all subleases 13 entered with Artesanos lacking School Board approval were also invalid. 14 The School Board gave both Artesanos and Gonzales notice that the lease was 15 invalid, and stated that, in any event, Artesanos was in default of the lease for failure 16 to comply with several of its provisions. The School Board gave Gonzales notice to 17 vacate La Cienega and notified Artesanos to either vacate or renegotiate the lease. 18 Artesanos refused, asserting that the lease was valid, that Artesanos was in full 19 compliance, and that it intended to defend the contract for its full term. [4] 1 The School Board brought separate suits against Gonzales and Artesanos for 2 forcible entry or unlawful detainer pursuant to NMSA 1978, Section 35-10-1 (1968). 3 In its complaint against Artesanos, the School Board alleged that the lease was invalid 4 as a matter of law, and even if the lease was found to be valid, Artesanos was in 5 violation of a number of its provisions. In a separate complaint against Gonzales, the 6 School Board alleged that Gonzales entered and occupied La Cienega against the will 7 of the owner (the School Board) and refused to vacate. The School Board sought 8 possession of La Cienega and removal of Defendants from the property. Both 9 Defendants answered, raising the affirmative defenses of estoppel, laches, unclean 10 hands, and waiver. The cases were consolidated for trial. 11 Before trial, the parties were granted a continuance to potentially negotiate a 12 sale of the property. A sale of the property did not occur, and litigation proceeded. 13 During the period of the continuance, the School Board obtained inspections of La 14 Cienega and, finding the building unsafe, attempted to close it. The district court 15 granted Defendants’ motion for a temporary restraining order preventing closure of 16 the buildings and barring the School Board from interfering with the property. The 17 case proceeded to trial. 18 In 2009, the district court held a four-day bench trial. At trial, the School Board 19 sought a ruling that the lease was invalid as a matter of law. In lieu of closing [5] 1 arguments, the School Board and Defendants filed proposed findings of fact and 2 conclusions of law. The district court specifically rejected the School Board’s 3 proposed conclusion of law that, because the lease was entered into without the 4 approval required by Section 13-6-2.1(A), it was invalid as a matter of law. Further, 5 the court did not make any explicit findings of fact or conclusions of law regarding 6 the validity of the lease. Nevertheless, the district court entered a final judgment 7 dismissing the School Board’s suit in its entirety. The court ruled that doctrines of 8 equity barred the School Board from challenging the validity of the lease and from 9 suing Artesanos and Gonzales for forcible entry or unlawful detainer. The School 10 Board timely appealed the judgment. 11 Artesanos and Gonzales then filed a motion for attorney fees in the district court 12 pursuant to Rule 1-011, alleging that the lease was at all times valid and that the 13 School Board’s suit was brought in bad faith because it was not supported by 14 evidence. After oral argument, the district court granted Defendants’ Rule 1-011 15 motion without making any findings of fact or stating a basis in law. The School 16 Board appealed the sanction. The appeals are consolidated here. 17 DISCUSSION 18 “It is a basic maxim that equity is ancillary, not antagonistic, to the law. 19 Equitable relief is not available when the grant thereof would violate the express [6] 1 provision of a statute.” Coppler & Mannick, P.C. v. Wakeland, 2005-NMSC-022, ¶ 8 , [2] 138 N.M. 108 , 117 P.3d 914 (internal quotation marks and citation omitted). Our 3 cases that determine whether equitable doctrines may be applied to governmental 4 entities hold true to this maxim. See, e.g., Rainaldi v. Pub. Emps. Ret. Bd., 115 N.M. 5 650, 658, 857 P.2d 761, 769 (1993) (recognizing that “estoppel cannot lie against the 6 state when the act sought to be carried out through the use of estoppel is contrary to 7 law”); Kilmer v. Goodwin, 2004-NMCA-122, ¶ 26 , 136 N.M. 440 , 99 P.3d 690 8 (“Estoppel cannot lie against the state when the act sought would be contrary to the 9 requirements expressed by statute.”). Because the district court cannot apply equitable 10 doctrines to circumvent statutory requirements, we must first decide whether the 11 provisions of Section 13-6-2.1(A) are mandatory. See Waters-Haskins v. N.M. Human 12 Servs. Dep’t, 2009-NMSC-031, ¶ 17 , 146 N.M. 391 , 210 P.3d 817 (stating that 13 equitable estoppel can only bar those rights or actions over which an agency has 14 discretionary authority). After deciding whether board of finance approval was a 15 mandatory precondition in order for the lease to be valid, we turn to whether the 16 equitable doctrines of estoppel, laches, unclean hands, and waiver are available 17 affirmative defenses for Defendants in this case. 18 Standard of Review [7] 1 To the extent this appeal requires us to interpret Section 13-6-2.1(A), our 2 review is de novo. See Cooper v. Chevron U.S.A., Inc., 2002-NMSC-020, ¶ 16 , 132 3 N.M. 382 , 49 P.3d 61 (“The meaning of language used in a statute is a question of law 4 that we review de novo.” ). “When construing statutes, our guiding principle is to 5 determine and give effect to legislative intent.” Albuquerque Bernalillio Cnty. Water 6 Util. Auth. v. N.M. Pub. Regulation Comm’n, 2010-NMSC-013, ¶ 52 , 148 N.M. 21 , [7] 229 P.3d 494 (internal quotation marks and citation omitted). “We look first to the 8 plain language of the statute, giving the words their ordinary meaning, unless the 9 Legislature indicates a different one was intended.” Id. (alteration, internal quotation 10 marks, and citation omitted). “Statutory language that is clear and unambiguous must 11 be given effect.” Id. (internal quotation marks and citation omitted). 12 We review the district court’s application of equitable doctrines under the abuse 13 of discretion standard. Cont’l Potash, Inc. v. Freeport-McMoran, Inc., 115 N.M. 690 , 14 697, 858 P.2d 66, 73 (1993); Vill. of Wagon Mound v. Mora Trust, 2003-NMCA-035 , 15 ¶ 25, 133 N.M. 373 , 62 P.3d 1255 . We find abuse of discretion when the district 16 court’s decision is “clearly untenable or contrary to logic and reason.” Cont’l Potash, 17 115 N.M. at 697, 858 P.2d at 73 (internal quotation marks and citation omitted). 18 The Lease Is Invalid as a Matter of Law [8] 1 At the time the parties attempted to enter the lease, the relevant statutory 2 provision provided: 3 [A]ny sale, trade or lease for a period of more than five years but less 4 than twenty-five years in duration of real property belonging to any state 5 agency, local public body, school district or state educational institution 6 or any sale, trade or lease of such real property for a consideration of 7 more than twenty-five thousand dollars ($25,000) but less than one 8 hundred thousand dollars ($100,000) shall not be valid unless it is 9 approved prior to its effective date by the state board of finance. 10 Section 13-6-2.1(A). There is no dispute that the lease at issue is governed by the 11 statute nor do the parties disagree that the above language is mandatory. Indeed, 12 Artesanos concedes that “[o]ur State’s statutes should always be enforced.” We 13 nevertheless briefly address the statute’s requirement that a lease of more than five 14 years, as was the case here, “shall not be valid unless it is approved prior to its 15 effective date by the state board of finance.” Section 13-6-2.1(A). By the use of 16 “shall” in the statute, the Legislature expresses “a duty, obligation, requirement or 17 condition precedent.” NMSA 1978, § 12-2A-4 (1997). “It is widely accepted that 18 when construing statutes, ‘shall’ indicates that the provision is mandatory, and we 19 must assume that the Legislature intended the provision to be mandatory absent a[] 20 clear indication to the contrary.” Marbob Energy Corp. v. N.M. Oil Conservation 21 Comm’n, 2009-NMSC-013, ¶ 22 , 146 N.M. 24 , 206 P.3d 135 . The language of 22 Section 13-6-2.1(A) is clear and unambiguous, and Section 12-2A-4 defines the word [9] 1 “shall” as used in the statute here to create an obligation. Because there is no 2 ambiguity in statutory language, we need proceed no further in our construction 3 analysis. Marbob Energy Corp., 2009-NMSC-013, ¶ 9 (“Only if an ambiguity exists 4 will we proceed further in our statutory construction analysis.”). Applying the plain 5 meaning rule, a lease that falls under the definition of Section 13-6-2.1(A) must be 6 approved by the board of finance in order for it to be legally valid. 7 Furthermore, this Court’s holding in State ex rel. Madrid v. UU Bar Ranch Ltd. 8 Partnership, 2005-NMCA-079 , 137 N.M. 719 , 114 P.3d 399 , is dispositive. There, 9 the State brought action against a private landowner to quiet title. Id. ¶ 8. More than 10 a decade earlier, the state highway department executed a formal declaration of 11 vacation and abandonment of the road. Id. ¶ 4. It was undisputed that the department 12 intended to relinquish control of the road. Id. ¶ 12. However, the state failed to obtain 13 board of finance approval as required by statute. Id. ¶ 13. The relevant statute in that 14 case states, 15 Any state agency or local public body is empowered to sell or otherwise 16 dispose of real or personal property belonging to the state agency or local 17 public body. No sale or disposition of real or personal property having 18 a current resale value of more than two thousand five hundred dollars 19 ($2,500) shall be made by any state agency or local public body unless 20 the sale or disposition has been approved by the state board of finance. 21 Id. ¶ 14 (quoting NMSA 1978, § 13-6-2(A) (1984) (amended 2007)). We interpreted 22 the statutory language de novo. UU Bar Ranch, 2005-NMCA-079, ¶ 11 . Guided by [10] 1 the principle that statutory language that is clear and unambiguous must be given 2 effect and because the use of the word “shall” generally imposes a mandatory 3 requirement, we held the language of Section 13-6-2(A) was mandatory. UU Bar 4 Ranch, 2005-NMCA-079, ¶ 19 . Although the result may have seemed harsh given the 5 length of time that had passed, the highway department’s intent to abandon the road, 6 and its belief that it had followed the appropriate procedures, we concluded these facts 7 were inconsequential to our holding. The statute had a mandatory precondition, and 8 the parties’ failure to secure board of finance approval rendered the state’s 9 abandonment of the road invalid. Id. ¶ 19. 10 Just as the statute in UU Bar Ranch imposed a mandatory precondition, so it 11 does here. Artesanos argues that UU Bar Ranch is distinguishable because that case 12 involved the sale of land while this one is based on estoppel. We disagree that this 13 single difference renders UU Bar Ranch inapplicable to the facts of this case. The 14 School Board and Artesanos were required to get approval from the board of finance 15 before entering into the agreement in order for the lease to be valid. They did not do 16 so. Moreover, Artesanos’ argument that it intended to enter into a valid lease and its 17 belief the lease was valid for seven years is irrelevant to our analysis. See UU Bar 18 Ranch, 2005-NMCA-079, ¶¶ 5-6, 10 (concluding that abandonment of the road was 19 invalid as a matter of law when abandoned contrary to statute, even when the state [11] 1 intended to abandon the road, followed the procedures it believed were required, and 2 multiple state agencies and the governor’s office issued letters declaring the road 3 abandoned, and the state treated the road as abandoned for more than a decade). 4 Because the parties failed to obtain approval from the board of finance, the lease 5 between the School Board and Artesanos is invalid. We hold that the district court 6 erred when it failed to construe the language of Section 13-6-2.1(A) as mandatory and, 7 therefore, that the lease was invalid as a matter of law. 8 Equitable Doctrines Do Not Apply in This Case 9 Having held the provisions of Section 13-6-2.1(A) are mandatory and that lack 10 of board of finance approval renders the lease invalid, we now turn to Defendants’ 11 argument that the district court properly applied doctrines of equitable estoppel to bar 12 the School Board’s suit. We disagree and hold that equitable doctrines are 13 inapplicable in this case for the reasons that follow. 14 It is well established that our courts will not apply equitable estoppel when 15 statutory mandates are clear, and the result would be contrary to the express 16 provisions of the statute. See Trujillo v. Gonzales, 106 N.M. 620, 622 , 747 P.2d 915 , 17 917 (1987) (holding that the county is not estopped from denying it had entered an 18 oral contract when the alleged contract was entered contrary to statutory 19 requirements); UU Bar Ranch, 2005-NMCA-079, ¶ 30 (concluding that affirmative [12] 1 defense of equitable estoppel was not available to the defendant who relied on the 2 opinions and advice of government officials that were contrary to law when the result 3 would be to circumvent statutory requirements). The district court’s “discretion is not 4 a mental discretion to be exercised as one pleases, but is a legal discretion to be 5 exercised in conformity with the law.” Cont’l Potash, 115 N.M. at 697, 858 P.2d at 6 73 (reviewing the district court’s application of equitable estoppel). Accordingly, 7 equitable estoppel will not lie with the state when the result is to circumvent statutory 8 requirements. Here, the district court acted contrary to law, rather than in conformity, 9 when it applied equitable doctrines against the School Board even though Section 13- 10 6-2.1(A) pertaining to board of finance approval was mandatory. 11 It is unclear from the record whether the district court found the lease to be 12 valid or whether it simply applied equitable doctrines to find a lease in equity. The 13 School Board argues the district court found the lease valid. The Defendants, on the 14 other hand, simultaneously assert that the district court made no findings regarding the 15 validity of the lease, but they believe the lease is valid. In practicality, it does not 16 matter. By estopping the School Board from challenging the validity of the lease and 17 barring its suit for forcible entry and unlawful detainer, the district court erred in 18 applying the equitable doctrines of estoppel and laches to give Defendants possessory 19 rights to La Cienega under the lease. The doctrine of estoppel does not create rights [13] 1 or benefits to which there is no entitlement. Rainaldi, 115 N.M. at 659 , 857 P.2d at 2 770. Because we determine that the lease was invalid, it follows that neither 3 Defendants have a legal right to possession of La Cienega in equity. To hold 4 otherwise would circumvent the statutory language contained in Section 13-6-2.1(A) 5 requiring board of finance approval, a result we expressly rejected in UU Bar Ranch. [6] 2005-NMCA-079, ¶ 30 . Consequently, the district court’s exercise of discretion in 7 recognizing the validity of the lease was contrary to law. 8 Defendants contend that, notwithstanding the issue of the lease’s validity, 9 equitable doctrines nevertheless apply in this case. We are not persuaded. Our courts 10 are instructed that “[equitable e]stoppel is rarely applied against the state or its 11 governmental entities, and only in exceptional circumstances where there is a 12 shocking degree of aggravated and overreaching conduct or where right and justice 13 demand it.” Envtl. Control, Inc. v. City of Santa Fe, 2002-NMCA-003, ¶ 22 , 131 14 N.M. 450 , 38 P.3d 891 ; see Vill. of Angel Fire v. Bd. of Cnty. Comm’rs of Colfax 15 Cnty., 2010-NMCA-038, ¶ 24 , 148 N.M. 804 , 242 P.3d 371 . Even in those 16 circumstances, the party raising estoppel must show the result of estoppel would not 17 be contrary to statutory requirements and must establish the six essential elements of 18 estoppel. Waters-Haskins, 2009-NMSC-031 ¶¶ 16-17, 21 (estopping the state only 19 after first determining whether the state was acting in its discretionary authority, the [14] 1 basic elements of estoppel were met, and right and justice demanded it). In this case, 2 Defendants have not demonstrated that any exceptional circumstance exists, and we 3 have found none. Therefore, we need not conduct any further analysis. In short, the 4 statutorily imposed obligation for parties to obtain board of finance approval prior to 5 entering into the lease forecloses the application of equitable doctrines against the 6 School Board. 7 We recognize that Section 13-6-2.1(A) does not specifically impose the duty 8 of obtaining board of finance approval of a lease on either party. And in this case 9 neither party took responsibility to ensure the lease was approved by the appropriate 10 authority. The School Board relied on State Department of Education approval, 11 assuming if other approval was required, the State would take care of it. Artesanos 12 relied on assurances from the School Board, never retaining counsel of their own prior 13 to entering into a long-term lease with a governmental entity. No one disputes that 14 Artesanos was formed with the worthy goal of helping people in the community and 15 that it did so by offering educational activities such as art, computer, and physical 16 education classes, as well as welfare services and an after-school program for at-risk 17 children. However, Artesanos had an obligation to know the law before it entered into 18 the lease with the School Board. It is a long standing maxim that ignorance of the 19 law is no excuse. Kelley v. Marron, 21 N.M. 239, 246 , 153 P. 262, 264 (1915). The [15] 1 Legislature meets, enacts, and publishes law so that the public has access to know 2 what the law is. Id. In this case, Section 13-6-2.1(A) was published eleven years 3 prior to the School Board and Artesanos attempting to enter into the lease. Both the 4 School Board and Artesanos had access to the law identifying what approvals were 5 necessary in order to enter into a valid lease. Accordingly, Artesanos is now 6 foreclosed from asserting that the equitable doctrines of estoppel and laches apply in 7 such nondiscretionary matters where the statutory language is mandatory. 8 The District Court Erred in Granting Rule 1-011 Sanctions 9 The School Board argues that the district court erred when it imposed Rule 10 1-011 sanctions because the School Board had good grounds on which to bring the 11 suit and because the district court provided no factual or legal basis for the award. We 12 agree. 13 We review the district court’s grant of Rule 1-011 for an abuse of discretion. 14 State ex rel. N.M. State Highway and Transp. Dep’t v. Baca, 120 N.M. 1, 8 , 896 P.2d 15 1148, 1155 (1995). “A court may award attorney fees in order to vindicate its judicial 16 authority and compensate the prevailing party for expenses incurred as a result of 17 frivolous or vexatious litigation.” Landess v. Gardner Turf Grass, Inc., 2008-NMCA- 18 159, ¶ 14, 145 N.M. 372 , 198 P.3d 871 (alteration, internal quotation marks, and 19 citation omitted). “Rule [1-0]11 was designed to encourage honesty in the bar when [16] 1 bringing and defending actions and ought to be employed only in those rare cases in 2 which an attorney deliberately presses an unfounded claim or defense.” Rivera v. 3 Brazos Lodge Corp., 111 N.M. 670, 674 , 808 P.2d 955, 959 (1991) (alteration, 4 internal quotation marks, and citation omitted). 5 Defendants assert that the district court correctly determined that the School 6 Board violated the “good grounds” provision of Rule 1-011. Specifically, they argue 7 that the School Board brought the lawsuits in bad faith because the suits were not 8 supported by evidence. We do not address Defendants’ specific allegations because 9 the district court failed to point us to any in its order granting attorney fees. The 10 pertinent provision of Rule 1-011(A) states, 11 The signature of an attorney . . . constitutes a certificate by the signer that 12 the signer has read the pleading, motion or other paper; that to the best 13 of the signer’s knowledge, information and belief there is good ground 14 to support it; and that it is not interposed for delay. 15 Our courts have interpreted the good grounds provision to allow for sanctions when 16 a pleading asserts a claim that is not warranted by existing law or a reasonable 17 argument for the extension of existing law. Rangel v. Save Mart, Inc., 2006-NMCA- 18 120, ¶ 11, 140 N.M. 395 , 142 P.3d 983 . We ask whether the challenged pleading 19 asserts a colorable claim and apply a subjective standard to evaluate it. Id. Under the 20 subjective standard, any violation depends on what the attorney knew and believed at 21 the relevant time and if the attorney was aware a particular pleading should not have [17] 1 been brought. Id. For Rule 1-011 sanctions to stand, there must be subjective 2 evidence that the attorney willfully violated the rule. Id. 3 Here, we conclude that the School Board brought a colorable claim challenging 4 the validity of the lease and suing for forcible entry or unlawful detainer; therefore the 5 imposition of Rule 1-011 attorney fees is inappropriate on this ground. The record 6 establishes that, at the time the School Board brought suit, the filing attorney had 7 knowledge of the provisions of Section 13-6-2.1(A), that neither the School Board nor 8 Artesanos had evidence of board of finance approval of the lease, and that this Court’s 9 holding in UU Bar Ranch was likely applicable to the facts of this case. There is no 10 evidence the School Board’s attorney deliberately pressed an unfounded claim. To 11 the contrary, the evidence in the record—further bolstered by our holding that the 12 lease is invalid—supports the School Board’s assertion that it filed suit in compliance 13 with the good grounds provision of Rule 1-011. As we have noted, the district court 14 entered no findings of fact or conclusions of law with regard to the imposition of the 15 Rule 1-011 sanctions. However, to the extent the district court believed that the 16 School Board’s suit was frivolous because it found the lease to be valid, the district 17 court’s view both of the lease and the legal application of Rule 1-011 is erroneous. 18 We reverse the order granting attorney fees. [18] 1 Additionally, we note the award of Rule 1-011 attorney fees must be supported 2 by particularized findings of misconduct. See, e.g., Baca, 120 N.M. at 8 , 896 P.2d at 3 1155 (“[G]eneralized conclusions, without more, do not justify a finding of bad faith 4 sufficient to support an attorney[] fee award.”). Here, the district court made no 5 particularized findings of fact and offered no legal grounds for the award of attorney 6 fees. After oral argument the district judge ruled, merely stating, 7 Based on everything that has gone on with this case, regardless of the 8 fact that this court would not grant any type of motion to dismiss or any 9 other type of motion because that is not the basis for what I am going to 10 rule on. I agree with Mr. Martín, and I am going to award him the 11 attorney fees that he has requested. 12 The court’s written order is no more clear, stating in its entirety, 13 This matter having come before this Court on the [m]otion filed 14 by . . . Defendants for payment of attorney fees pursuant to Rule [1-0]11, 15 this Court having considered the evidence and having heard oral 16 argument from the parties and being otherwise fully advised in the 17 premises, finds said [m]otion well taken and is hereby granted. 18 It is therefore ordered that Defendants be awarded their attorney 19 fees in the amount of $49,168.20 inclusive of gross receipts taxes. 20 These rulings are insufficient to support an award of attorney fees pursuant to Rule 21 1-011, as they give neither the parties nor this Court any basis for its ruling. Without 22 specific findings, reference to some evidence, or an explanation of how the court finds 23 grounds to support a Rule-1-011 sanction, the award of attorney fees cannot stand. 24 Cf. Benavidez v. Benavidez, 2006-NMCA-138, ¶ 19 , 140 N.M. 637 , 145 P.3d 117 [19] 1 (“The district court did not abuse its discretion in imposing sanctions pursuant to Rule 2 1-011 because it did so based on findings of fact and conclusions of law that are 3 supported by evidence in the record.”). The Rule 1-011 sanctions are unsupported, 4 and we reverse the district court’s grant of attorney fees. 5 We do not address Defendants’ arguments seeking sanctions for the School 6 Board’s pre-litigation conduct or conduct contemporary to the litigation but not before 7 the district court for two reasons: (1) the district court issued no findings regarding 8 these arguments, and (2) the district court’s inherent powers to sanction do not extend 9 to pre- or extra-litigation conduct. Baca, 120 N.M. at 8 , 896 P.2d at 1155 (“[A] 10 court’s inherent authority extends to all conduct before that court and encompasses 11 orders intended and reasonably designed to regulate the court’s docket, promote 12 judicial efficiency, and deter frivolous filings.”) 13 CONCLUSION 14 For the reasons set forth above, we hold that the lease between the School 15 Board and Artesanos is invalid and that equitable doctrines do not apply in this case. 16 Therefore, we reverse the district court’s judgment in favor of Artesanos. Further, we 17 reverse the district court’s order awarding Rule 1-011 attorney fees to Defendants. 18 IT IS SO ORDERED. 19 __________________________________ [20] 1 LINDA M. VANZI, Judge 2 WE CONCUR: 3 _________________________________ 4 MICHAEL E. VIGIL, Judge 5 _________________________________ 6 TIMOTHY L. GARCIA, Judge