Attorney General Opinions and Advisory Letters
Decision Information
Citations - New Mexico Appellate Reports
City of Albuquerque v. BPLW Architects & Engineers, Inc. - cited by 94 documents
City of Artesia v. Carter - cited by 61 documents
J. R. Hale Contracting Co. v. Union Pacific Railroad - cited by 68 documents
State ex rel. State Hwy. & Transp. Dep't v. Garley - cited by 48 documents
United Rentals NW, Inc. v. Yearout Mechanical Inc. - cited by 58 documents
City of Albuquerque v. BPLW Architects & Engineers, Inc. - cited by 94 documents
City of Artesia v. Carter - cited by 61 documents
J. R. Hale Contracting Co. v. Union Pacific Railroad - cited by 68 documents
State ex rel. State Hwy. & Transp. Dep't v. Garley - cited by 48 documents
United Rentals NW, Inc. v. Yearout Mechanical Inc. - cited by 58 documents
Decision Content
STATE OF NEW MEXICO
OFFICE OF THE ATTORNEY GENERAL
HECTOR H. BALDERAS
ATTORNEY GENERAL
February 3, 2020
Michael Padilla
State Senator
P.O. Box 67545
Albuquerque, NM 87193
Re: Opinion Request –Middle Rio Grande Conservancy District Gate Licensee Liability
Dear Senator Padilla:
You requested our opinion with respect to liability for the installation of gates on Middle
Rio Grande Conservancy District (hereinafter the “District”) roads. Specifically, you inquired as
to whether the District could require a licensee, who has previously obtained a license to install
and maintain a gate on District roads, to indemnify the District against any claims arising out of
the installation, operation, and existence of the gate. You also inquire as to whether this indemnity
requirement is in the public interest. As explained in greater detail below, we conclude that the
District may only require a licensee to assume limited liability for the construction and installation
of such a gate.
Background
The Middle Rio Grande Conservancy District is a political subdivision responsible for
carrying out a variety of functions related to water management in the Middle Rio Grande Valley.
1
As part of its mission to conserve and manage the Rio Grande River, the District performs regular
maintenance of dams and irrigation canals, necessitating the use of a number of maintenance roads.
Some of these maintenance roads, also called ditch bank roads, require the installation of gates so
as to prevent unauthorized access and criminal activity. Upon a showing of need, local residents
whose property abuts the boundaries of the District are allowed to request gate installations on
1
On its website, the District explains that it “manages irrigation, drainage, and river flood control in the Middle Rio
Grande Valley, promotes efficient and responsible water management, protects the environment, wildlife and
endangered species in cooperation with other local, state and federal agencies, and provides multi-use recreational
opportunities within the Middle Rio Grande Valley.” Mission Statement, Middle Rio Grande Conservancy District,
https://www.mrgcd.com/mission.aspx (last visited May 2, 2019).
TELEPHONE: (505)490-4060 FAX: (505)490-4883 www.nmag.gov
MAILING ADDRESS: P.O. BOX 1508 - SANTA FE, NEW MEXICO 87504-1508
STREET ADDRESS: 408 GALISTEO STREET - SANTA FE, NEW MEXICO 87501
State Senator Michael Padilla
February 3, 2020
Page 2
nearby maintenance roads, to afford greater protection against illegal activity. District rules require
local residents to apply for and obtain a license prior to installing a gate. This requires a formal,
notarized license agreement that is signed by the licensee and the District.
It is unclear whether the District is currently requiring licensees to indemnify the District
in connection with the installation of gates at a licensee’s request. Your opinion request quoted
language that required licensees to indemnify the District for, “Any and all liability related to or
arising from installation, construction, operation, or the existence of the gate.” This language was
not
present
in
the
District’s
Rule
Number 28 (“Gate
Request
Policy”),
nor
was
any
other
comparable language present. However, comparable language was indeed present in the example
license agreement you provided to our Office.
2
Therefore, we will address in this opinion whether
such language in a license agreement is enforceable.
Analysis
As a general proposition, indemnity clauses in contracts are enforceable in New Mexico.
“[P]arties have the freedom to enter into contracts that exculpate one party from liability for its
own negligence unless the agreements are ‘violative of law or contrary to some rule of public
policy.’” United Rentals Nw., Inc. v. Yearout Mech., Inc., 2010-NMSC-030, ¶ 19 (quoting
Berlangieri v. Running Elk Corp., 2003–NMSC–024, ¶¶ 27, 53). This general principle extends to
contracts to which a government entity is a party. See generally City of Albuquerque v. BPLW
Architects & Engineers, Inc., 2009-NMCA-081, ¶ 19 (upholding the validity of and requiring the
indemnitor
to
fulfill
its
responsibilities
under
an
indemnity
provision
against
the
City
of
Albuquerque) and City of Artesia v. Carter, 1980-NMCA-006, ¶ 3 (observing in a case involving
a municipality that, “There is ... no issue involving the validity of indemnity agreements as a
general proposition.”). In construing indemnity provisions and considering their enforceability,
courts recognize both “the public policy favoring freedom of contract and the public policy
embodied in New Mexico's anti-indemnity statutes.” Holguin v. Fulco Oil Servs. L.L.C., 2010-
NMCA-091, ¶ 9.
While
indemnity
provisions
are
generally
enforceable,
such
terms
in
New
Mexico
construction contracts are expressly limited by statute:
A provision in a construction contract that requires one party to the contract to
indemnify, hold harmless, insure or defend the other party to the contract, including
the other party's employees or agents, against liability, claims, damages, losses or
expenses, including attorney fees, arising out of bodily injury to persons or damage
to property caused by or resulting from, in whole or in part, the negligence, act or
omission of the indemnitee, its officers, employees or agents, is void, unenforceable
and against the public policy of the state.
2
This language generally required the licensee to indemnify the District against “any and all claims ... arising from
or by reason of the negligent existence, construction, maintenance, repair, condition or use of any structures,
accessories or encroachments authorized by this License or by the negligent exercise of the privilege conferred by
this License.”
TELEPHONE: (505)490-4060 FAX: (505)490-4883 www.nmag.gov
MAILING ADDRESS: P.O. BOX 1508 - SANTA FE, NEW MEXICO 87504-1508
STREET ADDRESS: 408 GALISTEO STREET - SANTA FE, NEW MEXICO 87501
State Senator Michael Padilla
February 3, 2020
Page 3
NMSA 1978, § 56-7-1(A). As our Supreme Court observed with respect to older but similar
statutory language, this statute “voids agreements which attempt to indemnify the indemnitee for
liability resulting, in whole or in part, from the indemnitee's negligence.” Sierra v. Garcia, 1987-
NMSC-116, ¶ 3 (emphasis in original). See also J.R. Hale Contracting Co. v. Union Pac. R.R.,
2008-NMCA-037, ¶ 61 (noting that Section 56-7-1(A) “bars enforcement of an indemnification
clause in construction contracts on public policy grounds where the indemnification is based on
the indemnitee's own negligence”). However, the same statute also allows indemnity provisions to
the extent that they indemnify the indemnitee against liability arising from the acts or omissions
of the indemnitor. See § 56-7-1(B)(1) (authorizing indemnity provisions in construction contracts
to the extent that they require “one party to the contract to indemnify, hold harmless or insure the
other party to the contract, including its officers, employees or agents, against liability, claims,
damages, losses or expenses, including attorney fees, only to the extent that the liability, damages,
losses or costs are caused by, or arise out of, the acts or omissions of the indemnitor or its officers,
employees or agents”).
Beyond Section 56-7-1(A), no other statute appears to limit the District’s ability to require
indemnity provisions in license agreements. The statutes effectively creating and empowering the
District, NMSA 1978, Chapter 73, Article 14 (1927, as amended through 2018), for example,
contain no such limitations. Conservancy districts generally have broad authority “to construct and
maintain main and lateral ditches, community ditches ... and any other works and improvements
deemed necessary to construct, preserve, operate or maintain the works in or out of said district.”
Section 73-14-39(A). Thus, we believe conservancy districts also have the corresponding authority
to negotiate and enter into contracts to that end, except as otherwise limited by law.
As such, we conclude that the indemnity provision in the District’s license agreement is
enforceable to the extent that the provision would indemnify the District against the licensee’s
negligent “maintenance, repair, condition or use of” the gate. However, with respect to the
construction and installation of the gate itself, the indemnity provision’s enforceability is limited,
to the extent that it indemnifies the District against the negligent act or omissions of the licensee,
and not against claims arising out of the District’s own negligence. See § 56-7-1(B)(1). One caveat
here is that in the event of the District’s attempt to seek indemnity in a case arising out of a license
agreement, the Court would likely have the discretion of deciding whether or not to enforce the
remaining portions of the indemnity provision. See Rivera v. Am. Gen. Fin. Servs., Inc., 2011-
NMSC-033, ¶ 55 (observing that, “When this Court determines that contract provisions are
unenforceable we can either ‘strike the ... provisions in their entirety’ or reform the provisions
‘into a fair and balanced’ agreement.”) (quoting Cordova v. World Fin. Corp. of NM, 2009-NMSC-
021, ¶ 39). See also State ex rel. State Highway & Transp. Dep't v. Garley, 1991-NMSC-008, ¶
30.
As to your question of whether all signatories to a petition for the installation of a gate
would be liable under an indemnity provision, the answer is definitively no. Pursuant to the express
language of the license agreement, only the “licensee,” as defined in the agreement itself, would
be liable to the extent outlined above. Local residents would not hold the license to install and
operate the gate by virtue of signing a petition.
TELEPHONE: (505)490-4060 FAX: (505)490-4883 www.nmag.gov
MAILING ADDRESS: P.O. BOX 1508 - SANTA FE, NEW MEXICO 87504-1508
STREET ADDRESS: 408 GALISTEO STREET - SANTA FE, NEW MEXICO 87501
State Senator Michael Padilla
February 3, 2020
Page 4
Your remaining question inquires as to whether this indemnity provision serves the public
interest. We submit that, consistent with the analysis above, the policy of the state with respect to
the function of indemnity clauses in construction contracts is stated in Section 56-7-1 itself. That
section states clearly that one-sided indemnity clauses that indemnify the indemnitee for its own
negligence are void and unenforceable as against “the public policy of the State,” and that only
those
clauses
that
indemnify
the
indemnitee
from
acts
or
omissions
of
the
indemnitor
are
enforceable. Section 56-7-1. Any contract provision to the contrary is in violation of the express
public policy of the State.
Your request to us was for a formal Attorney General’s opinion on the matters discussed
above.
Such
an
opinion
is
a
public
document,
not
subject
to
the
attorney-client
privilege.
Therefore, we may provide this letter to the public.
Sincerely,
John Kreienkamp
Assistant Attorney General
TELEPHONE: (505)490-4060 FAX: (505)490-4883 www.nmag.gov
MAILING ADDRESS: P.O. BOX 1508 - SANTA FE, NEW MEXICO 87504-1508
STREET ADDRESS: 408 GALISTEO STREET - SANTA FE, NEW MEXICO 87501
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.