AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• A class of workers provided electrical services on a construction project involving the Board of Regents of the University of New Mexico, Sandia Foundation, and Enterprise Builders. They sued for statutory minimum wage violations under the Public Works Minimum Wage Act and as third-party beneficiaries to a settlement agreement between the defendants and the Department of Workforce Solutions. The Department reversed its initial determination, leading to the dismissal of the statutory claims. The case focuses on whether the district court properly granted summary judgment on the claim alleging breach of the settlement agreement, based on a provision deemed void for violating federal tax law (paras 1-2).

Procedural History

• Garcia v. Bd. of Regents of Univ. of N.M., 2014-NMCA-083: Dismissal of all statutory claims as untimely by the relevant agency (para 1).

Parties' Submissions

• Plaintiffs-Appellants: Argued that the district court erred in granting summary judgment by declaring the settlement agreement void due to a provision violating federal tax law. They contended that the problematic term could be severed or reformed, maintaining the agreement's validity (para 9).
• Defendants-Appellees: Asserted that the settlement agreement was entirely void as against public policy because it contained a provision that violated the Internal Revenue Code, specifically regarding the non-withholding of taxes from certain payments (para 9).

Legal Issues

• Whether the district court properly granted summary judgment on the claim alleging breach of the settlement agreement based on a provision violating federal tax law (para 2).
• Whether the problematic provision of the settlement agreement can be severed to preserve the agreement's validity (para 20).

Disposition

• The Court of Appeals of New Mexico reversed the district court’s grant of summary judgment, holding that the agreement contained an unenforceable term that could be properly severed, thus preserving the validity of the rest of the agreement (para 2).

Reasons

• Per Linda M. Vanzi, J. (Michael E. Vigil, Chief Judge, and Roderick T. Kennedy, Judge, concurring):
  The court determined that while the settlement agreement contained an unenforceable term violating federal tax law, this term was not essential to the agreement's purpose and could be severed. This decision was based on the principle that contracts partially illegal can be enforced if the illegal part can be eliminated without destroying the contract's overall intent (paras 11-25).
  The court emphasized the importance of upholding the freedom to contract and the policy favoring the settlement of disputes. It found that the no-withholding provision was ancillary and not central to the agreement's purpose, which was to settle wage claims and avoid litigation. The court concluded that enforcing the valid portions of the contract, in this case, aligned with public policy and the law's intent (paras 20-25).