2024 New Mexico Statutes
Chapter 57 - Trade Practices and Regulations
Article 12 - Unfair Trade Practices
Section 57-12-3 - Unfair or deceptive and unconscionable trade practices prohibited.
Unfair or deceptive trade practices and unconscionable trade practices in the conduct of any trade or commerce are unlawful.
History: 1953 Comp., § 49-15-3, enacted by Laws 1967, ch. 268, § 3; 1971, ch. 240, § 2.
ANNOTATIONSClaims must be based on regular course of trade or commerce. — Claims made under the Unfair Practices Act must be based on conduct occurring in defendant's regular course of trade or commerce. Klein v. Bronstein, 39 B.R. 20 (Bankr. D.N.M. 1984).
Three essential elements of a claim under the Unfair Practices Act. — A successful plaintiff must prove (1) the defendant made an oral or written statement, a visual description or a representation of any kind that was either false or misleading; (2) the false or misleading representation was knowingly made in connection with the sale, lease, rental, or loan of goods or services in the regular course of the defendant's business; and (3) the representation was of the type that may, tends to, or does deceive or mislead any person. Dollens v. Wells Fargo Bank, 2015-NMCA-096.
Where defendant bank, as the agent of its borrower and as the licensed agency representing an insurance company in the sale of mortgage accidental death insurance policies for which it is a policyholder and beneficiary, knowingly created the perception that it would have a system in place or take some active role in the claims process to protect decedent's family's financial security in the event of an accidental death, decedent's family had a reasonable expectation that defendant bank would honor a request of the insurer, whose policy it sold, not to foreclose on decedent's house while a claim is pending or to otherwise credit back to the account any fees that were incurred while the insurer processed the claim. Where defendant bank failed to challenge evidence that it created a reasonable expectation that it would communicate and work together with the insurance company to prevent foreclosure during a pending accidental death claim, the district court did not err in finding a violation of the Unfair Practices Act. Dollens v. Wells Fargo Bank, 2015-NMCA-096.
Insufficient evidence of unfair trade practices. — In an action for breach of contract, where plaintiff hired defendant to design and construct a replacement irrigation well on plaintiff's property, and although a written contract was not executed, plaintiff's understanding of the agreement, as told to him by defendant, was that defendant would construct a well that would be fully adequate for plaintiff's irrigation purposes, that it would be capable of producing 2,500 to 3,000 gallons of water per minute, and that it would last at least fifty years, and where, after three-and-a-half years, the well stopped working, the district court did not err in denying plaintiff's claim for unfair trade practices, because, although plaintiff established that defendant made false or misleading misrepresentations, there was no evidence that the false or misleading representations were knowingly made. Robey v. Parnell, 2017-NMCA-038.
Insufficient evidence of unconscionable trade practices. — In an action for breach of contract, where plaintiff hired defendant to design and construct a replacement irrigation well on plaintiff's property, and although a written contract was not executed, plaintiff's understanding of the agreement, as told to him by defendant, was that defendant would construct a well that would be fully adequate for plaintiff's irrigation purposes, that it would be capable of producing 2,500 to 3,000 gallons of water per minute, and that it would last at least fifty years, and where, after three-and-a-half years, the well stopped working, the district court did not err in denying plaintiff's claim for unconscionable trade practices, because plaintiff did not meet his burden of providing evidence that the value received was grossly disproportionate to the price paid, other than arguing that he received less than 10 percent of the longevity he was promised. Robey v. Parnell, 2017-NMCA-038.
Establishing an unfair or deceptive practice by misrepresentation. — To establish an unfair or deceptive trade practice by misrepresentation, a plaintiff must show that defendant made a false statement, the defendant made the statement in connection with the sale of services and knew that the statement was false, the defendant made the statement in the regular course of trade or commerce, and the statement was one which may, tends to, or does deceive or mislead any person. OR&L Const. v. Mountain States Mut. Cas. Co., 2022-NMCA-035.
Where plaintiff, a construction business that conducts, among other things, roof repair, including "torch-down" roofing, a technique which uses a flaming torch to heat and seal tar paper onto a roof, purchased a general commercial liability insurance policy through an insurance broker, who was authorized to sell insurance products supplied by defendant, an insurance company, and where defendant transmitted to the broker a copy of the insurance policy, which specifically precluded coverage for damages caused by torch-down roofing, and where plaintiff, unaware of the exclusion, submitted a claim for coverage after a fire occurred at a home while plaintiff was performing torch-down roofing, and where defendant denied plaintiff's insurance claim relying on the torch-down roofing exclusion, and where plaintiff claimed that defendant made several material misrepresentations, the district court did not err in denying plaintiff's claim, because defendant failed to point to anywhere in the record demonstrating that defendant made any false statements or material misrepresentations. Defendant was entitled to rely on the torch-down roofing exclusion because the plaintiff had notice of the exclusion as a matter of law. OR&L Const. v. Mountain States Mut. Cas. Co., 2022-NMCA-035.
Summary judgment was proper where plaintiff's claim was not connected to any goods or services she purchased. — Where in 2010, defendants began manufacturing and selling several products, including magnets, flasks, and cards, bearing plaintiff's image with the caption, "I'm going to be the most popular girl in rehab!", and where in 2014, plaintiff filed an action under the Unfair Practices Act (UPA), §§ 57-12-1 through § 57-12-26 NMSA 1978, the district court did not err in granting defendants' motion for summary judgment because the UPA gives standing only to buyers of goods or services, and plaintiff failed to demonstrate how her claim, which is not connected to any goods or services she purchased, falls with the purview of the UPA. Vigil v. Taintor, 2020-NMCA-037, cert. denied.
Car dealer's representation that car was a demonstrator and failure to disclose prior ownership that car was actually a rental car states a claim under the Unfair Practices Act, the Motor Vehicle Dealers Franchise Act and for common law fraud. Salmeron v. Highlands Ford Sales, Inc., 271 F. Supp. 2d 1314 (D.N.M. 2003).
A buyer-seller relationship is ordinarily not fiduciary in nature. — Where plaintiff, a grower and harvester of chile peppers, and defendant, a dehydration chile plant that purchases, processes, and dehydrates different varieties of chile, entered into a contract where plaintiff would deliver raw chile peppers to defendant, which would then wash, dehydrate, weigh and pay for the chile, and where plaintiff filed a lawsuit against defendant when there was a dispute as to how much chile was delivered and how much was paid for, the district court did not err in granting summary judgment to defendant on plaintiff's claim that defendant breached its fiduciary duty, because an essential feature and consequence of a fiduciary relationship is that the fiduciary becomes bound to act in the interests of its beneficiary and not itself, and this dynamic does not inhere in the ordinary buyer-seller relationship. Valerio v. San Mateo Enterprises, Inc., 2017-NMCA-059.
Knowing and willful use of ambiguity as to material fact constituted an unfair or deceptive trade practice. — In a class action lawsuit, where individuals who purchased a Black & Decker coffeemaker at a New Mexico Wal-Mart store from 2009 to 2013 claimed that a trademark licensing agreement, whereby Applica Consumer Products, Inc. (Applica) paid royalties to Black & Decker in exchange for Applica's ability to use the Black & Decker name and trademarks in the sale of small kitchen appliances, including the coffeemaker at issue, but where there was no corporate affiliation between Black & Decker and Applica, and Black & Decker did not design, manufacture, distribute, or warrant the coffeemaker, was an unfair or deceptive trade practice, and where defendants argued that under the federal Lanham Act, the ultimate source or manufacturer of a product need not be identified by a brand name as long as the trademark owner exercises sufficient oversight over the nature and quality of the goods sold under its licensed mark and that if the Lanham Act allowed Applica to market the coffeemaker, the arrangement could not constitute a violation of the Unfair Practices Act (UPA), 57-12-1 to 57-12-26 NMSA 1978, the district court did not err in concluding that Applica's use of the Black & Decker trademark on the coffeemaker constituted an unfair or deceptive trade practice, because the New Mexico legislature did not intend to require courts to apply Lanham Act precedent in deciding UPA claims, and the Black & Decker name on the product packaging would tend to deceive a reasonable consumer, and defendants should have known that potential purchasers of the coffeemaker would likely regard information about the coffeemaker being a Black & Decker product as material. Puma v. W-Mart Stores East, 2023-NMCA-005, cert. granted.
The district court did not abuse its discretion in refusing to order disgorgement of unjust gains for defendants' unfair trade practices. — In a class action lawsuit, where individuals who purchased a Black & Decker coffeemaker at a New Mexico Wal-Mart store from 2009 to 2013 claimed that a trademark licensing agreement, whereby Applica Consumer Products, Inc. (Applica) paid royalties to Black & Decker in exchange for Applica's ability to use the Black & Decker name and trademarks in the sale of small kitchen appliances, including the coffeemaker at issue, but where there was no corporate affiliation between Black & Decker and Applica, and Black & Decker did not design, manufacture, distribute, or warrant the coffeemaker, was an unfair or deceptive trade practice, and where defendants argued that under the federal Lanham Act, the ultimate source or manufacturer of a product need not be identified by a brand name as long as the trademark owner exercises sufficient oversight over the nature and quality of the goods sold under its licensed mark and that if the Lanham Act allowed Applica to market the coffeemaker, the arrangement could not constitute a violation of the Unfair Practices Act (UPA), 57-12-1 to 57-12-26 NMSA 1978, and where the district court concluded that Applica's use of the Black & Decker trademark on the coffeemaker constituted an unfair or deceptive trade practice, the district court did not abuse its discretion in refusing to order disgorgement of unjust gains for defendants' unfair trade practices, because Plaintiffs failed to meet their burden of producing evidence permitting at least a reasonable approximation of the amount of the wrongful gain. Puma v. W-Mart Stores East, 2023-NMCA-005, cert. granted.
Descriptors on cigarette label were deceptive to a reasonable consumer. — Where consumers brought consolidated actions against a cigarette manufacturer alleging that the manufacturer's labeling of its cigarettes as natural, organic, and additive-free deceived them into believing that the cigarettes were safer and healthier than other cigarettes, and where defendant claimed that a disclaimer on the label of the cigarette package expressly stated that the lack of additives does not mean a safer cigarette, the natural and organic descriptors were found to be deceptive to a reasonable consumer, because the disclaimer was limited to the lack of additives, but said nothing about natural or organic which are descriptors that convey a message that the cigarettes are less harmful than other cigarettes. In re Santa Fe Natural Tobacco Co. Mktg. & Sales, 288 F.Supp.3d 1087 (2017).
Wrongful conduct rule barred unfair trade practices claim. — Where plaintiffs brought an action against defendant pharmacist who allegedly filled prescriptions for plaintiffs for improper and dangerous amounts of opioids and other controlled substances, asserting claims for unfair, deceptive, and unconscionable trade practices in violation of the New Mexico Unfair Practices Act (NMUPA), 57-12-1 to 57-12-26 NMSA 1978, and where plaintiffs admitted in court pleadings that they worked in concert with a nurse practitioner to present fraudulent prescriptions to defendant's pharmacy and to share those drugs with the nurse practitioner, plaintiffs were barred from asserting their claims because they are based on plaintiffs' own illegal conduct, acquiring narcotics through fraudulent prescriptions. Claims under the NMUPA may be dismissed under the wrongful conduct rule if the plaintiff's conduct is prohibited under a criminal statute, there is a sufficient causal nexus between the plaintiff's illegal conduct and plaintiff's damages, and the defendant's culpability is not greater than the plaintiff's. Inge v. McClelland, 257 F.Supp.3d 1158 (D. N.M. 2017).
Transportation motor carriers may bring a competitive injury claim under the Unfair Practices Act. — Where taxi company brought a diversity action against defendant, a ride-share service, on the theory that the ride-share service should have, but did not, comply with the New Mexico Motor Carrier Act (MCA), §§ 65-2A-1 through 65-2A-41 NMSA 1978, when it first entered the city market, and where defendant moved to dismiss, arguing that New Mexico law bars plaintiff from pursuing a cause of action for competitive injury damages under the Unfair Practices Act (UPA), §§ 57-12-1 through 57-12-26 NMSA 1978, the district court denied defendant's motion to dismiss, because the UPA generally precludes companies from asserting a cause of action against their competitors, but the legislature carved out an exception to the UPA's general prohibition of competitive injury lawsuits. The plain language of § 65-2A-33(J) of the MCA demonstrates that the legislature intended to allow an authorized transportation service carrier to sue a transportation services carrier who operates without authorization. Albuquerque Cab Co., Inc. v. Lyft, Inc., 460 F. Supp. 3d 1215 (D. N.M. 2020).
Law reviews. — For article, "Consumer Class Actions Under the New Mexico Unfair Practices Act," see 4 N.M. L. Rev. 49 (1973).
Am. Jur. 2d, A.L.R. and C.J.S. references. — Liability for interference with franchise, 97 A.L.R.3d 890.
When is termination of insurance agency contract wrongful so as to make insurer liable to agent, 5 A.L.R.4th 1080.
Recovery based on tortfeasor's profits in action for procuring breach of contract, 5 A.L.R.4th 1276.
Liability in tort for interference with physician's contract or relationship with hospital, 7 A.L.R.4th 572.
Failure to deliver ordered merchandise to customer on date promised as unfair or deceptive trade practice, 7 A.L.R.4th 1257.
Automobile repairman's duty to provide customer with information, estimates, or replaced parts, under automobile repair consumer protection act, 25 A.L.R.4th 506.
Landlord's liability for injury or death of tenant's child from lead paint poisoning, 19 A.L.R.5th 405.
World wide web domain as violating state trademark protection statute or state unfair trade practices act, 96 A.L.R.5th 1.
Modern status of pendent federal jurisdiction, under 28 USC § 1338(b), over state claim of unfair competition when joined with related claim under federal patent laws, 57 A.L.R. Fed. 418.
Modern status of pendent federal jurisdiction, under 28 USC § 1338(b), over state claim of unfair competition when joined with related claim under federal copyright laws, 58 A.L.R. Fed. 875.
Modern status of pendent federal jurisdiction, under 28 U.S.C. § 1338(b), over state claim of unfair competition when joined with related claim under federal trademark laws, 62 A.L.R. Fed. 428.
