February 7, 2019- Joe Tunis v. Country Club Estates Homeowners Associations, Inc., No. A-1-CA-35931

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Court of Appeals of New Mexico
JOE TUNIS, SHIRLEY WHEELER, Filed 2/7/2019 11:43 AM

JOHN EWERT, and PATTY SALESSES, AL —

Plaintiffs-Appellants, Mark Reynolds

v. No. A-1-CA-35931

COUNTRY CLUB ESTATES
HOMEOWNERS ASSOCIATIONS, INC.,

Defendant-Appellee.

APPEAL FROM THE DISTRICT COURT OF LUNA COUNTY
Daniel Viramontes, District Judge

Scott Hulse P.C.
R. Glenn Davis
Las Cruces, NM

Henry J. Paoli
El Paso, TX

for Appellants
Cervantes Scherr Legate
K. Joseph Cervantes
Las Cruces, NM

L. Helen Bennett, P.C.
L. Helen Bennett
Albuquerque, NM

for Appellee

1 	MEMORANDUM OPINION
2 ZAMORA, Chief Judge.
3 {l} 	This is the second time that this case has been appealed to this Court. See
4 	Tw;zis v. Country Club Estates Homeowners Ass 'n Inc., 2014-NMCA-025, 318 P.3d
5 713 (Tunis I). In this second appeal, we address whether the district court erred in
6 denying Plaintiffs' attorney fees incurred in pursuing their indemnification claim,
7 sometimes called "fees on fees," and whether Plaintiffs are entitled to attorney fees
8 on appeal. We reverse the district court's order precluding Plaintiffs' claim for
9 attorney fees incurred in prosecuting their claim for indemnity and remand this issue
10 to the district court for its consideration and determination of such attorney fees. In
11 	light of our holding, we also remand to the district court for its consideration and
12 determination of Plaintiffs' attorney fees on appeal. Last, Plaintiffs' request for
13 	exemption 	for 	any 	potential 	future 	assessment 	of attorney 	fees 	imposed by
14 Defendant is not ripe and we therefore decline to address it.
15 	BACKGROUND
16 	{2} 	Because 	of the complex procedural background, we first set forth that
17 background as those previous proceedings lay the rippling foundation that has given
18 rise to the appellate issues at hand.
2

1 Declaratory Judgment Action
2 	{3} 	In 	December 	2007 	the 	Defendant 	Country 	Club 	Estates 	Homeowners
3 Association (the Association) by its then-President, John Ewert, filed a complaint
4 for declaratory judgment to determine which of the two competing boards was the
5 duly elected board. The Association, a non-profit corporation, by its then president,
6 Ewert, sought a declaration that the Association's governing board was the board
7 headed by Ewert (the Ewert Board), rather than a purportedly newly elected board
8 headed by Pamela Fletcher (the Fletcher Board). Id. ,-r,-r 2, 6. The Ewert Board was
9 unsuccessful and the Fletcher Board was determined to be the governing board. In
10 the same action, the Fletcher Board requested attorney fees against the individual
11 	members of the Ewert Board. Id. ,-r,-r 2, 7. Although the district court initially entered
12 an order imposing personal liability on the Ewert Board, it subsequently entered an
13 	order relieving the individual members of the Ewert Board of personal liability and
14 	ordered the Association to pay the Fletcher Board's attorney fees. Id. ,-r 8. Neither
15 party appealed this order. Id. We refer to this as the "declaratory judgment action."
16 Tunis/
17 	{4} 	Following the conclusion of the declaratory judgment action, Plaintiffs, who
18 	are some of the former members of the Ewert Board, filed an action against the
19 Association for money damages to compensate them for attorney fees they incurred
20 in the declaratory judgment action. Tunis L 2014-NMCA-025, ,-r 2. Specifically,
3

1 pursuant to the indemnification clause contained in the Association's bylaws,
2 Plaintiffs sought $28,724.72 in attorney fees incurred to defend themselves against
3 the Fletcher Board's pursuit of fees against them. Id. ,r 9. The Association moved to
4 dismiss Plaintiffs' complaint claiming it was barred by the doctrine of res judicata.
5 Id. ,r 1. The district court agreed and dismissed Plaintiffs' complaint. Id. ,r,r 1, 14.
6 Plaintiffs appealed.
7 	{5} 	This Court in Tunis I limited its review to the interpretation and application
8 of the indemnification provision of the bylaws, concluding there were issues of fact
9 that defeated the Fletcher Board's motion for summary judgment. Id. ,r,r 29, 30. This
10 Court remanded the matter to the district court for further proceedings.
11 	District Court Proceeding Following Tunis I Remand
12 	{6} 	On remand, Plaintiffs filed an amended complaint alleging breach of contract
13 	and promissory estoppel, and seeking indemnification for the attorney fees they
14 incurred in defending against the attorney fees claim made by the Fletcher Board in
15 	the declaratory judgment action. Plaintiffs contended that, pursuant to the provision
16 	in the Association's bylaws, the Association must pay Plaintiffs' 	attorney fees
17 	incurred not only in the declaratory judgment action but also for the appeal in Tunis
18 I and subsequent trial on remand. Following a bench trial, the district court found
19 Plaintiffs were entitled to attorney fees incurred only in the declaratory judgment
20 action totaling $28,724.72. The district court found that as of June 18, 2008 and on
4

1 remand, it had entered an order confirming the declaration that the Fletcher Board
2 members were the duly elected and governing board members of the Association
3 and Plaintiffs were no longer board members performing as directors or officers of
4 the Association. The district court also found that because Plaintiffs did not appeal
5 this 2008 determination, they were no longer performing in their capacities as
6 directors or officers of the Association; therefore, they could not be indemnified for
7 	any actions after June 18, 2008. We refer to this stage of the case as the "remand
8 proceeding."
9 Appeal
10 {7} 	In this appeal, Plaintiffs argue that the Association is obligated under the
11 	indemnity provision of its bylaws to indemnify them for attorney fees incurred in
12 the declaratory judgment action, Tunis I, and the remand proceeding based on their
13 	roles as former members of the Association's Board of Directors. We agree.
14 {8} 	Plaintiffs also contend that the district court erred in failing to exempt them
15 	from any potential assessments by the Association to pay for the attorney fees owed
16 by the Association to Plaintiffs. We conclude that the Plaintiffs' potential assessment
17 exemption is premature. As a result, this issue is not ripe and we decline to address
18 	it.
19 DISCUSSION
20 I. 	Plaintiffs 	Can 	Recover 	Attorney 	Fees 	for 	Bringing 	Their
21 	Indemnification Claim in Tunis I and the Remand Proceeding
5

1 A. 	Standard of Review
2 	{9} 	Our review in this case is a matter of contract interpretation. In the absence of
3 ambiguity, which the parties here do not assert, "the interpretation of language in a
4 contract is an issue oflaw which we review de novo." Krieger v. Wilson Corp., 2006-
5 NMCA-034, ,r 12, 139 N.M. 274, 131 P.3d 661. We review the award or denial of
6 attorney fees for an abuse of discretion. N.M Right to Choose/NARAL v. Johnson,
7 1999-NMSC-028, if 6, 127 N.M. 654, 986 P.2d 450.
8 B. 	Indemnity for Attorney Fees Under New Mexico Law
9 {10} 	"New Mexico adheres to the so-called American rule that, absent statutory or
10 	other authority, litigants are responsible for their own attorney[] fees." Montoya v.
ll 	Villa Linda Mall, Ltd, 1990-NMSC-053, if 6, 110 N.M. 128, 793 P.2d 258. Likewise,
12 in the insurance context, New Mexico adheres to the general rule that attorney fees
13 	for prosecuting indemnification claims are not recoverable. Jackson Nat'/ Life Ins.
14 	Ca. 	v. 	Receconi, 	1992-NMSC-019, ,r,r 51, 	53, 	113 	N.M. 	403, 	827 P.2d 	118.
15 	However, freedom of contract allows exceptions to these general rules if the parties
16 so contract. See Montoya, 1990-NMSC-053, ,r 6 ("Authority [to depart from the
17 American rule] can be provided by agreement of the parties to a contract."); United
18 	Wholesale Liquor Co. v. Brown-Forman Distillers Corp, 1989-NMSC-030, ,r 14,
19 	108 N.M. 467, 775 P.2d 233 ("New Mexico also has a strong public policy of
20 freedom to contract[.]"). NMSA 1978, Section 53-8-26 (1987) of the Nonprofit
6

1 Corporation Act gives nonprofit corporations, such as the Association, the power to
2 indemnify its officers and directors. And bylaws, such as those at issue in this case,
3 can be used to provide such indemnification, as they are binding contracts on the
4 association and its members. See Yedidag v. Roswell Clinic Corp., 2015-NMSC-
5 012, ~ 46, 346 P.3d 1136 (noting medical staff bylaws are enforceable contracts).
6 {11} 	Plaintiffs contend that the district court erred by precluding their claim for
7 attorney fees incurred in prosecuting the claim for indemnity in Tunis I and the
8 remand proceeding. In response, the Association argues that New Mexico law bars
9 recovery of attorney fees for pursuing enforcement of indemnification. Defendant
10 relies on Jackson National Life Insurance Co., and numerous out of state cases to
11 	support its assertion.
12 	{12} 	Jackson National Life Insurance Co., however, is not helpful to Defendant. In
13 	that case, the indemnity clause in the agency agreement between the parties provided
14 that "the agent shall indemnify the company for any expenses, costs, causes of
15 	action, and damages resulting from or growing out of any unauthorized act or
16 transaction by him or his employees." 1992-NMSC-019, ~ 52. Our Supreme Court
17 stated "as a general rule, an indemnitee is entitled to recover its reasonable attorney[]
18 	fees incurred in defense 	of the claim indemnified (but not those incurred in
19 establishing the right of indemnity) as part of its damages." Id.~ 51. Applying that
20 rule, the court held that under the 	agency agreement, 	Jackson National Life
7

l 	Insurance Co., was entitled to recover from its agent reasonable costs in bringing
2 the declaratory action, but not the costs incurred in seeking indemnification from the
3 agent. Id. , 53. The court remanded the case so the district court could "estimate as
4 best it can the expenses for which [the agent] must indemnify Jackson [National Life
5 Insurance Co.]." Id.
6 {13} 	Plaintiffs distinguish Jackson National Life Insurance Co. from the present
7 case by differentiating the indemnification provisions at issue. Here, unlike the
8 indemnification provision at issue in Jackson National Life Insurance Co., the
9 Association's 	indemnification 	provision 	provides 	that 	the 	Association 	will
10 indemnify a director of the Association "against expenses (including attorney[]fees)
11 	actually and reasonably incurred by him or her in connection" therewith. (Emphasis
12 added.) Plaintiffs contend and we agree that under freedom to contract principles,
13 	the indemnity provision in the present case providing for indemnification 	of
14 expenses, including attorney fees, alters the general rule that parties pay their own
15 	attorney 	fees. 	See 	United 	Wholesale 	Liquor 	Co., 	1989-NMSC-030, 	, 	14
16 (recognizing "a strong public policy of freedom to contract"). Reading "every word
17 	or phrase ... to be given meaning and significance ... in the whole of the contract[,]"
18 we conclude that unlike the parties in Jackson National Life Insurance Co., the
19 Association's bylaws contemplate indemnification for an officer's or director's
20 attorney fees. See Banko/NM v. Shaler, 1984-NMSC-118,, 6, 102 N.M. 78,691
8

1 P.~d 465 ("A contract must be construed as a harmonious whole, and every word or
2 phrase must be given meaning and significance according to its importance in the
3 	context of the whole contract."). We next tum to whether the Association's bylaws
4 provide for attorney fees to the Plaintiffs for Tunis I and the remand proceeding.
5 	C. 	The Scope of the Indemnity Under the Bylaws
6 	{14} 	"The scope of [an attorney fees provision] is defined by the parties in the
7 contract, and a determination of what fees are authorized is a matter of contract
8 interpretation." Montoya, 1990-NMSC~053,, 6. The Association's bylaws state in
9 relevant part:
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Article 	IX 	[Section 	1]. 	Third 	Party 	Action 	The 	[Association] 	shall
indemnify any person who was or is a party . . . to any . . . pending or
completed action [or] suit ... by reason of the fact that he or she is or was a 	,
director, trustee, officer, employee[,] or agent of [the Association] ... against
expenses (including attorney[] fees) ... actually and reasonably incurred by
him or her in connection w~th such suit, action[,] or proceeding if he or she
acted in good faith and in a manner he or she reasonably believed to be in or'
not opposed to the best interests of the [Association.] ...
Extent of Indemnification. To the extent that a director, officer, employee or
agent of the [Association] has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in sections 1 and 2 of this
Article or in defense of any claim, issue or matter therein, he or she shall be
indemnified 	against 	expenses 	(including 	attorney[] 	fees) 	actually 	and
reasonably incurred by him or her in connection therewith.
25 	(Emphasis added.)
9

1 {15} 	Here, 	by 	virtue 	of .their positions 	as 	directors, 	Plaintiffs 	incurred fees
2 associated with their defense of the succeeding Board's claims against them. The
3 scope 	of the 	indemnification provision was 	delineated by the Association in
4 expansive terms and provides for indemnification against expenses incurred in
5 connection with suits or proceedings by reason of the fact that one was a director.
6 This broad language supports a policy 	of ensuring that volunteer homeowner
7 association board members would not be deterred from volunteering for fear of an
8 impending lawsuit and personal liability. See, e.g., Restatement (Third) of Agency,
9 § 8.14 cmt. c (Am. Law Inst., Tentative Draft No. 6, 2005) ("The better view is that,
10 absent an explicit statutory directive to the contrary, awarding 'fees on fees' is
11 	consistent with the statutory policy reflected in indemnification statutes of securing
12 the service of personnel whose loyal focus on serving the corporation's interests will
13 	not be clouded by the fear of litigation expenses.")); see also 	§ 53-8-26 (not
14 precluding "fees on fees"). All of the expenses, including attorney fees, referenced
15 	in the indemnification provision are connected to that intent. See Rivera v. Am. Gen.
16 Fin. Servs., Inc., 2011-NMSC-033, ~ 27, 150 N.M. 398,259 P.3d 803 ("The purpose,
17 meaning[,] and intent of the parties to a contract is to be deduced from the language
18 	employed by them; and where such language is not ambiguous, it is conclusive."
19 (internal quotation marks and citation omitted)). We construe the indemnification
20 provision in the bylaws broadly, to adhere to the drafters' inclusive intent and
10

1 conclude that the indemnification provision includes Plaintiffs' claims for "fees on
2 fees." See Warner v. Calvert, 2011-NMCA-028, ,126, 150 N.M. 333,258 P.3d 1125
3 (stating that this Court's goal in interpreting a contract is "to give effect to the intent
4 	of the parties" (internal quotation marks and citation omitted)).
5 {16} 	As previously noted, the district court found that any actions of Plaintiffs after
6 June 18, 2008, were not performed in their capacities as directors or officers of the
7 Association rendering the indemnification provision inapplicable to them. Plaintiffs
8 assert that because the indemnity provision here includes a person who "is" or "was"
9 a director of the Association, the phrase "was" in the Association's bylaws includes
10 former directors of the Association like Plaintiffs. They also contend that the bylaws
11 	apply to Plaintiffs because the attorney fees stemmed from their defense of the
12 claims raised against them in the declaratory judgment action. Since Plaintiffs were
13 	successful on the merits in pursuing a claim for indemnity under the bylaws and
14 since they are former directors of the Association, they argue they are entitled
15 pursuant to the bylaws to indemnification "against expenses (including attorney[]
16 fees)" for Tunis I and the remand proceeding. The Association responds that the
17 indemnification provision relied upon by Plaintiffs does not apply here because it
18 references attorney fees in prosecution or defense of third-party claims brought by
19 or against a director of the Association, not claims brought by former directors for
20 indemnification. It asserts that Plaintiffs were not "compelled to bring or defend a
11

1 third party claim" in the present case and thus Section 1, "Third Party Action[,]"
2 does not apply to them.
3 {17} 	Initially, we note that, with respect to the declaratory judgment action, the
4 district court found that Section 1 was applicable to Plaintiffs and further held that
5 Plaintiffs' actions were "taken in good faith and based on what they reasonably
6 believed to be in or not opposed to the best interests of [the Association]." The
7 Association does not challenge these determinations by the district court on appeal.
8 See Seipert v. Johnson, 2003-NMCA-119, ~ 26, 134 N.M. 394, 77 P.3d 298 ("An
9 unchallenged finding of the [lower] court is binding on appeal.").
10 	{18} 	Turning to the application of the indemnification provision to Tunis I and the
11 	remand proceedings, we recognize that New Mexico "courts strive to give effect to
12 a contract[, like the bylaws,] according to its terms." See Centex/Worthgroup, LLC
J
13 	v. WorthgroupArchitects, L.P., 2016-NMCA-013, ~ 18,365 P.3d 37. "We view the
14 contract as a harmonious whole, give meaning to every provision, and accord each
15 	part of the contract its significance in light of other provisions." Benz v. Town Ctr.
16 Land, LLC, 2013-NMCA-111, ~ 31, 314 P.3d 688 (alteration, internal quotation
17 marks, and citation omitted).
18 	{19} 	For the reasons that follow, we conclude that the bylaws indemnification
19 provision encompasses Plaintiffs' pursuit of Tunis I and the remand proceeding.
20 First, the bylaws cover the indemnification of former directors. The bylaws allow
12

1 for indemnification in Section 1 of"any person who was or is a party or is threatened
2 to be made a party" to any action "by reason of the fact that he or she is or was a
3 director" of the Association "against expenses (including attorney fees) ... actually
4 and reasonably incurred by him or her in connection with such suit." Plaintiffs
5 became involved in Tunis I and the remand proceeding as a result of fulfilling their
6 responsibilities as challenged directors, 	and they remained involved as former
7 directors. Their involvement, in other words, came about because they were directors
8 and parties to the declaratory judgment action, and thus they fall within the terms of
9 Section 1. This interpretation and application is consistent with Section 53-8-26,
10 which gives non-profit corporations the power to indemnify any director "in which
11 	he is made a party by reason of being or having been a director[.]" (Emphasis added.)
12 	{20} 	Second, as already discussed, the bylaws are broad enough to cover not just
13 	attorney fees incurred in the defense of a claim that is indemnified but also attorney
14 fees in establishing the right of indemnity. Plaintiffs were successful in defense of a
/
15 	claim for personal liability in the remand proceeding, they prevailed in their appeal
16 when this Court reversed the district court's order dismissing their complaint, and
17 they prevailed in recovering their attorney fees in the declaratory action on remand
18 	satisfying the first part of the "Extent of Indemnification" provision. Additionally,
19 	Tunis I and the remand proceeding are covered by the "in connection therewith"
20 because Plaintiffs' 	attorney fees were reasonably incurred by the Plaintiffs m
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1 connection with seeking indemnification in all three of the defensive and successful
2 legal proceedings.
3 	{21} 	The district court improperly interpreted the bylaws to exclude Plaintiffs.
4 Even though Plaintiffs were no longer directors of the Board, they brought this action
5 in Tunis I and the remand proceeding for damages in connection with their service
6 as members of the Board. Plaintiffs successfully defended themselves against the
7 personal liability imposed in the declaratory judgment action and the bylaws clearly
8 provide for indemnification for such actions. We conclude that the bylaws allow for
9 Plaintiffs' attorney fees in Tunis I and the remand proceeding. See, e.g., Dennison v.
10 Marlowe, 1989-NMSC-041, ~ 9, 108 N.M. 524, 775 P.2d 726 (holding that the plain
11 	and unambiguous contract provision that the "prevailing party shall be entitled to ..
12 	. reasonable attorney[] fees connected therewith" included attorney fees on appeal).
13 	{22} 	As already noted, the district court determined that the declaratory judgment
14 action fell within Article IX of the bylaws, and the Association has not challenged
15 	this determination. Further, 	although the title to Article 	IX 	Section 	1 of the
16 indemnification provision is "Third Party Action," the bylaws are broadly written to
17 apply to any "action, suit or proceeding, whether civil, criminal, administrative or
18 	investigative," which covers the declaratory judgment action, and subsequent Tunis
19 I actions.
14

1 {23} 	Based on the facts in this case, we reverse the district court's order that
2 Plaintiffs were not entitled to indemnification of the attorney fees they incurred in
3 	Tunis I and the remand proceeding under the Association's bylaws.
4 D. 	Determination of Plaintiffs' Attorney Fees
5 {24} 	Plaintiffs ask this Court for an award of attorney fees incurred in Tunis I and
6 the remand proceeding, as well as for this appeal. "Appellate courts have authority
7 to either make an allowance of attorney fees on appeal or to remand to the lower
8 court for that purpose." Vinton Eppsco, Inc. of Albuquerque v. Showe Homes, Inc.,
9 1981-NMSC-114, ,-r 6, 97 N.M. 225, 638 P.2d 1070; see Dennison, 1989-NMSC-
10 041, ,-r 9 (concluding that the contract included attorney fees incurred on appeal and
11 	remanding for the district court to determine reasonable attorney fees incurred on
12 appeal). Concluding that the district court is in the best position for this factual
13 	determination, we remand for the district court's determination 	of :reasonable
14 attorney fees incurred in Tunis I and the remand proceeding.
15 	{25} 	With respect to Plaintiffs request for attorney fees on appeal, the Association
16 	did not respond to this request for relief. Plaintiffs argue this is tantamount to a
17 concession. Regardless, we hold that Plaintiffs are entitled to reasonable attorney
18 fees incurred in this appeal. The central issue in this opinion was whether Plaintiffs
19 were entitled to recover attorney fees incurred in establishing a claim of indemnity,
15

1 which we have answered in the affirmative. Based on this holding, we remand for
2 the district court's determination of reasonable attorney fees incurred in this appeal.
3 E.
4
5 {26}
Plaintiffs' Request for Exemption of Potential Assessment of Attorney .
Fees Award Is Not Ripe
Plaintiffs below in their proposed findings of fact and conclusions of law
6 asked the district court to exclude Plaintiffs from any potential assessments resulting
7 from the Association paying Plaintiffs' attorney fees awarded by the district court.
8 Plaintiffs maintain the argument on appeal and contend that the district court erred
9 in failing to exempt Plaintiffs from any potential assessments. Plaintiffs assert that
10 the district court failed "to do equity" and provide "full relief' to Plaintiffs by
11 	denying their exemption request. In support of this argument, Plaintiffs cite to cases
12 generally discussing equitable principles.
13 	{27} 	The parties do not identify where in the record the district court considered
14 this request, nor were we able to find anything. See Rule 12-318(A)(3) NMRA
15 	(stating that a summary or proceedings shall "contain citations to the record proper,
16 transcript of proceedings, or exhibits supporting each factual representation"); Benz,
17 2013-NMCA-111, ~ 24 ("To preserve an issue for review on appeal, it must appear
18 that [the] appellant fairly invoked a ruling of the [district] court on the same grounds
19 argued in the appellate court." (internal quotation marks and citation omitted)).
20 	{28} 	Nonetheless, Plaintiffs' 	argument fails 	for lack 	of ripeness. 	"The basic
21 	purpose of ripeness law is and always has been to conserve judicial machinery for
16

1 problems which are real and present or im.m.inent, not to squander it on abstract or
2 hypothetical or remote problems." Titus v. City of Albuquerque, 2011-NMCA-038,
3 ,r 44, 149 N.M. 556, 252 P.3d 780 (internal quotation marks and citation omitted).
4 "The ripeness doctrine exists to prevent the courts, through avoidance of premature
5 adjudication, 	from. 	entangling them.selves 	in 	abstract 	disagreements." 	City 	of
6 Sunland Park v. 	Macias, 	2003-NMCA-098, ,I 23, 	134 N.M. 216, 75 P.3d 816
7 (internal quotation marks and citation omitted). "[A]n issue m.ay be ripe where the
8 threat of harm m.ust be sufficiently direct and im.m.ediate as to render the issue
9 appropriate for judicial review at this state." Id. 	(internal quotation marks and
10 citation omitted).
11 	{29} 	The ripeness analysis involves a two-pronged inquiry. We "evaluate both the
12 fitness 	of the 	issues 	for judicial decision and the hardship 	to the parties 	of
13 	withholding court consideration." N.M Indus. Energy Consumers v. NM Pub. Serv.
14 	Comm 'n, 1991-NMSC-018, ,r 25, 111 N.M. 622, 808 P.2d 592 (internal quotation
15 	marks and citation omitted). We have previously observed that the "m.ere possibility
16 	or even probability that a person m.ay be adversely affected in the future by official
17 acts" is insufficient to establish ripeness. New Energy Econ., Inc. v. Shoobrige, 2010-
18 NMSC-049, ,r 18, 149 N.M. 42,243 P.3d 746 (internal quotation marks and citation
19 	omitted). The second step in the ripeness analysis is whether, and to what extent, the
20 parties will endure hardship if a decision is withheld. See NM 	Indus. 	Energy
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l 	Consumers, 1991-NMSC-018, ~ 25. In this case, we are not convinced that the mere
2 possibility of a future action-assessment of attorney fees-by the Association
3 constitutes a hardship.
4 	{30} 	Based on the foregoing, we conclude that the "potential assessment" of
5 attorney fees by the Association is speculative at this point and we decline to address
6 it on appeal.
7 CONCLUSION
8 {31} 	We reverse the district court's order precluding Plaintiffs' claim for attorney
9 fees incurred in establishing their claim for indemnity in Tunis I and the remand
10 proceeding, and remand this issue to the district court for its consideration and
11 	determination of reasonable attorney fees. In light of our holding, we also remand to
12 the district for its consideration and determination of Plaintiffs' reasonable attorney
13 	fees incurred in this appeal. We decline to address Plaintiffs' request for exemption
14 from any potential assessment of the attorney fees for lack of ripeness.
15 	{32} 	IT IS SO ORDERED.
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17 	M. MONICA ZAMO
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—

4

WE CONCUR:

Chu.

JULIE #. VARGAS, Judg

= ATTREP, Judge

19