May 21, 2026- Damian Lara v. Presbyterian Healthcare Services, No. A-1-CA-42734

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Court of Appeals of New Mexico
Opinion Number: Filed 5/21/2026 9:20 AM

ML LZ —

Mark Reynolds

Filing Date: May 21, 2026
No. A-1-CA-42734

DAMIAN LARA, in his official capacity
as Bernalillo County Assessor,

Petitioner-Appellant,
V.

PRESBYTERIAN HEALTHCARE
SERVICES,

Respondent-Appellee.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Denise Barela Shepherd, District Court Judge

NM Local Government Law LLC
Charles Rennick

Lea Corinne Strife

Kenneth J. Tager

Albuquerque, NM

for Appellant

Rodey, Dickason, Sloan, Akin & Robb, P.A.
Edward Ricco

John P. Salazar

Kara B Murphy

Albuquerque, NM

for Appellee

OPINION	1
WRAY, Judge.	2
{1} 	In the district court, Petitioner Damian Lara, in his official capacity as	3
Bernalillo County Assessor (the Assessor), (1) appealed the final decision of the	4
Bernalillo 	County 	Valuation 	Protests 	Board 	(the 	Board) 	that 	Respondent	5
Presbyterian Healthcare Services (the Hospital) qualified for certain tax exemptions	6
for real property under the Hospital Equipment Loan Act (HELA), NMSA 1978,	7
§§ 58-23-1 to -32 (1983, as amended through 2006); and (2) challenged the	8
constitutionality of the tax exemption statutes, which was an issue that the Board	9
had determined it lacked jurisdiction to decide. The district court sua sponte certified	10
to this Court the following question as a matter of substantial public interest: “[D]oes	11
Article VIII, Section 3 of the New Mexico Constitution authorize the Legislature to	12
create the property tax exemptions at Section 58-23-29(B) and [NMSA 1978,]	13
Section 7-36-3(C) [(2019)]?” See NMSA 1978, § 39-3-1.1(F) (1999) (“The district	14
court may certify to the [C]ourt of [A]ppeals a final decision appealed to the district	15
court, but undecided by that court, if the appeal involves an issue of substantial	16
public interest that should be decided by the [C]ourt of [A]ppeals.”); Rule 1-075(S)	17
NMRA (same). The question whether the Hospital qualified for the tax exemption	18
under the statute, decided in the first instance by the Board, arose under the district	19
court’s appellate jurisdiction. But the Board did not decide the constitutional	20

2
question, which was presented to the district court to decide in the exercise of its	1
original jurisdiction. Without a decision from the Board in the first instance, Section	2
39-3-1.1(F) does not contemplate certification by the district court to this Court. We	3
conclude that we lack jurisdiction and dismiss this appeal.	4
BACKGROUND	5
{2} 	The following facts are undisputed. The Hospital owns a three-story parking	6
garage as part of its medical campus located in Albuquerque, New Mexico. The	7
parking garage was financed with proceeds of bonds issued pursuant to HELA. The	8
Hospital paid property taxes on the property in 2022, but in 2023, the Hospital valued	9
its property at zero dollars and claimed HELA tax exemptions. For that same period,	10
the Assessor valued the property at over ten million dollars.	11
{3} 	The Assessor denied the Hospital’s claim to the HELA exemptions, and the	12
Hospital appealed the Assessor’s decision to the Board. Before the Board, the	13
Assessor argued (1) that the Hospital did not properly apply or qualify for the HELA	14
exemptions; and (2) that the HELA exemptions were unconstitutional. The Board	15
concluded that the Hospital qualified for the property tax exemption under the terms	16
of the statute, but did not address the Assessor’s constitutional argument. While the	17
Board acknowledged that the instant protest was similar to previous cases where	18
courts had reviewed “a statutory tax exemption that is not fully congruent with a	19

3
constitutional 	basis 	for 	[a] 	tax 	exemption,” 	the 	Board 	concluded 	that 	the	1
“constitutional question [was] beyond its purview.”	2
{4} 	The Assessor appealed the Board’s decision to the district court. The Assessor	3
argued that the Board erred by finding that the Hospital qualified for the HELA	4
exemptions and also reasserted the argument that the HELA exemptions were	5
unconstitutional under Article VIII, Section 3 of the New Mexico Constitution. After	6
briefing by the parties, the district court (1) exercised its appellate jurisdiction to	7
conclude that the Board’s determination that the Hospital qualified for the HELA	8
exemptions was supported by substantial evidence and was neither arbitrary nor	9
capricious; and (2) noted that the constitutional challenge had not been decided by	10
the Board and that the issue arose under the district court’s original jurisdiction. The	11
district court did not exercise its original jurisdiction to consider and decide the	12
constitutional question de novo but instead found that the undecided constitutional	13
question “is an issue of substantial public interest” and certified the issue to this	14
Court. See § 39-3-1.1(F); Rule 1-075(S); see also El Castillo Ret. Residences v.	15
Martinez (El Castillo), 2017-NMSC-026, ¶ 23, 401 P.3d 751 (“On appeal to a	16
district court of claims first considered by an agency, where the appeal also asserts	17
constitutional and other claims in the district court that were beyond the scope of the	18
agency’s adjudicative authority, the district court should consider each claim	19
according to its appropriate standard of review and maintain the distinction between	20

4
the court’s appellate and original jurisdiction in rendering its decision.” (internal	1
quotation marks and citation omitted)).	2
DISCUSSION	3
{5} 	We 	requested 	supplemental 	briefing 	from 	the 	parties 	regarding 	our	4
jurisdiction under Rule 1-075(S) and Section 39-3-1.1(F). See Smith v. City of Santa	5
Fe, 2007-NMSC-055, ¶ 10, 142 N.M. 786, 171 P.3d 300 (“[I]t is incumbent upon	6
the appellate court to raise jurisdiction questions sua sponte when the Court notices	7
them.”). Specifically, we asked the parties to brief whether this Court has jurisdiction	8
to address a matter certified by the district court under the certification rules when	9
the certified issue is solely related to a matter arising under the district court’s	10
original, rather than appellate, jurisdiction and no decision on the issue was made by	11
the Board. This question, a legal one that we review de novo, see El Castillo, 2017-	12
NMSC-026, ¶ 20, is rooted in the fundamental principles of a district court’s	13
jurisdiction in relation to the decisions of administrative agencies, and we therefore	14
begin with those principles.	15
{6} 	The district court has two distinct types of jurisdiction over the decisions of	16
agencies: appellate jurisdiction and original jurisdiction. See N.M. Const. Art. VI,	17
§ 13 (“The district court shall have original jurisdiction in all matters and causes not	18
excepted in [the C]onstitution, and such jurisdiction of special cases and proceedings	19
as may be conferred by law, and appellate jurisdiction of all cases originating in	20

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inferior courts and tribunals in their respective districts as provided by law, and	1
supervisory control over the same.”); VanderVossen v. City of Española, 2001-	2
NMCA-016, ¶¶ 13-14, 130 N.M. 287, 24 P.3d 319 (distinguishing the grants of	3
original and appellate jurisdiction). First, the district court exercises its appellate	4
jurisdiction to review a decision an agency has made. See § 39-3-1.1(C), (D); Rule	5
1-074(A) NMRA (addressing appeals from administrative agencies when there is a	6
statutory 	right 	to 	review 	by 	the 	district 	court); 	Rule 	1-075(A) 	(governing	7
discretionary review by the district courts of administrative agency decisions when	8
there is no statutory right to review); see also Martinez v. N.M. State Eng’r Office,	9
2000-NMCA-074, ¶ 48, 129 N.M. 413, 9 P.3d 657 (noting “that in administrative	10
appeals the district court is a reviewing court, not a fact-finder”). Second, the district	11
court may exercise its broad original jurisdiction over issues that are related to, but	12
beyond the scope of, the agency’s authority to decide. See Maso v. N.M. Tax’n &	13
Revenue Dep’t, 2004-NMCA-025, ¶¶ 12-17, 135 N.M. 152, 85 P.3d 276. The district	14
court may exercise both appellate and original jurisdiction in the same case even	15
though the issues involve “the same parties and same general subject matter.” See	16
id. ¶ 17 (internal quotation marks and citation omitted).	17
{7} 	Though the district court may wield both aspects of its jurisdiction within the	18
same case, see id., the two types of jurisdiction function distinctly. In its appellate	19
capacity, the district court reviews a decision that was made by an agency, and may	20

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only consider the record created in the agency, and the parties may be required to	1
exhaust the remedies available in the agency before turning to the district court. See	2
id. ¶¶ 13, 15-16 (explaining that appellate review is limited to the record below);	3
Summit Properties, Inc. v. Pub. Serv. Co. of N.M., 2005-NMCA-090, ¶ 21, 138 N.M.	4
208, 118 P.3d 716 (addressing the exhaustion of administrative remedies). In	5
contrast, when exercising original jurisdiction, the district court is “unconstrained	6
by the statutory limits on appellate review” and is not limited by any record created	7
during the agency proceedings. Maso, 2004-NMCA-025, ¶¶ 15-16. No exhaustion	8
of remedies is required if the matter presents a question of law “that would have	9
been futile to pursue through the . . . administrative appeals process.” Smith, 2007-	10
NMSC-055, ¶ 27. Thus, when exercising appellate jurisdiction, the district court	11
reviews what the agency has done, and when exercising original jurisdiction, the	12
district court considers a claim in the first instance.	13
{8} 	Although the district court has appellate and original jurisdiction and this	14
Court may review a decision of the district court acting in either capacity,1 the New	15
1 This Court’s review of a district court’s determinations about agency
decisions is also impacted by the type of jurisdiction that the district court exercised.
On the one hand, after the district court conducts an appellate review of the agency’s
decision, a party may seek discretionary relief in this Court by petition for writ of
certiorari according to the procedures and timelines set forth in Rule 12-505 NMRA.
See Wakeland v. N.M. Dep’t of Workforce Sols., 2012-NMCA-021, ¶¶ 15, 18, 274
P.3d 766; see also Smith, 2007-NMSC-055, ¶¶ 22-23 (explaining the process to
petition for certiorari under Rule 1-075). On the other hand, a party’s appeal to this
Court from a final order arising from the exercise of original jurisdiction is a

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Mexico Constitution states that this Court “shall have no original jurisdiction.” See	1
N.M. Const. art. VI, § 29. This Court has only appellate jurisdiction—jurisdiction to	2
review other proceedings—as well as jurisdiction “to issue all writs necessary or	3
appropriate in aid of [our] appellate jurisdiction.” N.M. Const. art. VI, § 29. Despite	4
the limitations on this Court’s jurisdiction, the constitutional question was certified	5
to this Court without any decision having been made in the first instance by the	6
Board or the district court, suggesting an invocation of original jurisdiction we	7
simply do not have.	8
{9} 	The Assessor reads the Board’s decision to decide the constitutional issue in	9
the first instance, but we disagree. The Assessor maintains that in addition to	10
deciding that the constitutional issue was “beyond its purview,” the Board also	11
decided the constitutional issue by incorrectly interpreting El Castillo to create	12
separate statutory and constitutional tax exemptions and evaluating the Hospital’s	13
claim as only a statutory exemption. Both aspects of the Board’s decision avoid	14
deciding whether the statutes themselves were constitutional—one by disclaiming	15
jurisdiction and one by characterizing the claim as statutory. But neither decided the	16
constitutional right (provided the appeal conforms to our procedural rules). See Los
Chavez Cmty. Ass’n v. Valencia Cnty., 2012-NMCA-044, ¶ 5, 277 P.3d 475 (“In
general, the right to appeal is restricted to final judgments and decisions.” (internal
quotation marks and citation omitted)); Wakeland, 2012-NMCA-021, ¶ 15; Olguin
v. State, 1977-NMSC-034, ¶ 2, 90 N.M. 303, 563 P.2d 97 (holding that the
“constitutional right to appeal was not abridged by the dismissal for failure to follow
procedural rules”).

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constitutional issue in the first instance. We therefore agree with the district court	1
that the constitutional issue arose under its original jurisdiction.	2
{10} 	When, as in this case, the district court’s original jurisdiction is invoked in an	3
administrative appeal, the fundamental jurisdictional principles we have described,	4
together with the language of Rule 1-075(S) and Section 39-3-1.1(F), demonstrate	5
that certification may not be made to this Court. See El Castillo, 2017-NMSC-026,	6
¶ 25 (“A statute must be interpreted and applied in harmony with constitutionally	7
imposed limitations.”). Section 39-3-1.1(F) and Rule 1-075(S) permit the district	8
court, under some circumstances, to certify” to this Court “a final decision” that a	9
party has appealed to the district court, but that is “undecided by that court,”	10
provided that the matter “involves an issue of substantial public interest that should	11
be decided by the Court of Appeals.” The Board explicitly determined that the	12
constitutional issue was outside its jurisdiction. In these circumstances, there was no	13
Board decision on the constitutional issue that could have been “presented for review	14
to the district court.” See Rule 1-075(S). As a result, there was no Board decision to	15
“certify” to this Court. 2 See § 39-3-1.1(F) (permitting certification of “a final	16
2Because we determine that the Board made no decision at all, we need not
resolve the parties’ dispute about whether the Board’s decision was “final.” See § 39-
3-1.1(H)(2) (describing a final decision as one that “as a practical matter resolves all
issues arising from a dispute within the jurisdiction of the agency”). We also do not
decide whether the Board correctly determined whether it had jurisdiction to decide
the constitutional question, because the question was not presented by the parties to
this appeal and, in any event, we lack jurisdiction to address it. See Schuster v. N.M.

9
decision” if the “appeal involves an issue of substantial public interest”); Rule 1-	1
075(S) (addressing the certification of a “final decision” if the “matter” or “case	2
involves an issue of substantial public interest”). Instead, there was only a claim for	3
the district court to decide, in the exercise of its original jurisdiction, in the first	4
instance. See Maso, 2004-NMCA-025, ¶ 2. We therefore hold that Rule 1-075(S)	5
and Section 39-3-1.1(F) do not permit certification to this Court of issues that arise	6
under the district court’s original jurisdiction. The district court must first exercise	7
its original jurisdiction before this Court has authority to exercise its appellate	8
jurisdiction.	9
CONCLUSION	10
{11} 	Having no jurisdiction, we dismiss the appeal and remand to the district court	11
for determination of the constitutional issue. See Thorton v. Gamble, 1984-NMCA-	12
093, ¶ 15, 101 N.M. 764, 688 P.2d 1268 (“If we do not have jurisdiction, we must	13
dismiss.”).	14
{12} 	IT IS SO ORDERED.	15
______________________________	16
KATHERINE A. WRAY, Judge	17
Tax’n & Revenue Dep’t, 2012-NMSC-025, ¶¶ 11-19, 283 P.3d 288 (concluding that
in some circumstances, an agency has jurisdiction to determine constitutionality in
order to fulfill its statutory mandate); cf. El Castillo, 2017-NMSC-026, ¶ 7 (noting
that the parties in that case “agreed that the [b]oard did not have jurisdiction to
address the constitutional issue with regard to the statute itself” (internal quotation
marks omitted)).

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WE CONCUR:
2 3
ZACHARY A. IVES, Judge
0
4 5
Jane Bythaler
JANE B. XOHALEM, Judge
10