Old Abe Company and Lincoln Gold & Tungsten, Inc.

1 All statutory references are to the Bankruptcy Code as it
existed before the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005.
2 Early in each case, Jensen moved for stay relief in order
to complete a state court adjudication of his claims against the
debtors. 	After the bankruptcy cases were ordered to be jointly
administered, the Court denied Jensen’s motions for stay relief.
(continued...)
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW MEXICO
In re:
OLD ABE COMPANY,
Debtor. 	No. 11-04-15468 SA
MEMORANDUM OPINION ON CLAIMS OF LEONARD JENSEN
The claim of Leonard Jensen (“Jensen”) came before the Court
on September 7-9 and September 21, 2005 for a merits hearing on
the objection of the debtors in possession Old Abe Company (doc
33) and Lincoln Gold and Tungsten, Inc. (doc 37) and the response
thereto (doc 46 in both cases). 	After considering the evidence
and the arguments, the Court grants in part and denies in part
the claim objection. 	This is a core proceeding. 	28 U.S.C. §
157(b)(2)(B). 1
Procedural History
On July 27, 2004, the debtors in possession Old Abe Company
(“Old Abe”) and Lincoln Gold and Tungsten, Inc. (“Lincoln”)
commenced their chapter 11 cases, 11-04-15468 and 11-04-15469
respectively. 	Jensen promptly filed a proof of claim in each
case (claim no. 1 in the Old Abe case and claim no. 2 in the
Lincoln case). 2 	Old Abe and Lincoln objected to the claims (docs
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2(...continued)
Doc 95.
3 For material processed from the mine dumps, the royalty
was 15% on sand, gravel, rock and non-mineral byproduct. ¶ J.
4 Paragraph I provides in full as follows:
“Annual advance royalty per annum of $50,000.00 shall be due and
payable upon notice of exercise of option, and a condition
thereof. 	Lessors acknowledge receipt of nonrefundable deposition
[sic] on first year annual advance royalty, and by these presents
acknowledge receipt of the first year annual advance royalty on
date of execution hereof, which date will not vary effective
dates and term of the lease as set out herein. 	Lessee shall pay
monthly to Lessor 10 percentum (10%) of fair market value of all
production from operations consisting of commercial sand, gravel
(continued...)
Page 2 of 	74
33 and 37 respectively) and Jensen responded (doc 46 in both
cases). 	Subsequently the cases were ordered jointly administered
(docs 66 and 63 respectively) and have been continued to be
administered under the style and number of the Old Abe case.
Factual History
On March 23, 2001, Jensen and Carl Dotson (“Carl”) as
president of Old Abe and of Lincoln (“Lessors”, “Corporations”,
“Debtors”) executed the Letter of Agreement between Jensen and
the Debtors (“Lease” – Jensen exhibit 1) effective retroactively
to March 1, 2001.
The Lease required payment of an annual advance royalty of
$50,000. 	It also required royalty payments of 10% of the fair
market value of the sand, gravel and rock removed or sold 3 , and
12% of any gold produced, to be credited against the $50,000. 	¶¶
I4 and K. 5 	An addendum to the Lease (“Addendum”) imposed
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4(...continued)
and rock as sold by cubic yardage, or ton as removed, or sold,
from stockpiling and production of placer material under the
lease, and 12 percentum (12%) of any byproduct minerals resulting
from the milling process and any operations conducted by Lessee
on the leased lands and interests, not later than the 15 th of
each month for the preceding month, and shall report production
monthly in forms as Lessors may request.”
5 The Lease describes the annual $50,000 as “advance
royalty”, ¶¶ I and K, and “non-refundable”. 	¶ K. 	The Court
interprets this language to mean that the $50,000 paid each year
is a credit on the royalty payments owed for that year.
Page 3 of 	74
different and more specific conditions for keeping track of the
gold and for measuring it and distributing it in kind each month.
Jensen exhibit 1 (first page). 	Jensen was required to report the
production monthly. 	¶ I.
The Lease identifies the sites covered by the Lease, and
gives Jensen the right to mine, process and sell sand, gravel,
rock and minerals, including specifically gold. 	¶ A. 	Jensen was
entitled to use water from the Old Abe well and pipeline but had
to pay the electricity costs. 	¶ E. 	He was also required to pay
the costs of maintenance and replacement of the pumps and
pipeline. 	¶ E. 	The Lease required Jensen to install certain
equipment necessary to conduct operations. 	¶ C. 	Jensen was also
required to purchase the mining equipment already on the site
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6 Paragraph N also provided for Jensen’s purchase of
Lincoln’s stock, but those arrangements were independent of
Jensen’s lease obligations described above, and in event never
went into effect.
7 Paragraph M provides in full as follows:
“This Lease expires on March 1, 2002, or any extension year and
is automatically terminated upon such expiration, or if Lessee
permit any lien recorded against the lease, production or
equipment to remain attached for 90 days following attachment
thereof, or if Lessee have failed to pay when due any royalty
provided hereunder, for a term of 30 days after due date, or
failed to meet any requirement herein for providing notice of
extension under terms hereof. 	On date of termination, all
production stockpiled on site and all equipment shall become
security for any sums unpaid under the lease, and be disposable
by Lessor in satisfaction of any sums due it, and all production
and equipment of Lessee on the site shall be subject to such
security interest from commencement hereof. 	Provided, if all
sums due are paid current at time of expiration or termination of
this lease, Lessee shall have not to exceed 60 days within which
to remove equipment, after which all property remaining will
become the property of Lessors.”
Page 4 of 	74
that belonged to previous lessees. 	¶ N. 6 	And he was required to
process at least 30,000 yards of material per year. 	¶ H.
The Lease term was one year, until March 1, 2002, renewable
each year for nine years. 	In order to renew, Jensen was required
to provide written notice to Debtors no later than January 15,
and to be current on all the Lease obligations. 	¶ H. 	Failure to
renew timely or to pay any royalty within thirty days of its due
date were two conditions which would result in automatic
termination of the Lease on March 1. ¶ M. 7
The production stockpiled on site and all of Jensen’s
equipment comprised collateral to secure payment of any defaulted
payments, and termination of the Lease entitled Lessors to
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Page 5 of 	74
dispose of the production and equipment to pay the debts. 	If
Jensen were to be current when the Lease expired, he would have
sixty days to remove his equipment. 	Afterwards any “property”
(which the Court reads to include equipment and production) would
become property of Lessors. ¶ M. 	(However, given the provisions
of the Addendum for dividing the gold on a monthly basis, the
production remaining on the site would have presumably have been
only sand, gravel and rock, had the parties complied with the
Addendum.)
Upon execution of the Lease on March 23, Jensen paid $25,000
cash to Lessors (Jensen exhibit 26) and executed a promissory
note for the remaining $25,000 (Jensen exhibit 13, at 2). 	The
note had a due date of May 7, presumably for calendar year 2001.
Jensen, by himself and with others, worked hard to get the
mining operation up and running. 	He reached agreements for the
requisite equipment: the purchase of Jim Niebaum’s equipment on
April 10, 2001 (Jensen exhibit 7), 	the assumption of the lease
with First Banks, Inc. of Niebaum’s leased equipment on July 20,
2001 (Jensen exhibit 2), and the lease of equipment from
Citicapital on November 27, 2001 (Jensen exhibits 6 and 17, ¶¶ 3
and 10). 	(Citicapital and First Banks, Inc., fka First Capital
Group, are collectively identified as “Equipment Lessors”). 	He
purchased some of his own equipment.
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8 Earl Clark also testified to the poor condition of all the
equipment and the continuing effort to get and keep it
functioning.
9 At the White Oaks site there were at least two “house”
trailers: one for whomever was operating the site, as provided in
(continued...)
Page 6 of 	74
Jensen and his crew also struggled constantly to keep some
of the equipment, including the water pump, functioning. 	Indeed,
according to Jensen and Don Keller (“Keller”), the equipment was
in such poor shape that he spent until October 2001 just
repairing and trying to operate the equipment 8; during this time
he produced no product.
Jensen consulted frequently with Carl Dotson about the
status of the operations and production. 	He heeded Carl’s advice
about where there might be gold, and hired Wayne Holland as
recommended by Carl to help find veins of gold.
Unfortunately for Jensen, he was so undercapitalized from
the start and thereby also unable to afford adequate equipment
that by March 2002 he was behind in his payments and had produced
relatively little sand, gravel, rock or gold. 	Jensen testified
that he had sold maybe $1800 to $2000 worth of sand and gravel by
the end of February 2002. 	In particular, Jensen never payed any
portion of the $50,000 advance royalty for 2002-03.
Jensen asserted that he maintained production records in a
book that Carl’s son David Dotson (“David”) took out of the
office trailer 9 before a meeting the two of them participated in
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9(...continued)
¶ G of the Lease, which also served as the office, and one for
Carl. 	In addition, there was a storage unit on the site, the
size of a shipping container. 	It was into this storage unit or
trailer that Jensen moved a safe in May 2002. 	And apparently
there were one or more “van trailers” at the site as well.
10 Nor did he ever provide any sales reports to Lessors. 	In
his deposition taken by White Oaks Resources, Jensen stated that
the reports of all sales were in the office of his attorney.
Transcript of May 18, 2005 (“Tr.”), p. 42, ll. 10-14. 	Some sales
records were produced at trial (Jensen Exhibit 32 and Lessors
Exhibit E). 	The Court finds that, practically speaking, Jensen
did not maintain or deliver to Lessors any sales records on a
monthly basis. 	Nothing in the Lease specifically requires sales
reports as such; however, the parties spent time litigating this
issue.
Page 7 of 	74
on July 14, 2002. 	The Lease required the delivery of production
reports to Lessors on a monthly basis. 	Lease, ¶ I. 	There is no
evidence that Jensen ever did that. 	Maintaining those records in
the office was not the equivalent of delivering the reports. 10
On or around March 27, Jensen met with Carl, who did a
summary accounting of at least some of what Jensen owed. 	Jensen
exhibit 13. 	At that time Jensen still owed the entire $25,000
note plus interest at 10% for the year since the note was
executed ($2,500), together with some overdue electricity bills.
The accounting does not list anything due for whatever product
had been produced or sold. 	However, it also has a notation “1 yr
Lease Option Ext. 50,000.00", which is added to the note
obligation ($27,500) and electricity bills ($779.36) to total
$78,279.36.
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11 There are only nine entries, although March - January is
eleven months. 	It is possible that one or more of the numbers
that appears in that column might represent a bill that included
the unpaid balance from a previous (unlisted) bill. 	It is also
possible that there were no bills for two months because of
reduced operations in the late fall or early winter 2001-02.)
Keller testified that he stopped working the first week in
December because it got too cold and did not return until
February 2002. 	Neither party tendered into evidence either the
electricity bills themselves or evidence of the utility’s billing
cycle.
Page 8 of 	74
The figure for the electricity bills starts with a notation
at the top of “Mar. 01" and runs down to “Jan. 02", for a total
of $587.35. 11 	Added to that figure is $74.97 for “Feb. 02", for
a total of $662.32 labeled “For year”. 	Added to that total in
turn is $117.04 labeled “Mar 02", with a final total of $779.36.
Thus the electricity bills appear to include what was due for the
first lease year plus one month of a second lease year.
Entries on the accounting sheet show that Jensen paid the
entire electricity bill ($779.36) and $4,000 on the note that
day. 	The attached promissory note records that payment, and
another $15,000 payment on April 3, 2002. 	However, there is no
evidence of any additional payments after those dates, for any
purpose.
Although Jensen testified that he was prepared at various
times to tender whatever sums were owed, and that he had sources
of funding to do so, there was no concrete evidence that Jensen
ever had the money in hand to make those payments. 	(This comment
applies with particular force to the $50,000 advance royalty for
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Page 9 of 	74
2002-03.) 	Jensen’s explanation that he had the funds at various
times but used them for other business purposes because they were
not needed at the particular moment in question proves if
anything that he never had the money. 	That conclusion is
reinforced by the essentially uncontested testimony from David
about meetings that Jensen would show up for without his
checkbook.
As Carl’s health worsened, David became more involved in
dealing with Jensen on behalf of the Lessors. 	Over April, May
and June 2002, a series of meetings were arranged between Jensen
on the one hand and Carl and/or David on the other hand, to
resolve the situation. 	Jensen attended some of these meetings,
sometimes without his checkbook, and missed others, at first with
explanations delivered beforehand and then with no explanations.
In June and July 2002, three events transpired. 	Carl, whose
health had rapidly deteriorated, died on June 26. 	Thereupon
David took direct charge of the dealings with Jensen. 	Also on
June 26, Don Klein (“Klein”), Lessors’ attorney issued a letter
for delivery to Jensen essentially declaring Jensen to be in
default under the Lease and making certain resulting demands.
One effect of the letter was that Lessors locked Jensen out of
the site. 	Third, after certain aborted meetings, on July 14,
2002, David and his cousin Harold Dotson (“Hal”) met with Jensen
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Page 10 of 	74
and Don Keller at the White Oaks site, and effectively ended the
Lease to the extent it had not already been terminated.
While there is agreement on the broad outlines of what
happened at the White Oaks meeting on July 14, there is
disagreement on certain details. 	The witnesses agree that the
Dotsons, Jensen and Keller went first to look at the piles of
aggregate and discussed (and disagreed about) measuring them and
what the measurements signified. 	They also agree that they then
went to the storage trailer on site to open a safe to look at the
gold that had been produced. 	Jensen had brought the safe onto
the site in about May 2002, and had stored in it specimen gold
and the vials of gold dust and nuggets processed from the
operations. 	They agree that the lock had been cut off the
storage trailer by someone. 	They also agree that the safe
appeared to have been tampered with, and that Keller opened the
safe using the combinations for two or more of the four
combination locks. 	But upon the safe doors swinging open, in a
plot twist worthy of a Dashiell Hammett novel, some of the gold
was discovered to be missing. 	Each side purported to be
surprised to discover the gold to be missing (although Hal
characterized his reaction as more disgusted than surprised), and
Keller and/or Jensen and/or David supposedly cried out, “The gold
is missing!” 	The safe was then closed up, and the parties went
back to the office trailer.
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Page 11 of 	74
At the trailer, a heated discussion took place. 	Jensen and
Keller testified that Jensen tendered payment for the balance of
the note and for part if not all of the advance royalty for the
2002-03 lease renewal, but that David said that even if Jensen
wrote a check for $200,000 he would not accept it, and gave him
five minutes to leave the premises for good. 	David and Hal deny
that the tender was made, and also deny the $200,000 comment.
They do not dispute that Jensen was told the Lease had been
terminated and he needed to vacate the premises. 	Jensen and
Keller gathered up some of their personal belongings and left the
site.
During this time period David brought to the White Oaks site
certain equipment of Jensen’s (a grader and a front-end loader).
This was done at the request of a land owner on whose property it
had been left, according to Rip Tate, but it coincidentally (or
perhaps not so coincidentally) had the effect of bringing that
equipment within Lessors’ fenced premises. 	David had repairs
made to Jensen’s dump truck and titled it in his name. The pickup
was sold to a Gary Vega. 	And the front-end loader remained at
the site. 	The Equipment Lessors subsequently sued Jensen who,
having no ability to pay and no defenses that would be valid
against the Equipment Lessors, agreed to the entry of judgments
against him. 	Jensen testified that he sought legal counsel
shortly after the July 14 meeting, but did not take any overt
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Page 12 of 	74
action to regain possession any of the equipment including the
vehicles. 	Instead, when sued by Citicapital and First Banks, he
agreed to a judgment and filed a third-party claim over against
Old Abe, Lincoln and David. 	That litigation progressed until the
bankruptcy petitions were filed.
Analysis
The Lease
The Lease, including the Lease Addendum, is a mineral
interest lease, and is therefore treated not as a standard
landlord-tenant relationship but as a conveyance of real
property. 	Barela v. Locer, 103 N.M. 395, 398-99, 708 P.2d 307,
310-11 (1985); Vanzandt v. Heilman, 54 N.M. 97, 108, 214 P.2d
864, 870 (1950); Staplin v. Vesely, 41 N.M. 543, 72 P.2d 7, 8
(1937); Terry v. Humphreys, 27 N.M. 564, 203 P. 539, 543 (1922).
As such, the Lease is subject to the rules for construing
contracts that convey an interest in land. 	Vanzandt v. Heilman,
54 N.M. at 110, 214 P.2d at 872; Richard Lord, 17 Williston on
Contracts § 50:57 (4 th ed. 2005) (“Once it has been determined
that there is a valid mineral lease, the courts will apply the
basic fundamentals of contract law to determine the rights and
liabilities of the parties.”). 	“Generally, the lessor has the
burden of proving the cancellation of a mineral lease.” 	Maralex
Resources, Inc. v. Gilbreath, 134 N.M. 308, 312, 76 P.3d 626, 630
(2003). 	(Internal punctuation and citation omitted.)
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Page 13 of 	74
The Lease is relatively clear in specifying the obligations
imposed on Jensen. 	Jensen met some of those requirements. 	For
example, he paid the full $50,000 advance royalty for the first
year of the lease, by means of the $25,000 cash payment and the
$25,000 promissory note. 	The Court notes that the Lessors and
even Jensen seemed to regard the non-payment of the note as a
remaining Lease payment obligation, but it was not. 	Jensen’s
non-payment on the note constituted a remaining obligation on the
note, not on the Lease. 	So once the Lessors accepted the advance
royalty payment in the form of cash and a note, Jensen had
complied with the advance royalty payment for the first year.
Jensen also installed equipment or purchased the equipment
on site, and sought to get it all running so that he could
produce as required by the Lease. 	He also used and maintained
the water lines and pumps. 	He did pay the electricity bills,
albeit late.
In a number of other respects, however, Jensen did not
comply with the requirements of the Lease. 	As of February 28,
2002, Jensen was not in strict (or even not-so-strict) compliance
with the requirements in the Lease to renew it. 	So the question
arises whether Carl waived some or all of the conditions for
renewal. 	Since nothing in the Lease requires the waiver of any
conditions to be in writing, the Court must determine from the
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Page 14 of 	74
parties’ conduct what if anything was waived. 	(This analysis
bears also on Jensen’s assertion of promissory estoppel.)
Concerning the renewal of the Lease for another year, Jensen
never provided written notice of his intent to extend the Lease,
either by the deadline of January 15, 2002, or any time later.
There is no evidence whatever that Jensen made any tender of the
$50,000 before March 1, 2002. 	Nor did he in reality tender the
$50,000 afterward. 	The evidence was clear that Jensen never had
the funds to back up any offer to pay $50,000.
Jensen correctly cites the requirements for a valid tender:
an offer to perform coupled with the present ability to perform,
so that the obligation could be satisfied but for the other
party’s refusal to cooperate. 	Naumberg v. Pattison, 103 N.M.
649, 653, 711 P.2d 1387, 1391 (1985). 	Based on this definition,
Jensen never “tendered” the payment because he never had the
ability to pay the $50,000.
The Court finds that Carl never waived payment of the second
$50,000 annual advance royalty. 	That much at least is quite
clear, and all by itself probably constitutes all that needs to
be said about waiver. 	Nevertheless, the Court will consider what
other requirements Carl did or did not waive, since those facts
bear on the disposition of the claims.
Jensen argues that Carl and Jensen nevertheless extended the
Lease by the writing which is marked as Exhibit 13. 	Jensen also
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Page 15 of 	74
argues that Carl waived Jensen’s lease defaults (effectively
continuing the Lease), and that in any event Carl’s behavior led
Jensen to reasonably rely on his right to continue his operation
on the property.
Exhibit 13 was an accounting by Carl, who represented the
Lessors, of what were Jensen’s larger outstanding financial
obligations – the note and the electricity bills – together with
what it would cost were Jensen to be allowed to renew the Lease
for another year. 	That accounting did not include the additional
royalties that Jensen owed for gravel sold or for gold produced;
alternatively, regarding the gold, it did not take into account
the lack of dividing and distributing the gold as required by the
Addendum. 	Why those additional figures were not included is not
clear; it is most likely that the unpaid note (10 ½ months
overdue) and the unpaid electricity bills (which Lincoln was
paying out of pocket – see Exhibit 27, check 9036) were
immediately concrete numbers for Carl that needed to be dealt
with. 	And if Carl were faced with a request by Jensen to
continue working the Lease, given that Jensen had spent nearly
all his resources (capital, time, labor of himself and
acquaintances) just getting the operation up and running the
first year, it would also be likely that Carl would put in
writing the additional $50,000 that Jensen would need to come up
with to extend the Lease.
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12 This would have been the correct factual and legal
conclusion.
Page 16 of 	74
The lack of any mention of the non-monetary defaults is not
surprising, if the purpose of the accounting was to arrive at the
dollar figures Jensen owed or might owe. 	Less clear is why the
unpaid royalty payments do not appear in the exhibit. 	It is
likely that the production had been so minimal that Carl
considered the pre-March 1 production covered in full by the
$50,000 advance royalty payment. 12 	Since the amounts owed from
March 1 onward would be relatively small for sand, gravel, rock
and gold, and since it is likely that Carl was keeping close
track of whatever gold was produced, it is also likely that Carl
considered these additional royalty payments to amount to not
very much or to be easily calculated depending on the latest
production. 	Or perhaps Carl simply did not consider the unpaid
royalties as urgent as the other outstanding bills. 	Thus not
including the outstanding royalty obligations (in money’s worth
or in kind) on the accounting does not constitute evidence that
Carl waived those requirements. 	On the other hand, given his
frequent presence at the White Oaks site and his frequent
monitoring and consultation about gold production, it appears
that Carl did waive the requirement of monthly reports.
What is clear, in any event, is that Exhibit 13 does not in
itself constitute Lessors’ agreement to renew the Lease, nor does
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Page 17 of 	74
it constitute evidence of such. 	The fact that there were
subsequent entries made on the document argues in favor of it
being an accounting rather than a final statement of the parties’
contractual agreement. 	Nothing in the accounting states that the
Lease is being renewed. 	Neither party signed the document. 	The
accounting is so utterly different from the (relatively) detailed
documentation that is the Lease and the Addendum, that it is
extremely unlikely that Carl Dotson would ever have conducted
business this way.
Whether measuring from January 15, 2002, or from March 1,
2002, until at least the White Oaks Miners’ Days Fair (the
weekend of April 20-21, 2002), Carl had plenty of time to have
obtained the execution of a written extension with Jensen if
extending the lease was what Carl intended to do. 	No written
extension was executed. 	And Carl had previously shown his
flexibility in working out a financial arrangement that would
allow Jensen to comply with the Lease; i.e., taking half of the
$50,000 payment in the form of a note instead of cash. 	Carl also
did not do that. 	The implication of those facts must be that
Carl did not execute, and did not mean to execute, an extension
of the Lease.
It should be noted that there is some evidence that might be
construed as Carl’s consent to a renewal of the Lease for another
year. 	Jensen made two payments on the note on March 27 and on
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Page 18 of 	74
April 3. 	But Jensen’s making those payments does not change the
conclusion that the Lease was not extended because these were
obligations arising from the note, which Jensen was obligated on
regardless of the termination of the Lease. 	It is also the case,
and somewhat odd, that Jensen seems to have paid for a month of
electricity for the new lease period. 	Jensen and Carl may have
agreed that Jensen pay this bill as well if Jensen were going to
continue to operate for a while. 	An alternative explanation may
be that Jensen offered to pay that bill as a way of making or
keeping Carl happy in the same way he did with his offer to Carl
to hunt elk on Jensen’s land in Chama. 	But the significance of
the payment of that one bill, even coupled with Jensen’s
remaining on the site after February 28, 2002, pales when
compared with the contrary evidence. In any event, the notation
on Exhibit 13 by itself is too ambiguous to carry the weight that
Jensen puts upon it.
Arguably the strongest evidence Jensen has on this issue is
that Carl did not tell Jensen to get off the property on March 1,
2002. 	It seems clear Carl did not do any such thing, at least
until he allegedly instructed David to go to Klein’s office and
have him issue the letter announcing the termination of the
Lease. 	(Whether Carl issued that instruction makes little
difference for this analysis.) 	The Debtors cited the June 26,
2002 letter from Klein, and particularly its wording, as evidence
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13 The argument is not entirely academic; were it the case
that Carl instructed David to have the letter sent, it would
provide additional support for the contention that Carl did not
consider that he had bound the Lessors for an extension of the
lease through February 2003.
Page 19 of 	74
that Carl had decided that the Lease had been terminated for
nonperformance and to notify Jensen that he had to leave. 	David
also testified that on his deathbed Carl told David to go to
Klein and have him send the letter that Carl had had Klein
already prepare. 	The Court has some doubt whether Carl ordered
the letter to be sent, or whether it was David’s rather than
Carl’s instruction that generated the letter. 	On this point no
one produced Klein, who might have been able to shed some light
on this issue, including specifically when he was first told to
prepare the letter, and by whom. 	And without Klein, the Court
also has some doubt about the significance of some of the
wording. 	It could be, for example, that the omission of any
mention of the April 3 payment from the letter either reflected
that Carl had given Klein instructions sometime before April 3 to
prepare the letter, as the Debtors contend, or that Klein and/or
David were unaware or forgot about the April 3 payment when and
if David instructed Klein to prepare the letter.
However, questions about the authorizing of the letter and
its details are somewhat academic. 13 	David effectively, and then
formally as of June 29, succeeded Carl as the executive officer
of the Debtors. 	So, whether it was Carl or David who issued the
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14 Jensen argues that the June 27, 2002 letter from David
(Jensen Exhibit 10) constitutes an admission by David that Carl
had renewed the Lease. 	The wording of the letter, particularly
when coupled with the delivery of the June 26 letter from Klein
and the then polite but very strained relationship between David
and Jensen, is most accurately construed as a statement from
David that what was “dead” was the Lease, not any subsequent
(non-existent) agreement.
Page 20 of 	74
instructions to Klein, it was the Debtors who acted through that
letter. 	The letter constituted notice that the fence sitting was
over; the Lessors were telling Jensen that his rights to operate
under the Lease were terminated. 	And in fact the letter made
explicit what had already happened effective March 1, 2002, by
the terms of the Lease. 	At a minimum, when Jensen failed to the
$50,000 to renew the Lease, he triggered the termination of his
right to operate after February 28. 14
Once the Lease was terminated automatically by Jensen’s
failure to perform, it could not be revived. 	Greer v. Salmon, 82
N.M. 245, 251, 479 P.2d 294, 300 (1970). 	See also Jupiter Oil
Co. v. Snow, 819 S.W.2d 466, 468 (Texas 1991)(A mineral lease is
a fee simple determinable estate in the realty. 	The grantor
retains a possibility of reverter. 	Upon termination of the
lease, the grantor’s possibility of reverter becomes a present
possessory interest.) 	Reversions happen automatically and arise
by operation of law, not by any act of a party. 	Goldstein v.
Lindner, 254 Wis.2d 673, 681-82, 648 N.W.2d 892, 896 (Ct. App.
2002). 	Thus, even if Carl had continued to accept Jensen’s
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Page 21 of 	74
performance as a way of confirming the continuing validity or
vitality of the Lease (although that is not what the Court is
saying), that behavior would not revive Jensen’s right to
operate. 	Once the lease terminated, the possibility of reverter
became possessory and Jensen was left with no interest in the
land. 	He and Carl would have had to have entered into a new
lease.
As of March 1 and forward, Jensen remained on the site in a
very precarious and frustrating situation. 	He had used up most
of his money and all of his time on the first Lease period, and
all he had to show for it was a little bit of production and
major defaults on the Lease and the note. 	He clearly had not
complied with the requirements to extend the Lease for another
year, and so was vulnerable to Carl telling him to leave.
What Jensen had going for him was that Carl had no one else
to replace Jensen. 	If Carl ordered Jensen off the property,
there would be no one looking for gold. 	This was at a time when,
according to Hal, Carl was accumulating $26,000 in credit card
debt to keep the companies going. 	It is true that Jensen would
still be liable for the note payment, and his production and his
equipment would be available for liquidation. 	But Carl would
reasonably be wondering whether Jensen could or would pay the
note. 	There was very little production, and Carl must have
concluded that much of the equipment that Jensen owned was
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15 This analysis is consistent with Keller’s testimony about
Carl’s continuing solicitude for Jensen and his operation,
including in 2002.
Page 22 of 	74
virtually worthless. 	So any real hope of a substantial income
from the property after all the years and after all the previous
failed attempts would have depended on Jensen finding and
extracting significant quantities of gold. 	Jensen would not be
able to do that if he were not on the property.
Jensen’s unstated argument is that there were only two
options available to Carl: either declare the Lease terminated
and order Jensen off the property, which Carl did not do, or
renew the Lease by not declaring it terminated and not ordering
Jensen off the property. 	(Not that the latter is possible; see
Greer v. Salmon above.) 	In fact, a third alternative was
available, which was that Carl was deciding what to do and in the
meantime was not electing either alternative. 	In other words,
the parties’ relationship was in a sort of suspended animation.
The Court finds that is what was happening; namely, that as of
March 1, 2002, Jensen was staying on the property essentially as
Carl’s “guest”. 	Carl was permitting him to stay temporarily,
without a formal renewal of the Lease and of course without
payment of the $50,000, while he tried to decide what to do and
while both of them hoped that significant production of gold
would begin in the meantime. 15
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Page 23 of 	74
After a mineral lease expires, the lessee is in the position
of one holding over after executing a deed. 	Natural Gas Pipeline
Company of America v. Pool, 124 S.W.3d 188, 194 (Texas 2003).
The lessee no longer has any interest in the real estate or the
minerals. 	See Jupiter Oil Co., 819 S.W.2d at 468 (A mineral
lease is a fee simple determinable; upon termination of the lease
the mineral estate automatically reverts to the grantors.)
As a holdover tenant after the expiration of a mineral
lease, the general rule is that the landlord has the option to
treat a tenant wrongfully holding over as a trespasser who may be
ejected, or to accept the holding over and treat him as a tenant.
Bryan v. Big Two Mile Gas Co., 213 W.Va. 110, 119, 577 S.E.2d
258, 267 (2001). 	The decision is the landlord’s only; the
holdover tenant has no election to treat himself as a tenant.
Id. 	See also Moon v. Marker, 26 Cal.App.2d 33, 36-37, 78 P.2d
460, 462 (1938)(The conditions precedent of the mineral lease
must be satisfied to extend the lease and if not satisfied the
lessee has no claim to any right of possession and becomes a mere
tenant at sufferance.)
Therefore, it was Debtors’ election on how to treat Jensen
after the lease expired. 	Jensen had no option but to accept the
treatment elected by the Debtors.
Jensen had no reasonable expectation that he could stay for
any longer than Carl was willing to let him stay (and certainly
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16 Jensen also asserts that he committed to a major
equipment lease on or after March 1, 2002 in reasonable reliance
on an extension of the Lease. 	However, the alleged evidence of
Carl’s agreement to an extension, the accounting (Jensen Exhibit
13), was not “executed” until March 27, or later. 	And although
the first page of the Citicapital purchase agreement (the exhibit
does not contain the last three pages) appears to require Jensen
to begin making payments on March 1, 2002, the stipulated
judgment with Citicapital recites in paragraph 3 that the
agreement was executed November 17, 2001. 	Jensen Exhibit 17 ¶ 3.
It may be that the reason the payment date was changed to March
1, 2002 was because that was the date the equipment was actually
being delivered to the site or purchased by Jensen. 	And that
would make the documentation consistent with Jensen’s testimony.
(The assignment of the master lease with First Capital is dated
July 26, 2001 and the Niebaum equipment purchase is dated April
10, 2001, Exhibits 2 and 7 respectively, so the equipment covered
by those leases was presumably already on site by March 1, 2002.)
Page 24 of 	74
not until March 1, 2003 without Carl’s approval), and Carl had no
reason to believe that Jensen would consider he had a right to
stay on the property longer than Carl was willing to let him.
Jensen knew this. 	And consequently he had no reasonable
expectation of being allowed to continue to operate for any given
period of time. 	It is true that after March 1, 2002, Jensen
moved a safe and other equipment onto the site. 16 	In so doing he
clearly was relying on the fact that Carl had not ordered him off
the property at the time. 	But since he had started to accumulate
a small collection of gold, it would have made sense in any event
to have acquired a safe. 	And as long as Carl was not ordering
him off the property, Jensen could reasonably hope to hit “pay
dirt” and thereby persuade Carl to extend or renew the Lease.
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17 The June 27, 2002 letter from David to Jensen, Exhibit
10, does not establish that the Lease had been renewed. 	To begin
with, by itself the letter can naturally be read to refer to the
termination of the Lease rather than any new arrangement. 	And it
follows by one day, or is at least dated one day after, Klein’s
letter, dated June 26, 2002, which confirmed or announced the
termination of the Lease, making the more natural reading of the
June 27 letter to be referring to the termination addressed in
the June 26 letter. 	The Klein letter was authorized by either
Carl or David. 	It would have made no sense for either Carl or
(continued...)
Page 25 of 	74
But none of these actions were taken in reasonable reliance on
the right to continue operating for another year.
Jensen’s behavior during the spring, summer and fall of 2002
support this conclusion. 	The Court finds that at the conclusion
of the dramatic showdown at the site on July 14, Jensen and
Keller quickly and quietly left, and would not have done that had
Jensen believed that he had the right to continue operating. 	And
the Court also finds that Jensen otherwise would not have waited
until late 2002 or early 2003, when he was sued by the equipment
lessors, to make demand on or sue the Lessors and David over his
right to operate.
Finally, Jensen could not reasonably have relied on Carl’s
words or actions to believe that the Lease was still operative.
Jensen was an experienced miner; he knew he had not performed
under the Lease, and he knew that what it took to renew the Lease
had not been done. 	He undoubtedly knew that when Carl was ready
to renew the Lease, Carl would have a document drawn up saying
that. 17 	No reasonable person in these circumstances would have
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17 (...continued)
David to have sent that June 26 letter (Jensen Exhibit 9) if
either of them felt that Carl had entered into a new deal or a
renewal of the Lease. 	This interpretation is also consistent
with the letters from David to Jensen dated July 7 and July 16
respectively (Lessors Exhibits B and C). 	And throughout David’s
testimony it was evident that he was eager to expel Jensen, so it
is unlikely he would be willing to acknowledge in writing that
any new deal was in place to allow Jensen to stay.
18 As Debtors point out, given the relationship between
Keller and Jensen, it is telling that Keller did not testify that
at any point Jensen told him the Lease had been renewed. 	On the
contrary, Keller’s testimony was that he and Jensen were
uncertain what would happen were Carl to die.
Page 26 of 	74
concluded that the Lease had been renewed for another year. 18
That Jensen paid $19,000 on the $25,000 note obligation on March
27 and April 4, 2002, does not change this result. 	Jensen was
liable on the $25,000 note regardless of the status of the Lease;
he had already received the consideration for the note when he
was allowed to mine the property for a year.
There is evidence that suggests Carl waived certain other
fairly significant requirements. 	Paragraph I of the Lease is
reasonably clear that, once the sand, gravel and rock were
“removed, or sold” (emphasis added), the 10% royalty payment
became due. 	The same applies (albeit not unambiguously so) for
the 12% royalty on gold “resulting from the milling process and
any operations conducted by Lessee on the leased lands and
interests,...” 	The gold royalty provision is apparently
overridden by the Lease Addendum’s provisions for inspecting and
dividing the gold. 	Jensen did not pay any of the additional
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19 It is also possible that Carl was concerned that
accepting payments or gold would prejudice Lessors’ right to tell
Jensen to leave the site. 	In part because the Court is not
convinced that Carl directed the issuance of the Klein letter
(Jensen exhibit 9), there is insufficient evidence of this
motivation.
Page 27 of 	74
royalties due upon the sale of sand or gravel. 	Nor did he pay
any royalties on the gold that was produced or divide it up with
Carl. 	The conduct of the parties suggests strongly that Carl
also waived these requirements, at least until there was a larger
amount of either money or product deal with. 	Concerning the
gold, Keller testified that Jensen offered twice to split the
gold with Carl but Carl specifically declined.
A good part of the “evidence” of the waiver of the
obligation to divide the gold each month is that there is no
evidence any such division took place. 	Although Carl was on the
site many times and very interested in what progress was being
made, there was no testimony of even a single dividing session
taking place. 	Jensen testified that he offered in April 2002 to
split with Carl the gold then available, but Carl declined the
offer. 	This all suggests that Carl was waiting for larger
amounts of gold to be produced by Jensen before starting the
division process. 19
This conclusion also addresses in part David’s preposterous
claim that Jensen produced hundreds of thousands of dollars worth
of gold. 	Such an action on Jensen’s part would be so self-
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Page 28 of 	74
defeating that it challenges the credibility of the allegation.
It is completely at odds with the efforts to sell trifling
amounts of gold at the Miner’s Days festival and at the Silver
City rock shop. 	And Carl, who kept himself informed about the
status of production, surely would have claimed a share of so
much gold if it were available. 	There would be records of that,
and there are none.
Carl appears to have waived at least the timing of the
performance of some of the other Lease requirements. 	He accepted
late payment of the electricity bills. 	Jensen never came close
to processing 30,000 yards of material, but Carl apparently never
informed Jensen that Jensen’s failure to process 30,000 tons of
material by March 1, 2002 meant the Lease would not be renewed.
Jensen never submitted the production reports required by
the lease. 	Paragraph I of the Lease required Jensen to “report
production monthly in forms as Lessors may request.” 	However, no
evidence was presented by either side that Lessors had submitted
any forms for Jensen to use. 	It appears either that Carl
required no production reports or, more likely, Carl received
oral production reports and kept himself otherwise informed about
what production was occurring. 	The Lessors belated demand to
Jensen to produce such reports in June or July 2002 came too
late; Carl had already waived that requirement at least up
through mid-June 2002.
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20 Jensen Exhibit 13 and Carl’s actions make clear that Carl
waived the January 15 notice requirement.
Page 29 of 	74
Paragraph F of the Lease called for Lessee to restore the
original topography “as mining proceeds”. 	Given that previous
operators had already been on the site and how little mining
Jensen actually did, it is not clear how material a breach of the
Lease this might constitute. 	In any event, even assuming that
the quoted phrase required Jensen to engage in restoration while
he was operating, it seems this requirement was the last thing on
anyone’s mind, including Carl’s. 	The June 26, 2002 letter from
Klein makes no mention of it.
In summary, while it is apparent that the Lessors, through
Carl, waived performance of a number of the requirements imposed
on Jensen by the Lease and the Lease Addendum, certain critical
obligations were not waived. 	The requirement for renewing the
Lease by paying the $50,000 advance royalty for 2002-03 was not
waived and Jensen did not perform. 20 	Lessors, either through
Carl’s (or for that matter, David’s) words or actions or through
any other action, did not agree to be bound to an extension of
the Lease. 	The fact that Jensen was continuing to remain on the
site did not by itself have the effect of renewing the Lease.
Bryan v. Big Two Mile Gas Co., supra. 	The Lease terminated on
March 1, 2002.
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Page 30 of 	74
The conclusion that the Lease was terminated leads to a
number of other conclusions concerning the causes of action
asserted by Jensen. 	There can be no claim of breach of contract
except those provisions of the Lease which deal with the
consequences of Lessee’s breach. 	(These are discussed below.)
Thus the bedrock claim that Jensen had the right to continue to
operate for another year after February 28, 2002 is simply not
sustainable.
There can be no claim of conversion concerning the right to
operate on the site, because Jensen was properly excluded from
the site. 	As explained above, there was a period after February
28, 2002 when Jensen could have been excluded but was not, and
both Carl and Jensen knew it. 	The fact that Jensen was not
excluded from the property when he could have been did not
reinstate Jensen’s right to be on the property and thereby
provide him with a cause of action for conversion.
Nevertheless, Carl did allow Jensen to remain on the site
and operate for a period of time. 	And this provided Jensen with
certain rights that he would not have had if he been expelled
from the site on March 1 and thereby continued on as a
trespasser.
Remedies and damages
As described above, Jensen remained on the property with
Carl’s permission. 	He continued to produce sand, gravel and
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21 	[T]he essential elements of promissory
estoppel are: (1) An actual promise must have
been made which in fact induced the
promisee's action or forbearance; (2) The
promisee's reliance on the promise must have
been reasonable; (3) The promisee's action or
forbearance must have amounted to a
substantial change in position; (4) The
promisee's action or forbearance must have
been actually foreseen or reasonably
foreseeable to the promisor when making the
promise; and (5) enforcement of the promise
is required to prevent injustice.
Strata Production Co. v. Mercury Exploration Co., 121 N.M. 622,
628, 916 P.2d 822, 828 (1996).
Page 31 of 	74
gold, which production is most logically and reasonably treated
according to the terms of the Lease that deal with production.
And that is how the persons all seemed to conduct themselves.
Jensen’s statement that Lessors could keep his production to pay
his debts implicitly asserts that the productions was Jensen’s.
The testimony by David and Hal that Jensen said that, without a
qualifying statement on their part that the production did not
belong to Jensen, confirms their understanding that the
production was Jensen’s. 	And in any event, it would have been
unfair of Carl to allow Jensen to continue to operate and produce
under the reasonable belief that Carl was allowing the status quo
to continue until he told Jensen otherwise. 	Jensen does have a
legitimate claim for promissory estoppel 21 , but only in this
sense, and not for the broader claim that the Lease had been
renewed and Jensen was entitled to stay for another full year.
It simply would not have been reasonable for Jensen to rely on
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22 Renee Gurule, the heavy equipment rental coordinator for
Wagner Equipment Company, testified that she provided to Jensen
the 2002 rate sheet admitted as Jensen exhibit 11. 	However, she
also testified that she never saw Jensen’s equipment and so could
not say what condition it was in. 	Her testimony was entirely
credible but completely lacking in probative value.
Page 32 of 	74
Carl’s actions to believe the lease had been extended for another
year.
Jensen’s alleged waiver
Lessors argue that Jensen abandoned his property which
constituted collateral for his Lease defaults, including waiving
his rights to a commercially reasonable disposition of that
collateral. 	The Court finds that Jensen did not waive his
rights.
Part of the Lessors’ argument is based on the testimony of
David and Hal Dotson that Jensen, on July 14 in the trailer, told
David and Hal to take what he had to pay his debts. 	Jensen
denied making any such statement (and by this time on July 14,
Keller was outside the trailer and thus beyond hearing distance).
It is conceivable that Jensen made such a statement,
especially if he thought that he owed the rest of the note plus
$50,000 for 2002-03. 	Much of the mining equipment was worthless,
as demonstrated by the months of ultimately futile effort to get
it all working efficiently and Keller’s testimony that they would
have been better off just junking the equipment and starting
again with other equipment. 22 	He may not have thought the sand
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Page 33 of 	74
and gravel would be nearly enough to pay the $50,000, especially
after the argument with David about how much sand and gravel was
actually stockpiled and taking into consideration how much of a
fight he would have with David about it. 	This might also explain
why Jensen did not immediately demand a commercial disposition of
the product. 	This interpretation of the evidence would be
consistent with the other actions of Jensen, Keller and Carl,
which strongly suggest that none of them thought the operation
produced much significant value, at least in the way of gold.
All this would provide the context in which a statement by
Jensen, telling David and Hal to keep what he had to pay his
debts, made perfect sense.
On the other hand, that statement, if it was made, does not
literally say that Lessors may take what Jensen has to pay his
debts and not return the rest. 	The evidence is clear that what
Jensen desperately wanted then, as he does now, was the chance to
continue to operate at the White Oaks site. 	It is also clear
that what he was hearing that day was what he had been trying to
prevent for months: the Lessors, originally in the person of Carl
and now in the person of David, telling him that the dream of a
golden payday at the White Oaks site was now ended. 	Whether
there was sufficient collateral to leave him something after his
debts were paid was not the big issue, or perhaps even an issue
at all in Jensen’s mind at that time. 	And therefore the Court
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Page 34 of 	74
cannot find that in making that statement, Jensen was waiving a
commercial disposition of his collateral and a return to him of
what was not needed to pay his debts.
Part of Lessors’ waiver or ratification argument is also
based on Jensen’s failure to take any action to assert ownership
rights to the collateral until months later. 	Lessors point to ¶
M that requires Jensen to remove his equipment within sixty days
of the termination of the Lease or lose it to Lessors. 	Lessors
claim that Jensen abandoned the equipment by not removing it
within the sixty days. 	The June 26, 2002 Klein letter (Jensen
Exhibit 9) states that the sixty days began to run from March 1,
2002. 	Given that the Lessors had not notified Jensen of the
termination of the Lease and of his obligation to leave on March
1, the time could not have begun to run that early. 	To hold
otherwise would ignore Carl’s conduct in keeping open the option
to re-sign the Lease, and would be quite unfair to Jensen. 	In
addition, David had locked Jensen out of the site starting no
later than about June 26, 2002, and Jensen had no way to get his
property. 	Given David’s assertion that Jensen owed $161,000,
Jensen had no expectation that he would be able to recover any of
his equipment. 	This would have seemed particularly obvious as
David moved some of Jensen’s equipment onto the site and then
used it all to continue operations. 	Finally, as is apparent, in
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23 The second action appears to have been filed in early
2003. 	Exhibit 18 (No. CV-2003-02267). 	Plaintiff First Bank sued
Lincoln and David; Jensen filed a third party action against Old
Abe.
24 Under cross examination, Jensen testified that he went to
see Mr. Arland after receiving the letter from Klein, and that he
left in Mr. Arland’s hands the question of what to do.
Page 35 of 	74
June and July 2002 Jensen had few resources to initiate legal
action to recover his property.
The Court also finds that Jensen did not unreasonably delay
in asserting his rights to the collateral, including to the
leased equipment. 	Jensen was expelled from the site in the
middle of July. 	If David and Hal are correct in what Jensen said
(i.e., take what I have to pay what I owe), that statement,
coupled with Jensen’s statements to Keller and his actions in
quickly leaving the site, suggest the behavior of a person hit
hard emotionally with the realization that his mining operation
was over. 	That emotional impact could result in the need for a
period of time to recover and consider options. 	It appears that
Citicapital’s replevin action against Jensen was filed within a
few months. 	Jensen Exhibit 17 (No. D-0117-CV-200202462). 	And it
was in that action that Jensen filed his third party action
against Lessors and David. 23 	And he had already seen counsel
(William Arland) before he was sued. 24 	Whatever Jensen’s state
of mind was, his delay in taking action to protect his interests
was not unduly long under the circumstances.
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Page 36 of 	74
Generally, New Mexico cases have defined waiver as the
intentional relinquishment of abandonment of a known
right.... [T]he intent to waive contractual obligations
or conditions may be implied from a party’s
representations that fall short of an express
declaration of waiver, or from his conduct.
J.R. Hale Contracting Co., Inc. v. United New Mexico Bank, 110
N.M. 712, 716, 799 P.2d 581, 586 (1990). 	(Citations omitted.)
Jensen’s circumstances and the action that he subsequently took,
were such that he cannot be said to have intelligently and
knowingly waived his rights. 	Nor by his earlier inaction did
Jensen ratify the Lessors’ treatment of the collateral. 	See
McDonald v. Burke, 288 S.W.2d 363, 367-68 (Ky. 1956):
The doctrine of equitable estoppel is frequently
applied to transactions in which it would be
unconscionable to permit a person to maintain a
position inconsistent with one in which he, or those by
whose acts he is bound, has acquiesced. 	Declarations
or conduct which might not of themselves amount to an
estoppel may become such by acquiescence. 	Estoppel by
acquiescence is, obviously, closely related on the one
hand to estoppel by consent, and, on the other hand, to
estoppel by silence or inaction, or by delay. 	In fact
it is often impossible to distinguish clearly between
such estoppels, and the courts in many instances use
the term ‘acquiescence’ as covering or including all
the others. ‘Acquiescence,’ as the term is here used,
however, refers to an implied consent and need not
involve anything in the nature of a positive
affirmation; and while, as has already been pointed
out, silence or inaction may, under some circumstances,
amount to acquiescence, it does so only where the
circumstances are such as to afford some ground for
believing that acquiescence was intended. 	The rule is
well recognized that where a party with full knowledge,
or with sufficient notice or means of knowledge, of his
rights and of all the material facts remains inactive
for a considerable time or abstains from impeaching a
contract or transaction, or freely does what amounts to
a recognition thereof as existing, or acts in a manner
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Page 37 of 	74
inconsistent with its repudiation and so as to affect
or interfere with the relation and situation of the
parties, so that the other party is induced to suppose
that it is recognized, this amounts to acquiescence and
the transaction, although originally impeachable,
becomes unimpeachable.'
Cf. Restatement (Second) of Contracts § 69 cmt. a (1981)
(Acceptance of an offer by silence is exceptional.) 	Jensen acted
quickly enough to communicate his non-acquiesence in the
treatment of the collateral.
Jensen’s collateral rights
One consequence of the holding that what Jensen had produced
was his is that he owed royalties on that production at the rates
provided for in the Lease, even though he had not paid the
$50,000 advance royalty. 	As odd as it may seem that Jensen
should not have to pay the $50,000 advance royalty, that result
follows from Carl’s allowing Jensen to continue to operate
without having paid the $50,000. 	Payment of the $50,000, or the
imposition by the Court of the obligation to pay it, would have
the effect of the parties entering into a lease for another year,
and would be contrary to the promissory estoppel that the
Lessors, through Carl, brought about. 	By not paying the $50,000
advance royalty, Jensen gave up the right to stay on site and
operate for another full year. 	And in doing so, he risked having
the Lessors expel him from the property at any time (which they
eventually did) even if he were to have suddenly discovered an
enormously valuable deposit of gold.
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25 The measure of damages for a trespass committed under an
honest belief by the trespasser that it was acting within its
legal rights is the value of the product less the cost of
production, Bryan v. Big Two Mile Gas Co., 213 W. Va. at 120, 577
S.E.2d at 268, which cost must be reasonable. 	Id. at 121, 577
S.E.2d at 270. 	A wilful or bad trespasser loses the right to
deduct the cost of production. 	Id. at 120, 577 S.E.2d at 268.
Accord, Alvarado Mining & Milling Co. v. Warnock, 25 N.M. 694,
187 P. 542 (1919); Deltic Timber Corp. v. Great Lakes Chemical
Corp. 2 F.Supp.2d 1192, 1200 (W.D. Ark. 1998).
Page 38 of 	74
On the other hand, not paying the $50,000 advance royalty
did not mean that he did not have to pay royalties on what he
processed; that obligation remained. 	Jensen was never entitled
to mine the site free of charge, so it makes sense Jensen would
still owe royalties on what he produced. 	Carl’s conduct, whether
characterized as acquiescence or promissory estoppel or other
similar theory, was such that the rights and remedies of the
parties “continue[d] to be governed by lease-type rights and
responsibilities – i.e., a ‘holdover tenancy’”. 	Bryan v. Big Two
Mile Gas Co., 213 W.Va. at 120, 577 S.E.2d at 268. 	Jensen’s loss
of the right to continue on the site does not mean, in these
circumstances where Carl allowed him to stay, that everything he
produced belonged to the Lessors, which would be the case if
Jensen were a trespasser. 25
Another consequence of the holding is that the royalty
payments need to be allocated for the production ending on
February 28, 2002 and that which began on March 1, 2002. 	As is
detailed below, the production through February 28, 2002 was
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Page 39 of 	74
small enough that the advance royalty covered the royalty
payments in full.
The Lease has specific language about how the production and
the equipment are to be treated as collateral to ensure
compliance by Jensen with his Lease obligations. 	¶ M. 	From the
commencement of the Lease, the equipment on the site (and the
production) constitute collateral. 	On termination of the Lease,
if Jensen were to be current on his Lease obligations, he has
sixty days to remove the equipment from the site. 	If he is not
current on termination of the Lease, then all Jensen’s equipment,
whether on site or not, becomes collateral to secure payment of
“any sums unpaid” under the Lease. 	The Lease terminated on March
1, 2002. 	As of that date, unpaid sums included the promissory
note and the electricity bills. 	Thus, “all production stockpiled
on site and all equipment [became] security for any sums unpaid
under the lease....”
“Equipment” is not a defined term in the Lease. 	Paragraph N
of the Lease, titled “Equipment and Commencement of Operations”,
refers to “equipment on site for conduct of operations” and
requires that Jensen purchase that equipment from Niebaum. 	The
language suggests that by “equipment” the parties meant items
like conveyor belts, crushers, screens, etc., and in fact this is
what Jensen purchased from Niebaum. 	However, the term “all
equipment” in ¶ M suggests a broader scope for that term when the
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26 One definition of “equipment” is “all the fixed assets
other than land and buildings of a business enterprise”.
Webster’s Ninth New Collegiate Dictionary 421 (1993).
Page 40 of 	74
Lease has been terminated and the lessee owes money to the
Lessors. 	Paragraphs M and N address quite different purposes of
the Lease and relationships between the parties, and those
differences are reflected in the language of the two paragraphs
of the Lease. 	Thus the phrase “all equipment” is reasonably read
to include everything Jensen had assembled for the operation that
could reasonably be characterized as “equipment”. 26 	The parties
have treated the term this way; e.g., Jensen Exhibit 8, which
includes the pickup truck, the dump truck and the grader in the
list of “White Oaks Gold Mine Equipment”.
The equipment and the product were to be treated as
collateral, not deemed abandoned or forfeited outright as would
be the case for equipment left on the site sixty days after
termination of the Lease with Jensen being current. 	Lease, ¶ M.
Jensen was entitled to a commercially reasonable disposition of
the collateral and the return to him of excess proceeds.
Analogizing the Lease to a non-mineral lease, to allow the
lessor to dispose of the collateral in a non-commercially
reasonable manner and to keep any amount greater than the total
amount of past or future rent owed by lessee would run counter to
New Mexico’s landlord’s lien statute and the underlying
principles of American contract law. 	N.M. Stat. § 48-3-5 (1997);
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Page 41 of 	74
Nearburg v. Yates Petroleum Corp. 123 N.M. 526, 943 P.2d 560 (Ct.
App.), cert. denied, 123 N.M. 446, 942 P.2d 189 (1997).
The relevant section of Paragraph M of the lease agreement
essentially creates a landlord’s lien on the mining equipment and
any minerals present on the leased site. 	In fact, if Paragraph M
did not include the section regarding the lien, New Mexico law
would automatically have created a landlord’s lien on property of
the lessee’s that “remains in or about the premises rented.”
N.M.S.A. § 48-3-5. 	This would include the mining equipment and
all minerals present on the site as of the beginning of the
tenancy or after property came onto the premises. 	Id.; Nat’l
Inv. Trust v. First Nat’l Bank, 88 N.M. 514, 543 P.2d 482 (N.M.
1975); Kuemmerle v. United N.M. Bank, 113 N.M. 677, 831 P.2d 976
(N.M. 1992). 	According to the statute, the lien will secure only
the rent due and the rent to become due. 	§ 48-3-5; Chessport
Millworks, Inc. v. Solie, 86 N.M. 265, 522 P.2d 812 (Ct. App.
1974). 	This interpretation dovetails with the wording “in
satisfaction of any sums due [Lessors]” in ¶ M of the Lease.
Limiting the reach of the lien in this case also complies
with the Restatement (Second) of Contracts, and avoids the
problem of making Lease ¶ M into an invalid liquidated damages
clause. 	See Restatement (Second) of Contracts § 356 (1981);
Nearburg, 123 N.M. at 532, 943 P.2d at 566 (“A penalty is a term
fixing unreasonably large liquidated damages and is ordinarily
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27 The Court has already noted that by accepting the
promissory note in addition to the $25,000 cash, Lessors had
received the full $50,000 advance royalty required by the Lease.
See also ¶ I (Lessors’ acknowledgment of receipt of nonrefundable
(continued...)
Page 42 of 	74
unenforceable on grounds of public policy because it goes beyond
compensation into punishment.”).
Hal Dotson conceded that Lessors sent no notice to Jensen
concerning the sale of any of the collateral. 	The sale of
collateral needed to comply with the “commercially reasonable”
standard set by N.M. Stat. § 55-9-504 which follows U.C.C. § 9-
504. 	While the underlying contract is a lease agreement, not
normally subject to the U.C.C., courts throughout the country
have applied their identical state enactments of § 9-504 to apply
to the sale of collateral obtained through a lien on property
other than goods. 	Akins v. Santa Clara Land Co., Ltd., 34 S.W.3d
334 (Tex. App. 2000) (applying requirement to collateral seized
through landlord’s lien); River Valley State Bank v. Peterson,
154 Wis.2d 442, 453 N.W.2d 193 (Ct. App. 1990) (same); Cantrade
Private Bank Lausanne Ltd. V. Torrsey, 876 F.Supp. 564 (S.D.N.Y.
1995) (mortgage lien); Iama Corp. v. Wham, 99 Nev. 730, 669 P.2d
1076 (Nev. 1983) (same).
Jensen’s debt
As of March 1, 2002, the date on which the Lease was
terminated, Jensen owed $662.32 for unpaid electricity bills and
approximately $27,500 on the promissory note. 27 	Jensen Exhibit
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27 (...continued)
deposition [sic] on first year annual advance royalty). 	But the
satisfaction of the requirements of ¶ I does not mean that the
unpaid portion of the promissory note did not constitute a part
of “any sums due” as addressed by a different paragraph of the
Lease. 	¶ M.
28 There was no evidence of any additional electricity bills
for April through June or July 2002 that were incurred and not
paid. 	But those bills, and the March bill, for that matter,
would not come under the first year bills that needed to be paid.
Page 43 of 	74
13. 	However, by the time that the collateral was applied to the
debt, the electricity bill had been paid, including the March
2002 bill for $117.04 28 (Jensen Exhibits 13 and 27), and the
promissory note obligation had been reduced by $19,000 (Jensen
Exhibits 13, 27 and 28) to approximately $8,500, comprised of
$6,000 remaining principle plus 10% interest on $25,000 for about
one year.
The royalties on the small amount of sand, rock gravel and
gold produced before March 1, are a fraction of the $50,000
advance royalty already paid. 	In consequence, no further royalty
payments were due for the first (and only) year of the Lease,
either on March 1, 2002, or in July 2002 when Jensen was expelled
from the site. 	Jensen did owe Lessors royalties from the
production from March 1 onward. 	Because the Court rules (below)
that the amount of these royalties should be netted out against
the value of the production, the royalties owed for March 1 and
afterward are not included in this calculation of what debt
Jensen owed to Lessors. 	So, the “unpaid sums” that Jensen was
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29 Terms of the lease schedules, including a “purchase
price” and a fixed price obligation on lease termination of
$1.00, make it clear that the lease was really a purchase
agreement.
30 Jensen testified that the Cardinal digital indicator and
the Okidata ticket printer were never delivered, although these
two items are listed on Jensen Exhibit 5.
Page 44 of 	74
obligated to pay from the year the Lease was in effect was about
$8,500.
Value of Collateral
Jensen’s property that constituted the collateral taken by
Lessors was comprised of the following: (a) the equipment Jensen
was purchasing from Niebaum (Jensen Exhibit 7); (b) the equipment
he was purchasing, in the form of a lease 29 , from First Banks by
virtue of an assignment of Niebaum’s lease from First Capital
Group: the master lease (Jensen Exhibit 3) incorporating the
lease schedule for the 1994 Case Loader Model 821B (Jensen
Exhibit 4) and the lease schedule for the Cardinal scale
(included in which are the concrete deck and load cells) 30 and
the Caterpillar generator (Jensen Exhibit 5); (c) the equipment
he was purchasing from Citicapital pursuant to a purchase money
security agreement, comprised of a Deere excavator, three Goodman
radial stackers, and a Goodman conveyor (Jensen Exhibit 6); (d)
assorted items of equipment including the Ford 350 pickup truck,
the dump truck, the grader, two underground loaders, the gold
wheel, water pumps, supplies of oil, etc. but excluding the sand,
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31 Exhibits 7 and 8 are somewhat contradictory; for example,
the total purchase price of the equipment was $44,000 according
to Exhibit 7, whereas the Niebaum list on Exhibit 8 values the
screen plant all by itself at $45,000. 	The Court finds that the
lower values it has selected effectively resolve the
discrepancies.
Page 45 of 	74
gravel and rock as detailed in the “upper list” of equipment in
Jensen Exhibit 8; (e) the sand, gravel and rock that had been
stockpiled; and (f) the gold that had been produced.
Jensen attempted to establish the value of the property
through, inter alia, Jensen Exhibits 8 and 19. 	He partially
succeeded, as follows:
(a) The evidence was clear that the screen plant and conveyors he
bought from Niebaum (Jensen Exhibits 7 and 8 31 ) were in bad shape
when he took them over and that they never functioned adequately.
And Keller’s testimony that the equipment as a whole did not
function and should have been replaced, suggests that perhaps the
sand screw, the magnetic drum, and the sluice box did not
perform. 	Thus, although the purchase price of $44,000 (Jensen
Exhibit 7) was the result of arm’s length negotiations, the
equipment overall simply was not worth that. 	The mobile home
office and furnishings obviously performed their function, and
there was no evidence that the portable welder did not function.
Therefore the Court assigns a value to the Niebaum equipment of
$5,000.
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32 The master lease was assigned to Jensen. 	Jensen Exhibit
2.
33 That Jensen had paid nothing on this lease/purchase
agreement or on the Citicapital agreement is irrelevant; the
equipment had been delivered to him and Jensen had obligated
himself to pay for it, and in fact now has a judgment against him
for its price.
Page 46 of 	74
(b) The First Bank equipment purchase was presumably negotiated
at arm’s length between Niebaum and First Capital. 32 	The first
lease schedule sets a purchase price of $71,237.50 for the Case
loader, and the second lease schedule sets a price of $35,000 for
the equipment, for a total of $106,237.50. 	The judgment obtained
by First Bank (Jensen Exhibit 18) was for $96,809.42, exclusive
of attorneys fees. 	The list attached to the judgment includes
the digital indicator and the Okidata ticket printer, which were
not supplied. 	Assigning a value of $10,000 to those two items
together (a figure which may well overstate their value), the
Court assigns a value to the First Bank equipment of
$86,809.42. 33
(c) The Citicapital agreement values the equipment at $25,726.58.
Jensen Exhibit 6; Jensen Exhibit 17 ¶ 3. 	There was no direct
testimony that this equipment did not function as it was supposed
to.
(d) The assorted equipment contained in the “upper list” on
Jensen Exhibit 8 is valued at $262,987. 	Jensen testified that a
six-inch water pump that he purchased did not work, and so he
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Page 47 of 	74
replaced it. 	Two water pumps are listed in Jensen Exhibit 8; one
for $20,000 and one for $2,000. 	Given Jensen’s financial
circumstances, it is most likely that the replacement pump was
purchased for $2,000. 	Thus the Court will reduce the overall
value by $20,000. 	In addition, given what has already been said
about the state of Jensen’s equipment as a whole, the Court will
also reduce the value of the “upper list” by an additional
$60,000, representing the 150 Reed screen, since that would
appear to be another critical component of a mining operation of
this type.
Jensen valued the pickup at $12,000, but Lessors sold it for
$3,000. 	Hal testified that Carl had incurred $75,000 of personal
credit card debt for the companies, and new management (David and
Hal) were selling assets, including the pickup, for whatever they
could quickly get to pay down that debt. 	The Court accepts the
$12,000 figure for the pickup (Jensen Exhibit 8) rather than what
was probably a fire-sale price of $3,000 that the Lessors sold it
for.
Jensen also valued the two underground loaders at $25,000
each, for a total of $50,000. 	David testified that he sold the
underground loaders for a gross price of $11,000 for use in
Canada, where an apparently more liberal regulatory environment
for underground mining made them more useful. 	He testified that
the price was low because of the restrictive environment for
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Page 48 of 	74
underground mining in the United States. 	No one disputed this
testimony. 	The underground loaders were sold at auction, so the
Court has taken the sale values as the best price that could be
obtained. 	In consequence, the damage figure must be further
reduced by $39,000.
Page one of Jensen Exhibit 19 also lists daily rental values
for the equipment. 	(Page two lists the “ownership” values.)
There was no evidence that Jensen could have used any of the
functioning ore processing equipment elsewhere. 	And although
there was evidence that Jensen was engaged in other dirt-moving
activities elsewhere, there was insufficient evidence that he
could have used the rolling stock at those sites, or leased it to
someone else. 	When asked, Jensen said that the equipment was not
for rent. 	In addition, the daily rental value (which, given the
status of the equipment overall, is vastly overstated)
constitutes consequential damages which the Court cannot award in
this case. 	See Wall v. Pate, 104 N.M. 1, 2, 715 P.2d 449, 450
(1986):
The distinction between general and special [i.e.,
consequential] damages arose in the touchstone case of
Hadley v. Baxendale, 9 Exch. 341, 156 Eng.Rep. 145
(1854). 	Later cases freely translated the rule of
Hadley to mean that special damages may be recovered if
the loss was foreseeable by the breaching party at the
time of contracting. 	D. Dobbs, Remedies, § 12.3 at 804
(1973). 	Justice Holmes more critically analyzed the
foreseeability of damages rule to include a “tacit
agreement” by the defendant to respond in damages for
the particular damages understood to be likely in the
event of breach. 	Globe Refining Co. v. Landa Cotton
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Page 49 of 	74
Oil Co., 190 U.S. 540, 23 S.Ct. 754, 47 L.Ed. 1171
(1903). ... Stated another way, special provable
damages flow from the disappointment of a special
purpose for the subject matter of the contract or from
unusual circumstances, either or both of which were
known to the parties when they contracted. 	In such a
case, the amount permitted under the general damage
formula, alone, clearly will be either inadequate or
nonexistent.
The contract documents themselves do not show that rental values
of equipment would be within the contemplation of the contract,
nor did the trial testimony indicate that they were within the
parties’ contemplation. 	Cf. N.M.S.A. § 55-2-715(2)(a) (The
Uniform Commercial Code describes consequential damages as “any
loss resulting from general or particular requirements and needs
of which the seller at the time of contracting had reason to know
and which could not reasonably be prevented by cover or
otherwise.”)
Jensen Exhibit 8 values the Kenworth dump truck at $8,000.
Lessors elicited testimony from John Chavez, a self employed
mechanic, that the dump truck was in bad shape. 	His testimony
was laced with details about the poor condition of the dump
truck, and was credible and consistent with Keller’s brief
testimony about the broken leaf spring. 	However, Lessors offered
no testimony about what the value of the dump truck was in that
condition, and the Court does not have sufficient expertise on
its own to assign a different value. 	The same applies to Chavez’
and Clark’s testimony about the generally bad shape of the other
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34 Jensen Exhibit 15 is a copy of a mechanic’s lien for
repairs to and storage of the dump truck. 	Since the Lessors
should not have had possession of the dump truck to begin with,
given the surfeit of collateral, Lessors are not entitled to an
offset for this lien. 	Given the Court’s disposition of the dump
truck by awarding its value to Jensen, there is no need to deal
further with the lien.
35 Exhibit 12 was admitted by stipulation at the beginning
of the trial. 	No one testified about it during the trial;
however, the evidence suggests that it was compiled by Keller
rather than by Earl Clark who was gone by the time the later
entries were made.
Page 50 of 	74
equipment, and to Holland’s testimony about seeing the backhoe
with a leaking back end.
Other than the foregoing, there was no testimony that
disputed the values shown on the “upper list” on Exhibit 8. 34
Indeed, the evidence strongly suggested that the vehicles,
underground loaders, etc. all functioned well enough to be used
in the operation by David or sold, and that items such as the
storage container, and the safe would have performed as they were
supposed to had no one cut the lock, obtained the combination,
etc. 	Therefore the Court has valued this collateral at $143,987.
(e) The parties disputed how much sand, gravel, rock and
especially gold had been produced. 	The Court finds that Jensen’s
evidence of the production of sand, rock and gravel was credible
albeit flawed.
Jensen Exhibit 12 35 consists of some figures maintained on a
pad of paper, which appear to show operations and production for
the period January 28 through April 12, 2002. 	What they appear
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36 The royalty owed on this production is so closely related
to the production itself that it essentially constitutes a
defense to Jensen’s claim for payment for the production. 	This
is what is defined as recoupment. 	“[A] creditor properly
invoking the recoupment doctrine can receive preferred treatment
even though setoff would not be permitted. 	A stated
(continued...)
Page 51 of 	74
to show was activities and production over ten weeks that roughly
spanned equal periods before and after the termination date of
the Lease on March 1. 	The activities are consistent with
Keller’s testimony, that he and the others spent much of their
time trying to get the equipment running and processing
relatively small amounts of ore. 	Keller and Jensen also
testified that they spent all their time in 2001 getting the
equipment repaired and running. 	However, Keller also
consistently testified that it was not until the end of February
that he returned to the site and major work recommenced. 	The
Court finds that Keller was a credible witness; however, in this
instance the Court believes that the written evidence, Jensen
Exhibit 12, which appears to be a record contemporaneously
compiled, is probably a reasonably good approximation of when the
production took place. 	Assuming that to be the case, it is
likely that Jensen produced about half before March 1, 2002, and
the other half on March 1, 2002 and afterward. 	The production on
March 1 or afterward was not covered by the $50,000 payment, and
so Jensen’s claim should be reduced by the amount of the
royalties that he owed the Lessors on that production. 36
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36 (...continued)
justification for this is that when the creditor's claim arises
from the same transaction as the debtor's claim, it is
essentially a defense to the debtor's claim against the creditor
rather than a mutual obligation, and application of the
limitations on setoff in bankruptcy would be inequitable."
Ashland Petroleum Company v. Appel (In re B & L Oil Company), 782
F.2d 155, 157 (10th Cir. 1986) (addressing recoupment in a
bankruptcy context) (Citations and internal quotation marks
omitted.); see also Davidovich v. Welton (In re Davidovich), 901
F.2d 1533 (10th Cir.1990); Conoco, Inc. v. Styler (In re Peterson
Distributing, Inc.), 82 F.3d 956 (10th Cir.1996). 	Thus it is
appropriate to net out the royalty payment owed to Lessors
despite the fact that, as Jensen notes, no counterclaim was
asserted in the claim objections.
37 Lovelace was unclear about whether he ever purchased
gravel or rock from Jensen; it appears that he or his son
probably did. 	In any event, it seems clear that Jensen and
occasionally David were selling rock and gravel to someone.
Page 52 of 	74
Jensen valued the sand, gravel and rock at $43,250 (Jensen
Exhibit 8). 	Jensen valued the sand at $11.00 per yard. 	Since
there was no other testimony about the value of the sand, the
Court accepts that number. 	There was evidence that Jensen sold
some gravel and rock to Harry Lovelace 37 for $7.00 per yard, but
the Court accepts Jensen’s lower value of $4.50 per yard for the
gravel and rock (Jensen Exhibit 8). 	Based on the finding that
half the sand and gravel was likely produced before March 1 and
half on or after that date, the Court finds that $21,625 of the
sand, gravel and rock constituted Jensen’s “pre-March 1"
collateral and $21,625 constituted Jensen’s “March 1 or after”
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38 There was no evidence that any of the sand and gravel
came from the mine dumps, so the 15% royalty rate would not be
applicable.
39 Jensen stated that during the July 14 meeting, Lovelace
showed up to purchase some gravel and David operated the front
end loader to provide it to him. 	Clark also testified that
several times David used the front end loader and the dump truck
to deliver gravel to his (David’s) friends. 	The Court has no
reason to disbelieve Clark, but also has no way to estimate the
amount of Jensen’s gravel that David took.
Page 53 of 	74
collateral. 	From this latter figure needs to be subtracted the
10% royalty, or $2,162.50. 38
Exhibit 12 also shows sales of 96 yards. 	This presumably
was gravel and rock, given that most of the entries talk about
sizes of product ranging from 3/8" to 4". 	Jensen Exhibit 8
values the gravel at $4.50/yd. 	That would result in a royalty of
$43.20 ($4.50/yd. x 96 = $432 x .10 = $43.20) for gravel and rock
that was not in the stockpile on July 14. 	That figure should
probably be offset by half the amount of gravel taken by David
for sale to Lovelace 39 , but there was no evidence of how much
David took, so no offset will be allowed. 	In addition, Jensen
agreed that he sold about 300 yards at $7 per yard to Lovelace.
That would result in an additional royalty owed of $210. 	None of
the figures in Jensen Exhibit 12 identify the buyer or specify
the price, so one cannot tell whether the Lovelace sales are in
that exhibit. 	The Court has therefore concluded that royalties
for gravel and rock sold by Jensen totaled $253.20 ($43.20 +
$210.00). 	Taken together with the royalties owed by Jensen for
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40 The testimony was clear also that some decorative gold
had been sold in Silver City and at Miners’ Days. 	See Jensen
Exhibit 32 and Lessors Exhibit E. 	The royalties on the sales of
that gold, presumably produced before March 1, 2002, were so
small that they were easily covered by the $50,000 advance
royalty.
Page 54 of 	74
the gravel he sold, the royalties owed to Lessors for sand,
gravel and rock total $2,415.70. 	Subtracting this figure from
the total value of the sand, gravel and rock ($43,250) results in
a value of Jensen’s sand, gravel and rock collateral, adjusted
for royalties owed, of $40,834.30.
(f) There was little specific testimony about when the gold was
produced. 	Jensen testified that they began producing specimen
gold in late March. 	It also appears that the gold was being
produced at the same time as the sand and gravel; at least there
was no testimony of substantial production of gold separate from
any of the other operations at the site. 	The Court has therefore
assumed that the gold was produced in the same time frame, and
accordingly finds that half the gold was produced before March 1
and half on and after March 1.
How much gold was left on site, other than what was taken
from the safe (addressed below), was left somewhat unclear from
the evidence. 40 	As elaborated below, David’s statements about
how much gold had been produced were not credible. 	For purposes
of this section, the Court finds that the amount of gold produced
was somewhere between 44 and 80 ounces. 	Because it was Jensen’s
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41 Jensen testified without opposition that in the spring of
2002 the price of gold ranged from $240 to $260 per ounce. 	The
Court finds that at the relevant times, gold was selling for $250
per ounce. 	In fact, displayed attractively as part of specimen
gold, the metal may have had a greater value than the commodity
prices suggest, but the Court does not have sufficient evidence
before it to arrive at a different value.
42 This figure may in fact be less than the fair market
value at that time for whatever amount was sold. 	Because the
Court has no other basis to know exactly the amount of the gold,
it has adopted the figure of $12,500.
43 Jensen estimated early in the trial that he and Keller
(continued...)
Page 55 of 	74
burden to prove how much gold he produced, the Court will take
somewhat more than 44 ounces as the amount produced and still at
the site after July 14. 	At $250 per ounce, 41 that would be a
minimum of $11,000. 	Jensen Exhibit 19 listed the value at
$12,500, reflecting Hal’s testimony that he sold the totes for
$10,000 and one high grade piece for $2,500. 	For purposes of
calculating collateral values, the Court accepts the $12,500
figure for the gold. 42 	Assuming that half the gold was produced
on or after March 1 and therefore subject to the 12% byproduct
royalty not covered by an advance royalty payment, the value
would have to be reduced by $750.00 ($12,500 x .5 = $6,250 x .12
= $750), leaving a subtotal of $11,750.
That figure might have been subject to further reduction
because of the additional 12% royalties on the sales of gold at
the Miners’ Days Fair at White Oaks in April 2002. 	Jensen
Exhibit 32 lists the gold sold that weekend totaling $2,175. 43
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43 (...continued)
had sold about $2,100 worth of gold that weekend.
44 Jensen mentioned that some gold was placed on consignment
in Ruidoso; however, there was no testimony that any of that was
sold or was retained by Jensen.
45 Keller also fleetingly testified that some amount of gold
was sold to friends of Carl, but since there was no testimony
about what amount that was, the Court has not taken that into
consideration.
46 This royalty was a small enough figure that Jensen could
have afforded to pay it. 	Similarly, Jensen had the gold with
him, so that he could have shared it in kind.
Page 56 of 	74
In addition, Jensen and Keller consigned $4,605 of gold to the
Royal Scepter in Silver City on June 15, 2002. 44 	Some of it was
sold; the remainder was picked up (along with, presumably, the
cash for the gold that was sold) on July 25, 2002. 	Lessors
Exhibit E. 	Keller testified that he delivered the gold to Jensen
in Chama. 	There was no further testimony that the gold was
returned to or otherwise divided up with Lessors (this was, after
all, after Jensen had been kicked off the site), so Jensen would
have owed the 12% royalty on this gold also, in the amount of
$552.60. 	Together the royalties on this gold, which was an
amount separate from the $12,500 described in the preceding
paragraphs, totaled $813.60. 45 	However, Keller’s testimony was
clear that Carl told Jensen and Keller that they need not pay
royalties on these sales or share this gold in kind. 46 	This
statement by Carl constituted a waiver by the Lessors, and thus
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47 In the course of operations, Jensen produced gold in
various forms: specimen gold (rock with gold on or in it), gold
in vials (nuggets and dust), and concentrate or placer gold (sand
containing concentrations of gold). 	There was also testimony
about “decorative” gold, consisting of small items of nugget gold
or specimen gold that were sold at the Miners’ Days or at the
rock shop in Silver City, and about “practice” gold (specimen
gold that was to be used to experiment with hydraulic systems to
make the gold more accessible).
Page 57 of 	74
David had no basis for attempting to collect payment for those
sales or for that gold later in the year.
Total Collateral Value
Adding up the total of these collateral values results in a
figure of $314,107.30. 	This is the value of the collateral
retained by Lessors to repay a debt of $8,500. 	Netting out the
figures results in a claim by Jensen against the Lessors for
$305,607.30.
The Missing Gold and Mining Plan
Conversion is defined as the unlawful exercise of
dominion and control over personal property belonging
to another in exclusion or defiance of the owner’s
rights, or acts constitution an unauthorized and
injurious use of another’s property, or a wrongful
detention after demand has been made.
Nosker v. Trinity Land Co., 107 N.M. 333, 338, 757 P.2d 803, 808
(Ct. App.), cert. denied, 107 N.M. 267, 755 P.2d 605 (1988).
(Citations omitted.) 	In addition to the Lessors’ unreasonable
retention of Jensen’s collateral, they, through David, also
converted other property of Jensen; namely, the gold and other
items taken from the safe and the office trailer. 47
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48 Keller also testified that the production records were
missing from the trailer.
Page 58 of 	74
There is no question that some gold and the mining plan were
taken either from the trailer or from the storage container or
the safe. 48 	There is also no question that it is not immediately
obvious who took those items. 	The suspects include, in no
particular order, Keller, Roxanne Dotson and Hal Dotson, the
persons alleged to be Church of Scientology members, Jensen and
David Dotson. 	The Court finds that David Dotson took those
items, without of course disclosing that theft to Jensen.
Keller had access to the safe (which means he also had
access to the storage container) and the office trailer. 	He had
long been a colleague of Jensen’s, and was certainly invested in
making the project work. 	He cooperated with Jensen in
processing, safeguarding and marketing the gold. 	Toward the end
of the project he was not getting paid. 	And he had been in the
mining business for a number of years, which business, because of
its nature, presumably breeds in its participants a keen sense of
survival. 	So he had access and the incentive to have taken some
of the gold. 	However, those factors would not explain why Keller
would have taken the mining plan as well. 	The Court also
observed the demeanor of Keller and compared his testimony with
the testimony of other witnesses and the exhibits. 	For example,
Keller testified that he kept careful records of all the gold
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Page 59 of 	74
that was sold, and Jensen exhibit 32 and Lessors Exhibit E seem
to back that up. 	In addition, Keller testified, and David’s
testimony agrees, that on June 17 Keller opened the safe for
David and Roxanne so David could take pictures of the gold in the
safe. 	There is no dispute that the gold was there that day.
Subsequently Keller and Jensen were locked out of the premises,
so Keller’s access to the gold was within a fairly narrow time
frame. 	The Court finds that Keller’s testimony was credible and
that it is quite unlikely that he took the gold or the mining
plan.
Roxanne Dotson was at the site on June 17 with her husband
David and had the opportunity to view Keller opening the safe and
to see the contents. 	However, her participation in the overall
course of events was minimal enough that it is unlikely that she
would have ventured down to the site and taken the gold or the
mining plan.
Hal Dotson probably had the access to the contents of the
safe and to the trailer, albeit through David. 	However, he was
much less often at the site. 	It is hard to see exactly what the
incentive would be for him to take the gold or the mining plan,
since he was not the one directly responsible for making the
companies (Lessors) successful. 	And his testimony was consistent
enough that it lends credibility to him.
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49 The name is used the same way David used it; i.e., merely
as an identifier. 	Whether the youngsters were in fact associated
with the Church of Scientology is not relevant to this narrative
and so the Court makes no finding that any Church of Scientology
member was involved in the activities alleged by David to have
taken place.
Page 60 of 	74
David testified that in early June certain youths affiliated
with the Church of Scientology 49 about eight miles away were on
the site attempting to collect things that belonged to them.
They had a key to one of the gates but apparently did not have
keys to get into the storage unit or the office trailer. 	So they
cut the locks on the storage unit and on one or more of the van
trailers, and tried to break into the office trailer as well.
When David was able to accost them, the youngsters told him that
Jensen had allowed them to store some of their possessions there.
David let them leave the site and called the sheriff, and the
sheriff brought the young men back to the site. 	The young men
specifically identified their possessions, including a saddle, a
piano, some beds and some boxes, all of which were in the storage
container. 	Since they had a key to one of the gates and
identified their possessions exactly, David and the sheriff
agreed that pressing charges was not in order, and the young men
left. 	David then called Jensen and told him what had happened.
Jensen did not immediately go to the site. 	Instead, according to
David, Jensen responded that he had given permission to a Molly
Baxter and to these young men to store items on the site. 	David
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Page 61 of 	74
said he was extremely upset, that he could not fathom Jensen
doing this and this was forbidden by the Lease.
Jensen did not respond to this testimony, so David’s
testimony is all there is on the subject. 	But David’s account
raises some questions. 	No sheriff’s report was produced in
support of the testimony, but given the disposition of the
matter, it would not be surprising if there were no report.
There is nothing in the Lease that explicitly forbids this sort
of thing (although David’s discomfort is understandable), but
that is obviously a minor point. 	A major point is that there was
no testimony that the safe had been even touched, much less
tampered with. 	Surely David, having covered the distance between
Socorro and White Oaks in an hour once he received the call about
the break-in, would have pressed charges had he thought the young
men had taken any gold. 	And the testimony was that there had
been an attempt to get into the office trailer, not that there
had been an entry. 	So presumably the church youth could not have
taken the gold or the mining plan. 	(Besides, one wonders what
the youth would want with a mining plan anyway.)
Jensen had both the access and the incentive to take some of
the gold for himself, to live on if for no other reason. 	Despite
all his efforts, the mining operation itself was producing very
little; indeed, it was almost moribund. 	Much of his equipment
was still little more than junk, and he was not making the
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Page 62 of 	74
payments on the leased equipment. 	His workers were mostly off
elsewhere trying to make a living. 	So little gold had been
produced that Carl was not even requiring that it be divided.
Sales of gold had brought in penuriously small sums of money.
And he was facing the distinct possibility, indeed imminent
likelihood, of the announcement that the Lessors were pulling the
plug on him.
Jensen’s case is not helped by his at least occasional lack
of credibility. 	His inability to get his story straight about
whether he kept production records and, if so, where they were,
or whether he borrowed money from his son for this project, are
only two examples. 	Others are his responses of “I can’t answer
that” when he was confronted with a number of questions, such as
whether he had money to make certain payments, or whether he had
complied with the Lease, or what his production records would
say. 	This Court’s clear impression of Jensen was of a person
desperately trying to recover something (in fact, everything)
from this venture by means of this litigation but unwilling to
acknowledge the shortcomings in his case.
Despite all of this, the Court has concluded that Jensen did
not take the gold and the mining plan. 	He was already selling
the gold that he had, with the apparent acquiescence of Carl.
And were he to be taking gold to sell and pretend someone else
had taken it, why not take some of the nuggets and gold dust? 	In
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Page 63 of 	74
addition, he would have no use for the mining plan, other than
there at White Oaks. 	It is conceivable that he took the gold and
then took the mining plan also as a diversion, but that seems
rather more byzantine than Jensen is accustomed to or capable of.
And having taken the mining plan is certainly not consistent for
someone who, upon being told the plug was being pulled, simply
walked away.
That leaves David. 	He did have access to the safe; on June
17, he and Roxanne specifically asked Keller to open the safe,
and in the process were able to see what the two lower
combinations were. 	(The combinations were also kept in the
office trailer, which David also had access to.) 	David said he
wanted to take pictures of the gold for Carl, although Carl’s
actions had made it clear that Carl had been satisfied up to that
point with the informal reporting from Jensen. 	When Keller
opened the safe on July 14, David immediately announced,
according to Keller, that gold was missing and he knew exactly
what was missing. 	David ended up with some of the records of the
project; obviously he had taken them from the office trailer,
demonstrating his access to the office trailer and his
willingness to take from the trailer what he wanted without
informing the owner of the property taken. 	David’s assuming
management for the Lessors, as he knew was imminent as Carl got
more ill, would require him to make money from the site and to
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50 This conclusion is based in part on David’s impatience
with his father’s not moving more vigorously or quickly to
enforce the terms of the Lease.
Page 64 of 	74
deal with Jensen, with whom he had far less patience than his
father had. 	As soon as his father died, David, either speaking
for his father or for himself as the soon-to-be CEO of the
Lessors, had Don Klein issue the letter terminating the Lease.
He then promptly locked Jensen out. 	And after Jensen departed
the site for the last time on July 14, David assembled Jensen’s
equipment and began using some if it, including repairing the
dump truck and selling the pickup truck. 	David was clearly
convinced that the site could be profitably mined. 	Thus he also
had the incentive to have taken the mining plan.
David’s incentive for taking the gold is perhaps less clear.
Certainly Jensen being in a position of not being able to account
for all the gold fit in with David’s agenda to terminate the
Lease with Jensen. 50 	More likely, David’s apparent continuing
belief that the ore being mined, particularly the specimen gold,
was extremely rich, and he wanted to prove it, could have led him
to take that gold rather than the nuggets and gold dust from the
safe for testing or any other purpose. 	(One in David’s position
would assume that the specimen gold in the safe would be the most
gold-bearing of all the specimen gold on the site.)
Despite pauses to shed (genuine) tears over his father’s
death, David’s testimony was frequently not credible. 	For
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51 Keller calculated they had produced about 44 ounces
altogether, which was definitely not profitable.
Page 65 of 	74
example, he testified that one photograph showed a six cubic foot
bin (3'x2'x1') partially filled with rock that was 80% gold.
Even if the amount of rock in the photograph was only, say, one
cubic foot, that would constitute many pounds (not ounces) of
gold. 	That raises a significant conflict with Jensen’s testimony
that at most Jensen mined about 80 ounces of gold from the
property. 51 (and that he had 1/4 - ½ ounce of decorative gold for
sale in Silver City and about $2100 worth at the Miners’ Days at
White Oak). 	It would have made no sense for Jensen to “poor boy”
his situation. 	Jensen had poured his resources into making this
mining venture work, and he desperately needed to produce gold
for that to happen. 	Insufficient gold production meant the loss
of the Lease. 	Both Jensen and Carl shared a genuine economic and
emotional incentive to find and share as much gold as possible.
If Jensen had pounds of gold available to him, why would he have
not used it to keep himself operating? 	Why would he have not
told Carl, who never acted as if there were a lot of gold being
mined? 	And why would Jensen have meekly told David and Hal to
keep what he had mined in payment of his debts, as David and Hal
testified he said?
The same considerations apply to David’s claims that
Jensen’s operation had produced remarkably large quantities of
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52 This assumes that none of the advance royalty of $50,000
from either 2001-02 or 2002-03 would be credited against the
royalties that David calculated were owed by Jensen. 	If the
$50,000, or perhaps even the $100,000, is added in to the
multiplier to calculate the valued of the alleged production, the
resulting estimate of the value of production increases by 50% to
100%.
53 It would be in the Lessors’ interest to claim a very high
production of gold, so that the amount of the royalty Jensen owed
would exceed the $50,000 advance royalty.
54 Keller’s testimony was not that the safe had been broken
into, but only that it looked as if someone had tried to break
into it (or that it had been made to look that way).
Page 66 of 	74
gold and other product. 	David testified that in the office
trailer on July 14, he wrote down a figure of $161,000 that
Jensen owed. 	How he calculated that figure did not come out at
trial. 	But inferring that the figure included the $50,000 for
the second year lease, the remaining amount owed on the note
(about $8,500), and maybe some miscellaneous other expenses, that
would leave about $100,000 owed for royalties. 	Assuming that
virtually all of that $100,000 is attributable to gold at the 12%
royalty specified by the Lease, David was calculating, or at
least billing Jensen, as if he had produced $833,000 worth of
gold. 52 	Both the figure and demand were absurd. 53
As already stated, David’s suggested explanation for the
missing gold and mining plan is also flimsy. 	The facts that
someone had tampered with the screws on the safe to make it look
like a break-in, 54 and that the upper two locks were no longer
taped open as Keller testified he usually kept them, are
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Page 67 of 	74
consistent with someone who had access to the safe. 	David also
had complete access to the entire site at all times, including
during that time that Jensen was locked out.
Lessors argue that if David had taken the gold, he could
easily have blamed the theft on the church youth, and the fact
that he did not do that suggests he did not take the gold.
However, David is clearly clever enough to understand that
charging the youth with theft like that would have triggered a
significant investigation by the sheriff. 	For example, David
testified that the sheriff brought the youth back to the site
very shortly after David reported the intrusion, so that it would
have been clear fairly quickly that a theft charge could not be
substantiated. 	An investigation would have led away from the
youth and inevitably focused attention on David.
Finally, two other items help convince this Court that David
is not to be believed. 	David filed a voluntary petition under
chapter 13 of the Bankruptcy Code on July 26, 2004. 	In re David
L. Dotson, No. 13-04-15441 MA (Bankr. D. N.M.). 	In that case,
Judge Mark McFeeley made findings adverse to David in the
litigation over claim no. 11 in the case and in connection with
the confirmation hearing on David’s chapter 13 plan.
Claim no. 11 was filed by four creditors who asserted that
David had discharged a firearm over their heads. 	David denied in
his testimony that he had done so; the claimants testified
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Page 68 of 	74
otherwise; and the Court found that David had in fact discharged
the firearm. 	The Court entered an order containing findings of
fact and conclusions of law denying David’s objections to the
claims of these creditors. 	Order Denying Debtor’s Objection to
Claim No. 11 (doc 92).
The Claimants refused to leave, stating they did not
intend to go anywhere with Dotson and that they
intended to continue their hunt. 	Dotson testified that
after the argument, he left the area and contacted the
sheriff’s office.
According to the Claimants’ testimony, after the
argument, Dotson turned around, quickly walked to the
passenger side of his ruck and grabbed a rifle while
yelling that the Claimants were “going down” and that
they were “going to jail.” 	Dotson fired two quick
successive shots at a forty-five degree angle above the
Claimants [sic] heads, and then swung the rifle down
facing the ground.
After careful review of all of the evidence and the
conflicting testimony, the Court concludes that the
Claimants have presented the more credible version of
the events of that day and, therefore, have proven by a
preponderance of evidence that Dotson assaulted them by
threatening them with a rifle and by firing a rifle
above their heads.
Id. at 3-4, 8.
David’s chapter 13 plan (doc 9) came before the Court (Judge
McFeeley) on a contested confirmation hearing (doc 91 – minutes).
The Court entered an order denying confirmation (doc 93) and a
separate memorandum opinion detailing the reasons therefor. 	Doc
94. 	As Jensen accurately points out, the Court found reasons to
doubt David’s credibility:
...[T]he availability of funds far in excess of
earnings reported by the Debtor in his schedules and
statements, and the apparent concealment of the funds
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55 Two and half months after the order denying confirmation
was entered, David dismissed his Chapter 13 case. 	Docs 107 and
108.
Page 69 of 	74
from the creditors and the Trustee, causes the Court to
doubt the Debtor’s credibility and sincerity in seeking
Chapter 13 relief. 	The Debtor proposed a Plan that
constitutes an abuse of the Chapter 13 process. 	The
bank statements reveal a Plan premised on distorted
financial information and clearly lacking in good faith
as required by § 1325(a)(3).
Id. at 5. 55
What all the foregoing findings lead to is the conclusion,
sadly but easily reached by this Court, that David Dotson has
very little credibility. 	Nothing David has said during these
proceedings is to be believed merely because David said it, but
only if there is some other reason to believe it.
It is with some confidence, then, that the Court concludes
that it is more likely than not that David broke into the safe to
take specimen gold and that he entered the office trailer and
took the mining plan. 	Of course David did not disclose this to
Jensen, and so Jensen, not knowing that David took the items, did
not waive any of his rights or claims with respect to the items.
Thus Jensen has a conversion claim for the specimen gold and the
mining plan.
The question then presents itself as to what compensatory
damages has Jensen proved with respect to the gold and mining
plan. 	The answer is, in one sense, none. 	The Court is unable to
say, based on the testimony presented, precisely how much
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56 Keller’s testimony was that a small percentage of
specimen gold in small tubs was taken – around 1/20 of what was
there – together with the low grade practice rock. 	Keller also
testified that some specimen gold, flake gold and practice gold
was missing from the trailer, but there was no specification of
this amount either.
57 By the same token, the Lessors put on no evidence from
which the Court could determine what the amount of the royalty
would be on the stolen gold. 	The amount of the unpaid royalty
would be set off against the value of the stolen gold.
58 In Diviney v. Nationsbank of Texas, N.A. (In re Diviney),
225 B.R. 762 (10 th Cir. BAP 1998), the Tenth Circuit Bankruptcy
Appellate Panel addressed the issue of the ratio of punitive
damages to compensatory damages. 	In that case, the BAP upheld an
award of $40,000 for punitive damages on an award of actual
damages of $2,850 plus $15,000 in attorney fees. 	Id. at 777-78.
The BAP cited BMW of North America, Inc. v. Gore, 517 U.S. 559
(1996) and several Tenth Circuit Court of Appeals cases for the
(continued...)
Page 70 of 	74
specimen gold was taken 56 , or what its value or the value of the
mining plan was. 	However, it is clear enough that David did in
fact take Jensen’s property. 	Jensen put on no evidence about the
value of the gold that was taken, although doing so would be
somewhat difficult since Jensen had no access to weigh and value
it after the theft. 57 	Nor did Jensen put on evidence about what
the value of the mining plan was, although arguably he could have
done so. In consequence the Court can award only nominal damages.
See Sanchez v. Clayton, 117 N.M. 761, 768, 877 P.2d 567, 573
(1994). 	The Court therefore awards nominal damages to Jensen of
$20.00 combined for the specimen gold and the mining plan. 	In
addition, however, the Court awards punitive damages to Jensen of
$10,000 in connection with the theft of the gold. 58 	These awards
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58 (...continued)
proposition that under the Due Process Clause, punitive damage
awards may not be excessive. 	Id. at 777. 	Diviney was a case
with specific compensatory damages. 	In this instance, because
David’s theft of the gold has made it impossible to calculate the
value of the gold, the Court is forced to award only nominal
compensatory damages. 	The Debtors should not be rewarded and
Jensen penalized because David so stealthily accomplished the
tort.
59 This claim litigation is not an adversary proceeding.
Nor was David made a party personally to this proceeding (even
assuming that was possible). 	In consequence, the Court cannot
make David also liable for the tort damages. 	See Stinson v.
Berry, 123 N.M. 482, 486, 943 P.2d 129, 133 (Ct. App. 1997) (both
individual and corporation can be liable for the same tortious
conduct).
Page 71 of 	74
of damages also compensate for David’s trespasses into Jensen’s
office trailer and the safe. 	Punitive damages are properly
awarded for conduct that is outrageous and needs to be deterred.
Madrid v. Marquez, 131 N.M. 132, 135, 33 P.3d 683, 686 (Ct. App.
2001); Northrip v. Conner, 107 N.M. 139, 142, 754 P.2d 516, 519
(1988).
The total conversion damages are awarded jointly and
severally against the Lessors. 59 	When he converted the non-
collateral equipment, the specimen gold and the mining plan,
David was acting on behalf of the Corporations. 	Although it is
not clear on what exact date David took the gold and the plan, it
was at a time when David had taken over either effective or
formal management of the Corporations from Carl. 	And his taking,
using and selling the various pieces of equipment were all after
he officially became the CEO for the Lessors on June 29. 	The
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Page 72 of 	74
utility of David’s actions to the Corporations is obvious with
respect to the equipment and the mining plan; for example, there
would be no reason to take the plan other than to insure the
continuing operation of the site after Jensen left. 	Taking the
specimen gold would help David confirm what the quality of the
ore was, also useful for continuing the mining operation. 	And of
course the specimen gold could be sold to pay the bills, as was
demonstrated by the Corporations’ sales of specimen gold to the
New Mexico School of Mines.
Remaining causes of action
From what has been said, it is clear that Jensen has failed
to prove the remaining causes of action that he has alleged. 	The
Corporations, acting through David, had the right to lock Jensen
out of the property and to gather and prepare his equipment for
disposition as collateral for the debts he owed. 	The
Corporations’ temporarily cutting Jensen off from access to his
equipment in the course of telling Jensen that he had no more
right to operate on the site might have constituted a claim had
Jensen demanded immediate access to it. 	He did not do so, most
likely because he had no use for it anywhere else. 	It is true
that there was some testimony about other construction projects
that required the use of a grader and front-end loader, such as
the one on or near Peter Wolf’s land, but Jensen did not provide
sufficient concrete evidence of other activities or contracts at
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60 By the same reasoning, Jensen has no claim for the loss
of contractual relations or a prospective contract with
Citicapital, First Bank, or the Lessors.
Page 73 of 	74
which that equipment could have been. 	Thus he was not deprived
of the opportunity to earn money from the equipment, and he is
not entitled to damages for the loss of the use of the equipment.
Jensen testified that he had a contract with Lincoln County
for the supply of gravel, but he also testified that the county
had no need of gravel before July 14, so Jensen never sold any.
Therefore there was no loss for which the Debtors would be
liable. 	Jensen has no claim for cessation of business, since
Jensen’s own inaction and the Lease by its own terms caused the
cessation of the business. 60 	Nor is prima facie tort available
to Jensen; the Debtors terminated the Lease, but did so for
cause. 	And the Debtors acted in good faith and dealt fairly with
Jensen with respect to the termination of the Lease, since the
Lease was terminated by Jensen’s failure to provide notice of
renewal and to tender the required advance royalty.
Conclusion
Jensen lost his right to continue operations on the White
Oak site. 	On the other hand, he is entitled to be compensated
for the excess collateral that the Lessors took from him and did
not either return to him or dispose of commercially with the
excess funds going to him. 	He is also entitled to be compensated
for the theft of the gold and the mining plan. 	Those figures
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Page 74 of 	74
respectively are $305,607.30 + $10,020.00, for a total of
$315,627.30. 	An Order will enter for Jensen on this amount as
his claim as the joint and several liability of each Debtor.
Honorable James S. Starzynski
United States Bankruptcy Judge
copies to:
Michael K Daniels
PO Box 1640
Albuquerque, NM 87103-1640
Alice Nystel Page
PO Box 608
Albuquerque, NM 87103-0608
James A Askew
PO Box 1888
Albuquerque, NM 87103-1888
William R Keleher
PO Box 2168
Albuquerque, NM 87103-2168
Karen Howden Weaver
7430 Washington St NE
Albuquerque, NM 87109-4561
Case 04-15468-s11 Doc 303 Filed 10/13/06 Entered 10/13/06 14:43:48 Page 74 of 74