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                                                             New Mexico Compilation
                                                           Commission, Santa Fe, NM
                                                          '00'04- 09:47:23 2013.04.15

       IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 2013-NMCA-048

Filing Date: February 19, 2013

Docket No. 31,711


LA VIDA LLENA,

       Protestant-Appellee,

v.

KAREN L. MONTOYA,
BERNALILLO COUNTY ASSESSOR,
BERNALILLO COUNTY VALUATION
PROTEST BOARD,

       Respondent-Appellant.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Carl J. Butkus, District Judge

Modrall, Sperling, Roehl, Harris & Sisk, P.A.
Zachary L. McCormick
Albuquerque, NM

for Appellee

Randy M. Autio, Bernalillo County Attorney
Eric W. Schuler, Assistant County Attorney
Albuquerque, NM

for Appellant

                                       OPINION

WECHSLER, Judge.

{1}     Appellant Karen Montoya, Bernalillo County Assessor (the Assessor), appeals from
the district court’s order reversing the Bernalillo County Valuation Protest Board’s (the
Board) determination that Appellee La Vida Llena is not entitled to a charitable exemption

                                            1
from property tax. On appeal, we consider whether the property tax exemption for a
continuing care facility that donates or renders gratuitously a portion of its facilities or
services for charitable purposes found in NMSA 1978, Section 7-36-7(B)(1)(d) (2008)
requires the continuing care facility to donate or to render gratuitously a minimum threshold
amount in order to qualify for the exemption. We hold that (1) Section 7-36-7(B)(1)(d) does
not require a minimum threshold amount of donated or gratuitously rendered services or
facilities for charitable purposes in order for the continuing care facility to receive the
property tax exemption, and (2) the district court did not err by failing to give deference to
certain findings of the Board. Accordingly, we affirm.

BACKGROUND

{2}    La Vida Llena operates as a continuing care facility pursuant to the New Mexico
Continuing Care Act, NMSA 1978, §§ 24-17-1 to -18 (1985, as amended through 2010). As
governed by the Continuing Care Act, a continuing care facility is a live-in community that
provides for “the residential, social and health maintenance needs for the elderly.” Section
24-17-2(A). La Vida Llena requires that new residents of its facility be at least sixty-two
years old and capable of living independently.

{3}     In order to qualify for residency at La Vida Llena’s facility, potential residents are
required to possess assets equal to double their entrance fee and have a monthly income of
one and one-half times their monthly fee. Residents pay an entrance fee of between $91,000
to $342,000 based on the size of the unit to be occupied. Residents pay a monthly fee
ranging from $1697 to $3870 for the remainder of their stay. Once residents move into La
Vida Llena’s facility, their monthly payments remain the same regardless of whether the
intensity of care increases. The entrance fee covers the expected cost for additional needs
of the residents as they age.

{4}     On April 20, 2010, the Assessor sent a notice of valuation for property taxes for La
Vida Llena’s facility. On May 18, 2010, La Vida Llena filed an application for exemption
of property tax, which the Assessor denied. La Vida Llena filed an appeal to the Board. It
based its claim for exemption upon its status as a facility operating under the Continuing
Care Act and Section 7-36-7(B)(1)(d). Section 7-36-7(B)(1)(d) provides for a property tax
exemption for continuing care facilities if the facility meets three criteria: the facility (1) has
been granted an exemption from federal income taxes pursuant to 26 U.S.C. § 501(c)(3)
(2010); (2) “donates or renders gratuitously a portion of its services or facilities;” and (3)
“uses all funds remaining after payment of its usual and necessary expenses of operation,
including the payment of liens and encumbrances upon its property, to further its charitable
purpose, including the maintenance, improvement or expansion of its facilities.”

{5}      After an evidentiary hearing, the Board upheld the Assessor’s denial of La Vida
Llena’s claimed exemption. The Board concluded that La Vida Llena failed to demonstrate
that it “donates or renders gratuitously a portion of its services or facilities” for charitable
purposes as contemplated by Section 7-36-7(B)(1)(d). The Board made several factual

                                                2
findings regarding evidence that La Vida Llena presented to support its position that it did
“donate[] or render[] gratuitously a portion of its services or facilities[.]” Section 7-36-
7(B)(1)(d). The Board found that:

       19.     [La Vida Llena] controls what is in essence a captive foundation
               solely for the benefit of residents unable to meet their obligations.
               The foundation, funded by resident contributions, helps residents
               with bills, such as pharmacy, dentist and other medical bills and in
               some instances credit card bills and pays out $65,000-$100,000 per
               year.

       20.     Residents receive help from the foundation for different periods of
               time and in different amounts, but are given care for life regardless
               of ability to pay; residents are not asked to leave if they run out of
               funds after being accepted for entry.

       21.     As a separate track, when space is available [La Vida Llena] serves
               Medicaid residents who are not members of the community as
               described above. There is a “differential” between cost and Medicaid
               reimbursement.

       22.     [La Vida Llena] makes its facilities available for meetings by
               numerous groups. These tend to be groups with which residents or
               employees have an association or interest.

       23.     Employees are permitted time to serve other charitable organizations.

However, the Board determined that it “cannot find that any material portion of [La Vida
Llena]’s services and facilities are ‘donated’ or ‘rendered gratuitously’ as those terms are
commonly used. Rather, the use of [La Vida Llena]’s services and facilities is incidental to
its business operations.” (Emphasis added.)

{6}      La Vida Llena appealed the Board’s decision to the district court. The district court
reversed the Board’s decision, holding that the Board’s factual findings supported a
determination that La Vida Llena “donates or renders gratuitously a portion of its services
or facilities.” The district court concluded that “Section 7-36-7(B)(1)(d) does not provide
for a minimum amount of charitable acts” and that the word “portion” in Section 7-36-
7(B)(1)(d) does not contain a quantitative meaning. According to the district court, La Vida
Llena donated or rendered a portion of its facilities and services because the Board found
that “unchallenged evidence [establishes that La Vida Llena] donated the use of meeting
rooms, that it donated some services of its employees, and that it donated approximately
$65,000 in 2009 and $100,000 in 2010 through [the f]oundation.” The district court also
stated that La Vida Llena “provided evidence that it provides care at a cost greater than what
it is reimbursed through Medicaid, and considers the cost-differential it absorbs to be a

                                              3
donation” and that it does not terminate agreements with residents for failure to pay when
the resident cannot afford the monthly fees.

{7}     The Assessor petitioned this Court for a writ of certiorari pursuant to Rule 12-505(C)
NMRA, which this Court granted. The Assessor argues that the district court erred in
reversing the decision of the Board by (1) incorrectly determining that the word “portion”
in Section 7-36-7(B)(1)(d) does not contain a minimum quantitative threshold on the amount
of services and facilities that a continuing care facility must donate or render gratuitously;
and (2) rejecting the Board’s factual finding that La Vida Llena failed to donate a
“meaningful” portion of its services or facilities to qualify for the exemption contained in
Section 7-36-7(B)(1)(d).

{8}      The only issue on appeal is whether La Vida Llena “donates or renders gratuitously
a portion of its services or facilities” as contemplated by Section 7-36-7(B)(1)(d). The
Assessor concedes that La Vida Llena operates as a continuing care facility under the
Continuing Care Act, has been granted an exemption from federal income taxes pursuant to
§ 501(c)(3), and “uses all funds remaining after payment of its usual and necessary expenses
of operation, including the payment of liens and encumbrances upon its property, to further
its charitable purpose, including the maintenance, improvement or expansion of its
facilities[.]” Section 7-36-7(B)(1)(d).

SECTION 7-36-7(B)(1)(d)

Standard of Review

{9}     Upon a grant of a petition for writ of certiorari under Rule 12-505, this Court
“conduct[s] the same review of an administrative order as the district court sitting in its
appellate capacity, while at the same time determining whether the district court erred in the
first appeal.” Rio Grande Chapter of Sierra Club v. N.M. Mining Comm’n, 2003-NMSC-
005, ¶ 16, 133 N.M. 97, 61 P.3d 806. In conducting our whole record review, we review the
“record of the administrative hearing to determine whether the [b]oard’s decision was
arbitrary and capricious, not supported by substantial evidence, or otherwise not in
accordance with law.” Smyers v. City of Albuquerque, 2006-NMCA-095, ¶ 5, 140 N.M. 198,
141 P.3d 542 (internal quotation marks and citation omitted). When an administrative
decision is based on an issue of law, such as statutory interpretation, our review is de novo.
ERICA, Inc. v. N.M. Regulation & Licensing Dep’t, 2008-NMCA-065, ¶ 11, 144 N.M. 132,
184 P.3d 444. However, although we engage in whole record review, we will not disturb
any of an agency’s factual findings that are supported by substantial evidence. Montano v.
N.M. Real Estate Appraiser’s Bd., 2009-NMCA-009, ¶ 8, 145 N.M. 494, 200 P.3d 544.

Quantitative Meaning of “Portion”

{10} We first address the Assessor’s argument that the district court erred in determining
that Section 7-36-7(B)(1)(d) does not provide for a minimum threshold amount of facilities

                                              4
or services that a continuing care facility must donate or render gratuitously because the
word “portion” does not contain a quantitative meaning. In the Assessor’s view, a
reasonable interpretation of the word “portion” requires that a continuing care facility
gratuitously donate some meaningful quantitative amount or percentage of its revenue in
order to meet the statutory requirement for an exemption. Without such a quantitative
requirement, the Assessor asserts that the gratuitous donation requirement in the statute
becomes superfluous. This issue requires the Court to interpret the statutory language in
Section 7-36-7(B)(1)(d).

{11} In engaging in statutory construction, our primary purpose is to give effect to the
intent of the Legislature. Bd. of Educ. v. N.M. State Dep’t of Pub. Educ., 1999-NMCA-156,
¶ 16, 128 N.M. 398, 993 P.2d 112. “The first rule is that the plain language of a statute is
the primary indicator of legislative intent. Courts are to give the words used in the statute
their ordinary meaning unless the [L]egislature indicates a different intent. The court will
not read into a statute . . . language which is not there, particularly if it makes sense as
written.” Johnson v. N.M. Oil Conservation Comm’n, 1999-NMSC-021, ¶ 27, 127 N.M.
120, 978 P.2d 327 (internal quotation marks and citations omitted). Although we apply the
plain meaning rule, a “construction must be given which will not render the statute’s
application absurd or unreasonable and which will not defeat the object of the Legislature.”
Cox v. N.M. Dep’t of Pub. Safety, 2010-NMCA-096, ¶ 15, 148 N.M. 934, 242 P.3d 501
(internal quotation marks and citation omitted). Additionally, when interpreting a statute,
all sections of the statute “must be read together so that all parts are given effect.” High
Ridge Hinkle Joint Venture v. City of Albuquerque, 1998-NMSC-050, ¶ 5, 126 N.M. 413,
970 P.2d 599.

{12} The Assessor also contends that the gratuitous donation requirement of Section 7-36-
7(B)(1)(d) must contain a quantitative element in order to prevent a continuing care facility
from abusing the available tax exemption. However, the Assessor’s view is unduly focused
on the word “portion,” and the singular requirement that a continuing care facility donate or
render gratuitously a portion of its services or facilities. The donation of services or facilities
is only one of the requirements of Section 7-36-7(B)(1)(d). When we read the three
requirements together, the legislative intent becomes apparent. See Key v. Chrysler Motors
Corp., 121 N.M. 764, 769, 918 P.2d 350, 355 (1996) (“[A]ll parts of a statute must be read
together to ascertain legislative intent. We are to read the statute in its entirety and construe
each part in connection with every other part to produce a harmonious whole.” (citation
omitted)). First, the Legislature required that the facility be exempt from federal income
taxes. Section 7-36-7(B)(1)(d). Additionally, Section 7-36-7(B)(1)(d) requires that a
continuing care facility “use[] all funds remaining after payment of its usual and necessary
expenses of operation . . . to further its charitable purpose[.]” Through this last requirement,
Section 7-36-7(B)(1)(d) contains a mandate that a continuing care facility use all of its
proceeds to further its charitable purpose. By not defining a minimum gratuitous
contribution amount in the second requirement, the Legislature has provided flexibility for
a continuing care facility to qualify for its property tax exemption while also allowing the
facility to annually determine the most appropriate way of achieving its overall charitable

                                                5
purposes.

{13} The plain meaning of the word “portion” further reinforces our conclusion. When
determining the plain meaning of a term in a statute, we are guided by the common and
ordinary use of the term as ascertained by a dictionary. See Battishill v. Farmers Alliance
Ins. Co., 2006-NMSC-004, ¶ 8, 139 N.M. 24, 127 P.3d 1111 (“We . . . hold that the common
and ordinary meaning . . . may be ascertained from a dictionary.”). In this context, “portion”
is defined as “an individual’s part or share of something” or “a part of a whole.” Webster’s
Third New Int’l Dictionary 1768 (Unabridged 1993). The plain meaning of “portion” is
therefore synonymous with “part” and does not contain a minimum quantitative meaning.
Accordingly, under the plain meaning rule, Section 7-36-7(B)(1)(d) does not require a
minimum amount of donated or gratuitously rendered services or facilities for charitable
purposes in order for the continuing care facility to receive the property tax exemption.

{14} If the Legislature had intended for “portion” in Section 7-36-7(B)(1)(d) to contain
a minimum threshold amount for the required charitable contributions, it would have
expressly provided the manner for determining the intended amount. See Bishop v.
Evangelical Good Samaritan Soc’y, 2009-NMSC-036, ¶ 16, 146 N.M. 473, 212 P.3d 361
(stating that “[i]f the Legislature had intended to create different standards . . ., it likely
would have done so expressly”). The Legislature has expressly defined “portion” in other
statutes, including tax statutes, when it intended that the word “portion” to contain a
minimum or threshold amount. See, e.g., NMSA 1978, § 7-1-36(B) (1993) (stating that
“there shall also be exempt from levy on an employer of the taxpayer the greater of the
following portions of the taxpayer’s disposable earnings: (1) seventy-five percent of the
taxpayer’s disposable earnings for any pay period; or (2) an amount each week equal to forty
times the federal minimum hourly wage rate” (emphasis added)); NMSA 1978, § 6-6-19(B)
(2011) (“The amount that may be deposited into the local government permanent fund is any
portion of the unappropriated general fund surplus that is in excess of fifty percent of the
prior fiscal year’s budget of the county or municipality.” (emphasis added)).

{15} The Assessor also argues that the plain meaning of “portion” is not so easily
ascertainable and that “[a]n examination of different dictionary definitions of portion reveals
that it is a dynamic word with a variety of possible meanings.” The Assessor further argues
that due to the various meanings of “portion,” we should construe Section 7-36-7(B)(1)(d)
as requiring that the portion a continuing care facility donates or renders gratuitously for
charitable purposes should exceed the benefit that the public loses in tax revenue as a result
of the exemption. In the Assessor’s view, this interpretation of the “donation requirement
should be decided on a case[-]by[-]case basis” and furthers the legislative purpose of
“encourag[ing] charitable activities by providing them with tax relief, and to thereby
promote the general welfare of society.” Sisters of Charity v. Cnty. of Bernalillo, 93 N.M.
42, 45, 596 P.2d 255, 258 (1979). However, as the Assessor conceded at oral argument, a
formula for such an inquiry is not readily ascertainable from Section 7-36-7(B)(1)(d), nor
did the Assessor provide this Court with a framework to evaluate when a donation or
rendering of services or facilities is sufficiently large enough to be a “portion.”

                                              6
{16} Additionally, the Assessor’s interpretation of Section 7-36-7(B)(1)(d) requires that
this Court essentially rewrite the statute and place a minimum donation amount comparable
to the loss of tax revenue. We decline to do so. See Martinez v. Sedillo, 2005-NMCA-029,
¶ 7, 137 N.M. 103, 107 P.3d 543 (“We will not rewrite a statute.”). Although, we agree that
“portion” is a dynamic word and can have a number of possible meanings depending on the
context, the Assessor fails to point to a single definition of “portion” that contains a
quantitative minimum or any definition that supports its interpretation.

{17} Section 7-36-7(B)(1)(d) provides the mechanism for a continuing care facility with
a federal income tax exemption to be exempt from property tax. It contains the legislative
intent to encourage a continuing care facility to engage in charitable activity by requiring
only that the continuing care facility donate or render gratuitously a part of its services or
facilities without a threshold requirement, provided that, after payment of operational
expenses, it uses the balance of its funds for charitable purposes. The district court did not
err in concluding that “Section 7-36-7(B)(1)(d) does not provide for a minimum amount of
charitable acts.”

Deference to Factual Findings

{18} The Assessor also argues that the district court erred when, without citing any
authority or acknowledging the standard of review, it rejected the Board’s factual
determination that La Vida Llena failed to prove that it donated a meaningful portion of its
goods or services.

{19} Essentially, the Assessor argues that the district court failed to defer to several
findings of fact considered by the Board that: (1) the donated meeting space was for
organization and activities that are an integral part of the experience La Vida Llena offers
to residents; (2) no material portion of La Vida Llena’s services or facilities are donated or
gratuitously rendered, and their use is incidental to its business operations; (3) the foundation
was merely a vehicle of mutual assistance between residents of La Vida Llena and did not
constitute charitable donations by La Vida Llena itself; and (4) there is no charity when the
cost of service to long-term residents is less than actual revenues from those residents. We
agree with the Assessor that a district court sitting in an appellate capacity and reviewing an
agency’s decision must accept all factual findings made by the agency as a factfinder that
were supported by substantial evidence. See Montano, 2009-NMCA-009, ¶ 8 (“We will not
disturb the agency’s factual findings if supported by substantial evidence, although we
engage in a whole record review.”); see also Martinez v. N.M. State Eng’r Office, 2000-
NMCA-074, ¶ 48, 129 N.M. 413, 9 P.3d 657 (stating that “in administrative appeals the
district court is a reviewing court, not a fact-finder”). Thus, to the extent that substantial
evidence supports the Board’s factual findings, the district court was required to give the
factual findings deference and not substitute its judgment for that of the Board.

{20} However, the Assessor does not challenge the Board’s findings that La Vida Llena
(1) provides service to Medicaid residents when space is available and that the actual cost

                                               7
of care to these Medicaid residents exceeds the Medicaid reimbursement and that this
amount was approximately $30,000 in 2009; (2) permits its staff time to serve other
charitable organizations; (3) provides services such as bookkeeping and safeguarding for the
foundation even though it does not actually provide funds for the foundation; and (4) does
not terminate resident agreements if residents do not pay, although it is permitted to do so
in the resident agreements. Indeed, at oral argument, the Assessor conceded that there is a
charitable aspect to providing service to Medicaid residents that exceeds Medicaid
reimbursement. These factual findings are therefore binding on appeal. See Franco v.
Carlsbad Mun. Sch., 2001-NMCA-042, ¶ 13, 130 N.M. 543, 28 P.3d 531 (stating that
unchallenged factual findings are binding on appeal). These uncontested factual findings
made by the Board support a determination that La Vida Llena donated or rendered
gratuitously at least some “portion” of its facilities and services.

{21} To the extent that the Assessor contends that the factual findings indicate that the
Board did not find that La Vida Llena rendered a “meaningful” amount of its goods and
services to qualify for the exemption, this argument simply restates the previous argument
that “portion” as used in Section 7-36-7(B)(1)(d) has a quantitative threshold. The meaning
of “portion” and whether it contains a quantitative threshold is a legal question requiring
statutory interpretation, not a factual determination entitled to deference. We have
concluded that “portion” contemplates no such threshold requirement.

CONCLUSION

{22} The district court did not err by determining that Section 7-36-7(B)(1)(d) does not
require a minimum amount of donated or gratuitously rendered services or facilities for
charitable purposes in order for the continuing care facility to receive the property tax
exemption. Additionally, the district court did not err by failing to give deference to certain
findings of the Board. Accordingly, we affirm.

{23}   IT IS SO ORDERED.

                                                       ________________________________
                                                       JAMES J. WECHSLER, Judge

WE CONCUR:

___________________________________
MICHAEL E. VIGIL, Judge

___________________________________
TIMOTHY L. GARCIA, Judge

Topic Index for La Vida Llena v. Montoya, No. 31,711


                                              8
APPEAL AND ERROR
Certiorari
Standard of Review

ASSOCIATION AND SOCIETIES
Charitable Organization
Hospitals

PUBLIC ASSISTANCE
Medicare and Medicaid

STATUTES
Interpretation
Legislative Intent
Rules of Construction

TAXATION
Property Tax
Valuation




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