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In May of 2008, Wallen Development, LLC (Wallen) entered into a written agreement to construct and sell a new home to David and Corinne Fogelson (Fogelson). But, after Fogelson paid Wallen in excess of $165,111 under the agreement, Wallen went out of business as a result of financial difficulties.
Fogelson filed an arbitration action against Wallen and ultimately obtained a default judgment after Wallen failed to appear. Thereafter, Fogelson filed a complaint in court against various individuals affiliated with Wallen. As relevant here, Fogelson asserted a claim under New Mexico’s Unfair Practices Act, NMSA 1978 §§ 57-12-1 to -26 against one of Wallen’s owners, Mark Bozzone (Bozzone). Bozzone filed a motion to dismiss on the basis that “construction services,” such as those provided by Wallen, do not fall within the scope of the Unfair Practices Act. The trial court granted Bozzone’s motion.
The major issue on appeal was whether the doctrine of res judicata applied to an arbitration proceeding.