text:
    In re the Marriage of: Brian FRANK, Petitioner and Appellee, v. Sonia FRANK, Respondent and Appellant.
    DA 18-0151
    Supreme Court of Montana.
    Submitted on Briefs: March 20, 2019 Decided: June 4, 2019
    For Appellant: P. Mars Scott, Jason M. Scott, P. Mars Scott Law Offices, Missoula, Montana
    For Appellee: Dennis E. Lind, Datsopoulos, MacDonald & Lind, PC, Missoula, Montana
   Justice Jim Rice delivered the Opinion of the Court.

¶1 Sonia Frank (Sonia) appeals from the Fourth Judicial District Court's decree of dissolution of the marriage between her and Brian Frank (Brian), distributing marital assets and awarding Sonia five years of spousal maintenance. We address the following issue, and affirm:

Did the District Court abuse its discretion in determining the amount and duration of the maintenance award granted to Sonia?

FACTUAL AND PROCEDURAL BACKGROUND

¶2 Sonia and Brian were married in 1987 in California. Brian petitioned for dissolution in February 2016, and the District Court entered a dissolution decree in February 2018. At that time, both parties were 50 years old and in good health. They had three adult children and resided in Whitefish, Montana.

¶3 Brian and Sonia both attended some college, although neither graduated. In 1987, prior to their marriage, Brian, along with his father, Gerald Frank, and his step-mother, Tina Hansen Frank, incorporated a business in California called Hansen and Frank, Inc., to sell nutritional supplements to endurance athletes. Capital contributions from Gerald primarily financed the company, but Brian personally contributed $ 35,000. Early in their relationship, Sonia assisted at the company by answering phones and filling orders, but significantly decreased her involvement after the birth of the couple's first child in 1988. Brian inherited the company after his father's death in 1991. Sonia became an officer and director of the corporation, and invested $ 15,000 into the company, but except for her daily conversations with Brian about human resource and personnel issues, Sonia focused on being a homemaker and raising the couple's three children.

¶4 Brian and Sonia moved to Whitefish in 1995 to raise their family and operate the business there. Hansen and Frank, Inc. was dissolved in 1996, and after two corporate restructurings, became Hammer Nutrition, Ltd., as it is known today. The company remains focused on selling nutritional supplements. Following the last restructuring, Sonia was recognized as a 50% owner of Hammer Nutrition. As President, Brian grew Hammer Nutrition into a successful company. However, the company's gross sales steadily declined for five years prior to the parties' 2016 divorce and net income fell significantly. By the end of 2017, Hammer Nutrition was earning approximately $ 1,800,000 in annual net income, virtually all of which flowed to the Franks as personal earnings. During the two-year dissolution proceeding, Hammer Nutrition paid out almost all of its net profits to the parties and did not maintain an appropriate cash reserve for business contingencies.

¶5 During their marriage, Brian and Sonia accumulated a substantial estate, including the Hammer Nutrition business, real estate holdings, luxury vehicles, and other valuable personal property, such as jewelry, precious metals, artwork, wine, and firearms. The Franks also enjoyed a luxurious lifestyle that included travel, fine lodging and dining, and personal assistants. They experienced marital difficulties for several years prior to the divorce, and in 2012, Sonia filed for legal separation. The parties temporarily reconciled but continuing problems led to dissolution.

¶6 Historically, Hammer Nutrition carried a $ 1,000,000 line of credit with First Interstate Bank. In 2015, Sonia surreptitiously transferred over $ 800,000 from the company's business accounts into her personal account. These unauthorized withdrawals violated the bank's covenants because they created a deficit between the outstanding balance on the line of credit and the value of company assets upon which the credit was extended. Sonia refused requests from the bank to return the funds, so to remedy the imbalance, the Franks pledged three additional real estate properties as security for the loan. Brian subsequently made other disbursements from Hammer Nutrition to himself. The District Court found: "The parties exercised sole control and discretion over the funds withdrawn. Each of the parties has thus already received an equal disbursement of funds from the marital estate. No further accounting of how these funds have been spent or maintained is necessary." The District Court also found that Sonia interfered with company affairs by these transactions and by firing a key employee, which created personnel problems for the company. After a pre-trial hearing, the District Court restricted Sonia's access to Hammer Nutrition property and limited her involvement to recognizing employees on special occasions and continuing her work on the employee handbook. In the same order, the court restrained Brian from coming within 500 feet of the family's home where Sonia was living.

¶7 Numerous exhibits and witnesses were presented at trial, including experts who opined about the value of Hammer Nutrition. The District Court found, based on expert testimony it found to be credible, that Hammer Nutrition was worth $ 5,910,000. The court determined "an equitable distribution of 50% of the marital estate to each party is appropriate," but that 10% of the value of Hammer Nutrition should be credited to Brian as premarital inheritance, thus reducing the value of the company to $ 5,319,000 for purposes of the marital distribution.

¶8 The District Court valued the total marital estate at $ 10,260,971. Brian received full ownership of Hammer Nutrition, but in offset, the District Court ordered him to pay $ 2,088,717 to Sonia as an equalization payment, after also factoring in her other assets. Sonia received several vehicles, the precious metal holdings valued at $ 387,392, and approximately $ 1,951,167 in real estate equity, including two residential homes, a mountain condo, and two parcels of undeveloped land. Brian received a larger value than Sonia in vehicles, but less in real estate. Each party was generally permitted to keep other personal property they claimed or desired. Factoring in the equalization payment, each party received $ 4,834,986 in assets of the marital estate as valued by the court, after deduction of Brian's premarital inheritance.

¶9 At the time of dissolution, Sonia was unemployed and had not sought employment following the parties' separation. Sonia requested maintenance in the amount of $ 50,000 per month, totaling $ 600,000 annually, for the remainder of her life. Following the parties' separation, Sonia incurred over $ 37,000 in monthly credit card expenses, and estimated her future monthly expenses would be over $ 90,000 after accounting for the real estate mortgages and upkeep on the properties she was to receive. The District Court found Sonia's claimed expenses to be "unreasonable," and that, based upon her average life expectancy of 85, her maintenance request totaled $ 21,000,000. The District Court awarded Sonia maintenance in the amount of $ 15,000 per month for three years, and then $ 10,000 per month for two additional years, totaling $ 780,000 over the five-year period following the dissolution.

¶10 Sonia appeals the amount and duration of the maintenance award.

STANDARD OF REVIEW

¶11 We review maintenance awards to determine whether the district court's findings are clearly erroneous. In re Marriage of Haines , 2002 MT 182, ¶ 15, 311 Mont. 70, 53 P.3d 378. "A finding is clearly erroneous if it is not supported by substantial evidence, if the district court misapprehended the effect of the evidence, or if our review of the record convinces us that the district court made a mistake." Patton v. Patton , 2015 MT 7, ¶ 18, 378 Mont. 22, 340 P.3d 1242. Absent a clearly erroneous finding, we will affirm a district court's division of marital property and maintenance award unless we determine that the court abused its discretion. Jackson v. Jackson , 2008 MT 25, ¶ 9, 341 Mont. 227, 177 P.3d 474. "In a dissolution proceeding, the test for an abuse of discretion is whether the district court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in a substantial injustice." Jackson , ¶ 9.

DISCUSSION

¶12 Did the District Court abuse its discretion in determining the amount and duration of the maintenance award granted to Sonia?

¶13 Sonia argues the District Court failed to properly consider the factors relevant to a determination of maintenance under § 40-4-203(2), MCA. A district court may grant maintenance "only if it finds that the spouse seeking maintenance: (a) lacks sufficient property to provide for the spouse's reasonable needs; and (b) is unable to be self-supporting through appropriate employment ...." Section 40-4-203(1), MCA. Then, a maintenance order "must be in amounts and for periods of time that the court considers just ... after considering all relevant facts, including:

(a) the financial resources of the party seeking maintenance, including marital property apportioned to that party, and the party's ability to meet the party's needs independently, including the extent to which a provision for support of a child living with the party includes a sum for that party as custodian;
(b) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment;
(c) the standard of living established during the marriage;
(d) the duration of the marriage;
(e) the age and the physical and emotional condition of the spouse seeking maintenance; and
(f) the ability of the spouse from whom maintenance is sought to meet the spouse's own needs while meeting those of the spouse seeking maintenance.

Section 40-4-203(2), MCA. Although all these factors must be considered by the district court, "it need not make a specific finding relating to each, provided that this Court can determine the trial judge actually considered each factor." Jackson , ¶ 23 (quoting In re Marriage of Rudolf , 2007 MT 178, ¶ 27, 338 Mont. 226, 164 P.3d 907 ).

¶14 Referencing all the factors, Sonia argues generally the District Court failed to consider the amount of time it will take for her to "overcome her lack of training and experience, her age limitations on the job market, and her lack of higher education, and find employment that will suffice for the needs and requirements of the lifestyle she and Brian were accustomed to during the marriage." We have categorized Sonia's sub-arguments as challenges to the District Court's consideration of the factors regarding, and the sufficiency of the evidence supporting: 1) her financial resources; 2) her employability; and 3) the overall fairness of the distribution given the duration and standard of living of the marriage. Brian subtly offers, "[a] credible argument in this case could be made" that a maintenance award to Sonia was not appropriate or necessary, but he did not cross-appeal the District Court's award of maintenance, and instead primarily argues the District Court's award was based upon findings of fact that were not clearly erroneous and that the court did not abuse its discretion in determining the award's amount and duration.

¶15 Sonia contends the District Court lacked evidence that her financial resources, including the five-year maintenance award, would be sufficient to meet her expenses and provide the same standard of living she and Brian achieved during the marriage. The District Court did not share Sonia's assessment of the expenses that would be necessary to meet her future needs. Noting that her living expenses "dramatically increased" after her separation from Brian and that the costs she claimed were "unrealistically high," the District Court ruled, "[i]n consideration of the statutory considerations set forth in MCA § 40-4-203 and Sonia's reasonable needs, her claimed expenses are unreasonable." The District Court emphasized that Sonia would be receiving "substantial assets," and reasoned that, in addition to the maintenance award, Sonia could utilize these properties "to engage in opportunities for the acquisition of assets and income, including rental income and income from other related business activities." The District Court concluded that the substantial assets and maintenance award would be "sufficient to meet her reasonable needs."

¶16 Sonia argues that, beyond her acknowledgment that the properties are rentable, there was no evidence presented about the rental income potential of the properties. Further, she argues that an expectation she would rent her properties "significantly impacts her ability to use the assets awarded to her," thus impacting her standard of living. While additional evidence on the specific rental potential could have been helpful, there was no dispute between the parties that the properties were marketable, and Sonia's opinion was based upon her own experience ("I am very knowledgeable on property, in general, and know that [the] homes are rentable.") The District Court also considered that the estate distribution would put Sonia into a liquid cash position that would enhance her ability to invest and obtain a return. While the "standard of living" factor must be considered, it cannot be viewed in isolation or overemphasized, because the practical reality, as Sonia acknowledged in her testimony, is that two people cannot separately enjoy the same standard of living when living apart as they did while living together. The common phrase, "two can live as cheaply as one," may be true when joining forces, but not when dividing them. Although constrained by this reality, the District Court considered the Franks' standard of living and preserved it as much as possible through a careful distribution of the estate, reasoning, "[e]ach party will have significant assets following the Court's distribution, including the opportunity for the future acquisition of property." We conclude the District Court's findings, including general assumptions it made about the uses Sonia could make of the property at her disposal, were supported by substantial evidence and properly considered.

¶17 Next, Sonia argues the District Court failed to consider the challenges she will face in entering the job market in light of her age, lack of education, and the 30 years she spent supporting her marriage to Brian and their children, rather than developing marketable skills. She argues that it will take longer than the five years provided by the maintenance award for her to find appropriate employment to maintain the standard of living enjoyed by the parties during their marriage. See § 40-4-203(2)(b), (d), (e), MCA (requiring the district court to consider: (b) the time it will take for the claimant to obtain education or training to enable them "to find appropriate employment"; (d) the duration of the parties' marriage; and (e) the claimant's age and physical and emotional condition).

¶18 Sonia's argument again emphasizes the parties' standard of living during the marriage over the other factors to be considered and, as discussed above and noted previously, a court must consider all the factors under § 40-4-203(2), MCA. See In re Marriage of Harris , 252 Mont. 291, 297, 828 P.2d 1365, 1369 (1992) (holding that duration of marriage must be considered alongside the other § 40-4-203(2), MCA, factors and not be treated as "an overriding factor so as to preclude consideration by the District Court of other equitable reasons set forth in the statute for the award of maintenance" (internal citation and quotation omitted)).

¶19 As Sonia correctly points out, no specific evidence was presented to the District Court demonstrating what kind of employment she could obtain at her age and with her education, what she could earn, and whether she could sustain their prior standard of living. The District Court did note and consider that Brian and Sonia were both 50 years old, had been married for 30 years, and neither had earned a college degree. The court recognized that Sonia was "absen[t] from the labor market while participating as caregiver and homemaker for the family" during the marriage, which "allow[ed] Brian to more fully concentrate on the business." The court found that Sonia "is an educated, talented individual with capacity to obtain employment at a reasonable salary," that she "is in good health," and has no minor children to care for, but balanced these findings against the evidence, through Brian's testimony, that Sonia "has not been in the labor market for a number of years and may require education or training to enable [her] to find appropriate employment." Sonia also testified to her employability, indicating she is capable of holding a job and possesses "certain management skills and H.R. skills" that she could utilize. Beyond the specific considerations of Sonia's employability, the District Court expressly based its determination that the parties were entitled to a fifty-percent share of the estate on its consideration of the § 40-4-203, MCA, factors, "including the length of the marriage, the age and health of the parties, employability, the contribution of each to the marriage and opportunity for future acquisition of assets and income." Thus, the record reflects that these factors guided the District Court in coordinating the property distribution and maintenance determinations, and led to its conclusion that the five-year maintenance award was "reasonable" and "an appropriate amount of time to obtain additional training and for Sonia to secure appropriate employment." We conclude the District Court's findings were supported by substantial evidence, including its finding, mentioned repeatedly, that Sonia was receiving "substantial assets" capable of generating income and of sustaining a standard of living reasonably commensurate with what the parties enjoyed during the marriage.

¶20 Finally, Sonia makes a multi-faceted argument that challenges the overall fairness of the decree's distribution of the marital estate. She argues the District Court violated § 40-4-203(2)(f), MCA, by failing to recognize that Brian could pay maintenance longer than five years while still meeting his own needs. She argues Brian should pay more maintenance because he was awarded Hammer Nutrition, which is an income generating asset, while she was awarded assets, such as the mountain condo, the lake house, and the residence in Napa, California, which will incur costs for maintenance.

¶21 Following trial, the District Court ordered Brian to pay Sonia $ 2,088,717 within sixty days as a cash equalization payment. This payment was calculated to offset the value of Hammer Nutrition, which the court awarded to Brian because he "has been the driving force in the development of Hammer Nutrition, is intricately involved in the business and its relationships with employees, vendors, consumers, dealers, distributors, financing and marketing, national and international connections." The value of Hammer Nutrition used to calculate the equalization payment to Sonia was determined after the District Court, in accordance with In re Funk , 2012 MT 14, 363 Mont. 352, 270 P.3d 39, awarded Brian a ten-percent interest in the company that he inherited prior to the marriage, reasoning that "[t]he credit for Brian's premarital and inherited interest is approximately $ 19,700 per year, a total of $ 591,000 over the 30 years of business operations, and is reasonable given the circumstances." This is a permissible consideration under Funk , ¶ 19 ("The party claiming ownership of the pre-acquired, bequested or gifted property is entitled to argue that it would be equitable to award him or her the entirety of such property. Accordingly, when distributing pre-acquired property or assets acquired by gift, bequest, devise or descent, the court must also consider the contributions of the other spouse to the marriage, and take account of the three factors set forth at § 40-4-202(1)(a)-(c), MCA."). The premarital credit decreased the portion of Hammer Nutrition available for division between the parties, which in turn, decreased the value of the equivalent estate distribution to Sonia. However, this was based upon a statute governing the consideration of premarital property as applied in Funk , ¶¶ 19, 32-34, and we find no abuse of discretion in this determination by the District Court.

¶22 Sonia argues that, given the court's distribution, Brian's estimated income demonstrates his ability to pay higher maintenance. She points out that, during the first three years following dissolution, she will be receiving $ 180,000 annually, or only ten percent of Brian's estimated $ 1,800,000 annual income. For the following two years she will receive $ 120,000 annually, or eight percent of Brian's estimated income, which she argues Brian can "likely" earn "in perpetuity." Sonia also points out that once Brian completes the ordered equalization and maintenance payments, he will have an additional $ 57,460 per month in unallocated income, which Sonia argues demonstrates his ability to provide maintenance beyond five years.

¶23 The District Court came to different conclusions about Brian's ability to pay. Addressing Sonia's request for maintenance of $ 50,000 per month for the rest of her life, the District Court reasoned: "Brian's Final Disclosure Statement indicates that after taxes, conservative reserve to meet Bank loan covenants and contingent expenses, and living expenses substantially less than Sonia's stated expenses, together with the loan amount necessary to provide the equalization payment to Sonia, Brian's financial resources are exhausted. There is no ability for Brian to meet Sonia's excessive demands for maintenance, nor is the extensive time frame realistic or warranted." Regarding Sonia's claim that Brian would earn high income in perpetuity, the District Court also considered Hammer Nutrition's recent financial challenges, including five years of significant decline in sales, lack of retained earnings, increased competition from other retailers, and stricter regulations in the sports nutrition industry, in making its determination. Again, the record demonstrates the District Court considered the factors under § 40-4-203(2), MCA.

¶24 We understand Sonia's concerns that she faces future challenges to obtain the training and education necessary to secure appropriate employment, and to effectively manage the assets distributed to her to earn a return. She makes a well-supported argument for entitlement to a higher maintenance award. However, § 40-4-202, MCA, governs the distribution of marital assets and vests a district court with broad discretion to design an equitable apportionment of the estate. Jackson , ¶ 9. "Because district courts face a difficult task in awarding maintenance, our final analysis is not whether we would reach a different conclusion after considering the same evidence, but rather whether there is sufficient evidence to support its conclusion." Rudolf , ¶ 27. Our review for abuse of discretion leaves us with the conclusion that the District Court employed conscientious judgment, did not act arbitrarily or outside the bounds of reason, and did not clearly err in its findings. Jackson , ¶ 9.

¶25 Affirmed.

We concur:

MIKE McGRATH, C.J.

BETH BAKER, J.

INGRID GUSTAFSON, J.

JAMES JEREMIAH SHEA, J.

      Hammer Nutrition is the trade or brand name of the business, which, for operational reasons, is comprised of seven separate business entities. For purposes of this appeal, the entities are treated as one company and are collectively referred to as Hammer Nutrition.

      The District Court stated the value of the marital estate was "approximately $ 10,347,248," but utilized a table indicating the value was $ 10,260,971. This latter amount, less the $ 591,000 premarital inheritance the court credited to Brian, results in an amount of $ 9,669,971, which is the actual value of the combined tangible assets evenly distributed to Brian and Sonia.


source: Caselaw Access Project

license: Public Domain

text:
    EMPLOYERS MUTUAL CASUALTY COMPANY, Plaintiff and Appellant, v. The ESTATE OF Zachary S. BUCKLES; BH Flow Testing Inc.; Continental Resources, Inc.; Jansen Palmer d/b/a Black Gold Testing; and Does 1-10, Defendants and Appellees,
    Continental Resources, Inc., Counterclaim Plaintiff and Appellee, v. Employers Mutual Casualty Company, Counterclaim Defendant and Appellant.
    DA 18-0436
    Supreme Court of Montana.
    Submitted on Briefs: April 3, 2019 Decided: June 11, 2019
    For Appellant Employers Mutual Casualty Company: David C. Berkoff, Berkoff Law Firm, P.C., Missoula, Montana, Gary M. Zadick, Ugrin Alexander Zadick, P.C., Great Falls, Montana
    For Appellee Continental Resources, Inc.: Kyle A. Gray, W. Scott Mitchell, Holland & Hart, LLP, Billings, Montana
    For Appellee BH Flow Testing, Inc.: Christopher C. Stoneback, Monique P. Voigt, Crowley Fleck PLLP, Billings, Montana
   Justice Beth Baker delivered the Opinion of the Court.

¶1 Employers Mutual Casualty Company ("Employers Mutual") filed a declaratory judgment action in the Seventeenth Judicial District Court, Valley County, to determine its obligations to defend and to indemnify Continental Resources, Inc. ("Continental") under a commercial general liability ("CGL") insurance policy it issued to Black Rock Testing, Inc. ("Black Rock"). Employers Mutual appeals the order of the District Court denying its motion for summary judgment, granting Continental's motion for summary judgment, and dismissing Employers Mutual's first amended complaint. The District Court held in part that Continental was entitled to a defense as an additional insured under the Employers Mutual insurance policy. We restate the issues on appeal as follows:

1. Did the District Court err as a matter of law when it determined that Employers Mutual must defend Continental as an additional insured under the CGL insurance policy issued to Black Rock? and
2. Did the District Court err as a matter of law when it determined that the pollution exclusion in the CGL insurance policy did not apply to exclude coverage?

We reverse on Issue 1 and therefore do not reach Issue 2.

PROCEDURAL AND FACTUAL BACKGROUND

¶2 This is an appeal from a declaratory judgment action initiated by Employers Mutual to determine its duties to defend and to indemnify Continental and other defendants in an underlying wrongful death lawsuit (the "Underlying Suit") filed by the Estate of Zachary Buckles. The Underlying Suit arose from Buckles's death on April 28, 2014, at a well site near Alexander, North Dakota. Buckles was working as a flow tester at the site. Continental owns or leases the well site. At the time of Buckles's death, Continental had a master service contract with BH Flow Testing to perform flow testing at the site. BH Flow Testing subcontracted the work to Black Rock, which subcontracted the work to Jansen Palmer, doing business as Black Gold Testing, with which Buckles was working at the time.

¶3 Black Rock had a CGL insurance policy (the "Policy") through Employers Mutual. After the Estate of Buckles brought suit, Continental made a tender to Employers Mutual to provide it with a defense, alleging that Continental was an additional insured under the Policy. Employers Mutual denied the tender.

¶4 In July 2015, Employers Mutual filed this declaratory judgment action. Among other issues, Employers Mutual sought a determination that Continental is not an additional insured under the Policy and that Employers Mutual does not have duties to defend or to indemnify Continental in the Underlying Suit. Continental answered Employers Mutual's complaint and filed counterclaims seeking a declaratory judgment of its rights under the Policy and alleging breach of the insurance contract, bad faith, and violations of the Unfair Trade Practices Act. Employers Mutual filed its first amended complaint on May 31, 2016. Before Continental filed its answer, Employers Mutual moved for summary judgment against Continental. Continental responded with its own motion to dismiss the first amended complaint or, alternatively, for summary judgment on Employers Mutual's duty to defend. Much of the briefing on the cross-motions focused on whether Employers Mutual had provided necessary evidence to make an unequivocal demonstration that Continental was not an additional insured and whether Continental proffered any evidence to raise a genuine issue of material fact in response to Employers Mutual's statement of undisputed facts.

¶5 After both motions were fully briefed, the District Court entered an order denying Employers Mutual's motion and granting Continental's motion. The District Court explained that it could not grant summary judgment to Employers Mutual because there was a genuine issue of material fact regarding the status of an "additional interested party" under the policy. But it granted Continental's motion for summary judgment, explaining that Employers Mutual failed to make an unequivocal demonstration that Continental is not an additional insured under the Policy. On motion from Employers Mutual, the District Court certified its order "as final in its entirety for purposes of appeal" pursuant to M. R. Civ. P. 54(b), and we authorized the appeal to proceed. M. R. App. P. 4(4)(b).

STANDARDS OF REVIEW

¶6 Summary judgment is proper only when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Plum Creek Mktg., Inc. v. Am. Econ. Ins. Co. , 2009 MT 264, ¶ 21, 352 Mont. 56, 214 P.3d 1238. The party seeking summary judgment has the initial burden of showing a complete absence of any genuine issue of material fact in "the pleadings, the discovery and disclosure materials on file, and any affidavits" and that the party is entitled to judgment as a matter of law. See M. R. Civ. P. 56(c)(3) ; Davis v. Westphal , 2017 MT 276, ¶ 12, 389 Mont. 251, 405 P.3d 73. The burden then shifts to the party opposing the motion to show either the existence of a genuine issue of material fact or that the moving party is not entitled to judgment as a matter of law on the undisputed facts of the record. Davis , ¶ 12. The court must view the record in the light most favorable to the non-moving party and draw all reasonable inferences against summary judgment. Davis , ¶ 12. But "the court has 'no duty to anticipate or speculate' regarding contrary material facts." Davis , ¶ 12 (quoting Gamble Robinson Co. v. Carousel Props. , 212 Mont. 305, 312, 688 P.2d 283, 287 (1984) ). We review a district court's conclusions of law for correctness. Plum Creek Mktg., Inc. , ¶ 21.

DISCUSSION

¶7 1. Did the District Court err as a matter of law when it determined that Employers Mutual must defend Continental as an additional insured under the CGL insurance policy issued to Black Rock?

¶8 Employers Mutual challenges the District Court's determination that it had a duty to defend Continental. It argues on appeal that Continental is not an additional insured under the Policy as a matter of law. First, Continental does not meet the contractual requirements to be an automatic additional insured under the Policy: there is no evidence in the record that Black Rock and Continental executed a Master Service Contract before Buckles's death or that Continental leased a premises or equipment to Black Rock. Second, Employers Mutual argues that Continental is not listed as an additional insured in the Policy, and the unambiguous waiver of subrogation endorsement does not grant additional insured status.

¶9 In response, Continental relies on our holdings in Tidyman's Management Services, Inc. v. Davis , 2014 MT 205, ¶ 29, 376 Mont. 80, 330 P.3d 1139 ( Tidyman's I ), and Farmers Union Mutual Insurance Co. v. Staples , 2004 MT 108, ¶ 22, 321 Mont. 99, 90 P.3d 381, to argue that the District Court correctly required Employers Mutual to "unequivocally demonstrat[e]" that the claim against Continental did not fall within the coverage of the Policy. Continental maintains that because Employers Mutual cannot unequivocally demonstrate that claim does not fall within the coverage of the Policy, it violated the duty to defend by refusing to defend under a reservation of rights while seeking a court determination of its duties.

¶10 As this Court explained in Staples , "the general rule is that the insurer has a duty to defend when a complaint filed against its insured sets forth the facts which bring the event within the policy provisions." Staples , ¶ 20 (quoting Graber v. State Farm , 244 Mont. 265, 270, 797 P.2d 214, 217 (1990) ); see also Plum Creek Mktg., Inc. , ¶ 31. Thus, before a duty to defend can arise under policy provisions based on claims in a complaint, the party seeking insurance coverage must be an insured under the policy. See Staples , ¶ 20. "An insurer must defend unless there exists an unequivocal demonstration that the claim against the insured does not fall under the policy's coverage." Plum Creek Mktg., Inc. , ¶ 31 (quoting Farmers Union Mut. Ins. Co. v. Rumph , 2007 MT 249, ¶ 14, 339 Mont. 251, 170 P.3d 934 ). "The interpretation of an insurance policy presents a question of law."

Plum Creek Mktg., Inc. , ¶ 31.

¶11 This case raises the fundamental question whether Continental qualifies for any coverage under the subject policy regardless of the claim. Unlike Tidyman's I and Staples , the answer to this question is readily determined from the insurance policy in question and does not challenge or depend on the veracity of the allegations in the underlying complaint. Rather, the question raised in this appeal is a matter of contract interpretation, which is a question of law. See Plum Creek Mktg., Inc. , ¶ 31.

¶12 Black Rock is the only named insured on the Policy issued on February 18, 2014. The Policy includes a Commercial General Liability Coverage Form, laying out the general provisions of the insurance contract. This form is organized into five sections: Section I - Coverages; Section II - Who Is An Insured; Section III - Limits Of Insurance; Section IV - Commercial General Liability Conditions; and Section V - Definitions. The Policy then contains a number of endorsements directly amending or adding to the CGL coverage form. The issues on appeal center around two of these endorsements: the Liability Extension Endorsement and a separate endorsement added to the Policy on April 21, 2014 (the "April Endorsement"). We discuss each in turn.

¶13 Employers Mutual first argues on appeal that Continental does not meet the requirements to be an automatic additional insured under the Liability Extension Endorsement to the Policy: (1) the written Master Service Contract between Black Rock and Continental was not executed before Buckles's death, because Continental had not signed the contract at the time of Buckles's death; and (2) there is no evidence that Continental is a lessor of a premises or equipment to Black Rock or a state or political subdivision. In support of its arguments, Employers Mutual produced the Master Service Contract between Black Rock and Continental and the Policy and its endorsements.

¶14 The Liability Extension Endorsement to the Policy states that it amends Section II - Who Is An Insured of the CGL coverage form. The amended provisions provide for automatic additional insured status only for specified relationships. First, Black Rock, the named insured, must have a written contract with a person or organization that is in effect and executed before a covered occurrence and requires it to add the person or organization as an additional insured. Second, in order for a third party to be covered as an automatic additional insured under this endorsement, the third party must be (1) "[t]he manager or lessor of a premises leased to" Black Rock with whom Black Rock has "agreed per a written contract ... to provide insurance, but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to" Black Rock; (2) "[a]ny state or political subdivision with which [Black Rock] ha[s] agreed per a written contract ... to provide insurance," but only in regard to certain activities for which the state or political subdivision has issued a permit; or (3) "[a]ny person or organization from which [Black Rock] lease[s] equipment with whom [Black Rock] ha[s] agreed per a written contract ... to provide insurance with respect to liability for 'bodily injury', 'property damage' or 'personal and advertising injury' caused in whole or in part by [Black Rock's] maintenance, operation, or use of equipment leased to [Black Rock] by such person(s) or organization(s)." No party argues that Continental is a state or political subdivision. Therefore, Continental can be covered under the automatic additional insured provisions only if it is a manager or lessor of a premises to Black Rock or a lessor of equipment to Black Rock that has contracted with Black Rock to provide insurance for liability arising out of Black Rock's maintenance, operation, or use of such leased premises or equipment.

¶15 Even assuming the Master Service Contract was executed and in force before Buckles's death-a point the parties dispute-the Master Service Contract between Continental and Black Rock does not help Continental. The Master Service Contract between Continental and Black Rock-which is the only written agreement requiring Black Rock to maintain insurance coverage for Continental in the record-is what it proclaims itself to be: a service contract. It does not provide for the leasing of a premises or any equipment from Continental to Black Rock. In fact, the only two mentions of equipment use in the contract provide that Black Rock represents that all of its equipment has been thoroughly tested, inspected, and is safe and that any equipment that Black Rock uses or furnishes in connection with the work under the Master Service Contract does not infringe on any licenses or patents.

¶16 In its summary judgment briefing before the District Court, Employers Mutual maintained that it was undisputed that Continental did not fall within any of these categories, because the Master Service Contract did not fall within the unambiguous requirements for automatic additional insured coverage in the Liability Extension Endorsement. Employers Mutual produced the Policy and the Master Service Agreement between Black Rock and Continental. Our interpretation of these documents is a matter of law. See Plum Creek Mktg., Inc. , ¶ 31. These documents establish unequivocally that Continental was not an automatic additional insured under the policy. In its District Court briefing, Continental failed to produce any evidence to raise a genuine issue of material fact whether Black Rock and Continental were parties to a written agreement that would qualify under the automatic additional insured provision of the Policy. Continental's Rule 56(f) affidavit requesting further discovery did not identify what additional discovery it needed from Employers Mutual to demonstrate that it was a lessor of a premises or equipment to Black Rock. This makes sense, as we would expect evidence of any leasing agreement between Continental and Black Rock to be in Continental's control. Continental produced no evidence or affidavits of any such agreements before the District Court. In its briefing before this Court, Continental speculates that leasing of equipment could have occurred "depending on the context of how the term 'lease' is used in the Policy." At the summary judgment phase, however, such speculation without any evidence to support it is not enough to raise a genuine issue of material fact. See Davis , ¶ 12. Upon review of the record, we hold that Employers Mutual was entitled to summary judgment that Continental was not an automatic additional insured under the terms of the Liability Extension Endorsement.

¶17 We next address Employers Mutual's contention that Continental is excluded from coverage under the Policy because Continental is not named as an additional insured. Continental maintains that the April Endorsement named it as an "additional interested party." It argues that because this term is not defined in the Policy, it is ambiguous and can be fairly interpreted as synonymous with "additional insured."

¶18 The first page of the April Endorsement provides the date the endorsement was issued and its effective dates. It states: "In consideration of the premium charged the following item ... additional interested parties ... is changed to read: (see page two for endorsement description)." Page two states: "Class 87734 and Form CG2404 have been amended adding waiver of subrogation Continental Resources, Inc." Attached is an updated general liability policy declarations form with an endorsement schedule, an updated general liability schedule, and the referenced Form CG2404. Form CG2404, titled "Waiver of Transfer of Rights of Recovery Against Others to Us," states that Employers Mutual "waive[s] any right of recovery [it] may have against the person or organization" shown on the declarations page "for injury or damage arising out of" Black Rock's ongoing operations or work performed under a contract with that person or entity. The updated declarations form shows the addition of Form CG2404 to the Policy and lists Continental Resources under that form. The updated general liability schedule shows changes to Black Rock's premium related to the April Endorsement in a table format.

¶19 Employers Mutual maintains that the April Endorsement is simply a subrogation waiver that waives any right it may have to recover against Continental in certain circumstances. Continental argues that the April Endorsement adds it as a named additional insured. Continental puts a great amount of weight on the charges listed on the updated general liability schedule. Continental argues that the form shows two separate charges: a $ 0 charge and a $ 15 charge. Continental maintains that the $ 15 premium was charged for adding the "additional interest" and $ 0 was charged for the subrogation waiver described in Form CG2404.

¶20 Interpreting whether the April Endorsement adds Continental Resources as an additional insured is a matter of contract interpretation that can be determined as a matter of law. See Plum Creek Mktg., Inc. , ¶ 31. Although the April Endorsement does not define "additional interest" or "additional interested parties," the descriptions in the April Endorsement and the forms attached make clear that the April Endorsement waives Employers Mutual's subrogation rights against Continental. We reject Continental's argument that the April Endorsement also fairly may be read to add Continental as an additional insured under the Policy. Upon review of the table showing the premium changes on the updated general liability schedule, it is clear that the $ 0 is listed next to the change in class number and the $ 15 charge is listed next to the information identifying the addition of Form CG2404 to the Policy. Further, the April Endorsement provides no description of coverage for Continental under the Policy and does not state that it amends Section II of the Policy entitled, "Who Is An Insured." The explicit incorporation of Form CG2404 and that form's explanation of the subrogation waiver demonstrate plainly that the April Endorsement is not for purposes of adding Continental as an insured. The District Court erred in determining that genuine issues of material fact remained to be determined regarding the status of an "additional interested party" under the Policy, because the interpretation of this term is a question of law. We conclude that the April Endorsement does not extend additional insured status to Continental.

¶21 Under any reasonable interpretation of the insurance contract and its endorsements, the Policy does not cover Continental as an additional insured. Thus, Employers Mutual owes no duty to defend or indemnify Continental under the Policy.

¶22 2. Did the District Court err as a matter of law when it determined that the pollution exclusion in the CGL insurance policy did not apply to exclude coverage?

¶23 Because we determine that Continental is not an additional insured under the Policy, we need not address whether the Policy's pollution exclusion applies.

CONCLUSION

¶24 We reverse and remand to the District Court with instructions to grant Employers Mutual's motion for summary judgment and enter judgment that Employers Mutual owes no duty to defend or indemnify Continental under the Policy.

We Concur:

MIKE McGRATH, C.J.

LAURIE McKINNON, J.

JIM RICE, J.

INGRID GUSTAFSON, J.

      Three other motions decided in the same order affecting Black Rock and other defendants are not at issue on appeal, and Black Rock was dismissed from the action without prejudice by stipulation.

      Continental argues that this issue was not certified as final for appeal under Rule 54(b). In its certification order, the District Court explained that the "specific issues related to the adjudicated claims, [Employers Mutual's] duty to defend and whether [Employers Mutual] met its burden and provided an 'unequivocal showing' that [Continental] was not an additional insured, would not be brought before the appellate court again and would, after ruling by the appellate court, be fully adjudicated." Thus, the District Court certified as final its determination that Continental was an additional insured and that Employers Mutual owed it a duty to defend. The question of Continental's status as an automatic additional insured is properly before this Court on appeal.

      The record contains two versions of the Policy. Continental argued below that the two versions of the Policy were substantively different and conflicted with one another. The District Court did not determine that the two versions were substantively different and Continental does not renew that argument on appeal. The provisions we rely on in this Opinion are identical in both versions.


text:
    Jamaa Anthony CINQUE, Appellant, v. The STATE of Nevada; and Dwayne Deal, Time Keeper, NDOC, Respondents.
    No. 78941
    Supreme Court of Nevada.
    FILED JUNE 21, 2019
    DISMISSED.


text:
    Adam MILMAN, M.D., an Individual, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF CLARK; and the Honorable Kenneth C. Cory, District Judge, Respondents, and Jeffery Green and Sara L. Foley, as Co-Administrators of the Estate of Marilyn Green; Jeffery Green, Individually; and Rickey Green, Individually, Real Parties in Interest.
    No. 78647
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    DENIED.


text:
    Kenneth WATSON, Appellant, v. HELMSMAN MANAGEMENT SERVICES; and The State of Nevad a Division of Industrial Relations, Respondents.
    No. 75211
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    REVERSED. REMAND.


text:
    Ryan Keith WOOD, Appellant, v. The STATE of Nevada, Respondent.
    No. 75254
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    AFFIRMED.


text:
    Shelly R. YAKIMCHUK, Appellant, v. Christopher J. YAKIMCHUK, Respondent.
    No. 77571
    Supreme Court of Nevada.
    FILED JUNE 18, 2019
    Dismissed.


text:
    Pablo Jose LUPERCIO, Appellant, v. The STATE of Nevada, Respondent.
    No. 76271
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    AFFIRMED.


text:
    Derrick Lamar MCKNIGHT, Appellant, v. The STATE of Nevada, Respondent.
    No. 77249
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    AFFIRMED.


text:
    In the MATTER OF the Parental Rights as to A.A.W., a Minor.
    Sharon A.W., Appellant, v. State of Nevada Department of Family Services; and A.A.W., a Minor, Respondents.
    No. 75459
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    AFFIRMED.


text:
    BRIGHTSOURCE ENERGY, INC., a Delaware Corporation, Appellant, v. COYOTE SPRINGS INVESTMENT, LLC, a Nevada Limited Liability Company, Respondent.
    No. 72273
    Supreme Court of Nevada.
    FILED JUNE 28, 2019
    REVERSED. REMAND.


text:
    In the MATTER OF DISCIPLINE OF Amy M. GAMAGE, Bar No. 9304.
    No. 78079
    Supreme Court of Nevada.
    FILED JUNE 21, 2019
    Suspend.


text:
    DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR GSAMP TRUST 2007-FM2, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-FM2, Appellant, v. AIRMOTIVE INVESTMENTS, LLC., Respondent.
    No. 75354
    Supreme Court of Nevada.
    FILED JUNE 21, 2019
    Dismissed.


text:
    ALLIANT COMMERCIAL, LLC, Appellant, v. The BANK OF NEW YORK MELLON, f/k/a The Bank of New York as Trustee for the Certificates of Cwalt 2005-38, Respondent.
    No. 76565
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    AFFIRMED.


text:
    Christina DANG, Appellant, v. The STATE of Nevada, Respondent.
    No. 76623
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    AFFIRMED.


text:
    Carl Alan BOND, Jr., Appellant, v. The STATE of Nevada, Respondent.
    No. 75804
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    AFFIRMED.


text:
    Zackery Allen CRABTREE, Appellant, v. The STATE of Nevada, Respondent.
    Zackery Allen Crabtree, Appellant, v. The State of Nevada, Respondent.
    No. 76166 No. 76167
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    AFFIRMED.


text:
    Sean D. WHITE, Appellant, v. The STATE of Nevada, Respondent.
    No. 76041
    Supreme Court of Nevada.
    FILED JUNE 17, 2019
    AFFIRMED.


text:
    FORTUNET, INC., a Nevada Corporation, Appellant/Cross-Respondent, v. PLAYBOOK PUBLISHING, LLC, a Nevada Limited Liability Company; Playbook Management, Inc., a Nevada Corporation; Jack Coronel, an Individual; Juli Rosten, an Individual, Respondents/Cross-Appellants, and DeWayne Wooten, an Individual; Rosalina Wooten, an Individual; Wooten Consulting, a Nevada Entity; Himelfarb & Associates, LLC, a Nevada Limited Liability Company; and Bruce Himelfarb, an Individual, Respondents.
    No. 72930
    Supreme Court of Nevada.
    FILED JUNE 25, 2019
    AFFIRMED IN PART. REVERSED IN PART. REMAND.


text:
    Julie L. HAMMER; Gonzalo I. Galindo-Milan, a/k/a Gonzalo I. Galindo, Appellants, v. Mary Johanna RASMUSSEN, Respondent.
    No. 78858
    Supreme Court of Nevada.
    FILED JUNE 24, 2019
    DISMISSED.


text:
    In the MATTER OF DISCIPLINE OF William H. GAMAGE, Bar No. 9024.
    No. 77956
    Supreme Court of Nevada.
    FILED JUNE 21, 2019
    Suspend.


text:
    Dennis J. HUELBIG, Jr., Appellant, v. Lynn Carol RIZZO, Respondent.
    No. 78766
    Supreme Court of Nevada.
    FILED JUNE 18, 2019
    DISMISSED.


text:
    ROCKLIN COVENANT GROUP, L.P., a California Limited Liability Company, Appellant, v. Rod E. GIETZEN, Individually and d/b/a Yolanda's Mexican Cafe; and Yolanda's, Inc., a California Corporation, Respondents.
    No. 75532
    Supreme Court of Nevada.
    FILED JUNE 27, 2019
    AFFIRMED.


text:
    WYNN RESORTS LIMITED; John J. Hagenbuch; Ray R. Irani; Jay L. Johnson; Robert J. Miller; Patricia Mulroy; Clark T. Randt, Jr.; Alvin V. Shoemaker; J. Edward Virtue; D. Boone Wayson; and Matthew Maddox, Petitioners, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF CLARK; and the Honorable Linda Marie Bell, Chief District Judge, Respondents, and Bruce Bannister; Lana Talamas; Howard Meadows; Gerald Oonigian; Larry Clerks; Joe Tillotson; John Kalish; Florence Kalish; Marvin Myers; William Caproni; Rodney V. John; A. Larain John; Clifford Nazzaro; and Lawrence Weiner, Real Parties in Interest.
    John J. Hagenbuch; Ray R. Irani; Jay L. Johnson; Robert J. Miller; Patricia Mulroy; Clark T. Randt, Jr.; Alvin V. Shoemaker; J. Edward Virtue; D. Boone Wayson; and Matthew Maddox, Petitioners, v. The Eighth Judicial District Court of the State of Nevada, in and for the County of Clark; and the Honorable Linda Marie Bell, Respondents, and Thomas Dinapoli, Derivatively on Behalf of Wynn Resorts Limited, Real Party in Interest.
    No. 78381 No. 78394
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    DENIED.


text:
    Christopher Charles SNOWDEN, Appellant, v. Kathy Imagene SNOWDEN, Respondent.
    No. 78930
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    Dismissed.


text:
    EFFICIENT ENTERPRISES, INC., Appellant, v. FIRE INSURANCE EXCHANGE, Respondent.
    No. 75643
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    AFFIRMED.


text:
    Shane Donovan BROOKS, Appellant, v. NEVADA DEPARTMENT OF CORRECTIONS ; "NDOC"; William A. Gittere, Warden; James Dzurenda, Director; and NDOC Employees, Respondents.
    No. 78848
    Supreme Court of Nevada.
    FILED JUNE 24, 2019
    DISMISSED.


text:
    Eldon P. ANDERSON, Appellant, v. Monique A. MCNEILL; and Law Office of Monique A. McNeill, Respondents.
    No. 78896
    Supreme Court of Nevada.
    FILED JUNE 24, 2019
    DISMISSED.


text:
    Jerry Frank GRASSEL, Jr., Appellant, v. The STATE of Nevada, Respondent.
    No. 77926
    Supreme Court of Nevada.
    FILED JUNE 18, 2019
    DISMISSED.


text:
    Daniel Patrick ARCHULETA, Appellant, v. The STATE of Nevada, Respondent.
    No. 76259
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    AFFIRMED.


text:
    Peter GARDNER; and Christian Gardner, Individually and on Behalf of Minor Child, Leland Gardner, Appellants, v. R&O CONSTRUCTION COMPANY, a Utah Corporation, Respondent.
    No. 77261
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    REVERSED. REMAND.


text:
    Joseph ANORUO, Appellant, v. VALLEY HEALTH SYSTEM, LLC, d/b/a Summerlin Hospital and Medical Center, Respondents.
    No. 78600
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    Dismissed.


text:
    In the MATTER OF the Parental Rights as to D. J. L.; and T. W. B., Minors.
    Shanethia McNeal, Appellant, v. The State of Nevada, Respondent.
    No. 78880
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    Dismissed.


text:
    DMVH, LLC, a Nevada Limited Liability Company; Norman Pham, a/k/a Nam Ngoc Pham, a/k/a Norman Ng, an Individual; and in His Capacity of Co-Trustee of the Pham Family Trust, Appellants, v. HANH THI HOANG, Respondent.
    No. 78514
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    Dismissed.


text:
    Christopher Charles SNOWDEN, Appellant, v. Kathy Imagene SNOWDEN, Respondent.
    No. 78929
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    Dismissed.


text:
    Joshua Hank Jerold VIALPANDO, Appellant, v. The STATE of Nevada, Respondent.
    No. 76209
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    AFFIRMED.


text:
    COLLEGIUM FUND LLC SERIES 16, a Nevada Limited Liability Company, Appellant, v. DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER the POOLING AND SERVICING AGREEMENT RELATED TO IMPAC SECURED ASSETS CORP., MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-3, Respondent.
    No. 74879
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    REVERSED. REMAND.


text:
    Julie L. HAMMER; Gonzalo I. Galindo-Milan, a/k/a Gonzalo I. Galindo, Appellants, v. Mary Johanna RASMUSSEN, a/k/a Murphy Jo Rasmussen, Respondent.
    No. 78860
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    Dismissed.


text:
    Todd ROBBEN, Appellant, v. Joanne ROBBEN, n/k/a Joanne Michael, Respondent.
    No. 78815
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    Dismissed.


text:
    Keontae CAMPBELL, Appellant, v. The STATE of Nevada, Respondent.
    No. 75700
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    AFFIRMED.


text:
    RLP-BARROW DOWNS, LLC, a Nevada 9 Series Limited Liability Company of the Container Red Lizard Productions 10 LLC Under NRS 86.296, Appellant, v. CALIBER HOME LOANS, INC., f/k/a Vericrest Financial, Inc., a Delaware Corporation; Wells Fargo Delaware Trust Company, N.A., as Trustee for Vericrest Opportunity Loan Trust 2011-NPL1 ; U.S. Bank, N.A., a National Association ; and Willow Creek Community Association, Respondents.
    No. 78310
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    Dismissed.


text:
    Gabrial WILLIAMS, a/k/a Gabriel Earl Williams, Appellant, v. The STATE of Nevada, Respondent.
    No. 74520
    Supreme Court of Nevada.
    JULY 01, 2019
    AFFIRMED.


text:
    BINH MINH CHUNG, a/k/a Ben Minh Chung, Appellant, v. The STATE of Nevada, Respondent.
    No. 73657
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    AFFIRMED.


text:
    Herbert Don BROOKS, Appellant, v. The STATE of Nevada, Respondent.
    No. 75778
    Supreme Court of Nevada.
    FILED JUNE 26, 2019
    AFFIRMED.


text:
    Eldon P. ANDERSON, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF CLARK, Respondent, and Monique A. McNeill; and Law Office of Monique A. McNeill, Real Parties in Interest.
    No. 78423
    Supreme Court of Nevada.
    FILED JUNE 24, 2019
    Dismissed.


text:
    JACK N. TEDFORD, INC., a Nevada Corporation; JNT, Inc., a Nevada Corporation; Jack N. Tedford, III; and Nancy J. Tedford, Appellants, v. SMS FINANCIAL XXVII, LLC, an Arizona Limited Liability Company, Respondent.
    Jack N. Tedford, Inc., a Nevada Corporation; JNT, Inc., a Nevada Corporation; and Jack N. Tedford, III; and Nancy J. Tedford, Appellants, v. SMS Financial XXVII, LLC, an Arizona Limited Liability Company, Respondent.
    No. 74898 No. 75965
    Supreme Court of Nevada.
    FILED JULY 03, 2019
    Dismissed.


text:
    Magda Gertrudis CARRASCO, Appellant, v. Nancy GARCIA, Respondent.
    No. 77784
    Supreme Court of Nevada.
    FILED JULY 03, 2019
    Dismissed.


text:
    JIN O BAE, an Individual; and Shin Ok Bae, an Individual, Appellants, v. PENNYMAC LOAN SERVICES, LLC, a Nevada Limited Liability Company, Respondent.
    No. 76992
    Supreme Court of Nevada.
    FILED JULY 02, 2019
    Dismissed.


text:
    Travis SHEFFIELD, Appellant, v. The STATE of Nevada, Respondent.
    No. 76200
    Supreme Court of Nevada.
    FILED JULY 01, 2019
    AFFIRMED.


text:
    Danny TAYLOR, Petitioner, v. The ELEVENTH JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF PERSHING, Respondent.
    No. 78989
    Supreme Court of Nevada.
    FILED JULY 03, 2019
    DENIED.


text:
    Conrad G. ANCHETA, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF CLARK, Respondent, and Adam S. Kutner, P.C.; and Allan P. Long, Real Parties in Interest.
    No. 78927
    Supreme Court of Nevada.
    FILED JULY 03, 2019
    DENIED.


text:
    James Lamont MOORE, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF CLARK, Respondent, and The State of Nevada, Real Party in Interest.
    No. 78985
    Supreme Court of Nevada.
    FILED JULY 03, 2019
    DENIED.


text:
    Todd ROBBEN, Petitioner, v. The FIRST JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF CARSON CITY; the Honorable William A. Maddox, Senior Judge ; and C. Torres, Deputy Clerk, Respondents.
    No. 78639
    Supreme Court of Nevada.
    FILED JULY 03, 2019
    DENIED.


author: VIGIL, Justice.

text:
    In the MATTER OF Daniel M. SALAZAR, An Attorney Suspended from the Practice of Law Before the Courts of the State of New Mexico
    NO. S-1-SC-37306
    Supreme Court of New Mexico.
    Filing Date: May 16, 2019 Released for Publication July 2, 2019
    Jane Gagne, Albuquerque, NM, for Disciplinary Board
    Debra S. Doll, Albuquerque, NM, Law Works, LLC, John A. McCall, Albuquerque, NM, for Respondent
   VIGIL, Justice.

I. INTRODUCTION

{1} In this disciplinary case the Court addresses the flagrant and intentional failure of Daniel M. Salazar (Salazar) to comply with the Rules of Appellate Procedure, among other rules and orders of this Court. This case came before the Court upon the recommendation of the Disciplinary Board (the Board) to sustain charges and impose discipline against Salazar for multiple violations of the Rules of Professional Conduct. The Board's request centers on its conclusion that Salazar repeatedly failed to comply with certain Rules of Appellate Procedure relating to the timely filing of appellate pleadings. The Board concluded that Salazar violated Rule 16-101 NMRA (competence), Rule 16-103 NMRA (diligence), Rule 16-302 NMRA (failure to expedite litigation), and Rule 16-804(D) NMRA (engaging in conduct prejudicial to the administration of justice). The Board recommended a one-year deferred suspension of Salazar, during which time Salazar would be supervised on all appellate matters.

{2} This Court adopted the Board's findings and conclusions with one exception and modified the Board's recommended discipline, indefinitely suspending Salazar for a period of no less than one year, effective thirty days from November 9, 2018. Salazar's history of disciplinary offenses relating to similar intentional misconduct and his refusal to acknowledge the wrongfulness of his conduct justified his prompt suspension. When Salazar failed to comply with both our order of suspension and the requirements for suspended attorneys under the Rules Governing Discipline, we held Salazar in contempt of court and increased his indefinite suspension to a period of no less than eighteen months.

{3} We begin by explaining that attorneys must adhere to the rules of this Court as those rules serve to protect the interests of all clients and the equal administration of justice under the law. If one disagrees with the rules, there is a process by which court rules are amended. Ignoring them is not an option. Procedural gamesmanship in an effort to skirt the requirements of our rules cannot and will not be tolerated.

II. BACKGROUND

{4} Salazar has been practicing law in New Mexico for nearly twenty years with a focus on criminal defense. Since 2000, Salazar has been a contract attorney with the Law Office of the Public Defender (LOPD). This is not the first time Salazar has been subject to attorney discipline. Outside of these proceedings, Salazar has twice been admonished by the Board for his mismanagement of post-trial procedure.

{5} Two Rules of Appellate Procedure are essential to understanding Salazar's misconduct in the instant proceedings, as well as his misconduct in the past: Rule 12-201 NMRA and Rule 12-208 NMRA. First, under Rule 12-201(A)(1)(b), a party must file a notice of appeal within thirty days of the judgment or order it wishes to appeal. Second, under Rule 12-208, for most types of appeals, trial counsel is responsible for "preparing and filing a docketing statement in the Court of Appeals or a statement of the issues in the Supreme Court" within thirty days of the filing of the notice of appeal. Rule 12-208(A)-(B). The docketing statement must meet certain requirements, all of which are outlined in Rule 12-208(D). Among those is the requirement that the docketing statement include "a statement of the issues presented by the appeal, including a statement of how they arose and how they were preserved in the trial court[.]" Rule 12-208(D)(4). At the crux of Salazar's professional misconduct is his refusal to comply with Rules 12-201 and 12-208. To provide context and additional support for the ultimate discipline we impose upon him, we first address Salazar's prior misconduct.

A. Prior Professional Misconduct

{6} In April 2015, Salazar accepted an informal admonition for failure to timely file a docketing statement in a client's appeal despite the Court of Appeals' order to do so. As the contract public defender at trial, Salazar was responsible for filing a docketing statement with the Court of Appeals after his client filed a pro se notice of appeal. See Rule 12-208(A). Salazar did not file the docketing statement within the thirty-day deadline imposed by Rule 12-208(B). Only after a hearing to show cause before the Court of Appeals-at which Salazar argued that he did not believe an appeal was necessary-did he eventually file the docketing statement, six months after his client filed the notice of appeal. Because Salazar failed to comply with his client's wishes to appeal and ignored for some time an order from the Court of Appeals to file the docketing statement, Salazar was informally admonished by the Board for violating four Rules of Professional Conduct: Rule 16-101 ; Rule 16-102(A) NMRA (settlement authority); Rule 16-103 ; and Rule 16-804(D).

{7} Salazar was again before the Board in May 2017. The Board issued a formal reprimand of Salazar for dilatory and incompetent post-trial practice related to another client's petition for writ of habeas corpus. See In re Salazar , Disciplinary No. 01-2016-733, Bar Bulletin , N.M. State Bar, June 7, 2017, at 15 (Formal Reprimand dated May 19, 2017). Salazar served as the contract public defender for purposes of his client's post-conviction habeas corpus proceedings. Id. Salazar entered his appearance on behalf of his client on March 28, 2002. Id. By that time, the client had already filed a petition for writ of habeas corpus and the State had filed its response. Id. Salazar failed to file his client's reply to the State's response for over four years. See id. In May 2006, the district court denied the petition for writ of habeas corpus. Id. One month after the district court's denial of the petition, Salazar filed his client's reply and a motion to reconsider the order denying the petition. Id. Over a period of two years, Salazar requested no less than six continuances of the hearing on his motion to reconsider. Id. He claimed that he needed more time to conduct discovery, yet as the Board found, he took no action to compel discovery from the State. Id. In December 2014, eight years after the district court's denial of the petition for writ of habeas corpus, Salazar stipulated on behalf of his client to a dismissal of the petition without prejudice. Id.

{8} Six months later, Salazar's client filed a complaint with the Board alleging that Salazar had not communicated with him since January 2009. Id. Salazar claimed that he had withdrawn from representation "in or about January 2009." Id. However, the Board found that Salazar failed to inform his client of his withdrawal, never filed a motion to withdraw, and continued to act as defense counsel when he stipulated to the dismissal of the petition in 2014-five years after his claimed withdrawal. See id. The Board formally reprimanded Salazar for violations of Rule 16-101, 16-103, Rule 16-104 NMRA (failure to communicate), Rule 16-116(A) NMRA (failure to withdraw from representation), Rule 16-302, and Rule 16-804(D). In re Salazar , Bar Bulletin , N.M. State Bar, June 7, 2017, at 15.

{9} Between the two instances of prior misconduct described, Salazar violated the same four Rules of Professional Conduct at issue in these proceedings: Rules 16-101, 16-103, 16-302, and 16-804(D). We determine that Salazar has shown an inability to learn from his past misconduct and the discipline imposed for such misconduct. This is evidenced by his continued failure, directly at issue in the instant proceedings, to manage his clients' appeals in a competent, diligent, and expeditious manner. As we will explain, his lack of respect for the Rules of Appellate Procedure, the Rules of Professional Conduct, and the Rules Governing Discipline is no longer tolerable. We now address Salazar's misconduct as it applies to the instant case: his representation of Jason Nowicki and Sean Godkin.

B. Misconduct at Issue

1. Nowicki appeal

{10} Salazar was Nowicki's attorney at his trial in February 2015. Nowicki was convicted of first-degree murder and other offenses. On February 1, 2016, the district court entered its judgment and sentenced Nowicki to life imprisonment plus eighteen years. Salazar did not file a notice of appeal on behalf of Nowicki within thirty days of the entry of judgment as required under Rule 12-201(A)(1)(b). In fact, Salazar did not file a notice of appeal until November 9, 2018, the day after this Court conducted oral argument in the instant proceedings. As such, the notice of appeal was filed nearly three years after Nowicki was sentenced.

{11} In September 2017, Nowicki filed a complaint with the Board stating that he had not been able to contact Salazar and was concerned that no appellate motions had been filed on his behalf. The Board initiated an investigation as a result of Nowicki's complaint. In the course of its investigation of the Nowicki matter, disciplinary counsel discovered that Salazar had failed to comply with the Rules of Appellate Procedure in his representation of yet another client.

2. Godkin appeal

{12} Salazar represented Godkin at his trial in June 2016. That trial resulted in a mistrial, and a new trial was set for August 2, 2016. Salazar did not object to the new trial setting and did not obtain transcripts from the first trial to use at the new trial. Godkin was convicted of drug trafficking and possession charges at the second trial. Salazar timely moved for a new trial based on the expeditious setting of the second trial date, his inability to obtain transcripts from the first trial, and an alleged relationship between the trial judge and Godkin's mother. The motion for new trial was denied, and the district court notified Salazar of its entry of judgment and sentence on November 4, 2016.

{13} Once again, Salazar failed to file a notice of appeal within thirty days of the entry of judgment as required by Rule 12-201(A)(1)(b). Instead, he filed a renewed motion for new trial in April 2017 after a new judge was assigned to Godkin's case. The renewed motion was identical to the original motion, was untimely, and was denied. In its denial of the renewed motion for new trial, the district court ordered Salazar to file a notice of appeal and docketing statement.

{14} Salazar filed the untimely notice of appeal in June 2017. One month later, he filed a docketing statement that was nearly identical to his motions for new trial. The docketing statement also did not comply with Rule 12-208(D) as it did not properly address the issues on appeal and how those issues were preserved at trial. In addition, Salazar failed to timely serve upon the district court a copy of the docketing statement as required by Rule 12-208(C). In an apparent effort to remedy this error, Salazar refiled the docketing statement in the Court of Appeals and then served a copy upon the district court in October 2017.

{15} On December 11, 2017, the Court of Appeals rejected the docketing statement and ordered Salazar to file an amended docketing statement within twenty days. The order explained that the original docketing statement did not meet the requirements of Rule 12-208 because it failed to provide sufficient facts for the Court to adequately review the appellate issues raised. The order also noted the "striking similarities" between the docketing statement and the motions for new trial. For example, the docketing statement stated that opposition to the "present motion" was presumed and requested that the Court of Appeals enter an order granting a new trial. On January 3, 2018, Salazar filed an amended docketing statement. This docketing statement was accepted by the Court of Appeals though the Court noted it "remain[ed] deficient" and alerted Salazar that by neglecting to produce an adequate docketing statement "counsel runs the risk of prejudicing Defendant's appeal by failing to provide this Court with sufficient information."

C. The Disciplinary Proceedings

{16} After completing its investigation into the Nowicki and Godkin appeals, the Board filed a specification of charges against Salazar in January 2018. In the course of the subsequent proceedings, including his hearing before this Court, Salazar asserted that Rules 12-201 and 12-208 do not apply with full force to criminal defense trial attorneys.

{17} Salazar's contention that he need not adhere to the thirty-day deadline imposed by Rule 12-201 first arose in his amended response to disciplinary counsel's initial inquiry based on Nowicki's complaint. In that response, Salazar explained that Nowicki's appeal " 'as of right' cannot be lost simply because the court imposed time table has been exceeded." Salazar continued that "Nowicki's appeal will likely begin in earnest within the next several month's [sic]." The response letter was dated December 11, 2017-nearly two years after Nowicki was sentenced to life imprisonment.

{18} Salazar maintained his argument that criminal defense trial attorneys need not comply with the filing deadlines set forth in the Rules of Appellate Procedure at his hearing before the Board in June 2018. When asked by disciplinary counsel whether he disputed that a notice of appeal is due thirty days after a judgment is entered, Salazar stated, "Yes and no. According to the rules, it's due 30 days after the judgment, but according to case law, it's not." He continued:

[W]e have a little bit of wiggle room. There are cases that tell us that the appeal from a conviction is a matter of right, and it can't be lost simply because the defence [sic] attorney misses a deadline.... [I]n reality, it matters almost zero if a deadline is missed on a docketing statement, things of that nature, as far as the criminal law goes.... [A]lthough it's due under the rules, it's not necessarily due under the case law.

Throughout the hearing, Salazar was not able to provide legal authority by way of a citation to case law that would permit defense counsel to skirt the Rules of Appellate Procedure. In his briefing to this Court, Salazar identified State v. Duran , 1986-NMCA-125, 105 N.M. 231, 731 P.2d 374, as authority to support his contention that criminal defense attorneys need not comply with the deadlines of Rule 12-201 because "[t]he practical translation [of Duran ] is that the higher courts will address an appeal irrespective of the deadlines." We disagree with Salazar's interpretation of Duran . As we will discuss, Duran does not stand for the proposition that criminal defense attorneys may ignore the Rules of Appellate Procedure.

{19} Further, Salazar admitted at the hearing before the Board that the docketing statement he filed on behalf of Godkin did not contain a statement of how the appellate issues arose or were preserved at trial, despite the requirements of Rule 12-208(D)(4). Yet, he did not agree that the docketing statement did not comply with Rule 12-208, arguing that the docketing statement was in compliance because it "was accepted by the Court of Appeals." When confronted with the Court of Appeals' admonition that Salazar "runs the risk of prejudicing [his client's] appeal by failing to provide this Court with sufficient information," Salazar incorrectly responded that it is the job of appellate counsel to ensure that the docketing statements are correct. He further justified his actions by testifying that criminal defense trial attorneys "do the best we can" in drafting docketing statements to the standards required by Rule 12-208(D). We underscore in this opinion that the Rules of Professional Conduct require a much more competent and diligent effort to comply with the rules of procedure and to expeditiously serve the client than was demonstrated by Salazar in this case. The Board concluded that Salazar violated Rules 16-101, 16-103, 16-302, and 16-804(D).

III. DISCUSSION

{20} In reviewing the proceedings and determining the proper course of discipline, we draw from the Board's findings of fact and view the evidence in the light most favorable to those findings. See In re Bristol , 2006-NMSC-041, ¶ 28, 140 N.M. 317, 142 P.3d 905 (per curiam). We review the Board's conclusions of law de novo. See id. ¶ 18. As such, we adopt the Board's findings of fact and conclusions of law with one exception. We disagree with the Board that Salazar's "deficiencies" can be attributed "to his infrequent appellate work," as the Rules of Appellate Procedure at issue here apply to trial counsel, not appellate counsel. See Rules 12-201, -208.

A. Professional Misconduct

{21} In our view, Salazar's pattern of practice over many years demonstrates an intentional and flagrant disregard for the Rules of Appellate Procedure. Such disregard constitutes a failure to comply with the standards imposed on the legal profession under the Rules of Professional Conduct. "A lawyer's conduct should conform to the requirements of the law ... in professional service to clients[.] ... [I]t is ... a lawyer's duty to uphold legal process." Rule 16-Preamble NMRA. We conclude that Salazar's failure to conform his conduct to the requirements of Rules 12-201 and 12-208 was a violation of Rules 16-101, 16-103, 16-302, and 16-804(D). Accordingly, we indefinitely suspended Salazar from the practice of law for one year pursuant to Rule 17-206(A)(3) NMRA and imposed certain conditions on his reinstatement. As we explain, Salazar's failure to comply with the Rules Governing Discipline and his failure to comply with certain conditions we imposed relating to his initial suspension warranted an extension of his period of suspension to eighteen months.

1. Competence and diligence

{22} Lawyers are bound by the Rules of Professional Conduct to act with competence and diligence in the representation of their clients. See Rules 16-101, 16-103. "Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation." Rule 16-101. A diligent attorney is one who "act[s] with reasonable diligence and promptness in presenting a client." Rule 16-103. Diligence in legal practice is crucial as "[p]erhaps no professional shortcoming is more widely resented than procrastination." Rule 16-103 Comm. commentary note [3]. Not only may a client grow frustrated at a lack of diligence, "unreasonable delay" may also adversely affect a client's interests, "cause a client needless anxiety[,] and undermine confidence in the lawyer's trustworthiness." Id.

{23} Client frustration resulting from a failure to comply with Rules 16-101 and 16-103 is on full display in this case. It was Nowicki's exasperation with Salazar's failure to file the notice of appeal and docketing statement that led him to complain to the Board, which in turn led disciplinary counsel to investigate Salazar's representation of both Nowicki and Godkin. Though Nowicki later wrote that he consented to the delay in filing his notice of appeal, this does not excuse Salazar's blatant failure to comply with required appellate deadlines in the first place.

{24} Nor is Salazar's conduct excused by his misreading of the Court of Appeals' holding in Duran. In Duran , the Court held that "an attorney who fails to do anything within the time allowed for appeal can be said to have neglected his duty and a conclusive presumption of ineffective assistance arises." 1986-NMCA-125, ¶ 4, 105 N.M. 231, 731 P.2d 374. Because the defendant in Duran was afforded ineffective assistance of counsel when her attorney failed to comply with the deadline to file a notice of appeal, the Court of Appeals permitted the late filing of the notice and reached the merits of the defendant's appeal. See id. ¶¶ 1, 6.

{25} We agree with the Board's conclusion in this case that "[t]he Duran holding that a criminal defendant's untimely appeal may proceed notwithstanding his attorney's negligence and lack of diligence does not excuse the violation of Rule[s] 16-101 and 16-103." Duran is a case focused on criminal defendants' rights to appellate due process. See id. ¶ 3. It is not to be read as providing an opportunity for criminal defense attorneys to ignore the deadlines set forth in the Rules of Appellate Procedure. We will not condone Salazar's legal scheming to thwart the appellate deadlines at the expense of his clients' due process rights. Nowicki has a constitutional right to a direct appeal of his conviction to this Court. See N.M. Const. art. VI, § 2. Salazar's lack of competence and diligence left his client in legal limbo, anxiously wondering for nearly three years whether he would ever have the opportunity to be heard on appeal. Such flagrant refusal to comply with the Rules of Appellate Procedure will not be tolerated in our criminal justice system.

{26} While not as egregious as the delay in Nowicki's case, Salazar's failure to promptly initiate Godkin's appeal also demonstrates a lack of reasonable competence and diligence. Salazar waited seven months before filing the notice of appeal in Godkin's case. Once again, this delay evidences some chicanery on Salazar's part. He testified before the hearing committee that he "could have filed the notice of appeal, and just painted by the numbers, but then [he] would have lost that [one] percent, maybe even half-percent chance that a new judge would see [the motion for new trial] favorably." We emphasize that "painting by the numbers"-or as we see it, following the rules-is precisely what Salazar must do as an attorney. His conduct should "conform to the requirements of the law[.]" Rule 16-Preamble NMRA. That includes the requirement that he file a notice of appeal within thirty days of his client's sentencing. See Rule 12-201(A)(1)(b). This "painting by the numbers" also includes the requirement that he file a docketing statement that meets the standards explicated in Rule 12-208(D).

{27} Salazar's practice of copying, wholesale, previous pleadings and presenting them as new documents meant to serve a new purpose further demonstrates his lack of competence. The Court of Appeals raised this incompetence to Salazar on several occasions where it noted the docketing statement's similarity to the motions for new trial and the fact that the docketing statement did not provide sufficient information for the Court of Appeals to consider Godkin's claims of error. A docketing statement serves a different purpose than a motion for new trial and the drafting of a docketing statement is governed by a wholly separate rule. See Rule 12-208(D). A docketing statement is meant to alert the appellate court to the issues before it on appeal and how those issues were preserved at trial. See id. The docketing statement in Godkin's case did not meet these purposes. Even when he was given a second chance to file an amended docketing statement, Salazar failed to sufficiently provide those facts necessary for the Court of Appeals to properly review whether Godkin received a fair trial. His failure to draft an appropriate docketing statement establishes Salazar's lack of competence in representing Godkin. Because he failed to act competently and diligently in his representation of both Nowicki and Godkin on appeal, we conclude that Salazar violated Rules 16-101 and 16-103.

2. Expediting litigation

{28} Rule 16-302 states that attorneys "shall make reasonable efforts to expedite litigation consistent with the interests of the client." This rule prohibits attorneys from engaging in "[d]ilatory practices [that] bring the administration of justice into disrepute." Rule 16-302 Comm. commentary. In determining whether an attorney has failed to expedite litigation, "[t]he question is whether a competent lawyer acting in good faith would regard the course of action as having some substantial purpose other than delay." Id.

{29} Salazar's explanation for the delay in Nowicki's appeal was not professionally reasonable. He stated to the hearing committee and this Court that he did not file the notice of appeal because, had he done so, the case would have been transferred to LOPD appellate counsel, thereby preventing him from continuing to work on the case under his LOPD contract. Randy Chavez, the director of contract counsel legal services for LOPD, confirmed to the hearing committee that LOPD protocol dictates that trial counsel's job is complete once trial counsel files the notice of appeal and docketing statement in a case. He further explained that after the LOPD appellate division takes over a case, trial counsel can "help out" the appellate attorney, but trial counsel is "no longer ... the attorney of record[.]"

{30} Salazar argued that he did not file the necessary appellate pleadings because he needed to be Nowicki's attorney in order to monitor exculpatory evidence that was brought to his attention approximately six months after trial and which could be used in Nowicki's petition for writ of habeas corpus. However, Salazar also correctly testified before the hearing committee that a habeas corpus petition could not be filed before the exhaustion of Nowicki's direct appeal. See State v. Sisk , 1968-NMSC-087, ¶ 4, 79 N.M. 167, 441 P.2d 207. The desire to work on a petition for writ of habeas corpus may at some level conflict with the notion that a direct appeal must be completed before a petition for writ of habeas corpus can be filed. Nonetheless, these conflicting notions do not provide justification for Salazar to wait nearly three years to file Nowicki's notice of direct appeal. Salazar was obligated to file the notice of appeal and docketing statement within the deadlines imposed by Rules 12-201 and 12-208. Then, he should have notified the appropriate division of LOPD of the existence of exculpatory evidence that may support a claim under habeas proceedings. Instead, Salazar's dilatory strategy left Nowicki in a legal lurch for years after his conviction, a consequence we will not condone.

{31} Moreover, the appearance of exculpatory evidence six months after the trial should have led Salazar to file a motion for new trial on the grounds of newly discovered evidence. See Rule 5-614(C) NMRA. Nevertheless, Salazar did not file a motion for new trial within the two-year limit of Rule 5-614(C). When asked at oral argument why he did not pursue a new trial once he learned of exculpatory evidence, Salazar responded, "Quite frankly because it didn't occur to me." Salazar's lack of understanding of post-trial procedure effectually impeded his client from obtaining the full legal protections to which he was entitled under the criminal justice system. Nowicki was denied the chance to pursue a new trial. He did not receive a timely review of his conviction on appeal. If exculpatory evidence does in fact exist in his case, no court has had the opportunity to consider it. And the impetus for all this is Salazar's blatant refusal to comply with the court rules enacted to facilitate and protect every person's constitutional rights. We therefore conclude that Salazar violated Rule 16-302.

3. Conduct prejudicial to the administration of justice

{32} Attorney misconduct includes "engag[ing] in conduct that is prejudicial to the administration of justice[.]" Rule 16-804(D). "Lawyers are subject to discipline when they violate or attempt to violate the Rules of Professional Conduct[.]" Rule 16-804 Comm. commentary note [1]. Salazar's incompetence and lack of diligence in failing to expeditiously advance his clients' appeals violated Rules 16-101, 16-103, and 16-302. For the reasons stated above, Salazar's delays in filing appropriate appellate pleadings prevented his clients from accessing justice and fair process. Such misconduct also impedes the administration of justice in violation of Rule 16-804(D) and therefore must be addressed by imposing appropriate discipline.

B. Discipline

{33} On November 8, 2018, the Board recommended to this Court that Salazar receive a one-year deferred suspension, during which time Salazar would be supervised in all appellate work. We rejected the Board's recommendation to defer the suspension and indefinitely suspended Salazar from the practice of law for a period of time of no less than one year, effective thirty days from November 9, 2018. In our view, Salazar's pattern and practice of intentionally ignoring the Rules of Appellate Procedure constitutes serious professional misconduct that must be stopped.

{34} In imposing discipline, we are guided by the American Bar Association's Standards for Imposing Lawyer Sanctions (ABA Standards). In re Key , 2005-NMSC-014, ¶ 5, 137 N.M. 517, 113 P.3d 340 (per curiam) (explaining that we look to these standards to "insure a certain degree of consistency" but noting that "each case is decided on the basis of its own merits"). The ABA Standards express that suspension is appropriate when an attorney "knowingly fails to perform services for a client and causes injury or potential injury to a client[.]" Am. Bar Ass'n, Annotated Standards for Imposing Lawyer Sanctions (ABA Annotated Standards ), Standard 4.42 (2015). Suspension is also recommended under the ABA Standards when an attorney has been repeatedly "reprimanded for the same or similar misconduct and engages in further similar acts of misconduct that cause injury or potential injury to a client, the public, the legal system, or the profession." Am. Bar Ass'n, ABA Annotated Standards , Standard 8.2.

{35} Salazar's misconduct aligns with these guidelines for imposing discipline. Salazar intentionally failed to file Nowicki's notice of appeal, thereby usurping his client's right to appellate review of his conviction. Furthermore, Salazar has a history of filing untimely and unsatisfactory appellate pleadings on behalf of his clients, including Godkin's notice of appeal and docketing statement, for which he has previously been reprimanded by the Board and warned of by the Court of Appeals. For these reasons, we conclude an indefinite full suspension is justified.

{36} In our initial ruling, we ordered Salazar to comply with Rule 17-212 NMRA, the rule governing suspended attorneys. Under Rule 17-212, a suspended attorney is required to give notice of his or her suspension to each client, each opposing attorney in all pending cases, and each court or administrative agency overseeing a pending matter. Rule 17-212(A)-(B). The form of notification must be approved by disciplinary counsel. Rule 17-212(A). A suspended attorney must also file in this Court and serve upon disciplinary counsel an affidavit stating that he has "fully complied with the provisions of the order and with [ Rule 17-212 ]" within ten days after the effective date of the suspension order. Rule 17-212(D). This Court may hold in contempt any attorney who fails to comply with this rule. Rule 17-212(F).

{37} As conditions of his reinstatement, we ordered Salazar to complete ten hours of ethics continuing legal education classes (with at least five hours consisting of in-person classes) and to submit to a character and fitness investigation by the board of bar examiners at his expense. Finally, we ordered Salazar to pay the costs of this proceeding.

{38} On November 30, 2018, disciplinary counsel filed a motion for an order to show cause resulting from Salazar's failure to comply with Rule 17-212 as well as his entry in a pending criminal case notwithstanding this Court's order of suspension. We granted the motion and heard argument on December 19, 2018.

{39} The afternoon before the hearing to show cause, Salazar filed a motion to continue the hearing based on the unavailability of his newly-acquired attorney, John McCall. We denied the motion to continue. On the morning of December 19, 2018, Debra S. Doll entered her appearance on behalf of Salazar as substitute counsel for Mr. McCall, the attorney of record. In oral argument, Ms. Doll asserted that Salazar entered his appearance in a new case-despite the fact that he was suspended-at the urging of the district court judge hearing the case. She also admitted that Salazar was not in compliance with Rule 17-212 and asked this Court for an extension of time to fulfill the requirements of the rule. She explained that her client had sought and received disciplinary counsel's approval of his suspension notification letters that very day. She personally assured the Court that she would ensure that Salazar met the requirements of Rule 17-212 by the extended deadline.

{40} We consider the argument pinning Salazar's disobedience of our order on a judicial officer to be quite dubious and unsupported by evidence. We also note that Salazar's required affidavit of compliance under Rule 17-212(D) was due to this Court several weeks before the hearing to show cause. Yet, Salazar had not even sought disciplinary counsel's approval of his notification letters prior to the day of the hearing on the order to show cause. Not only did Salazar miss the deadline to prove his compliance to this Court, he had not yet begun to formally notify his clients of his suspension more than a month after our order.

{41} As a result of his noncompliance with both our initial suspension order and Rule 17-212, we held Salazar in contempt of court and increased the period of his suspension by six months for a total indefinite suspension period of no less than eighteen months. This extension of discipline rests on Salazar's intentional act of disobedience in entering his appearance on behalf of a client following our order suspending him from the practice of law, as well as his continued habit of ignoring rules of this Court. See Am. Bar Ass'n, ABA Annotated Standards , Standard 9.22 (listing as aggravating factors the "bad faith obstruction of the disciplinary proceeding by intentionally failing to comply with rules or orders of the disciplinary agency" and "a pattern of misconduct"); see also Am. Bar Ass'n, ABA Annotated Standards , Standard 9.21 (defining "aggravating circumstances" as "any considerations or factors that may justify an increase in the degree of discipline to be imposed").

{42} On the personal assurances of his attorney, we afforded Salazar two days from the date of the contempt order to "comply with all requirements of Rule 17-212" and "deliver to the Office of Disciplinary Counsel ... a separate list setting forth the names of [Salazar's] clients and the case numbers for any cases of those clients that are pending in any court[.]" Though Ms. Doll gave her word that these requirements would be met, it was ultimately Salazar's responsibility to comply with our order. Failure to complete these requirements would result in Salazar's disbarment. To aid us in ensuring that Salazar complied with our order and Rule 17-212, we ordered disciplinary counsel to file an affidavit with this Court detailing whether Salazar had come into full compliance.

{43} On January 2, 2019, disciplinary counsel filed an affidavit stating that Salazar had not provided a separate list of clients and had not fully met the requirements of Rule 17-212 by the deadline set forth in our December 19, 2018 order. Specifically, Salazar had failed to include in his affidavit of compliance copies of the letter he sent to his clients informing them of his suspension. He also failed to include copies of letters notifying each individual opposing counsel in his pending cases that he was suspended. Instead, Salazar sent letters only to the district attorneys in the First, Second, and Thirteenth Judicial Districts. Those letters failed to "state the place of residence of [each] client" as required by Rule 17-212(B). We seriously considered disbarring Salazar due to his ongoing defiance and lack of compliance to the terms of our December 19, 2018 order. However, two weeks later, disciplinary counsel filed a supplemental notice with this Court stating that Salazar had fully complied with Rule 17-212 and our November 9, 2018 order.

{44} Two days before disciplinary counsel's supplemental notice, Salazar filed a pleading asking to set aside and reconsider the December 19, 2018 order and decision of this Court. In that pleading, Salazar once again held himself out as a lawyer-a blatant violation of this Court's order of November 9, 2018. He requested this Court, "by and through his attorney of record, The Law Office of Daniel M. Salazar ESQ., (Daniel M. Salazar, Esq.)," to reconsider our suspension order as he considered it "contrary to common sense and law." Salazar argued that his successful trial record and "perceived excellence in other areas" should serve to mitigate the extent of his discipline. A lawyer's self-proclaimed excellence is not a mitigating factor we consider when dispensing appropriate discipline for flagrant violations of the Rules of Appellate Procedure, the Rules of Professional Conduct, the Rules Governing Discipline, and perhaps most importantly, this Court's order imposing discipline.

{45} We strike Salazar's motion as it was not filed by his counsel of record, but by "The Law Office of Daniel M. Salazar, ESQ." We are deeply troubled that Salazar continues to represent himself as an attorney of record in any case, let alone his own disciplinary matter, at a time when he is indefinitely suspended from the practice of law in New Mexico. We affirm Salazar's indefinite suspension for a period of no less than eighteen months from the effective date of his suspension as set forth in our November 9, 2018 order.

{46} Rules matter. An attorney must conform his or her conduct to the requirements of the rules and orders of this Court. The discipline we impose may salvage Salazar's potential and ability to practice law. This period of suspension will enable Salazar to reform his dilatory ways and accept responsibility for the harm he has inflicted on his clients and the fair administration of justice in New Mexico.

IV. CONCLUSION

{47} We adopt the Board's findings of fact and conclusions of law as modified in our November 9, 2018 order and in this opinion. We indefinitely suspend Salazar from the practice of law for a period of no less than eighteen months. His reinstatement is conditioned upon his compliance with the requirements set forth in our November 9, 2018 order and in this opinion. We order him to pay the costs of this proceeding as provided in our November 9, 2018 order.

{48} IT IS SO ORDERED.

WE CONCUR:

JUDITH K. NAKAMURA, Chief Justice

PETRA JIMENEZ MAES, Justice, Retired Sitting by designation

CHARLES W. DANIELS, Justice, Retired Sitting by designation

GARY L. CLINGMAN, Justice, Retired Sitting by designation

      Though informal admonitions from the Board typically remain confidential, the admonition and underlying investigation may become public record should the Board later file a formal specification of charges against the same attorney. See Rule 17-304(A)(1)(a) NMRA.

      The events underlying this disciplinary proceeding are the subject of appeals pending before this Court and the Court of Appeals. See State v. Nowicki , S-1-SC-37388; State v. Godkin , A-1-CA-36509. We discuss the facts of those cases based on the Board's findings of fact. Our analysis and conclusions in this proceeding are not intended to influence the legal merits of the pending appeals.