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Magdalena businesses seek damages from village

mkb062113FOR THE RECORD: This story incorrectly said businesses had sued Magdalena over water woes from the summer. It also incorrectly identified one of the businesses that have, in fact, retained counsel to explore their legal options. Winston’s service station is not part of the group that retained the Albuquerque Business Law Office.

MAGDALENA – Four Magdalena businesses have retained a law firm to pursue damages from the village of Magdalena related to financial woes caused by the water crisis in the town that began in early June.

The Magdalena Area Community Development Corp., a nonprofit that owns the High Country Lodge among other ventures, has banded together with Magdalena Merchantile and Laundry, Winston’s service station and the M and M Grill to retain the Albuquerque Business Law Office to pursue compensation for losses.

Jeremy Theoret, representing the law firm, said it has been in discovery since early August, including holding town hall meetings and gathering information for its clients.

On June 5, the village posted notices throughout town that its water supply would be cut off as of 1 p.m. that day. Officials reported that the only functioning well had run dry. An emergency ordinance was passed by the village council requiring severe water restrictions.

Emergency restrictions and water use limitations gradually were relaxed beginning within about a month of the initial notice. But full water availability was not reinstated until August.


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The community’s largest single economic event, the Old Timers Reunion, which attracts people from all around the state for the weekend following July 4, was canceled due to the water outage. Many businesses counted on that weekend as an essential part of their annual revenue.

MACDC felt that the water outage was as much a result of negligence on the part of the village as it was of the drought and water shortage, so it filed a claim against the village’s insurance policy.

The Municipal League’s Self-Insurer’s Fund denied it based on sovereign immunity. Mayor Sandy Julian reiterated that position, but the village has declined further comment.

MACDC then engaged Albuquerque Business Law, which has taken the case without retainer, and hopes to use the research to help small communities facing similar issues.

The law firm said the village is liable because an employee failed to administer proper maintenance on the well and that the village should have had more than one well in operation. As a result, it believes the sovereign immunity ruling does not exempt the insurance policy from damages.