RIO RANCHO, N.M. — A preliminary $5 million settlement has been reached in a class-action lawsuit pitting individual property owners in the master-planned Mariposa community in Rio Rancho against the project’s original developer, High Desert Investment, and Albuquerque Academy.
A key element of the preliminary settlement is that, more than likely, it will have to be approved by all property owners covered by the class action. If not unanimously approved, defendants High Desert and the academy have the option to withdraw from the settlement.
“The case will go back to court to be litigated,” said Richard Alvidrez of Miller Stratvert, the law firm representing High Desert.
The lawsuit was filed in 2012 after High Desert, the for-profit arm of the nonprofit Albuquerque Academy, announced it was withdrawing as developer of High Desert, a mostly residential community that was still in its early stages when the housing bubble burst.
The lawsuit was filed in response to the withdrawal, alleging breach of contract, unfair practices, negligence and violations of the state Constitution. The essence of the allegations is that affected owners lost money on their property investments due to the actions of High Desert and Albuquerque Academy.
From 225 to 235 individuals and households who purchased their property on or before June 20, 2012, are covered by the class action, said plaintiffs’ lawyer Christopher Bauman of Bauman, Dow & León PC.
“We have to give the class members an opportunity to accept the settlement, reject portions or all of it, or opt out,” he said. “We will send out notices directly to those class members we’ve identified by the end of this week.”
The preliminary settlement, which was reached through mediation, was approved last week by District Court Judge James L. Sanchez in Valencia County. Both Valencia and Sandoval County, where Mariposa is located, are in the state’s 13th Judicial District.
As outlined in the judge’s order, unanimous approval of the settlement is important because, by signing off on the agreement, the property owners are basically giving up the right to sue High Desert and Albuquerque Academy on their own.
A “final fairness hearing” on the preliminary settlement will be held May 27 at the county courthouse in Los Lunas.
The active development portion of the original 6,500-acre Mariposa, about 800 acres sometimes called Mariposa East, was repossessed by lenders and sold last fall to current owner Scottsdale, Ariz.-based Harvard Investments.