The El Salto showdown

That was pretty much the scene at the annual meeting Saturday (June 30) of the El Salto del Agua Association, the remnant of a former Spanish land grant wedged between the village of Arroyo Seco, the Carson National Forest and Taos Pueblo.

The association owns about 2,000 acres at the end of El Salto Road, popular for a hiking trail up to the waterfalls. Arthur Manby, the infamous British land prospector, once took control of the former land grant. But in 1949 a group of 75 people from the community rallied their money and paid off the taxes on the land, setting up an association, so their heirs, many of whom still live in El Salto and surrounding areas, could enjoy the slice of heaven, its wildlife and its waters for generations to come.

In a place where demographic and economic shifts have started to erode the old Spanish culture of Northern New Mexico, the land and water in the hills of El Salto are more important than ever.

The elephant in the room Saturday night was a question that's been festering among the extended family for years: whether or not everyone in the room, especially the elected leaders sitting at the front table, are actually "heirs" to the association with legitimate stake in how things are run.

Within two minutes of the official start of the shareholders' meeting, Joe Torres, a former board member, stood up and demanded over a chorus of groans that the chairman read the qualifications to be elected as a director -- a not-so-subtle way of challenging the authority of the board sitting before the crowd.

"Really? Are you going to be doing this all night?" asked board member Moises Martinez.

"If I have to call someone to have you removed, I will," said chairman Norbert Mondragon. A few minutes later, a town of Taos police officer was standing in back of the room, where he stayed all night.

'A good plan'

The original members of the land association set out more than half a century ago to make sure their children and grandchildren had a stake in the land situated to the east of their community in the steep and rocky foothills of the Sangre de Cristo Mountains.

After registering as a business corporation, the association decided to give each of the original members an equal portion of ownership. They planned to issue 50,000 shares; split among 75 people, each would have received a certificate for about 666 shares. When it came time to transfer the shares to heirs, the members would submit that paperwork to the association's board of directors for approval and it'd be on the books.

"It was a good plan. It just wasn't carried out," Mondragon, the chairman, told The Taos News.

As far as anyone involved in the association can figure out, no certificates for the shares were ever created. The paper trail was lacking from the get-go.

Even though the shares were never distributed in a formal way, the organization's bylaws set out a procedure to transfer interest in the association from generation to generation. A person could include the shares in their will, just like any other asset. If that didn't happen, then the shares were supposed to pass to the heirs according to New Mexico's inheritance laws. If a descendant wanted to sell the share, the association had the first rights to buy them back. But if that didn't happen, the shares were still supposed to pass to the heirs by way of the state's inheritance laws.

But during the early 1970s, some heirs of the original members started acquiring other people's shares in the association. And so it went for many years.

"You're not permitted to sell the association membership to anyone. People did sell them and the board looked the other way," Mondragon said. According to his research of the association's minutes, only one transfer -- the first, in 1959 -- was approved by the board and recorded for history. The only evidence for the rest of the transfers are individual deeds never written down in the association's logs.

Because the association is not a public entity, its records are not subject to open records laws in New Mexico. Furthermore, members openly acknowledged during Saturday's annual meeting that financial records and meeting minutes even from the past decade aren't likely to surface, despite their efforts to find them.

'You have no authority'

Over the past decade, more people started asking basic questions about the operations and structure of the organization, Mondragon said. Folks who still live at the base of the mountain and people who had moved to other states but still claimed a stake in the association were getting curious. The leaders decided it was time to put to rest these lingering questions of membership.

In April 2016, the board of the association asked for a "declaratory judgement" in the 8th Judicial District Court in Taos. It's a legal process to find the heirs and determine their stake and voting power in the corporation. A final ruling in a declaratory judgement would take the casual guesswork out of the membership rolls and determine with absolute certainty who's in and who's out.

And it's the various answers to the membership question that is the crux of the dispute that erupted in the past two years.

Erminio Martinez, a bail bondsman and former magistrate judge for Taos County, served on the board of directors from 2010 until Saturday's meeting. Martinez, who claims the shares of at least two of the original 75 members, argues that a person's membership should be easy enough to determine; though no shareholder certificates were issued, he says documents like quit claim or warranty deeds are all it would take to settle the matter of being a heir to the association and, by extension, who could be a legitimate leader.

"If you don't have a legal document, you have no authority," Martinez said.

While the declaratory judgement process was moving through the court, the issue over who could be elected to the board came to a head in June 2017 around the time of the annual meeting. After the elections, Mondragon, Martinez and three other people (Horacio Trujillo, Arnold Quintana and Moises Martinez) constituted the association's leaders.

Not everyone was happy with that outcome.

Erminio Martinez argued that only the people who had "proper documentation" proving their status as a rightful heir could serve on the board. Martinez says he was the only one on the board who had proof of being an heir and so in late June 2017 he called another annual meeting where none of the other four board members were present. After the alternative annual meeting, there was another board, including Martinez and other longtime players in the association's affairs: Joe Torres, Bolivar Quintana, Raymundo Garcia Jr. and Leo Valencia Jr.

Martinez sent the minutes of his meeting to the association's lawyer, but Mondragon and the other "prior officers" told the lawyer they didn't recognize the legitimacy of the second annual meeting, according to an affidavit filed by the attorney, John F. McCarthy, who has since withdrawn from the membership case.

A battle of the boards halted the court process to determine membership.

"I am unable ethically to proceed with a (declaratory judgment) hearing," McCarthy wrote in the July 2017 affidavit.

The association sued Martinez and the four other members of the alternative board, claiming Martinez had "acted outside the scope of any legal authority," including extortion, misleading the board, being unwilling to go about with normal business and showing "belligerent, angry, threatening, abusive and unwarranted behavior," according to a statement accompanying the complaint.

Martinez turned around and sued the board. He and his board denied the claims and asked the court to recognize their authority, adding that their meeting "consisted of members with a greater number of shares than the alleged annual meeting."

The disputes had real fallout for the land association. Namely, it had been trying to secure over $100,000 in nonprofit and government funding to thin overgrown forests. The existence of two boards put that at risk.

In an attempt to get the declaratory judgment, a financial review and even normal business like hiring a lawyer back on track, the two groups reached a settlement to their lawsuits in November of last year. In that agreement, the court recognized the Mondragon board, which included Erminio Martinez, as the rightful board of directors with legal authority and forced everyone to behave "in a normal business-like-manner." The underlying lawsuits between them were dismissed.

Snafu

Ultimately, the settlement did not mean the affairs of the El Salto del Agua Association returned to normal.

McCarthy, the association's lawyer, withdrew from from the cases on April 9 and the court gave the association 20 days to find a new lawyer. Nine days later, on April 18, Erminio Martinez submitted an "entry of appearance" on behalf of the association, essentially nominating himself as its lawyer. Though he's a former judge, he is not licensed to practice law. He did not notify the rest of the board.

Martinez told The Taos News he submitted his name because the association wouldn't listen to his issues about hiring a lawyer. "I was concerned either the court is going to take control of the whole association or it might go into receivership."

In the first week of May, Martinez asked the court for a hearing in the declaratory judgement. Three days later, the rest of the board filed for a temporary restraining order against him. At the same time, they requested the courts force Martinez to abide by the settlement agreement.

According to court filings, the board claimed Martinez had continued to cause disruptions, challenged the legitimacy of the board and tried to take "unilateral and illegal authority." At times, near-constant email threats aired these disputes before everyone in the association.

The annual meeting was coming up in just a month and the board hoped to avoid another controversy -- and challenge to their authority -- that would further bruise the "black eye" in the community and could cost the association thousands of dollars in attorney fees to duke it out in court.

Judge Sarah Backus of the Eighth Judicial District Court granted both the restraining order against Martinez and sided with the association in their efforts to force Martinez to let go of his challenges to the board and attempts to get "documentation" out of heirs.

In a preliminary injunction, Backus wrote that Martinez's actions "are in violation of ... the agreement, and, unless restrained from continuing, will cause irreparable harm to the association, for which there is no adequate remedy at law."

The only thing left to do was wait for the annual meeting.

Elections

The entire weekend around the El Salto del Agua association's annual meeting is a familial affair. It started off with a BBQ dinner and then a picnic. Usually, folks wander into to the forest, but that was nixed this year due to the extreme fire danger. Sunday morning was yet another communal meal, a good-bye breakfast.

Yet the main thrust of the annual meeting is the election of a board. In accordance with the court-recognized bylaws, only two seats were up for grabs -- that of Horacio Trujillo, who was not present, and Erminio Martinez's.

Four people accepted their nominations, including Martinez. Each had to say how they were bona fide heir, detailing who in their families were original members.

The family of each of the original members was entitled to one vote. Where an original share was disputed, both the family and the person making a claim against that share were allowed to vote. This was meant to avoid the membership debacle -- a question reserved for the court in the declaratory judgement process.

Martinez said he came armed with about 17 proxies, forms that authorized him to vote on behalf of other shareholders who were not present. He told The Taos News those shareholders mostly lived out of state, including Michigan, Arizona, Colorado and Oklahoma.

But Mondragon said no proxies would be allowed at the annual meeting because a process to vet them had not been established ahead of time.

"The reason they didn't allow (proxies) is because they manipulated the whole process," Martinez later said in an interview.

Once voting started, a moderator called out the name of each of the original members based off of two slightly different lists, one of which was filed with the county clerk's office in 1957. One by one an heir stood up before everyone and walked to an open Amazon Prime box to cast their handwritten ballot on behalf of the family. About 15 to 20 families, roughly the same number of unaccepted proxies, did not have someone present to cast a vote.

When it came time to tally the votes, nearly a dozen people gathered around the table to check the count; one person videoed the vote count on his cell phone.

In the end, Cynthia Manjarrez and Charles Martinez won the election with 38 and 34 votes, respectively. Erminio Martinez got 15 votes, while a fourth candidate, Arthur Martinez, received only 7 votes.

After seven years at the helm, Erminio Martinez was no longer one of the association's official leaders.

As the meeting finished up, people started chatting and milling around the convention center as if the backyard picnic was still going on.

'Wait and see'

In a Tuesday (July 3) interview with The Taos News, former board member Joe Torres, one of Erminio Martinez's alternative officers whose authority was stripped by the courts, raised several issues with the way the meeting was conducted.

Primarily, he challenged Mondragon's decision to not allow the proxy votes. "There is a process (for proxies) and they chose not to follow it," Torres said. But he doesn't know what will come of that challenge. Some members could take it to court, contesting the results and legitimacy of the newly elected board members.

"We'll wait and see ... what the members whose voices weren't heard think," Torres said.

But Martinez doesn't foresee mounting another challenge in district court. "I don't think that would be wise," he said. "I have to live with what we've got."

Both Martinez and Mondragon told The Taos News they want to get the declaratory judgment moving forward again.

"Until that happens, this squabbling will continue," Mondragon said.

Martinez has more pointed thoughts on the matter. "Hopefully the board has the guts and the cajones to move this process forward civilly ... and get it concluded," he said.

Correction: The original version of this story misstated the name of one of the newly elected board members, who is Charles Martinez. The story also erred in the date of the first and only official transfer of a share, which was 1959, according to association chairman Norbert Mondragon.