Court Opinion

ID: 9610219
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:38:17.248843+00
Date Added: 2024-06-11T12:27:05.700300
License: Public Domain

RANSOM, Justice (dissenting). I respectfully dissent. This Court today holds when a senior mortgagee obtains a default judgment of foreclosure against the mortgagor and bids in the property at foreclosure sale for the amount of indebtedness, all without actual notice to a junior lienholder who is a party to the collection and foreclosure action, the mortgagee is not entitled to a subsequent foreclosure of the junior lien if the failure to give actual notice of the foreclosure judgment and sale was deliberate and intentional. By “deliberate and intentional,” I understand the Court to mean deliberate behavior in bad faith. I likely could affirm such a remedy if fashioned by the trial court in equity based upon the premise of bad faith. In fact, the mortgagee here agrees. However, I do not believe we reach that question. The premise of bad faith has not been established. The majority holds that, “in the absence of an express finding of fact by the district court, when it is apparent that the court intended to find a certain fact, and, in fact, the evidence would not allow a contrary finding, this court, in the interest of judicial economy, can adopt the finding of fact.” Then, “In the interests of judicial economy, [the majority finds] on appeal that Western Bank failed to serve PHC with the appropriate notice and that this omission was deliberate.” I do not believe it apparent that the trial court intended to find bad faith. The court commented from the bench, seemingly to correct a statement to the contrary, “that there was an omission, that is clear and I don’t think on this record we can say that we have plumbed the depths of the intent.’’ What the court actually said in its letter of August 7, 1987, is: “Whether or not failure to give such notice renders the foreclosure ‘defective’ I do not pass on____ [T]he failure to give such notice denies [junior lienholders] the opportunity to participate in the bidding process____ It is true that deliberate conduct so calculated carries with it certain possible recourse. No malintention is attributed * * * * ” The court specifically refused a finding requested by PHC that the failure to give notice “was deliberately and intentionally done by [the bank].” Clearly, failure of the trial court to find as requested is treated as a finding against the party asserting the affirmative. Landskroner v. McClure, 107 N.M. 773, 775, 765 P.2d 189, 191 (1988) (citing Gallegos v. Wilkerson, 79 N.M. 549, 445 P.2d 970 (1968)). Landskroner is the most recent in a long line of cases on this issue. E.g., Gallegos v. Wilkerson, 79 N.M. 549, 551, 445 P.2d 970, 972 (1968) (refusal to make a requested finding on a material issue is a finding against the party having the burden of proof); J.A. Silversmith, Inc. v. Marchiondo, 75 N.M. 290, 294, 404 P.2d 122, 124 (1965) (“Failure to find specifically upon a material point in issue must be regarded as finding such material fact against the party having the burden of proof.”). The significance of this rule is to satisfy the requirement that the court must make findings on ultimate facts. See NMSA 1986, 1-052(B)(1)(b). Refusal to find the deliberate failure to give notice is simply a finding that PHC, the party asserting the affirmative, did not prove that assertion. Finally, I disagree that the evidence would not allow a finding contrary to the fact of bad faith. The bank’s vice-president was the only witness to testify at trial and, when asked why the bank proceeded with the judicial sale without first obtaining a judgment of foreclosure against junior lienholders, the witness responded that the principal individual involved in the mortgagor corporation had recently filed bankruptcy and it was thought the mortgagor might seek bankruptcy, resulting in prolonged foreclosure litigation. PHC’s attomey specifically asked the vice-president if he knew whether notice had been sent, to which the vice-president replied, “To my best information and belief, that particular issue was handled by our attorneys.” The bank’s attorney informed the court that he did not know whether notice had been sent because his partner who handled the proceedings earlier was out of the country. The attorney did inform the trial court that he had discussed the notice issue with several of the other attorneys involved in the case and that at least some had received notice. The notice of sale in the court file had no certificate of service. In a brief filed by the bank, it agrees that, if it or its attorneys deliberately failed to send notice of the foreclosure sale to PHC, then the bank should not be allowed to foreclose PHC’s lien interests. The bank’s attorneys, including the one handling the earlier proceedings who had been out of the country at the time of trial, as officers of this Court, specifically represent by their signatures to their brief that “there was no deliberate or intentional failure to give notice of the judicial sale.” Given the above, I would conclude that this Court cannot find, or imply, as the basic premise for its rationale and opinion today, that the bank acted with deliberateness or bad faith.