Court Opinion

ID: 4168319
Source: CourtListenerOpinion
Date Created: 2017-05-15 14:12:10.061871+00
Date Added: 2024-06-11T09:21:02.625470
License: Public Domain

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 1        IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

 2   DEUTSCHE BANK NATIONAL TRUST
 3   COMPANY AS INDENTURE TRUSTEE
 4   FOR CENTURY HOME EQUITY LOAN
 5   TRUST 2005-2,

 6          Plaintiff-Appellant,

 7 v.                                                                                   NO. 34,727

 8 COLETTE SLADE and CURTIS SLADE,

 9          Defendants-Appellees,

10 and

11   DILCO, INC. d/b/a A & I WAREHOUSE;
12   CLOVER, INC.; UNITED STATES OF AMERICA
13   DEPARTMENT OF JUSTICE; CAGO, INC.; and
14   RESTORATION SOLUTIONS, LLC,

15          Defendants.

16 APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
17 Clay Campbell, District Judge

18   Little, Bradley & Nesbitt, P.A.
19   Sandra A. Brown
20   Lucinda R. Silva
21   Albuquerque, NM

22 for Appellant
 1 Simon A. Kubiak, Attorney at Law, P.C.
 2 Simon A. Kubiak
 3 Albuquerque, NM

 4 for Appellees

 5                            MEMORANDUM OPINION

 6 VANZI, Chief Judge.

 7   {1}   Plaintiff Deutsche Bank National Trust Company as Indenture Trustee for

 8 Century Home Equity Loan Trust 2005-2 (Deutsche Bank) appeals from an order of

 9 the district court dismissing its foreclosure complaint against Defendants Colette and

10 Curtis Slade (the Slades); Dilco, Inc. d/b/a A & I Warehouse; Clover, Inc.; United

11 States of America Department of Justice; Cago, Inc. (Cago); and Restoration

12 Solutions, LLC. We conclude that the district court erred in dismissing the complaint

13 and voiding the decree of foreclosure for lack of standing. Accordingly, we reverse.

14 BACKGROUND

15   {2}   Deutsche Bank sought foreclosure of the Slades’ mortgage in September 2008.

16 The foreclosure complaint included copies of the note and mortgage, naming New

17 Century Mortgage Corporation (New Century) as the lender. The complaint alleged

18 that “the [n]ote and [m]ortgage were assigned to [Deutsche Bank], and [Deutsche

19 Bank] is the owner and holder in due course of said [n]ote and [m]ortgage.” The note,

20 however, showed no indorsement to Deutsche Bank from New Century, nor did it

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 1 contain an indorsement in blank. The Slades’ pro se answer to the complaint did not

 2 raise standing, lack of jurisdiction, or any affirmative defenses.

 3   {3}   In November 2008 Deutsche Bank filed a motion for summary judgment. Only

 4 Cago filed a response, in which it did not oppose summary judgment. On January 9,

 5 2009, the district court held a hearing on Deutsche Bank’s motion for summary

 6 judgment, with Cago appearing by counsel and the Slades appearing in person and

 7 unrepresented. The issues of standing and jurisdiction were not raised during the

 8 hearing. Instead, the Slades requested time to hire an attorney. The district court held

 9 off on addressing the merits of the summary judgment motion, granted the Slades’

10 request, and gave them four weeks to file a written response to Deutsche Bank’s

11 motion for summary judgment. The district court advised the Slades that it would

12 grant summary judgment without any further hearing if no response was filed, either

13 by them or by their attorney. On February 17, 2009, having received no written

14 response from the Slades, the district court entered a stipulated summary and default

15 judgment, decree of foreclosure, and appointment of special master in favor of

16 Deutsche Bank. The mortgaged property was sold in August 2011, and the district

17 court entered an order confirming the sale in June 2012. The Slades did not appeal

18 from the foreclosure judgment and related orders.

19   {4}   Almost two years after the district court entered the order confirming the sale,

20 on April 7, 2014, the Slades filed a motion pursuant to Rule 1-060(B) NMRA to set

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 1 aside the judgment as void, based primarily on our Supreme Court’s opinion in Bank

 2 of New York v. Romero, 2014-NMSC-007, ¶ 1, 320 P.3d 1, abrogation in part

 3 recognized by PNC Mortgage v. Romero, 2016-NMCA-064, ¶ 19 n.3, 377 P.3d 461,

 4 which held that a foreclosure judgment was void for lack of subject matter jurisdiction

 5 when the plaintiff did not have standing to file the foreclosure complaint. After a

 6 hearing on the Slades’ Rule 1-060(B) motion, the district court concluded in a

 7 memorandum opinion that Deutsche Bank failed to establish that it had standing at the

 8 time it filed suit. Consequently, relying on Bank of New York, the district court

 9 dismissed Deutsche Bank’s foreclosure complaint for lack of jurisdiction and voided

10 the decree of foreclosure and the subsequent sale of the mortgaged property.

11 DISCUSSION

12   {5}   Generally, we review a district court’s grant or denial of relief under Rule 1-

13 060(B) for an abuse of discretion. Meiboom v. Watson, 2000-NMSC-004, ¶ 29, 128

14 N.M. 536, 994 P.2d 1154. “However, a district court has no discretion to refuse to set

15 aside a void judgment under Rule 1-060(B)(4).” State ex rel. Office of Att’y Gen. v.

16 Grand River Enters. Six Nations, Ltd., 2014-NMCA-073, ¶ 7, 329 P.3d 723.

17   {6}   In Deutsche Bank National Trust Co. v. Johnston, 2016-NMSC-013, ¶¶ 9, 11,

18 13, 369 P.3d 1046, our Supreme Court clarified certain statements in Romero

19 concerning the issue of standing and ultimately held that the issue of standing in

20 mortgage foreclosure cases is not jurisdictional, but rather is prudential. As a

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 1 prudential matter, a standing issue in a foreclosure case may be raised any time “prior

 2 to the completion of a trial on the merits.” Johnston, 2016-NMSC-013, ¶ 16. Although

 3 the Johnston Court ultimately held that the homeowner in that case did not waive the

 4 issue of standing because he raised it prior to trial, id. ¶ 17, the Court did clarify that

 5 “a final judgment on . . . an action to enforce a promissory note . . . is not voidable

 6 under Rule 1-060(B) due to a lack of prudential standing.” Johnston, 2016-NMSC-

 7 013, ¶ 34.

 8   {7}   Here, the Slades are attempting to attack the final judgment as void under Rule

 9 1-060(B)(4) for lack of standing. This is exactly the type of attack that our Supreme

10 Court expressly prohibited in Johnston. As a result, we must conclude that the Slades’

11 motion to set aside the judgment as void for lack of standing—filed five years after

12 entry of the foreclosure judgment, and where no previous challenge had been made

13 as to Deutsche Bank’s standing during active litigation prior to the final

14 judgment—has no legal basis, and the Slades can find no relief in their Rule 1-060(B)

15 motion.

16 CONCLUSION

17   {8}   For the foregoing reasons, the district court erred in dismissing Deutsche

18 Bank’s foreclosure complaint as void for lack of standing. Accordingly, we reverse.

19   {9}   IT IS SO ORDERED.

                                                5
1                               __________________________________
2                               LINDA M. VANZI, Chief Judge

3 WE CONCUR:

4 _________________________________
5 JONATHAN B. SUTIN, Judge

6 _________________________________
7 HENRY M. BOHNHOFF, Judge

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