Court Opinion

ID: 4118874
Source: CourtListenerOpinion
Date Created: 2017-01-26 18:09:05.45893+00
Date Added: 2024-06-11T14:46:21.078168
License: Public Domain

1       IN THE SUPREME COURT OF THE STATE OF NEW MEXICO

 2 Opinion Number:

 3 Filing Date: January 26, 2017

 4 NO. S-1-SC-35512

 5 PHOENIX FUNDING, LLC,

 6        Plaintiff-Respondent,

 7 v.

 8 AURORA LOAN SERVICES, LLC and
 9 MORTGAGE ELECTRONIC REGISTRATION
10 SYSTEMS, INC.,

11        Defendants-Petitioners.

12 ORIGINAL PROCEEDING ON CERTIORARI
13 Francis J. Matthew, District Judge

14 Murr Siler & Accomazzo, P.C.
15 Joshua A. Spencer
16 Albuquerque, NM

17 Jamie G. Siler
18 James P. Eckels
19 Denver, CO

20 for Petitioners

21 William F. Davis & Associates, P.C.
22 Nephi Hardman
1 Albuquerque, NM

2 for Respondent
 1                                       OPINION

 2 NAKAMURA, Justice.

 3   {1}   We are called to decide whether a 2009 default foreclosure judgment may be

 4 collaterally attacked based on assertions that the judgment was void for lack of

 5 jurisdiction and procured by fraud. In this case, those assertions were made by

 6 Phoenix Funding, LLC, which attempted to overturn a settled foreclosure judgment

 7 entered in favor of Aurora Loan Services, LLC. We hold that the 2009 default

 8 judgment was not void and that Phoenix’s fraud claim is procedurally barred.

 9 Accordingly, we reverse the judgment of the Court of Appeals, reinstate the district

10 court’s grant of summary judgment to Aurora, and remand to the district court with

11 instructions to dismiss Phoenix’s fraud claim.

12 I.      BACKGROUND

13   {2}   On December 13, 2006, Kirsten Hood executed a promissory note payable to

14 GreenPoint Mortgage Funding, Inc., for the purchase of a home in Santa Fe, New

15 Mexico (the Property). This note was secured by a mortgage in favor of Mortgage

16 Electronic Registration Systems, Inc., (MERS), as nominee for GreenPoint.

17   {3}   By way of the following transactions, the Hood note was eventually transferred

18 from GreenPoint to Aurora. First, after origination, the note was pooled into a

19 securitized trust—namely, GreenPoint Mortgage Funding Trust Mortgage Pass-
 1 Through Certificates, Series 2007-ARI. An agreement that created this securitized

 2 trust indicated that the Hood note was held by Lehman Brothers Holdings Inc., which

 3 transferred it to Structured Asset Securities Corporation, who then transferred the

 4 note to U.S. Bank National Association. In January 2009, the note was transferred

 5 to Aurora.

 6   {4}   On March 3, 2009, Aurora filed a foreclosure complaint in district court,

 7 alleging that Hood had defaulted on the note. Aurora alleged that it was, by

 8 assignment, the current holder of the note and mortgage. Aurora attached to its

 9 complaint an unindorsed copy of both the Hood note and a document entitled

10 “Corporate Assignment of Mortgage” indicating that MERS had assigned to Aurora

11 the mortgage “together with the Note . . . .”

12   {5}   Because Hood did not respond to Aurora’s complaint, the district court entered

13 default judgment on October 8, 2009, finding that the note and mortgage had been

14 properly assigned to Aurora. The district court also found that Hood had defaulted

15 on the note, ordered the mortgage foreclosed, and appointed a special master to

16 conduct a foreclosure sale. Hood neither redeemed the Property nor appealed the

17 district court’s order.

18   {6}   Aurora purchased the Property at the foreclosure sale and recorded a Special

                                              2
 1 Master’s Deed. On August 23, 2010, the district court entered an order that

 2 confirmed the sale of the Property to Aurora and approved the Special Master’s Deed.

 3   {7}   Enter Gregory Hutchins, a speculator in foreclosed properties. Seeking to

 4 procure the Property, on November 3, 2011—fourteen months after the district court

 5 approved the Special Master’s Deed—Hutchins obtained a quitclaim deed to the

 6 Property from Hood for “valuable consideration.” Hood executed the quitclaim deed

 7 on November 3, 2011, despite the 2009 default judgment against her. The deed was

 8 recorded on the same day.

 9   {8}   Hutchins then attempted to transfer the Property to Phoenix, a New Mexico

10 limited liability company of which Hutchins was the sole member. Hutchins first

11 executed a note, promising to pay $750,000.00 to Phoenix. As security for the note,

12 he executed a mortgage in favor of Phoenix, encumbering his supposed interest in the

13 Property.

14   {9}   On March 1, 2012, Phoenix filed a complaint against Hutchins, GreenPoint,

15 Aurora, and MERS. Against Hutchins, Phoenix asserted actions for judgment on the

16 note, foreclosure on the Property, and quiet title. This Court recognizes that, by

17 directing Phoenix to assert these claims in this case, Hutchins effectively sued himself

18 in his attempt to take control of the Property.

                                              3
 1   {10}   Against GreenPoint, Aurora, and MERS, Phoenix asserted claims for

 2 declaratory judgment and quiet title. Phoenix argued that because Aurora did not

 3 attach a copy of an indorsed note to its 2009 foreclosure complaint against Hood,

 4 Aurora lacked standing to commence suit. Phoenix alleged that the district court was

 5 consequently without jurisdiction and, thus, the 2009 default judgment against Hood

 6 and the resulting foreclosure sale were void. Phoenix sought an order quieting title

 7 to itself in fee simple.

 8   {11}   Aurora and MERS answered and asserted counterclaims against Phoenix and

 9 crossclaims against Hutchins to cancel the quitclaim deed and the Hutchins mortgage.

10 Aurora and MERS also asserted counterclaims and crossclaims against Phoenix and

11 Hutchins, respectively, for declaratory judgment and quiet title. GreenPoint did not

12 answer the complaint, leading to the district court’s entry of default judgment.

13 Hutchins responded to Phoenix’s complaint by disclaiming all interest in the matter.

14   {12}   Aurora, MERS, and Phoenix cross-moved for summary judgment. Aurora and

15 MERS argued, inter alia, that Aurora had standing to assert the 2009 foreclosure

16 action against Hood, that Phoenix’s claims were barred by res judicata, and that

17 Phoenix’s complaint was an improper collateral attack on the 2009 default judgment

18 against Hood. Phoenix, by contrast, repeated its argument that the 2009 district court

                                             4
 1 lacked jurisdiction to adjudicate the Hood action because Aurora lacked standing to

 2 foreclose.

 3   {13}   Phoenix also argued in its summary judgment motion that Aurora committed

 4 fraud by attaching the Corporate Assignment of Mortgage to its 2009 foreclosure

 5 action against Hood. Phoenix’s fraud claim alleged that Aurora was not a successor

 6 to GreenPoint and, therefore, lacked the right either to prepare the Corporate

 7 Assignment or to direct MERS to do so. According to Phoenix, Aurora’s attachment

 8 of the Corporate Assignment to Aurora’s 2009 complaint constituted a fraud on the

 9 district court that warranted setting aside the 2009 foreclosure judgment. In its

10 complaint, Phoenix did not assert a claim to set aside the 2009 default foreclosure

11 judgment for fraud. Rather, Phoenix first raised its fraud theory in its motion for

12 summary judgment.

13   {14}   The district court granted summary judgment to Aurora and MERS. The

14 district court determined that Phoenix’s suit was a collateral attack by a party in

15 privity with or a successor-in-interest to Hood. The district court also concluded that

16 the 2009 district court had jurisdiction over Aurora’s foreclosure action, that the

17 district court’s default foreclosure judgment was therefore not void, and, accordingly,

18 that Phoenix’s claims were barred by res judicata. The district court declared that

                                              5
 1 Aurora owned the property in fee and that all adverse claims of Phoenix and Hutchins

 2 were barred. The district court consequently held Phoenix’s motion for summary

 3 judgment to be moot. Phoenix filed a timely notice of appeal.

 4   {15}   The Court of Appeals reversed the district court. Phoenix Funding, LLC v.

 5 Aurora Loan Servs., LLC, 2016-NMCA-010, ¶ 1, 365 P.3d 8, cert. granted 2016-

 6 NMCERT-001. The Court first determined that judgments may be challenged

 7 collaterally “where the challenge is based on an asserted lack of jurisdiction” of the

 8 court that rendered the judgment. Id. ¶ 11. The Court then considered whether the

 9 2009 district court had subject matter jurisdiction to render the default foreclosure

10 judgment against Hood. Id. ¶¶ 14-28. The Court noted that, under Bank of New York

11 v. Romero, a plaintiff’s failure to establish standing to foreclose is a jurisdictional

12 defect and that a plaintiff must demonstrate that it had the right to enforce a note at

13 the time of filing suit in order to establish standing. Phoenix Funding, 2016-NMCA-

14 010, ¶¶ 15, 21 (citing Bank of N.Y., 2014-NMSC-007, ¶ 17, 320 P.3d 1). The Court

15 of Appeals determined that Aurora did not present sufficient evidence to establish

16 that it was the holder of the note at the time it filed suit. Phoenix Funding, 2016-

17 NMCA-010, ¶ 20. The Court of Appeals, therefore, concluded that Aurora lacked

18 standing to foreclose, which consequently deprived the 2009 district court of subject

                                              6
 1 matter jurisdiction and voided the 2009 default foreclosure judgment against Hood.

 2 Id. ¶ 28. Because the Court of Appeals determined that the 2009 default foreclosure

 3 judgment was void, it held that Phoenix’s claims against Aurora and MERS for

 4 declaratory judgment and quiet title were not barred by res judicata. Id. ¶ 30.

 5 Furthermore, because the Court of Appeals held that the 2009 default foreclosure

 6 judgment was void, it declined to rule on Phoenix’s fraud argument. Id. ¶ 44.

 7   {16}   Aurora and MERS petitioned for a writ of certiorari. We granted the petition

 8 and issued the writ, exercising our jurisdiction under Article VI, Section 3 of the New

 9 Mexico Constitution and NMSA 1978, Section 34-5-14(B) (1972).

10 II.      DISCUSSION

11 A.       Standard of Review

12   {17}   We review the district court’s grant of summary judgment to Aurora and MERS

13 de novo. See Encinias v. Whitener Law Firm, P.A., 2013-NMSC-045, ¶ 6, 310 P.3d
14 611. In the summary judgment posture, we review the facts and make all reasonable

15 inferences from the record in the light most favorable to the party opponent of the

16 motion. Id. “‘Summary judgment is appropriate where there are no genuine issues

17 of material fact and the movant is entitled to judgment as a matter of law.’” Id.

18 (citation omitted); see also Rule 1-056(C) NMRA.

                                              7
 1 B.       The 2009 Foreclosure Judgment Was Not Void for Lack of Jurisdiction

 2 1.       Because standing is a jurisdictional prerequisite only for causes of action
 3          created by statute, standing is not a jurisdictional prerequisite in actions
 4          to enforce a promissory note and foreclose on a mortgage

 5   {18}   We recently clarified the relationship between justiciability requirements and

 6 subject matter jurisdiction. See Am. Fed. of State, Cty. & Mun. Emps. v. Bd. of Cty.

 7 Comm’rs of Bernalillo Cty. (AFSCME), 2016-NMSC-017, ¶¶ 14-15, 373 P.3d 989;

 8 Deutsche Bank Nat’l Trust Co. v. Johnston, 2016-NMSC-013, ¶¶ 10-12, 369 P.3d
9 1046. Unlike in the federal courts, the requirement of a plaintiff’s standing to

10 commence suit in New Mexico courts is not derived from a constitutional limitation

11 on the power of the judicial branch. Compare, e.g., City of Los Angeles v. Lyons, 461

12 U.S. 95, 101-102 (1983) (“[Anyone] who seek[s] to invoke the jurisdiction of the

13 federal courts must satsify the threshold requirement imposed by Article III of the

14 Constitution by alleging an actual case or controversy . . . show[ing] that he has

15 sustained or is immediately in danger of sustaining some direct injury . . . .” (internal

16 quotation marks and citations omitted)), with Am. Civil Liberties Union of N.M. v.

17 City of Albuquerque (ACLU of N.M.), 2008-NMSC-045, ¶ 9, 144 N.M. 471, 188 P.3d
18 1222 (“[S]tanding in our courts is not derived from the state constitution . . . .”).

19 Because the requirement of a plaintiff’s standing is not derived from a constitutional

                                               8
 1 limitation of the judiciary to decide cases or controversies, it is not a jurisdictional

 2 prerequisite to every cause of action that a New Mexico court is called to adjudicate.

 3 See ACLU of N.M., 2008-NMSC-045, ¶ 9.

 4   {19}   In some cases, however, justiciability requirements are jurisdictional

 5 prerequisites. For example, standing is a jurisdictional prerequisite where an action

 6 is created by statute and the statute specifies that only a limited class of plaintiffs who

 7 satisfy certain conditions may sue. See Deutsche Bank, 2016-NMSC-013, ¶ 11

 8 (“‘[W]hen a statute creates a cause of action and designates who may sue, the issue

 9 of standing becomes interwoven with that of subject matter jurisdiction. Standing

10 then becomes a jurisdictional prerequisite to an action.’” (citation omitted)); see also

11 AFSCME, 2016-NMSC-017, ¶ 31 (“Under New Mexico’s Declaratory Judgment Act,

12 standing—like ripeness—is a jurisdictional prerequisite.”). Where a cause of action

13 is created by statute, the Legislature empowers the courts to adjudicate a new kind of

14 claim and, thus, the Legislature may condition the exercise of that power on the

15 plaintiff’s satisfaction of certain prerequisites. See AFSCME, 2016-NMSC-017, ¶ 14

16 (“If a statute creates a right and provides that only a specific class of persons may

17 petition for judicial review of an alleged violation, then the courts lack the

18 jurisdiction to adjudicate that alleged violation when the petition is brought by a

                                                9
 1 person outside of that class.”). Hence, when a claim is created by statute, the

 2 justiciability requirements of standing, ripeness, and mootness can be jurisdictional.

 3 See, e.g., id. ¶¶ 15-17 (explaining that because the Declaratory Judgment Act requires

 4 the demonstration of an “actual controversy,” the justiciability requirements of

 5 ripeness and standing are necessary to establish a court’s jurisdiction over a

 6 declaratory judgment action); see also New Energy Econ., Inc. v. Shoobridge, 2010-

 7 NMSC-049, ¶ 17, 149 N.M. 42, 243 P.3d 746 (same).

 8   {20}   By contrast, when a claim is not created by statute but rather was born of

 9 common law, the lack of the traditional justiciability prerequisites does not impair a

10 court’s jurisdiction. See Deutsche Bank, 2016-NMSC-013, ¶ 12 (“[A]n action to

11 enforce a promissory note fell within the district court’s general subject matter

12 jurisdiction . . . because it was not created by statute.”). New Mexico courts have

13 general subject matter jurisdiction over common-law claims. See N.M. Const. art. VI,

14 §§ 1, 13. For these claims, the justiciability doctrines are prudential, imposed not by

15 the Constitution or by statute but by the judicial branch on itself to serve judicial

16 economy and “the proper—and properly limited—role of courts in a democratic

17 society . . . .” Shoobridge, 2010-NMSC-049, ¶ 16 (internal quotation marks and

18 citation omitted). Yet, while the justiciability doctrines as applied to nonstatutorily

                                             10
 1 created claims are prudential, they are not toothless: A nonstatutorily created claim

 2 is also dismissable for want of the plaintiff’s “prudential standing.” See, e.g.,

 3 Deutsche Bank, 2016-NMSC-013, ¶¶ 9, 32 (holding that a bank’s action to enforce

 4 promissory note was dismissable for failure to prove that the bank had standing at the

 5 time it filed its foreclosure complaint).

 6   {21}   Employing this framework, this Court explained in Deutsche Bank that because

 7 actions to enforce a promissory note and foreclose on a mortgage originated at

 8 common law and were not created by statute, standing in mortgage-foreclosure cases

 9 is a prudential concern. See 2016-NMSC-013, ¶¶ 12-13. The lack of a plaintiff’s

10 standing in an action to enforce a promissory note does not divest a court of subject

11 matter jurisdiction. See id. Consequently, when a district court enters a foreclosure

12 judgment against a defendant, that judgment cannot be collaterally attacked in a

13 subsequent action as void for the reason that the plaintiff in the prior matter lacked

14 standing. See id. ¶ 34. Deutsche Bank explained that this framework was a clear

15 “practical implication[] of our holding that standing is not jurisdictional in mortgage

16 foreclosure cases.” Id. ¶ 33.

17   {22}   Phoenix cannot successfully argue that the 2009 district court lacked

18 jurisdiction over Aurora’s foreclosure action because Aurora lacked standing. The

                                               11
 1 2009 district court had jurisdiction to adjudicate Aurora’s complaint to enforce the

 2 Hood note and foreclose on the mortgage, and the 2009 district court had such

 3 jurisdiction independent of Aurora’s standing. Accordingly, the district court’s 2009

 4 default foreclosure judgment was not void for lack of jurisdiction.

 5 2.       Deutsche Bank’s holding is not limited to nonnegotiable instruments

 6   {23}   Phoenix attempts to escape the reach of Deutsche Bank by contending that our

 7 holding in that opinion is limited to nonnegotiable instruments. Phoenix asserts that,

 8 unlike actions to enforce nonnegotiable instruments, actions to enforce negotiable

 9 instruments are a creation of the Uniform Commercial Code and did not originate at

10 common law.        Phoenix argues that because the Hood note was a negotiable

11 instrument, Deutsche Bank does not apply, and consequently, the district court lacked

12 subject matter jurisdiction and its default judgment against Hood is void.

13   {24}   We are unconvinced; our holding in Deutsche Bank is not limited to

14 nonnegotiable instruments.      First, contrary to Phoenix’s contention, Deutsche

15 Bank involved a negotiable instrument, and, hence, its holding directly applies to this

16 case. See 2016-NMSC-013, ¶¶ 2-3, 6, 13. Second and also contrary to Phoenix’s

17 contention, actions to enforce negotiable instruments, including promissory notes,

18 originated at common law. “[T]he principles that govern negotiable instruments

                                             12
 1 today, currently embodied in the Uniform Commercial Code, long ago became part

 2 of the common law, and it is only because of their assimilation into the common law

 3 that they developed any legal significance.” 22 Richard A. Lord, Williston on

 4 Contracts, § 60:1, at 484 (4th ed. 2002). These rules were once known as the lex

 5 mercatoria or the law merchant and formed a part of the English common law. Id.

 6 at 484-85 (citing Gannon v. Bronston, 55 S.W.2d 358, 362 (Ky. 1932)). Although

 7 the law merchant was first codified in the United States by the Uniform Negotiable

 8 Instruments Law (NIL), Lord, supra, at 486, it formed a part of New Mexico common

 9 law prior to New Mexico’s adoption of the NIL in 1907. For instance, in Farmers’

10 State Bank of Texhoma, Okla. v. Clayton National Bank, we made clear:

11          The adoption of the Uniform Negotiable Instruments Act introduced no
12          new system. Generally speaking . . . it is merely declaratory of the
13          existing law merchant or common law. Prior to 1907, when we adopted
14          it, a very few sections embodied all of our statute law of negotiable
15          instruments. Our law was the common law, which we adopted in 1876
16          as the rule of practice and decision.

17 1925-NMSC-026, ¶ 17, 31 N.M. 344, 245 P. 543 (citing Section 1345, C.L. 1915).

18 Hence, Phoenix’s suggestion that actions to enforce negotiable instruments did not

19 exist at common law is without merit, and accordingly, its attempt to limit Deutsche

20 Bank’s holding to nonnegotiable instruments fails.

21   {25}   We are also unpersuaded by Phoenix’s assertion that standing is jurisdictional

                                              13
 1 for causes of action that derive from statutory codifications of common law. This

 2 argument is foreclosed by Deutsche Bank’s holding that, for purposes of an action to

 3 enforce a promissory note (which existed at common law and was later codified)

 4 standing is not a jurisdictional prerequisite. See 2016-NMSC-013, ¶¶ 12-14.

 5 3.       A plaintiff’s failure to establish standing in an action to enforce a
 6          promissory note does not divest a district court of the power or authority
 7          to decide the particular matter presented

 8   {26}   Phoenix also attempts to evade the application of Deutsche Bank to this case.

 9 Phoenix argues that, despite Deutsche Bank, Aurora’s failure to establish standing

10 nevertheless deprived the district court of jurisdiction. According to Phoenix,

11 Aurora’s lack of standing divested the court of a jurisdictional concept separate from

12 subject matter jurisdiction—namely, the power or authority to decide the particular

13 matter presented. In support of this contention, Phoenix adverts to this Court’s

14 statement that “[t]here are three jurisdictional essentials necessary to the validity of

15 every judgment: jurisdiction of parties, jurisdiction of subject matter and power or

16 authority to decide the particular matter presented.” Heckathorn v. Heckathorn,

17 1967-NMSC-017, ¶ 10, 77 N.M. 369, 423 P.2d 410; see also In re Field’s Estate,

18 1936-NMSC-060, ¶ 11, 40 N.M. 423, 60 P.2d 945 (same). In Heckathorn, this Court

19 concluded that the lack of power or authority to decide a particular case renders a

                                              14
 1 judgment void. See 1967-NMSC-017, ¶¶ 10-11. In this case, even though the 2009

 2 district court had subject matter jurisdiction, Phoenix suggests that the court’s

 3 judgment was nevertheless void because Aurora’s failure to establish standing

 4 divested the court of the power or authority to decide the matter presented. We are

 5 unpersuaded.

 6   {27}   We have previously doubted but have not decided whether there is a true

 7 distinction between, on the one hand, a court’s power or authority to decide the matter

 8 presented and, on the other, a court’s subject matter jurisdiction. See Sundance Mech.

 9 & Util. Corp. v. Atlas, 1990-NMSC-031, ¶ 13, 109 N.M. 683, 789 P.2d 1250 (“[O]ne

10 may doubt that the distinction serves any useful purpose.”). We now clarify that a

11 court’s power or authority to decide the particular matter presented is not distinct

12 from subject matter jurisdiction.

13   {28}   In the past, this Court has simply used the formulation power or authority to

14 decide the particular matter presented to refer to subject matter jurisdiction for a

15 certain set of claims. New Mexico appellate courts have expressly considered a

16 court’s power or authority to decide the particular matter presented only where a

17 statute created the claim at issue and specifically empowered a court to adjudicate that

18 class of claim. See Heckathorn, 1967-NMSC-017, ¶¶ 10-11 (concluding that the trial

                                              15
 1 court lacked the power to grant a divorce because the parties had not satisfied the

 2 statutory condition of being New Mexico residents for at least one year); Field’s

 3 Estate, 1936-NMSC-060, ¶¶ 32-34 (concluding that the probate court, under statute,

 4 had power or authority to classify certain claims filed against an estate); Quintana v.

 5 State Bd. of Educ., 1970-NMCA-074, ¶¶ 7-8, 81 N.M. 671, 472 P.2d 385 (concluding

 6 that, under statute, the Court of Appeals lacked authority to review a decision of a

 7 state administrative board because that board lacked authority of review where the

 8 local administrative board never conducted a hearing). Accordingly, the power or

 9 authority to decide the particular matter presented is not a separate element of a

10 court’s jurisdiction, but rather a formulation we have used to refer to a court’s subject

11 matter jurisdiction over claims created by statute when the statute makes a court’s

12 power of review dependent upon certain prerequisites. In other words, the power or

13 authority to decide the particular matter presented is simply an older way of

14 describing the same legal proposition that this Court recently explained in AFSCME

15 and Deutsche Bank: where the Legislature creates a cause of action and makes a

16 court’s power of review dependent upon the satisfaction of certain prerequisites

17 regarding, for example, who may commence suit, those prerequisites are conditions

18 on a court’s subject matter jurisdiction. AFSCME, 2016-NMSC-017, ¶ 31; Deutsche

                                              16
 1 Bank, 2016-NMSC-013, ¶ 11.

 2   {29}   We reject the assertion by Phoenix that a court’s power or authority to decide

 3 the particular matter presented is distinct from the court’s subject-matter jurisdiction.

 4 See, e.g., Heckathorn, 1967-NMSC-017, ¶ 10. That formulation, which concerns

 5 causes of actions that are created by statute, is unavailing to Phoenix. As we

 6 explained, the 2009 district court’s jurisdiction over the foreclosure action was not

 7 conferred by statute. Accordingly, the cases in which we have referred to a court’s

 8 power or authority to decide the particular matter presented are inapposite.

 9 C.       Phoenix Is Barred From Asserting a Claim That the 2009 Foreclosure
10          Judgment Should Be Set Aside for Fraud

11   {30}   We now turn to Phoenix’s argument that the 2009 default foreclosure judgment

12 should be set aside for fraud. We granted certiorari to consider whether this Court

13 should uphold current New Mexico law regarding the “procedures and requirements

14 for collaterally attacking judgments” or instead adopt those of the Restatement

15 (Second) of Judgments. In its opinion, the Court of Appeals perceived tensions in

16 New Mexico law concerning attacks on judgments and left “the task of resolving the

17 tension, if any,” to this Court. Phoenix Funding, 2016-NMCA-010, ¶ 44 (quoting

18 State ex rel. Martinez v. City of Las Vegas, 2004-NMSC-009, ¶ 22, 135 N.M. 375, 89

19 P.3d 47 (inviting the Court of Appeals “‘to explain any reservations it might harbor

                                              17
 1 over its application of our precedent’”)). We decided to address this question because

 2 the Court of Appeals’s discussion of Phoenix’s fraud claim might leave the inaccurate

 3 impression that the Restatement (Second) of Judgments §§ 78-80 (Am. Law Inst.

 4 1982) offers Phoenix some means to press its claim that is unavailable under New

 5 Mexico law. See Phoenix Funding, 2016-NMCA-010, ¶¶ 32-44.

 6 1.       New Mexico law regarding relief from judgments is consistent with the
 7          Restatement (Second) of Judgments

 8   {31}   Although the Restatement (Second) of Judgments jettisons the terminology of

 9 “direct attacks” and “collateral attacks,” New Mexico courts have adhered to the use

10 of those terms as shorthand for different ways of seeking relief from judgments.

11 Despite that difference in terminology, we do not perceive New Mexico law

12 concerning relief from final judgments to be inconsistent in substance with the

13 position articulated by the Restatement (Second) of Judgments. Nor do we perceive

14 any tensions in this area of law that are not readily relieved by reference to the course

15 of judicial opinions that have applied it.

16   {32}   To begin, the distinction between direct and collateral attacks in New Mexico

17 case law is well developed:

18          A direct attack on a judgment is an attempt to avoid or correct it in some
19          manner provided by law and in a proceeding instituted for that very
20          purpose, in the same action and in the same court . . . . A collateral

                                                18
 1          attack is [either] an attempt to impeach the judgment by matters [outside
 2          of] the record, in an action other than that in which it was rendered [or]
 3          an attempt to avoid, defeat, or evade it, or deny its force and effect, in
 4          some incidental proceeding not provided by law for the express purpose
 5          of attacking it.

 6 Barela v. Lopez, 1966-NMSC-163, ¶ 5, 76 N.M. 632, 417 P.2d 441 (quoting Lucus

 7 v. Ruckman, 1955-NMSC-014, ¶ 12, 59 N.M. 504, 287 P.2d 68 (1955) (quoting 34

 8 Corpus Juris § 827, at 520-21 (Mack, ed. 1924)), overruled on other grounds by

 9 Kalosha v. Novick, 1973-NMSC-010, 84 N.M. 502, 505 P.2d 845 (1973)); see also

10 Hanratty v. Middle Rio Grande Conservancy Dist., 1970-NMSC-157, ¶¶ 4-5, 82

11 N.M. 275, 480 P.2d 165; Arthur v. Garcia, 1967-NMSC-205, ¶ 6, 78 N.M. 381, 431

12 P.2d 759; Sanders v. Estate of Sanders, 1996-NMCA-102, ¶ 23, 122 N.M. 468, 927

13 P.2d 23.

14   {33}   In Bowers v. Brazell, an early opinion of this Court, we employed a contrary

15 terminology, wherein we used the term “direct attack” in a way that could be read to

16 describe what we would now call a “collateral attack”—namely, an independent

17 action to challenge the validity of a prior judgment. See 1922-NMSC-014, ¶ 3, 27

18 N.M. 685, 205 P. 715. But this Court later noticed that the development of the law

19 specifically rendered the imprecise Bowers formulation anomalous. See Apodaca v.

20 Town of Tome Land Grant, 1971-NMSC-084, ¶ 5, 83 N.M. 55, 488 P.2d 105 (“[T]he

                                               19
 1 later cases clearly suggest that under the definitions of direct and collateral attacks

 2 adopted therein, the present suit would fall within the definition of a collateral

 3 attack . . . .” (citing Barela, 1966-NMSC-163; Lucus, 1955-NMSC-014)). We are

 4 aware that courts around the country have not always been consistent regarding the

 5 referents of the terms “direct attack” and “collateral attack.”         See generally

 6 Restatement (Second) of Judgments, ch. 5 intro. note at 141-42. We now emphasize

 7 that “direct attack” refers to a litigant’s attempt to nullify a judgment through a Rule

 8 1-060(B) motion in the same action and with the same court that rendered the

 9 judgment. A “collateral attack,” by contrast, refers to a litigant’s attempt to nullify

10 a judgment and makes that attempt in a separate action and not through a Rule 1-

11 060(B) motion.

12   {34}   A motion under Rule 1-060(B) is the proper procedure to assert a direct attack

13 on a judgment—i.e., a challenge filed in the same court and in the same manner in

14 which the contested judgment was issued. See, e.g., Barela, 1966-NMSC-163, ¶¶ 2,

15 6 (moving under Rule 1-060(B) to vacate a judgment for lack of jurisdiction over the

16 defendant); Sanders, 1996-NMCA-102, ¶ 22 (“When proceeding by motion under the

17 specific subdivisions of Rule 60(B), the presumption is that the motion must be filed

18 in the district court and in the action in which the judgment was rendered.”).

                                              20
 1   {35}   But Rule1-060(B) does not provide the specific ground on which a litigant may

 2 assert a collateral attack. Although Rule 1-060(B)(6) contemplates independent

 3 actions for relief from judgment, it neither creates nor provides the authority for such

 4 actions. As Rule 1-060(B)(6) states, it “does not limit the power of a court to

 5 entertain an independent action to relieve a party from a judgment, order, or

 6 proceeding, or to set aside a judgment for fraud upon the court.” (Emphasis added).

 7 We observe that the federal courts of appeal have emphasized that this “independent

 8 action,” as noted in the analogous Federal Rule of Civil Procedure 60(d)(1), “was

 9 meant to refer to a procedure which has been historically known simply as an

10 independent action in equity to obtain relief from a judgment. This action should

11 under no circumstances be confused with . . . the 60(b) motion [for relief from a final

12 judgment or order].” Bankers Mortg. Co. v. United States, 423 F.2d 73, 78 (5th Cir.

13 1970) (footnote omitted)); see also Kinder Morgan CO2 Co. v. State Taxation &

14 Revenue Dep’t, 2009-NMCA-019, ¶ 11, 145 N.M. 579, 203 P.3d 110 (“[T]he federal

15 construction of Rule 60(b) is persuasive authority for the construction of Rule 1-

16 060(B).”). In fact, the Court of Appeals has already also made this point clear. See

17 Sanders, 1996-NMCA-102, ¶ 1 (“Rule [1-0]60(B) motions must normally be filed in

18 the original cause of action in the same court in which the challenged judgment was

                                              21
 1 rendered and may not be relied upon to launch a collateral attack in a different cause

 2 of action or a different court.”).

 3   {36}   In contrast to the straightforward procedure for a direct attack under Rule 1-

 4 060(B), New Mexico cases have recognized a limited number of ways in which a

 5 litigant may seek relief from a prior judgment in a proceeding separate from that in

 6 which the judgment was rendered. First, a litigant may file an independent action to

 7 set aside a judgment for fraud, accident, or mistake. Sanders, 1996-NMCA-102, ¶

 8 15. New Mexico has long recognized this cause of action as a matter of common law.

 9 See Apodaca, 1971-NMSC-084, ¶¶ 2, 7 (reversing the dismissal of a complaint in

10 equity attacking the validity of a prior judgment); Brown v. King, 1959-NMSC-088,

11 ¶ 9, 66 N.M. 218, 345 P.2d 748 (“[A]n equity action lies to avoid judgment procured

12 by fraud.”); Day v. Trigg, 1922-NMSC-012, ¶ 7, 27 N.M. 655, 204 P. 62 (deciding

13 on the merits whether a judgment “may be vacated through an independent

14 proceeding . . . solely upon the ground that it was obtained by false testimony”);

15 Sanders, 1996-NMCA-102, ¶¶ 10-17 (assuming and describing an independent action

16 for relief from judgment).

17   {37}   Second, a litigant may file an independent action asserting that a previously

18 rendered judgment was void for lack of jurisdiction. See, e.g., Bonds v. Joplin Heirs,

                                              22
 1 1958-NMSC-095, ¶ 13, 64 N.M. 342, 328 P.2d 597 (upholding collateral attack on

 2 judgment because the trial court that rendered judgment “failed to obtain jurisdiction

 3 of the parties or the subject matter”). Such an action may be properly filed as a claim

 4 for declaratory relief. See Heimann v. Adee, 1996-NMSC-053, ¶ 36, 122 N.M. 340,

 5 924 P.2d 1352 (recognizing that a claim seeking a declaration that the prior judgment

 6 was void for lack of jurisdiction was a collateral attack on the judgment); see also

 7 Restatement (Second) of Judgments, ch. 5 intro. note at 138-39 (“When relief from

 8 a judgment may properly be sought through an independent action, a declaratory

 9 proceeding is usually the functional equivalent of the older equitable suit to enjoin

10 enforcement of a judgment.”). And an action collaterally attacking a previous

11 judgment as void for lack of jurisdiction may also be filed in “other proceedings long

12 after the judgment has been entered.” Chavez v. Cty. of Valencia, 1974-NMSC-035,

13 ¶ 15, 86 N.M. 205, 521 P.2d 1154 (citations omitted).

14   {38}   Third, a litigant may argue (either based on fraud, accident, mistake, or lack of

15 jurisdiction) for relief from judgment in a proceeding both separate from that in which

16 the judgment was rendered and in which the judgment is relied on for a claim or

17 defense. This may occur, for example, where a plaintiff attempts to use a prior

18 judgment as a basis to achieve some further relief, and the defendant, through a

                                               23
 1 counterclaim or motion to dismiss, defensively argues that the court should set aside

 2 the judgment for one of the aforementioned reasons. See, e.g., Hanratty, 1970-

 3 NMSC-157, ¶¶ 3, 6-7 (characterizing a counterclaim in a separate proceeding as a

 4 collateral attack but dismissing because judgment was not obviously invalid); Barela,

 5 1966-NMSC-163, ¶ 5 (noting that “impeaching or overturning of the judgment” may

 6 be necessary to the success of an action that has an independent purpose); St. Paul

 7 Fire & Marine Ins. Co. v. Rutledge, 1961-NMSC-024, ¶¶ 6-10, 68 N.M. 140, 359

 8 P.2d 767 (upholding dismissal of writ of garnishment because the prior judgment was

 9 void for want of personal jurisdiction over the defendant); cf. Restatement (Second)

10 of Judgments § 80, cmt. b, illus. 1 (providing that a litigant may defend against a

11 contempt proceeding on the ground that the underlying judgment awarding injunction

12 is invalid).

13   {39}   In light of the development of New Mexico case law, we do not perceive any

14 irreconcilable inconsistency between our law and the Restatement position regarding

15 relief from judgments. As described above, in New Mexico, a litigant may seek relief

16 from judgment through a direct attack by a Rule 1-060(B) motion, a collateral attack

17 by an independent action in a proceeding separate from that in which the judgment

18 was rendered, and, in some circumstances, a collateral attack by way of a

                                            24
 1 counterclaim or motion to dismiss in a proceeding separate from that in which the

 2 judgment was rendered. The methods by which a litigant may seek relief from a prior

 3 judgment in New Mexico align with those broadly described by Sections 78 through

 4 80 of the Restatement (Second) of Judgments. Phoenix sought to overturn the 2009

 5 default foreclosure judgment in a separate 2012 proceeding, first, by claiming in its

 6 complaint that the judgment was void for lack of jurisdiction and, later, in the

 7 summary-judgment posture, by claiming that the 2009 judgment was procured by

 8 fraud. The Restatement does not add anything to how New Mexico law categorizes

 9 and disposes of Phoenix’s collateral attack.

10 2.       Phoenix’s fraud claim is procedurally barred

11   {40}   Phoenix may not pursue its claim that the 2009 default foreclosure judgment

12 should be set aside for fraud. Phoenix points to Section 80 of the Restatement, but

13 it is unavailing. This section allows for relief from judgment “[w]hen a judgment is

14 relied upon as the basis for a claim or defense” where the litigant has made an

15 “appropriate pleading” and establishes that “the convenient administration of justice

16 would be served by determining the question of relief in the course of the subsequent

17 action.” Restatement (Second) of Judgments § 80. Phoenix did not make an

18 “appropriate pleading,” however, and its fraud claim is procedurally barred.

                                             25
 1   {41}   A litigant may not assert a new claim, long after discovery has commenced,

 2 through argument in a brief supporting or opposing summary judgment or in a cross

 3 motion for summary judgment. Once a case has arrived at the summary judgment

 4 posture, the proper procedure for a plaintiff to assert a new claim is to amend his or

 5 her complaint. We recognize that this is the well-settled federal law. See, e.g.,

 6 Desparois v. Perrysburg Exempted Vill. Sch. Dist., 455 F. Appx. 659, 667 (6th Cir.

 7 2012); Asociacion de Suscripcion Conjunta del Seguro de Responsabilidad

 8 Obligatorio v. Juarbe-Jimenez, 659 F.3d 42, 52-53 (1st Cir. 2011); Gilmour v. Gates,

 9 McDonald & Co., 382 F.3d 1312, 1315 (11th Cir. 2004); Shanahan v. City of

10 Chicago, 82 F.3d 776, 781 (7th Cir. 1996); Fischer v. Metro. Life Ins. Co., 895 F.2d
11 1073, 1078 (5th Cir. 1990). And the “federal construction of the federal rules is

12 persuasive authority for the construction of New Mexico rules.” Albuquerque Redi-

13 Mix, Inc. v. Scottsdale Ins. Co., 2007-NMSC-051, ¶ 9, 142 N.M. 527, 168 P.3d 99.

14 We also note that there are good reasons supporting this procedural bar. To conserve

15 judicial resources and prevent unfair surprise, our liberalized pleading rules “do not

16 permit plaintiffs to wait until the last minute to ascertain and refine the theories on

17 which they intend to build their case.” Green Country Food Mkt., Inc. v. Bottling

18 Grp., LLC, 371 F.3d 1275,1279 (10th Cir. 2004); cf. Dominguez v. Dairyland Ins.

                                             26
 1 Co., 1997-NMCA-065, ¶ 17, 123 N.M. 448, 942 P.2d 191 (“Where a motion to

 2 amend comes late in the proceedings and seeks to materially change [p]laintiff’s

 3 theories of recovery, the court may deny such motion.”).

 4   {42}   Phoenix’s 2012 complaint did not assert an independent claim to set aside the

 5 judgment for fraud. Rather, Phoenix asserted a claim against Aurora and MERS only

 6 for declaratory judgment that the 2009 default foreclosure judgment was void for lack

 7 of standing and a claim for quiet title. Phoenix first asserted its claim that the 2009

 8 judgment should be set aside for fraud in its motion for summary judgment. This was

 9 improper, and Phoenix’s claim for relief from judgment because of fraud is

10 accordingly barred.

11   {43}   Moreover, we note that Phoenix’s claim for relief from judgment, founded on

12 its allegation that the Corporate Assignment of Mortgage was fraudulent, likely fails

13 on the merits. It has long been the law “that [a] court will not set aside a judgment

14 because it was founded on a fraudulent instrument . . . .’” Day, 1922-NMSC-012, ¶

15 14 (quoting United States v. Throckmorton, 98 U.S. 61, 66 (1878)). We make this

16 observation because the mortgage industry in New Mexico requires stability and

17 because we disfavor the uncertainty that Phoenix has attempted to inject through its

18 unmeritorious attempt to overturn a settled foreclosure judgment.

                                              27
1 III.     CONCLUSION

2   {44}   For the reasons set forth above, we reverse the judgment of the Court of

3 Appeals, reinstate the district court’s 2012 grant of summary judgment to Aurora and

4 MERS, and remand to the district court with instructions to dismiss Phoenix’s fraud

5 claim as procedurally barred.

6   {45}   IT IS SO ORDERED.

7                                               ______________________________
8                                               JUDITH K. NAKAMURA, Justice

9 WE CONCUR:

10 ___________________________________
11 CHARLES W. DANIELS, Chief Justice

12 _________________________________
13 PETRA JIMENEZ MAES, Justice

14 ___________________________________
15 EDWARD L. CHÁVEZ, Justice

                                           28
1 _________________________________
2 JAMES J. WECHSLER, Judge, sitting by designation

                                   29