United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
matter comes before the Court upon “Defendants [sic]
Motion for Relief from Judgment for Fraud in the Inducement,
Constructive Fraud, Misconduct/Misrepresentation”
(Motion for Relief), filed March 1, 2018. (Doc. 164).
Defendants bring the Motion for Relief under Fed.R.Civ.P.
60(b)(2) (newly discovered evidence) and 60(b)(3) (fraud,
misrepresentation or misconduct). Defendants challenge the
Court's March 1, 2017, entry of summary judgment in favor
of Plaintiff Volt Asset Holdings Trust XVI (Volt) and against
Defendants. (Docs. 140 and 141). Volt filed a response to the
Motion for Relief on March 2, 2018, and Defendants filed a
reply on March 16, 2018. (Docs. 166 and 167). Having reviewed
the Motion for Relief and the accompanying briefs, the Court
denies the Motion for Relief.
Arguments Raised for the First Time in the Reply
initial matter, the Court notes that Defendants raise
arguments in their reply that they did not raise in the
Motion for Relief. Movants, however, waive arguments that
they raise for the first time in a reply. See United
States v. Hodges, 684 Fed.Appx. 722, 728 (10th Cir.
2017) (finding that movant waived argument he did not raise
until reply brief); United States v. Harrell, 642
F.3d 907, 918 (10th Cir. 2011) (“[A]rguments raised for
the first time in a reply brief are generally deemed
waived.”); Stump v. Gates, 211 F.3d 527, 533
(10th Cir. 2000) (noting court will not ordinarily review
issues raised for first time in reply brief). The Court,
therefore, deems the new arguments raised in Defendants'
reply as waived and will not address those arguments.
move for relief under both Rule 60(b)(2) and (3). Relief
under Rule 60(b), generally, is discretionary and is
warranted only in exceptional circumstances. Van Skiver
v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991).
Rule 60(b) relief “is not properly granted where a
party merely revisits the original issues and seeks to
challenge the legal correctness of the district court's
judgment by arguing that the district court misapplied the
law or misunderstood the party's position.”
Lebahn v. Owens, 813 F.3d 1300, 1306 (10th Cir.
2016) (brackets and internal quotation marks omitted).
Furthermore, Rule 60(b) relief is not “an appropriate
vehicle to advance new arguments or supporting facts that
were available but not raised at the time of the original
argument.” Id. Rather, “[p]arties
seeking relief under Rule 60(b) have a higher hurdle to
overcome because such a motion is not a substitute for an
appeal.” Zurich N. Am. v. Matrix Serv., Inc.,
426 F.3d 1281, 1289 (10th Cir. 2005) (internal quotation
addition, a Rule 60(b) motion “must be made within a
reasonable time-and for reasons … (2), and (3) no more
than a year after the entry of the judgment….”
Fed.R.Civ.P. 60(c)(1). As the Tenth Circuit explained,
“A motion is not timely merely because it has been
filed within one year of the judgment.” White v.
Am. Airlines, Inc., 915 F.2d 1414, 1425 (10th Cir.
1990). “There must be a ‘sufficient justification
for the delay … taking into consideration the interest
in finality, the reason for delay, the practical ability of
the litigant to learn earlier of the grounds relied upon, and
prejudice to other parties'….” Saggiani
v. Strong, 718 Fed.Appx. 706, 710 (10th Cir. 2018)
(quoting Mullin v. High Mountain, 182 Fed.Appx. 830,
833 (10th Cir. 2006); Sorbo v. United Parcel Serv.,
432 F.3d 1169, 1178 (10th Cir. 2005)).
Timeliness of the Motion for Relief
base their Motion for Relief on that fact that on August 14,
2017, they “ordered a Securitization Audit/Mortgage
investigation” which provided “evidence of the
securitization and transactions from the
inception/origination of the instant Loan/Note.” (Doc.
164) at 2. That investigation was apparently completed by the
end of August 2017. (Doc. 164-2) at 2-3. Defendants also base
their Motion for Relief on a letter dated July 14, 2017,
which states that the mortgage loan at issue was sold to
Upland Mortgage Loan Trust (Upland). (Doc. 163-5).
Defendants filed the Motion for Relief exactly a year from
the March 1, 2017, summary judgment determination, Defendants
must still show that they had a sufficient justification for
waiting until the last day of the one-year period to file the
Motion for Relief. The Court notes that Defendants chose to
file the Motion for Relief after the property at issue was
sold on February 20, 2018, despite having the information
from the “Securitization Audit/Mortgage”
investigation in August 2017, six months prior to the sale,
and knowledge of the sale of the mortgage loan in July 2017,
seven months prior to the sale. Filing the Motion for Relief
after the sale of the property certainly adversely affects
the interest in the finality of the property sale.
Consequently, granting the Motion for Relief at this time
will prejudice the purchaser of the property, who believes
that the property was lawfully sold to it and that it now has
lawful ownership of the property. Defendants also have not
explained why they waited until after the sale of the
property, and a year after the Court entered its summary
judgment, to file the Motion for Relief. Additionally, as a
practical matter, Defendants could have sought a
“Securitization Audit/Mortgage” investigation any
time prior to the Court's entry of the summary judgment
in March 2017. Considering the above factors, the Court finds
that Defendants have not demonstrated a sufficient
justification for their delay in filing this Motion for
Relief. Hence, the Motion for Relief is untimely and should
be denied for that reason. In the alternative, even if
Defendants timely filed the Motion for Relief, the Court
would deny the Motion for Relief for the reasons described
Rule 60(b)(2)(newly discovered evidence)
argue first that the Court should grant the Motion for Relief
under Rule 60(b)(2) because they discovered new evidence
after the Court entered the March 2017 summary judgment.
Specifically, Defendants claim that the August 2017
“Securitization Audit/Mortgage” investigation
produced new evidence while the sale of the mortgage loan to
Upland in July 2017 constitutes new evidence.
60(b)(2) provides that a court can grant relief from a
judgement if there is “newly discovered evidence that,
with reasonable diligence, could not have been
discovered” beforehand. To qualify for relief under
Rule 60(b)(2), the moving party must show: (1) the evidence
was newly discovered since the entry of the judgement; (2)
the moving party was diligent in discovering the new
evidence; (3) the newly discovered evidence is not merely
cumulative or impeaching; (4) the newly discovered evidence
is material; and (5) reconsideration with the newly
discovered evidence would probably produce a different
result. See Dronsejko v. Thornton, 632 F.3d 658, 670
(10th Cir. 2011). “[L]earning of a new legal theory is
not the discovery of new evidence” nor is the
simple existence of an investigation considered new evidence.
F.D.I.C. v. Arciero, 741 F.3d 1111, 1118 (10th Cir.
noted above, Defendants could have obtained a
“Securitization Audit/Mortgage” investigation
prior to the entry of the Court's summary judgment in
March 2017. In that respect, Defendants were not diligent in
obtaining that evidence. Moreover, in trying to comprehend
Defendants' convoluted arguments, the Court is
hard-pressed to find that the investigation produced material
evidence that would have probably produced a different
result, i.e., that Defendants could continue to default on
the note at issue without any consequence. Finally,
Defendants' discovery of new legal theories arising from
the “Securitization/Audit Mortgage” investigation
and the investigation itself do not constitute new evidence.
For the foregoing reasons, a Rule 60(b)(2) motion for relief
based on the August 2017 “Securitization
Audit/Mortgage” investigation is without merit.
respect to the sale of the mortgage loan to Upland, the Court
observes that Fed.R.Civ.P. 25(c) states: “If an
interest is transferred, the action may be continued by or
against the original party unless the court, on motion,
orders the transferee to be substituted in the action or
joined with the original party.” “The most
significant feature of Rule 25(c) is that it does not require
that anything be done after an interest has been transferred.
The action may be continued by or against the original party,
and the judgment will be binding on the successor in interest
even though the successor is not named.” 7C Wright,
Miller & Kane, Federal Practice and Procedure: Civil
3d § 1958 at 696. Rule 25(c) is merely a
procedural device to facilitate litigation. Luxliner P.L.
Exp., Co. v. RDI/Luxliner, Inc., 13 F.3d 69, 71-72 (3d
Cir. 1993). Importantly, “Rule 25(c) does not
ordinarily alter the ...