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Los Alamos National Bank v. Velasquez

Court of Appeals of New Mexico

April 25, 2019

GEORGE P. VELASQUEZ, Defendant-Appellant.

          APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY Sarah M. Singleton, District Judge

          Scott & Kienzle, P.A. Duncan Scott Albuquerque, NM for Appellee

          Jay Goodman & Associates Law Firm, P.C. Vanessa L. DeNiro Santa Fe, NM for Appellant



         {¶1} Defendant George P. Velasquez (Homeowner) appeals the district court's order granting in rem summary judgment in favor of Plaintiff Los Alamos National Bank (LANB) in this mortgage foreclosure action. On appeal, Homeowner argues that the district court erred in granting summary judgment because LANB failed to establish that it had standing to enforce Homeowner's note at the time it filed its complaint. Homeowner also argues that the district court erred by permitting LANB, as servicer of the loan, to enforce the note. We conclude LANB had standing to enforce the note, as holder and loan servicer, at the time the complaint for foreclosure was filed and therefore affirm. We need not address Homeowner's remaining issue.


         {¶2} The following facts are undisputed. In March 2007 Homeowner executed a promissory note in favor of LANB for $273, 000, secured by a mortgage. A few years later, Homeowner entered into a home affordable modification agreement with LANB to avoid defaulting on the mortgage. In March 2011 Homeowner defaulted by failing to make payments on the note when due.

         {¶3} On August 23, 2011, LANB filed a complaint for foreclosure against Homeowner. Attached to the complaint was an unindorsed note bearing a statement stamped on the top of the first page by "Title Guaranty & Ins. Co." certifying that it was a true and correct copy of the original note. LANB also attached a copy of Homeowner's mortgage to the complaint.

         {¶4} On February 5, 2012, the district court entered a default judgment in favor of LANB based on Homeowner's failure to answer, and LANB subsequently filed a notice of sale. Shortly thereafter, and before the scheduled sale took place, Homeowner filed for voluntary Chapter 7 bankruptcy in the United States Bankruptcy Court. Within Homeowner's bankruptcy proceedings and on his Schedule D (Creditors Holding Secured Claims), he listed LANB as a secured creditor based on its mortgage, which he valued at $300, 000. On March 22, 2012, seven months after it filed its complaint, LANB deposited the original note, indorsed in blank (the indorsed note), with the district court. Absent from this note was the stamped statement from the title company certifying that it was a true and correct copy.

         {¶5} On June 7, 2012, Homeowner filed a motion to set aside the default judgment, requesting proof that LANB was the proper party to foreclose on the mortgage at the time the complaint was filed. Homeowner argued that his failure to timely answer was excusable neglect under Rule 1-060(B)(1) NMRA and raised the defense of standing. Homeowner also attached a document printed from the Federal National Mortgage Association (Fannie Mae) website indicating that Fannie Mae owned Homeowner's loan, and argued at the motion hearing that LANB had "some explaining to do about where the note went" and how it came to "get [the note] back." The district court found that Homeowner satisfied the requirements of Rule 1-060(B), and set aside the default judgment. Homeowner then filed his answer and raised various affirmative defenses, only one of which is relevant to this appeal: LANB lacks standing to enforce the note and foreclose on the mortgage.

         {¶6} LANB filed three motions for in rem summary judgment. In its first motion, LANB asserted it was entitled to summary judgment because it was the holder of the note and Homeowner was in default. The district court denied LANB's first motion for in rem summary judgment because it did not address Homeowner's affirmative defenses.

         {¶7} In its second motion for in rem summary judgment, LANB included its responses to Homeowner's affirmative defenses and maintained that it could enforce the note because it was the holder. In support of this second motion, LANB attached an affidavit from Jamie Gallegos (the Gallegos affidavit), a loss mitigation specialist at LANB. Gallegos detailed the procedural background of Homeowner's loan and then stated, "[LANB] is the holder of the [n]ote and [m]ortgage." In LANB's reply, it attached an affidavit by Jane Finch (the first Finch affidavit), the LANB loan administrative officer who placed the indorsement on the note. Finch explained that LANB began the process to obtain the original, indorsed note from Fannie Mae twenty-nine days before the complaint was filed. She stated that upon receiving it from Fannie Mae, LANB delivered the original indorsed note to LANB's previous counsel, the Little Law Firm, on August 5, 2011, eighteen days before the foreclosure complaint was filed. Attached to the first Finch affidavit were three exhibits: (1) an e-mail from Jonathan LeDuc of LANB's legal department requesting the original note memorializing Homeowner's loan from Fannie Mae for judgment and foreclosure purposes; (2) a letter from Jonathan LeDuc to the Little Law Firm enclosing the original note for Homeowner's loan; and (3) a Federal Express air bill receipt from Jonathan LeDuc to the Little Law Firm stamped received on August 5, 2011. LANB additionally argued in its reply that Homeowner is judicially estopped from challenging LANB's standing because he acknowledged that LANB was a secured creditor during the course of his bankruptcy proceedings.

         {¶8} At the hearing on LANB's second motion for in rem summary judgment, Homeowner argued:

Opposing counsel states that he has evidence that [LANB] held the note at the time [of] the filing of the complaint, but I don't see that evidence. The exhibit, which I would object to, to admit into court, is hearsay. And it is basically just a cover letter stating that it has the ...

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