Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Wilmington Savings Fund Society, FSB v. Hutchins

United States District Court, D. New Mexico

October 18, 2019

WILMINGTON SAVINGS FUND SOCIETY, FSB, D/B/A CHRISTIANA TRUST AS OWNER TRUSTEE OF THE RESIDENTIAL CREDIT OPPORTUNITIES TRUST III, Plaintiff,
v.
GREGORY HUTCHINS, in his individual capacity and as personal representative of the Estate of SANDRA J. NEILL, and THE UNKNOWN HEIRS, DEVISEES, OR LEGATEES OF SANDRA J. NEILL, Defendants.

          PROPOSED FINDINGS AND RECOMMENDED DISPOSITION

          JERRY H. RITTER, U.S. MAGISTRATE JUDGE

         This matter comes before the Court on Defendant Gregory Hutchins' Motion to Dismiss [Doc. 34');">34], filed March 28, 2019, and fully briefed on April 22, 2019. [See Docs. 35, 38]. Pursuant to 28 U.S.C. § 636(b), presiding District Judge Herrera referred this case to the undersigned Magistrate Judge “to conduct hearings, if warranted, including evidentiary hearings, and to perform any legal analysis required to recommend to the Court an ultimate disposition of the case.” [Doc. 46]. At issue in Mr. Hutchins' Motion is whether the Court has subject matter jurisdiction over the parties, whether Plaintiff Wilmington Savings has standing to bring the present action, and whether it has adequately stated a claim for in rem foreclosure of the subject property. Having considered the parties' arguments and all pertinent authority, the undersigned recommends that Defendant's Motion to Dismiss be DENIED.

         I. INTRODUCTION

         Wilmington Savings seeks an in rem judgment of foreclosure against the former property of Ms. Sandra J. Neill, more commonly known as 929');">29');">29');">29 Purple Aster Dr., Bernalillo, New Mexico. Mr. Hutchins, who claims an interest in the property post-dating Ms. Neill's default, moves under Federal Rule of Civil Procedure 12 to dismiss Wilmington Savings' Complaint for lack of subject matter jurisdiction, lack of standing, and failure to state a claim. Mr. Hutchins' arguments are primarily based on his contention that Wilmington Savings does not exist as a legal entity and therefore cannot demonstrate the requirements of diversity of citizenship. Alternatively, Mr. Hutchins argues that Wilmington Savings has failed to demonstrate its ownership of the debt sufficient to demonstrate Article III standing and to state a claim under New Mexico law. For the reasons that follow, the Court disagrees.

         II. BACKGROUND

         Plaintiff, “Wilmington Savings Fund Society, FSB, d/b/a, Christiana Trust as Owner Trustee of the Residential Credit Opportunities Trust III, ” [Doc. 1, p. 1] (hereinafter “Wilmington Savings”), filed its Complaint for In Rem Foreclosure against Sandra J. Neill on April 13, 2018. [See generally Doc. 1]. Attached to the Complaint is a copy of a promissory note, dated May 23, 2007, and indorsed in blank, bearing Ms. Neill's signature and evidencing a debt in the principal sum of $225, 000.00 with a fixed interest rate of 6.875% per annum until paid. [See Doc. 1-2]. Also attached to the Complaint is a copy of a recorded mortgage, dated June 26, 2007, bearing Ms. Neill's signature and securing the Note by reference to:

Lot numbered One Hundred Ninety-five (195) of THE ORCHARD'S UNIT 3, being a replat of Tract 3 of the Orchard's, as the same is shown and designated on the plat thereof, filed in the Office of the County Clerk of Sandoval County, New Mexico, on January 31, 2005, in Vol. 3, Folio 2499B (Book 408, Page 34');">3428, as Document No. 2005034');">3428).

         This property is more commonly known as 929');">29');">29');">29 Purple Aster Dr., Bernalillo, New Mexico. [See Doc. 1-3]. Also attached to the Complaint is an affidavit of Wilmington Savings' counsel, stating that his law firm is in possession of the original note that is the subject of this suit. [See Doc. 1-4].

         On June 13, 2018, Ms. Neill filed a Notice of Filing of Petition of Bankruptcy, thereby staying these proceedings. [See Doc. 9]. On September 20, 2018, Wilmington Savings filed a Notice Regarding Closing of Bankruptcy and Discharge. [See Doc. 10]. On September 21, 2018, Mr. Hutchins, claiming to be “Executor of the Estate of Sandra J. Neill, ” filed a Suggestion of Death informing the Court of Ms. Neill's death. [See Doc. 12]. After briefing, District Judge Herrera granted Wilmington Savings' Motion to Amend its Complaint to substitute Mr. Hutchins as well as any unknown heirs who make claim an interest in the subject property as Defendants in light of Ms. Neill's death. [See Docs. 13, 28]. Wilmington Savings filed its Amended Complaint naming Mr. Hutchins in his individual capacity and as personal representative of the estate of Ms. Neill and her unknown heirs, devisees or legatees on March 1, 2019. [Doc. 30].

         On March 28, 2019, Mr. Hutchins filed the instant Motion. [Doc. 34');">34]. In it, he raises three issues. First, Mr. Hutchins argues there is no diversity jurisdiction because Wilmington Savings does not exist as a legal entity and cannot claim citizenship of any state. [Doc. 34');">34, pp. 5-8]. Second, Mr. Hutchins argues that Wilmington Savings has no standing to bring the present action because it has no legally cognizable existence and, therefore, cannot suffer an injury in fact as required by Article III. [Doc. 34');">34, pp. 8-11]. Finally, Mr. Hutchins argues that Wilmington Savings has failed to state a claim because it “has not alleged facts that would allow the reasonable inference that it is the owner or assignee of the beneficial interest in the debt.” [Doc. 34');">34, p. 20].

         On April 11, 2019, Wilmington Savings filed a Response. [Doc. 35]. In it, Wilmington Savings presents evidence of its legal existence, and argues that the Amended Complaint plausibly alleges its capacity to sue as a statutory trust along with the requirements of diversity jurisdiction. [Doc. 35, p. 12; see Docs. 35-1, 35-2]. Wilmington Savings also argues that it has standing to foreclose under New Mexico law because the Complaint included as attachments (1) a scanned reproduction of the original promissory note at issue in this lawsuit; and (2) an affidavit from an employee of Lewis Roca Rothgerber Christie LLP attesting that this original promissory note was in the possession of the law firm at the time of filing suit. [Id., pp. 2-3]. Wilmington Savings also argues that it has adequately pled Article III standing because it has suffered a “defined economic injury” due to the fact that Ms. Neill and any successor now claiming an interest in the subject property have failed to pay the obligations under the mortgage. [Doc. 35, pp. 10-12]. Wilmington Savings can trace this injury to Defendant Hutchins and any individuals who may claim an interest in the property. As to redressability, Wilmington Savings argues that “the federal court system can easily provide relief through in rem relief against the real estate at issue in the dispute, ” explaining that “[t]he standard remedy afforded in a mortgage foreclosure dispute is to move forward with a foreclosure auction under the oversight of a special master.” [Id., p. 11]. Thus, Wilmington Savings argues that the Amended Complaint plausibly alleges a right to relief on the loan obligation consistent with Rule 12(b)(6) standards because a borrower's failure to pay the loan obligation permits it, as the mortgagee, to pursue suit on the mortgage. [Doc. 35, p. 13].

         On April 22, 2019, Mr. Hutchins filed a Reply, largely restating his arguments in support of the Motion. [See Doc. 38].

         III. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.