Deutsche Bank v. Todd
33,789
N.M. Ct. App.Oct 24, 2016Background
- Deutsche Bank filed an original foreclosure complaint (Sept. 2011) against Robert Todd attaching a Note payable to First Magnus, the Mortgage, and an Assignment; the attached Note had no indorsements.
- Deutsche Bank amended the complaint (Feb. 2012) but still attached the unindorsed Note.
- About two years later, when moving for summary judgment (Mar. 2013), Deutsche Bank produced a copy of the Note that included two undated special indorsements (First Magnus → Residential Funding → Deutsche Bank) and submitted an affidavit (Cunningham) stating the bank possessed the original Note at the time of filing.
- Todd opposed summary judgment, pointing out the original complaint attached an unindorsed Note and producing a 2013 servicer/owner letter indicating Residential Funding owned the account.
- The district court granted summary judgment and denied reconsideration after Romero, but the Court of Appeals reversed, finding material factual disputes about whether Deutsche Bank had standing when the complaint was filed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff had standing to foreclose at the time the complaint was filed | Deutsche Bank: possession of the original Note (per Cunningham affidavit) and later-produced indorsements show it is holder entitled to enforce the Note | Todd: Note attached to the complaint lacked indorsements; later-produced undated indorsements cannot prove standing at filing; servicer letter shows Residential Funding owned the account | Reversed summary judgment — genuine issues of material fact remain whether Deutsche Bank was holder at filing; undated indorsements produced later are insufficient to prove standing at filing (per Johnston) |
| Whether Romero and related precedents apply retroactively | Deutsche Bank: district court relied on Romero as distinguishable | Todd: Romero and Beneficial should control | Held: Johnston clarifies standing-at-filing is a long-standing rule and Romero/Beneficial apply retroactively; standing is prudential and may be raised anytime in active litigation |
| Whether undated special indorsements produced at summary judgment establish holder status at filing | Deutsche Bank: indorsements on the Note (produced with motion) show chain of ownership to Deutsche Bank | Todd: indorsements are undated and thus do not establish possession at filing; later production cannot cure lack in complaint | Held: Undated indorsements produced after filing do not establish standing at the time of filing; distinction between blank and special indorsements is immaterial for timing issue |
| Proper remedy where standing at filing is not established | Deutsche Bank: summary judgment appropriate | Todd: case should be dismissed with prejudice | Held: Remand for further proceedings (not dismissal); material factual disputes require trial or further adjudication, per Johnston and remand precedent |
Key Cases Cited
- Deutsche Bank Nat'l Trust Co. v. Johnston, 369 P.3d 1046 (N.M. 2016) (holding standing in foreclosure must be proved as of filing, is a prudential requirement, and later-produced undated indorsements do not establish standing at filing)
- Bank of New York v. Romero, 320 P.3d 1 (N.M. 2014) (mere possession of an unindorsed third-party note does not establish entitlement to enforce it)
- Deutsche Bank Nat'l Trust Co. v. Beneficial New Mexico, Inc., 335 P.3d 217 (N.M. Ct. App. 2014) (bank must show possession/supporting documentation at time complaint filed; later-produced differing note insufficient)
- Maestas v. Zager, 152 P.3d 141 (N.M. 2007) (remand is appropriate when summary judgment is reversed and genuine material facts remain in dispute)