365 P.3d 8
N.M. Ct. App.2015Background
- In 2006 Kirsten Hood executed a promissory note (payable to GreenPoint) and a mortgage recorded with MERS as nominee for GreenPoint.
- In March 2009 Aurora sued to foreclose, and a default foreclosure judgment was entered against Hood in October 2009.
- In November 2011 Hood quitclaimed the property to Gregory Hutchins (Phoenix’s sole member); Hutchins defaulted and Phoenix (successor in interest) brought a quiet-title/foreclosure action attacking the validity of the 2009 judgment.
- Phoenix argued Aurora never had the right to enforce the note when it filed in 2009 (no proper indorsement/possession), so the district court lacked subject-matter jurisdiction and the judgment was void.
- The district court granted summary judgment to Aurora, finding Phoenix’s challenge an improper collateral attack barred by res judicata. Phoenix appealed.
- The Court of Appeals held Aurora failed to show it had enforceable possession/standing in March 2009, so the original judgment was void for lack of jurisdiction; res judicata therefore did not bar Phoenix’s challenge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose: was Aurora the holder entitled to enforce the note when suit was filed? | Aurora lacked enforceable possession/indorsement of the Hood note in March 2009, so the foreclosure was unauthorized. | Aurora contends it had standing and Phoenix cannot collaterally attack because Phoenix acquired its interest after the judgment. | Held for Phoenix: Aurora did not present admissible evidence that it was holder when suit was filed; genuine issue not met for summary judgment. |
| Effect of lack of standing: does lack of standing deprive the court of subject-matter jurisdiction? | Lack of standing to enforce the note makes the foreclosure statutory cause defective and deprives the court of jurisdiction. | Aurora argues lack of standing is not the same as lack of subject-matter jurisdiction and that any defect is merely voidable. | Held for Phoenix: under New Mexico precedent (Romero, ACLU reading), standing is a jurisdictional prerequisite here; lack of standing rendered the judgment void. |
| Successor-in-interest’s right to attack judgment: can Phoenix (post-judgment acquirer) collaterally attack prior judgment in a subsequent quiet-title action? | Yes — successors may bring collateral attacks based on lack of jurisdiction; no time limit for asserting voidness. | Aurora argues Phoenix lacked standing to challenge because it was not a party and acquired interest after judgment. | Held for Phoenix: successors in interest may collaterally attack void judgments; Phoenix has standing to challenge the prior default foreclosure. |
| Preclusion/res judicata: does the 2009 foreclosure judgment bar Phoenix’s claims? | A void judgment has no claim-preclusive effect, so res judicata does not bar Phoenix. | Aurora argued the 2009 judgment was final on merits and binds successors, so res judicata prevents relitigation. | Held for Phoenix: because the underlying judgment is void, it cannot serve as res judicata; summary judgment based on res judicata reversed. |
Key Cases Cited
- Romero v. Philip Morris Inc., 242 P.3d 280 (N.M. 2010) (summary judgment standard and courts disfavor summary judgment)
- Walls v. Erupcion Mining Co., 6 P.2d 1021 (N.M. 1931) (judgments rendered without authority are nullities and may be attacked at any time)
- Heckathorn v. Heckathorn, 423 P.2d 410 (N.M. 1967) (three jurisdictional essentials and judgment void where court lacked authority)
- Hanratty v. Middle Rio Grande Conservancy Dist., 480 P.2d 165 (N.M. 1970) (successor-in-interest allowed to collateral attack default foreclosure for lack of jurisdiction)
- Bank of N.Y. v. Romero, 320 P.3d 1 (N.M. 2014) (party must show right to enforce note at time foreclosure suit was filed)