U.S. Bank v. Chavez
35,638
| N.M. Ct. App. | May 31, 2017Background
- U.S. Bank, as trustee (Plaintiff), filed a foreclosure complaint alleging Marcus and Lorraine Chavez executed a mortgage and note, and attached the note (indorsed in blank), mortgage, assignment, and loan modification to the complaint.
- The mortgage had been assigned to U.S. Bank (by MERS) in August 2012; the foreclosure complaint was filed in December 2012.
- Defendants (the Chavezes) defended pro se; both signed the answer, but only Marcus Chavez (pro se) appealed the district court’s denial of a motion to vacate the judgment and dismiss for lack of standing.
- Appellant challenged Plaintiff’s standing to foreclose, relying primarily on Bank of N.Y. v. Romero and Deutsche Bank Nat’l Trust Co. v. Johnston.
- The Court of Appeals found the complaint attached a note indorsed in blank and an assignment of mortgage predating the complaint, concluding Plaintiff was the holder of the note and had standing to foreclose.
- Appellant’s late-raised challenge to the trustee status of Plaintiff and a motion to amend the docketing statement were denied as non-viable and untimely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose | U.S. Bank was the holder in due course of the note (note indorsed in blank attached to complaint) and had been assigned the mortgage before filing | Bank’s mere possession of the note and the MERS mortgage assignment do not prove the right to enforce the note (relying on Romero/Johnston) | Held: Plaintiff had standing — note was indorsed in blank and in Plaintiff’s possession at filing; assignment of mortgage predated complaint |
| Effect of MERS assignment | Assignment of mortgage to U.S. Bank occurred before suit and supports foreclosure right when combined with possession of indorsed note | Assignment alone cannot transfer note rights; MERS assignment ineffective if note not transferred | Held: MERS assignment did not need to alone transfer the note because Plaintiff also presented the indorsed-in-blank note; Romero distinguished on facts |
| Plaintiff’s capacity as trustee to hold note (raised on appeal) | (Not argued below) — Plaintiff presented note and assignment showing enforceable rights | Appellant argued trustee status affects standing | Held: Issue raised first on appeal; motion to amend docketing statement denied as non-viable and untimely |
| Appellate representation of co-defendant Lorraine Chavez | Plaintiff treats mortgage as signed by both spouses; Marcus appealed only for himself | Marcus (pro se) cannot represent Lorraine on appeal | Held: Marcus cannot represent Lorraine; but outcome applies equally to her because both executed the mortgage |
Key Cases Cited
- Bank of N.Y. v. Romero, 320 P.3d 1 (2014) (New Mexico Supreme Court — possession alone cannot establish right to enforce a note when no indorsement or transfer evidence exists)
- Deutsche Bank Nat’l Trust Co. v. Johnston, 369 P.3d 1046 (2016) (New Mexico Supreme Court — assignment of mortgage does not by itself prove transfer of the note)
- Chisholm v. Rueckhaus, 948 P.2d 707 (1997) (New Mexico Court of Appeals — non-attorneys cannot represent others in legal proceedings)
- State v. Rael, 668 P.2d 309 (1983) (New Mexico Court of Appeals — standards for motions to amend a docketing statement on summary calendar)