US Bank v. Rodriguez, 35,096

Background

In 2000 Paul Rodriguez executed a note and mortgage to Express Capital Lending (ECL) for a Santa Fe residence. U.S. Bank later sought to enforce the note and foreclose.
Foreclosure I (2009): U.S. Bank sued; Rodriguez moved to dismiss for lack of standing because the note/mortgage were not indorsed/assigned to U.S. Bank. Counsel exchanged documents showing undated indorsements to intermediary entities; U.S. Bank did not oppose a proposed order and the court dismissed Foreclosure I with prejudice in 2011.
Foreclosure II (2011): U.S. Bank (new counsel) refiled the same claim attaching the same documentary materials plus a 2011 assignment from Impac to U.S. Bank. Rodriguez moved for summary judgment arguing (1) U.S. Bank lacked standing under Romero and (2) Foreclosure II was barred by claim preclusion due to Foreclosure I.
After the summary-judgment hearing U.S. Bank filed a 2015 certificate attaching an "allonge" purporting to indorse the note to U.S. Bank; the district court found the allonge was created in 2015 and not effective at filing.
The district court granted summary judgment for Rodriguez, holding U.S. Bank lacked standing under Romero and that Foreclosure II was barred by claim preclusion; it dismissed Foreclosure II with prejudice. The Court of Appeals reversed only the with-prejudice dismissal and remanded to dismiss without prejudice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did U.S. Bank have standing to enforce the note and foreclose?	U.S. Bank claimed it either was a holder or transferee and later obtained an allonge showing indorsement.	Rodriguez argued U.S. Bank lacked holder/transferee status at the time of filing because the note was not specially indorsed to it.	Held: U.S. Bank lacked standing at filing; undated/allonge evidence did not cure standing as of filing.
Was dismissal for lack of standing an adjudication on the merits (i.e., dismissal with prejudice)?	U.S. Bank argued dismissal should be without prejudice because lack of standing is not a merits adjudication and parties can later obtain standing.	Rodriguez argued dismissal with prejudice was proper and Foreclosure I precluded refiling.	Held: Dismissal for lack of standing is not on the merits; should be without prejudice.
Did Foreclosure I's dismissal preclude Foreclosure II under claim preclusion?	U.S. Bank argued Foreclosure I’s dismissal was not on the merits and thus not claim-preclusive.	Rodriguez argued the 2011 dismissal with prejudice barred refiling.	Held: Foreclosure I did not have claim-preclusive effect; it was not an adjudication on the merits despite the "with prejudice" label.
Could the 2015 allonge retroactively cure standing for the 2011 complaint?	U.S. Bank argued possession/transfer later gave it transferee standing or cured defects.	Rodriguez maintained subsequent documents cannot establish standing as of the filing date.	Held: Post-filing allonge did not establish standing at the time of filing; it did not cure the defect for purposes of the prior complaint.

Key Cases Cited

Bank of New York v. Romero, 320 P.3d 1 (N.M. 2014) (holder/transferee status must be established at time of filing; mere possession later is insufficient)
Deutsche Bank Nat’l Trust Co. v. Johnston, 369 P.3d 1046 (N.M. 2016) (standing to enforce note is jurisprudential, must be proven as of the filing date; undated indorsements are insufficient)
Bank of New York v. Romero, 382 P.3d 991 (N.M. Ct. App. 2016) (dismissal for lack of standing is not necessarily claim-preclusive; courts should look behind "with prejudice" language)