Wells Fargo Bank, N.A. v. City of Gallup
150 N.M. 706
| N.M. Ct. App. | 2011Background
- Foreclosure action on motel secured by deed of trust; City recorded lodger’s tax and utility liens on the property.
- Bank moved for foreclosure; City stated its liens were junior but then sought priority over the deed of trust.
- Final judgment approved by all parties and stayed judicial sale pending Navajo Nation sale; City’s liens were declared junior to the deed of trust.
- Navajo Nation sale failed; City sought relief under Rule 1-060(B) asserting lodger’s tax and utility liens had priority over the deed of trust.
- District court granted relief, holding the lodger’s tax lien had priority under 3-38-18.1(B) and that the City’s utility lien also had priority, and the Bank appealed.
- Bank contends Rule 1-060(B) motion was untimely and that the court abused its discretion in reopening the case; City contends timely filing and proper exercise of discretion to address first-impression issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §3-38-18.1 provides priority to lodger’s tax lien over deed of trust | City argues lodger’s tax lien has priority | Bank argues priority should follow first-in-time doctrine | Yes; lodger’s tax lien has priority over deed of trust under §3-38-18.1(B) when enforced in a judicial sale context |
| Whether the district court properly reopened the judgment under Rule 1-060(B) | City contends reopening was necessary to correct error | Bank argues reopening was improper and untimely | Yes; the court did not abuse discretion in reopening to address the priority issue |
| Timeliness of City’s Rule 1-060(B) motion | Motion timely under Rule 1-060(B)(1) or (6) | Motion untimely under Rule 1-060(B) timing rules | Timely; not barred by direct-appeal time limitations |
| Relation of Subsection A and Subsection B of §3-38-18.1 | Subsection A governs enforcement by municipalities; Subsection B governs priority in judicial sales | Cannot reconcile with first-in-time doctrine; Bank argues conflict | Subsections (A) and (B) govern different contexts; Subsection B controls here, giving City priority from sale proceeds |
| Application of the first-in-time doctrine | Plain language controls; statute creates explicit priority | Common law priority should apply absent explicit legislative grant | Statutory language controls; Section 3-38-18.1 creates priority for lodger’s tax lien over sale proceeds |
Key Cases Cited
- Resolution Trust Corp. v. Ferri, 120 N.M. 320 (1995) ( Rule 1-060(B) context; use of relief from judgment governed by discretionary principles)
- Deerman v. Board of County Commissioners, 116 N.M. 501 (Ct. App. 1993) (Rule 1-060(B) not used to circumvent appeal; timing considerations)
- Click v. Litho Supply Co., 95 N.M. 419 (1979) (Relief under Rule 1-060 is discretionary; merits-based inquiry)
- Koppenhaver v. Koppenhaver, 101 N.M. 105 (Ct. App. 1984) (Substance governs rather than nomenclature in Rule 1-060(B) relief)
- Phelps Dodge Corp. v. Guerra, 92 N.M. 47 (1978) (Good-cause standard for vacating judgments; liberal approach)
- Ballard v. Miller, 87 N.M. 86 (1974) (Stipulations enforced absent good cause for relief)
- United States v. Atlantic Mun. Corp., 212 F.2d 709 (5th Cir. 1954) (Federal priority principles; legislative intent controls over common law)