Brown v. Trujillo

Decision Date28 January 2004
Docket NumberNo. 23,529.,23,529.
Citation135 N.M. 365,88 P.3d 881,2004 NMCA 40
PartiesPeter Mack BROWN, Petitioner-Appellant, v. C.B. TRUJILLO, Respondent-Appellee.
CourtCourt of Appeals of New Mexico

Jane Bloom Yohalem, Santa Fe, for Appellant.

Jacob D. Caldwell, Stephen Natelson, Natelson Law Firm, Taos, for Appellee.

Certiorari Denied, No. 28,545, April 1, 2004.



{1} Petitioner (Debtor) appeals the trial court's grant of summary judgment, which dismissed his petition to redeem property sold under judgment or decree of foreclosure. Debtor argues that the trial court erred in finding that he had not substantially complied with the redemption statute as a matter of law. Debtor also contends that genuine issues of material fact exist to preclude the trial court's denial of an extension of the redemption period in equity, but we interpret his argument as raising the issue of law of whether, when viewing the facts in the light most favorable to Debtor, equity permits the trial court to grant an extension. Finally, Debtor asserts that Respondent (Purchaser) waived his right to strict compliance with the redemption statute by agreeing to issue a quitclaim deed in exchange for the redemption price. We affirm.


{2} Debtor owned a tract of property in Tres Piedras, New Mexico, on which a predecessor to Chase Manhattan Bank (Chase) held a mortgage. In June 2000, Chase began foreclosure proceedings that concluded with a foreclosure judgment against Debtor in November 2000. At a sheriff's sale of the property on October 24, 2001, Purchaser acquired the property. The order confirming the sale was not issued until December 21, 2001.

{3} When the court entered the order confirming the sale, the time for Debtor to exercise his right to redemption commenced. See NMSA 1978, § 39-5-18 (1987). Debtor's mortgage had shortened the redemption period to one month. See NMSA 1978, § 39-5-19 (1965) (permitting the nine-month statutory period for redemption to be shortened by contract to not less than one month). The parties operate under the assumption that the final day for redemption was January 20, 2002. But see U.S. Bank Nat'l Ass'n v. Martinez, 2003-NMCA-151, ¶ 5, 134 N.M. 665, 81 P.3d 608 (holding that one-month period means a calendar month so that redemption period for a sale confirmed on December 21 would end on January 21).

{4} Debtor made arrangements with Arriba Mortgage Company to secure private financing that would enable him to redeem the property. Debtor worked with Taos Title Company (Taos Title), which contacted Purchaser. According to Debtor, Purchaser agreed to come to a closing on January 11, 2002, where he would execute a quitclaim deed in exchange for the full amount required for redemption. On January 11th, Purchaser did not come to the closing, although Debtor had deposited the funds in escrow with Taos Title. On January 14th, a representative of Taos Title called Purchaser, and Purchaser denied having ever agreed to come to the closing and stated that he was unwilling to deal with Debtor. The private lenders from whom Arriba Mortgage had secured financing would not agree to place their funds in the district court registry to effect redemption. In the remaining six days before the expiration of the redemption period, Debtor was unable to find any alternative financing.

{5} On January 17, 2002, Debtor filed a petition to redeem property sold under judgment or decree of foreclosure (Petition). The Petition was not accompanied by the deposit of funds with the clerk of the district court, as prescribed by Section 39-5-18(A)(2). Instead, Debtor requested that the district court "waive any requirement of deposit of funds with the Court" because "all funds needed to satisfy the [Purchaser] have been available at Taos Title Company ... and cannot be released to [Purchaser] until he signs a QuitClaim deed to [Debtor]." Debtor attached an affidavit from the Special Master in the foreclosure case, which stated that the Special Master had informed Purchaser that the funds were available at Taos Title and that Purchaser had not completed the closing. The Petition also alleged intentional infliction of emotional distress, a claim that was dismissed by the trial court and is not at issue in this appeal.

{6} Purchaser answered that Debtor had failed to state a claim on which relief could be granted, and he counterclaimed for quiet title and declaratory judgment confirming the sale of the property. He also made a claim for unlawful detainer and rent, which was subsequently settled and is not at issue on appeal. Purchaser then moved for summary judgment, arguing that there was no genuine issue of material fact and that Debtor had failed to meet the statutory requirements for redemption as a matter of law. In response, Debtor put forth the arguments that he had substantially complied with the requirements of the redemption statute and that he was entitled to an extension of the redemption period in equity.

{7} After a hearing on July 22, 2002, the trial court issued an oral ruling granting summary judgment for Purchaser. The court noted that Debtor's petition was not filed with cash as required by the statute, that the money was no longer in escrow at Taos Title, and that none of Debtor's actions rose to the level of substantial compliance.

{8} Debtor moved for reconsideration and provided four additional affidavits to the court. First, an employee of Taos Title stated that all the arrangements had been made for the January 11th closing, that Purchaser had been notified, and that Purchaser "indicated that he was agreeable and would come" to the closing. Second, the private lenders with whom Arriba Mortgage had contracted for the funds stated that they "would not agree to place the funds in the District Court" when they learned that the closing had not been completed. Third, a representative of Arriba Mortgage stated that after the closing had fallen through, the private lenders had told him that "they did not want to have their money tied-up with the District Court pending the outcome of a legal dispute." Finally, Debtor explained that he "had great difficulty" obtaining financing for the redemption and that he "relied on [Taos Title's employee's] assurances that [Purchaser] was agreeable and would attend the closing, and did not make further efforts to find an alternative lender who would allow the money to be deposited in court." Purchaser's response included his own affidavit, stating that he had never agreed to come to the closing and had never agreed to sign a quitclaim deed.

{9} On August 26, 2002, Debtor placed the redemption amount into the court registry. That same day, the court heard Debtor's motion for reconsideration. The arguments in this hearing focused mostly on Debtor's request for an extension of the redemption period in equity. The trial court remained unconvinced. It stated that Debtor was not entitled to equitable relief because, even assuming Purchaser's misrepresentation as to the closing, Debtor still had the option of depositing the funds in the court registry before the redemption period expired. Finding that any factual issue pertaining to Purchaser's agreement to come to the closing was "peripheral," the trial court denied Debtor's motion for reconsideration of its summary judgment for Purchaser and entered its final order.


{10} "On appeal of an order granting summary judgment, the evidence is viewed in a light most favorable to the party opposing summary judgment, and the evidence is reviewed to determine whether there are disputed material factual issues warranting trial on the merits." Blackwood & Nichols Co. v. N.M. Taxation & Revenue Dep't, 1998-NMCA-113, ¶ 5, 125 N.M. 576, 964 P.2d 137 (citation omitted). We review the issues de novo, considering the whole record. Tempest Recovery Servs., Inc. v. Belone, 2003-NMSC-019, ¶ 7, 134 N.M. 133, 74 P.3d 67.

ISSUE ONE: Substantial Compliance

{11} Debtor's stated argument is that there is a genuine issue of material fact as to whether he substantially complied with the provisions of Section 39-5-18, which sets forth the procedures for redemption. We, however, view his argument as raising the question of law of whether, when viewed in the light most favorable to him, the trial court could find substantial compliance. Section 39-5-18 reads:

A. After sale of any real estate pursuant to any such judgment or decree of any court, the real estate may be redeemed by the former defendant owner of the real estate ...:
(1) by paying to the purchaser, his personal representatives or assigns, at any time within nine months from the date of sale, the amount paid, with interest from the date of purchase at the rate of ten percent a year, together with all taxes, interest and penalties thereon, and all payments made to satisfy in whole or in part any prior lien or mortgage not foreclosed, paid by the purchaser, with interest on such taxes, interest, penalties and payments made on liens or mortgages at the rate of ten percent a year from the date of payment; or
(2) by petitioning the district court in which the judgment or decree of foreclosure was entered for a certificate of redemption and by making a deposit of the amount set forth in Paragraph (1) of this subsection in cash in the office of the clerk of the district court in which the order, judgment or decree under which the sale was made was entered, at any time within nine months from the date of sale.

{12} Debtor argues that the trial court misapplied the law by failing to consider statutory provisions permitting tender of the redemption amount directly to the purchaser and by "applying an unduly technical and rigid approach to substantial compliance." He also states that the trial court improperly decided that the disputed fact of Purchaser's agreement to come to the closing was not material to this issue. We disagree with...

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