Wilmington Sav. Fund Soc'y v. Romero
| Decision Date | 10 April 2023 |
| Docket Number | A-1-CA-38642 |
| Parties | WILMINGTON SAVINGS FUND SOCIETY, FSB d/b/a CHRISTIANA TRUST, as Trustee for HLSS MORTGAGE MASTER TRUST FOR THE BENEFIT OF THE HOLDERS OF THE SERIES 2014-1 CERTIFICATES ISSUED BY HLSS MORTGAGE MASTER TRUST, Plaintiff-Appellee, v. MICHAEL P. ROMERO, Defendant-Appellant. |
| Court | Court of Appeals of New Mexico |
Corrections to this opinion/decision not affecting the outcome, at the Court's discretion, can occur up to the time of publication with NM Compilation Commission. The Court will ensure that the electronic version of this opinion/decision is updated accordingly in Odyssey.
APPEAL FROM THE DISTRICT COURT OF TAOS COUNTY Jeff F. McElroy District Court Judge
Rose L. Brand &Associates, P.C. Eraina M. Edwards Albuquerque NM for Appellee
New Mexico Legal Center, P.C. Lee Boothby Taos, NM for Appellant
{¶1} Defendant Michael Romero appeals the district court's order granting summary judgment in favor of Plaintiff Wilmington Savings Fund Society d/b/a Christiana Trust as Trustee for HLSS Mortgage Master Trust (Wilmington). Because we agree with Romero that a genuine issue of material fact exists regarding Wilmington's standing to bring this foreclosure action, we reverse and remand.
{¶2} A party bringing a foreclosure action must demonstrate that at the time of filing their complaint, they "had the right to enforce the note and the right to foreclose the mortgage." PNC Mortg. v. Romero, 2016-NMCA-064, ¶ 19, 377 P.3d 461 (internal quotation marks and citation omitted). "With respect to the promissory note, the foreclosing party must demonstrate that, at the time it filed suit, it either (1) had physical possession of the note indorsed to it or indorsed in blank or (2) received the note with the right to enforcement, as required by the UCC." HSBC Bank USA, Nat'l Ass'n v. Wiles, 2020-NMCA-035, ¶ 9, 468 P.3d 922 ().
{¶3} In this case, Wilmington filed a motion for summary judgment seeking foreclosure and rejection of Romero's affirmative defenses.[1] Romero filed a cross- motion for summary judgment in which he argued that Wilmington lacked standing. The district court granted Wilmington's motion for summary judgment on all matters but standing and denied Romero's cross-motion for summary judgment.[2]The district court reasoned that multiple mortgage assignments, versions of the note, and undated indorsements in the record created a genuine issue of material fact as to whether Wilmington or, rather, another entity-Ocwen Loan Servicing, LLC (Ocwen)-held the note on the date Wilmington filed its complaint. Wilmington moved the district court to reconsider the issue of standing, arguing that as Wilmington's loan servicer, Ocwen was its agent, and any distinction between the two entities was immaterial for the purposes of standing. Romero responded by arguing in part that the record did not establish an agency relationship between Ocwen and Wilmington. The district court accepted Wilmington's agency theory, reconsidered its earlier ruling, and granted Wilmington's motion for summary judgment in full.
{¶4} We review the district court's grant of summary judgment de novo. PNC Mortg., 2016-NMCA-064, ¶ 17. Summary judgment is proper only where "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Rule 1-056(C) NMRA. In deciding whether summary judgment is proper, we "consider the whole record for evidence that puts a material fact at issue" and view the facts "in the light most favorable" to the non-moving party, "drawing all inferences" in their favor. PNC Mortg., 2016-NMCA-064, ¶ 17 (internal quotation marks and citations omitted). As the party moving for summary judgment, Wilmington had the "initial burden of establishing a prima facie case" by producing "such evidence as is sufficient in law to raise a presumption of fact or establish the fact in question unless rebutted." Romero v. Philip Morris, Inc., 2010-NMSC-035, ¶ 10, 148 N.M. 713, 242 P.3d 280 (internal quotation marks and citations omitted); see also Brown v. Taylor, 1995-NMSC-050, ¶ 8, 120 N.M. 302, 901 P.2d 720 ().
{¶5} Thus, to make out a prima facie case under its agency theory, Wilmington had to establish that Ocwen was authorized to act as its agent and was acting under its control at the time the complaint was filed. See Hansler v. Bass, 1987-NMCA-106, ¶ 28, 106 N.M. 382, 743 P.2d 1031 (providing that the party asserting an agency relationship must come forward with evidence that the purported agent was authorized to act on behalf of the principal, and defining an agent as "one authorized by another to act on his behalf and under his control"). Additionally, as Romero argues, Wilmington had to demonstrate not only that Ocwen possessed the note when the complaint was filed, but also that such possession fell within the scope of Ocwen's agency relationship with Wilmington. See Restatement (Third) of Agency § 1.01 cmt. c (2006) (providing that the existence of an agency relationship does not necessarily mean an agent has authority to act on behalf of its principal in all matters because "[t]he fact that an agent acts on behalf of, or represents, another person implies the existence of limits on the scope of the agency relationship").
{¶6} On appeal, Romero primarily argues that the district court's grant of summary judgment was improper because the record lacks evidence of the existence and scope of an agency relationship between Ocwen and Wilmington. Wilmington counters that it was undisputed that Ocwen was acting as Wilmington's loan servicer and that a servicer is by definition an agent that may hold a note on the principal's behalf without affecting the principal's ability to enforce the note.[3] See NMSA 1978, § 58-21-2(N) (2009) (). We do not necessarily agree with Wilmington's contention, however, since "[n]ot all relationships in which one person provides services to another satisfy the definition of agency." Restatement (Third) of Agency § 1.01 cmt. c. Regardless, even assuming arguendo that an entity's status as a "loan servicer" is equivalent to that of an agent authorized to possess a note on the principal's behalf, Wilmington still failed to make out a prima facie case under its agency theory, due to the lack of evidence that Ocwen was acting as Wilmington's loan servicer at the time the complaint was filed. See Sanders v. Est. of Sanders, 1996-NMCA-102, ¶ 1, 122 N.M. 468, 927 P.2d 23 ().
{¶7} In support of its agency theory, Wilmington contends that "it was not necessary for [it] to come forward with evidence of the scope of its agency relationship with Ocwen" because either Romero admitted Ocwen was Wilmington's loan servicer or the record indisputably establishes that fact. Concerning its first contention Wilmington cites arguments Romero made in his briefing on the cross-motions for summary judgment. We think Wilmington reads too much into these arguments, the first being Romero's contention that "[a]t the time of the filing of the [c]omplaint, the actual [n]ote was indorsed to Ocwen, who was servicing the loan." When Romero made this contention, he was speculating about why the endorsements on the note had changed from the time the complaint was filed to the time of the summary judgment briefing. Moreover, even if the contention were viewed as an admission, it would prove little-Romero did not admit that Ocwen was acting as Wilmington S loan servicer at the time of the complaint. Wilmington next cites Romero's contention that the asset purchase agreement relied on by Wilmington meant only that "Ocwen purchased the servicing rights and the right to the servicing compensation," not that Ocwen purchased the note or the mortgage. Romero made this contention when arguing that the mortgage assignment to Wilmington was invalid. Here too, even if this contention were deemed an admission, it would prove little-at no time did Romero admit that Ocwen was serving as Wilmington 's loan servicer at the time of the complaint. In short, even if we assume that proof of Ocwen's status as a loan servicer could prove Ocwen's status as Wilmington's agent, Romero never admitted there was a loan servicing relationship between Wilmington and Ocwen at the time the complaint was filed, such that Wilmington was relieved of demonstrating this point for purposes of summary judgment. See Romero, 2010-NMSC-035, ¶ 10. {¶8} Wilmington's alternative contention that the record "indisputably" demonstrates the existence of an agency relationship between it and Ocwen, likewise, is not borne out. On this point, Wilmington cites two affidavits and a "Certificate of Possession of Original Note" that...
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