Wells Fargo Bank, N.A. v. Pyle , 9 N.M. 665 ( 2016 )

1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 Opinion Number: _______________
3 Filing Date: February 9, 2016
4 NO. 33,983
5 WELLS FARGO BANK, N.A.,
6 Plaintiff-Appellee,
7 v.
8 JAMES J. PYLE,
9 Defendant-Appellant,
10 and
11 LAREE J. PYLE, MORTGAGE ELECTRONIC
12 REGISTRATION SYSTEMS, INC. (solely as
13 nominee for lender and lender’s successors and
14 assigns), and CAPITAL ONE BANK (USA), N.A.,
15 Defendants.
16 APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
17 Beatrice J. Brickhouse, District Judge
18 Snell & Wilmer L.L.P.
19 Allison L. Biles
20 Denver, CO
21 Kelly H. Dove
22 Las Vegas, NV
23 for Appellee
1 United South Broadway Corp.
2 Michael Prinz
3 Mark A. Pustay
4 Albuquerque, NM
5 for Appellant
1 OPINION
2 BUSTAMANTE, Judge.
3 {1} James and Laree Pyle were unable to redeem their property after a foreclosure
4 sale because the district court denied their motion to extend the thirty-day redemption
5 period set by their mortgage on the ground that the motion was not filed before the
6 foreclosure judgment was entered. James Pyle appeals arguing that the plain language
7 of NMSA 1978, Section 39-5-19 (1965), which requires that motions for extensions
8 of redemption periods be made “before judgment,” is contrary to the purpose of the
9 redemption statutes. We disagree and affirm.
10 BACKGROUND
11 {2} In 2003 James (Appellant) and Laree Pyle, who is not a party in this appeal,
12 executed a note and mortgage for the purchase of property in Albuquerque, New
13 Mexico. Approximately six years later, Wells Fargo Bank, N.A. (Wells Fargo) filed
14 a complaint for foreclosure. An amended complaint was filed approximately three
15 months later. Appellant did not answer either complaint. Consequently, a default
16 judgment was entered against him in June 2010. Appellant did not move to set aside
17 the default judgment and does not argue on appeal that the default judgment was
18 improperly entered against him. See Rule 1-060(B) NMRA (providing for relief from
19 a judgment for, among other things, “mistake, inadvertence, surprise, or excusable
1 neglect”). The judgment provided that Appellant was “barred and foreclosed of any
2 right, title, interest, or claim in or to the property, subject only to a one month period
3 of redemption set forth in the [m]ortgage[.]” See § 39-5-19 (stating that “[t]he parties
4 to any such instrument may, by its terms, shorten the redemption period to not less
5 than one month”).
6 {3} After a series of delays, some of which were caused by bankruptcy filings by
7 Appellant, the property was sold at a public auction on December 17, 2013, to Wells
8 Fargo for approximately $46,000 less than the amount owed by Appellant. The sale
9 was approved by the district court. Twenty-five days later, Appellant moved for a
10 thirty-day extension of the one month redemption period so that he could assign his
11 right to redeem to a third party. Because the district court hearing on the motion to
12 extend was scheduled for more than thirty days after the original redemption period
13 ended, Appellant filed an amended motion requesting a ninety-day extension. A
14 hearing was held on June 26, 2014. The district court denied the motion to extend and
15 Appellant filed a timely notice of appeal.
16 DISCUSSION
17 {4} Appellant argues that a “strict interpretation” of Section 39-5-19 leads to
18 absurd results that are “contrary to the purpose of the redemption statute and overly
19 restrictive of the district court’s exercise of equitable [powers].” We begin with Wells
2
1 Fargo’s contention that this argument was not preserved for appeal. See Woolwine v.
2 Furr’s, Inc., 1987-NMCA-133, ¶ 20, 106 N.M. 492, 745 P.2d 717 (“To preserve an
3 issue for review on appeal, it must appear that appellant fairly invoked a ruling of the
4 trial court on the same grounds argued in the appellate court.”). At the hearing on
5 Appellant’s motion to extend the redemption period, Appellant argued that requiring
6 a showing that he intended to redeem the property before the judgment “does lead to
7 an absurdity,” and that “[t]he plain language [reading of the statute] would limit the
8 statute so greatly I don’t know if the [L]egislature intended that.” During Appellant’s
9 argument, the district court stated that it was “trying to think what the purpose of [the
10 ‘before judgment’] language is” and that under that language, it “seems as though it
11 would be extremely difficult to redeem.” Finally, the district court observed that “[it
12 couldn’t] even imagine very many scenarios where a homeowner . . . on the verge of
13 judgment at that point thinks, okay, I’m going to have enough [money], and I’m
14 asking right now for there to be an extension of the redemption.” It is clear from the
15 district court’s comments that it understood Appellant’s arguments. This issue was
16 adequately preserved for appeal.
17 {5} The operative statutes here are NMSA 1978, Section 39-5-18 (2007) and
18 Section 39-5-19. Section 39-5-18(A) permits a former defendant owner of property
19 to redeem the property after a foreclosure sale within nine months of the sale. Section
3
1 39-5-19 permits the parties to a mortgage to reduce the redemption period to not less
2 than one month and provides that the district court may, “upon a sufficient showing
3 before judgment that redemption will be effected, increase the period of redemption
4 to not to exceed nine months notwithstanding the terms of such instrument.” See Sun
5 Country Sav. Bank of N.M., F.S.B. v. McDowell, 1989-NMSC-043, ¶ 21, 108 N.M.
6 528, 775 P.2d 730 (noting that it had “implicitly interpreted the phrase ‘parties to an
7 instrument’ to mean that parties to a mortgage may reduce the redemption period to
8 one month”). The grant or denial of an extension of the redemption period, an
9 equitable remedy, is generally reviewed for an abuse of discretion. Chapel v. Nevitt,
10 2009-NMCA-017, ¶ 39, 145 N.M. 674, 203 P.3d 889 (stating that “in equity, the
11 district court has some discretion to extend the time to redeem”).
12 {6} The grounds for the district court’s denial of Appellant’s motion are unclear.
13 But since the mortgage here specified a redemption period of one month and the
14 parties’ arguments below focused on the interpretation of Section 39-5-19, we infer
15 that the district court’s decision rested on its construction of the statute. Our review
16 is therefore de novo. Pub. Serv. Co. of N.M. v. Diamond D Constr. Co., 2001-NMCA-
17 082, ¶ 48, 131 N.M. 100, 33 P.3d 651.
18 {7} Appellant argues that “[o]ne of the purposes of the redemption statute is to give
19 the property owner . . . a reasonable opportunity to redeem the property.” Chase
4
1 Manhattan Bank v. Candelaria, 2004-NMSC-017, ¶ 9, 135 N.M. 527, 90 P.3d 985.
2 He maintains that requiring property owners to demonstrate that they intend to
3 redeem the property before judgment restricts the opportunity to redeem such that it
4 is no longer a reasonable one and hence is contrary to the Legislature’s intent.
5 Appellant also argues that such a requirement “seriously erode[s] the rights of all non-
6 responsive defendants to redeem as they will be precluded from ever getting an
7 extension, no matter the circumstances surrounding the request.” Finally, appellant
8 argues that the requirement “runs contrary to the notion that enlargement of the
9 redemption period is an equitable remedy” because it restricts the district court’s
10 ability to grant such relief.
11 {8} “In construing a statute, [the appellate courts’] charge is to determine and give
12 effect to the Legislature’s intent.” Marbob Energy Corp. v. N.M. Oil Conservation
13 Comm’n, 2009-NMSC-013, ¶ 9, 146 N.M. 24, 206 P.3d 135. In doing so, we are
14 “aided by classic canons of statutory construction, and . . . look first to the plain
15 language of the statute, giving the words their ordinary meaning, unless the
16 Legislature indicates a different one was intended.” Id. (internal quotation marks and
17 citation omitted); see NMSA 1978, § 12-2A-19 (1997) (“The text of a statute or rule
18 is the primary, essential source of its meaning.”). If the plain language is “clear and
19 unambiguous, [the appellate courts] must give effect to that language and refrain from
5
1 further statutory interpretation.” Marbob, 2009-NMSC-013, ¶ 9 (internal quotation
2 marks and citation omitted). Our courts have repeatedly recognized that “[t]he right
3 to redeem from a foreclosure at law is a legal right, is created by the statute, and can
4 neither be enlarged nor abridged by courts.” Ulivarri v. Lovelace, 1934-NMSC-087,
5 ¶ 7, 39 N.M. 36, 38 P.2d 1114 (internal quotation marks and citation omitted);
6 Richardson v. Pacheco, 1930-NMSC-111, ¶ 7, 35 N.M. 243, 294 P. 328 (stating that
7 redemption “is a statutory right that is not to be enlarged by judicial interpretation”
8 (internal quotation marks and citation omitted)), abrogated on other grounds by
9 Plaza Nat’l Bank v. Valdez, 1982-NMSC-105, ¶ 17, 106 N.M. 464, 745 P.2d 372.
10 Consistent with these principles, we conclude that the phrase “before judgment” in
11 Section 39-5-19 is clear and unambiguous and does not require further construction.
12 {9} We disagree with Appellant that our conclusion is contrary to the purpose of
13 the statute. The fact that the Legislature set a deadline for a request for an extension
14 of the redemption period does not contravene its intent to provide a reasonable
15 opportunity to redeem. Even though the request must be made before judgment,
16 property owners may still request up to nine months to effectuate the redemption.
17 Section 39-5-19. In addition, Appellant’s argument rests on a false premise that it is
18 unreasonable to expect defendant property owners to consider whether they might
19 redeem the property during foreclosure proceedings and before judgment. We
6
1 recognize, as did the district court, that the statutory deadline for extension requests
2 makes redemption more difficult for defendant property owners. Nevertheless, we
3 conclude that the deadline does not render the opportunity to redeem, or at least to
4 request an extension of the redemption period, unreasonable. Indeed, here, Appellant
5 was aware of the complaint for foreclosure for six months before the default judgment
6 was entered. Thus, he was not taken unawares by the judgment and was not deprived
7 of a reasonable opportunity to request an extension of the redemption period.
8 {10} As to Appellant’s argument that, under a “strict” reading of the statute,
9 defaulting property owners would never be granted an extension of the redemption
10 period because they would not be able to request an extension of the redemption
11 period before judgment, we disagree that this presents a problem that requires judicial
12 action. Appellant’s argument ignores his own role as a nonresponsive party; by
13 failing to respond to the complaint, Appellant removed himself from the legal process
14 and deprived himself of the opportunities it offers. We agree with Wells Fargo that
15 Appellant’s appeal arises from his “failure to move for an extension in the litigation
16 he chose to ignore.” Cf. Xorbox v. Naturita Supply Co., 1984-NMSC-062, ¶ 12, 101
17 N.M. 337, 681 P.2d 1114 (“[Appellate courts] cannot reward those who sleep on their
18 rights and ignore a summons to appear in court to defend their position.”).
7
1 {11} Finally, we disagree that the statute improperly impinges on the district court’s
2 equitable powers. “It is a basic maxim that equity is ancillary, not antagonistic, to the
3 law. Equitable relief is not available when the grant thereof would violate the express
4 provision of a statute.” Coppler & Mannick, P.C. v. Wakeland, 2005-NMSC-022, ¶ 8,
5 138 N.M. 108, 117 P.3d 914 (internal quotation marks and citation omitted). The
6 principle of equity “cannot overcome the public policy established by the
7 Legislature.” Id.; cf. Dalton v. Franken Constr. Cos., 1996-NMCA-041, ¶ 9, 121
8 N.M. 539, 914 P.2d 1036 (stating that “[a] statute establishes public policy, and the
9 courts advance that policy by enforcing the statute”). Thus, the district court’s
10 equitable powers must be exercised within the framework established by the
11 Legislature. Furthermore, although the statutory deadline for requests for extensions
12 provides this framework, it does not unduly hinder the district court’s ability to grant
13 an extension upon a timely request and “sufficient showing.” Section 39-5-19.
14 {12} To the extent Appellant argues that the district court erred by not granting his
15 motion as an equitable matter, “we note that equity aids the vigilant, not those who
16 slumber on their rights.” Magnolia Mountain Ltd. P’ship v. Ski Rio Partners, Ltd.,
17 2006-NMCA-027, ¶ 37, 139 N.M. 288, 131 P.3d 675 (internal quotation marks and
18 citation omitted). Moreover, Appellant does not argue that there was a clerical error
19 or misconduct such that equitable relief was appropriate. See Chapel, 2009-NMCA-
8
1 017, ¶ 39 (stating that “[t]here are two general situations in which a court may use its
2 equitable power to grant an extension to the redemption period . . . [where]
3 redemption is not complete because of a clerical error or technical mix-up . . . [and
4 where there is] evidence of fraud, deceit, or collusion” (internal quotation marks and
5 citation omitted)).
6 CONCLUSION
7 {13} We affirm the district court’s denial of Appellant’s request for an extension of
8 the redemption period.
9 {14} IT IS SO ORDERED.
10
11 MICHAEL D. BUSTAMANTE, Judge
12 WE CONCUR:
13 __________________________________
14 JAMES J. WECHSLER, Judge
15 __________________________________
16 JONATHAN B. SUTIN, Judge
9