Hoping Justice Prevails – New Mexico Supreme Court Building in Santa Fe

I was surprised when the New Mexico Appeals Court denied my appeal which was based on Deutsche v. Johnston, but I was shocked when the New Mexico Supreme Court concurred, even though the Appeals Court decision effectively gutted Deutsche.

I had 15 days from November 27, 2018, the date of the filing of the NM Supreme Court Order denying certiorari and concurring with the Appeals Court, to file my Motion for Rehearing. The rule relating to the motion says the motion may not contain argument, and that a Brief is to be submitted with the motion. The following is my brief, written in the hope that case law and justice prevails, and filed December 10, 2018. I am truly hoping Justice prevails.

There’s a video link at the bottom of the page…

Comes now Karen M. Kline, pursuant to Rule 12-404 and files her Brief in support of her Motion for Rehearing.


The Appeals Court contradicted Deutsche v. Johnston, 369 P.3d 1046 (2016), when it wrote, “[W]e find no error in the fact that the Plaintiff proved standing by establishing its entitlement to enforce a lost instrument by way of evidence at trial,” page 5, Memorandum Opinion. The contradiction lies in the Appeals Court approving the use of two UCC statutory categories with the second not being stated at the commencement of the case whereas Deutsche specifically says, paragraph 14,

“To show a “direct and concrete” injury, Deutsche Bank needed to establish that it fell into one of these three statutory categories that would establish both its right to enforce Homeowner’s promissory note and its basis for claiming that it suffered a direct injury from Homeowner’s alleged default on the note,” bold added.

Wells Fargo filed its Complaint for Foreclosure as if it fell into the statutory category of holding the note, indicated by the copy of the note attached to its complaint, filed in 2008. However, the note had in fact been lost in 2002, according to Wells Fargo business records and the testimony at trial of its witness, Brook Bosier.

Given the existence of the fact that the note was lost in 2002, Wells Fargo needed to have chosen the lost note category in order to have established standing at the time it filed foreclosure. Under Deutsche, Wells Fargo is not allowed a second category within the same case, whether Wells Fargo can prove the second category at trial, or not.

At commencement of the case Wells Fargo chose one statutory category, as required under Deutsche, but Wells Fargo chose the category of holder of the note when Wells Fargo was not holding the note. As a result Wells Fargo failed to establish standing. Without standing Wells Fargo could not go on to change its category or add the category of Lost Note, not even by amending its complaint, as defendant argued when Wells Fargo moved for leave to file an Amended Complaint.


The definition of “one” can be as a single thing, or a member of a group. If “one” means a member of a group, I don’t know if that means that “one” could be a succession of members. If so, then that may be how the Appeals Court read it. However, if a succession of categories is what the New Mexico Supreme Court meant, then the Court would not have gone on to write,

{27} However, this is an issue of proof rather than pleading standards. The elements of standing are not mere pleading requirements but rather an indispensable part of the plaintiff’s case, [and therefore] each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation. Lujan, 504 U.S. at 561. For example, a foreclosure plaintiff may satisfy pleading requirements by simply alleging that it is the holder of the note without attaching any additional documentary evidence, but when a defendant subsequently raises the defense that the plaintiff lacks standing to foreclose, the plaintiff must then prove that it held the note at the time of filing. Emphasis added. Deutsche.

Here, when defendant Kline raised the defense that plaintiff lacked standing because it could not produce the note, Wells Fargo took the murky step of filing a false Affidavit of Lost Original Note on July 19, 2011, rather than showing proper candor to the Court.

Another indication that the Court meant “one” in the sense of singular, is its agreement with the Vermont Supreme Court,

We agree with the Vermont Supreme Court, which opined that “[i]t is neither irrational nor wasteful to expect a foreclosing party to actually be in possession of its claimed interest in the note, and have the proper supporting documentation in hand when filing suit.” Kimball, 2011 VT 81, ¶ 20.

Since the note was lost in 2002, and supporting documentation showed this, Wells Fargo was required under the UCC and Deutsche to file the case saying that the note was lost. The fact Wells Fargo chose instead to dissemble could be explained by the fact the mortgage was not assigned to Wells Fargo until July 1, 2005, almost three years after the note was last seen in September, 2002. This also could explain why Wells Fargo chose not to serve me its Complaint for Foreclosure, since if I did not know about the case I could not fight it and a default judgment would eliminate any problems with proving standing. To me, the lack of service raised a red flag.


Perhaps this Court and the Appeals Court misunderstood what I wrote because I don’t write as clearly as someone without a brain injury, much less as clearly as a lawyer. If I could have raised the money to hire Caren Friedman, I would have. But my GoFundMe raised only $1,615 of her $10,000 retainer. She very kindly helped me on a pro bono basis with my Notice of Appeal, but she could not take my case without being paid, which I totally understand.

My Neuropsychological Evaluation after my brain injury, is on record as an exhibit to my motion of July 15, 2008, and shows on pages 3-4, my working memory and processing speed to be in the 37th and 39th percentile respectively when the normal range is 95th and 96th. The Evaluation says, “performance was low below average when she used her non-dominant hand (8th %tile)”. Significantly it says, “Subtests such as Vocabulary and Similarities are typically resistant to the effects of brain injury, and usually there are discrete areas of strength that remain unaffected. In this case, her areas of strength were in the above average to borderline superior range; combined with the fact that she graduated from college and has run a successful business for many years, I would estimate her premorbid intellectual ability to be in the high above average range. However, mental confusion and some problems with memory continue to limit her ability to apply her intelligence to solve problems and improve her life in effective ways,” and, on page 5 says, “ Ms. Kline’s symptoms are qualitatively different from what is typically seen in cases of primarily an anxiety disorder, particularly her level of mental confusion… When she is required to hurry, she becomes frustrated and anxious, which leads to heightened confusion and poorer performance.”

Because of hurrying to meet the deadline for filing my Informal Docketing Statement and because of confusion, I needed to incorporate a Motion to Amend my Docketing Statement into my Informal Memorandum in Opposition, pursuant to Rule 12-210, NMRA and stated,

I am moving to amend my Informal Docketing Statement to include the following facts which I did not include in my docketing statement because I was confused when I wrote it. I had just seen for the first time that my trial lawyer, Eric Ortiz, had written “mortgage” in #14 of Kline’s Amended Findings and Conclusions of Law, filed 8/15/2017. I believed he had written “note” because the note is relevant to standing in foreclosures under the UCC. Emphasis added.

I said the allotted time was not enough for me to overcome my confusion,

The only thing I felt sure of after seeing my mistake was the case law, so I went forward relying on Deutsche v Johnston, 369 P.3d 1046 (2016). I felt as if I owed it to the Court of Appeals to file my Informal Docketing Statement within the time allotted, without asking for an extension. The allotted time, however, was not actually enough for me to overcome my confusion

Because Rule 12-210, NMRA says, “for good cause” I wrote,

Just to be clear, and to show good cause, I have a brain injury. My thinking is slow now. Beliefs are indelible, unlike facts which I have to keep checking in order to be accurate with them and their dates. Under The Americans with Disabilities Act, Title II, being allowed to amend my Informal Docketing Statement is a reasonable accommodation.

I was, however, not allowed to add the facts that show Wells Fargo’s Complaint for Foreclosure failed to establish standing. My motion to Amend was denied, “(declining to grant a motion to amend where the issue to be asserted is not viable)”. Copy of Order Denying is attached to my Petition. My Motion to Amend should have been granted in part, re the facts, and denied in part, re the Appeals Court’s disagreement with my use of the word “transfer.”


Under Deutsche, whether the note was lost in transit, in a transfer, or at First Union, the decisive fact is that if the note was lost before Wells Fargo filed its Complaint for Foreclosure, then Wells Fargo could not have standing by filing a complaint in which it said it was the holder of the note.

In researching “transfer” years earlier I had found a pamphlet put out by FNMA in which the word “transfer” was used in relation to moving a note from a servicer to FNMA. I attached a copy of FNMA’s 2008 pamphlet, as Exhibit 3, to my Motion for Rehearing in the Appeals Court. Rehearing was denied. Order denying was attached to my Petition.


The Appeals Court and I did not understand each other. The Appeals Court wrote, beginning at the bottom of page 4 of its Memorandum Opinion:

Defendant is arguing that standing must be established at the time of filing suit when Deutsche Bank actually says that “standing must be established as of the time of filing suit.” Id. ¶ 20. Thus, the relevant question is not when the plaintiff proves its standing, but simply when the plaintiff has standing. In other words, “standing to bring a foreclosure action must exist at the time a plaintiff files suit.” Id.

The stark at vs. as of distinction was confusing, especially since “exist at the time” is how I was using “at”. The definitions of “at” and “as of” are almost identical and they are shown as synonyms. I spent days trying to understand and could not. Even Black’s did not make a distinction clear. Plus, the New Mexico Supreme Court wrote “at” in Deutsche, in paragraph 21 which it talks about creation of lost note affidavits, destruction of original notes, and falsification, all of which are elements or near elements of Wells Fargo’s foreclosure action against my home and garden,

{21} There are sound policy reasons for requiring strict compliance with the traditional procedural requirement that standing be established at the time of filing in mortgage foreclosure actions. This procedural safeguard is vital because the securitization of mortgages has given rise to a pervasive failure among mortgage holders to comply with the technical requirements underlying the transfer of promissory notes, and more generally the recording of interests in property. See Elizabeth Renuart, Uneasy Intersections: The Right to Foreclose and the U.C.C., 48 Wake Forest L.Rev. 1205, 1209–10 (2013) (“[T]he failure to deliver the original notes with proper indorsements [to assignees], the routine creation of unnecessary lost note affidavits, the destruction of the original notes, and the falsification of necessary indorsements is widespread.”). Under these circumstances, not even the plaintiffs may be sure if they actually own the notes they seek to enforce. As Professor Levitin notes, Article 3 of the UCC and the land records recording system are each based upon the notion of strict “compliance with demonstrative legal formalities to achieve property rights,” which admittedly carries “up-front costs,” but also ensures “a high degree of security in the property rights, both vis-à-vis other competing claimants to the property rights and as to the ability to enforce the mortgage property rights.” Levitin, supra, at 648. Bold added.

I was not saying in my Appeal or Petition that Wells Fargo had to prove the basis of its standing at the time it filed suit. What I was saying and am saying is that Wells Fargo needed to honestly and accurately say, when it filed its Complaint for Foreclosure, which UCC provision it was relying on for standing and going forward would be able to document. In other words, following the NM Supreme Court opinion in Deutsche, “one” UCC provision had to be used to establish standing, rather than the UCC provisions as a group in regard to who is entitled to enforce a negotiable instrument. See, Deutsche ¶ 14.

I thought/believed I was clear in saying that whichever of the three UCC provisions re enforcing a negotiable instrument a foreclosure plaintiff used at the beginning of its suit in order to establish standing, like Wells Fargo attached a copy of the note indicating that it was in possession of the note, that choice had to remain viable in the middle of the case as well as at the end, which of course it would do if it were true.


The Informal Docketing Statement and Informal Memorandum in Opposition forms are misleading in respect of the fact they imply by their very name that you can use your own words. To me, in my own words, “at” meant that “at the time” Wells Fargo filed its Complaint for Foreclosure the UCC provision it used as the basis for its standing had to exist, had to be true at that time so that it would remain the basis of standing throughout the case, at every point in the case. “At” didn’t mean that Wells Fargo had to prove it, it simply meant that whatever Wells Fargo showed at the beginning, as the basis of its standing, that had to be true and had to remain the basis of its standing throughout the case, because in fact it was true.

In Wells Fargo’s foreclosure against my home, the UCC category Wells Fargo chose as the basis of its standing, by attaching of a copy of the note to its Complaint as if it held the note, was untenable and did not hold up when I asked Wells Fargo to produce the note, nor did it hold up at trial where it was shown that the note had not been seen since 2002. Further, 2002 was three years before my mortgage was assigned to Wells Fargo in 2005.

“Informal” gives the impression that the Court will look closely at the issues so that the normal use of language, rather than the use of studied legal language as used by lawyers, will not be the reason an appeal is denied. But, normal use of language appears to be the reason my appeal was denied, unless it was denied because the Courts no longer support Deutsche.

Simply put, in ordinary language, the basis of Wells Fargo’s standing, chosen from among the three UCC statutory categories by Wells Fargo at the beginning of the case, was false and therefore later in the case, in fact at no point in the case, could the standing Wells Fargo said it had, be proven.


Deutsche, as written, drew a clear boundary line that ended the mobility foreclosure plaintiffs once enjoyed that had allowed them to freely move from one provision to another as their needs changed. For instance, in the past, the foreclosure plaintiff attached a copy of the note to its Complaint for Foreclosure indicating that it was in possession of the note, or was the holder pursuant to UCC scenario two. The foreclosure plaintiff did not say specifically, nor was it required to be specific, about exactly which UCC provision it was relying on for standing. Under these permissive circumstances, the foreclosure plaintiff, who knew all along, to include at the time it filed its complaint with a copy of the note attached, that it did not actually have the note, could say at a later date in the action when challenged to produce the note, that the note was lost. In fact Wells Fargo did exactly that in this case on July 19, 2011, when it filed its Affidavit of Lost Original Note falsely affirming that the note was sent to its litigation department where it was then lost. In truth the Original Note was lost years before the loan was assigned to Wells Fargo on July 1, 2005, and years before the 2008 foreclosure was filed.


I did not state the facts in my Informal Docketing Statement for two reasons:

First, I am a quite literal person, especially since my brain injury. As a result, when I saw that my lawyer had written “mortgage” in his findings and conclusions filed in my name, when the operative word would have been “note” I didn’t know whether Judge Ortiz could have decided in my favor. I couldn’t see how I could hold him responsible for making a wrong decision, when my lawyer had used a word that does not signify in standing issues. In writing my Petition, I was further surprised to see in the Log Notes that my lawyer had invoked, Deutsche v. Romero, which to my understanding does not exist.

Second, the Informal Docketing Statement as a form for self-represented parties, gives the impression that telling the story in ordinary language is sufficient. While the Informal Docketing Statement likely means to be helpful, it is misleading since what is actually needed is a rigorous explanation with pertinent facts in support at every stage. When I tried to supply the facts by amending my docketing statement pursuant to NMRA, Rule 12-210, my amendment was denied because I used the word “transfer” in talking about moving/sending the note from Wells Fargo to either the document custodian or FNMA. Order denying was attached to my Petition for Writ of Certiorari.


 In view of the fact that the Court of Appeals Memorandum Opinion allowed Wells Fargo to use a second UCC statutory category to establish standing when, years after filing its complaint, Wells Fargo’s first choice didn’t work out, I wrote in my Preliminary Statement in my Petition, imperfect though my writing was,

Since the Court of Appeals misinterpreted Deutsche v. Johnston, 369 P.3d 1046 (2016) 2016-NMSC-013, by thwarting its stated requirement that, ‘To show a “direct and concrete” injury, Deutsche Bank needed to establish that it fell into one of these three statutory categories that would establish both its right to enforce Homeowner’s promissory note and its basis for claiming that it suffered a direct injury from Homeowner’s alleged default on the note,” only review by this Court of the issue as it relates to foreclosures that are commenced with a copy of the Original Note attached to the Complaint for Foreclosure, then at a later stage the plaintiff enters an Affidavit of Lost Note, which at trial is shown to be false in view of records showing the last time the Original Note was seen was years before the Complaint for Foreclosure was filed and years before a foreclosure judgment on the same instrument by a different entity.

My Petition went on to say the Appeals Court “eviscerated the protections provided to New Mexico homeowners and the integrity of the State’s title system by affirming a decision in which the plaintiff was not required to confirm it had the proper documentation before filing suit and was allowed to choose two UCC categories in establishing its right to enforce the promissory note.” The Appeals Court, in contradicting the NM Supreme Court in Deutsche, is allowing a foreclosure plaintiff to have successive stabs at standing. Plus, after I failed to have my appeal granted when I used the Informal Docketing Statement and Informal Memorandum in Opposition, I purchased through the clerks in the Supreme Court’s clerks’ office, a copy of two different Petitions for Writ of Certiorari that had been granted: the one in Bank of New York, and the one in Deutsche. The one in Deutsche was hard to understand so I patterned my petition on the one in Bank of New York. The word “eviscerated” was used in that petition, and it seemed appropriate to use in mine. I was actually surprised that some facts in the petition in Bank of New York were so similar to facts in my case.

Another reason I did not include all the facts from trial, etc. in my Informal Docketing Statement was that it appeared to be entirely clear on its face that Wells Fargo had begun the foreclosure using one UCC provision, then later had switched to a second, that of the lost note, when the category regarding possession was not sustainable given the reality that no record existed of the original note being seen since 2002. I fully trusted the NM Supreme Court when it wrote in Deutsche ¶ 14,

To show a “direct and concrete” injury, Deutsche Bank needed to establish that it fell into one of these three statutory categories that would establish both its right to enforce Homeowner’s promissory note and its basis for claiming that it suffered a direct injury from Homeowner’s alleged default on the note,” emphasis – bold – added.


My understanding of the review for which I am moving and Petitioning is taken from Bank of New York,

{18} Because the district court determined after a trial on the issue that the Bank of New York established standing as a factual matter, we review the district court’s determination under a substantial evidence standard of review. See Sims v. Sims, 1996-NMSC-078, ¶ 65, 122 N.M. 618, 930 P.2d 153 (“We have many times stated the standard of review of a trial court’s findings of fact: Findings of fact made by the district court will not be disturbed if they are supported by substantial evidence.”). “ ‘Substantial evidence’ means relevant evidence that a reasonable mind could accept as adequate to support a conclusion.” Id. “This Court will resolve all disputed facts and indulge all reasonable inferences in favor of the trial court’s findings.” Id. However, “[w]hen the resolution of the issue depends upon the interpretation of documentary evidence, this Court is in as good a position as the trial court to interpret the evidence.” Kirkpatrick v. Introspect Healthcare Corp., 1992-NMSC-070, ¶ 14, 114 N.M. 706, 845 P.2d 800; see also United Nuclear Corp. v. Gen. Atomic Co., 1979- NMSC-036, ¶ 62, 93 N.M. 105, 597 P.2d 290 (“ ‘Where all or substantially all of the evidence on a material issue is documentary or by deposition, the Supreme Court will examine and weigh it, and will review the record, giving some weight to the findings of the trial judge on such issue.’ ” (citation omitted)).

WHEREFORE, defendant-petitioner prays for the granting of her Motion and Petition for Writ of Certiorari.

Respectfully submitted,


Karen M. Kline
Santa Fe, New Mexico  87507


I hereby certify that the foregoing Brief in Support of Motion for Rehearing was mailed, postage prepaid on this 10th day of December, 2018 to:

Larry J. Montano
110 N. Guadalupe, Suite 1
Santa Fe, New Mexico 87505

James P. Eckels, Esq.
401 17thStreet, Suite 2400
Denver, Colorado 80202

Subscribed and sworn to before me this  10th  day of   December,   2018.                                                                                

Notary Public

My Commission Expires:                                                   


(I had the copies all notarized at my Credit Union)

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Image Credits

NM Supreme Court Building was taken on December 29, 2016, by C. Hanchey