Objections to Motions to Dismiss

FIRST JUDICIAL DISTRICT COURT
COUNTY OF SANTA FE
STATE OF NEW MEXICO

Karen M. Kline, Self Represented,
Plaintiff,

No. D-101-CV-2019-00787

Wells Fargo Bank, NA,
Breckenridge Property Fund 2016, LLC
Defendants.

PLAINTIFF’S OBJECTION TO DEFENDANT BRECKENRIDGE PROPERTY FUND 2016, LLC’S MOTION TO DISMISS AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS

         Plaintiff, Karen M. Kline, (hereinafter “Kline”), self represented, hereby objects to the Motions to Dismiss of both Defendant Breckenridge Property Fund 2016, LLC (hereinafter “Breckenridge”) and Wells Fargo Bank, N.A. (hereinafter “Wells Fargo”), and as grounds states, beginning with an overview of Wells Fargo’s foreclosure which predates the instant suit:

BACKGROUND OVERVIEW – FACTUAL AND PROCEDURAL HISTORY

            Plaintiff, Wells Fargo, sued Defendant, Kline, for foreclosure, Case No. D-101-CV-2008-00942, despite the fact that Wells Fargo was not at any time the holder the promissory note. The facts follow:

In 2002, Wells Fargo Home Mortgage was subservicer for G.E. Capital Mortgage Services (hereinafter “WFHM/GE CMS”) pursuant to a Subservicing Agreement dated September 30, 2000. Kline’s loan was one of the loans serviced under the agreement, In Rem Judgment for Decree of Foreclosure and Order of Sale, (hereinafter “Judgment”). See Complaint, Ex. 3, Findings of Fact, ¶ 21.

On May 16, 2002, WFHM/GE CMS imaged, the original of Kline’s Promissory Note, with the special indorsement from Bank United of Texas FSB to GE CMS, and the subsequent blank indorsement by GE CMS; (2) the original of the Modification Agreement; and (3) a facsimile from Safeguard Properties, Inc. to GE Capital Mortgage Services. Id. ¶ 28.

On September 1, 2002, original documents, none of which were individually named, were returned to the Document Custodian, Id. ¶ 30. Wells Fargo’s “[Proposed] Findings of Fact and Conclusions of Law”, filed June 15, 2017, (hereinafter “Proposed Findings”), Exhibit 1, say the same at ¶ 34, with the exception that ¶ 34 begins, “Ms. Bosier testified”.

On September 21, 2002, Kline’s original documents, none of which were individually named, were said to have been returned to the Document Custodian, First Union, by the WFHM/GE CMS employee, identified as “TPX”, that had received them on May 16, 2002. Complaint, Ex. 3, Findings of Fact, ¶ 29. However, a servicing note also entered on September 21, 2002 says Kline’s original documents, none of which were individually named, were sent to the owner of the Loan, FNMA, on that same date by a different WFHM/GE CMS employee. Id. Footnote 2.

Wells Fargo’s Proposed Findings, Exhibit 1, state at ¶ 34, “Ms. Bosier testified there is no evidence that, after the original loan documents were returned to the Document Custodian on September 1, 2002, that those original loan documents were negotiated, conveyed, transferred, or seized.” However, the date testified to by Ms. Bosier differs from the date in the WFHM/GE CMS servicing notes, See Complaint, Ex. 3, Findings of Fact, 29 and Footnote 2. This discrepancy casts doubt on the veracity of Ms. Bosier conclusion that the original loan documents were not negotiated, conveyed, transferred, or seized, given that the date she cites differs from that in the WFHM/GE CMS servicing notes. Ms. Bosier’s conclusion is incorporated into the Judgment, Complaint, Ex. 3, Findings of Fact, 30.

On January 15, 2004, the original Note was requested from FNMA. When FNMA’s file arrived on February 2, 2004, it did not include the original Note. Id. Footnote 2. Thus, the first evidence of the original Note being lost was when it was not found in FNMA’s file on February 2, 2004.

There is no record that names the original Note and evidences its existence after May 16, 2002, at which time GE CMS was the holder of the Note or possibly some individual was the holder of the Note, under the UCC definition, § 55-1-201(b)(21)(A), given that the Note was indorsed in blank. Under the “indorsed in blank” theory Wells Fargo proposed that it was the holder of the Note indorsed in blank, under UCC definition, § 55-1-201(b)(21)(A), Proposed Conclusions, Exhibit 1, ¶ P. The Trial Court adopted this in its Conclusions of Law, pg 19, ¶ 17, Complaint, Ex. 3. There is, however, a problem or error with Wells Fargo’s Proposed Conclusion, adopted by the Trial Court in its Judgment, Complaint, Ex. 3, in that under the UCC definition, § 55-1-201(b)(21)(A), the actual person in possession and therefore entitled to enforce the Note on May 16, 2002, or possibly September 21, 2002, (or thereafter if the Note was lost) would have been the WFHM/GE CMS employee, identified as “TPX”, who had the note in his or her possession as a result of having received the original Note on May 16, 2002, and possibly had possessed it on September 21, 2002, prior to returning it, Supra.; or, the Note could have been possessed by the other employee who was unnamed in the footnote, Supra, or by the employee who returned documents on September 1, 2oo2, Supra.

The Findings indicate that the original Note was lost sometime after a WFHM/GE CMS employee returned it to the Document Custodian or sent it to FNMA. It stands to reason that if the original Note was lost while in the possession of WFHM/GE CMS the WFHM/GE CMS servicing notes would have said that the original Note was unable to be located in order to return it to the Document Custodian, or send it to FNMA. Unless, of course, the author of the WFHM/GE CMS servicing notes did not what to admit that the servicer had lost the original Note. In any case, what the WFHM/GE CMS servicing notes say is that original documents (without specifically naming the original Note) “were returned” and at another time, “were sent”. Thereafter, on February 2, 2004, the original Note appeared to be lost in that it was not found in the FNMA file, Supra. On February 2, 2004, had the Note not been lost, GE Mortgage Services, LLC, successor by merger to GE CMS, would have been the holder of the Note.

In Wells Fargo alternative theory of possession, again trading on the Finding of Fact that the Note was lost, Wells Fargo entered into evidence its business records regarding its acquisition of the Document Custodian, First Union, by means of Wells Fargo’s merger with Wachovia in 2010, (two years after Wells Fargo filed its Complaint for Foreclosure in 2008). Significantly, however, there is no evidence that the Note arrived at the Document Custodian in September, 2002, or thereafter. The last evidence of the Note existing is WFHM/GE CMS servicing notes from May 16, 2002, Supra. After that the evidentiary testimony and Findings of Fact conflict in that the testimony says that the original documents were returned to the Document Custodian on September 1, while one of the WFHM/GE CMS servicing notes says the documents were returned to the Document Custodian on September 21, 2002, and another servicing note says original documents were sent to FNMA on September 21, 2002. Complaint, Ex. 3, Findings of Fact ¶ 29, ¶ 30 and Footnote 2. There is no evidence of original documents, or the Note in particular, arriving at the Document Custodian. Without evidence that the Note arrived at the Document Custodian it cannot factually be found that the Note was lost while in the possession of the Document Custodian. Thus, whether Wells Fargo acquired the Document Custodian, Id. ¶ 25, ¶ 26, ¶ 31, ¶ 32, and ¶ 33, or not, at some later time, there is no Finding of Fact which evidences that the Document Custodian possessed the Note at any time after the Note was said to be returned on September 1, or September 21, 2002. Supra. Thus, whether Wells Fargo was the successor to First Union by merger, Id. ¶ 31, is immaterial.

FACTUAL AND PROCEDURAL HISTORY WITH AUTHORITIES

On July 1, 2005, GE Mortgage Services LLC, (hereinafter “GE LLC”) successor by merger to GE CMS, assigned Kline’s mortgage to Wells Fargo, ¶ 43, Complaint, Ex. 3. However, as shown above, Kline’s Original Promissory Note was lost between May 16, 2002 and February 2, 2004, when it was not found in FNMA’s file. Bogle Farms, Inc. v. Baca, 925 P.2d 1184 (N.M. 1996) makes a salient point in relation to this when it cites Richard R. Powell, Powell on Real Property ¶ 938.21[5], at 84D-31, stating that assignees may not take more than what assignor possessed.

On April 7, 2008, Wells Fargo filed its Complaint for Foreclosure with a copy of Kline’s Promissory Note attached as if Wells Fargo was the holder of the Note. Wells Fargo did not serve Kline. The record shows there is no Return of Service for Kline. The first time Kline appeared it was solely to object to not being served, “If the appearance be for the purpose of objecting to the jurisdiction of the court, and is confined solely to the question of jurisdiction, then the appearance is special,” Dailey v. Foster, 1912-NMSC-045, 17 N.M. 377, 128 P. 71 (S. Ct. 1912). The Court, however, said it didn’t matter if she wasn’t served, since she found the case. If Kline had not accidentally found the foreclosure while using CaseLookUp her home would have been foreclosed just as her condo was in 2007; in 2008 Kline was not allowed to redeem her condo because under HSBC v. Fenton, 2005-NMCA-138, Docket No. 24,974, she was not the first to file to redeem, which of course she could not be if she had no notice. Kline had a buyer for her condo at the time and had planned to pay off her home at 3255 Calle de Molina with proceeds from the sale.

In 2009, Wells Fargo failed to produce the Promissory Note after a May 26, 2009 Request to do so in Discovery. On July 19, 2011, Wells Fargo filed an Affidavit of Lost Note, Exhibit 2, which evidence at trial proved to be false. On 4/29/2015, Wells Fargo filed a Notice of Lost Note, Exhibit 3, which on its face was false because no servicing notes were attached. It was also false in view of the evidence produced at trial. Wells Fargo’s Notice acknowledged, “The Scheduling Order required that Wells Fargo file the Original Note, executed by Ms. Kline, no later than April 30, 2015.” Wells Fargo wrote,

“The best evidence rule, Rule 11-1002 NMRA, which states, “[a]n original writing, recording, or photograph is required in order to prove its content unless these rules or a stature provides otherwise,” is applicable when a party seeks to prove the contents of a writing. See Guitierrez v. Albertson’s, Inc, 1991-NMCA-135, ¶ 39, 824 P.2d 1058. If the original is not available, a [p]laintiff must rely on secondary evidence to establish the existence and contents of … [a document], but in order to be permitted to introduce such evidence, [p]laintiff must make a threshold showing of (1) the loss or destruction of the original … and (2) the absence of bad faith. Loss or destruction of the original is most commonly shown through circumstantial evidence of a ‘diligent but unsuccessful search and inquiry for the missing document.’” See Servants of the Paraclete, Ind. v. Great Am Ins. Co., 857 F. Supp. 822, 828 (D.N.M) amended on reconsideration in part, 866 F. Supp. 1560 (D.N.M 1994).

“Wells Fargo has diligently searched its records and files concerning the loan in search of the original promissory note. However, as previously indicated, despite extensive efforts by Wells Fargo and its attorneys, Wells Fargo has been unable to locate the original promissory note.” Exhibit 3.

It is unbelievable that Wells Fargo searched its records in good faith without finding that the original Note was lost between May 16, 2002 and February 2, 2004. Further, Wells Fargo falsely continued as if there was “absence of bad faith”,

“Wells Fargo respectfully submits the best available evidence of the mortgage loan, which is a photocopy of the indorsed note, the recorded mortgage and assignments, and Wells Fargo’s servicing records.” Exhibit 3.

The fact and truth is that there were no exhibits attached. See Exhibit 3. Had the servicing records been attached, they would have shown that the note was lost between May 16, 2002 and February 2, 2004.

On May 12, 2015, Kline filed Defendant Kline’s Objection to Wells Fargo Bank’s Notice of Lost Note, Exhibit 4,

“Wells Fargo is not accurate to categorize the Original Note as an “original writing” governed by the rules of evidence. The Original Note is in fact a negotiable instrument and is governed by the Uniform Commercial Code.

Wells Fargo cannot evade Uniform Commercial Code requirements by filing a Notice of Lost Note and treating the note as evidence rather than a negotiable instrument. The fact is that commercial law principles relating to negotiable instruments govern: 55-3-309 …

New Mexico Supreme Court has clearly stated, “[O]ur state’s UCC governs how a party becomes legally entitled to enforce a negotiable instrument,” paragraph 19, Bank of New York v. Romero, 320 P.3d 1 (2014).

Wells Fargo says it has searched its records and files without finding the Original Note and asks the court to accept a photocopy in lieu of the negotiable instrument.

The Uniform Commercial Code and New Mexico case law, Bank of New York v. Romero, 320 P.3d (2014), agree in relation to who is legally entitled to enforce a negotiable instrument and the holder of a photocopy is not one of those entitled to enforce.” Exhibit 4.

 THE QUESTION OF WHETHER THE COMPLAINT IS BARRED
WITH AUTHORITIES

            At first glance res judicata and/or collateral estoppel seem to militate against Kline’s Complaint given that Kline’s appeal of the Judgment, Notice of Appeal filed on December 6, 2017, Informal Docketing Statement filed on January 3, 2018, resulted in Summary Affirmance on April 10, 2018. Kline’s Informal Docketing Statement, Exhibit 5, said,

I think the trial court made a mistake when it entered its In Rem Judgment for Decree of Foreclosure and Order of Sale as if Wells Fargo had standing when in fact Wells Fargo had not identified in its complaint that it was suing for foreclosure under the lost note provisions of UCC Article 3. Section 55-3-301. Deutsche v Johnston, 369 P.3d 1046 (2016) 2016-NMSC-013 says in paragraph 14, “The UCC provides that there are three scenarios in which a person is entitled to enforce a negotiable instrument such as a promissory note: (1) when that person is the holder of the instrument; (2) when that person is a non-holder in possession of the instrument who has the rights of a holder; and (3) when that person does not possess the instrument but is still entitled to enforce it subject to the lost-instrument provisions of UCC Article 3. Section 55-3-301.

What Kline meant was that by attaching a copy of the Note to its Complaint, Wells Fargo filed Foreclosure as if it was the holder of the Note, whereas in actual fact the Note had been lost. Kline had failed to provide facts of the case, however. Without having stating the facts, what she meant was unclear and the Appeals Court believed she meant standing had to be proven at filing of the Complaint. Thus, the Appeals Court wrongly held on September 19, 2018, that “Plaintiff proved standing by establishing its entitlement to enforce a lost security instrument by way of evidence at trial,” page 5, Memorandum Opinion, Breckenridge Motion to Dismiss, Ex. B. In addressing what it understood to be Kline’s understanding/misunderstanding, the Appeals Court was not actually saying it had looked at the evidence provided at trial and found it to be supportive of the Judgment. When the N.M. Supreme Court denied Kline’s Petition for Writ of Certiorari, Id. Ex. C, it was agreeing with the Appeals Court that evidence of standing could be produced at trial, rather than definitively saying it was produced at trial. Kline had not stated any facts in her appeal, so there were no actual Findings of Fact under review.

What the Findings of Fact, none of which were included in Kline’s appeal, evidenced was that Kline’s Promissory Note was lost between May 16, 2002, when GE CMS was the holder of the note, not counting whoever handled the documents on that day, Supra., and February 2, 2004, when the original Note was not found in the FNMA file, Supra. Kline’s mortgage was not assigned to Wells Fargo until 2005, ¶ 43, Complaint, Ex. 3, which was three years after the last recorded time Kline’s Note was seen.

Regarding Findings of Fact, in Mora v. Martinez, 80 N.M. 88, 451 P.2d 992 (1969), the N.M. Supreme Court wrote,

We agree with the federal cases which, without exception, require adequate findings and insist on the exercise of an independent judgment on the part of the trial judge in making his own findings of fact rather than adopting those of one of the parties… The Supreme Court recently underscored the responsibility of the court with respect to findings, and was critical of any indiscriminate dependence upon counsel in formulating them. (Citing United States v. El Paso Natural Gas Co., et al., 376 U.S. 651, 84 S. Ct. 1044, 12 L. Ed. 2d 12 (1964).)

            Indications of “indiscriminate dependence upon counsel in formulating” the findings in the Judgment run from Id. ¶ 25, ¶ 26, ¶ 31, ¶ 32, and ¶ 33, which are the same as Wells Fargo’s Proposed Findings at ¶ 27, ¶ 28, ¶ 35, ¶ 36, and ¶ 37, Exhibit 1. By way of these findings Wells Fargo proposed that because Wells Fargo acquired/ merged with Wachovia in 2010, Wells Fargo possessed the Note when it was lost. The gist of the reasoning is that WFHM/GE CMS servicing notes say that original documents were returned to the Document Custodian on September 21, 2002, and that the Document Custodian, First Union, later became a part of Wachovia, which became a part of Wells Fargo in 2010; the fact that there is no evidence that First Union had the Note in its possession at any time after September 21, 2001, is necessarily omitted from the reasoning.

In the American Law Reports, 54 A.L.R. 3d 868 (1973), J.S. Bryant, Jr., states that it is not a reversible error to adopt verbatim a party’s proposed findings and conclusions if those findings and conclusions are supported by the evidence.

To adopt verbatim a party’s proposed findings of fact and conclusions of law is not the best practice, even if both sides have submitted proposals, but it is not reversible error where those findings and conclusions essential to the decision reached are sufficient and are supported by the evidence. 54 A.L.R.3d 868 (1973)

For there to be “reversible error” the findings and conclusions essential to the Trial Court’s decision must be insufficient and unsupported by evidence, which is the case in the underlying foreclosure judgment where the evidence shows that the original Note existed and was not lost, given that it was reported seen, on May 16, 2002 when GE CMS, not Wells Fargo, was the holder of the note, Supra. On February 2, 2004, the original Note appeared to be lost in that it was not found in the FNMA file, Supra. There is no evidence that the original Note was ever in the possession of the Document Custodian after September 1 (per Ms. Bosier’s testimony, Supra.) or September 21, 2002, when original documents were said to have been returned, Supra. For this reason, adopting Wells Fargo’s Proposed Findings at ¶ 27, ¶ 28, ¶ 33, ¶ 34, ¶ 35, ¶ 36, and ¶ 37, Exhibit 1, exclusively and verbatim, was a mistake and reversible error in so far as they contribute to a false view of the case in which the original Note was somehow in Wells Fargo possession after September 1 or September 21, 2002, and that as a result Wells Fargo was entitled to enforce the security instrument under § 55-3-309, and thus had standing to file and prosecute the foreclosure.

Following affirmance of the judgment, the foreclosure auction was held and thereafter the foreclosure sale was confirmed without hearing despite objections filed by Kline. It was a mistake for the Trial Court to include in its Judgment that Kline had to vacate the property prior to the date set for the Foreclosure Sale, which necessarily would predate Confirmation of Sale. After the March 4, 2019 hearing, the Trial Court signed a Writ of Assistance and on April 10, 2019, a deputy sheriff drilled into the locks and had Kline removed from what was her home. On May 17, 2019, Breckenridge allowed men into the property who displaced Kline’s things, took some things for themselves, and refused to move things Kline wanted stored. This caused distress to Kline so great that she could not sleep for three days.

Kline’s Appeal includes the following (the Exhibits were removed by the Appeals Court clerk):

7.) It was a mistake for the In Rem Judgment, Exhibit 1, to say in its final paragraph that personal property remaining in the property after an Order Approving Sale would be deemed abandoned. Kline objected to the Sale but there was no hearing and the Order Approving Sale was signed by the Court after it was sent to the Court by Wells Fargo attorneys without any hearing. That was one of the things Kline was objecting to at the March 4, 2019 Hearing from which the appealed Order emanated. It is a mistake for the Trial Court to dispose of Kline’s personal property prior to the conclusion of all available appeals. New Mexico Statutes seem to indicate that a judgment lien on personal property would necessitate separate court action from the foreclosure. §§ 39-1-1 through 39-1-20.

Restatement of the Law: Second; Judgments 2D (hereinafter “Rest.2d Judgments”) explains that because the law of collateral estoppel is essentially equitable in nature there must be some leeway for reexamination of judgments, i.e., there must be some limit to the principle of finality to accord basic fairness to the parties, Rest.2d Judgments, Introduction, p. 11. One of the circumstances to be considered in determining whether a party should be precluded from relitigating an issue with an opposing party is whether “the determination relied on as preclusive was itself inconsistent with another determination of the same issue.” Rest.2d Judgments, § 29.

In relation to Rest.2d Judgments, Kline’s Docketing Statement filed June 11, 2019, appeals the Order Resulting from March 4, 2019 Hearing, and is based on the “extremely detailed findings of fact and conclusions of law” cited by the Trial Court and composing “the determination relied on as preclusive,” as well as on the law of the land, to include N.M. Supreme Court and U.S. Supreme Court case law. Basically, the determination relied upon as preclusive is inconsistent with the determination that a foreclosure plaintiff is required to own the note and the mortgage in a foreclosure. “The Bank of New York had the burden of establishing timely ownership of the note and the mortgage to support its entitlement to pursue a foreclosure action,” Bank of New York v. Romero, 320 P.3d 1 (2014).

Warth v. Seldin, 422 U.S. 490 (1975) held:

Whether the rules of standing are considered as aspects of the constitutional requirement that a plaintiff must make out a “case or controversy” within the meaning of Art. III, or, apart from such requirement, as prudential limitations on the courts’ role in resolving disputes involving “generalized grievances” or third parties’ legal rights or interests, none of the petitioners has met the threshold requirement of such rules that to have standing a complainant must clearly allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute and the exercise of the court’s remedial powers. Pp. 422 U. S. 498-518. (emphasis added)

Particularly apropos to the present case, Warth v. Seldin says,

For purposes of ruling on a motion to dismiss for want of standing, both the trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party. E. g., Jenkins v. McKeithen, 395 U.S. 411, 421 -422 (1969). At the same time, it is within the trial court’s power to allow or to require the plaintiff to supply, by amendment to the complaint or by affidavits, further particularized allegations of fact deemed supportive of plaintiff’s standing. If, after this opportunity, [422 U.S. 490, 502] the plaintiff’s standing does not adequately appear from all materials of record, the complaint must be dismissed.

Thus, in the instant case the trial court was within its power to allow Wells Fargo to file its Amended Complaint and proceed to trial. It would not appear to be within the trial court’s power to allow Wells Fargo’s false affidavit and false Notice of Lost Note in support of its standing, as discussed above. Once materials of record supplied at trial showed that GE CMS was holder of Kline’s Promissory Note in 2002, or possibly its employee was the holder, Supra., the last recorded time the Note was seen, and there is no evidence of the Note having arrived at the Document Custodian so that Wells Fargo’s eventual acquisition of the Document Custodian could be said to make Wells Fargo the holder at the time the Note was lost, plaintiff Wells Fargo’s standing no longer appeared adequate given that Kline’s mortgage was not assigned to Wells Fargo until 2005, at which time the assignor apparently no longer had the Note, Supra. Further, under Warth v. Seldin, “If, after this opportunity, [422 U.S. 490, 502] the plaintiff’s standing does not adequately appear from all materials of record, the complaint must be dismissed.”

In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues. This inquiry involves both constitutional limitations on federal-court jurisdiction and prudential limitations … In both dimensions it is founded in concern about the proper – and properly limited – role of the courts in a democratic society. Warth v. Seldin (citations omitted)

The law of the land requires that if, after plaintiff has been given the opportunity to prove standing, standing does not adequately appear from all materials of record, the complaint must be dismissed, Warth v. Seldin.

Farmers State Bank of Texhoma v. Clayton Nat Bank, Supreme Court of New Mexico Apr 12, 1926, 31 N.M. 344, 245 P. 543, deals with the law of the land in relation to the doctrine of the law of the case, “[W]e feel that we are not endangering the orderly and expeditious administration of the law by refusing here to apply the doctrine of the law of the case … [W]e feel that it is better and more just to apply in this case what we find to be the law of the land. As affects the parties concerned, the evil effects of so doing are trivial as compared to the unfortunate consequences of perpetuating the error.”

In relation to Wells Fargo v. Kline, the error is that the affirmed decision of the trial court, e.g. that Wells Fargo had standing to foreclose, runs contrary to the fact that Kline’s Original Promissory Note was lost between May 16, 2002, September 1, 2002, or September 21, 2002, all of which dates compose a period of time during which GE CMS was the holder of the note, and February 2, 2004, when the original Note was not found in the FNMA file, Supra. Additionally, there is no evidence that the Note was ever in the possession of the Document Custodian after September 1 or September 21, 2002, Supra. The whole of the time period, 2002 – February 2, 2004, is before Kline’s mortgage was assigned to Wells Fargo in 2005. Significantly, by 2005 GE (GE LLC successor by merger to GE CMS) no longer possessed the Note.

The facts show that there was no time at which Wells Fargo was the holder Kline’s Original Promissory Note. Without being the holder of Kline’s Original Promissory Note at any time, Wells Fargo is not entitled to enforce Kline’s Note under the UCC, N.M. Statutes 55-3-301 and 55-3-309. Therefore, under the facts of this case and the law of the land it is an error to say that Wells Fargo had standing to file its Complaint for Foreclosure in 2008. In keeping with this, Kline’s Docketing Statement, Exhibit 5, says, “It is better and more just to apply in this case … the law of the land,” Farmers.

            Significantly, Farmers says the law of the case, “has never been applied in this state in a case where, admittedly, the former holding was wrong.”

            Under Bank of New York, the former holding in the instant case was wrong; Wells Fargo did not establish timely ownership of the note and mortgage to support its entitlement to pursue a foreclosure action. “The Bank of New York had the burden of establishing timely ownership of the note and the mortgage to support its entitlement to pursue a foreclosure action,” Bank of New York v. Romero, 320 P.3d 1 (2014).

State King v. UU Bar Ranch Limited Partnership, No. 30,722. Decided: March 05, 2009 by the New Mexico Supreme Court, says, “We have more recently noted that the law-of-the-case doctrine is ‘discretionary and flexible,’ Trujillo v. City of Albuquerque, 1998-NMSC-031, ¶ 31, 125 N.M. 721, 965 P.2d 305, and is not a doctrine ‘of inflexible law,’ Reese v. State, 106 N.M. 505, 506, 745 P.2d 1153, 1154 (1987) (quoting 5 Am.Jur.2d Appeal and Error §750 at 194 (1962)).

The law of the case and stare decisis are each about upholding what has already been decided. Stare decisis in particular lies at the very core of the judicial process. In relation to the instant case, Bank of New York decided that the plaintiff in a foreclosure has, “the burden of establishing timely ownership of the note and the mortgage to support its entitlement to pursue a foreclosure action.”

Trujillo v. City of Albuquerque, says:

Stare decisis is the judicial obligation to follow precedent, and it lies at the very core of the judicial process of interpreting and announcing law. See State ex rel. Callaway v. Axtell,74 N.M. 339, 343, 393 P.2d 451, 454 (1964); Planned Parenthood v. Casey, 505 U.S. 833, 854, 112 S. Ct. 2791120 L. Ed. 2d 674 (1992). It promotes very important principles in the maintenance of a sound judicial system: 1) stability of the law, see, e.g., State v. Jones, 44 N.M. 623, 634, 107 P.2d 324, 331 (1940) (Bickley, C.J., concurring) (stating that the object of stare decisis is to promote “uniformity, certainty, and stability in the law”); Note, Constitutional Stare Decisis, 103 Harv. L.Rev. 1344, 1347 (1990); 2) fairness in assuring that like cases are treated similarly, see, e.g., City of Las Vegas v. Oman, 110 N.M. 425, 433, 796 P.2d 1121, 1129 (Ct.App.1990); and 3) judicial economy, see, e.g., id. (discussing how stare decisis discourages the relitigation of similar issues).

Trujillo says stare decisis may be overruled, but departure from precedent demands special justification and precedent may be overturned only when particular questions are considered:

*315 {34} However, the principle of stare decisis does not require that we always follow precedent and may never overrule it. Instead, the doctrine states that “in both common law and constitutional cases … `any departure from [precedent] … demands special justification.'” Note, supra at 1346 (quoting Arizona v. Rumsey, 467 U.S. 203, 212, 104 S. Ct. 230581 L. Ed. 2d 164(1984)). Particular questions must be considered before overturning precedent: 1) whether the precedent is so unworkable as to be intolerable; 2) whether parties justifiably relied on the precedent so that reversing it would create an undue hardship; 3) whether the principles of law have developed to such an extent as to leave the old rule “no more than a remnant of abandoned doctrine;” and 4) whether the facts have changed in the interval from the old rule to reconsideration so as to have “robbed the old rule” of justification. Planned Parenthood, 505 U.S. at 855, 112 S. Ct. 2791; see also Patterson v. McLean Credit Union, 491 U.S. 164, 173, 109 S. Ct. 2363105 L. Ed. 2d 132 (1989) (noting that special circumstances to reverse precedent might include “subsequent changes or development in the law” or showing that the precedent has become a “detriment to coherence and consistency in the law”).

In the previous appeal in this case: 1) the precedent set in Bank of New York was not shown to be unworkable or intolerable; 2) Kline justifiably relied on Bank of New York, and was caused unjustifiable hardship when the Appeals Court effectively reversed Bank of New York by allowing that Wells Fargo had standing despite not having established timely ownership of the note and the mortgage to support its entitlement to pursue a foreclosure action; 3) the principles of law were not shown to have developed so as to leave the old rule “a remnant of abandoned doctrine; and 4) it was not shown that the facts changed so as to have “robbed the old rule” of justification.

Discussing the law of the case, in paragraph 40, Trujillo says, “Generally, the law-of-the-case doctrine stands for the proposition that ‘the law applied on the first appeal of a case is binding in the second appeal’ of that case. In paragraph 41, Trujillo says,

{41} The application of the law-of-the-case doctrine, however, is discretionary and flexible; it will not be used to uphold a clearly incorrect decision: [S]ince the doctrine of the law of the case is merely one of practice or court policy, and not of inflexible law, so that appellate courts are not absolutely bound thereby, but may exercise a certain degree of discretion in applying it, there are many holdings in which the courts have retreated from any inflexible rule requiring the doctrine to be applied regardless of error in the former decision, and it has been said that the doctrine should not be utilized to accomplish an obvious injustice, or applied where the former appellate decision was clearly, palpably, or manifestly erroneous or unjust. Reese v. State, 106 N.M. 505, 506, 745 P.2d 1153, 1154 (1987) (quoting, 5 Am.Jur.2d Appeal and Error § 750 at 194 (1962)); see also Killeen v. Community Hosp., 101 Misc. 2d 367, 420 N.Y.S.2d 990, 992 (Sup.Ct.1979) (law-of-the-case is discretionary); Greene v. Rothschild,68 Wash.2d 1, 414 P.2d 1013, 1013-14 (Wash.1966) (if application of the doctrine would work a manifest injustice to one party, the erroneous decision should be disregarded and set aside).

In Trujillo the N.M. Supreme Court reversed its earlier decision, “After lengthy reexamination of the parties’ arguments and consideration of law-of-the-case and stare decisis principles, this Court now reverses that decision.”

With stare decisis and law-of-the-case in mind, and after reexamination of the Findings of Fact and the parties’ arguments it would be better and more just for the Appeals Court to apply in this case the law of the land and the precedent set in Bank of New York, and to reverse its previous decision affirming the Trial Court.

ARGUMENT WITH AUTHORITIES

            The Complaint does not constitute an impermissible collateral attack on the Trial Court’s Judgment; Wells Fargo’s fraud makes the attack permissible. Fraud, defined as an intentional misrepresentation of existing material facts made with knowledge of its falsity and for the purpose of inducing action based on the misrepresentation, which will result in injury or damage, is at the heart of Wells Fargo’s Proposed Findings ¶ 27, ¶ 28, ¶ 35, ¶ 36, and ¶ 37, Exhibit 1, which were adopted by the Trial Court, Supra, and at the heart of Wells Fargo’s Complaint for Foreclosure, Breckenridge’s Motion to Dismiss, Ex. A. Fraud includes any intentional or deliberate act to deprive another of property or money by guile, deception, or other unfair means.

In Sanders v. Estate of Sanders, 1996-NMCA-102, 122 N.M. 468, 927 P.2d 23, the Appeals Court wrote,

“It has long been the general rule that “a judgment is not subject to collateral attack where the court had jurisdiction of the subject matter and of the parties. . . [It] is not open to contradiction or impeachment, in respect of its validity, verity, or binding effect, by parties or privies in any collateral action or proceeding, except . . . for fraud in its procurement.” (Citations omitted.) Royal Int’l Optical Co. v. Texas State Optical Co., 92 N.M. 237, 241, 586 P.2d 318, 322 (Ct. App.) (quoting 46 Am. Jur. 2d Judgments § 621 (1969) and 49 C.J.S. Judgments § 401 (1947)), cert. denied, 92 N.M. 260, 586 P.2d 1089 (1978), and cert. denied, 442 U.S. 930, 61 L. Ed. 2d 297, 99 S. Ct. 2860 (1979).

The exception is applicable here.

 STATUTE OF LIMITATIONS

Other than for specific exceptions, the New Mexico statute of limitations generally begins to run at the time when a “cause of action arises” – in other words, at the time when an injury occurs that would qualify for a lawsuit to be filed in a New Mexico state court.

In actions for relief, on the ground of fraud or mistake, and in actions for injuries to, or conversion of property, the cause of action shall not be deemed to have accrued until the fraud, mistake, injury or conversion complained of, shall have been discovered by the party aggrieved. History: Laws 1880, ch. 5, § 6; C.L. 1884, § 1865; C.L. 1897, § 2918; Code 1915, § 3366; C.S. 1929, § 83-123; 1941 Comp., § 27-106; 1953 Comp., § 23-1-7. In this case, Kline did not discover, in terms of apprehending, Wells Fargo’s fraud in relation to how Wells Fargo claimed to be entitled to enforce the Note until after Wells Fargo’s evidence presented at trial was accepted by the Trial Court as true and as grounds to foreclose Kline’s home, and the Trial Court entered its Judgment, filed November 9, 2017. Kline could have discovered Wells Fargo’s fraud from Wells Fargo’s Proposed Findings of Facts, filed June 15, 2017, but they didn’t really make sense to Kline until she heard them as testimony from Ms. Bosier at trial. Kline in fact has a traumatic brain injury which interferes with her initial understanding of things if she has a belief that runs counter to something. Here, Kline believed the Trial Court would decide, following the trial, that Wells Fargo had not held the note when it filed for Foreclosure or when the note was lost. If the Trial Court had not adopted Wells Fargo’s Proposed Findings of Facts and Conclusions of Law, Kline would not have suffered the loss of her home and she would not have known that throughout the case Wells Fargo was counting on its Fraud being convincing to the Trial Court. Beneath each Count in Kline’s Complaint there is the fraud by Wells Fargo.

WHEREFORE Kline prays that the Motions to Dismiss of Defendants Wells Fargo Bank, N.S. and Breckenridge Property Fund 2016, LLC be denied and for whatever other relief the Court deems proper and just.

Respectfully submitted,

 

Karen M. Kline, Plaintiff – Self Represented

Room 122

Motel 6

3695 Cerrillos Rd.

Santa Fe, NM  87507

(505) 471-2367

CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing was mailed on June 17, 2019 to the following parties:

Snell & Wilmer L.L.P.

Gregory J. Marshall

Joshua R. Zimmerman

201 Third St. N.W. Suite 500

Albuquerque, NM 87102

(602) 382-6000

[email protected]

[email protected]

Attorneys for Wells Fargo Bank, N.A.

 

Nathan Stimson

Kelcher and & McLeod, PA for Breckenridge Property Fund 2016, LLC

PO Box AA

Albuquerque, NM 87103

(505) 346-4646