AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The case involves a foreclosure action initiated by New Mexico Bank & Trust (Bank) against Del Reanne Lucas (Borrower) following Borrower's failure to make payments on a home equity line of credit (HELOC). The HELOC was secured by a mortgage on property located in Albuquerque. After Borrower filed for Chapter 7 bankruptcy, which discharged her personal liability for the HELOC debt, she failed to make subsequent payments. The Bank then filed a complaint for foreclosure. Borrower contended that the Bank failed to provide notice of default as required by New Mexico's Home Loan Protection Act (HLPA) before filing the foreclosure action (paras 2-6, 8).

Procedural History

• District Court of Bernalillo County, Nan G. Nash, District Judge: Issued a summary and default judgment, decree for foreclosure, and order of sale in favor of the Bank, following the court's order granting Bank's summary-judgment motion and denying Borrower's summary-judgment motion (para 1).

Parties' Submissions

• Bank: Argued that it properly exercised its rights under the HELOC and Mortgage by filing its complaint for in rem foreclosure and that it was entitled to judgment as a matter of law on Borrower’s affirmative defenses because the Mortgage did not require notice after default and Bank was prohibited from sending a HLPA notice due to the bankruptcy discharge injunction (paras 12, 13).
• Borrower: Contended that providing notice and the right to cure pursuant to HLPA is a statutory condition precedent to filing a foreclosure suit in New Mexico and that the Bank’s failure to provide such notice constitutes a violation of HLPA and a per se violation of the Unfair Practices Act (UPA) (paras 11, 14).

Legal Issues

• Whether the Bank's failure to comply with the HLPA notice requirements before filing the foreclosure action barred the Bank from proceeding with the foreclosure (paras 22-27).
• Whether the district court erred in its conclusions regarding the bankruptcy discharge injunction and conflict preemption as reasons for dismissing Borrower's affirmative defenses and counterclaim (paras 34-35).

Disposition

• The Court of Appeals affirmed the district court's judgment in favor of the Bank, although on grounds different from those stated by the district court (para 36).

Reasons

• The Court of Appeals held that even if the HLPA is not preempted by federal bankruptcy law, nothing in HLPA’s text bars the filing and prosecution of an in rem foreclosure action. The court concluded that the Bank's failure to comply with HLPA Section 58-21A-6(A) did not operate to deprive the creditor of its legal rights or deprive the district court of jurisdiction over an in rem foreclosure action. Furthermore, the court found that Borrower did not challenge any material facts upon which the district court based its rulings and did not show that she was "harmed" by the Bank's failure to comply with HLPA Section 58-21A-6(A), which is necessary to establish standing under HLPA. The court also noted that Borrower's contention that the sale should be set aside was not properly before them as the district court must enter an order approving and confirming the Property sale, and no such order is in the record (paras 19-35).