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 on a motel in Gallup, New Mexico, where the City of Gallup recorded liens for delinquent lodger’s taxes and utility service charges against the property. The City initially did not dispute its liens were junior to the Bank's deed of trust. However, after a failed sale of the property to the Navajo Nation, which would have covered all claims, the City sought to assert that its liens had statutory priority over the Bank's deed of trust (paras 2-4).

Procedural History

• District Court of McKinley County: The court approved a foreclosure judgment declaring the City's liens as junior and inferior to the Bank's deed of trust. Subsequently, an amended final judgment was filed, reiterating the City's liens' status and postponing the property's sale to pursue a sale to the Navajo Nation, which ultimately failed (paras 2-3).

Parties' Submissions

• Plaintiffs-Appellants (Bank): Argued that the City's utility lien is entitled to priority under operative statutes but contested the reopening of the final judgment under Rule 1-060(B), claiming there were no grounds justifying such action (para 1).
• Defendant-Appellee (City of Gallup): Filed a motion under Rule 1-060(B)(1) and (6) to correct the final judgment, asserting that its lodger’s tax and utility liens had statutory priority over the deed of trust. The City claimed it had inadvertently failed to assert this priority status earlier due to the anticipated sale to the Navajo Nation (para 4).

Legal Issues

• Whether the district court abused its discretion under Rule 1-060(B) NMRA in granting relief from the final judgment to address the priority of the City's lodger’s tax lien over a previously filed deed of trust lien (para 1).
• Whether the City's lodger’s tax lien under Section 3-38-18.1 of the Lodgers’ Tax Act has statutory priority over the deed of trust (para 1).

Disposition

• The Court of Appeals affirmed the district court's decision, agreeing with its legal conclusion that the City's lodger’s tax lien has statutory priority over the deed of trust and that the district court did not abuse its discretion in granting relief from the final judgment under Rule 1-060(B) (para 1).

Reasons

• Per Michael E. Vigil, J. (James J. Wechsler, J., and Jonathan B. Sutin, J., concurring):
  The district court's decision to reopen the case under Rule 1-060(B) was not an abuse of discretion. The City's motion was timely filed and raised an issue of first impression regarding the priority of its liens. The court was liberal in determining good cause to vacate the judgment to address the true merits and ensure substantial justice (paras 6-14).
  The Court of Appeals held that Section 3-38-18.1(B) of the Lodgers’ Tax Act clearly provides first priority from sale proceeds to the City’s lodger’s tax lien in situations where property of a vendor is sold under court order, thus affirming the district court's ruling (paras 15-24).