Montano v. Bank of America, N.A.

Opinion

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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO 2 FRED MONTANO, 3 Petitioner-Appellant, 4 v. No. 35,866

5 BANK OF AMERICA, N.A., 6 SUCCESSOR BY MERGER TO 7 BAC HOME LOAN SERVICING, 8 L.P., FKA COUNTRYWIDE HOME 9 LOANS, L.P., and FANNIE MAE,

10 Respondents-Appellees,

11 APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY 12 Clay Campbell, District Judge

13 Fred Montano 14 Rio Rancho, NM

15 Pro Se Appellant

16 Weinstein & Riley, PS 17 Jason C. Bousliman 18 Albuquerque, NM

19 for Appellees 20 MEMORANDUM OPINION 21 ZAMORA, Judge.

1 {1} Petitioner Fred Montano, a self-represented litigant, appeals from the district 2 court’s order granting Respondent Bank of America, N.A.’s motion to dismiss and 3 dismissing the complaint with prejudice. In this Court’s notice of proposed 4 disposition, we proposed to summarily affirm. Appellant filed a memorandum in 5 opposition (MIO), which we have duly considered. Remaining unpersuaded, we 6 affirm the district court’s order granting Respondent’s motion to dismiss and 7 dismissing the complaint with prejudice. 8 {2} In his docketing statement, Appellant raised four issues: the district court erred 9 (1) by ignoring Appellant’s rescission of the note and mortgage; (2) by ignoring the 10 fact that Respondent did not prove it had the right to enforce the note, a burden 11 established by the New Mexico Supreme Court; (3) because subject matter jurisdiction 12 may be raised at any time and is not subject to doctrines of res judicata and collateral 13 estoppel; and (4) in ruling that res judicata and collateral estoppel apply. [DS 5; see 14 also DS 6, 10, 11] With regard to issues two through four, in our notice of proposed 15 disposition, we proposed to conclude that the district court did not abuse its discretion 16 in applying collateral estoppel and correctly applied res judicata to bar re-litigation of 17 whether Respondent had standing to bring the prior case [CN 5], and that, 18 accordingly, we need not address whether Respondent had the right to enforce the 19 note, and whether it had standing to foreclose because these issues have already been

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1 addressed and resolved in the prior case [CN 5–6; see also, e.g., RP 59–72 (this 2 Court’s memorandum opinion in the prior case addressing, inter alia, standing)]. 3 {3} In his MIO, Appellant does not respond to our proposed disposition with regard 4 to collateral estoppel and res judicata aside from simply contending that, although 5 standing was raised in the prior case, that court granted summary judgment on the 6 pleading without requiring Respondent to prove standing, so its judgment is void 7 because it did not consider the issue. [MIO 3-4] In other words, Appellant essentially 8 contends that, because the district court erred in determining that Respondent had 9 standing, the preclusion doctrines do not apply. As Appellant cites no authority for 10 this contention, we assume none exists. See Curry v. Great Nw. Ins. Co., 2014- 11 NMCA-031, ¶ 28, 320 P.3d 482 (“Where a party cites no authority to support an 12 argument, we may assume no such authority exists.”). Moreover, to the extent 13 Appellant fails to actually address the merits of the collateral estoppel and res judicata 14 arguments, we consider such issues abandoned. See State v. Johnson, 1988-NMCA- 15 029, ¶ 8, 107 N.M. 356, 758 P.2d 306 (explaining that, when a case is decided on the 16 summary calendar, an issue is deemed abandoned when a party fails to respond to the 17 proposed disposition of that issue). Additionally, although Appellant does make 18 additional standing and jurisdictional arguments, we do not address these issues 19 because, as noted above and in our notice of proposed disposition, such arguments are

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1 precluded from reconsideration by the doctrines of collateral estoppel and res judicata. 2 [See CN 2-6] 3 {4} The only argument remaining is whether Appellant’s attempted rescission of 4 the note is valid. In our notice of proposed disposition, we noted that, although the 5 district court did not expressly rule on this issue, we nonetheless proposed to affirm 6 under the “right for any reason” doctrine. See Cordova v. World Fin. Corp. of N.M., 7 2009-NMSC-021, ¶ 18, 146 N.M. 256, 208 P.3d 901 (stating that “it is established law 8 that our appellate courts will affirm a district court’s decision if it is right for any 9 reason, so long as the circumstances do not make it unfair to the appellant to affirm”). 10 [CN 6] We then proceeded to explain that the right to rescission expires three years 11 after the date of consummation of the transaction or upon the sale of the property, 12 whichever occurs first, and that, as such, in the present case, because the transaction 13 consummated on May 7, 2003 [RP 28], the right to rescission expired on May 7, 2006. 14 [CN 6-7] See 15 U.S.C. § 1635(a), (f) (2012); Beach v. Ocwen Fed. Bank, 523 U.S. 15 410, 415-19 (1998) (discussing the federal right to rescind and concluding that “the 16 Act permits no federal right to rescind, defensively or otherwise, after the 3-year 17 period of § 1635(f) has run”). 18 {5} In his MIO, Appellant continues to argue that his right to rescission is absolute 19 and complete upon his having mailed notice of such rescission to Respondent; that

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1 this Court and the district court may not review such exercise of his 2 right—notwithstanding the fact that Appellant brought the petition before the district 3 court to enforce such rescission and appealed the district court’s dismissal to this 4 Court; and that there is no evidence that the transaction has consummated because the 5 note is void since it was purportedly rescinded, a circular argument in which 6 Appellant expends much focus on this Court’s use of the word “appears.” [See MIO 7 4-21] We first briefly address Appellant’s argument regarding the date of 8 consummation. [See MIO 4-5, 8] The transaction in the present case was 9 consummated on May 7, 2003, as indicated by the executed note attached to 10 Appellant’s complaint. [RP 28-30] As the Code of Federal Regulations defines 11 “consummation” as “the time that a consumer becomes contractually obligated on a 12 credit transaction[,]” 12 C.F.R. § 226.2(a)(13) (2012), and as the borrower, 13 Appellant’s predecessor in interest [RP 8, 135, 176], became contractually obligated 14 on the date she signed the promissory note, this is simply definitional. The note is 15 evidence of consummation, and we are aware of no evidence in the record, and 16 Appellant points us to no evidence in the record, that undermines this. Accordingly, 17 as previously suggested, we now conclude that the transaction was consummated on 18 May 7, 2003.

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1 {6} Second, we address Appellant’s argument that consummation and delivery of 2 all required disclosures and their acceptance must occur before the three-year 3 expiration of the right to rescind commences. [See MIO 5, 8] As noted by Appellant 4 and as we stated in our calendar notice, 15 U.S.C. § 1635(f) (2012) states, in pertinent 5 part, that

6 [a]n obligor’s right of rescission shall expire three years after the date of 7 consummation of the transaction or upon the sale of the property, 8 whichever occurs first, notwithstanding the fact that the information and 9 forms required under this section or any other disclosures required under 10 this part have not been delivered to the obligor[.]

11 (Emphasis added.) [MIO 5] Appellant apparently misunderstands the meaning of the 12 word “notwithstanding” in his argument that delivery of all disclosures and their 13 acceptance are required before the three-year expiration period begins. [MIO 5] 14 “Notwithstanding” means “despite” or “in spite of.” Black’s Law Dictionary 1231 15 (10th ed. 2014). Thus, Section 1635(f) in fact states that the right of rescission expires 16 three years after consummation or upon the sale of the property, whichever occurs 17 first, despite the fact that such disclosures have not been delivered. In other words, not 18 only is it not a requirement that such disclosures be delivered before the three-year 19 period begins to run, but the opposite is true—the three-year period begins to run even 20 if such disclosures have not been delivered. See id.

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1 {7} Finally, we address the bulk of Appellant’s argument: that rescission is effective 2 upon mailing of the notice of such rescission; that, absent a lawsuit by a lender 3 disputing such rescission, it is an absolute right requiring or allowing no judicial 4 review; and that the three-year period discussed in Section 1635(f) is not relevant to 5 whether the rescission itself is effective. [See MIO 6–8, 9–13, 15–18, 19–21] The only 6 law Appellant cites purportedly in support of his argument that the courts do not have 7 jurisdiction to review the validity of rescission is Jesinoski v. Countrywide Home 8 Loans, Inc., ___ U.S. ___, 135 S. Ct. 790 (2015). Jesinoski neither states nor stands 9 for the proposition that courts have no authority to review a petitioner’s efforts to 10 enforce a notice of rescission. See generally id. [See RP 8 (petition by Appellant 11 seeking to enforce notice of rescission in the district court)] Indeed, such a conclusion 12 is counter-logical. As Appellant cites no other authority, we assume none exists. See 13 Curry, 2014-NMCA-031, ¶ 28. As such, we proceed to consider whether Appellant’s 14 rescission is effective upon mailing of his notice or whether the three-year expiration 15 date bars such attempted rescission. 16 {8} As we explained in our calendar notice, although Section 1635(a) provides 17 obligors with a right to rescind a transaction in certain circumstances, Section 1635(f) 18 limits such right by stating that it “shall expire three years after the date of 19 consummation of the transaction or upon the sale of the property, whichever occurs

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1 first[.]” See also Beach, 523 U.S. at 415-19 (discussing the federal right to rescind and 2 concluding that “the Act permits no federal right to rescind, defensively or otherwise, 3 after the [three]-year period of [Section] 1635(f) has run”). [CN 6-7] Appellant 4 contends that Jesinoski somehow overrides this limitation because it addresses 5 how rescission is effective, not when. [See MIO 9, 15] However, Jesinoski expressly 6 states that the “conditional right to rescind does not last forever. Even if a lender never 7 makes the required disclosures, the right of rescission shall expire three years after 8 the date of consummation of the transaction or upon the sale of the property, 9 whichever comes first.” 135 S. Ct. at 792 (citing Section 1635(f)). Thus, the United 10 States Supreme Court made clear that, although Section 1635(f) does not change the 11 fact that the borrower need not sue in order to effectuate the right—i.e., that the right 12 is effective upon notice mailed—the right is still conditioned upon the three-year 13 period set forth in Section 1635(f). See Jesinoski, 135 S. Ct. at 792 (stating that the 14 right expires three years after the date of consummation of the transaction, that there 15 is “no doubt that rescission is effected when the borrower notifies the creditor of his 16 intention to rescind[,] . . . so long as the borrower notifies within three years after the 17 transaction is consummated,” and that Section 1635(f) “tells us when the right to 18 rescind must be exercised” (first emphasis added)). Jesinoski clearly reiterates what 19 Section 1635(f) and Beach have already made clear: the right to rescind only exists

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1 for three years after the transaction has been consummated. See Jesinoski, 135 S. Ct 2 at 792; Beach, 523 U.S. at 415-19; see also Section 1635(f). As the transaction in the 3 present case commenced on May 7, 2003, the time within which Appellant or his 4 predecessor in interest was permitted to exercise his or her right of rescission expired 5 three years later, on May 7, 2006. Appellant’s arguments to the contrary are 6 unpersuasive. As Appellant had no right of rescission on January 18, 2011, when he 7 attempted to exercise such right [RP 11], such attempt was invalid. Thus, Appellant’s 8 complaint was properly dismissed with prejudice. 9 {9} Accordingly, for the reasons stated in our notice of proposed disposition and 10 herein, we affirm the district court’s order granting Respondent’s motion to dismiss 11 and dismissing the complaint with prejudice. 12 {10} IT IS SO ORDERED.

13 14 M. MONICA ZAMORA, Judge

15 WE CONCUR:

16 17 LINDA M. VANZI, Chief Judge

18 19 JAMES J. WECHSLER, Judge