Flagstar Bank v. Mavestrand ( 2014 )

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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 FLAGSTAR BANK, FSB,
3 Plaintiff-Appellee,
4 vs. No. 33,212
5 TOR MAVESTRAND & JANE DOE
6 MAVESTRAND, HUSBAND AND WIFE;
7 WELLS FARGO BANK, N.A.; ABC
8 CORPORATIONS I-X; XYZ
9 PARTNERSHIPS I-X, JOHN DOES
10 I-X, THE UNKNOWN HEIRS AND
11 DEVISEES OF ANY OF THE ABOVE,
12 IF DECEASED,
13 Defendants-Appellants.
14 APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
15 Francis J. Mathew, District Judge
16 McCarthy & Holthus
17 Denise A. Snyder
18 Albuquerque, NM
19 McCarthy Holthus & Levine
1 Matthew Silverman
2 Scottsdale, AZ
3 for Appellee
4 Eric Ortiz, Attorney at Law
5 Eric N. Ortiz
6 Jean Y. Kao
7 Joseph C. Gonzales
8 Albuquerque, NM
9 for Appellant Tor Mavestrand
10 MEMORANDUM OPINION
11 HANISEE, Judge.
12 {1} Appellant-Defendant Tor Mavestrand (Mavestrand) appeals from the district
13 court’s order denying his motion to set aside the default judgment and vacate the
14 foreclosure sale of his home. Our notice proposed to reverse and Plaintiff-Appellee
15 Flagstar Bank (Bank) filed a memorandum in opposition. We are unpersuaded by
16 Bank’s arguments, and therefore reverse.
17 {2} Mavestrand’s issues relate to the central contention that the district court erred
18 in denying his Rule 1-060(B) NMRA amended motion to set aside the default
19 judgment. [DS 4; RP 90, 97, 110, 116, 122] We review the district court’s denial of
20 a motion to set aside a default judgment for abuse of discretion. See Sunwest Bank v.
21 Roderiguez, 1989-NMSC-011, ¶ 6, 108 N.M. 211, 770 P.2d 533. Mavestrand argues
22 that the default judgment should be set aside based on Bank’s failure to properly serve
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1 him with the summons and complaint. [DS 4] Mavestrand also argues that the default
2 judgment should be set aside because he had a meritorious defense. [DS 4] For
3 reasons discussed below, we conclude that the propriety of the district court’s ruling
4 on the motion to set aside turns on the sufficiency of the service of process.
5 {3} In support of its argument that the service of process was sufficient [MIO 5],
6 Bank points to pleadings in the record proper and their attached exhibits which reflect
7 that Mavestrand was properly served with the summons and complaint. In significant
8 part, these pleadings and attached exhibits include a certified mail receipt card with
9 what appears to be Mavestrand’s signature that he received the summons and
10 complaint [RP 97, 101, 104, 116; MIO 2], as well as an affidavit of service by the
11 process server. [RP 100] We acknowledged these pleadings and attached exhibits in
12 our notice, but pointed out that the matter of personal service was nonetheless
13 disputed below. To this end, the docketing statement provides that “Mavestrand was
14 never personally served . . . [and] [i]t was established later that Jane Doe [Jane Doe
15 Mavestrand, Husband’s named wife] was served with summons and complaint via
16 certified mail.” [DS 2] Consistent with this, Mavestrand’s challenge to the service of
17 process was set forth in his affidavit below [RP 93] and, while not apparent from the
18 record proper, perhaps too at the hearing on his motion to set aside the default
19 judgment. [RP 114] Bank disputes Mavestrand’s position that he was not served,
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1 arguing Mavestrand “failed to provide evidence that the description provided in the
2 [a]ffidavit of service was false and failed to state the signature on the green card was
3 not his . . . [and] [i]nstead . . . prepared a self-serving affidavit claiming service was
4 not perfected.” [MIO 5; RP 93]
5 {4} Bank suggests in its memorandum in opposition that the district court resolved
6 the dispute over personal service, asserting that the district court “found that service
7 was perfected upon [Mavestrand] and [Mavestrand] received proper service.” [MIO
8 5] Significantly and problematically, however, and as we noted in our notice, the
9 district court’s order does not resolve the factual dispute over whether Mavestrand
10 received proper service of process. Instead, the district court’s order provides that
11 “regardless of whether service was proper,” Mavestrand had actual notice of the
12 complaint [RP 122] for purposes of establishing jurisdiction over Mavestrand for the
13 default judgment. [DS 3; RP 122] Thus, rather than resolve the dispute over whether
14 Mavestrand received proper service of process, the district court instead attempted to
15 rely on Mavestrand’s actual notice of the summons and complaint to establish its
16 jurisdiction over Mavestrand. [RP 122]
17 {5} As discussed in our notice, actual notice alone was not enough to give the
18 district court jurisdiction over Mavestrand, because case law provides the district court
19 lacks jurisdiction over a defendant absent that individual being properly summoned
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1 into court. See generally Trujillo v. Goodwin, 2005-NMCA-095, ¶ 10, 138 N.M. 48,
2 116 P.3d 839 (refusing to overlook technical deficiencies in service, although
3 defendant had actual notice of the case, where plaintiff “cite[d] no cases standing for
4 the proposition that a district court has jurisdiction to issue a binding judgment against
5 a party not served in accordance with Rule 1-004 who does not somehow waive the
6 defects in service”); Edmonds v. Martinez, 2009-NMCA-072, ¶ 17, 146 N.M. 753,
7 215 P.3d 62 (rejecting broader interpretation of the service statute allowing service “to
8 be performed in a manner reasonably calculated to bring the proceedings to the
9 attention of the defendant[,]” where plaintiff “cited[d] no cases standing for the
10 proposition that a district court has jurisdiction over a party when personal service was
11 not effectuated subject to the requirements of Rule 1-004”). Accordingly, absent
12 proper service or waiver of service of process, the district court lacked jurisdiction to
13 enter default judgment against Maverstrand, such that the default judgment should be
14 set aside. See Ortiz v. Shaw, 2008-NMCA-136, ¶ 17, 145 N.M. 58, 193 P.3d 605
15 (holding that “where the court never acquires jurisdiction over a defendant because
16 of improper service, it abuses its discretion in refusing to set aside a default
17 judgment”); see also Capco Acquisub, Inc. v. Greka Energy Corp., 2008-NMCA-153,
18 ¶ 46, 145 N.M. 328, 198 P.3d 354 (citing Ortiz as authority for the reversal of default
19 judgment against the defendant who had actual knowledge of the suit, but was never
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1 properly served). We decline to resolve the dispute of whether or not Mavestrand
2 received proper service of process in light of the district court’s failure to do so. See,
3 e.g., State v. Franks, 1994-NMCA-097, ¶ 8, 119 N.M. 174, 889 P.2d 209 (recognizing
4 that “ordinarily it is improper for this Court to engage in fact-finding; that is a
5 trial-court function”).
6 {6} To conclude, we reverse and remand for further proceedings in accordance with
7 this opinion.
8 {7} IT IS SO ORDERED.
9 _____________________________
10 J. MILES HANISEE, Judge
11 WE CONCUR:
12 __________________________________
13 MICHAEL D. BUSTAMANTE, Judge
14 __________________________________
15 TIMOTHY L. GARCIA, Judge
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