May 21, 2019- Federal National Mortgage Association v. Tracy McDermott, No. A-1-CA-35974

1 	IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 	FEDERAL NATIONAL MORTGAGE
3 ASSOCIATION (FANNIE MAE),
4 	Plaintiff-Appellant/Cross-Appellee,
5 v. 	No. A-1-CA-35974
6 TRACY MCDERMOTT AND LA BUENA
7 VIDA CONDOMINIUMS UNIT OWNERS'
8 ASSOCIATION,
9 	Defendants-Appellees/Cross-Appellants.
10 APPEAL FROM THE DISTRICT COURT OF TAOS COUNTY
11 	Jeff F. McEiroy, District Judge
12 Rodey, Dickason, Sloan, Akin & Robb, P.A.
13 	Jocelyn Drennan
14 Edward Ricco
15 	Charles J. Vigil
16 Albuquerque, NM
17 for Appellant
18 Armstrong & Armstrong, P.C.
19 Julia Lacy Armstrong
20 Taos, NM
21 	for Appellee Tracey McDermott
22 	Walcott, Henry & Winston P.C.
23 	Donald A. Walcott
24 Rachel L. Winston
25 	Santa Fe, NM
26 for Appellee La Buena Vida Condominium Owners' Association
Court of Appeals of New Mexico
Filed 5/21/2019 11:28 AM

/
1 	MEMORANDUM OPINION
2 HANISEE, Judge.
3 	{t} 	The question we answer in this case is whether the district court abused its
4 discretion in granting Plaintiff Fannie Mae's predecessor-in-interest JPMorgan
5 Chase Bank (JPMorgan) an extension to file its notice of appeal under Rule 12-
6 201(E)(3) NMRA. 1 Concluding that it did, we reverse the district court's order .
7 granting the extension and dismiss Fannie Mae's appeal as untimely.
8 BACKGROUND
9 {2} 	JPMorgan filed 	a complaint for 	foreclosure 	against Defendants Tracey
10 McDermott and La Buena Vida Condominium Unit Owners' 	Association in
11 	October 2012. In May 2016 the district court granted Defendants' joint motion to
12 	dismiss the foreclosure action with prejudice under Rule 1-041(E)(l) NMRA, as
13 	JPMorgan had taken no action in the case for more than two years and based on its
14 finding 	that 	JPMorgan's 	inaction 	"was 	inappropriate, 	unnecessary[,] 	and
15 	intentional." JPMorgan moved for reconsideration of the dismissal, which the
16 distri(?t court denied on August 31, 2016. JPMorgan did not file a notice of appeal
1By order of this Court, Fannie Mae was substituted as the plaintiff-appellant
in JPMorgan's appeal of the district court's order dismissing its foreclosure action.
Fannie 	Mae 	also 	was 	substituted 	as 	the 	plaintiff-appellee 	in 	Defendant
McDermott's 	and 	Defendant 	La 	Buena 	Vida 	Condominiums 	Unit 	Owners'
Association's respective app~als of the district court's order granting JPMorgan an
extension to file a notice of appeal, which we consolidated with Fannie Mae's
appeal.
2

1 prior to the September 30, 2016, deadline for filing such notice. See Rule 12-
2 201(A)(l)(b) ("A notice of appeal shall be filed ... within thirty (30) days after the
3 judgment or order appealed from is filed in the district court clerk's office.").
4 	{3} 	On October 7, 2016, a full week after the deadline, JPMorgan filed a notice
5 of appeal and amotion asking the district court to consider its notice timely filed
6 under Rule 12-201(E)(3)2 (providing that a motion for an extension of time filed
7 within thirty days after the original deadline for filing the notice of appeal "may be
8 granted on a showing of excusable neglect or circumstances beyond the control of
9 the appellant"). JPMorgan asked the district court to find that there was "excusable
10 neglect associated with the ability to file a timely notice as [JPMorgan's] counsel
11 	was unable to obtain direction from its client and the investor on the mortgage
12 	loan, Fannie Mae, before the ... September 30, 2016, deadline." Specifically,
13 	JPMorgan represented that its failure to timely file its notice of appeal was due to
14 excusable neglect based on misunderstan~ings · and miscommunication between
15 	[JPMorgan]'s counsel and [JPMorgan] regarding the August 31, 2016 	[o]rder
2 We note that the parties incorrectly cited Rule 12-201(E)(2) rather than
(E)(3) in their arguments to the district court, despite that Subsection (E)(2) had
been renumbered (E)(3) in the 2013 amendments to Rule 12-201. The district
court's statements at the hearing on JPMorgan's motion indicate that it understood
JPMorgan' s motion to be brought pursuant to Subsection (E)(3) and that it applied
the standard of "excusable neglect or circumstances beyond the control of the
appellant" rather than current Subsection (E)(2)'s "good cause" standard. See Rule
12-201(E)(2) (providing that "[i]fthe motion [for extension of time] is filed before
the expiration of the time otherwise prescribed by this rule for filing the notice of
appeal, the motion may be granted on a showing of good cause").
3

1 being a 	final 	appealable order, the 	effect 	of the 	[o]rder, .and who 	would be
2 responsible for prosecuting any appeal. There were also discussions related to ·
3 possible settlement options and the settlement history in the matter. The appeal
4 deadline of September 30, 2016[,] was on a Friday and the parties were all located
5 in different areas of the country, with the management of each party not available.
6 There was miscommunication as to who was responsible for making the decision
7 related to the appeal. It was not until several days past the appeal deadline that the
8 cl~ar direction was received from all parties in a management position about the
9 need to appeal the [o]rder denying the [m]otion to [r]econsider the [d]ismissal with
10 	[p]rejudice.
11 	{4} 	JPMorgan 	argued 	that 	the 	district 	court 	should 	apply 	the 	four-factor
12 balancing test set forth in Pioneer Investment Services Co. v. Brunswick Associates
13 	Ltd. Partnership (Pioneer), 507 U.S. 380 (1993), to evaluate its claim of excusable
14 neglect. See Kinder Morgan CO2 Co. v. State Taxation & Revenue Dep 't (Kinder
15 	Morgan), 2009-NMCA-019, 145 N.M. 579, 203 P.3d 110 (adopting the Pioneer
16 factors to determine whether excusable neglect existed for purposes of granting
17 relief under Rule 1-060(B)(l) NMRA). Defendants responded that New Mexico
18 	has employed a stricter standard for determining "excusable neglect" under Rule
19 	12-201(E)(3) through precedent specifically addressing that rule. See Guess v. Gulf
.20 Ins. Co., 1980-NMSC-040, 94 N.M. 139, 607 P.2d 1157; Capco Acquisub, Inc. v.
4

1 Greka Energy Corp. (Capco), 2007-NMCA-Oll, 140 N.M. 920, 149 P.3d 1017;
2 The district court expressed its opinion that Rule 12-201 (E) itself "gives ... pr~tty
3 clear guidance, even without a lot of consideration of the case law." It found "just
4 on the face" of Rule 12-201(E)(3) that "excusable neglect is present and that the
5 appeal should be considered timely filed." The district court then explained that if
6 it were to 	consider and apply the 	Pioneer 	factors, .it would reach the 	same
7 conclusion. Defendants appeal the district court's order granting JPMorgan an
8 extension to file its notice of appeal.
9 DISCUSSION
10 {5} 	Defendants argue that the district court erred by applying an incorrect
11 	standard for determining whether "excusable neglect" existed under Rule 	12-
12 	201 (E)(3 ), and contend that no excusable neslect existed under the facts of this
13 	case to warrant an extension of time for JPMorgan to file its notice of appeal. We
14 agree.
15 	I.
16 {6}
Standard of Review
We review a district court's ruling on a motion for an extension of time to
17 file a notice of appeal for abuse of discretion. 	Capco, 2007-NMCA-01 f, 125.
18 "[T]he trial court abuses discretion when it applies an incorrect standard, incorrect
19 	substantive law, or its discretionary decision is premised on a misapprehension of
20 the law." Aragon v. Brown, 2003-NMCA-126, 1 9, 134 N.M. 459, 78 P.3d 913.
5

1 Further, "[a]n abuse of discretion occurs when a ruling is clearly contrary to the
2 logical conclusions demanded by the facts and circumstances of the case." Benz v.
3 	Town Ctr. Land, LLC~ 2013-NMCA-lll,, 11, 314 P.3d 688 (internal quotation
4 marks and citation omitted). "[E]ven when we review for an abuse of discretion,
5 our review 	of the application of the law to the facts is conducted 	de 	novo.
6 Accordingly, 	we 	may 	characterize 	as 	an 	abuse 	of discretion a discretionary
7 decision that is premised_ on a misapprehension of the law." Harrison v. Bd. of
8 Regents of the Univ. 	of N.M, 2013-NMCA-105, 114, 311 P.3d 1236 (internal
9 quotation marks and citations omitted). We review a district court's interpretation
10 	of a procedural rule de novo. See Becenti v~ Becenti, 2004-NMCA-091, 16, 136
11 	N.M. 124, 94 P.3d 867 (explaining that "when called upon to apply and interpret
12 rules of civil procedure, we review these questions de novo").
13 	II.
14
15
16 {7}
The 	District 	Court 	Failed 	to 	Apply 	the 	Correct 	Standard 	for
Determining Whether Excusable Neglect Existed to Extend the Time for
Filing a Notice of Appeal Under Rule 12-20l(E)(3)
Under Rule 12-201, if a party fails to file its notice of appeal prior to the
17 expiration of the time prescribed for perfecting an appeal as of right, it may move
18 the district court for an extension of time to file the notice of appeal. Rule 12-
19 20l(E)(3). A motion for an extension of time under Rule 12-20l(E)(3) "may be
20 	granted on a showing of excusable neglect or circumstances beyond the control of
21 	the appellant." Id. (addressing motions for extensions filed within thirty days after
6

1 the expiration of the appeal deadline). Here, JPMorgan claimed that its failure to
2 timely file a notice of appeal was due to excusable neglect, not to any circumst'ance
3 beyond its control. We therefore only address whether the district court abused its
4 discretion in finding that JPMorgan's inaction was due to excusable neglect and in
5 granting the motion. See Capco, 2007-NMCA-01 l,, 26 (noting that the appellants
6 in that case claimed only "excusable neglect" and not "circumstances beyond their
7 control" as a basis for seeking an extension, and proceeding to "only address
8 whether the [appellants'] inaction was due to excusable neglect").
9 A. 	The "Excusable Neglect" Standard Under Rule 12-201(E)(3)
10 {8} 	Decades ago, our Supreme Court declared that the rule for granting an
11 	extension of time to file a notice of appeal is to be "strictly construed so as to
12 prevent the progressive erosion of the rule· to the point that attorneys ·will assume
. 13 	that they have sixty days within which to file notices of appeal." Guess, 1980-
14 NMSC-040,, 17. More recently, this Court reiterated that our Supreme Court "has
15 	prescribed a firm approach to claims of excusable neglect." Capco, 2007-NMrA-
16 011,, 27. In doing so, we specifically contrasted the "firm approach to claims of
17 excusable neglect" made under Rule 12-201(E) with the "liberal standard" for
18 determining the existence of excusable neglect in motions made under Rule 1-
19 060(B)(l). Capco, 2007-NMCA-Ol 1, , 27 (comparing Guess, 	1980-NMSC-040,
20 with Sunwest Bank of Albuquerque v. Roderiguez, 1989-NMSC-Ol 1,, 6, 108 N.M.
7

1 211, 770 P.2d 533 (explaining that courts are to be "liberal in determining the
2 existence 	of 	grounds 	that 	satisfy" 	Rule 	1-060(B)(l)'s 	"excusable 	neglect"
3 standard)). We also reiterated that" '[m]ere failure to receive notice alone, work
4 overload of attorneys, palpable error of counsel and other causes that do not rise to
5 the level of 'unique' circumstances that cannot be anticipated or controlled by a
6 party's counsel are not sufficient.' 	" 	Capco, 	2007-NMCA-Oll, 	127 	(quoting
7 Guess, 	1980-NMSC-040, 	117). 	Finally, 	we 	explained 	that 	"[w]hether 	an
8 appellant's conduct amounts to excusable neglect will depend on the facts and
9 circumstances of each case." Capco, 2007-NMCA-Oll, 127.
10 	{9} 	In Capco, we held that a party's failure to timely file a notice of appeal due
11 	to a claimed "miscommunication" with the party's trial counsel does not constitute
12 excusable neglect where the party "had plenty of time and several opportunities to
13 	correct any miscommunication" and also "failed to provide the district court with
14 	any detail·s regarding the alleged 'miscommunication' with trial counsel[.]" Capco,
15 	2007-NMCA-Ol 1, 1130, 33. The appellants in Capco-subsidiary companies of a
16 	co-defendant parent corporation-·moved for an extension of time to file their
17 notice of appeal after the original deadline for filing the notice had passed. Id. 1 4.
18 	They contended that their failure to timely file their notice of appeal "was a result
19 	of a miscommunication with their attorneys." Id. 15. Specifically, the appellants
20 based their claim of excusable neglect on an apparent miscommunication between
8

1 the attorney who served as general counsel for both the appellants and the parent
2 corporation and trial counsel. Id. General counsel believed that trial counsel would
3 file the notice of appeal on behalf of both the parent corporation and the appellants
4 and did not learn until after trial counsel filed the notice of appeal that it was filed
5 on behalf of the parent corporation only. Id. At the time general counsel became
6 aware of that fact, however, there was still time-at least two weeks-for the
7 appellants to file their own notice of appeal. Id. , 31. The appellants attributed their
8 further delay in filing a notice of appeal-and their failure to file a notice prior to
9 the end of the permissive period for doing so-to "the time required to retain a new
10 firm to handle their motion for an extension and to bring that firm up to- speed on
11 	the facts and circumstances of the underlying case." Id. , 32. Noting the "history"
12 	of the appellants' "complete indifference· to the judicial process throughout the
13 	litigation[,]" the district court denied the appellants' motion for an extension. Id.
14 , 7 (internal quotation marks omitted).
15 	{to} 	This Court affirmed the district court's denial of the motion. See id., 35. In
. 16 doing so, we noted that the record showed that the appellants "had plenty of time
17 and several opportunities to correct any miscommunication they had with their trial
18 	counsel" and "never offered any details as to why [any purported] error went
19 uncorrected." Id., 30. We also expressly rejected the appellants' attempt to excuse
20 their failure to timely file a notice of appeal by attributing the delay in. filing to
9

1 their need to retain substitute counsel. Se~ id. 132. We acknowledged that "a
2 substitution of counsel may incur some delay" but observed that the appellants
3 "could have directed their outgoing counsel to file the motion for an extension
4 under the [more liberal] good cause standard of Rule 12-201(E)(l) before the
5 deadline to file a notice of appeal expired." Id. 1125, 32. We concluded that under
6 the facts of that case, the appellants had "failed to act diligently[,]" and that all of
7 the reasons offered to explain their failure to timely file their notice of appeal
8 failed to "present a compelling case to support a finding of excusable neglect." Id.
9 1132, 34.
10 	{11} 	JPMorgan made no effort in the district court to distinguish Guess or Capco,
11 	either factually or legally, nor does Fannie Mae on appeal. In the district court,
12 JPMorgan argued that the district court should apply Kinder Morgan's approach to
13 	determining the existence of excusable neglect, even though Kinder Morgan's
14 holding was limited to cases arising under Rule 1-060(B)(l). See Kinder Morgan,
15 	2009-NMCA-019, 	119-13 	(noting 	repeatedly 	that 	the 	issue 	the 	Court 	was
16 addressing was the definition of "excusable neglect" as used in Rule 1-060(B)(l)
17 and ultimately adopting the Pioneer test "as the standard for relief under Rule J-
18 	060(B)(l)" (emphasis added)). Indeed, JPMorgan faulted Defendants for failing to
19 "address the four factors relevant to the 'excusable neglect' analysis under Kinder
· 20 Morgan[.]" 	But it was JPMorgan, not Defendants, who failed to address the
10

1 applicable standard for determining excusable neglect under Rule 12-201(E)(3) as
2 set forth in Guess and Capco.
3 {12} 	On appeal, Fannie Mae implicitly acknowledges what JPMorgan did not-
4 that 	Kinder 	Morgan's 	adoption 	of the 	Pioneer 	factors 	as 	the 	standard . for
5 determining 	excusable neglect under Rule 	1-060(B)(l ), 	a decidedly 	"liberal'~
6 standard, does not extend to Rule 12-20l(E)(3). See Kinder Morgan, 2009-NMCA-
7 019, 110 (stating that "unde~ Rule 1..:060(B)(l) it is for the district court ... to
8 determine what is a good excuse, and that the district court should be liberal in that
9 determinatfon" (internal quotation marks and citation omitted)); cf Capco, 2007-
10 NMCA-011, 127 (contrasting Guess's holding that the rule governing extensions
11 	to file 	a notice 	of appeal "should be strictly construed'' with the rule from
12 Roderiguez that district courts should apply a liberal standard in determining the
13 	existence of excusable neglect under Rule 1-060(B)(l) (internal quotation marks
14 and citation omitted)). Fannie Mae nonetheless seeks 	to 	avoid 	Guess's 	clear
15 	pronouncement that Rule 12-20l(E)(3) is to be "strictly construed" by arguing that
16 this Court "should recognize that the analysis of the 'excusable neglect' standard in
17 Pioneer extends to the 'excusable neglect' standard in Rule 12-201(E)(3)." But
18 under the doctrine of stare decisis, 	we are not· at liberty to deviate from the
19 standard set forth in Guess and Capco. See Alexander v. Delgado, 1973-NMSC-
20 	030, 19, 84 N.M. 717, 507 P.2d 778 ("The general rule is that a court lower in
11

1 rank than the court which made the decision invoked as a precedent cannot deviate
2 therefrom 	and 	decide 	contrary 	to 	that 	precedent, 	irrespective 	of whether 	it
3 considers the rule laid down therein as correct or incorrect." (internal quotation
4 marks and citation omitted)); City of Las Vegas v. Oman, 1990-NMCA-069,, 35,
· 5 	110 N.M. 425, 796 P.2d 1121 ("[T]he doctrine of stare decisis presumes that a
6 court will .apply the rules of law previously announced by courts of the same
7 jurisdiction to cases involving similar facts.").
8 {13} 	Likewise, the district court was without authority to adopt or apply a
9 different standard than that already established in. our case law. See Alexander,
10 	1973-NMSC-030,, 9; Oman, 1990-NMCA-069, 135; cf Kinder Morgan, 2009-
11 	NMCA-019, 110 (explaining that "[w]e currently have no explicit guidance in
12 New Mexico decisions on what constitutes 'excusable. neglect' for purposes of
13 	granting relief under Rule 1-060(B)( 1)" before proceeding, in the first instance, to
14 adopt a standard). To the extent that the district court applied Kinder Morgan's
15 	standard for determining excusable neglect in concluding that JPMorgan' s failure
16 to timely file its notice of appeal should be excused, it erred in doing so. However,
17 the record indicates that the district court only peripherally considered the Pioneer
18 	factors and that the principal basis for the district court's conclusion was its belief
19 that excusable neglect was present "just on the face of [Rule 12-201(£)(3)]." We
12

I therefore next consider whether the facts and circumstances of this case support the
2 district court's finding that excusable neglect existed.
3 B. 	JPMorgan's 	Failure 	to 	Timely File Its Notice 	of Appeal Does Not
4 	Amount to Excusable Neglect in Light of Guess and Capco
5 {14} 	As noted previously, JPMorgan contended that "there was excusable neglect
6 associated with the ability to file a timely notice as [JPMorgan]'s counsel was
7 unable to obtain direction from its client and the investor on the mortgage loan,
8 Fannie Mae, before the ... deadline." JPMorgan did not. elaborate upon what it
9 meant by "unable to obtain direction" other than to assert that there had been
10 "misunderstandings and miscommunication between [JPMorgan]' s counse~ and
11 	[JPMorgan.]" 	According 	to 	JPMorgan, 	the 	"misunderstandings · 	and
12 miscommunication" related to (1) "the effect" of the district' court's order denying
13 	JPMorgan's motion for reconsideration, (2) "who was responsible for making the
14 decision 	related 	to 	the 	appeal[,]" 	and 	(3) 	"who 	would 	be 	responsible 	for
15 	prosecuting any appeal[.]" JPMorgan offered neither specific details regarding the
16 purported "misunderstandings and miscommunication" nor evidence to support its
17 ipse dixit assertions that the failure to timely file a notice of appeal indeed resulted
18 	from any such misunderstandings and miscommunication. JPMorgan additionally
19 suggested 	that 	"discussions 	related 	to 	possible 	settlement 	options 	and 	the
20 settlement history in the matter" may have contributed to its failure to timely file a
21 	notice of appeal but failed to demonstrate how such discussions, assuming they
13

1 occurred, would serve as a basis for extending JPMorgan's time to file a notice of
2 appeal. Finally, JPMorgan included in its explanation of its failure that "[t]he
3 appeal deadline of September 30, 2016[,] was on a Friday and the parties were all
4 located in different areas of the country, with the management of each party not
5 available." Setting aside that as with all of its other assertions, JPMorgan offered
6 no affidavits or other competent evidence to support this aspect of its explanation,
7 JPMorgan's explanation of the circumstances that existed on the date of the filing
8 deadline fails to explain its failure to file a notice of appeal on any of the preceding
9 twenty-nine days following the district court's entry of a final appealable order.
10 	{15} 	JPMorgan' s 	excusable 	neglect 	argument 	is 	based 	on 	facts 	that 	are
11 	substantially similar to those underlying the excusable neglect argument made in
12 	Capco, i.e., facts that were rejected by this Court as failing to rise to the level of
13 	excusable neglect. 	Moreover, 	the 	circumstances· JPMorgan 	claims 	amount to
14 excusable neglect are exactly those that the Guess Court unequivocally stated "are
15 	not sufficient" to warrant an extension. 1980-NMSC-040, , 	17 ("Mere failure to
16 receive notice alone, work overload of attorneys, palpable error of counsel and
17 other causes that do not rise to the level of "uniqμe" circumstances that cannot be
18 	anticipated or controlled by a party's counsel are not sufficient."). On the record
19 before us, there exists no basis to support an extension of JPMorgan's time for
20 	filing a notice of appeal based on excusable neglect under the standard set forth in
14

1 Guess and applied by this Court in Capco. JPMorgan provided the district court
2 with nothing more than bald assertions regarding the reasons it failed to timely file
3 a notice of appeal. Critically, it failed to even assert-let alone establish-that the
4 circumstances that caused JPMorgan to be unable to timely file a notice of appeal
. 5 were unique and could not have been anticipated by counsel, i.e., were excusable_.
6 The record evinces that much in the same way JPMorgan failed to prosecute its
7 case, leading to its dismissal in the first instance, JPMorgan simply failed to
8 prosecute its appeal. JPMorgan then sought a reprieve under Rule 12-201(E)(3) to
9 correct "precisely the kind of delay and waste of judicial resources against which
10 our Rules of Appellate Procedure are designed to protect." Capco, 2007-NMCA-
11 	011,134.
12 	{16} 	The district court concededly relied 'just on the face" of Rule 12-201(E)(3)
13 	and failed to apply controlling precedent in determining whether excusable neglect
14 existed to excuse JPMorgan's untimely filing of its.notice of appeal. We therefore
15 	conclude that the district court abused its discretion in granting JPMorgan's motion
16 for an extension to file its notice of appeal.
17 CONCLUSION
18 	{17} 	We reverse the district court's order granting JPMorgan an extension of time
19 to file its notice of appeal. Accordingly, we dismiss Fannie Mae's appeal of the
15

1 district court's dismissal of its foreclosure action with prejudice. We remand to the
2 district court for proceedings consistent with this opinion.
3 {18}
4
5
IT IS SO ORDERED.
6 WE CONCUR:
7 	~db 	m
8 JEN~TTREP,Judge
10 	,P
11 	l1l:e:JJ P. oUF9 	~
J. MILES HANISEE, Judge
16