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 Defendant entered into two real estate transactions with the Plaintiff, a real estate developer, involving the purchase of two lots in 1992 and 1993. The Defendant failed to make payments under a promissory note for the second lot, leading the Plaintiff to initiate foreclosure proceedings. The Defendant alleged that the Plaintiff violated the Interstate Land Sales Full Disclosure Act (ILSFDA) by failing to properly attach a receipt to the property report and sought rescission of the contract (paras 2-5).
Procedural History
- District Court of Santa Fe County: Entered a judgment of foreclosure against the Defendant, denied the Defendant's counterclaim for rescission, and awarded costs to the Plaintiff.
Parties' Submissions
- Defendant (Appellant): Argued that the trial court erred in striking his jury demand, that the Plaintiff's violation of ILSFDA warranted rescission of the contract, and that the award of costs was improper (paras 1, 6, 19).
- Plaintiff (Appellee): Contended that the Defendant was not entitled to a jury trial as the counterclaim sought equitable relief, that the ILSFDA violation was merely technical and did not justify rescission, and that the costs awarded were appropriate (paras 6-8, 11, 19).
Legal Issues
- Whether the Defendant was entitled to a jury trial on his counterclaim for rescission under ILSFDA (para 6).
- Whether the Plaintiff's technical violation of ILSFDA regulations warranted rescission of the contract (para 11).
- Whether the trial court erred in awarding costs to the Plaintiff (para 19).
Disposition
- The Court of Appeals affirmed the trial court's judgment of foreclosure, denial of rescission, and award of costs (para 21).
Reasons
Per Armijo J. (Bosson J. concurring):
Jury Trial: The Court held that the Defendant was not entitled to a jury trial because his counterclaim sought equitable rescission, which does not grant a constitutional or statutory right to a jury trial under ILSFDA or the New Mexico Constitution. The Court also noted that foreclosure actions are inherently equitable, and no jury trial is required for issues arising in such cases (paras 6-10).
Rescission: The Court found that the Plaintiff's failure to physically attach the receipt to the property report was a technical violation of ILSFDA regulations but did not frustrate the statute's purpose of ensuring informed decision-making by buyers. The Defendant received the property report before signing the contract, and there was no evidence of concealment or misleading practices. Thus, rescission was not warranted (paras 11-18).
Costs: The Court determined that the Defendant failed to preserve his objection to the award of costs by not raising specific objections at the trial level. Although travel expenses were later deemed non-taxable in a subsequent case, the Court upheld the award as the Defendant did not specifically challenge this item (paras 19-20).
Per Hartz CJ. (specially concurring):
- Hartz CJ. agreed with the majority's reasoning and conclusions but noted that the discussion in paragraph 9 regarding the scope of jury trials in foreclosure actions was unnecessary for resolving the case (para 23).