VIGIL, Judge.
APPEAL FROM THE DISTRICT COURT OF DONA ANA COUNTY
Mary W. Rosner, District Judge McCarthy & Holthus, LLP
Joshua T. Chappell
Karen Weaver
Albuquerque, NM for Appellant Eric Ortiz & Associates
Eric N. Ortiz
Albuquerque, NM for Appellees
OPINION
VIGIL, Judge. {1} Wells Fargo (Bank) appealed from the district court's order dismissing its foreclosure action against Joann and Frank Sanchez (Homeowners) with prejudice. During the pendency of the appeal, and after briefing was completed, Bank filed a motion to substitute LSF9 Master Participation Trust (LSF9) as appellant in the case, which we granted. LSF9 raised no new claims after our order of substitution, and as such, we address the arguments raised by Bank. Bank made two arguments on appeal: (1) the district court erred in dismissing its entire foreclosure claim as barred by the applicable statute of limitations, NMSA 1978,§ 37-1-3(A) (2015); and (2) the district court abused its discretion in denying Bank leave to amend its complaint to plead the tolling effect on the statute of limitations of Homeowners' three bankruptcy cases. We reverse.
BACKGROUND
{2} The material facts are not in dispute. On October 30, 2007, Homeowners executed a note and mortgage to secure a $203,669.41 loan. The mortgage was secured by real property located in Las Cruces, New Mexico. The note and mortgage provided for periodic payments in the amount of $1,712.55 to be paid on the fourth day of every month beginning on December 4, 2007. The note and mortgage also contained acceleration clauses, providing that in the event of default, Bank "may require [Homeowners] to pay immediately the full amount of as of October 7, 2009, fell within the statute of limitations in light of the tolling of the limitations period because of Homeowners' three bankruptcy cases pursuant to 11 U.S.C. § 362 (2012) (stating the circumstances in which the filing of a bankruptcy petition triggers an automatic stay of other proceedings involving the property of a debtor or bankruptcy estate), and NMSA 1978,Section 37-1-12 (1880) (governing the effect of a stay on the computation of statutes of limitations). {8} After a hearing, the district court dismissed Bank's foreclosure complaint with prejudice. The district court ruled that it would not consider the tolling effect of Homeowners' bankruptcy filings and denied Bank's request to amend its complaint to plead facts concerning Homeowners' bankruptcies and their tolling effect on the limitation period for Bank's foreclosure claim. The district court did not provide reasoning explaining why it would not grant Bank leave to amend its complaint, but apparently agreed with Homeowners' argument that "[t]here has been nothing that prevented [Bank] from filing a motion to amend" between the filing of the complaint and litigation of Homeowners' motion to dismiss, and that "if [Bank] wished to remedy the problem by amending the complaint, they had the opportunity to do that and they failed to do so." {9} Bank appeals from the order of dismissal with prejudice.
DISCUSSION
I. Standard of Review
{10} "When facts relevant to a statute of limitations issue are not in dispute, the standard of review is whether the district court correctly applied the law to the undisputed facts." Haas Enters. v. Davis, 2003-NMCA-143, ¶ 9, 134 N.M. 675, 82 P.3d 42. "We review questions of law de novo." Id. Further, insofar as our analysis involves statutory interpretation, our review is de novo. See Wolinsky v. N.M. Corr. Dep't, 2018-NMCA-071, ¶ 3, 429 P.3d 991, cert. denied, 2018-NMCERT-___ (No. S-1-SC-37287, Oct. 26, 2018).
II. Dismissal of Bank's Foreclosure Claim Was Precluded by Section 37-1-3
{11} Bank argues that the district court erred in dismissing its entire foreclosure claim with prejudice as barred by the statute of limitations, Section 37-1-3(A) (providing that "[a]ctions founded upon any bond, promissory note, bill of exchange or other contract in writing shall be brought within six years"). Bank concedes that certain of Homeowners' missed payments due prior to Bank's October 7, 2009 acceleration of the balance remaining under the note may have been barred when Bank filed the second foreclosure action on February 22, 2016. However, Bank asserts that the limitation period had not run on the accelerated balance as of October 7, 2009, considering the import of Welty and the tolling of the limitation period due to Homeowners' three bankruptcy cases and Bank's 2015 demand letter. We agree. A. Homeowners' Missed Payments Prior to Bank's October 7, 2009 Acceleration {12} Generally, "[i]n a breach of contract action, the statute of limitations begins to run from the time of the breach." Welty, 1987-NMSC-066, ¶ 8. In the context of an installment contract, like the note in this case, see Maffett v. Emmons, 1948-NMSC-012, ¶¶ 1, 6, 52 N.M. 115, 192 P.2d 557 (construing a note promising periodic payments as an installment contract), our Supreme Court held in Welty that
under contract obligations payable by installments, the statute [of limitations defined in
Section 37-1-3(A)] would have begun to run only with respect to each installment when due. The statute would have begun to run with respect to the whole indebtedness only from the date of an exercise of the option to declare the whole indebtedness due.
Welty, 1987-NMSC-066, ¶ 9.
{13} Under the foregoing authority, we conclude that the payments due between October 4, 2008 and October 4, 2009, prior to Bank's October 7, 2009 acceleration of the balance due under the note, were barred by the statute of limitations at the time of Bank's filing of the second foreclosure action. Pursuant to the note, which provided that payments were due on the fourth day of every month, the last payment Homeowners failed to make prior to the October 7, 2009 acceleration was
{18} Pursuant to § 362(c)(3)(A), "if a single or joint case is filed by or against a
debtor is filed by or against a
debtor who is an individual in a case under Chapter 7, 11, or 13, and if a single or joint case of the
debtor was pending within the preceding 1-year period but was dismissed . . . the stay under subsection (a) with respect to any action taken with respect to a debt or property securing such debt . . . shall terminate with respect to the
debtor on the 30th day after the filing of the later case." (Emphases added.) Similarly, pursuant to § 108(c):
if applicable nonbankruptcy law . . . fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the
debtor, or against [a codebtor] . . . protected under section 1201 or 1301 of this title, and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of--
(1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or
(2) 30 days after notice of the termination or expiration of the stay under section 362, 922, 1201, or 1301 of this title, as the case may be, with respect to such claim.
(Emphasis added.)
{19} While Homeowners are correct to note that § 362(c)(3) and § 108(c) can operate as exceptions or limitations to the mandatory stays described in § 362(a) in actions filed by or against the
debtor, Homeowners fail to recognize the significance, as Bank argues in its reply brief, of the material distinction drawn in
bankruptcy law between actions against the
debtor and actions against the
estate, as described in § 541, in the context of § 362(a). Bank argues that the precedent of "[a] majority of federal courts, including the Tenth Circuit's Bankruptcy Appellate Panel[,]" which would have applied to Homeowners' bankruptcy case that was brought in New Mexico, holds that termination of the automatic stay occurs, pursuant to § 362(c)(3)(A), only with regard to the
debtor—not the
estate. In support of this argument, Bank cites
In re Holcomb, 380 B.R. 813 (B.A.P. 10th Cir. 2008).
{20} In
Holcomb, the Tenth Circuit Bankruptcy Appellate Panel held that:
a majority of courts have [concluded] . . . the automatic stay terminates under § 362(c)(3)(A) only with respect to the debtor and the debtor's property but not as to the property of the estate. These courts reason that if Congress meant to terminate the stay in its entirety, it would have done so in plain language[.] . . . On this basis, we conclude that the language of § 362(c)(3)(A) terminates the stay only as to the debtor and the debtor's property.
380 B.R. at 815-16 (citations omitted). Accordingly, following the Tenth Circuit precedent in
Holcomb, we conclude that § 362(c)(3) and § 108(c), each of which apply only to actions brought by or against the
debtor, do not apply to this case in which Bank sought only in rem relief against the property of Homeowners' bankruptcy estate.
See Fed.
Nat'l Mortg.
Ass'n v.
Chiulli, 2018-NMCA-054, ¶ 2, 425 P.3d 739 (recognizing that in the event of a default on a promissory note, the
2016, 107 days remained under the statute of limitations for Bank to refile its action for the accelerated balance. Accordingly, we conclude that the district court erred in dismissing Bank's entire foreclosure claim as precluded by the statute of limitations.
{25} In so concluding, we briefly address the issue raised by Bank concerning the tolling effect of Bank's 2015 demand letter, which Bank argues should apply to toll the limitation period for an additional thirty days on grounds that Homeowners failed to respond to the argument, constituting a concession of the issue.
See,
e.
g.,
State v.
Templeton, 2007-NMCA-108, ¶ 22,
142 N.M. 369,
165 P.3d 1145 (stating that the failure to respond to contentions made in an answer brief is "a concession on the matter"). Based on our conclusion above that Bank's claim for the accelerated balance as of October 7, 2009 was filed within the statute of limitations, determination of this issue is unnecessary. Similarly, based on our conclusion above, we do not address Bank's second argument—that the district court abused its discretion in denying Bank leave to amend the second foreclosure complaint to plead Homeowners' three bankruptcy cases.
CONCLUSION
{26} The district court's order of dismissal is reversed. We remand for further proceedings consistent with this opinion.
{27} IT IS SO ORDERED.
/s/ _________
MICHAEL E. VIGIL, Judge
WE CONCUR:
/s/ _________
M. MONICA ZAMORA, Judge /s/ _________
JULIE J. VARGAS, Judge