AI Generated Opinion Summaries

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 case involves a dispute over water rights and easements related to undeveloped real property in Sandoval County, intended for the development of a master-planned community. Butera used its interest in groundwater as security for a loan from Johnson Bank, granting the bank a mortgage in its water rights and interests in all easements and rights-of-way. Following a default, Johnson Bank conducted a public sale of the collateral, claiming acquisition of all rights and interests related to Butera's water rights. Southwest Lending, having filed a foreclosure suit against the Recorp Entities and naming Johnson Bank as a defendant, sought a declaratory judgment on the priority of its lien over Johnson Bank's interests (paras 2-5).

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Appellant (Southwest Lending): Argued that Johnson Bank's interest in Butera's property is inferior and subordinate to Southwest Lending's lien on the property.
• Appellee (Johnson Bank): Contended that it acquired all of Butera's rights in the water rights at issue, including existing and future easements, through a public sale following Butera's default. Asserted that under the settlement agreement between Southwest Lending and the Recorp Entities, it holds all right, title, and interest to Butera's water rights and easements (paras 5-6).

Legal Issues

• Whether the district court properly granted summary judgment in favor of Johnson Bank on the water rights disclaimed by Southwest Lending.
• Whether the district court erred in granting summary judgment on Johnson Bank’s claims to the Butera easements and rights-of-way (para 1).

Disposition

• The district court's entry of summary judgment in favor of Johnson Bank on Southwest Lending’s declaratory judgment claim related to the water rights disclaimed is affirmed.
• The district court's grant of summary judgment to Johnson Bank as it relates to the Butera easements and rights-of-way, as well as its determinations as to the water rights and easements as reflected in findings N(iv)-(viii) of its final judgment, is reversed (para 1).

Reasons

• JULIE J. VARGAS, Judge (MICHAEL E. VIGIL, Judge, HENRY M. BOHNHOFF, Judge concurring):
  The court found that the district court correctly entered summary judgment in Johnson Bank's favor regarding the water rights Southwest Lending disclaimed, as Southwest Lending conceded it had disclaimed any interest in the disclaimed collateral when it signed the Settlement Agreement with the Recorp entities (para 10).
  The court held that the district court erred in granting summary judgment to Johnson Bank on the Butera easements and rights-of-way. Johnson Bank's reliance on its purchase at the 2012 public UCC sale to establish its right to the easements and rights-of-way was misplaced, as easements are interests in real property, and Article 9 of the UCC does not apply to the transfer of an interest in real property (para 11).
  The court also found that Johnson Bank improperly raised new claims in its motion for summary judgment, which were not part of the claims or defenses raised by the pleadings. This was unnecessary to resolve Southwest Lending’s declaratory judgment claim against Johnson Bank and was procedurally barred (paras 12-13).