{ "id": 260698, "name": "Richard J. STONEKING and Dierdre J. Stoneking, husband and wife, Plaintiffs-Appellants, v. BANK OF AMERICA, N.A., Defendant-Appellee", "name_abbreviation": "Stoneking v. Bank of America, N.A.", "decision_date": "2002-03-04", "docket_number": "No. 22,172", "first_page": "79", "last_page": "82", "citations": [ { "type": "official", "cite": "132 N.M. 79" }, { "type": "parallel", "cite": "43 P.3d 1089" }, { "type": "parallel", "cite": "2002-NMCA-042" } ], "court": { "name_abbreviation": "N.M. Ct. App.", "id": 9025, "name": "Court of Appeals of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "446 F.Supp. 620", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 3992774 ], "pin_cites": [ { "page": "623" } ], "opinion_index": 0, "case_paths": [ "/f-supp/446/0620-01" ] }, { "cite": "499 F.2d 1145", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1171040 ], "pin_cites": [ { "page": "1147" } ], "opinion_index": 0, "case_paths": [ "/f2d/499/1145-01" ] }, { "cite": "12 C.F.R. \u00a7 560.34", "category": "laws:admin_compilation", "reporter": "C.F.R.", "weight": 2, "year": 2002, "opinion_index": 0 }, { "cite": "12 C.F.R. \u00a7 560.2", "category": "laws:admin_compilation", "reporter": "C.F.R.", "weight": 2, "year": 2002, "pin_cites": [ { "page": "(a)" }, { "page": "(b)(5)", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "459 F.Supp. 903", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 4039269 ], "pin_cites": [ { "page": "910" } ], "opinion_index": 0, "case_paths": [ "/f-supp/459/0903-01" ] }, { "cite": "458 U.S. 141", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 636558 ], "weight": 3, "year": 1982, "pin_cites": [ { "page": "161", "parenthetical": "quoting Glendale Fed. Sav. & Loan Ass'n v. Fox, 459 F.Supp. 903, 910 (C.D.Cal.1978)" }, { "parenthetical": "quoting Glendale Fed. Sav. & Loan Ass'n v. Fox, 459 F.Supp. 903, 910 (C.D.Cal.1978)" }, { "parenthetical": "quoting Glendale Fed. Sav. & Loan Ass'n v. Fox, 459 F.Supp. 903, 910 (C.D.Cal.1978)" } ], "opinion_index": 0, "case_paths": [ "/us/458/0141-01" ] }, { "cite": "12 U.S.C. \u00a7 1464", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(a)" } ], "opinion_index": 0 }, { "cite": "986 F.2d 372", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 662174 ], "pin_cites": [ { "page": "375" } ], "opinion_index": 0, "case_paths": [ "/f2d/986/0372-01" ] }, { "cite": "95 N.M. 128", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1575594 ], "weight": 2, "pin_cites": [ { "page": "133" }, { "page": "578" } ], "opinion_index": 0, "case_paths": [ "/nm/95/0128-01" ] }, { "cite": "2001-NMCA-017", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 352289 ], "weight": 3, "pin_cites": [ { "page": "\u00b6 6" } ], "opinion_index": 0, "case_paths": [ "/nm/130/0214-01" ] }, { "cite": "12 U.S.C. \u00a7 1461", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 1994, "opinion_index": 0 } ], "analysis": { "cardinality": 488, "char_count": 6796, "ocr_confidence": 0.705, "pagerank": { "raw": 7.5668779347235e-08, "percentile": 0.4487394824949254 }, "sha256": "68a1f87de7a013cc58189a29677e02fc62eac7fe2f2dc2a80f7268db7eb07262", "simhash": "1:ad931d1ca73a5c56", "word_count": 1084 }, "last_updated": "2023-07-14T17:25:52.963241+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "WE CONCUR: RICHARD C. BOSSON, Chief Judge, and A. JOSEPH ALARID, Judge." ], "parties": [ "Richard J. STONEKING and Dierdre J. Stoneking, husband and wife, Plaintiffs-Appellants, v. BANK OF AMERICA, N.A., Defendant-Appellee." ], "opinions": [ { "text": "OPINION\nKENNEDY, Judge.\n{1} Question: Does federal law preempt NMSA 1978, \u00a7 56-8-30 (1980), which prohibits banks from collecting prepayment penalties on home mortgages? Answer: Yes, when applied to federally-chartered thrift institutions and banks. Because this opinion interprets a statute important to New Mexico residential borrowers and banks, we issue it as a formal opinion.\nFACTUAL AND PROCEDURAL BACKGROUND\n{2} On April 3, 1998, Plaintiffs obtained a home loan from Bank of America, Federal Savings Bank, a predecessor to Bank of America, N.A. (Defendant). The loan was secured by a mortgage against Plaintiffs\u2019 home. Plaintiffs signed an Adjustable Rate Note containing a prepayment penalty clause providing that should the loan be paid off within thirty-six months, Defendant could charge a prepayment penalty of two percent on any amount prepaid in excess of twenty percent of the original principal. On May 19, 2000, Plaintiffs paid off the balance of the mortgage and were charged a prepayment penalty of $1,400.61.\n{3} Plaintiffs sued Albuquerque Title Company, Inc. (not a party to this appeal) and Defendant in district court for unjust enrichment, fraud, prima facie tort, and unfair trade practices, claiming that Defendant violated the New Mexico Residential Home Loan Act, NMSA 1978, \u00a7\u00a7 56-8-22 to -30 (1980, \u00a7\u00a7 56-8-25 to -28 repealed by Laws 1983, ch. 44, \u00a7 1), and specifically Section 56-8-30, when it enforced the prepayment penalty provision contained in the Adjustable Rate Note. Defendant moved to dismiss Plaintiffs\u2019 complaint on the grounds that section 56-8-30 was preempted by the federal Home Owners\u2019 Loan Act (HOLA) 12 U.S.C. \u00a7 1461 (1994) and the regulations promulgated pursuant to it. The district court granted the motion to dismiss and this appeal followed.\nDISCUSSION\nI. Standard of Review\n{4} Dismissal is proper under Rule 1-012(B)(6) NMRA 2002 when the law does not support the claim under the facts presented. Wallis v. Smith, 2001-NMCA-017, \u00b6 6, 130 N.M. 214, 22 P.3d 682. We review a ruling on a grant of a motion to dismiss de novo, accepting all well-pleaded factual allegations as true and resolving all doubts in favor of the sufficiency of the complaint. Id.; see, e.g., Trigg v. Allemand, 95 N.M. 128, 133, 619 P.2d 573, 578 (Ct.App.1980) (stating that conclusions of law are not binding upon the appellate court which may draw its own legal conclusions).\nII. Federal Preemption.\n{5} Under Article VI of the Constitution, the laws of the United States \u201cshall be the supreme Law of the Land ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.\u201d U.S. Const, art. VI, cl. 2. The Supremacy Clause prohibits the application of state laws which conflict with federal laws. Home Mortgage Bank v. Ryan, 986 F.2d 372, 375 (10th Cir.1993).\n{6} Section 5678-30 of the New Mexico Residential Home Loan Act states that \u201cNo provision in a home loan, the evidence of indebtedness of a home loan, a real estate contract or an obligation secured by a real estate mortgage requiring a penalty or premium for prepayment of the balance of the indebtedness is enforceable.\u201d Defendant argues that Section 56-8-30 is preempted by the HOLA and the regulations promulgated pursuant to the HOLA. We agree.\n{7} 12 U.S.C. \u00a7 1464(a) gives the following power to the Director of the Office of Thrift Supervision (OTS):\nIn order to provide thrift institutions for the deposit of funds and for the extension of credit for homes and other goods and services, the Director is authorized, under such regulations as the Director may prescribe\u2014\n(1) to provide for the organization, incorporation, examination, operation, and regulation of associations to be known as Federal savings associations (including Federal savings banks).\nThis broad language \u201cexpresses no limits on the [Director\u2019s] authority to regulate the lending practices of federal savings and loans. As one court put it, \u2018[i]t would have been difficult for Congress to give the [Director] a broader mandate.\u2019 \u201d Fid. Fed. Sav. & Loan Ass\u2019n v. de la Cuesta, 458 U.S. 141, 161, 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982) (quoting Glendale Fed. Sav. & Loan Ass\u2019n v. Fox, 459 F.Supp. 903, 910 (C.D.Cal.1978)).\n{8} It is well established that state laws may be preempted by properly promulgated federal regulations as well as through duly enacted laws. \u201cFederal regulations have no less pre-emptive effect than federal statutes.\u201d Id. at 153. 12 C.F.R. \u00a7 560.2(a) (2002) states that OTS \u201chereby occupies the entire field of lending regulations for federal savings associations.\u201d The regulation further provide that \u201cthe types of state laws preempted by [HOLA] include, without limitation, state laws purporting to impose requirements regarding ... initial charges, late charges, prepayment penalties, servicing fees, and overlimit fees.\u201d 12 C.F.R. \u00a7 560.2(b)(5) (emphasis added). Specifically, OTS states in 12 C.F.R. \u00a7 560.34 (2002):\nAny prepayment on a real estate loan must be applied directly to reduce the principal balance on the loan unless the loan contract or the borrower specifies otherwise. Subject to the terms of the loan contract, a Federal savings association may impose afee for any prepayment of a loan.\n(Emphasis added.)\n{9} OTS, under the power granted to it by Congress, has clearly preempted state laws concerning prepayment penalties on home loans. See Meyers v. Beverly Hills Fed. Sav. & Loan Ass\u2019n, 499 F.2d 1145, 1147 (9th Cir.1974) (holding that a regulation promulgated by the Federal Home Bank Board (whose powers were assumed by the current OTS, see 12 U.S.C. 1462a(e)), which allowed federally chartered savings and loan associations to charge prepayment penalties, was a valid exercise of its delegated power and that federal law preempted state law in the field of prepayment of real estate loans); Greenwald v. First Fed. Sav. & Loan Ass\u2019n, 446 F.Supp. 620, 623 (D.Mass.1978) (\u201cEvery Federal Court which has addressed preemption questions involving HOLA has held that Congress impliedly intended that federal law should govern the regulation of federal savings and loan associations.\u201d).\n{10} Thus, we hold that, as a matter of law, 12 C.F.R. \u00a7 560.34 preempts Section 56-8-30.\nCONCLUSION\n{11} The granting of the motion to dismiss is affirmed.\n{12} IT IS SO ORDERED.\nWE CONCUR: RICHARD C. BOSSON, Chief Judge, and A. JOSEPH ALARID, Judge.", "type": "majority", "author": "KENNEDY, Judge." } ], "attorneys": [ "Stephen E. Mcllwain, Stephen E. Mcllwain, P.C., Albuquerque, NM, for Appellants.", "William R. Keleher, Megan T. Muirhead, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, NM, for Appellee." ], "corrections": "", "head_matter": "2002-NMCA-042\n43 P.3d 1089\nRichard J. STONEKING and Dierdre J. Stoneking, husband and wife, Plaintiffs-Appellants, v. BANK OF AMERICA, N.A., Defendant-Appellee.\nNo. 22,172.\nCourt of Appeals of New Mexico.\nMarch 4, 2002.\nStephen E. Mcllwain, Stephen E. Mcllwain, P.C., Albuquerque, NM, for Appellants.\nWilliam R. Keleher, Megan T. Muirhead, Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, NM, for Appellee." }, "file_name": "0079-01", "first_page_order": 111, "last_page_order": 114 }