December 29, 2022- TAL Realty, Inc. v. Ashok Kaushal, No. A-1-CA-38966

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO	1
Opinion Number: ________________	2
Filing Date: December 29, 2022	3
No. A-1-CA-38966	4
TAL REALTY, INC.,	5
Petitioner-Appellee,	6
v.	7
ASHOK KAUSHAL,	8
Respondent-Appellant.	9
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY	10
Bryan Biedscheid, District Judge	11
Marrs Griebel Law, Ltd.	12
Clinton W. Marrs	13
Albuquerque, NM	14
for Appellee	15
Ferrance Law, P.C.	16
David A. Ferrance	17
Albuquerque, NM	18
for Appellant	19
Court of Appeals of New Mexico
Filed 12/29/2022 10:36 AM

OPINION	1
BACA, Judge.	2
{1} 	This appeal calls upon this Court to again interpret NMSA 1978, Section 39-	3
5-18 (2007), which allows a party to redeem property sold pursuant to a foreclosure	4
judgment by (1) paying the purchaser “the amount paid at sale, with interest from	5
the date of sale at the rate of ten percent a year,” along with certain other expenses,	6
or (2) initiating a judicial redemption by filing a petition for redemption and	7
depositing the above-described amount with the district court clerk. Section 39-5-	8
18(A)(1), (2). In this case, the issue presented is whether the statutory interest of ten	9
percent per year accrues only until the redeeming party deposits the purchase price	10
with the court, or whether interest continues to accrue until the district court enters	11
a final judgment confirming the redemption. Here, the district court found that	12
interest stopped accruing at the time the redeemer deposited funds with the district	13
court. We affirm for the reasons set forth below.	14
BACKGROUND	15
{2} 	Appellant, Ashok Kaushal, submitted the winning bid at a judicial foreclosure	16
sale. The district court subsequently entered an order confirming that sale on	17
November 13, 2019. Appellee, TAL Realty, Inc. (TAL), then petitioned for	18
redemption of the property, having acquired the mortgagor’s right of redemption	19
through an assignment. Along with filing the petition, TAL deposited funds into the	20

2
registry of the district court on December 3, 2019, in an amount calculated to cover	1
Kaushal’s purchase price plus interest at ten percent per year for the twenty days	2
from November 13 to December 3. TAL moved for summary judgment on its	3
petition the following week, and Kaushal responded, challenging only the interest	4
calculation. The district court heard TAL’s motion and entered a final order on	5
March 23, 2020, granting TAL’s redemption petition and awarding twenty days of	6
statutory interest. In doing so, the district court found that “interest ceases to run	7
when [the] redeeming party tenders funds into [the court’s] registry.” In this appeal,	8
Kaushal asserts that he is entitled to interest for 132 days, representing the time from	9
November 13, 2019, to March 23, 2020.	10
DISCUSSION	11
I. 	Standard of Review	12
{3} 	Interpretation of Section 39-5-18 is a legal question that this Court reviews de	13
novo. See Tucson Elec. Power Co. v. State of N.M. Tax’n & Revenue Dep’t, 2020-	14
NMCA-011, ¶ 6, 456 P.3d 1085. “When construing statutes, our charge is to	15
determine and give effect to the Legislature’s intent.” Little v. Jacobs, 2014-NMCA-	16
105, ¶ 7, 336 P.3d 398 (internal quotation marks and citation omitted). “We begin	17
with the plain meaning of the statute’s words and construe its provisions together to	18
produce a harmonious whole.” Rivera v. Flint Energy, 2011-NMCA-119, ¶ 4, 268	19
P.3d 525. The text of the statute is the “primary indicator of legislative intent.”	20

3
Bishop v. Evangelical Good Samaritan Soc’y, 2009-NMSC-036, ¶ 11, 146 N.M.	1
473, 212 P.3d 361. If a term is not defined in a statute, we construe it giving those	2
words “their ordinary meaning absent clear and express legislative intention to the	3
contrary.” State v. Johnson, 2009-NMSC-049, ¶ 10, 147 N.M. 177, 218 P.3d 863	4
(internal quotation marks and citation omitted). “We must also consider the practical	5
implications and the legislative purpose of a statute, and when the literal meaning of	6
a statute would be absurd, unreasonable, or otherwise inappropriate in application,	7
we go beyond the mere text of the statute.” Bishop, 2009-NMSC-036, ¶ 11.	8
{4} 	In addition to the text of the statute, we examine “the context in which [the	9
statute] was promulgated, including the history of the statute and the object and	10
purpose the Legislature sought to accomplish.” Maes v. Audubon Indem. Ins. Grp.,	11
2007-NMSC-046, ¶ 11, 142 N.M. 235, 164 P.3d 934; see also State v. Rivera, 2004-	12
NMSC-001, ¶ 13, 134 N.M. 768, 82 P.3d 939 (“In other words, a statutory	13
subsection may not be considered in a vacuum.” (internal quotation marks and	14
citation omitted)).	15
II. 	Current Operation of Section 39-5-18	16
{5} 	Under Section 39-5-18, a mortgagor or a party deriving their rights from a	17
mortgagor has two methods to redeem foreclosed real estate following a judicial	18
sale. The first is a nonjudicial redemption in which the redeeming party directly pays	19
the purchaser “the amount paid at the [foreclosure] sale, with interest from the date	20

4
of sale at the rate of ten percent a year.” Section 39-5-18(A)(1). If the purchaser has	1
paid other listed expenses related to the property, those expenses must be added to	2
the sale price and interest accrues on those expenses. See id. Thus, a nonjudicial	3
redemption ultimately compensates the purchaser for both the funds expended on	4
the property and the time value of those funds between the time of their expenditure	5
and the ultimate redemption.	6
{6} 	The second is a judicial redemption in which the redeeming party files a	7
petition with the district court and makes “a deposit of the amount set forth” in the	8
preceding paragraph with the district court clerk. Section 39-5-18(A)(2). Apart from	9
directing that the funds deposited with the court should be the “amount set forth” in	10
connection with a nonjudicial redemption, our statutes do not separately describe the	11
method or timing of calculating statutory interest in the context of a judicial	12
redemption. See id.	13
III. 	Judicial Redemption and Tender	14
{7} 	Before 1931, judicial redemption did not exist in New Mexico, and the	15
redemption of the foreclosed property could be accomplished only by tendering the	16
redemption amount, including interest, directly to the foreclosure purchaser. See	17
NMSA 1929, § 117-119 (1909); Brown v. Trujillo, 2004-NMCA-040, ¶ 14, 135	18
N.M. 365, 88 P.3d 881. In a case decided under an early version of the statute, a	19
mortgagor seeking to redeem foreclosed land on the last day of the redemption	20

5
period who could not locate the foreclosure purchaser deposited the relevant funds	1
with the clerk of the county court to try to preserve his rights. Richardson v. Pacheco,	2
1930-NMSC-111, ¶ 2, 35 N.M. 243, 294 P. 328. On appeal, our Supreme Court held	3
that “payment to the clerk was ineffectual as a redemption” under the existing	4
statute. Id. ¶ 4; see id. ¶ 8 (noting that, under the statute, one “who waits until the	5
last day to seek out the purchaser takes the risk of missing him”); see also First State	6
Bank of Taos v. Wheatcroft, 1931-NMSC-047, ¶ 13, 36 N.M. 88, 8 P.2d 1061 (stating	7
that “[i]n many jurisdictions,” redemption could be accomplished by paying “the	8
official making the sale, or . . . the clerk of the court,” but that in New Mexico law	9
there was “no such provision”). The next year, the Legislature amended the	10
redemption process to incorporate the judicial redemption option at issue in this case.	11
See 1931 N.M. Laws, ch. 149, § 2.	12
{8} 	That 	option 	requires, 	along 	with 	petitioning 	for 	redemption, 	that 	the	13
redeeming party deposit funds in the district court registry, just as the mortgagor in	14
Richardson had attempted. 1930-NMSC-111, ¶ 2. Since the addition of that option,	15
our cases applying Section 39-5-18 have generally described a redeeming party’s	16
deposit of funds with the court as a tender of payment equivalent to the direct tender	17
of payment contemplated by the statutes in existence before 1931. See Dalton v.	18
Franken Constr. Cos., 1996-NMCA-041, ¶¶ 12, 14, 121 N.M. 539, 914 P.2d 1036	19
(noting that an attempt to deposit an unendorsed cashier’s check “was in effect no	20

6
cash tender”); W. Bank of Las Cruces v. Malooly, 1995-NMCA-044, ¶¶ 28-29, 119	1
N.M. 743, 895 P.2d 265 (describing funds deposited in the court’s registry as a	2
tender of the amount due); Morgan v. Tex. Am. Bank/Levelland, 1990-NMSC-058,	3
¶ 4, 110 N.M. 184, 793 P.2d 1337 (describing a deposit of funds as a “tendered	4
redemption”); Leonard Farms v. Carlsbad Riverside Terrace Apartments, Inc.,	5
1974-NMSC-041, ¶ 3, 86 N.M. 241, 522 P.2d 576 (describing deposited funds as “a	6
proper tender in good faith”); Chapel v. Nevitt, 2009-NMCA-017, ¶ 36, 145 N.M.	7
674, 203 P.3d 889 (holding that the amount of interest required for the deposit into	8
the court registry can be easily calculated “by simply computing interest from the	9
date of purchase to the date the redemption deposit was tendered” (emphasis	10
added)); see also Chapel, 2009-NMCA-017, ¶ 36 (indicating that the required tender	11
is “a sum calculated to the date of tender” (internal quotation marks and citation	12
omitted)). The deposit contemplated by Section 39-5-18(A)(2) accomplishes the	13
same purposes as a direct tender. Indeed, the deposit of funds into the court registry	14
appears to meet the generally accepted definition of a tender of payment. See Tender,	15
Black’s Law Dictionary (11th ed. 2019) (defining “tender” as “an unconditional	16
offer of money or performance to satisfy a debt or obligation”); Brown v. Fin. Sav.,	17
1992-NMSC-025, ¶ 9, 113 N.M. 500, 828 P.2d 412 (same).	18
{9} 	Like any other tender of payment, a deposit of funds with the court registry	19
establishes both the redeeming party’s willingness to pay the redemption amount	20

7
and that party’s immediate ability to pay the redemption amount. See Miller v.	1
Johnson, 	1998-NMCA-059, 	¶ 	21, 	125 	N.M. 	175, 	958 	P.2d 	745 	(describing	2
“[t]ender” as “an offer to perform coupled with the present ability of immediate	3
performance, so that the obligation could be satisfied but for the other party’s refusal	4
to cooperate”). Thus, a tender of payment amounts to performance of an obligation	5
so much that consummation of the contemplated transaction only depends on the	6
other party accepting that performance. Id.	7
{10} 	As a result, it is a nearly universal rule that the accrual of fees, penalties, or	8
interest arising from nonpayment of an obligation ceases upon tender of payment:	9
A lawful, bona fide tender of the amount due stops the accrual of further	10
interest. In some jurisdictions, the rule is that a tender, to have this	11
effect, must be kept good and must be continuing. To stop the running	12
of interest, the amount tendered must be sufficient to include the whole	13
amount due from the debtor.	14
74 Am. Jur. 2d Tender § 38 (2022) (footnotes omitted); see 74 Am. Jur. 2d Tender	15
§ 39 (2022) (noting tender generally stops the accrual of fees and costs). In the	16
mortgage redemption context, the majority rule holds that a “proper and sufficient	17
tender stops the running of interest, although a redemptioner who fails to bring the	18
tendered money into court at the time of suit, as required by statute, is chargeable	19
with interest from that time.” 59A C.J.S. Mortgages § 1475 (2022) (footnote	20
omitted); cf. Tondre v. Garcia, 1941-NMSC-042, ¶ 38, 45 N.M. 433, 116 P.2d 584	21

8
(holding that the tender of property taxes “prevents interest or penalties from	1
thereafter accruing on the amount tendered”).	2
{11} 	Notwithstanding that majority rule, Kaushal argues that statutory interest in	3
New Mexico should accrue until the court approves the redemption. In doing so, he	4
directs our attention to a paragraph from Morgan, which explains that	5
the party seeking redemption may withdraw money tendered to the	6
court or the purchaser until the tender is accepted. Interest on the	7
purchase price ceases to run when the party seeking redemption validly	8
tenders the redemption price to the purchaser.	9
Morgan, 1990-NMSC-058, ¶ 17 (citation omitted). Accordingly, Kaushal argues,	10
the tender is not “complete” until the district court approves the redemption and	11
orders the money be paid to the purchaser. Kaushal emphasizes the reference to a	12
tender “to the court or the purchaser” followed by the holding that accrual of interest	13
ceases upon a valid tender “to the purchaser.” Kaushal asserts that Morgan is	14
describing two tenders—one to the court and another to the foreclosure purchaser,	15
which occurs when the court approves the redemption. Based on this assertion,	16
Kaushal argues that interest continues to accrue until the court enters an order or	17
judgment approving the redemption.	18
{12} 	Kaushal misreads Morgan. In a redemption following foreclosure, there is	19
only one tender, though it can be made in two ways. The redeeming party can tender	20
payment directly to the foreclosure purchaser, or the redeeming party can achieve	21
the same by depositing the relevant funds into the district court registry, as described	22

9
in 	the 	first 	sentence 	quoted 	above 	from 	Morgan. 	See 	§ 	39-5-18(A)(1), 	(2)	1
(authorizing both payment to the purchaser and deposit with the court). In either	2
case, the actions of the redeeming party accomplish what is commonly understood	3
to be a tender of payment. See Leonard Farms, 1974-NMSC-041, ¶ 3 (describing	4
the deposit of redemption funds as “a proper tender”). As a result, interest stops	5
accruing at that time, as described in the second sentence quoted from Morgan. In	6
most cases, the tender itself will also place the foreclosure purchaser in a position to	7
accept the offer of payment, thereby consummating the transaction and obviating the	8
need for any further accumulation of interest. Alternatively, the purchaser can reject	9
the tender, requiring a court to resolve the parties’ dispute.	10
{13} 	In a judicial redemption like this case, that resolution will ultimately take the	11
form of a judgment disposing of the pending petition to redeem the foreclosed	12
property. We see no reason that the calculation of interest contained in such a	13
judgment should deviate from the majority rule holding that interest stops accruing	14
upon a proper tender. Thus, where a deposit under Section 39-5-18(A)(2) consists	15
of a “proper and sufficient tender,” there should be no further accrual of interest	16
following the deposit. 59A C.J.S. Mortgages § 1475.	17
{14} 	To have this effect, however, the tendered funds must be sufficient to cover	18
the entire redemption obligation:	19
To stop the running of interest, the amount tendered must be sufficient	20
to include the whole amount due from the debtor. Only when a tender	21

10
is unconditional will interest toll on an obligation, and for the tender to	1
be unconditional, it must be the actual production of a sum not less than	2
the amount due on a specific debt or obligation.	3
74 Am. Jur. 2d Tender § 38 (footnote omitted); see Chapel, 2009-NMCA-017, ¶ 36.	4
Thus, where the amount due is in dispute and the redeeming party deposits a sum	5
ultimately found to be less than the amount due, the final judgment on a redemption	6
petition may include the accrual of additional interest, as occurred in Malooly, 1995-	7
NMCA-044, ¶¶ 30-32. In Malooly, this Court held that the redeeming party’s deposit	8
omitted taxes paid by the purchaser that were reimbursable under Section 39-5-18.	9
Malooly, 1995-NMCA-044, ¶ 30. Under the facts of that case, we concluded that the	10
purchaser was entitled to statutory interest running from the foreclosure sale until	11
the judgment confirming redemption. Id. In doing so, we explicitly relied on the fact	12
that the deposit accompanying the redemption petition “did not tender the full	13
amount due” to the foreclosure purchaser. Id. ¶ 29; see 59A C.J.S. Mortgages § 1475	14
(noting that a party failing to deposit a “proper and sufficient tender” is chargeable	15
with interest from that time).	16
{15} 	Unlike Malooly, however, this case involves no dispute over the redemption	17
amount 	TAL 	deposited 	in 	connection 	with 	its 	redemption 	petition. 	Because	18
Kaushal’s sole argument below was that interest should continue to accrue on the	19
amount after it was deposited, there has never been any dispute that the amount	20
tendered was insufficient to cover the amount due on the date it was deposited with	21

11
the court. As a result, there appears to be no basis for deviation from the general rule	1
that an unconditional tender of funds sufficient to satisfy a debt stops the accrual of	2
further interest on the outstanding debt. We, therefore, conclude that the district	3
court correctly found that statutory interest ceased accruing following TAL’s deposit	4
of the redemption funds into the court registry.	5
CONCLUSION	6
{16} 	We affirm the judgment of the district court approving the redemption of the	7
foreclosed property and awarding twenty days of statutory interest under Section 39-	8
5-18.	9
{17} 	IT IS SO ORDERED.	10
_________________________________	11
GERALD E. BACA, Judge	12
WE CONCUR:	13
_________________________________	14
MEGAN P. DUFFY, Judge	15
_________________________________	16
SHAMMARA H. HENDERSON, Judge	17