BOKF, N.A. v. Pacheco
Background
- Linora P. Pacheco executed a promissory note and deed of trust in favor of BOKF, securing a property in Santa Fe, NM; she defaulted, and BOKF initiated foreclosure.
- BOKF attempted service on Linora and other parties, then moved for service by publication, asserting she lived in “Vegas” and could not be located.
- Linora Pacheco died during the litigation; a Suggestion of Death was filed but not served on known heirs, Bryan and Raymond, although their identity and residence were known to BOKF.
- BOKF amended the complaint to name "Unknown Heirs, Devisees, and Legatees" of Linora but did not name or personally serve known heirs, nor did it effect proper service on unknown heirs by publication.
- Foreclosure judgment was entered, the property sold, and post-sale redemption rights litigation ensued between competing parties, including Ashok Kaushal (who obtained assignments from two Pacheco heirs) and the Santa Fe Community Housing Trust.
- On certiorari, the Supreme Court reviewed whether the default and foreclosure judgments were void for lack of proper service on both known and unknown heirs, raising the issue sua sponte in the interest of due process.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Adequacy of service of process on heirs | BOKF claims diligent search justified naming "unknown heirs" and attempted service by publication sufficed | Trust/Kaushal argue known heirs were not named or served, and publication was inadequate | Judgment may be void; remanded for fact-finding on adequacy of search and service |
| Use of Section 39-5-15 to proceed against "unknown heirs" | Statute allows foreclosure by naming unknown heirs if their identity/location is unknown | Section requires actual diligence to locate heirs; it is not a shortcut | Statute does not excuse duty to conduct and document diligent search before naming/serving unknown heirs |
| Sufficiency of service by publication on deceased borrower | Service in Albuquerque Journal was sufficient | Should have published in areas where Linora was known to reside ("Vegas"), more effort was required | Publication did not meet due process; court must consider more appropriate venues |
| Appellate review of unpreserved service issues | Did not address (not argued below) | Court should address due process/fundamental rights even if not preserved | Court exercises discretion to raise unpreserved issues implicating due process |
Key Cases Cited
- T.H. McElvain Oil & Gas Ltd. P’ship v. Grp 1: Benson-Montin-Greer Drilling Corp., 388 P.3d 240 (N.M. 2017) (A judgment without sufficient service of process violates due process and is void.)
- State ex rel. Hill v. Dist. Court of Eighth Jud. Dist., 439 P.2d 551 (N.M. 1968) (In New Mexico a mortgage is a lien and passes no estate to the mortgagee.)
- Madrid v. St. Joseph Hosp., 928 P.2d 250 (N.M. 1996) (Notice and the opportunity to be heard are core purposes of service of process.)
- Kepler v. Slade, 896 P.2d 482 (N.M. 1995) (Explains quasi in rem foreclosure actions distinct from in personam claims.)
- Robertson v. Mine & Smelter Supply Co., 110 P. 1037 (N.M. 1910) (Void foreclosure judgment where owners were not served.)