Due Process in Foreclosure: Service on Known and Unknown Heirs under NM § 39-5-15

Introduction

The Supreme Court of New Mexico’s decision in BOKF, N.A. v. Pacheco (2025) revisits fundamental due process guarantees in mortgage foreclosure proceedings, especially when the mortgagor has died and heirs must be identified and served. BOKF, N.A. (“Bank”) sought foreclosure against property once owned by Linora P. Pacheco, who died mid-litigation. The Bank amended its complaint to name “unknown heirs, devisees, or legatees” under NMSA 1978, § 39-5-15, then obtained a default and foreclosure judgment without naming or properly serving Linora’s known sons or any other heirs. Later redemption disputes brought these service‐of‐process deficiencies to light. The Court, acting sua sponte, remanded for fact-finding on whether the foreclosure judgment is void for lack of personal jurisdiction over Linora’s heirs and devisees.

Summary of the Judgment

1. The Court held that due process requires a “diligent and good faith effort” to identify and personally serve known heirs of a deceased mortgagor, and where identities or locations are unknowable, to comply strictly with § 39-5-15’s publication requirements.
2. BOKF failed to name or serve Linora’s known sons (Bryan and Raymond), and never moved to publish notice to the substituted “unknown heirs, devisees, or legatees.”
3. The foreclosure judgment “may be void” for want of personal jurisdiction over those heirs. The Court remanded for further fact-finding on service efforts, substitution procedures, and the validity of the in rem judgment.
4. Prior Court of Appeals rulings that rested on the underlying foreclosure were vacated and unpublished to avoid reliance on possibly void judgments.

Analysis

1. Precedents Cited

Robertson v. Mine & Smelter Supply Co. (1910) – Held a foreclosure judgment void where property owners were never served, underscoring that quasi in rem actions still demand due‐process notice.
First National Bank v. Julian (1981) – Allowed a counterclaim without publication where the counter-defendant was already before the court, but emphasized that Rule-based service cannot be “discarded.”
Mullane v. Central Hanover Bank & Trust Co. (1950) – U.S. Supreme Court: notice must be “reasonably calculated” to inform interested parties; substituted service by publication is constitutional only when names/addresses are not “reasonably ascertainable.”
T.H. McElvain Oil & Gas Ltd. P’ship v. Grp 1 (2017) – New Mexico’s leading case on constructive service; reaffirmed that default judgments are void without proper service and due diligence in locating defendants.
State v. Nunez (2000) – Clarified that in rem and quasi in rem proceedings address interests of persons in property, not the property itself.

2. Legal Reasoning

The Court’s reasoning centers on the Fourteenth Amendment’s due process requirements and New Mexico’s rules of civil procedure:

Personal jurisdiction and service of process are indispensable even in quasi in rem actions; they protect the “opportunity to be heard.”
Rule 1-004(E)(1) & (J) NMRA demand that process be served in a manner “reasonably calculated” to notify defendants; affidavits supporting publication must detail the “diligent and good faith effort” to locate them.
Rule 1-025(A)(1) NMRA requires service of a motion to substitute non-parties on those persons under Rule 1-004; BOKF never served the substitution motion on Linora’s known heirs.
Section 39-5-15 authorizes naming “unknown heirs, devisees, or legatees” in foreclosure only if the plaintiff alleges (and can show) no probate administration or inability to ascertain their names/locations.
BOKF’s Amended Complaint parrots § 39-5-15 language without citing any diligent search; its earlier process‐server affidavit admitted knowledge of Linora’s sons at the property.
No publication notice was ever ordered or accomplished to notify the substituted “unknown” heirs, and no defaults were entered in strict accordance with Rule 1-055 NMRA.

3. Impact

This decision carries several far-reaching implications:

Foreclosure plaintiffs must conduct and document a robust, good‐faith search for heirs before invoking § 39-5-15. Internet searches, obituary checks, and public records must be considered and reflected in supporting affidavits.
Failure to name or serve known heirs can void foreclosure judgments, reopening title disputes years after sale.
Courts must scrutinize proposed use of § 39-5-15, require clear factual showings, and enforce publication rules under Rule 1-004(K)(1) — including publication in the county or community where the missing heirs are likely to see it.
Existing judgments obtained through § 39-5-15 filings without proper notice may be subject to collateral attacks, potentially unsettling sales and redemptions.

Complex Concepts Simplified

In Personam vs. Quasi in Rem: An in personam suit seeks a money judgment against a defendant personally. A quasi in rem suit affects only the specific property, but still requires notifying those with interests in it.
Service by Publication: When names/addresses are truly unknown after diligent search, notice can be published in newspapers. But affidavits must show what searches were done and why personal service failed.
Section 39-5-15 Procedure: If a mortgagor dies, and no probate exists or heirs cannot be identified, a foreclosure plaintiff may name “unknown heirs, devisees, or legatees” — but must still serve them by publication under Rule 1-004.
Default Judgments and Rule 1-055: No judgment by default can be entered until the clerk formally notes a default under Rule 1-055(A). Absent this, even a stipulated judgment in rem can be void.

Conclusion

BOKF, N.A. v. Pacheco reasserts that due process in foreclosure actions is non-negotiable: plaintiffs must identify and serve all parties in interest — known heirs by name and address, unknown heirs by publication — supported by detailed affidavits demonstrating diligent efforts. Section 39-5-15 can streamline foreclosures against decedents’ estates, but only when its strict prerequisites are met and courts insist on full compliance. Failure to do so risks voiding judgments, unsettling title, and denying rightful heirs their day in court.