House Bill 90, effective January 1, 2024, amends the UCC title regarding controllable accounts, controllable electronic records and controllable payment intangibles, including electronic money and electronic copies of records evidencing chattel paper, and the perfection and priority of security interests therein and the rights and duties of secured parties with respect thereto.
Senate Bill 202, effective July 1, 2021, provides that the articles of incorporation of a business, nonprofit or foreign corporation and articles of organization of an LLC must contain the name under which the corporation or LLC transacts business if different from its official name.
Senate Bill 202, effective July 1, 2021, amends the Corporations title by authorizing registration of alternate names by business and nonprofit corporations and LLCs.
House Bill 66, effective June 18, 2021, amends Article 9 of New Mexico’s UCC law to add definitions of “good faith” and “public finance transactions.”
Executive Order 2020-24 preempts specified statutory sections in ordering that shareholder meetings of business corporations or member meetings of nonprofit corporations which are scheduled to be held during June of 2020, be held by remote participation as virtual meetings, if the meeting would bring five or more persons together.
Case summaries
Choice of Law; Failure to File UCC-1
Jacobs v. Taylor, Civ. No. 22-135, decided October 24, 2022. The U.S. District Court, District of New Mexico held that the alleged tort – a Colorado lawyer’s legal malpractice in failing to timely file a UCC-1 financing statement to secure a $2.1 million promissory note for the plaintiff, a New Mexico resident, occurred in New Mexico, and that therefore New Mexico substantive law applied to the case.
The plaintiff retained the lawyer to represent him in the sale of his New Mexico corporation. The buyers became obligated to the plaintiff on the promissory note. According to the plaintiff, the lawyer was supposed to file a financing statement to perfect his security interest. However, he failed to do so until approximately 18 months later when the plaintiff asked whether it had been filed. The corporation later filed for bankruptcy in New Mexico and the plaintiff alleged he received less money than he would have had the financing statement been timely filed. In holding that the tort occurred in New Mexico, the court noted that the alleged malpractice stemmed from the failure to timely file the financing statement in New Mexico and the alleged harm occurred from the fact that the plaintiff received less money from a New Mexico bankruptcy court. The court rejected the lawyer’s argument that Colorado law should apply because the promissory note was drafted in Colorado and the UCC-1 that was eventually filed in New Mexico was filed from his Colorado office.
Suit by Administratively Dissolved Corporation
Reynolds v. Landau, No. A-1-CA-37135, decided April 21, 2020. The New Mexico Court of Appeals held that a corporation that had been administratively dissolved ten years before filing a suit to foreclose on a mortgage could maintain the suit. The New Mexico corporation law does not have a time limit in which a dissolved corporation may file a suit on a claim existing before it was dissolved and it is not for the court to second guess the legislature.
Other notices
The New Mexico Secretary of State’s office announced that effective December 9, 2024, it will no longer accept paper business entity filings. The office rolled out a new online filing system and changed the information required for certain filings as well.