Blackwell v. Lurie
134 N.M. 1, 2003 NMCA 082, 71 P.3d 509 (2003)
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Rule of Law:
Under New Mexico's conflict of laws rules, the character of an interest in personal property is determined by the law of the jurisdiction at the time and in the manner of its acquisition. Consequently, property held as tenants by the entirety under another state's law is not subject to execution in New Mexico to satisfy the separate debt of only one spouse.
Facts:
- In 1978, while domiciled in Missouri, Ronald and Nancy Lurie jointly purchased a Frederic Remington sketch titled 'Scenes of Navajo Life'.
- Ronald Lurie was a general partner in the Missouri law firm Popkin & Stern.
- In the early 1990s, Popkin & Stern went into bankruptcy, which resulted in a deficiency judgment of $1,121,743 solely against Ronald Lurie.
- In 1993, the Luries placed the sketch on consignment at the Fenn Gallery in Santa Fe, New Mexico, where it remains.
- After placing the sketch in New Mexico, the Luries relocated to Montana, their present domicile.
Procedural Posture:
- Robert Blackwell, the Liquidating Trustee, obtained a deficiency judgment against Ronald Lurie in a Missouri bankruptcy court.
- The Liquidating Trustee domesticated the judgment in New Mexico.
- The Liquidating Trustee filed a petition for a writ of execution in the First Judicial District Court of New Mexico, seeking to seize a sketch owned by the Luries.
- Ronald and Nancy Lurie filed a motion to quash the writ of execution, arguing the sketch was exempt.
- The district court granted the Luries' motion, quashing the writ.
- The Liquidating Trustee (appellant) appealed the district court's order to the New Mexico Court of Appeals, with the Luries as appellees.
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Issue:
Does New Mexico law permit a creditor to execute a judgment for one spouse's separate debt by seizing personal property that the couple acquired in Missouri and holds as tenants by the entirety under Missouri law?
Opinions:
Majority - Wechsler, Chief Judge
No. New Mexico law does not permit execution on the property because its character is determined by the law of Missouri, where it was acquired. The court applied New Mexico's 'time-and-manner-of-acquisition' conflict of laws rule, which dictates that property interests are characterized by the law of the jurisdiction where they are acquired. Since the Luries purchased the sketch as a married couple in Missouri, Missouri law presumes they hold it as tenants by the entirety. The court rejected the argument that New Mexico's community property statutes override this rule or that recognizing the tenancy by the entirety violates New Mexico's public policy. For the debt's character, the court found it could not apply New Mexico law because its debt satisfaction statutes do not address tenancy by the entirety property. It therefore applied Missouri law, under which the debt is Ronald Lurie's separate debt. Because Missouri law protects tenancy by the entirety property from the separate creditors of one spouse, the sketch is exempt from execution.
Analysis:
This case reinforces the significance of the 'time-and-manner-of-acquisition' rule in conflict of laws analysis for property characterization. It establishes that New Mexico courts will recognize forms of property ownership, like tenancy by the entirety, that are validly created in other states, even though New Mexico law itself has abolished such forms. The decision limits the reach of New Mexico's community property regime, clarifying that it does not automatically re-characterize all property brought into the state. This precedent provides stability and predictability for creditors and debtors in situations involving mobile assets and parties who have moved between states with different marital property systems.
