May a judge and spouse buy foreclosed property at a judicial sale arising from a case handled by the judge's court?

Plain-English summary

The judge's court had entered a default foreclosure judgment about eighteen months earlier. The judge and spouse considered buying the property at a judicial sale. The judge had no involvement in the case, learned of the sale from a newspaper, inspected the file through the clerk as any member of the public could, and would not attend or bid personally. Source: Opinion 11-03, p. 1

Rule 21-500(D)(2) permitted a judge to hold and manage family investments, including real estate, subject to the Code's other limits. Rules 21-500(D)(1)(a) and 21-200(B) prohibited exploiting judicial position or using judicial prestige to advance private interests. Source: Opinion 11-03, pp. 1–2

The committee found neither concern on the described facts. The judge had the same access as the public, did not know the special master, would not be present at bidding, and there was no bidder preregistration to reveal the judge's identity. The committee accordingly permitted participation in the sale as described. Source: Opinion 11-03, p. 2

In practice

The opinion's conclusion depended on the judge's lack of involvement in the foreclosure case and the absence of special access or identification in the sale process. It addressed the proposed purchase, not participation by the judge in bidding. Source: Opinion 11-03, pp. 1–2

Common questions

Q: Did the judge's court having entered the foreclosure judgment bar the purchase?

A: The committee said no on the stated facts because the judge had no involvement in that case and had learned of the sale through public channels. Source: Opinion 11-03, pp. 1–2

Q: Why did the judge's absence from bidding matter?

A: The committee relied in part on the judge's plan not to attend or bid, which avoided identification by the special master. Source: Opinion 11-03, p. 2

Q: Was the property purchase considered a permissible investment?

A: Rule 21-500(D)(2) permits real-estate investments subject to other Code provisions, and the committee found the described purchase did not exploit the judge's position or judicial prestige. Source: Opinion 11-03, pp. 1–2

Background and rules framework

The committee interpreted Code of Judicial Conduct Rules 21-500(D)(2), 21-500(D)(1)(a), and 21-200(B) against the judge's proposed purchase of real estate at a public judicial sale. Source: Opinion 11-03, pp. 1–2

Citations and references

New Mexico Code of Judicial Conduct:

• Rules 21-500(D)(2), 21-500(D)(1)(a), and 21-200(B). Source: Opinion 11-03

See also

• NM Judicial Ethics Op. 12-09: Recreational Balloon LLC
• NM Judicial Ethics Op. 22-01: LLC Legal Fees

Source

• Landing page: New Mexico judicial advisory opinions
• Original PDF: Advisory Opinion 11-03

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

September 21, 2011

Re: Judicial Advisory Opinion No. 11-03

You have asked the Advisory Committee on the Code of Judicial Conduct for an opinion as to whether the Code of Judicial Conduct precludes you and your wife from purchasing foreclosed real property at a scheduled judicial sale. The district court upon which you sit entered the underlying judgment of foreclosure by default approximately eighteen months ago.

You have also informed the Committee that: (1) you had no involvement whatsoever in the case; (2) you learned of the foreclosure sale by reading about it in the newspaper and thereafter read the court file by checking it out at the court clerk’s office in the same manner that any person would be entitled to do; (3) you would not attend or personally participate in the bidding at the sale; (4) you do not know the special master responsible for conducting the sale; and (5) if successful in the bidding, you and your wife would pay for the property with community funds and take title jointly.

The Code of Judicial Conduct permits a judge to “hold and manage investments of the judge and members of the judge’s family, including real estate,” subject to the other provisions of the Code. Rule 21-500(D)(2) NMRA. The Code prohibits a judge from engaging in business or financial activities that “may reasonably be perceived to exploit the judge’s judicial position.” Rule 21-500(D)(1)(a). Further, the Code provides that “[a] judge shall not lend the prestige of judicial office to advance the private interest of the judge or others.” Rule 21-200(B) NMRA.

The Committee does not believe that your proposed action would violate the Code. First, we do not believe that your action can be reasonably perceived to be exploiting your position. You did not participate in the case and learned about it through the public notice that was available to anyone. You read the court file in the same manner as would a member of the public, and you will not participate in the bidding at the sale to avoid any identification of you by the special master.

Second, we do not believe that your proposed action lends the prestige of your office to advance the private interests of you and your wife. You have advised that you do not know the special master, and, moreover, that you will not attend the bidding. In addition, there is no pre-registration that would identify bidders prior to the bidding process.

Based on the facts that you have provided, the Committee does not believe that the Code of Judicial Conduct prohibits your participation in the foreclosure sale in the manner that you have described.

Very truly yours,

James J. Wechsler
Chair

JJW:ow

cc: Hon. Kevin L. Fitzwater
Hon. Freddie J. Romero
Paul L. Biderman
Professor Robert L. Schwartz