A Taos HOA let its own lawsuit go quiet, lost it, and could not appeal its way back
A Taos HOA let its own lawsuit go quiet, lost it, and could not appeal its way back
2026-09-15 · New Mexico · Courts
An association that sues owns the duty to keep the case moving. A Taos association discovered what happens when nobody does — and then discovered that the appellate deadline that follows is jurisdictional.1
The sequence
SDC-HOA, Inc. v. Casa Encantada Condominiums, LLC, No. A-1-CA-42691, filed September 24, 2025 in the New Mexico Court of Appeals, on appeal from the District Court of Taos County. Memorandum opinion, not precedent.
The association sued a condominium entity and two individuals. In July 2024 the defendants moved to dismiss under Rule 1-041(E)(1) NMRA for failure to prosecute. The association's counsel did not respond, and in September 2024 the district court granted the motion without a hearing.
The association's motion to reconsider was denied in January 2025. It did not appeal either order within the deadline. In February 2025 it filed a Rule 1-060(B) motion arguing excusable neglect, lost that, and appealed from that denial.
Why the appeal failed
“Plaintiff's memorandum in opposition does not challenge this Court's proposed determination that Plaintiff's appeal is untimely insofar as it relates to the district court's September 6, 2024 order, granting Defendant's motion to dismiss, and its January 24, 2025 order, denying Plaintiff's motion to reconsider the dismissal. … Thus, Plaintiff's appeal as to those issues are abandoned.”
And on the attempt to raise, through Rule 1-060(B), the argument that the district court should have held a hearing before dismissing:
“the timely filing of a notice of appeal is a mandatory precondition to our exercise of jurisdiction to hear an appeal… This includes Plaintiff's current argument that the district court erroneously deprived Plaintiff of an opportunity to be heard prior to dismissing the case pursuant to Rule 1-041(E). … 'Rule [1-0]60(B) is not to be used as a substitute for appeal.'”
The line that should go in a board's minutes
“'Relief should not be granted to a party who has failed to do everything reasonably within [their] power to achieve a favorable result before the judgment becomes final.'”
That is the standard an association is measured against once it has let a deadline pass. It is not a forgiving one, and it is applied to the association rather than to the lawyer who missed it.
This is a governance story in procedural clothing
An association litigates in its own name, funds the litigation from assessments collected from the membership, and bears the outcome. When a case is dismissed for failure to prosecute, the money is spent, the claim is gone, and the board has to explain both to the owners.
The failure mode here is specific and it is common: silence read as progress. A board that hears nothing from counsel for several months typically assumes the case is proceeding. Rule 1-041(E)(1) exists precisely because cases can sit, and the rule puts the motion in the opponent's hands.
Note the two features that made this unrecoverable. The motion was granted without a hearing, because nobody responded to it — so there was no court appearance at which the board might have learned what was happening. And the appeal deadline ran from the dismissal, not from the association's later realisation.
What this means in practice
Ask for docket status in writing, on a schedule. Not “how is the case going” but what has been filed, what is outstanding, and what the next deadline is. A one-line monthly report from counsel would have surfaced this.
Treat any motion filed against the association as a board matter. A motion to dismiss for failure to prosecute is not a technicality for counsel to handle quietly. It is notice that the case is about to end.
Know who decides whether to appeal, and by when. Appeal deadlines are short and jurisdictional. A board that has to convene, take advice and vote needs that process defined before the clock starts, not after.
Put litigation in the budget and the minutes. An association carrying live litigation has a contingency that belongs in its financial planning — and a dismissal with costs is a worse outcome than the settlement the board probably declined.
The wider point about suing at all
New Mexico gives an association a lien for unpaid assessments that arises when the assessment becomes due and “may be foreclosed in like manner as a mortgage on real estate,” with no statutory minimum amount and no minimum delinquency period. The power to sue is therefore easy to reach for.
What this case shows is that the decision to file is the beginning of an obligation, not the end of a problem. An association that files and then loses interest has converted a collectible debt into a dismissed claim and a bill from its own lawyers.
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