The owner of a small Gallup trucking company tries to pay a fuel bill in September 2026 and the card is declined. Her bank has frozen the operating account under a writ of garnishment on a 2023 judgment from the U.S. Bankruptcy Court in Albuquerque. She has never heard of the case. The summons, it turns out, went to a yard on the east side of town that the company left in 2021.
Until this year, a business in her position could tell a federal court in New Mexico that a judgment entered without valid service was void and open to attack whenever it surfaced. In January the Supreme Court put that attack on a clock.
What did the Supreme Court decide in Coney Island Auto Parts v. Burton?
In Coney Island Auto Parts Unlimited, Inc. v. Burton, No. 24-808 (U.S. Jan. 20, 2026), Justice Alito wrote for eight Justices and Justice Sotomayor concurred in the judgment. The holding: “Litigants seeking relief under Rule 60(b)(4) must comply with Rule 60(c)(1) and file a motion within a reasonable time.” Civil Rule 60(b)(4) covers a judgment that “is void,” and Rule 60(c)(1) requires every Rule 60(b) motion to be “made within a reasonable time.” Bankruptcy default judgments are covered through Bankruptcy Rules 7055 and 9024.
The case began as an adversary proceeding, a lawsuit inside a bankruptcy. Process was mailed to the corporate name alone, and default judgment followed in 2015. The trustee’s demand reached the CEO in April 2016; funds were seized in 2021. Per the Sixth Circuit’s opinion, 109 F.4th 438 (6th Cir. 2024), the motion at issue was filed in July 2022. The Court expressly declined to decide whether the mailing voided the judgment (footnote 4).
Could a void default judgment be challenged at any time in the Tenth Circuit before 2026?
Yes. V.T.A., Inc. v. Airco, Inc., 597 F.2d 220, 224 (10th Cir. 1979), said Rule 60(b)(4) “is not subject to any time limitation,” and a footnote explained that the judgment is then “a nullity from the outset and any 60(b)(4) motion for relief is therefore filed within a reasonable time.” Orner v. Shalala, 30 F.3d 1307 (10th Cir. 1994), repeated it and added that once voidness is shown, “relief is not a discretionary matter; it is mandatory.” The Supreme Court’s footnote 1 places V.T.A. on the side of the split it rejected.
New Mexico defendants lost that protection on January 20, 2026. The mandatory-relief half of Orner should survive for a timely motion. Hukill v. Oklahoma Native American Domestic Violence Coalition, 542 F.3d 794 (10th Cir. 2008), shows it working: mail signed for by someone with no authority to accept it was not valid service, and a motion filed within a month got the default judgment vacated. I found no Tenth Circuit or BAP opinion applying Coney Island; a Utah federal court cited it in United States v. Geddes (D. Utah Aug. 12, 2026).
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How does Rule 7004 service by mail go wrong for a New Mexico LLC?
Bankruptcy courts allow service by first-class mail. Bankruptcy Rule 7004(b)(3) lets a plaintiff serve a corporation, partnership or other association by mailing the papers “to an officer, a managing or general agent, or an agent authorized by appointment or by law to receive service.” Individuals are served under Rule 7004(b)(1) at a dwelling or regular place of business. Cheap service is easy to botch.
New Mexico makes the agent easy to find. Every LLC must keep a registered office and registered agent in the state under NMSA 1978, § 53-19-5, corporations must do the same under § 53-11-11, and changes are filed with the Secretary of State. A trustee who mails to the company name at an old invoice address, ignoring the agent on file, has a weak position. A company that lets its agent lapse gives the trustee an argument that the company caused the miss. Dissolved entities and departed agents raise state-law wrinkles (§ 38-1-5 addresses corporations whose agent cannot be found) that belong with New Mexico counsel.
Rule 7004(i), effective December 1, 2022, says the officer or agent “need not be correctly named in the address” if the envelope goes to the proper address “directed to the attention of the officer’s or agent’s position or title.” The 2024 restyling kept it. “Attention: Managing Member” now works. An envelope bearing only the company name never qualified, and mail sent before December 2022 is judged without subdivision (i).
How much delay will a court accept under Rule 60(c)(1)’s reasonable-time limit?
The Supreme Court did not define it, but said “it might be reasonable for a defendant not to seek relief before learning about a plaintiff’s attempted enforcement.” The Sixth Circuit asked how long the company waited and why, and whether the trustee was hurt by the wait, starting the clock when the movant knew or should have known the basis for the motion. I expect the Tenth Circuit to ask much the same.
Within the circuit, V.T.A. found no error in calling a Rule 60(b)(5) and (6) motion untimely at 16 months after judgment. In Hukill, the motion came within a month and timing never came up. Notice starts the trouble, not the judgment date, and a demand letter that reached the owner may count.
How would this play out for a Gallup trucking company?
Illustration only. A Chapter 7 trustee for a bankrupt fuel supplier sues a two-truck Gallup LLC for $38,400 in alleged preferences. The summons issues Monday, April 11, 2022, and on April 13 is mailed to the LLC’s name at the yard address on the debtor’s old invoices. No officer, agent or title is on the envelope, and the registered agent on file, the owner at her home address, gets nothing. Default judgment enters Wednesday, February 8, 2023.
A writ of garnishment freezes $41,200 at a Gallup bank on Monday, September 14, 2026. She learns the next day and files under Rule 9024 and Rule 60(b)(4) on Tuesday, September 29. Excusable neglect under Rule 60(b)(1) expired a year after the judgment. Voidness is her argument: the mailing missed Rule 7004(b)(3), a defect subdivision (i) would not cure. Her timing looks strong because nothing reached her before the garnishment. Change one fact, a 2023 email from the trustee’s counsel that she forwarded to her bookkeeper and forgot, and she starts to look like Coney Island.
What should a New Mexico business do when an old bankruptcy judgment freezes its account?
Move at once, in the court that entered the judgment. Under Rule 7069, collection follows Civil Rule 69 and state procedure, so a garnishment can look like a state-court matter. Coney Island’s first motion, in October 2021, went to a bankruptcy court in New York, which sent it back to Tennessee. A D.N.M. adversary judgment is attacked in the D.N.M. adversary case.
Plead Rule 60(b)(4) first and Rule 60(b)(6) in the alternative. In re Gledhill, 76 F.3d 1070 (10th Cir. 1996), confirms Rule 9024 relief is sought by motion, but limits (b)(6) to “extraordinary circumstances” and bars resting it on a ground (b)(1) through (b)(5) covers, so the alternative needs its own facts. A denial must be appealed within 14 days under Rule 8002(a); in In re Vaughan Co. Realtors, No. 18-2030 (10th Cir. Nov. 6, 2018) (unpublished), a D.N.M. case, an appeal filed 23 days after the court refused to vacate was dismissed. The firm’s post on the 14-day bankruptcy appeal deadline explains it.
If a summons does arrive, even a defective one, answer it instead of planning a voidness motion later. Rule 7012 allows 30 days from issuance of the summons and imports Civil Rule 12(b)(5), insufficient service, which Rule 12(h)(1) treats as waived if omitted from the first response. Raise it alongside the merits, as with a trustee’s fraudulent transfer complaint. New Mexico’s Rule 1-060(B) NMRA has a parallel void-judgment ground, a separate state-law question.
| Rule 60(b) ground | Time limit after Coney Island | Use against an old default judgment |
|---|---|---|
| (1) Mistake, inadvertence, excusable neglect | Reasonable time, no more than one year after judgment | Usually expired before a garnishment hits |
| (2) New evidence; (3) fraud by the opposing party | Reasonable time, no more than one year | Rarely available years later |
| (4) Judgment is void | Reasonable time, now enforced in the Tenth Circuit | Main tool for defective Rule 7004 service; clock runs from notice |
| (5) Satisfied or no longer equitable | Reasonable time | Paid or settled judgments, not service defects |
| (6) Any other reason | Reasonable time; extraordinary circumstances | Alternative only, on facts beyond voidness (Gledhill) |
Frequently Asked Questions
Is a void default judgment in New Mexico still void after Coney Island?
The Court did not hold that time cures defective service. It held that the motion to vacate must come within a reasonable time, so a company that waits too long can be stuck with the judgment.
Does the one-year deadline apply when the motion argues the judgment is void?
No. The one-year cap in Rule 60(c)(1) covers grounds (1) through (3). A voidness motion has no fixed cap, but it must be prompt once the company learns of the judgment.
When does the reasonable-time clock start?
When the defendant knew or should have known the basis for the motion. A garnishment is the usual trigger, but an earlier demand letter that reached an owner may start it sooner.
Is mail addressed only to my company’s name proper service under Rule 7004?
Generally not. Rule 7004(b)(3) requires mail directed to someone who can accept service, such as an officer or the registered agent, and since December 1, 2022, a title such as “President” is enough. The Supreme Court left open whether that defect voids a judgment.
Where do I file the motion to vacate a bankruptcy default judgment?
In the bankruptcy court that entered it, in the same adversary proceeding, under Bankruptcy Rule 9024. A detour to another court can cost months that will count against you.
How North Star Law Firm Can Help
North Star Law Firm defends New Mexico businesses in trustee lawsuits, including preference and clawback actions, and moves to vacate default judgments entered in them. Its bankruptcy practice also represents owners whose companies are in, or facing, Chapter 7.
Phillip Zagotti, JD/CPA, is admitted to the U.S. District Court and Bankruptcy Court for the District of New Mexico and represents taxpayers before the IRS and the U.S. Tax Court. The firm works alongside New Mexico-licensed counsel on state-law questions. If a judgment you never knew about has frozen your account, contact North Star Law Firm.