## Facts

- Henry and Valetta Fingado, a married couple, acquired two New Mexico real-property parcels in 1964 and 1969 for residential and rental purposes.
- The deeds conveyed title to the spouses “as joint tenants.”
- Before 1984, New Mexico law treated each spouse’s undivided interest in spousal joint-tenancy property as separate property.
- In 1984, New Mexico amended its community-property statutes to create a presumption that property acquired by spouses in writing “as joint tenants or otherwise” is community property unless it qualifies as separate property.
- In 1987, an involuntary Chapter 7 petition was filed against Henry Fingado.
- The bankruptcy trustee argued the 1984 amendments applied retroactively, converting the pre-1984 jointly titled properties into community property and bringing Valetta’s interest into the bankruptcy estate.
- The bankruptcy court agreed with the trustee; the federal district court reversed and ordered payment to Valetta of one-half of the net sale proceeds.
- In related federal appellate proceedings, a federal court certified to the New Mexico Supreme Court the question whether the 1984 amendments applied retroactively to pre-1984 spousal joint tenancies.

## Issues

1. Whether the 1984 amendments to NMSA 1978, § 40-3-8 apply retroactively to convert property acquired before 1984 by spouses as joint tenants—previously characterized as separate property—into community property included in a debtor spouse’s bankruptcy estate.
2. Whether the legislature clearly expressed an intent for retroactive application, overcoming the presumption of prospective operation.
3. Whether retroactive recharacterization would improperly impair vested property rights.

## Decision

- The court answered the certified question in the negative.
- The 1984 amendments do not apply retroactively to convert pre-1984 spousal joint-tenancy property from separate property into community property.
- Property acquired by spouses as joint tenants before 1984 remains governed by the pre-1984 statutory classification for purposes of determining what enters the bankruptcy estate.

## Legal Principles

- Statutes are presumed to operate prospectively unless the legislature clearly indicates retroactive intent.
- When prior statutory text unambiguously establishes a property classification, later amendments that delete that classification and add a new presumption are treated as substantive changes, not mere clarifications.
- Retroactive statutory reclassification of property interests is disfavored where it would disturb vested rights absent clear legislative authorization.
- In bankruptcy, state-law characterization of marital property (separate vs. community) controls whether a nondebtor spouse’s interest can be reached as part of the debtor’s estate.

## Conclusion

The New Mexico Supreme Court held that the 1984 amendments creating a community-property presumption for spousal joint-tenancy acquisitions apply prospectively only, so pre-1984 spousal joint-tenancy interests remain separate property and are not retroactively pulled into a debtor spouse’s bankruptcy estate.


Swink v. Fingado, 850 P.2d 978 (N.M. 1993)