How to File a Counterclaim in New Mexico Small Claims Court

Being sued doesn't mean you're only on defense. If the person suing you also owes you money from the same dispute — an unpaid invoice, unreturned deposit, or property they damaged — a counterclaim lets you seek that recovery in the same case. In New Mexico small claims court, failing to raise certain counterclaims means losing the right to sue over them entirely.

Compulsory vs. Permissive Counterclaims

New Mexico follows Rule 1-013(A) NMRA, which divides counterclaims into two categories:

Compulsory counterclaims arise from the same transaction or event as the plaintiff's suit. If a homeowner sues you for $4,000 in shoddy electrical work and you're owed $3,500 for materials they never paid for — same project, same contract — your claim is compulsory. You must include it in your answer. If you don't, you permanently lose the right to pursue it in a separate lawsuit. The court treats your silence as a waiver.

Permissive counterclaims involve a completely different transaction. If that same homeowner also borrowed $1,000 from you for something unrelated to the renovation, that's a permissive counterclaim. You can include it in this case for convenience, or you can file it as a separate lawsuit later.

When in doubt, include it. Raising a counterclaim that turns out to be permissive causes no harm. Failing to raise one that turns out to be compulsory is irreversible.

The $10,000 Limit

Magistrate Courts and the Bernalillo County Metropolitan Court can only award up to $10,000, exclusive of interest and costs. Your counterclaim is subject to the same cap. If a contractor caused $18,000 in damage to your property, you have two choices:

1. Waive the excess — Sue for $10,000 and accept the loss of $8,000 to keep the case in lower court
2. Transfer to District Court — File a motion to transfer the entire case to District Court, which has unlimited monetary jurisdiction. This brings higher complexity and potentially attorney fees, but it preserves your full damages

How to Add a Counterclaim to Your Answer

There is no separate counterclaim form. You include your counterclaim within Form 4-301 (Answer to Civil Complaint), the same document you use to respond to the plaintiff's allegations. After your admissions, denials, and affirmative defenses, add a section titled "Counterclaim" and include:

• A clear statement of what the plaintiff owes you
• The facts supporting your claim (what happened, when, what evidence you have)
• The dollar amount you're seeking

File the completed Form 4-301 with your counterclaim at the court clerk's office within your 20-day answer deadline. Serve a copy on the plaintiff. If a filing fee applies (typically the same as a plaintiff's initial filing fee — $35 in Magistrate Court, $72 in Metropolitan Court), request a fee waiver through Form 4-222 if you can't afford it.

Once your counterclaim is filed, the plaintiff becomes a counter-defendant and must respond to your claims. The judge will hear both sides at the same trial.

Common Counterclaim Scenarios

Contractor disputes. A homeowner sues over alleged defective work; the contractor counterclaims for unpaid labor and materials on the same project.

Landlord-tenant money claims. A landlord sues for apartment damages; the former tenant counterclaims for the unreturned security deposit and withheld interest under NMSA § 47-8-18.

Private car sales. A buyer sues over undisclosed mechanical problems; the seller counterclaims for the buyer's bounced payment or damage to a trade-in vehicle.

In each case, the counterclaim arises from the same transaction as the original suit, making it compulsory under Rule 1-013(A).

Don't Miss the Deadline

Your counterclaim must be included in your answer, and your answer is due within 20 calendar days of service. Filing the counterclaim after your answer deadline requires a motion to amend, which the judge may or may not grant. The safest path is to include everything in your initial filing.

The Responding to a Small Claims Case in New Mexico guide includes a Counterclaim Decision Checklist to help you determine whether your claim is compulsory, calculate your damages within the $10,000 cap, and organize the facts before adding them to Form 4-301.

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