§ 3-16-17 NMSA 1978

If any action, suit or proceeding is pending in any court for or against the city or county at the time the combined municipal organization becomes operative, the combined municipal organization shall be substituted as plaintiff or defendant, as the case may be, in such action, suit or proceeding, and the same shall proceed as if the claim, right, debt or demand upon which the action, suit or proceeding was founded, had originally existed in favor of or against the combined municipal organization.