v. Evans

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
December 5, 2019
2019COA179
No. 18CA2085, Evans v. Evans — Real Property — Spurious
Liens and Documents
A division of the court of appeals considers two issues
involving invalidation of an encumbrance as a spurious lien or
spurious document under section 38-35-201, C.R.S. 2019. First, is
an order issued by a district court magistrate an “order” of a state
court for purposes of Colorado’s spurious lien statute? Second, is a
summary of such a magistrate’s order recorded in real property
records a lien “imposed by” an order of a “state court”? The division
answers both questions in the affirmative and holds that the
appellees did not create a “spurious lien” or “spurious document”
when they encumbered petitioner’s real property by recording a
summary of a magistrate’s order entered in the underlying
dissolution of marriage case. The division, therefore, affirms.
COLORADO COURT OF APPEALS 2019COA179
Court of Appeals No. 18CA2085
Douglas County District Court No. 18CV30747
Honorable David J. Stevens, Judge
Ken Evans,
Plaintiff-Appellant,
v.
Delinda Evans,
Defendant-Appellee,
and
Jennifer Holt,
Attorney-Appellee.
ORDER AFFIRMED AND CASE
REMANDED WITH DIRECTIONS
Division III
Opinion by JUDGE LIPINSKY
Webb and Davidson*, JJ., concur
Announced December 5, 2019
Richards Carrington LLC, Christopher P. Carrington, Ruth M. Moore, Denver,
Colorado, for Plaintiff-Appellant
Griffiths Law PC, Duncan Griffiths, Christopher J. Griffiths, Lone Tree,
Colorado, for Defendant-Appellee and Attorney-Appellee
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2019.
¶1 This appeal raises two narrow issues. First, is an order issued
by a district court magistrate an “order” of a state court for
purposes of Colorado’s spurious lien statute? Second, is a
summary of such a magistrate’s order recorded in real property
records a lien “imposed by” an order of a “state court”?
¶2 In the trial court, plaintiff, Ken Evans (husband), contended
that appellees, Delinda Evans (wife) and her attorney, Jennifer Holt,
wrongfully encumbered his real property in Douglas County by
recording Holt’s self-styled “Abstract” summarizing the magistrate’s
order. He argued that the Abstract must be removed from the
Douglas County real property records under the procedure set forth
in section 38-35-204, C.R.S. 2019, and C.R.C.P. 105.1. The district
court disagreed with husband. So do we.
¶3 We answer both questions “yes” and hold that appellees did
not create a “spurious lien” or “spurious document” within the
meaning of subsections (3) and (4) of section 38-35-201, C.R.S.
2019, when they encumbered husband’s real property by recording
a summary of a magistrate’s order entered in the underlying
dissolution of marriage case. Therefore, we affirm.
1
I. Background
¶4 Four years after the district court entered a decree dissolving
the Evanses’ marriage, wife petitioned the court to modify the
decree. She alleged that husband had violated his disclosure
obligations in the dissolution of marriage proceeding by failing to
inform her of his interest in certain business assets, as required
under C.R.C.P. 16.2(e)(10). She asked the court to allocate the
previously undisclosed assets.
¶5 Ruling without the parties’ consent, which was not required
under C.R.M. 6(b)(1)(A), a district court magistrate granted wife’s
petition and ordered husband to pay wife half of the value of the
previously undisclosed assets in monthly installments:
[T]he net marital value that must be divided is
$2,337,278.00, of which [wife] shall receive
$1,168,639.00. [Husband] shall pay [wife]’s
sum at a minimum of $50,000.00 per month.
Interest shall accrue at the statutory rate of
8% per annum, compounded annually, until
paid in full. [Husband]’s payments toward this
obligation must commence not later than 45
days from the date of this order, and [this
order] shall create a lien against all [husband]’s
rights, title and interest in [the subject assets]
and any other assets in his name.
2
(Emphasis added.) Husband timely filed a petition for district court
review of the magistrate’s order.
¶6 Less than one week after husband filed the petition, Holt
recorded a summary of the magistrate’s order, entitled “Abstract of
Court Order,” with the Douglas County Clerk and Recorder. The
Abstract said:
[Husband] was . . . required by [the
magistrate’s] order to pay said $1,168,639.00
amount with interest at the rate of 8% per
annum compounded annually until paid in full
at the rate of not less than $50,000.00 per
month commencing not later than 45 days
after the date of the order and further provided
that [wife] was granted a lien against all
[husband’s] rights, title and interest in [the
subject assets], and any other assets in his
name.
(Emphasis added.)
¶7 Husband did not learn about the Abstract until months later,
when he attempted to close a transaction secured by real property
he owned in Douglas County. The Abstract appeared in the
County’s real property records as an encumbrance against his
property. He argued that the transaction fell through because the
Abstract clouded title to his property.
3
¶8 After discovering the Abstract, husband petitioned the district
court to invalidate the Abstract as a “spurious lien” or “spurious
document” on an expedited basis following the procedure set forth
in section 38-35-204 and C.R.C.P. 105.1. The court denied
husband’s petition, finding that the Abstract was neither a
“spurious lien” nor a “spurious document” under the statutory
definitions.
¶9 Although husband attacks the Abstract under several legal
theories, we consider only whether it falls within the statutory
definitions of “spurious lien” or “spurious document.” This case is
not an appeal of any ruling in the Evanses’ dissolution of marriage
case. Simply put, we must affirm the trial court’s order unless we
determine that the Abstract ran afoul of section 38-35-201, even if
the Abstract or the underlying magistrate’s order was invalid or
otherwise unenforceable under another legal theory.
II. Standard of Review
¶ 10 We review de novo whether a recorded document is a spurious
lien or spurious document, as defined in subsections (3) and (4) of
section 38-35-201. See Battle N., LLC v. Sensible Hous. Co., 2015
COA 83, ¶ 53, 370 P.3d 238, 250. We also review de novo whether
4
a district court applied the correct legal standard in a case filed
under the statute. See Pierce v. Francis, 194 P.3d 505, 509 (Colo.
App. 2008). And we review issues of statutory construction de
novo. Tuscany, LLC v. W. States Excavating Pipe & Boring, LLC, 128
P.3d 274, 277 (Colo. App. 2005).
III. The “Spurious Lien” and “Spurious Document” Statute
¶ 11 For purposes of this case, a “spurious lien” is “a purported lien
or claim of lien that: . . . [i]s not imposed by order, judgment, or
decree of a state court . . . .” § 38-35-201(4)(c). “State court”
means “a court established pursuant to title 13, C.R.S.”
§ 38-35-201(5). A “spurious document” is “any document that is
forged or groundless, contains a material misstatement or false
claim, or is otherwise patently invalid.” § 38-35-201(3).
¶ 12 Section 38-35-204 and C.R.C.P. 105.1 provide an expedited
remedy for persons whose real property is encumbered by a
“spurious lien” or a “spurious document.” Any person whose
property is so encumbered may petition the district court for an
order to show cause why the spurious lien or spurious document
should not be declared invalid and released. See § 38-35-204(1);
C.R.C.P. 105.1. The court must hold a hearing at which the
5
proponent of the recorded document has an opportunity to respond
to the order to show cause. See § 38-35-204(1)(a); C.R.C.P.
105.1(a)(1).
¶ 13 Following the show cause hearing, if the district court
“determines that the lien or document is a spurious lien or spurious
document, [it] shall make findings of fact and enter an order and
decree declaring the spurious lien or spurious document . . . invalid
[and] releasing the recorded or filed spurious lien or spurious
document.” § 38-35-204(2); see C.R.C.P. 105.1(d); Fiscus v. Liberty
Mortg. Corp., 2014 COA 79, ¶ 31, 373 P.3d 644, 650, aff’d on other
grounds, 2016 CO 31, 379 P.3d 278.
¶ 14 The General Assembly established this mechanism, which
takes less time and involves fewer procedural steps than quiet title
actions and most other types of civil cases, “to protect individuals
from those who use groundless claims to cloud title to real property
as a form of protest or harassment.” Westar Holdings P’ship v.
Reece, 991 P.2d 328, 331 (Colo. App. 1999).
6
IV. The Abstract Is Neither a “Spurious Lien” Nor a “Spurious
Document”
A. The Abstract Does Not Meet the Statutory Definition of
“Spurious Lien”
¶ 15 Husband contends that the Abstract is a spurious lien
because, while it purports to encumber his property, the underlying
magistrate’s order is not an “order” and, therefore, the Abstract is
not a valid “lien” within the meaning of section 38-35-201(4)(c). As
noted above, a lien cannot be spurious if it is “imposed by order . . .
of a state court . . . .” Id.
¶ 16 First, husband asserts that, in non-consent cases, a
magistrate’s order is merely an unenforceable recommendation and
not a court order. Second, he contends that a magistrate’s order is
not an order “of a state court” because magistrates’ orders are not
orders of a district court. Third, he argues that because the
Abstract did not satisfy the requirements for a judgment lien, it was
not a “lien . . . imposed by order . . . of a state court” under the
statute. Id. We consider and reject each of these assertions.
7
1. The Magistrate’s Order Was an Enforceable “Order” at the
Time Wife’s Attorney Recorded the Abstract
¶ 17 In contending that the magistrate’s order was not an “order”
when wife’s attorney recorded the Abstract, husband attacks the
authority of magistrates in non-consent cases. He argues that,
until a district court reviews a magistrate’s order or the time for
such review has passed, a magistrate’s order is merely a
recommendation. Husband, however, rests this argument on case
law analyzing the actions of state court referees at a time when they
possessed less authority than do present-day magistrates.
¶ 18 For example, husband cites to In re Marriage of Petroff, 666
P.2d 1131, 1132 (Colo. App. 1983), which held that, under a local
rule of the Twentieth Judicial District, a referee’s decision was
merely a recommendation, and not an order or judgment, absent
further district court action. (All district court local rules were
repealed five years after Petroff. C.R.C.P. 121(b).)
¶ 19 But the law governing referees changed two years later. “The
decision of the referee shall remain in full force and effect while a
reconsideration is pending unless stayed by the judge for good
cause shown.” Ch. 132, sec. 4, § 13-5-305(2)(b), 1985 Colo. Sess.
8
Laws 590. This statutory language mirrors current Magistrate Rule
5(a), which states that “[a]n order or judgment of a magistrate . . .
shall be effective upon the date of the order or judgment and shall
remain in effect pending review by a reviewing judge unless stayed
by the magistrate or by the reviewing judge.” C.R.M. 5(a); see
§ 13-5-201(3), C.R.S. 2019 (“District court magistrates may hear
such matters as are determined by rule of the supreme
court . . . .”). Husband does not point us to any order staying the
magistrate’s order.
¶ 20 Under the authority of section 13-5-201(3), the supreme court
empowered magistrates to modify permanent orders in dissolution
of marriage proceedings without the parties’ consent. See C.R.M.
6(b)(1)(B) (“A district court magistrate shall have the power to
preside over all motions to modify permanent orders concerning
property division . . . .”).
¶ 21 Husband’s attack on the power of magistrates to enter orders
in non-consent cases cannot be squared with the unambiguous
language of Magistrate Rule 5(a). The magistrate’s order was
enforceable when entered, even though husband timely appealed it
9
to the district court. See C.R.M. 7(a) (providing that magistrate’s
orders not requiring consent must be appealed to the district court).
2. The Magistrate’s Order Is an Order of a State Court
¶ 22 Husband contends that, even if the magistrate’s order was an
enforceable “order” under C.R.M. 5(a), it is not an “order . . . of a
state court,” within the meaning of section 38-35-201(4). Therefore,
he argues, the Abstract is spurious because it was not a lien
“imposed by order . . . of a state court . . . .” § 38-35-201(4)(c).
¶ 23 The spurious lien statute defines “state court” as a court
“established pursuant to title 13, C.R.S.” § 38-35-201(5). Husband
asserts that district courts are “established pursuant to title 13”
because they are courts of record under title 13. He argues that,
unlike district judges’ orders, magistrates’ orders in non-consent
cases are not those of a “district court.” Thus, he continues, the
magistrate’s order was not entered by a “state court.”
¶ 24 Husband’s argument, however, ignores the authority vested in
magistrates to act as officers of district courts. See In re R.G.B., 98
P.3d 958, 960 (Colo. App. 2004) (holding that magistrates are
hearing officers who act with limited authority). While magistrates
are not judges, they perform judicial functions. C.R.M. 1 (“Although
10
magistrates may perform functions which judges also perform, a
magistrate at all times is subject to the direction and supervision of
the chief judge or presiding judge.”); see In re Parental
Responsibility of M.B.-M., 252 P.3d 506, 509-10 (Colo. App. 2011).
¶ 25 Magistrates are authorized to act as officers of the district
court in certain matters. See § 13-5-201; C.R.M. 3(a) (explaining a
magistrate is “[a]ny person other than a judge authorized by statute
or by these rules to enter orders or judgments in judicial
proceedings”). As noted above, in domestic relations proceedings,
“[a] district court magistrate shall have the power to preside over all
motions to modify permanent orders concerning property division,
maintenance, child support or allocation of parental
responsibilities.” C.R.M. 6(b)(1)(B). And a magistrate can exercise
this power without the parties’ consent. Id.; see C.R.M. 6(b)(1).
¶ 26 Husband fails to explain in whose name district court
magistrates enter their orders, if not the name of the district court
to which they are assigned and for which they work. Section
13-5-201 and the Magistrate Rules do not establish a judicial junior
varsity league comprised of magistrates. After all, district court
magistrates routinely place the court’s name on their rulings and
11
label them “orders” without facing accusations of usurping the
court’s authority.
¶ 27 For these reasons, the magistrate was authorized to act on
behalf of the district court when she entered the order at issue.
Thus, the magistrate’s order is an order of the district court.
¶ 28 Husband relies on inapposite authority in arguing that
magistrates’ orders are not district court orders. He cites to the
rule specifying the process for appealing magistrates’ orders.
C.R.M. 7(a)(12) (“If timely review in the district court is not
requested, the order or judgment of the magistrate shall become the
order or judgment of the district court. Appeal of such district
court order or judgment to the appellate court is barred.”).
Husband argues that, because he requested timely review by the
district court, the magistrate’s order was not the equivalent of an
order of a district court judge during the pendency of the review.
C.R.M. 7(a)(12), however, addresses when a magistrate’s order may
be appealed, and not whether such an order is a district court
order. Husband’s argument conflates the authority to issue an
enforceable order with the distinct question of how a magistrate’s
order can be appealed.
12
¶ 29 In sum, the magistrate’s order was an “order . . . of a state
court” for purposes of section 38-35-201(4)(c). Thus, any lien
imposed by the magistrate’s order could not have been spurious.
3. A Lien Imposed by a Court Order Need Not Be a Judgment
Lien
¶ 30 Husband further contends that only a judgment lien created
by recording a court-issued transcript of judgment can be a lien
“imposed by order, judgment, or decree of a state court . . . .”
§ 38-35-201(4)(c). According to husband, “there is no support for
allowing a litigant to cloud its adversary’s title to real property by
recording an attorney-created document that is not a certified copy
of an enforceable order, judgment or decree.” We disagree.
¶ 31 To create a judgment lien, a party must record a transcript of
the judgment certified by the clerk of court. See § 13-52-102(1),
C.R.S. 2019. “[F]rom the time of recording such transcript, and not
before, the judgment shall become a lien upon all the real estate,
not exempt from execution in the county where such transcript of
judgment is recorded, owned by such judgment debtor.” Id. The
parties do not dispute that wife’s attorney did not record a
13
transcript of judgment and, for that reason, the Abstract was not a
judgment lien.
¶ 32 Wife, however, did not need a judgment lien to encumber
husband’s property. Unlike a typical money judgment, the
magistrate’s order by its terms created an equitable lien to secure
husband’s payment obligation to wife. It expressly said that the
judgment entered against husband would be secured by “a lien
against all [husband]’s rights, title and interest in [the subject
assets] and any other assets in his name.”
¶ 33 In light of the lien language in the magistrate’s order, wife did
not require a transcript of judgment or other separate document to
create a lien against husband’s property. See Willis v. Neilson, 32
Colo. App. 129, 132, 507 P.2d 1106, 1108 (1973) (holding that
language in stipulation incorporated into divorce decree providing
that husband’s real estate was security for payment of sum owed to
wife created lien against husband’s real property). But she needed
to record documentation of the lien to perfect her interest in
husband’s real property. See § 38-35-109(1), C.R.S. 2019; Nile
Valley Fed. Sav. & Loan Ass’n v. Sec. Title Guarantee Corp. of Balt.,
813 P.2d 849, 851 (Colo. App. 1991) (Section 38-35-109 “requires a
14
secured party properly to record his interest in real property with
the clerk and recorder of the county in which the property is located
in order to protect his interest against those who subsequently
claim interests in the same property.”).
¶ 34 Contrary to husband’s position, Colorado law does not limit
the documents that can be recorded to enforce a judicially created
lien to “certified cop[ies] of an enforcement order.” See
§ 38-35-109(1) (“All deeds, powers of attorney, agreements, or other
instruments in writing conveying, encumbering, or affecting the title
to real property, certificates, and certified copies of orders,
judgments, and decrees of courts of record may be recorded . . . .”).
We need not consider whether wife could enforce the lien referenced
in the magistrate’s order by foreclosing on husband’s property,
however, as our inquiry is limited to whether the Abstract is a
spurious lien or a spurious document.
¶ 35 Section 38-35-201 does not specify that a lien “imposed by
order, judgment, or decree of a state court” must take the form of a
judgment lien. Rather, under the plain meaning of the statute, any
type of lien “imposed by order, judgment, or decree of a state court”
cannot be spurious, regardless of how it was created or what it is
15
called. § 38-35-201(4)(c). Because, as explained above, the
magistrate’s order was an “order, judgment, or decree of a state
court,” any recorded document that accurately characterized the
lien created through the magistrate’s order would not be spurious.
For this reason, the Abstract, when recorded, created a lien
“imposed by” an order of a state court within the meaning of section
38-35-201(4)(c).
¶ 36 This interpretation is consistent with the purpose of the
spurious lien statute, which is to provide a process for removing
groundless claims against title. Westar Holdings, 991 P.2d at 331.
The Abstract is not groundless, as it accurately summarizes the
language of an enforceable court order.
¶ 37 Therefore, we disagree with husband’s argument that a
judgment lien was the only means by which wife could have
encumbered his property for purposes of enforcing the magistrate’s
order. (Although we hold that the Abstract does not run afoul of the
spurious lien statute, we neither address its validity in other
contexts nor condone the practice of recording attorney-drafted
summaries of court orders.)
16
B. The Abstract Was Not a Spurious Document
¶ 38 Husband alternatively contends that the Abstract was a
“spurious document” because it did not accurately reflect the terms
of the lien described in the magistrate’s order and, therefore, was
materially misleading within the meaning of section 38-35-201(3).
The trial court disagreed “because the statement in the Abstract is
language from the Order itself.” We agree with the trial court.
¶ 39 Husband contends that the lien described in the magistrate’s
order would become effective only if he failed to make one of the
required monthly payments and that the lien did not secure his
entire $1,168,639 indebtedness to wife. As husband accurately
notes, the magistrate’s order explained that “[husband]’s payments
toward this obligation [$1,168,639] must commence not later than
45 days from the date of this order, and [the order] shall create a
lien against all [husband]’s rights, title and interest in [the subject
assets] and any other assets in his name.” But we do not need to
determine the scope of the lien, because the language of the
Abstract is so similar to that of the magistrate’s order. Given the
similarity between the magistrate’s order and the Abstract, the
latter accurately characterized the former and was not misleading.
17
¶ 40 Husband further argues that the Abstract was not a proper
judgment lien, violated the judgment enforcement statute, did not
satisfy the requirements of the relevant real property recording
statutes, and was not a valid lis pendens. But, as explained above,
the definition of spurious document requires more than an invalid
encumbrance — the encumbrance must be “patently invalid.”
§ 38-35-201(3). None of husband’s miscellaneous arguments
explains why the Abstract was “patently invalid,” even if a closer
look may have shown it was “invalid.” When examining the
statutory definition of “spurious document,” we must “give effect to
every word and render none superfluous because we ‘do not
presume that the legislature used language idly and with no intent
that meaning should be given to its language.’” Baum v. Indus.
Claim Appeals Office, 2019 COA 94, ¶ 35, ___ P.3d ___, ___ (quoting
Lombard v. Colo. Outdoor Educ. Ctr., Inc., 187 P.3d 565, 571 (Colo.
2008)).
¶ 41 A division of this court explained that a spurious document is
one “for which a proponent can advance no rational argument
based on evidence or the law to support the claim.” Westar
Holdings, 991 P.2d at 330. The “no rational argument” test is
18
similar to the definition of a “[p]atently insubstantial claim[]” as one
that is “essentially fictitious.” Davis v. U.S. Sentencing Comm’n, 716
F.3d 660, 667 (D.C. Cir. 2013) (quoting Best v. Kelly, 39 F.3d 328,
330 (D.C. Cir. 1994)). Thus, a spurious document is one that no
rational argument can support and that is “essentially fictitious.”
¶ 42 For example, in Egelhoff v. Taylor, the disputed encumbrance
reflected a judge’s purported $500 million indebtedness to an
offender whom the judge had sentenced, which the judge allegedly
created by failing to contest the alleged debt under a “Commercial
Affidavit Process” not recognized under Colorado law. 2013 COA
137, ¶¶ 17-19, 312 P.3d 270, 273-74. The Egelhoff court rejected
the offender’s baseless arguments and affirmed the trial court’s
finding that the alleged lien was spurious. Id. at ¶ 21, 312 P.3d at
274.
¶ 43 In contrast, wife has advanced a rational argument that the
Abstract reflects an enforceable order. Even if the Abstract were
invalid, it is not the type of patently invalid document that section
38-35-210 was enacted to invalidate. See Westar Holdings, 991
P.2d at 331. Thus, the Abstract is not a spurious document.
19
V. The Parties’ Requests for Attorney Fees
¶ 44 Rule 105.1 provides, in relevant part, that
[i]f, following the hearing on the order to show
cause, the court determines that the lien or
document is not a spurious lien or document,
the court shall issue an order so finding and
enter a monetary judgment against the
petitioner and in favor of the respondent in the
amount of the respondent’s costs, including
reasonable attorney fees.
C.R.C.P. 105.1(d); see § 38-35-204(3).
¶ 45 In light of our disposition of this appeal, we deny husband’s
request for attorney fees, grant the request of wife and wife’s
attorney for recovery of their costs, including reasonable attorney
fees, and remand for findings of the amount of such costs
awardable to wife and wife’s attorney.
VI. Conclusion
¶ 46 The district court’s order is affirmed. We remand to the
district court for findings on the amount of reasonable attorney fees
and other costs awardable to wife and wife’s attorney under section
38-35-204(3) and C.R.C.P. 105.1.
JUDGE WEBB and JUDGE DAVIDSON concur.
20