Actarus, LLC v. Johnson
| Citation | 451 P.3d 1270 |
| Decision Date | 01 August 2019 |
| Docket Number | Court of Appeals No. 18CA1655 |
| Parties | ACTARUS, LLC, Plaintiff-Appellant, v. Larnitta Darlene JOHNSON, BY AND THROUGH Bret JOHNSON, as next friend, Defendant-Appellee. |
| Court | Court of Appeals of Colorado |
Hatch Ray Olsen Conant, LLC, Robert W. Hatch, II, Christopher J. Conant, Denver, Colorado, for Plaintiff-Appellant
Sparkman+Foote LLP, Kieran A. Lasater, Denver, Colorado; Pelz & Associates, P.C., Harlan P. Pelz, Denver, Colorado, for Defendant-Appellee
Opinion by JUDGE GROVE
¶1 Plaintiff-appellant, Actarus, LLC, appeals the district court’s declaration that defendant-appellee, Larnitta Darlene Johnson, has a statutory right of redemption to the property for which Actarus holds a treasurer’s deed. Because Johnson was under a legal disability and did not have a legal guardian when Actarus received a treasurer’s deed for the property from the Arapahoe County Treasurer, we affirm.
¶2 Johnson suffers from severe mental illness and has lived in an assisted care facility since 1997. Her husband, Robert Johnson,1 served as her court-appointed guardian until his death in 2012. That same year, Johnson failed to pay property taxes on a house that she owned. The county placed a tax lien on the property and then sold it. Actarus bought the lien from its original buyer and, when the lien went unredeemed, received a treasurer’s deed from the county in August 2017.
¶3 Robert had not filed his annual guardian’s report before his death, and so, beginning in March 2012, the probate court issued a series of delay prevention notices requesting updates on the guardianship as well as on Johnson’s status. The first of these was addressed to Robert, but after an unknown person filed Robert’s certificate of death with the Arapahoe County probate court, subsequent notices were addressed to the other members of Johnson’s family.
¶4 No one responded to the delay prevention notices until February 2013, when Johnson’s son Bret, apparently having learned of at least one of them, mailed a "Guardian’s Report – Adult" to the court. Using a court-approved form, Bret listed his name and contact information in the section entitled "guardian information," wrote "this is the first report for the new guardian," and checked a box indicating that he wished to "remain guardian." He also provided information about Johnson’s health, activities, finances, and living conditions.
¶5 Even though it had received notice that Robert — Johnson’s initial court-appointed guardian — had died, and notwithstanding Bret’s representation in the report that he was "the new guardian," the probate court took no action to formally appoint Bret or anyone else as Johnson’s guardian. In fact, the probate court did nothing for nearly three years, when, in early 2016, it issued another delay prevention order — this time addressed to Bret — ordering him to file the guardian’s report for 2015 no later than February 4, 2016. Although Bret had never been formally appointed as Johnson’s guardian, the order included a bold "X" by the stock language, "[t]he Letters of Guardianship/Conservatorship that authorize you to act will be suspended if the document(s) remain delinquent."
¶6 Bret filed a second guardian’s report, again identifying himself as Johnson’s guardian and indicating a desire to remain guardian. The pattern then repeated itself the next year. Each of Bret’s reports was handwritten on the standard court-prescribed form, which included a verification that it was being filed under penalty of perjury.
¶7 Meanwhile, the clock was running on the tax lien that the Treasurer had sold in 2013. The lien went unredeemed, and, on August 15, 2017, the Treasurer issued a treasurer’s deed to Actarus, which promptly recorded it.
¶8 After the treasurer’s deed was issued, Bret formally petitioned the probate court to be appointed Johnson’s conservator and for his sister to be appointed guardian. Actarus then filed this quiet title action seeking a declaration that it was the sole legal owner of Johnson’s home. Johnson (acting through Bret with the district court’s approval) filed cross-claims against the Treasurer, for allegedly failing to comply with statutory notice and due diligence requirements, and counterclaims against Actarus, asserting that Johnson had a statutory right to redeem her interest in the property due to her legal disability.
¶9 Actarus moved for partial summary judgment, asking the court to "decree[ ] that Ms. Johnson has no right of redemption under C.R.S. § 39-12-104 [, C.R.S. 2018]." The Treasurer also moved for summary judgment, arguing that the undisputed facts established that the treasurer’s deed had been validly issued. The district court granted the Treasurer’s motion but denied summary judgment for Actarus after concluding that Johnson was under a legal disability — and was without a guardian — when the treasurer’s deed was issued. As a result, the court concluded, section 39-12-104 applied to extend Johnson’s redemption period by nine years beyond the date on which Actarus recorded the treasurer’s deed.
¶10 Actarus appeals the district court’s order denying its motion for summary judgment and declaration that Johnson has a right of redemption.2
¶11 The district court ruled as a matter of law, basing its conclusions on its interpretation of the probate and tax codes. We review de novo questions of statutory interpretation. Stamp v. Vail Corp. , 172 P.3d 437, 442 (Colo. 2007).
¶12 A homeowner who fails to pay property taxes risks losing her property through a treasurer’s deed.3 §§ 39-11-101 to - 109, C.R.S. 2018. When taxes go unpaid, the county "may sell a tax lien on the property to a third party." Red Flower, Inc. v. McKown , 2016 COA 160, ¶ 1, 411 P.3d 1094. If the owner does not redeem the lien by paying the outstanding taxes and interest within three years of its issuance, "the holder of an unredeemed lien may obtain a treasurer’s deed for the property." Id.
¶13 Typically, a treasurer’s deed "terminate[s] the taxpayer’s entire ownership interest in the subject property by conveying the totality of the land on which the taxes are delinquent." Bolser v. Bd. of Comm’rs , 100 P.3d 51, 54 (Colo. App. 2004). It does so by "convey[ing] a paramount title, wiping out any other interest in the property." Meyer v. Haskett , 251 P.3d 1287, 1291 (Colo. App. 2010).
¶14 There are, however, some exceptions. For example, a treasurer’s deed is void "when the taxing entity lacked the authority or jurisdiction to issue it" and is voidable when it "is issued with authority but where that authority is exercised in an improper manner." Lake Canal Reservoir Co. v. Beethe , 227 P.3d 882, 889 (Colo. 2010). Both void and voidable deeds may be set aside by a court when challenged as part of an action to quiet title. See Sandstrom v. Solen , 2016 COA 29, ¶ 42, 370 P.3d 669.
¶15 Even validly issued treasurer’s deeds can be set aside in some situations. As relevant here, a property owner who is "under legal disability at the time of execution and delivery of a tax deed ... shall have the right to make redemption of such property at any time within nine years from the date of the recording of such tax deed." § 39-12-104(1). Thus, while a homeowner’s legal disability will not prevent the placement of a tax lien, the sale of that lien, or the subsequent issuance of a treasurer’s deed, the recordation of that deed does not extinguish a qualifying homeowner’s right to redeem the property.
¶16 It is undisputed that Johnson is incapacitated and needs a court-appointed guardian to look after her interests. The parties likewise appear to agree that if Johnson had had such a guardian at the time that the treasurer’s deed was issued, then she was not "under legal disability" as contemplated by section 39-12-104(1). As we explain below, Johnson’s "legal disability" (or lack thereof) turns on whether Bret became her guardian once he began filing guardianship reports with the probate court. We conclude that Bret’s submission of these reports did not, without more, serve to install him as Johnson’s guardian. Thus, Johnson was under a legal disability when the treasurer’s deed was issued, and she accordingly had nine years to exercise her right of redemption following recordation of the treasurer’s deed.
¶17 The statutes outlining the right of redemption do not define the phrase "under legal disability," see §§ 39-12-101 to - 113, C.R.S. 2018, and its plain and ordinary meaning is capable of alternative reasonable interpretations. As a result, we may rely on canons of statutory construction, "including legislative history, the language of laws on the same or similar subjects, and the placement of a provision within the statutory framework," to divine the General Assembly’s intent. Associated Gov’ts of Nw. Colo. v. Colo. Pub. Utils. Comm’n , 2012 CO 28, ¶ 11, 275 P.3d 646 ; see also 2B Norman Singer & Shambie Singer, Sutherland Statutory Construction § 51:2, Westlaw (7th ed. database updated Nov. 2018). Here, because they share the goal of ensuring that incapacitated individuals will not be deprived of an opportunity to assert their rights, we look to Colorado’s statutes of limitation, which have special provisions for "person[s] under disability," to assist our interpretation. § 13-81-101, C.R.S. 2018.
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50 Colo.law. 36 Real Estate Law
...of Golden, 461 P.3d 659 (Colo.App. 2020); Rare Air Ltd. v. Prop. TaxAdm'r, 459 P.3d 547 (Colo.App. 2019). [66] Actarus, LLC v. Johnson, 451 P.3d 1270 (Colo.App. 2019); Moeller v. Ferrari Energy, LLC, 471 P.3d 1258 (Colo.App. 2020). [67] Hajek v. Bd. of Cty. Commr's for Boulder Cty, 461 P.3d......