Amos v. Aspen Alps 123, LLC, No. 10SC187.

• Docket Nº: No. 10SC187.
• Citation: 2012 CO 46, 280 P.3d 1256
• Case Date: July 30, 2012
• Court: Supreme Court of Colorado

280 P.3d 1256
2012 CO 46

Betty G. AMOS and the Estate of Thomas R. Righetti, Petitioners
v.
ASPEN ALPS 123, LLC, and Equitable Bank, Respondents.

No. 10SC187.

Supreme Court of Colorado,
En Banc.

June 18, 2012.
Rehearing Denied July 30, 2012.

[280 P.3d 1257]

Holland & Hart, LLP, Wiley E. Mayne, Steven T. Collis, Denver, Colorado, Holland & Hart, LLP, Christopher J. Heaphey, Aspen, Colorado, Attorneys for Petitioners.

Garfield & Hecht, P.C., Matthew C. Ferguson, Christopher D. Bryan, Aspen, Colorado, Attorneys for Respondent, Aspen Alps 123, LLC.

Duncan, Ostrander & Dingess, P.C., Richard F. Rodriguez, James Birch, Denver, Colorado, Attorneys for Respondent, Equitable Bank.

Justice RICE delivered the Opinion of the Court.

¶ 1 In this appeal, we address whether a failure to strictly comply with C.R.C.P. 120's notice requirements mandates setting aside a completed foreclosure sale. We conclude that when the parties received actual notice which afforded them an opportunity to present their objections and no prejudice resulted, we will not disturb a completed foreclosure sale. Accordingly, we affirm the court of appeals' judgment with respect to Rule 120 notification.

¶ 2 We also examine whether the principals of Aspen Alps 123, LLC (Aspen Alps) engaged in bid rigging in violation of the Colorado Antitrust Act, section 6–4–106, C.R.S. (2011). We determine that the limited record before us fails to establish bid rigging and, therefore, we reverse the court of appeals on the issue of bid rigging.

I. Facts and Proceedings Below

¶ 3 This case involves the public trustee foreclosure sale under C.R.C.P. 120 of a condominium unit in Aspen. Prior to the foreclosure sale, Betty Amos and her late husband, Thomas Righetti, owned the unit. Amos borrowed approximately $1.6 million from Equitable Bank securing the loan with a Deed of Trust on the condominium unit in favor of Equitable Bank and granted by Amos and Righetti.

¶ 4 In September 2002, Righetti died. Amos and Righetti's daughter, Brandy Righetti, were named as co-personal representatives of the Estate of Thomas Righetti.

¶ 5 In 2006, Amos' loan fell into default and Equitable Bank decided to foreclose on the property. Equitable Bank filed a Rule 120

[280 P.3d 1258]

Motion for Order Authorizing Sale and sent notice of the proceeding to Amos in her individual capacity. Equitable Bank did not send notice of the Rule 120 proceeding to the Estate or to Brandy Righetti. Neither Amos nor the Estate opposed the order authorizing sale.

¶ 6 The public trustee held a foreclosure sale on February 27, 2007. Neither Amos nor the Estate submitted a bid. After Equitable Bank bid the amount of its debt, three individuals—Seguin, Mayer, and Griffin (representing Flaum)—bid competitively until Seguin had bid $1.86 million. At that point, Griffin proposed to the others that, instead of “bidding the property up further and further,” they cease bidding against each other and buy the property jointly. All agreed and formed Aspen Alps 123, LLC after the auction. The public trustee deemed Aspen Alps as the successful bidder. On August 14, 2007, the public trustee issued the deed quieting title in the property to Aspen Alps.

¶ 7 Amos then brought this action against the public trustee and Equitable Bank to enjoin the issuance of the deed to Aspen Alps, and to compel the trustee to allow her to redeem.¹ Concurrently, she filed a notice of lis pendens. When the trial court refused to grant a preliminary injunction in Amos' favor, she filed a second notice of lis pendens. Amos then amended her complaint to include a claim that Equitable Bank failed to strictly comply with the notice requirements of Rule 120.

¶ 8 Prior to trial, Amos also filed a summary judgment motion asserting that Equitable Bank failed to comply with the foreclosure procedure set forth in Rule 120. The trial court determined that Equitable Bank sent Righetti's notice to the wrong address and thus did not strictly comply with the Rule. Nonetheless, the trial court found that the error was a mere technicality and that the plaintiffs failed to show any prejudice since they received actual notice. Accordingly, the trial court declined to declare the sale null and void.

¶ 9 Shortly before trial, Amos attempted to add a third claim alleging bid rigging, antitrust violations, and conspiracy by the principals of Aspen Alps. The trial court denied Amos' motion to amend, but allowed evidence of bid rigging as a defense to counterclaims ² asserted by Aspen Alps.

¶ 10 The case proceeded to a trial to the court and the court dismissed Amos' redemption claim under C.R.C.P. 41(b). The trial court also determined that the principals of Aspen Alps had not engaged in illegal bid rigging and that both lis pendens filed by Amos were spurious documents and slandered title to the property.

¶ 11 Amos appealed. The court of appeals held that a foreclosing party must strictly comply with the notice requirements of Rule 120, but excused Equitable Bank's failure to send notice to Brandy Righetti or to the Estate. The court of appeals reasoned that Equitable Bank sent notice to Amos, a co-personal representative and agent of the Estate. Accordingly, because the Estate had constructive notice of the foreclosure and was not prejudiced, there was no basis for setting aside the foreclosure sale. The court of appeals also held that the principals of Aspen Alps had engaged in illegal bid rigging because their agreement to purchase the property together was anti-competitive. Consequently, it set aside the deed to Aspen Alps. The court of appeals did not, however, void the foreclosure sale. Instead, it remanded to the trial court with instructions for that court to exercise its equitable discretion to determine whether to award the deed to the high bidder or void the foreclosure sale.

[280 P.3d 1259]

¶ 12 Amos sought certiorari review by this Court.³ We now affirm the court of appeals' judgment with respect to the Rule 120 notice requirement, and reverse its decision with respect to bid rigging.

II. Analysis A. Notice Requirement

¶ 13 First, we examine whether a failure to strictly comply with Rule 120's notice requirements mandates setting aside a completed foreclosure sale. We review a trial court's grant of summary judgment de novo. A.C. Excavating v. Yacht Club II Homeowners Ass'n, 114 P.3d 862, 865 (Colo.2005). Summary judgment is appropriate when no issues of material fact exist and the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c); A.C. Excavating, 114 P.3d at 865. The nonmoving party is entitled to the benefit of all favorable inferences that may be drawn from the undisputed facts, and all doubts as to the existence of a triable issue of fact must be resolved against the moving party. A.C. Excavating, 114 P.3d at 865.

¶ 14 C.R.C.P. 120 governs the process by which an interested person may request that a court enter an order authorizing the sale of real property when the power of sale is contained in a deed of trust to a public trustee. To request an Order Authorizing Sale, the interested person files a verified motion with the trial court. Rule 120 states that the motion “shall be accompanied by a copy of the instrument containing the power of sale, shall describe the property to be sold, and shall specify the default or other facts claimed by the moving party to justify invocation of the power of sale.” The Rule further provides that in the instance of foreclosure of the real property secured by a deed of trust to a public trustee:

the motion shall state the name and last known address, as shown by the records of the moving party, of the grantor of such deed of trust, of the current record owner of the property to be sold, and of any person known or believed by the moving party to be personally liable upon the indebtedness secured by the deed of trust, as well as the names and addresses of those persons who appear to have acquired a record interest in such real property, subsequent to the recording of such deed of trust and prior to the recording of the notice of election and demand for sale, whether by deed, mortgage, judgment or any other instrument of record.

C.R.C.P. 120(a). The Rule then provides a notice requirement which states that a copy of the motion shall be served “to each person named in the motion (other than persons for whom no address is stated) at the address or addresses stated in the motion.” C.R.C.P. 120(b).

¶ 15 First, we hold that the trial court correctly found that Equitable Bank failed to strictly comply with Rule 120's notice requirements by serving Righetti at the wrong address. Amos and Righetti were the grantors of the Deed of Trust in favor of Equitable Bank. Equitable Bank mailed notice to the deceased Righetti at the address on the Deed of Trust, but that notice contained a typographical error so that the street address numbers were transposed, rendering the mail undeliverable. Pursuant to Rule 120 and the terms of the Deed of Trust, Equitable Bank was required to provide notice to Righetti at his last known address. Because Equitable Bank failed to do so, it did not strictly comply with the Rule.⁴

¶ 16 This brings us to the question before the Court on certiorari review: whether a completed foreclosure sale must be set aside for a failure to strictly adhere to Rule 120's notification requirements when actual notice was received. Jurisdictions across the country are divided as to whether

[280 P.3d 1260]

the standard for foreclosure notification is actual notice or strict compliance.⁵ This Court addressed public trustee foreclosure notice requirements in Dews v. District Court, 648 P.2d 662, 664 (Colo.1982), and found that the “provisions of Rule 120 must be strictly complied with by one seeking foreclosure under a power of sale through the public trustee.” At issue in Dews was the fact that the Rule 120 foreclosure notices were not timely sent to the debtor. Id. at 663. Rather than being mailed at...