Evans v. Evans

• Decision Date: 05 December 2019
• Docket Number: Court of Appeals No. 18CA2085
• Citation: 469 P.3d 498
• Parties: Ken EVANS, Plaintiff-Appellant, v. Delinda EVANS, Defendant-Appellee, and Jennifer Holt, Attorney-Appellee.
• Court: Colorado Court of Appeals

469 P.3d 498

Ken EVANS, Plaintiff-Appellant,

v.Delinda EVANS, Defendant-Appellee,andJennifer Holt, Attorney-Appellee.

Court of Appeals No. 18CA2085

Colorado Court of Appeals, Division III.

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

Opinion by JUDGE LIPINSKY

¶ 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.

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 .

(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.

¶ 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 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 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).

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.

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. 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...