Goodman Assocs., LLC v. Winter Quarters, LLC

• Decision Date: 07 June 2012
• Docket Number: No. 11CA1657.,11CA1657.
• Citation: 292 P.3d 1060
• Parties: GOODMAN ASSOCIATES, LLC, Plaintiff–Appellant, v. WINTER QUARTERS, LLC; and Capital West National Bank, a/k/a First National Bank of Wyoming, Defendants–Appellees.
• Court: Colorado Court of Appeals

292 P.3d 1060

GOODMAN ASSOCIATES, LLC, Plaintiff–Appellant,

v.WINTER QUARTERS, LLC; and Capital West National Bank, a/k/a First National Bank of Wyoming, Defendants–Appellees.

No. 11CA1657.

Colorado Court of Appeals, Div. V.

June 7, 2012.

Bennington Johnson Biermann & Craigmile, LLC, Philip E. Johnson, Tami L. Sapp, Denver, Colorado, for Plaintiff–Appellant.

Sweetbaum Sands Anderson, P.C., Alan D. Sweetbaum, Thomas L. DeVine, Jr., Denver, Colorado, for Defendants–Appellees.

Opinion by Judge BOORAS.

¶ 1 In this priority dispute between competing lienholders, plaintiff, Goodman Associates, LLC (Goodman), appeals the trial court's order that Goodman's amended judgment lien does not have priority over a deed of trust given by defendant Winter Quarters, LLC (Winter Quarters), to defendant Capital West National Bank (Capital West), for the purchase price of certain property in Grand County. Goodman also appeals the trial court's order denying its motion for reconsideration. We affirm.

I. Background

¶ 2 The parties stipulated to the following facts in a joint motion, which was approved and adopted by the trial court.

A. Eagle County District Court Case

¶ 3 On October 22, 2008, Goodman filed a complaint in Eagle County District Court, alleging claims against WP Mountain Properties, LLC (WPMP) for declaratory judgment and breach of contract arising out of a failed purchase and sale agreement between the parties (the Eagle County case). After WPMP failed to file any responsive pleadings, Goodman moved for entry of a default judgment. On December 4, 2008, the Eagle County District Court entered a default judgment in favor of Goodman and against WPMP.

¶ 4 Goodman filed a transcript of the default judgment with the Grand County Clerk and Recorder, which identified a judgment amount of $152,289.98, plus 8% interest “per annum compounded annually from the date of judgment until paid in full,” and a judgment date of December 4, 2008 (the December 2008 judgment lien). The transcript of judgment was appropriately filed and recorded and encumbered all real property owned by WPMP within Grand County, which included the subject property here—Lot 13 within the Lakota Park subdivision.

¶ 5 On January 9, 2009, Winter Quarters purchased Lot 13 from WPMP, financed by a promissory note secured by a deed of trust in favor of Capital West. Capital West's deed of trust was recorded on January 23, 2009.

¶ 6 On April 3, 2009, WPMP filed a motion to set aside the default judgment, and Goodman filed an objection. The Eagle County District Court granted WPMP's motion to set aside the default judgment.

¶ 7 On June 10, 2009, Goodman filed a petition for relief pursuant to C.A.R. 21 with the Colorado Supreme Court seeking to overturn the order setting aside the default judgment. On January 11, 2010, the Colorado Supreme Court issued a rule made absolute granting Goodman's requested relief and directing the Eagle County District Court to reinstate the default judgment in favor of Goodman and to determine “whether and to what extent Goodman is entitled to attorney[ ] fees and costs associated with this petition and the underlying motion.” See Goodman Assocs., LLC v. WP Mountain Props., LLC, 222 P.3d 310, 323 (Colo.2010). The Colorado Supreme Court issued a mandate on February 1, 2010.

¶ 8 On February 11, 2010, pursuant to the Colorado Supreme Court's mandate, the Eagle County District Court entered an order vacating the order setting aside the default judgment and directing that the order filed on December 4, 2008 should be reinstated nunc pro tunc.

¶ 9 Thereafter, Goodman filed a motion for an award of attorney fees and costs against WPMP and a supplement thereto in the amount of $134,138.90, plus interest. On June 17, 2010, the Eagle County District Court entered the amended judgment, which included a calculation of post-judgment interest through June 15, 2010, and added an award of attorney fees in the amount of $137,138.90.

¶ 10 Goodman recorded a transcript of the amended judgment with the Grand County Clerk and Recorder on July 1, 2010, which identified the judgment date as December 4, 2008 and the original judgment amount as $307,081.27, plus 8% post-judgment interest per annum “compounded annually from the date of judgment until paid in full” (the July 2010 amended judgment lien).

B. Grand County District Court Case (the Instant Case)

¶ 11 While the Eagle County case was pending, a foreclosure action involving Lot 13 had been commenced in Grand County District Court. Goodman filed a cross-claim for priority and foreclosure of the July 2010 amended judgment lien against Winter Quarters and Capital West (collectively, Capital West). Based on the above-mentioned stipulated facts, the parties filed cross-motions for a determination of a question of law pursuant to C.R.C.P. 56(h) regarding whether Capital West's interest in Lot 13 was subject to the July 2010 amended judgment lien.

¶ 12 The trial court concluded that, although Capital West had notice of the December 2008 judgment and continuing accrual of interest, Capital West did not have notice of the subsequent litigation between Goodman and WPMP that resulted in the July 2010 amended judgment lien. The court determined that “there was no way” that Capital West “could have known, inquired or discovered” that the December 2008 judgment was “subject to change” or going to “increase by over 100%”:

Goodman [did] not identify, nor [could] the Court find evidence in the [December 2008] Transcript of Judgment or in any of the stipulated facts that would indicate the judgment would arouse the suspicions of an ordinary purchaser. In fact, a reasonable investigation would have supported [Capital West's] belief that [its] liability was limited to Goodman's [December] 2008 judgment. At the time of purchase, the default judgment was entered against [WPMP,] who did not participate in the litigation and the forty-five (45) days required by Colorado law to appeal the decision ... was soon to expire. According to the record, WPMP may not even have known about the default judgment against [it] at the time Lot 13 was purchased by [Capital West]....

¶ 13 The trial court therefore ruled that Capital West purchased Lot 13 subject only to the December 2008 judgment lien and that Goodman's priority rights were limited to the amount of the December 2008 judgment lien, plus interest. Because the court ruled on the notice issue, it deemed moot the issue of whether the July 2010 amended judgment lien related back to the December 2008 judgment.

¶ 14 On June 11, 2011, the trial court entered an order of final judgment pursuant to C.R.C.P. 58 in favor of Goodman and against Capital West in the stipulated sum of $101,382.76.

¶ 15 Meanwhile, Goodman had filed a motion for reconsideration of the trial court's C.R.C.P. 56(h) ruling, arguing that the trial court's order should be vacated because it was based on “an incomplete and inaccurate record of the facts, namely, that [Capital West] had notice of the subsequent litigation between Goodman and WPMP.” As a basis for its argument that Capital West had notice, Goodman presented the following additional evidence: (1) the same counsel who represented Capital West also represented WPMP in its appeal of the default judgment in the Eagle County case; and (2) Capital West was monitoring the Eagle County case through its title company.

¶ 16 The trial court chided Goodman for failing to present the additional evidence when the parties stipulated to the facts for the original C.P.R.P. 56(h) motion, but nevertheless reviewed the reconsideration motion under the rubric of C.R.C.P. 60(b), concluding that it would consider the new facts because they were relevant to the issue and were not disputed by, or prejudicial to, Capital West.

¶ 17 The trial court denied the motion for reconsideration, concluding that the July 2010 amended judgment lien did not relate back to the December 2008 judgment lien. The court determined that Goodman's additional evidence only corroborated the fact that Capital West knew of the December 2008 judgment lien and of Goodman's intent to foreclose on that lien:

The facts show that [Capital West] was making reasonable efforts to follow the [Eagle County] case and even imply [Capital West] attempted to partially satisfy the lien.... What Goodman fails to show is, that by acquiring Lot 13 with a judgment lien for $152,289.98 “plus post interest at the rate of 8% per annum compounded annually from the date of judgment until paid in full,” [Capital West] had notice that eighteen months after [Capital West] purchased the property the judgment would be amended to include an additional $137,138.90 in attorney[ ] fees and costs.

¶ 18 The court determined that, based on the facts, an ordinary purchaser would not be suspicious or have any way of knowing that the December 2008 judgment lien would increase “in such manner and amount” and that “a reasonable investigation would have supported” Capital West's understanding that its liability was limited to the amount of the December 2008 judgment lien.

¶ 19 The trial court affirmed its earlier order that Capital West did not have notice of the July 2010 amended judgment lien, and therefore concluded that the July 2010 amended judgment lien did not relate back to the December 2008 judgment lien. The court thus ruled that Capital West purchased Lot 13 “subject only to the amount recorded” in the December 2008 judgment lien and that the full amount of the July 2010 amended judgment lien did not have priority over Capital West's deed of trust recorded on January 23, 2009. In other words, the trial court limited Goodman's priority rights to the amount of the December 2008 judgment lien.

II. Standard of Review

¶ 20 Under C.R.C.P. 56(h), a trial court may enter an order deciding a question of law if “there is no genuine issue of any material fact necessary for the determination of the question of law.” We review...