Old Republic Nat'l Title Ins. Co. v. Kornegay

• Decision Date: 16 August 2012
• Docket Number: No. 11CA2248.,11CA2248.
• Citation: 292 P.3d 1111
• Parties: OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, a Minnesota corporation, as subrogee of James H. Hines, Jr., Plaintiff–Appellee, v. Roger KORNEGAY, Defendant–Appellant.
• Court: Colorado Court of Appeals

292 P.3d 1111

OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, a Minnesota corporation, as subrogee of James H. Hines, Jr., Plaintiff–Appellee,

v.Roger KORNEGAY, Defendant–Appellant.

No. 11CA2248.

Colorado Court of Appeals, Div. III.

Aug. 16, 2012.

Wheeler Trigg O'Donnell LLP, Habib Nasrullah, Joel S. Neckers, Denver, Colorado, for Plaintiff–Appellee.

Torbet & Tuft, LLC, David G. McConkie, Colorado Springs, Colorado, for Defendant–Appellant.

Opinion by Judge VOGT.^*

¶ 1 Roger Kornegay appeals three trial court orders sustaining a prejudgment attachment obtained by Old Republic National Title Insurance Company in connection with its pending civil action against him. We affirm.

I. Background

¶ 2 Old Republic, a title insurance company, paid its insured $250,000 following the insured's purchase of property from Kornegay that Kornegay did not in fact own. Old Republic then sued Kornegay, alleging that its losses were the result of a fraud scheme he had perpetrated. Along with its complaint, Old Republic filed an ex parte motion for a prejudgment writ of attachment pursuant to C.R.C.P. 102.

¶ 3 In a supporting affidavit, Old Republic's investigator, Doug Pollock, averred that Kornegay had perpetrated similar fraud schemes against other victims; that he used funds generated by those schemes to purchase tax liens in Colorado and elsewhere, using various aliases and shell companies; that he then collected, and deposited into various bank accounts, money from the redemption of the tax lien certificates, in an effort to launder the proceeds of his fraud; and that, although Kornegay was incarcerated, his wife had a power of attorney to control and dispose of his assets.

¶ 4 Alleging that there was “a real threat that [Kornegay] or individuals he is close to will further transfer or hide his assets,” thereby rendering execution unavailing in the event of a judgment against him, Old Republic sought a writ of attachment directing the sheriff to attach Kornegay's property pending final judgment. The trial court granted the motion and issued the writ without requiring Old Republic to post a bond.

¶ 5 Old Republic served the writ, along with a writ of continuing garnishment in aid of attachment, on four banks, several Colorado county treasurers, and the clerk and recorder of El Paso County, where Kornegay owned real property. Kornegay, who was incarcerated in Nebraska, was served with copies of the writs and of the subsequently issued notice of levy.

¶ 6 Through counsel, Kornegay moved to dismiss and discharge the attachment and quash the garnishment. He also filed a traverse, a counterclaim for wrongful attachment, and a notice of a claimed homestead exemption. In three orders entered the same day, the trial court denied Kornegay's motions and dismissed his wrongful attachment counterclaim, thereby sustaining the attachment. Kornegay filed this appeal pursuant to C.R.C.P. 102(y) (“Any order by which an attachment is released or sustained is a final judgment.”). The underlying civil action remains pending.

II. Issues on Appeal

¶ 7 On appeal, Kornegay does not challenge the sufficiency of the Pollock affidavit to establish the grounds for attachment under C.R.C.P. 102(c). Rather, he argues, as he did in the trial court, that the attachment was wrongful because (1) Old Republic is not a Colorado resident and thus cannot avail itself of the remedy of prejudgment attachment; (2) the procedural requirements of C.R.C.P. 102(d), (h), (i), and (n) were not met; (3) the trial court should not have sustained the attachment without addressing his homestead exemption claim; and (4) the trial court erred in dismissing his counterclaim for wrongful attachment. We find no grounds for reversal.

¶ 8 In assessing Kornegay's claims, we are mindful that prejudgment attachments are in derogation of the common law, and that rules authorizing them are strictly construed. See Jayne v. Peck, 155 Colo. 513, 515, 395 P.2d 603, 604 (1964).

¶ 9 A trial court's interpretation of a rule of civil procedure is a question of law that we review de novo. City & County of Broomfield v. Farmers Reservoir & Irrigation Co., 239 P.3d 1270, 1275 (Colo.2010).

A. Old Republic's Right to Prejudgment Attachment

¶ 10 Although Old Republic is registered with the Colorado Secretary of State to conduct business in Colorado and has three offices here, its principal place of business is in its state of incorporation, Minnesota. Under C.R.C.P. 102(a) and (b), prejudgment attachment is available in an action on contract or “in an action to recover damages for tort committed against the person or property of a resident of this state.” Kornegay does not dispute that Old Republic has the right to sue him in Colorado, but he contends that Old Republic may not, in that action, avail itself of the remedy of prejudgment attachment because it is not a resident of Colorado. We disagree.

¶ 11 Colorado courts have not addressed whether a foreign corporation authorized to conduct business in Colorado and having offices here may be considered a “resident of this state” for purposes of C.R.C.P. 102.¹

¶ 12 In deciding whether Old Republic is entitled to the prejudgment attachment remedy provided in C.R.C.P. 102, we begin with the plain language of the rule. See Farmers Reservoir & Irrigation Co., 239 P.3d at 1275 (“We interpret a rule of procedure according to its commonly understood and accepted meaning. Words and provisions should not be added to a rule, and the inclusion of certain terms in a rule implies the exclusion of others.” (citation omitted)). In doing so, we find it significant that the rule refers to “resident,” rather than to “domiciliary,” “citizen,” or other similar terms.

¶ 13 Colorado cases have distinguished “residence” from “citizenship,” “domicile,” or “legal residence.” In Carlson v. District Court, 116 Colo. 330, 338–39, 180 P.2d 525, 529–30 (1947), the supreme court held that a pastor temporarily serving a church in Leadville was a resident of Colorado for purposes of service of process on him. The court reasoned that there was a difference between residence—which requires only “personal presence at some place of abode with no present intention of definite and early removal therefrom and with a purpose and intent to remain for an undetermined period”—and domicile, which refers to “the legal home of a person, or that place where the law presumes that he has the intention of permanently residing although he may be absent from it.” Id. at 338, 180 P.2d at 529–30;see also Gordon v. Blackburn, 618 P.2d 668, 671 (Colo.1980) (distinguishing “residence” from “legal residence” or “domicile” in election context).

¶ 14 Recently, in Munoz–Hoyos v. de Cortez, 207 P.3d 951, 952 (Colo.App.2009), a division of this court held that a plaintiff's status as a non-citizen of the United States did not preclude her from being considered a “resident of this state” for purposes of the cost bond statute, section 13–16–101, C.R.S.2011. The division cited case law establishing that, “[i]n Colorado, whether a person is a resident of the state is determined by that person's physical presence and intent to remain,” id. at 953, and stated that it had “found no Colorado authority suggesting that, in enacting the cost bond statute, the General Assembly meant that the term ‘resident’ be determined by something other than these uniformly accepted criteria.” Id.

¶ 15 These cases address the “residence” inquiry for individuals, not corporations. Neither they nor any other Colorado cases of which we are aware have discussed the distinction between residence, on the one hand, and domicile, citizenship, or similar terms, on the other hand, in the corporate context. We therefore look to authority from other jurisdictions to inform our inquiry.

¶ 16 Although a corporation is generally considered to be domiciled in, and a citizen of, its place of incorporation, it may for some purposes be considered a resident of more than one state. American Employers' Ins. Co. v. Elf Atochem North America, Inc., 157 N.J. 580, 725 A.2d 1093, 1098 (1999) ( “ ‘Residence’ is a word with many meanings. For example, a person may have only one domicile, but a person may have more than one residence. Although a corporation is usually thought to be domiciled in its place of incorporation, depending on the context, it may be considered a resident of several states.”).

¶ 17 In varying contexts, courts have recognized that a corporation can be a resident of a particular jurisdiction even if it is not incorporated in, and does not have its principal place of business in, that jurisdiction. See Int'l Milling Co. v. Columbia Transp. Co., 292 U.S. 511, 519, 54 S.Ct. 797, 78 L.Ed. 1396 (1934) (no unreasonable burden on interstate commerce to sue Delaware corporation in Minnesota, where it was doing business; although corporation's “domicile in law” was for many purposes the state of its creation, it was “[i]n a very real and practical sense” a resident of Minnesota); Hordis Bros., Inc. v. Sentinel Holdings, Inc., 562 So.2d 715, 717 (Fla.Dist.Ct.App.1990) (prejudgment attachment not available under “nonresident” portion of attachment statute where debtor corporation, although neither incorporated in, nor having its principal place of business in, Florida, “resided” in Florida by virtue of its operation of a manufacturing plant there); Reimers v. Honeywell, Inc., 457 N.W.2d 336, 338 (Iowa 1990) (Delaware corporation with principal place of business in Minnesota, but authorized to do business in Iowa and having an office there, was an Iowa resident for venue purposes); State ex rel. Cartwright v. Hillcrest Investments, Ltd., 630 P.2d 1253, 1259 (Okla.1981) (Canadian corporation licensed to do business in Oklahoma was a resident of Oklahoma for purposes of restrictions on land ownership; collecting cases); Great Lakes Dredge & Dock Co. v. Norberg, 117 R.I. 600, 369 A.2d 1101, 1107 (1977) (corporation incorporated in New Jersey but...