Sant v. Stephens
| Decision Date | 13 June 1988 |
| Docket Number | No. 84-1556,84-1556 |
| Citation | 848 F.2d 1119 |
| Parties | John W. SANT, Plaintiff-Appellee, v. Ella STEPHENS, Public Trustee for Garfield County, State of Colorado, Defendant, and Edmund W. Roginski and Elisabeth D. Getzen, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Nicholas W. Goluba, Jr. of Goluba & Goluba, Glenwood Springs, Colo., for defendants-appellants.
David D. Schlachter of Tilly & Graves, P.C., Denver, Colo., for plaintiff-appellee.
Before SEYMOUR and SETH, Circuit Judges, and BROWN, District Judge *.
This is an appeal in a diversity foreclosure and redemption case raising unusual questions of state law. The state law questions were certified to the Colorado Supreme Court and we were provided with the answers which resolve the issues raised in this appeal, 753 P.2d 752. A brief outline of the facts is necessary, but the details and the applicable state law are contained in the opinion of the Colorado Supreme Court which is attached.
James and Elizabeth Patterson were the owners of certain real property in the City of Glenwood Springs, Colorado. They delivered a deed of trust in the entire property to the Horace Mann Life Insurance Company. This interest was recorded on December 15, 1976. Subsequently, James Patterson gave a deed of trust to his undivided one-half interest in the property to the Valley Bank and Trust. Finally, on February 2, 1983, the City of Glenwood Springs recorded a "Notice of Lien" with the clerk and recorder of Garfield County asserting a lien against the Pattersons' property for unpaid utility services pursuant to Sec. 22-2 of the Glenwood Springs Municipal Code. The City of Glenwood Springs' lien was subsequently assigned to appellants Edmund Roginski and Elizabeth Getzen.
On May 4, 1983, the undivided one-half interest securing the deed of trust to Valley Bank and Trust was sold at foreclosure by the public trustee to the plaintiff-appellee, John W. Sant, for $19,260.00 and Mr. Sant was issued a certificate of purchase. No junior lienors filed notices of intent to redeem or exercised their rights of redemption by July 18 as required by C.R.S. Sec. 38-39-103. Therefore, pursuant to C.R.S. Sec. 38-39-110, Mr. Sant was issued a public trustee deed dated and recorded on July 27, 1983 for an undivided one-half interest in the property.
When the public trustee gave the notice of election and demand for foreclosure sale under the deed of trust held by the Horace Mann Life Insurance Company, Mr. Sant again purchased the interest, this time in the entire property, for $26,369.00 and on May 6, 1983 was issued a certificate of purchase.
Appellees Roginski and Getzen filed a notice of redemption with the public trustee for the entire interest in the Horace Mann foreclosure as possessors of a junior lien (Glenwood Springs lien) and the next day tendered $26,917.13 to the public trustee and were issued a certificate of redemption and a public trustee deed (July 19) for the property which was recorded July 21, 1983.
Mr. Sant made demands upon the public trustee to issue a public trustee deed based on his May 6, 1983 certificate of purchase received at the Horace Mann sale and a July 1983 deed from the Valley Bank sale. This request was refused. Mr. Sant then brought this diversity action in the United States District Court for the District of Colorado to vacate the defendants' certificate of redemption and public trustee deed. The issues raised before the district court were whether the lien purported to be created by Sec. 22-2 of the Glenwood Springs Municipal Code is entitled to redemptive rights under C.R.S. Sec. 38-39-103 and whether such a lien's redemptive rights are extinguished as to the whole property by the failure to exercise them at a public trustee sale of an undivided one-half interest.
Without expressly ruling on the general availability of redemptive rights for such liens, the district court ordered the clerk and recorder of Garfield County to vacate and set aside the defendants' public trustee deed and issue a deed in favor of the plaintiff Sant. The defendants thereupon took this appeal.
As mentioned at the outset, this appeal raised several unusual questions of Colorado law which appeared not to have been decided by the Colorado courts and this court certified two questions to the Supreme Court of Colorado the answers to which would be dispositive of the basic issues. The Colorado court has provided answers to the certified questions in a finely crafted and thorough en banc opinion on which we have based our disposition of the appeal and which we have attached to this opinion. It was handed down on April 11, 1988 as No. 85SA463, 753 P.2d 752.
The two questions certified to the Supreme Court of Colorado were:
The court answered "yes" to the first question and "no" to the second.
Thus the position taken by the appellants was correct. Their lien on the one-half interest of Elizabeth S. Patterson, as the Colorado Supreme Court held, "was not extinguished by their failure to redeem from the first sale"; also, the Roginskis, based on their lien, had the right to redeem the entire property covered by the Horace Mann sale and did so.
The judgment of the trial court is REVERSED and the case REMANDED with directions to enter judgment for the defendant and the appellants.
v.
and
Edmund W. Roginski and Elisabeth D. Getzen, Defendants-Appellants.
Certification of Questions from the United States Court of Appeals for the Tenth Circuit Pursuant to C.A.R. 21.1.
In accordance with C.A.R. 21.1, the United States Court of Appeals for the Tenth Circuit has certified to the Supreme Court of Colorado two questions of law pertaining to a pending federal case:
(1) Does a lien created by the City of Glenwood Springs Municipal Code Sec. 22-2 for unpaid utility services have rights of redemption under C.R.S. Sec. 38-39-103?
(2) Does the failure of a junior lienholder to exercise redemptive rights under C.R.S. Sec. 38-39-103 at a public sale foreclosing on an undivided one-half interest in the property extinguish that lienholder's redemptive rights in subsequent foreclosure sales of the entire property?
This court has agreed to answer both interrogatories, and now answers "yes" to the first question and "no" to the second.
Resolution of these questions requires careful consideration of the factual context in which they arose. J. James Patterson and Elizabeth S. Patterson were the owners of certain real property in Glenwood Springs, Colorado. This case involves three liens that attached to the property during the time it was owned by the Pattersons. The senior lien was a first deed of trust given by the Pattersons to the public trustee for the use of Horace Mann Life Insurance Company (Horace Mann). This instrument was recorded 1 on December 15, 1976. On March 4, 1982, J. James Patterson gave a second deed of trust on his undivided one-half interest in the property to the public trustee for the use of Valley Bank & Trust, which was recorded on March 17, 1982. The third relevant lien was created when the City of Glenwood Springs recorded a notice of lien against the entire property on February 2, 1983. This lien was for unpaid utility assessments in the amount of $176.07, and it arose pursuant to section 22-2 of the Glenwood Springs Municipal Code.
The Pattersons were unable to meet the obligations secured by the deeds of trust, and the holders of the first and second deeds of trust commenced separate foreclosure proceedings. On May 4, 1983, a public trustee's sale was conducted based upon the deed of trust held by Valley Bank & Trust on J. James Patterson's undivided one-half interest. The plaintiff, John W. Sant, bid $19,260.00 and was issued a certificate of purchase for the undivided one-half interest by the public trustee. A second public trustee's sale was held two days later on May 6, 1983, based upon the Horace Mann deed of trust on all interests in the property. Sant bid $26,369.00 and was issued a second certificate of purchase, covering the entire property.
On May 26, 1983, the City of Glenwood Springs assigned its lien to Edmund W. Roginski and Elisabeth D. Roginski. 2 This assignment was recorded on July 20, 1983. On that same date, the last day of the period allowed by statute for the owners of the property to redeem from the Horace Mann foreclosure sale, the Roginskis filed a notice of intent to redeem the property from that foreclosure sale. The owners did not redeem, and no other lienor filed a notice of intent to redeem. On July 21, the Roginskis tendered $26,917.13 to the public trustee in order to exercise their right of redemption from the Horace Mann foreclosure sale as holders of a junior lien. The public trustee accepted this payment and on July 21 issued to the Roginskis a certificate of redemption and a public trustee's deed for all interests in the property. The Roginskis then took possession of the property.
Neither the Roginskis nor any other junior lienors had filed a notice of intent to redeem or had exercised their rights of redemption in the Valley Bank & Trust foreclosure proceeding, and on July 27, 1983, the public trustee issued to Sant a public trustee's deed to J. James Patterson's undivided one-half interest.
Sant then requested that the public truste...
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...may pay as many debts as possible." Walker v. Wallace, 79 Colo. 380, 382, 246 P. 553, 553 (1926). See, generally, Sant v. Stephens, 848 F.2d 1119, 1124 (10th Cir.1988); Arnove v. First Federal Savings & Loan Association of Tarpon Springs, Florida, 713 P.2d 1329, 1330 (Colo.App.1985), cert. ......