Source: https://cbaclelegalconnection.com/tag/property-law/
Timestamp: 2019-04-24 15:54:31+00:00

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The Colorado Supreme Court issued its opinion in Atlantic Richfield Co. v. Whiting Oil & Gas Corp. on Monday, March 3, 2014.
In this case, the Supreme Court considered whether a nondonative, commercial option entered into before the passage of the Statutory Rule Against Perpetuities Act is subject to reformation under CRS § 15-11-1106(2). As a threshold matter, the Court examined whether the option violated the common law rule against perpetuities, and concluded that it does not. Because the commercial option negotiated by the parties was fully revocable, it posed no practical restraint on alienation, and did not violate the common law rule against perpetuities as that rule was construed in Supreme Court case law before passage of the Statutory Rule Against Perpetuities Act.
The Court held that because the option did not violate the common law rule against perpetuities, no reformation was necessary. Accordingly, the Supreme Court affirmed the judgment of the court of appeals on different grounds, and did not reach the questions of whether § 15-11-1106(2) provides for reformation of nondonative, commercial instruments, or whether the lower courts’ application of that section to the option here was unconstitutionally retrospective.
The Tenth Circuit published its opinion in Burnett v. Mortgage Electronic Registration Systems, Inc. on Friday, February 1, 2013.
Charlene Burnett filed an action against James H. Woodall, the successor trustee appointed by Mortgage Electronic Registration Systems, Inc. under the trustee deed securing her home, (MERS), and fifty unnamed individuals. The complaint asserted violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., the Utah Consumer Sales Practices Act (USCPA), Utah Code Ann. § 13-11-1 et seq., and related claims arising out of the foreclosure of her home. The district court granted Woodall’s motion and dismissed her complaint under F.R.C.P. 12(b)(6).
After discussing the Iqbal/Twombly pleading standard as interpreted in Khalik v. United Air Lines, 671 F.3d 1188 (10th Cir. 2012), the Tenth Circuit analyzed Burnett’s claims to see if she had “set forth plausible claims.” Burnett argued that Woodall violated the FDCPA because MERS had no authority to appoint him as trustee so he had no authority to foreclose her property. The trust deed expressly granted MERS “the right to foreclose and sell the Property” and Burnett consented to those terms. “The plain language of the trust deed undermines her argument that MERS lacked the authority to appoint Mr. Woodall as successor trustee for the purpose of foreclosing on her property.” The court also rejected Burnett’s argument that MERS lost its authority to foreclose once her debt was securitized and sold to another lender.
Burnett also argued that Woodall violated § 1692e of the FDCPA by making false representations as to the nature and character of the debt. The court found her allegations too vague and conclusory because she failed to include details or concrete examples in her complaint regarding the demands for payment. She should have included dates received and who sent the demands. The court also found her complaint lacking regarding her § 1692g FDCPA claim that the defendants violated that provision by failing to provide notices within five days of the first communication with the debtor. Burnett failed to identify when the initial communication took place or from whom it came.
The court also found Burnett’s state law claims were correctly dismissed and affirmed the district court.
The Colorado Court of Appeals issued its opinion in Wahrman v. Golden West Realty, Inc. on December 8, 2011.
Barbara Wahrman petitioned for interlocutory review of the district court’s order that the economic loss rule barred her breach of fiduciary duty and negligence claims against defendants Golden West Realty, Inc. and Kathleen Smith. The petition was denied.
Defendants acted as Wahrman’s broker in leasing and managing her residential rental property. According to Wahrman, the tenants significantly damaged the property during and in connection with the termination of the tenancy. She alleged defendants were liable because they obtained an adverse credit report on the tenants but failed to inform Wahrman, inspected the property but failed to note the damage, consented to violations of the lease, and advocated on the tenants’ behalf.
On defendants’ Motion for Determination of Question of Law, the trial court requested briefing on the economic loss rule and then held that it barred the breach of fiduciary duty and negligence claims. It then granted Wahrman’s Motion for Interlocutory Appeal without making any findings.
C.A.R. 4.2 allows an interlocutory appeal when (1) immediate review may promote a more orderly disposition or establish a final disposition of the litigation; (2) the order from which an appeal is sought involves a controlling question of law; and (3) the order from which an appeal is sought involves an unresolved question of law. The Court of Appeals found that whether the economic loss rule applies to claims regarding the duties a residential broker owes to a landlord appeared to be a question of first impression in Colorado and, therefore, assumed it was an unresolved question of law.
However, the Court found nothing to suggest why the economic loss question is a controlling question of law in this case. The petition could have been denied for this reason alone. The Court also found that the assertion that immediate review may support more orderly disposition based on the specter of retrial and attendant additional cost was not a reason that would support interlocutory review. The petition was denied and the appeal was dismissed.
The Colorado Court of Appeals issued its opinion in Board of County Commissions of the County of Park v. Park County Sportsmen’s Ranch, LLP on October 27, 2011.
Colorado Uniform Fraudulent Transfer Act—Jury Verdict—Evidence—Asset—Lien—Successor Liability—Foreclosure—Notice—Accommodation Party.
Defendants appealed the jury verdicts and trial court judgments in favor of plaintiffs on their claims of fraudulent conveyance, civil conspiracy, successor liability, and quiet title. The judgment was affirmed in part and reversed in part, and the case was remanded for further findings.
Defendants contended that the jury’s verdict under the Colorado Uniform Fraudulent Transfer Act (CUFTA) was not supported by sufficient evidence. A fraudulent transfer under CUFTA includes the transfer of an asset; however, an asset does not include “property to the extent it is encumbered by a valid lien.” Here, because defendant Park County Sportsmen’s Ranch, LLP (PCSR)was encumbered by valid liens that exceeded its value at the time of foreclosure, it was not an asset under CUFTA. Further, defendants signed the 2002 note as accommodation to the parties under CRS § 4-3-419, because they did not receive any direct benefit from the loan. Therefore, the verdict was not supported by the evidence, and the judgment was reversed. Additionally, the jury’s verdict on civil conspiracy was reversed because it was based on the alleged fraudulent transfer.
Defendants contended that the jury’s verdict on successor liability must be reversed. Generally, a corporation that acquires the assets of another corporation does not become liable for its debts. Here, however, the indirect transfer of assets through a foreclosure sale supports successor liability despite the fact that the property lacked any equity. Additionally, the evidence supports the jury’s verdict that defendant JJWM, LLP was liable as a successor corporation, because (1) the original four partners of PCSR, the previous corporation, also were the only four partners of JJWM; (2) both partnerships had the same purpose; (3) JJWM acquired the sole asset of PCSR; and (4) PCSR also was JJWM’s sole asset. This evidence was sufficient to support the jury’s verdict on successor liability under the mere continuation exception.
Defendants argued that the trial court erred by reattaching plaintiffs’ original judgment liens to the ranch owned by JJWM. Because the individual defendants were accommodation parties, the foreclosure sale was valid and, except for Thornton’s lien due to defective notice, the foreclosure extinguished the other plaintiffs’ judgment liens. Based on this conclusion, the trial court’s order attaching plaintiffs’ original judgment liens to the ranch was reversed, except as to Thornton.
Defendant City of Aurora contended that the trial court erred by (1) finding lack of notice to Thornton of the foreclosure; and (2) voiding Aurora’s quitclaim deed from JJWM for a portion of the ranch. Because the record shows that the notice to Thornton was defective, the foreclosure did not extinguish its judgment lien. Because no fraudulent transfer occurred under CUFTA, the court’s order voiding the quitclaim deed was reversed.
This summary is published here courtesy of The Colorado Lawyer. Other summaries for the Colorado Court of Appeals on October 27, 2011, can be found here.
The Department of Regulatory Agencies’ Division of Real Estate has adopted a new permanent rule regarding conservation easements. The purpose of the rule, entitled D-1 Cease and Desist, is to fulfill the legislative directive to promulgate necessary rules concerning the state income tax credit that may be claimed for the donation of a conservation easement.
Specifically, the Division of Real Estate states that the purpose of this new rule is to define discipline authorized in CRS § 12-61-720(11). The definition will allow the Director of the Division the ability to impose discipline for noncompliance on an organization for negotiating or accepting a conservation easement if they are not in compliance with CRS § 38-30.5-104(2) and 12-61-720.
If the Division of Real Estate has reasonable cause to believe any public or private organization is not in compliance with section 38-30.5-104 (2), C.R.S. and section 12-61-720, C.R.S., the Director of the Division of Real Estate may enter a order requiring such organization to cease and desist from attempting to hold a conservation easement for which a state tax credit may be claimed.
This permanent rule will be effective on September 14, 2011.
A hearing on the new rule will be held on Monday, July 18, 2011 at the Colorado Division of Real Estate, 1560 Broadway, Suite 1250 C, Denver, Colorado 80202, beginning at 10 am.
Any interested person may participate in the rulemaking process by submitting written data, views, and arguments to the Division of Real Estate. Those interested are asked to submit their materials in writing no less than ten days prior to the hearing date. However, all materials submitted prior to or at the rulemaking hearing or prior to the closure of the rulemaking record will be considered.
Full text of the proposed changes and the new rule can be found here. Further information about rule and hearing can be found here.
The Colorado Supreme Court issued its opinion in Burlington Ditch, Reservoir and Land Co. v. Metro Wastewater Reclamation Dist. on May 31, 2011.
Determination of Historical Consumptive Use of Water Rights—CRS § 37-92-305—Unlawful Enlargement of Water Rights—“One-Fill” Rule—Preclusive Effect of Prior Water Court Orders and Decrees—New Structures and Points of Diversion.
Appellants Burlington Ditch, Reservoir and Land Company (Burlington), Farmers Reservoir and Irrigation Company (FRICO), United Water and Sanitation District (United), Henrylyn Irrigation District (Henrylyn), and East Cherry Creek Valley Water and Sanitation District (ECCV) challenged the order and decree of the water court regarding its determination of historical consumptive use of water rights, the effect of prior decrees and new structures related to the Burlington Canal, the application of the “one-fill” rule, and the impact of these decisions on appellants’ senior rights to use the waters of the South Platte River.
This case arose from two applications seeking changes in points of diversion and storage of water rights, as well as changes from irrigation to municipal use for Burlington and FRICO water rights with 1885, 1908, and 1909 priority dates. These changes were precipitated by the United–ECCV Water Supply Project, aimed at providing a renewable source of water to replace Denver Basin groundwater on which ECCV previously relied.
To prevent an unlawful enlargement of the Burlington–FRICO water rights, the water court limited appellants’ 1885 Burlington direct flow water right to 200 cubic feet per second, historically diverted and used for irrigation above Barr Lake. Likewise, the 1885 Burlington storage right was limited to annual average reservoir releases of 5,456 acre-feet. The water court further determined that seepage gains into the Beebe Canal, water collected through the Barr Lake toe drains, and diversions at the Metro Pumps could not be given credit in the calculation of historical consumptive use. The court determined that historical releases from Barr Lake, rather than a pro rata share of the one-fill rule,constitute the proper measure of storage rights. The water court concluded that its system-wide analysis of historical consumptive use was not precluded by the orders and decrees issued in FRICO Case No. 54658 and Thornton Case No. 87CW107. The court imposed conditions to prevent injury to other water rights by the heretofore undecreed diversions via the Globeville Project. The Supreme Court upheld the water court‘s judgment and decree.
The Colorado Supreme Court issued its opinion in Kobobel v. State of Colorado on March 28, 2011.
The supreme court affirms the water court’s dismissal of plaintiffs’ inverse condemnation claim. The court holds that the well owners’ claim is a water matter within the exclusive jurisdiction of the water court because it is predicated on the well owners’ right to use the water in their decreed wells. The court further holds that the state engineer’s orders curtailing the well owners’ use of the water in their wells did not constitute a taking in violation of article II, section 15 of the Colorado Constitution or the Fifth and Fourteenth Amendments to the U.S. Constitution. The cease and desist orders simply curtailed the well owners’ out-of-priority diversions consistent with Colorado’s prior appropriation doctrine. Because the well owners cannot show that the State infringed on a constitutionally protected property right, they are not entitled to just compensation for the “taking” of that alleged right.

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