CO Code § 38-10-124 (2021)
2021 Colorado Code|Title 38 - Property - Real and Personal|Article 10 - Frauds - Statute of Frauds|§ 38-10-124. Credit Agreements - Required to Be in Writing

  As used in this section, unless the context otherwise requires:   “Credit agreement” means:   A contract, promise, undertaking, offer, or commitment to lend, borrow, repay, or forbear repayment of money, to otherwise extend or receive credit, or to make any other financial accommodation;    Any amendment of, cancellation of, waiver of, or substitution for any or all of the terms or provisions of any of the credit agreements defined in subparagraphs (I) and (III) of this paragraph (a); and    Any representations and warranties made or omissions in connection with the negotiation, execution, administration, or performance of, or collection of sums due under, any of the credit agreements defined in subparagraphs (I) and (II) of this paragraph (a).       “Creditor” means a financial institution which offers to extend, is asked to extend, or extends credit under a credit agreement with a debtor.    “Debtor” means a person who or entity which obtains credit or seeks a credit agreement with a creditor or who owes money to a creditor.    “Financial institution” means a bank, savings and loan association, savings bank, credit union, or mortgage or finance company.       Notwithstanding any statutory or case law to the contrary, including but not limited to section 38-10-112, no debtor or creditor may file or maintain an action or a claim relating to a credit agreement involving a principal amount in excess of twenty-five thousand dollars unless the credit agreement is in writing and is signed by the party against whom enforcement is sought.    A credit agreement may not be implied under any circumstances, including, without limitation, from the relationship, fiduciary or otherwise, of the creditor and the debtor or from performance or partial performance by or on behalf of the creditor or debtor, or by promissory estoppel.     History. Source: L. 89: Entire section added, p. 1438, § 1, effective March 15. L. 2013: (1)(d) amended,(SB 13-154), ch. 282, p. 1489, § 71, effective July 1.    ANNOTATION   Law reviews. For article, “Limiting Lender Liability Through the Statute of Frauds”, see 18 Colo. Law. 1725 (1989). For article, “Chapter 13 Bankruptcy as an Alternative to Chapter 7”, see 18 Colo. Law. 2089 (1989). For comment, “Stemming the Tide of Lender Liability: Judicial and Legislative Reactions”, see 67 Den. U. L. Rev. 453 (1990). For article, “The Colorado Credit Agreements Act and Its Impact on Lenders and Borrowers”, see 36 Colo. Law. 31 (June 2007). For article, “Bad Boy Guaranties: Know What to Do When the Lender Comes for You”, see 42 Colo. Law. 29 (Sept. 2013).   An agreement for the purchase of commercial paper is not a financial accommodation as that term is used in the definition of “credit agreement”. Echo Acceptance Corp., 267 F.3d 1068 (10th Cir. 2001).   In a deficiency judgment action, settlement agreement was “credit agreement” for purposes of this section and was unenforceable because it was not reduced to writing. Pima Financial Serv. Corp. v. Selby, 820 P.2d 1124 (Colo. App. 1991).   A federally chartered bank is a bank for purposes of subsection (1)(d), and nothing indicates that the term “bank” is limited to state-chartered banks. The definition of “bank” in § 11-101-401 (5) does not apply to this section. To import that definition would be contrary to the obligation to apply this section broadly. Premier Farm Credit, PCA v. W-Cattle, LLC, 155 P.3d 504 (Colo. App. 2006).   A representation or promise made in connection with a credit agreement involving more than $25,000 is invalid unless it is in writing. As a matter of law, reliance placed on oral representations or promises cannot be reasonable or justifiable. Norwest Bank Lakewood v. GCC P'ship, 886 P.2d 299 (Colo. App. 1994).   Contract providing for financing in excess of $25,000 is a “credit agreement” for purposes of this section, and section applies to any agreement to extend credit regardless of the context in which the agreement was formed. Univex Int'l, Inc. v. Orix Credit Alliance, Inc., 902 P.2d 877 (Colo. App. 1995), aff'd, 914 P.2d 1355 (Colo. 1996).   Any tort claim relating to an oral credit agreement involving a principal amount greater than $25,000 is barred by this section. Instead of encouraging tortious behavior by lenders, such an interpretation comports with intent of the general assembly that borrowers and lenders must be sure to reduce agreement to writing to ensure enforceability of any claims they may have in the future. Hewitt v. Pitkin County Bank & Trust Co., 931 P.2d 456 (Colo. App. 1995).   To the extent that claims for fraudulent misrepresentation, promissory estoppel, unjust enrichment, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and outrageous conduct are based on alleged oral representations made in connection with draws or disbursements under a loan and a line of credit in excess of $25,000, they are precluded by this section because they constitute and relate to a credit agreement. Dalton v. Countrywide Home Loans, Inc., 828 F. Supp. 2d 1242 (D. Colo. 2011 ).   This section, requiring a signature, and not § 38-10-112 , controls in cases involving a credit agreement. Univex Int'l, Inc. v. Orix Credit Alliance, Inc., 902 P.2d 877 (Colo. App. 1995), aff'd on other grounds, 914 P.2d 1355 (Colo. 1996).   The phrase “action or claim” in subsection (2) is not limited to claims for affirmative recovery. It is not intended to cover only claims for relief while excluding defenses to liability based on oral representations. Accordingly, this section applies to a claim of fraudulent inducement that seeks rescission of the transaction on which the creditor's claim is based. Premier Farm Credit, PCA v. W-Cattle, LLC, 155 P.3d 504 (Colo. App. 2006).   This section specifically precludes assertion of a promissory estoppel claim to enforce an unsigned credit agreement. Univex Int'l, Inc. v. Orix Credit Alliance, Inc., 902 P.2d 877 (Colo. App. 1995), aff'd, 914 P.2d 1355 (Colo. 1996).   There is no basis to distinguish between promissory estoppel and equitable estoppel in this context, given that this section must be construed broadly to effectuate its purposes. Premier Farm Credit, PCA v. W-Cattle, LLC, 155 P.3d 504 (Colo. App. 2006).   Borrowers made co-makers their agents in executing future modifications of a note, in effect, by consenting to future modifications of the note in the original instrument. Modifications to note that were reduced to writing and executed by co-makers met the purpose and requirements of this section. Crown Life Ins. Co. v. Haag Ltd. P'ship, 929 P.2d 42 (Colo. App. 1996).   The terms “debtor” and “creditor” do not require a direct borrower-lender relationship under the credit agreement statute of frauds. The statute applies to a “credit agreement” that arose from oral representations made between lenders to the same borrower. Schoen v. Morris, 15 P.3d 1094 (Colo. 2000); Lang v. Bank of Durango, 78 P.3d 1121 (Colo. App. 2003).   A mortgage broker does not fall under the definition of “financial institution”. Fisher v. 1st Consumers Funding, Inc., 160 P.3d 321 (Colo. App. 2007); People v. Shifrin, 2014 COA 14 , 342 P.3d 506.   An e-mail qualifies as a writing for purposes of subsection (2). PayoutOne v. Coral Mortg. Bankers, 602 F. Supp. 2d 1219 (D. Colo. 2009 ).   Customer service representative's call note does not qualify as a writing because it does not indicate that there was any meeting of the minds between debtor and creditor about granting debtor a loan modification. Mayotte v. US Bank Nat'l Ass'n, 424 F. Supp. 3d 1077 (D. Colo. 2019 ).   Multiple emails may serve to satisfy the writing requirement. There is no indication the credit agreement statute of frauds requires that the requisite writing be a single document. PayoutOne v. Coral Mortg. Bankers, 602 F. Supp. 2d 1219 (D. Colo. 2009 ).   A party may not avoid the writing requirement in the credit agreement statute of frauds by arguing promissory estoppel. PayoutOne v. Coral Mortg. Bankers, 602 F. Supp. 2d 1219 (D. Colo. 2009 ).   A claim for unjust enrichment that arises from an oral assertion regarding a credit agreement is barred by the credit agreement statute of frauds. Legislative history and case law strongly disfavor any type of claim involving oral credit agreements, and the credit agreement statute of frauds expressly bars all claims relating to a credit agreement unless the credit agreement is in writing. Lang v. Bank of Durango, 78 P.3d 1121 (Colo. App. 2003).   Applied in McDonald v. Miller, 945 F. Supp. 2d 1201 (D. Colo. 2013 ), aff'd in part and rev'd in part on other grounds, 769 F.3d 1202 (10th Cir. 2014).