Court Opinion

ID: 4417878
Source: CourtListenerOpinion
Date Created: 2019-07-18 15:02:32.111525+00
Date Added: 2024-06-11T13:34:59.996109
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                   SUMMARY
                                                                July 11, 2019

                               2019COA107

No. 18CA1087, Franklin Credit Management Corporation v.
Galvan — Creditors and Debtors — Judgment Liens — Writs of
Execution; Civil Procedure — Execution and Proceedings
Subsequent to Judgment; Courts and Court Procedure —
Property Subject to Execution

     In this dispute over the plaintiff’s efforts to execute on a

judgment, a division of the court of appeals considers whether a

valid judgment lien is a prerequisite to obtaining a writ of execution

on real property. Applying the plain language of the Colorado Rules

of Civil Procedure and section 13-52-102, C.R.S. 2018, the division

concludes that a valid judgment lien is not required to obtain a writ

of execution and reverses the district court’s order setting aside the

writ of execution.
     The division also concludes that the district court abused its

discretion in awarding attorney fees and costs for the frivolous

opposition to the motion to set aside the writ of execution.
COLORADO COURT OF APPEALS                                   2019COA107

Court of Appeals No. 18CA1087
Adams County District Court No. 07CV226
Honorable Edward C. Moss, Judge

Franklin Credit Management Corporation,

Plaintiff-Appellant,

v.

Raul Galvan,

Defendant-Appellee.

                       ORDERS REVERSED AND CASE
                       REMANDED WITH DIRECTIONS

                                Division VII
                         Opinion by JUDGE DUNN
                       Navarro and Berger, JJ., concur

                          Announced July 11, 2019

Janeway Law Firm P.C., Lynn M. Janeway, Elizabeth S. Marcus, David R.
Doughty, Alison L. Berry, Denver, Colorado, for Plaintiff-Appellant

Sweetbaum Sands Anderson PC, Geoffrey P. Anderson, Reagan Larkin, Denver,
Colorado; Navaro & Associates LLC, Steven Navaro, Castle Rock, Colorado, for
Defendant-Appellee
¶1    In this dispute over the efforts of plaintiff, Franklin Credit

 Management Corporation, 1 to execute on its judgment against

 defendant, Raul Galvan, we are asked to consider whether a valid

 judgment lien is a prerequisite to obtaining a writ of execution.

 Because we conclude it is not, we reverse the district court’s order

 setting aside Franklin Credit’s writ of execution as well as the

 related order awarding attorney fees and costs to Mr. Galvan, and

 we remand for further proceedings.

               I.   Background and Procedural History

¶2    The undisputed facts, as alleged in the pleadings, show that

 Franklin Credit obtained a $43,037 default judgment against Mr.

 Galvan in 2007. Franklin Credit then recorded a transcript of the

 default judgment with the Adams County Clerk and Recorder,

 creating a judgment lien on Mr. Galvan’s nonexempt real property

 in Adams County. Franklin Credit, however, didn’t execute on the

 1Franklin Credit assigned its rights in the judgment to Deutsche
 Bank National Trust Company, as Certificate Trustee on Behalf of
 Bosco Credit II Trust Series 2010-1 in 2017. Deutsche Bank,
 however, was not substituted as a party in this case, and Franklin
 Credit properly continued it. See C.R.C.P. 25(c).

                                    1
 judgment, and the judgment lien expired in 2013. All agree that

 Franklin Credit did not continue (or revive) 2 the judgment lien.

¶3    In 2016, Franklin Credit re-recorded the transcript of

 judgment with the Adams County Clerk and Recorder but did not

 revive its judgment. Two years after that, Franklin Credit obtained

 a writ of execution and delivered it to the Adams County Sheriff. As

 required, the sheriff recorded a certificate of levy with the Adams

 County Clerk and Recorder and then personally served Mr. Galvan

 with the notice of levy and the writ of execution.

¶4    Mr. Galvan moved to set aside the writ of execution, arguing

 that because the judgment lien had expired in 2013 and had not

 been revived, Franklin Credit’s writ of execution was “improper.”

 Franklin Credit responded that, even though the judgment lien had

 expired, the judgment was “still valid,” and it had the right to

 execute on the judgment by certificate of levy.

¶5    The district court granted Mr. Galvan’s motion and entered an

 order setting aside the writ of execution. In doing so, it agreed that

 2 While the statute provides for the continuation of a judgment lien,
 § 13-52-102(1), C.R.S. 2018, the process also has been described as
 judgment lien revival, see Sec. Credit Servs., LLC v. Hulterstrom,
 2019 COA 7, ¶ 17 n.4.

                                    2
 Franklin Credit’s judgment lien had expired and had not been

 revived. The court did not consider, however, Franklin Credit’s

 argument that a judgment lien was not required and that it could

 execute on its judgment by writ of execution and certificate of levy.3

¶6    Mr. Galvan then requested his attorney fees and costs, arguing

 Franklin Credit’s position was substantially frivolous and

 groundless. The district court agreed and granted Mr. Galvan’s

 request, finding frivolous Franklin Credit’s opposition to Mr.

 Galvan’s motion to set aside the writ of execution.

                         II.    Judgment Liens

¶7    Franklin Credit contends that because a judgment lien is not a

 “necessary prerequisite to a writ of execution,” the district court

 erred in setting the writ aside based on the expired judgment lien.

 We agree and therefore reverse the district court’s order setting

 aside the writ of execution.

 3In fairness to the district court, these arguments were not clearly
 presented. But Mr. Galvan doesn’t dispute that they were raised
 and preserved.

                                    3
                        A.    Standard of Review

¶8     We review de novo an issue of statutory interpretation. Sec.

  Credit Servs., LLC v. Hulterstrom, 2019 COA 7, ¶ 8. In doing so, we

  seek to effectuate the legislature’s intent and purpose. Perfect

  Place, LLC v. Semler, 2018 CO 74, ¶ 40. We begin by looking to the

  statutory language, giving the words and phrases their plain and

  ordinary meanings. Sec. Credit Servs., ¶ 8. When this language is

  clear, we go no further. Wells Fargo Bank, Nat’l Ass’n v. Kopfman,

  226 P.3d 1068, 1072 (Colo. 2010). The same rules apply to the

  interpretation of the Colorado Rules of Civil Procedure. Sec. Credit

  Servs., ¶ 8.

¶9     Applying these principles, we turn to the relevant rules and

  statutes that govern the execution of judgments.

                 B.   Colorado Rules of Civil Procedure

¶ 10   The “process to enforce a final money judgment shall be by

  writ of execution,” unless otherwise provided by law. C.R.C.P.

  69(a); see First Nat’l Bank of Denver v. Dist. Court, 652 P.2d 613,

  617 (Colo. 1982). “[N]o execution shall issue upon a judgment” or

  any action taken to enforce it until fourteen days have passed since

  entry of the judgment (absent a court-ordered stay of execution).

                                    4
  C.R.C.P. 62(a). Satisfaction “of a money judgment may be entered

  in the judgment record” when an “execution” is returned satisfying

  the judgment in whole or in part. C.R.C.P. 58(b).

¶ 11   While these rules plainly contemplate execution on a final

  money judgment, none contemplates or requires a judgment lien to

  obtain a writ of execution and certificate of levy or execute on the

  judgment. 4 And Mr. Galvan doesn’t direct us to anything in the

  Colorado Rules of Civil Procedure that says otherwise.

                         C.   Section 13-52-102

¶ 12   “All goods and chattels, lands, tenements, and real estate of

  every person against whom any judgment is obtained . . . are liable

  to be sold on execution to be issued upon such judgment.”

  § 13-52-102(1), C.R.S. 2018. A certified copy of the transcript of

  the judgment “may be recorded in any county,” and if recorded, “the

  judgment shall become a lien upon” all the judgment debtor’s

  nonexempt real property owned or later acquired in that county.

  4 Although his briefing suggests differently, Mr. Galvan conceded at
  oral argument that he is not contending a judgment lien is required
  to execute on every judgment, but only where a creditor seeks a writ
  of execution to execute on real property. See generally C.R.C.P.
  102, 103.

                                     5
  Id.; see Wells Fargo, 226 P.3d at 1071-72 (outlining judgment lien

  process).

¶ 13   If obtained, a judgment lien expires six years after entry of the

  judgment. § 13-52-102(1). But expiration of “the judgment lien . . .

  does not extinguish the debt.” Mortg. Invs. Corp. v. Battle Mountain

  Corp., 70 P.3d 1176, 1186 (Colo. 2003); see also Ryan v. Duffield,

  899 P.2d 378, 380-81 (Colo. App. 1995) (expiration of a judgment

  lien did not prevent enforcing unexpired judgment through

  garnishment). Rather, “execution may issue on any judgment . . .

  within twenty years” from the entry of the judgment.

  § 13-52-102(2)(a); see Baum v. Baum, 820 P.2d 1122, 1123 (Colo.

  App. 1991); see also Floyd v. Sellers, 7 Colo. App. 498, 505, 44 P.
373, 376 (1896) (recognizing that even though the judgment

  creditor did not obtain a judgment lien, he could satisfy the

  judgment through other legal means), aff’d, 24 Colo. 484, 52 P. 674

  (1898).

¶ 14   As with the civil rules, we see nothing in the plain language of

  section 13-52-102 that requires a judgment creditor to get a

  judgment lien before a writ of execution. Indeed, a lien itself is not

  a method to execute on a judgment; rather, it secures the judgment

                                     6
  creditor’s right to collect on its judgment from the equity in a

  judgment debtor’s real property. See Robison v. Gumaer, 43 Colo.
310, 313, 95 P. 935, 935 (1908) (recognizing that a lien allows a

  creditor to seek relief on property).

¶ 15   So while a judgment creditor may get a judgment lien, nothing

  in the statute requires one. Instead, a transcript of judgment “may

  be recorded in any county” to obtain a judgment lien.

  § 13-52-102(1). Giving these words their plain meaning, the statute

  creates a permissive procedure to obtain a lien on real property and

  nothing more. Sinclair Mktg. Inc. v. City of Commerce City, 226 P.3d
1239, 1246 (Colo. App. 2009) (“A statute using ‘may’ generally

  connotes permissive rather than mandatory action.”).

¶ 16   We are not persuaded otherwise by Mr. Galvan’s reliance on

  the statutory language that real estate may be “sold on execution.”

  § 13-52-102(1). Contrary to Mr. Galvan’s contention, that real

  estate is subject to execution doesn’t “clearly contemplate[]” that a

  judgment lien is required to execute on the property. The statute

  provides only that “execution . . . be issued upon [the] judgment.”

  § 13-52-102(1). Thus, it requires a judgment to execute, not a

  judgment lien; and we won’t read a requirement into the statute

                                      7
  that isn’t there. See Rook v. Indus. Claim Appeals Office, 111 P.3d
549, 552 (Colo. App. 2005).

¶ 17   Nor do the cases Mr. Galvan relies on say anything different.

  These cases by and large discuss judgment liens, Baum, 820 P.2d

  at 1123, the expiration of judgment liens, Mortg. Invs. Corp., 70
P.3d at 1186, and the requirements to revive judgment liens, Wells

  Fargo, 226 P.3d at 1071-72. None of them, however, considers

  whether a judgment lien is required to obtain a writ of execution, let

  alone concludes that it is.

¶ 18   This is also true of Great Western Exchange, Inc. v. Walters,

  819 P.2d 1093 (Colo. App. 1991). While that case broadly states

  that “writs of execution or certificates of levy, regardless of when

  acquired, merely serve as means to enforce the [judgment] lien,” it

  did not consider the issue presented here — whether a judgment

  lien is a prerequisite to a writ of execution. Id. at 1095. Rather,

  that case dealt with the extension of a judgment lien and concluded

  only that obtaining a writ of execution and filing a certificate of levy

  does not “extend[] the term of the judgment lien beyond its

  statutory period.” Id. And the cases that the division cited in

  support of its statement that “writs of execution or certificates of

                                     8
  levy” are “means to enforce” a judgment lien don’t support that

  statement. Id. Those cases simply recognize that executing on the

  judgment does not extend the life of the judgment lien. See

  Ingraham v. Forman, 63 P.2d 998, 998-99 (Ariz. 1937); Hyman v.

  Jones, 171 S.E. 103, 103 (N.C. 1933). In any event, assuming

  Great Western concluded that a judgment lien is required to execute

  on a judgment and obtain a writ of execution, we don’t agree. See

  Dig. Landscape Inc. v. Media Kings LLC, 2018 COA 142, ¶ 68 (one

  division of the court of appeals is not bound by the decision of

  another division).

¶ 19   For these reasons, we see nothing in section 13-52-102 (or

  case law) that requires a judgment creditor to get a valid judgment

  lien as a prerequisite to obtaining a writ of execution. See

  § 13-52-102; see also Jong Ik Won v. Fernandez, 324 S.W.3d 833,

  835 (Tex. App. 2010) (concluding that, under Texas law, “a

  judgment lien is not a prerequisite to an execution sale to satisfy a

  judgment”). And consistent with this interpretation, the writ of

  execution issued here makes no reference to a judgment lien; it

  refers only to Franklin Credit’s judgment.

                                    9
¶ 20   The district court thus erred in setting aside the writ of

  execution because Franklin Credit’s judgment lien had expired.

                           D.    Execution Lien

¶ 21   Franklin Credit also contends that the district court erred in

  setting aside the writ of execution because (1) Colorado recognizes

  an execution lien independent of a judgment lien and (2) it had a

  valid execution lien. We agree with the former contention, but don’t

  reach the latter.

¶ 22   True, an execution lien allows a judgment creditor to levy on

  real estate. §§ 13-56-101, -103, C.R.S. 2018. Though a judgment

  creditor may obtain a judgment lien and an execution lien, they are

  independent statutory liens. See Routt Cty. Mining Co. v. Stutheit,

  101 Colo. 254, 257, 72 P.2d 692, 693 (1937) (“Until they filed their

  transcript or made a levy, they had no lien on the real estate.”);

  Baker v. Allen, 34 Colo. App. 363, 367, 528 P.2d 922, 924-25 (1974)

  (recognizing that the judgment creditor obtained a judgment lien

  through filing a transcript of judgment and obtained a lien upon the

  real estate when the certificate of levy was filed); see also Robison,
43 Colo. at 313, 95 P. at 935 (explaining that a lien can be created

  for executing on a judgment by levy of an execution, recording a

                                     10
  transcript of judgment, or attachment); 1C Stephen A. Hess,

  Colorado Practice Series: Methods of Practice §§ 40:3, 40:5, Westlaw

  (7th ed. database updated May 2019).

¶ 23   But for three reasons we decline to address whether Franklin

  Credit obtained a valid execution lien under sections 13-56-101 and

  -103 and whether this execution lien independently supports its

  writ of execution and certificate of levy. First, the district court set

  aside the writ of execution only on the basis that Franklin Credit’s

  judgment lien had expired. And as already discussed, we conclude

  that the district court erred in doing so. Second, whether a valid

  execution lien exists under sections 13-56-101 and -103 was

  neither addressed by the district court nor adequately developed in

  the record. Third, the district court also did not address Mr.

  Galvan’s claim for homestead exemption under section 38-41-201,

  C.R.S. 2018. So, for us to consider these issues now is premature.

  See Softrock Geological Servs., Inc. v. Indus. Claim Appeals Office,

  2012 COA 97, ¶ 6, aff’d, 2014 CO 30.

¶ 24   To sum up, a judgment lien is not a prerequisite to obtaining a

  writ of execution. Although Franklin Credit’s judgment lien expired,

  its judgment has not. Franklin Credit represents that it obtained

                                     11
  an execution lien, but the district court has not yet addressed the

  validity of that lien. And for his part, Mr. Galvan filed a claim for

  homestead exemption, which the district court also didn’t consider.

  We therefore must reverse the order setting aside the writ of

  execution and remand for further proceedings.

             III.   Re-Recording the Transcript of Judgment

¶ 25   Franklin Credit alternatively contends that by re-recording the

  transcript of the default judgment in 2016, it created a judgment

  lien that also supports the writ of execution. Given our conclusion

  that the district court erred in setting aside the writ of execution,

  we need not address this argument other than to point out that

  another division of this court recently rejected it. See Sec. Credit

  Servs., ¶ 16 (“[T]he recordation of a transcript of judgment, without

  more, after the expiration of the [judgment lien’s] six-year period,

  accomplishes nothing[.]”).

                       IV.   Attorney Fees and Costs

¶ 26   Franklin Credit next contends the district court erred in

  awarding attorney fees and costs to Mr. Galvan. We agree.

¶ 27   We review a district court’s award of attorney fees and costs

  for an abuse of discretion. In re Estate of Shimizu, 2016 COA 163,

                                     12
  ¶ 15. The court abuses its discretion when it misapplies the law,

  see Genova v. Longs Peak Emergency Physicians, P.C., 72 P.3d 454,

  458 (Colo. App. 2003); its decision is manifestly arbitrary,

  unreasonable, or unfair, see Shimizu, ¶ 15; or its findings are so

  against the weight of the evidence as to compel a contrary result,

  see Colo. Citizens for Ethics in Gov’t v. Comm. for Am. Dream, 187
P.3d 1207, 1220 (Colo. App. 2008).

¶ 28   The district court may assess reasonable attorney fees against

  a party who files a “frivolous opposition to a motion.” C.R.C.P. 121,

  § 1-15(7). A defense is frivolous if the proponent can present no

  rational argument based on the evidence or law in support of that

  defense. Liebowitz v. Aimexco Inc., 701 P.2d 140, 142 (Colo. App.

  1985); accord Double Oak Constr., L.L.C. v. Cornerstone Dev. Int’l,

  L.L.C., 97 P.3d 140, 151 (Colo. App. 2003).

¶ 29   Concluding the law was well settled that a judgment lien

  expires six years after entry of the judgment, the district court

  found that Franklin Credit’s opposition to the motion to set aside

  the writ of execution was frivolous. But as discussed, Franklin

  Credit argued — and we agree — that a valid judgment lien is not

  required to obtain a writ of execution. The district court therefore

                                    13
  abused its discretion in concluding that Franklin Credit presented

  no rational argument in opposing the motion to set aside the writ of

  execution, and we must reverse the district court’s order awarding

  attorney fees and costs.

                      V.     Appellate Attorney Fees

¶ 30   Because we reverse the district court’s order setting aside the

  writ of execution, we necessarily reject Mr. Galvan’s request for

  appellate attorney fees.

                             VI.   Conclusion

¶ 31   We reverse the district court’s orders setting aside the writ of

  execution and awarding attorney fees and costs. The case is

  remanded to the district court for further proceedings.

       JUDGE NAVARRO and JUDGE BERGER concur.

                                    14