Court Opinion

ID: 4461591
Source: CourtListenerOpinion
Date Created: 2019-12-05 17:03:10.890209+00
Date Added: 2024-06-11T14:25:37.316732
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
                                                           December 5, 2019

                               2019COA179

No. 18CA2085, Evans v. Evans — Real Property — Spurious

Liens and Documents

     A division of the court of appeals considers two issues

involving invalidation of an encumbrance as a spurious lien or

spurious document under section 38-35-201, C.R.S. 2019. First, is

an order issued by a district court magistrate an “order” of a state

court for purposes of Colorado’s spurious lien statute? Second, is a

summary of such a magistrate’s order recorded in real property

records a lien “imposed by” an order of a “state court”? The division

answers both questions in the affirmative and holds that the

appellees did not create a “spurious lien” or “spurious document”

when they encumbered petitioner’s real property by recording a
summary of a magistrate’s order entered in the underlying

dissolution of marriage case. The division, therefore, affirms.
COLORADO COURT OF APPEALS                                         2019COA179

Court of Appeals No. 18CA2085
Douglas County District Court No. 18CV30747
Honorable David J. Stevens, Judge

Ken Evans,

Plaintiff-Appellant,

v.

Delinda Evans,

Defendant-Appellee,

and

Jennifer Holt,

Attorney-Appellee.

                        ORDER AFFIRMED AND CASE
                       REMANDED WITH DIRECTIONS

                                 Division III
                        Opinion by JUDGE LIPINSKY
                       Webb and Davidson*, JJ., concur

                         Announced December 5, 2019

Richards Carrington LLC, Christopher P. Carrington, Ruth M. Moore, Denver,
Colorado, for Plaintiff-Appellant

Griffiths Law PC, Duncan Griffiths, Christopher J. Griffiths, Lone Tree,
Colorado, for Defendant-Appellee and Attorney-Appellee

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2019.
¶1    This appeal raises two narrow issues. First, is an order issued

 by a district court magistrate an “order” of a state court for

 purposes of Colorado’s spurious lien statute? Second, is a

 summary of such a magistrate’s order recorded in real property

 records a lien “imposed by” an order of a “state court”?

¶2    In the trial court, plaintiff, Ken Evans (husband), contended

 that appellees, Delinda Evans (wife) and her attorney, Jennifer Holt,

 wrongfully encumbered his real property in Douglas County by

 recording Holt’s self-styled “Abstract” summarizing the magistrate’s

 order. He argued that the Abstract must be removed from the

 Douglas County real property records under the procedure set forth

 in section 38-35-204, C.R.S. 2019, and C.R.C.P. 105.1. The district

 court disagreed with husband. So do we.

¶3    We answer both questions “yes” and hold that appellees did

 not create a “spurious lien” or “spurious document” within the

 meaning of subsections (3) and (4) of section 38-35-201, C.R.S.

 2019, when they encumbered husband’s real property by recording

 a summary of a magistrate’s order entered in the underlying

 dissolution of marriage case. Therefore, we affirm.

                                    1
                           I.     Background

¶4    Four years after the district court entered a decree dissolving

 the Evanses’ marriage, wife petitioned the court to modify the

 decree. She alleged that husband had violated his disclosure

 obligations in the dissolution of marriage proceeding by failing to

 inform her of his interest in certain business assets, as required

 under C.R.C.P. 16.2(e)(10). She asked the court to allocate the

 previously undisclosed assets.

¶5    Ruling without the parties’ consent, which was not required

 under C.R.M. 6(b)(1)(A), a district court magistrate granted wife’s

 petition and ordered husband to pay wife half of the value of the

 previously undisclosed assets in monthly installments:

           [T]he net marital value that must be divided is
           $2,337,278.00, of which [wife] shall receive
           $1,168,639.00. [Husband] shall pay [wife]’s
           sum at a minimum of $50,000.00 per month.
           Interest shall accrue at the statutory rate of
           8% per annum, compounded annually, until
           paid in full. [Husband]’s payments toward this
           obligation must commence not later than 45
           days from the date of this order, and [this
           order] shall create a lien against all [husband]’s
           rights, title and interest in [the subject assets]
           and any other assets in his name.

                                    2
 (Emphasis added.) Husband timely filed a petition for district court

 review of the magistrate’s order.

¶6    Less than one week after husband filed the petition, Holt

 recorded a summary of the magistrate’s order, entitled “Abstract of

 Court Order,” with the Douglas County Clerk and Recorder. The

 Abstract said:

           [Husband] was . . . required by [the
           magistrate’s] order to pay said $1,168,639.00
           amount with interest at the rate of 8% per
           annum compounded annually until paid in full
           at the rate of not less than $50,000.00 per
           month commencing not later than 45 days
           after the date of the order and further provided
           that [wife] was granted a lien against all
           [husband’s] rights, title and interest in [the
           subject assets], and any other assets in his
           name.

 (Emphasis added.)

¶7    Husband did not learn about the Abstract until months later,

 when he attempted to close a transaction secured by real property

 he owned in Douglas County. The Abstract appeared in the

 County’s real property records as an encumbrance against his

 property. He argued that the transaction fell through because the

 Abstract clouded title to his property.

                                     3
¶8     After discovering the Abstract, husband petitioned the district

  court to invalidate the Abstract as a “spurious lien” or “spurious

  document” on an expedited basis following the procedure set forth

  in section 38-35-204 and C.R.C.P. 105.1. The court denied

  husband’s petition, finding that the Abstract was neither a

  “spurious lien” nor a “spurious document” under the statutory

  definitions.

¶9     Although husband attacks the Abstract under several legal

  theories, we consider only whether it falls within the statutory

  definitions of “spurious lien” or “spurious document.” This case is

  not an appeal of any ruling in the Evanses’ dissolution of marriage

  case. Simply put, we must affirm the trial court’s order unless we

  determine that the Abstract ran afoul of section 38-35-201, even if

  the Abstract or the underlying magistrate’s order was invalid or

  otherwise unenforceable under another legal theory.

                        II.   Standard of Review

¶ 10   We review de novo whether a recorded document is a spurious

  lien or spurious document, as defined in subsections (3) and (4) of

  section 38-35-201. See Battle N., LLC v. Sensible Hous. Co., 2015
COA 83, ¶ 53, 370 P.3d 238, 250. We also review de novo whether

                                    4
  a district court applied the correct legal standard in a case filed

  under the statute. See Pierce v. Francis, 194 P.3d 505, 509 (Colo.

  App. 2008). And we review issues of statutory construction de

  novo. Tuscany, LLC v. W. States Excavating Pipe & Boring, LLC, 128
P.3d 274, 277 (Colo. App. 2005).

       III.   The “Spurious Lien” and “Spurious Document” Statute

¶ 11    For purposes of this case, a “spurious lien” is “a purported lien

  or claim of lien that: . . . [i]s not imposed by order, judgment, or

  decree of a state court . . . .” § 38-35-201(4)(c). “State court”

  means “a court established pursuant to title 13, C.R.S.”

  § 38-35-201(5). A “spurious document” is “any document that is

  forged or groundless, contains a material misstatement or false

  claim, or is otherwise patently invalid.” § 38-35-201(3).

¶ 12    Section 38-35-204 and C.R.C.P. 105.1 provide an expedited

  remedy for persons whose real property is encumbered by a

  “spurious lien” or a “spurious document.” Any person whose

  property is so encumbered may petition the district court for an

  order to show cause why the spurious lien or spurious document

  should not be declared invalid and released. See § 38-35-204(1);

  C.R.C.P. 105.1. The court must hold a hearing at which the

                                     5
  proponent of the recorded document has an opportunity to respond

  to the order to show cause. See § 38-35-204(1)(a); C.R.C.P.

  105.1(a)(1).

¶ 13   Following the show cause hearing, if the district court

  “determines that the lien or document is a spurious lien or spurious

  document, [it] shall make findings of fact and enter an order and

  decree declaring the spurious lien or spurious document . . . invalid

  [and] releasing the recorded or filed spurious lien or spurious

  document.” § 38-35-204(2); see C.R.C.P. 105.1(d); Fiscus v. Liberty

  Mortg. Corp., 2014 COA 79, ¶ 31, 373 P.3d 644, 650, aff’d on other

  grounds, 2016 CO 31, 379 P.3d 278.

¶ 14   The General Assembly established this mechanism, which

  takes less time and involves fewer procedural steps than quiet title

  actions and most other types of civil cases, “to protect individuals

  from those who use groundless claims to cloud title to real property

  as a form of protest or harassment.” Westar Holdings P’ship v.

  Reece, 991 P.2d 328, 331 (Colo. App. 1999).

                                    6
       IV.     The Abstract Is Neither a “Spurious Lien” Nor a “Spurious
                                      Document”

         A.      The Abstract Does Not Meet the Statutory Definition of
                                   “Spurious Lien”

¶ 15         Husband contends that the Abstract is a spurious lien

  because, while it purports to encumber his property, the underlying

  magistrate’s order is not an “order” and, therefore, the Abstract is

  not a valid “lien” within the meaning of section 38-35-201(4)(c). As

  noted above, a lien cannot be spurious if it is “imposed by order . . .

  of a state court . . . .” Id.

¶ 16         First, husband asserts that, in non-consent cases, a

  magistrate’s order is merely an unenforceable recommendation and

  not a court order. Second, he contends that a magistrate’s order is

  not an order “of a state court” because magistrates’ orders are not

  orders of a district court. Third, he argues that because the

  Abstract did not satisfy the requirements for a judgment lien, it was

  not a “lien . . . imposed by order . . . of a state court” under the

  statute. Id. We consider and reject each of these assertions.

                                         7
       1.     The Magistrate’s Order Was an Enforceable “Order” at the
                    Time Wife’s Attorney Recorded the Abstract

¶ 17        In contending that the magistrate’s order was not an “order”

  when wife’s attorney recorded the Abstract, husband attacks the

  authority of magistrates in non-consent cases. He argues that,

  until a district court reviews a magistrate’s order or the time for

  such review has passed, a magistrate’s order is merely a

  recommendation. Husband, however, rests this argument on case

  law analyzing the actions of state court referees at a time when they

  possessed less authority than do present-day magistrates.

¶ 18        For example, husband cites to In re Marriage of Petroff, 666
P.2d 1131, 1132 (Colo. App. 1983), which held that, under a local

  rule of the Twentieth Judicial District, a referee’s decision was

  merely a recommendation, and not an order or judgment, absent

  further district court action. (All district court local rules were

  repealed five years after Petroff. C.R.C.P. 121(b).)

¶ 19        But the law governing referees changed two years later. “The

  decision of the referee shall remain in full force and effect while a

  reconsideration is pending unless stayed by the judge for good

  cause shown.” Ch. 132, sec. 4, § 13-5-305(2)(b), 1985 Colo. Sess.

                                        8
  Laws 590. This statutory language mirrors current Magistrate Rule

  5(a), which states that “[a]n order or judgment of a magistrate . . .

  shall be effective upon the date of the order or judgment and shall

  remain in effect pending review by a reviewing judge unless stayed

  by the magistrate or by the reviewing judge.” C.R.M. 5(a); see

  § 13-5-201(3), C.R.S. 2019 (“District court magistrates may hear

  such matters as are determined by rule of the supreme

  court . . . .”). Husband does not point us to any order staying the

  magistrate’s order.

¶ 20    Under the authority of section 13-5-201(3), the supreme court

  empowered magistrates to modify permanent orders in dissolution

  of marriage proceedings without the parties’ consent. See C.R.M.

  6(b)(1)(B) (“A district court magistrate shall have the power to

  preside over all motions to modify permanent orders concerning

  property division . . . .”).

¶ 21    Husband’s attack on the power of magistrates to enter orders

  in non-consent cases cannot be squared with the unambiguous

  language of Magistrate Rule 5(a). The magistrate’s order was

  enforceable when entered, even though husband timely appealed it

                                     9
  to the district court. See C.R.M. 7(a) (providing that magistrate’s

  orders not requiring consent must be appealed to the district court).

        2.    The Magistrate’s Order Is an Order of a State Court

¶ 22   Husband contends that, even if the magistrate’s order was an

  enforceable “order” under C.R.M. 5(a), it is not an “order . . . of a

  state court,” within the meaning of section 38-35-201(4). Therefore,

  he argues, the Abstract is spurious because it was not a lien

  “imposed by order . . . of a state court . . . .” § 38-35-201(4)(c).

¶ 23   The spurious lien statute defines “state court” as a court

  “established pursuant to title 13, C.R.S.” § 38-35-201(5). Husband

  asserts that district courts are “established pursuant to title 13”

  because they are courts of record under title 13. He argues that,

  unlike district judges’ orders, magistrates’ orders in non-consent

  cases are not those of a “district court.” Thus, he continues, the

  magistrate’s order was not entered by a “state court.”

¶ 24   Husband’s argument, however, ignores the authority vested in

  magistrates to act as officers of district courts. See In re R.G.B., 98
P.3d 958, 960 (Colo. App. 2004) (holding that magistrates are

  hearing officers who act with limited authority). While magistrates

  are not judges, they perform judicial functions. C.R.M. 1 (“Although

                                     10
  magistrates may perform functions which judges also perform, a

  magistrate at all times is subject to the direction and supervision of

  the chief judge or presiding judge.”); see In re Parental

  Responsibility of M.B.-M., 252 P.3d 506, 509-10 (Colo. App. 2011).

¶ 25   Magistrates are authorized to act as officers of the district

  court in certain matters. See § 13-5-201; C.R.M. 3(a) (explaining a

  magistrate is “[a]ny person other than a judge authorized by statute

  or by these rules to enter orders or judgments in judicial

  proceedings”). As noted above, in domestic relations proceedings,

  “[a] district court magistrate shall have the power to preside over all

  motions to modify permanent orders concerning property division,

  maintenance, child support or allocation of parental

  responsibilities.” C.R.M. 6(b)(1)(B). And a magistrate can exercise

  this power without the parties’ consent. Id.; see C.R.M. 6(b)(1).

¶ 26   Husband fails to explain in whose name district court

  magistrates enter their orders, if not the name of the district court

  to which they are assigned and for which they work. Section

  13-5-201 and the Magistrate Rules do not establish a judicial junior

  varsity league comprised of magistrates. After all, district court

  magistrates routinely place the court’s name on their rulings and

                                    11
  label them “orders” without facing accusations of usurping the

  court’s authority.

¶ 27   For these reasons, the magistrate was authorized to act on

  behalf of the district court when she entered the order at issue.

  Thus, the magistrate’s order is an order of the district court.

¶ 28   Husband relies on inapposite authority in arguing that

  magistrates’ orders are not district court orders. He cites to the

  rule specifying the process for appealing magistrates’ orders.

  C.R.M. 7(a)(12) (“If timely review in the district court is not

  requested, the order or judgment of the magistrate shall become the

  order or judgment of the district court. Appeal of such district

  court order or judgment to the appellate court is barred.”).

  Husband argues that, because he requested timely review by the

  district court, the magistrate’s order was not the equivalent of an

  order of a district court judge during the pendency of the review.

  C.R.M. 7(a)(12), however, addresses when a magistrate’s order may

  be appealed, and not whether such an order is a district court

  order. Husband’s argument conflates the authority to issue an

  enforceable order with the distinct question of how a magistrate’s

  order can be appealed.

                                     12
¶ 29        In sum, the magistrate’s order was an “order . . . of a state

  court” for purposes of section 38-35-201(4)(c). Thus, any lien

  imposed by the magistrate’s order could not have been spurious.

       3.     A Lien Imposed by a Court Order Need Not Be a Judgment
                                        Lien

¶ 30        Husband further contends that only a judgment lien created

  by recording a court-issued transcript of judgment can be a lien

  “imposed by order, judgment, or decree of a state court . . . .”

  § 38-35-201(4)(c). According to husband, “there is no support for

  allowing a litigant to cloud its adversary’s title to real property by

  recording an attorney-created document that is not a certified copy

  of an enforceable order, judgment or decree.” We disagree.

¶ 31        To create a judgment lien, a party must record a transcript of

  the judgment certified by the clerk of court. See § 13-52-102(1),

  C.R.S. 2019. “[F]rom the time of recording such transcript, and not

  before, the judgment shall become a lien upon all the real estate,

  not exempt from execution in the county where such transcript of

  judgment is recorded, owned by such judgment debtor.” Id. The

  parties do not dispute that wife’s attorney did not record a

                                         13
  transcript of judgment and, for that reason, the Abstract was not a

  judgment lien.

¶ 32   Wife, however, did not need a judgment lien to encumber

  husband’s property. Unlike a typical money judgment, the

  magistrate’s order by its terms created an equitable lien to secure

  husband’s payment obligation to wife. It expressly said that the

  judgment entered against husband would be secured by “a lien

  against all [husband]’s rights, title and interest in [the subject

  assets] and any other assets in his name.”

¶ 33   In light of the lien language in the magistrate’s order, wife did

  not require a transcript of judgment or other separate document to

  create a lien against husband’s property. See Willis v. Neilson, 32
Colo. App. 129, 132, 507 P.2d 1106, 1108 (1973) (holding that

  language in stipulation incorporated into divorce decree providing

  that husband’s real estate was security for payment of sum owed to

  wife created lien against husband’s real property). But she needed

  to record documentation of the lien to perfect her interest in

  husband’s real property. See § 38-35-109(1), C.R.S. 2019; Nile

  Valley Fed. Sav. & Loan Ass’n v. Sec. Title Guarantee Corp. of Balt.,

  813 P.2d 849, 851 (Colo. App. 1991) (Section 38-35-109 “requires a

                                     14
  secured party properly to record his interest in real property with

  the clerk and recorder of the county in which the property is located

  in order to protect his interest against those who subsequently

  claim interests in the same property.”).

¶ 34   Contrary to husband’s position, Colorado law does not limit

  the documents that can be recorded to enforce a judicially created

  lien to “certified cop[ies] of an enforcement order.” See

  § 38-35-109(1) (“All deeds, powers of attorney, agreements, or other

  instruments in writing conveying, encumbering, or affecting the title

  to real property, certificates, and certified copies of orders,

  judgments, and decrees of courts of record may be recorded . . . .”).

  We need not consider whether wife could enforce the lien referenced

  in the magistrate’s order by foreclosing on husband’s property,

  however, as our inquiry is limited to whether the Abstract is a

  spurious lien or a spurious document.

¶ 35   Section 38-35-201 does not specify that a lien “imposed by

  order, judgment, or decree of a state court” must take the form of a

  judgment lien. Rather, under the plain meaning of the statute, any

  type of lien “imposed by order, judgment, or decree of a state court”

  cannot be spurious, regardless of how it was created or what it is

                                     15
  called. § 38-35-201(4)(c). Because, as explained above, the

  magistrate’s order was an “order, judgment, or decree of a state

  court,” any recorded document that accurately characterized the

  lien created through the magistrate’s order would not be spurious.

  For this reason, the Abstract, when recorded, created a lien

  “imposed by” an order of a state court within the meaning of section

  38-35-201(4)(c).

¶ 36   This interpretation is consistent with the purpose of the

  spurious lien statute, which is to provide a process for removing

  groundless claims against title. Westar Holdings, 991 P.2d at 331.

  The Abstract is not groundless, as it accurately summarizes the

  language of an enforceable court order.

¶ 37   Therefore, we disagree with husband’s argument that a

  judgment lien was the only means by which wife could have

  encumbered his property for purposes of enforcing the magistrate’s

  order. (Although we hold that the Abstract does not run afoul of the

  spurious lien statute, we neither address its validity in other

  contexts nor condone the practice of recording attorney-drafted

  summaries of court orders.)

                                    16
            B.   The Abstract Was Not a Spurious Document

¶ 38   Husband alternatively contends that the Abstract was a

  “spurious document” because it did not accurately reflect the terms

  of the lien described in the magistrate’s order and, therefore, was

  materially misleading within the meaning of section 38-35-201(3).

  The trial court disagreed “because the statement in the Abstract is

  language from the Order itself.” We agree with the trial court.

¶ 39   Husband contends that the lien described in the magistrate’s

  order would become effective only if he failed to make one of the

  required monthly payments and that the lien did not secure his

  entire $1,168,639 indebtedness to wife. As husband accurately

  notes, the magistrate’s order explained that “[husband]’s payments

  toward this obligation [$1,168,639] must commence not later than

  45 days from the date of this order, and [the order] shall create a

  lien against all [husband]’s rights, title and interest in [the subject

  assets] and any other assets in his name.” But we do not need to

  determine the scope of the lien, because the language of the

  Abstract is so similar to that of the magistrate’s order. Given the

  similarity between the magistrate’s order and the Abstract, the

  latter accurately characterized the former and was not misleading.

                                     17
¶ 40   Husband further argues that the Abstract was not a proper

  judgment lien, violated the judgment enforcement statute, did not

  satisfy the requirements of the relevant real property recording

  statutes, and was not a valid lis pendens. But, as explained above,

  the definition of spurious document requires more than an invalid

  encumbrance — the encumbrance must be “patently invalid.”

  § 38-35-201(3). None of husband’s miscellaneous arguments

  explains why the Abstract was “patently invalid,” even if a closer

  look may have shown it was “invalid.” When examining the

  statutory definition of “spurious document,” we must “give effect to

  every word and render none superfluous because we ‘do not

  presume that the legislature used language idly and with no intent

  that meaning should be given to its language.’” Baum v. Indus.

  Claim Appeals Office, 2019 COA 94, ¶ 35, ___ P.3d ___, ___ (quoting

  Lombard v. Colo. Outdoor Educ. Ctr., Inc., 187 P.3d 565, 571 (Colo.

  2008)).

¶ 41   A division of this court explained that a spurious document is

  one “for which a proponent can advance no rational argument

  based on evidence or the law to support the claim.” Westar

  Holdings, 991 P.2d at 330. The “no rational argument” test is

                                   18
  similar to the definition of a “[p]atently insubstantial claim[]” as one

  that is “essentially fictitious.” Davis v. U.S. Sentencing Comm’n, 716
F.3d 660, 667 (D.C. Cir. 2013) (quoting Best v. Kelly, 39 F.3d 328,

  330 (D.C. Cir. 1994)). Thus, a spurious document is one that no

  rational argument can support and that is “essentially fictitious.”

¶ 42     For example, in Egelhoff v. Taylor, the disputed encumbrance

  reflected a judge’s purported $500 million indebtedness to an

  offender whom the judge had sentenced, which the judge allegedly

  created by failing to contest the alleged debt under a “Commercial

  Affidavit Process” not recognized under Colorado law. 2013 COA
137, ¶¶ 17-19, 312 P.3d 270, 273-74. The Egelhoff court rejected

  the offender’s baseless arguments and affirmed the trial court’s

  finding that the alleged lien was spurious. Id. at ¶ 21, 312 P.3d at

  274.

¶ 43     In contrast, wife has advanced a rational argument that the

  Abstract reflects an enforceable order. Even if the Abstract were

  invalid, it is not the type of patently invalid document that section

  38-35-210 was enacted to invalidate. See Westar Holdings, 991
P.2d at 331. Thus, the Abstract is not a spurious document.

                                     19
              V.    The Parties’ Requests for Attorney Fees

¶ 44   Rule 105.1 provides, in relevant part, that

            [i]f, following the hearing on the order to show
            cause, the court determines that the lien or
            document is not a spurious lien or document,
            the court shall issue an order so finding and
            enter a monetary judgment against the
            petitioner and in favor of the respondent in the
            amount of the respondent’s costs, including
            reasonable attorney fees.

  C.R.C.P. 105.1(d); see § 38-35-204(3).

¶ 45   In light of our disposition of this appeal, we deny husband’s

  request for attorney fees, grant the request of wife and wife’s

  attorney for recovery of their costs, including reasonable attorney

  fees, and remand for findings of the amount of such costs

  awardable to wife and wife’s attorney.

                             VI.   Conclusion

¶ 46   The district court’s order is affirmed. We remand to the

  district court for findings on the amount of reasonable attorney fees

  and other costs awardable to wife and wife’s attorney under section

  38-35-204(3) and C.R.C.P. 105.1.

       JUDGE WEBB and JUDGE DAVIDSON concur.

                                    20