July 22, 2014

Colorado Court of Appeals: Spurious Liens and Documents Statute Does Not Require Hearing or Permit Attorney Fees Award After Challenged Lien or Document Has Been Released

The Colorado Court of Appeals issued its opinion in Sifton v. Stewart Title Guaranty Co. on June 9, 2011.

Attorney Fees—Spurious Liens and Documents—CRS §§ 38-35-204 and 13-17-102.

The issue in this case was whether a trial court must hold a hearing to resolve a respondent’s liability for attorney fees under CRS §38-35-204 when the respondent has released a contested lien or document before the show cause hearing. Here, the trial court dismissed plaintiff’s action and declined to award attorney fees because respondent Stewart Title Guaranty Company (Stewart) had voluntarily released its contested deeds of trust before the show cause hearing. The Court of Appeals agreed that plaintiff was not entitled to a hearing on attorney fees under the statute. However, the Court remanded for a determination of whether plaintiff was entitled to attorney fees under CRS §13-17-102.

Plaintiff filed this action to have two deeds of trust that encumbered her property, on which she asserted her signature had been forged, declared spurious, and released. The deeds of trust originally were for the benefit of two of Stewart’s insureds and had been assigned to Stewart. The proceedings lasted almost a year. The trial management order stated that the signatures were forged. Shortly before the show cause hearing date, Stewart deposed plaintiff, released both deeds of trust, and moved to vacate the hearing. Plaintiff argued that the court still should determine whether the deeds had been spurious and, if so, award her attorney fees. Plaintiff also argued she was entitled to attorney fees under § 13-17-102 because Stewart had “unnecessarily expanded the proceedings” by not promptly investigating the alleged forgeries. The trial court dismissed the case without addressing plaintiff’s latter argument.

The Court of Appeals affirmed the trial court’s determination that the spurious liens and documents statute does not require a hearing or permit an attorney fees award after the challenged lien or document has been released. Because the trial court did not address attorney fees under CRS §13-17-102, the Court remanded for consideration of this issue.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 9, 2011, can be found here.

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