July 17, 2019

Archives for May 31, 2013

Congratulations to New Members of Colorado’s Bar!

BarAdmittees5-13Congratulations to all the new attorneys who were sworn in at the Spring Admission Ceremony on Tuesday, May 28, 2013, at the Boettcher Concert Hall. Of the 400 people who took the bar exam in February, 275 or 69 percent passed. Approximately 175 of those people were in attendance at the admission ceremony.

JudgeKrieger5-13Chief Judge Marcia Krieger of the U.S. District Court for the District of Colorado delivered the welcoming remarks and introductions. Colorado Supreme Court Chief Justice Michael Bender also spoke, as did Dean Martin Katz of the University of Denver’s Sturm College of Law and CBA President Mark Fogg.

Click here to view photos from the event on the CBA Facebook page. For more information on the results of the February 2013 bar exam, click here.

Congratulations, and welcome to the bar!

Colorado Court of Appeals: Agent’s Error in Proceeding with Closing Despite Lack of Proof of Compliance with Underwriter’s Terms Constituted Violation of Contract

The Colorado Court of Appeals issued its opinion in Fidelity National Title Co. v. First American Title Insurance Co. on Thursday, May 23, 2013.

Contractual Duties of a Real Estate Closer.

Defendant Fidelity National Title Company (Agent) appealed the trial court’s judgment in favor of third-party defendant First American Title Insurance Company (Underwriter). The Court of Appeals affirmed the judgment.

Agent issued title insurance policies underwritten by Underwriter pursuant to an underwriting agreement (contract). Under the contract, Agent was to perform title and closing services. Toward the end of 2007, Agent wrote two title insurance commitments underwritten by Underwriter, each of which committed to insure a different bank as the first-position lienholder for the same parcels of real estate. The policies were issued in 2008.

The first commitment was issued with respect to Brown Financial, LLC (Brown), which loaned money to the developer of the parcels (Developer). Brown assigned its deed of trust to Academy Bank (Academy), and Brown serviced the loan by collecting money from Developer and forwarding it to Academy. The policy insured Academy as the first-position lienholder.

Two months after Agent had issued the commitment for the Brown title policy, it issued a commitment to insure the interest of Colorado East Bank & Trust (CEB&T) as first position lienholder on the same parcels in connection with a new loan from CEB&T to Developer. The CEB&T commitment had a requirement that the previous deed of trust be released, and noted it had been assigned to Academy.

Agent closed both loans within two months. Agent failed to pay Academy from the closing proceeds of the CEB&T loan and failed to obtain a release of Academy’s deed of trust on the parcels. Both Academy and CEB&T were insured in their respective policies as first position lienholders for the same parcels. Agent did not notify Underwriter of this fact.

After Academy began foreclosure proceedings on the parcels in 2009, CEB&T sought to enjoin the foreclosure. Because the Academy lien had not been paid or released, Academy asserted a claim against Underwriter under the Brown title policy, and CEB&T asserted a claim against Underwriter under CEB&T’s policy. Underwriter paid CEB&T $986,000 to resolve the latter’s claims in foreclosure and $55,000 to reimburse CEB&T for its attorney fees.

The claims in this appeal are by Underwriter against Agent under the terms of the contract. The trial court found in favor of Underwriter.

On appeal, Agent argued the trial court misconstrued section 7.3 of the contract and erroneously found Agent liable for committing “[an] error, fault, or negligence in handling funds in connection with [an] escrow.” Requirement G of the title commitment required that the deed of trust on the property be released. It indicated that Academy would need to release the deed of trust. A letter from Brown was received before closing, stating it would provide a release of the deed of trust and the original promissory note marked “paid in full” within fourteen days of the closing. No mention was made of Academy. The closer was not happy with this, but her branch manager authorized her to proceed. The trial court found this was negligent handling of funds in connection with an escrow by Agent, in violation of section 7.3 of the contract.

Agent argued it was not “handling funds,” but simply performing a title search and completing a closing. Also, Agent contended that any errors occurred in the context of a real estate closing and that those services do not fall within the meaning of “escrow.” The Court held that the record and the plain meaning of those terms supported the trial court’s finding that Agent’s error was a breach of section 7.3 of the contract.

Agent also argued that under CRS § 38-35-124.5, the letter it received from Brown was a “payoff statement” on which Agent was entitled to rely. The Court found the letter was not a payoff statement within the meaning of the statute. The testimony of the expert witnesses and the plain language of the statute support the finding that a payoff statement is a statement that a certain sum of money would need to be paid at closing in exchange for release of a deed of trust. The Brown letter was simply a statement that no money was due to Brown; it did not specify how much was due to Academy, which was the holder of the indebtedness.

Agent argued that the trial court misconstrued section 7.4 of the contract by ruling that Agent had knowledge of a claim or loss stemming from a title report, and its failure to give notice of such a claim or loss caused Underwriter to sustain “actual prejudice.” The Court disagreed. Agent contended that it didn’t know about the claim or loss because parts of the knowledge were held by various employees. The Court found that Agent must be held accountable for the knowledge of its employees. Agent knew and therefore had a duty to report to Underwriter that it was ensuring two different entities as the first priority lien holders with respect to the same parcels of property. Clearly, Underwriter suffered “actual prejudice” as a result of the lack of this knowledge. Had it known of the potential claim in advance, it could have taken proactive steps to mitigate the damages it ultimately had to pay. The judgment was affirmed.

Summary and full case available here.

Colorado Court of Appeals: Defendant Clearly Violated Protection Order When He Was Found by Police at Victim’s Apartment Complex

The Colorado Court of Appeals issued its opinion in People v. Bernard, Jr. on Thursday, May 23, 2013.

Protection Order Violation—Authentication of E-Mails Under CRE 901.

Defendant appealed the judgment of conviction entered following a jury verdict finding him guilty of one count of violating a protection order. The Court of Appeals affirmed the judgment.

On August 11, 2011, a mandatory protection order was entered, naming defendant as the restrained party and the victim and her son as the protected parties. The order restrained defendant from harassing, molesting, intimidating, contacting, or communicating with the victim, and ordered him to vacate victim’s home.

The victim testified that defendant called her on August 15 to wish her a happy birthday and arranged to pick up some of his clothing that she was to leave outside her door. He arrived early on August 16 and banged and knocked on her doors and windows. He told her that if she showed up in court the next day, one of them would not be “making it back,” and that he would kill her if she called the police. She called her mother and then the police.

Defendant testified that he and the victim had spent the entire day together on August 15 and that late that night, they had an argument. He testified that the following morning, he left to smoke a cigarette and then tried to get back into the apartment.

The responding police officers testified that when they arrived, they found defendant in a basement storage room in the victim’s apartment complex. He was arrested and charged with one count of intimidation of a witness and one count of violation of a protection order. He was acquitted of the witness intimidation charge but found guilty and convicted of violating a protection order.

On appeal, defendant argued it was error to admit an e-mail into evidence because it was not properly authenticated. The Court disagreed.

An e-mail was sent to the victim from defendant’s e-mail account on the morning she was scheduled to testify in defendant’s trial, stating, “I told you it wuz us r nobody u getting ready 2 make the biggest mistake my God have mercy on Ur soul rip [sic].” The e-mail was admitted into evidence.

The Court held that e-mails may be authenticated (1) through testimony explaining that they are what they purport to be, or (2) through consideration of distinctive characteristics shown by an examination of their contents and substance in light of the circumstances of the case.

The victim testified the e-mail was a true and accurate copy of the e-mail that defendant had sent to her. She testified as to the time she received it and that she recognized the e-mail address of the sender as one belonging to defendant. Defendant did not contest that the sending e-mail address belonged to him. Based on this testimony, there was no abuse of discretion in admitting it into evidence.

Defendant also argued that the prosecution failed to present evidence proving beyond a reasonable doubt that he was guilty of violating a protection order. The Court disagreed. The record clearly showed that defendant was informed of the contents of the protection order, and the testimony of witnesses and of defendant clearly established a violation of that order. The judgment was affirmed.

Summary and full case available here.

Tenth Circuit: Where Property Held By Trust Was For Benefit of Taxpayer, Foreclosure Of Tax Lien Proper

The Tenth Circuit Court of Appeals published its opinion in United States v. Tingey on Wednesday, May 29, 2013.

The district court permitted the government to foreclose on federal tax liens on a ski cabin (the Ski Cabin) titled in the name of the D.E. Brown Family Trust (Family Trust), whose beneficiaries were Douglas Brown’s wife and children. The taxes were owed by Douglas Brown (Brown) and his wife (together, the Browns), not the trust, but the court found that the Browns were the beneficial owners of the cabin because Brown had a purchase-money resulting trust (PMRT) arising from his having purchased the cabin and then conveyed it to the Family Trust. The district court also held that under federal law, the Family Trust held legal title to the cabin as nominee for the Browns. The trustee of the Family Trust, Robert Tingey, appealed.

Tingey first argued that that the government waived the right to assert that the Browns held the beneficial interest in the cabin. Tingey based his waiver argument on a stipulated order in Brown’s criminal securities-fraud case, which required that the proceeds of certain stock held by the Family Trust be forfeited to the United States as restitution, but lifted any further restraint on remaining trust property. Tingey argued that the government knew of the Family Trust’s claim to the cabin at the time of the stipulation. The Tenth Circuit held that even if “the government was fully aware of the Family Trust’s claims to the cabin, its agreement to the stipulated order did not waive its rights to pursue a tax claim. The order said nothing about tax liability or who had beneficial interests in the Ski Cabin.”

Tingey next argued that the district court erred in concluding that the Family Trust held the cabin in a PMRT for Brown’s benefit. The Tenth Circuit agreed with the district court that clearly Brown paid the purchase price for the cabin before legal title transferred to the Family Trust, thus meeting a threshold requirement for a PMRT.

The court also rejected Tingey’s argument that when an express trust holds legal title, a resulting trust is not possible.

Tingey challenged the district court’s ruling that the government demonstrated by clear and convincing evidence the final requirement for finding a PMRT, that Brown intended to retain the beneficial interest in the Ski Cabin. Brown made note payments out of personal funds, used the property without the trustee’s knowledge, rented the cabin out without the trustee’s involvement, and performed maintenance on the cabin. Additionally, the testimony of Tingey established that Brown set up the trust to shield the cabin from his creditors. The court affirmed the district court’s holding that the Ski Cabin was held by the Family Trust in a PMRT for the benefit of Brown.

Tenth Circuit: Unpublished Opinions, 5/30/13

On Thursday, May 30, 2013, the Tenth Circuit Court of Appeals issued no published opinions and eleven unpublished opinions.

United States v. Cavillo-Arzate

United States v. Bly

United States v. Verasa-Barron

United States v. Abbo

Whitmore v. Parker

Davis v. Workman

United States v. Polly

Goosby v. Trammell

United States v. Crosby

Tucker v. Wilson

Crump v. Wilkinson

No case summaries are provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

Tenth Circuit: Unpublished Opinions, 5/29/13

On Wednesday, May 29, 2013, the Tenth Circuit Court of Appeals issued two published opinions and seven unpublished opinions.

Payne v. Maye

Clay v. Canadian County Jail

Stricker-Campos v. Laramie County District Court

United States v. McDowell

United States v. Wallace

United States v. Fowler

G & C v. Rexam Beverage

No case summaries are provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.