August 20, 2019

Colorado Court of Appeals: Assets in Revocable Trust are Assets of Settlor and Can Be Sold to Satisfy Creditor Claims

The Colorado Court of Appeals issued its opinion in Independent Bank v. Pandy on Thursday, January 15, 2015.

Foreign Judgment—Domesticated Judgment—Lien—Statute of Limitations—Interlocutory Appeal—Quiet Title.

In August 2010, Independent Bank (Bank) obtained two judgments against Joseph Pandy in a Michigan state court. In April 2012, the Bank domesticated the Michigan judgment in the district court in Grand County, Colorado. It then filed transcripts of the domesticated judgments with the Grand County Clerk and Recorder in January 2013 to obtain a judgment lien against Joseph Pandy’s real property in the county, including the C Lazy U Homesteads. At that time, the Joseph Pandy, Jr. and Elizabeth Pandy Living Trust (Trust) held title to the C Lazy U Homesteads. In March 2014, the Bank filed a “Complaint for Quiet Title and Decree of Foreclosure” against the Pandys in Colorado. The complaint sought a decree that the judgment lien against Joseph Pandy individually was valid against his interest in the Trust. After the court denied the Pandys’ motion to dismiss, the Pandys filed a CAR 4.2 petition for interlocutory appeal.

The Pandys contended that their petition for interlocutory appeal satisfies the requirements of CAR 4.2. Here, if the statute of limitations in CRS § 13-80-101(1)(k) bars the Bank’s complaint, the litigation would be resolved without the need for a trial. Because the issue presented is both case dispositive and presents an unresolved question of law, the Pandys’ petition for interlocutory appeal satisfies the requirements of CAR 4.2.

The Pandys also contended that the three-year statute of limitations in CRS § 13-80-101(1)(k) bars the Bank’s complaint. The three-year statute of limitations is inapplicable to the Bank’s complaint because the Bank was not seeking a judgment. The applicable statute here is CRS § 13-52-102(1), which gives the Bank six years from the date of the Michigan judgment to foreclose on the judgment lien. Because the Bank brought its quiet title and foreclosure action within six years of the Michigan judgment, the action is not precluded by the statute of limitations. Accordingly, the three-year statute of limitations in CRS § 13-80-101(1)(k) does not bar the Bank’s complaint for quiet title on and foreclosure of the Trust’s property. The order was affirmed and the case was remanded for further proceedings.

Summary and full case available here, courtesy of The Colorado Lawyer.

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