May 19, 2019

Colorado Court of Appeals: Tender of Funds in Satisfaction of Lien Before Redemption Period Must Be Accepted by Creditor

The Colorado Court of Appeals issued its opinion in Mortgage Investment Enterprises, LLC v. Oakwood Holdings, LLC on Thursday, July 14, 2016.

Foreclosure—Lien—Redemption.

The debtors purchased the property at issue and subsequently defaulted on their obligation to pay monthly fees to the Kimblewyck Village Owners Association (Kimblewyck). Kimblewyck filed a lien against the property. The property was also encumbered by (1) a lien filed by the Fox Run Owners Association and (2) two judgments entered in favor of Community Management Association, Inc. (CMA). Kimblewyck obtained a judgment and decree of foreclosure. Mortgage Investments Enterprises LLC (Mortgage Investments) was the successful bidder at the foreclosure sale. On the day before the foreclosure sale, Oakwood Holdings, LLC (Oakwood) purchased the Fox Run lien and both CMA judgments. Oakwood subsequently filed notices of intent to redeem the Fox Run lien and one of the CMA judgments. Mortgage Investments tendered, on behalf of the debtor, pursuant to a valid power of attorney, lien satisfaction payments to Oakwood. Although Oakwood’s period to redeem had not yet begun, it refused to accept the payments. Mortgage Investments filed a complaint for a declaratory judgment that Oakwood was required to accept Mortgage Investments’ tenders on behalf of the debtor. Oakwood subsequently redeemed the property, and the district court granted Oakwood’s motion for summary judgment.

On appeal, Mortgage Investments argued that the district court erred in concluding that Oakwood had no duty to accept tender of payment in satisfaction of its liens. Prior to the start of Oakwood’s period to redeem and before it tendered redemption funds, Oakwood had a duty to accept Mortgage Investments’ tender of payment, on behalf of the debtor, in satisfaction of the lien Oakwood sought to redeem. The district court’s judgment was reversed and the case was remanded with directions to enter summary judgment in favor of Mortgage Investments.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Maintenance Awards Exempt from Attorney Charging Liens

The Colorado Court of Appeals issued its opinion in In re Marriage of Dixon v. Samuel J. Stoorman & Associates PC on Thursday, July 16, 2015.

Charging Lien—Maintenance—Attorney Fees.

Samuel J. Stoorman & Associates PC (law firm) sought to enforce its lien against the maintenance payments that husband was obligated to pay to the law firm’s former client (wife). The law firm had represented wife in the dissolution action giving rise to husband’s maintenance obligation. The trial court determined that the maintenance payments were exempt from enforcement of the attorney’s lien.

On appeal, the law firm contended that the trial court erred in finding that the law firm’s attorney’s lien could not be enforced against husband’s spousal maintenance obligations. A charging lien automatically attaches to the fruits of the attorney’s representation of the client, to the extent of the attorney’s reasonable fees remaining due and unpaid. An attorney may immediately enforce the lien against the client once judgment in favor of the client is entered. Maintenance payments and obligations are exempt from enforcement of the charging lien. Accordingly, an attorney’s charging lien may not be enforced against a court-ordered spousal maintenance obligation or payment. The trial court’s denial of the law firm’s motion to enforce the lien against husband’s maintenance obligations to wife was affirmed. Nevertheless, the law firm’s position did not lack substantial justification because the question whether a charging lien may be enforced against spousal maintenance payments or obligations had not been decided at the time of the law firm’s motion. Consequently, the award of attorney fees and costs to husband was reversed and husband’s request for an award of attorney fees and costs incurred on appeal was denied.

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

Colorado Court of Appeals: No Error in Trial Court’s Calculation of Medicaid Lien

The Colorado Court of Appeals issued its opinion in State of Colorado Department of Health Care Policy & Financing v. S.P. on Thursday, June 18, 2015.

Accident—Medicaid—Settlement—Statutory Lien—Calculation.

S.P. was injured in a snowboarding accident at a ski area. As a result of her injuries, she is a paraplegic and will require ongoing medical care and assistance for the rest of her life. She applied for Medicaid assistance and was accepted. Over the course of several years, Medicaid paid $142,779 for her accident-related medical care. S.P. sued the ski area, alleging negligence, and eventually settled the case for $1 million. Medicaid was entitled to a statutory lien against the settlement for repayment of the medical assistance it had provided. The settlement agreement, however, did not specify the portion of the settlement amount attributable to medical expenses, as opposed to other categories of damages. The Medicaid administration agency sued S.P. to enforce its lien.

On appeal, both parties argued that the trial court incorrectly calculated the amount S.P. was required to repay to Medicaid. Colorado has not enacted statutory, administrative or other procedures for apportioning third-party settlements for Medicaid lien purposes. The trial court applied a proportional allocation formula to determine what amount out of S.P.’s settlement funds should be considered compensation for past medical expenses. The trial court also relied on an objective indication of S.P.’s total past medical expenses that was supported by the record.

The Court of Appeals held that the decision to rely on the amount paid rather than the amount billed by Medicaid was not clearly erroneous, and that the trial court’s method in this case was neither unreasonable nor arbitrary. The trial court also did not err in applying its formula to the gross settlement amount and properly took attorney fees into consideration in reducing the amount owed to Medicaid. The judgment was affirmed and the case was remanded to the trial court to release the funds held in its registry pursuant to the judgment.

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