Independent Bank v. Pandy

Citations: 383 P.3d 64; 2015 COA 3; 2015 Colo. App. LEXIS 5; 2015 WL 188988Docket: Court of Appeals No. 14CA1733

Court: Colorado Court of Appeals; January 14, 2015; Colorado; State Appellate Court

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Joseph T. Pandy, Elizabeth Pandy, and the Joseph Pandy Jr. Elizabeth Pandy Living Trust petitioned for interlocutory review of the district court's denial of their motion for judgment on the pleadings. The court granted the petition, affirmed the lower court's decision, and remanded for further proceedings. In 2010, Independent Bank obtained two judgments against Joseph Pandy in Michigan, which were domesticated in Colorado in 2012. The Bank sought to enforce a judgment lien against Pandy's interest in the C Lazy U Homesteads, owned by the Trust, through a foreclosure complaint filed in 2014. The Pandys argued that the complaint was barred by a three-year statute of limitations, but the district court determined this statute did not apply since the complaint aimed to enforce a domesticated judgment rather than obtain a new one. Instead, the court ruled that a six-year period from the date of the Michigan judgment applied for enforcing the lien. The Pandys subsequently filed for an interlocutory appeal, which the court found met the criteria set forth in C.A.R. 4.2, allowing for review due to the potential for a more orderly litigation process and the presence of unresolved legal questions.

No unified definition of 'controlling' exists within the court for a C.A.R. 4.2 petition; its determination is context-specific, influenced by factors such as whether the issues are potentially case-dispositive. If the statute of limitations in section 13-80-101(l)(k) precludes the Bank’s complaint, the case could be resolved without trial, making the issue case-dispositive and warranting immediate review. An incorrect ruling on this matter would necessitate reversing a final judgment, thereby underscoring its controlling nature. 

The issue also represents an unresolved legal question, as no Colorado appellate decision has addressed section 13-80-101(l)(k) or its purported conflict with section 13-52-102(1). Consequently, the Pandys' petition for interlocutory appeal meets C.A.R. 4.2 requirements. 

The Pandys argue that the three-year statute of limitations in section 13-80-101(l)(k) bars the Bank’s complaint. However, the analysis will follow a de novo review of statutory interpretation, starting with the statute's plain language. Relevant Colorado statutes include section 13-80-101(l)(k), section 13-53-103, and section 13-52-102(1). Under section 13-80-101(l)(k), civil actions accruing outside Colorado are subject to a three-year limitation if the foreign jurisdiction's limit exceeds Colorado’s. In Michigan, quiet title actions must be initiated within fifteen years, and noncontractual money obligations have a ten-year limit.

The Uniform Enforcement of Foreign Judgments Act (UEFJA) allows for the collection of authenticated foreign judgments in Colorado as if they were domestic judgments, providing a simplified process for domesticating such judgments. Judgment creditors can file these judgments with the clerk of any Colorado court that would have had jurisdiction if the action had originated there. Once filed, the foreign judgment gains the same legal effect and is subject to the same enforcement procedures as a domestic judgment. Importantly, this filing does not constitute an action for statute of limitations purposes; it serves merely to convert a foreign judgment into a domestic one.

A domesticated foreign judgment does not automatically create a lien on a debtor’s real property. To establish such a lien, a creditor must file a transcript of judgment in the relevant county, which then attaches as a lien to all real estate owned by the debtor in that county. In Colorado, a judgment can be executed up to twenty years after its entry, but judgment liens expire six years after the judgment is entered. For foreign judgments domesticated under the UEFJA, the six-year period starts from the original judgment date.

In this context, the Bank obtained a judgment against Joseph Pandy in Michigan in August 2010, which it domesticated in Colorado in April 2012. The Bank recorded a transcript of the domesticated judgment in Grand County in January 2013, establishing a statutory judgment lien on Pandy’s property that would remain effective until August 2016. While the Pandys acknowledge the validity of the Bank's statutory lien on Joseph Pandy’s real property, they contend that because the C Lazy U Homesteads title is held by a Trust, the lien applies solely to Joseph Pandy's individual property, excluding the Trust’s assets.

The Pandys argue that, based on Walker v. Staley, judgment creditors cannot foreclose on property held by a third party and assert that the Bank must pursue a creditor's suit against the Trust, which would be barred by the three-year statute of limitations in section 13-80-101(l)(k). However, it is concluded that this statute does not apply to the Bank's complaint, as it does not prevent the Bank from collecting on its judgment. Instead, section 13-52-102(1) allows the Bank six years to foreclose on the judgment lien, and the Bank's action was initiated within this timeframe.

The Bank contends that the Trust is revocable, making its assets subject to the creditors of its settlors, Joseph and Elizabeth Pandy. If the Trust is indeed revocable, some assets may be considered Joseph Pandy's individual assets, allowing the Bank to collect on its judgment. The court indicates that the Bank's foreclosure and quiet title action are attempts to enforce its judgment and do not change the record ownership of the property.

Ultimately, the court affirms the order, determining that the three-year statute of limitations does not bar the Bank's complaint regarding the Trust's property, and remands the case for further proceedings. Judges Webb and J. Jones concur.