Hutchins v. LA Plata Mountain Resources, Inc., 373 P.3d 582

Background

In 1987 Leadville issued multiple identical convertible debentures secured by one deed of trust; some were later converted or released, leaving several outstanding.
The debentures originally matured October 31, 1989, and had been extended by consent over time until December 31, 1997.
In 2008 Hutchins and Gasper (holders of certain debentures) had documents signed by Leadville that (a) acknowledged the debts, (b) purported to extend maturity dates, and (c) waived defenses; La Plata did not sign those documents.
La Plata sued in 2008 to collect on debentures it held and to foreclose; La Plata’s suit was within the statute of limitations, while Hutchins’s and Gasper’s claims arguably were time-barred absent tolling.
Lower courts held the 2008 documents failed to effectuate a modification because they lacked the two-thirds consenting holders required by the debentures, and therefore did not revive Hutchins’s and Gasper’s claims; the court of appeals rejected the separate-acknowledgment theory.
The Colorado Supreme Court reversed, holding the signed, written, and unqualified acknowledgments in the 2008 documents constituted a new promise to pay that restarted the limitations period regardless of whether the attempted modification succeeded.

Issues

Issue	Hutchins/Gasper (Plaintiffs) Argument	Leadville/La Plata (Defendants) Argument	Held
Whether a signed written acknowledgment in 2008 restarted the statute of limitations on the debentures	The 2008 writings contained a clear, unqualified written acknowledgment by Leadville and therefore implied a new promise to pay, creating a new accrual date	The acknowledgments were part of failed amendment documents and did not revive the debt because the amendment lacked the contractual two-thirds consent	Held: A written, signed, unqualified acknowledgment is effective to create a new promise and restarts limitations, even if contained in attempted amendments
Whether the 2008 documents were valid modifications requiring two-thirds consent	The consent threshold should be calculated by original principal, and signers met the 66 2/3% threshold	The consent provision must be measured by unpaid principal at the time; signers did not meet the required percentage, so modification failed	Held (as to modification): lower courts erred in finding extension via modification; the Court did not adopt alternative principal calculation and focused on acknowledgment doctrine rather than validating the modification
Whether an acknowledgment embedded in an attempted (but invalid) amendment may be effective on its own	The acknowledgment language was separate, unqualified, and therefore effective even if the amendment failed	If the amendment is void, the entire document (including acknowledgment) is void and cannot revive limitations	Held: The acknowledgment stood on its own; failure of the amendment did not nullify a clear, unqualified written acknowledgment signed by the debtor
Effect on foreclosure rights and secured-status priorities	Revival of Hutchins’s/Gasper’s claims would toll limitations for foreclosure tied to those debentures	La Plata argued only it timely filed and is the sole secured creditor because others’ claims expired	Held: Because the acknowledgments revived Hutchins’s/Gasper’s debts, the court remanded for proceedings consistent with that determination (implicating secured-status questions)

Key Cases Cited

Van Diest v. Towle, 179 P.2d 984 (Colo. 1947) (acknowledgment of debt can imply new promise and revive limitations)
Hickerson v. Vessels, 316 P.3d 620 (Colo. 2014) (partial payment or acknowledgment can toll or restart limitations)
Drake v. Tyner, 914 P.2d 519 (Colo. App. 1996) (written acknowledgment can extend limitations when it implies a promise to pay)
Du Bois v. First Nat'l Bank, 96 P. 169 (Colo. 1908) (tolling on debt also tolls statute for foreclosure on mortgage securing that debt)