Janicek v. Obsideo, LLC
2011 Colo. App. LEXIS 2036
Colo. Ct. App.2011Background
- Homeowners executed a first deed of trust with a lender who waived homestead rights in that instrument; homeowners also executed a second deed of trust for Snavely which did not contain a homestead waiver.
- Foreclosure of the first deed of trust occurred; prior to sale, Snavely sold the note securing the second deed to Obsideo.
- Public trustee sale produced excess proceeds totaling $24,769.71 after the winning bid; Obsideo outbid at sale and later attempted redemption.
- Obsideo redeemed the property but paid two days late per diem interest ($99.56); the public trustee held the excess proceeds pending court order.
- Trial court held homeowners waived homestead rights in the first deed and were not entitled to homestead exemption; Obsideo entitled to excess proceeds up to the amount of the second-deed note; Snavely sought attorney fees which the court denied.
- homeowners appealed challenging homestead priority, strict redemption compliance, and equity defenses; Snavely cross-appealed for attorney fees; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the homestead exemption waived for junior lienholders under 38-41-212(1)? | Janiceks contend second deed lacks waiver and preserves homestead rights. | Obsideo argues 38-41-212(1) applies, binding redemption free of homestead rights due to first-deed waiver by homeowners. | 38-41-212(1) applies; redemption by Obsideo under the first deed takes property free of homestead rights. |
| Do homeowners have standing to challenge Obsideo's redemption? | Janiceks argue they may challenge redemption to recover excess proceeds. | Obsideo contends homeowners lack injury and thus no standing. | Homeowners lack standing to challenge redemption. |
| Do equitable doctrines bar Obsideo from receiving excess proceeds? | Equitable doctrines could bar Obsideo from profit due to alleged improper conduct. | Equitable defenses do not create a right to opposite recovery. | Equitable estoppel, unclean hands, and judicial estoppel do not apply to create recovery for homeowners. |
| Did Obsideo's redemption compliance merit striking the certificate to entitle homeowners to excess proceeds? | Late payment of per diem interest undermines validity of certificate. | Compliance deemed sufficient; standing issue controls outcome. | Standing resolved against homeowners; no reversal for strict compliance. |
| Was Snavely entitled to attorney fees on appeal and in the trial court? | Snavely contends fees due for frivolous or vexatious action. | Court found claims not substantially frivolous and denied fees. | Trial court’s denial of attorney fees affirmed; appeal for fees denied. |
Key Cases Cited
- Patterson v. Serafini, 187 Colo. 209, 532 P.2d 965 (Colo. 1974) (excess proceeds and homestead rights under prior lienholder redemption)
- Howell v. Farrish, 725 P.2d 9 (Colo. App. 1986) (redemption rights not governed by execution; junior lien redemption context)
- City Ctr. Nat'l Bank v. Barone, 807 P.2d 1251 (Colo. App. 1991) (junior lien creditors may redeem without homestead exemption)
- Frank v. First Nat'l Bank, 653 P.2d 748 (Colo. App. 1982) (waiver of homestead rights limited to scope of senior instrument prior to 38-41-212(1))
- Osborn Hardware Co. v. Colo. Corp., 32 Colo. App. 254, 510 P.2d 461 (Colo. App. 1973) (redemption context; execution vs. redemption distinctions)
- Titan Indem. Co. v. Travelers Prop. Cas. Co., 181 P.3d 303 (Colo. App. 2007) (contract interpretation; ambiguity standard is law question)
- Hamon Contractors, Inc. v. Carter & Burgess, Inc., 229 P.3d 282 (Colo. App. 2009) (frivolousness standard for attorney fees)
- Cherokee Metro. Dist. v. Upper Black Squirrel Creek Designated Ground Water Mgt. Dist., 247 P.3d 567 (Colo. 2011) (abuse of discretion standard for fee awards)