Oakwood Holdings, LLC v. Mortgage Investments Enterprises, LLC
2018 CO 12
Colo.2018Background
- Senior lienor foreclosed; Mortgage Investments bought the property at a sheriff's sale on September 25, 2014.
- The day after the sale Mortgage Investments obtained a limited power of attorney from the prior owner authorizing payment of junior liens.
- Oakwood purchased the junior association liens and timely filed notices of intent to redeem on October 1 and October 6, 2014 under § 38-38-302.
- Mortgage Investments sent cashier's checks purporting to pay Oakwood’s liens on behalf of the prior owner; Oakwood refused to accept the payments.
- Mortgage Investments sued for a declaratory judgment that its payoffs were valid and that Oakwood could not redeem; district court entered summary judgment for Oakwood; the court of appeals reversed; the Colorado Supreme Court granted certiorari.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a junior lienor who timely files a § 38-38-302 notice of intent to redeem must accept a payoff tendered by a certificate-of-purchase holder acting for the prior owner after the foreclosure sale | Oakwood: once it complied with § 38-38-302 (timely notice), it was entitled to redeem and had no duty to accept a tendered payoff | Mortgage Investments: as certificate-of-purchase holder (with power of attorney), it could pay off junior liens on behalf of the prior owner before Oakwood tendered redemption funds, thereby preventing redemption | Court: reversed court of appeals — under § 38-38-302 a junior lienor who timely filed its notice is entitled to redeem and has no obligation to accept a post-sale payoff tendered by a certificate-of-purchase holder acting for the prior owner |
Key Cases Cited
- Plute v. Schick, 71 P.2d 802 (Colo. 1937) (junior lienholder refused payoff and sought redemption; court applied equitable principles under earlier statutory regime)
- WYSE Financial Servs., Inc. v. Nat’l Real Estate Inv., LLC, 92 P.3d 918 (Colo. 2004) (junior lienholder that complied with statutory redemption requirements was entitled to redeem despite later satisfaction attempts)
- Johnson v. Smith, 675 P.2d 307 (Colo. 1984) (right of redemption is statutory and must be exercised in strict compliance with statutory terms)
- Sant v. Stephens, 753 P.2d 752 (Colo. 1988) (certificate of redemption assigns purchaser’s interest but remains subject to others’ redemption rights)