Red Flower, Inc. v. McKown
2015 COA 160
| Colo. Ct. App. | 2016Background
- McKown owned 320 acres of unimproved farmland; Don Lohrey farmed it under an oral sharecrop arrangement and visited periodically.
- McKown failed to pay county property taxes; Red Flower bought the tax liens in 2007 and applied for treasurer’s deeds in August 2010.
- The Baca County Treasurer published notice in September 2010 and issued treasurer’s deeds in December 2010 after unsuccessful attempts to notify McKown.
- Red Flower sought quiet title; McKown challenged the deeds, asserting inadequate notice to both the owner and the occupant (Lohrey), who had been in actual possession or occupancy.
- The district court held the treasurer must provide actual (limitless) notice to occupants and voided the deeds; the Court of Appeals rejected that construction, affirmed voiding the real-property deed for deficient publication, and remanded on the mineral deed to determine whether the treasurer made a diligent inquiry to locate and notify Lohrey.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 39-11-128(1)(a) requires actual (unlimited) notice to persons "in actual possession or occupancy" | Red Flower: statute should be read to avoid imposing an extraordinary burden; no actual-notice requirement beyond reasonable efforts | McKown: occupants are entitled to actual notice; treasurer must take any steps necessary to notify occupants | Court: "diligent inquiry" qualifier does not apply grammatically, but statute does not require limitless actual notice; occupants on the premises may be served there; if occupant is off-premises, treasurer must use diligent inquiry and reasonable efforts to effectuate notice |
| Whether Lohrey (the farmworker) was entitled to a diligent-inquiry effort because he was off the premises | Red Flower: treasurer's efforts satisfied notice requirements as matter of law | McKown: treasurer failed to locate and notify Lohrey | Held: factual issue whether treasurer’s efforts constituted a "diligent inquiry" — remand on mineral deed to decide under case-specific standard |
| Whether the publication requirement in § 39-11-128(1)(b) was satisfied for the real-property deed | Red Flower: publication satisfied the statute (three notices in Sept. 2010 were sufficient) | McKown: publication was deficient because deed issued less than three months after last notice | Held: publication was statutorily deficient (not within 3–5 month window); real-property deed voidable and properly set aside |
| Effect of deficient notice on validity of the treasurer's deed | Red Flower: any defect is harmless or previously decided | McKown: defect renders deed invalid | Held: defective publication is procedural (not jurisdictional); deed is voidable — set aside here as within statute of limitations |
Key Cases Cited
- Lake Canal Reservoir Co. v. Beethe, 227 P.3d 882 (Colo. 2010) (interpreting § 39-11-128 notice scheme and distinguishing categories of persons entitled to notice)
- Jones v. Flowers, 547 U.S. 220 (U.S. 2006) (due-process principle that notice must be reasonably calculated to inform)
- Schmidt v. Langel, 874 P.2d 447 (Colo. App. 1993) (section construed to require efforts consistent with minimum due process; extraordinary efforts not required)
- Brown v. Davis, 83 P.2d 326 (Colo. 1938) (distinguishing actual physical occupancy from constructive possession for notice purposes)
- People v. Cooper, 27 P.3d 348 (Colo. 2001) (statutory interpretation starts with plain language)