Angela Lea Argo v. Christina T. Hemphill, a/k/a Christina Tara O‘Berto and Dianna K. Hemphill, a/k/a Dianna K. Hemphill-O‘Byrne
No. 21CA0897
Colorado Court of Appeals
September 8, 2022
2022COA104
Otero County District Court No. 19CV30031, Honorable Michael A. Schiferl, Judge
SUMMARY
September 8, 2022
2022COA104
No. 21CA0897, Argo v. Hemphill — Real Property — Nonprobate Transfers on Death — Transfer of Real Property on Death — Vesting of Ownership in Grantee-Beneficiary — Unrecorded Interests
In this property rights case, the division of the court of appeals interprets the notice and recording requirements of
Under
The division holds that the plaintiff‘s unrecorded lifetime lease agreement is unenforceable because the defendants did not have actual notice of it at the time of the owner‘s death and because it was not recorded within four months of the owner‘s death.
Further, the division concludes that the district court‘s findings were insufficient to permit meaningful appellate review of its ruling that the lifetime lease agreement was a spurious document and award of attorney fees and costs to the defendants.
Accordingly, the division (1) affirms the judgment that the lifetime lease agreement is unenforceable; (2) reverses the judgment in favor of two of the defendants on their spurious document counterclaim; (3) reverses the order awarding attorney fees and costs; and (4) remands for further proceedings.
Division VII
Opinion by JUDGE KUHN
Navarro and Hawthorne*, JJ., concur
Announced September 8, 2022
Brunette Law Office, LLC, Stephen A. Brunette, Colorado Springs, Colorado, for Plaintiff-Appellant
Jessica Hoyt, Denver, Colorado, for Defendants-Appellees
*Sitting by assignment of the Chief Justice under provisions of
I. Background and Procedural History
¶ 2 This case involves a property rights dispute over an agricultural property in Otero County. The property belonged to Don William Argo, who died on March 19, 2018, after a lengthy illness. Angela is Don‘s surviving spouse.1 The Hemphills are Don‘s nieces.
¶ 3 In September 2017, Don executed a last will and testament bequeathing the property to the Hemphills upon his death. That same month, Don also executed and recorded a beneficiary deed conveying the property to the Hemphills upon Don‘s death.
¶ 5 Angela contends that she has a leasehold interest in the property. On March 16, 2018 — three days before Don‘s death — Angela and Don executed an agreement granting Angela a lifetime lease for the property. The agreement stated that it “shall supersede the Beneficiary Deed should Don William Argo die. Even though said property is transferred to the new owners upon death, this agreement must be honored.” It further specified that “[u]pon [Angela‘s] death all uses of the land will be then transferred to [the Hemphills].” Neither Don nor Angela recorded the lifetime lease agreement at or shortly after the time it was created.
¶ 6 On August 25, 2018 — more than five months after Don‘s death — Angela personally delivered the lifetime lease agreement to the Hemphills at a family gathering. It is undisputed that the Hemphills did not have notice of the lifetime lease before that date.
¶ 8 On March 15, 2019, Angela recorded the lifetime lease agreement in Otero County.
¶ 9 The next month, Angela filed suit against the defendants, seeking a “complete adjudication of the rights of all parties to this action with respect to the [property]” under
¶ 11 Additionally, the court implicitly found that the lifetime lease agreement is a spurious document, ruled in favor of the Hemphills on their spurious document counterclaim, quieted title to the property in the Hemphills, and ordered the defendants to file any attorney fees requests within twenty-one days of the issuance of the written order.
¶ 13 The court denied Angela‘s post-trial motions in identical written orders that stated, in their entirety, as follows: “Denied. The evidence at trial was that there was no notice of any type within four months of [Don‘s] death.”
¶ 14 After the court denied Angela‘s
II. Analysis
¶ 16 Broadly, Angela asserts that the court erred by (1) finding that the lifetime lease agreement is unenforceable and invalid; (2) finding that the lifetime lease agreement is a spurious document; and (3) awarding attorney fees and costs to the Hemphills. We first address Angela‘s arguments in turn. Then we address the Hemphills’ request for appellate attorney fees and costs.
A. Enforceability of the Lifetime Lease Agreement
¶ 17 Angela raises several interrelated challenges to the court‘s directed verdict, interpretation of
1. Standard of Review and Legal Principles
¶ 18 ”
¶ 20 Statutory interpretation presents a question of law that we review de novo. Fischbach v. Holzberlein, 215 P.3d 407, 409 (Colo. App. 2009). When interpreting a statute, our main goal is to ascertain and effectuate the General Assembly‘s purpose and intent. Town of Vail v. Vill. Inn Plaza-Phase V Condo. Ass‘n, 2021 COA 108, ¶ 11. “In doing so, we consider the entire statutory scheme to give consistent, harmonious, and sensible effect to all of its parts, and we construe words and phrases in accordance with
2. Discussion
¶ 21 Angela contends that the district court‘s interpretation of
a. The District Court‘s Interpretation Did Not Conflict with the Plain Language and Legislative Intent of the Statute
¶ 22 Under
A grantee-beneficiary of a beneficiary deed takes title to the owner‘s interest in the real property conveyed by the beneficiary deed at the death of the owner subject to all conveyances, encumbrances, assignments, contracts, mortgages, liens, and other interests, affecting title to the property, whether created before or after the recording of the beneficiary deed, or to which the owner was subject during the owner‘s lifetime including, but not limited to, any executory contract of sale, option to purchase, lease, license, easement, mortgage, deed of trust, or other lien. The grantee-beneficiary also takes title subject to any interest in the property of which the grantee-beneficiary has either actual or constructive notice.
¶ 24
A person having an interest described in subsection (2) of this section whose interest is not recorded in the records of the office of the clerk and recorder of the county in which the property is located at the time of the death of the owner, shall record evidence or a notice of the interest in the property not later than four months after the death of the owner. The notice shall name the person asserting the interest, describe the real property, and describe the nature of the interest asserted.
¶ 25
Failure to record evidence or notice of interest in the property described in subsection (2) of this section within four months after the death of the owner shall forever bar the person from asserting an interest in the property as against all persons who do not have notice of the interest. A person who, without notice, obtains an interest in the property acquired by the grantee-beneficiary shall take the interest free from all persons who have not recorded their notice of interest in the property or evidence of their interest prior to the expiration of the four-month period.
¶ 26 Together, these provisions unambiguously provide that a grantee-beneficiary takes title to the property subject to a number of different kinds of interests at the time of the owner‘s death. These include both recorded and unrecorded interests. If a grantee-beneficiary has actual notice of an unrecorded interest at the time of the owner‘s death, then the grantee-beneficiary takes title subject to that interest. A grantee-beneficiary also takes title subject to any recorded interests at the time of the owner‘s death.
¶ 27 But an unrecorded interest in the property that the grantee-beneficiary did not have actual knowledge of at the time of the owner‘s death must be recorded within four months of the owner‘s death. If the interest is not recorded within that time period, then
¶ 28 Angela argues that the district court‘s interpretation of the statute is incorrect, but we disagree. Angela‘s arguments selectively use certain language from the statute while disregarding its overall structure. She contends that the language in
¶ 29 Angela heavily relies on secondary sources in her briefing. We find the statute unambiguous, but those materials would bolster our conclusion even if we did not. Angela points to a pair of 2005 Colorado Lawyer articles. The authors describe themselves as Colorado Bar Association members of a joint committee that apparently drafted the beneficiary-deed legislation. In the articles,
as to interests in the property that have not been recorded with the clerk and recorder, such interests are subject to the requirement that they must be recorded within four months after the death of the owner. After that deadline, the grantee-beneficiary‘s title will be deemed free and clear of any such unrecorded interests for which the grantee-beneficiary had no actual notice prior to the grantor-owner‘s death. This illustrates yet another intent of the drafters: to have the record title capable of establishing all interests in the property to which the grantee-beneficiary‘s interest is to be subject determinable at the end of the relatively short period of four months after the death of the owner.
Carl G. Stevens & James G. Benjamin, Beneficiary Deeds in Colorado — Part II: Practical Applications, 34 Colo. Law. 103, 104 (June 2005) (footnotes omitted).
¶ 30 The Hemphills took title to the property subject to other unrecorded interests of which they had actual notice at the time of Don‘s death. Evidence or notice of any unrecorded interests had to be recorded within the four-month period following his death. Providing notice to the Hemphills after that time is insufficient and
b. The District Court‘s Interpretation Does Not Conflict with the Commonly Understood Meanings of Actual and Constructive Notice
¶ 31 Angela contends that the district court‘s interpretation “renders meaningless the well-established meaning of the ‘actual notice’ and ‘constructive notice’ exceptions incorporated in the statute, by narrowing these exceptions to a four-month period after death.” We disagree.
¶ 32 The statute does not change the well-settled definitions of these terms. See Martinez v. Affordable Hous. Network, Inc., 123 P.3d 1201, 1206 (Colo. 2005) (defining actual and constructive notice). Instead, it imposes time limits for a holder of a property interest to record the interest or to provide notice of the interest to a grantee-beneficiary and provides that failure to do so will render the interest unenforceable.
¶ 33 Nor do we perceive any way in which the district court misapplied or misinterpreted these phrases. The district court‘s findings identify both when Angela gave the Hemphills actual notice
c. Angela‘s Statute of Limitations Argument is Unpreserved
¶ 34 Angela contends that the court‘s interpretation of
¶ 35 Angela first raised this argument in her second
d. The Lifetime Lease Agreement is Unenforceable
¶ 36 We conclude that the lifetime lease agreement is unenforceable under
¶ 37 It is undisputed that the Hemphills did not have notice of Angela‘s lifetime lease agreement at the time of Don‘s death, which is when title in the property vested in them. And it is also undisputed that Angela did not record the lifetime lease agreement until nearly a year after his death. Angela advances several arguments based on Don and Angela‘s intent in creating the agreement and whether Angela acted in good faith in recording it. But under
B. The Record is Insufficient To Determine Whether the Lifetime Lease Agreement is a Spurious Document
¶ 38 Angela also contends that the court erred by determining that the lifetime lease agreement is a spurious document. One of her arguments is that the court made insufficient findings to enable appellate review. We agree with that contention.
1. Standard of Review and Legal Principles
¶ 39 We review de novo whether a recorded document is a spurious document, as defined by
¶ 40 “The spurious liens and documents statute protects property owners from frivolous claims used to cloud title as a means of protest or harassment.” Better Baked, LLC v. GJG Prop., LLC, 2020 COA 51, ¶ 17. The statute allows a person “‘whose real . . . property is affected by a recorded or filed . . . document’ to petition for the release of a ‘spurious document.‘” Id. (quoting
2. Additional Background and Discussion
¶ 42 The court did not explicitly find that the lifetime lease agreement is a spurious document. And it did not make any findings related to whether the lease agreement is a spurious document during its oral ruling at trial. Instead, it ordered the defendants to prepare and file a draft order, which it appears to have approved without modification. The final order states only that “[j]udgment is entered in favor of the Hemphill Defendants on their Claims A and B. Title to the Subject Property is hereby quieted to the Hemphill Defendants who have fee simple title to the
¶ 43 The post-trial motions proceedings do not shed more light on this issue. In its order denying Angela‘s first
¶ 44 But the lifetime lease agreement isn‘t spurious just because Angela‘s underlying claims failed. See Better Baked, ¶ 20. A spurious document is “any document that is forged or groundless, contains a material misstatement or false claim, or is otherwise patently invalid.”
¶ 46 The judgment and decree quieting title does not explain the statutory basis for finding the lease agreement to be a spurious document and does not contain specific findings that would provide insight into the court‘s reasoning and the basis for its decision. The oral ruling also does not contain any discussion on this issue. We therefore conclude that this portion of the judgment does not permit meaningful appellate review. In re Marriage of Aldrich, 945 P.2d 1370, 1379 (Colo. 1997). We reverse this portion of the judgment and remand it to the district court for further proceedings.
C. Attorney Fees and Costs
¶ 47 Angela next contends that the court erred by awarding attorney fees and costs to the Hemphills. She contends the court‘s order contains inadequate findings and challenges its ultimate conclusion that the Hemphills were entitled to attorney fees and costs. We agree that the court‘s findings are inadequate on this issue.
¶ 48 In its entirety, the court‘s order states as follows:
THE COURT, having reviewed Defendants’ Motion for Attorney Fees and Costs, the Court‘s file, any response thereto, and having been fully advised on the premises, does hereby GRANT the Motion and Award Defendants their attorney fees and costs from and against the Plaintiff in the amount of $36,318.20, plus interest at the statutory rate until paid in full.
¶ 49 The order — which does not list the statutory basis for the award and does not permit us to understand the court‘s reasoning — also “does not permit meaningful appellate review.” Aldrich, 945 P.2d at 1379. We therefore reverse the order and remand to the district court for further proceedings.
¶ 50 On remand, based on our holding in Part II.B, supra, the district court should first make factual findings and determine
¶ 51 The court may also consider whether the Hemphills are entitled to attorney fees and costs under
¶ 52 In conducting this analysis, the court must make specific findings as dictated by
D. Appellate Attorney Fees and Costs
¶ 53 Finally, the Hemphills request appellate attorney fees and costs under
¶ 54 Our conclusions in Parts II.B and II.C, supra, that the orders below contain insufficient findings for appellate review demonstrate that Angela‘s arguments on those issues do not lack substantial justification. And although we disagree with Angela‘s interpretation of
III. Conclusion
¶ 55 We reverse the district court‘s judgment on the Hemphills’ first counterclaim and the order awarding attorney fees and costs to the Hemphills. We remand for further proceedings consistent with this opinion on these two issues.
¶ 56 Based on our holding that the lifetime lease agreement is unenforceable, we affirm the district court‘s dismissal of Angela‘s claims against the Hemphills and Rein and its judgment quieting title to the property in the Hemphills in all other regards.
JUDGE NAVARRO and JUDGE HAWTHORNE concur.
