“Rather fail with honor than succeed by fraud.” – Sophocles. In this case the attorney for a borrower signed a request for a release of a lender’s deed of trust as “attorney for lender.” Lender later found out and sued, seeking to set aside the release because CRS 38-39-102 voids releases based on a “fraudulent request.” The Court upheld the trial court and reversed the court of appeals by holding that “fraudulent” means proof of actual fraud by a preponderance of the evidence, similar to common law fraud. It did so to fulfill the purpose of the statute: creating certainty, predictability, and relieving public trustees from a duty to inspect releases to determine validity. Here, borrower’s attorney signed for the lender because he had done so before and was under time pressures. It was negligent, not fraudulent. Thus, the later bona fide purchaser obtained title to the property.
Tag Archives: Public Trustee
Dennis Shaw and First Horizon Home Loan Corporation, v. 17 West Mill St, LLC, 2013CO37 (June 24, 2013)
TCF Equipment Finance, Inc. v. Public Trustee for the City and County of Denver, 2013COA8 (January 17, 2013)
Garnishment defined: He owes me money, you owe him money; where’s my money? Here, a Public Trustee held excess funds following a foreclosure sale and redemption. Creditor did not obtain judgment until after the foreclosure, and the redemption period expired. Creditor sought to garnish the excess from the Public Trustee, who claimed the excess funds cannot be garnished. CRS 38-38-111 dictates distribution of excess funds following a foreclosure, and states that after the redemption period for junior lien holders ends, excess funds are paid to the owner. CRCP 103 permits garnishing funds of a judgment debtor held in escrow by a public entity. The court of appeals held the statute did not bar garnishment because Creditor was not a junior lienor, but a judgment creditor. Thus, the funds were subject to garnishment once the Public Trustee determined the excess funds were due to Debtor.