COLORADO COURT OF APPEALS                                      2016COA111

Court of Appeals No. 15CA1046
Adams County District Court No. 14CV31889
Honorable Mark D. Warner, Judge


Mortgage Investments Enterprises LLC,

Plaintiff-Appellant,

v.

Oakwood Holdings, LLC,

Defendant-Appellee.


                       JUDGMENT REVERSED AND CASE
                        REMANDED WITH DIRECTIONS

                                 Division III
                         Opinion by JUDGE BOORAS
                       Graham and Richman, JJ., concur

                          Announced July 14, 2016


Murr Siler & Accomazzo, P.C., Joseph A. Murr, Maris S. Davies, Denver,
Colorado, for Plaintiff-Appellant

Sweetbaum Sands Anderson PC, Geoffrey P. Anderson, Reagan Larkin, Denver,
Colorado; Navaro & Associates LLC, Steven Navaro, Castle Rock, Colorado for
Defendant-Appellee
¶1    Plaintiff, Mortgage Investments Enterprises LLC (Mortgage

 Investments), appeals the district court’s order granting

 defendant’s, Oakwood Holdings, LLC (Oakwood), motion for

 summary judgment. We reverse the district court’s judgment and

 remand the case with directions.

                             I.   Background

¶2    This case involves a dispute regarding the foreclosure and

 redemption processes in Colorado. Thus, to better understand the

 facts of this case, it is helpful to first provide a brief overview of the

 foreclosure and redemption procedures.

                    A. Foreclosure and Redemption

¶3    The foreclosure process protects a creditor’s right to

 repayment of debts, including homeowners’ association liens and

 monetary judgments. Specifically, section 38-38-101, C.R.S. 2015,

 enables a creditor to obtain a judgment and decree of foreclosure

 against a debtor and have the subject property auctioned at a

 foreclosure sale. The creditor can then use the proceeds of the sale

 to satisfy the unpaid debts.

¶4    Foreclosure is not without consequences, however,

 particularly for creditors whose liens are subordinate to — i.e.,


                                      1
 junior to — a lien being foreclosed (junior lienors). Indeed, where

 multiple liens are filed against the foreclosed property, foreclosure

 of a senior lien generally extinguishes all junior liens. § 38-38-501,

 C.R.S. 2015; see also Ferguson Enters., Inc. v. Keybuild Sols., Inc.,

 275 P.3d 741, 745 (Colo. App. 2011).

¶5    Accordingly, to protect creditors’ entitlement to payment, the

 General Assembly has provided them with the right to redeem

 foreclosed property on which they have a junior lien.

 See § 38-38-302, C.R.S. 2015. This right to redeem refers to a

 process by which title to the previously foreclosed property vests

 with the redeeming junior lienor, rather than with the purchaser at

 the foreclosure sale (the certificate of purchase holder), if (1) the

 junior lienor follows the required statutory procedures, including

 filing a notice of intent to redeem; (2) the junior lienor pays, within

 its statutory period for redemption, the required redemption

 amount; and (3) no other, more junior lienors exercise their

 subsequent right of redemption. See id.; see also WYSE Fin. Servs.,

 Inc. v. Nat’l Real Estate Inv., LLC, 92 P.3d 918, 921-22 (Colo. 2004).

¶6    With respect to the timing for redemption, the “junior lienor

 having the most senior recorded lien” has the first opportunity to


                                     2
 redeem, which begins “[n]o sooner than fifteen business days” and

 ends “nineteen business days” after the foreclosure sale.

 § 38-38-302(4)(a). Each subsequent junior lienor then has five

 business days to redeem from the previous lienor’s redemption.

 § 38-38-302(4)(b)(I).

¶7    Prior to 2008, owners of foreclosed property also had the right

 to redeem from a foreclosure sale. Ch. 275, sec. 2, § 38-38-302,

 1990 Colo. Sess. Laws 1664-65. Effective in 2008, however, the

 General Assembly eliminated that right. See Ch. 305, sec. 21,

 § 38-38-302, 2006 Colo. Sess. Laws 1467. Under the current

 scheme, only junior lienors have the right to redeem. See

 § 38-38-302.

                            B. The Facts

¶8    Turning, now, to the facts of this case, the debtors purchased

 a home in Adams County (the property) in 2006. That same year,

 they defaulted on their obligation to pay monthly fees to the

 Kimblewyck Village Owners Association (Kimblewyck). Kimblewyck

 filed a lien against the property in December 2006.

¶9    In addition to the Kimblewyck lien, the property was also

 encumbered by (1) a lien filed by the Fox Run Owners Association


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  and (2) two judgments entered in favor of Community Management

  Association, Inc. (CMA).

¶ 10   In May 2014, Kimblewyck obtained a judgment and decree of

  foreclosure, and the property was auctioned at a sheriff’s sale on

  September 25, 2014. Mortgage Investments was the successful

  bidder at the foreclosure sale, so the Adams County Sheriff issued

  Mortgage Investments a certificate of purchase.

¶ 11   On the day before the foreclosure sale, Oakwood purchased

  the Fox Run lien and the two CMA judgments.1

¶ 12   And, on the day after the foreclosure sale, Mortgage

  Investments obtained a valid power of attorney from the debtor,

  which authorized Mortgage Investments to pay the Fox Run lien

  and the CMA judgments.

¶ 13   On October 1, 2014, within eight business days after the sale,

  pursuant to section 38-38-302(1)(d), Oakwood filed a notice of

  intent to redeem the Fox Run lien so that it could acquire title to

  the property. On October 7, 2014, Mortgage Investments tendered,

  on behalf of the debtor, pursuant to the power of attorney, payment

  1The parties dispute the exact timing of Oakwood’s purchase.
  However, this factual dispute has no effect on our resolution of the
  case.

                                    4
  to Oakwood in satisfaction of the Fox Run lien. Although

  Oakwood’s period to redeem had not yet begun, it refused to accept

  payment.

¶ 14   On October 6, 2014, Oakwood filed a notice of intent to

  redeem one of the CMA judgments. On October 15, 2014, before

  Oakwood’s redemption period had commenced, Mortgage

  Investments again tendered payment to Oakwood in satisfaction of

  the judgment. And, again, Oakwood rejected the payment, despite

  the fact that its redemption period had not yet begun.

¶ 15   On October 15, 2014, Mortgage Investments filed a complaint

  seeking a declaratory judgment that Oakwood was required to

  accept Mortgage Investments’ tenders on behalf of the debtor.

  Mortgage Investments also filed a motion for a temporary

  restraining order and preliminary injunction to enjoin Oakwood

  from redeeming.

¶ 16   The district court granted the request for a temporary

  restraining order and later held a hearing on Mortgage Investments’

  motion for a preliminary injunction. Ultimately, on November 10,

  2014, the court denied Mortgage Investments’ request for a




                                   5
  preliminary injunction. On November 20, 2014, Oakwood tendered

  redemption funds and received a sheriff’s deed to the property.

¶ 17     The parties later filed motions for summary judgment on the

  issue of whether Mortgage Investments could pay off, before the

  redemption period began, the lien and judgments Oakwood had

  purchased.

¶ 18     As relevant here, Mortgage Investments contended that it

  tendered payment in satisfaction of the lien and judgments before

  Oakwood’s period for redemption had begun and before Oakwood

  tendered redemption funds. Thus, Mortgage Investments argued

  that under WYSE, 92 P.3d at 921-22, Oakwood had not yet

  accomplished redemption. Relying on Osborn Hardware Co. v.

  Colorado Corp., 32 Colo. App. 254, 258, 510 P.2d 461, 463 (1973),

  Mortgage Investments asserted that Oakwood therefore had a duty

  to “accept the tender and to assist in satisfaction of the judgment.”

¶ 19     In relevant part, Oakwood’s response contended that

        Mortgage Investments “knew that sufficient funds were already

         being held by the Court Registry to satisfy the liens held by

         Oakwood as a result of the overbid proceeds from [the

         foreclosure] sale”;


                                      6
        Osborn is inapplicable because that case was decided before

         the General Assembly eliminated a debtor’s right to post-

         foreclosure redemption in 2008;

        Oakwood “had already established its choate right of

         redemption prior to [Mortgage Investments’] tender by filing its

         Notice of Intent to Redeem”; and

        Oakwood was not required to accept Mortgage Investments’

         tender on behalf of the debtors because, under WYSE, a

         certificate of purchase holder cannot extinguish a junior

         lienor’s right to redeem.

¶ 20     The district court granted summary judgment in favor of

  Oakwood, concluding that Oakwood was not required to accept

  Mortgage Investments’ tender of payment on behalf of the debtor.

  Specifically, the court concluded that

        cases standing for the proposition that a debtor has a right to

         pay judgments and to prevent redemption were inapplicable

         because they were decided before the General Assembly




                                      7
      eliminated a debtor’s post-foreclosure right to redeem in

      2008;2

     the property was sold at the foreclosure sale on September 25,

      2014, and Mortgage Investments “did not seek to satisfy

      [Oakwood’s] outstanding judgment and liens until October 14,

      2014,” so “to any extent [it] was acting ‘in the shoes of the

      debtor’ under power of attorney, it failed to exercise the

      debtor’s rights within the statutory redemption period”;3

     “the General Assembly has not taken affirmative action to give

      a holder of a [c]ertificate of [p]urchase the right to purchase

      recorded debts against the property to frustrate redemption by

      the holder or assignee of the debts recorded on the property”;

      and




2 The district court did not cite or address Mortgage Investments’
reliance on Osborn Hardware Co. v. Colorado Corp., 32 Colo. App.
254, 258, 510 P.2d 461, 463 (1973).
3 The “statutory redemption period” to which the trial court was

referring is unclear. As the trial court acknowledged, the General
Assembly eliminated property owners’ post-foreclosure redemption
rights effective in 2008. See Ch. 305, sec. 21, § 38-38-302, 2006
Colo. Sess. Laws 1467. Moreover, based on our review of the
record, Mortgage Investments tendered payment in satisfaction of
the liens on October 7, 2014, and October 15, 2014.

                                    8
        it could find nothing in the foreclosure scheme that would give

         Mortgage Investments the “statutory right” to force Oakwood

         “to accept the tender.”

            II.   Standard of Review and Summary Judgment

¶ 21     We review a district court’s grant of summary judgment de

  novo. Armed Forces Bank, N.A. v. Hicks, 2014 COA 74, ¶ 20.

¶ 22     “Summary judgment is appropriate when the pleadings and

  supporting documents clearly demonstrate no issue of material fact

  exists, and the moving party is entitled to judgment as a matter of

  law.” Olson v. State Farm Mut. Auto. Ins. Co., 174 P.3d 849, 852

  (Colo. App. 2007).

¶ 23     The facts in this case are undisputed. The appeal turns on

  the district court’s legal conclusion that Oakwood had no duty to

  accept tender of payment in satisfaction of its liens. We review

  such conclusions de novo. See Ferguson, 275 P.3d at 745.

                             III.   Discussion

¶ 24     As discussed above, the district court granted Oakwood’s

  motion for summary judgment on the bases that (1) the General

  Assembly has preserved junior lienors’ post-foreclosure right to

  redeem, while simultaneously eliminating that same right for


                                       9
  debtors; (2) the General Assembly has “not taken affirmative action

  to give a holder of a [c]ertificate of [p]urchase the right to purchase

  recorded debts against the property to frustrate redemption”; and

  (3) it could find nothing in the foreclosure statutes giving Mortgage

  Investments the right to force Oakwood to accept tender of payment

  on behalf of the debtor. Mortgage Investments contends that the

  district court erred in granting summary judgment on those

  grounds. We agree.

¶ 25   The district court’s, and Oakwood’s, reliance on the

  elimination of a debtor’s post-foreclosure redemption right is

  misplaced. In this case, Mortgage Investments did not attempt to

  make a post-foreclosure redemption. Rather, it was attempting to

  pay, on behalf of the debtor, outstanding liens encumbering the

  property it had purchased at the foreclosure sale.

¶ 26   Nevertheless, we agree that had Oakwood accepted (or been

  required to accept) Mortgage Investments’ tender of payment, the

  effect would have been to prevent a redemption by Oakwood. The

  question, then, is whether, prior to the start of Oakwood’s period to

  redeem and before it tendered redemption funds, Oakwood had a




                                     10
  duty to accept Mortgage Investments’ tender of payment, on behalf

  of the debtor, in satisfaction of the lien Oakwood sought to redeem.

¶ 27   The statute provides that the period for redemption begins

  “[n]o sooner than fifteen business days” after the foreclosure sale,

  but it does not address the rights of debtors, certificate of purchase

  holders, or junior lienors during this period. § 38-38-302(4).

  Indeed, the statute does not explicitly give a certificate of purchase

  holder the right to pay, on behalf of the debtor, liens encumbering

  foreclosed property. Nor does it explicitly give a junior lienor the

  right to refuse a tender of payment in satisfaction of a lien prior to

  the start of the junior lienor’s redemption period and before the

  junior lienor tenders redemption funds.

¶ 28   Thus, because the statute is silent as to the issue raised in

  this appeal, we interpret it to give effect to the General Assembly’s

  objectives. Buckley v. Chilcutt, 968 P.2d 112, 117 (Colo. 1998). But

  in doing so, we do not write on a clean slate: the supreme court and

  divisions of this court have previously considered the competing

  rights of debtors and junior lienors under earlier versions of the

  redemption statute.




                                    11
¶ 29   We begin by noting that “[t]he redemption laws were enacted

  with the beneficent view of helping creditors to recover their just

  demands, nothing more.” Plute v. Schick, 101 Colo. 159, 161-62, 71

  P.2d 802, 804 (1937); Osborn, 32 Colo. App. at 258, 510 P.2d at

  463 (same). And, because the right is “purely a creature of statute

  and depends entirely upon the provisions of the statute creating it,”

  WYSE, 92 P.3d at 921, the right to redeem must be “exercised in

  strict compliance with” the redemption statute’s terms, Sant v.

  Stephens, 753 P.2d 752, 756 (Colo. 1988).

¶ 30   Furthermore, the right to redeem is not absolute; it must be

  balanced against a debtor’s right to pay a judgment. In Plute, the

  supreme court held that a debtor has “a legal right to pay [a]

  judgment, and thereby prevent a redemption by [a] defendant.” 101

  Colo. at 162, 71 P.2d at 804. Ordinarily, once the debtor tenders

  payment, “[t]he creditor’s duty is to accept the tender and to assist

  in satisfaction of the judgment.” Osborn, 32 Colo. App. at 258, 510

  P.2d at 463-64; see also Davis Mfg. & Supply Co. v. Coonskin Props.,

  Inc., 646 P.2d 940, 944 (Colo. App. 1982) (“There is no dispute in




                                    12
  the instant case about the right of the debtor to pay its own debts

  and to obtain a satisfaction thereof.”).4

¶ 31   This is not to say that a debtor has an absolute right to

  prevent redemption, either. In WYSE, the supreme court narrowed,

  but did not overrule, Plute, holding that once redemption is

  accomplished, the right to redeem cannot “be extinguished by any

  subsequent satisfaction of the judgment.” 92 P.3d at 920.

¶ 32   Thus, under Plute, Osborn, and WYSE, debtors have a right to

  pay liens and monetary judgments, and to have creditors accept

  payment and assist in satisfaction thereof, until a junior lienor

  “actually makes [a] redemption.” WYSE, 92 P.3d at 922; see also

  Plute, 101 Colo. at 161-62, 71 P.2d at 804; Osborn, 32 Colo. App. at

  258, 510 P.2d at 463-64.

¶ 33   “[R]edemption by the lienor is actually made or accomplished

  by paying to the public trustee or sheriff, within the statutory



  4 We acknowledge that Plute and Osborn were decided before the
  General Assembly eliminated property owners’ right to redeem after
  a foreclosure sale. However, in both cases, the courts followed the
  rule that debtors have a legal right to pay a judgment, despite the
  fact that the property owners’ statutory periods for redemption had
  passed. Plute v. Schick, 101 Colo. 159, 160-63, 71 P.2d 802, 803-
  04 (1937); Osborn, 32 Colo. App. at 256-58, 510 P.2d at 462-64.

                                     13
  redemption period for th[e] lienor, the redemption amount required

  by statute.” WYSE, 92 P.3d at 922.

¶ 34   Oakwood does not dispute that Mortgage Investments

  tendered, on behalf of the debtor, payment in satisfaction of the

  liens Oakwood sought to redeem before Oakwood’s statutory period

  for redemption had begun and before Oakwood tendered

  redemption funds to the sheriff.

¶ 35   Accordingly, Oakwood had not yet accomplished redemption

  by tendering redemption funds within the statutory period, id., so it

  had a “duty . . . to accept [Mortgage Investments’] tender and to

  assist in satisfaction of the judgment,” Osborn, 32 Colo. App. at

  258, 510 P.2d at 463-64; see also Plute, 101 Colo. at 161-62, 71

  P.2d at 804.

¶ 36   This result is consistent with the purpose of the redemption

  statute. The General Assembly did not provide junior lienors the

  right of redemption to give real estate speculators an alternative

  means for acquiring foreclosed properties. Rather, as courts have

  repeatedly stated, the purpose is to help creditors protect their

  interests in repayment of debts. Plute, 101 Colo. at 161-62, 71 P.2d

  at 804.


                                     14
¶ 37   And, in this case, we hold only that, prior to the start of a

  junior lienor’s redemption period and before a junior lienor tenders

  redemption funds, a certificate of purchase holder may pay, on

  behalf of the debtor, existing liens encumbering a foreclosed

  property. In the event that a certificate of purchase holder does so,

  the junior lienor will have received his or her just demand: payment

  of the judgment underlying the lien. See id. In such cases,

  redemption is therefore unnecessary because the junior lienor

  would no longer have a need to “protect [a] security interest[], which

  would be lost upon transfer of title to the purchaser” of the

  foreclosed property. WYSE, 92 P.3d at 921.

¶ 38   Moreover, a contrary holding would, in our view, discourage

  participation in foreclosure sales. Indeed, it would make little sense

  for a party to compete to purchase property at a foreclosure sale if a

  certificate of purchase holder had no ability to pay, on behalf of the

  debtor, liens encumbering foreclosed property, despite the fact that

  the period for redemption had not started. Instead, the party could

  simply (1) acquire the most junior lien; (2) reject tender of payment

  in satisfaction of the lien made prior to the start of the redemption

  period; and (3) wait at the back of the line to exercise an absolute


                                    15
  right to redeem. Consequently, a contrary holding would encourage

  a race to acquire the most junior lien, rather than participation in

  the foreclosure sale.

¶ 39   As Oakwood acknowledges, the purpose of the foreclosure

  statutes is to use a debtor’s property to pay off as many creditors as

  possible. See Ameriquest Mortg. Co. v. Land Title Ins. Corp., 216

  P.3d 597, 602 (Colo. App. 2007), rev’d on other grounds, 207 P.3d

  141 (Colo. 2009). And, presumably, more competition at

  foreclosure sales will lead to higher purchase prices. Accordingly,

  we cannot conclude that the General Assembly intended parties to

  use the right of redemption as a work-around for the usual process

  of competing to purchase foreclosed property.

¶ 40   Lastly, we are not persuaded by Oakwood’s reliance on failed

  Colorado Senate Bill 10-093, which would have given certificate of

  purchase holders the right to compel junior lienholders to accept a

  post-foreclosure tender of payment in lieu of redemption. See S.B.

  10-093, 67th Gen. Assemb., 2nd Reg. Sess. (Colo. 2010). Because

  a particular item of legislation may fail for many reasons, we do not

  infer legislative intent from the General Assembly’s failure to enact




                                    16
  proposed legislation. Ritter v. Jones, 207 P.3d 954, 962 (Colo. App.

  2009).

                          IV.   Conclusion

¶ 41   Mortgage Investments tendered payment on behalf of the

  debtor in satisfaction of the judgments and lien Oakwood had

  purchased. And it did so before the period for redemption had

  begun and before Oakwood tendered redemption funds.

  Accordingly, Oakwood had not yet made or accomplished a

  redemption, so its duty as a creditor was to “accept the tender and

  to assist in satisfaction of the judgment.” Osborn, 32 Colo. App. at

  258, 510 P.2d at 463-64.

¶ 42   We therefore reverse the district court’s judgment and remand

  the case with directions to enter summary judgment in favor of

  Mortgage Investments.

       JUDGE GRAHAM and JUDGE RICHMAN concur.




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