Angela Lea Argo v. Christina T. Hemphill

Colorado Court of Appeals·Decided September 8, 2022·No. 21CA0897·Published

Opinion

The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.

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 section 15-15-407, C.R.S. 2021, to determine whether the plaintiff’s lifetime lease agreement is enforceable against two defendants who received the contested property by beneficiary deed.

Under section 15-15-407(2), a grantee-beneficiary takes title to a property conveyed by a beneficiary deed subject to several different types of interests at the time of the property owner’s death. These include interests the grantee-beneficiary had actual notice of at the time of the owner’s death and interests that were recorded before the owner’s death.

Under section 15-15-407(3), a party holding an unrecorded interest in the property must record evidence or notice of that interest no later than four months after the owner’s death. If the party holding the interest fails to do so, and if the grantee- beneficiary did not have actual notice of the interest at the time they took title, then the party is forever barred from asserting the interest in the property.

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.

COLORADO COURT OF APPEALS 2022COA104

Court of Appeals No. 21CA0897 Otero County District Court No. 19CV30031 Honorable Michael A. Schiferl, Judge

Angela Lea Argo, Plaintiff-Appellant, v.

Christina T. Hemphill, a/k/a Christina Tara O’Berto and Dianna K. Hemphill, a/k/a Dianna K. Hemphill-O’Byrne,

Defendants-Appellees.

JUDGMENT AFFIRMED IN PART, REVERSED IN PART, ORDER REVERSED, AND CASE REMANDED WITH DIRECTIONS

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 Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2021.

¶1 Plaintiff, Angela Lea Argo, appeals the district court’s judgment in favor of defendants, Christina T. Hemphill (also known as Christina Tara O’Berto), Dianna K. Hemphill (also known as Dianna K. Hemphill-O’Byrne), and Steven K. Rein, and its order awarding attorney fees and costs to the Hemphills. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

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.

1To promote clarity and prevent confusion, we refer to Angela and Don by their first names throughout the opinion. We mean no disrespect in doing so.

¶4 When Don died, title to the property passed to the Hemphills. The Hemphills attempted to sell the property to Rein. The sale was to be completed on March 20, 2019. The Hemphills contend the sale fell apart because Angela recorded a lifetime lease agreement regarding the property. When the sale did not go through, they leased the property to Rein in October 2019.

¶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.

¶7 During the next few months, Angela unsuccessfully attempted to persuade the Hemphills to honor the lifetime lease. Then, on February 1, 2019, the Hemphills’ attorney sent Angela a letter stating that (1) per the beneficiary deed, title to the property vested in the Hemphills upon Don’s death; (2) the lifetime lease agreement was unenforceable and Angela was forever barred from asserting an interest in the property because she didn’t record her interest in the property within four months of Don’s death; and (3) she had one month to remove her personal belongings from the property.

¶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 C.R.C.P. 105. In the complaint, which contained several individual claims against the Hemphills and Rein, Angela sought a ruling that her lifetime lease agreement is enforceable against all the defendants. In response, the Hemphills filed several counterclaims against Angela, petitioned the court to declare that the lifetime lease agreement is a spurious document under C.R.C.P. 105.1 and sections 38-35-201 to -204,

C.R.S. 2021, and requested that the court quiet title to the property in them. The district court held a two-day bench trial on Angela’s claims and the Hemphills’ counterclaims in April 2021. After Angela rested her case, the Hemphills and Rein separately moved for directed verdicts under C.R.C.P. 50 on the grounds that the lifetime lease agreement is unenforceable.

¶ 10 In oral findings and a subsequent written order, the district court found that the lifetime lease agreement is unenforceable, “void, invalid, and otherwise of no legal [e]ffect” under section 15-15-407, C.R.S. 2021, because the defendants did not have notice of the lifetime lease agreement until more than four months after Don’s death. The court ruled that, because the agreement is unenforceable, Angela has no right, title, or interest in the property. The court dismissed Angela’s remaining claims.

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