Elrick v. Merrill

10 P.3d 689, 2000 WL 674903
CourtColorado Court of Appeals
DecidedAugust 31, 2000
Docket99CA0467
StatusPublished
Cited by14 cases

This text of 10 P.3d 689 (Elrick v. Merrill) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elrick v. Merrill, 10 P.3d 689, 2000 WL 674903 (Colo. Ct. App. 2000).

Opinion

Opinion by

Judge TAUBMAN.

In this interpleader action, defendants, Robert F. and Hona W. Parker, appeal the trial court's judgment dismissing their cross-claims against defendants, Shawn and Crystal Osthoff; the United States of America, Farmers Home Administration, n/k/a Farm Service Agency (FSA); and Richard D. and Barbara P. Merrill The Parkers further appeal the trial court's judgment granting the Merrills and the Osthoffs' requests for attorney fees. We affirm in part, reverse in part, and remand for further proceedings.

This case arose from an interpleader action filed by the Washington County treasurer and ex-officio public trustee, plaintiff, Ma-ryin A. Elrick, as a result of excess proceeds held by her following a foreclosure sale. The trial court dismissed the Parkers' cross-claims against the Osthoffs and FSA and ruled in favor of the Merrills following a bench trial.

The trial court made findings of fact as follows. On or about June 3, 1981, the Mer-rills executed a promissory note and deed of trust secured by the property in question. The principal amount of the note was $8338,-390, payable to FSA. Subsequently, FSA granted the Merrills additional loans secured by the wheat crop growing on the property in 1997, as well as other equipment on the property. These loans totaled $230,420.

On or about October 15, 1995, the Merrilis entered a lease agreement with the Osthoffs which expired by its terms on December 1, 1996. However, the lease permitted the Os-thoffs to enter the property to harvest a winter wheat crop in the summer of 1997 that would be planted in the fall of 1996. The Osthoffs did plant this erop in the fall of 1996, and harvested the wheat in July 1997.

On February 9, 1996, the Merrills received a chapter 7 discharge of their debts in bankruptcy, including a discharge of their obligations pursuant to three separate deeds of trust secured by the property at issue here.

*693 As a result of their insolvency, the Merrills defaulted on the promissory note secured by the third deed of trust, and a proper Notice of Election and Demand for Sale was filed. The encumbered property was sold at a public sale on December 18, 1996. Robert Parker was the high bidder at $221,000. He was issued a certificate of purchase, which was later assigned to Robert F. Parker and Nona W. Parker. From the amount collected, the public trustee paid the entire balance on the promissory note-$201,019.87-to FSA. This left a balanee of $19,980.13 to be held by the public trustee until the six month redemption period expired on June 18, 1996.

After the public sale, the Parkers purchased the promissory note secured by the first deed of trust, and obtained an assignment of the second deed of trust.

On April 16, 1997, FSA filed with the public trustee a notice of claim to redeem the excess proceeds as payment for the debt secured by the erop and other equipment. However, FSA did not redeem.

On May 27, 1997, the Parkers filed with the public trustee a notice of claim for the excess proceeds and a notice seeking payment of that balance as an overpayment. Also on May 27, 1997, the Merrills filed with the public trustee a claim for the excess funds pursuant to the homestead exemption, § 38-38-111, C.R.S.1999.

Subsequently, the Parkers filed their cross-claim for waste against the Merrills. The cross-claim alleged that the Merrilis had caused $7,500 worth of damage to various items of personalty on the property.

Two months after the public trustee filed this action, the Parkers amended their cross-complaint and joined the Osthoffs as defendants, alleging that the Parkers had acquired ownership of a wheat crop on the property that had been planted, cultivated, and harvested by the Osthoffs. The amended cross-complaint also requested reimbursement from the Merrills for taxes and interest owed on the property that the Parkers had paid during the redemption period.

Pursuant to $ 38-88-8302(8), C.R.S. 1999, the period of redemption expired on June 18, 1997. and at that time, a public trustee deed was issued to the Parkers. However, under § 38-38-303(1), C.R.S. 1999, FSA still had ten days after June 18, 1997, within which to redeem the property. Therefore, on June 18, 1997, the Parkers obtained title to the property subject to FSA's right to redeem. After June 28, 1997, the Parkers obtained title to the property free of FSA's redemption rights. See Graham v. Alcoves, Inc., 148 Colo. 379, 366 P.2d 375 (1961) (deed issued prematurely by public trustee is not void, but carries the naked title held by the trustee and does not divest the parties of their redemption rights).

The trial court dismissed the Parkers claims against the Osthoffs, concluding that the Osthoffs did not receive notice of the foreclosure sale, and thus their lease to the 1997 winter wheat crop was not extinguished by it.

The trial court then granted the Osthoffs' request for attorney fees against the Parkers and their attorney, jointly and severally, concluding that the Parkers' claims were frivolous, groundless, and without substantial justification.

The trial court also dismissed the Parkers' claims against FSA, finding that the Parkers did not meet their burden of showing that FSA had waived its sovereign immunity. Accordingly, the court concluded that it lacked jurisdiction to adjudicate the cross-claims against FSA.

In addition, after a bench trial, the court dismissed the claims against the Merrills, determining that the Parkers had not established their claim for damages. The trial court then awarded attorney fees against the Parkers and their attorney in favor of the Merrills on the same basis that it had awarded the Osthoffs' attorney fees.

I. Dismissal of FSA

The Parkers assert the trial court erred in concluding they had not met their burden to show that FSA had waived its sovereign immunity by entering an appearance and requesting the excess proceeds from the foreclosure sale. We disagree.

*694 Absent an express and unequivocal waiver, sovereign immunity protects the federal government and its agencies from suit. A waiver of a federal agency's sovereign immunity must be strictly construed in favor of the government entity. See Department of Army v. Blue Fox, Inc., 525 U.S. 255, 119 S.Ct. 687, 142 L.Ed.2d 718 (1999).

A trial court's conclusion as to whether immunity has been waived is a determination as to subject matter jurisdiction, and is subject to a mixed standard of review. The trial court's factual findings will not be reversed on appeal unless clearly erroneous. However, the existence of subject matter jurisdiction is a question of law and is therefore subject to de novo review. City of Boulder v. Public Service Co., 996 P.2d 198 (Colo.App.1999); Smith v. Town of Estes Park, 944 P.2d 571 (Colo.App.1996). The party seeking to establish a government agency's liability has the burden of proving jurisdiction.

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Cite This Page — Counsel Stack

Bluebook (online)
10 P.3d 689, 2000 WL 674903, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elrick-v-merrill-coloctapp-2000.