June 18, 2015
Battle North, LLC, Petitioner-Appellee,
Sensible Housing Company, Respondent-Appellant
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Opinion is subject to revision upon final publication.
County District Court No. 12CV330. Honorable Mark D.
AFFIRMED IN PART, REVERSED IN PART, AND CASE REMANDED WITH
LLC, Michael G. Martin, Denver, Colorado, for
Offices of Theodore W. Brin, Theodore W. Brin, Denver,
Colorado, for Respondent-Appellant.
by JUDGE J. JONES. Casebolt and Bernard, JJ., concur.
[¶1] Respondent, Sensible Housing Company
(Sensible), appeals the district court's order
determining that a stock certificate and two quitclaim deeds
are spurious documents under sections 38-35-201(3) and -204,
C.R.S. 2014. We conclude that because the stock certificate
was " filed" only as an exhibit in a court
proceeding and does not affect petitioner Battle North,
LLC's real property, it is not a spurious document within
the meaning of the applicable statutes. But we also conclude
that the quitclaim deeds, which Sensible recorded in Eagle
County, are. Therefore, we affirm the order in part and
reverse the order in part. We also remand the case to the
district court for a determination of Battle North's
reasonable appellate attorney fees incurred in defending the
judgment as to the quitclaim deeds.
[¶2] This case concerns a dispute over
ownership of real property in Eagle County which the parties
and the courts have referred to as the Pine Martin parcel.
The history of that dispute is rather
complicated. It essentially began, at least from a
litigation perspective, in 1998, when Mortgage Investment
Corporation (MIC) filed for judicial foreclosure on a deed of
trust encumbering the Pine Martin parcel and another piece of
real property referred to as the Piney Lumber parcel. The
foreclosure complaint named numerous defendants that might
claim ownership of the parcels, including, as relevant in
this case, Pine Martin Mining Company (PMMC) and Piney Lumber
Company (PLC). PMMC and PLC answered, claiming ownership of
the Pine Martin parcel and the Piney Lumber parcel,
respectively. They asserted counterclaims and cross-claims
alleging fee ownership of the parcels and sought declarations
that they are the fee owners of the parcels. The 1998
foreclosure case thus morphed into a quiet title action, and
we will refer to it as such as we discuss the issues raised
in this appeal.
[¶3] In 2000, PMMC and PLC moved for partial
summary judgment on their quiet title claims in the quiet
title action. MIC filed a cross-motion for partial summary
judgment. In 2004, while the cross-motions for summary
judgment remained pending, MIC assigned its interest in the
matter to Ginn Battle Lender, LLC (Ginn), and Ginn was
substituted as a party. PMMC and PLC purported to transfer
their interests in the parcels to Sensible by quitclaim
deeds, which Sensible recorded in the Eagle County Clerk and
Recorder's Office. (Sensible was then substituted for
PMMC and PLC.) Two of those quitclaim deeds, one recorded in
2006 and the other recorded in 2008, were from PMMC to
Sensible and concerned the Pine Martin parcel. They are the
quitclaim deeds at issue in this case.
[¶4] The parties in the quiet title action
stipulated to a procedure to resolve the case. The court
adopted the stipulation. In the course of identifying and
briefing the outstanding issues in the quiet title action,
Sensible filed as an exhibit with the district court a
purported 1915 Stock Certificate certifying that 1,251,000
shares of the capital stock of PMMC had been issued to
Charles Bouvier. Sensible's principal, Jeff Tucker,
claimed that he had obtained the shares represented by the
1915 Stock Certificate from Mr. Bouvier's heir in 1996.
Claiming authority to act on PMMC's behalf by virtue of
that transfer, Mr. Tucker created and recorded, or caused to
be created and recorded, the 2006 and 2008 quitclaim deeds to
[¶5] In 2009, the district court granted
Ginn's cross-motion for summary judgment and denied
Sensible's motion for partial summary judgment. The court
struck Sensible's pleadings, concluding that the 1915
Stock Certificate and other documents purporting to convey
the stock represented by that certificate first to Mr. Tucker
and then to a
newly-formed PMMC were incredible as a matter of law, and
therefore Sensible had no interest in either parcel.
[¶6] Sensible appealed. A division of this
court affirmed the summary judgment as to the Piney Lumber
parcel, but reversed the summary judgment as to the Pine
Martin parcel. Ginn Battle Lender, LLC v. Sensible Hous.
Co., (Colo.App. Nos. 10CA0114 & 10CA2158, Apr. 21, 2011)
(not published pursuant to C.A.R. 35(f)). With respect to the
Pine Martin parcel, the division concluded that, contrary to
the district court's ruling, the 1915 Stock Certificate,
through which Sensible purported to derive its ownership
interest, was not " so incredible that no reasonable
jury could believe it." Accordingly, the division
remanded the case " for further proceedings as to that
[¶7] Apparently, nothing of consequence has
happened in the quiet title action since. But on April 6,
2012, Battle North filed a petition for an order to show
cause pursuant to section 38-35-204 and C.R.C.P. 105.1,
instituting this case, and alleging that the 1915 Stock
Certificate is a spurious document. The petition sought an
order directing Sensible to show cause why the 1915 Stock
Certificate should not be declared invalid, and an order
following a hearing declaring the stock certificate to be
invalid. Battle North subsequently filed an amended petition
alleging that the two quitclaim deeds also are spurious
documents, which the court should declare invalid. The
district court conducted an evidentiary hearing on the
amended petition. It then issued a detailed written order
with findings of fact and conclusions of law. As now most
relevant, the court found:
o Mr. Tucker created the 1915 Stock Certificate;
o Mr. Tucker's testimony as to the " recreation of
the 1915 Stock Certificate" was " unconvincing and
wholly incredible" ;
o " [T]he 1915 Stock Certificate is a sham and not a
genuine copy of anything" ;
o Sensible filed the 1915 Stock Certificate in Eagle County
District Court on July 21, 2008, as an exhibit to a brief;
o The quitclaim deeds were recorded in the Eagle County Clerk
and Recorder's office in 2006 and 2008;
o Mr. Tucker claimed to have derived his authority to act on
behalf of the newly-created PMMC (incorporated by Mr. Tucker
in South Dakota in 1996) in creating and recording the
quitclaim deeds from the purported 1915 Stock Certificate;
o Mr. Tucker did not have any authority to act on behalf of
the original PMMC, and, consequently lacked authority to
execute and record the quitclaim deeds;
o The quitclaim deeds " are not what they purport to be,
to wit, legitimate quitclaim deeds executed by [PMMC]" ;
o After the original PMMC failed to pay taxes on the
property, the Pine Martin parcel was sold at a tax sale and
treasurer's deeds for that parcel were issued to new
owners in 1932;
o Battle North's claim of title derives from those
o Battle North owns the Pine Martin parcel; and
o Battle North is in possession of the Pine Martin parcel.
[¶8] Based on these findings (and others),
the court concluded that the 1915 Stock Certificate and the
quitclaim deeds are spurious documents. The court declared
the 1915 Stock Certificate and the quitclaim deeds invalid
and " released" them. The court also awarded Battle
Mountain attorney fees and costs pursuant to section
[¶9] Sensible raises a host of issues on
appeal. Some challenge the district court's decision to
act on the petition and amended petition and others challenge
the legal merits of the court's ruling. Sensible does not
appear to challenge any of the district court's
underlying findings of fact. We first address Sensible's
challenges to the district court's decision to act,
reject those challenges, and then address its challenges to
the legal merits of the district court's determinations
that the 1915 Stock Certificate and quitclaim
deeds are spurious documents within the meaning of sections
38-35-201(3) and -204.
This Action Is Not Barred by the Priority Rule
[¶10] The priority rule holds that "
[w]here two courts may exercise jurisdiction over the same
parties and subject matter, . . . the first action filed has
priority of jurisdiction, and . . . the second action must be
stayed until the first is finally determined." Town
of Minturn v. Sensible Hous. Co., 2012 CO 23, ¶ 19,
273 P.3d 1154. " The purpose of the priority rule is to
promote judicial efficiency and 'avoid unnecessary
duplication and multiplicity of suits.'"
Id. (quoting in part Pub. Serv. Co. of Colo. v.
Miller, 135 Colo. 575, 577, 313 P.2d 998, 999 (1957)).
[¶11] Sensible argues that the priority rule
required the district court to stay this case pending
resolution of the quiet title action.
[¶12] The district court rejected that
argument because (1) " neither the parties or the
subject matter is identical" and (2) staying the case
would be contrary to the intent of section 38-35-204 and
C.R.C.P. 105.1 to provide " a swift resolution to a
discrete issue." We conclude that the priority rule does
not apply in these circumstances, though our reasoning
differs somewhat from the district court's. See
Newflower Mkt., Inc. v. Cook, 229 P.3d 1058, 1061
(Colo.App. 2010) (" If the trial court reached the
correct result, we may affirm its determination on different
Preservation and Standard of Review
[¶13] Battle North argues that Sensible did
not preserve this issue for appellate review because it did
not move to consolidate the two cases or move for a stay of
this case. The record shows, however, that Sensible
repeatedly raised the priority rule and requested a stay.
There is some ambiguity in the record whether Sensible
requested a stay only as to the quitclaim deeds, but the
district court construed Sensible's requests for a stay
as applying to the entire case and ruled on the issue with
that understanding. We therefore regard the issue as
preserved. See Target Corp. v. Prestige Maint.
USA, Ltd., 2013 COA 12, ¶ 23, 351 P.3d 493 (where
issue was brought to the district court's attention and
the court ruled on it, it was preserved for appellate review;
no talismanic language is required to preserve an issue).
[¶14] Case law is not clear as to the
standard of appellate review of an order denying a stay
requested pursuant to the priority rule. The supreme court
has used mandatory language in characterizing the district
court's obligation to stay the second proceeding.
See, e.g., Town of Minturn, ¶ 19
(" the second action must be stayed"
(emphasis added)); Wiltgen v. Berg, 164 Colo. 139,
145, 435 P.2d 378, 381 (1967) (same). But in the same context
the supreme court has approved of certain considerations
" that may serve the trial court in the exercise of its
discretion in granting or denying a stay." Town of
Minturn, ¶ 19; see also Nationwide
Mut. Ins. Co. v. Mayer, 833 P.2d 60, 62 (Colo.App. 1992)
(addressing such considerations where cases are pending in
two different states; cited with approval in Town of
Minturn, ¶ 19).
[¶15] The priority rule derives from the
inherent power of courts to stay proceedings before them.
See Town of Minturn, ¶ 18. That power
is commonly understood as discretionary. See In
re Marriage of Fleet, 701 P.2d 1245, 1247 (Colo.App.
[¶16] Our determination of the appropriate
standard of review is also informed by the purposes of the
priority rule, which, as noted, are " to promote
judicial efficiency and 'avoid unnecessary duplication
and multiplicity of suits.'" Town of
Minturn, ¶ 19 (quoting in part Pub. Serv. Co.
of Colo., 135 Colo. at 577, 313 P.2d at 999);
see Estates in Eagle Ridge, LLLP v. Valley Bank
& Trust, 141 P.3d 838, 844 (Colo.App. 2005). Not every
situation in which courts have concurrent jurisdiction will
implicate these policy concerns. See, e.g.,
Estates in Eagle Ridge, 141 P.3d at 844-45. Perhaps
that is why the supreme court has directed a district court
considering whether to stay a case because of the priority
rule to take into account " expense and convenience,
availability of witnesses, the stage to which proceedings in
the first action have already progressed, and the possibility
resulting from the stay." Town of Minturn,
[¶17] In light of all this, we conclude that
the decision whether to grant a stay pursuant to the priority
rule is committed to the district court's
discretion. Consequently, we review such a
decision for an abuse of that discretion. A court abuses its
discretion when its decision is manifestly arbitrary,
unreasonable, or unfair, or based on a misapprehension of the
law. Sinclair Transp. Co. v. Sandberg, 2014 COA 75M,
¶ 26, 350 P.3d 915.
[¶18] Sensible contends initially that the
district court applied an incorrect standard -- requiring
that the parties and subject matter be "
identical." We need not address the extent to which the
parties and subject matter in the two actions must be
identical because the district court's order is correct
for two independent reasons: (1) C.R.C.P. 105.1 allowed
Battle North to bring the petition in a separate action; and
(2) staying this case would not further the policies
animating the priority rule.
[¶19] We begin by looking at the content and
structure of section 38-35-204. That statute provides that
[a]ny person whose real or personal property is affected by a
recorded or filed lien or document that the person believes
is a spurious lien or spurious document may petition the
district court in the county or city and county in which the
lien or document was recorded . . . for an order to show
cause why the lien or document should not be declared
invalid. . . .
§ 38-35-204(1). The statute then provides an expedited
procedure whereby the court issues an order to show cause to
the respondent (the entity which recorded or filed the
allegedly spurious lien or document); the respondent responds
to the order to show cause; an evidentiary hearing is
conducted; and the court determines whether the lien or
document is spurious, and, if called for, imposes remedies.
[¶20] The purpose of the act containing
section 38-35-204 is " to protect individuals from those
who use groundless claims to cloud title to real property as
a form of protest or harassment." Westar Holdings
P'ship v. Reece, 991 P.2d 328, 331 (Colo.App. 1999).
The General Assembly's express requirement of an
expedited process clearly indicates that it intended these
matters to be resolved relatively quickly, unabated by the
procedures governing ordinary civil actions and the delays
inherent in applying those procedures. See
Fiscus v. Liberty Mtg. Corp., 2014 COA 79, ¶ 31
(observing that " [t]he simplicity and expedited time
frame of [these] proceedings contrasts with the more complex
and protracted proceedings under the general civil
rules" ) ( cert. granted Apr. 6, 2015).
[¶21] Promptly after the enactment of
section 38-35-204, the supreme court adopted C.R.C.P. 105.1,
which governs the procedure for spurious document petitions.
It largely tracks section 38-35-204, but it does more. As
relevant in this case, after repeating the statute's
language that a petition may be filed in the county in which
the spurious document was recorded or filed, it says that
" [t]he petition . . . may also be brought as a
counterclaim or a cross-claim in a pending action . . .
." C.R.C.P. 105.1(a) (emphasis added).
[¶22] Therefore, a party desiring to
challenge the validity of a recorded or filed lien or
document has a choice: the party " may" file the
petition as a counterclaim or cross-claim, or the party may
institute a separate proceeding. See Cont'l
Casualty Co. v. Rio Grande Fuel Co., 108 Colo. 472,
476-77, 119 P.2d 618, 619-20 (1941) (statute providing that a
party " may" commence an action against a surety on
a contractor's bond was permissive, and did not bar an
action on the bond itself). So, to the extent the
rule might otherwise be implicated by the commencement of a
separate action, C.R.C.P. 105.1 creates an exception to the
[¶23] The second reason the district court
ruled correctly is that the policy reasons animating the
priority rule -- concerns about judicial efficiency and
unnecessary duplication of effort -- are not implicated under
[¶24] When Battle North filed its petition,
the quiet title action had been dormant for some time; no
action had been taken in the case since the remand from the
court of appeals. It remained essentially moribund throughout
the proceedings in this case. And though the quiet title
action had been pending for many years, it had not progressed
very far. Sensible's counsel said during a hearing in
this proceeding in May 2012 that " very little
discovery" had been conducted in the quiet title action.
No trial date had been set. Further, had this case been
stayed, and the matter somehow transferred to the quiet title
action, there likely would have been additional delay in
determining the spurious document claims (though the same
expedited procedure mandated by section 38-35-204 would have
applied in the quiet title action). As the district court
pointed out, staying this action pending resolution of the
quiet title action would have thwarted the General
Assembly's intent to provide an expedited process for
determining the validity of allegedly spurious liens and
[¶25] For these reasons, we conclude that
the district court did not err in determining that the
priority rule does not apply.
The Filing of the Petition Did Not
Contravene the Court of Appeals' Mandate
[¶26] Sensible also contends that allowing
Battle North to litigate this proceeding contravenes the
mandate of this court in an earlier appeal of the quiet title
action. We are not convinced.
[¶27] The division in the prior appeal of
the quiet title action remanded for " further
proceedings" as to the Pine Martin parcel. Nothing about
that remand order precluded Battle North from proceeding as
allowed by section 38-35-204 and C.R.C.P. 105.1. And by so
doing, Battle North did not impair the court's ability to
resolve the quiet title issues in the quiet title action.
Accordingly, proceeding in this action was not inconsistent
with the remand order in the quiet title action. See
Musgrave v. Indus. Claim Appeals Office, 762 P.2d
686, 688 (Colo.App. 1988) (A general remand for further
proceedings consistent with the appellate court's
decision " authorizes the trial court to make new
findings and conclusions so long as there is no conflict with
the ruling of the appellate court." ).
The 1915 Stock Certificate Is Not a Spurious
[¶28] Sensible contends that its use of the
1915 Stock Certificate as an exhibit in the quiet title
action did not entitle Battle North to relief under section
38-35-204 because filing a document as an exhibit in a civil
case does not qualify as recording or filing the document
within the meaning of the statute. We agree with
Standard of Review
[¶29] Sensible's contention requires us
to construe the meaning of sections 38-35-201(3) and -204. We
review issues of statutory construction de novo. Sperry
v. Field, 205 P.3d 365, 367 (Colo. 2009); Barnhart
v. Am. Furniture Warehouse Co., 2013 COA 158, ¶ 13,
338 P.3d 1027.
[¶30] In interpreting a statute, we strive
to discern and give effect to the General Assembly's
intent. Hassler v. Account Brokers of Larimer Cnty.,
Inc., 2012 CO 24, ¶ 15, 274 P.3d 547; Krol v.
CF & I Steel, 2013 COA 32, ¶ 15, 307 P.3d 1116.
To do this, we first look to the statutory language, giving
the words and phrases used in the statute their plain and
ordinary meanings. Hassler, ¶ 15;
Krol, ¶ 15. We read the language in the dual
contexts of the statute as a whole and the comprehensive
statutory scheme, giving consistent, harmonious, and sensible
effect to all of the statute's language. Jefferson
Cnty. Bd. of Equalization v. Gerganoff, 241 P.3d 932,
935 (Colo. 2010); BP Am. Prod. Co. v. Patterson, 185
P.3d 811, 813 (Colo. 2008). After doing this, if we conclude
that the statute is not ambiguous, we enforce it as written
and do not resort to other rules of statutory construction.
Denver Post Corp. v. Ritter, 255 P.3d 1083, 1089
(Colo. 2011); Krol, ¶ 15. We are also mindful,
however, that the General Assembly's intent must prevail
over a literal meaning of the statute which would lead to an
absurd result. Henisse v. First Transit, Inc., 247
P.3d 577, 579 (Colo. 2011); Barnhart, ¶ 14.
[¶31] Section 38-35-201(3) defines a "
spurious document" as " any document that is forged
or groundless, contains a material misstatement or false
claim, or is otherwise patently invalid." If such a
document is " recorded or filed," and "
affect[s]" a person's " real or personal
property," that person may bring an action under section
38-35-204. See § 38-35-204(1).
[¶32] Sensible's challenge to the
district court's ruling that the 1915 Stock Certificate
is a spurious document turns on the meaning of "
recorded or filed" in section 38-35-204(1). The statute
does not say what " recorded or filed" means.
Battle North argues that the phrase is broad, necessarily
including the filing of a document with any " state or
local official or employee," which includes a district
court clerk who receives documents for filing in civil court
actions. It reasons that section 38-35-204(1) does not
contain any language limiting " recorded or filed,"
and section 38-35-201(6) defines " [s]tate or local
official or employee" as including any "
employee" of " any branch of state
government." Though the district court agreed with
Battle North, we do not.
[¶33] Contrary to Battle North's reading
of the statute, it does contain limiting language. The
recording or filing at issue must be one that affects a
person's real or personal property. See §
38-35-204(1) (" Any person whose real or personal
property is affected by a recorded or filed lien or
document" may file a petition.). The filing of an
exhibit in a civil court action does not affect a
person's real property. Such an exhibit is nothing more
than evidence relating to the parties' legal positions.
To be sure, consideration of such an exhibit (and other
evidence) may ultimately lead to a ruling that, if recorded
or filed in certain records, may affect a person's real
property, but there is no indication in the statute that such
an attenuated and contingent effect is what the General
Assembly had in mind when it enacted the
[¶34] Indeed, to read the statute as broadly
as Battle North advocates would lead to absurd results. Court
disputes over real property almost always require the
consideration of documents used as exhibits allegedly
supporting or relating to title. Battle North's proposed
interpretation would encourage spurious document litigation
based on such documents almost as a matter of course.
[¶35] Battle North's reliance on the
statutory definition of " [s]tate or local official or
employee" is similarly unpersuasive. As Sensible points
out, if that term applies to a court clerk responsible for
accepting filings in civil court cases, section 38-35-202(1),
C.R.S. 2014, would give such a clerk the authority to reject
a document that the clerk " reasonably believes in good
faith may be a spurious . . . document." Battle
North's reading of " recorded or filed" would
thus lead to the absurd result of allowing court clerks to
reject exhibits or other documents relevant to civil
[¶36] We also note that the primary remedy
provided by section 38-35-204 is plainly inapplicable to
documents filed as exhibits in civil court cases. Section
38-35-204(2) provides that if a court determines that a
document is spurious, the court shall
" declar[e] the . . . spurious document . . . invalid,
releasing the recorded or filed . . . spurious document . . .
." A court cannot " release" an exhibit or
document filed in a civil court case because the filing of
the material does not attach it to anyone's property.
[¶37] Thus, considered in context, and in
light of the consequences resulting from the district
court's construction of " recorded or filed,"
we think it reasonably clear that the General Assembly did
not intend that phrase to encompass documents filed merely as
exhibits in civil cases.
[¶38] In any event, any ambiguity in the
phrase is resolved, at least for present purposes, by
legislative history. See Jordan v. Panorama
Orthopedics & Spine Ctr., P.C., 2015 CO 24, ¶ 14,
346 P.3d 1035 (if a statute is ambiguous, the court may
consider legislative history); see also §
2-4-203(1)(c), C.R.S. 2014 (same). As noted, that history
shows that " the purpose of the [spurious lien statutes]
was to protect individuals from those who use groundless
claims to cloud title to real property as a form of protest
or harassment." Westar Holdings, 991 P.2d at
331. Further, it appears evident that the General Assembly
intended to cover not merely liens or documents that can be
" recorded," such as documents recorded in the
property records of county clerks and recorders, but also
documents that can be " filed" with another public
agency or official in a way that may affect a person's
property. An example of the latter is the Secretary of
State's office, which accepts filings of certain liens
relating to real property. See § §
4-9.7-103(a)(3), 4-9.7-105, 4-9.7-106, C.R.S. 2014.
[¶39] We conclude, in short, that the
General Assembly intended to address liens and documents
filed against real and personal property. See
Shyanne Props., LLC v. Torp, 210 P.3d 490, 492
(Colo.App. 2009) (" The supreme court adopted C.R.C.P.
105.1(d) [relating to hearings on spurious document
petitions] as a procedural mechanism for challenging the
validity of a spurious lien or other document filed against
real property." ). An exhibit filed in a civil case is
not filed against real property: it does not cloud title or
otherwise have a legal effect on real property.
[¶40] Based on the foregoing, though we do
not disturb the district court's factual finding that the
1915 Stock Certificate is a " sham," we further
conclude that the district court erred in ruling that the
filing of the 1915 Stock Certificate as an exhibit in the
quiet title action rendered it a spurious document. That
portion of the district court's order so ruling is
The Quitclaim Deeds Are Spurious Documents
[¶41] The district court ruled that the 2006
and 2008 quitclaim deeds which the newly-created PMMC had
given to Sensible, and which Sensible had recorded in the
county real property records, are spurious documents.
Sensible's opening brief does not expressly address that
ruling; Sensible challenges it for the first in its reply
brief. We could affirm that ruling for this reason alone.
Saint John's Church in the Wilderness v. Scott,
2012 COA 72, ¶ 9 n.3, 296 P.3d 273 (" [W]e will not
consider arguments raised for the first time in a reply
brief." ); IBC Denver II, LLC v. City of Wheat
Ridge, 183 P.3d 714, 718 (Colo.App. 2008) (same).
[¶42] Nonetheless, because certain of
Sensible's arguments purport to challenge the court's
subject matter jurisdiction to determine the validity of the
quitclaim deeds, and its argument on the merits could be
construed as having been subsumed in its arguments relating
to the 1915 Stock Certificate, we will address Sensible's
argument pertaining to the quitclaim deeds. We conclude that
all of those arguments fail.
Subject Matter Jurisdiction
[¶43] Sensible contends in its reply brief,
in rather conclusory fashion, that the district court "
did not have subject matter jurisdiction to decide the
validity of the  Stock Certificate because it was never
'filed' for the purpose of" section 38-35-204,
and hence, if we conclude that the 1915 Stock Certificate is
not a spurious document, we must reverse as to the quitclaim
deeds, presumably because the district court would have
lacked jurisdiction to decide their validity.
This contention misperceives the nature of subject matter
[¶44] " Subject matter jurisdiction
concerns the court's authority to deal with the class of
cases in which it renders judgment." Protest of
McKenna, 2015 CO 23, ¶ 16, 346 P.3d 35 (internal
quotation marks omitted); accord Closed Basin
Landowners Ass'n v. Rio Grande Water Conservation
Dist., 734 P.2d 627, 636 (Colo. 1987). Section 38-35-204
plainly gives district courts the authority to decide the
validity of allegedly spurious liens and documents. §
38-35-204(1). The existence of that authority does not depend
on any ultimate ruling that the allegedly spurious lien or
document is invalid. Indeed, the statute requires a court to
enter an order declaring a lien or document not spurious if
it so determines. See § 38-35-204(5). Doing so
would not be permissible if such a determination deprived the
court of jurisdiction. Thus, Sensible's jurisdictional
The Amended Order to Show Cause Encompassed the Quitclaim
[¶45] As noted, Battle North's original
petition alleged only that the 1915 Stock Certificate was a
spurious document. The district court issued an order to show
cause based on that petition. Sensible contends that because
that order to show cause was limited to the 1915 Stock
Certificate, the court had no authority to determine the
validity of the quitclaim deeds.
[¶46] In responding to the court's
amended order to show cause (discussed below), Sensible
asserted that because no order to show cause had been issued
as to the quitclaim deeds, their validity was not at issue.
But Sensible did not thereafter make this argument in the
district court. Its trial brief did not mention the matter,
nor did Sensible's counsel mention the matter during the
hearing on the order to show cause or in closing argument
after the hearing. In fact, Sensible acted as if the validity
of the quitclaim deeds was at issue. Sensible included the
quitclaim deeds in its list of exhibits and did not object
when Battle North did the same. Sensible's counsel
stipulated to the admission of the quitclaim deeds at the
hearing, did not object to Battle North's questioning of
Mr. Tucker about the quitclaim deeds, and questioned Battle
North's expert about the legal effect of the quitclaim
[¶47] Under these circumstances, we could
conclude that Sensible abandoned the issue, so it is not
preserved for our review. See JW Constr. Co. v.
Elliott, 253 P.3d 1265, 1271 (Colo.App. 2011) ("
The identification of an affirmative defense in an answer and
trial management order, without more, fails to preserve a
matter for appellate review." ); Borquez v. Robert
C. Ozer, P.C., 923 P.2d 166, 171 (Colo.App. 1995)
(" [I]ssues presented in the pleadings but not presented
at trial will not serve as a basis of appellate review."
), aff'd in part, rev'd in part on other
grounds, 940 P.2d 371 (Colo. 1997).
[¶48] But the issue arguably pertains to the
district court's subject matter jurisdiction, an issue
which may be raised at any time, including on appeal.
See Pueblo W. Metro. Dist. v. So. Colo. Water
Conservancy Dist., 717 P.2d 955, 957 (Colo. 1986). This
is so because a court's jurisdiction to decide the
validity of a document is invoked by filing a petition under
section 38-35-204(1), and Sensible contends that the
court's jurisdiction was accordingly limited to deciding
the validity of the document challenged in the petition.
Therefore, we will address this contention.
[¶49] Sensible's contention ignores the
course of events following the court's issuance of its
initial order to show cause.
[¶50] Battle North filed an amended petition
for an order to show cause, expressly alleging that because
the quitclaim deeds were " entirely derivative of the
1915 Stock Certificate," they too were " spurious
documents . . . and should be declared invalid."
Thereafter, and before Sensible filed any response to the
order to show cause, the court held a status conference. The
minute order summarizing the discussions at the status
conference does not indicate that Sensible's counsel
objected to the amended petition. A
few days later, the court issued an amended order to show
cause directing Sensible to respond to Battle North's
[¶51] In our view, the court's amended
order pertained to Battle North's then operative pleading
-- the amended petition to show cause. As discussed, Sensible
proceeded at the hearing as if that was the case. And the
court said in its order declaring the documents spurious that
" [t]he Amended Petition added two quitclaim deeds as
documents, both of which Battle North contends are spurious.
The parties proceeded to hearing based upon the allegations
set forth in the Amended Petition." Thus, we conclude
that the quitclaim deeds were encompassed within the district
court's amended order to show cause. The court therefore
had statutory authority to determine the validity of those
The Quitclaim Deeds Affect Battle North's Real
[¶52] In its reply brief, Sensible argues
that the quitclaim deeds are not spurious because (1) a
quitclaim deed can convey only such title or interest as the
grantor had and (2) the district court determined that the
newly-created PMMC had no title or interest to convey.
Accordingly, Sensible asserts that Battle North's
property could not have been affected by the recording of the
quitclaim deeds. This argument is entirely without merit.
Standard of Review
[¶53] Sensible's contention depends on
the legal effect of documents. It therefore presents a
question of law that we review de novo. See
Nat'l State Bank of Boulder v. Burns, 525 P.2d
504, 506 (Colo.App. 1974) (not published pursuant to C.A.R.
35(f)); see generally Am. Water Dev., Inc. v.
City of Alamosa, 874 P.2d 352 (Colo. 1994).
[¶54] In effect, Sensible argues that unless
a document is a valid lien or encumbrance against real
property, it cannot be a spurious document because it cannot
affect the real property. But if a lien or document creates a
valid lien or encumbrance, it is not a spurious document. As
noted, a spurious document is " any document that is
forged or groundless, contains a material statement or false
claim, or is otherwise patently invalid." §
38-35-201(3). This definition obviously may encompass a
document that purports to convey an interest in property but
does not do so because the grantor has no interest to convey.
[¶55] In Pierce v. Francis, 194
P.3d 505, 508 (Colo.App. 2008), a division of this court held
that a notice of lis pendens can be a spurious document as
defined by section 38-35-201(3). Accord Shyanne
Props., 210 P.3d at 491; see also Westar
Holdings P'ship, 991 P.2d at 330. A notice of lis
pendens is nothing more than a notice that litigation
involving title to real property is pending. See
Hewitt v. Rice, 154 P.3d 408, 412 (Colo. 2007).
Ultimately, it may be determined that the party who filed the
notice of lis pendens does not have any interest in the
property. But, even if that is the outcome, the notice
creates a cloud on title, rendering title unmarketable.
Id. at 412-13; Pierce, 194 P.3d at 508.
[¶56] Likewise, a quitclaim deed gives
notice that the grantee claims an interest in the property.
Whether valid or not, it thus creates a cloud on title.
See Nielson v. Benton, 903 P.2d 1049, 1052
(Alaska 1995) (" A cloud on title is an outstanding
claim or incumbrance which, if valid, would affect or impair
the title of the owner of a particular estate. . . . To be a
cloud on title the claim need not be valid, it need only be
colorable until removed by a quiet title action."
(internal quotation marks and citations omitted));
Gambino v. Boulevard Mortg. Corp., 398 Ill.App.3d
21, 922 N.E.2d 380, 410, 337 Ill.Dec. 257 (Ill.App.Ct. 2009)
(" A cloud on title is the semblance of title, either
legal or equitable, appearing in some legal form but which
is, in fact, unfounded or which it would be inequitable to
enforce." ); Essex Crane Rental Corp. v.
Carter, 371 S.W.3d 366, 388 (Tex.App. 2012) (" A
cloud on title exists when an outstanding claim or
encumbrance is shown, which on its face, if valid, would
affect or impair the title of the owner of the
property." (internal quotation marks omitted));
Robinson v. Khan, 89 Wn.App. 418, 948 P.2d 1347,
1349 (Wash. Ct.App. 1998)
(" 'A cloud upon a title is but an apparent defect
in it.'" (quoting Whitney v. City of Port
Huron, 88 Mich. 268, 50 N.W. 316, 317 (Mich. 1891))).
Several courts have regarded quitclaim deeds as creating a
cloud on title. See, e.g., Ridgeway v.
Lewis, 203 Ark. 1063, 160 S.W.2d 50, 51 (Ark. 1942);
Joseph v. Duran, 436 So.2d 316, 316-17 (Fla. Dist.
Ct.App. 1983); Pierson v. Davidson, 252 Mich. 319,
233 N.W. 329, 330-31 (Mich. 1930).
[¶57] In this case, the cloud on title is
particularly obvious given that the purported grantor of the
quitclaim deeds, an entity referred to in the deeds as Pine
Martin Mining Company, appears early on in the record chain
of title of the Pine Martin parcel. Any potential purchaser
of the property would have notice of -- and likely be
deterred by -- the claims represented by these quitclaim
[¶58] We therefore conclude that the
district court did not err in finding that the quitclaim
deeds are spurious documents. As clouds on title they
obviously affect Battle North's property. And the
district court's underlying findings, which are supported
by the record, and which Sensible does not contest, support
the conclusion that the quitclaim deeds are "
groundless" and contain " false claim[s]."
See § 38-35-201(3). Those findings include that
the 1915 Stock Certificate (which Mr. Tucker created and from
which he purported to derive his authority) was a " sham
and not a genuine copy of anything," and that Mr. Tucker
had no authority to execute and record the quitclaim deeds.
Battle North's Title Is Not Invalid
[¶59] Sensible argued in the district court
that Battle North is not a " person whose real . . .
property is affected by" the 1915 Stock Certificate and
quitclaim deeds, as required by section 38-35-204(1), because
it does not own the Pine Martin parcel. On appeal, Sensible
contends that the district court erred in rejecting that
argument. We are not persuaded.
Standard of Review
[¶60] The parties disagree as to the
appropriate standard of appellate review. Sensible argues
that we should review the district court's ruling de
novo, while Battle North argues that we should review the
ruling for clear error. Under the circumstances presented, we
agree with Sensible.
[¶61] Sensible's challenge to the
district court's ruling is based on its contention that
two 1932 treasurer's deeds in Battle North's chain of
title are invalid. It argues that one such deed contains an
insufficient legal description of the property conveyed, and
that the other was ineffective because the United States had
record title to the property when the treasurer's deed
was issued. These contentions are based only on consideration
of documents and the law of conveyances. The district court
did not make any credibility determinations relevant to these
contentions, nor did the court weigh conflicting evidence.
Because we are in as good a position as the district court to
determine the legal effect of the relevant documents, we
review de novo. See Colo. River Water
Conservation Dist. v. Mun. Subdistrict, 198 Colo. 352,
355, 610 P.2d 81, 83 (1979); Bolser v. Bd. of
Comm'rs, 100 P.3d 51, 53 (Colo.App. 2004);
Dynasty, Inc. v. Winter Park Assocs., Inc., 5 P.3d
392, 393 (Colo.App. 2000).
[¶62] The 1932 treasurer's deeds were
issued as a result of the original PMMC's failure to pay
taxes on a larger tract of property containing the Pine
Martin parcel. One refers to the Bolt and Brooklyn Placer
parcel and the other refers to the River Bend Mill site.
Because Sensible's more specific contentions as to these
two deeds differ, we address them separately.
The Bolt/Brooklyn Placer Treasurer's Deed
[¶63] The legal description in the
Bolt/Brooklyn Placer treasurer's deed described the
property conveyed as follows:
A part of the Brooklyn placer, U.S. Survey No. 19500,
containing one and one-half acres, also a strip of land along
the eastern side of the F.S. Bolt Homestead of H.E.S. No. 41,
containing 2.93 acres situate in the County of Eagle, State
of Colorado . . . .
deed also said that the two parcels were "
contiguous." Relying on a number of cases, Sensible
argues that this legal description was insufficient to
identify the property conveyed, and therefore the deed was
void. See, e.g., Smith v. Highland Mary Mining,
Milling & Power Co., 82 Colo. 288, 290, 259 P. 1025,
1026 (1927); Webber v. Wannemaker, 39 Colo. 425,
428, 89 P. 780, 781 (1907); Adelson v. Bd. of Cnty.
Comm'rs, 875 P.2d 1387 (Colo.App. 1993).
[¶64] The district court rejected this
argument for two reasons. First, the court ruled that
Sensible's argument is barred by section 38-41-111,
C.R.S. 2014, which provides, in relevant part, that no one
may challenge the title of one in possession of real property
based on the alleged invalidity of any deed (including a
treasurer's deed) in the chain of title more than seven
years after the deed was recorded.
[¶65] Second, the district court determined
that the description was sufficient because the deeds by
which PMMC had obtained the parcels mentioned in the
Bolt/Brooklyn Placer treasurer's deed described those
parcels by metes and bounds. In so determining, the court
relied on the principle that a property description in a
treasurer's deed is sufficient if " the description
of real property sold for taxes is such that thereby it can
be identified, either with or without extrinsic evidence, and
does not mislead the owner." Seymour v.
Deisher, 33 Colo. 349, 351-52, 80 P. 1038, 1039 (1905)
(quoted with approval in Lake Canal Reservoir Co. v.
Beethe, 227 P.3d 882, 891 (Colo. 2010)); see
also Harrison v. Everett, 135 Colo. 55, 60, 308
P.2d 216, 219 (1957) (" If the description in a deed
identifies, or furnishes the means of identifying,
the property conveyed, it performs its function."
(emphasis added)). The court also noted the current trend in
the law toward affirming the validity of tax titles.
See Lake Canal Reservoir Co., 227 P.3d at
[¶66] We reject Sensible's challenges to
[¶67] Sensible argues that section 38-41-111
does not apply because " [t]he issue in this case was
what property, if any, Battle North acquired by virtue of the
Treasurer's deed, not whether the deed was valid."
But Sensible's argument that Battle North does not own
the Pine Martin parcel is based expressly on its assertion
that the Bolt/Brooklyn Placer treasurer's deed is
invalid. Thus, by its plain terms, section
38-41-111 applies to Sensible's argument. See
Bald Eagle Mining & Refining Co. v. Brunton, 165
Colo. 28, 32, 437 P.2d 59, 61 (1968) (noting that the
predecessor statute to section 38-41-111 " makes a title
acquired by tax deed virtually invulnerable to attack after
it has been of record seven years" ); see also
Dynasty, Inc., 5 P.3d at 393-94 (rejecting a
virtually identical argument); Joseph v. Joseph, 43
Colo.App. 533, 534-35, 608 P.2d 839, 840 (1980). Because the
deed at issue was recorded on November 12, 1932,
Sensible's challenge was more than seventy years too
[¶68] Sensible's argument as to the
legal description fares no better. Sensible argues that the
legal description was insufficient as a matter of law because
it conveyed only a part of a larger tract. But that argument
ignores the holding of Seymour, which our supreme
court relatively recently approved in Lake Canal
Reservoir Co., that such a description is sufficient if
the property can be identified by extrinsic evidence and the
owner is not misled. Sensible does not challenge the district
court's determination that the deeds from which the
Bolt/Brooklyn Placer treasurer's deed was derived, which
are in the record chain of title, described the property by
metes and bounds. Nor does Sensible assert that the grantee
of the Bolt/Brooklyn Placer treasurer's deed, or anyone
else for that matter, was misled by the legal description.
[¶69] Sensible's reliance on
Smith, which dealt with a grant of a portion of
larger tracts, is misplaced because in that case
there was apparently no contention that the property was
identifiable by reference to extrinsic evidence.
[¶70] We therefore conclude that the
district court did not err in rejecting Sensible's
challenge to Battle North's ownership based on the
alleged invalidity of the Bolt/Brooklyn Placer
The River Bend Mill Treasurer's Deed
[¶71] Sensible argues that the River Bend
Mill treasurer's deed, which was recorded three days
after the Bolt/Brooklyn Placer treasurer's deed, is void
because when the treasurer issued it, the United States had
record title to the parcel. Sensible bases this argument on
the fact that the 1920 Patent from the United States
conveying the parcel to the original PMMC was not recorded
until 1993. The district court rejected this argument because
of section 38-41-111's statute of limitations and because
the failure to record the patent until 1993 did not render
the River Bend Mill treasurer's deed subject to attack by
one having notice of the conveyances.
[¶72] Sensible's argument that section
38-41-111 does not apply fails for the reasons discussed
above. It did not challenge the River Bend Mill
treasurer's deed within seven years after it was
[¶73] Sensible's argument pertaining to
the delayed recording of the 1920 Patent misconstrues the
effect of the failure to record a deed. Such a failure may
allow one later claiming an interest in title to assert that
it was not on notice of a claim dependent on an unrecorded
instrument. See § 38-35-109(1), C.R.S. 2014.
But an unrecorded deed is valid as between the parties
thereto and therefore conveys title. It is not void. See
id.; Page v. Fees-Krey, Inc., 617 P.2d 1188,
1194 (Colo. 1980). Thus, because Sensible does not claim any
lack of notice (and could not because the 1920 Patent was
recorded before Sensible purported to obtain title), its
attempt to challenge Battle North's title on this basis
Appellate Attorney Fees
[¶74] Battle North requests an award of its
appellate attorney fees pursuant to section 38-35-204(2) and
C.R.C.P. 105.1(d). We grant the request in part. Both
provisions require an award of attorney fees if the court
determines that a document is spurious. And divisions of this
court have held that where a party has successfully defended
on appeal a judgment as to which attorney fees were awarded
pursuant to a fee-shifting statute, that party is entitled to
recover reasonable appellate attorney fees. See,
e.g., Fiscus, ¶ 60 (awarding appellate
attorney fees under § 38-35-204(2)); Melssen v.
Auto-Owners Ins. Co., 2012 COA 102, ¶ 75, 285 P.3d
328. We exercise our discretion to remand the case to the
district court for a determination of Battle North's
reasonable appellate attorney fees incurred in defending the
judgment as to the quitclaim deeds. (Battle North is not
entitled to an award pertaining to the 1915 Stock
[¶75] We do not award fees to Sensible
because it did not include a request for fees in its opening
brief. See C.A.R. 39.5.
[¶76] The judgment is affirmed in part and
reversed in part, and the case is remanded to the district
court for a determination of Battle North's reasonable
appellate attorney fees incurred in defending the judgment as
to the quitclaim deeds.
CASEBOLT and JUDGE BERNARD concur.
The history of disputes over the Pine
Martin parcel is recounted in several Colorado appellate
court decisions, including: Town of Minturn v. Sensible
Hous. Co., 273 P.3d 1154, 2012 CO 23,
rev'g, 280 P.3d 36 (Colo.App. 2010); Mortg.
Invs. Corp. v. Battle Mountain Corp., 70 P.3d 1176
(Colo. 2003), rev'g, 56 P.3d 1104 (Colo.App.
2001); Ginn Battle Lender, LLC v. Sensible Hous.
Co., (Colo.App. Nos. 10CA0114 & 10CA2158, Apr. 21, 2011)
(not published pursuant to C.A.R. 35(f)); Mortg. Invs.
Corp. v. Battle Mountain Corp., 93 P.3d 557 (Colo.App.
2003); and Turkey Creek Ltd. Liab. Co. v. Anglo Am.
Consol. Corp., 43 P.3d 701 (Colo.App. 2001).
We would reach the same result on the
merits of the priority rule issue were we to review it de
To be sure, " may" will be
construed as " must" or " shall" if the
context indicates an intent that it be so construed. See,
e.g., Danielson v. Castle Meadows, Inc., 791
P.2d 1106, 1113 (Colo. 1990). But nothing in C.R.C.P. 105.1
indicates that " may" as used in subsection (a)
must be interpreted as " must" or "
shall" to fulfill the rule's purpose.
We reject Battle North's argument that
Sensible failed to preserve this contention for review for
the same reason we rejected its similar argument concerning
Sensible's priority rule contention.
We observe that both Battle North's and
Sensible's title experts agreed that the 1915 Stock
Certificate did not have any effect on Battle North's
To be clear, we do not hold that a document
must cloud title to be one that affects property within the
meaning of section 38-35-204(1). We hold that a document that
clouds title affects property within the meaning of the
Sensible never contested that Battle North
is in actual possession of the Pine Martin parcel.
We express no opinion on whether Sensible
may seek to vacate the attorney fees and costs awarded by the
district court pertaining to the 1915 Stock Certificate.
See Oster v. Baack, 2015 COA 39, ¶
¶ 17-26, 351 P.3d 546.