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Hutchins v. La Plata Mountain Resources, Inc.

Supreme Court of Colorado, En Banc

June 20, 2016

Scot B. Hutchins and John H. Gasper, Petitioners
v.
La Plata Mountain Resources, Incorporated, Respondent

          Certiorari to the Colorado Court of Appeals. Court of Appeals Case No. 11CA156.

          SYLLABUS

         Hutchins and Gasper petitioned for review of the court of appeals' judgment affirming the district court's ruling in favor of La Plata, in an action brought by La Plata to collect on certain debentures issued by Leadville Mining and foreclose on a deed of trust securing the debts. Although Leadville's authorized agent had signed documents acknowledging its obligations for the amounts owed on other similar debentures held by Hutchins and Gasper, which were secured by the same deed of trust, the court of appeals reasoned that because these documents lacked the two-thirds consent required for modification of the debentures, the included acknowledgments were insufficient to restart the applicable limitations period. The court of appeals therefore concluded, as had the district court, that the statute of limitations had run on any action by Hutchins and Gasper to collect on the debts or foreclose on the deed of trust.

         The supreme court reversed the judgment of the court of appeals, holding that because the documents in question were in writing, were signed by Leadville, and contained a clear and unqualified acknowledgement of the debt owed to Hutchins and Gasper, they constituted a new promise to pay, establishing a new accrual date and effectively extending the limitations period on collection of the debt, whether or not the documents in question also successfully modified the terms of the debentures.

         John H. Gasper, Pro se, Fishers, Indiana.

         For Petitioner Scot B. Hutchins: Davis Graham & Stubbs LLP, Andrew M. Low, Kyle W. Brenton, Denver, Colorado.

         For Respondent: Gordon & Rees LLP, John R. Mann, Denver, Colorado.

         JUSTICE COATS delivered the Opinion of the Court. JUSTICE HOOD dissents, and JUSTICE MÁRQUEZ and JUSTICE GABRIEL join in the dissent.

          OPINION

         COATS, JUDGE

          [¶1] Hutchins and Gasper petitioned for review of the court of appeals' judgment affirming the district court's ruling in favor of La Plata, in an action brought by La Plata to collect on certain debentures issued by Leadville Mining and foreclose on a deed of trust securing the debts. Although Leadville's authorized agent had signed documents acknowledging its obligations for the amounts owed on other similar debentures held by Hutchins and Gasper, which were secured by the same deed of trust, the court of appeals reasoned that because these documents lacked the two-thirds consent required for modification of the debentures, the acknowledgments included in them did not have the effect of extending the due date of the Hutchins and Gasper debentures, and therefore did not restart the limitations period for collection of the respective debts. The court of appeals therefore concluded, as had the district court, that the applicable statute of limitations had run on any action by Hutchins and Gasper to collect on the debts or foreclose on the deed of trust, leaving La Plata as the sole secured creditor.

          [¶2] Because the documents in question were in writing, were signed by Leadville, and contained a clear and unqualified acknowledgement of the debt owed to Hutchins and Gasper, they constituted a new promise to pay, establishing a new accrual date and effectively extending the limitations period on collection of the debt, according to the statutes and case law of this jurisdiction, whether or not the documents in question also successfully modified the terms of the debentures. The judgment of the court of appeals is therefore reversed.

         I.

          [¶3] In 2003, La Plata Mountain Resources, Inc., brought actions against Leadville Mining Corporation, Scot Hutchins, John Gasper, and other holders of debt instruments, denominated " debentures," [1] issued by Leadville, seeking to collect on those debentures held by La Plata and to foreclose on a deed of trust, which secured all of Leadville's outstanding debentures. La Plata also sought a determination that only it among the holders of the remaining outstanding debentures secured by the same deed of trust had filed within the applicable statute of limitations, and therefore that only it among the outstanding debenture holders had a secured position. Hutchins and Gasper held interest in other of the debentures secured by the same deed of trust.

          [¶4] The district court held a three-day bench trial, resulting in lengthy, undisputed factual findings. As relevant here, the district court found that Leadville owned hundreds of mining properties in Lake and Park Counties. In 1987, in an effort to obtain $3.3 million of operating cash, Leadville created fifteen convertible debentures secured by a single deed of trust encumbering the bulk of Leadville's properties. While the amount owed on each debenture varied according to the sum loaned by each investor, the debentures were otherwise identical. By the time of trial, some debentures had been converted to stock or released, but seven remained outstanding. The debentures were originally scheduled to ...


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