The Rule of 7 or why do I have to learn new deadlines after practicing law for 29 years?

On January 1, 2012, the Colorado Supreme Court changed all of the  Rules of Civil Procedure to make all deadlines divisible by 7.  I learned in law school that an answer was due 20 days after service.  Now it is 21 days after service.  Answers to discovery requests were always due in 30 days.  Now it is 35 days.  I can understand that all new deadlines are divisible by 7, but why did the Supreme Court give a District Court judgment debtor 21 days to answer  Rule 69 Interrogatories and only give a County Court judgment debtor 14 days to answer Rule 369 Interrogatories?   Why couldn't it be the same amount of time? 

Now the Colorado State Legislature has joined into the Rule of 7.  It changed all deadlines that affect court proceedings to be divisible by 7 as well.  This is effective on July 1, 2012.  So if you want to appeal a county court judgment, you now have 21 days to do so, instead of the 15 you used to have.  So take heed all you attorneys who get the desperate phone call from the procrastinating litigant on the 13th day, you still have 8 more days to file that appeal! 

Terry Ehrlich, Esq.  Arnold & Arnold, LLP
http://www.arnoldarnold.com/

If you are a landlord or represent a landlord, that deliquent tenant has a few more days.  The tenant formerly had to appear not less than five days or more than 10 days after the summons was issued. It has now been changed to not less than seven and not more than fourteen days from the date of issuance of the summons. 

Garnishment deadlines have also changed as of July 1, 2012.  Writs of Continuing Garnishment now last for 182 days, instead of 180.  Two more days of wages!  However, a garnishee who thinks they have an exemption now has fourteen days, instead of ten, to file the claim of exemption.  However, the exemption still can't claim "I can't pay because I have no money".

The Legislature has also decreed that you have to stay married to that "jerk", "deadbeat" or whatever label you give to your soon to be ex-spouse one day longer.  You can't get a decree of marriage until 91 days have passed since the Court acquired jurisdiction over the respondent.  It used to be 90 days. 

This blog is not intended to be an exhaustive list of all changes in deadlines.  You will need to assume that all deadlines must be divisible by 7.  If you are looking at a deadline that you think is 10 days, think again.  It is probably 14 days!  Good luck with relearning all of deadlines you memorized in law school!     

          

Finding Assets- Disclosure Hearings

Rule 69, C.R.C.P. provides for Execution and Proceedings Subsequent to Judgment.  The Rule allows a creditor to either serve written interrogatories on the judgment debtor, who must be personally served under Rule 45, CR.C.P., or serve a subpoena on the judgment debtor to appear in Court to answer questions concerning property.  You can serve a subpoena duces tecum and require the judgment debtor to bring documents with him, so you can verify the answers. County Court allows Interrogatories to be served under Rule 369, C.R.C.C.P., but does not provide for subpoenas. 

There is a dispute as to whether Rule 45 requires a judgment debtor to be served a witness fee.  Many attorneys serve a witness fee in accordance with the requirements of Rule 45.  This office does not serve a witness fee on a judgment debtor who is personally named.  Judge King in Douglas County agreed with this and said that Rule 69 is a rule that affects proceedings occuring post-judgment.  He ruled that it doesn't make sense to give a judgment debtor money to appear in court and answer questions about his/her own assets.    So at least one judge doesn't require the witness fee.  There may be a divergence of opinions on this issue.    

At the Rule 69 hearing, you can ask questions of the debtor regarding his/her/its assets.  The debtor is required to answer truthfully, under oath. The judgment creditor is allowed to bring a court reporter to the Rule 69 hearing.  A deposition of any person, including the judgment debtor, may be taken  upon order of the Court under Rule 69 (i).    Rule 69 (f) also allows for the creditor to subpoena a debtor of the judgment debtor.  The debtor must owe the judgment debtor at least $500.00.  The Court is  allowed to make reasonable orders for mileage and expenses.       

If the debtor fails to answer the interrogatories within 21 days after service of the interrogatories, the creditor can file a motion with the Court requesting an order to have the judgment debtor appear in court at a specified time to show cause why he should not be held in contempt for failure answer the interrogatories.  It is generally better to prepare this Motion as a contempt citation and serve the citation at least 21 days prior to the hearing.  If the judgment debtor fails to appear for this show cause hearing, the Court can issue a bench warrant for the debtor’s arrest.

If the debtor fails to appear on the date specified on the Rule 69 subpoena, the Court will issue a bench warrant for his or her arrest. This also applies to corporate officers or registered agents who fail to appear.    

Submitted by Terry Ehrlich

Pilot Program in Civil Cases in Certain Counties

PILOT PROGRAM IN CVIL CASES IN CERTAIN COUNTIES

WHO:  The pilot program applies to District Court civil litigation business cases, including breach of contract, business tort actions, (e.g. unfair competition, fiduciary duty, fraud, misrepresentation) transactions involving the Uniform Commercial Code, commercial real property transactions, cases involving business dealings, intellectual property, business transactions with commercial banks or other financial institutions, and product liability.  There are other matters as well.

Excluded are :  Construction defect claims; foreclosure actions or for rent on real property, replevin cases, and cases involving a statute or rule that contains distinct time frames for the proceeding.  (Mechanic Lien foreclosures would be included in this). There are other exclusions not listed.

WHAT:  Plaintiff must file a disclosure statement within 21 days after service of the complaint.  Defendant must file an answer within 21 days after service of the disclosure statement.  The parties are to meet and confer within 14 days after filing of the answer.  An initial case management conference will be held within 49 days after the answer is filed.  Seven days prior to the conference, the parties will submit a joint report.

WHERE:   Jefferson, Gilpin, Adams, Denver, and Arapahoe Counties.  

WHEN:  On January 1, 2012, the Colorado Supreme Court instituted a pilot program for civil cases. It expires on January 1, 2014.  

HOW DOES THIS AFFECT YOU:   You will need to give us more information up front in order to file the disclosure statement.  The statement must include a listing of all person with information related to the claims and a brief description of the information each such individual is believed to possess; and a list of documents related to the claims, whether they are supportive or harmful.      

Be aware of the change of dates in when the answer is due. 

Your case may move faster than before.  A single judge is assigned to the case from start to finish.  The judge will manage the case much more closely than before.  Requests for extensions and continuances will be denied by the Court, so we have to be sure that trial dates work for all witnesses schedules. 

Medical Advance Directives

             Medical Advance Directives.

            One often overlooked area of planning is that of advance medical planning.   These are documents in which you can express your wishes to your family and medical care givers.   The following are typical:

Medical Durable Power of Attorney.  This document appoints an agent to make medical decisions for you in the event you lack legal capacity to express your desires.  Typically, a person appoints his or her spouse or adult child.  This document usually has a very broad grant of authority.  The agent gains the authority only after the principal has lost legal capacity.  This document can be drafted with “customized” limitations to the agent’s authority.

Declaration as to Medical Treatment (Living Will).  This document provides in advance for the cessation of active medical treatment for a person when certain specific conditions are met.  A person must have an irreversible or terminal condition and be in a persistent vegetative state in order for this directive to be effective.  These conditions must be certified by two physicians.   Upon satisfaction of those conditions, the living will directs that further medical procedures cease.

HIPPA Release.  This document is effective immediately and grants a spouse or other trusted person access to medical records.

Medical Order for Scope of Treatment (MOST).   This document must be prepared with the assistance of a physician, advanced practice nurse or physician assistant.  This is normally used at a stage of life when further treatment may not be desired.  It can include “do not resuscitate” orders. 

Other Directives.   You may see other documents such as the “Five Wishes” or similar documents.  These often contain simplified versions of the directives described above, along with other instructions.

Submitted by Rich Arnold Copyright 2012

Work on Federally-Own Projects - Summary of Payment Remedy under the Miller Act

WORK ON FEDERALLY-OWNED PROJECTS.

            Miller Act Remedies.  On federally-owned projects, Miller Act bonds are usually required to be filed with the Contracting department of the government.  Procedures under the Miller Act require that the claimant who DOES NOT have a direct contract with the contractor who furnished the bond, give written notice to the prime contractor by certified or registered mail within ninety (90) days from the date that labor, materials or equipment were last furnished.  The right to recover under the Miller Act is lost if the required notice is not given.  It should be noted that other jurisdictions have expressly ruled that giving written notice “requires receipt of the notice by the contractor.”  This means that the notice should be received by the contractor prior to the ninety days, regardless of whether it was sent by registered mail or not.  This issue has not been ruled on in Colorado or in the 10^th Circuit, but it is good practice to follow this rule.  See, Pepper Burns Insulation, Inc. v. Artco Corp., 970 F.2d 1340, 1343 (C.A.4 (N.C.),1992); U.S. for Use and Ben. of B & R, Inc. v. Donald Lane Const., 19 F.Supp.2d 217, 226 (D.Del.,1998). Only those who have not contracted directly with the contractor providing the bond need give the Miller Act notice.  Interest can also be recovered on the bond from the contractor and surety. U.S. for the Use of C.J.C., Inc. v. Western States Mechanical Contractors, Inc., 834 F.2d 1533 (10^th Cir. 1987).

            Parties who have a contract directly with the general contractor as well as subcontractors and suppliers who have given timely notice by certified or registered mail must commence suit on the Miller Act bond in Federal Court.  The suit must be commenced within one (1) year after the date that labor, materials or equipment were last furnished.

Submitted by Jean C. Arnold, Esq.

ETHICAL CONSIDERATIONS IN DIVORCE AND FAMILY LAW

Mandatory and Permissive Withdrawal of Legal Representation
   
            A lawyer must withdraw from representation if any of three circumstances exist.   First, if the representation will result in violation of the RPC.  Second, if the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client.  Third, if the client discharges the lawyer.  Colo. RPC 1.16(a). 

Permissive withdrawal may occur when the attorney is in compliance with Colo. RPC 1.16(b).  Seven circumstances are described in the rule.  I will touch on only a few.  A lawyer may withdraw if the withdrawal can be accomplished without material adverse effect on the interests of a client.  A lawyer may also withdraw if the client fails substantially to fulfill an obligation to the lawyer.  These permissive reasons for withdrawal are tempered by the tribunal’s authority to order the attorney to continue the representation (Colo. RPC 1.16(c)).  In short, if you plan to get out of the case do so well in advance of any hearing.  I recommend seeking withdrawal at least 90 days prior to any hearing of the matter.

Permissive withdrawal is also allowed when the client persists in a course of action involving the lawyer’s services that the lawyer believes to be fraudulent.  This circumstance may require a “noisy withdrawal.”  If the client intends to present false testimony or evidence, the attorney may not participate, and has a duty to the court to correct false statements (Colo. RPC 3.3).  The attorney must also keep client confidentiality (Colo. RPC 1.16).  Thus, the attorney should cite as the basis of withdrawal that “professional considerations require termination.”   Ordinarily, this should be sufficient.

© 2011 Richard M. Arnold, Arnold & Arnold, LLP, Attorneys at Law

Colorado Pre-Lien Legislation 2012

Colorado Pre-Lien Update

The Colorado Association of Home Builders Government Affairs Committee removed mechanics’ liens as a proactive item from their 2012 legislative agenda and as such will not be proceeding with a bill on this issue. 

In 2011, House Bill 11-1020, initiated by the CAHB was considered by the House Economic and Business Development Committee.  On March 3, 2011 the Committee - on a 13-0 vote - referred HB 11-1020 to a Legislative Committee for further study.  I participated on the committee through the summer and early fall.  A revised version of a possible bill was reviewed this week by CAHB, who decided not to pursue the bill in the 2012 legislative session.

Jean Arnold, Esq.

NAVIGATING SMALL CLAIMS COURT

NAVIGATING THE LEGAL SYSTEM ON YOUR OWN IN SMALL CLAIMS COURT

Small claims court can be useful when the amount in controversy is $7,500 or less.  It is a quick process that avoids attorney's fees and the delays of typical litigation.  There are some excellent self-help resources at the websites below if you decide to embark on the process or if you find yourself involuntarily involved.

http://www.courts.state.co.us/Self_Help/Local_Small_Claims.cfm
http://www.courts.state.co.us/Forms/Forms_List.cfm?Form_Type_ID=9

Some of the important steps and rules of the small claims court are as follows:

1. Only certain actions can be filed in small claims court, so first make sure you have a case that is allowed to be heard in small claims court.  You can see a list of the correct types of cases at Colorado Revised Statute §13-6-403 or at the self-help website. 

2. There is a limit for how much money you can sue for in small claims court.  Your amount has to be $7,500 or less, which includes interest. 

3. Your trial will be before a Judge or Magistrate.  There are no jury trials in small claims court.

4. You will sue in the county in which any of the defendants resides, is regularly employed, or is a student at a University.  In an action involving real property, such as a landlord-tenant dispute, the action may be brought in the county in which the subject real property is located.

5. You can print the forms off of the self-help website above and file them in the county that you choose.  If you are the Plaintiff, you will need to file the Notice, Claim and Summons to Appear for Trial.  You will also need to have those papers served on the Defendant(s) and file an Affidaivit of Service.  If you are the Defendant, you need to appear to the named court on the day listed on your summons.  Failure to appear could result in a default judgment against you. 

6. Service can be obtained by a Sheriff's Department or a private process server.  You must have the defendant(s) served personally.  You can recover your costs of service in a final judgment against the Defendant(s). You can also recover the filing fee as a cost.  The filing fee depends on the amount of your claim. If you are the defendant and you win at trial or you win a counterclaim, you can recover your costs. 

7. If you obtain a judgment, the court will not help you collect that judgment.  If you live near Jefferson County, there is a collection clinic taught at the courthouse every first Tuesday of the month by Arnold & Arnold, LLP. 

Kelley G. Shirk, Esq.

Differences under Chapter 7 and Chapter 13 of The Bankruptcy Code: Secured or Unsecured, payment of judgment, impairment of exemptions?

What are the Differences under Chapter 7 and Chapter 13:  Secured or Unsecured, payment of judgment, impairment of exemptions?  By Jean C. Arnold, Esq.

A.             Payment of judgment – unsecured debt.  In Bankruptcy, it is unlikely the debtor will pay the full amount of the judgment unless the underlying debt is found to be non-dischargeable under 11 U.S.C. §523 or the judgment is part of a Chapter 13 plan to pay the judgment in full or the judgment is reaffirmed by agreement with Court approval. 

Under Chapters 7 and 13, if there are non-exempt assets available for distribution, the creditor must timely file a proof of claim under 11 U.S.C. §501.  The creditor’s deadline to file the proof of claim is shown on the notice of bankruptcy, and in Chapter 7 or Chapter 13 cases, must be filed within 90 days after the first date set for the meeting of creditors under 11 U.S.C. § 341(a).  See Bankruptcy Rule 3002(c).  The bar date for Chapter 7 and Chapter 13 proofs of claim cannot be extended for excusable neglect.  In re Smartt Construction Co., 138 B.R. 269 (D.Colo.1992) and Jones v. Arross, 9 F.3d 79 (10th Cir.1993).  If the claim is allowed, the creditor will receive the pro rata distribution of assets, following payment of administrative expenses and the Trustee’s fee. 

B.                 Payment of judgment – secured debt.  Under both Chapters 7 and 13, the creditor is entitled to maintain its security interest in the debtor’s property.  The creditor may seek relief from the automatic stay under 11 U.S.C. §362 and proceed to dispose of the secured asset to satisfy its debt.  If the value is insufficient, then the creditor can seek recovery for the unsecured – undersecured – debt component through the claims process under §501. 

There are circumstances under 11 U.S.C. §363(c) allowing the Trustee and debtor to use, sell, or lease secured property.  Such as the use of “cash collateral” in the ordinary course of the debtor’s business under §§ 721 or 1304.  Then, unless the creditor consents, the debtor must comply with the requirements of 11 U.S.C. §363 by providing “adequate protection” to the creditor under §363(e).  Adequate protection generally takes the form of providing the creditor with alternative property to secure the debt.   

C.                 Impairment of exemptions.  Colorado’s listing of exempt property appears in §13-54-102, C.R.S.  However, §13-54-107, C.R.S. expressly prohibits the Bankruptcy exemptions contained in 11 U.S.C. § 522(d).   Thus, because Colorado’s state exemptions are not inconsistent with Federal Law, Colorado residents can only use the state exemptions when filing bankruptcy in Colorado.  In re Parrish, 19 B.R. 331 (D. Colo. 1982).  

I have just been ordered to mediation! What does that mean?

Courts are frequently ordering mediation before you can go to trial.  Many people have never experienced mediation and don’t know what it is.  Mediation is separate from a trial.  Mediation is a time to sit down with a mediator – a neutral third party who doesn’t have a stake in the outcome and has been trained to assist people in coming to a resolution of their conflict.  Mediators can be employed by the court or can be private mediators.  They are often attorneys or retired judges, but don’t have to have legal training at all.  Mediation is an opportunity to hear your opponent’s side of the conflict and be creative in coming to a resolution.   Sometimes mediation is the first time that you can hear the other person’s story.  Mediation often brings new facts to light, which helps people resolve their dispute.  Mediation also gives parties control over the outcome.  The disadvantage of having a judge resolve a dispute is that the judge can only rule for one party and they can only enter orders allowed under law.   There is always risk in going to court.  Mediation helps parties control that risk by having control over the outcome.

Some people dislike mediation because they may have already tried to resolve the issue themselves and think it is hopeless.  However, there is something advantageous about having to tell your side of the dispute to a third party. People are usually better behaved and don’t shout or interrupt the other person when there is a third party present.   The mediator listens to both sides equally and asks questions to try to narrow the disputed issues.  The mediator will control the discussion and can intervene and talk to one party separately if necessary.  Sometimes the conflict is centered around emotional issues, such as hurt feelings or anger, completely separate from the legal issues that are the source of the complaint.  A skilled mediator can seek to address those emotional issues and see if there can be resolution of those issues as well as the legal issues.  Often tears are shed at mediation.  I have seen the parties noticeably soften, once the conflict is resolved, and begin talking to each other after mediation.  They would hardly look at the other person when the mediation started, but afterwards they are able to look the other person directly in the eye and have a normal conversation.    This rarely happens in a courtroom. When the judge issues the order of the Court, people usually leave without talking to each other.  After a trial, both parties are unhappy because the outcome was not what they hoped for.     So be open about mediation and go ready to mediate in good faith.  You might be surprised at the positive outcome.    

By Terry Ehrlich, Esq.

New Wyoming Lien Law

Change in Wyoming lien law – Have you filed your pre-lien notice?

A number of our clients have done work or will soon be doing work or supplying goods and services for projects located in Wyoming.  Unlike Colorado, Wyoming is a pre-lien state and thus a supplier of goods and services must provide a notice to the owner and general contractor within thirty (30) days of FIRST supplying to the project.  Although the pre-lien notice has been a requirement under Wyoming lien law for quite some time, there have been a few loopholes in the statute that would allow a lien claimant to pursue their lien even if the pre-lien notice was not done.   However, the Wyoming statutes changed as of July 1, 2011 doing away with the loopholes.  Thus,  a pre-lien notice is a mandatory requirement to filing a lien in Wyoming and failure to timely do so will bar the claimant from filing a lien.  Wyoming requires that a pre-lien notice be filed even on public projects.

There have also been a number of other changes to the mechanic’s lien law. Among them is extending the time for filing a lien claim.  The old statute required that a lien claim be filed by the general contractor within 120 days of his last work and within 90 days of last work for subcontractors and suppliers.  The statutory changes have lengthened these time periods to 150 days for general contractors and 120 days for subcontractors and suppliers.  Again it is important to remember that without the pre-lien notice a claimant will not be able to file a lien at all.

There are other changes that have occurred in the statute which effect mechanic’s liens claims as well as oil and gas claims and public projects.  I have only touched on two of those changes in this blog.  If your company is doing business or planning on doing business in Wyoming it is best that you know the requirements for protecting your lien rights.  Feel free to contact our office with questions regarding the statutory requirements or any other issues you may have doing business in Wyoming.

Sources:

TITLE 29 Wyoming Statutes

Section 29-2-106 When statement of lien to be filed.

Section 29-2-112 Preliminary Notices

How to get your property back from a debtor who is not paying you.

SELF-HELP REPOSSESSION

A creditor can only use self-help repossession if it has a security interest (UCC filing or a title)  in personal property.   If a creditor has a perfected (it has been filed with the Secretary of State) security interest, it is entitled to use self-help under the UCC.  Section 4-9-609 C.R.S. allows a secured party to take possession of the personal property (collateral), without an order from the court, if the creditor can do so without breaching the peace.  If the collateral is behind a locked door or gate, then repossession would breach the peace.  If the collateral is unreachable or the location is unknown, a creditor can file a replevin action under Rule 104, C.R.C.P.   Rule 104 requires the following to be filed with the Court:

1.         A verified complaint alleging that the Plaintiff is the owner of the property or is entitled to possession, attaching a copy of the document entitling the Plaintiff to possession;

2.         An allegation that the property is being detained by the defendant against the Plaintiff’s right to possession thereof and the specific facts constituting detention against the right of the Plaintiff to possession;  

3.         A particular description of the property, a statement of its actual value, a statement of the location of the property, and;

4.         a statement that the property has not been taken for a tax assessment, or fine; or seized under an execution against the property of the Plaintiff.

The Court reviews the Verified Complaint and issues a show cause order directed at the Defendant to show cause why the property should not be taken from the Defendant and delivered to the Plaintiff.  The hearing shall be not more than 10 days from the date of the issuance of the order and the order must be served on the Defendant at least 5 days prior to the hearing date.  The Plaintiff may request a hearing date longer than 10 days, which waives the right to a hearing not more than 10 days after the date of the order. This hearing takes precedence over all civil actions, except other cases to which special precedence is given by law.  If the Defendant fails to appear for the Show Cause hearing, then the Court will issue an order granting possession of the property to the Plaintiff.

The Court can grant an Order for Possession prior to the hearing, if:

a)                  the defendant gained possession of the property by theft;

b)                  the property consists of negotiable instruments or credit cards;

c)                  the property is perishable or the defendant may destroy, dismantle, remove parts from or in any way substantially change the character of the property; or will conceal or remove the property from the jurisdiction of the court; or

d)                  the defendant, by contract, voluntarily, intelligently, and knowingly waived his right to a hearing prior to losing possession of the property.

The Court can require a bond, in its discretion, not to exceed double the value of the property. The Court can also order the Defendant to preserve the property.

The order for possession will describe the specific property and specify the probable location or locations where the property can be found. The sheriff is directed to take the property and retain it in his custody.  The sheriff can deliver the property to the Plaintiff, after receiving his fees.  The sheriff can also cause a building or enclosure to be broken into, if necessary. The Sheriff generally will require a Writ of Assistance for this. The Sheriff then serves a copy of the order for possession upon the Defendant.

Submitted by Terry Ehrlich, Esq.

HELP! MY TENANT STOPPED PAYING RENT - The Quick Guide to Eviction

HELP! MY TENANT STOPPED PAYING RENT!

The Quick Guide to Eviction

If you are a landlord having trouble collecting your rents, this is a quick guide to eviction.  You can also read Colorado eviction instructions and find the necessary forms by following our link at http://www.arnoldarnold.com/Resources.shtml or going directly to http://www.courts.state.co.us/Forms/Forms_List.cfm?Form_Type_ID=28.

Step #1- You need to post either the Demand for Compliance (if the tenancy has a specified termination date) or the Notice to Quit (if the tenancy does not have a specified termination date).  This posting should be on the door of the property.  The notice should be posted for the applicable time period before filing any court action.  The forms can be found at the above links.

Step #2- Once the time period has passed from posting the Demand for Compliance or Notice to Quit, you are ready to file an action for Forcible Entry and Detainer in the County Court where the property is located.  The "plaintiff" filing the action should be the named landlord on the lease.  The maximum amount of damages you are allowed to request is $15,000.00.

Print the Summons, Complaint, and Affidavit of Service forms available at the above links.  You are the plaintiff and the tenant(s) are the defendant(s).  You can request all back rent owed plus late fees if they are specifically mentioned in your signed lease.  You need to attach a copy of the signed lease to the complaint.  You can also request all costs for filing the action in your judgment.  This would include filing and service fees.

Filing- Once all the paperwork is filled out, you need to go to the courthouse and file it with the clerk of court.  They will give you a case number and a court date. There is a fee. 

Service- you can either post the summons and complaint with the attached lease on the door of the property again OR you can have the defendant(s) personally served.  If you just want the tenants evicted, you can just post the paperwork on the door.  However, if you want to request a money judgment from the court, you must have them personally served.  The county sheriff or a private process server can do this for you.  The person serving the documents cannot be the named plaintiff or anyone related to the named plaintiff.  It needs to be a neutral person with no interest in the case.  If you serve the defendant(s) personally, the server will have to fill out the affidavit of service, sign it in front of  a notary and have it notarized. 

Step #3- Go to court on the day your summons states and bring copies of all your documents.  Make sure to bring the original signed and notarized affidavit of service and give it to the court clerk upon arrival.  You will either meet with the defendant(s) and try to work out a deal or the defendant(s) will need to file an answer.

If the defendant(s) do not file an answer or do  not show up at court, you can request judgment against them.  If you had them personally served, you can request judgment for possession and the money judgment.  If you only posted the paperwork on the door, you can only request judgment for possession.  This means you can evict the tenants.  You will need to get a Writ of Restitution from the Court and take this to the county sheriff's department. 

Step #4- Once the sheriff has the writ of restitution, they will serve this upon the tenants and give them 3 days to get out or be forced out.  You may need to have people ready to move the tenants out.  The sheriffs will usually only give you one hour to do this. Be prepared.

Kelley G. Shirk, Esq.

GETTING TO YES WHEN YOU WANT TO SAY NO - JOINT PAYMENT ARRANGEMENTS

GETTING TO YES WHEN YOU WANT TO SAY NO

JOINT PAYMENT ARRANGEMENTS

Jean C. Arnold, Esq.

Whether selling materials, renting equipment, or providing labor, consider whether your customer has the financial ability to pay without funds from the project.  Perhaps, establish a "joint payment" arrangement with either the owner or general contractor when you want to say “no” to the customer, but “yes” to the project.  Beware, however, of some pitfalls.

Joint Check Agreements.  First, analyze your customer’s contract.  Check the contract for “pay-when” and “pay-if” paid terms that could impact when and if payment will occur. 

Second,  understand the joint payment agreement is a contract creating rights and obligations.  In White Construction Company, Inc. v. Sauter Construction Company, Inc., 731 P.2d 734 (Colo. App. 1986), a sub-subcontractor was held liable to the general contractor for work not performed in a workmanlike manner because the general contractor and the sub-subcontractor had entered into a joint check agreement.  In Buttermore v. Firestone Tire and Rubber Company, 721 P.2d 701 (Colo. App. 1986), the owner was held to be personally liable to subcontractors because of a joint check arrangement on a project.

Finally, employ caution when using the owner’s or general contractor’s joint payment agreement form.  Many owners and general contractors, in order to limit liability to suppliers, will include such language as: "This arrangement is made merely as an accommodation to the supplier and is not intended to be relied upon by the supplier or to prove any contractual obligations owing from contractor to supplier."  Others will include language:  (1) limiting their payment obligation to the amount due the subcontractor; (2) incorporating arbitration or other dispute resolution conditions stated in the subcontract agreement; and (3) language waiving mechanic’s lien rights or other supplier’s payment remedies.  If you are a supplier, beware of these limitations.   

Remitting joint payments to your customer.  Some material suppliers remit portions of the joint check proceeds to their customers even though they are still owed money for materials for the project.  A materialman can make loans to his customer, but not with the owner's or general contractor’s money intended to avoid liens against the property.  Section 38-22-127, C.R.S.  Additional language would need to be added to the joint payment form if you are planning to remit funds to your customer from joint payments received.  Be sure to keep the owner or general contractor apprised as to the amounts remitted.

Payment application.  Often suppliers will apply joint payments received to oldest invoices rather than to the invoices for the project – even knowing the source of funds.  In the case of Jackson v. A.B.Z. Lumber Co., 155 Colo. 33, 392 P.2d 288 (1964),  the Colorado Supreme Court found that a lumber supplier could not maintain its mechanic’s lien against the property because the lumber company knew the source of funds used by the subcontractor to pay the delinquent material bill even though the subcontractor never directed the lumber company how to apply the payment.

Submitted June 16, 2011.

Copyright 2011.  Jean C. Arnold.  All rights reserved.  No portions of this textual material may be reproduced without the prior written permission of Jean C. Arnold, Arnold & Arnold, Attorneys at Law, LLP, 7691 Shaffer Parkway Suite A, Littleton, CO 80127 720-962-6010.

e-mail:  jeanarnold@arnoldarnold.com.

COLLECTION OF A JUDGMENT

COLLECTING THE JUDGMENT

A.                                       USE OF JUDGMENT LIENS ON REAL PROPERTY

RECORDING THE TRANSCRIPT OF JUDGMENT:  One of the easiest and most cost-effective collection tools in your arsenal is the transcript of judgment.  You can lien any real property owned by the judgment debtor. (See 13-52-102, C.R.S.) .  As soon as judgment is entered, you should obtain the transcript of judgment from the Clerk of the Court for a fee of $25.00 (as of July 1, 2008) and record it with the Clerk and Recorder of each county where the judgment debtor owns property.  The transcript of judgment only encumbers real property in the county that it is recorded in, so you need to verify the correct county prior to recording the lien.  You can record the transcript in multiple counties.  The recording of the transcript does not effectuate execution of the judgment. Recording the lien makes the judgment a lien against the property, which needs to be paid off if the property is sold or refinanced.  It may also make the judgment creditor a secured creditor in the event of a bankruptcy as long as the transcript is recorded at least 90 days prior to the filing of bankruptcy.  It also gives the creditor the right to redeem the property in the event of a foreclosure.

REVIVAL OF THE JUDGMENT LIEN:  Pursuant to Section 13-52-102(1), C.R.S. the lien expires 6 years from the judgment date, unless revived as set forth in Rule 54, C.R.C.P.  A Motion to Revive the lien must be filed and the Court will issue a Show Cause Order, ordering the judgment debtor to file cause, in writing, within 10 days as to why the judgment lien should not be revived.  The Order to Show Cause must be served upon the judgment debtor.  If the debtor files an answer, a hearing must be held.  If the Court finds no cause or no answer is filed, then the Court will enter an order reviving the judgment lien and the clerk will issue a revived transcript of judgment.  The revived transcript of judgment must be recorded in the same county to keep the same priority date.     

http://www.arnoldarnold.com/Practice-Areas/collections-and-creditor-bankruptcy.shtml

What should you do with a Judgment when a debtor files for Bankruptcy?

Collections, Asset Recovery and Creditor Bankruptcy Representation

Last week Terry Ehrlich and Jean Arnold conducted a seminar on Seeking and Collecting a Judgment.  The following is an excerpt from Jean Arnold's seminar materials answering the question: 

What should you do with a Judgment when a debtor files for Bankruptcy?  The creditor should immediately determine the relevant time frames to take action in the bankruptcy.  The key determinations are:

A.                 First meeting of creditors.  Under Chapter 7 the first meeting of creditors shall be held not less than 20 nor more than 40 days after the Court enters the order for relief.  In Chapter 13 cases the first meeting of creditors shall be held not less than 20 nor more than 50 days after the order for relief enters.  The creditor should attend this meeting, after reviewing the schedules, and ask questions of the debtor who is under oath.  This limited questioning can alert the Trustee to issues in the bankruptcy and allow the creditor to gather important information as to the debtor’s intentions.    

B.                 Deadline to file proof of claim.  90 days after the first date set for the meeting of creditors under 11 U.S.C. § 341(a).  See Bankruptcy Rule 3002(c).  This deadline will be shown on the bankruptcy notice.  In case under Chapter 7 the notice will often state it is a “no asset” case and tell the creditor not to file a claim until directed by the Court.  The creditor will then need to pay particular attention to the bankruptcy proceedings and watch for any further notices of “bar date” for filing claims coming from the U.S. Trustee’s office.

C.                 Deadline to object to discharge of debt.  A complaint to determine the dischargeability of a debt under § 523(c) shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a).  A new time period for filing complaints objecting to discharge commences when a Chapter 11 or Chapter 13 case is converted to a Chapter 7 case.  No new time period is available, however, if a case started in Chapter 7, and the applicable period expired in that original chapter, and the case thereafter was converted to Chapter 11 or 13 and then reconverted to Chapter 7.  See  Bankruptcy Rule 1019(3) and discussion in 10 Colo. Prac., Creditors' Remedies - Debtors' Relief § 9.32 (2010).   

D.                Determination of whether to seek relief from stay. If the creditor has a security interest in property of the debtor, the creditor must determine whether there is equity in the property.  If there is not or the creditor is not adequately protected due to declining value or misuse of the secured property, then the creditor may seek relief from stay.

COLLECTIONS: SEEKING AND COLLECTING A JUDGMENT

On April 25, 2011, Terry Ehrlich and Jean Arnold will be teaching at a seminar put on by National Business Institute at the Red Lion Inn at 4040 Quebec Street.  Terry will be teaching on Identifying Fraudulent Conveyances, Asset Searches and the Judgment Debtor Exam and Post-Judgment Collection Strategies.  Jean will be teaching on Creditor Remedies available in Bankruptcy, Fair Debt Collection Practices, and Averting Potential Ethical Problems in Collection.  If you want to learn about collection, this is the seminar to go to!

FRAUDULENT CONVEYANCES:  What happens if you are trying to collect from a debtor and you find that he/she recently transferred all or a large portion of their property to another person, most likely the spouse.  I recently became involved in litigation regarding just that issue.  The husband owned a large house in Elbert County with his wife.  As litigation loomed, he quit claimed his interest in the house to his wife, so that she is now the sole owner.  Is this a fraudulent transfer?  Colorado Statute defines a fraudulent transfer two ways: either a transfer made with actual intent to hinder, delay, or defraud any creditor, or a reasonably equivalent value was not given in exchange for the transfer and the debtor was engaged in a business or transaction in which the remaining assets of the debtor were unreasonably small in relation to the business or transaction. 

The second of these factors would eliminate a sale of an asset made to a unrelated third party for the value of the asset, such as a sale of real property.  In my situtation, there was no a sale to an unrelated third party.  How do we prove intent to defraud?  The Court can look at multiple factors.  Was the transfer made to an insider?  The wife is considered an insider.  Did the debtor retain control of the property after it was transferred?  Since his wife is the owner, it can be assumed that the use of the property is still available to the debtor.  Before the transfer was made, was the debtor sued or threatened with lawsuit?  The debtor had been sued personally in multiple lawsuits totalling hundreds of thousands of dollars. Was the transfer was of substantially all of the debtor's assets?  It was a large portion of his assets.  Did the debtor abscond?  This  debtor moved to Texas, which is very protective of debtors.  Did the transfer occur shortly before or after a substantial debt was incurred?  The transfer occurred shortly before subtantial judgments were entered  against the debtor.  Did the debtor become insolvent as a result of the transfer?  This fact is not known at this time. Was a reasonably equivalent value received for the transfer?  The wife has alleged that she gave her husband consideration, but she has has not given proof of what that consideration was.  Was this a fraudulent transfer?  Soon the judge will decide. that question, if the parties do not settle it before trial.

http://www.arnoldarnold.com/Practice-Areas/collections-and-creditor-bankruptcy.shtml                       

HB 11-1020 UPDATE - Prelien statute referred to Legislative Committee

On March 3, 2011 the House Economic and Business Development Committee on a 13-0 vote, referred HB 11-1020 - Colorado's proposed amendment to its prelien statute - to a Legislative Committee for further study.  The legislative committee will meet over the summer, study the issue and a revised bill will be presented in the 2012 Legislative Session.  Jean Arnold.

Debt Collection Litigation and Post-Judgment Enforcement

In the present economy, debt collection and post-judgment enforcement are popular topics in the legal field.  Too many people think going after a debt right now is a lost cause.  Fear not, there are many options available in our legal system that facilitate the collection of a debt or judgment.  There are also many creative solutions to collecting on a judgment from defendants that you believe are judgment proof. 

Partners Jean C. Arnold and Terry Ehrlich will walk everyone through debt collection litigation and post-judgment enforcement on April 25, 2011 with Onsager, Staelin, & Guyerson, LLC's Christian C. Onsager at an NBI Seminar. 

Register today!
800-930-6182
http://www.nbi-sems.com/

HB 11-1020 Colorado Prelien Statute

 I attended the meeting this morning to discuss the Utah model for the State Construction Registry.  There was a presentation by Colorado Interactive whose parent company handles the Utah portal and online State Construction Registry.  The presentation raised more questions – fee and cost concerns.

The group consensus was to refer the matter for further study over the summer with legislation to be introduced next session.  An amendment L008 is being drafted to accomplish this.  Meetings – with legislative participation – would occur after this session recesses at the end of June.  This issue is not “going away,” but all agreed more study was necessary to appreciate the cost vs. benefit.