Colorado § 38-35-204 - Order to show cause.

§ 38-35-204. Order to show cause.

(1) Any 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 or filed or the federal district court in Colorado for an order to show cause why the lien or document should not be declared invalid. The petition shall set forth a concise statement of the facts upon which the petition is based and shall be supported by an affidavit of the petitioner or the petitioner's attorney. The order to show cause may be granted ex parte and shall:

(a) Direct any lien claimant and any person who recorded or filed the lien or document to appear as respondent before the court at a time and place certain not less than fourteen days nor more than twenty-one days after service of the order to show cause why the lien or document should not be declared invalid and why such other relief provided for by this section should not be granted;

(b) State that, if the respondent fails to appear at the time and place specified, the spurious lien or spurious document will be declared invalid and released; and

(c) State that the court shall award costs, including reasonable attorney fees, to the prevailing party.

(2) If, following the hearing on the order to show cause, the court determines that the lien or document is a spurious lien or spurious document, the court shall make findings of fact and enter an order and decree declaring the spurious lien or spurious document and any related notice of lis pendens invalid, releasing the recorded or filed spurious lien or spurious document, and entering a monetary judgment in the amount of the petitioner's costs, including reasonable attorney fees, against any respondent and in favor of the petitioner. A certified copy of such order may be recorded or filed in the office of any state or local official or employee, including the clerk and recorder of any county or city and county and the Colorado secretary of state.

(3) If, following the hearing on the order to show cause, the court determines that the lien or document is not a spurious lien or spurious document, the court shall issue an order so finding and enter a monetary judgment in the amount of any respondent's costs, including reasonable attorney fees, against any petitioner and in favor of the respondent.

Source: L. 97: Entire part added, p. 37, § 1, effective March 20. L. 2012: (1)(a) amended, (SB 12-175), ch. 208, p. 895, § 170, effective July 1.

Editor's note: Section 38-22.5-110 states that this section applies to liens asserted pursuant to article 22.5 of this title.

ANNOTATION

For purposes of satisfying the definition of "spurious document" under this section, a document is "groundless" for which a proponent can advance no rational argument based on evidence or the law to support the claim of a lien. Westar Holdings P'ship v. Reece, 991 P.2d 328 (Colo. App. 1999).

Exhibit in civil action cannot be a spurious document. Section only applies to recording or filing that affects a person's real property, and an exhibit is nothing more than evidence relating to the parties' legal positions. Battle N., LLC v. Sensible Hous. Co., 2015 COA 83, 370 P.3d 238.

An invalid quitclaim deed may be a spurious document. Such a document creates a cloud on the title, and thereby may affect a person's real property. Battle N., LLC v. Sensible Hous. Co., 2015 COA 83, 370 P.3d 238.

A hearing held pursuant to subsection (3) includes both the privilege to be present when the case is being considered and the right to present and support one's contentions by evidence and argument, unless the parties agree to a waiver of the right to be present and have evidence considered. Accordingly, the court erred in limiting its review to the pleaded allegations and legal argument. Westar Holdings P'ship v. Reece, 991 P.2d 328 (Colo. App. 1999).

Trial court had jurisdiction to award attorney fees and costs to defendants for a spurious lis pendens. Because plaintiff did not refute that the lis pendens was spurious at the show cause hearing, and because a lis pendens can be a spurious document, trial court had jurisdiction to enter judgment in favor of defendants and against plaintiff for defendants' costs and attorney fees. Shyanne Props., LLC v. Torp, 210 P.3d 490 (Colo. App. 2009).

This section only provides for an award of attorney fees when the court concludes that an existing lis pendens notice is or is not spurious. Because wife released the lis pendens notices nearly three years before the trial court concluded that they were not spurious, the request for attorney fees was denied. Carter Holdings Inc. v. Carter, 2023 COA 26, 531 P.3d 437.

Trial court abused its discretion in awarding attorney fees without holding an evidentiary hearing on the reasonableness and necessity of the attorney fees requested by defendants. If a party requests a hearing concerning an award of fees, the trial court must hold a hearing. Shyanne Props., LLC v. Torp, 210 P.3d 490 (Colo. App. 2009).

Release of contested liens or documents before the show cause hearing precludes an award of attorney fees under this section. Sifton v. Stewart Title Guar. Co., 259 P.3d 542 (Colo. App. 2011).

This section and C.R.C.P. 105.1, both governing spurious lien proceedings, conflict with, and thus control over, the more general rules of pleading. Therefore, the trial court did not err when it concluded that banks could not raise their counterclaims and third-party claim in the spurious lien action and dismissed them without prejudice. Fiscus v. Liberty Mortg. Corp., 2014 COA 79, 373 P.3d 644, aff'd on other grounds, 2016 CO 31, 379 P.3d 278.

38-35.5 ARTICLE 35.5

Nondisclosure of Information Psychologically Impacting Real Property

38-35.5-101. Circumstances psychologically impacting real property - no duty for broker or salesperson to disclose.