C & C Investments, LP v. Hummel.
2022 COA 42. No. 20CA1879. Homeowners Association—Foreclosure Sale—Notice—Due Process—Default Judgment—Void Ab Initio—Post-Foreclosure Right to Cure.
April 14, 2022
In 1999, Hummel purchased a home that was subject to declarations and covenants, including monthly homeowners’ association (HOA) dues. She paid her bills, including HOA dues, via autopayments. In 2011, Hummel became a shut-in for eight years. She did not retrieve her mail, so the post office eventually discontinued service to her home. Hummel was unaware that HOA management changed and that her automatic withdrawal authorization for HOA fees was no longer viable, causing her HOA account to fall into arrears. The HOA filed suit, but the complaint it mailed to Hummel was returned as undeliverable and personal service was unsuccessful. The court granted the HOA’s request to serve by publication but also ordered the HOA to serve by posting on the property. Despite the lack of any further posting or service, the court thereafter granted the HOA’s motion for default judgment and a decree of foreclosure. C & C Investments, LP (C & C) purchased Hummel’s home at a sheriff’s sale. After Hummel received the eviction notice that C & C posted on her door, she retained counsel. The court found excusable neglect and extraordinary circumstances to set aside the default judgment. Hummel subsequently tendered the cure funds, and the court issued an order to quiet title in her favor and voided the sheriff’s deed.
On appeal, C & C argued that the trial court erred by affording Hummel a post-foreclosure cure opportunity. CRS § 38-38-104 expressly permits an owner to cure if the owner provides notice of intent to cure at least 15 days before the sale and pays the cure sums by noon on the day before the scheduled sale date. Hummel had no statutory right to cure after the foreclosure sale, so the court erred.
C & C also argued that the trial court erred by voiding the sheriff’s sale and confirmation deed and quieting title in Hummel when she tendered the cure amount. Here, the HOA did not take reasonably calculated steps to provide Hummel with actual notice of the lawsuit or the resulting sheriff’s sale, and the trial court entered the foreclosure order by default without ensuring that the due process requirements had been satisfied. Accordingly, the trial court did not have adequate jurisdiction, and the default judgment and resulting sheriff’s sale and confirmation deed were void ab initio and were properly vacated by the trial court.
The order granting a post-foreclosure cure remedy was vacated, but the order vacating the default judgment, the sheriff’s sale, and the confirmation deed was affirmed.