Daily Development for Thursday, October 21, 1999

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

JUDGMENT LIENS; PRIORITY; REOPENING: Where court has jurisdiction to render judgment, and does enter that judgment, but judgment debtor contests validity of judgment on grounds other than jurisdiction, court's reopening of the original hearing results in an order entered by the court "opening," and not "vacating," the judgment. Therefore, the judgment lien obtained by the plaintiff remained in full force and effect until a trial on the merits could be completed.

Fleischer v. First National Bank of Telluride, 973 P.2d 690 (Colo. App. 1998) cert granted.

Plaintiff brought a declaratory judgment action to determine priority of liens on the subject property. In 1992 judgment was entered against owner on plaintiff's motion for summary judgment. Judgment was entered when the owner failed to respond to the motion for summary judgment.

Prior to entering the judgment, the trial court issued an order that owner was to respond to the motion for summary judgment by a certain date since owner's previously filed bankruptcy had been dismissed. The owner claimed that he never received notice that he had been ordered to respond to the motion for summary judgment. In January 1993, owner filed a motion to vacate judgment and in April 1993 the defendant bank recorded a deed of trust on the property. Subsequently, a trial court found in favor of the plaintiff in the original declaratory judgment action, and as a consequence plaintiff had a lien against the property.

In 1996, the bank began proceedings to foreclose on its deed of trust and plaintiff filed an action stating that his judgment lien was prior and superior to the bank's lien under the deed of trust.  The trial court had decided that the 1992 judgment was void and that the judgment lien should be vacated. This appeal was then filed.

The Court of Appeals held that the trial court erred in holding that the bank's deed of trust was superior to the judgment lien. When a judgment that has been entered is set aside, then the courts must determine whether the underlying judgment is "opened" or "vacated".When a judgment is set aside on grounds other than those challenging the court's jurisdiction, the judgment is opened. When a judgment is set aside on jurisdictional grounds, it is vacated and is of no force or effect. After the original judgment is opened for trial on the merits and if the plaintiff is successful, then the judgment lien remains in full and effect as if the original judgment had not been opened. If the trial ends in favor of the defendant, then the judgment is vacated and the judgment lien is expunged. In this case the lack of notice claim served to "open" the 1992 judgment and did not "vacate" such judgment. The judgment lien remained in full force and effect until the trial. Since the plaintiff prevailed at the trial, the judgment lien remained valid and superior to the bank's lien.

Comment: An interesting case. Note that certiorari was granted by the Colorado Supreme court in March. Westlaw shows no action yet.

 MORTGAGES; LEGAL DESCRIPTION: An inaccurate legal description in a deed or mortgage does not automatically serve to invalidate it.

 Selby v. Roggow, 175 P.2d 379 (NM. App. 1999).

Real estate developers sued their lawyer for malpractice based upon his failure to raise certain counterclaims to the bank's attempted enforcement of the mortgage. One of those counterclaims noted the legal description in the mortgage was erroneous because it contained an inaccurate metes and bounds description, not the required lot and block description. The New Mexico Court of Appeals noted previous Supreme Court holdings in which the Supreme Court of New Mexico held that so long as "it is possible by any reasonable rules of construction to ascertain from the description, aided by extrinsic evidence what property is intended to be the conveyed" that the deed will not be declared void for uncertainty. The Court of Appeals held that by construing the note and the mortgage together the instruments sufficiently describe the property intended to be mortgaged.

Comment: One never wants to rely upon an improper legal description, since it may in fact be inadequate. But it is comforting to know that some errors in life are forgiven.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. The same is true of all commentary provided by contributors to the DIRT list. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.

Parties posting messages to DIRT are posting to a source that is readily accessible by members of the general public, and should take that fact into account in evaluating confidentiality issues.

ABOUT DIRT:

DIRT is an Internet discussion group for serious real estate professionals. Message volume varies, but commonly runs 5 ‑ 10 messages per workday.

Daily Developments are posted every workday.

To subscribe to Dirt, send an e-mail to:

To:

ListServ@listserv.umkc.edu

Subject:

[Does not matter]

Text in body of message

Subscribe Dirt [your name]

To cancel your subscription to Dirt, send an e-mail to:

To:

ListServ@listserv.umkc.edu

Subject:

[Does not matter]

Text in body of message

Signoff Dirt

For information on other commands, send the message Help to the listserv address.

DIRT has an alternate, more extensive coverage that includes not only commercial and general real estate matters but also focuses specifically upon residential real estate matters. Because real estate brokers generally find this service more valuable, it is named “Brokerdirt.” But residential specialist attorneys, title insurers, lenders and others interested in the residential market will want to subscribe to this alternative list. If you subscribe to Brokerdirt, it is not necessary also to subscribe to DIRT, as Brokerdirt carries all DIRT traffic in addition to the residential discussions.

To subscribe to Brokerdirt, send an e-mail to:

To:

ListServ@listserv.umkc.edu

Subject:

[Does not matter]

Text in body of message

Subscribe Brokerdirt [your name]

To cancel your subscription to Brokerdirt, send an e-mail to:

To:

ListServ@listserv.umkc.edu

Subject:

[Does not matter]

Text in body of message

Signoff Brokerdirt

DIRT is a service of the American Bar Association Section on Real Property, Probate & Trust Law and the University of Missouri, Kansas City, School of Law. Daily Developments are copyrighted by Patrick A. Randolph, Jr., Professor of Law, UMKC School of Law, but Professor Randolph grants permission for copying or distribution of Daily Developments for educational purposes, including professional continuing education, provided that no charge is imposed for such distribution and that appropriate credit is given to Professor Randolph, DIRT, and its sponsors.

DIRT has a WebPage at: http://www.umkc.edu/dirt/