Opinion
No. 84CA0120
Decided January 30, 1986. Rehearing Denied March 13, 1986. Certiorari Denied Barnett September 29, 1986 (86SC119).
Appeal from the District Court of Douglas County Honorable Thomas J. Curry, Judge
Stutz, Dyer, Miller Delap, R. Gregory Stutz, F. James Donnelly, for Plaintiff-Appellee.
John A. Meininger, for Defendant-Appellant Elvi Joanne Barnett.
No Appearance for Defendant-Appellant Dean T. Farrish.
Two defendants, Dean T. Farrish and Elvi Joanne Barnett, appeal the judgment in favor of plaintiff, Kenneth W. Howell, holding that plaintiff's redemption of certain real property from a public trustee's sale pursuant to § 38-39-101, et seq., C.R.S., does not constitute a proceeding against the property that would require compliance with the procedures specified in the homestead exemption statute, § 38-41-201, et seq., C.R.S. (1982 Repl. Vol. 16A).
The issue before us is whether a junior judgment lien creditor may redeem from a public trustee's sale according to the procedures set forth in §§ 38-39-102 and 38-39-103, C.R.S. (1982 Repl. Vol. 16A), without complying with the requirements of the homestead exemption statute, § 38-41-201, et seq., C.R.S. (1982 Repl. Vol. 16A). We hold that a junior judgment lien creditor may do so and therefore affirm.
The facts in this case are the following. Defendants Farrish and Barnett were husband and wife for 17 years and jointly owned the property in question. The property was encumbered by a deed of trust which contained a waiver of the homestead exemption clause by defendants. The exemption allows a homeowner to exclude from execution any debt, contract, or civil obligation not exceeding the sum of $20,000. Section 38-41-201, C.R.S. (1982 Repl. Vol. 16A).
On August 13, 1981, the marriage of defendants was dissolved. On April 7, 1982, plaintiff recorded a judgment lien on the property based on a previously obtained judgment against defendants. On August 17, 1982, foreclosure proceedings were commenced against the property by the Arapahoe Colorado National Bank. On October 5, 1982, the bank purchased the property for the amount due it. Neither Farrish nor Barnett exercised the redemption rights accorded them under § 38-39-102, C.R.S. On December 30, 1982, pursuant to § 38-39-103, C.R.S., plaintiff redeemed the property by paying to the public trustee $94,074, the amount due under the deed of trust in favor of the bank.
Thereafter, plaintiff filed this action in the district court requesting a judgment that defendants had no homestead exemption rights with respect to the property. The district court granted that request, and this appeal ensued.
Section 38-41-201, C.R.S. (1982 Repl. Vol. 16A) provides that:
"Every homestead . . . shall be exempt from execution and attachment arising from any debt . . . not exceeding in value the sum of $20,000 . . . ." (emphasis added).
Here, however, the homestead exemption clause is inapplicable. While the statute concerning homestead exemption is generally interpreted liberally, such exemption is, nevertheless, entirely a creature of statute. Barnett v. Knight, 7 Colo. 365 (1884). Thus, there are no homestead exemption rights independent of the statute. McPhee v. O'Rourke, 10 Colo. 301, 15 P. 420 (1887); Helkey v. Ashley, 113 Colo. 175, 155 P.2d 143 (1945).
Here, plaintiff redeemed the property in question at a foreclosure sale pursuant to § 38-39-103, C.R.S. (1982 Repl. Vol. 16A). The only party "executing" upon defendants' property was the Arapahoe Colorado National Bank, not plaintiff. A judgment creditor's right of redemption is also entirely a matter of statute. First National Bank v. Energy Fuels Corp., 200 Colo. 540, 618 P.2d 1115 (1980). Like the statute concerning the homestead exemption, statutes concerning rights of redemption are also to be liberally construed. Walker v. Wallace, 79 Colo. 380, 246 P. 552 (1922).
Contrary to defendants' assertions, the redemption statute is not an execution procedure; rather, it serves the purpose of benefiting debtors and creditors by reducing the property owner's debt while satisfying every possible creditor. First National Bank v. Energy Fuels Corp., supra.
Section 38-39-103, C.R.S. (1982 Repl. Vol. 16A) provides that:
"If no redemption is made within the redemption period provided for in § 38-39-102, the . . . lienor . . . may redeem within ten days after the expiration of the above redemption period by obtaining the amount required by § 38-39-102."
Plaintiff followed these procedures, and thus, his redemption rights cannot be construed to be an execution.
Neither Frank v. First National Bank, 653 P.2d 748 (Colo.App. 1982) nor Patterson v. Serafini, 187 Colo. 209, 532 P.2d 965 (1974) is applicable here. In those cases, the court held that an owner, rather than the redeeming junior lienor, is entitled to the surplus of property sold in a public trustee's sale over the amount of the trust deed indebtedness. Here, plaintiff redeemed the property by paying to the public trustee the sum of $94,074, the exact amount due under the deed of trust.
Given the competing public policies for a liberal construction of both the homestead exemption statute and the redemption statute, we conclude the trial court properly held that a junior lien creditor may redeem from a public trustee's sale under §§ 38-39-102 and 38-39-103, C.R.S. (1982 Repl. Vol. 16A) without complying with the homestead exemption statute, § 38-41-201, et seq., C.R.S. (1982 Repl. Vol. 16A).
The judgment is affirmed.
JUDGE METZGER concurs.
JUDGE TURSI dissents.