Hagerty v. Luxury

24CA0669 Hagerty v Luxury 04-17-2025

COLORADO COURT OF APPEALS

Court of Appeals No. 24CA0669
City and County of Denver District Court No. 20CV33842
Honorable Jill D. Dorancy, Judge

Hagerty Insurance Agency, LLC, as subrogee of Robert W.J. Mortenson, and
Robert W.J. Mortenson,

Plaintiffs-Appellants,

v.

Luxury Asset Capital, LLC, a foreign limited liability company,

Defendant-Appellee.

JUDGMENT AFFIRMED

Division II
Opinion by JUDGE GOMEZ
Fox and Lum, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced April 17, 2025

Dworkin, Chambers, Williams, York, Benson & Evans, P.C., Steven G. York,
Denver, Colorado, for Plaintiffs-Appellants

Campbell, Killin, Brittan & Ray, LLC, Bruce E. Rohde, Margaret R. Pflueger,
Denver, Colorado, for Defendant-Appellee
¶1 Robert W.J. Mortenson, a car enthusiast, purchased a Rolls

Royce from Luxury Asset Capital, LLC (Luxury Asset), a

pawnbroker, after the car’s previous owner failed to pay a loan

secured by the car. Later, Mortenson discovered the car had

previously been stolen. Mortenson pursued a claim against Luxury

Asset for breach of contract, and his insurer, Hagerty Insurance

Agency, LLC (Hagerty), pursued a related claim for equitable

subrogation based on its payment to Mortenson under an

insurance policy.

¶2 The two plaintiffs, Mortenson and Hagerty, now appeal the

judgment entered in favor of the defendant, Luxury Asset, after a

trial to the court. Specifically, they challenge the trial court’s

finding that the circumstances surrounding the transaction were

sufficient to exclude the statutory warranty of title under section 4-

2-312(2), C.R.S. 2024. We reject their challenge and affirm the

judgment.

I. Background

A. The Underlying Dispute

¶3 In 2019, Luxury Asset, a pawnbroker doing business in

Colorado, provided a loan to Kathryn Lee Thompson secured by a

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2015 Rolls Royce with a South Carolina title. Luxury Asset took

possession of the car but agreed that Thompson could reclaim it by

repaying the loan. When Thompson failed to make the required

payments, Luxury Asset advertised the car for sale online.

¶4 Mortenson responded to the advertisement and negotiated the

purchase of the car with a Luxury Asset representative. The two

agreed on a purchase price of $127,000. Mortenson then paid to

have the car transported from Georgia, where it was being stored, to

his home in Nevada.

¶5 The Luxury Asset representative went to Nevada to complete

the transaction and transfer the car title to Mortenson. Using a

power of attorney that allowed the Luxury Asset representative to

sign documents on behalf of Thompson, the representative and

Mortenson executed a bill of sale transferring the car directly from

Thompson (as seller) to Mortenson (as buyer). That bill of sale

indicated that the car was sold “as is,” with no express or implied

warranties. The two also went to the Nevada Department of Motor

Vehicles (DMV) to transfer the title from Thompson to Mortenson.

¶6 Unfortunately, however, a few months after the sale, the

Nevada DMV notified Mortenson that the vehicle identification

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number (VIN) on the car was forged and that a search using the

authentic VIN from the car’s onboard computer revealed that the

car was stolen. The car was impounded, and Mortenson never

recovered it. Mortenson had insured the car under a policy issued

by Hagerty, which paid him the policy limit of $50,000.

¶7 Mortenson brought several claims against Luxury Asset,

including a claim for breach of contract — specifically, breach of the

warranty of good title. Hagerty also brought a claim for equitable

subrogation against Luxury Asset.

¶8 On motions for summary judgment, the trial court determined,

as a matter of law, that (1) Luxury Asset hadn’t disclaimed the

statutory warranty of title by specific language and (2) the warranty

hadn’t been disclaimed by the circumstances of the transaction.

Accordingly, the court granted summary judgment for Mortenson

on his breach of contract claim and for Hagerty on its equitable

subrogation claim. The court denied summary judgment on

Mortenson’s remaining claims, which were later dismissed by

stipulation of the parties.

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B. The First Appeal and Remand

¶9 In the first appeal, a division of this court affirmed in part and

reversed in part the trial court’s grant of summary judgment to

Mortenson and Hagerty. See Hagerty Ins. Agency, LLC v. Luxury

Asset Cap., LLC, 2023 COA 57 (Hagerty I).

¶ 10 As a matter of first impression, the division in Hagerty I

determined that the statutory warranty of title imposed by section

4-2-312 cannot be excluded simply by contract language stating

that a good is sold “as is” and without any express or implied

warranties. Id. at ¶ 13. Instead, the division concluded that the

warranty can be excluded only through more specific language. Id.

at ¶¶ 14-20. Accordingly, the division affirmed the trial court’s

ruling that the warranty of title was not excluded by the language of

the bill of sale. Id. at ¶ 21.

¶ 11 However, the Hagerty I division reversed the trial court’s ruling

as to whether the statutory warranty of title was excluded by the

circumstances surrounding the transaction, as contemplated by

section 4-2-312(2), concluding that there were disputed issues of

fact precluding summary judgment on that issue. Id. at ¶¶ 22-31.

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Accordingly, the division remanded the case for further proceedings

consistent with its decision. Id. at ¶¶ 31-32.

¶ 12 On remand, the trial court held a bench trial, after which it

entered written findings of fact and conclusions of law. The court

found that the factual circumstances surrounding the transaction

were sufficient to give Mortenson reason to know that Luxury Asset

didn’t claim the title in itself or was purporting to sell only such title

as it or Thompson may have had. Specifically, the court found,

The surrounding factual circumstances
created by the conduct of this pawnbroker
Luxury Asset and the information received by
[Mr. Mortenson] would lead a reasonable
person to believe that the vehicle being sold
was not in Luxury Asset’s name[;] rather the
vehicle was in the name of the person in whose
name the vehicle was registered and whose
name was on the vehicle Bill of Sale. The fact
that Luxury Asset had a Power of Attorney is
further evidence that Mr. Mortenson should
have had reason to know that Luxury Asset
did not own the property and that the title was
in the name of the owner, Ms. Thompson. The
fact that Luxury Asset did not move the vehicle
to Colorado further supports the Court’s
ruling. The kind of knowledge assumed
ordinarily in a private sale is not present in a
pawnbroker sale. As such, the Court finds in
favor of Luxury Asset that there were sufficient
circumstances which gave Mr. Mortenson
reason to know that Luxury Asset was

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purporting to sell only such right or title as it
or Ms. Thompson had.

The court accordingly entered judgment in favor of Luxury Asset.

II. Law of the Case

¶ 13 As a preliminary matter, plaintiffs challenge the validity of the

decision in Hagerty I, asserting that (1) the division improperly

construed section 4-2-312(2) and the corresponding comment 5

from the Uniform Commercial Code and (2) the division improperly

considered evidence and facts not presented to the trial court or on

appeal. We decline to consider either contention.

¶ 14 The Hagerty I division already addressed, in a thorough,

published opinion, the proper interpretation of section 4-2-312(2)

and comment 5. See Hagerty I, ¶¶ 22-30. Because we see no

reason to reopen what was already decided, we decline to address

plaintiffs’ arguments on that issue. See Owners Ins. Co. v. Dakota

Station II Condo. Ass’n, 2021 COA 114, ¶ 23 (the law of the case

doctrine “expresses the practice of courts generally to refuse to

reopen what has been decided” (quoting People v. Morehead, 2019

CO 48, ¶ 10)); Christianson v. Colt Indus. Operating Corp., 486 U.S.

800, 817 (1988) (although courts have the power to revisit their

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prior decisions, they “should be loathe to do so in the absence of

extraordinary circumstances,” such as where the earlier decision

was clearly erroneous and would work a manifest injustice); see

also Simpson v. Yale Invs., Inc., 886 P.2d 689, 699 (Colo. 1994)

(“When a case is remanded to the trial court and subsequently

appealed, the reviewing court will consider only those issues arising

after the remand and whether the trial court complied with the

order of remand.”).

¶ 15 We also decline to consider whether the Hagerty I division

addressed matters not properly preserved in the trial court or

presented in the appeal. The Hagerty I division rejected that

argument when it denied plaintiffs’ petition for reconsideration

raising the argument. And even assuming we could review that

argument again in this subsequent appeal, we decline to do so. See

Owners Ins. Co., ¶ 23; Christianson, 486 U.S. at 817.

III. Exclusion of the Warranty of Title by Circumstances

¶ 16 In the alternative, plaintiffs contend that the trial court erred

by finding that the circumstances of the transaction were sufficient

to exclude the section 4-2-312(2) warranty of title. Specifically,

plaintiffs assert that (1) the trial court didn’t comply with the

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mandate from Hagerty I and (2) the evidence doesn’t support the

court’s ultimate finding. We address each contention in turn.

A. Compliance with the Mandate

¶ 17 Plaintiffs first contend that the trial court failed to follow the

Hagerty I division’s mandate to assess all of the circumstances

surrounding the transaction. Instead, plaintiffs argue, the trial

court relied solely on Luxury Asset’s status as a pawnbroker and

ignored the critical fact that Thompson had endorsed the title of the

car to Luxury Asset. We disagree.

¶ 18 Under the mandate rule, an appellate court’s conclusions on

the issues presented to it, as well as the rulings logically necessary

to sustain those conclusions, become the law of the case, which a

trial court must follow on remand. Owners Ins. Co., ¶ 24. We

review de novo whether a trial court complied with the mandate on

remand. Thompson v. Catlin Ins. Co. (UK), 2018 CO 95, ¶ 20.

¶ 19 The mandate from Hagerty I tasked the trial court with

determining “whether the circumstances gave Mortenson reason to

know that Luxury Asset did not claim title in itself or that Luxury

Asset purported to sell only such title as it or a third party may

have.” Hagerty I, ¶ 31. The division held that the fact that Luxury

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Asset is a pawnbroker is insufficient, by itself, to establish that

“Mortenson had reason to know that the sale of the Rolls Royce to

him for $127,000 was so out of the ordinary commercial course that

its peculiar character should have been immediately apparent to

him.” Id. at ¶ 24. The division noted, however, that this fact, in

combination with other evidence, could support such a finding. Id.

Ultimately, the division cited evidence that could support a finding

either way on this issue, and it remanded the case to the trial court

to resolve the question after a trial. See id. at ¶¶ 30-32.

¶ 20 We conclude that the trial court complied with this mandate.

¶ 21 While the trial court noted that Luxury Asset is a pawnbroker,

that wasn’t the sole factor upon which it based its finding that the

circumstances of the transaction were sufficient to exclude the

statutory warranty of title. The court specifically stated that it had

also considered “the conduct of . . . Luxury Asset”; “the information

received by [Mortenson],” including that the car was registered to

Thompson and that her name was on the bill of sale; “[t]he fact that

Luxury Asset had a Power of Attorney”; and “[t]he fact that Luxury

Asset did not move the vehicle to Colorado.”

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¶ 22 Moreover, nothing in the Hagerty I division’s opinion indicates

that any evidence regarding Thompson’s endorsement of the title

compels a finding in plaintiffs’ favor. While the division noted that

no documents in the summary judgment record before it “showed

that the title was endorsed or transferred to Luxury Asset,” that was

only one of the many facts the division cited in identifying a genuine

dispute of material fact. Hagerty I, ¶ 25. Plaintiffs argue that the

evidence at trial revealed that the title was, in fact, endorsed to

Luxury Asset. They cite evidence that Thompson endorsed the title

in blank before handing it over to Luxury Asset, Luxury Asset held

onto the title until it verified that Thompson had failed to pay the

loan and it negotiated the sale with Mortenson, and the Luxury

Asset representative took the title to the DMV to transfer title to

Mortenson. But Luxury Asset’s act of holding onto the endorsed

title until the car was resold doesn’t necessarily mean that the title

transferred from Thompson to Luxury Asset and then from Luxury

Asset to Mortenson. Yet even if it did, and Luxury Asset was

temporarily the titled car owner, that doesn’t undermine the trial

court’s finding that the circumstances of the transaction were

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sufficient for Mortenson to know that Luxury Asset was only

purporting to sell such title as it had from Thompson.

B. Sufficiency of the Evidence

¶ 23 Second, plaintiffs contend that the evidence doesn’t support

the trial court’s finding that the circumstances surrounding the

transaction were sufficient exclude the warranty of title under

section 4-2-312(2). We aren’t persuaded.

¶ 24 When a trial court enters a judgment after a bench trial, that

judgment presents a mixed question of law and fact. Frisco Lot 3

LLC v. Giberson Ltd. P’ship, 2024 COA 125, ¶ 66. We review the

court’s legal conclusions de novo. Id. But we review the court’s

factual findings for clear error and, thus, will not disturb those

findings unless they are not supported by the record. Id. “If the

evidence is conflicting, we may not substitute our own conclusions

for those of the trial court merely because there may be credible

evidence supporting a different result.” Id.

¶ 25 Plaintiffs challenge the trial court’s finding by asserting that

the court should’ve afforded more weight to the following facts:

• Luxury Asset complied with all statutory requirements as

a pawnbroker, including having Thompson complete a

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written declaration to verify her ownership of the car and

holding the car for a period of time after its purchase.

See generally § 29-11.9-103, C.R.S. 2024.

• Luxury Asset complied with all other legal requirements

of the transaction and provided the required information

to law enforcement agencies, which didn’t flag any issues

with the car. See § 29-11.9-103(7)(a).

• Luxury Asset followed the practice, apparently used by

the used car dealers with whom Mortenson had worked

in the past, of leaving the car titled in the previous

owner’s name but having the owner endorse the back

side of the title.

• The sale of the car “went according to plan.”

¶ 26 These facts may have supported a contrary finding. But just

like the facts in the summary judgment record in Hagerty I, they

don’t compel a contrary finding as a matter of law. See Hagerty I,

¶ 31. And as an appellate court, we aren’t in a position to reweigh

the trial court’s factual finding. See Frisco Lot 3, ¶ 66; see also

Korean New Life Methodist Church v. Korean Methodist Church of the

Ams., 2020 COA 20, ¶ 51 (“[A]n appellate court will neither weigh

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the evidence nor appraise the credibility of witnesses . . . .” (quoting

Van Cise, Phillips & Goldberg v. Jelen, 593 P.2d 973, 974 (Colo.

1979)) (alteration in original).

¶ 27 Plaintiffs rely in particular on the fact that Thompson had

endorsed the title in blank. But, as explained above, the evidence

on that issue doesn’t entitle plaintiffs to judgment as a matter of

law. And many other facts support the peculiarity of the

transaction, such as the following:

• Mortenson knew that Luxury Asset was a pawnbroker,

that the Rolls Royce secured a loan from Luxury Asset to

Thompson, and that Thompson failed to make the

required payments on the loan.

• Mortenson knew that the title Luxury Asset provided to

the DMV in Nevada was in Thompson’s name (not Luxury

Asset’s) and was issued in South Carolina (not Colorado).

• Mortenson knew that Thompson was listed as the seller

on the bill of sale.

• Mortenson knew that Luxury Asset was signing the sale

documents on Thompson’s behalf under a power of

attorney.

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• The car was never moved to Colorado. Instead,

Mortenson paid to ship it directly from Georgia to his

home in Nevada.

• Before the sale, Mortenson indicated to Luxury Asset that

he had contacted a Rolls Royce dealer about obtaining a

second key, and the dealer said there was something

wrong with the VIN number because it couldn’t be

located in its system. Mortenson also indicated that he

planned to check with another Rolls Royce dealer the

following day to try to confirm the VIN number. Yet, as

the trial court noted, “[t]here is no evidence that

Mr. Mortenson checked with another Rolls [Royce] dealer

to confirm the VIN.”

¶ 28 Based on these facts, we conclude that the trial court didn’t

clearly err by finding that the circumstances surrounding the sale

were sufficient for Mortenson to know that Luxury Asset didn’t

claim the title in itself or was purporting to sell only such title as it

or Thompson may have had.

IV. Disposition

¶ 29 The judgment is affirmed.

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JUDGE FOX and JUDGE LUM concur.

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