C & C Investments, LP v. Martha L. Hummel

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.

SUMMARY
April 14, 2022

2022COA42

No. 20CA1879, C & C Inv. v. Hummel — Real Property —
Common Interest Communities — Homeowners Associations —
Dues — Foreclosure Sales — Right to Cure; Civil Procedure —
Process — Service by Publication; Constitutional Law — Due
Process

A division of the court of appeals considers whether a

homeowners association, before proceeding with a foreclosure sale,

is constitutionally required to do more than serve notice by mailing

and publication. Applying the reasoning of Jones v. Flowers, 547

U.S. 220 (2006), the division concludes that due process requires

homeowners associations to make a good faith, rather than highly

technical, effort to effectuate actual notice to a homeowner before

foreclosing on their property. When, as in this case, a homeowners

association does not take reasonably calculated steps to serve an

owner with actual notice before proceeding with a foreclosure, the
trial court does not have jurisdiction, and any resulting judgment,

sheriff’s sale, and confirmation deed are void ab initio.

Consistent with Colorado’s foreclosure statutes and Oakwood

Holdings, LLC v. Mortgage Investments Enterprises LLC, 2018 CO

12, the division vacates the trial court’s order granting a

post-foreclosure right to cure but affirms the court’s order vacating

the default judgment, sheriff’s sale, and confirmation deed for lack

of jurisdiction.
COLORADO COURT OF APPEALS 2022COA42

Court of Appeals No. 20CA1879
Larimer County District Court No. 17CV30536
Honorable Daniel M. McDonald, Judge

C & C Investments, LP,

Appellant,

v.

Martha L. Hummel,

Defendant-Appellee.

ORDERS AFFIRMED IN PART AND VACATED IN PART

Division I
Opinion by JUDGE SCHUTZ
Dailey and Fox, JJ., concur

Announced April 14, 2022

Hatch Ray Olsen Conant, LLC, Christopher J. Conant, Denver, Colorado, for
Appellant

Law Office of Ingrid J. DeFranco, Ingrid J. DeFranco, Brighton, Colorado, for
Defendant-Appellee
¶1 More than 2.6 million Colorado residents live in communities

governed by covenants that are administered by a homeowners

association. Colo. Div. of Real Est., HOA Info. & Res. Ctr., 2021

Annual Report 8, https://perma.cc/CQN4-J846. This case

presents two important issues related to the foreclosure on a

residence for purposes of collecting outstanding homeowners

association dues. First, we address whether a trial court may

exercise its equitable powers to grant a property owner a post-

foreclosure right to cure. Following established precedent

interpreting our current statutes, we answer “no” to that question

and vacate the trial court’s order. Next, we address whether a

homeowners association, before proceeding with a foreclosure, is

constitutionally required to do more than serve notice on the

homeowner by mail and newspaper publication. Based upon the

facts presented, we answer that question “yes” and therefore affirm

this order, albeit for different reasons than those provided by the

trial court.

I. Factual Background

¶2 The pertinent facts of this case are unique and undisputed. In

1999, Martha L. Hummel purchased a home in Loveland, Colorado.

1
The home was subject to declarations and covenants that imposed

monthly homeowners association dues. Amended Windsong

Homeowners Association, a Colorado nonprofit corporation (HOA),

administered the covenants.

¶3 Hummel’s relationship with the HOA was uneventful for the

first fifteen years of her occupancy. She timely paid her mortgage

and association dues through automatic withdrawals from her

checking account. In 2011, Hummel’s sister, the only person with

whom she socially interacted, relocated from Wyoming to Georgia.

Hummel’s mental health progressively deteriorated. Suffering from

severe depression, she shut herself in her home for the next eight

years.

¶4 Hummel never left her home during this period. She did not

shower or change clothing during the entire time she was cloistered;

she did not answer the door unless to accept delivery of the pizzas

she had ordered; she stacked every pizza box around the home and

never took trash or refuse to the curb for collection; and she did not

retrieve her mail, so the post office eventually discontinued service

to her home.

2
¶5 During this period, Hummel paid all her bills via

autopayments from her checking account or credit card, including

her mortgage, property taxes, and HOA dues. She screened her few

phone calls through an answering machine. Periodically,

authorities were contacted to check on her welfare, and she

returned at least one phone call to adult protective services,

reassuring them that she needed no assistance.

¶6 In 2014, the HOA hired a new management company.

Hummel was not aware of this change and was also unaware that

the automatic withdrawal authorization she had previously put in

place was no longer viable. Because Hummel had not authorized

payments to the new management company, her HOA dues were no

longer being paid and her HOA account soon fell into arrears. She

did not receive the letters the HOA sent her advising of the

deficiencies and demanding payment.

¶7 During this time, Hummel continued to pay her other

outstanding bills. She had nearly paid off her mortgage. Although

no formal appraisal was presented to the trial court, an HOA

representative testified that homes in her neighborhood were valued

between $250,000 and $300,000.

3
II. The Lawsuit

¶8 On May 18, 2017, the HOA’s governing board voted

unanimously to commence a foreclosure action based upon

Hummel’s years of unpaid HOA dues totaling approximately $7,000.

On June 28, 2017, the HOA filed suit against Hummel and her

mortgage lender, First National Bank of Arizona, for judicial

foreclosure and mailed the complaint and summons to Hummel.

The papers were returned “undeliverable.” In September of 2017,

the HOA filed a motion for extension of time to serve Hummel. The

motion was accompanied by an affidavit from a process server

indicating that he had unsuccessfully attempted to personally serve

Hummel in July of 2017 on four separate occasions. The court

granted the requested extension. Despite the extension, the HOA

made no additional efforts to personally serve Hummel.

A. The HOA’s Efforts to Serve Hummel by Publication

¶9 On November 14, 2017, the HOA filed a motion requesting

permission to serve Hummel and her lender by publication. The

motion referred to prior efforts to effectuate personal service on

Hummel stating, “[a] search has been made of the public records of

Larimer County, Colorado and its surrounding counties, and of the

4
telephone and other available directories, and various inquiries

have been made to obtain information concerning the whereabouts

of Defendant Hummel . . . to no avail.” The motion provided no

further description or documentation of the HOA’s efforts to

personally contact Hummel. On December 3, 2017, the trial court

granted the HOA’s motion for service by publication. Accordingly,

notice of the foreclosure was published in the Loveland Reporter

Herald. Because Hummel did not receive the newspaper and did

not have the ability to access it online, she did not receive actual

notice of the foreclosure suit.

B. The HOA’s Motion for Foreclosure by Default

¶ 10 In May of 2018, the HOA filed a motion for default judgment

and a decree of foreclosure. The trial court held a hearing to

address the motion on September 27, 2018, which counsel for the

HOA and an HOA representative, but not Hummel, attended. At the

hearing, the court found that neither Hummel nor her mortgage

lender had been personally served. In explaining the lack of

personal service, counsel for the HOA informed the court,

It sounds like she’s somewhat eccentric.
They’ve tried to do wellness checks through
the sheriff’s office. And each time she will call

5
just prior to the sheriff’s arrival, say everything
is okay. But she seems to be somewhat of a
recluse. She orders pizza to be delivered daily.
And so that is going to be at least some of the
reasons why personal service couldn’t be
affected [sic]. But I would obviously have to
make sure that other avenues of due process
were, were met in order to proceed with a
decree of foreclosure here.

(Emphasis added.)

¶ 11 The trial court expressed deep concern about granting the

remedy of foreclosure without providing additional notice to

Hummel:

Well, and also what I would require before I
would even ever consider ordering a sale; is if
you can’t get personal service and I know
you’ve tried publication . . . I would also
[require] you to look back into serving the
mortgagee . . . which apparently is First
National Bank of Arizona. And then also post,
at the very least, posting on the property itself,
on the front door, notice of what’s going on here
and that there is a default judgment that’s
being entered and there’s a lien and there’s a
request[] to foreclose on the house.

(Emphasis added.)

¶ 12 Thus, the trial court required that the HOA post notice “on the

front door” of the property before it would authorize the foreclosure

by default. The HOA’s counsel then reiterated the court’s order: “So

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just so I’m clear on my marching orders, you want to confirm that

we’ve had proper posting, and if not, post it to the property,

re-examine what had been done to serve the mortgagor [sic].” The

court confirmed counsel’s understanding.

C. A Default Foreclosure Judgment Entered Against Hummel

¶ 13 Shortly after this hearing, new counsel entered an appearance

for the HOA. On October 18, 2018, this attorney filed an amended

motion for default asserting, “[a]ll named Defendants were duly and

properly served. True and correct copies of the Affidavits of Service

and Proof of Publications are on file with the Court and are

incorporated herein by reference.” The amended motion also cited

legal authority permitting a homeowners association to collect its

assessment lien through the remedy of foreclosure. The amended

motion did not address, however, the court’s prior order that the

notice must also be posted on the property before any foreclosure

would be permitted.

¶ 14 On February 28, 2019, without further hearing, the court

granted the HOA’s motion for default judgment and decree of

foreclosure. In granting the motion, the court noted, “though

Plaintiff is not required to post a copy of the summons and

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complaint on Defendant’s property, Plaintiff did not use this method

of publication. However, the court finds that all named Defendants

were duly and properly served.” The court did not mention its prior

order requiring that the notice be posted on the property before

foreclosure would be permitted. Nor did the court vacate its prior

order or state that the posting requirement had been fulfilled. The

court completed the order with this notation,

under C.R.S. 38-38-103, entering a decree of
foreclosure does not allow for immediate sale
of the Property, and Defendant Hummel will
have an opportunity to cure the default prior
to the sale. Both named Defendants will be
provided with significant opportunity to pay
the outstanding balance and avoid the sale of
the Property.

¶ 15 A sheriff’s sale of Hummel’s home was conducted on June 25,

2019. Contrary to the trial court’s assumption when it granted the

foreclosure by default, the record contains no evidence suggesting

Hummel received actual notice, whether by mail or posting, before

the sheriff’s sale. At the sale, C & C Investments, LP (C & C),

purchased Hummel’s home for $19,360.10.

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D. Hummel’s Motion to Set Aside the Default Judgment

¶ 16 On August 15, 2019, C & C posted a notice to quit on

Hummel’s front door. Hummel saw the notice, immediately

contacted an attorney, and on August 29, 2019, filed an affidavit

with the court asserting she had never been properly served and a

motion to set aside the default judgment on the grounds of fraud

under C.R.C.P. 60(b)(2).

¶ 17 The court set an evidentiary hearing to address the motion to

set aside the default judgment. Because of COVID-19 protocols, the

hearing was delayed for several months. During that period, the

presiding judge for the case changed because of the district’s

rotating docket policy. Eventually, the hearing was scheduled and

held before a new judge on July 6, 2020. By that time, C & C had

been permitted to intervene in the proceedings but had not filed any

claims for relief. Leading up to the hearing, the court entered an

order advising the parties:

The Court finds that the sole issue currently
before it is whether the default should be set
aside. The issue of the Sheriff’s sale and title
to the property is a separate issue that has
been raised but not in a way that would allow
the matter to proceed to hearing on July 6,

9
2020 unless both parties agree to have that
issue heard as well.

¶ 18 Consistent with this directive, at the commencement of the

hearing, the court clearly stated it would only address whether

there were grounds to vacate the default judgment in favor of

Hummel and would not address any claim to set aside the sheriff’s

sale until a later date.

¶ 19 Also, at the start of the hearing, the court acknowledged that it

had been informed that the HOA and Hummel had reached an

agreement resolving the HOA’s claims that, once consummated,

would result in the dismissal of the claims against Hummel. As

part of this resolution, the HOA agreed not to oppose Hummel’s

request to vacate the default judgment. Thus, the HOA did not

actively participate in the hearing. Nonetheless, the court permitted

C & C to participate.

¶ 20 After addressing these preliminary matters, the court

proceeded to hear the parties’ evidence.

E. The Trial Court’s Findings and Conclusions

¶ 21 At the completion of the evidence and after closing arguments,

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

10
began by ruling that even though the motion to set aside the default

judgment was expressly filed under C.R.C.P. 60(b)(2), Hummel had

adequately preserved her right to challenge the judgment under all

subparts of Rule 60(b).

¶ 22 Referencing the prior court order directing the HOA to post

notice on Hummel’s property, the court noted, “I think the court

was very clear that she wanted service by posting on the door. And

then later found that it wasn’t necessary, based on the fact that

there was a posting on the door.”1 The court found Hummel’s

testimony “very compelling.” The court credited her statement that

during this period she was suffering from debilitating mental illness

and that she had never received notice of the lawsuit or the

subsequent foreclosure proceedings until the summer of 2019,

when the eviction notice was posted on the door.

¶ 23 The court also heard testimony from the HOA’s process server,

who had filed an affidavit indicating he attempted service upon

Hummel on four occasions over a sixteen-day period in July of

1Despite the statement, there is no evidence in the record to
support the conclusion that the notice was ever posted on the
property. Indeed, the parties agree it was not.

11
2017. The court found this testimony “not very compelling” due to

the process server’s inability to correctly describe Hummel’s home,

cite the time of day he attempted service, or recall if he stayed

longer than sixty seconds at Hummel’s door.

¶ 24 Based upon these findings, the court concluded Hummel had

demonstrated excusable neglect for her failure to timely file an

answer, that she had a viable defense on the merits, and that there

were “extraordinary circumstances” justifying setting aside the

default judgment under Rule 60(b)(1) and (5).

¶ 25 In addition to finding excusable neglect and extraordinary

circumstances, the court stated, “I do not believe there is good

cause to set aside under 60(b)(2), or (3) or (4).” But, in making this

statement, the court made no reference as to whether it had

personal jurisdiction over Hummel. After its ruling, the court

reiterated it was not addressing the status of the sheriff’s sale

because “that’s a separate issue that requires a different amount of

evidence, different standards, [and] different information before the

court.” It ordered additional briefing by both parties on the issue of

whether the court should nullify the sheriff’s sale and resulting

deed and scheduled a hearing date to resolve that issue.

12
¶ 26 On September 11, 2020, after receiving the requested briefs,

the court sua sponte entered an order granting Hummel fifteen days

to file a notice of intent to cure the foreclosure sale.2 Upon payment

of the cure amount, Hummel was ordered to file a status update

with the court, after which the court would declare the sheriff’s sale

and confirmation deed void and quiet title in Hummel. Hummel

subsequently tendered the cure funds, and the court, in turn,

issued an order to quiet title in her favor and voided the sheriff’s

deed. That same day, the court denied C & C’s motion to

reconsider the cure order, which asserted the court had no

discretion to afford Hummel a post-sale right to cure under current

Colorado law.

2 The trial court labeled the remedy it was affording Hummel as a
right to cure. As discussed in more detail below, historically an
owner had both a statutory right to cure prior to a foreclosure sale
and a post-foreclosure right to redeem. In 2008, however, the
General Assembly “eliminated a homeowner’s formal statutory
redemption rights after the foreclosure sale and . . . combined the
pre-and post-sale cure periods into one before-sale cure and payoff
period.” Oakwood Holdings, LLC v. Mortg. Invs. Enters. LLC, 2018
CO 12, ¶ 8. Even though the trial court’s remedy was to be
exercised after the foreclosure sale, for the sake of consistency, we
will refer to it as a “cure” right rather than a right of redemption.

13
¶ 27 C & C now appeals the trial court’s order affording Hummel a

post-sale cure opportunity and providing that, upon such cure, the

sheriff’s sale and resulting confirmation deed would be vacated.

III. Was the Trial Court’s Order Authorizing the Post-Sale Cure
Proper?

¶ 28 C & C argues that the trial court erred by affording Hummel a

post-foreclosure cure opportunity. We agree.

A. Standard of Review

¶ 29 A trial court abuses its discretion when it misconstrues the

law. People v. Salas, 2017 COA 63, ¶ 30. An appellate court

reviews a trial court’s application of the law de novo yet defers to

the court’s factual findings, which it will not disturb if they have

record support. People v. Fuerst, 2013 CO 28, ¶ 10.

B. Analysis of the Post-Sale Cure Right Granted by the Trial
Court

¶ 30 Colorado’s foreclosure statutes apply to foreclosures processed

by a public trustee or by a sheriff and govern all processes by which

a sheriff’s sale occurs. § 38-38-701(1), C.R.S. 2021. C & C argues,

and we agree, that the trial court was required to comply with

section 38-38-104, C.R.S. 2021, when determining whether to allow

Hummel to cure. Section 38-38-104 expressly permits an owner to

14
cure, but to exercise that right, an owner must provide notice of

intent to cure at least fifteen days prior to the sale, § 38-38-104(1),

and the cure sums must be paid by noon on the day before the

scheduled sale date, § 38-38-104(2)(b). It is true that Colorado’s

foreclosure statutes previously permitted an owner both a pre-sale

right to cure and a post-sale right to redeem. § 38-38-302, C.R.S.

1990. But the General Assembly eliminated an owner’s post-sale

right to redeem in 2008. Compare Ch. 275, sec. 2, § 38-38-302,

1990 Colo. Sess. Laws 1664-65, with Ch. 305, sec. 21, § 38-38-302,

2006 Colo. Sess. Laws 1467. Thus, when the trial court entered its

order, an owner had no statutory right to cure after the foreclosure

sale.

¶ 31 The trial court was aware of the statutory requirement that a

cure must be exercised prior to sale. The court’s order stated that

Hummel could exercise the right to cure it was creating

“notwithstanding any subsections, such as subsections 38-38-

104(1), (2)(a)(1) or (b), which require cure to be made prior to sale.”

Thus, the trial court was purporting to authorize a remedy that the

General Assembly had previously eliminated.

15
¶ 32 We appreciate that the trial court was laboring under the belief

that it could fashion an equitable remedy to address the

circumstances of this case. But regardless of how it perceived its

equitable powers and the equities of this situation, the trial court

was not at liberty to create a remedy that did not statutorily exist.

The exercise of such equitable powers was expressly rejected by the

supreme court in Oakwood Holdings, LLC v. Mortgage Investments

Enterprises LLC, 2018 CO 12, ¶ 3 (“Although a debtor-owner is

sometimes entitled to cure, the statute is clear that he or she must

do so before the foreclosure sale is complete . . . .”). Like the right

to cure, the court also stated that the right to redeem is not derived

from principles of equity but depends entirely upon the provisions

of the statute creating that right:

[T]he right to redeem from an execution sale is
a creature of statute. The right of redemption
has long been recognized as a substantive
right to be exercised in strict compliance with
statutory terms. It is not a right derived from
principles of equity, but depends entirely upon
the provisions of the statute creating the right.

Id. at ¶ 14 (quoting Johnson v. Smith, 675 P.2d 307, 310 (Colo.

1984)). Strict compliance with these statutory rights is required to

protect persons with a stake in the process from prejudice. Janicek

16
v. Obsideo, LLC, 271 P.3d 1133, 1139 (Colo. App. 2011). Thus, the

supreme court held, these rights may not be expanded by judicial

interpretation. Oakwood Holdings, ¶ 14.

¶ 33 The trial court’s order granting Hummel a post-sale right to

cure is contrary to these established principles. Accordingly, we

vacate that portion of the order.

IV. Whether the Decree of Foreclosure Should be Vacated and the
Sheriff’s Deed Set Aside

¶ 34 C & C also takes issue with the trial court’s order that, upon

Hummel tendering the cure amount, the court would “declare the

sheriff’s sale and confirmation deed void, and quiet title in Ms.

Hummel.” Consistent with this order, Hummel timely paid the

amounts due to C & C under the court’s order. The cure proceeds

were released to C & C to repay the amounts it bid at the

foreclosure sale plus subsequently incurred holding costs, and the

trial court voided the sheriff’s sale and confirmation deed. C & C

contends the court erred by entering these orders.

A. Standard of Review

¶ 35 Whether the trial court properly ordered a foreclosure by

default presents a mixed question of fact and law. We review the

17
trial court’s factual findings for clear error and its legal conclusions

de novo. People v. Miller, 75 P.3d 1108, 1111-12 (Colo. 2002).

B. Consequences of Setting Aside a Default Judgment

¶ 36 When a default judgment is set aside, the original judgment

may either be reopened or vacated. See, e.g., Weaver Constr. Co. v.

Dist. Ct., 190 Colo. 227, 231, 545 P.2d 1042, 1045 (1976). Because

the default judgment was not set aside at the July 2020 hearing, C

& C argues the sheriff’s sale and resulting deed remain valid.

¶ 37 Weaver counsels that when a default judgment “is opened the

defendant is allowed to answer to the merits of the claim, but the

original judgment and judgment lien remain in effect as security

pending the resolution of the trial on the merits.” Id. at 232, 545

P.2d at 1045. But Weaver also teaches,

if a judgment results in plaintiff’s favor after
the original judgment is opened for a trial on
the merits, his judgment lien will remain in full
force and effect as if the original default
judgment had not been opened. If a judgment
results in favor of the defendant . . . then the
original default judgment is vacated — the
judgment and judgment lien are dissolved as
though they never existed. Therefore,
generally, the court must refrain from vacating
a default judgment until after the opened
judgment results in a new judgment on the
merits.

18
Id. In contrast to an opened judgment, when a default judgment is

set aside on jurisdictional grounds, the underlying judgment and

any subsequent foreclosure sale are void and treated as if they

never existed. Id.

C. Did the Trial Court Have Jurisdiction to Enter the Foreclosure
Decree?

¶ 38 Contending the trial court only opened the underlying

judgment, C & C argues the court lacked jurisdiction to vacate the

judgment and resulting sheriff’s deed. We disagree but for reasons

different than those articulated by the trial court. See, e.g., Roque

v. Allstate Ins. Co., 2012 COA 10, ¶ 7 (“We can affirm for any reason

supported by the record, even reasons not decided by the trial

court.”). Recall that Hummel has consistently argued since her

entry into this case that she did not receive adequate notice of these

proceedings. This argument challenges the trial court’s jurisdiction

to enter the foreclosure order in the first instance. But the trial

court did not fully resolve this essential question. Because

jurisdiction is a necessary prerequisite to the enforceability of any

order, we must address and resolve that question.

19
¶ 39 C & C concedes, and we agree, that if the trial court lacked

jurisdiction, the judgment and resulting sheriff’s deed must be set

aside. See, e.g., Davidson Chevrolet, Inc. v. City & Cnty. of Denver,

138 Colo. 171, 173-76, 330 P.2d 1116, 1118-19 (1958). We

conclude the trial court failed to expressly rule on the question of

whether it had sufficient jurisdiction. Nonetheless, we conclude

that the trial court made adequate factual findings to allow us to

resolve this question as a matter of law.

1. An Association’s Duties When Enforcing Covenants

¶ 40 The Colorado Common Interest Ownership Act (CCIOA) creates

a comprehensive framework for the creation and operation of

common interest communities. Rancho Escondido Prop. Owners

Ass’n v. Redstone Mgmt. Co., 169 P.3d 270, 273 (Colo. App. 2007).

Assessment liens created under its provisions “may be foreclosed

[by an association] in like manner as a mortgage on real estate.” Id.

(quoting § 38-33.3-316(11)(a), C.R.S. 2021). Although an

association is not the government, it serves “quasi-governmental

functions” when enforcing covenants and must abide by the due

process requirements of the United States and Colorado

Constitutions. See Colo. Homes, Ltd. v. Loerch-Wilson, 43 P.3d 718,

20
722 (Colo. App. 2001) (recognizing fiduciary obligations owed to

homeowners based upon “the power held by homeowner

associations, the quasi-governmental functions they serve, and the

impact on value and enjoyment that can result from the failure to

enforce covenants”).

2. General Service Requirements for Actions Involving Real
Estate

¶ 41 As C & C correctly notes, the HOA was proceeding in rem —

that is, against Hummel’s property, rather than against her

personally — when pursuing its foreclosure remedy. And, as C & C

also notes, C.R.C.P. 4(g) contemplates mailing and publication as a

means of effectuating “other service” when jurisdiction over

property is sought:

Except as otherwise provided by law, service
by mail or publication shall be allowed only in
actions affecting specific property . . . . The
court, if satisfied that due diligence has been
used to obtain personal service or that efforts
to obtain the same would have been to no
avail, shall:

(1) Order the party to send by registered or
certified mail a copy of the process addressed
to such person at such address, requesting a
return receipt signed by the addressee
only . . . , or

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(2) Order publication of the process in a
newspaper published in the county in which
the action is pending. Such publication shall
be made once each week for five successive
weeks. Within 14 days after the order the
party shall mail a copy of the process to each
person whose address or last known address
has been stated in the motion and file proof
thereof. . . .

In this case, the trial court’s initial written order permitted “other

service” by publication in the newspaper. C & C argues that since

the HOA published notice in the newspaper in accordance with the

order, it fulfilled the requirements of Rule 4(g), and therefore we

must conclude the trial court had sufficient jurisdiction to enter a

default judgment of foreclosure. We disagree.

¶ 42 C & C’s error is predicated upon an assumption that

compliance with Rule 4(g) is, under all circumstances, sufficient to

confer adequate jurisdiction to allow a foreclosure to proceed. Yet

in addition to compliance with Rule 4(g), an association must also

meet the mandates of due process before foreclosing on an

individual’s property.

¶ 43 Before turning to the specific case law upon which we base

our conclusion, we amplify the trial court’s intuitive statement that

it would require, “at the very least, posting on the property itself, on

22
the front door” before it would authorize foreclosure by default.

Similarly, at the same hearing, counsel for the HOA conceded he

“would obviously have to make sure that other avenues of due

process were . . . met in order to proceed with a decree of

foreclosure here.” These statements were grounded in counsel’s

and the court’s appreciation that due process may well require

something more than mailing or publication in a newspaper before

a foreclosure could move forward by default. They were right. See,

e.g., Owens v. Tergeson, 2015 COA 164, ¶ 40 (“Compliance with

[the rules of procedure regarding service by publication], however, is

not the end of the matter.” (citing Mullane v. Cent. Hanover Bank &

Tr. Co., 339 U.S. 306, 315 (1950))). Unfortunately, the trial court

lost sight of these principles and entered the foreclosure order by

default without ensuring that the requirements of due process had

been satisfied.3 That omission does not relieve us of the obligation

3 We appreciate trial courts are always in a difficult position when
acting upon motions for default judgment because the party who
will be adversely affected by the ruling is not before the court and
assisting to ensure its rights are protected. Because of these
vulnerabilities, the trial court has an obligation to be extra vigilant
to ensure basic due process principles have been satisfied before
entering a default judgment.

23
to ensure that the entry of the judgment was consistent with due

process.

3. Due Process Requirements when Foreclosing an Association’s
Lien

¶ 44 Despite the ancient and often unhelpful distinction between

actions in rem and in personam, see Mullane, 339 U.S. at 312-13

(discussing the origins of the terms in rem, quasi in rem, and in

personam, and their limited value when assessing the degree of

diligent inquiry and notice required to fulfill the constitutional

mandates of due process), or the requirements of a particular

statute or rule of procedure that addresses service in foreclosure

actions, the United States Supreme Court has long held that when

foreclosing a lien against an individual’s home, due process requires

“notice [that is] reasonably calculated, under all the circumstances,

to apprise interested parties of the pendency of the action and

afford them an opportunity to present their objections.” Id. at 314.

Moreover, this is not a generalized “check the box” exercise, but

rather “[t]he means employed must be such as one desirous of

actually informing the absentee might reasonably adopt to

accomplish it.” Id. at 315.

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¶ 45 The Court’s decision in Jones v. Flowers is particularly

instructive. 547 U.S. 220 (2006). The State of Arkansas held a tax

lien against Flowers’ residence, which he no longer occupied. Id. at

223. After years of nonpayment of taxes, the state commenced a

tax sale and notified Flowers by certified mail, which met the notice

requirements of the applicable state statute. Id. at 223-24. The

letter was returned unclaimed. Id. at 224. The state also published

notice of the sale in a local newspaper. Id. The sale proceeded

without Flowers receiving actual notice, and a third party

purchased the home. Id. The purchaser then posted an eviction

notice on the property, and the tenant brought the sale to the

attention of Flowers, who promptly moved to set aside the sale

based upon Mullane and its progeny. Id. at 224-25.

¶ 46 Writing for the majority, Chief Justice Roberts conveyed the

Court’s holding: “[W]hen mailed notice of a tax sale is returned

unclaimed, the State must take additional reasonable steps to

attempt to provide notice to the property owner before selling his

property, if it is practicable to do so.” Id. at 225.

¶ 47 In rejecting the state’s argument that the mailing and

subsequent publication were sufficient to meet the requirements of

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due process, Chief Justice Roberts noted, “we have required the

government to consider unique information about an intended

recipient regardless of whether a statutory scheme is reasonably

calculated to provide notice in the ordinary case.” Id. at 230. The

Court held that the state’s knowledge that the normal procedures

were ineffective triggered its obligation to take additional steps to

effectuate notice. Id. While recognizing that the type of additional

steps will vary from case to case, the Court stated, “posting notice

on real property is ‘a singularly appropriate and effective way of

ensuring that a person . . . is actually apprised of proceedings

against him.’” Id. at 236 (quoting Greene v. Lindsey, 456 U.S. 444,

452-53 (1982)); see also Long v. Pippin, 914 P.2d 529, 532 (Colo.

App. 1996) (posting on door coupled with certified mailing were

sufficient to provide homeowner notice of tax sale).

¶ 48 The holdings and rationale of Mullane and Flowers are

particularly instructive in the homeowners association setting.

Homeowners associations have extraordinary powers and authority

under CCIOA. They may record a lien against an individual’s home

to recover delinquent assessments and enforce such liens by

foreclosure. They are permitted to charge and recover late fees,

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interest, and attorney fees related to the nonpayment and

enforcement mechanisms. Typically, the lien and foreclosure rights

are directed toward an individual’s home. And unlike many larger

agencies, an association is typically governed by volunteers who live

in the same neighborhood as the property that is the subject of the

foreclosure action. Such familiarity can also provide insight into

the intangible circumstances of the homeowner who is the subject

of the foreclosure action. Given these dynamics, it is not

unreasonable to require a homeowners association to make a good

faith, rather than a highly technical, effort to effectuate actual

notice to a fellow neighbor before foreclosing on their property.

¶ 49 Applying these principles to the undisputed facts presented on

appeal, it is manifest that the HOA did not take reasonable steps

calculated to provide Hummel with actual notice of the lawsuit or

the resulting sheriff’s sale. Recall that the trial court did not find

credible the testimony from the process server that he attempted

personal service upon Hummel. Even if the court had deemed that

testimony credible, it reflects an attempt at personal service that

spanned only sixteen days in a case that was pending for years.

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¶ 50 In addition, recall that in September of 2018, the HOA’s

counsel acknowledged he knew that Hummel was a “recluse” who

did not answer her door except to take pizza deliveries, and that she

was occasionally the subject of welfare checks by adult social

services. Indeed, after reciting these facts, the HOA’s counsel

acknowledged to the court, “I would obviously have to make sure

that other avenues of due process were . . . met in order to proceed

with a decree of foreclosure here.” It was these same concerns that

prompted the original trial judge to require “at the very least,

posting on the property itself, on the front door, notice of what’s

going on here and that there is a default judgment that’s being

entered and there’s a lien and there’s a request[] to foreclose on the

house.” Yet despite these acknowledgments by both counsel and

the trial court, the HOA never posted notice on the property.

¶ 51 Given these undisputed facts, we conclude the HOA failed to

achieve service that meets the strictures of due process. To the

extent that any of the trial court’s orders could be interpreted

otherwise, we conclude any such orders are inconsistent with

Hummel’s right to due process. Accordingly, we conclude the trial

court did not have adequate jurisdiction, and the default judgment

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and resulting sheriff’s sale and confirmation deed were void ab

initio and were properly vacated by the trial court.

¶ 52 Finally, we note that C & C has been made whole by actions

taken in response to the trial court’s prior orders. It obtained the

return of the money it paid at the foreclosure sale, and it recovered

all holding costs it incurred between the time it took title and when

the sheriff’s deed was vacated. While we recognize C & C will not

realize the windfall profit it would have received had the

confirmation deed been validated, both principles of law and equity

mandate this result.

V. C & C’s Request for Attorney Fees

¶ 53 Considering our resolution of the appeal, coupled with the fact

that C & C was not bringing an action to enforce the HOA

covenants, rules, or regulations, we conclude C & C is not entitled

to an award of attorney fees on appeal. See § 38-33.3-123(1)(c),

C.R.S. 2021 (“In any civil action to enforce or defend the provisions

of this article or of the declaration, bylaws, articles, or rules and

regulations, the court shall award reasonable attorney fees, costs,

and costs of collection to the prevailing party.”).

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VI. Conclusion

¶ 54 For the reasons stated, we vacate the trial court’s order

granting a post-foreclosure cure remedy but affirm the order of the

court vacating the default judgment, the sheriff’s sale, and the

confirmation deed.

JUDGE DAILEY and JUDGE FOX concur.

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