Leyden v. Citicorp Industrial Bank

782 P.2d 6 (1989)

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Facts

P and Tommy Howe were divorced. The court found that the marital residence was held in joint tenancy by P, Tommy Howe, and Tommy Howe's mother, Lois Howe. The court further found that P was the fee simple owner of an undivided one-third interest in the property, which had an equity value of $30,000. The court did not order a sale of the property. To protect the interest of Lois Howe, the court ordered P to quitclaim her one-third undivided interest in the property to Tommy Howe and his mother. Tommy Howe was ordered to contemporaneously execute a promissory note in the principal value of $ 10,000, with interest as provided in the order, and that was to become due upon the terms set forth in the decree. P quitclaimed her one-third interest in the property to Tommy and Lois Howe, and Tommy Howe duly executed the promissory note. On November 18, 1980, P filed the dissolution decree but not the promissory note in the records of Arapahoe County, where the property was located. D extended a loan to Tommy Howe, his new wife, Blanche, and Lois Howe (the Howes). In exchange, the Howes executed a promissory note in the principal amount of $19,600.77 to D, secured by a deed of trust on the property. The deed of trust was recorded on September 20, 1982. The Howes filed for bankruptcy, and the debt evidenced by the promissory note to P was discharged. The Howes disclaimed any interest they had in the property, and D, after obtaining relief from the automatic stay in the bankruptcy court, foreclosed on the property and obtained a public trustee's deed. After the discharge in bankruptcy, P filed a complaint in the district court on February 7, 1984, asking for a declaratory judgment that the recorded dissolution decree created either a judicial or equitable lien on the property, praying for foreclosure of the lien, and requesting attorney fees as provided in the promissory note. P filed a lis pendens on the property in Arapahoe County. While the declaratory action was pending, D transferred the property by deed to the Evanses on March 28, 1985. Both P and D moved for summary judgment. The district court granted P's motion, holding that P had an equitable lien on the property. It ruled that D and the Evanses were on notice that P was claiming a lien on the property when they obtained their interest in the property, so Ds took the property subject to the lien. The court ordered a foreclosure sale of the property within thirty days, with the proceeds in excess of $24,084.51 going to P, and any excess to the Evanses. Ds appealed. The court held that the imposition of an equitable lien was in error and reversed. If held that the dissolution court did not intend to create any security interest in favor of P. P appealed.

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