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Keywords

contractattorneystatuteappealtrialtrustforeclosure

plaintiffdefendantattorneystatutetrialtrustforeclosure

Related Cases

Margason v. Roberts, 919 P.2d 818, 30 UCC Rep.Serv.2d 751

Facts

Charles M. Margason owned real property in El Paso County and had granted a deed of trust to the United Bank of Colorado Springs. After the bank declared the loan due and initiated foreclosure proceedings, Margason attempted to postpone the foreclosure while seeking refinancing. The bank assigned the deed of trust to Bob and Phyllis Roberts, who refused to postpone the foreclosure. Margason then contracted to sell the property to a third party but was informed by the Roberts' attorneys of additional costs owed. Margason paid the amount claimed by the Roberts under protest, indicating he may seek to recover some of the money later. The trial court dismissed his complaint, leading to this appeal.

Plaintiff owned real property in El Paso County on which he had granted a deed of trust to the United Bank of Colorado Springs. In January of 1991, the bank declared the loan to be due and later initiated foreclosure proceedings. Plaintiff attempted to postpone further action on the foreclosure while he sought refinancing.

Issue

Did the trial court err in concluding that Margason waived his right to bring an action to recover the amount he paid to the Roberts to avoid foreclosure?

1 Plaintiff contends that the trial court erred in concluding that he had waived his right to bring an action to recover the amount he paid to the defendants to avoid foreclosure. We agree.

Rule

A party who with explicit reservation of rights performs or promises performance in a manner demanded by the other party does not thereby prejudice the rights reserved. Words such as 'without prejudice', 'under protest', or the like are sufficient.

That statute provides, in relevant part: A party who with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as ‘without prejudice’, ‘under protest’, or the like are sufficient.

Analysis

The court found that Margason had complied with the requirements of the statute regarding the reservation of rights. He had explicitly informed the Roberts that his payment was 'under protest' prior to the closing, and thus he did not need to renew this protest at the closing. The trial court's interpretation that Margason had waived his rights by not reasserting his protest was incorrect, as the statute allowed for protest to be made at either of two separate times.

Here, plaintiff, in his attorney's letter, had promised performance and had explicitly informed defendants that performance would be “under protest.” Having complied with the plain language of the statute, plaintiff was not required to renew this protest at the closing.

Conclusion

The Court of Appeals reversed the trial court's dismissal of Margason's complaint and remanded the case for further proceedings.

Accordingly, the judgment of dismissal is reversed. The cause is remanded for further proceedings on plaintiff's complaint.

Who won?

Charles M. Margason prevailed in the case because the court found that he did not waive his right to challenge the payment made under protest.

The court found that Margason had complied with the requirements of the statute regarding the reservation of rights.

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