Denney v. Olsen

23CA1057 Denney v Olsen 09-05-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1057

Yuma County District Court No. 22CV1

Honorable Justin B. Haenlein, Judge

Jeffrey P. Denney,

Plaintiff-Appellant,

v.

Keree DeLynn Olsen,

Defendant-Appellee.

APPEAL DISMISSED

Division V

Opinion by JUDGE JOHNSON

Freyre and Brown, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced September 5, 2024

Ausmus Law Firm P.C., Adam R. Ausmus, Greenwood Village, Colorado, for

Plaintiff-Appellant

Wagers Law Firm P.C., Sara M. Wagers, Wray, Colorado, for Defendant-

Appellee

1

¶ 1 Plaintiff, Jeffrey P. Denney (Denney) had to sell property to pay

a civil judgment owed to defendant, Keree DeLynn Olsen (Olsen).

He appeals the district court order that awarded him an exemption

from sale or levy of up to $20,000 worth of his tools-of-trade

property as part of his “other gainful occupation” under section 13-

54-102(1)(i)(I)(B), C.R.S. 2024. He contends the district court erred

because he should have been awarded a larger exemption. We

dismiss the appeal as moot.

I. Background

¶ 2 Denney filed this replevin action against Olsen, his ex-

girlfriend. He sought return of property that he had left at Olsen’s

home following their breakup. Some of this property included

vehicles and tools Denney had used when he worked in the

construction field. Olsen counterclaimed, asserting, as relevant

here, a civil theft claim for various items she alleged that she had

purchased during the relationship but Denney had stolen.

¶ 3 After a hearing, the district court ordered that some of the

items Denney sought needed to be returned to Olsen, and that

Olsen prevailed on her civil theft claim. The court awarded Olsen

$64,995.59 in damages (which were trebled). In addition to the civil

2

judgment, the court awarded Olsen attorney fees and costs. As of

May 2023, Denney owed Olsen $82,116, which included accrued

interest.

¶ 4 Olsen began efforts to collect on her judgment and Denney

sought a stay. As part of his request, Denney sought a property

exemption that would have allowed him to retain up to $60,000 in

property for his “primary gainful occupation” under section 13-54-

102(1)(i)(I)(A). Following another hearing, the court concluded that

Denney did not have a “primary gainful occupation,” but he had

“other gainful” work in the construction field. As a result, the court

determined that Denney was entitled to a tools-of-trade property

exemption in the aggregate value of $20,000. The court exempted

from levy and sale several of Denney’s tools.

¶ 5 Although Denney requested that the order be stayed so that

the unexempted tools were not sold, his repeated requests were

denied by the district court because he did not obtain a

supersedeas bond. His tools were sold at auction in May 2023.

Olsen’s judgment was credited $8,517.02 from the sale of Denney’s

tools. On May 18, 2023, the Yuma County Sheriff’s Office, which

had executed on the writs and sold the tools at auction, filed a

3

report (sheriff’s report) with the court indicating that the

outstanding amount of Olsen’s judgment was $73,598.98. See

Schnelle v. Cantafio, 2024 COA 17, ¶ 2 n.1 (an appellate court may

take judicial notice of court documents related to the case under

CRE 201(b)).

1

¶ 6 Denney appeals, contending that the district court improperly

interpreted section 13-54-102(1)(i)(I) by holding that he did not have

a “primary gainful occupation,” and therefore, he should be eligible

for the tools-of-trade property exemption up to $60,000. In other

words, he claims that none of his tools should have been sold at

auction so Olsen must compensate him.

¶ 7 Although both parties mentioned that Denney’s tools had been

sold, neither party briefed whether this fact affected this appeal.

We requested supplemental briefing from the parties on (1) whether

this appeal was moot, and if not, (2) what remedy could be provided

to Denney because his tools cannot be recovered from the bona fide

purchasers. We conclude that this appeal is moot.

1

Although the sheriff’s report was filed in the district court before

Denney filed his notice of appeal, the document is not in the record

on appeal.

4

II. Standard of Review

¶ 8 We may raise mootness nostra sponte because the doctrine

implicates a court’s subject matter jurisdiction. In re Marriage of

Wenciker 2022 COA 74, ¶¶ 8-9; Fullerton v. Cnty. Ct., 124 P.3d 866,

867 (Colo. App. 2005).

¶ 9 We review de novo whether an appeal is moot. DePriest v.

People, 2021 CO 40, ¶ 8. Because courts must only decide actual

controversies, when events occur while a case is pending that make

it “impossible for the court to grant ‘any effectual relief’ . . . to a

prevailing party,” then the court must dismiss the appeal as moot.

Id. (quoting Church of Scientology of Cal. v. United States, 506 U.S.

9, 12 (1992)); see also In re Marriage of Tibbetts, 2018 COA 117, ¶ 8

(“An issue is moot when a judgment, if rendered, would have no

practical legal effect on the existing controversy.” (quoting In re

Marriage of Dauwe, 148 P.3d 282, 284 (Colo. App. 2006))).

III. Mootness

¶ 10 In her supplemental brief, Olsen contends that, even if Denney

is entitled to a property exemption up to $60,000, any judgment

ordering Olsen to pay Denney for his tools is money she could

5

garnish from Denney to pay to herself because she continues to

have an outstanding judgment against him. We agree.

¶ 11 It is true that under section 18, comment f of the Restatement

(Third) of Restitution and Unjust Enrichment (Am. L. Inst. 2011)

(hereinafter Restatement), when property of a judgment debtor has

been sold on execution, and the underlying judgment is set aside,

the judgment debtor may assert a restitution claim against the

judgment creditor. In such instances, the judgment debtor’s

restitution “claim is limited — where the judgment creditor has

acted in good faith — to the amount of the sale proceeds, with

interest.” Id. at cmt. f(1); see also Tuscany, LLC v. W. States

Excavating Pipe & Boring, LLC, 128 P.3d 274, 281 (Colo. App. 2005)

(citing Restatement (First) of Restitution § 74 cmt. m (Am. L. Inst.

1937), for the restitution formula).

2

¶ 12 But Denney appeals the wrong order to be able to assert a

restitution claim. The Restatement authorizes a claim for

restitution when the underlying judgment is reversed on appeal,

2

Based on the formula set forth in section 18 the Restatement

(Third) of Restitution and Unjust Enrichment (Am. L. Inst. 2011),

we reject Denney’s claim that he would be entitled to compensation

for new tools to replace his older tools.

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which in this case means Olsen’s judgment involving her civil theft

claim, not the court’s exemption order. Here, Denney did not file an

appeal challenging the underlying civil theft judgment. Olsen’s

judgment remains intact no matter what relief could be granted in

this appeal.

¶ 13 Denney’s reliance on FCC Construction, Inc. v. Casino Creek

Holdings, Ltd., 916 P.2d 1196, 1198 (Colo. App. 1996), is therefore

misplaced. In that case, a division of this court was presented with

whether a defendant’s case was moot because he failed to obtain a

supersedeas bond following an order for sale of his home. Id. But

Denney misconstrues the nature of the appeal: the defendant in

that case was challenging the underlying judgment obtained by the

plaintiff. Id. If Denney had appealed Olsen’s civil theft judgment,

then under FCC Construction, Inc., this case would likely not be

moot because he would be entitled to compensation for his sold

tools if he prevailed and Olsen’s civil theft judgment was reversed.

¶ 14 And even if we were to read section 18, comment f of the

Restatement as contemplating review of a judgment debtor’s

exemption order to form the basis of a restitution claim, illustration

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9 nonetheless forecloses any practical relief to Denney. That

illustration says,

A obtains a judgment against B for $25,000.

Property of B worth $35,000 is sold at

execution to C, a bona fide purchaser who is

otherwise a stranger to the transaction. C is

aware that B is prosecuting an appeal from A’s

judgment. The sale, although properly

conducted, brings only $25,000: this amount

is paid to A. A’s judgment against B is

subsequently reversed on appeal. B has no

claim to recover the property from C. B has a

claim in restitution against A to the extent of A’s

unjust enrichment. If A’s actions have been in

good faith, B’s claim is for $25,000 plus

interest.

Restatement § 18 cmt. f, illus. 9 (emphasis added). Here, the

sheriff’s report indicated that it received a bid for Denney’s property

at auction totaling $48,343, of which, as noted above, $8,517.02

was credited to Olsen’s judgment.

3

Because Denney owes Olsen far

more than she recovered from the auction, it is difficult to discern

how Olsen is unjustly enriched.

¶ 15 Generally whether a person is unjustly enriched is an

adjudicative finding a district court makes in the first instance. We

3

The report also indicated that monies were paid to the sheriff’s

office for its auction services and to Olsen as part of her efforts to

obtain the order authorizing levy and sale of Denney’s property.

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acknowledge that appellate courts should cautiously take judicial

notice so as not to “bypass the usual fact finding process.” Prestige

Homes, Inc. v. Legouffe, 658 P.2d 850, 853 (Colo. 1983). Here,

though, we may take judicial notice of the auction amount and civil

judgment amounts based on CRE 201(b)(2). Our determination

that Olsen is still owed money is “capable of accurate and ready

determination,” and we “resort[ed] to sources whose accuracy

cannot reasonably be questioned” in the form of the court record.

CRE 201(b)(2). Assuming Denney prevailed in this appeal, neither

the $48,343 amount obtained at auction for Denny’s tools nor the

$8,517.02 credited to Olsen’s judgment covers the outstanding

balance of Olsen’s judgment of $73,598.98. In short, if Denney

prevailed in this appeal, any money judgment Denney obtained

against Olsen for his tools would be money still owed to Olsen to

satisfy her existing judgment. Thus, any relief that may be awarded

9

Denney in this appeal would have no practical effect on the existing

controversy.

4

IV. Conclusion

¶ 16 We dismiss this appeal as moot.

JUDGE FREYRE and JUDGE BROWN concur.

4

Denney contends that even though he did not obtain a

supersedeas bond to stay the sale of his tools, he has not waived

his claim, rendering his appeal moot. But whether an appeal is

moot by waiver is distinct from whether the appeal is moot on other

grounds. See Munoz v. Indus. Claim Appeals Off., 271 P.3d 547,

551 (Colo. App. 2011) (finding that when a person sought a stay,

the issue on appeal could not be rendered moot due to waiver, but

that the appeal was moot for other reasons). Because we dismiss

the appeal as moot for reasons other than waiver, we do not

address this argument.