RBL Financial Layton

23CA1501 RBL Financial v Layton 08-22-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1501

Boulder County District Court No. 21CV30778

Honorable Dea M. Lindsey, Judge

RBL Financial LLC,

Plaintiff,

v.

Main 434 LLC,

Defendant-Appellee,

and Concerning Angelique Layton,

Other Interested Party-Appellant.

JUDGMENT AFFIRMED AND CASE

REMANDED WITH DIRECTIONS

Division II

Opinion by JUDGE GROVE

Fox and Sullivan, JJ., concur

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

Announced August 22, 2024

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

Defendant-Appellee

Angelique Layton, Pro Se

1

¶ 1 Angelique Layton appeals remedial contempt sanctions

entered against her by the district court. The court held Layton in

contempt after it concluded that she filed a notice of lis pendens

against a piece of real property in which she claimed an interest for

the purpose of frustrating the district court’s order that the

property be partitioned and sold. We affirm the district court’s

judgment.

¶ 2 Defendant, Main 434 LLC (Main 434), requests its appellate

attorney fees and costs pursuant to C.R.C.P. 107(d)(2). We grant

the request and remand the case to the district court for further

proceedings.

I. Background

¶ 3 While the history of this case is complex — involving at least

eight different actors and three related legal actions — it revolves

around a shifting mosaic of ownership interests in 432-436 Main

Street in Lyons (the property).

¶ 4 We begin with the purchase of the property by Sara Toole and

Chris Mattair via a warranty deed executed by Squier Realty LLC.

The purchase was financed, in part, by assuming a debt that Squier

owed to Sanford and Marsha Williams (Williams Note) that was

2

secured by a first position deed of trust (Williams DOT)

encumbering the property. After closing, Toole and Mattair each

owned a one-half undivided interest in the property.

¶ 5 In connection with the purchase, Toole also borrowed money

from Matthew Sutton. That loan was secured by a second position

deed of trust (Sutton DOT) that encumbered only Toole’s one-half

interest in the property. After executing the Sutton DOT, Toole

became involved in significant litigation against Mattair involving

the property. Layton represented Toole in that litigation.

1

¶ 6 Toole and Mattair defaulted on the Williams DOT, and the

holder of that note commenced foreclosure proceedings (the first

foreclosure). Plaintiff, RBL Financial LLC (RBL), subsequently

purchased the debt secured by the Williams DOT. Shortly

thereafter, Toole filed for Chapter 7 bankruptcy.

¶ 7 In response, RBL sued Mattair, alleging that he was personally

liable on the debt secured by the Williams DOT. RBL and Mattair

1

Layton’s law license was suspended based on her conduct during

the Toole-Mattair litigation. While suspended, she continued to

“guide[] her former client” and engage in other acts that constituted

the practice of law. People v. Layton, Colo. O.P.D.J. No. 22PDJ032

(Apr. 19, 2023). This conduct led to Layton’s disbarment. See id.

3

reached a settlement under which RBL dismissed the lawsuit and

released Mattair from the debt obligation in exchange for Mattair’s

agreement to transfer his one-half interest in the property to Main

434, an entity affiliated with RBL. Importantly, the settlement only

released Mattair’s liability and not RBL’s claim to the debt.

Additionally, the settlement agreement provided that there would be

no merger of the ownership interest conveyed by Mattair to Main

434 and the lien interest in the property that RBL still held.

¶ 8 The bankruptcy court allowed Toole to repurchase her interest

in the property from the Bankruptcy Trustee for $8,000. Layton

provided the funds for the purchase. The order approving the

purchase provided, “The sale of the Property IS NOT and SHALL

NOT be considered a sale free and clear of any and all liens, claims,

and encumbrances on the Property.” Thus, Toole regained her one-

half interest in the property — subject to the Williams DOT and the

Sutton DOT. Main 434 still owned the other one-half interest.

¶ 9 RBL then recommenced foreclosure proceedings on the

Williams DOT (the second foreclosure). Layton, using her own

personal funds, paid RBL $125,837.91 as a cure before the

foreclosure sale. In response, RBL initiated a second foreclosure

4

proceeding because Toole’s bankruptcy constituted a nonmonetary

default. Layton then paid the remaining $265,000 on the Williams

DOT to RBL to cure the foreclosure.

¶ 10 While the second foreclosure was ongoing, RBL purchased

from Sutton the loan secured by the Sutton DOT and commenced

foreclosure proceedings (the third foreclosure). While Toole initially

seemed to dispute whether she had been properly served in

connection with the third foreclosure, she eventually submitted to

the court’s jurisdiction by filing an answer with various

counterclaims. Toole also raised claims against Main 434 and Ikon

Funding LLC — another entity associated with RBL.

¶ 11 Layton moved to intervene in the third foreclosure proceeding.

She argued that she had an interest in the property because she

and Toole formed SA Lyons LLC for the purpose of running a

restaurant there. Layton claimed that the various payments she

made to cure Toole’s defaults were intended to be her contribution

to SA Lyons, and, in return, Toole made an oral promise to transfer

her one-half interest in SA Lyons to Layton. Toole never did so.

¶ 12 Layton’s motion to intervene in the third foreclosure

proceeding was denied because (1) she failed to attach a pleading as

5

required by C.R.C.P. 24(c); (2) she failed to articulate why Toole

could not adequately represent her interests; and (3) she had

attempted to intervene in a pro se capacity in order to circumvent

her suspension from practicing law. After the court denied her

motion, Layton used her own personal funds, in the amount of

$371,433.55, to cure the Sutton DOT default.

¶ 13 With the default cured, the property was free and clear of all

liens. Toole and Main 434 each owned a one-half undivided

interest. The case was not over, however, because Toole had

asserted counterclaims against RBL, and, moreover, she and Layton

had possession of the property to the exclusion of Main 434 and

were handling the property’s upkeep and receiving its tenant’s rent.

¶ 14 After repeatedly being denied access to the property, Main 434

filed a cross-claim

2

against Toole demanding a “partition and/or

division” and requesting that the court appoint a commissioner to

oversee the process. The district court appointed a commissioner to

determine the parties’ interests in the property and recommend

2

Due to its interest in the property, Main 434 was a named

defendant in the third foreclosure action along with Toole and

another RBL-related entity that has not participated in this appeal.

6

whether partition would be appropriate under sections 38-28-

103, -105, and -110, C.R.S. 2024.

¶ 15 The commissioner held a hearing at which Layton testified on

her own behalf and as a witness for Main 434.

3

After considering

the evidence, the commissioner found that the only parties with an

interest in the property were Main 434 and Toole. As for Layton,

the commissioner concluded that while she contributed significant

funds to pay off the debt encumbering Toole’s interest, she acquired

no interest in the property. The commissioner recommended that

the district court order a partition sale because a partition in kind

was impracticable, and, as a tenant in common, Main 434 had an

absolute right to demand partition. The proceeds of a partition sale

were to be split evenly between Main 434 and Toole, with Main 434

maintaining a right of contribution from Toole. The district court

adopted the commissioner’s findings of fact and ordered the

partition sale.

3

Layton did not designate the transcript of this hearing as required

by C.A.R. 10(d)(3). The commissioner’s order, however, makes it

clear that Layton testified.

7

¶ 16 Before the property could be sold, Layton filed a separate

lawsuit against Toole and Main 434 seeking to relitigate the issues

in the original lawsuit while asserting an equitable lien on the

property. Layton also recorded a notice of lis pendens on the

property, which prevented the partition sale from moving forward.

In response, in this case, Main 434 filed a motion for issuance of a

contempt citation against Layton for preventing the partition sale

that the district court had ordered. The court scheduled a hearing

on the matter. At the hearing, Layton testified that she “hoped,”

but did not know, that the notice of lis pendens would prevent the

sale of the property.

4

¶ 17 The district court issued an order finding Layton in remedial

contempt. It reasoned that Layton (1) knew of the partition order;

(2) had the present ability to comply with the partition order; and

(3) “interfered with the Court’s administration of justice by

interfering with the Court’s Partition Order rendering it unable to be

complied with by the parties in this matter.” It then ordered Layton

4

As noted above, Layton did not designate a transcript from the

contempt hearing; however, the district court’s order referenced her

testimony.

8

to remove the notice of lis pendens and granted Main 434 its

attorney fees and costs related to the contempt proceeding.

¶ 18 This appeal followed.

II. Analysis

¶ 19 Layton raises five issues on appeal. We address each in turn.

A. Subject Matter Jurisdiction

¶ 20 First, Layton contends that the district court lacked subject

matter jurisdiction to hold her in remedial contempt because the

court was deprived of jurisdiction due to an alleged irregularity with

the Sutton DOT (i.e., the note underlying the third foreclosure).

Specifically, Layton asserts that “the DOT filed by [RBL’s attorney]

and used to begin the foreclosure contains pages that do not match

the signature page.” As a result of this alleged inconsistency,

Layton argues, “[T]he [district court] may never have had in rem

jurisdiction over the property.” We are not persuaded.

¶ 21 We apply a mixed standard of review when determining

whether the district court had jurisdiction over the underlying

dispute. Levine v. Katz, 192 P.3d 1008, 1012 (Colo. App. 2006).

We defer to the district court’s factual findings but review legal

conclusions de novo. Id.

9

¶ 22 Subject matter jurisdiction concerns the “court’s power to

resolve a dispute in which it renders judgment.” Ashton Props., Ltd.

v. Overton, 107 P.3d 1014, 1017 (Colo. App. 2004). As such,

subject matter jurisdiction may be raised at any time. McClure v.

JP Morgan Chase Bank NA, 2015 COA 117, ¶ 6, aff’d, 2017 CO 22.

Thus, even though Layton does not appear to have raised this issue

in the district court,

5

we may review it — at least to the extent that

it actually implicates the district court’s subject matter jurisdiction.

See Olson v. Hillside Cmty. Church SBC, 124 P.3d 874, 878 (Colo.

App. 2005) (holding that an order issued by a court lacking

jurisdiction is void).

¶ 23 However, Layton cites no authority, and we are aware of none,

supporting the proposition that an evidentiary issue implicates a

district court’s subject matter jurisdiction. To the contrary,

Layton’s claim that the copy of the Sutton DOT attached to RBL’s

foreclosure complaint was not what it purported to be raises a

5

In her opening brief, Layton claims that she preserved this issue

and provides general citations to two briefs she filed in advance of

the contempt hearing. We could find no argument in either of those

briefs that resembles Layton’s appellate argument concerning the

signature page on the Sutton DOT.

10

question of authenticity. It does not affect either the nature of the

claim or the relief sought. See People v. Rodriguez, 2022 COA 11,

¶ 21 (holding that evidence susceptible of tampering is an

authentication evidentiary issue). Moreover, unlike subject matter

jurisdiction, evidentiary issues like authentication must be raised in

the district court or else they are waived. See, e.g., Fink v.

Montgomery Elevator Co. of Colo., 421 P.2d 735, 738 (Colo. 1966).

Thus, authentication does not implicate subject matter jurisdiction,

and any evidentiary challenge to the Sutton DOT is not properly

before us.

B. Contemptuous Behavior

¶ 24 Second, Layton contends that the district court exceeded its

authority by finding her in contempt of court for recording a notice

of lis pendens concerning the property — a statutorily authorized

practice. We disagree.

1. Legal Principles of Remedial Contempt

¶ 25 Generally, appellate review of a contempt order presents a

mixed question of fact and law. Hartsel Springs Ranch of Colo., Inc.

v. Cross Slash Ranch, LLC, 179 P.3d 237, 239 (Colo. App. 2007).

We review questions of law de novo while deferring to the district

11

court’s findings of historical fact so long as they have some support

in the record. Id. If the appellant fails to provide a complete record,

we assume that the district court’s findings are supported by

competent evidence. Hock v. N.Y. Life Ins. Co., 876 P.2d 1242, 1252

(Colo. 1994).

¶ 26 A district court may impose sanctions for failure to comply

with court orders. See People v. McGlotten, 134 P.3d 487, 489-90

(Colo. App. 2005); C.R.C.P. 107. The district court has the inherent

authority to issue orders that are necessary for the performance of

judicial functions, including the power to enforce obedience to its

orders through contempt sanctions. Id.; Dworkin, Chambers &

Williams, P.C. v. Provo, 81 P.3d 1053, 1059 n.3 (Colo. 2003).

C.R.C.P. 107(a)(1) provides, as relevant here, that contempt is the

“disobedience or resistance by any person to or interference with

any lawful writ, process, or order of the court.”

¶ 27 There are two types of contempt sanctions: remedial and

punitive. In re Parental Responsibilities Concerning A.C.B., 2022

COA 3, ¶ 21. Punitive contempt is intended to punish the

contemnor and to encourage the public not to interfere with judicial

proceedings. Id. at ¶ 23. Remedial contempt is aimed at forcing

12

compliance with lawful court orders. Id. at ¶ 24. When

contemptuous behavior is committed outside the presence of the

court, the court must provide notice and a hearing. C.R.C.P.

107(c). In an order holding a nonparty in remedial contempt, the

court must find that the contemnor (1) was aware of the order;

(2) interfered with the order; and (3) has the ability to comply with

the order or remove the interference. In re Marriage of Cyr, 186

P.3d 88, 92 (Colo. App. 2008); In re Lopez, 109 P.3d 1021, 1023

(Colo. App. 2004).

¶ 28 There is no categorical limitation on the type of conduct that

may constitute contempt and trigger sanctions; instead, C.R.C.P

107 renders any behavior that is disorderly or disruptive to the

execution of a lawful order contemptuous. See generally People v.

Aleem, 149 P.3d 765, 781 (Colo. 2007). So long as the conduct

interferes with a lawful court order, otherwise legal conduct may be

contemptuous. See Lopez, 109 P.3d at 1023 (nonparty’s conduct in

aiding person who was subject of a conservatorship proceeding to

leave the state was contemptuous); see generally Cook v. Baca, 625

Fed. Appx. 348, 355 (10th Cir. 2015) (federal courts have inherent

power to regulate litigation activities with sanctions if processes are

13

being misused or abused). Likewise, there is no limitation on who

may be held in contempt of court; parties and nonparties alike

must not interfere with lawful court business — otherwise, they

may be held in contempt. See, e.g., Lopez, 109 P.3d at 1023.

2. Application

¶ 29 Layton attempts to argue that she was held in contempt for

merely exercising her legal rights to file a notice of lis pendens on

the property. However, her argument depends on false premises —

that she filed the notice of lis pendens in good faith and that it was

not a spurious and groundless document. The district court

rejected these premises, finding that notice of lis pendens was “a

spurious and groundless document.” Layton contends that this

finding lacked evidentiary support, but without the transcripts from

the commissioner’s hearing or the contempt hearing, we must

assume that the district court correctly determined that Layton

groundlessly filed the notice of lis pendens with the goal of

frustrating a lawful order, and it was therefore a spurious

document. See Hock, 876 P.2d at 1252.

¶ 30 We are unpersuaded by Layton’s argument that she cannot be

held in contempt for exercising her legal rights because she was

14

not, in fact, held in contempt for exercising her legal rights. Layton

does not argue that the filing of a spurious and groundless

document is a legal right, nor does she argue that the filing of a

spurious document cannot form the basis of contempt proceedings.

And rightly so. It is well established that the misuse of legal

proceedings can be sanctioned. See, e.g., James H. Moore & Assocs.

Realty, Inc. v. Arrowhead at Vail, 892 P.2d 367, 373-74 (Colo. App.

1994) (improper recording of notice of lis pendens can constitute

abuse of process if improper and for an ulterior motive); In re

Skinner, 917 F.2d 444, 447-50 (10th Cir. 1990) (creditor’s suit in

violation of bankruptcy stay was subject to contempt proceeding).

Therefore, the district court did not err by finding Layton’s misuse

of a statutory proceeding that interfered with a lawful order could

form the basis of contempt as a matter of law.

C. Remaining Contentions

¶ 31 Layton raises three other issues — all without merit. We

address each summarily.

¶ 32 Layton contends that the court lacked jurisdiction to hold her

in contempt of court because she was a nonparty. A division of our

court has addressed this issue previously and concluded that the

15

broad language of C.R.C.P. 107 — “any person” — encompasses

nonparties and parties alike. Lopez, 109 P.3d at 1023. We see no

reason to depart from this holding.

¶ 33 Layton also argues that she cannot be held in contempt of

court because the partition order did not explicitly compel or enjoin

her. But C.R.C.P. 107 prevents anyone from knowingly interfering

with the execution of a lawful court order; its application is not

limited to individuals explicitly named. See, e.g., Lopez, 109 P.3d at

1023 (social worker who helped remove individual subject to

conservator proceedings was not compelled or enjoined explicitly).

A notice of lis pendens renders title unmarketable and prevents the

sale or transfer of the property until either the litigation ends or the

notice is removed. Hewitt v. Rice, 154 P.3d 408, 412-13 (Colo.

2007). By filing the notice of lis pendens, Layton prevented the

court-ordered sale of the property, and the district court found that

Layton filed the notice for that very purpose. Therefore, she

knowingly interfered with the execution of the partition order —

satisfying the C.R.C.P. 107 elements for contempt.

¶ 34 Finally, Layton contends that the partition order is void

because the district court lacked personal jurisdiction over Toole

16

due to improper service of the third foreclosure complaint. Even

assuming that the service was deficient, any objection that the

district court lacked personal jurisdiction over Toole was waived

once Toole voluntarily appeared and participated in the partition

proceedings. See Gognat v. Ellsworth, 224 P.3d 1039, 1054 (Colo.

App. 2009), aff’d, 259 P.3d 497.

III. Attorney Fees

¶ 35 Main 434 requests its appellate attorney fees and costs

pursuant to C.R.C.P. 107(d)(2), which, in connection with C.A.R. 38,

authorizes our court to grant reasonable costs and attorney fees in

connection with contempt proceedings. While Rule 107(d)(2)’s

language is permissive rather than mandatory, we exercise our

discretion in this case and grant Main 434’s request. The district

court’s order noted that Layton had testified that she hoped the

notice of lis pendens would prevent the partition sale. Layton’s

intentional misconduct informs our decision that Main 434 should

not pay the cost of her actions. We are unpersuaded by Layton’s

argument that she had no alternative to recording the lis pendens

notice. She could have corrected the procedural defects in her

motion to intervene. Or, she could have sought to immediately

17

appeal the denial of her motion to intervene. Likewise, she could

have filed a motion to reconsider the denial of her motion to

intervene with the required pleading and included a developed

argument explaining why Toole could not protect her interests.

Simply put, Layton had a variety of options at her disposal to

represent her alleged interests.

¶ 36 Layton’s present appeal is an attempt to litigate a number of

issues relevant to the contempt order; therefore, we conclude that

the costs and fees Main 434 incurred on appeal are connected to

the contempt proceeding. See Madison Cap. Co. v. Star Acquisition

VIII, 214 P.3d 557, 562 (Colo. App. 2009). Accordingly, we grant

Main 434’s request to recover its reasonable appellate attorney fees

and costs.

IV. Disposition

¶ 37 We affirm the judgment and remand the case to the district

court for a determination of Main 434’s appellate attorney fees and

costs.

JUDGE FOX and JUDGE SULLIVAN concur.