Opinion
Nov. 16, 1971.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 110
John T. Dugan, Denver, for plaintiffs in error.
Robert L. McDougal, Denver, for defendants in error.
PIERCE, Judge.
This case was transferred from the Supreme Court pursuant to statute.
The parties appear here as they appeared below and will be referred to by their trial court designations or by name.
Plaintiff, Elmer Wilson, husband of plaintiff, Ellen Wilson, was the owner of certain real property upon which their home was located. In March 1962, Elmer executed a contract, prepared by defendant Thomas without the aid of legal counsel, whereby he was to convey his property to Thomas who agreed that he would erect a nursing home to be built and financed by defendant, Hot Springs Health Resort, Inc. (Hot Springs), a corporation of which Thomas was president. Under this contract, which was subsequently recorded, Elmer retained the right to maintain his home on the property and was to receive $500 per month after the nursing home was completed.
On April 14, 1964, at the request of Thomas, plaintiffs went to the office of the attorney for defendant Englewood Savings and Loan Association, now Key Savings and Loan Association (Key), to sign certain documents allowing Thomas to secure funds for construction of the nursing home. While at the office, plaintiffs executed a quitclaim deed to defendant Thomas. Thomas subsequently borrowed $11,000 from Key, payable in monthly installments and secured by a deed of trust on the subject property which was promptly recorded.
Thereafter, plaintiffs became convinced that Thomas could not, or would not, raise sufficient funds for construction of the nursing home and demanded that he reconvey the property to them. Thomas refused. Plaintiffs then brought a civil suit designated as action no. 25520. In their complaint, plaintiffs alleged that defendant Thomas's actions were fraudulent. The relief demanded included rescission of the contract, reconveyance of the deed, actual damages of $35,000, exemplary damages of $15,000, and body judgment.
Upon trial to the court, wherein defendant Thomas appeared Pro se, judgment of rescission only was entered in favor of plaintiffs. The court held that the contract of March 1962 was void on the grounds that the agreement was 'so ambiguous, indefinite and uncertain as to be invalid for want of certainty.' In its findings of fact and conclusions of law, the trial court additionally found that:
'At the request of defendant Thomas on April 14, 1964, plaintiffs met with Thomas, a representative of Englewood Savings and Loan Association and William K. Malone, an attorney, in Mr. Malone's office in Englewood, Colorado, for the purpose of signing a quitclaim deed to plaintiffs' property pursuant to the agreement in order to expedite the financing of the proposed construction.
The court ordered rescission of the contract, declared the quitclaim deed null and void, and further ordered that defendants Richard Thomas and Hot Springs reconvey the subject property to Mr. and Mrs. Wilson.
The action here appealed arose when plaintiffs received a letter from Key's attorney indicating that Key was the holder and beneficiary of a deed of trust on the property in question as security for payment of a promissory note from defendants Richard Thomas and Hot Springs in the principal amount of $11,000. The letter also indicated that the note and deed of trust were then in default and demanded payment from plaintiffs.
Plaintiffs thereafter instituted this independent proceeding (action no. 26735), asking that the deed of trust to Key be cancelled, that the Public Trustee be enjoined from foreclosing the deed of trust, and for actual and exemplary damages against Thomas for his alleged fraudulent concealment of the loan obtained from Key and the existence of the deed of trust. Plaintiffs also alleged fraud by Key upon the same or similar grounds.
Upon trial to court, evidence disclosed that defendant Thomas made regular payments on the loan to the bank until he was ordered to reconvey the subject property to plaintiffs by the decision in action no. 25520. Testimony further indicated that, despite the court order in action no. 25520, no reconveyance of the subject property was executed by defendant Thomas or Hot Springs and no action was ever taken by plaintiffs to have the court clerk, as a commissioner, execute such a conveyance to them as provided for in the court order. Although plaintiffs testified they knew nothing of the loan secured by their property, it appears that plaintiff Mrs. Wilson was a licensed real estate agent; that she understood the functions of a quitclaim deed and deed of trust; and further, that both plaintiffs knew that a loan was going to be made on the property and that was the very reason the had been requested to sign a quitclaim deed.
Upon commencement of trial of the second action, the court referred to the former case and, nothing that defendants were the same except for Key and the Public Trustee, ruled that 'all matters which were determined by Judge Lee in Civil Action No. 25520, are matters that cannot be retried in this case.'
This ruling notwithstanding, the court found in favor of plaintiffs and against Thomas and Hot Springs, awarding judgment in the amount of $11,245.29. Further, the court dismissed plaintiffs' claims for equitable relief against Key on the ground that said action was barred by an applicable statute of limitations. Motions for new trial by both parties were denied.
Among other grounds, plaintiffs complain on appeal that the damages awarded were insufficient, that the trial court erred in dismissing Key and the Public Trustee, and that they were entitled to injunctive relief against the foreclosure. By cross-error, defendant Thomas contends that the matters at issue in action no. 25520 were res judicata and that the trial court erred in awarding a money judgment based on facts already decided against plaintiffs in the previous action.
Plaintiffs' assignment of error regarding the trial court's application of the Colorado statute of limitations in dismissing the action against Key is not well taken. C.R.S.1963, 87--1--10 states:
'Bills for relief on the ground of fraud, shall be filed within three years after the discovery by the aggrieved party, of the facts constituting such fraud, and not afterwards.'
The quitclaim deed and deed of trust were given on April 14, 1964, and were promptly recorded. The action against Key Savings and Loan Association was filed on June 3, 1968. Upon the facts determined by the trial court, amply supported by the record, the three-year statute of limitations was properly applied as a bar to the action against Key. The evidence and findings indicate that the sole purpose for plaintiffs signing the quitclaim deed was to enable defendant to secure a loan from Key. The circumstances of this entire transaction would certainly put plaintiffs on notice that a deed of trust, mortgage, or similar encumbrance would be given and recorded, and the facts are such as to awaken a person of ordinary prudence, with interest in the property, to an inquiry. Cherrington v. Woods, 132 Colo. 500, 290 P.2d 226. Pursued with reasonable diligence, the encumbrance could easily have been found. Redd v. Brun, 8 Cir., 157 F. 190; Swift v. Smith, 8 Cir., 79 F. 709; Bowman v. May, 102 Colo. 417, 80 P.2d 327. We therefore conclude that Key was properly dismissed from the action on the ground that the claim was barred by C.R.S.1963, 87--1--10.
The same issues, arising from the same transactions, are involved in case no. 25520 and the present action. Also, there was either an identity of parties or a situation where the parties were entitled by law to depend upon the factual determinations made in the previous suit. See Murphy v. Northern Colorado Grain Co., Inc., Colo.App., 488 P.2d 103. Action no. 25520 was an adjudication on the merits and was res judicata concerning every question actually litigated and any question which might have been litigated and determined. Barnett v. Clouse, 167 Colo. 562, 448 P.2d 959; Fladung v. Boulder, 165 Colo. 244, 438 P.2d 688; Rogoff v. Charash, 154 Colo. 503, 391 P.2d 680.
Plaintiffs' further contention that the award of damages in action no. 26735 was justified and permitted under R.C.P.Colo 60(b)(5) is without merit. Under C.R.S.1963, 37--4--17, it is clear that the second trial judge did not have the power to vacate or modify a judgment, decree, or order entered by another judge of the same court. Furthermore, we find nothing in R.C.P.Colo. 60(b)(5) permitting an amendment of a judgment to include damages. The application of R.C.P.Colo. 60 is strictly limited to the vacation of a previous judgment, not modification.
We will not address ourselves herein to plaintiffs' assignment of error regarding the insufficiency of damages since the claim on cross-error by Thomas is valid. Plaintiffs' further allegations of error have been fully considered and are found to be without merit.
We therefore reverse that portion of the judgment awarding damages to plaintiffs and remand to the district court with direction that judgment be entered in favor of defendants in accordance with this opinion.
SILVERSTEIN, C.J., and DUFFORD, J., concur.