Paraguay Place-View Trust v. Gray, 981 P.2d 681 (Colo. App. 1999)
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- Citation: 981 P.2d 681 (Colo. App. 1999) (Div. I; Casebolt, J.; Ruland, J., dissenting). Docket No. 98CA0894, decided May 13, 1999.
- Court / Year: Colorado Court of Appeals, 1999.
- Topic tags: forfeiture, foreclosure, equitable_interest, remedies
- Facts: In 1994 the Grays took possession of a residence as purchasers under an installment land contract with the plaintiff trust’s predecessor. In 1997 the Grays defaulted on the payments. The trust brought a forcible entry and detainer (FED) action in county court to recover possession. The Grays answered that they held an ownership interest and that the seller’s only remedy for default was foreclosure, not a summary FED. The trial court agreed with the Grays and dismissed the FED action, reasoning that the installment-land-contract provisions of the foreclosure article (C.R.S. §§ 38-38-300.5, 38-38-305) made the vendee an owner who could only be foreclosed. The trust appealed.
- Holding: Reversed and remanded. Colorado’s foreclosure statutes do not require an installment-land-contract vendor to foreclose upon default as a matter of law. Sections 38-38-305 (treating the vendee “as an owner” and the vendor as a “lienor”) and the related redemption provisions describe the redemption and cure rights that exist when a foreclosure is actually conducted; they do not convert the contract into a mortgage or strip the vendor of the FED remedy. Whether to permit forfeiture and grant possession through FED, or instead to require the vendor to foreclose the contract as an equitable mortgage, is committed to the trial court’s equitable discretion, applying the balancing factors of grombone-v-krekel-1988. The case was remanded for that fact-bound equitable determination.
- Reasoning: The court read §§ 38-38-305 and the redemption provisions by their plain language and statutory context: they govern the mechanics of redemption and cure within a foreclosure that the lienholder chooses to bring, not a mandate that every defaulted land contract be foreclosed. The vendee’s status “as an owner” for redemption purposes does not displace the body of Colorado decisional law (Grombone; Woods v. Monticello Development Co.) under which a vendor may recover possession by FED unless the equities — the amount and length of the default, the vendee’s accumulated equity, improvements made, and whether the property was adequately maintained — make forfeiture unconscionable, in which case the court treats the contract as a mortgage and requires foreclosure with its attendant redemption rights. Judge Ruland dissented, reading the 1990 amendments to the foreclosure article (Title 38, Art. 38) as having made the vendee an owner entitled to be foreclosed and pointing to the redemption framework (including § 38-38-701).
- Practical impact for CFD operators/buyers: This is the modern controlling statement of Colorado’s hybrid regime. Forfeiture-by-FED is not foreclosed by statute, but it is not guaranteed either: a Colorado vendor cannot count on summary possession against a buyer with substantial equity. The seller’s path on default runs through a county-court FED in which the buyer may raise an equitable defense converting the matter into a foreclosure. Operators should assume a substantial-equity buyer will obtain foreclosure (and redemption) treatment; buyers with significant equity should plead the Grombone factors.
- Good-law status: Good law; repeatedly cited as the controlling Colorado appellate authority on whether a land-contract vendor must foreclose.
- Source (retrieved): https://www.courtlistener.com/opinion/1160933/paraguay-place-view-trust-v-gray/ · Verified: 2026-06-08
Jurisdictions that follow / cite: colorado
Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.