## Facts

- Monay N. Jones executed a $261,250 residential promissory note secured by a deed of trust on her home; Fifth Third Bank later became the note holder.
- After an initial default, the parties modified the note in September 2001, increasing the balance to $280,231.23.
- Jones defaulted again, and in November 2001 the bank received a third-party check as payment on Jones’s account.
- A bank representative recorded receipt of the check and forwarded it to the payoff department; bank records later reflected that the check was lost before being posted or presented for payment.
- Neither party could locate a copy of the check or independent proof of its maker, drawee bank, or amount.
- Jones asserted the lost instrument was a cashier’s check from an Arkansas bank obtained at a deceased relative’s request and that it fully satisfied the note.
- In a C.R.C.P. 120 proceeding, the trial court found by a preponderance of the evidence that the instrument was cashier’s/certified funds and that it was for at least the full payoff amount.
- The trial court concluded the obligation was discharged under Colorado’s enactment of U.C.C. § 3-310 and terminated the foreclosure.

## Issues

1. Whether receipt of a cashier’s or certified check discharged the underlying note under C.R.S. § 4-3-310 even though the bank lost the instrument before posting or payment.
2. Whether the trial court clearly erred in finding, by a preponderance of the evidence, that the lost instrument was cashier’s/certified funds and was in a payoff amount.
3. Whether the trial court abused its discretion in denying the bank’s motion for a new trial based on newly discovered evidence.

## Decision

- The Colorado Court of Appeals affirmed the judgment for Jones and the termination of foreclosure.
- The court held the trial court correctly applied C.R.S. § 4-3-310 to treat the obligation as discharged upon the bank’s receipt of cashier’s/certified payoff funds.
- The court held the trial court’s findings about the instrument’s character and payoff amount were supported by the evidence and not clearly erroneous.
- The court held the trial court did not abuse its discretion in denying a new trial based on newly discovered evidence.

## Legal Principles

- Under C.R.S. § 4-3-310 (U.C.C. § 3-310), delivery and acceptance of a cashier’s check or certified check in payment discharges the underlying obligation to the extent of the instrument’s amount.
- A creditor’s internal processing (e.g., whether the check was posted) does not defeat discharge where the creditor received the instrument as payment and treated it as payoff funds before losing it.
- Appellate review of trial-court fact-finding is deferential; findings supported by the record under a preponderance standard are upheld absent clear error.
- When uncertainty about a payoff instrument’s handling arises from the creditor’s loss of the instrument and its records, the resulting evidentiary risk may fall on the creditor rather than the debtor.
- A new trial based on newly discovered evidence is discretionary and requires, among other things, diligence and a likelihood of a different result; denial is affirmed absent abuse of discretion.

## Conclusion

The court affirmed termination of foreclosure because the evidence supported that the bank received cashier’s/certified payoff funds, which discharged the promissory note under C.R.S. § 4-3-310 even though the bank later lost the check, and the trial court properly denied a new trial request.


Fifth Third Bank v. Jones, 168 P.3d 1 (Colo. App. 2007)