## Facts

- Donald P. Hicks recorded a judgment lien against a prior owner of residential property in Englewood, Colorado, leaving Hicks in junior priority behind existing encumbrances.
- Later purchasers (the Londres) financed their purchase with a loan that paid off a senior lien; in prior litigation, the Londres and their mortgagee were granted equitable subrogation because they lacked actual knowledge of Hicks’s lien, keeping Hicks junior.
- The Londres sold the property to Shirley and Brian Joondeph, financed by CitiMortgage, Inc.
- The Joondephs and CitiMortgage had actual knowledge of Hicks’s judgment lien at the time of acquisition.
- The warranty deed conveying the property expressly excepted Hicks’s lien from the warranties of title.
- Hicks sued the Joondephs and CitiMortgage to determine lien priority and to foreclose his judgment lien, disputing whether they could claim the Londres’ earlier equitable-subrogation priority.

## Issues

1. Whether a purchaser and lender with actual knowledge of a pre-existing lien may obtain equitable subrogation to the priority of a satisfied senior lien.
2. Whether Colorado recognizes “derivative equitable subrogation” allowing a successor in title with notice to inherit a predecessor’s equitably subrogated priority.

## Decision

- The Colorado Supreme Court affirmed the court of appeals.
- The court held equitable subrogation is generally unavailable when the claimant had actual knowledge of the intervening lien.
- The court rejected any doctrine of “derivative equitable subrogation” by which a predecessor’s subrogation priority would pass to successors by deed.
- As a result, Hicks’s judgment lien retained priority ahead of the interests of the Joondephs and CitiMortgage.

## Legal Principles

- Equitable subrogation in Colorado is a narrow, case-specific equitable remedy that typically requires the claimant’s lack of actual knowledge of intervening liens when paying off a senior encumbrance.
- A party who knowingly takes title and finances a transaction subject to a recorded lien, including where the deed excepts that lien from warranty coverage, is not entitled to use equitable subrogation to reorder recorded priorities.
- Equitable subrogation does not “run with the land” as a freely transferable right; it adjusts priorities based on the equities of the parties before the court.
- The remedy must be confined to avoid undermining the predictability of Colorado’s race-notice recording system.

## Conclusion

The court refused to allow purchasers and their lender—who bought with actual notice of an existing judgment lien—to obtain priority through equitable subrogation or by inheriting a predecessor’s prior subrogation ruling, leaving the judgment lien senior to their interests.


Joondeph v. Hicks, 235 P.3d 303 (Colo. 2010)