10 June 2011

Is Colorado Revised Statutes Section 14-2-205 Still Good Law?

Wife's land subject to judgment. When any woman against whom liability exists marries and has or acquires lands, judgment on such liability may be rendered against her and her husband jointly, to be levied on such lands only.

- Section 14-2-205, Colorado Revised Statutes.

The statute above, part of the Married Women's Property Act passed very early on in Colorado's history (actually a few years before its admission to statehood when it was under the territorial legislature rather than the state legislature), remains on the books exactly as it read when it was enacted in the late 1800s as part of a general package of legislation that reformed the common law rule that a married woman was subsumed as one person with her husband who was vested with all of her property, upon marrying and ceased to have an of the legal rights of an adult person. Most of the sections of the act had that effect.

But, this section, by its terms (despite the fact that the heading for the section doesn't give a clue that this is the case), this section would suggest that if a woman had an unpaid debt from before the marriage, married, and then, for example, acquired a home which she and her husband co-owned, that both the half of the home owned by her, and the half of the home owned by him would be subject to liquidation for payment of the debt, despite the fact that it was her sole pre-marital debt that he wouldn't otherwise have any personal liability upon, and that the reverse (in the case of a man with premarital debts) would not be true. This gives creditors access to more assets than they would otherwise have available to them from which to collect debts of recently married women.

While some debts contracted for "necessities" by a married person in a single spouse's name may be the responsibility of the other spouse, and a spouse may be responsible for the other spouse's automobile accident liability under the "family car doctrine," the general rule is that a spouse is never legally responsible for the other spouse's sole debts and that one spouse's interest in land cannot be seized for the other spouse's debts in the absence of a fraudulent transfer.

The statute surely violates the intermediate scrutiny test for gender distinctions under the 14th Amendment's equal protection clause, but normally the remedy would be simply to say that wives who co-own real estate with their husbands have responsibility for their husbands' pre-marital debts just as husbands do for their wives under this statute.

This is the standard way that statutes that use masculine language only are interpreted and the reverse ought to be true, even though this is a case where the original intent of the statute (enacted when the 14th Amendment didn't apply, interestingly) was probably not to do so, because it was enacted in response to previously unequal treatment of the pre-marital debts of husbands and wives.

The law in Colorado's case, however, probably due to wholesale copying from the laws of some other state, corrected a problem that Colorado didn't have. Unlike some states in the Eastern United States, Colorado has never had the doctrine of tenancies by the entireties that prohibited judgment liens against a single spouse from attaching to a single spouse's interest in real property co-owned by a husband and wife. So, a husband and wife purchasing real property as co-owners does not impair the ability of a wife's pre-marital creditors to collect from her as it would, for example, in Boston where the tenancies by the entireties doctrines survives.

But, there is no obvious constitutional principle that would prohibit the law from making all of real estate jointly owned by spouses subject to the pre-marital claims of one of the spouses, and the general rule is that statutes are given effect according to their plain language. In order to escape the claim of a creditor that this expands their collection rights, a debtor husband would have to argue that the law doesn't really mean what it seems to say on its face, given the larger intent of the Married Women's Property Acts to simply treat married women the same way that unmarried women are treated in private law. This argument could be made, and its disuse suggests that there are widespread assumptions that creditors don't have this right, but such an argument would hardly be a slam dunk. Moreover, most individual consumer debt collection defendants (and some of the lawyers who represent them) aren't legally sophisticated enough to make that kind of argument.

Interestingly, there is not a single reported case that has ever discussed this statute in the entire history of Colorado, despite the fact that this would be a rule that would seem to favor creditors in debt-collection actions that could benefit that class of creditors thousands of times per year. The leading treatise on debt collection law in Colorado, by Stephen W. Siefert, "Colorado Creditors' Remedies - Debtors' Relief," doesn't ever mention the statute once. Neither does the treatise, "Colorado Family Law and Practice," by Frank L. McGuane, Jr. and Kathleen A. Hogan. While this could simply be a function of the law being unambiguous, the more likely reality is that it is forgotten and not utilized because it doesn't make logical sense in the context of the contemporary was that we think about the property rights of married people. Most lawyers don't expect it to be there and therefore don't look for it, and don't expect it to work, in the rare cases where they do know about it and it does apply by its terms to a case.


Michael Malak said...

My socially conservative layman intuition assumed that something like this was in place (though bidirectionally), and I assume creditors would assume the same -- though out of self-interest rather than out of social conservativism.

Do liens against jointly owned property due to one spouse's sole debt really stop at the 50% mark? Do creditors really restrain themselves to that?

Andrew Oh-Willeke said...

"Do liens against jointly owned property due to one spouse's sole debt really stop at the 50% mark?"

Yes. There are a handful of important but technical appellate cases in Colorado to govern precisely how this works in concert with the homestead exemption and morgages. (Those cases, however, do not involve debts allege to be pre-marital.)

"Do creditors really restrain themselves to that?"

Courts do. Creditors mostly take great pains to get both spouses on a debt in voluntary transactions so it pretty much only comes up in tort debt cases. The creditors can force a sale, but generally the single spouse's interest in the proceeds is preserved.