Appellate court: Aspen auction tainted by bid rigging
ASPEN – A foreclosure auction on an Aspen condominium unit was tainted by bid rigging, the Colorado Court of Appeals concluded in a 54-page order issued last week.
The unit sold at a Feb. 27, 2008, auction conducted by the Pitkin County trustee. The bid rigging occurred, the court determined, when three individual bidders – Mike Seguin, Debra Mayer and Tom Griffin, who was representing an Avon businessman – formed a limited liability corporation called Aspen Alps 123. The LLC claimed ownership of the unit, located at 700 Ute Ave., with a winning bid of $1.86 million, which was the amount Seguin had bid.
“Then they agreed to stop bidding and form [Aspen Alps 123] to purchase the condominium unit,” the appellate court said.
The ruling added that “because the three bidders intended their agreement to eliminate further competition among them, we conclude that they engaged in bid rigging.”
The three had not been associated with each other until they formed the LLC, the court ruled.
According to state statute, “it is illegal for any person to contract, combine, or conspire with any person to rig any bid, or any aspect of the bidding process, in any way related to the provision of any commodity or service.”
The appellate court’s decision reversed a previous ruling made by a Pitkin County district judge, who determined that joint bidding occurred. Joint bidding is a legal means of bidders pooling their resources together to buy a property they otherwise could not afford.
The appellate court opted not to void the foreclosure sale, instead remanding the case back to the trial court “to determine whether setting aside the foreclosure is the appropriate equitable remedy.”
The appellate court also instructed the trial court to void the public trustee’s deed to Aspen Alps 123. Additionally, the trial court must either order the public trustee to issue to the deed to Seguin, who placed the winning bid before joining the other two to form the LLC, or hold another foreclosure sale.
Aspen attorney Matthew Ferguson, who represents Aspen Alps 123, said he plans to appeal the high court’s decision.
The appellate court held up other elements of the trial court’s decision regarding the condo unit previously owned by Betty Amos and the Estate of Thomas R. Righetti. Righetti, Amos’ husband, died in 2002, and the condo went into foreclosure in 2006 on an undisputed loan default.
Amos and the estate sued Aspen Alps 123 and Equitable Bank, claiming that the estate was not properly notified about the foreclosure auction. They also claimed that Amos sent a letter to the public trustee as a notice of intent to redeem five weeks after the foreclosure auction. The public trustee, however, said the letter was never received, and the trial court determined that the letter had likely never been mailed.
“Accordingly, we discern no error in the trial court’s conclusion that Amos failed to timely redeem,” the court of appeals ruled.
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