Judge issues final ruling in 1002 Walnut foreclosure case

BOULDER — A judge in a protracted challenge to a foreclosure action in Boulder has decided not to reconsider his previous order and has told the defendant in the case that this is his final word on the matter.

The case pits the owner of property at 1002 Walnut St. in Boulder against its lender, which sought to foreclose over nonpayment of  amounts due as required by a note and deed of trust.

The judge in his final order said that the lender can proceed with a sequential foreclosure sale of units at 1002 Walnut St. until the debt is paid but not an en masse sale.

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The background: George Williams LLLP borrowed $5.78 million from 1002 Walnut Investments in December 2020. The loan was secured by a deed of trust. When the note came due a year later, no payments were made, thus setting up the foreclosure process. The foreclosure of the property at 1002 Walnut in Boulder, which includes five units, was supposed to occur June 15. But on June 13, the property owner filed a motion requesting an injunction to stop the sale and an order forcing the lender to foreclose on individual units sequentially until the debt had been cleared. The lender argued, also on June 13, that language in the deed of trust that secured the loan gave it unilateral authority to foreclose on the property en masse.

Judge Patrick Butler said that “the court’s main concern … was the fact that if defendant was allowed to proceed with an en masse sale, then defendant would experience a windfall that could be almost twice what was owed to them by plaintiff.” That would be because the overall, five units in question are likely worth more than the amount due under the loan.

The units involved are 101A, 101B, 102A, 201A and 201B. Some of those are office spaces suitable for technology companies. The Mediterranean restaurant space, which is not open, is also part of the footprint.

The judge said he was aware of the terms of the deed of trust with regard to the lender’s discretion over how to conduct the foreclosure sale but agreed with the plaintiff’s interpretation of the language.

“This order is final for purposes of appeal,” the judge said.

Whether 1002 Walnut will appeal is not determined. David Laird, an attorney with Moye White LLP who represents 1002 Walnut Investments, did not return a request for comment.

The case is George Williams LLLP v. 1002 Walnut Investments LLC filed in Boulder County District Court, case number 2022cv30387.