April 20, 2014

Timothy Gordon: Lis Pendens Still Required, Even If Mechanics’ Lien Is Bonded

Today, in Weize Company, LLC v. Martz Supply Co., 09CA1369 (Colo. App. June 10, 2010), a division of the Colorado Court of Appeals held that a subcontractor suing to enforce its rights to a mechanics’ lien that has been substituted by a bond and thus discharged must still record a lis pendens. So, according to the Court of Appeals, bonding over a mechanics’ lien will not clear title, despite the clear language of the statute.

Prime contractor Colorado Regional Construction, Inc. (“CRC”), subcontracted with Weize Company, LLC (“Weize”). CCR failed to pay Weize for the work that Weize completed, so Weize recorded a mechanics lien and commenced a lawsuit. Weize’s supplier, Martz Supply Co. (“Martz”), also recorded a lien and joined in the lawsuit.

Weize filed its lawsuit in December of 2007. “Before year end, CRC substituted bonds for the liens and the court ordered the liens released.” Probably because the mechanics’ liens were released, neither Weize nor Martz recorded a lis pendens. The trial court entered a directed verdict in CCR’s favor as to the lien claims for failure to record a lis pendens, and the Court of Appeals affirmed. This author assumes that Weize and Martz were attempting to enforce their rights against the bond, and not foreclose their previously-discharged liens. When a lien is substituted, the lien claimant may bring an action against the bond (C.R.S. § 38-22-133), but the cause of action is essentially the same as a claim to foreclose a lien. Mountain Ranch Corp. v. Amalgam Enters., Inc., 143 P.3d 1065, 1068 (Colo. App. 2005).

In holding that a lis pendens still must be recorded even though a mechanics’ lien substitution bond had been approved and the liens discharged, the Court of Appeals in Weize relied on the plain languge of Section 38-22-110, which provides that:

No lien claimed by virtue of this article . . . shall hold the property longer than six months after the last work or labor is performed . . . unless an action has been commenced within that time to enforce the same, and unless also a notice stating that such action has been commenced is filed for record within that time in the office of the county clerk and recorder of the county in which said property is situate. (Emphasis by Court of Appeals).

There are some academic and practical problems with the Court’s decision.

Once a lien has been discharged, the lien is no longer “hold[ing] the property”. Instead, “upon the filing of a bond or undertaking . . . the real property described in such bond or undertaking shall be released from the lien . . . .” C.R.S. § 38-22-132 (emphasis added).

Recording a lis pendens seems completely contrary to the intent of the lien substitution provisions in the mechanics’ lien statute. The clear purpose for bonding a mechanics’ lien, as stated right in the statute itself, is to “release[ the property] from the lien and from any action brought to foreclose such lien.” C.R.S. § 38-22-132. Yet a “lis pendens notice effectively renders title unmarketable and prevents its transfer until the litigation is resolved or the notice is expunged.” Pierce v. Francis, 194 P.3d 505, 508 (Colo. App. 2008), citing Kerns v. Kerns, 53 P.3d 1157, 1164 n.6 (Colo. 2002).

In fact, it seems improper to record a lis pendens once the mechanics’ lien has been discharged. A lis pendens can only be recorded when “relief is claimed affecting the title to real property . . . .” C.R.S. § 38-35-110(1). Once a mechanics’ lien has been discharged, the bond becomes substituted security, and there is no longer any claim affecting real property.

upon the filing of a bond or undertaking . . . the real property described in such bond or undertaking shall be released from the lien and from any action brought to enforce such lien, and the bond or undertaking shall be substituted. . . . [T]he certificate of release [issued by the clerk] shall show that the property has been released from the lien and from any action brought to foreclose such lien.

C.R.S. § 38-22-132 (emphasis added). Thus, once the bond is approved, there can be no action to enforce the mechanics’ lien, and therefore no action affecting title to real property. As such, pursuant to Section 38-35-110(1), no lis pendens should be recorded.

The Court of Appeals, without referencing Section 38-22-132, reasoned that the bonding of the lien does not completely free up title. In doing so, however, the Court of Appeals relied on a section of the mechanics’ lien statute dealing with payment bonds, not substitution bonds. According to the Court:

despite bonding, the validity of a lien would still be of concern to a person interested in title to the liened property because the surety could become insolvent. In that event, “any lien claimant shall be entitled to enforce such lien claim in the same manner as if no bond had been filed.” § 38-22-129(5). Hence, if a lis pendens was not required, its absence could mislead a person seeking to obtain an interest in the liened property into concluding that even if the surety became insolvent, the property was not subject to a lien foreclosure action because the claimant here failed to [record a lis pendens].

Again, the Court’s reasoning is confusing, Once a mechanics’ lien substitution bond is approved and recorded, the property indeed is no longer subject to a lien foreclosure action. Instead of a mechanics’ lien foreclosure lawsuit, the former lien claimant can maintain an action upon the bond or undertaking. C.R.S. § 38-22-133.

Additionally, Section 38-22-129(5), which the Court of Appeals quotes above, applies only to situations where a general contractor obtains a payment bond prior to commencing work, and the payment bond surety becomes insolvent. Ironically, earlier in the opinion, the Court of Appeals clearly distinguishes payment bonds from lien release bonds in addressing CRC’s trust fund defense.

Weize also argued that having to record a lis pendens after a lien has been released would put it at risk of violating the spurious lien statute. The Court of Appeals rejected the argument, reasoning that “a lis pendens ‘provided for by specific Colorado . . . statute’ is excepted from the definition of a spurious lien.” The Court’s reasoning ignores the holding in Pierce v. Francis, 194 P.3d 505 (Colo. App. 2008), where a different division of the Court of Appeals specifically held that a notice of lis pendens is not exempted from the spurious lien statute. Specifically, the Court in Pierce held that “because a notice of lis pendens can be a spurious document, it falls under the spurious lien statute.” Id. at 508. Now in dicta, the Court in Weize suggests that a lis pendens is excepted from the spurious lien statute, thus creating a split of authority.

In addition to putting Weize at risk under the spurious lien statute, recording a lis pendens where there is no claim affecting title to real property could put Weize at risk for a slander of title claim by the property owner. Fountain v. Mojo, 687 P.2d 496, 500-01 (Colo. App. 1984) (improper filing of lis pendens can amount to tort of slander of title).

The holding in Weize may cause serious problems for property owners who want to free title from mechanics’ liens. As the appellate courts in Colorado have acknowledged, the recording of a lis pendens effectively renders title unmarketable. The reason a property owner bonds over a lien, or requires its general contractor to bond over a lien, is to free up title. That’s in fact what the statute says. But now, in light of Weize, bonding over a mechanics’ lien will no longer free up title, since the lien claimant will be required to record a lis pendens once an action is filed.

Timothy Gordon blogs at Holland & Hart’s Construction Law in Colorado and this post originally appeared here on June 10, 2010. Gordon is one of the managing editors for CBA-CLE’s Practitioner’s Guide to Colorado Construction LawClick here to read all posts by this author.

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Colorado Court of Appeals: Weize Company, LLC v. Colorado Regional Construction, Inc.

The Colorado Court of Appeals issued its opinion in Weize Company, LLC v. Colorado Regional Construction, Inc. on June 10, 2010.

Construction Dispute—Mechanics’ Lien Foreclosure—Trust Fund Statute—Lis Pendens.

In this construction dispute, the Court of Appeals affirmed the trial court’s dismissal of a lien foreclosure claim and the award of damages. The case was remanded.

Colorado Regional Construction, Inc. (CRC) hired Weize Company, LLC (Weize) as a plumbing subcontractor. Plaintiff-intervenor, Martz Supply Company (Martz) provided plumbing materials to Weize. After Weize had completed all of the underground plumbing and some of the above-ground plumbing, CRC replaced it with a different subcontractor.

When CRC failed to pay Weize for the completed work, Weize recorded mechanics’ liens against the project and commenced this action. Martz intervened, joining in the claims for breach of contract and lien foreclosure. It added a claim against CRC for treble damages and attorney fees under the trust fund statute.

CRC argued the trial court erred by precluding its defense that all claims were barred because Weize’s principal, John Neiberger, was not licensed as a master plumber and Weize did not employ a master plumber on the project. The Court disagreed.

CRC relied on CRS § 12-58-105. The Court rejected CRC’s argument that, because lack of licensure rendered the contract illegal, Weize did not have standing. Standing is a jurisdictional limitation. The Court rejected the one case relied on by Weize in this regard and found that all other cases and jurisdictions treat an illegal contract as an affirmative defense, not a basis for lack of standing.

Weize moved to compel CRC to make initial disclosures three months after Weize and Martz had made their disclosures. When CRC did not respond, the trial court ordered it to submit initial disclosures by September 4, 2008. On October 24, Weize requested that the court enter a default judgment because CRC still had not made its disclosures. The Court declined to enter default judgment, but after CRC finally submitted its disclosures on November 12, the court struck all of CRC’s counterclaims and affirmative defenses as a sanction for the discovery abuse. The Court found no abuse of discretion in the sanction.

CRC then argued it was error to find that it violated the trust fund statute because the record did not support rejecting CRC’s good faith defense under subsection 2 of the trust fund statute, and because substituting bonds for liens released CRC from the requirement to hold funds in trust under subsection 3. The Court rejected both arguments, finding that the evidence in the record supported the trial court’s findings rejecting the good faith defense and that CRC’s lien release bonds did not support exemption from the trust fund statute. The Court also affirmed the trial court’s treble damages and attorney fees award as supported by the evidence.

On cross-appeal, Weize and Martz argued the trial court erred in directing a verdict on Weizes’s lien foreclosure claim for failure to have recorded a lis pendens as required by CRS § 38-22-110. The Court found no error.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: People v. Alvarado-Juarez

The Colorado Court of Appeals issued its opinion in People v. Alvarado-Juarez on June 10, 2010.

Extreme Indifference Murder—Reckless Manslaughter—Elements—Equal Protection—Reasonable Doubt—Jury Instruction.

Defendant Alvarado-Juarez appealed the judgment of conviction for extreme indifference murder, attempted extreme indifference murder, assault, and two counts of reckless endangerment. The judgment was affirmed.

Defendant argued that his conviction under the extreme indifference murder statute denied him equal protection because the reckless manslaughter statute prohibits identical conduct, yet punishes that conduct less severely. However, there is a significant difference between the elements of extreme indifference murder and reckless manslaughter. Extreme indifference murder proscribes “acts that put at grave risk a number of individuals not targeted by the defendant, as well as acts putting at risk a single victim, without knowing or caring who that may be.” Reckless manslaughter lacks that element. Accordingly, defendant’s conviction under the extreme indifference murder statute did not deny him equal protection.

Defendant also contended that Colorado’s pattern reasonable doubt jury instruction inaccurately described the degree of certainty required to find defendant guilty. Colorado’s pattern jury instruction defines reasonable doubt as one that “would cause reasonable people to hesitate to act in matters of importance to themselves.” The judgment was affirmed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: People v. Portillo

The Colorado Court of Appeals issued its opinion in People v. Portillo on June 10, 2010.

Trial Record—Merger—Menacing—Lesser-Included Offense—Attempted Extreme Indifference Murder.

Defendant Portillo appealed the judgment of conviction entered on jury verdicts finding him guilty of two counts of attempted extreme indifference murder and two counts of menacing. The judgment was affirmed.

Defendant contended that the trial court erred, and thereby violated his right not to be subjected to double jeopardy, by bifurcating the attempted murder and menacing counts of the original information (each of which named two victims) into two separate counts (each of which named a single victim). Because defendant did not provide a portion of the record containing the trial court’s ruling, the Court of Appeals had no basis to question the soundness of the court’s decision.

Defendant also contended that his dual convictions with respect to each victim should be merged, because menacing is a lesser-included offense of attempted extreme indifference murder. Because the offense of menacing requires proof of an element that need not be proved to obtain a conviction for attempted extreme indifference murder (knowingly placing, or attempting to place, another person in fear of imminent serious bodily injury), the former offense is not a lesser-included offense of the latter. Therefore, the convictions for the two offenses do not merge.

Defendant finally contended that the evidence is insufficient to support the jury’s verdicts. Again, because defendant provided only a portion of the trial transcript (and none of the exhibits), it is presumed that the full record supports the jury’s verdicts. The judgment was affirmed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: Town of Erie, Colorado v. Town of Frederick, Colorado

The Colorado Court of Appeals issued its opinion in Town of Erie, Colorado v. Town of Frederick, Colorado on June 10, 2010.

Annexation—Proper Notice of Hearings.

The Court of Appeals affirmed the trial court’s approval of annexations by defendant. The Court remanded for calculations of attorney fees and costs.

In January 2007, the mayor of the Town of Frederick (Frederick), Eric Doering, executed four petitions to annex land known as the Yardley Wetlands, which are located in the southwest portion of Frederick’s planning area and are bisected by State Highway 52. Frederick’s Town Board approved the petitions and adopted resolutions in March. In April, the Town of Erie (Erie) submitted four motions for reconsideration regarding the annexations, which the town board denied the next week. However, Frederick repealed the annexations because it had failed to publish proper notice.

In May, after providing notice, Frederick again adopted resolutions adopting the Yardley Wetlands. Erie submitted another set of motions for reconsideration, which again were denied. On May 25, 2007, a group of landowners known as SMT sued Frederick over the annexations. Erie also sued, and the cases were consolidated. SMT was dismissed for lack of subject matter jurisdiction, a trial was held, and judgment was entered in favor of Frederick in April 2009. Erie appealed.

Notice to abutting landowners of an annexation hearing under the Municipal Annexation Act (Act) must be given ninety days before the hearing. An inadvertent failure to comply with this notice provision may be excused. Erie argued the trial court erred in finding that Frederick’s short notice to landowners was inadvertent. The Court disagreed.

One provision of the Act requires that a hearing be held thirty to sixty days after the effective date of a resolution setting an annexation hearing, and that notice be published at least thirty days prior to the hearing. Another provision requires annexations using a public road to achieve contiguity (as was the case here) to provide ninety days’ written notice to abutting landowners. The section also provides: “Inadvertent failure to provide such notice shall neither create a cause of action in favor of any landowner nor invalidate any annexation proceedings.” Only the ninety-day notice was at issue on appeal.

The Court concluded, in affirming the trial court, that the evidence in the record supported the trial court’s finding that the failure to give ninety days notice was inadvertent. The Court also affirmed the trial court’s legal conclusions: (1) that Erie did not have standing to raise issues on behalf of third parties; (2) that contiguity for an annexation is not affected by the existence of a public right-of-way and that consent is not required from the owners of such a public right-of-way; (3) that Frederick’s comprehensive plan, updated annually, satisfied the Act’s requirement for a plan of development even though it was not titled “Three-Mile Plan”; that Frederick’s petitions substantially complied with the Act even though they had minor deficiencies (not having four copies of the annexation maps, not having an address for Frederick’s mayor or a date accompanying his signature). Finally, the Court agreed with Frederick that it was entitled to its reasonable appellate attorney fees and costs.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: People v. Bloom

The Colorado Court of Appeals issued its opinion in People v. Bloom on June 10, 2010.

Plea Agreement—Sentence—Right to Appeal.

Defendant Bloom appealed the sentence imposed following his guilty plea to second-degree kidnapping of a robbery victim and a crime of violence sentence enhancer count. The appeal was dismissed.

The district court accepted defendant’s plea, which included an agreement that defendant’s prison sentence would not exceed forty years, and sentenced him to forty years’ imprisonment. Absent the agreement, defendant could have been sentenced to up to forty-eight years in prison.

Defendant argued that the district court did not properly weigh the statutory sentencing factors listed in CRS § 18-1-102.5 when imposing his sentence. If a sentence is within a range pursuant to a plea agreement, defendant does not have the right of appellate review of the propriety of the sentence. Here, defendant acknowledges that his sentence is within the agreed range; therefore, defendant’s appeal was dismissed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: People v. Griffiths

The Colorado Court of Appeals issued its opinion in People v. Griffiths on June 10, 2010.

Distribution—Methamphetamine—Prior Bad Acts—Res Gestae Evidence—C.R.E. 404(b)—Drug Offender Surcharge—Inability to Pay—Incarceration.

Defendant Griffiths appealed the judgment of conviction entered on a jury verdict finding her guilty of distributing a schedule II controlled substance (methamphetamine), unlawfully possessing one gram or less of a schedule IV controlled substance (alprazolam), and possessing drug paraphernalia. She also appealed the statutory drug offender surcharge imposed. The judgment and sentence were affirmed.

During a drug task force sting operation, a police informant gave L.B. $175 to purchase methamphetamine. L.B. purchased two packages of methamphetamine from defendant for $120. Both L.B. and defendant were arrested, and the police recovered from defendant’s home two tablets of alprozolam; two syringes with blood in them; two radio scanners; and a spiral notebook containing phone numbers (commonly known as a pay-owe book).

Defendant contended the evidence was insufficient to support her distribution conviction. L.B.’s testimony, if believed, and the evidence recovered from defendant’s home—including the bills that matched the serial numbers provided to the informant—were sufficient to support defendant’s convictions.

Defendant also contended that her right to a fair and impartial jury was violated by the introduction of irrelevant and prejudicial prior bad acts. The evidence of the spiral notebook found at defendant’s home helped provide the jury a more complete understanding of the events surrounding the crime. It was relevant to show that defendant knowingly possessed the drug paraphernalia and alprazolam, and knowingly sold or distributed methamphetamine. Further, the danger of unfair prejudice did not outweigh the evidence’s relevance. Therefore, the notebook constituted admissible res gestae evidence, which is not subject to C.R.E. 404(b). Further, the prosecutor did not violate the court’s previous order excluding prior bad acts, because he did not elicit testimony suggesting that defendant had engaged in prior drug distribution and use.

Defendant further contended that the trial court erred in imposing the drug offender surcharge due to inability to pay, because she was unemployed and would be incarcerated. Incarceration does not necessarily render a defendant unable to pay the statutorily mandated drug offender surcharge. Because the record supports the court’s determination that defendant had not met her burden of proving she was unable to pay, and CRS § 16-18.5-106(1) accounts for defendant’s incarceration in calculating her ability to pay the surcharge, the trial court’s order was not disturbed on review. The judgment and sentence were affirmed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: Mounkes v. Industrial Claim Appeals Office of the State of Colorado

The Colorado Court of Appeals issued its opinion in Mounkes v. Industrial Claim Appeals Office of the State of Colorado on June 10, 2010.

Unemployment Compensation—CRS § 8-73-108(5)(e)(VII)—Other Records or Reports.

The Industrial Claim Appeals Office (Panel) affirmed a decision that disqualified claimant from receiving unemployment benefits because he had falsified a letter notifying his employer about his arrest. The Court of Appeals set aside the Panel’s order and remanded for an award of benefits.

Claimant worked as a customer service representative for Sears Roebuck & Co. (employer). His job required him to occasionally drive customers’ automobiles. The hearing officer found that employer discharged claimant because he violated employer’s policy by intentionally failing to disclose that his arrest involved driving under the influence of alcohol (DUI) and possession of marijuana. Specifically, the hearing officer found that claimant reported only the DUI charge and not the marijuana possession charge.

The hearing officer determined the claimant was disqualified from receiving benefits pursuant to CRS § 8-73-108(5)(e)(VII), which provides for disqualification based on the “intentional falsification of expense accounts, inventories, or other records or reports whether or not substantial harm or injury was incurred.” Claimant appealed and the Panel affirmed, and claimant appealed.

Claimant argued that the Panel erred in concluding that the letter through which he initially reported his arrest to employer constituted a “report” under CRS § 8-73-108(5)(e)(VII). The Court agreed.

Under the doctrine of ejusdem generis, the Court determined the meaning of “other reports and records” in its context following “expense accounts” and “inventories.” The Court concluded that “other reports or records” means only those documents, such as expense accounts and inventories, that relate directly to an employer’s assets and liabilities.

Claimant’s letter notifying employer of his arrest, under this definition, is not a record or report that would result in disqualification. The order was set aside and the case was remanded for an award of unemployment benefits to claimant.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: Bruce v. City of Colorado Springs

The Colorado Court of Appeals issued its opinion in Bruce v. City of Colorado Springs on June 10, 2010.

Single Subject Ordinance—Disqualification of Trial Judge.

This was an appeal of a trial court order issued after remand from an earlier appeal to the Court of Appeals (Bruce I), which concluded that the City of Colorado Spring’s (City) single subject ordinance is not unconstitutional and that plaintiff’s petition for an initiated ordinance violated the single subject rule. Plaintiff also appealed the trial court’s order denying his motion seeking disqualification of the trial court judge. The Court affirmed.

Plaintiff had unsuccessfully attempted to place an initiative on the municipal ballot intended to prevent the City’s use of non-business enterprises to serve as “fronts for traditional governmental public works projects paid for by force fees (taxes) outside TABOR’s spending limit.” Plaintiff argued that the City’s single subject ordinance is unconstitutional because it was adopted without first holding a public election to allow voters to decide the matter through a state constitutional amendment and because it violates the right to petition. The Court disagreed.

Colo. Const. art. XX, § 6, grants a home rule city or town broad powers, including all those of the General Assembly, with regard to local and municipal electoral matters. Colo. Const. art. V, § 1(9), also permits cities to provide for the manner of exercising the initiative and referendum powers as to their municipal legislation. The City is authorized to enact ordinances establishing the manner in which municipal legislation is exercised, which clearly includes ordinances that require initiatives submitted for voter approval to contain only single subjects. The Court adopted the reasoning of the Tenth Circuit in Campbell v. Buckley, 203 F.3d 738, 746-47 (10th Cir. 2000), in further finding that a single subject requirement does not violate the right to petition.

The Court rejected plaintiff’s argument that the trial court erred in concluding that his initiative contains more than a single subject in violation of the City’s ordinance. An initiative violates the requirement when it (1) relates to more than one subject and (2) has at least two distinct and separate purposes. The Court agreed that the initiative contained more than one subject with distinct and separate purposes.

Finally, the Court rejected plaintiff’s contention that the trial judge should have disqualified himself. The test under C.R.C.P. 97 is whether the motion and supporting affidavits allege sufficient facts from which it may reasonably be inferred that the judge is prejudiced or biased, or appears to be prejudiced or biased, against a party to the litigation. Plaintiff’s motion was accompanied by his own affidavit alleging the trial judge was biased and prejudiced against him based on his prior rulings and his facial expressions. The motion was insufficient to warrant recusal.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: People v. Trujillo

The Colorado Court of Appeals issued its opinion in People v. Trujillo on June 10, 2010.

Incest—Aggravated Incest—Sexual Assault on a Child—Hearsay—Victim—Age—CRS § 13-25-129.

Defendant Trujillo appealed the judgment of conviction entered on a jury verdict finding him guilty of aggravated incest and sexual assault on a child by one in a position of trust. The judgment was affirmed.

Before trial, the prosecution moved to admit separate hearsay statements that the victim, Trujillo’s daughter, had made about the assault to her mother, a physician, and a social worker. After a hearing, the trial court found that the statements were admissible under CRS § 13-25-129. They were presented to the jury, although the victim also testified at trial.

Defendant’s sole contention on appeal was that the trial court erred by admitting the victim’s hearsay statements under § 13-25-129. Trujillo asserted that the statute should be interpreted as applying to victims who were “less than fifteen years of age at the time of the offense”; here, the victim was 16 years old when the alleged assault occurred. However, the phrase “when the victim was less than fifteen years of age at the time of the commission of the offense” in § 13-25-129(1) applies only to a victim of incest under § 18-6-301. Because Trujillo was charged with aggravated incest and sexual assault on a child by one in a position of trust, the trial court did not err by admitting the victim’s hearsay statements under § 13-25-129.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: Thompson Creek Townhomes, LLC v. Tabernash Meadows Water and Sanitation District

The Colorado Court of Appeals issued its opinion in Thompson Creek Townhomes, LLC v. Tabernash Meadows Water and Sanitation District on June 10, 2010.

Summary Judgment—Specific Performance Regarding Water Taps—Governmental Immunity from Specific Performance.

Thompson Creek Townhomes, LLC (Thompson Creek) filed a suit for breach of contract and promissory estoppel against the Tabernash Meadows Water and Sanitation District (District), seeking specific performance and money damages for the District’s failure to reserve water taps for Thompson Creek’s residential development. The District filed a motion to dismiss, which the court considered a motion for summary judgment because the underlying operative facts were undisputed. The court granted summary judgment dismissing Thompson Creek’s specific performance and promissory estoppel claims and the remaining claims were dismissed by stipulation. The Court of Appeals affirmed the lower court’s decision.

In 2005, First Community Bank (Bank) acquired a parcel of real property known as Lot 16 through foreclosure. The District then had a policy of reserving water and sewer taps for landowners who paid “availability of service charges.” These charges were based on 50 percent of the monthly cost for the sewer and water service, and were to be paid quarterly. When the Bank acquired the Lot, these charges had not been paid for approximately three years. The Bank paid past due amounts to the District when it foreclosed, but it elected to defer any newly accumulating charges until the lot was sold.

In 2006, Lot 16 was sold to Thompson Creek. Before the closing, the District announced that it would no longer reserve taps in exchange for availability of service charges and would reserve them only if they were purchased outright. The District notified the Bank that no taps would be reserved for the Lot until they were purchased.

The closing occurred in early 2007. The Bank tendered payment for the accrued availability of service charges on closing, but the payment was rejected by the District. Thompson Creek filed suit, asserting claims for breach of contract and promissory estoppel, seeking specific performance and money damages. Thompson Creek appealed the judgment dismissing the claim for specific performance.

Thompson Creek argued that a contracting party may seek specific performance against a governmental entity, notwithstanding governmental immunity, if the performance it seeks involves a non-core governmental power. Thompson Creek contended that a contractual obligation to reserve water taps is such a non-core governmental power. The Court disagreed, finding no exception for governmental immunity from specific performance for such so-called non-core powers. The judgment was affirmed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

Colorado Court of Appeals: In re the Marriage of White and Martin

The Colorado Court of Appeals issued its opinion in In re the Marriage of White and Martin on June 10, 2010.

Post-Dissolution of Marriage—Motion to Modify—Child Support—Change in Residence.

In this post-dissolution of marriage matter between David D. Martin (father) and Holly Budean White (mother), father appealed from the order modifying child support. The order was affirmed.

When the parties’ marriage was dissolved, their child lived primarily with mother, and the court ordered father to pay child support. In June 2007, when the child was nearly 16 years old, mother agreed that the child could live primarily with father, and that he could stop paying child support. Father, in turn, agreed that mother would not pay child support, provided that the child continued to have overnight visits with mother. However, in August 2008, father filed a motion to modify child support, asking that mother pay child support and contribute to the child’s uninsured medical expenses. In pertinent part, the court found that the child lived primarily with father beginning in June 2007 and ordered mother to pay child support as of the date father filed his motion, August 2008, taking into account equitable considerations.

Father contended that the trial court was required to modify mother’s child support obligation as of the date the parties allowed the child to move to father’s residence. The general rule is that the provisions of any decree regarding child support may be modified only as to installments accruing after the filing of the motion for modification. CRS § 14-10-122(5) is an exception to this general rule. Under the plain meaning of § 14-10-122(5), when a mutually agreed change of physical care occurs and the court modifies the provision for child support of the obligor under an existing child support order, it must modify that provision as of the date the parties allowed the child to move. Here, because mother was not the obligor under the existing child support order, CRS § 14-10-122(1)(d) prohibited the court from ordering mother to pay child support installments accruing before father filed the motion for modification. Accordingly, the court did not err when it did not order mother to pay child support retroactively to the date of the change of custody.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.