May 23, 2018

Colorado Court of Appeals: Late Filed Counterclaims Timely Because they Relate Back to Original Answer

The Colorado Court of Appeals issued its opinion in Makeen v. Hailey on Thursday, December 31, 2015.

Real Property—Compulsory Counterclaims—Timely—Discovery Violations—Sanctions—Trial Management—Attorney Fees.

Makeen and his father, Hailey, purchased real property in Denver (Utopia Property) as joint tenants. Makeen alleged that he had an oral agreement with his father pursuant to which he would manage the property while his father was alive, and upon his death Makeen would become the sole owner. According to Makeen, Hailey also promised to give him seven other properties upon Hailey’s death. Hailey, however, alleged that he never promised Makeen any property interests, and that Makeen fraudulently purchased the Utopia Property in both of their names, even though he had agreed to act as Hailey’s agent and to buy the property only in Hailey’s name. The court found in favor of Hailey on all claims and counterclaims.

On appeal, Makeen contended that the trial court erred in finding Hailey’s counterclaims for breach of fiduciary duty and fraud timely. Although it was more than a year since the original complaint was filed, the counterclaims were timely because Hailey’s amended answer and counterclaims related back to his initial answer, which was filed within the revival statute’s one-year limitations period.

Makeen also contended that the trial court erred in failing to sanction Hailey for repeated discovery violations. First, although PPR 3.7 requires mandatory sanctions for a failure to timely and completely disclose, it applies only to initial disclosures and not the discovery requests at issue here. Additionally, the trial court did not abuse its discretion in deciding not to impose discovery sanctions against Haley after finding that Haley had made substantially all of the required disclosures and, even if there had been intermittent noncompliance with some of the CAPP discovery rules, the noncompliance was substantially justified and harmless.

Makeen further argued that the trial court erred in prematurely cutting off discovery at the final discovery dispute hearing in October 2013. Makeen had nearly 11 months to conduct discovery, and the trial court acted well within its discretion in enforcing reasonable trial management deadlines in this matter. Further, Makeen failed to show that he was prejudiced by this ruling.

The judgment was affirmed. Because Makeen’s appeal of some of the issues was frivolous, the case was remanded to award Hailey attorney fees and costs related to the defense of those claims on appeal.

Summary and full case available here, courtesy of The Colorado Lawyer.

Print Friendly, PDF & Email

Speak Your Mind

*