August 22, 2017

Archives for May 2017

Colorado Court of Appeals: Condominium Association Failed to Satisfy Statutory Requirements to Amend Declaration

The Colorado Court of Appeals issued its opinion in Tyra Summit Condominiums II Association, Inc. v. Clancy on Thursday, May 18, 2017.

Colorado Common Interest Ownership Act—Amendment of Declaration—Notice Requirement.

The Clancys (owners) own a condominium unit at the Tyra Summit Condominiums II (Tyra II). Tyra II is administered by the Tyra Summit Condominiums II Association, Inc.. The Association is run by a Board of Managers. The Association was established by a declaration recorded in 1983 and subsequent amendments. In 2016, the Association sought judicial approval of its attempt to amend the Declaration, which effectively rewrote the 1983 Declaration.

The owners objected to the amendment, arguing that the Association failed to meet certain statutory requirements and that the amendment improperly changed their allocated interests. The district court approved the amendment.

On appeal, the owners asserted that the district court erred in approving the amendment because the Association failed to provide sufficient notice of the meeting at which the amendment was discussed. The Colorado Common Interest Ownership Act requires associations to discuss proposed amendments during at least one meeting of the association and contains specific notice requirements. The court of appeals found that the record did not support the court’s finding that adequate notice of the meeting where the proposed amendment was discussed was given to the owners.

As the prevailing party on appeal, the owners were entitled to their attorney fees pursuant to the Act.

The order was reversed and the case was remanded.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Mutual Benefit Doctrine Supports Union Member’s Claim for Workers’ Compensation Coverage While at CBA Discussion Meeting

The Colorado Court of Appeals issued its opinion in Pueblo County, Colorado v. Industrial Claim Appeals Office on Thursday, May 18, 2017.

Workers’ Compensation—Injury at a Union Meeting—Mutual Benefit Doctrine.

Claimant was president of the local union. She worked for Pueblo County (employer). Union membership is required for workers in a bargaining unit, and union dues are deducted from workers’ paychecks. Participation in union meetings is voluntary. Claimant stayed after work for a union meeting, which was held immediately after claimant clocked out for the day and took place in a conference room in the building in which she worked. The purpose of the meeting was to review and revise the new collective bargaining agreement.

After the meeting, claimant walked to the adjacent parking lot where she normally parked for work. While getting in her car, she slipped on ice and injured herself. She filed a workers’ compensation claim for her medical expenses. An administrative law judge (ALJ) denied and dismissed the claim, finding the claimant “was not in the course and scope of her employment at the time of her injury.” The Industrial Claim Appeals Office (Panel) disagreed, finding the union activities were “sufficiently incidental” to claimant’s work “as to be properly considered as arising out of and in the course of employment.” It remanded to the ALJ to determine benefits. On remand, the ALJ ordered employer to pay all of claimant’s reasonable, necessary, and related medical expenses. The Panel affirmed.

On appeal, employer argued that the Panel erred in holding that the post-work injury sustained immediately following claimant’s attendance at a union meeting arose out of and in the course of employment. An injury arises out of employment when it originates in an employee’s work-related functions and is sufficiently related to those functions to be considered part of employment. It is not essential that an employee be engaged in an obligatory job function.

This was a case of first impression in Colorado but has been addressed in a number of other states. In general, injuries sustained during “unilateral union activities conferring, if any, only a remote or indirect benefit upon the employing enterprise” are not covered. However, the leading treatise recognizes a trend toward finding a mutual employer-employee benefit in actions of union officers. The court of appeals concluded that union activity cases in Colorado should be analyzed under the mutual benefit doctrine to determine compensability. This doctrine requires courts to examine the circumstances of each case to determine whether a union activity is of mutual benefit to the employer and employee. Here, where a union officer participated in a union meeting that served to facilitate ongoing negotiations between the union and employer concerning a new collective bargaining agreement, there was mutual benefit to employer and employee. Further, once mutual benefit is established, the location of the injury is not determinative. Accordingly, the injuries sustained were compensable.

The order was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Tenth Circuit: Unpublished Opinions, 5/30/2017

On Tuesday, May 30, 2017, the Tenth Circuit Court of Appeals issued no published opinion and four unpublished opinions.

United States v. Schubert

United States v. Bell

Chan v. Commissioner of Internal Revenue

Lomack v. Farris

Case summaries are not provided for unpublished opinions. However, some published opinions are summarized and provided by Legal Connection.

Colorado Court of Appeals: No Constitutional Violation by Using ALJs in Workers’ Compensation Proceedings

The Colorado Court of Appeals issued its opinion in Sanchez v. Industrial Claim Appeals Office on Thursday, May 18, 2017.

Workers’ Compensation Act of Colorado—Constitutionality—Separation of Powers—Equal Protection.

Claimant sustained a back injury at work lifting a hydraulic unit from his truck. Within two months he was back to work and placed at maximum medical improvement. Soon thereafter he complained of excruciating lower back pain, but both his original doctor and a specialist concluded that this new lumbar strain was not work-related but related to normal age-related degenerative changes.

Claimant sought temporary partial disability (TPD) benefits from the date of his injury and temporary total disability (TTD) benefits from when his low back pain flared up. An  administrative law judge (ALJ) rejected the request for benefits, finding that (1) his lower back pain was unrelated to his work injury, and (2) because he had continued working, claimant had not suffered a wage loss and was not entitled to either TPD or TTD benefits. The ALJ dismissed his requests. The Industrial Claim Appeals Office (Panel) affirmed but remanded the case to the ALJ to determine whether claimant was entitled to change his physician.

On appeal, claimant argued the separation of powers doctrine is violated by having workers’ compensation cases heard in the executive branch. In rejecting this argument, the court of appeals followed Dee Enterprises v. Industrial Claim Appeals Office, which held that the statutory scheme for deciding workers’ compensation cases does not violate the separation of powers doctrine.

Claimant then argued his equal protection claims should be analyzed under the strict scrutiny standard. The court held that the rational basis test applies to equal protection challenges in the workers’ compensation context. Under that test, “a statutory classification is presumed constitutional and does not violate equal protection unless it is proven beyond a reasonable doubt that the classification does not bear a rational relationship to a legitimate legislative purpose.”

Claimant argued that his and other workers’ compensation litigants’ rights to equal protection were violated because workers’ compensation cases are not heard by judges. The court concluded that legitimate governmental goals provide a rational basis for employing executive branch ALJs and the Panel to decide workers’ compensation cases. The court rejected claimant’s contention that his right to equal protection was violated because his claim was heard by an ALJ and the Panel.

Claimant then contended that the Panel’s dual role as decision-maker and then-named litigant if a case is appealed “reeks of impropriety.” The requirement that the Panel be added as a party is not arbitrary and serves the purpose of the Workers’ Compensation Act of ensuring thorough and expeditious review and enforcement of ALJ and Panel orders.

Claimant also challenged on equal protection grounds C.R.S. § 8-43-404(5)(a)(II)(A), which exempts governmental entities and health care providers from providing an injured worker with a list of four physicians from whom the worker may seek medical care for his injury. The court concluded that a rational basis exists for excluding employees of those two types of employers from the four-physician referral requirement. Thus, there was no equal protection violation.

The court rejected claimant’s three non-constitutional arguments, which were that: (1) the exemption from the four-physician referral requirement did not apply because claimant’s employer did not meet the requirements of C.R.S. § 8-43-404(5)(a)(II)(A); (2) substantial evidence did not support the ALJ’s factual findings; and (3) the ALJ made numerous evidentiary errors.

The Panel’s order was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Unavailability of Transcript of Child’s In Camera Interview Violated Parents’ Due Process Rights

The Colorado Court of Appeals issued its opinion in People in Interest of H.K.W. on Thursday, May 18, 2017.

Dependency and Neglect—In Camera Interview of Child—Record of In Camera Interview.

The Weld County Department of Human Services (the Department) filed a dependency or neglect petition regarding 6-year-old H.K.W. The child was initially removed from the home and placed with father, and three days later with special respondents. In a prior dependency and neglect case, the child had also been placed with special respondents.

The trial court adjudicated the child dependent or neglected. Father and mother complied with the court ordered treatment plans. Father, mother, and special respondents later moved for an allocation of parental responsibilities. The child’s guardian ad litem (GAL) moved for an in camera interview with the child. None of the parties objected. The court agreed to interview the child and told the parties it would have a record made that would be sealed unless the matter was appealed. There were no objections.

The interview with the child was recorded but not transcribed, and none of the parties requested a transcript. At a subsequent hearing, the court allocated parental responsibilities to special respondents and set forth a parenting time schedule for mother and father. In making its findings, the court relied extensively on the child’s statements during the in camera interview. Father and mother appealed, and father requested a transcript of the interview. The trial court denied father’s request.

On appeal, father and mother argued that the trial court erred by relying on the in camera interview with the child, which was not admitted into evidence, as the basis for its allocation of parental responsibilities decision. They asserted their due process rights were violated because without access to the interview transcript, they were unable to contest the court’s findings or the information on which it relied.

Although the Children’s Code does not specifically allow a court to conduct an in camera interview with a child, C.R.S. § 19-1-106(5) provides that a child “may be heard separately when deemed necessary” by the court. The Uniform Dissolution of Marriage Act (UDMA) provides that the “court may interview the child in chambers to ascertain the child’s wishes as to the allocation of parental responsibilities.” Read together, the court of appeals concluded that a trial court is permitted to conduct an in camera interview with a child to determine a child’s best interests and how to allocate parental responsibilities within a dependency and neglect proceeding.

The Children’s Code does not address whether a record of an in camera interview with a child must be made. The UDMA requires the trial court to make a record of the interview, which must be part of the case record. The court concluded that, unless waived by the parties, a record of the interview must be made. Further, the record must be made available, upon request, in situations when a parent needs (1) to determine whether the court’s findings, insofar as they relied on facts from the interview, are supported by the record, or (2) an opportunity to contest information supplied by the child during the interview and relied on by the court.

In this case, the parents requested access to a transcript only after they filed a notice of appeal. By not requesting access earlier, they waived their right to access the transcript to rebut information presented during the interview, but they did not waive their right to access the transcript for the purpose of contesting the bases for the court’s findings related to the interview. Thus, the trial court erred in not ordering the transcript to be made and made part of the record on appeal.

The trial court was ordered to have the in camera interview transcribed and transmitted, as a suppressed document, to the court as a supplement to the record on appeal. Following supplemental briefing, the court will issue an opinion addressing the merits of the appeal.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Announcement Sheet, 5/30/2017

On Tuesday, May 30, 2017, the Colorado Supreme Court issued three published opinions.

England v. Amerigas Propane & Indemnity Insurance Co. of North America

People v. Opana

In the Matter of the Title, Ballot Title and Submission Clause for 2017–2018 #4

Summaries of these cases are forthcoming.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.

Tenth Circuit: Unpublished Opinions, 5/26/2017

On Friday, May 26, 2017, the Tenth Circuit Court of Appeals issued one published opinion and three unpublished opinions.

United States v. Haupt

Schwab v. State of Kansas

Iselin v. The Bama Companies, Inc.

Case summaries are not provided for unpublished opinions. However, some published opinions are summarized and provided by Legal Connection.

Rules of Civil Procedure and Rules for Magistrates Amended in Rule Change 2017(06)

On May 25, 2017, the Colorado Supreme Court adopted Rule Change 2017(06), which amends Rule 52 of the Colorado Rules of Civil Procedure and Rules 5 and 6 of the Colorado Rules for Magistrates. The changes are effective July 1, 2017.

Rule 52 was amended to change the last sentence, which now provides that “Findings of fact and conclusions of law are unnecessary on decisions on motions under Rule 12 or 56 or any other motion except as provided in these rules or other law.” Previously, it read “Findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 or 56 or any other motion except as provided in Rule 41(b).” A new 2017 comment explains the reason for the change:

The final sentence of the former version of the rule, “Findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 or 56 or any other motion except as provided in Rule 41(b),” was replaced because of requirements for findings and conclusions in rules other than Rule 41(b) and in some statutes. Regardless, judges are encouraged to include in decisions on motions sufficient explanation that would be helpful to the parties and a reviewing court. Thus, even where findings and conclusions are not required, the better practice is to explain in a decision on any contested, written motion the court’s reasons for granting or denying the motion.

C.R.M. 5 was amended to add a subsection (g) and renumber the prior subsection (g) as (h). Subsection (g) reads as follows:

(g) For any proceeding in which a district court magistrate may perform a function only with consent under C.R.M. 6, the notice — which must be written except to the extent given orally to parties who are present in court — shall state that all parties must consent to the function being performed by the magistrate.

(1) If the notice is given in open court, then all parties who are present and do not then object shall be deemed to have consented to the function being performed by the magistrate.

(2) Any party who is not present when the notice is given and who fails to file a written objection within 7 days of the date of written notice shall be deemed to have consented.

C.R.M. 6(a)(1)(I) was amended by changing statutory references within the subsection and changing the Act cited from the Uniform Act for Out-of-State Parolee Supervision to the Interstate Compact for Adult Offender Supervision. Additionally, a new subsection (f) was added to C.R.M. 6, which reads, “A district court magistrate shall not perform any function for which consent is required under any provision of this Rule unless the oral or written notice complied with Rule 5(g).”

For a redline of Rule Change 2017(06), click here. For all of the Colorado Supreme Court’s adopted and proposed rule changes, click here.

Colorado Court of Appeals: Securities Company Not Liable for Outside Bad Acts of Its Broker

The Colorado Court of Appeals issued its opinion in Houston v. Southeast Investments, N.C., Inc. on Thursday, May 18, 2017.

InvestmentsColorado Securities ActControl Person Liability.

Sorenson created and owned 1st Consumer Financial Services, Inc. (CFS). Around early 2011 Sorenson hired Hornick to work for CFS. Southeast Investments N.C., Inc. (Southeast) was an authorized and registered broker-dealer of securities at all relevant times. In February 2013 Sorenson signed an independent contractor agreement and registered representative agreement with Southeast that prohibited him from engaging in business activities not involving Southeast without disclosing such activities to Southeast and obtaining written approval. In spring 2013 Houston, a retired, unmarried woman, agreed to Hornick’s requests and liquidated her entire retirement savings and transferred the money into a self-directed IRA account to be managed by Hornick. Ultimately these funds were invested in CFS and Houston was unable to obtain a return of the money. Houston sued a number of parties under various theories of liability, including a control person liability claim against Southeast. The district court concluded that, as a matter of law, Southeast was not a control person with regard to Sorenson’s conduct underlying Houston’s securities fraud claim, and Southeast was entitled to summary judgment.

The sole issue on appeal was whether the district court erred in granting summary judgment for Southeast, based on its conclusion that, as a matter of law, Southeast was not liable as a control person under C.R.S. § 11-51-604(5)(b) of the Colorado Securities Act (the Act). A plaintiff establishes a prima facie case of control person liability where the plaintiff demonstrates that (1) a primary violation of securities fraud occurred and (2) the defendant was a controlling person. As a general rule, a broker-dealer is statutorily in control of its registered representatives as a matter of law. However, a broker-dealer is not in statutory control of its registered representative’s underlying conduct when all of the following factors are undisputed: (1) the plaintiff did not reasonably rely on the registered representative’s relationship with the broker-dealer in making plaintiff’s investment; (2) the plaintiff invested in markets other than those promoted by the broker-dealer; (3) the registered representative did not rely on its relationship with the broker-dealer to access the securities market to sell the subject securities to the plaintiff; and (4) the broker-dealer did not know of, or have a financial interest in, the investor’s business with the registered representative.

Here, Sorenson hid his conduct from Southeast by failing to notify Southeast of his outside securities sales on behalf of CFS and by using undisclosed, private email accounts to engage in the subject transactions. No one from Southeast knew about Sorenson’s involvement with Houston. Sorenson did not use Southeast’s access to the securities markets to promote or conduct his deals with Houston (through Hornick), because CFS was a private venture created and owned by Sorenson. Southeast never held any of Houston’s money because Sorenson never opened a Southeast account for Houston. Southeast accordingly had no financial interest in Houston’s investments with Sorenson. Houston did not rely on Sorenson’s relationship with Southeast in deciding to invest with Sorenson. Thus, Southeast was not in control of Sorenson with respect to his conduct underlying this case, and Southeast was entitled to judgment as a matter of law on the issue of control.

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Property Stored in Evidence Locker Is Not Owned by County

The Colorado Court of Appeals issued its opinion in People v. Berry on Thursday, May 18, 2017.

Sheriff’s DeputyEmbezzlementPublic PropertyOwnershipOfficial Misconduct.

Berry was a sheriff’s deputy when he responded to a domestic violence call involving a husband and his wife. Four guns were removed from the home while the domestic violence charges were pending. After those charges were resolved, the district attorney authorized the sheriff to either destroy the guns or return them to their rightful owner. Because the owner (the husband) had been deported from the United States, the sheriff could not return them to him, so the sheriff planned to destroy them. Instead, before the guns were destroyed, Berry purchased them from wife. A jury found Berry guilty of embezzlement of public property and first degree official misconduct.

On appeal, Berry argued that the evidence admitted at trial was insufficient to support a guilty verdict on the embezzlement charge. He asserted that the statute under which he was charged requires proof that the guns were owned, not merely possessed, by the county, and there was no such evidence. A person is culpable under C.R.S. § 18-8-407(1) only if he knowingly converts public moneys or property to his own use or to any use other than the public use authorized by law. Because there is no evidence that Lake County or any other public entity owned the guns, there was insufficient evidence to support Berry’s conviction for embezzlement.

Berry also contended that the evidence didn’t sufficiently prove that he committed “an act relating to his office but constituting an unauthorized exercise of his official function,” an element of first degree official misconduct. Here, Berry committed an act relating to his office because he used his office as a sheriff’s deputy to facilitate and effectuate the purchase of the guns. Berry followed the wife in his police car, spoke to her while in full police uniform, and gave her comfort that, because he was a police officer, the transaction was lawful. Thus, sufficient evidence supports the official misconduct conviction.

The judgment for conviction for embezzlement of public property was vacated and the case was remanded for entry of a judgment of acquittal on that charge. The judgment of conviction for first degree official misconduct was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Announcement Sheet, 5/25/2017

On Thursday, May 25, 2017, the Colorado Court of Appeals issued no published opinions and 20 unpublished opinions.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.

Tenth Circuit: Unpublished Opinions, 5/25/2017

On Thursday, May 25, 2017, the Tenth Circuit Court of Appeals issued no published opinion and nine unpublished opinions.

United States v. Aparicio

Wright v. State of Colorado

Hays v. Berryhill

United States v. Garcia

United States v. Mowery

McMiller v. Corrections Corp. of America

Booth v. Davis

Rollins v. Finch

Lee v. Berryhill

Case summaries are not provided for unpublished opinions. However, some published opinions are summarized and provided by Legal Connection.