September 21, 2017

Archives for August 25, 2017

Colorado Court of Appeals: Counties Not Liable for Attorney Fees to Defend Disciplinary Action Against District Attorney

The Colorado Court of Appeals issued its opinion in Ruybalid v. Board of County Commissioners of Las Animas County on Thursday, August 24, 2017.

Ruybalid was the District Attorney for the Third Judicial District, and he admitted to serial violations of the Colorado Rules of Professional Conduct during his tenure as District Attorney. Ruybalid believed the counties should have defended him against his disciplinary actions, but the counties refused to pay for his attorney fees and costs. Ruybalid hired an attorney and entered into a settlement, admitting a pattern of discovery violations that led to the dismissal of criminal charges in several cases and stipulating that he did not diligently represent the people and engaged in conduct prejudicial to the administration of justice.

After resolving the disciplinary action, Ruybalid filed a complaint for declaratory relief against the counties, seeking reimbursement of his attorney fees and costs incurred in defending the disciplinary action. The counties moved to dismiss for failure to state a claim, arguing Ruybalid had no right to fees and costs. Ruybalid countered that he had a statutory right to fees and costs, and also an equitable claim. The district court concluded that Ruybalid had failed to state a claim and had no right to fees and costs, and dismissed the complaint. Ruybalid appealed.

The court of appeals noted that the American Rule generally requires parties to pay their own fees and costs. Ruybalid argued that C.R.S. § 20-1-303 required the counties to pay his attorney fees, but the court of appeals disagreed, finding nothing in the rule to require the counties to pay attorney fees or costs. The court refused to infer an exception to the American Rule not explicitly authorized by statute. The court declined to consider the attorney fees and costs incurred in defending Ruybalid’s disciplinary action as “expenses necessarily incurred” in discharging a district attorney’s official duties. The court also noted that Ruybalid failed to allege any facts that tended to support that the expenses incurred were for the benefit of the counties.

The court of appeals affirmed the trial court’s motion to dismiss for failure to state a claim.

Colorado Court of Appeals: Trial Court Within Discretion to Impose Surcharge in Protective Proceeding

The Colorado Court of Appeals issued its opinion in Becker v. Wells Fargo Bank, N.A. on Thursday, August 24, 2017.

Aaron Becker was the conservator on an account set up for his daughter after she was the beneficiary of settlement funds from a personal injury claim. The trial court’s order to set up the restricted account specified that “no funds could be withdrawn from the account except by ‘separate certified order of this court.'” However, due to a “coding error,” Wells Fargo failed to set up the account as a restricted account. The account balance was $56,642.46 as reported in August 2013. Wells Fargo allowed Becker to make unauthorized withdrawals until the balance was negative, then closed the account.

The trial court issued an order to show cause in August 2016 to both Wells Fargo and Becker regarding the withdrawn funds. At the show cause hearing, Becker testified that he used the funds for his personal expenses, as well as to pay rent, groceries, utilities, sports activities expenses, and other expenses for the beneficiary. The court ordered Becker to file an accounting of how the funds were used from August 2013 until the account was closed. He agreed to do so, but never filed the accounting.

The court ordered Becker and Wells Fargo to restore to the account the last amount reported and found them jointly and severally liable for breach of fiduciary duty. The court ordered Wells Fargo to restore $56,642.46 to a new restricted account. 

Wells Fargo appealed, arguing the court should have apportioned liability per C.R.S. § 13-21-111.5. Wells Fargo also requested a hearing to determine the amount of the funds used to benefit the protected person so as not to afford her a double recovery. The trial court denied Wells Fargo’s motion.

On appeal, the court of appeals disagreed with Wells Fargo that C.R.S. § 13-21-111.5 applied, ruling instead that the court properly determined that it was a surcharge action under C.R.S. §§ 15-10-501 to -504. The court noted that the trial court had authority to impose a surcharge on Wells Fargo for failing to correct its error. The court of appeals agreed with Wells Fargo, however, that requiring the bank to restore the full amount of the settlement funds could potentially result in an impermissible double recovery to the protected person, and remanded for a determination of how the conservatorship funds were spent.

Tenth Circuit: Unpublished Opinions, 8/24/2017

On Thursday, August 24, 2017, the Tenth Circuit Court of Appeals issued two published opinions and four unpublished opinions.

Warren v. United States

Vallejos v. Lovelace Medical Center

United States v. Kemp

Alonso-Bernabe v. Sessions

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