May 23, 2013

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Colorado Court of Appeals: Arbitration Award Must Be Confirmed by Trial Court if Not Timely Appealed

March 7, 2013 by Leave a Comment

The Colorado Court of Appeals issued its opinion in In re Marriage of Rivera on Thursday, February 28, 2013.

Dissolution of Marriage—Arbitration Award—CRS §§ 13-22-222(1) and 14-10-128.5(2).

In this dissolution of marriage proceeding, husband appealed from the trial court’s order partially confirming an arbitration award as to property and maintenance provisions and ordering a hearing on the remaining parenting issues. The order was reversed and the case was remanded with directions.

Husband and wife agreed to resolve the terms of their dissolution of marriage through mediation and arbitration. At mediation, they agreed to joint decision-making authority and adopted the parenting schedule recommended by the child and family investigator. The parties agreed the mediator would be designated as an arbitrator to resolve any dispute arising out of the mediated agreement.

The parties then disputed the property distribution provisions in the mediated agreement and proceeded to arbitration. The arbitrator entered a final award, which reaffirmed the parenting time agreement. Wife then filed a motion requesting trial court confirmation of the arbitration award under CRS § 13-22-222(1), and husband objected on grounds not relevant to the appeal. The court held a hearing wherein husband withdrew his objection, and both parties requested the mediated agreement and arbitration award be made orders of the court.

Following a colloquy with wife, the trial court determined that wife did not believe the mediation agreement was fair and therefore stopped the hearing, declined to confirm the arbitration award, and set a permanent orders hearing. Husband then moved to confirm the arbitration award under CRS § 13-22-222(1). He stressed that because neither party had timely sought to vacate, modify, or correct the award, the court was required to confirm it. Wife agreed, but objected as to the provisions concerning parenting issues. The court entered an order confirming all property and maintenance provisions, but ordered all parenting issues remain set for hearing. Husband appealed.

Husband argued that because he and wife resolved the dissolution through arbitration and wife did not seek to vacate, modify, or correct the arbitration award in a timely manner, the trial court lacked authority to set a permanent orders hearing to resolve parenting issues. The Court of Appeals agreed. CRS § 14-10-128.5(2) provides a specific means by which a party may seek trial court review of an arbitration award. The motion for a hearing must be made no later than thirty-five days after the date of the award. Here, no such timely request was made. Accordingly, the order was reversed and the case was remanded to confirm the award in its entirety.

Summary and full case available here.

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Colorado Supreme Court: Case Law from Protect Our Mountain Environments Case Not Applicable in Private Dispute At Issue Here

November 28, 2012 by Leave a Comment

The Colorado Supreme Court issued its opinion in General Steel Domestic Sales, LLC v. Bacheller III on Tuesday, November 27, 2012.

First Amendment—Right to Petition—Trebeled Exemplary Damages.

The Supreme Court held that Protect Our Mountain Environment, Inc. v. District Court, 677 P.2d 1361 (Colo. 1984), (POME) is inapplicable where, as here, the underlying alleged petitioning activity was the filing of an arbitration complaint that led to a purely private dispute. Under POME, a plaintiff must meet a “heightened standard” when suing a defendant for the “alleged misuse or abuse of the administrative or judicial processes of government.” In this case, Harold Bacheller III sued General Steel Domestic Sales, LLC (General Steel), Discount Steel Buildings, LLC (Discount Steel), and the presidents and sole shareholders of each of the companies for abuse of process, malicious prosecution, and civil conspiracy, based on their filing an arbitration complaint against him. During trial, the trial court denied defendants’ request to include additional elements reflecting POME’s heightened standard in the malicious prosecution jury instruction. Because POME is inapplicable here, the Court affirmed the trial court’s ruling.

The Court also held that the trial court did not abuse its discretion by trebling the exemplary damages award against General Steel and Discount Steel. After the jury returned verdicts in Bacheller’s favor on several claims and awarded actual and exemplary damages, the trial court granted Bacheller’s motion to treble the exemplary damages award but against only General Steel and Discount Steel. Because the record supports the trial court’s finding that defendants acted willfully and wantonly during the pendency of the action and further aggravated Bacheller’s damages, the Court affirmed the trial court’s ruling.

Summary and full case available here.

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Tenth Circuit: Employees Constituted Management and Therefore Did Not Consent to Arbitration Under the Collective Bargaining Agreement, Which Was Aimed at Non-Management Employees

September 13, 2012 by Leave a Comment

The Tenth Circuit Court of Appeals published its opinion in Communication Workers of America v. Avaya on Tuesday, September 11, 2012.

In March 2010, Communication Workers of America (CWA) commenced a union organizing drive aimed at Avaya “backbone engineers.” Avaya objected to the drive. A Neutrality Agreement (appended to the parties Collective Bargaining Agreement), governed union organizing efforts aimed at “non-management employees.” Avaya argued its backbone engineers were management, and refused arbitration. CWA filed a complaint in District Court to compel arbitration. After cross-motions for summary judgment, the District Court granted CWA’s motion to compel arbitration. Avaya appealed.

The Tenth Circuit stated the case required reconciliation of two competing principles: (1) courts must evaluate the threshold question of whether the parties consented to arbitration; versus (2) courts making this determination are not to rule on the merits of the underlying claims. The Tenth Circuit concluded that the Court’s duty to determine whether the parties intended the dispute to be arbitrable trumps its duty to avoid reaching the merits.

Without a judicial determination of arbitrability, the scope of the arbitration clause was determined by the pleadings. The Tenth Circuit concluded the record was clear that Avaya employees constituted management. Accordingly the record showed the parties never consented to submit the dispute of the backbone engineers to arbitration. REVERSED and REMANDED.

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Colorado Court of Appeals: Fractional Ownership Interests in Real Estate Development Do Not Constitute “Lots” Under HUD Definitions; Arbitrator’s Award Affirmed

August 22, 2012 by Leave a Comment

The Colorado Court of Appeals issued its opinion in PFW, Inc. v. Residences at Little Nell Development, LLC on August 16, 2012.

Contract Rescission—Interstate Land Sales Full Disclosure Act—Arbitration Award.

PFW, Inc. (PFW) appealed the trial court’s judgment in favor of Residences at Little Nell Development, LLC (Little Nell) on its rescission claim arising under the Interstate Land Sales Full Disclosure Act (ILSFDA). PFW also appealed the trial court’s order denying its motion to vacate an arbitration award in favor of Little Nell on other non-ILSFDA claims. The judgment was affirmed.

In 2005, Little Nell began developing a private residential complex comprising eight hotel units, eight affordable housing units, three commercial units, and twenty-six condominium units at the base of Aspen Mountain. Little Nell sold one-eighth interests in the condominium units.

By December 2006, a one-eighth interest in a condominium unit sold for $3 million. Miller entered into a purchase agreement with Little Nell for such an interest at that price. He tendered $450,000 in escrow as earnest money. In May 2008, Miller assigned his rights under the purchase agreement to PFW, of which he is owner and president.

The construction completion deadline and closing date were in December 2008. The price had fallen due to the downturn in the economy. Before completion, PFW sent Little Nell a notice of its intent to rescind the agreement based on ILSFDA violations and contract breaches, and demanded release of its earnest money. PFW sued Little Nell, asserting eleven claims, including breach of ILSFDA and the Colorado Consumer Protection Act, breach of contract, and fraudulent inducement.

PFW alleged the same claims in arbitration pursuant to the arbitration clause of the agreement. The arbitrator found PFW in default under the agreement and entered interim and final awards in favor of Little Nell on all counts. PFW moved to vacate the award in May 2010; the motion was denied. Following a hearing, the trial court entered judgment in favor of Little Nell on the two ILSFDA claims in July 2011. PFW appealed.

PFW argued it was error to deny its statutory claim to rescind solely because the court held that Little Nell’s condominium project was exempt from ILSFDA’s registration and disclosure requirements. The Court of Appeals held that the fractional interests in the project’s twenty-six condominium units are not “lots” under the ILSFDA and therefore were exempt from registration and disclosure requirements. The Court looked to the ILFSDA and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) to determine whether an interest is a “lot.”

The ILFSDA’s registration and disclosure requirements do not apply to “the sale or lease of lots in a subdivision containing fewer than one hundred lots.” The term “lot” is not defined. HUD’s implementing regulations define “lot” as “any portion, piece, division, unit, or undivided interest in land located in any State or foreign country, if the interest includes the right to the exclusive use of a specific portion of the land.” HUD’s interpretive rules also provide further guidance.

The purchase agreement was for an “undivided [one-eighth] fee simple ownership interest as a tenant in common” in a four-bedroom “fractional ownership unit.” The Declaration further elaborated on the ownership interest. PFW argued that the twenty-six condominium units, each divided into eight fractional interests, constitute 208 “lots” under ILSFDA. The trial court disagreed, finding “no right of exclusive possession attaches to . . . ownership” of the fractional interests. Therefore, the development was exempt because it contained fewer than one hundred lots. PFW argued this was error because the fractional ownership interests in the Little Nell units are like ownership of traditional condominiums, which the Secretary of HUD has treated as lots.

The Court disagreed, noting that HUD’s regulations expressly require that an ownership interest “include[] the right to exclusive use of a specific portion of the land.” Here, the fractional ownership interest allowed for exclusive use of a designated unit type for four weeks every year, but not a specific unit. The owners do not obtain exclusive use of any portion of the project. It was not error for the trial court to deny PFW’s ILSFDA claims.

PFW then argued it was error not to vacate the arbitration award on the non-ILFSDA claims because the award was procured by fraud. The Court disagreed. PFW contended that Little Nell procured the arbitration award by fraudulently concealing that it had not properly registered with the Colorado Division of Real Estate (Division) when it executed the purchase agreement and therefore the agreement was “voidable by the purchaser and unenforceable by the developer.” The Court held that this was an issue for the arbitrator. Because it was not raised during the arbitration, it was not properly before the trial court. Therefore, the trial court correctly denied PFW’s motion to vacate the award.

Summary and full case available here.

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Colorado Court of Appeals: Trial Court Properly Submitted Question to Jury of Whether Insurance Company Consented to Submission of their Dispute to ADR or Whether they Waived that Provision

June 25, 2012 by Leave a Comment

The Colorado Court of Appeals issued its decision in Melssen v. Auto-Owners Ins. Co. on June 21, 2012.

Breach of Contract—Insurers Duty to Defend.

Defendant Auto-Owners Insurance Company (Auto-Owners) appealed the trial court’s judgment entered on a jury verdict in favor of plaintiffs Gene and Diane Melssen. The judgment was affirmed and the case was remanded for an award of reasonable appellate attorney fees and costs.

The Melssens built the Holleys a custom home. During construction, the Melssens had comprehensive general liability (CGL) coverage with Auto-Owners. Their policy, effective through November 2004, obligated Auto-Owners to defend the Melssens with respect to any “suit” seeking damages for “property damage” occurring during the policy period.

Soon after the house was constructed, cracks developed in the drywall and, later, large cracks formed in the outside stucco and basement slab. In 2007, the Holleys contacted the Melssens, the engineer for the foundation, an attorney, and Auto-Owners. A claims adjuster investigated.

In April 2008, the Holleys sent the Melssens a notice of claim in accordance with the Colorado Defect Action Reform Act (CDARA), asserting approximately $300,000 in damages caused by engineering and construction defects. In June 2008, the Melssens demanded that Auto-Owners defend and indemnify the Melssens. In October 2008, Auto-Owners sent a “coverage position letter,” purportedly denying coverage of claimed damages, because they were sustained outside the policy period. The focus of this appeal is the extent to which Auto-Owners was obligated to defend the Melssens.

The Holleys agreed to an arbitration and mediation settlement with the Melssens and the foundation engineer. The Melssens paid $140,000 toward the cost of the settlement, but Auto-Owners did not receive advance copies of the settlement documents.

In 2009, the Melssens filed this action against Auto-Owners, asserting breach of contract, bad faith breach of contract, and violations of CRS §§ 10-3-1115 and -1116. A jury returned a verdict in favor of the Melssens on all claims and awarded damages. The trial court awarded costs and attorney fees.

On appeal, Auto-Owners argued it was error to submit to the jury the issue of whether the CDARA notice of claim process between the Melssens and the Holleys constituted a “suit,” thus triggering the duty to defend under the policy. The Court of Appeals found the trial court properly submitted to the jury the question of whether Auto-Owners consented to the submission of their dispute to “any other alternative dispute resolution proceeding” or whether they waived that policy provision. However, the Court found that it was error to submit the question as to whether the CDARA notice of claim process otherwise constituted a “suit” under the policy, because this was a legal matter, but that the error was harmless because the CDARA notice is a “suit” within the definition of the policy.

Auto-Owners argued the trial court’s error was not harmless for three reasons: (1) the CDARA notice of claim process was not a civil proceeding because the notice of claim was not a complaint nor was the claim process otherwise an alternative dispute resolution proceeding under the policy; (2) the CDARA notice of claim process failed to satisfy the policy’s definition of “suit” because there was no evidence to show that the Melssens submitted to and settled the Holleys’ claim against them with its express or implicit consent; and (3) the liberal interpretation of a CDARA notice of claim as set forth in CRS § 13-20-808(7) does not apply retroactively to this policy.

The Court rejected each of these. The Court first held that the notice of claim process was an alternative dispute resolution proceeding under the policy. Next, the Court determined that it was a question of fact that was presented to the jury and there was sufficient evidence in the record to support the jury’s decision. Finally, the Court had determined the CDARA notice constituted a “suit” under the policy and did not need to address the third argument.

The Court also took up numerous evidentiary and instruction arguments made by Auto-Owners and rejected them all. It affirmed the award of attorney fees and costs, and granted the Melssens’ request for their appellate attorney fees.

Summary and full case available here.

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Successfully Resolving Your Clients’ Legal Problems: Choosing the Right Model

May 3, 2012 by Leave a Comment

Over the last several decades, alternative methods for addressing conflicts among private citizens have received increasing attention. This movement has been driven by a number of factors inherent in the public court system: (1) delays, (2) expense, (3) formality, and (4) uncertainty. As a result, alternatives to the public court system continue to develop.

These alternatives include Adjudication, Negotiation, and Evaluation, each with their own pros and cons and each suited better for particular clients and cases.

Jean Stewart will be in the CBA-CLE classroom on Monday, May 7, 2012 to discuss the various forms of alternative dispute resolution (ADR) that have been most successful and that offer the most promise. Attorneys will benefit from understanding these alternatives, and will learn:

  • How to prepare for the various kinds of ADR;
  • How they work and when they are viable;
  • How to counsel clients on each kind; and
  • How to use them successfully.

Whether you are new to ADR or a seasoned professional, Ms. Stewart will provide useful information and insider tips to build your practice and better serve your clients.

CLE Program: Successfully Resolving Your Clients’ Legal Problems – Choosing the Right Model

This CLE presentation will take place on Monday, May 7. Participants may attend live in our classroom or watch the live webcast.

If you can’t make the live program or webcast, the program will also be available as a homestudy in two formats: video on-demand and mp3 download.
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Colorado Court of Appeals: Person Cannot Be Held in Contempt of Court for Violating an Unconfirmed Award of an Arbitrator

May 1, 2012 by Leave a Comment

The Colorado Court of Appeals issued its opinion in In re the Marriage of Leverett on April 26, 2012.

Dissolution of Marriage—Arbitration Award—Unconfirmed—Contempt of Court.

In this post-dissolution of marriage contempt matter between husband and wife, husband appealed from the district court’s order denying his petition for review of a district court magistrate’s judgment. The order was vacated and the case was remanded.

The district court magistrate found husband in contempt and imposed punitive sanctions against him for violating the awards of an arbitrator. Wife had not asked the district court to confirm the arbitrator’s awards pursuant to CRS §13-22-222(1).

On appeal, husband argued that the magistrate erred in finding him in contempt of court for alleged violations of unconfirmed arbitration awards. An arbitrator’s award does not become enforceable as an order of the court unless and until (1) a party makes a motion to the court for an order confirming the award, and (2) the court issues an order confirming the arbitration award pursuant to CRS §13-22-222(1). Therefore, a person cannot be held in contempt of court for violating an unconfirmed award of an arbitrator. Because neither wife nor husband made a motion to the court for an order confirming the arbitrator’s awards, those awards were not enforceable as an order of the court, and husband may not be held in contempt on that basis.

Summary and full case available here.

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New Instructions to Request Reduced Mediation Fees Released by State Judicial

March 28, 2012 by Leave a Comment

The Colorado State Judicial Branch has issued a new Filing Fees form. The new form provides instructions on how to complete a request to reduce mediation fees under JDF 211. Practitioners should begin using the new instructions immediately.

Download the new form from State Judicial’s individual forms pages, or below.

Filing Fees

  • Instruction – “Instructions to Complete Request to Reduce Mediation Fees (JDF 211)” (3/12)

State Judicial also continues to update many forms to include the new time computation (“Rule of 7″) rules and filing fee requirements. Check the State Judicial website for the most up-to-date forms. State Judicial is reviewing all JDF forms and instructions, however it is always the Parties’ responsibility to ensure compliance with the Supreme Court rules. It is therefore important to review the time calculation rule changes prior to filing, as many of the forms have not been reviewed and changed yet.

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Colorado Court of Appeals: Arbitration Action Mischaracterized by Trial Court as Action to Recover Illiquid Debt

March 20, 2012 by Leave a Comment

The Colorado Court of Appeals issued its opinion in Estate of Guido v. Exempla, Inc. on March 15, 2012.

Arbitration Award—Confirmation Proceedings—Statute of Limitations.

Plaintiff, the Estate of Salvadore Guido (estate), appealed the district court’s order denying its motion to confirm an arbitration award as time-barred. The order was reversed and the case was remanded.

Salvadore Guido brought a medical malpractice action against Lutheran Medical Center, which was a predecessor entity to defendant Exempla, Inc. (Exempla). The parties agreed to submit the claims to arbitration and, in June 1998, the arbitrator awarded Guido $20,000, plus interest and costs. Guido died in September 2009. In December 2010, the estate filed a motion to confirm the arbitrator’s award, alleging that the amounts awarded to Guido in the arbitration were never paid or satisfied.

The estate contended that the district court erred in denying its confirmation motion as time-barred under the six-year statute of limitations applicable to actions to recover a liquidated debt set forth in CRS § 13-80-103.5(1)(a). An application for confirmation is not a complaint that initiates a civil action in the district court. There is a clear statutory framework for the confirmation process under the Colorado Uniform Arbitration Act of 1975, which does not impose a deadline to file an application to confirm the award. Therefore, the district court mischaracterized the confirmation proceeding as an action to recover a liquidated debt pursuant to CRS § 13-80-103.5(1)(a). Accordingly, the order was reversed and the case was remanded to the district court with directions to reconsider the estate’s motion to confirm the arbitration award.

This summary is published here courtesy of The Colorado Lawyer. Other summaries for the Colorado Court of Appeals on March 15, 2012, can be found here.

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Employment Law and Social Media: Rights, Obligations, and Disputes in the Workplace

February 15, 2012 by Leave a Comment

The intersection of social media and the workplace has become a given. Use of social media is rapidly expanding while societal norms regarding exposure of employment-related information continue to erode. The result is an increasingly complex social media environment for employees, employers, and attorneys.

Added to the complicated mix are various cases and National Labor Review Board opinions that attempt to define what recourse an employer has against an employee over social media content. When can an employer fire an employee over what the employee said on their personal social media accounts? When is the employee’s speech protected? The questions can sometimes be hard to answer, especially if the company has an underdeveloped, or no, social media policy.

Once an employment decision is made, a host of new issues arise regarding the discovery of social media. Different rules apply to the discovery process in the context of litigation and mediation, and the distinction of what may or may not be discovered in either situation could make all the difference in a case.

On February 22, 2012, join us at CBA-CLE to learn about employment law and social media trends and how they affect you, your clients, and your practice.

This interactive program, Employment Law and Social Media: Rights, Obligations, and Disputes in the Workplace, will use hypotheticals and audience inquiries to approach numerous issues important for practitioners, including:

  • Recent Court decisions and NLRB opinions and their impact on workplace social media policies;
  • Discovery and use of social media in litigation; and
  • Discovery and use of social media in mediation.

As a primer for the discussion, Magistrate Judge Kristen L. Mix, a faculty member for the program, has provided us with a number of Practice Tips that attorneys should be mindful of when engaging in discovery of social media in litigation:

  1. Seek discovery of social networking information from the opposing party before subpoenaing Facebook or other social networking websites.
  2. Perform a public search for information usually available on a social networking website.
  3. Be mindful of your ethical responsibilities. Hiring a private investigator to “friend” the opposing party may be “inherently deceitful and unethical, even if the investigator uses his own name.”(1) Contacting the opponent yourself would likely be impermissible direct contact, and may also violate the rule providing that a lawyer may not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.(2)
  4. In complex cases, explore the possibility of “unbundling,” or development of a litigation management team to handle electronic data.(3)
  5. This is not your father’s discovery. Successful discovery of social networking information may require significant efforts to educate the judiciary about the fallacy underlying electronic discovery (just because something is electronic, it can be searched and produced instantly) and the actual cost and burden of production.
  6. Advise your clients to be prudent and avoid spoliation sanctions. “The courts have a right to expect that litigants and counsel will take the necessary steps to ensure that relevant records are preserved when litigation is reasonably anticipated, and that such records are collected, reviewed and produced to the opposing party.”(4)
  • (1) Phil. Bar Ass’n Prof’l Guidance Comm. Op. 2009-02 (Mar. 2009), available at http://www.philadelphiabar.org/WebObjects/PBAReadOnly.woa/Contents/WebServerResources/CMSResources/Opinion_2009-2.pdf.
  • (2) See, e.g., Robert S. Kelner & Gail S. Kelner, Social Networks and Personal Injury Suits, N.Y.L.J., Sept. 24, 2009, available at www.law.com/jsp/nylj/PubArticleFriendlyNY.jsp?hubtype=&id=1202434026615.
  • (3) Howard B. Iwrey et al., A Multidimensional Solution to the Problems of Runaway Discovery, 29 No. 6 OF COUNSEL 12 (June 2010) pp. 2-3.
  • (4) Pension Comm. of the Univ. of Montreal Pension Plan v. Bank of Am. Sec. LLC, 685 F. Supp. 2d 456, 472 (S.D.N.Y. 2010).

CLE Program: Employment Law and Social Media – Rights, Obligations, and Disputes in the Workplace [RESCHEDULED]

This CLE presentation has been rescheduled. Check back soon for program information or call (303) 860-0608.
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D. Colo. Civil Settlement Conferences No Longer Routine

January 10, 2012 by 1 Comment

In a surprise move by the Colorado federal district court last month, the customary D. Colo. magistrate judge settlement conference has essentially been cut back significantly. Apparently frustrated with the typical half-day exercise, sometimes stretching over several sessions, featuring oft-times unprepared litigants, the district judges implemented revised Local Rule 16.6, effective December 1, 2011. The revised rule and the redline edits can be viewed below.

As Magistrate Judge Boland explained at the Faculty of Federal Advocates annual meeting in mid-December, parties will now need to file a motion with their district judge, or the magistrate judge if exercising consent jurisdiction, to warrant a classic settlement conference: “It is going to be hard to obtain, and you will have to persuade a judge that you are close to settlement and need help.” In short, for those parties who historically dropped in unprepared for an early settlement meeting, or did not wish to make the first move – hoping that the magistrate judge would extract offers, uncover and convey key information, and do the heavy lifting in settlement – the game is over. As Boland elaborated, “there is a booming industry of private mediators, and there is only a small cadre who can adjudicate cases. It makes sense in a very busy court to use resources to adjudicate.”

The revised rule puts the burden on counsel to show some good reason (the rule does not require the high showing of “good cause”) to trigger the traditional magistrate-judge-led settlement conference. Though probably not very early in the litigation process, as it appears that any “early” request will qualify only for “early neutral evaluation” (“ENE” in the ADR vernacular) (Rule 16.6A), which theoretically could be quite an abbreviated effort. Thus, parties will likely need to turn to private ADR options unless they can explain in detail to the court that far reaching settlement steps have already been taken by both sides, or perhaps that one of the litigants cannot afford his or her half of the cost of a private neutral.

The revised rule is somewhat controversial. The comment period was relatively short and no comments were disclosed by the court, though several respondents went public with their opposition to the change. In addition, several senior Article III judges were concerned that the freeing up of magistrate judges from settlement work would inexorably lead to an unconstitutional expansion of adjudications by the Article I magistrate judges. Read Judge Kane’s dissent concerning revised Rule 72.2 on magistrate judge consent jurisdiction here.

It is too early to speculate about the ultimate impact of the Rule 16.6 revision. Each judge retains the right to direct the parties, presumably either by motion or sua sponte, to pursue either ENE or an “other” (undefined) ADR proceeding:  this could presumably still be the traditional magistrate judge settlement conference, or more likely a private-sector mediation, or any of a host of different ADR approaches, such as binding arbitration, so-called med/arb (mediation, followed by binding arbitration), a mini-trial, or whatever the parties might jointly consent to. Public reports indicate that the dissenting senior judges are continuing with their traditional approach, and that some other district judges have granted requests for settlement conferences since the revision was implemented in December. Nonetheless, given the new approach, it seems likely that at least a few hundred cases each year will no longer receive free settlement help from the District Court.

There were approximately 700 settlement conferences convened in the District last year. Some 25% involved employment and ERISA disputes, 10% involved personal injury matters, and single-digit percentages were taken up by, in order, contract disputes, civil rights complaints, fair debt collection work, insurance disputes, intellectual property cases, and business and product liability matters. (Notably, the vast majority of these cases settled for less than anticipated defense costs through trial).

How will these now be handled? Although the D. Colo. clerk of the court is designated to “implement, administer, oversee, and evaluate” the court’s ADR program (Rule 16.6 D), the court has quite purposefully chosen not to assemble a referral roster of potential neutrals, as it does not wish to provide an imprimatur for any private person or group. It will thus be left to the ADR professionals in the district to help litigants make their way in the new paradigm.

It is worth noting that this new approach is the way that many federal districts already operate. For those raised in this district court, it might have been assumed that all 94 districts have magistrate judge settlement conferences, but that is not the case. For instance, the Utah federal court refers out its settlement cases, as does the Southern District of Florida, for the most part.

It is possible that the district court or the ADR-designee clerk of the court might later choose to establish a more formal program, or at least a roster of eligible neutrals. The Alternative Design Resolution Act of 1998, 28 U.S.C. § 651, found that “alternative dispute resolution, when supported by the bench and bar, and utilizing properly trained neutrals in a program adequately administered by the court, has the potential to provide a variety of benefits . . . .” The Act provides that the district designee, who should be knowledgeable in ADR practices and processes, “may also be responsible for recruiting, screening, and training attorneys to serve as neutrals and arbitrators” in the court’s ADR program.

Although the private sector ADR community in Colorado is very active (the Dispute Resolution section of the CBA has over 250 members), there are only a few seasoned veterans of this District Court who are serving as neutrals locally, mainly former magistrate judges and senior federal litigators. There is no formal “federal neutral” roster, and the FFA and other similar groups may wish to establish some training programs and eligibility rosters to help fill this gap. As Vice-Chair of the DR section of the CBA, I will personally be contacting the Federal Judicial Center and the Administrative Office of the U.S. Courts to find out what assistance they may make available pursuant to the Act.

Revised Rule:

D.C.COLO.LCivR 16.6 – ALTERNATIVE DISPUTE RESOLUTION

A. Alternative Dispute Resolution. Pursuant to 28 U.S.C. § 652, all litigants in civil cases shall consider the use of an alternative dispute resolution process. A district judge or a magistrate judge exercising consent jurisdiction may direct the parties to a suit to engage in an early neutral evaluation or other alternative dispute resolution proceeding. To facilitate settlement or resolution of the suit, the district judge or a magistrate judge exercising consent jurisdiction may stay the action in whole or in part during a time certain or until further order. Relief from an order under this section may be had upon motion showing good cause.

B. Definition of Early Neutral Evaluation. Early neutral evaluation means a nonbinding, non-adjudicative assessment of a case by a magistrate judge.

C. Disqualification of Neutrals. A magistrate judge serving as a neutral providing early neutral evaluation may be disqualified under the provisions of 28 U.S.C. §§ 144 or 455.

D. Designation of Court ADR Administrator. Pursuant to 28 U.S.C. § 651(d), the Clerk of the Court is designated to implement, administer, oversee, and evaluate the court’s alternative dispute resolution program.

Redline Edits:

D.C.COLO.LCivR 16.6 – A. Alternative Dispute Resolution. Pursuant to 28 U.S.C. § 652, all litigants in civil cases shall consider the use of an alternative dispute resolution process. At any stage of the proceedings, on a A district judge’s initiative or [sic – or] a magistrate judge exercising consent jurisdiction pursuant to motion or stipulation of counsel or the pro se parties, a district judge may direct the parties to a suit to engage in an early settlement conference neutral evaluation or other alternative dispute resolution proceeding. To facilitate settlement or resolution of the suit, the district judge or a magistrate judge exercising consent jurisdiction may stay the action in whole or in part during a time certain or until further order. Relief from an order under this section may be had upon motion showing good cause. Unless otherwise ordered by a judicial officer, cases exempt from this rule are:

1. those in which the plaintiff is a prisoner proceeding pro se; and

2. habeas corpus actions.

B. Definition of Early Neutral Evaluation. Early neutral evaluation means a nonbinding, non-adjudicative assessment of a case by a magistrate judge.

C. Disqualification of Neutrals. A magistrate judge serving as a neutral providing early neutral evaluation may be disqualified under the provisions of 28 U.S.C. §§ 144 or 455.

D. Designation of Court ADR Administrator. Pursuant to 28 U.S.C. § 651(d), the Clerk of the Court is designated to implement, administer, oversee, and evaluate the court’s alternative dispute resolution program.

Greg Whitehair, Esq., is a nationally certified mediator and arbitrator and Vice-Chair of the Dispute Resolution Section of the Colorado Bar Association. He is in the process of creating the website www.DColoADR.com to keep track of developments in the Colorado federal ADR community. He also owns IP Resolution Co. LLC, a national ADR consultancy specializing in intellectual property and high-tech commercial disputes. He can be contacted at jgw@ipresolutionco.com.
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State Judicial Issues New Form to Request Reduced Payment for Dispute Resolution Services

September 6, 2011 by Leave a Comment

The Colorado State Judicial Branch has issued a new form that allows a party to request a reduced payment for services provided by the Office of Dispute Resolution. Practitioners should begin using the new form immediately.

All forms are available in Adobe Acrobat (PDF) and Microsoft Word formats. Many are also available as Word templates; download the new forms from State Judicial’s individual forms pages, or below.

Filing Fees

  • JDF 211 – “Request To Reduce Payment for ODR Services and Supporting Financial Affidavit” (8/11)
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