January 31, 2015

Colorado Court of Appeals: Announcement Sheet, 1/29/2015

On Thursday, January 29, 2015, the Colorado Court of Appeals issued three published opinions and 41 unpublished opinions.

People v. Barry

Whitewater Hill, LLC v. Industrial Claim Appeals Office

Rich v. Ball Ranch Partnership

Summaries of these cases are forthcoming, courtesy of The Colorado Lawyer.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions.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

Frederick Skillern: Real Estate Case Law — Contracts, Purchase and Sale, Transactions (5)

Editor’s note: This is Part 8 of a series of posts in which Denver-area real estate attorney Frederick Skillern provides summaries of case law pertinent to real estate practitioners (click here for previous posts). These updates originally appeared as materials for the 32nd Annual Real Estate Symposium in July 2014.

By Frederick B. Skillernfrederick-b-skillern

In the Interest of Delluomo v. Cedarblade
Colorado Court of Appeals, April 10, 2014
2014 COA 43

Revocable living trust; breach of fiduciary duty; undue influence; no attorney fees under breach of trust exception to American Rule.

Delluomo created a revocable living trust and included all of his assets, including title to his real property. He named two beneficiaries, his niece, Cedarblade, and his nephew, Corcoran. Cedarblade uses undue influence (according to the jury) on her uncle and gets him to convey title to Delluomo and herself in joint tenancy. Corcoran objects, and ultimately a conservator is appointed for Delluomo, who brings suit to set aside the property conveyance. The case is tried to a jury, which finds that Cedarblade breached a fiduciary duty. The court set aside the conveyance and granted Cedarblade’s directed verdict on damages. The court did, however, allow the jury to award attorney fees for prosecuting the litigation, as an exception to the American rule allows fees in actions for breach of trust.

The court of appeals reverses that ruling, drawing a distinction between a garden variety breach of fiduciary duty and the kind of breach of trust in which a court has allowed recovery of attorney fees. The lead case is Buder v. Sartore, 774 P.2d 1383, 1390-91 (Colo. 1989), where a custodian of a minor’s account mismanaged funds by investing the funds in penny stocks. The court here notes that Colorado courts have denied recovery of litigation fees “when the circumstances do not involve a type of fund, type of wrong, or type of wrongdoer” at issue in Buder. In other words, Cedarblade did not manage funds for her brother or serve as his trustee; she was a beneficiary, and only controlled funds after her wrongful act. A mere existence of a fiduciary duty is enough; the breach of trust exception calls for control of funds for another, and egregious conduct of some kind. A breach of trust, the court notes, is but one species of breach of fiduciary duty. It is a “failure by the trustee to comply with any duty that the trustee owes, as trustee, to the beneficiaries.” Restatement (Third) of Trusts § 93. This panel notes that our supreme court has “expressly cautioned against liberally construing exceptions to the American rule on attorney fees, because that is “a function better addressed by the legislative than the judicial branch of government.”

Frederick B. Skillern, Esq., is a director and shareholder with Montgomery Little & Soran, P.C., practicing in real estate and related litigation and appeals. He serves as an expert witness in cases dealing with real estate, professional responsibility and attorney fees, and acts as a mediator and arbitrator in real estate cases. Before joining Montgomery Little in 2003, Fred was in private practice in Denver for 6 years with Carpenter & Klatskin and for 10 years with Isaacson Rosenbaum. He served as a district judge for Colorado’s Eighteenth Judicial District from 2000 through 2002. Fred is a graduate of Dartmouth College, and received his law degree at the University of Colorado in 1976, in another day and time in which the legal job market was simply awful.

Colorado Court of Appeals: Assets in Revocable Trust are Assets of Settlor and Can Be Sold to Satisfy Creditor Claims

The Colorado Court of Appeals issued its opinion in Independent Bank v. Pandy on Thursday, January 15, 2015.

Foreign Judgment—Domesticated Judgment—Lien—Statute of Limitations—Interlocutory Appeal—Quiet Title.

In August 2010, Independent Bank (Bank) obtained two judgments against Joseph Pandy in a Michigan state court. In April 2012, the Bank domesticated the Michigan judgment in the district court in Grand County, Colorado. It then filed transcripts of the domesticated judgments with the Grand County Clerk and Recorder in January 2013 to obtain a judgment lien against Joseph Pandy’s real property in the county, including the C Lazy U Homesteads. At that time, the Joseph Pandy, Jr. and Elizabeth Pandy Living Trust (Trust) held title to the C Lazy U Homesteads. In March 2014, the Bank filed a “Complaint for Quiet Title and Decree of Foreclosure” against the Pandys in Colorado. The complaint sought a decree that the judgment lien against Joseph Pandy individually was valid against his interest in the Trust. After the court denied the Pandys’ motion to dismiss, the Pandys filed a CAR 4.2 petition for interlocutory appeal.

The Pandys contended that their petition for interlocutory appeal satisfies the requirements of CAR 4.2. Here, if the statute of limitations in CRS § 13-80-101(1)(k) bars the Bank’s complaint, the litigation would be resolved without the need for a trial. Because the issue presented is both case dispositive and presents an unresolved question of law, the Pandys’ petition for interlocutory appeal satisfies the requirements of CAR 4.2.

The Pandys also contended that the three-year statute of limitations in CRS § 13-80-101(1)(k) bars the Bank’s complaint. The three-year statute of limitations is inapplicable to the Bank’s complaint because the Bank was not seeking a judgment. The applicable statute here is CRS § 13-52-102(1), which gives the Bank six years from the date of the Michigan judgment to foreclose on the judgment lien. Because the Bank brought its quiet title and foreclosure action within six years of the Michigan judgment, the action is not precluded by the statute of limitations. Accordingly, the three-year statute of limitations in CRS § 13-80-101(1)(k) does not bar the Bank’s complaint for quiet title on and foreclosure of the Trust’s property. The order was affirmed and the case was remanded for further proceedings.

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

Colorado Court of Appeals: Complaint Timely Filed in ICCES Despite Selection of Wrong District Court

The Colorado Court of Appeals issued its opinion in Maslak v. Town of Vail on Thursday, January 15, 2015.

CRCP 106(a)(4)—Complaint—E-filing—Lack of Subject Matter Jurisdiction.

The Town of Vail (Town) and the Vail Recreation District (VRD) submitted an application to the Planning Commission to amend the Vail Golf Course’s conditional use permit so the golf course could be expanded to accommodate an events center. Over the objections of plaintiffs (collectively, homeowners), the Planning Commission approved the application. The homeowners appealed the Planning Commission’s decision to the Town Council, which upheld the decision. The homeowners then filed a CRCP 106(a)(4) complaint, seeking review of the Town Council’s decision. Although the complaint was timely filed, it was inadvertently e-filed in Denver District Court, the wrong district court. The complaint was thereafter e-filed in the Eagle County District Court, the correct district court, but by then it was not timely. The court granted defendants’ motions to dismiss for lack of subject matter jurisdiction and awarded defendants their attorney fees.

On appeal, the homeowners contended that, because their complaint was timely filed (albeit in the wrong court), the Eagle County District Court erred in dismissing it for lack of subject matter jurisdiction. The Court of Appeals agreed. The fact that the homeowners e-filed their complaint with the Denver District Court did not deprive the Eagle County District Court of its subject matter jurisdiction over the action. Furthermore, submitting the complaint to the “correct court” pursuant to the Denver District Court Clerk’s e-filing rejection notice instructions, did not constitute the filing of an entirely new and separate action for purposes of invoking district court jurisdiction within the twenty-eight-day jurisdictional window. The orders were vacated and the case was remanded with directions.

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

Colorado Court of Appeals: Trial Court Erred By Refusing Self-Defense Instruction for Reckless Manslaughter Charge

The Colorado Court of Appeals issued its opinion in People v. McClelland on Thursday, January 15, 2015.

Reckless Manslaughter—Self-Defense—Jury Instruction—Burden of Proof—In Life Photographs—Evidence.

Defendant’s father and the victim were involved in a physical altercation. Defendant pulled a gun out of his father’s backpack and shot the victim seven times, killing the victim. The jury found defendant guilty of reckless manslaughter.

On appeal, defendant contended that the trial court erred by not giving the jury a “self-defense law instruction” on the charge of reckless manslaughter.Instruction Number 19, which addressed the applicability of self-defense to the reckless manslaughter count, directed the jurors not to apply Instruction Number 18, which explained the legal meaning of self-defense. Therefore, the jurors received no guidance as to the meaning of self-defense with respect to the offense of reckless manslaughter. This cast serious doubt on the fairness of defendant’s conviction. Because the error was seriously prejudicial and obvious, it constituted plain error. Accordingly, defendant’s conviction was reversed and the case was remanded for retrial.

Defendant also contended that the trial court erred by placing the burden on him to prove self-defense to the charges of reckless manslaughter and criminally negligent homicide.Here, the trial court did not err. Defendant had the burden of proving self-defense to the charges of reckless manslaughter and criminally negligent homicide.

Defendant further argued that the trial court abused its discretion when it admitted three “in life” photographs depicting the victim participating in family events. In life photographs of homicide victims are not per se inadmissible; rather, their admissibility must be determined on a case-by-case basis. Here, the photographs were evidence of an undisputed fact—that the victim was alive prior to the shooting. Because the photographs had almost no probative value, and because the prosecutor sought to elicit the jury’s sympathy based on those photographs, the admission of the photographs unfairly prejudiced defendant and the trial court erred by admitting them. On retrial, the court should reconsider whether to allow in life photographs in light of the above discussion, and if so, how many, and whether to limit the prosecution’s comments about them so as to avoid the risk of unfair prejudice.

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

Colorado Court of Appeals: Status as VA Designated Payee Does Not Confer Priority for Appointment as Conservator

The Colorado Court of Appeals issued its opinion in In re Estate of Runyon on Wednesday, December 31, 2014.

Appointment of Uniform Veterans’ Guardianship Act Guardian—Appointment of Guardian by Incapacitated Person.

Gladys Runyon (mother) was the authorized payee for Sidney Runyon’s Department of Veterans Affairs (VA) benefits until August 2011, when Elizabeth Knight (sister) became the payee. In February 2012, the VA designated Colorado State Bank and Trust (Bank) as payee.

The Bank petitioned for appointment as Runyon’s guardian under the Uniform Veterans’ Guardianship Act (UVGA). It also petitioned to have Jeanette Goodwin appointed as Runyon’s guardian under the Colorado Probate Code. The Denver Probate Court concluded that the Bank’s petitions were filed in the wrong venue but appointed Goodwin as emergency guardian through August 2012.

Ten months after the expiration of the emergency guardianship, mother and sister sought appointment as co-guardians and conservators in Arapahoe County. Runyon advised the court-appointed visitor that he didn’t want mother and sister appointed. The court appointed counsel for Runyon.

The Bank then entered an appearance and sought appointment as conservator and UVGA guardian, and nominated Goodwin as guardian. At the hearing, Runyon’s attorney advised the court of Runyon’s preferences to appoint the Bank and Goodwin as conservator and guardian, and the court granted the appointments.

On appeal, mother and sister argued that the trial court erred because (1) their purported status as designated payees for Runyon’s VA and Social Security Administration (SSA) benefits entitled them to be appointed, and (2) the court should not have given effect to Runyon’s preferences. The Court of Appeals disagreed with the first point and remanded for further proceedings on the second.

The appointment of a guardian lies within the sound discretion of the probate court. A respondent’s nomination of a guardian creates a priority for that nominee, but only if the respondent had “sufficient capacity to express a preference” at the time of the nomination. The respondent may make an oral nomination at an appointment hearing. There is a similar scheme for appointment of conservators and UVGA guardians.

Here, mother and sister had no priority claim to be a guardian or conservator, and being appointed as designated payees of Runyon’s SSA and VA benefits did not confer any such priority claim on them. By nominating the Bank and Goodwin at the hearing, Runyon conferred on them a priority for appointment. However, the record did not reflect whether the trial court found that Runyon had sufficient capacity to express a preference at the time of the nomination. The Court remanded for such a determination, but noted that a finding that a respondent is an “incapacitated person” under the statute does not necessarily mean that the respondent lacks sufficient capacity to express a preference as to a guardian or conservator.

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

Colorado Court of Appeals: Jury Instructions Erroneously Failed to Consider Parent’s Actions; Error Not Harmless

The Colorado Court of Appeals issued its opinion in People in Interest of J.G. on Wednesday, December 31, 2014.

Dependency and Neglect—Proof as to Each Parent.

In January 2014, the Fremont County Department of Human Services (FCDHS) learned that 5-year-old S.L. had told her parents that her half-brother, 11-year-old Jo.G., had touched her inappropriately while she was trying to sleep. Mother and Father immediately reported the incident to police. Investigation found that Jo.G. had also inappropriately touched his 8-year-old sister. Jo.G was criminally charged and moved to an offense-specific foster home.

FCDHS then filed a petition in dependency and neglect, alleging that all five of the children living in the home were dependent and neglected because the environment in which Jo.G. was able to sexually act out against his sisters was injurious to all of the children. Mother admitted that Jo.G was dependent and neglected, but denied the allegation as to the other four children, and requested a jury trial on the issue of their adjudication.

The jury found that although none of the children lacked proper parental care and none were homeless, each child’s environment was injurious to his or her welfare. Accordingly, the court adjudicated all as dependent and neglected.

On appeal, the Court of Appeals found that the court erred by providing jury instructions and a special verdict form that allowed the jury to determine the status of each child without considering each parent’s actions, availability, ability, andwillingness to provide reasonable parental care. The Court further concluded that the trial court’s errors were prejudicial to mother, and therefore constituted grounds for reversal. As instructed, the jury was permitted to find that a child’s dependent status in relation to any respondent parent was sufficient to find that the child was dependent and neglected as to all respondent parents. If properly instructed to separately examine the children’s status in relation to each parent, the jury might have concluded that the children’s environment was notinjurious to their welfare, because mother was available, willing, and able to provide reasonable parental care. Had the jury made such a determination, the children could not have been adjudicated as dependent and neglected.

Accordingly, the order was reversed and the case was remanded for a new adjudicatory trial. If FCDHS does not pursue adjudication, the order and decree of adjudication must be vacated and the petition dismissed.

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

Colorado Court of Appeals: No Statutory Requirement for Law Enforcement to Inquire Into Immigration Status of Detainee

The Colorado Court of Appeals issued its opinion in People v. Cruz-Velasquez on Wednesday, December 31, 2014.

Exoneration From Bond Liability.

Vargas, a bonding agent, posted a $10,000 appearance bond on behalf of defendant. When defendant failed to appear at a hearing, Vargas received notice of bail forfeiture. Vargas did not request a show-cause hearing, and the court ordered the bond forfeited.

Vargas filed a “Motion Seeking Exoneration of Bond Liability” and a “Motion Seeking Reconsideration of Bond Exoneration Liability Denial, or a Hearing into the Argument.” The court summarily denied both. The motion was re-filed through counsel, and the court denied it in a written order.

The Court of Appeals reviewed the district court’s denial of bond exoneration for abuse of discretion. CRS § 16-4-117(5)(b)(III) provides that, upon failure to request a show cause hearing and thirty-five days after the entry of forfeiture, the court must enter judgment against the surety. The judgment may be vacated “if it appears that justice so requires.”

Here, the Court found no abuse of discretion. Vargas made no attempt to explain his failure to request a show-cause hearing. Surety’s arguments on appeal regarding the failure of jail personnel to determine defendant’s illegal immigration status were not supported by the record. Further, his argument that there is a requirement for jail personnel to make such an inquiry was misplaced. The order was affirmed.

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

Colorado Court of Appeals: District Court Authorized to Waive Some of Drug Offender Surcharge

The Colorado Court of Appeals issued its opinion in People v. Archuleta-Ferales on Wednesday, December 31, 2014.

Drug Offender Surcharge.

Defendant pleaded guilty to conspiracy to distribute a schedule II controlled substance, a class 3 felony, in exchange for an eight-year prison sentence and the dismissal of other charges. At the providency hearing, the district court advised defendant that there would also be a mandatory $3,000 drug offender surcharge, which could not be waived. Defense counsel asked for clarification regarding the surcharge, arguing that CRS § 18-19-103(6)(a) permitted “at least some portion of [the surcharge], if not all of it,” to be waived if the court found that defendant was financially unable to pay it. The court responded that it couldn’t waive any of the surcharge if it found that defendant could pay any of it.

At sentencing, defense counsel asked the court to waive all but $480 of the surcharge based on defendant’s testimony that she would earn only $4.99 per month while in prison. The court rejected the request.

On appeal, the Court of Appeals held that the district court misconstrued its authority under CRS § 18-19-103(6). The plain language of the statute affords district courts the authority to waive any portion of the otherwise mandatory surcharge that it finds the offender is financially unable to pay. The portion of defendant’s sentence requiring her to pay the entire drug offender surcharge was reversed, and the case was remanded to the district court for reconsideration of defendant’s request to waive at least a portion of the surcharge.

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

Colorado Court of Appeals: Copyright Claims Carrying “Extra Element” Beyond Copyright Act Properly Tried in State Court

The Colorado Court of Appeals issued its opinion in Long v. Cordain on Wednesday, December 31, 2014.

Breach of Contract—Copyright Law—Breach of Fiduciary Duty—Civil Theft—Request for Accounting—Federal Law—Subject Matter Jurisdiction.

Cordain was a leading proponent of the Paleo Diet and had already published two books and several articles on the Paleo Diet before he met Long. Long and Cordain thereafter formed a company, Paleo Diet Enterprises, LLC (PDE), to commercially market the Paleo Diet. A few years later, Long and Cordain had a falling out. Cordain dissolved PDE and formed a new company, The Paleo Diet, LLC (TPD), without Long. Cordain filed a motion to dismiss, claiming that the federal courts had jurisdiction to determine the copyright claims. While this matter was pending, Long filed similar actions in federal court.

Long argued that the district court erred in dismissing his claims against Cordain for lack of subject matter jurisdiction. Generally, federal courts have exclusive jurisdiction over any claim for relief arising under any act of Congress relating to copyrights. However, if the state claim requires an “extra element” beyond those required for relief under the Copyright Act, then it is not “equivalent to” a copyright action, and the state court may hear the claim. Here, Long’s complaint advanced four state-law causes of action: breach of contract, breach of fiduciary duties, civil theft, and a request for an accounting. Long’s breach of contract claim, which alleged that Cordain violated the LLC Agreement, required proof of acts different from those required to establish a copyright infringement action. Long’s breach of fiduciary duty claim, in which he would have to prove, among other things, that Cordain breached a fiduciary duty he owed to PDE, also satisfied the extra elements test. Additionally, the civil theft claim as a whole satisfied the extra element test because it required proof of “theft, robbery, or burglary” of tangible and intellectual property. Therefore, these claims contained an extra element that distinguished them from a claim arising under copyright law. Because these claims did not seek a remedy expressly granted by the Copyright Act, and did not require construction of the Act, they did not arise under federal copyright law, and the district court erred by dismissing them. Finally, Long’s request for accounting did not involve federal law at all, and the court erred by dismissing this claim, as well. The orders were vacated in part and dismissed in part, and the case was remanded with directions.

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

Colorado Court of Appeals: Testimony of Treating Physician About Preexisting Condition Properly Admitted in Personal Injury Case

The Colorado Court of Appeals issued its opinion in Gonzales v. Windlan on Wednesday, December 31, 2014.

Personal Injuries—Expert Testimony—Non-retained Expert—Noneconomic Damages—Costs—Prevailing Party.

This case arose from a car accident in which Windlan drove through an intersection without the right-of-way and struck a car driven by Gonzales. The jury found Windlan 60% at fault and Gonzales 40% at fault for the accident. The trial court found Windlan to be the prevailing party and awarded costs to her in the amount of $15,637.77.

On appeal, Gonzales contended that the trial court abused its discretion in admitting Dr. Sayed’s expert testimony about a radiologist’s MRI report from October 2009. Dr. Sayed was Gonzales’s primary care physician, treated Gonzales after the accident, reviewed the MRI report from another specialist at the time, and opined that the MRI report showed a degenerative condition that was probably present before Gonzales’s accident and did not indicate an acute injury as claimed by Gonzales. Although he was not a radiologist, Dr. Sayed had the knowledge and experience to testify about MRI reports because he regularly reviewed and relied on them in the course of his medical practice. Therefore, Dr. Sayed was qualified to give expert testimony about the 2009 MRI report, and such testimony was properly admitted as non-retained expert testimony.

Gonzales also contended that the jury award of zero noneconomic damages was contrary to the evidence and inconsistent with the jury award of $640 for economic damages. There was ample evidence, however, to support the jury’s finding that Gonzales’s injuries were minor and did not result in compensable noneconomic damages.

Gonzales also contended that the trial court abused its discretion in finding that Windlan was the prevailing party and granting Windlan’s motion for costs under CRCP 54(d). The jury’s verdict generally aligned with Windlan’s position on each contested issue. It found Gonzales 40% at fault for the accident (Gonzales claimed that Windlan was fully at fault); awarded damages in an amount equal to an amount billed by the doctor who diagnosed Gonzales with a temporary muscle strain (Gonzales sought $212,000 in economic damages); and awarded no damages for noneconomic losses or physical impairment (Gonzales’s counsel requested noneconomic damages between $25,000 and $2 million). Therefore, the trial court did not abuse its discretion in finding Windlan to be the prevailing party and awarding costs to Windlan. The judgment was affirmed.

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

Colorado Court of Appeals Warns of Spam Emails

On Thursday, January 8, 2015, the Colorado Court of Appeals posted a warning on its website regarding spam emails. An email that appears to be from a law firm is circulating, saying the Colorado Court of Appeals requires your appearance at a pretrial hearing on illegal software use. The email is a scam, and you may delete it if you receive it. The court of appeals does not have pretrial hearings, and it does not serve notice by emails from law firms.