June 18, 2013

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Colorado Court of Appeals: Statute of Limitations Tolled for Cross-Claims In Complicated Foreclosure and Quiet Title Proceeding

June 3, 2013 by Leave a Comment

The Colorado Court of Appeals issued its opinion in Deutsche Bank Trust Company Americas v. Samora on Thursday, May 23, 2013.

Statute of Limitations—Equitable Tolling—Attorney Fees—Fraud in the Factum—Holder in Due Course—Spurious Lien.

Defendant Veronica E. Samora appealed the trial court’s judgment in favor of Deutsche Bank Trust Company Americas (Deutsche Bank). Samora also appealed the trial court’s dismissal of her claims against Saxon Mortgage, Inc. (Saxon). The Court of Appeals affirmed the judgment and the case was remanded with directions.

On June 30, 1997, Samora purchased real property at 4555 W. 33rd Avenue in Denver (property), financing the purchase with a note and deed of trust. In 2003, Samora fell behind on payments on the note and foreclosure proceedings were commenced. It was disputed whether Samora was aware of the foreclosure action.

In October 2003, Samora approached Randy Gonzales, a mortgage broker, to refinance the property to lower her monthly payments. In October, Samora executed a new promissory note and deed of trust in favor of BNC Mortgage, Inc., which was then transferred to Chase Bank.

On October 21, 2003, Gonzales and Kenneth Medina, his uncle, transferred title to the property into their names by forging Samora’s signature on a quitclaim deed. Medina then obtained a loan for $32,000 from a third party, which he secured by another note and deed of trust. Medina later executed a quitclaim deed conveying the property solely to Gonzales.

Samora was unaware of the foregoing transactions. In May 2004, she sought a second refinancing of the property to obtain an even lower interest rate. Chase Bank told her the property belonged to Gonzales. When Samora confronted him, he acted surprised to learn that title to the property was in his name. On September 9, 2004, Gonzales signed and filed a quitclaim deed conveying the property back to Samora.

Samora continued to work with Gonzales and Medina on the second refinance. When Medina determined Samora was ineligible for refinancing, he sold the property to his girlfriend, Amanda Wasia, who would then lease the property back to Samora. Samora was unaware of this.

In September 2004, Gonzales completed a loan application for Wasia with Saxon. The loan application provided a false income and stated that she would be using the property as her primary residence. Wasia did not qualify for the loan. Matthew Libby, a loan officer with Saxon, suggested to Medina and Gonzales that they submit a falsified gift letter stating that Wasia was Samora’s granddaughter and that Samora was gifting the equity in her home to Wasia. Based on this, Wasia obtained a loan from Saxon for $172,000.

On September 20, 2004, Medina told Samora her loan was approved and had her come to his office to sign the documents. When she arrived, he placed a document in front of her with the top covered by his hand and told her to sign. She noticed it was titled “Warranty Deed” and that Wasia, whom she had never heard of, was on the deed. When she asked Medina about this, he stated that Wasia was a co-signer and on the deed for her protection. She signed it and it was recorded on October 4, 2004.

Also on the same day, Wasia executed a note and deed of trust in favor of Saxon for the $172,000 loan. The proceeds were used in part to pay off Samora’s existing loan on the Property. Saxon endorsed the note in blank, and the note and deed of trust were deposited in the trust res of Saxon Asset Securities Trust 2004-3 (Trust). Deutsche Bank was the indentured trustee of the Trust.

In 2005, this whole scheme fell apart. After investigation by the Denver District Attorney’s Office, Gonzales, Wasia, Medina, and Libby were indicted by a grand jury for crimes, including fraud. They all pleaded guilty and, as part of the plea agreement, each executed a quitclaim deed in favor of Samora.

No payments were made on the note during the criminal proceedings. In October 2006, Deutsche Bank commenced foreclosure proceedings. Based on the fraud committed by the parties and the complexity of the underlying transactions, the magistrate denied the requested foreclosure.

In July 2007, Deutsche Bank filed this CRCP 105 action to quiet title in the Trust. A default judgment was entered, which Samora appealed and a division of this Court reversed (Samora I). After reversal, Deutsche Bank amended its complaint to include a claim for unjust enrichment. Samora filed an amended answer on November 2, 2009, alleging for the first time counterclaims against Deutsche Bank and cross-claims against Saxon.

Saxon filed a motion to dismiss based on the two-year statute of limitations applicable to the cross-claims. On February 17, 2012, the trial court granted the motion to dismiss. A trial to the court was held on Deutsche Bank’s and Samora’s claims and counterclaims, and the court found in favor of Deutsche Bank.

On appeal, Samora argued it was error to grant Saxon’s motion to dismiss based on the statute of limitations. The Court disagreed. Samora filed its cross-claims on November 2, 2009. They sounded in tort and therefore had to be brought within two years after the cause of action accrued. Similarly, its spurious documents and lien claims had to be brought within two years of accrual. Accrual of such claims occurs on “the date both the injury and its cause are known or should have been known by the exercise of reasonable diligence.” Samora argued accrual occurred in October 2006 when Deutsche Bank started its foreclosure proceedings. The Court found that Samora was injured when she executed the deed to Wasia in September 2004, which made it possible for Wasia to execute the note and deed of trust. In December 2005, indictments were issued against Medina, Gonzales, Libby, and Wasia based on their scheme to transfer title to the property. The Court found that Samora either knew of the indictments or should have known of them based on her participation in pursuing these actions against the perpetrators.

Samora argued the doctrine of equitable tolling should have prevented the application of the statute of limitations. The Court disagreed. Equitable tolling of a statute of limitations is restricted to situations in which the defendant has wrongfully impeded the plaintiff’s ability to bring the claim or truly extraordinary circumstances prevented the plaintiff from filing the claim despite diligent efforts. The Court found neither of these circumstances was present.

Saxon was awarded reasonable attorney fees pursuant to CRS § 13-17-201, and the Court held it was entitled to reasonable attorney fees for defending this appeal. The Court remanded the case to the trial court for a determination of reasonable attorney fees.

Samora then argued it was reversible error for the trial court to find that she failed to establish fraud in the factumin the execution of the warranty deed. Fraud in the factum results in an instrument that is void and not merely voidable. The Court agreed with Samora that the trial court erred in using an objective standard of “ordinary prudence,” rather than a subjective standard based on her education, age, and other considerations to determine whether she was excusably ignorant in signing the warranty deed. However, the Court concluded that Samora failed to establish fraud in the factum because she was not fraudulently deceived about the nature of the document she signed and because she had a reasonable opportunity to obtain knowledge; therefore, she was not excusably ignorant. Samora knew the nature of the document she signed; she was deceived by Medina’s fraudulent misrepresentations about the use of the warranty deed. As a result, the deed was voidable but not void. In addition, the Court agreed with the trial court that Samora was not excusably ignorant.

As a result of the warranty deed being voidable and not void, to defeat Deutsche Bank’s claim to quiet title in the trust, Samora needed to show that Deutsche Bank as trustee was not advancing a claim by the trust as a holder in due course of the note and deed of trust. Samora argued that the interrelated Saxon companies and the trust shared such a “close connectedness” that the trust’s status as a holder in due course should be defeated. The trial court simply concluded that Deutsche Bank was a holder in due course.

Samora argued the focus should have been on the status of the trust, and the Court agreed. However, Samora introduced no evidence that Saxon and the other Saxon entities shared employees, officers, directors, or other members, or that any one entity controlled the actions of another. Absent such evidence, the Court was unwilling to decide that corporate status was enough to establish a close relationship causing the conduct of Saxon to be imputed to the Trust.

Finally, Samora contended that it was error not to find that the deed of trust was a spurious document under CRS § 38-35-201(3). A deed of trust is a lien. The Court agreed with Deutsche Bank that the deed of trust should have been examined under CRS § 38-35-201(4) as a spurious lien, not as a spurious document. Samora executed a voidable warranty deed in favor of Wasia. When Wasia executed the note and deed of trust, she was the legal owner of the property and the deed of trust was not a spurious lien. The judgment was affirmed.

Summary and full case available here.

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Colorado Court of Appeals: Agent’s Error in Proceeding with Closing Despite Lack of Proof of Compliance with Underwriter’s Terms Constituted Violation of Contract

May 31, 2013 by Leave a Comment

The Colorado Court of Appeals issued its opinion in Fidelity National Title Co. v. First American Title Insurance Co. on Thursday, May 23, 2013.

Contractual Duties of a Real Estate Closer.

Defendant Fidelity National Title Company (Agent) appealed the trial court’s judgment in favor of third-party defendant First American Title Insurance Company (Underwriter). The Court of Appeals affirmed the judgment.

Agent issued title insurance policies underwritten by Underwriter pursuant to an underwriting agreement (contract). Under the contract, Agent was to perform title and closing services. Toward the end of 2007, Agent wrote two title insurance commitments underwritten by Underwriter, each of which committed to insure a different bank as the first-position lienholder for the same parcels of real estate. The policies were issued in 2008.

The first commitment was issued with respect to Brown Financial, LLC (Brown), which loaned money to the developer of the parcels (Developer). Brown assigned its deed of trust to Academy Bank (Academy), and Brown serviced the loan by collecting money from Developer and forwarding it to Academy. The policy insured Academy as the first-position lienholder.

Two months after Agent had issued the commitment for the Brown title policy, it issued a commitment to insure the interest of Colorado East Bank & Trust (CEB&T) as first position lienholder on the same parcels in connection with a new loan from CEB&T to Developer. The CEB&T commitment had a requirement that the previous deed of trust be released, and noted it had been assigned to Academy.

Agent closed both loans within two months. Agent failed to pay Academy from the closing proceeds of the CEB&T loan and failed to obtain a release of Academy’s deed of trust on the parcels. Both Academy and CEB&T were insured in their respective policies as first position lienholders for the same parcels. Agent did not notify Underwriter of this fact.

After Academy began foreclosure proceedings on the parcels in 2009, CEB&T sought to enjoin the foreclosure. Because the Academy lien had not been paid or released, Academy asserted a claim against Underwriter under the Brown title policy, and CEB&T asserted a claim against Underwriter under CEB&T’s policy. Underwriter paid CEB&T $986,000 to resolve the latter’s claims in foreclosure and $55,000 to reimburse CEB&T for its attorney fees.

The claims in this appeal are by Underwriter against Agent under the terms of the contract. The trial court found in favor of Underwriter.

On appeal, Agent argued the trial court misconstrued section 7.3 of the contract and erroneously found Agent liable for committing “[an] error, fault, or negligence in handling funds in connection with [an] escrow.” Requirement G of the title commitment required that the deed of trust on the property be released. It indicated that Academy would need to release the deed of trust. A letter from Brown was received before closing, stating it would provide a release of the deed of trust and the original promissory note marked “paid in full” within fourteen days of the closing. No mention was made of Academy. The closer was not happy with this, but her branch manager authorized her to proceed. The trial court found this was negligent handling of funds in connection with an escrow by Agent, in violation of section 7.3 of the contract.

Agent argued it was not “handling funds,” but simply performing a title search and completing a closing. Also, Agent contended that any errors occurred in the context of a real estate closing and that those services do not fall within the meaning of “escrow.” The Court held that the record and the plain meaning of those terms supported the trial court’s finding that Agent’s error was a breach of section 7.3 of the contract.

Agent also argued that under CRS § 38-35-124.5, the letter it received from Brown was a “payoff statement” on which Agent was entitled to rely. The Court found the letter was not a payoff statement within the meaning of the statute. The testimony of the expert witnesses and the plain language of the statute support the finding that a payoff statement is a statement that a certain sum of money would need to be paid at closing in exchange for release of a deed of trust. The Brown letter was simply a statement that no money was due to Brown; it did not specify how much was due to Academy, which was the holder of the indebtedness.

Agent argued that the trial court misconstrued section 7.4 of the contract by ruling that Agent had knowledge of a claim or loss stemming from a title report, and its failure to give notice of such a claim or loss caused Underwriter to sustain “actual prejudice.” The Court disagreed. Agent contended that it didn’t know about the claim or loss because parts of the knowledge were held by various employees. The Court found that Agent must be held accountable for the knowledge of its employees. Agent knew and therefore had a duty to report to Underwriter that it was ensuring two different entities as the first priority lien holders with respect to the same parcels of property. Clearly, Underwriter suffered “actual prejudice” as a result of the lack of this knowledge. Had it known of the potential claim in advance, it could have taken proactive steps to mitigate the damages it ultimately had to pay. The judgment was affirmed.

Summary and full case available here.

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Colorado Court of Appeals: Defendant Clearly Violated Protection Order When He Was Found by Police at Victim’s Apartment Complex

May 31, 2013 by Leave a Comment

The Colorado Court of Appeals issued its opinion in People v. Bernard, Jr. on Thursday, May 23, 2013.

Protection Order Violation—Authentication of E-Mails Under CRE 901.

Defendant appealed the judgment of conviction entered following a jury verdict finding him guilty of one count of violating a protection order. The Court of Appeals affirmed the judgment.

On August 11, 2011, a mandatory protection order was entered, naming defendant as the restrained party and the victim and her son as the protected parties. The order restrained defendant from harassing, molesting, intimidating, contacting, or communicating with the victim, and ordered him to vacate victim’s home.

The victim testified that defendant called her on August 15 to wish her a happy birthday and arranged to pick up some of his clothing that she was to leave outside her door. He arrived early on August 16 and banged and knocked on her doors and windows. He told her that if she showed up in court the next day, one of them would not be “making it back,” and that he would kill her if she called the police. She called her mother and then the police.

Defendant testified that he and the victim had spent the entire day together on August 15 and that late that night, they had an argument. He testified that the following morning, he left to smoke a cigarette and then tried to get back into the apartment.

The responding police officers testified that when they arrived, they found defendant in a basement storage room in the victim’s apartment complex. He was arrested and charged with one count of intimidation of a witness and one count of violation of a protection order. He was acquitted of the witness intimidation charge but found guilty and convicted of violating a protection order.

On appeal, defendant argued it was error to admit an e-mail into evidence because it was not properly authenticated. The Court disagreed.

An e-mail was sent to the victim from defendant’s e-mail account on the morning she was scheduled to testify in defendant’s trial, stating, “I told you it wuz us r nobody u getting ready 2 make the biggest mistake my God have mercy on Ur soul rip [sic].” The e-mail was admitted into evidence.

The Court held that e-mails may be authenticated (1) through testimony explaining that they are what they purport to be, or (2) through consideration of distinctive characteristics shown by an examination of their contents and substance in light of the circumstances of the case.

The victim testified the e-mail was a true and accurate copy of the e-mail that defendant had sent to her. She testified as to the time she received it and that she recognized the e-mail address of the sender as one belonging to defendant. Defendant did not contest that the sending e-mail address belonged to him. Based on this testimony, there was no abuse of discretion in admitting it into evidence.

Defendant also argued that the prosecution failed to present evidence proving beyond a reasonable doubt that he was guilty of violating a protection order. The Court disagreed. The record clearly showed that defendant was informed of the contents of the protection order, and the testimony of witnesses and of defendant clearly established a violation of that order. The judgment was affirmed.

Summary and full case available here.

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Colorado Court of Appeals: Announcement Sheet, 5/30/13

May 30, 2013 by Leave a Comment

On Thursday, May 30, 2013, the Colorado Court of Appeals issued no published opinions and 25 unpublished opinions.

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

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Colorado Court of Appeals: Statute Unclear About Sealing Records When Traffic and Non-Traffic Offenses Charged Together

May 30, 2013 by Leave a Comment

The Colorado Court of Appeals issued its opinion in In re Petition of R.C. on Thursday, May 30, 2013.

Petition to Seal Records—Traffic Offenses—Non-Traffic Offenses.

Petitioner appealed a district court’s order denying his petition to seal records of non-traffic offense charges brought against him that were subsequently dismissed. The Court of Appeals reversed the order and remanded the case with directions.

Petitioner was charged with possession of marijuana (a class 2 petty offense), possession of drug paraphernalia (a class 2 petty offense), and unsafe lane change. After successful completion of a juvenile diversion program, all of the charges were dismissed with prejudice.

Petitioner argued that the court erred when it denied his petition to seal his records after all of the charges against him were dismissed with prejudice. Although CRS § 24-72-308 specifically prohibits the sealing of traffic infractions, the statute does not appear to contemplate petitions to seal records for cases that include both traffic offenses and non-traffic offenses. Therefore, if the district court “finds that the harm to the privacy of the petitioner or dangers of unwarranted adverse consequences to the petitioner outweigh the public interest in retaining the record” as to the drug offenses, it should seal the criminal records as to those charges. Therefore, the order was reversed and the case was remanded for further proceedings consistent with this opinion.

Summary and full case available here.

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Colorado Court of Appeals: Police Officer Injured at Work Only Entitled to One Year of Full Pay Disability Leave Under City Charter

May 30, 2013 by Leave a Comment

The Colorado Court of Appeals issued its opinion in Miller v. City & County of Denver on Thursday, May 23, 2013.

Disability Compensation—Police Officers—Line-of-Duty Injury Leave.

In this dispute over disability compensation, plaintiffs Daryl Miller and the Denver Police Protective Association (DPPA) appealed the district court’s summary judgment in favor of defendant, the City and County of Denver (City). The Court of Appeals affirmed the judgment.

On July 15, 2005, Miller, a lieutenant in the Denver Police Department, was injured in an automobile accident in the course and scope of his employment. As a result of his injuries, surgeries, and medical treatment associated with the accident, he did not work for five months. Thereafter, for four years, he worked intermittently either at his position or in modified work functions.

Miller was entitled to disability benefits under the City Charter and the City’s Collective Bargaining Agreement (CBA) with the DPPA. On March 8, 2010, the City determined that he had reached maximum medical improvement (MMI) with respect to his injuries, and discontinued giving Miller line-of-duty injury leave at full salary after one year.

Miller and the DPPA contended that the district court erred in granting the City’s motion for summary judgment, because he was entitled to line-of-duty injury leave at full salary beyond one year. Here, both City Charter § 9.6.14 and Article 22.2 of the CBA relate to the same subject: disability benefits for a police officer who becomes “incapacitated from service” or “unable to perform [his or her] duties” because of “injuries received” in the “performance” or “discharge” of his or her “duties.” Charter provision § 9.6.14 awards the injured officer “full pay for such time as [he or she] is temporarily incapacitated,” and CBA Article 22.2 awards “any necessary leave of absence not to exceed one year at his [or her] full salary.”

Unlike § 9.6.14, Article 22.2 makes no distinction between benefits for temporary and permanent disabilities. Therefore, an injured officer is entitled to a maximum of one year of disability leave at full salary, without regard to the temporary or permanent nature of his or her disability. Because the record discloses that Miller received 178.25 hours above his allocated full-salary disability leave, the district court properly determined, as a matter of law, that the City was entitled to deduct his excess disability leave from his other accrued leave time.

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Colorado Court of Appeals: No Shreck Hearing Required for Admission of Fingerprint Evidence

May 28, 2013 by Leave a Comment

The Colorado Court of Appeals issued its opinion in People v. Wilson on Thursday, May 23, 2013.

Voir Dire—Entrapment—Shreck Hearing—Expert Testimony—Fingerprint Evidence—Prior Conviction—Burden of Proof—Preponderance of the Evidence.

Defendant appealed the judgment of conviction entered on a jury verdict finding him guilty of possession of a controlled substance, as well as the sentence that the court subsequently imposed. The Court of Appeals affirmed the judgment and sentence.

In May 2008, defendant asked an undercover police officer, who was posing as a prostitute on east Colfax Avenue, if she wanted to smoke crack cocaine with him. When he showed her a Blistex tube that contained three rocks of crack cocaine, police officers from the Aurora Police Department arrested him.

Defendant argued that voir dire was insufficient because the trial court refused his request that the court read to the potential jurors a legal definition of the defense of entrapment. Both the prosecutor and defense counsel, however, had the opportunity to question jurors about the general nature of the entrapment defense. Further, the trial court properly gave instructions to the jury on the issue of entrapment at the close of the evidence. Accordingly, the trial court’s denial of defendant’s request to instruct the jury on the defense of entrapment duringvoir dire was not an abuse of discretion.

Defendant further argued that the trial court abused its discretion when it denied his motion to hold a Shreck hearing on the admissibility of expert testimony regarding fingerprint evidence concerning a prior conviction. [People v. Shreck, 22 P.3d 68 (Colo. 2001).] The Court ruled that the motions court acted within its discretion when it denied defendant’s request for a Shreck hearing because: (1) the trial court was the finder of fact, not a jury; (2) defendant was permitted to raise issues during the sentencing hearing that would have been allowed during a Shreck hearing; (3) the evidence was not complex; and (4) fingerprint comparisons are reliable evidence.

Defendant contended that the trial court denied his right to due process of law when it used the wrong burden of proof—a preponderance of the evidence—in finding that he had been convicted of the 1997 drug-related felony. When a sentencing statute does not establish a burden of proof, “the prosecution need only prove the existence of prior conviction facts by a preponderance of the evidence.” CRS § 18-18-405(2.3)(a) was a sentence enhancer, not a substantive offense or an element of a substantive offense, and did not contain a prescribed burden of proof. Thus, the trial court used the proper evidentiary standard—a preponderance of the evidence—and defendant’s due process rights were not abridged.

Summary and full case available here.

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Colorado Court of Appeals: Proof of Prior Convictions Not “Element” of Class 3 Felony for Motor Vehicle Theft

May 28, 2013 by Leave a Comment

The Colorado Court of Appeals issued its opinion in People v. Hopkins on Thursday, May 23, 2013.

Aggravated Motor Vehicle Theft—Prior Convictions—Element—Due Process—Class of Felony.

Defendant appealed the judgment of conviction entered on a jury verdict finding him guilty of aggravated motor vehicle theft in the first degree. The Court of Appeals affirmed the judgment.

Based on proof that defendant had two prior convictions involving theft of a motor vehicle, the court ruled that the current charge was punishable as a class 3 felony and sentenced defendant to ten years in prison. Defendant contended that proof of his prior convictions is an element of the class 3 felony and that the trial court erred when it did not submit this element to the jury for its determination beyond a reasonable doubt. Alternatively, he argued that even if proof of prior convictions is not an element, due process required the court to submit the question to the jury.

CRS § 18-4-409(2)(a) describes the elements of motor vehicle theft in the first degree, which does not include proof of prior convictions. CRS § 18-4-409(3) addresses only the class of felony (it does not create a separate crime), and CRS § 409(3)(b) describes when aggravated motor vehicle theft in the first degree can be a class 3 felony. Therefore, the actus reus and mens rea are the same for the class 3 and class 4 felonies, and proof of two prior convictions related to motor vehicle theft is not an element of the class 3 felony. It follows that due process does not require that defendant’s prior conviction be proved to a jury beyond a reasonable doubt.

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Judge Janice B. Davidson to Retire from Colorado Court of Appeals

May 23, 2013 by Leave a Comment

Davidson,JaniceChief Judge Janice B. Davidson of the Colorado Court of Appeals will be retiring, effective October 1, 2013. Judge Davidson has been on the Court of Appeals bench since 1988, and has been Chief Judge since 2003.

Judge Davidson received her law degree from the University of Pennsylvania School of Law in 1969, and was an appellate attorney for the New York Legal Aid Society from 1969 to 1971. She then moved to Colorado, and was a Colorado State Public Defender from 1971 to 1973. She continued in public interest law by working, and worked with the Attorney General’s office for nine years prior to her appointment to the Denver County Court bench in 1985. She is the managing editor for CBA-CLE’s Colorado Appellate Handbook, and is a frequent presenter at CLE programs.

The Supreme Court nominating commission will meet on August 13 and 14, 2013, to interview applicants and select nominees for appointment by the governor. Eligible applicants must have been licensed to practice law in Colorado for the past five years and must be qualified electors in the State of Colorado.

Applications are due to Chief Justice Michael Bender, ex officio chair of the nominating commission, no later than 4 p.m. on Thursday, July 11, 2013. Applications must be submitted electronically. Additional information regarding the application process may be found here, and contact information for the members of the nominating commission is available on the State Judicial website.

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Colorado Court of Appeals: Announcement Sheet, 5/23/13

May 23, 2013 by Leave a Comment

On Thursday, May 23, 2013, the Colorado Court of Appeals issued 10 published opinions and 40 unpublished opinions.

People v. Hopkins

People v. Wilson

People v. Jenkins

In re Petition of R.C.

Miller v. City & County of Denver

People v. Bernard, Jr.

Fidelity National Title Company v. First American Title Insurance Company

Deutsche Bank Trust Company Americas v. Samora

Oasis Legal Finance Group LLC v. Suthers

Hudak v. Medical Lien Management, Inc.

Summaries for 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.

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Colorado Court of Appeals: Announcement Sheet, 5/16/13

May 16, 2013 by Leave a Comment

On Thursday, May 16, 2013, the Colorado Court of Appeals issued no published opinions and 27 unpublished opinions.

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

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Colorado Court of Appeals: In Workers’ Compensation Proceeding, 18-Month DIME Physician’s Findings Carry No Presumptive Weight Regarding Impairment Ratings

May 15, 2013 by Leave a Comment

The Colorado Court of Appeals issued its opinion in Meza v. Industrial Claim Appeals Office on Thursday, May 9, 2013.

Workers’ Compensation—Jurisdiction—Weight of Evidence—Substantial Evidence—CRS § 8-42-107(8)(b)(II).

In this workers’ compensation action, claimant sought review of a final order of the Industrial Claim Appeals Office (Panel). The order was affirmed.

Claimant sustained an admitted, compensable injury in 2004 when a cow bone fell on his right foot. On November 26, 2004 his authorized treating physician (ATP) placed him at maximum medical improvement (MMI) with no impairment and released him to work, with no restrictions. Plaintiff continued to experience pain and developed low back pain four years after his initial injury.

His employer, Swift Foods Company, and its insurer, Zurich American Insurance Company (collectively, employer), agreed to reopen the claim in 2008. A new ATP suspected claimant had developed complex regional pain syndrome (CRPS) and that his low back pain was related to the foot injury. Employer retained a physician to conduct an independent medical examination (IME). The physician found that claimant had reached MMI, and that the low back pain was unrelated to the 2004 injury.

Because the ATP had not placed claimant at MMI within eighteen months of commencing treatment, employer requested a division-sponsored independent medical examination (DIME). The DIME physician examined claimant in January 2010 and placed him at MMI as of the date of the exam. The DIME physician rated claimant’s impairment at 10% of the whole person for CRPS and 11% for his spine, giving him a 20% impairment rating of the whole person.

Employer filed a final admission of liability (FAL) based on the DIME physician’s MMI and impairment ratings. Claimant moved to strike the FAL, arguing that a physician performing an eighteen-month DIME is limited to determining MMI and may not give an impairment rating. An administrative law judge (ALJ) agreed with claimant, struck the FAL, and ordered claimant to see his ATP for a permanent impairment evaluation. The ATP rated claimant at 18% for his spinal injuries, 10% for CRPS, and 4% for the lower extremity, resulting in a total impairment rating of 27% of the whole person.

Employer requested a second DIME to review the ATP’s impairment rating. The second DIME agreed that claimant had reached MMI in January 2010, but rated his impairment at 18% of the whole person. In her deposition, however, she corrected herself and rated him at 4% of the whole person.

At the hearing, claimant objected to the second DIME physician’s opinions. The ALJ found that when claimant moved to strike the FAL he waived his opportunity to rely on any presumptive weight that might otherwise have been given to the eighteen-month DIME’s impairment rating. The ALJ awarded claimant PPD benefits based on an impairment rating of 10% of the lower extremity, but found claimant’s spine injury and CRPS unrelated and therefore awarded no benefits for those conditions. The Panel affirmed.

On appeal, claimant argued he was entitled to a higher impairment rating because (1) the ALJ was bound by the eighteen-month DIME physician’s opinions and therefore lacked jurisdiction to rule on the relatedness of his alleged CRPS and low back conditions; and (2) the ALJ improperly assigned him the burden of overcoming the second DIME’s opinion. The Court of Appeals disagreed.

Claimant argued the determination of the eighteen-month DIME physician’s opinion was binding on the ALJ because neither party had requested a hearing to challenge his opinions. In general, a DIME physician’s opinions concerning MMI and permanent medical impairment are given presumptive effect. However, the Panel has found this general rule does not govern as to impairment when an eighteen-month DIME determination is requested under CRS § 8-42-107(8)(b)(II), because it does not mention or address impairment. The Court found that this a reasonable interpretation of the statutory language and an eighteen-month DIME report under this section only carries presumptive weight concerning MMI.

Consequently, the causation findings associated with the impairment ratings carried no presumptive effect and were not jurisdictionally binding on the ALJ. The impairment rating was advisory only and did not statutorily close the issue of causation of impairment.

Claimant also argued that the ALJ “did not enforce the presumption of validity” associated with the eighteen-month DIME physician’s causation determinations. The Court found this argument premised on the incorrect notion that the eighteen-month DIME physician’s causation opinions were related only to MMI. To the extent they were related to impairment ratings, they were not subject to presumptive weight. It was for the ALJ to determine whether the impairment opinions expressed by the second DIME physician, including the causes of impairment, had been overcome by clear and convincing evidence. The ALJ’s findings in this regard will not be set aside if supported by substantial evidence in the record. The Court found such evidence in the record. The order was affirmed.

Summary and full case available here.

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