May 27, 2015

Colorado Court of Appeals: Parties to Dissolution Have Affirmative Duty to Disclose Information Under Rule 16.2

The Colorado Court of Appeals issued its opinion in In re Marriage of Hunt on Thursday, May 7, 2015.

Legal Separation—Business Valuation—CRCP 16.2(e)—Mandatory Disclosures—Reallocation.

In July 2012, wife petitioned for legal separation of the parties’ marriage. One month later, husband filed a certificate of mandatory disclosures under CRCP 16.2. In September 2012, based on an agreement reached in mediation, the parties entered into a memorandum of understanding (MOU) dividing the marital value of a business, Big R Construction Company (Big R), owned and operated by husband. In March 2013, wife filed a motion for relief from the MOU provisions relating to Big R, which was denied.

On appeal, wife contended that husband violated CRCP 16.2(e) by not disclosing mandatory financial information regarding Big R, and therefore, the district court erred by not granting her motion to reopen the property division under CRCP 16.2(e)(10). Husband had an affirmative duty to disclose financial information regarding Big R, and he violated CRCP 16.2(e) by failing to disclose all personal and business financial statements prepared in the last three years; loan applications and agreements from 2011 and 2012; a 2010 appraisal of Big R’s real property; and a 2012 appraisal of its equipment. Without husband having violated the disclosure requirements of CRCP 16.2, wife would have been bound by her decision to enter into the MOU, acknowledging the uncertain value of Big R. Because husband violated CRCP 16.2(e), however, the plain language of CRCP 16.2(e)(10) applies, which allows a five-year period within which to reallocate “material assets or liabilities, the omission or non-disclosure of which materially affects the division of assets and liabilities. Accordingly, the district court should have applied CRCP 16.2(e)(10) and granted wife’s motion to reopen the property division, despite the MOU language. The district court’s order was reversed and the case was remanded.

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

Colorado Supreme Court: Appeal Not Properly Before Supreme Court Because No Issues Finally Decided by Trial Court

The Colorado Supreme Court issued its opinion in East Cherry Creek Valley Water & Sanitation District v. Wolfe on Monday, May 11, 2015.

CRCP 54(b)—Final Judgment of a Claim—Dismissal of Appeal for Lack of Jurisdiction—Prayer for Relief in a Change of Water Right Application Case.

The Supreme Court held that this appeal was not properly before it under CRCP 54(b) because the trial court did not enter final judgment on any claim for relief in this litigation. Here, East Cherry Creek Valley’s application pleaded one claim for relief: that the water court issue a change decree granting its change of water right application from irrigation use to domestic, municipal, augmentation, and exchange uses in connection with the 5.472 Greely Irrigation Company shares it owns. Accordingly, the Court reversed the water court’s certification order, dismissed the appeal, and returned the case for further proceedings consistent with this opinion.

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

Colorado Court of Appeals: Amended Complaint Could Not Avoid Jurisdictional Time Bar Because It Did Not Relate Back to Original Complaint

The Colorado Court of Appeals issued its opinion in Auxier v. McDonald on Thursday, April 23, 2015.

CRCP 106(b) Time Limits in Relation to CRCP 106(a)(4).

The Fritzes obtained a building permit to construct an accessory structure at a Salida address adjacent to plaintiff Auxier’s property. Auxier objected and appealed several decisions related to the project to the City of Salida Planning Commission. The Planning Commission affirmed the issuance of the building permit on January 10, 2013.

On January 25, Auxier filed a complaint in the district court, alleging four claims for relief and naming the Salida City Administrator, the Fritzes, and Chalk Creek Initiative, LLC as defendants. Auxier filed an amended complaint on March 25, seventy-four days after the Planning Commission’s final decision. The amended complaint added the City of Salida, the City Council, and the Planning Commission as defendants. It also added a CRCP 106(a)(4) claim against the Planning Commission.

Defendants moved to dismiss the claims against them. The district court found Auxier’s CRCP 106(a)(4) claim untimely because it had not been filed within twenty-eight days of the Planning Commission’s final decision and did not relate back to the original complaint. It therefore dismissed this claim for lack of subject matter jurisdiction. Construing Auxier’s claim against the Administrator as seeking mandamus relief under CRCP 106(a)(2), the court dismissed it for failure to state a claim on which relief could be granted.

On appeal, Auxier argued it was error to dismiss his CRCP 106(a)(4) claim as untimely. He contended that it related back to his original complaint, which gave “ample notice” of facts giving rise to a CRCP 106(a)(4) claim against the Planning Commission. The Court of Appeals disagreed. Auxier’s original complaint did not give notice of a claim against anyone in the City other than the Administrator, and did not give notice of any claim regarding abuse of discretion or exceeding its jurisdiction of any governmental body. Under these circumstances, his original complaint did not give ample notice of a CRCP 106(a)(4) claim against the Planning Commission, and the district court properly treated Auxier’s claim against the Planning Commission in the amended complaint as a new claim.

Auxier further argued that CRCP 106(b) permitted him to add a Rule 106(a)(4) claim after the twenty-eight-day limitations period expired because his original complaint alleging other claims for relief was filed within twenty-eight days of the Planning Commission’s final decision. The Court disagreed. Auxier’s original complaint did not seek review under CRCP 106(a)(4), so his amended complaint seeking such review did not relate back to his original complaint. The judgment was affirmed.

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

Proposed Changes to Colorado Rules of Civil Procedure

The Colorado Supreme Court is seeking public comment on proposed changes to the Colorado Rules of Civil Procedure. Amendments to rules 1, 12, 16, 16.1, 26, 30, 31, 34, 37, 54, and 121, § 1-22 are proposed; some of the amendments, including those for Rule 16, “Case Management and Trial Management,” are extensive. A redline of the proposed changes is available here.

Written comments to the proposed rule changes can be submitted to Christopher Ryan, the Clerk of the Colorado Supreme Court, at 2 East 14th Ave., Denver, CO 80203. Comments must be received no later than 5 p.m. on April 17, 2015.

A public hearing on the changes will be held on April 30, 2015, at 1:30 p.m. in the Colorado Supreme Court courtroom. The courtroom is located on the 4th floor of the Ralph Carr Justice Center at 2 East 14th Avenue in Denver.

Colorado Court of Appeals: Abuse of Discretion for Trial Court to Deny Correction of Minor Error

The Colorado Court of Appeals issued its opinion in Reisbeck, LLC v. Levis on Thursday, December 4, 2014.

Quiet Title—CRCP 60(a).

Plaintiffs Reisbeck, LLCand Robert Jersin are the record owners of real property in Adams County (property). Reisbeck owns an undivided 85% interest and Jersin owns an undivided 15% interest in the property.

In 1947, defendant Arthur Levis obtained a right-of-way across the property for a “rail spur.” However, no rail spur was ever constructed on the property. To clear the record encumbrance, Reisbeck’s counsel commenced an action under CRCP 105 to quiet title to the property in Reisbeck and Jersin against any claims of Levis and all unknown persons claiming any interest in the property. Jersin was joined as an involuntary party plaintiff.

Defendants were served by publication, and no answers or responsive pleadings were filed. Reisbeck’s counsel moved for entry of default. The judgment form submitted named “Reisbeck, LLC” as plaintiff. However, Reisbeck, LLC does not exist; its proper name is Reisbeck Subdivision, LLC. The district court granted the motion and entered default judgment in plaintiffs’ favor. Following entry of judgment, Reisbeck’s counsel discovered the name error. He filed a motion under CRCP 60(a), seeking relief and asking the court to amend the judgment and correct the name. The court denied the request.

On appeal, plaintiffs argued it was an abuse of discretion to deny the request for relief. The Court of Appeals agreed. CRCP 60(a) is a safety valve allowing the district court to correct, at any time, an honestly mistaken judgment that does not represent the understanding and expectations of the court and the parties. Here, there was nothing in the record indicating that the error by counsel was anything other than an honest mistake. The corrected judgment would represent the parties’ expectation in pursuing the quiet title action and the court’s intention in issuing the judgment. No different or additional liability would be imposed on any existing defendant and no party previously not named would need to be added. The district court’s order was reversed and the case was remanded to amend the judgment.

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

Colorado Rules of Civil Procedure and Colorado Rules of Juvenile Procedure Amended

The Colorado Supreme Court announced Rule Change 2014(14), effective October 30, 2014, and 2014(15), effective November 1, 2014. Rule Change 2014(14) amends Rule 47, “Jurors,” of the Colorado Rules of Civil Procedure. Rule Change 2014(15) amends Rule 2.2, “Summons — Content and Service,” Rule 3, “Advisement,” and Rule 3.7, “Detention,” of the Colorado Rules of Juvenile Procedure, and it adds a new Rule 3.9, “Counsel.” The changes to the Rules of Juvenile Procedure coordinate with changes to the Colorado Revised Statutes pursuant to HB 14-1032.

C.R.C.P. 47(u), “Juror Questions,” was amended to clarify that juror questions will be reviewed with counsel for the parties outside the hearing of the jury, to permit jurors to ask follow up questions in writing, and to prohibit jurors from orally questioning any witness. The amendments specify that the court retains discretion to address juror questions or permit follow up questions. Click here for a redline of the changes to Rule 47.

The changes to the Rules of Juvenile Procedure are extensive. Rule 2.2 was amended to subdivide different types of juvenile proceedings and specify summons procedures for each type of proceeding. The changes to Rule 3 were relatively minor, adding language to clarify timing for the juvenile’s advisement and changing some wording. The changes to Rule 3.7 were much more extensive, detailing procedures for juvenile detention and court oversight of the detainer. New Rule 3.9, “Counsel,” deals with appointed counsel in juvenile delinquency proceedings, and includes provisions for appointment of counsel, waiver of counsel, and withdrawal of counsel. Click here for a redline of the changes to the Rules of Juvenile Procedure.

In addition to the rules changes, two Chief Justice Directives were amended to comply with HB 14-1032. The Colorado Supreme Court amended CJD 04-04 and added new CJD 14-01CJD 04-04 was amended to eliminate specified procedures related to the appointment of counsel in juvenile delinquency proceedings. CJD 14-01 was added to adopt new procedures for the appointment of defense counsel in juvenile delinquency proceedings. Both CJDs are effective November 1, 2014.

C.R.C.P. 26 and 121 Amended Regarding Privilege Claims in Discovery and Motions to Reconsider

The Colorado Supreme Court released Rule Change 2014(11) on Monday, September 22, 2014. Rule Change 2014(11) creates a new subparagraph (B) in C.R.C.P. 26(b)(5), which addresses claims of privilege for information inadvertently disclosed during discovery, as follows:

(B) If information produced in disclosures or discovery is subject to a claim of privilege or of protection as trial-preparation material, the party making the claim may notify any party that received the information of the claim and the basis for it. After being notified, a party must not review, use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and shall give notice to the party making the claim within 14 days if it contests the claim. If the claim is not contested within the 14-day period, or is timely contested but resolved in favor of the party claiming privilege or protection of trial-preparation material, then the receiving party must also promptly return, sequester, or destroy the specified information and any copies that the receiving party has. If the claim is contested, the party making the claim shall within 14 days after receiving such notice present the information to the court under seal for a determination of the claim, or the claim is waived. The producing party must preserve the information until the claim is resolved, and bears the burden of proving the basis of the claim and that the claim was not waived. All notices under this rule shall be in writing.

Rule Change 2014(11) changed C.R.C.P. 121, § 1-15, to add a new subparagraph 11:

11. Motions to Reconsider. Motions to reconsider interlocutory orders of the court, meaning motions to reconsider other than those governed by C.R.C.P. 59 or 60, are disfavored. A party moving to reconsider must show more than a disagreement with the court’s decision. Such a motion must allege a manifest error of fact or law that clearly mandates a different result or other circumstance resulting in manifest injustice. The motion shall be filed within 14 days from the date of the order, unless the party seeking reconsideration shows good cause for not filing within that time. Good cause for not filing within 14 days from the date of the order includes newly available material evidence and an intervening change in the governing legal standard. The court may deny the motion before receiving a responsive brief under paragraph 1(b) of this standard

The committee comment to Rule 121, § 1-15, was amended as well to clarify the limits of subparagraph 11.

Rule 411, “Appeals,” was amended to allow the clerk to certify records.

For the full text of the rule change, click here. For all of the Colorado Supreme Court’s rule changes, click here.

Colorado Court of Appeals: Wife’s Failure to Disclose Financial Records Not Fraud or Misconduct Under Rule 16.2(b)(2)

The Colorado Court of Appeals issued its opinion in In re Marriage of Roddy and Betherum on Thursday, July 31, 2014.

Modification of Child Support—Abuse of Discretion—Financial Disclosures—CRCP 16.2(e)(10)—CRCP 60(b)(2) and (5).

When the parties’ 2003 decree of dissolution was entered, the court adopted their stipulation that wife would be the primary residential parent for the parties’ minor child and husband would pay her $3,000 in monthly child support. Eight years later, husband moved to modify child support on the bases that his parenting time had increased and his income had decreased since the order. After a hearing, the district court increased husband’s child support obligation to $4,604 per month.

On appeal, husband contended that the district court erred in its child support calculation. Because husband’s appeal from the child support order was untimely, this part of husband’s appeal was dismissed.

Husband also argued that the district court abused its discretion when it denied his motion for post-trial relief after he established that wife had withheld financial information. The plain language of CRCP 16.2(e)(10) does not allow a court to re-determine a child support award. Further, although husband’s post-hearing evidence demonstrated that wife was “inconsistent” insofar as her finances were concerned, the court already made a finding at the child support hearing that wife’s testimony in that regard was “inconsistent” and “incredible.” Additionally, the parties did not dispute that their combined gross incomes exceed the uppermost guideline limits. Therefore, an exact income for wife was not required, because the court had discretion to deviate from the guidelines and enter an appropriate support order. As a result, the district court did not err by denying husband’s motion for relief.

Husband further argued that the court should have granted relief under CRCP 60(b)(5). Because husband alleged that wife either fraudulently failed to disclose or misrepresented her income, his motion fell squarely under CRCP 60(b)(2). In such cases, the residual provision of CRCP 60(b)(5) is not applicable. The appeal from the child support order was dismissed and the post-decree order was affirmed.

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

C.R.C.P. 42.1, Consolidated Multidistrict Litigation Rule, Changed by Supreme Court

On Monday, May 5, 2014, the Colorado Supreme Court issued Rule Change 2014(06), amending Rule 42.1 of the Colorado Rules of Civil Procedure. Rule 42.1, “Consolidated Multidistrict Litigation,” was amended to clarify the procedures for filing original procedures in consolidated matters, as shown by this redline:

(k)(2) Original pleadings regarding consolidated matters shall thereafter be filed with the clerk of the transferee court and copies filed with the clerk of the transferor court.

For a complete list of the Colorado Supreme Court’s rule changes, click here.

Comment Period Open for Proposed Changes to Rules of Professional Conduct and Rules of Civil Procedure

The Colorado Supreme Court has announced proposed changes to the Colorado Rules of Professional Conduct. The public comment period for proposed changes to Comment [2A] of Colo. RPC 8.4 and a proposed new Rule 8.6 is now open. Written comments should be submitted to Christopher Ryan, Clerk of the Supreme Court, no later than 5 p.m. on February 25, 2014. There will be a public hearing on these proposed changes on March 6, 2014, at 1:30 p.m. at the Colorado Supreme Court courtroom.

Proposed changes to the Colorado Rules of Civil Procedure were also announced. Changes to C.R.C.P. 54(d) and C.R.C.P. 121, § 1-22 are submitted for public comment. Comments should be submitted in writing to Christopher Ryan by 5 p.m. on April 15, 2014, and the public hearing on the proposed changes will be held on April 29, 2014, at 1:30 p.m. in the Colorado Supreme Court courtroom.

Additional changes to the Colorado Rules of Professional Conduct were also announced, concerning the repeal and readoption of Colo. RPC 1.15. Comments regarding this proposed change are due no later than 5 p.m. on Tuesday, May 20, 2014, and should be submitted in writing to Christopher Ryan. The public hearing regarding this change will be held on June 5, 2014, at 1:30 p.m. in the Colorado Supreme Court courtroom.

For more information on these proposed changes or for the address at which to submit written comments, click here.

Changes to Colorado Rules of Civil Procedure, Rules for Magistrates, and County Court Civil Procedure Announced

On Wednesday, January 8, 2014, the Colorado State Judicial Branch announced the final rules changes of 2013, Rule Change 2013(17) and Rule Change 2013(18), amended and adopted by the supreme court on December 31, 2013.

Rule Change 2013(17) amends § 1-26 of C.R.C.P. 121 and Rule 305.5 of the Colorado Rules of County Court Civil Procedure. The changes outline amended procedures for use of the state’s electronic filing system, ICCES, by pro hac vice or other out-of-state attorneys. The Comments to these rules have also been amended to reflect that ICCES is now the official e-filing system for Colorado.

Rule Change 2013(18) amends § 1-15 of C.R.C.P. 121 and Rule 7 of the Colorado Rules for Magistrates. The changes to C.R.C.P. 121 amend the time in which affidavits may be filed in support of motions. The changes to C.R.M. 7 specify that an order that effectively ends a case shall be subject to de novo review.

For the complete list of the Colorado Supreme Court’s rules changes, click here.

Colorado Court of Appeals: Appeal Untimely When Filed After Resolution of Case but Not Within 45 Days of C.R.C.P. 54(b) Certification

The Colorado Court of Appeals issued its opinion in Colorado Community Bank v. Hoffman on Thursday, November 7, 2013.

Judicial Dissolution—CRCP 54(b)—Final Judgment—Receiver—Abuse of Process—Civil Conspiracy.

This action arose from the judicial dissolution of certain companies in the course of a receivership proceeding. Defendants appealed from orders certified as final under CRCP 54(b) and from orders granting summary judgment to intervenors Victor Harshberger, Kenneth Adelberg, and Robert Williams on defendants’ counterclaims for abuse of process and civil conspiracy. The appeal was dismissed in part and affirmed in part.

Walter E. Hoffman was the president and chief executive officer of Oxford Resource & Management (Oxford). Oxford, Adelberg, and Williams owned equity membership interests in KDGC Holdings, LLC (Holdings). Holdings was the parent of three operating subsidiaries, which served as the ownership structure for three golf courses. Hoffman served as general manager of all of the entities owned by Holdings. Plaintiff Colorado Community Bank (Bank) made several loans to finance Holdings’ acquisitions of two of the golf courses. Bank initiated this action after Hoffman and the subsidiary defaulted on this loan, and intervenors joined to appoint a receiver to remove Hoffman from control.

After the assets of Holdings and the subsidiaries were sold, the intervenors moved to certify the sale orders as final under CRCP 54(b). Over Hoffman’s objection, the district court granted the intervenors’ motion. Defendants contended that the district court erred in numerous ways when it issued the sale orders. The sale orders disposed of an “entire claim for relief” for purposes of CRCP 54(b) certification. Because defendants did not appeal this order within forty-five days of the certification, the Court of Appeals lacked jurisdiction over this issue and that portion of the appeal was dismissed.

Defendants also contended that the district court erred in granting summary judgment to the intervenors on defendants’ counterclaims for abuse of process and civil conspiracy. Although the evidence might have proved that the intervenors had an ulterior motive in bringing the receivership action, it did not establish the requisite improper use of process element. Therefore, defendant’s abuse of process claim failed. Because defendants’ conspiracy claims were based on the alleged underlying wrong of abuse of process, these claims also failed.

Summary and full case available here.