August 16, 2017

Colorado Court of Appeals: District Court Lacked Authority to Award Fees for Unjustified Claim in Foreign Court

The Colorado Court of Appeals issued its opinion in Bruce v. Roberts on Thursday, December 15, 2016.

Trust—Frivolous Lawsuit—Attorney Fees—Foreign Court—Work Product.

James Roberts assisted his mother Della Roberts with forming the Della I. Roberts Trust in Colorado, where she lived. Upon Della’s death eight days later, James, the designated trustee, was supposed to divide the trust’s assets into two equal shares—one to benefit James and his wife, Mary Sue Roberts, and the second to benefit Della’s grandchildren, James and Mary Sue’s children. James did not properly administer the trust, but apparently, no one expressed concern about his administration until after he died.

After James’s death, Mary Sue assumed the role of trustee pursuant to the trust’s provisions. The grandchildren, who were ultimately appointed as trustees (trustees) objected and promptly removed Mary Sue as trustee. Although the Colorado court assumed jurisdiction, Mary Sue filed a separate case in West Virginia, where she lived, which was later dismissed for lack of jurisdiction. Bruce represented Mary Sue in both the Colorado and West Virginia matters. The district court in Colorado accepted a final accounting of the trust filed by trustees, ordered all assets remaining in the trust be distributed to the grandchildren in equal shares, and found that the trust could recover administrative costs and attorney fees incurred in litigating both the Colorado and West Virginia cases, pursuant to CRS § 13-17-102, from Bruce and Mary Sue. It also assessed $54,565 in fees against Bruce for the West Virginia action.

Bruce appealed the district court’s order only as it pertains to attorney fees awarded for the West Virginia action. He contended that CRS § 13-17-102 did not authorize the court to award attorney fees incurred solely in the West Virginia case. CRS §13-17-102 does not authorize a Colorado court to award attorney fees incurred in an action in a foreign court, unless work product created for use in the foreign court is also used in the Colorado court. Neither the district court’s order nor the record clarifies whether the trustees used work product created for the West Virginia action in the Colorado proceedings.

The portion of the order awarding $54,565 for attorney fees incurred in the West Virginia action was vacated, and the case was remanded for the district court to determine whether the trustees used work product created for the West Virginia action in the Colorado proceedings.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Foreign Judgment Must Comport with United States Law Prior to Enforcement

The Colorado Court of Appeals issued its opinion in In re Marriage of Lohman on Thursday, September 24, 2015.

Dissolution of Marriage—Foreign Judgment—Personal Jurisdiction—Uniform Interstate Family Support Act—Due Process—Support Order.

Husband and wife (a native of England) married in Colorado in 1997. Their child was born the following year. Wife moved back to England with the child in 2008 after the parties’ separation. Husband remained in Colorado. Wife petitioned for divorce in England and served husband in Colorado. Husband did not respond or participate in the English court, which entered judgment against husband for £638,000 (approximately $1,010,911). Wife then filed a notice of registration of foreign support order with the Grand County District Court, which sustained the notice of registration and ordered enforcement of the English judgment.

On appeal, husband contended that for purposes of enforcement by a Colorado court, the English court lacked personal jurisdiction over him and, therefore, the English judgment cannot constitutionally be recognized. Pursuant to the Uniform Interstate Family Support Act, the district court was required to determine not only whether the English court had personal jurisdiction over husband under the laws of England, but also whether enforcement of the English court’s order by a U.S. court was permissible under the Due Process Clause of the U.S. Constitution. Accordingly, the district court was required to adjudicate whether husband had sufficient minimum contacts with England to render constitutional (under U.S. law) the assertion of jurisdiction over him by the English court. Because the district court did not do so, its orders were reversed.

Husband also contended that the district court erred in determining that the portion of the English judgment awarding wife £423,000 to purchase a home constituted support rather than a transfer or award of property. The court’s finding that the English judgment represented a support order, rather than a property equalization payment, was not clearly erroneous and may not be overturned.

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

Colorado Court of Appeals: Foreign-Country Judgment Improperly Served so No Recognition Required

The Colorado Court of Appeals issued its opinion in Ledroit Law v. Kim on Thursday, August 13, 2015.

Ontario Judgment Enforceability—Uniform Enforcement of Foreign Judgments Act—Uniform Foreign-Country Money Judgments Recognition Act.

Ledroit Law, a Canadian law firm, filed this action seeking recognition of an Ontario court’s assessment of legal fees against Snell & Wilmer, L.L.P., an Arizona law firm with offices in Colorado, and Eugene Kim, a former associate at Snell & Wilmer. In 2011 and 2012, Snell & Wilmer represented two related Ontario entities in a civil suit they filed against an American corporation in federal court in Colorado. Kim was a first-year associate who worked on the case. Ledroit represented at least one of the Ontario entities in related proceedings in Canada.

Defendants stated that the principals of the Ontario entities instructed Snell & Wilmer to have Ledroit serve subpoenas duces tecumin Ontario related to the federal suit in Colorado. Kim communicated with Ledroit by telephone and e-mail to coordinate service. In March 2012, Ledroit sent Snell & Wilmer a bill for legal services of over $15,000 Canadian for their attempts to serve the subpoenas. There was no retainer agreement, and Snell & Wilmer stated that the Ontario entities were responsible for the bill.

In September 2012, Ledroit filed an action in the Ontario Superior Court of Justice to recover the legal fees. A “Notice of Appointment for Assessment of Costs” was sent by regular mail to Kim’s office in Colorado. The Ontario court issued an assessment in the amount of $15,829.99 Canadian against Kim and Snell & Wilmer following their non-appearance.

Ledroit filed this action in district court seeking enforcement of the assessment in Colorado under the Uniform Enforcement of Foreign Judgments Act (Enforcement Act). The district court entered an order domesticating the assessment under the Enforcement Act.

Defendants moved to vacate the order on the basis that the Enforcement Act only applies to judgments entered by sister states within the United States and that the Uniform Foreign-Country Money Judgments Recognition Act (Recognition Act) governs the recognition of foreign-country money judgments. The district court vacated its order and ultimately recognized the Ontario assessment under both the Recognition Act and common law principles of comity.

On appeal, defendants argued it was error to recognize the Ontario judgment under the Recognition Act because the Ontario court lacked personal jurisdiction over them. The Court of Appeals agreed. Under the Recognition Act, CRS § 13-62-104(2)(b), a Colorado court “may not recognize a foreign-country judgment if . . . [t]he foreign court did not have personal jurisdiction over the defendant.”

The Court found that defendants were not validly served with process by the attempt at service by regular mail. Service under Ontario law requires either service through the central authority in the contracting state or “in a manner that is permitted by the [Hague] Convention and that would be permitted by these rules if the document were being served in Ontario.” Because service by mail was not proper under the Ontario rules, the Ontario court lacked personal jurisdiction over defendants when it issued the assessment.

The Court also agreed with defendants’ contention that the district court erred in relying on principles of comity. The Recognition Act requires a Colorado court to deny recognition if the foreign court lacked personal jurisdiction. Here, where the Recognition Act applied, the Colorado court was required to deny recognition of the assessment. The order was reversed.

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