April 19, 2018

CJD 85-22 Amended, Modifying Rate of Interest on Judgments that are Appealed

On Thursday, January 18, 2018, the Colorado Supreme Court issued modifications to Chief Justice Directive 85-22, “Rate of Interest on Judgments Which are Appealed.” The changes to the CJD reflect the Secretary of State’s certification that interest on monetary judgments that are appealed is 4 percent. The changes are in accordance with C.R.S. § 5-12-106(2)(a) and 13-21-101(3). For all of the Colorado Supreme Court’s Chief Justice Directives, click here.

HB 17-1162: Repealing Drivers’ License Penalties for Unpaid Court Judgment

On February 6, 2017, Rep. Matt Gray introduced HB 17-1162, “Concerning Action that Can be Taken Against an Individual Based on the Individual’s Failure to Pay for a Traffic Violation.”

Under current law, an individual who is cited for certain traffic infractions must either pay the penalty assessment or appear in court for a hearing. If the individual neither pays the infraction nor appears for a hearing, the court must issue a judgment against the individual. An individual who has an outstanding judgment:

  • May have their driver’s license canceled;
  • May not receive a new driver’s license; and
  • May not renew a current driver’s license.

The bill repeals these penalties and provides courts with the option of withholding a driver’s state income tax refund in order to satisfy the outstanding judgment.

The bill was introduced in the House and assigned to the Judiciary Committee.

Tenth Circuit: Issue Preclusion Does Not Apply in Bankruptcy Court to a Final Determination in District Court Where Party Waived Issue

The Tenth Circuit Court of Appeals published its opinion in In re Zwanziger on Tuesday, January 28, 2014.

James Hamilton and Richard Kus sued Wolfgang Zwanziger for fraud and violations of Oklahoma’s wage laws. A jury found Zwanziger liable and awarded Hamilton and Kus a combined sum of $573,000. Zwanziger appealed.

On appeal, the Tenth Circuit affirmed the jury’s verdict on liability but reversed on damages. Hamilton and Kus had failed to include damages for emotional distress in their final pretrial order, even though they listed such damages in their complaint. Thus, the Tenth Circuit concluded that the district court erred in instructing the jury to consider emotional distress damages. So the Tenth Circuit remanded to the district court to recalculate damages.

But before the district court could recalculate damages, Zwanziger declared bankruptcy. Kus and William Clark, as trustee of Hamilton’s estate, (since Hamilton had also declared bankruptcy), then filed a complaint in bankruptcy court to determine how much of Zwanziger’s liability was not dischargeable. After reviewing both sides’ damages case, the bankruptcy court awarded Clark and Kus a combined sum of $181,300 in nondischargeable damages, $50,000 of which was for emotional distress. Zwanziger appealed to the Bankruptcy Appellate Panel (BAP), arguing that res judicata precluded the bankruptcy court from including damages for emotional distress. The BAP reversed. Clark and Kus appealed the BAP’s decision.

In this appeal, the Tenth Circuit considered a novel question: Does issue preclusion apply in bankruptcy court to a final determination in district court that a party waived an issue? The court concluded issue preclusion does not apply to the waiver finding here. In this case, issue preclusion does not apply because a finding that an issue of fact or law is waived is not a decision on the merits. Waiver as a general matter is a procedural determination that governs only the case in which it is made.

Therefore, the court REVERSED the judgment of the Bankruptcy Appellate Panel and REMANDED for the bankruptcy court to REINSTATE its order.