September 30, 2016

Colorado Supreme Court: Test Enunciated to Determine Personal Jurisdiction for Non-resident Company Based on In-state Contacts

The Colorado Supreme Court issued its opinion in Griffith v. SSC Pueblo Belmont Operating Co. on Monday, September 26, 2016.

Constitutional Law—Personal Jurisdiction—Corporations and Business Organizations—Related or Affiliated Entities.

The Colorado Supreme Court held that, to exercise personal jurisdiction over a nonresident parent company based on the in-state contacts of its resident subsidiary, a trial court shall perform the following analysis: First, the trial court shall determine whether it may pierce the corporate veil and impute the resident subsidiary’s contacts to the nonresident parent company. If so, the court shall analyze all of the nonresident company’s contacts with Colorado, including the resident subsidiary’s contacts, to determine whether exercising either general or specific personal jurisdiction over the company comports with due process. Conversely, if the trial court concludes that it may not pierce the corporate veil, it shall treat each entity separately and analyze only the contacts that each parent company has with the state when performing the personal jurisdiction analysis. Here, because the trial court did not perform this two-step analysis when it determined that petitioners were subject to personal jurisdiction in Colorado, the court made its rule to show cause absolute.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Newly Announced Griffith Test Applied to Determine Personal Jurisdiction

The Colorado Supreme Court issued its opinion in Meeks v. SSC Colorado Springs Colonial Columns Operating Co. on Monday, September 26, 2017.

Constitutional Law—Personal Jurisdiction—Corporations and Business Organizations—Related or Affiliated Entities.

The Supreme Court holds that the trial court must apply the test announced in Griffith v. SSC Pueblo Belmont Operating Co., 2016 CO 60, __ P.3d __, to determine whether nonresident parent companies may be haled into court in Colorado based on the actions of their resident subsidiaries. It also held that, although an evidentiary hearing is not always required for a ruling on a CRCP 12(b)(2) motion, this case requires a hearing to fully address this case’s complex record and to apply the fact-intensive Griffith test.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: City Waived Immunity by Failing to Maintain Road

The Colorado Court of Appeals issued its opinion in Dennis v. City & County of Denver on Thursday, September 22, 2016.

Colorado Governmental Immunity Act—Deteriorated Roadway—Unreasonable Risk to Health or Safety of Public.

Heyboer sustained injuries as a passenger on a motorcycle that could not timely brake when a car unexpectedly turned left in front of it. Dennis, as conservator and guardian for Heyboer, brought this negligence and premises liability action against the City and County of Denver (City). The complaint alleged that (1) the City had a duty to maintain the roadway free from dangerous conditions that physically interfered with the movement of traffic, (2) it breached that duty by allowing the roadway to fall into disrepair, (3) it knew of the deteriorated state of the road from prior complaints, and (4) Heyboer’s injuries resulted from the City’s breach of its duty of care.

The City moved to dismiss under C.R.C.P. 12(b)(1), asserting immunity and denying the allegations. The district court conducted a hearing and granted the City’s motion.

On appeal, Heyboer argued that she satisfied her burden of proving an unreasonable risk to the health or safety of the public; she contended that the court erred in finding no evidence of an unreasonable risk and, by doing so, erred as a matter of law in refusing to find a waiver of immunity. Both the record and the court’s factual findings demonstrated that the City failed to maintain the road as required by C.R.S. § 24-10-103(2.5), thereby creating an unreasonable risk to the health or safety of the public. The court of appeals concluded that the district court clearly erred in its factual finding that the record contained no evidence of an unreasonable risk to the health and safety of the public. This also leads to the conclusion that it was error to find, as a matter of law, that there was no waiver of immunity under the Colorado Governmental Immunity Act.

The judgment was reversed and the case was remanded for reinstatement of the complaint.

Summary provided courtesy of The Colorado Lawyer.

Ask the Experts: Why Do Lawyers Get Sued?

EthicsThe ABA Standing Committee on Lawyers’ Professional Liability compiled a comprehensive Profile of Legal Malpractice Claims, evaluating claims from 2008 through 2011. According to the Committee’s report, real estate lawyers held the dubious honor of having the highest percentage of malpractice claims, followed by family law, trust and estate, and personal injury law. Forty-five percent of all malpractice claims were filed due to substantive errors, like failure to know or properly apply the law, discovery errors, procedural choice errors, missing deadlines, and conflicts of interest. Administrative errors counted for the second-highest reason for claims, including procrastination in performance or follow-up (read: not returning phone calls), lost files, calendaring errors, and other clerical errors. Together, nearly three-quarters of all legal malpractice claims filed during the Committee’s study period were due to errors. That is a frightening statistic.

One way to avoid becoming the subject of a malpractice claim is to choose clients carefully. Everyone has experienced “problem” clients—clients who won’t leave you alone, who lack the ability to pay, and who seem to criticize your every move. Attorney Sally Field (no relation to the actress) compiled a list of the top ten warning signs for problem clients:

  1. Clients who want to change lawyers in the middle of the case;
  2. Clients who trash the lawyer they just left;
  3. Clients who are reluctant to answer basic questions;
  4. Clients who are overly opinionated about the law without justification;
  5. Clients who have unreasonable expectations;
  6. Clients who micromanage everything;
  7. Clients who won’t let you end an excessively long initial client interview;
  8. Clients who want to exact revenge or punishment through the legal system;
  9. Clients who make negative comments about judges, courts, and the judicial system; and
  10. Companies with unusually high turnover of key staff or unusual corporate structures.

Bottom line? Many potential malpractice claims can be avoided by refusing to represent those clients who seem like trouble from the outset. Avoiding mistakes is helpful, too.

Sally Field, along with John Palmeri, will discuss common reasons for lawyer malpractice lawsuits in a panel discussion moderated by Heather Kelly. Join us for this interesting and informative breakfast CLE on Tuesday, September 27, 2016. Call (303) 860-0608 to register, or click the links below.

 

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CLE Program: Why Lawyers Get Sued

This CLE presentation will occur on September 27, 2016, at the CBA-CLE offices (1900 Grant Street, Third Floor), from 8:30 a.m. to 9:30 a.m. Register for the live program here or register for the webcast here. You may also call (303) 860-0608 to register.

Can’t make the live program? Order the homestudy here: MP3Video OnDemand.

Event Data Recorders, Drones, and Evidence: What You Need to Know

DroneThe Denver District Attorney’s monthly newsletter for September 2016 warned consumers about connecting their cell phones to the computers in rental cars. The newsletter warned, “Once your phone is connected to the car, it can access all your phone’s information such as GPS searches, home address, phone calls, contacts, etc. The information is stored indefinitely, waiting for the next person to connect to the car, and to your private information. The risk is obvious.”

The risk to rental car drivers concerns the car’s Event Data Recorder, or EDR. However, EDRs in cars can be useful for more than accessing another driver’s playlist. EDRs can record when and how often drivers use certain features in cars, such as the hand brake or the turn signal. The raw data from a vehicle’s EDR can be enormously useful in litigation. C.R.S. § 12-6-402 governs the use of EDR evidence in litigation, providing

EDR data is the personal information of the vehicle’s owner and the data shall not be retrieved by a person who is not the owner unless:

  1. The owner or the owner’s agent has consented to the retrieval in the last 30 days;
  2. The data is retrieved by a technician performing service or repair;
  3. The data is subject to discovery pursuant to the rules of civil procedure in an auto accident case;
  4. A court or administrative agency with jurisdiction orders the data be retrieved;
  5. The EDR is installed after the manufacturer or dealer sells the vehicle; or
  6. A peace officer retrieves the data pursuant to a court order as part of an investigation.

Another relatively new source of litigation evidence comes from drones. Drones, or unmanned aerial systems, collect video evidence from their on-board cameras. The use of drones is fraught with controversy, as cases collect regarding people shooting drones in the airspace above their property, people expressing surveillance concerns regarding drones, and more. The Federal Aviation Administration has promulgated rules regarding the use of drones, but more will be developed as these unmanned aircraft gain popularity.

Savvy lawyers need to know about the complexities of digital evidence preservation and the ethical considerations of working with technology and the experts who gather the data. Join Fay Engineering and Chad Lieberman, Esq. for an exciting presentation about the cutting edge technology of drones, dash cams and black boxes. Digital information is being gathered by our vehicles, our phones, and in nearly every aspect of our lives. The technology of aerial photography continues to rapidly change. The presentation covers the latest advances in evidence collection by drones and commercial services. Register online here, or by clicking the links below.

 

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CLE Program: New Technology for Evidence Preservation: Drones, Dashcams, Black Boxes and More

This CLE presentation will occur on September 26, 2016, at the CBA-CLE offices (1900 Grant Street, Third Floor), from 12 p.m. to 1:30 p.m. Register for the live program here or register for the webcast here. You may also call (303) 860-0608 to register.

Can’t make the live program? Order the homestudy here: MP3Video OnDemand.

Tenth Circuit: Jurisdictional Time Limit Not Tolled When Rule 4(a)(4)(A) Requirements Not Met

The Tenth Circuit Court of Appeals issued its opinion in Williams v. Akers on Tuesday, September 20, 2016.

George Rouse hanged himself shortly after being booked into the Grady County Law Enforcement Center in Oklahoma. His mother, Regina Williams, brought suit under 42 U.S.C. § 1983, arguing the defendants knew he was suicidal but failed to inform jail staff of that fact. Defendants asserted qualified immunity and moved to dismiss Williams’ § 1983 claim. The district court denied the motion on October 8, 2014, concluding Williams’ complaint adequately alleged facts showing defendants’ violated Rouse’s clearly established Fourth Amendment rights.

Eight months later, defendants filed a motion to reconsider the district court’s denial of their motion to dismiss. The district court denied the motion on July 31, 2o15. Defendants then filed an appeal of the October 2014 motion with the Tenth Circuit. Noting the jurisdictional defect, the Tenth Circuit requested additional briefing from the parties on August 24, 2015. Defendants argued that because their notice of appeal was filed only four days after the district court denied their motion to reconsider, it was timely filed as to the October 2014 motion to dismiss.

The Tenth Circuit disagreed. The Tenth Circuit noted that Fed. R. App. P. 4(a)(4)(A)(vi) allows a party to enlarge the 30-day time limit for filing an appeal if that party timely files a Rule 60(b) motion, in which case the time limit is tolled until 30 days after the entry of the order disposing of the motion for reconsideration. The Tenth Circuit remarked that it appears that defendants believed they could enlarge the time for filing their notice of appeal from the October 2014 order by filing a motion for reconsideration. However, because the motion for reconsideration was not filed within Rule 4(a)(4)(A)’s mandated 30-day time limit, the notice of appeal was not timely.

The Tenth Circuit also addressed the defendants’ attempt to change the focus of the appeal after the Tenth Circuit requested additional briefing on jurisdiction. Although the Tenth Circuit could look to the notice of appeal, the docketing statement, and the request for the district court to stay proceedings as evidence of defendants’ intent, the Tenth Circuit found only an intent to appeal the October 2014 order, not the July 2015 order. Due to the untimeliness of the appeal from the October 2014 order, the Tenth Circuit lacked jurisdiction to consider the defendants’ arguments.

The Tenth Circuit dismissed the appeal for lack of jurisdiction.

Colorado Court of Appeals: Arbitration Agreement Must Strictly Comply with Statute

The Colorado Court of Appeals issued its opinion in Fischer v. Colorow Health Care, LLC on Thursday, September 8, 2016.

Arbitration Agreement—Motion to Compel—C.R.S. § 13-64-403—Strict Compliance.

Colorow Health Care, LLC, and its management company, QP Health Care Services, LLC, operate a long-term healthcare facility. When Fischer (the decedent) was admitted to the facility, her daughter, acting under a power of attorney, signed an arbitration agreement. The decedent passed away while a resident of the facility. Plaintiffs Amy and Roger Fischer pleaded tort claims arising from the decedent’s death. Defendants appealed the trial court’s order denying their motions to compel arbitration.

Defendants then filed this interlocutory appeal as of right under C.R.S. § 13-22-228(1)(a), contesting the trial court’s order denying their motions to compel arbitration. C.R.S. § 13-64-403 sets out specific language that an arbitration agreement must include to comply with the Health Care Availability Act. Defendants contended that the statute requires only substantial compliance with its provisions; plaintiffs argued that the arbitration agreement had to strictly comply, and because it admittedly did not, it was invalid. The court of appeals concluded that C.R.S. § 13-64-403 calls for strict compliance, and based on the complete lack of bold-faced type in the agreement, the court agreed that the agreement was invalid.  The court further concluded that this neither creates an absurd result nor violates Colorado’s public policy favoring arbitration.

The order was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Trial Court Did Not Err in Considering Unredacted Invoices on Remand

The Colorado Court of Appeals issued its opinion in Thompson v. United Securities Alliance, Inc. on Thursday, September 8, 2016.

Judgment—Garnishment—Mandate—Prejudgment Interest—Post-judgment Interest.

Plaintiffs obtained a judgment against United Securities Alliance, Inc. (United), and then instituted garnishment proceedings against Catlin Insurance Company (UK) Ltd. (Catlin), United’s insurer. The district court deducted from the policy limit the amount of attorney fees incurred by Catlin in defending the underlying arbitrations against United, and entered judgment for plaintiffs for the remainder of the policy. The court denied plaintiffs’ requests for pre- and post-judgment interest.

On appeal, plaintiffs contended that the district court acted beyond the scope of the court of appeals’ mandate because, by considering the unredacted attorney fees invoices submitted after the mandate, the district court expressly disregarded the mandate’s instruction to review “the existing record.” Given the unusual procedural posture of this case and the largely “indiscernible” unredacted invoices, the language to review “the existing record” was permissive rather than restrictive, and the remand order meant that the district court could rely exclusively on the existing record to calculate reasonable fees, not that it had to. Accordingly, the district court did not err in considering the unredacted invoices.

Plaintiffs next contended that the district court erred in declining to award prejudgment interest pursuant to C.R.S. § 5-12-102(1). This statute, however, governs contract and property damage cases. Because garnishment actions do not result in damages to the garnishor, prejudgment interest is not appropriate.

Plaintiffs also argued that an award of post-judgment interest was mandatory under C.R.S. § 5-12-106(1)(b) and the district court erred by denying their request. Because the court of appeals’ mandate did not direct the district court to award post-judgment interest and plaintiffs did not request that the court amend its mandate, the district court correctly held that it lacked jurisdiction to make such an award.

The judgment was affirmed.

Summary available courtesy of The Colorado Lawyer.

Colorado Supreme Court: Officer Entitled to Bring Interlocutory Appeal Regarding Whether Sovereign Immunity Applied

The Colorado Supreme Court issued its opinion in Martinez v. Estate of Bleck on Monday, September 12, 2016.

Colorado Governmental Immunity Act—Interlocutory Appeal—Sovereign Immunity—Willful and Wanton Conduct.

Bleck was injured when Officer Jeffrey Martinez’s firearm  discharged during an attempt to subdue Bleck. Bleck filed a state law battery claim against Martinez, and Martinez filed a motion to dismiss, claiming immunity under the Colorado Governmental Immunity Act (CGIA). The trial court found that Bleck had adequately pleaded willful and wanton conduct by Martinez and thus denied Martinez’s motion. Martinez then filed an interlocutory appeal with the Court of Appeals. The Court of Appeals held that it lacked jurisdiction to hear the appeal because Martinez was only entitled to qualified immunity, which is not appealable on an interlocutory basis, not sovereign immunity, which is. The Supreme Court reversed and concluded that whether a public employee’s conduct is willful and wanton under the CGIA implicates sovereign immunity. Thus, the plain language of the CGIA affords Martinez a right to an interlocutory appeal. The Court further held that the trial court erred in (1) not deciding the issue of whether Martinez’s conduct was willful and wanton, and (2) using a negligence standard to define willful and wanton. Accordingly, the Court remanded the case for further proceedings consistent with this opinion.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Corporate Defendant Not “Essentially At Home” in Colorado, Therefore Jurisdiction Did Not Attach

The Colorado Supreme Court issued its opinion in Magill v. Ford Motor Co. on Monday, September 12, 2016.

Constitutional Law—Personal Jurisdiction—General Jurisdiction—Corporations and Business Organizations—Related or Affiliated Entities.

The Supreme Court issued a rule to show cause to review the trial court’s  conclusion that defendant Ford Motor Company (Ford) is subject to general personal  jurisdiction in Colorado and that venue was proper in Denver County. The Court  concluded that, under Daimler A.G. v. Bauman, 134 S. Ct. 746 (2014), the record does not support a finding that Ford is “essentially at home” in Colorado. Therefore, Ford is not subject to general personal jurisdiction in Colorado. Because the trial court did not  determine whether Ford was subject to specific jurisdiction, the Court did not reach that issue. The Court also held that maintaining a registered agent in the state does not convert a foreign corporation to a resident. Because none of the parties reside in Denver and the accident did not occur there, venue was not appropriate in Denver County.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Insurer’s Definition of “Resident Relative” Void as Against Public Policy

The Colorado Court of Appeals issued its opinion in Grippin v. State Farm Mutual Automobile Insurance Co. on Thursday, September 8, 2016.

Shane Grippin was seriously injured when he was hit by a truck while riding his motorcycle. After collecting the policy limits on the tortfeasor’s insurance and his motorcycle insurance, Grippin sought underinsured motorist benefits from State Farm pursuant to his grandparents’ four policies on which he was named as an “other household driver.” Although Grippin owned a home in Colorado Springs, he and his family resided approximately one week per month with his grandparents.

State Farm moved for summary judgment on the grounds that because Grippin did not reside primarily with his grandparents, he was not a “resident relative” as contemplated by the policies. Grippin responded that State Farm’s definition of “resident relative” was void as against public policy because the qualifier “primarily” diluted the statutory definition of resident relative. He alternatively argued the contracts were ambiguous because he was listed as an “other household driver” and therefore had a reasonable expectation of coverage. The trial court granted summary judgment in favor of State Farm, and Grippin appealed.

On appeal, the Colorado Court of Appeals evaluated Colorado’s statutory mandate of uninsured/underinsured motorist (UM/UIM) coverage and noted that insurance policy provisions that attempt to dilute, condition, or limit statutorily mandated coverage are void and unenforceable. The court of appeals evaluated the definition of resident relative under C.R.S. § 10-4-601(13) and found no qualifying language as to the insured’s primary residence. The court of appeals agreed with Grippin that a person can have multiple residences under Colorado law and the statute’s plain language does not restrict the definition of “resident relative” to a single, “primary” residence. State Farm argued that Grippin’s reading would render some statutory language superfluous, but the court of appeals disagreed, finding the statutory definition cohesive.

The court of appeals disagreed with Grippin’s alternative contention that the contracts were ambiguous, since the policies at issue unambiguously failed to list Grippin as a covered insured. The court also determined that Grippin could not rely on the doctrine of reasonable expectations because that doctrine would only apply after coverage was determined.

The court of appeals reversed the trial court’s grant of summary judgment and remanded for further proceedings.

Tenth Circuit: Attorney Fee Award Appropriate Where Oil and Gas Well Sustained Physical Damage

The Tenth Circuit Court of Appeals issued its opinion in Sundance Energy Oklahoma, LLC v. Dan D. Drilling Corp. on Friday, September 2, 2016.

Sundance contracted with Dan D. to drill several oil and gas wells, and used a standard International Association of Drilling Contractors (IADC) form for each individual well. Dan D. was unable to drill several of the wells because it could not acquire permits, so Sundance asked Dan D. to drill a different group of wells instead, including the Rother well, under the supervision of Tres Management. Although Dan D. did not have a contract, it began drilling the Rother well in December 2012 under the supervision of a Tres company man. Days later, Dan D.’s drill pipe became stuck in the hole. After several failed attempts to remove the pipe, the company man instructed the Dan D. employees to stop pulling on the pipe. A driller ignored the instructions and continued pulling on the pipe, causing the drilling line to break and throw debris, killing the driller. A medical examiner later determined the driller had substantial amounts of methamphetamine in his blood at the time of his death.

A subsequent OSHA investigation suspended all drilling at the Rother well, concluding that the drilling failure resulted from progressive fatigue on the drill line. OSHA issued a citation to Dan D. for failing to inspect and properly maintain the drill line. After the OSHA investigation concluded, Sundance attempted to fish out the stuck drill pipe, but the wellbore had deteriorated and the well was ultimately plugged and abandoned as a total loss.

Sundance sued Dan D. for damages, asserting that Dan D.’s negligence, gross negligence, and breach of implied contract to drill the well in a workmanlike manner resulted in the loss of the hole. Dan D. filed several motions in limine prior to trial, including objecting to the admission of the OSHA narratives and the medical examiner’s toxicology report. The district court denied the motion to suppress the toxicology report and partially denied the motion to suppress the OSHA reports, allowing only portions of the documents to be used. At trial, Sundance’s expert witness testified that Dan D.’s failure to log and track the ton miles of the drill line was “unheard of” in the industry, and that Dan D. should have slipped and cut the drill line to prevent the accident. Sundance relied on Dan D.’s gross negligence caused the line failure and the ultimate loss of the hole. Dan D. disagreed, arguing the fault should lie with Tres and the company man. Dan D. also argued that the IADC contract’s exculpatory provisions state that Sundance was liable for any loss or damage to the hole. Dan D. also asked the district court to instruct the jury that it should impute negligence to Tres, but the district court declined to do so. The district court instead instructed the jury that if it did not find Dan D. was grossly negligent, it should not consider whether an implied contract between the parties incorporated the IADC contract’s exculpatory provisions.

The jury returned a verdict for Sundance, finding Dan D. was grossly negligent and breached an implied contract to drill the well in a workmanlike manner. The jury attributed 75% of the loss to Dan D.’s negligence and 25% to Tres’ negligence, awarding Sundance $1.2 million in damages. Dan D. moved for a new trial under F.R.C.P. 59(a). The district court denied the motion and Dan D. appealed that order. Sundance then filed a motion for attorney fees, which the district court granted. Dan D. also appealed the attorney fee award. The appeals were consolidated.

Dan D. first argued the district court erred in instructing the jury that it need not consider whether the implied contract included the allocation of risk provisions if it found Dan D. grossly negligent, and refusing to impute Tres’ negligence to Sundance. The Tenth Circuit analyzed Dan D.’s claims for abuse of discretion and found none. The district court based its instruction regarding gross negligence on an Oklahoma Supreme Court case where a federal district court certified a question to the Oklahoma Supreme Court regarding whether an exculpatory provision was valid and enforceable. The Oklahoma Supreme Court ruled it was not enforceable in cases involving, among other things, gross negligence. The Tenth Circuit approved of the district court’s reliance on this case and found no abuse of discretion.

Dan D. also argued the district court should have granted a new trial based on its refusal to give Dan D.’s proposed instructions on whether Sundance owed Dan D. a non-delegable duty. The Tenth Circuit found that even if it agreed with Dan D. that the district court erred by not giving the proposed instruction, the error did not prejudice Dan D. because the jury’s verdict for Sundance on the breach of implied contract claim independently supported the damages award. Accordingly, any imputation of negligence would not have affected the breach of contract award.

The Tenth Circuit also found no error in the district court’s admission of the toxicology report or OSHA narratives. Because Dan D. did not object to the admission of any other evidence, and other evidence showed Dan D.’s failures, Dan D. could not show prejudice by the admission of the toxicology report or OSHA narratives.

Finally, the Tenth Circuit addressed Dan D.’s challenge to the attorney fee award. The Tenth Circuit evaluated Okla. Stat. tit. 12, § 940(A), which provides for attorney fees to the prevailing party in any action related to the negligent or willful injury to property, and found the statute applicable in the instant action. The Tenth Circuit noted the physical deterioration of the Rother well during the 12-day OSHA investigation was precisely the type of injury contemplated under § 940(A). Because Sundance prevailed in the action regarding physical injury to a well, the attorney fee award was appropriate.

The Tenth Circuit affirmed the district court.