May 24, 2018

Colorado Court of Appeals: C.R.C.P. 4(m) Does Not Require Dismissal if Defendants Not Served 63 Days Prior to Filing of Complaint

The Colorado Court of Appeals issued its opinion in Curry v. Zag Built, LLC on Thursday, May 3, 2018.

Construction Defect Action Reform Act—C.R.C.P. 4(m)—Service—Notice—Notice of Claim—Statute of Limitations.

Defendants Zag Built LLC and its owner, Zagrzebski, (collectively, Zag Built) built a house for the Currys. Shortly after the Currys moved into the house in July 2013, they noticed signs of damage, such as cracks in the drywall and sagging doors. In late-June 2015, the Currys filed a complaint naming Zag Built (among others) as defendants and citing the applicability of the Construction Defect Action Reform Act’s (the Act) notice of claim process, C.R.S. § 13-20-803.5. After filing a status report and two updates, the Currys filed an amended complaint in mid-May 2016. In early July 2017, Zag Built filed a motion for summary judgment, contending that the trial court should dismiss the case. The trial court denied the motion. Zag Built then filed a C.A.R. 4.2 motion for interlocutory review.

On appeal, Zag Built asserted that pursuant to C.R.C.P. 4(m) the trial court erred when it did not dismiss the case when the Currys had not served it within 63 days of the filing of the original complaint. C.R.C.P. 4(m) does not require a trial court to dismiss a case if the plaintiff does not serve the defendant within 63 days of when the plaintiff filed a complaint. Instead, applying the plain language of Rule 4(m), if the court is contemplating dismissing the case within that 63-day period, it must provide the plaintiff with (1) notice that it is contemplating dismissing the case, and (2) an opportunity to show good cause why the court should not dismiss the case. If the plaintiff shows good cause, the court must extend the deadline. If the plaintiff does not show good cause, the court has the discretion to dismiss the case without prejudice, or order that the plaintiff serve the defendant within a specified time. Here, the trial court did not give the Currys notice. Further, C.R.S. § 13-20-803.5(9) stayed the case until mid-April 2016. Therefore, the trial court did not err in declining to dismiss the case.

Zag Built also contended that the trial court should have dismissed this case because the Currys did not send it a notice of claim under the Act until after the statute of limitations had run. First, the statute of limitations stops running once a case is commenced by filing a complaint. Here, the Currys filed their complaint in mid-June 2015, before the statute of limitations had expired. Second, the Act’s notice of claim process is not a prerequisite to filing a complaint or commencing an action. If a plaintiff files a complaint before completing the notice-of-claim process, the case is stayed until the plaintiff completes the process. Therefore, the trial court did not err in declining to dismiss the case on this basis.

The order was affirmed and the case was remanded.

Summary provided courtesy of Colorado Lawyer.

HB 17-1142: Allowing Court Clerks to Use Electronic Notice

On February 1, 2017, Rep. Dominique Jackson and Sen. Bob Gardner introduced HB 17-1142, “Concerning Certain Court Proceedings.”

Under current law, the clerk of the court mails notice of the filing of certain petitions and the date and time of hearings on the petition to specified interested parties by registered mail. The bill changes the process so the clerk of the court may send the notice by first-class mail or electronically using the e-filing system of the judicial department.

Under current law, if a respondent in a domestic relations action cannot be personally served and is served by publication, the clerk of the court is required to post a copy of the process on a bulletin board in the clerk’s office for 35 days after the date of publication and may post the notice online on the court’s website. The bill gives the clerk the option of posting the notice online on the court’s website rather than on a bulletin board.

The bill also updates the time frame for holding certain hearings to multiples of 7 days.

The bill was introduced in the House and assigned to the Judiciary Committee. It is scheduled for hearing in committee on February 14, 2017, at 1:30 p.m.

HB 15-1010: Creating Presumption of Notification to Beneficiaries by Trustee

On January 7, 2015, Reps. Tracy Kraft-Tharp and Dan Nordberg and Sen. Cheri Jahn introduced HB 15-1010 — Concerning a Presumption that a Trustee has Notified a Beneficiary when the Trustee has Adopted a Beneficiary Notification Procedure, and, in Connection Therewith, Clarifying that a Trustee May Deliver Information to Beneficiaries Electronically. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Current law requires a trustee to keep beneficiaries of a trust informed about the status of the trust. The bill creates a presumption that a beneficiary has received information or a statement of account when the trustee has procedures in place requiring the mailing or delivery of information or a statement of account to a beneficiary. The presumption applies to electronic notifications if the beneficiary has agreed to receive such electronic delivery or access and to a beneficiary’s receipt of a final account or statement.

The bill was assigned to the House Business Affairs and Labor Committee. The bill passed through the committee unamended and also survived Second and Third Reading in the House with no amendments.

Colorado Supreme Court: “Actual Notice” Means “Actual Knowledge” Under UMDDA

The Colorado Supreme Court issued its opinion in People v. McKimmy on Monday, October 27, 2014.

Uniform Mandatory Disposition of Detainers Act—Actual Notice.

The Supreme Court clarified the process for invoking one’s rights under the Uniform Mandatory Disposition of Detainers Act (UMDDA or Act), CRS §§ 16-14-101 to -108. Even when prisoners do not strictly comply with the UMDDA’s requirements, the Court previously determined that they invoke their rights under the Act if (1) their request substantially complies with the Act’s requirements, and (2) the prosecution receives “actual notice” of their request.

Here, the Court held that, for purposes of substantial compliance under the UMDDA, “actual notice” means “actual knowledge.” Therefore, the Court reversed the judgment of the court of appeals and remanded the case with instructions to return the case to the trial court for further fact-finding. Specifically, the trial court should determine: (1) when the prosecution gained actual knowledge of defendant’s UMDDA requests in each of his cases, at which point defendant would have effectively invoked his rights under the Act; and (2) whether any UMDDA violations subsequently occurred.

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

Colorado Court of Appeals: Treasurer Did Not Undertake Diligent Inquiry as to Actual Residence for Notice

The Colorado Court of Appeals issued its opinion in Cordell v. Klingsheim on Thursday, October 9, 2014.

Tax Lien—Deed—Treasurer—Diligent Inquiry—Notice—Jurisdictional.

Plaintiffs Carl and Wanda Cordell were record owners of a tract of land in La Plata County (Tract 1). Carl Cordell was also the record owner of an adjoining tract (Tract 2). The Cordells failed to pay the taxes owed on the properties, and Brenda Heller purchased the tax liens on the properties. Heller assigned the tax liens to Klingsheim, who later requested and received deeds from the La Plata County Treasurer to the two properties after the Treasurer sent notice to the Cordells. Upon learning of the Treasurer’s deeds, the Cordells filed the present action seeking, as relevant here, a declaratory judgment that the Treasurer’s deeds are void, which the trial court granted.

On appeal, Klingsheim contended that the trial court erred in concluding that the Treasurer had failed to undertake diligent inquiry in attempting to determine Carl’s and Wanda’s residences. The Treasurer sent the notices, by certified mail, to 705 N. Vine, Farmington, New Mexico, which was the address listed for them in the county tax rolls. The return receipts from the mailings, however, indicated that the notices were not delivered to plaintiffs, nor were they delivered to 705 N. Vine. Rather, the receipts indicated that the notices were delivered to Cleo Cordell at 703 N. Vine, and the box for “agent” on the return receipts had not been checked. Despite this discrepancy, the Treasurer conducted no further inquiry to determine whether 705 N. Vine was indeed plaintiffs’ residence.

Such inaction after learning that the notices were not delivered either to plaintiffs or to a person claiming to be their agent does not constitute “diligent inquiry” in attempting to determine their residences. Because a treasurer’s “full compliance” with the requirements of CRS §39-11-128 is jurisdictional, the trial court properly set aside the deeds as void.

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

Colorado Court of Appeals: Notice of Mechanics’ Lien Sufficient when Amended Lien Filed Same Day as Original Lien

The Colorado Court of Appeals issued its opinion in Sure-Shock Electric, Inc. v. Diamond Lofts Venture, LLC on Thursday, August 28, 2014.

Property—Mechanics’ Lien—Contract—Foreclosure—Notice—Equitable Apportionment—Prevailing Party—Costs.

Diamond Lofts Venture, LLC (DLV) was the developer and owner of a building project at 2210 Blake Street in Denver (Blake Street property). Sure-Shock Electric, Inc. (Sure-Shock), as the primary electrical contractor on the project, installed the electrical work throughout the building. Thereafter, Sure-Shock filed a mechanics’ lien for the unpaid contract price. Pursuant to their contract, DLV and Sure-Shock participated in arbitration. The arbitrator determined that Sure-Shock had proved its claims, and awarded it the principal amount claimed in the amended lien statement. The trial court affirmed the arbitrator’s award and entered a decree of foreclosure authorizing the sale of the DLV units to satisfy Sure-Shock’s lien.

On appeal, DLV contended that the trial court erred in allowing Sure-Shock to foreclose on its lien because Sure-Shock failed to comply with the statutory requirements necessary to perfect the lien. The Court of Appeals disagreed. Sure-Shock provided DLV proper notice more than ten days before filing the original lien statement. Sure-Shock was not required to provide an additional notice before it filed its amended lien statement the same day as the original lien to correct the amount claimed. Additionally, although DLV only owned seven of the twenty-nine units in the Blake Street property at that time, Sure-Shock’s lien statement sufficiently identified the property by listing the entire Blake Street property and naming only DLV as the property owner. Finally, Sure-Shock was not required to apportion the unpaid contract price according to the amount due for work on the DLV units, rather than claiming the full amount due.

In its cross-appeal, Sure-Shock contended that the trial court abused its discretion in apportioning the lien. A court may equitably apportion a blanket lien. Here, the trial court determined that an equitable apportionment should be based on the actual benefit enjoyed by each unit. Therefore, Sure-Shock was awarded 33.1% of the lien amount, which corresponded to the total square footage of the DLV units relative to the square footage of the entire Blake Street property. Because Sure-Shock’s electrical work benefited the entire Blake Street property, and Sure-Shock chose to encumber only the DLV units, Sure-Shock may not recover the entire unpaid amount of the contract. Therefore, the trial court’s apportionment was not an abuse of its discretion.

In addition, because Sure-Shock’s lien was determined to be valid, Sure-Shock succeeded on a “significant issue in the litigation.” Therefore, the trial court did not abuse its discretion in concluding that Sure-Shock was the prevailing party and awarding it costs. The judgment was affirmed.

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

Colorado Supreme Court: Delay in Providing Notice to Co-Defendant Permissible Under Relation-Back Doctrine and C.R.C.P. 15(c)

The Colorado Supreme Court issued its opinion in In re Garcia v. Schneider Energy Services, Inc. on Monday, October 22, 2012.

Commencement of Proceedings—Notice—Relation Back—CRCP 15(c)

In this original CAR 21 proceeding, the Supreme Court reviewed the trial court’s grant of summary judgment after it found that seventy-one days was not a reasonable time for purposes of “relating back” an amended complaint under CRCP 15(c). Pursuant to Dillingham v. Greeley Publishing Company, 701 P.2d 27, 31 (Colo. 1985), the proper measure for relation back under CRCP 15(c) is the time between the filing date of the original complaint and the date when the party related back receives notice—in this case, 116 days. Accordingly, the trial court’s judgment was vacated.

Summary and full case available here.