August 22, 2017

Colorado Court of Appeals: District Court Did Not Err in Confirming Arbitration Award

The Colorado Court of Appeals issued its opinion in Pacitto v. Prignano on Thursday, July 27, 2017.

Uniform Arbitration Act—Award—Motion to Vacate—Deadline—Confirmation.

The Prignanos asserted multiple claims against Pacitto, a registered representative, in a Financial Industry Regulatory Authority securities industry arbitration. Pacitto raised several counterclaims. The arbitration panel denied the Prignanos’ claims and awarded Pacitto compensatory damages, punitive damages, and fees solely against Mr. Prignano. Many months later, when Mr. Prignano had not paid the award, Pacitto filed a combined complaint and motion to confirm the arbitration award in district court. Among other things, the Prignanos filed a motion to vacate the award and an amended answer that included a counterclaim for a declaratory judgment vacating the award. The district court order confirmed the arbitration award and found that the Prignanos filed the motion to vacate well past the 91-day deadline, thus waiving their right to object to confirmation of the award.

On appeal, the Prignanos asserted that the district court erred in applying the 91-day deadline in C.R.S. § 13-22- 223(2) and in failing to extend the deadline for filing a counterclaim for one year pursuant to C.R.S. § 13-80-109, when it confirmed the award. Under the Uniform Arbitration Act (UAA), a motion to vacate an arbitration award must be filed within 91 days after the movant receives notice of the award. The parties agreed that the Prignanos filed their motion to vacate and raised their declaratory judgment counterclaim well after the 91-day period for challenging arbitration awards. The more specific limitation period of C.R.S. § 13-22 223(2) that applies only to arbitration proceedings prevails over the more general limitation period contained C.R.S. § 13-80-109, which applies to any civil suit.

The Prignanos also argued that an equitable tolling exception should be read into the UAA. The court of appeals rejected this argument, stating that the notice of the arbitration decision made them aware of their responsibility to challenge the decision in a permitted format and by a statutory deadline. They were aware of all the grounds they could assert on appeal when the arbitration concluded.

The judgment was affirmed and the case was remanded for a calculation of Pacitto’s reasonable attorney fees and costs incurred on appeal.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Statutory Limitations Period Began when Broker Knew of Contractual Breach

The Colorado Court of Appeals issued its opinion in International Network, LLC v. Woodard on April 6, 2017.

Breach of Contract—Exclusive Right-to-Sell Listing—Statute of Limitations—Jury Instructions.

Woodard (seller) owned a 100-acre ranch. In 2006 he signed an exclusive right-to-sell listing agreement with International Network, Inc. (broker). The agreement was for a six-month listing period and provided for a percentage commission to be paid to broker upon sale. Seller had the absolute right to cancel the agreement at any time upon written notice.

Approximately four months into the listing period, seller began negotiating with an attorney who represented a group of potential buyers. Seller did not disclose his negotiations to broker. About a month after commencing these discussions, seller abruptly cancelled the listing agreement without cause. Broker ceased marketing the property. After the listing period had expired, but within the 90-day holdover period set forth in the agreement, seller and the buyers finalized an agreement resulting in the sale of the property.

Seven years later, broker initiated this action against seller for breach of contract based on seller’s failure to comply with the referral provision, which required seller to conduct all negotiations for the sale of the property through broker and refer to broker all communications received from prospective buyers. Following trial, a jury found in favor of broker and awarded damages in the amount of the commission that would have been owed under the listing agreement.

On appeal, seller argued that the trial court erred in denying his motion for directed verdict and his post-trial motion for judgment notwithstanding the verdict because broker’s breach of contract claim was barred by the statute of limitations. C.R.S. § 13-80-101(1)(a) states that a breach of contract claim must be commenced within three years after accrual of the cause of action, and accrual occurs when the breach is discovered or should have been discovered. It was undisputed that seller breached the referral provision in 2006. Seller argued that under the facts, broker should have realized there might have been a breach of the referral provision and through the exercise of reasonable diligence should have discovered it in 2006. Broker asserted it had no knowledge of seller’s duplicity until broker’s agent heard seller’s testimony in another lawsuit in 2011 in which seller testified he had violated the listing agreement and intentionally concealed his negotiations to avoid paying a commission. Therefore, in commencing this action in 2013 broker was within three years of its discovery of the breach. Based on the record, the Colorado Court of Appeals could not conclude that the evidence, viewed in the light most favorable to broker, compelled a different result.

Seller also argued that it was error to not give a jury instruction on the elements of liability for recovery on a real estate commission claim, contending that the broker was not the procuring cause of the sale. Here, seller breached the referral provision and cannot use his intentional concealment of his negotiations to prevent broker from obtaining damages in the form of a commission. The court did not err in rejecting seller’s procuring cause instruction.

Seller contended the trial court erred by rejecting seller’s proposed jury instruction on the affirmative defense of laches. The trial court ruled, and the Court agreed, that seller’s improper conduct precluded his assertion of a laches defense.

Seller further argued that the court erred in denying him the right to impeach broker’s agent with certain evidence. The court precluded seller’s questioning due to lack of a sufficient foundation and acted within its discretion in limiting seller’s cross-examination.

Broker requested attorney fees and costs in accordance with the agreement, which the court awarded.

The judgment was affirmed and the case was remanded for further proceedings to award broker’s costs and attorney fees incurred on appeal.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Terms of Settlement Offer were Valid and Enforceable When Accepted

The Colorado Court of Appeals issued its opinion in Kovac v. Farmers Insurance Exchange on Thursday, January 12, 2017.

Personal Injury—Underinsured Motorist—Statute of Limitations—Summary Judgment.

Kovac was seriously injured in a car accident with Filipelli. It was undisputed that Filipelli was at fault. Kovac’s medical expenses exceeded $1.4 million. Filipelli was covered by Shelter Insurance Company (Shelter) with a liability limit of $100,000. Kovac was insured under two different automobile policies with Farmers Insurance Exchange (Farmers).

Kovac settled with Shelter for its policy limits. Later, Farmers offered to settle Kovac’s remaining claims for $80,000, but the parties could not reach a settlement. Kovac sued Farmers on April 3, 2015 for recovery of UIM benefits, tortious bad faith breach of contract, and unreasonable delay and denial of insurance benefits. Farmers moved for summary judgment on the grounds that the Shelter settlement check was tendered to Kovac’s attorney on April 2, 2013 and the statute of limitations therefore ran on April 2, 2015. The district court agreed and dismissed the suit.

On appeal, Kovac argued that although her attorney received the check and settlement offer on April 2, it was not accepted until April 5 when the release was signed and the check endorsed. Therefore, the statute of limitations ran on April 5, 2015 and her complaint was timely filed on April 3, 2015. C.R.S. § 13-80-107.5(b) provides that the statute of limitations runs two years from the date when the insured “received payment of the settlement” on the underlying bodily injury claim. The court of appeals determined that Kovac released her claims against Filipelli on April 5, 2013.  Therefore the statute of limitations had not run when she filed her complaint against Farmers.

The summary judgment was reversed and the case was remanded.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Donor and Transferee Are One Entity for Conservation Easement Tax Credit Purposes

The Colorado Court of Appeals issued its opinion in Medved v. Colorado Department of Revenue on Thursday, October 20, 2016.

Conservation Easement Tax Credit—Statute of Limitations—Notice of Disallowance.

The Medveds purchased a conservation easement (CE) tax credit from Whites Corporation (Whites). The appraised value of the tax credit was $130,000. Whites was the CE donor and the Medveds were the CE transferees. On October 23, 2006, the Medveds filed their 2005 Colorado tax returns and claimed a $130,000 credit based on the CE. On October 30, 2007, Whites filed a Colorado State C Corporation income tax return and claimed a $260,000 credit based on the same CE.

On March 4, 2011, the Colorado Department of Revenue (Department) issued a notice of disallowance to Whites and the Medveds, disallowing the credit in its entirety. The Medveds appealed to the district court and argued the notice of disallowance was barred by the four-year statute of limitation in C.R.S. § 39-21-107(2). The Department argued that the Medveds and Whites were subject to the same statute of limitations that was triggered when the donor filed its tax return under C.R.S. § 39-22-522(7)(i). The district court found that the donor and the transferee were a single entity and were bound as to all issues concerning the tax credit to the four-year statute of limitations, which was triggered by the donor’s tax claim. Because Whites filed its return on October 30, 2007, the Department’s notice of disallowance was within the statute of limitations.

On appeal, the Medveds claimed they were not bound by the same statute of limitations as Whites. The court of appeals agreed with the Department that a donor and transferee are considered a single entity under the statute and are bound by the same statute of limitations. The Medveds also argued that the first claim filed triggers the four-year statute of limitations. Finding the statutory language ambiguous, the court considered its legislative intent and purposes and concluded that the General Assembly intended that the first claim filed, either by the donor or transferee, begins the four-year statute of limitations period. Because the Department’s notice of disallowance was beyond the four-year limitations period, the Department’s disallowance was untimely and statutorily barred.

The judgment was reversed and the case was remanded for dismissal.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Construction Defect Claims Filed Against Subcontractors were Time-Barred

The Colorado Court of Appeals issued its opinion in Sopris Lodging, LLC v. Schofeld Excavation, Inc. on Thursday, October 20, 2016.

Construction Defect—Summary Judgment—Time Bar.

TDC was the general contractor for construction of a hotel owned by Sopris Lodging (Sopris). On March 11, 2011, Sopris sent TDC a notice of claim regarding alleged construction defects at the hotel. On May 24, 2013, Sopris filed a complaint in district court asserting construction defect claims against one of the subcontractors of the hotel and against TDC’s individual principals, who had guaranteed TDC’s performance. On the same date, Sopris and TDC entered into an agreement to toll the statute of limitations for Sopris’s claims against TDC.

In 2014, TDC filed third-party claims against several subcontractors including Schofield and CEC for breach of contract, negligence, contribution, and indemnification. CEC and Schofield moved for summary judgment, asserting the claims were barred by the two-year statute of limitations in C.R.S. § 13-80-102. TDC did not dispute that the claims accrued on or before March 11, 2011 but argued C.R.S. § 13-80-104(1)(b)(II) tolled the statute of limitations for a defendant’s third-party clams until 90 days after a settlement or final judgment on the plaintiff’s claims against the defendant. The district court entered summary judgment in favor of CEC and Schofield.

On appeal, Sopris (standing in the shoes of TDC following a settlement and assignment of the third-party claims) argued it was error to find the claims time-barred. C.R.S. § 13-80-104(1)(b)(II) gives a contractor the option to bring indemnity or contribution claims against subcontractors in a separate lawsuit after the underlying claims are resolved and tolls the statute of limitations for such claims. But because TDC asserted third-party claims in the original construction defect litigation, the tolling section does not apply. Thus TDC’s third-party claims were time barred.

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: No Time Limit Exists for Prosecuting Sexual Assaults Where DNA Proves Defendant’s Identity

The Colorado Court of Appeals issued its opinion in People v. Shores on Thursday, September 8, 2016.

Sexual Assault—Statute of Limitations—CRE 404(b) Evidence.

In 1994, an elderly woman was found badly beaten and sexually assaulted. No suspect was initially identified. The victim died in 2000 from cancer. In 2010, the DNA evidence from the victim’s case was matched to Shores’s DNA, but the district attorney’s office chose not to file charges against Shores at that time. Several years later, the Denver Police Department learned that Shores had been tied, through DNA, to a 2013 sexual assault of a woman, D.B., in Texas. This information led to the 2014 charges against Shores for first degree sexual assault and a crime of violence enhancer. Shores was convicted as charged.

On appeal, Shores argued that the trial court erred in denying his motion to dismiss for failure to file charges within the 10-year statute of limitations in effect in September 1994. The change in the statute, however, provides that there is no time limit for prosecuting certain sexual assaults committed after July 1, 1991, if (1) the defendant’s identity is determined in whole or in part by DNA and (2) the offense is reported to a law enforcement agency within 10 years after its commission. Shores conceded that his identity was determined by DNA but argued that the second prong was not met because the victim herself did not report the crime to law enforcement. The statute does not require that the victim be the person who reported the offense, only that the offense was reported. Here, the police had known about the physical assault on the victim from their response to the initial call, and they received further information from the hospital about her condition, including the results of the sexual assault examination kit.  Accordingly, there was no statutory time limit in which to file charges against Shores, and the trial court correctly denied his motion to dismiss.

Shores next argued that the trial court abused its discretion in admitting CRE 404(b) evidence of the 2013 sexual assault in Texas. The evidence relating to D.B. was probative of the ultimate fact of whether Shores committed the offense charged and was logically relevant independent of bad character evidence because it had a tendency to make it more probable that the victim did not consent than it would be without the evidence. The court acted within its discretion in determining that the danger of unfair prejudice did not outweigh the probative value of this evidence.

The judgment of conviction was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: CUFTA Limitations Period May Be Tolled by Express Agreement

The Colorado Supreme Court issued its opinion in Lewis v. Taylor on Monday, June 20, 2016.

Uniform Fraudulent Transfer Act—Limitation of Actions—Agreements Tolling Limitation.

Under the Colorado Uniform Fraudulent Transfer Act (CUFTA), CRS §§ 38-8-101 to -112, any action to avoid an intentionally fraudulent transfer is extinguished if not brought within four years after the transfer was made or, if later, within one year after the transfer was or could reasonably have been discovered. Here, the Supreme Court held that these time limitations may be tolled by express agreement. Because the parties to this case signed a tolling agreement, and petitioner’s CUFTA claims were properly brought within the tolling period, the Court concluded that his claims were timely filed and were not barred by CUFTA’s limitations period. Therefore, the Court reversed the judgment of the Court of Appeals.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Written Extensions of Acknowledgments of Debt Extended Statute of Limitations for Foreclosure

The Colorado Supreme Court issued its opinion in Hutchins v. La Plata Mountain Resources, Inc. on Monday, June 20, 2016.

Limitations of Actions—Acknowledgments of Existing Debt—Form and Essential Elements of Acknowledgements.

Hutchins and Gasper petitioned for review of the Court of Appeals’ judgment affirming the district court’s ruling in favor of La Plata Mountain Resources, Inc. (La Plata), in an action brought by La Plata to collect on certain debentures issued by Leadville Mining and foreclose on a deed of trust securing the debts. Although Leadville’s authorized agent had signed documents acknowledging its obligations for the amounts owed on other similar debentures held by Hutchins and Gasper, which were secured by the same deed of trust, the Court of Appeals reasoned that because these documents lacked the two-thirds consent required for modification of the debentures, the included acknowledgments were insufficient to restart the applicable limitations period. The Court of Appeals therefore concluded that the statute of limitations had run on any action by Hutchins and Gasper to collect on the debts or foreclose on the deed of trust.

The Supreme Court reversed. The documents in question were in writing, were signed by Leadville, and contained a clear and unqualified acknowledgement of the debt owed to Hutchins and Gasper. Therefore, they constituted a new promise to pay, establishing a new accrual date and effectively extending the limitations period on collection of the debt.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Late Filed Counterclaims Timely Because they Relate Back to Original Answer

The Colorado Court of Appeals issued its opinion in Makeen v. Hailey on Thursday, December 31, 2015.

Real Property—Compulsory Counterclaims—Timely—Discovery Violations—Sanctions—Trial Management—Attorney Fees.

Makeen and his father, Hailey, purchased real property in Denver (Utopia Property) as joint tenants. Makeen alleged that he had an oral agreement with his father pursuant to which he would manage the property while his father was alive, and upon his death Makeen would become the sole owner. According to Makeen, Hailey also promised to give him seven other properties upon Hailey’s death. Hailey, however, alleged that he never promised Makeen any property interests, and that Makeen fraudulently purchased the Utopia Property in both of their names, even though he had agreed to act as Hailey’s agent and to buy the property only in Hailey’s name. The court found in favor of Hailey on all claims and counterclaims.

On appeal, Makeen contended that the trial court erred in finding Hailey’s counterclaims for breach of fiduciary duty and fraud timely. Although it was more than a year since the original complaint was filed, the counterclaims were timely because Hailey’s amended answer and counterclaims related back to his initial answer, which was filed within the revival statute’s one-year limitations period.

Makeen also contended that the trial court erred in failing to sanction Hailey for repeated discovery violations. First, although PPR 3.7 requires mandatory sanctions for a failure to timely and completely disclose, it applies only to initial disclosures and not the discovery requests at issue here. Additionally, the trial court did not abuse its discretion in deciding not to impose discovery sanctions against Haley after finding that Haley had made substantially all of the required disclosures and, even if there had been intermittent noncompliance with some of the CAPP discovery rules, the noncompliance was substantially justified and harmless.

Makeen further argued that the trial court erred in prematurely cutting off discovery at the final discovery dispute hearing in October 2013. Makeen had nearly 11 months to conduct discovery, and the trial court acted well within its discretion in enforcing reasonable trial management deadlines in this matter. Further, Makeen failed to show that he was prejudiced by this ruling.

The judgment was affirmed. Because Makeen’s appeal of some of the issues was frivolous, the case was remanded to award Hailey attorney fees and costs related to the defense of those claims on appeal.

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

Colorado Court of Appeals: Domestic Relations Court Lost Jurisdiction Five Years After Case Ended

The Colorado Court of Appeals issued its opinion in Fritsche v. Fritsche Thoreson on Thursday, November 5, 2015.

Divorce—Modification of Decree—Statute of Limitations—Fraud, Theft and Conversion.

Husband and wife divorced in April 2007. In January 2013, wife allegedly disclosed, for the first time, income of $69,399 that she had earned in 2011 from an employment-related lawsuit. In July 3013, wife filed sworn financial statements that allegedly disclosed, for the first time, a pension from IBM in the amount of $111,575.94. In November 2013, husband filed a motion to modify the final decree. The court did not rule on the motion within the 63-day period, as required by CRCP 59(j), and therefore it was deemed denied in January 2014. In June 2014, husband filed a motion for relief from judgment under CRCP 60(a) and (b), which was denied as untimely. Husband then filed an equitable action in district court, asserting fraud, theft, and conversion claims against wife. Wife moved to dismiss, and the district court granted the motion.

The Court of Appeals first held that a party to the original domestic relations proceedings may file an independent equitable action in district court related to the domestic relations court proceedings aft the expiration of that five-year period. The Court then affirmed the district court’s conclusion that husband failed to state a claim upon which relief could be granted. Relief pursuant to an independent equitable action is available in cases of unusual and exceptional circumstances, including fraud. However, a party challenging a judgment previously entered in a domestic relations case by “seeking relief through an independent equitable action based on fraud must establish extrinsic fraud as opposed to mere intrinsic fraud.” Husband’s claims of perjury and failure to disclose are forms of intrinsic fraud, and therefore do not warrant relief through an independent action, and his claims of theft and conversion do not present unusual or exceptional circumstances. The Court denied wife’s request for attorney fees, holding that husband’s claims were not frivolous or lacking substantial justification.

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

Colorado Court of Appeals: Settlement Agreement Not “Payment” and Therefore Does Not Toll Statute of Limitations

The Colorado Court of Appeals issued its opinion in Stoesz v. State Farm Mutual Automobile Insurance Co. on Thursday, June 18, 2015.

Underinsured Motorist Benefits—Statute of Limitations—Meaning of “Payment”—Summary Judgment.

Plaintiff Stoesz, an insured of defendant (State Farm), was injured when an underinsured motorist rear-ended her car. Three days before the statutorily required three-year limitations period expired, Stoesz sent an e-mail to the underinsured motorist’s liability insurer, Progressive Insurance Company (Progressive), confirming a policy limits settlement. Shortly after the limitations period had ended, State Farm approved the settlement at Stoesz’s request. Within two years of receiving the settlement payment from Progressive, Stoesz commenced this action to recover underinsured motorist benefits from State Farm. The trial court entered summary judgment against Stoesz on the basis that this settlement agreement did not constitute payment that would have extended the limitations period for an additional two years. The Court of Appeals affirmed.

On appeal, State Farm argued that, pursuant to CRS § 13-80-107.5(1)(b), payment must be made during the three-year limitations period, which was not met here, and a tolling agreement between Progressive and Stoesz did not affect its rights. The Court agreed. Under the clear wording of the statute, an insured is allowed an additional two years only if the underlying bodily injury liability claim against the underinsured motorist has been preserved by commencing an action against the underinsured motorist or by payment of either the liability claim settlement or judgment. No action was commenced and no payment occurred within the limitations period. The summary judgment was affirmed.

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

Colorado Court of Appeals: Complaint Filed Two Years and One Day After Accrual Date Untimely

The Colorado Court of Appeals issued its opinion in Williams v. Crop Production Services, Inc. on Thursday, May 7, 2015.

Tort Statute of Limitations—CRCP 6(a)(1) Not Applicable to Statutory Time Periods—CRS § 13-80-102(1)(a).

The parties agreed that this wrongful discharge action sounded in tort, was subject to the two-year statute of limitations in CRS § 13-80-102(1)(a), and accrued on the date of termination by defendant. The parties disagreed on the manner of calculating the deadline for filing the complaint. Plaintiff claimed he had until October 8, 2013, or two years and one day after the accrual date. Defendant countered that the complaint had to be filed no later than the second anniversary of the accrual date, October 7, 2013. The Court of Appeals agreed with defendant.

Plaintiff relied on CRCP 6(a)(1) to calculate the accrual date, arguing that “the day of the act, event or default from which the designated period of time begins to run shall not be included.” Therefore, the date of defendant’s termination was not to be included and he had until two years after October 8, 2011 to file his complaint.

The Court rejected the application of the CRCP 6(a)(1) counting method for determining the deadline for filing an action under CRS § 13-80-102(a), instead looking to the Colorado statutes. CRS § 13-80-102(1) provides that tort actions “must be commenced within two years after the cause of action accrues, and not thereafter.” Pursuant to CRS § 2-4-107, the word “year” means a calendar year, so days need not be counted. Here, the cause of action accrued on the date of termination and therefore had to be filed no later than the second anniversary of that date—that is, by October 7, 2013. The district court was therefore correct in dismissing the action as untimely filed.

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