July 22, 2018

Archives for September 20, 2010

Colorado Court of Appeals: Buyer’s Unsuccessful Suit Against Tenant Not Necessary to Maintain or Defend Buyer’s Title

The Colorado Court of Appeals issued its opinion in Loveland Essential Group, LLC v. Grommon Farms, Inc. on September 16, 2010.

Real Property—Purchase Agreements—Warranty Deed—Lease—Encumbrance—Damages—Diminution in Value—Indemnity Clause—Attorney Fees—Fraud—Breach of Contract.

In this real property contract case, Loveland Essential Group, LLC (buyer) appealed and Grommon Farms, Inc., Gary Grommon, and Connie Grommon (collectively, seller) cross-appealed various aspects of the district court’s judgment. The judgment was affirmed in part and reversed in part.

The district court found that seller had breached a real estate purchase agreement (RPA), an asset purchase agreement (APA), and a warranty deed by conveying the property subject to an encumbrance (collectively, tenant), but awarded buyer no damages. The court ruled in seller’s favor on buyer’s fraud claim, which also pertained to the existence of the lease.

Buyer contended that the district court erred by concluding that it was not entitled to damages from seller for breach of the RPA, APA, and warranty deed. Buyer was entitled to claim diminution in the property’s fair market value caused by the existence of the lease. The district court found that damages were limited to the fair rental value of the property to the expiration of the lease term, which tenant pays pursuant to the lease. Because the district court did not make any findings concerning buyer’s request for such loss in value, the case was remanded to the district court for such findings.

Buyer also contended that the indemnity clauses in the RPA, APA, and warranty deed entitle it to reasonable costs and attorney fees it incurred in suing tenant to determine the validity of the lease; therefore, the district court erred in denying its request for such damages. The Court of Appeals determined that buyer’s unsuccessful suit against tenant was not necessary either to maintain or defend buyer’s title; therefore, the court did not err in denying its request for attorney fees.

Buyer further contended that the district court erred in finding that seller did not commit fraud. The court’s finding that buyer had full knowledge of the written lease and its terms before the closing is amply supported by the record; therefore, the district court did not clearly err in finding that buyer could not have justifiably relied on seller’s alleged misrepresentation. As a result, buyer’s fraud claim failed.

Seller contended that the district court erred in concluding that it breached the RPA, APA, and warranty deed by conveying the real property subject to the lease. Because the lease constituted an encumbrance on the property, which was not listed as an exception in the warranty, seller breached the RPA and the warranty deed. On the other hand, the lease, though an encumbrance on the real property, was not an encumbrance on the acquired assets, which were the subject of the APA. Therefore, the APA was not breached. It also follows that seller’s challenge to the district court’s ruling on buyer’s indemnification claim necessarily failed. The judgment was affirmed in part and reversed in part.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on September 16, 2010, can be found here.

Colorado Court of Appeals: Grandparents Have Burden of Proof to Overturn Visitation Order

The Colorado Court of Appeals issued its opinion in In re the Parental Responsibilities of A.M. and Concerning Goebel on September 16, 2010.

Parental Responsibilities—Grandparent Visitation—Changed Circumstances—Burden of Proof—Clear and Convincing Evidence.

In this parental responsibilities and support action concerning A.M., respondents, the child’s paternal biological grandparents, appealed the trial court’s order terminating grandparent visitation and in favor of petitioners, A.M.’s mother and adoptive father. The order was affirmed.

In 2005, the trial court awarded mother sole residential and decision-making responsibility over A.M. and declined to award parenting time to A.M.’s biological father, who was incarcerated. In September 2008, the paternal grandparents petitioned for and the court awarded visitation with A.M. one weekend day per month. In February 2009, father’s parental rights were terminated, mother’s husband adopted A.M., and the paternal grandparents’ visitation was terminated.

The grandparents argued that the trial court erred by applying an incorrect legal standard to mother’s and adoptive father’s termination motion and improperly placed the burden of proof on them. The Court of Appeals disagreed. Mother provided evidence of a material change in circumstance: the parents’ marriage, the adoption of A.M., and the reports to the therapist. Because mother established the presumption that her visitation decision was in A.M.’s best interests, the burden of proof shifted to the grandparents. The trial court then correctly required the grandparents to present clear and convincing evidence. The grandparents failed to establish either the mother’s unfitness or the presence of exceptional circumstances showing that termination of the grandparents’ visitation would adversely impact the child pursuant to that burden. The order was affirmed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on September 16, 2010, can be found here.

Colorado Court of Appeals: Time to Complete Nursing Degree Not Unreasonable, But Must Determine Whether It Unreasonably Deprives Children of Support

The Colorado Court of Appeals issued its opinion in In re the Marriage of Connerton and Nevin on September 16, 2010.

Modification of Child Support—Voluntary Unemployment.

The parties’ marriage was dissolved in 2006. On March 22, 2006, the trial court entered permanent orders requiring father to pay $2,280 per month in maintenance through May 1, 2008, and $654 per month in child support for parties’ two children. On August 13, 2008, mother moved the court to modify child support, arguing that the termination of maintenance resulted in a change in father’s child support obligation of more than 10 percent. The children were 3 and 5 years old. Mother also requested attorney fees under CRS § 14-10-119. Father responded that he had paid additional child support voluntarily because maintenance had terminated and that mother, a licensed real estate agent and emergency medical technician (EMT), was voluntarily unemployed.

The trial court modified its support order, requiring father to pay $1,609 per month. The court determined mother was voluntarily unemployed and imputed income of $3,010 per month based on potential full-time employment as an EMT. Mother was pursuing a nursing degree, but the court found this did not meet the statutory reasonableness standard; the degree would take four-and-a-half years to complete and she did not pursue it while she was receiving maintenance. Mother appealed the modification.

Mother filed a verified C.R.C.P. 59 motion, arguing: (1) a parent is not required to pursue an educational degree while receiving maintenance; (2) there was no evidence to support a finding that her educational goal was not reasonable; and (3) it was error to deny her request for attorney fees (which were $16,000 at the time of the hearing). The motion was denied.

On appeal, mother argued it was error to find that she could not complete the nursing degree within a reasonable time and that she did not begin it at a reasonable time. The Court agreed that it was error to find that four-and-a-half years was not a reasonable time, but because there were no findings as to whether mother pursued the degree in good faith or whether doing so unreasonably reduced the support available to the children, the Court of Appeals remanded the case to make those determinations.

The Court looked to the standard set forth in CRS § 14-10-115(5)(b)(III)(C) to determine whether mother should be deemed voluntarily underemployed because she was enrolled in the nursing program. The Court noted that the trial court’s concern with how long the degree program would take had to do with the fact that one of the children would be “more than half way through her child support years” when mother obtained the degree. The Court concluded this was not sufficient to conclude the length of the degree program was unreasonable. The Court remanded for the trial court to make determinations and findings based on all of the factors outlined in the statutory section.

The Court then addressed several issues that might arise on remand. Mother argued that imputing full-time employment at $17 to $18 per hour was error, because there was no evidence she had worked full-time in the last five years. The Court disagreed; there was sufficient evidence that mother was qualified and previously worked full-time as an EMT.

Mother also argued it was error for the trial court not to impute full-time child care expenses in its calculations of child support after imputing full-time income to her. The Court disagreed. By statute, child care expenses are not part of the adjusted gross (or potential) income calculation. They are expenses to be shared by the parents in proportion to their adjusted gross (or potential) incomes. Only child care costs actually incurred may be considered in a support calculation.

Mother finally argued it was error to deny her request for attorney fees. The Court disagreed. No evidence was presented at the hearing regarding the number of hours billed, the necessity for them, billing records, and time records; therefore, the request was properly denied. The Court of Appeals affirmed the trial court’s order in part, reversed in part, and remanded the case.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on September 16, 2010, can be found here.

Colorado Court of Appeals: Denial of Grandparents’ First Petition for Visitation Not Grounds to Award Attorney Fees to Parent

The Colorado Court of Appeals issued its opinion in In re the Marriage of Gallegos on September 16, 2010.

Post-Dissolution of Marriage—Attorney Fees—Grandparent Visitation.

Mother appealed the trial court’s court order denying attorney fees. The Court of Appeals affirmed the order.

The parties’ marriage ended by decree in July 2008. Father was in the military and stationed out of state. The intervenors are his parents and the grandparents of the parties’ minor child. The trial court permitted their intervention in the dissolution action and their petition for visitation in excess of the time mother was allowing them to spend with the child. The trial court denied their petition, finding it had no authority to override mother’s decisions regarding the amount of time the child was to spend with her grandparents. It also denied mother’s request for attorney fees under CRS §§ 19-1-117(3) and 14-10-119.

On appeal, mother argued it was error for the court to determine it had no authority to award attorney fees. Whether either statute authorizes the court to award mother’s attorney fees against the grandparents in connection with their petition is a question of first impression. The Court concluded the trial court was correct in finding that neither statute authorized it to award mother her attorney fees.

CRS § 19-1-117 provides that a grandparent may seek a court order granting reasonable visitation, and the court shall enter such an order if it finds the visitation will be in the child’s best interests. Only one portion of that section—regarding subsequent requests for grandparent visitation—addresses attorney fees. This section is limited to an award of attorney fees to requests made after an initial visitation determination. Nowhere in the statutory provision did the legislature indicate an intent for attorney fees to be awarded in an initial grandparent visitation request. In addition, an attorney fee provision for repetitive requests by grandparents would serve the purpose of addressing a concern to protect parents and children from repetitive litigation.

Mother argued in the alternative that the court was authorized to award her attorney fees pursuant to § 14-10-119. The Court disagreed. The purpose of this section is to allow a court to apportion costs and fees equitably between spouses based on their relative financial positions. It applies in non-parent parental responsibility allocations and child support proceedings brought under title 14, article 10 of the Uniform Dissolution of Marriage Act. The basis for the grandparent visitation request was § 19-1-117 and therefore mother did not incur attorney fees in a proceeding under article 10 of title 14. The trial court order denying attorney fees was affirmed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on September 16, 2010, can be found here.

Colorado Court of Appeals: An Election Not Required Where There Is an Affirmative Obligation on City to Renew Leased Public Facilities

The Colorado Court of Appeals issued its opinion in Fischer v. City of Colorado Springs on September 16, 2010.

Multiple Fiscal Year Financial Obligation.

Plaintiff appealed the grant from a motion for judgment on the pleadings and dismissal of the complaint. The Court of Appeals affirmed in part, reversed in part, and remanded the case.

The City of Colorado Springs (City) and the U.S. Olympic Committee (USOC) entered into an Economic Development Agreement (EDA) for the purpose of developing facilities for use by the USOC. To raise funds, the EDA provided for a lease purchase agreement between the City and the Colorado Springs Public Facilities Authority (PFA), a nonprofit corporation operated by City officials. Under the lease purchase, the City authorized the PFA to issue certificates of participation. With the proceeds, the PFA was to purchase from the City the Police Operations Center and Fire Station No. 8, assigning its rental income to the investors who had purchased the certificates. The lease between the PFA and the City was to be annually renewable, subject to future city council decisions to appropriate money to fund it.

The City was to use the revenue from the sale of the police and fire stations to acquire and renovate a downtown building and lease it to the USOC for either no charge or for one dollar per year, and then convey it to the USOC for no additional cost after thirty years.

Plaintiff challenged the validity of the EDA on three grounds: (1) the certificates amounted to a contract obligating the City to commit future revenues, which is prohibited unless first authorized by an election, by the Colorado Constitution and the City’s home rule Charter; (2) the scheme was an unconstitutional donation to a private corporation; and (3) the EDA conflicted with the PFA’s articles of incorporation, which prohibited arrangements not consistent with the Colorado Constitution and the City’s home rule Charter.

The trial court determined the lease purchase agreement “does not constitute a general obligation debt or multiple fiscal year financial obligation.” It granted the City’s motion for judgment on the pleadings and dismissed the complaint with prejudice.

On appeal, plaintiff argued that it was error to grant judgment on the pleadings as to whether the certificates could not be issued unless first authorized by an election. In essence, he argued that because future city councils effectively would be obligated to appropriate money from the general fund to renew the City’s lease of the police and fire stations each year, an election was required under the Colorado Constitution, Article XI, § 6, and the City Charter, § 7-90. The Court disagreed.

The Constitution and Charter provisions proscribe any arrangement in which the City is contractually obligated to incur a debt, the repayment of which will obligate future city councils to commit revenues from the general fund. Such a constitutional debt arises only if the agreement affirmatively requires the payments to be made.

Plaintiff alleged that the City would never walk away from its police and fire facilities. The Court noted that despite the importance of the collateral, the City still could determine each year whether to continue the arrangement.

Plaintiff argued the PFA was the alter ego of the City because every member of the PFA was a city council member. The Court noted that the certificates did not pledge any specific source of revenue for repayment. Therefore, even if the PFA’s obligation to the investors could become the City’s, the investors remained entitled only to an interest in the annually appropriated lease purchase agreement to the extent the City chose to fund it.

The Court concluded that even taking as true plaintiff’s allegation that future city councils would face overwhelming political pressure to renew the lease of the police and fire stations, there was no material fact in dispute. An election is not required unless there is an affirmative obligation placed on the City to renew, which is not the case here. Judgment on the pleadings against the plaintiff was affirmed.

Plaintiff argued that it was improper to dismiss the remaining claims in his complaint, specifically that the EDA provides for an unconstitutional gift to the USOC and the PFA’s articles of incorporation do not authorize the issuance of the certificates. The Court agreed that further proceedings were required.

The trial court essentially determined, following a status conference, that it only had to reach the issue of whether an election was required. Plaintiff never abandoned his other claims and continued to raise them; therefore, they were remanded for consideration by the trial court in the first instance.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on September 16, 2010, can be found here.

Colorado Court of Appeals: Tax Issues within Scope of Arbitration Clause of Lease Agreement

The Colorado Court of Appeals issued its opinion in Taubman Cherry Creek Shopping Center, LLC v. Neiman-Marcus Group, Inc. on September 16, 2010.

Arbitrability.

In 1989, the Neiman-Marcus Group, Inc. (Neiman) entered into a seventy-page long-term lease on a parcel of the Cherry Creek Shopping Center (Mall) with Taubman Cherry Creek Shopping Center, LLC (Taubman). In 2009, a dispute arose concerning apportionment of property taxes. Neiman sought arbitration, contending the dispute fell under certain arbitration provisions of the lease. Taubman filed a motion for a stay of arbitration under CRS §§ 13-22-205, -206, and -207, which the trial court granted. The Court of Appeals vacated the order and remanded the case.

The lease has nineteen articles and the only one requiring arbitration as a dispute remedy is Article III, concerning “Real Estate Taxes.” The provisions provide, in part, a formula for determining Neiman’s tax obligations and that the parties will submit to arbitration any disputes concerning the amount attributable to the Demised Premises or the common area and Neiman’s share of the common area tax.

The dispute here concerned a tie-back credit (designed to avoid overvaluation of the common area as used in conjunction with all the parcels) that was assigned by the tax assessor only to Taubman’s parcel. Neiman argued that Taubman should have reduced the common area impositions it charged to other tenants and that the dispute is subject to arbitration under the provision in Article III providing the parties will arbitrate tax disputes “in the even such [c]ommon [a]rea is not separately assessed.” Taubman argued that because the common area was separately assessed, the provision does not apply. The parties agreed the dispute was governed by the Colorado Uniform Arbitration Act (CUAA).

The Court first addressed Neiman’s argument that the arbiter, not the court, should have determined arbitrability. The Court found that, at best, whether the parties agreed to have an arbiter decide questions of arbitrability under the lease was ambiguous and therefore the lease did not abrogate the general rule that courts make such determinations.

The Court then turned to whether the dispute is within the parties’ agreement to arbitrate. The Court found it was. The dispute at issue was whether Taubman should have reduced Neiman’s share of the common area impositions to make up for the fact that the tie-back credit was assigned only to Taubman’s parcel. This is within the scope of the agreement to arbitrate any disputes concerning Taubman’s calculations of Neiman’s share of the common are impositions. The order staying arbitration was vacated and the case was remanded.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on September 16, 2010, can be found here.

Colorado Court of Appeals: Evidence that Ski Area Boundaries Were Not Properly Marked Presents Issue of Material Fact Inconsistent with Summary Judgment

The Colorado Court of Appeals issued its opinion in Anderson v. Vail Corp.; Ciocian v. Vail Corp. on September 16, 2010.

Summary Judgment—Ski Safety Act.

Jesse Anderson (skier #1) and Melissa Ciocian (skier #2) and Chris Ciocian appealed entries of summary judgment in favor of Vail Corporation (ski resort) in their respective cases. The two appeals were consolidated because they presented virtually identical facts and the same legal issues, and the parties were represented by the same counsel. The Court of Appeals determined there was an issue of material fact regarding signage, vacated the trial court’s order granting summary judgment, and remanded the case for further proceedings.

Primrose, an intermediate trail, commences at the top of Larkspur Bowl. Primrose splits and the left fork remains Primrose but becomes a beginner’s trail; the right fork becomes Bitterroot, an intermediate trail. Two ski lifts terminate just below the split, allowing access to Primrose, Bitterroot, and an unrated glade. Downhill from the split, the two trails are connected by Overshot, a catwalk, which traverses the glade commencing at Primrose and terminating at Bitterroot. Overshot is an intermediate trail because it terminates at an intermediate trail. The downhill edge of Overshot is a ski area boundary. Immediately below the boundary are three private residences, and below them is a paved road.

Skier #1’s accident occurred on February 25, 2007; skier #2’s accident occurred on March 3, 2007. Both skiers entered the glade and proceeded until they reached Overshot, crossed it, and continued downhill through the glade. Shortly after crossing Overshot, the skiers skied off a 19-foot retaining wall, dropped onto the paved road, and sustained injuries.

There is no dispute that there were nine ski area boundary signs facing uphill across Overshot on the left as the skiers crossed; however, an expert opined there was a lack of sufficient signage. The skiers skied through a gap approximately 56 yards downhill from the last sign and 16 yards uphill from a rope closure.

The trial court granted summary judgment in favor of the ski resort. On appeal, the skiers argued that the trial court improperly made findings of fact on disputed issues of material fact and the Court agreed.

The skiers argued that the ski resort acted negligently and violated the Ski Safety Act by failing to properly mark the ski area boundaries. They argued specifically that the ski resort violated CRS § 33-44-107(6), which provides: “The ski area operator shall mark its ski area boundaries in a fashion readily visible to skiers under conditions of ordinary visibility.” The trial court found the boundary markers met this standard.

The skiers presented evidence that the boundary signs were not readily visible to skiers in their line of travel. An expert testified the signs and ropes were not visible; ski patrol members responding to the incidents admitted they could see how this could be the case. This evidence, viewed in the light most favorable to skiers, presented a genuine issue of material fact as to whether the boundary signs were readily visible. Thus, summary judgment was inappropriate, the trial court’s orders were vacated, and the case was remanded.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on September 16, 2010, can be found here.

Colorado Court of Appeals: Quantum Meruit Recovery Subject to Three-Year Statute of Limitations

The Colorado Court of Appeals issued its opinion in Portercare Adventist Health System v. Lego on September 16, 2010.

Breach of Contract—Medical Services—Statute of Limitations.

Defendant Robert Lego appealed the jury’s finding that he is liable to plaintiff Portercare Adventist Health System (hospital) on its claim for breach of a contract implied in fact to pay for medical services and care that the hospital provided to his wife, Bernadette Lego. He also appealed the district court’s order requiring him to pay the hospital’s attorney fees. The judgment was reversed.

Bernadette Lego was admitted to the hospital on August 18, 2001. In late September, her insurer indicated that it believed she no longer needed the level of care provided by the hospital and would not pay for her to stay at the hospital after October 1. She unsuccessfully challenged the insurer’s determination through administrative channels and in court. She remained at the hospital until November 9, 2001. The hospital thereafter billed a total of $453,084 for her stay. Her insurer paid $301,570.99. In November 2001, the hospital demanded that she pay the remaining bill of $144,044.36. Bernadette and Robert Lego refused the bill. In April 2005, the hospital filed a complaint against Bernadette Lego’s estate (she had died in the interim) and against Robert Lego, stating a single claim for money owed.

Robert Lego argued that the trial court erred in allowing the hospital’s claim to proceed to trial, because it was barred by the three-year statute of limitations. The Court of Appeals agreed. The hospital conceded that its sole claim for breach of a contract implied in fact accrued in November 2001. All contract actions must be commenced within three years after the cause of action accrues, except pursuant to CRS § 13-80-103.5, which applies a six-year statute of limitations to contract claims if it is one to recover a liquidated debt or an unliquidated, determinable amount of money. A sum is liquidated or determinable within the meaning of § 13-80-103.5(1)(a) only where a document evidencing the agreement sets forth an amount owed or a formula for calculating an amount owed.

In this case, no provision of any alleged agreement sets forth an amount owed or a formula (or other readily calculable means) for determining the amount owed; rather, the hospital alleged a contract arising from the parties’ conduct. Because the hospital’s recovery was limited to quantum meruit, its claim was subject to the three-year statute of limitations. Because it is undisputed that the hospital commenced this case more than three years after its claim accrued, Robert Lego is entitled to judgment on the claim as a matter of law. Accordingly, the judgment was reversed, the order awarding attorney fees to the hospital was vacated, and the case remanded for entry of judgment in Robert Lego’s favor.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on September 16, 2010, can be found here.

Colorado Court of Appeals: Due Process Rights Not Violated by Time Limit for Trial

The Colorado Court of Appeals issued its opinion in Maloney v. Brassfield on September 16, 2010.

Personal Injuries—Trial Time—Due Process—Video Depositions—Unavailable.

Plaintiff Robert Maloney appealed from a judgment entered in favor of defendant Michael Brassfield regarding causation and damages in an automobile accident case. The judgment was affirmed.

The trial court set this automobile accident case for a jury trial for a maximum of seven days. It ruled that trial time would be split equally between Maloney and Brassfield; tracked use of trial time with a clock; and refused all of Maloney’s requests during trial for additional time, despite his assertions that he was not being afforded an adequate opportunity to present his case. Maloney argued that the court violated his due process rights by not allowing him more time to present his case. The Court of Appeals disagreed. The trial court was familiar with the facts of the case and legal issues, and was aware that both sides were represented by experienced attorneys. In addition, the case appeared to be triable within the time limits imposed when those limits were set and both sides received adequate notice of the time limits imposed by the trial court. Furthermore, the parties were allowed to make strategic decisions within those time limits and the court kept both sides apprised of their remaining time throughout the trial.

Maloney also contended that the trial court erred in allowing the video depositions of Brassfield’s experts to be played at trial in lieu of having these doctors testify. Because the witnesses were available to testify, the trial court erred in admitting the preservation depositions in lieu of live testimony. However, Maloney failed to explain how the live testimony of the experts would have differed from their video depositions; therefore, any error was harmless. The Court affirmed the trial court’s judgment.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on September 16, 2010, can be found here.

Tenth Circuit: Opinions, 9/20/10

The Tenth Circuit on Monday issued one published opinion and no unpublished opinions.

Published

In Universal Service v. AT&T Corp., the Court affirmed the district court’s award of 16 Million in damages in the class action. The class, comprised of residential long-distance customers of AT&T in California, “challenged the lawfulness of a monthly line-item charge defendant imposed on its customers to recover contributions to the federal Universal Service Fund (“USF”) required by 47 U.S.C. § 254.” Among other denied motions for judgment as a matter of law and a new trial, the Court determined that the district court’s denial of AT&T’s motion for remittitur related to prepaid calling card expenses was not in err; “AT&T points to no evidence which suggests its failure to impose a Universal Connectivity Charge on its prepaid calling card customers could fairly be compensated by overcharging its residential customers.”