August 22, 2019

Archives for October 16, 2012

Colorado Court of Appeals: In Interlocutory Appeal, Immunity Found Not Waived Under CGIA and Trial Court’s Order Reversed

The Colorado Court of Appeals issued its opinion in Daniel v. City of Colorado Springs on Thursday, October 11, 2012.

Governmental Immunity—CRS § 24-10-106(1)(e)—Public Parking Lots.

Defendant, the City of Colorado Springs (City), brought this interlocutory appeal of the district court’s order denying its motion to dismiss, on governmental immunity grounds, the complaint filed by plaintiff Marilyn Daniel. The order was reversed and the case was remanded.

Plaintiff alleged she was injured when she fell after stepping into a hole in a parking lot for the public Valley Hi Golf Course, which was owned and maintained by the City. She asserted the City knew or should have known about the dangerous condition of the parking lot.

The City moved to dismiss pursuant to CRCP 12(b)(1) for lack of subject matter jurisdiction under the Colorado Governmental Immunity Act (CGIA). Plaintiff argued that immunity had been waived, under CRS § 24-10-106(1)(e), for a dangerous condition of any public facility located in any park or recreation area maintained by a public entity. The City responded that the phrase “in any park or recreation area” includes only places and areas within a golf course, but not the parking lot. The trial court denied the City’s motion to dismiss and the City brought an interlocutory appeal.

On appeal, the Court of Appeals emphasized that waiver was for a dangerous condition located in any park or recreation area. It also noted that before the 1986 amendments to the CGIA, the statute had excepted immunity for a “public parking facility” and that this section was deleted by the amendments. The Court followed other decisions that found this deletion was intended to remove the exclusion from governmental immunity to such areas. It therefore was error to find that the City’s immunity was waived. The order was reversed and the case was remanded with directions to dismiss the complaint against the City.

Summary and full case available here.

Colorado Court of Appeals: Plain Meaning of C.R.S. § 12-47.1-521 Gives Court of Appeals Exclusive Jurisdiction to Review Rule-Making Actions of Gaming Commission

The Colorado Court of Appeals issued its opinion in Board of County Commissioners of Gilpin County v. City of Blackhawk on Thursday, October 11, 2012.

Subject Matter Jurisdiction—Rule-Making Proceeding—CRS § 12-47.1-521.

Plaintiffs, the Board of County Commissioners of Gilpin County, Forrest Whitman, Bruce Schmalz, and Connie McLain (collectively, Gilpin County) and defendant, the City of Black Hawk (Black Hawk), appealed the district court’s order dismissing their claims against defendants, the Colorado Limited Gaming Control Commission (Commission), the Colorado Division of Gaming (Division of Gaming), Colorado State Treasurer Walker Stapleton, the Board of County Commissioners of Teller County (Teller County), the City of Cripple Creek (Cripple Creek), and the City of Central (Central), for lack of subject matter jurisdiction pursuant to CRCP 12(b)(1). The order was affirmed.

This case arose from a rule-making proceeding before the Commission. The proceeding addressed the interpretation of the phrase “gaming revenue” as used in the Colorado Constitution.

At a Commission hearing, the Division of Gaming proposed an amendment to the Commission’s Rule 24 that reflected its interpretation of “gaming revenue” and, in response, Gilpin County proposed its own amendment. The Commission adopted the Division of Gaming’s amendment.

Gilpin County then filed a complaint against defendants, seeking judicial review of the Commission’s rule-making proceeding. Defendants, excluding Black Hawk, filed a motion to dismiss for lack of subject matter jurisdiction under CRCP 12(b)(1), which was granted by the district court.

On appeal, Gilpin County argued that CRS § 12-47.1-521 does not give the Court of Appeals exclusive jurisdiction to review the rule-making actions of the Commission. The Court, relying on the plain meaning of the statute, held that it does. Therefore, the district court was correct that it lacked jurisdiction to review the Commission’s rule-making actions.

The Court also considered whether Gilpin County and Black Hawk had claims for declaratory relief under CRCP 57, because review under CRS §§ 12-47.1-521 and 24-4.106 do not provide adequate relief for their constitutional challenges to the Commission’s rule-making actions. The Court held they do not have claims for declaratory relief because the statutory sections provide adequate relief in these circumstances. Here, adequate relief was provided because Gilpin County and Black Hawk were parties to the rule-making proceeding. The order was affirmed.

Summary and full case available here.

Colorado Court of Appeals: Summary Judgment In Favor of Insurance Company Appropriate Where Insurance Company Would Not Have Been Liable if In Insured’s Shoes

The Colorado Court of Appeals issued its opinion in Abady v. Certain Underwriters at Lloyd’s London Subscribing to Mortgage Banker’s Bond No. MBB-06-0009 on Thursday, October 11, 2012.

Summary Judgment—Damage Suffered by Investors—Direct Financial Loss—Distinction Between Liability Policy and Fidelity Bond.

Plaintiffs (investors) appealed the trial court’s summary judgment in favor of Certain Underwriters at Lloyd’s London (Lloyd’s). The judgment was affirmed.

Investors alleged that the chief executive officer (CEO) of Commercial Capital Inc. (CCI) formed CCI as a real estate lending company providing short-term financing for commercial construction projects. During 2006 and 2007, CCI solicited private investors to invest funds in the company. The proposed investment involved the acquisition of debt securities documented by a subscription agreement and promissory note from CCI (notes). Seminars were held by CCI to describe the investment.

Investors alleged that the CEO was involved in all day-to-day operations and made misrepresentations that included: (1) CCI had a $5 million policy in place to protect investors’ principal against loss; (2) the investments had high guaranteed rates of return; (3) the interests sold were registered with the Securities and Exchange Commission; (4) the investments were “more liquid than other private real estate strategies” and “enjoyed a superior risk return profile due to inefficiencies in the commercial lending market”; (5) CCI would conduct vigorous due diligence before granting any loans; and (6) the investments and any interest would be personally guaranteed by the CEO. Investors alleged that, based on these and other misrepresentations, they invested or loaned money to CCI in an amount in excess of $1 million. CCI is allegedly in default on the notes and the CEO has not honored his personal guarantee.

It appeared that CCI loaned investors’ funds to developers at lower interest rates than those payable to investors but with very high loan origination fees. On April 22, 2009, CCI filed a voluntary petition for Chapter 11 bankruptcy. Certain creditors, including investors, moved for relief from the automatic stay to pursue CCI’s rights under Insuring Clause A1(b) of the Mortgage Bankers Bond No. MBB-06-00090 (bond), which was issued to CCI by Lloyd’s. The relief was granted and the bankruptcy trustee assigned all of CCI’s rights, title, and interest in the bonds to investors, retaining 30% of the gross recovery less reasonable attorney fees and $50,000 to be paid to investors, with the balance to the investors.

Investors filed a complaint against CCI, the CEO, and Lloyd’s, alleging that CCI and the CEO officer violated the Colorado Securities Act, sold unregistered securities, committed common law fraudulent misrepresentation, constructive fraud, negligent misrepresentation or omission, civil theft, breach of fiduciary duty, and vicarious liability. Investors also asserted two first-party claims against Lloyd’s: (1) as assignee of the bond, and (2) as a garnishment claim asserting a right to garnish Lloyd’s after obtaining judgment against CCI. Lloyd’s, following some discovery, filed a motion for summary judgment, which the trial court granted. Investors appealed.

Investors conceded on appeal that the policy was a fidelity bond. As such, it is analogous to an insurance policy. As far as an assignment was concerned, an assignee stands in the assignor’s shoes “and takes ‘only as good a claim as his assignor had.’” Therefore, investors’ third-party claims were not first-party losses merely because investors were now in CCI’s shoes as first-party claimants. Investors may recover only those losses that CCI could have recovered for itself.

The Court of Appeals framed the issue presented as whether, under the agreed-on coverage, Lloyd’s would be liable to CCI for the damages suffered by investors arising out of the wrongful acts of its officers and employees in marketing interests in CCI to investors. The Court held this was not the case, because the losses asserted by investors did not constitute direct losses to CCI as contemplated by the bond. The bond provided coverage for “direct financial loss” sustained by CCI. The phrase was not defined. However, the Court again noted that this was a fidelity bond and not a liability policy. CCI could have purchased such insurance, but it did not. Thus, the Court held that “direct financial loss” unambiguously refers only to the immediate loss of CCI’s property through the dishonesty of its own officers and employees. It does not provide coverage to CCI for acts that cause damages to third parties. The summary judgment in favor of Lloyd’s was affirmed.

Summary and full case available here.

Colorado Court of Appeals: Landowner May Consent to Entry of Neighbor by Actions Absent Express Verbal Consent

The Colorado Court of Appeals issued its opinion in Corder v. Folds, Jr.  on Thursday, October 11, 2012.

Premises Liability—Summary Judgment—Express and Implied Consent.

In this premises liability case, plaintiff Gerald Corder (neighbor) appealed from the summary judgment dismissing his complaint against defendant William Folds, Jr. (landowner). The judgment was reversed and the case was remanded for further proceedings.

Neighbor and landowner were next-door neighbors. In August 2008, neighbor entered landowner’s backyard to return a propane tank he had borrowed from him. He walked up the stairs leading to landowner’s deck, and left the tank on the deck. On his way down the stairs, the stairs collapsed and he was injured. Landowner was not home at the time.

Neighbor sued landowner under the premises liability act (Act), alleging he was either an invitee or licensee at the time of his injury and that landowner failed to exercise reasonable care with respect to a dangerous condition on his property. Landowner filed a motion for determination of law, asserting neighbor was a “trespasser,” as that term is used in CRS § 13-21-115(5)(c). The trial court agreed and entered summary judgment in favor of the landowner because there was no evidence suggesting he had injured the neighbor willfully or deliberately. Neighbor appealed.

The Act provides the exclusive remedy against a landowner for injuries sustained on the landowner’s property. A landowner’s standard of care is determined by the classification of the injured party.

Landowner maintained that neighbor was a trespasser because he was not given express consent to enter the property at the time of the injury. Neighbor countered that he had implied consent because: (1) landowner gave him a key to his home to perform maintenance projects and care for landowner’s home when he was away (2) landowner and neighbor were close friends who had a long history of entering each other’s property without express permission; and (3) the loan of the propane tank gives rise to a logical inference that neighbor was permitted to return it without contemporaneous, express permission.

The Court of Appeals held that a landowner may consent to entry, absent express words, by his or her course of conduct. Therefore, “consent” in the Act may include implied consent. Accordingly, the summary judgment was reversed and the case was remanded.

Summary and full case available here.

Colorado Court of Appeals: Court Upheld Exclusion of Vehicle Under Liability Coverage of Policy from Underinsured Motorist Benefits

The Colorado Court of Appeals issued its opinion in Rivera v. American Family Insurance Group  on Thursday, October 11, 2012.

Automobile Insurance—CRCP 56(h)—Uninsured/Underinsured Coverage—CRS § 10-4-609.

In this automobile insurance case, plaintiff Anita Rivera appealed the district court’s order granting the CRCP 56(h) motion for a determination of law in favor of defendant American Family Insurance Group (American Family). The order was affirmed.

Rivera, while a passenger in an automobile, was seriously injured in a one-car accident when the driver lost control of the automobile. Rivera made a claim against the driver’s insurer, American Family. The declarations page provided that $100,000 was the policy limit for bodily injury under the liability coverage section and $100,000 was the limit for a bodily injury caused by an underinsured motorist.

American Family paid Rivera $100,000, the policy limit of the liability section, but declined coverage under the uninsured/underinsured (UI/UIM) coverage section. Rivera then sued American Family under CRCP 57(a), seeking a declaration that she was covered under the UM/UIM section of the driver’s policy. In turn, American Family filed a motion under CRCP 56(h), seeking a determination of law upholding its denial of Rivera’s claim for coverage under the UM/UIM section.

On appeal, Rivera conceded that the policy was unambiguous when it stated that the insured vehicle exclusion eliminates from the definition of “underinsured vehicle” a vehicle “insured under the liability coverage of this policy.” This bars Rivera from recovering UM/UIM coverage benefits under the policy if she recovers the policy’s liability coverage benefits. She argued this exclusion violates CRS § 10-4-609 and the Court of Appeals disagreed.

The Court found the Supreme Court’s reasoning in Terranova v. State Farm Mutual Insurance Company, 800 P.2d 55, 59 (Colo. 1990),to be dispositive of the issue. The insured vehicle exclusion in Terranova was virtually identical to that at issue in this case, and the Supreme Court held it was enforceable. The Court further held that the amendments to CRS § 10-4-609, made subsequent to Terranova, did not change the basis for the Terranovaholding.

Rivera also argued that the insured vehicle exclusion contravened the public policy of Colorado that tort victims injured by uninsured or underinsured motorists receive full compensation for their injuries. The Court disagreed. It noted that the legislative intent behind the statute was to compensate insureds for losses subject to the limits of their insurance contract. In addition, the Supreme Court in Terranova observed that a “majority, and the better reasoned cases, have upheld the exclusion of a vehicle under the liability coverage of the policy from uninsured motorist benefits.” The order was affirmed.

Summary and full case available here.

Tenth Circuit: Owner of Oil and Gas Leasehold Rights Can Validly Grant Permission Authorizing Another to Conduct Seismic Exploration of a Mineral Estate

The Tenth Circuit Court of Appeals issued its opinion in Kimzey vs. Flamingo Seismic on Monday, October 15, 2012.

Plaintiffs own surface estates in Oklahoma. Defendant is a company engaged in geophysical data services for the oil and gas industry. Owners of undivided interests in the oil and gas and/or mineral leaseholds underlying Plaintiffs’ lands granted permission to Defendant to conduct seismic exploration. Plaintiffs argued that the owners of the leaseholds had no right to grant Defendant permission to enter the properties, and that such permission was further invalid because the seismic exploration did not benefit the mineral estate. In granting Defendant’s summary judgment motion, the district court noted that it is well-established under Oklahoma law that an owner of mineral interests and/or oil and  gas leasehold rights can validly grant a permit authorizing another person to conduct  seismic exploration of a mineral estate. The district court further found that there was no support in the case law for Plaintiffs’ assertion that there must be a benefit to the mineral estate in order for an owner to have authority to assign his right to conduct seismic operations. The district awarded also Defendant $71,560 in attorney’s fees.

The Tenth Circuit agreed with the district court that  Oklahoma law clearly permits owners of mineral estates to grant access to the surface property in order to conduct seismic exploration. In Oklahoma, the owner of a mineral interest has the right to enter the land to explore for oil and gas. As to attorneys’ fees, after establishing jurisdiction, the Tenth Circuit found no abuse of discretion by the district court in its award of attorneys’ fees. District court’s grant of Defendant’s summary judgment motion and award of attorneys’ fees AFFIRMED.

Tenth Circuit: Unpublished Opinions, 10/15/12

On Monday, October 15, 2012, the Tenth Circuit Court of Appeals issued one published opinion and four unpublished opinions.

Steinmetz v. Romero

Fomby v. Jones

Peterson v. Lampert

Rivers v. Hartmann

No case summaries are provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.