August 22, 2019

Archives for October 25, 2012

Tenth Circuit: Freight Operator Not Liable for Worker’s Injuries Under Federal Employers Liability Act (FELA)

The Tenth Circuit issued its opinion in Smith v. Rail Link on Tuesday, October 23, 2012.

Plaintiff-Appellant Bridget Smith worked for Rail Link, Inc. (“Rail Link”) as a freight operator at the Belle Ayre Mine in Wyoming. She was injured on the job, and sued Rail Link and its corporate parent Genessee & Wyoming, Inc. (“GWI”) in federal district court, asserting that the companies were liable for her injuries under the Federal Employers Liability Act (“FELA”). FELA provides, in certain circumstances, a federal cause of action for injured employees of common carriers by railroad. The Defendants moved for summary judgment, contending that they were not subject to FELA liability for Ms. Smith’s injuries because FELA only applies where a defendant is the injured worker’s employer and is a common carrier. Rail Link argued it was a not a common carrier, and GWI argued it was neither a common carrier nor Ms. Smith’s employer. The district court granted summary judgment for both Defendants. Ms. Smith appealed.

Rail Link’s potential liability in this case turned not on whether Rail Link was acting as a common carrier at the mine where Ms. Smith was injured, but instead depended on whether Rail Link was a common carrier at other facilities. That Ms. Smith never worked at those facilities is of no moment. An employer is a common carrier everywhere for FELA. purposes. The Tenth Circuit determined that the question was whether Rail Link operated a going railroad that carries for the public. The Tenth Circuit concluded that Rail Link did not, and was therefore not a common carrier under FELA.

Ms. Smith asserted GWI was her employer under common law master-servant principles. The Supreme Court has made it clear that FELA applies not only to “nominal” employers of an injured plaintiff, but also to “common-law” employers. However, the Tenth Circuit found that Ms. Smith did not show any connection between GWI’s administrative control over Rail Link and any control over what Rail Link’s employees actually did in the field on a day-to-day basis. Ms. Smith offered no evidence to support an inference that GWI’s control over administrative functions ever affected any physical conduct of Rail Link employees. The concept of employment under FELA is a broad one, but to show an employment relationship, a plaintiff still must offer some evidence that physical conduct was or could have been controlled by an alleged employer. The record here was lacking in this regard, compelling a ruling in GWI’s favor.


Tenth Circuit: Nonrefundable Portion of Child Tax Credit is Not Exempt from Bankruptcy Under Colorado Law

The Tenth Circuit Court of Appeals issued its opinion in In re Borgman on Tuesday, October 23, 2012.

Appellees Vernon and Elyse Dunckley (“the Dunckleys”) and Appellee Richard Borgman (“Borgman”) (collectively, the “Debtors”) each filed for Chapter 7 bankruptcy in October 2009. The Debtors listed their prospective tax refunds, including child tax credit, as exempt property on their bankruptcy petitions, citing C.R. S. § 13-54-102(1)(o). The Dunckleys received a tax refund in the amount of $4,261. Borgman received a tax refund in the amount of $3,770.

In a Chapter 7 bankruptcy, a debtor’s property is liquidated and the proceeds distributed to creditors. But a debtor may claim certain property as exempt from liquidation and sale.  Colorado has codified its own exempt property rules.  The relevant Colorado statute exempts a wide range of personal property, including, the full amount of any federal or state income tax refund attributed to an earned income tax credit or a child tax credit. C.R.S. “§ 13-54-102(1)(o).

Under the Internal Revenue Code, a taxpayer with minor children may claim a child tax credit (“CTC”) of $1,000 for each qualifying child. The Internal Revenue Code distinguishes between “nonrefundable credits,” “refundable credits.” “Nonrefundable” means it can only reduce tax liability to the extent that tax liability exists. For example, if a taxpayer had $750 of total tax liability and one qualifying child, she could use $750 of the $1,000 CTC to reduce her tax liability to zero, but she would not be entitled to have the remaining $250 paid to her. For certain taxpayers with earned income, however, a portion of the $1,000 Credit that exceeds the tax liability is refundable. This component is called the additional child tax credit. If a taxpayer in this example qualified for the Additional CTC, not only would $750 of the nonrefundable CTC reduce her tax liability, to zero, but she could also receive some or all of the $250 difference as a refund.

The Dunckleys claimed an exemption of $2,000 from the bankruptcy estate, equivalent to the $2,000 nonrefundable CTC. Likewise, Borgman sought to exempt $818 from his bankruptcy estate, corresponding to the nonrefundable portion of the CTC on his tax return. The Trustee objected to each of these claims, on the grounds that the Debtors were claiming an exemption on a child tax credit which is related to a non-refundable portion credited against the amount of tax owed. The Bankruptcy Judge disallowed both exemptions and the Debtors appealed to the Bankruptcy Appellate Panel, which reversed.  The Trustee appealed to the Tenth Circuit.

This appeal presents the question of whether the amount of a federal tax refund equivalent to the nonrefundable portion of the child tax credit of 26 U.S.C. § 24(a) is exempt from a bankruptcy debtor’s estate under Colorado Revised Statutes § 13-54-102(1)(o). That statute exempts from a bankruptcy estate the full amount of any federal or state income tax refund attributed to an earned income tax credit or a child tax credit.

The Tenth Circuit stated that it is axiomatic that a refund attributed to  a child tax credit must first be a “refund,” and that the nonrefundable portion of the Child Tax Credit — i.e., the portion claimed in the “tax and credits” section of Form 1040—never gives rise to a “refund.” A reduction in tax liability, standing alone, will never result in a refund. Accordingly, the nonrefundable portion of the CTC is outside the scope of § 13-54-102(1)(o).

Further, the disputed refunds were not “attributed to” the Child Tax Credit. In light of the fact that a refund depends first upon a payment, it cannot be said that the refunds were “attributed to” the nonrefundable portion of the CTC. The Dunckleys’ refund was “attributed to” the fact that they had $8,447 in withholding, as against total tax liability of $4,186. Borgman’s refund was “attributed to” the fact that he had $1,328 in withholding, a $400 Making Work Pay credit, a $1,860 earned income tax credit, and a $182 Additional CTC, against total tax liability of zero.

In sum, the Tenth Circuit held that the nonrefundable portion of the child tax credit cannot give rise to a “refund,” and is not included in the full amount of a federal income tax refund attributed to a child tax credit under Colorado Revised Statutes § 13-54-102(1)(o). It is therefore not exempt from the bankruptcy estate, as the Bankruptcy Court correctly held.

The order of the Bankruptcy Appellate Panel is REVERSED and the orders of the Bankruptcy Court are REINSTATED disallowing the claimed exemptions.

Tenth Circuit: No Obligation to Answer Officer’s Questions During Consensual Encounter

The Tenth Circuit issued its opinion in Kaufman v. Higgs on Tuesday, October 23, 2012.

A female driver with a male passenger hit a car in a parking lot and left the scene. The Colorado State Patrol investigated after receiving the license plate number from a witness and determined the car belonged to the plaintiff, Richard Kaufman. Two troopers met with Kaufman, who refused to identify the driver, citing privilege. The troopers arrested Kaufman for obstruction of justice. Kaufman brought a § 1983 action against the troopers based on violations of his Fourth and Fifth Amendment rights. The district court granted summary judgment for the troopers based on qualified immunity. Kaufman appealed only the claim that his Fourth Amendment rights were violated when he was arrested without probable cause.

As the first part of analyzing whether qualified immunity applied, the Tenth Circuit examined the plain language of Colorado’s obstruction of justice statute, C.R.S. § 18-8-104, and a Colorado Supreme Court case interpreting the statute to determine whether the officers had probable cause to arrest Kaufman. The court held that the officers had no probable cause, including arguable probable cause, because “[r]efusal to answer questions during a consensual encounter, expressed by silence and assertion of ‘privilege,’ is not an ‘obstacle’ as the term is used in the statute.” In answering the second part of the  qualified immunity analysis, the court determined that no officer could reasonably believe Kaufman’s silence constituted a criminal act, so his Fourth Amendment right to be free from unreasonable seizure was clearly established. The court reversed summary judgment for the defendants and remanded.

Tenth Circuit: Unpublished Opinions, 10/23/12

On Tuesday, October 23, 2012, the Tenth Circuit Court of Appeals issued three published opinions and seven unpublished opinions.

United States v. Roberts

Rogers v. Denecke

Kriston v. Peroulis

United States v. Fields

Rivas v. US Bank

Optima Oil & Gas Company v. Mewbourne Oil Company

Hall v. Astrue

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

Colorado Court of Appeals: Announcement Sheet, 10/25/12

On Thursday, October 25, 2012, the Colorado Court of Appeals issued 11 published and 45 unpublished opinions.


People v. Phillips

People v. Howe

Colorado Pool Systems, Inc. v. Scottsdale Insurance Company

People v. Berdahl

Parker Excavating, Inc. v. City & County of Denver

People v. Aguilar

Legro v. Robinson

In the Matter of Harte and Concerning Routt County District Court

People v. Seader

Young v. Jefferson County Sheriff

Western Logistics, Inc. v. Industrial Claim Appeals Office

The summaries for these cases are forthcoming, courtesy of The Colorado Lawyer.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.