June 16, 2019

Archives for January 8, 2013

The State of Kansas Wants a Sperm Donor To Pay Child Support. Could This Happen in Colorado?

Laura Koupal PhotoKansas, 2009. William Marotta provided sperm to a lesbian couple, Angela Bauer and Jennifer Schreiner, to enable them to have their first child together. Schreiner conceived a child, a girl, by artificial insemination done at home with Marotta’s sperm. Marotta has never had a relationship with the child.

Several years later Bauer and Schreiner broke off their relationship but both women continued to co-parent and provide for their child. Schreiner applied for state assistance for the child. Although Schreiner was listed as the sole parent on the birth certificate for the child, the Kansas Department of Children and Families required that she list a father’s name. Schreiner listed Marotta as the father and the state is now ordering Marotta to pay child support.

It is being reported that the parties had entered into a sperm donor agreement prior to the insemination. According to the reports, the donor agreement contained language stating that Marotta waived any parental rights and that Bauer and Schreiner agreed to indemnify Marotta and hold him harmless for any child support payments demanded of him by any other person or entity, public or private.

The state of Kansas is arguing that it does not recognize the agreement because the artificial insemination was not performed by a licensed physician. Kansas statutory law provides that the donor of semen provided to a licensed physician for use in artificial insemination of a woman other than the donor’s wife is treated in law as if he were not the birth father of a child thereby conceived, unless agreed to in writing by the donor and the woman. Kan. Stat. Ann §23-2212(f).

This story has made national news in the last week. Colorado sperm donors and intended parents may be wondering if a similar claim could be brought in Colorado. The short answer is yes. Colorado statutory law has a similar requirement stating that the assisted reproductive procedure must be done under the supervision of a licensed physician or advanced practice nurse. Specifically, the statute states, in part: “If, under the supervision of a licensed physician or advanced practice nurse, and with the consent of her husband, a wife consents to assisted reproduction with an egg donated by another woman, to conceive a child for herself, not as a surrogate, the wife is treated in law as if she were the natural mother of a child thereby conceived. Both the husband’s and the wife’s consent must be in writing and signed by each of them. The physician or advanced practice nurse shall certify their signatures and the date of the assisted reproduction and shall file the consents with the department of public health and environment, where they shall be kept confidential and in a sealed file; however, the physician’s failure to do so does not affect the father and child relationship or the mother and child relationship.” C.R.S. §19-4-106. Colorado has the added requirement that the recipient of the sperm must be married.

However, Colorado does allow second parent adoptions. After a child is born to a sole legal parent, same-sex couples may petition the court to have the other non-biological parent added to the birth certificate. The child’s two legal parents responsible for support and care would then be the biological mother and the adoptive mother, not the sperm donor.

Laura Koupal founded Koupal Law Firm, P.C. this year. Prior to starting her own firm, Laura spent nine years in private practice representing clients in assisted reproductive technology matters, complex divorce litigation, non-traditional family formation and dissolution, adoption and estate planning matters. Laura also completed a one-year clerkship with the Honorable Christina M. Habas of Denver District Court following law school.

Laura holds a Bachelor of Science degree from the University of Colorado and a Juris Doctor from the University of Denver. She is a Fellow of the American Academy of Assisted Reproductive Technology Attorneys, a professional Member of the American Society for Reproductive Medicine and RESOLVE, a Member of the Colorado Bar Association Family Law Section and the Denver Bar Association, and a Member of the American Bar Association Assisted Reproductive Technology Committee. Laura regularly writes and speaks on the issues of family law and assisted reproductive technology law. You can visit her website at www.koupallaw.com.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

Colorado Court of Appeals: In Theft by Deceiving Case, Statute of Limitations Begins to Run When Theft is Discovered

The Colorado Court of Appeals issued its opinion in People v. Cito on Thursday, December 27, 2012.

Theft by Deception—CRS § 16-5-401(4.5).

The People appealed the district court’s order dismissing various theft by deception charges against defendant Kirk Cito. The order was vacated and the case was remanded with directions.

In 2006, Cito, a veterinarian, was hired as the hospital director for an animal hospital. Each month, he sent to the hospital’s certified public accountant (CPA) a packet of documents that included a list of the expenses he had incurred and checks he had written on the hospital’s behalf, receipts for charges made to the hospital’s credit card, and other supporting documents. A monthly report was prepared for the hospital’s owner summarizing this information.

In February 2011, the owner expressed concern to the CPA about the information Cito had been providing. The CPA went back through all five years of packets and concluded Cito had not been truthful in his submitted documentation. Cito was entitled to additional compensation for any unused personal time off, but not if he actually used the personal time. The CPA determined that Cito had paid himself approximately $53,700 for unused personal time off, even though he had actually taken the time off.

On December 5, 2011, Cito was charged with ten counts of theft by deception in violation of CRS § 18-4-401(1) and (4). Four of those counts, and a portion of a fifth, alleged thefts committed more than three years before the charges were filed. Cito moved to dismiss those counts, arguing they were barred by the three-year statute of limitations in CRS § 16-5-401(4.5). In response, the prosecution argued that the limitations period does not commence until the date of discovery, and the theft was not discovered until February 2011.

The district court rejected the prosecution’s argument, finding that “discovery of the criminal act” had occurred at the time Cito received payments from the hospital because all of the information available in February 2011 also was available at the time of the payments. The prosecution appealed.

The People argued that “discovery of the criminal act” did not occur when Cito obtained the money, because this ignores that the theft was by deception and the hospital didn’t discover the deception until February 2011. The Court of Appeals agreed that the district court erred, but for slightly different reasons.

The Court held that “discovery of the criminal act” is an ambiguous phrase. In turning to the legislative history of the act, the Court found no specific guidance, though there was testimony regarding applicability to financial crimes where information may be buried or it may take time to discover. The Court also noted that in the criminal context, this accrual question appeared to be one of first impression. However, in civil cases, Colorado courts have long and consistently held that “discovery” refers to the point at which the aggrieved party knew or in the exercise of reasonable diligence should have known of her claim. The Court held that “discovery” in this instance refers to the point at which the victim or the state knew or through the exercise of reasonable diligence should have known of the theft by deception. The order was vacated and the case was remanded for the district court to reconsider Cito’s motions in light of the Court’s ruling.

Summary and full case available here.

http://www.cobar.org/opinions/opinionlist.cfm?casedate=12/27/2012&courtid=1

Colorado Court of Appeals: In Breach of Contract Case, Three-Part Test to Determine Equitable Estoppel Was Satisfied

The Colorado Court of Appeals issued its opinion in Extreme Construction Co. v. RCG Glenwood, LLC  on Thursday, December 27, 2012.

Construction Contract—Equitable Estoppel in a Contract Action.

In this action concerning the interpretation of a payment provision in a construction contract, plaintiff Extreme Construction Co. (Extreme) appealed the amount of the monetary judgment that it obtained against defendant RCG Glenwood, LLC (RCG) and the judgment entered in favor of defendant Mike Spradlin. RCG cross-appealed the trial court’s award of attorney fees, costs, and certain prejudgment interest to Extreme, as well as the court’s denial of RCG’s request for fees and costs. The judgment was affirmed in part and vacated in part, and the case was remanded with directions.

RCG, through Spradlin, its owner, negotiated for Extreme to remodel a portion of a building. Extreme provided a budget that estimated the total price and included amounts for superintendence and labor, which were calculated at $68.50 per hour and $38.50 per hour, respectively. The contract that was entered into did not include these hourly rates. Instead, it was a Guaranteed Maximum Price contract that provided for payment of wages of construction workers employed by Extreme, as well as “Builder’s overhead and construction management fee of 5.5%, and Builder’s profit of 5.5%, for a total of 11%.”

Extreme mailed monthly bills reflecting the hourly wage charges noted above. These invoices were paid without objection, but some of RCG’s checks bounced. Each time Extreme discussed the bounced checks with Spradlin, no issues regarding the hourly rates were raised. Notwithstanding the failure of RCG to pay its bills, Extreme completed the project on time, to Spradlin’s satisfaction, and for about $45,000 less than the Guaranteed Maximum Price.

RCG failed to pay in full, and Spradlin proposed a payment schedule and “a promissory note, personally guaranteed.” Based on his request, Extreme did not file a lien and prepared a promissory note, which was never signed.

Extreme sued, claiming breach of contract against RCG and that Spradlin had breached his personal guarantee. RCG and Spradlin asserted Extreme had overbilled RCG, claiming Extreme was not permitted to bill for superintendence and labor on an hourly basis. Extreme replied that the contract was ambiguous and that extrinsic evidence, including the pre-contractual budget, favored its interpretation. In addition, Extreme claimed RCG was estopped from contesting Extreme’s interpretation of the contract.

The trial court found that the contract was ambiguous but that the extrinsic evidence supported RCG and Spradlin’s argument. It rejected the estoppel argument. The court entered judgment in favor of Extreme and against RCG in the amount of $18,523.65. Because this was significantly less than the amount Extreme had sought at trial, RCG argued it was the prevailing party under a fee-shifting provision in the contract. Also, because the amount of the judgment was less than the offer of settlement made under CRS § 13-17-202, any interest awarded to Extreme had to be abated as of the date of the offer, and RCG was entitled to an award of costs. The trial court rejected all of these arguments. Both parties appealed.

Extreme contended that RCG was equitably estopped from contesting Extreme’s interpretation of the contract, and the Court of Appeals agreed. The Court held, as a matter of first impression, that the equitable estoppel doctrine applies to disputes over contract interpretation, at least in cases involving the construction of an ambiguous contractual provision unrelated to insurance coverage.

The Court also agreed with the trial court that the contractual provision regarding wages was ambiguous. For equitable estoppel to apply, the party asserting the doctrine must establish that (1) the other party had full knowledge of the facts, (2) the other party unreasonably delayed in asserting an available remedy, and (3) the party asserting the doctrine relied on the other party’s delay to its detriment.

The trial court found, and the record supported, that the first element was satisfied. The trial court found the second element was not met because if RCG had sought redress, it would have halted the project. The Court found this was error. It is unreasonable for a contracting party who knows of, but secretly disagrees with, the other side’s contract interpretation to delay challenging the interpretation until the other side has completed its performance. This is even more the case where, as here, RCG’s silence induced Extreme’s continued performance. The trial court also erred in finding the third element wasn’t met, because the facts clearly demonstrated that Extreme relied on RCG’s failure to contest its invoices to its detriment. The award of damages was vacated and the case was remanded to the trial court to recalculate the damages.

Extreme argued it was error for the trial court to determine that Extreme never accepted Spradlin’s offer of a personal guarantee. The Court was not persuaded. It agreed with the trial court that although an offer was made by Spradlin, no action was taken that indicated an acceptance by Extreme.

RCG argued it was error to find that under the fee-shifting provision in the contract, Extreme, and not RCG, was the prevailing party. The Court disagreed. RCG was held liable for breach of the contract; therefore, it was the prevailing party for purposes of awarding attorney fees.

RCG also contended it was error for the trial court to reject its assertion that under CRS § 13-17-202, the interest awarded to Extreme should have abated as of the time of the offer of settlement. The Court disagreed, finding that RCG did not address in its briefs the trial court’s finding that RCG did not make a qualifying offer of settlement.

Summary and full case available here.

Colorado Supreme Court: Announcement Sheet, 1/7/13

The Colorado Supreme Court issued one published opinion on Monday, January 7, 2013.

In the Matter of Titles, Ballot Titles and Submission Clause for Proposed Initiatives 2011-2012 Nos. 67, 68, 69 and Nos. 94, 95

The summaries for this case is 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.

Tenth Circuit: Unpublished Opinions, 1/7/13

On Monday, January 7, 2013, the Tenth Circuit Court of Appeals issued one published opinion and one unpublished opinion.

United States v. Robinson

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