August 18, 2019

Archives for June 13, 2013

Colorado Court of Appeals: Insurance Company Owed Duty to Third-Party so Trial Court’s Grant of Motion to Dismiss in Error

The Colorado Court of Appeals issued its opinion in Medical Lien Management v. Allstate Insurance Company on Thursday, June 6, 2013.

Breach—Assignment—Personal Injury—Settlement—Notice.

In this breach of assignment action, plaintiff Medical Lien Management, Inc. (MLM) appealed the judgment dismissing its complaint against defendant Allstate Insurance Co. (Allstate). The judgment was reversed and the case was remanded.

In October 2005, Fred Martinez was injured in an automobile accident caused by a tortfeasor insured by Allstate. In March 2007, in consideration for payment by MLM of his medical bills, Martinez executed a written agreement granting MLM a lien on, and assigning his rights to, any and all proceeds derived from his personal injury claim in an amount equal to the fees and costs of the medical treatment paid by MLM. MLM eventually paid $9,938 for such treatment. In October 2008, Martinez settled his personal injury claim against the tortfeasor insured by Allstate. Allstate issued payment to Martinez without paying MLM.

MLM asserted that the court erred in granting Allstate’s CRCP 12(b)(5) dismissal motion for failure to state a claim. First, an individual can validly assign the sums to be recovered from his or her personal injury claim before settlement. Here, the language of the agreement was sufficient to withstand a pleadings challenge as to whether the parties intended to affect a present transfer of the proceeds of Martinez’s personal injury recovery. Additionally, the complaint adequately alleged a valid assignment to MLM of Martinez’s rights to proceeds resulting from his injury and notice of the assignment. Once a debtor receives notice of a valid assignment, it is required to pay the assignee. Allstate failed in this regard. Therefore, the trial court erred in granting Allstate’s motion to dismiss for failure to state a claim.

Summary and full case available here.

Colorado Court of Appeals: Rules of Professional Conduct and Common Law Do Not Establish Standard of Care for Disclosure of Representing Attorney’s Medical and Arrest History

The Colorado Court of Appeals issued its opinion in Moye White LLP v. Beren on Thursday, June 6, 2013.

Law Firm Fiduciary Duty to Disclose Information About Attorneys.

Defendant David I. Beren appealed the trial court’s judgment and order of costs in favor of plaintiff Moye White LLP, denying, as relevant here, Beren’s counterclaim for breach of fiduciary duty. The judgment and order were affirmed.

Moye White sued Beren for recovery of attorney fees incurred during its representation of Beren in a probate matter form 2009 to 2010. Moye White sought $229,118.10 from Beren on a breach of contract claim. Beren counterclaimed, alleging that Moye White breached its fiduciary duty to him by failing to disclose and intentionally concealing material information related to one of the attorneys working on his case (Attorney A), who had a history of disciplinary proceedings, mental illness, alcoholism, and related arrests. The trial court found in favor of Moye White on all claims. As the prevailing party, Moye White moved for an award of costs totaling $76,637.49 and was awarded $69,975.59.

On appeal, Beren asserted it was error to find no duty existed for Moye White to disclose Attorney A’s medical and arrest history, because the duty exists under common law and Colo. RPC 1.4 and 7.1. The Court of Appeals disagreed. Neither party cited cases in Colorado or other jurisdictions addressing this issue. The Court looked to cases involving other professionals’ fiduciary duty to disclose material information to a principal and concluded no duty existed here, because the failure to disclose did not pose a demonstrable risk to the firm’s ability to represent Beren.

Attorney A was added to the team representing Beren at the recommendation of the partner assigned to the case. Attorney A had a longstanding history of marital, alcohol, domestic violence, and other issues. He self-reported to the Office of Attorney Regulation Counsel (OARC), which, following a full investigation, suspended his license to practice law conditioned on his receiving ongoing substance abuse treatment. He was monitored and tested positive several times. From June 2010 until the date of the trial court’s order in this case, he remained sober. Moye White was aware of these issues but allowed him to return to work and instituted a supervision plan under which his legal work was reviewed by another attorney.

Moye White never advised Beren regarding Attorney A’s medical and arrest history, and his stayed suspension. Beren found out about Attorney A’s history after Moye White moved to withdraw from representing Beren in July 2010; however, the information was of public record.

Beren asserted that had he known about Attorney A’s medical and arrest history, he would have objected to his representation. The Court noted that a fiduciary relationship exists as a matter of law between an attorney and his or her client. To prevail on a claim of breach of fiduciary duty against an attorney, a plaintiff must establish that a particular standard of care existed and that the attorney failed to adhere to that standard. Here, Beren asserted that the common law and Colo. RPC 1.4 and 7.1 established a standard of care that required such a disclosure when any such history has a possibility of interfering with the representation. The Court disagreed.

Under the common law, the information has to be material to require disclosure. The Court found that the information was not material, because the presented evidence demonstrated that Attorney A’s medical and arrest history did not adversely affect the quality of Moye White’s representation. The risk was speculative and not material.

The Colorado Rules of Professional Conduct do not create a fiduciary duty, but they may evidence standards of care. Colo. RPC 1.4 was inapposite because it relates to disclosure of information necessary for a client to give informed consent. There is no requirement for a client’s informed consent before a law firm can allow an additional attorney to work on a case. Moreover, the information was not material.

Colo. RPC 7.1(a)(1) also is inapposite. The rule pertains to attorneys’ advertisements of legal services. Even if it were applicable, it would again not impose a duty to disclose because the information was not material to the representation.

Summary and full case available here.

Tenth Circuit: Plaintiff’s Complaint Stated a First Amendment Compelled Speech Claim Concerning Image on Oklahoma License Plate

The Tenth Circuit Court of Appeals published its opinion in Cressman v. Thompson on Wenesday, June 12, 2013.

In August 2008, Keith Cressman learned that the State of Oklahoma had redesigned its vehicle license plate. The plate included an image depicting a sculpture of a Native American shooting an arrow toward the sky. Mr. Cressman discerned that it depicted and communicated Native American religious beliefs in contradiction to his own Christian religious beliefs.

To avoid displaying the image, Mr. Cressman purchased a specialty license plate, which cost more than the standard plate and had a $35 renewal fee. He then purchased a cheaper specialty license plate, which cost more than the standard plate, plus $16.50 for renewal. Eventually, he decided he no longer wanted to pay additional fees for a specialty license plate. Instead, he wanted to cover up the image. However, covering up the image is illegal under Oklahoma law.

Mr. Cressman sued several state officials for violation of his civil rights under 42 U.S.C. § 1983. Concluding that he failed to state a claim upon which relief could be granted, the district court dismissed his complaint. Mr. Cressman appealed.

Two issues were before the Tenth Circuit on appeal. First, the Defendants asserted that Mr. Cressman lacked Article III standing to sue them in their official capacities. Second, Mr. Cressman argued that the district court erred in dismissing his complaint for failure to state a First Amendment compelled speech claim

A. Article III Standing  

“When evaluating a plaintiff’s standing at [the motion to dismiss] stage, both the trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” Initiative & Referendum Inst. v. Walker, 450 F.3d 1082, 1089 (10th Cir. 2006). Mr. Cressman’s “appeal cannot proceed on the merits in the absence of . . . [a] case or controversy” under Article III of the U.S. Constitution. Habecker v. Town of Estes Park, Colo., 518 F.3d 1217, 1223 (10th Cir. 2008). “To establish Article III standing, a plaintiff must establish (1) that he or she has ‘suffered an injury in fact;’ (2) that the injury is ‘fairly traceable to the challenged action of the defendant;’ and, (3) that it is ‘likely’ that ‘the injury will be redressed by a favorable decision.’” Awad v. Ziriax, 670 F.3d 1111, 1120 (10th Cir. 2012).

1. Injury in Fact

“First, the plaintiff must have suffered an injury in fact—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). The credible threat of prosecution if Mr. Cressman covered up the license plate was sufficient to support an injury in fact. See Ward v. Utah, 321 F.3d 1263, 1267 (10th Cir. 2003.

2. Causation

Mr. Cressman had show there was “a causal connection between the injury and the conduct complained of—the injury had to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court.” Lujan, 504 U.S. at 560.  At oral argument, counsel for the Defendants conceded that all Defendants except for Ms. Allen had enforcement authority for the statute at issue. Accordingly, the Tenth Circuit concluded that Mr. Cressman showed causation as to every Defendant except for one, Ms. Allen.

3. Redressability

Finally, “it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Lujan, 504 U.S. at 561. Mr. Cressman sought forms of relief that all Defendants except Ms. Allen could provide. Accordingly, he demonstrated redressability.

In sum, Mr. Cressman demonstrated he had Article III standing to sue all Defendants in their official capacities, except for Ms. Allen.

B. First Amendment Compelled Speech Claim

The main issue on appeal was whether the district court erred in dismissing Mr. Cressman’s First Amendment compelled speech claim under Fed. R. Civ. P. 12(b)(6).

1. Legal Background

“The First Amendment, as applied to state and local governments through the Fourteenth Amendment, provides that state actors ‘shall make no law . . . abridging the freedom of speech.’” Hawkins v. City & Cnty. of Denver, 170 F.3d 1281, 1286 (10th Cir. 1999) (quoting U.S. Const. amend. I). This protection is multifaceted. “Just as the First Amendment may prevent the government from prohibiting speech, [it] may prevent the government from compelling individuals to express certain views.” United States v. United Foods, Inc., 533 U.S. 405, 410 (2001). Thus, “one important manifestation of the principle of free speech is that one who chooses to speak may also decide what not to say.” Hurley v. Irish-Am. Gay, Lesbian & Bisexual Grp. of Boston, 515 U.S. 557, 573 (1995).

The issue was whether the license plate image was speech that qualified for protection under the First Amendment compelled speech doctrine. This issue included two questions. First, did displaying the license plate image constitute symbolic speech that qualified for First Amendment protection? Second, if the answer to the first question is yes, did requiring Mr. Cressman to display the image on the license plate affixed to his personal vehicles violate his First Amendment rights under the compelled speech doctrine?

a. Symbolic Speech

“The First Amendment literally forbids the abridgment only of ‘speech,’” but the Supreme Court has “long recognized that its protection does not end at the spoken or written word.” Texas v. Johnson, 491 U.S. 397, 404 (1989). The First Amendment protects certain expressive conduct. As part of the inquiry regarding what symbolic display is protected, the Court considered two relevant factors in Spence v. Washington, 418 U.S. 405 (1974): (1) an intent to convey a particularized message, and (2) a great likelihood that the message would be understood by those who viewed the symbolic act or display.

b. Compelled Speech

The compelled speech doctrine has its roots in West Virginia State Board of Education v. Barnette, 319 U.S. 624 (1943). Over three decades later, the Court revisited Barnette in Wooley v. Maynard, 430 U.S. 705 (1977). Wooley concerned the constitutionality of New Hampshire’s requirement that noncommercial vehicles display license plates featuring the state motto, “Live Free or Die.” The plaintiffs were Jehovah’s Witnesses who wished not to display the motto because it was repugnant to their moral, religious, and political beliefs. Requiring the plaintiffs to use their personal property as a “mobile billboard for the State’s ideological message or suffer a [criminal] penalty” implicated First Amendment protections and could be justified only by a “sufficiently compelling” state interest. Id. at 715-16. The Court determined that New Hampshire’s interest in requiring drivers to display the state motto was not sufficiently compelling.

2. Sufficiency of Mr. Cressman’s Complaint

At the motion-to-dismiss stage, “[w]e must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff.”Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir. 2007).

a. Mr. Cressman Alleges the License Plate Image is Symbolic Speech

Mr. Cressman’s complaint alleged that displaying the license plate image conveyed a particularized message that others would likely understand. The license plate image conveyed a message that promoted “pantheism, panentheism, polytheism, and/or animism,” to which he objected on religious grounds. Accepting these factual allegations as true, the Tenth Circuit concluded that Mr. Cressman alleged that displaying the image conveyed a particularized message that viewers likely would understand.

b. Mr. Cressman Has Plausibly Stated a Compelled Speech Claim

As required by Wooley, Mr. Cressman alleged that the license plate image was based on a “Sacred Rain Arrow” sculpture and conveyed a religious message that conflicted with his beliefs. His allegations were sufficient to show an ideological message.

In sum, Mr. Cressman plausibly alleged that the image on the Oklahoma license plate conveyed a particularized message that others would likely understand and therefore constituted symbolic speech that qualified for First Amendment protection. In addition, he plausibly alleged that he was compelled to speak because the image conveyed a religious/ideological message, covering up the image posed a threat of prosecution, and his only alternative to displaying the image was to pay additional fees for specialty license plates that did not contain the image. The allegations in his complaint therefore plausibly alleged a compelled speech claim under Wooley.

3. Government Speech

The Defendants argued the Oklahoma license plate image was government speech that did not trigger First Amendment scrutiny. See Pleasant Grove City, Utah v. Summum, 555 U.S. 460, 467 (2009). However, the Defendants did not show, nor did the Tenth Circuit uncover, Supreme Court government speech decisions that have overruled or limited Wooley.


Tenth Circuit: Second-Degree Murder Conviction Affirmed of Mother Whose Daughter Died of Dehydration in Her Care

The Tenth Circuit Court of Appeals published its opinion in United States v. Christie on Tuesday, June 11, 2013.

For Rebecca Christie, life must have seemed more virtual than real. She usually awoke around noon, settled in before her computer, and logged on to World of Warcraft for gaming sessions lasting well past midnight. There she assumed a new identity in a fantastical world filled with dragons and demons where players staged heroic adventures with and against other players. All the while back in the real world Ms. Christie ignored the needs of her three-year-old daughter (“BW”). The neglect didn’t prove fatal so long as Ms. Christie’s husband Mr. Wulf was around to provide some care. But nine days after her husband left for an out-of-state deployment, the child was dead from dehydration.

Ms. Christie appealed her second-degree murder and state child abuse convictions, raising significant questions about computer searches under the Fourth Amendment and the exclusion of witnesses from trial under the Sixth Amendment. The government’s cross-appeal raised important questions, too, touching on the Assimilative Crimes Act and the Fifth Amendment’s double jeopardy guarantee.

The Tenth Circuit held that the district court handled all these questions well and carefully and saw no grounds on which to reverse its judgment in this tragic case.

Much of the evidence presented at trial came from the computer she so prized. From their forensic analysis, FBI investigators learned that Ms. Christie’s online activities usually kept her busy from noon to 3 a.m. with little pause. They learned that she was in a chat room only an hour before finding BW near death, and that she was back online soon afterwards. They learned from Ms. Christie’s messages to other gamers that she was annoyed by her responsibilities as a mother and “want[ed] out of this house fast.”

Ms. Christie contended this evidence and more from her computer was uncovered in violation of her Fourth Amendment rights and the district court should have suppressed it from her trial. Ms. Christie doesn’t question whether the government’s seizure of the computer satisfied the Fourth Amendment. Instead, Ms. Christie attacked the propriety of the two searches the government undertook once it had control of the computer. To justify its searches, the government pointed to a pair of warrants it sought and received, one for each search. It was these warrants Ms. Christie challenged.

The first warrant came some five months after authorities seized the computer. Ms. Christie argued this delay was constitutionally impermissible, should have precluded any warrant from issuing, and itself required the suppression of everything the government found.

An unreasonable delay in obtaining a search warrant can sometimes violate the Fourth Amendment. In assessing the reasonableness of a delay in seeking a warrant, we must take account of “the totality of the circumstances.” United States v. Sokolow, 490 U.S. 1, 8 (1989). The task in each case is to “balance the nature and quality of the intrusion on the individual’s Fourth Amendment interests against the importance of the governmental interests alleged to justify the intrusion.” United States v. Place, 462 U.S. 696, 703 (1983).

Mr. Wulf was at least a co-owner of the computer, he consented to its seizure, and Ms. Christie herself raised no objection to the seizure either at the time or in the following weeks and months. There was also undisputed evidence that the government was called away on other operations in the intervening months. The Tenth Circuit held that the government’s side of the ledger revealed a colorable interest in prioritizing law enforcement efforts while Ms. Christie could point to little harm to her interests in light of her husband’s express consent and her lack of objection.

Next Ms. Christie attacked the validity of the second warrant to conduct a more thorough search of her computer. She argued this warrant violated the Fourth Amendment’s promise that “no Warrants shall issue” without “particularly describing the place to be searched, and the persons or things to be seized.” A warrant isn’t ever supposed to be a license for just “a general . . . rummaging.” United States v. Brooks, 427 F.3d 1246, 1251 (10th Cir. 2005).

No doubt the particularity requirement and its underlying purposes are fully engaged when investigators seek to search a personal computer. Personal computers can and often do hold “much information touching on many different areas of a person’s life.” United States v. Walser, 275 F.3d 981, 986 (10th Cir. 2001). They can contain (or at least permit access to) our diaries, calendars, files, and correspondence — the very essence of the “papers and effects” the Fourth Amendment was designed to protect.

The warrant in this case allowed the police to search the computer for “[a]ll records and information relating to the murder, neglect, and abuse of [BW] from June 19, 2002 (date of birth) to May 4, 2006, (date computer seized.” The Tenth Circuit found this limiting direction particular enough under the case law. See Brooks, 427 F.3d at 1252.

In her final Fourth Amendment attack, Ms. Christie returned to the theme of faulting the government for its delay in seeking the second warrant. However, after the government executed its first search warrant and found incriminating evidence, it was presumptively entitled to retain the computer through trial. The general rule is that lawfully seized property bearing evidence relevant to trial “should be  returned to its rightful owner once the criminal proceedings have terminated,” not before. United States v. Rodriguez-Aguirre, 264 F.3d 1195, 1212 (10th Cir. 2001).

Ms. Christie further objected to the district court’s decision to exclude Mr. Wulf from the courtroom during the brief testimony of his ten-year-old daughter. Mr. Wulf’s exclusion, Ms. Christie insisted, violated her Sixth Amendment right to a public trial.

To support a partial closure of a trial, the district court need only identify a “‘substantial’ interest and document it with “sufficient findings to allow the reviewing court” to assess the decision. The Tenth Circuit held that “safeguarding the physical and psychological well-being of a minor” qualifies not just a substantial interest but a compelling one. See Globe Newspaper Co. v. Superior Court for Norfolk Cnty., 457 U.S. 596, 607 (1982).

This took the Court to the government’s cross-appeal. At the end of Ms. Christie’s trial, the jury convicted her of one federal charge (second-degree murder) and three crimes assimilated from New Mexico state law (intentional child abuse resulting in death, negligent child abuse resulting in death, and negligent child abuse not resulting in death). After receiving the verdict, the district court dismissed the two assimilated state homicide charges, leaving Ms. Christie responsible for second-degree murder and negligent child abuse not resulting in death. In explaining its dismissal of the assimilated homicide charges, the court pointed to the fact New Mexico does not permit more than one homicide conviction per death and, in this case, Ms. Christie already stood convicted for second-degree murder.

On appeal, the government argued the state assimilated homicide charges should be reinstated. The Assimilative Crimes Act (ACA), 18 U.S.C. § 13, states in part that anyone “guilty of any act or omission which, although not made punishable by any enactment of Congress, would be punishable if committed . . . within the jurisdiction of the State . . . in which [the federal enclave] is situated, . . . shall be guilty of a like offense and subject to a like punishment.” In this case, the ACA required the district court to dismiss the assimilated state law claims after trial because New Mexico prohibits the entry of convictions for child abuse-resulting-in-death alongside a conviction for any other form of homicide. See State v. Santillanes, 27 P.3d 456, 468 & n.3 (N.M. 2001).

Apart from the ACA but not wholly unrelated to it, there remains the question of double jeopardy. The Double Jeopardy Clause of the Fifth Amendment protects not only against successive trials on the same charges but also against “multiple punishments for the same offense.” Whalen v. United States, 445 U.S. 684, 688 (1980). When a federal statute contains a plainly expressed direction on the question of multiple punishments, it controls. See Garrett v. United States, 471 U.S. 773, 779 (1985). In this case, the ACA states specifically how much punishment Congress wants the Court to impose: the ACA authorizes federal courts to impose “like punishment” and no more. “Like punishment” in this case means no punishment at all because in New Mexico courts would have to dismiss both of the child-abuse-resulting-in-death convictions given the presence of another homicide conviction. So, Ms. Christie cannot stand convicted of both second-degree murder and the dismissed state offenses.

One final issue remained. Ms. Christie argued the district court erred by failing to dismiss the state homicide charges before trial, rather than after. Even assuming (without deciding) that the district court committed an error by failing to dismiss the state homicide charges before trial, the Tenth Circuit found any such error was harmless.


Tenth Circuit: Unpublished Opinions, 6/11/13

On Tuesday, June 11, 2013, the Tenth Circuit Court of Appeals issued two published opinions and thirteen unpublished opinions.

Grynberg v. Bar S Services

Ventris v. State of Kansas

United States v. Vandemerwe

Dmytryszyn  v. Hickenlooper

Conkleton v. Zavaras

Carrillo v. Wieland

Tinner v. Coffee

United States v. Peterson

Dmytryszyn v. Werholtz

Wilson v. Morrissey

Acker v. Dinwiddie

Yadon v. Hilton

Jenner v. Faulk

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