November 18, 2018

Archives for August 8, 2013

Colorado Court of Appeals: Summary Judgment Reversed Where Non-Traditional Homeowners Suffered Loss in Residential Transaction

The Colorado Court of Appeals issued its opinion in Mid Valley Real Estate Solutions V, LLC v. Hepworth-Pawlak Geotechnical, Inc. on Thursday, August 1, 2013.

“Homeowner” for Purposes of Construction Negligence Action—Summary Judgment—Economic Loss Rule.

Defendants, Hepworth-Pawlak Geotechnical, Inc., Steve Pawlak, and Daniel E. Hardin (collectively, H-P), the project soils engineer; and S K Peightal Engineers, LTD (SKPE), the project structural engineer, challenged an order denying their motion for summary judgment on the negligence claim of plaintiff, Mid Valley Real Estate Solutions V, LLC (Mid Valley), a wholly-owned subsidiary of Alpine Bank (bank), the construction lender. The Court of Appeals affirmed and remanded the case with directions.

A developer entered into a written contract with H-P to analyze the soils on which houses would be built for resale. H-P’s report recommended a particular type of foundation. The developer’s general contractor entered into an oral contract with SKPE to provide structural engineering services, including foundation design. The general contractor built the house at issue according to H-P’s recommendations and SKPE’s design.

The developer couldn’t sell the house and eventually defaulted on the construction loan agreement with the bank. The default was resolved with a deed-in-lieu agreement. The bank received $355,000 and title to the house was transferred to Mid Valley, which entity was created to hold the house, its sole asset, for resale. The balance of the construction loan was forgiven.

Structural damage then began to appear, beginning with foundation cracks. Mid Valley sued defendants for negligence in failing to indentify expansive soils and specify an appropriate foundation and sought costs of repair.

The Court reviewed the economic loss rule and found that there is clearly an independent duty of care on the part of a builder in residential construction that renders the economic loss rule inapplicable in that context. This is not the case, however, in the commercial construction context.

The Court then looked to whether Mid Valley fell within the class of plaintiffs who may enforce this independent duty of care. It concluded that because the duty arises from the services provided and the residential nature of a project, the attributes of the owner harmed when the latent defect ripens does not limit the scope of the duty. Thus, while Mid Valley was not a traditional homeowner, allowing defendants to avoid liability for this reason would afford them a windfall resulting from the fortuity that the latent defect caused damage before Mid Valley sold the house. Accordingly, the denial of summary judgment was affirmed and the case was remanded for further proceedings.

Summary and full case available here.

Colorado Court of Appeals: Incidental Use Doctrine Permits Railroad to Lease Right-of-Way if Consistent with Railroad Purpose

The Colorado Court of Appeals issued its opinion in Durango & Silverton Narrow Gauge Railroad v. Wolf on Thursday, August 1, 2013.

Railroad Right-of-Way—Non-Exclusive Easement—Summary Judgment—Incidental Use Doctrine.

Defendants Timothy Wolf and Katherine Turner (collectively, Wolf) appealed the trial court’s summary judgment in favor of plaintiff Durango & Silverton Narrow Gauge Railroad (DSNGRR). The Court of Appeals affirmed.

In 1881, DSNGRR’s predecessor in interest acquired a right-of-way from plaintiff’s predecessor in interest. In 2009, DSNGRR agreed to grant the City of Durango a nonexclusive easement to extend a public recreation trail over its right-of-way and adjacent to the railroad tracks (which are still in use), part of which would run through Wolf’s property. In return, Durango paid DSNGRR $1 million specifically for continued operations and maintenance. The trail also will promote safe use of the right-of-way by pedestrians and bicyclists who walk and ride directly on the railroad tracks.

Wolf opposed the agreement, arguing that the 1881 right-of-way permitted use only for “railroad purposes” and that a recreation trail is not such a purpose. On cross-motions for summary judgment, the trial court held that the original deed conveyed an easement that gave DSNGRR exclusive use and control of its right-of-way as long as it continues to operate a railroad. It also found that the use by the public was a railroad purpose, because it eliminated safety and liability problems and increased efficiency on any rail repairs.

On appeal, the Court agreed with the trial court that the right-of-way was more expansive than a typical easement and that DSNGRR had the right to exclusive use and control of it. The Court noted Colorado and federal precedent that railroad rights-of-way are more expansive than ordinary easements and include the right to exclusive use and control. This expansive easement includes the right to lease portions of the right-of-way.

The Court did not address whether a public recreation trail is a “railroad purpose,” because it found the trail satisfied the incidental use doctrine. This doctrine, applied here for the first time in Colorado, states that a railroad may lease a portion of its right-of-way where the use is incidental to or not inconsistent with the railroad’s continued use of its right-of-way for railroad purposes. The public recreation trail meets both of these criteria.

Wolf then argued that the trial court erred by not requiring the joinder of five indispensable parties whose property also was subject to DSNGRR’s right-of-way and were affected by the public recreation trail. The Court disagreed, finding that this dispute centered on the interpretation of the deed from Wolf’s predecessor, which only concerned the right-of-way on Wolf’s property. The judgment was affirmed.

Summary and full case available here.

Tenth Circuit: Unpublished Opinions, 8/8/13

On Thursday, August 8, 2013, the Tenth Circuit Court of Appeals issued no published opinion and two unpublished opinions.

Long v. Miller

United States v. Lake

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

Tenth Circuit: Summary Judgment for Medical Malpractice Defendants Affirmed

The Tenth Circuit Court of Appeals published its opinion in Talavera v. Wiley on Wednesday, August 7, 2013.

Carmen Talavera suffered a stroke while visiting a store in November 2007 and incurred permanent disabilities that she attributed to the medical malpractice of personnel at the Southwest Medical Center (SWMC), where she was taken after her stroke. Talavera brought claims against a number of these medical personnel defendants under diversity jurisdiction, alleging that they should have diagnosed and immediately treated her stroke symptoms with blood-clotting therapy, or, absent that, proceeded with early surgical intervention to prevent damage caused by swelling in her brain. The district court granted summary judgment for the defendants.

The Tenth Circuit first discussed the weight to give a report submitted by Dr. Helgason, Talavera’s expert neurologist. In the report, Dr. Helgason offered opinions as to how she believed the defendants had caused Talavera’s injuries. She later qualified those opinions in her deposition. The court held that a party “cannot create a genuine dispute of material fact solely by relying on a conclusion that was written in an expert report and later qualified during that expert’s deposition. A witness’s later qualifications are the relevant ‘opinions’ for purposes of summary judgment unless there is some reason for disregarding them.”

The court then applied Kansas law to Talavera’s tort claims and affirmed summary judgment.

Tenth Circuit: Reciprocal Attorney Discipline Upheld

The Tenth Circuit Court of Appeals published its opinion in In re Harper on Wednesday, August 7, 2013.

David Harper is an attorney licensed in Florida and admitted to practice in the Colorado federal district court. After being admitted in Colorado, however, he was suspended for 91 days from practicing law in Florida. This suspension prompted the Colorado federal district court to conduct reciprocal disciplinary proceedings under D.C. COLO. LCvR 83.3(E) and impose its own suspension of 91 days. Harper appealed, arguing that the district court’s reciprocal suspension resulted in a denial of due process, the opportunity to confront adverse witnesses, and the right to free speech.

A federal district court can rely on a state court’s judgment unless an “‘intrinsic consideration of the record’ shows: (1) that due process was lacking in the state procedure because the attorney was denied notice and a fair opportunity to be heard; (2) that there was insufficient proof regarding a lack of private and professional character; or (3) that some other ‘grave reason’ makes reciprocal discipline inconsistent with principles of right and justice.” Harper failed to supply the Tenth Circuit with a transcript of his state court disciplinary proceedings, which would ordinarily be fatal to an appeal. The court found, however, that even if it were to accept Harper’s version of events, there was no constitutional violation.

Harper also asserted that Local Rule 83.5 requires an evidentiary hearing. This argument was rejected by the federal district court as Rule 83.5 does not apply to proceedings based on reciprocal discipline. The Tenth Circuit refused to second guess the district court’s interpretation of its own rules and affirmed.

Colorado Court of Appeals: Announcement Sheet, 8/8/13

On Thursday, August 8, 2013, the Colorado Court of Appeals issued no published opinions and 17 unpublished opinions.

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, 8/7/13

On Wednesday, August 7, 2013, the Tenth Circuit Court of Appeals issued two published opinions and six unpublished opinions.

Williams v. Ezell

Thomas v. Adrahtas

United States v. Huffman

Borwick v. T-Mobile West Corp.

D’Addabbo v. President Barack Obama

United States v. Walston

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

Tenth Circuit: Unpublished Opinions, 8/6/13

On Tuesday, August 6, 2013, the Tenth Circuit Court of Appeals issued no published opinion and four unpublished opinions.

United States v. Davis

Walters v. Colvin

Henderson v. Board of County Comm’rs

Delcid-Zelaya v. Holder

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