July 17, 2019

Archives for September 10, 2013

Colorado Rules of Civil Procedure and Municipal Court Rules of Procedure Amended

On Monday, September 9, 2013, the Colorado Supreme Court announced Rule Changes 2013(10), 2013(11), and 2013(12).

Rule Change 2013(10) amends Rule 210of the Colorado Municipal Court Rules of Procedure, “Arraignment.” The rule change allows the court to designate violations and penalties for traffic infractions involving speeding 24 or less miles per hour over the speed limit. Previously, the limit was 19 miles per hour over the speed limit.

Rule Change 2013(11) amends Rule 232 of the Colorado Municipal Court Rules of Procedure, “Sentence and Judgment.” It adds subparagraph (f), mandating that any sentence imposed shall comply with the Compact for the Supervision of Adult Offenders at C.R.S. §§ 24-60-2801, et seq.

Rule Change 2013(12) amends Rules 4 and 15 of the Colorado Rules of Civil Procedure. Rule 4, “Process,” was amended to add a subsection (m), which sets a limit for service on a defendant to 63 days, unless good cause can be shown by the plaintiff why the service could not be completed in that time. This change also clarifies that the new subsection does not apply to service in foreign countries.

C.R.C.P. 15, “Amended and Supplemental Pleadings,” was amended in subsection (c) by clarifying that an amended pleading relates back to the original filing if notice of the amendment was served within the time frame elucidated in C.R.C.P. 4(m).

For all of the Colorado Supreme Court’s adopted and proposed rule changes, click here.

Tenth Circuit: Plaintiffs Failed to Establish Statutory Standing Under Colorado State Law

The Tenth Circuit Court of Appeals published its opinion in Niemi v. Lasshofer on Friday, September 6, 2013.

John Niemi and his investors set out to build a luxury ski condominium complex in Breckenridge, Colorado, in two phases, working through a set of companies controlled by Mesatex. But traditional financing proved hard to find: after completing the first phase of development they found no bank willing to loan the $220 million needed to finish the project. So they looked for alternative sources.

They found Michael Burgess. Mr. Burgess claimed to represent a European investor, Erwin Lasshofer, who Burgess said had $250 million to loan. All Mesatex had to do was to pay a $180,000 commitment fee and provide another $2 million as a collateral deposit.  This Mesatex did, but the promised loan never materialized. Mr. Burgess found himself in federal prison serving time for fraud and money laundering.

The investors brought this lawsuit alleging that the lost loan ruined Mesatex’s business, caused it millions in lost profits, and sent its properties into foreclosure. But neither Mesatex nor any of its subsidiaries was included as a party to this lawsuit. Instead, the suit named only Mesatex’s investors as plaintiffs.

The district court granted the plaintiffs’ motion for a preliminary injunction, effectively freezing the worldwide assets of Mr. Lasshofer and the corporate defendants and ordering them to deposit $2.18 million in escrow pending a final judgment. It is this interlocutory order Mr. Lasshofer and the corporate defendants asked the Tenth Circuit to undo.

However, it was Mesatex that sought the loan, signed the loan application, and received the loan commitment. It was Mesatex’s subsidiaries that signed the loan agreement and its amendment, paid the loan fees, and advanced the loan collateral. It was those companies, too, that owned the Breckenridge properties and whose business allegedly suffered when the loan failed to materialize. Yet neither Mesatex nor any of its subsidiaries was named as a plaintiff in this lawsuit. Accordingly, plaintiffs lacked standing to proceed under Colorado state law, let alone to win a preliminary injunction.

Plaintiffs argued that they invested in Mesatex and its subsidiaries; they stressed, too, that they guaranteed some of the corporations’ loans. But it is long settled law that a shareholder or guarantor lacks standing to assert RICO claims when their losses are only derivative of a corporation’s when the individuals’ losses come about only because of the firm’s loss. And despite being challenged to do so in this appeal, the plaintiffs did not identify any direct and personal injury they suffered.

Accordingly, the preliminary injunction was VACATED and the case was REMANDED for further proceedings consistent with this opinion.

Tenth Circuit: Court Did Not Have Subject Matter Jurisdiction Over Plaintiff’s Claims Against Federal Officers

The Tenth Circuit Court of Appeals published its opinion in Ingram v. Faruque on Friday, September 6, 2013.

Delbert Ingram is an employee at the Oklahoma City Department of Veterans Affairs Medical Center (“VAMC”). At the time of the incidents resulting in this appeal, VAMC police received a report from one of Mr. Ingram’s coworkers stating that Mr. Ingram had said he had been thinking about killing his supervisor.  Mr. Ingram was taken to an emergency room. An emergency room physician found Mr. Ingram to be was sufficiently ill “that immediate emergency action [was] necessary.” When Mr. Ingram attempted to leave the emergency room, Lt. Stevenson informed him that, although he was not under arrest, he was not free to leave the emergency room. Mr. Ingram stated that Lt. Stevenson said this with his hand on his firearm, and that after making this statement, Lt. Stevenson shut and locked the door to the padded isolation room. After conversations with physicians and being transported to a psychiatric ward, Mr. Ingram was held in the ward for over twenty-four hours before being medically cleared and released.

Mr. Ingram sued Defendants in their individual capacities claiming they violated his rights under the Fourth and Fifth Amendments of the U.S. Constitution by holding him in the psychiatric ward without his consent. Defendants filed motions to dismiss, arguing that, among other things, the district court lacked subject matter jurisdiction over the action, because the Federal Tort Claims Act (“FTCA”) provided the sole remedy for Mr. Ingram’s claims, and that the court therefore should not authorize a remedy under Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971). In Bivens, the U.S. Supreme Court recognized for the first time an implied private action for damages against federal officers alleged to have violated a citizen’s constitutional rights.

The district court agreed and granted Defendants’ motions to dismiss. Specifically, the court concluded that Mr. Ingram had a remedy available under 38 U.S.C. § 7316 (“VA Immunity Statute”), which applies the remedy available against the United States under the FTCA to damages arising from the provision of medical services by health care employees of the Veteran’s Administration (“VA”). Because of the availability of that remedy, the district court concluded Mr. Ingram did not have a cause of action under Bivens. Mr. Ingram appealed.

The Tenth Circuit held that the text of the VA Immunity Statute created an exclusive remedy that precluded a Bivens claim. The court also concluded that Mr. Ingram’s claims fell within the scope of the VA Immunity Statute, such that he was precluded from bringing a cause of action under Bivens. Because Mr. Ingram had an adequate alternative remedy available through the VA Immunity Statute and the FTCA, it was not appropriate to authorize a Bivens remedy for Mr. Ingram. Accordingly, the Tenth Circuit held the district court did not err in ruling that it lacked subject matter jurisdiction over Mr. Ingram’s claims.


Tenth Circuit: Unpublished Opinions, 9/9/13

On Monday, September 9, 2013, the Tenth Circuit Court of Appeals issued one published opinion and three unpublished opinions.

Bowie v. Franklin

Shue v. Custis

Flores v. United States Attorney General

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