April 20, 2019

Archives for December 12, 2013

Colorado Court of Appeals: Decedent’s Son’s Interest in Liquidating Trust Could Be Garnished Without Obtaining Judgment in Separate Action

The Colorado Court of Appeals issued its opinion in In re Estate of Beren: Beren v. Beren on Thursday, December 5, 2013.

Probate—Contribution/Garnishment—Spendthrift Provision—Appellate Attorney Fees.

This appeal involved the estate of Sheldon Beren, who died testate in 1996 and whose estate has been the subject of previous litigation (Beren I). This appeal involved defendant David Beren, who is one of decedent’s sons; Robert Goodyear, Jr., the estate’s personal representative in his capacity as liquidating trustee,; and the decedent’s surviving spouse, Miriam Beren (garnishor).

On September 2, 2010, the probate court approved Goodyear’s petition for final settlement and distribution (Final Distribution Plan), which called for the creation of liquidating trusts, including the Beren Estate Residuary Liquidating Trust Agreement (Liquidating Trust), because of Goodyear’s concern over a contingent income tax liability of the estate. Over defendant’s objections to the creation of the trusts, the probate court ordered Goodyear to distribute the estate assets as outlined in the Final Distribution Plan.

On appeal, defendant argued that garnishor could not garnish his interest in the Liquidating Trust to collect the contribution amounts that he owed her until she obtained a judgment establishing his liability in a separate contribution action. The Court of Appeals found that because the September 2 order fixed the contribution liability, garnishor was not required to obtain a separate judgment before she could garnish his account.

CRS § 15-11-205(4) provides for determination by the probate court of the elective-share and empowers it to “order its payment from the assets of the augmented estate or by contribution.” Under this authority, the probate court, in its September 2, 2010 order, had shown a 1997 distribution of $1 million to defendant subject to contribution of $459,546.51 for funding garnishor’s elective share. Defendant argued that this order was not an executable judgment and that under § 15-11-205(5), garnishor was required to bring a separate contribution action and obtain a judgment on which she could execute, before serving a writ of garnishment. The Court of Appeals found this section did not require a separate action but addressed only whether an order or judgment on contribution liability may be enforced in other Colorado state courts or other jurisdictions.

Alternatively, defendant argued that his bequest should not have been subject to contribution because the 1997 stipulation did not reserve to garnishor any right to seek contribution. This argument was foreclosed by Beren I. The division there declined to address this issue and he was precluded from raising it again.

Garnishor sought a portion of her appellate attorney fees under CRS § 13-17-102 because defendant’s assertion that the 1997 stipulation precluded contribution liability lacked substantial justification. The Court agreed and remanded the case for a determination of the amount.

Defendant argued that because the Liquidating Trust Agreement contained a spendthrift provision, the probate court erred by allowing his interest in the Liquidating Trust to be garnished before any distribution to him. The Court held that this provision did not protect funds that Goodyear was required to distribute under the Agreement, although the distribution had not yet occurred.

The Agreement provided that as soon as all applicable statutes of limitations on the contingent tax liabilities had expired, the Liquidating Trustee must distribute the remaining balance of each beneficiary’s separate share. The statute of limitations ran, and Goodyear told the beneficiaries he planned to make a distribution to each of them. Before he did so, garnishor served a writ of garnishment on Goodyear requiring him to pay her any personal property belonging to defendant up to the amount of his contribution liability from the September 2 order, plus interest. Defendant filed a claim of exemption relying on the spendthrift provision in the Agreement.

The probate court found that the spendthrift provision was invalid, or, even if the provision was valid, the trust funds could be garnished once Goodyear exercised his discretion to make a distribution. On appeal, the Court noted that funds under the discretionary control of a trustee subject to a spendthrift provision cannot be garnished. Once distributed, such funds are within the reach of creditors. The Court ruled that once the trust funds had become subject to mandatory distribution, they could be garnished. The order was affirmed and the case was remanded for further proceedings.

Summary and full case available here.

Colorado Court of Appeals: Purpose of Uniform Parentage Act is to Establish and Protect Parent-Child Relationship

The Colorado Court of Appeals issued its opinion in In re Parental Responsibilities of A.R.L., and Concerning Limberis on Thursday, December 5, 2013.

Biological Versus Presumptive Mother in Same-Sex Relationship—Uniform Parentage Act.

Elizabeth Limberis and Sabrina Havens began living together as a couple in 2000. Several years later, Havens unsuccessfully underwent one round of artificial insemination. Her friend, Marc Bolt, then agreed to inseminate her through sexual intercourse. Neither Havens nor Bolt revealed their sexual encounter to Limberis. Havens conceived and gave birth to A.R.L. in 2008. Limberis was present at the birth, and the child was given her last name. The birth certificate identifies Havens as the mother and does not name the father.

In 2011, the couple separated and Limberis filed a petition for parental responsibilities. Havens contested Limberis’s request for allocation of parental responsibilities and joined Bolt as a party. Bolt responded, describing himself as a sperm donor, and later filed a petition to relinquish his parental rights.

Limberis then petitioned for maternity under the Colorado Uniform Parentage Act (UPA), arguing that she was a presumed parent under the UPA. Havens moved to dismiss for failure to state a claim on which relief could be granted. Havens argued that because A.R.L. had a father and a mother, Limberis could not be a second mother and third parent under the UPA. The trial court agreed and dismissed Limberis’s petition. Following a hearing, the court allocated all parental responsibilities to Havens and granted Bolt’s petition to relinquish his parental rights.

The Court of Appeals found that the trial court erred in denying Limberis’s maternity petition on legal grounds without considering the merits. Limberis alleged facts in her petition that, if true, demonstrated she was an interested party. Therefore, she did not lack capacity under the UPA. The UPA’s purpose is to establish and protect the parent–child relationship. A person may be a presumed parent without being a biological or adoptive parent.

The Court rejected the argument that granting Limberis’s maternity petition would have left A.R.L. with three legal parents. First, Bolt was, at most, an alleged father. Second, no other statutory presumption applied to Bolt. Third, even if Bolt claimed a presumption as the father, that presumption is rebuttable. Fourth, if Bolt had filed a petition for parentage, it would have just been a competing petition, not the possibility of three parents. Finally, Bolt never claimed paternity.

The Court also rejected the argument that there is no authority in Colorado to support substituting a second legal mother for a child’s legal father. At most, the trial court had two competing presumptions to consider.

Finally, the Court addressed the underlying implicit premise of the trial court’s ruling—that a child may not have two legal mothers under the UPA. The Court found nothing in the UPA that would prohibit a child from having two same-sex parents. Accordingly, the order denying Limberis’s maternity petition was reversed. On remand, the trial court must determine whether Limberis is A.R.L.’s presumptive mother under the UPA’s holding out provision.

Summary and full case available here.

Colorado Court of Appeals: District Court Lacked Jurisdiction to Determine Paternity in Dependency and Neglect Action

The Colorado Court of Appeals issued its opinion in People in Interest of J.G.C. on Thursday, December 5, 2013.

Dependency and Neglect—Subject Matter Jurisdiction for Paternity Determination.

The Logan County Department of Social Services (LCDSS) filed a petition in dependency and neglect and a motion seeking temporary custody of a child who had been born eight days earlier. LCDSS identified J.C.H. as the child’s father because his name was on the birth certificate, but alleged that he might not be the biological father. Paternity tests were ordered, and results showed that J.C.H. was not the biological father. LCDSS then filed a motion to dismiss J.C.H. from the petition, which the trial court granted.

On its own motion, the Court of Appeals considered whether the district court had subject matter jurisdiction to make a paternity determination, and ruled that it did not. Colorado’s Uniform Parentage Act (UPA) vests exclusive original jurisdiction in parentage proceedings in the juvenile court. However, a paternity proceeding “may be joined with an action in another court of competent jurisdiction for dissolution of marriage, legal separation, declaration of invalidity of marriage, or support.” When a paternity action arises in a non-paternity proceeding, as here, the court must follow the procedures outlined in the UPA.

The UPA provides that before paternity can be determined, each man presumed to be the father and each man alleged to be the natural father must be made a party to the action, or given notice and an opportunity to be heard. Here, an alleged father had been identified by mother and therefore his joinder was required. Because the record did not show that he was given legal notice that a paternity determination was being sought and he was made a party to the proceeding only after J.C.H.’s dismissal, the Court concluded that the district court lacked subject matter jurisdiction to decide the issue of paternity. The order dismissing J.C.H. from the petition therefore was void. The dismissal order was vacated and the case was remanded.

In anticipation of an issue that might be raised on remand, the Court addressed J.C.H.’s contention that the trial court erred in dismissing him based on the genetic test results. Under the UPA, a presumption of fatherhood may arise from several sets of circumstances. Here, the claim was based on J.C.H.’s acknowledgment of paternity on the birth certificate. His acknowledgment that he was not the biological father did not rebut this presumption, and there was no such evidence at the time he was dismissed from the case.

Summary and full case available here.

Colorado Court of Appeals: Memberships in Golf Club are Licenses, Not Interests in Land, and Should Not Be Considered for Tax Valuation Purposes

The Colorado Court of Appeals issued its opinion in Roaring Fork Club, LLC v. Pitkin County Board of Equalization on Thursday, December 5, 2013.

Valuing a Private, Non-equity Golf Club Property for Property Taxes.

The Pitkin County Assessor determined the value of a golf club property owned by the Roaring Fork Club, LLC for tax year 2011. The Pitkin County Board of Equalization (BOE) affirmed this value over the club’s objection. The Board of Assessment Appeals (Board) agreed with the BOE. On appeal, the club asserted that the assessor should not have included the value of sold club memberships in the assessment of the club’s property. The Court of Appeals agreed.

The club’s property is open only to its members. Membership rights are retained for life unless sold or relinquished or revoked by the club. The club uses membership deposits to improve the property and maintain the improvements. The deposits are treated as a liability for accounting purposes because all or a part of them are refunded if members maintain their membership for at least thirty years or if they resign earlier and replacement members fill their spots.

The club’s amenities were completed in 1999 and the club had sold about 82% of the memberships by 2011. The club argued that the value of the sold memberships should not be considered in determining the actual value of the club’s property for property tax purposes because they are not interests in the real property. The BOE contended the membership deposits were effectively prepaid rent on leasehold interests and they would escape taxation if not included in the property value.

On appeal, the Court interpreted the membership agreement and then determined how that interpretation fit into the requirements of the property tax statute. The club and the BOE agreed that the income approach was the proper method to value the club’s property. However, the BOE argued that the memberships are an interest in land, like a leasehold, and should be included in the value under the “unit assessment rule.” The club contended the sold memberships are licenses and licenses are not an interest in land. The Court agreed with the club. Specifically, it found: (1) the membership agreement is not a lease; (2) memberships are not life estates; (3) the membership agreement does not give members any other taxable interest in the club’s property; (4) the membership agreement establishes that memberships are revocable licenses; (5) the unit assessment rule does not apply to these memberships; and (6) the sold memberships are not usufructory interests. Accordingly, the Board’s order was reversed and the case was remanded to hold a hearing to determine the actual value of the club’s property without taking into account the value of the sold memberships.

Summary and full case available here.

Tenth Circuit: Denial of Motion for New Trial Based on Inadmissible New Evidence Affirmed

The Tenth Circuit Court of Appeals published its opinion in United States v. Hill on Tuesday, December 10, 2013.

Defendant Vernon Hill was charged with bank robbery, along with his brother Stanley. Hill was convicted; Stanley was not as the jury could not agree as to him. Stanley was later retried and convicted. Several months after Defendant’s conviction, the government, having obtained cell phone data and other additional evidence, charged Defendant and his brother DeJuan with conspiring to commit various robberies, including the robbery of the bank. In presenting the new case to the grand jury, FBI agent Charles Jones testified that the government’s understanding of the bank robbery had changed: Stanley had not been one of the two masked robbers in the bank but had driven the getaway car. Dejuan had been the other robber in the bank with Defendant.

The Defendant appealed the denial of his motion for a new trial based on newly discovered evidence. Motions based on newly discovered evidence are disfavored and denials are reviewed for abuse of discretion. The Tenth Circuit applied the five-part test in United States v. Orr in deciding if Defendant had met his burden to establish:

(1) the evidence was discovered after trial; (2) the failure to learn of the evidence was not caused by lack of diligence; (3) the new evidence is not merely impeaching or cumulative; (4) the new evidence is material to the principal issues involved; and (5) the new evidence would probably produce an acquittal if a new trial were granted.

Any new evidence must be admissible at trial. The court held that the only possible new evidence, Agent Jones’s grand jury testimony, was opinion testimony and so not admissible. It therefore affirmed the district court.

Tenth Circuit: Unpublished Opinions, 12/11/13

On Wednesday, December 11, 2013, the Tenth Circuit Court of Appeals issued no published opinions and seven unpublished opinions.

Garza v. Burnett

United States v. Barocio-Mendez

United States v. Allen

Love v. Daniels

United States v. Santana-Gomez

Schreibvogel v. WY D.O.C. State Warden

United States v. Flores-Lopez

Case summaries are provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.