May 21, 2019

Archives for August 21, 2014

Colorado Supreme Court Reverses Years of Precedent in Softrock and Western Logistics

It is advantageous to employers to retain the services of independent contractors when possible. Contractors are not required to be covered by workers’ compensation insurance and employers need not pay unemployment tax out of the contractors’ wages. However, classifying workers as contractors has its risks; after an audit, the employer may be found liable for back taxes on workers who are found to be employees rather than contractors.

That is precisely what happened to Carpet Exchange in 1993, when the Colorado Court of Appeals issued its opinion in Carpet Exchange of Denver v. Industrial Claim Appeals Office, 859 P.2d 278 (Colo. App. 1993). The court of appeals analyzed C.R.S. § 8-70-115(1)(b) and, after applying the factors, decided that the workers in question were employees rather than contractors because they were not “customarily engaged in an independent trade, occupation, profession, or business related to the service performed.” Since then, courts have relied on this one-factor test to determine whether long-term workers are employees or contractors.

Industrial Claim Appeals Office v. Softrock Geological Services, 2014 CO 30 (Colo. May 12, 2014), reversed that precedent. In Softrock, the Colorado Supreme Court rejected the outside employment test as dispositive of whether a worker is an employee or an independent contractor, ruling instead that the totality of the circumstances must be considered and no single factor can be dispositive in deciding whether an individual is customarily engaged in an independent business or trade.

Michael Santo, lead counsel in Softrock, will present a lunchtime program on Friday, August 22, 2014 at the CLE offices to discuss Softrock‘s impact on employment law. Santo will also discuss Western Logistics, Inc. v. Industrial Claim Appeals Office, 2014 CO 31 (Colo. May 12, 2014), a related opinion that the supreme court delivered the same day as Softrock. Employment attorneys, business attorneys, and in-house counsel should attend this informative lunchtime program.

CLE Program: Independent Contractor or Employee? Softrock‘s and Western Logistics‘ Effect

This CLE presentation will take place on August 22, 2014. Click here to register for the live program and click here to register for the webcast. You can also register by phone at (303) 860-0608.

Can’t make the live program? Order the homestudy here — MP3 audio downloadVideo OnDemand

Colorado Court of Appeals: Statutory Language Precludes Discontinuation of Colorado Sex Offender Registration for Out of State Conviction

The Colorado Court of Appeals issued its opinion in People v. Curtiss on Thursday, August 14, 2014.

Sexual Assault on a Child—Sex Offender Registry—Petition to Discontinue Registration.

Curtiss pleaded guilty to the felony charge of first-degree sexual assault of a child in Oneida County, Wisconsin. He was required to register as a sex offender as a condition of his probation. Thereafter, Curtiss moved to Colorado and registered as a sex offender in this state. Curtiss later filed a petition in district court requesting to be removed from the Colorado sex offender registry, which was denied by the district court.

On appeal, Curtiss argued that the district court erred in denying his petition to discontinue registration. CRS §16-22-113(3) applies to persons whose convictions were obtained from out-of-state courts and prohibits removal from the registry for an offense comparable to sexual assault on a child in Colorado. Because Curtiss was convicted of an offense comparable to Colorado’s offense of sexual assault on a child, he was not eligible for discontinuation of sex offender registration. The order was affirmed.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Colorado Bridge Enterprise Fee Not Subject to TABOR

The Colorado Court of Appeals issued its opinion in TABOR Foundation v. Colorado Bridge Enterprise on Thursday, August 14, 2014.

Tax—TABOR—Enterprise—Fee.

In 1992, Coloradans adopted the Taxpayer’s Bill of Rights (TABOR), which limits the power of the state, its subdivisions, and its districts to levy taxes or create debt. TABOR requires voter approval for any new tax and for the issuance of debt. Enterprises, as defined by TABOR, are exempt from TABOR’s voter approval requirements. In 2009, the General Assembly created the Colorado Bridge Enterprise (CBE). CRS § 43-4-805authorizes the CBE to impose a bridge safety surcharge to finance, repair, reconstruct, and replace any designated bridge in the Colorado highway system, without being subject to TABOR.

In 2012, the TABOR Foundation (Foundation) commenced this action, asserting that the CBE was subject to TABOR. The trial court held that the CBE did not levy a TABOR-prohibited tax when it imposed a bridge safety surcharge, but instead imposed a permissible fee. It further held that the CBE operates as a TABOR-exempt enterprise and did not violate TABOR by issuing bonds without submitting the matter to voters in a statewide election.

On appeal, the Foundation contended that the bridge safety surcharge is a tax because it is collected without regard to any services used by the vehicles for which the charge is imposed, and thus fails to meet the definition of a TABOR-exempt fee. The Court of Appeals disagreed. The General Assembly’s primary purpose was to create a charge that would finance a particular service. Further, the charge can be imposed only for the purpose of financing, repair, reconstruction, and replacement of designated bridges. The money raised by the surcharge could never be used for general government purposes. Further, it is not determinative that persons registering their vehicles might never use a CBE bridge. Therefore, the bridge safety surcharge is a fee, not a tax.

The Foundation also contended that the trial court erred in finding that the CBE is an enterprise exempt from TABOR requirements. CBE is a business because it pursues a benefit and generates revenue by collecting fees from service users. Also, CBE is authorized to issue its own revenue bonds and receives less than 10% of annual revenue in grants from all Colorado state and local governments combined. Therefore, it is an enterprise exempt from TABOR requirements. The judgment was affirmed.

Summary and full case available here, courtesy of The Colorado Lawyer.

Tenth Circuit: Subsurface Mineral Rights Lessee May Cross Surface Owner’s Property to Access Leasehold

The Tenth Circuit Court of Appeals issued its opinion in Entek GRB, LLC v. Stull Ranches, LLC on Thursday, August 14, 2014.

Stull Ranches is the surface owner of a tract of property in rural Colorado. Entek GRB leases subsurface mineral rights, and, in order to access those subsurface rights, sought to access them by installing oil wells on the surface of Stull’s property. Entek’s subsurface oil leasehold rights extend onto neighboring property owned by the Bureau of Land Management, and Entek sought to traverse Stull’s property in order to reach the subsurface minerals on BLM’s property, since the only way to access the BLM property was on the existing road crossing Stull’s property. Stull objected, arguing that Entek’s drilling would disrupt Stull’s grouse hunting business. The district court granted summary judgment to Entek regarding access to its wells on Stull’s property, but denied Entek’s request to cross Stull’s property in order to access the BLM land. Entek appealed to the Tenth Circuit.

The Tenth Circuit explored the history of the government’s land grants, specifically as to separate grants of surface ownership and rights to subsurface minerals and water. Stull is the successor in interest of land acquired under the Stock-Raising Homestead Act of 1916, which expressly reserved to the government all mineral rights, along with the right to enter and use as much of the surface as is “reasonably incident” to the exploration and removal of mineral deposits, and the right to enact future laws and regulations regarding “disposal” of the mineral estate. The subsequently-enacted Mineral Leasing Act granted the Secretary of the Interior the right to amend mineral leases, which it did for the lease encompassing the subsurface mineral rights on Stull’s property and the adjacent BLM property in the Focus Ranch Unit Agreement. This agreement deems all drilling and producing operations on one part of a leasehold interest will be accepted and performed on all leasehold interests. Because Entek is allowed to drill through Stull’s surface estate to access its subsurface mineral lease, it is deemed access to all leasehold interests, including the leasehold interest on BLM’s surface property. Entek has the right to use the existing road that traverses Stull’s property in order to achieve efficient access to its subsurface leasehold.

Stull also argued that, in a case involving the prior holder of Entek’s current rights, the district court ruled that the lessee of the mineral rights was not permitted to access a different property in order to reach a well on an adjacent tract. However, that case was not appealed because the prior lessee entered into an agreement with Stull allowing it to traverse Stull’s property. The Tenth Circuit ruled that preclusion was precluded by this prior agreement.

The district court’s grant of summary judgment to Stull was vacated and the case was remanded for further proceedings consistent with the Tenth Circuit opinion.

Tenth Circuit: Unpublished Opinions, 8/20/2014

On Wednesday, August 20, 2014, the Tenth Circuit Court of Appeals issued no published opinion and one unpublished opinion.

Stallings v. Franco

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.