April 24, 2019

Archives for November 2014

Local Rules for U.S. District Court Amended Effective December 1, 2014

The U.S. District Court for the District of Colorado has made changes to its Local Rules, effective December 1, 2014. The Advisory Committee continues to revise the rules in its comprehensive review. The changes effective December 1 focus on stylistic changes to the criminal rules, converting pilot programs to local rules, and updating rules applicable to members of the bar.

The Advisory Committee will conduct a public forum in January 2015 in which to discuss these changes to the Local Rules and invite questions and comments from the bar. It will be held at the Alfred A. Arraj U.S. District Courthouse at an as yet undetermined date.

For the complete Local Rules effective December 1, 2014, click here. For a redline showing the changes to the Local Rules, click here.

Nominees Selected for Judgeships on 17th Judicial District Court and Ouray County Court

The Colorado State Judicial Branch released the names of nominees for judicial vacancies on the Seventeenth Judicial District Court bench and the Ouray County Court bench. The vacancy on the bench of the Seventeenth Judicial District Court will be created by the retirement of Hon. Chris Melonakis, effective January 12, 2015, and the vacancy on the Ouray County Court bench will be created on January 13, 2015, due to the appointment of Hon. David Westfall to the district court.

Nominees for the vacancy on the Seventeenth Judicial District bench are Tomee Crespin of Thornton, Sharon D. Holbrook of Broomfield, and Donald S. Quick of Westminster. Pursuant to the Colorado Constitution, the governor has 15 days from November 24, 2014, in which to select one of the nominees for appointment.

Nominees for the vacancy on the Ouray County Court bench are Leslie M. German of Ridgway and Donald (Cory) Jackson of Ouray. The governor has 15 days from November 18, 2014, in which to select one of the nominees for appointment.

Comments regarding any of the nominees may be emailed to the governor at gov_judicialappointments@state.co.us. For more information about the Seventeenth Judicial District Court nominees, click here. For more information about the Ouray County Court nominees, click here.

Colorado Court of Appeals: Mother’s Fraud in Adoption Deprived Father Rights of Biological Parent

The Colorado Court of Appeals issued its opinion in M.C. v. Adoption Choices of Colorado, Inc. on Thursday, November 20, 2014.

Termination of Parent–Child Legal Relationship—Due Process—Troxel Presumption.

On September 13, 2012, mother gave birth to twins in Grand Junction. The next day, she filed a petition for expedited relinquishment of her parental rights. She provided a first name for the children’s father, but alleged she didn’t know any other information that might have been used to locate him. Intervenors, clients of Adoption Choices of Colorado, Inc., were chosen as the children’s adoptive parents. They were present for the birth and the children were placed with them that day. Father’s legal relationship with the children was terminated, and a final decree of adoption was entered in December 2012.

In February 2013, father, who resided in Iowa, sought relief from the judgment terminating his parental rights. He alleged that mother had informed him she lost the pregnancy and that he didn’t discover her deception until December 2012.

The trial court found overwhelming evidence of fraud on the court by mother and held that the termination of father’s parental rights was void. The trial court ordered the parties to confer and arrange for father to have weekly visitation with the children. The parties could not agree on a means to accomplish this order and the court modified its order to provide for a more gradual visitation schedule. A guardian ad litem(GAL) was appointed to provide a written report for the court. The GAL found it was in the best interests of the children to maintain their secure attachment to intervenors and recommended termination of father’s parental rights.

Following a hearing, the trial court concluded that father had not established a substantial positive relationship with the children. The court held it was in the best interests of the children to terminate father’s parental right and place the children in the permanent legal custody of intervenors. The Court of Appeals reversed.

The Court held that the trial court erred by terminating father’s parental rights based on his not having established a substantial positive relationship with the children. Evidence did not support the conclusion that the children likely would suffer significant psychological harm if removed from intervenors’ home. The trial court also erred in failing to give father the benefit of the Troxel presumption. [Troxel v. Granville, 530 U.S. 57, 65 (2000).] Having found him “not unfit,” the court was required to presume that father’s decisions were in the best interests of the children.

The Court rejected intervenors’ contention that the entry of final adoption decrees conferred on them a fundamental liberty interest in the care, custody, and control of the children equal to father’s, and that the children have a fundamental right to continue their relationship with intervenors and to have a stable, permanent home. Intervenors argued that the interest of the state, as set forth in CRS § 19-5-100.2(2), is “to promote the integrity and finality of adoptions.” However, the integrity of an adoption is not to be preserved at the cost of denying the rights of a fit biological parent. On remand, the trial court must conduct a custody hearing after affording father a full and fair opportunity to establish a meaningful relationship with his children.

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

Colorado Court of Appeals: Economic Realities Test Determines When General Partnership Interests Constitute Securities

The Colorado Court of Appeals issued its opinion in Rome, Acting Securities Commissioner for the State of Colorado v. HEI Resources, Inc. on Thursday, November 20, 2014.

Partnership Interests as Securities Under the Colorado Securities Act—Strong Presumption Test Under Williamson.

Rome, Acting Securities Commissioner for the State of Colorado (commissioner), appealed from a judgment dismissing his enforcement action against defendants. Two of the defendants, HEI Resources, Inc. (HEI) and Heartland Energy Development Corporation (HEDC), had their principal place of business in Colorado. In 2009, the commissioner filed a complaint alleging that defendants violated the Colorado Securities Act (Act) by using unlicensed sales representatives to offer and sell unregistered securities.

The allegations were premised on defendants’ formation and operation of several joint ventures in oil and gas exploration and drilling. To capitalize the ventures, defendants solicited investors by cold-calling thousands of people across the country. If an individual was interested, defendants sent an information package that included a Confidential Information Memorandum (CIM) and a Joint Venture Agreement (JVA). The JVA provided for the formation of a joint venture, organized as a general partnership under the Texas Revised Partnership Act.

HEI or HEDC was named as the initial managing venture. Although the JVA gave the venturers authority to remove the managing venturer by a majority vote and to vote on other issues, the commissioner alleged that any theoretical control by the venturers was illusory. The commissioner argued that the substance of the transaction was an investment contract under which the venturers invested money with the expectation that defendants’ efforts would return a profit.

The trial court granted summary judgment motions filed by defendants. It held the commissioner was collaterally estopped (due to a 2002 cease and desist action) from arguing that, based on the plain language of the JVAs, the joint venture interests were securities. It also ruled that, as a matter of law, the commissioner could not establish that the interests were securities. Based on its summary judgment orders, the subsequent trial was limited to the commissioner trying to prove that the interests were securities based on the knowledge and experience of the partners or venturers or under other economic realities surrounding their offer and sale. The court ruled in favor of defendants.

On appeal, the commissioner argued it was error to apply a strong presumption that general partnership or joint venture interests are not securities and to conclude that the relevant experience of the venturers is their general business experience. Only transactions that involve a “security” fall under the scope of the Act. Courts are to look to the “economic realities” of the transaction.

In what the Court of Appeals saw as a matter of first impression in Colorado, it held that Colorado courts should not apply the “strong presumption” that interests in joint ventures or general partnerships are not securities. Because the trial court applied the strong presumption, the Court vacated the judgment and remanded the case for reconsideration.

The Court found that the inquiry is to be based on the knowledge of the nature of the underlying venture. The Court clarified that this is not a requirement that every investor have specific experience related to the underlying venture. Therefore, this issue must also be reconsidered on remand.

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

Tenth Circuit: Unpublished Opinions, 11/25/2014

On Tuesday, November 25, 2014, the Tenth Circuit Court of Appeals issued one published opinion and ten unpublished opinions.

United States v. Hendrickson

Melin v. Verizon Business, Inc.

United States v. Vann

Rice v. Dowling

United States v. Barrett

United States v. Hernandez-Garcia

Robbins v. County of Boulder

Marshall v. Wyoming Department of Corrections

United States v. Gonzalez-Alvarado

Morones-Quinones v. Holder

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

Frederick Skillern: Real Estate Case Law — Brokers

Editor’s note: This is the first in a series of posts in which Denver-area real estate attorney Frederick Skillern provides summaries of case law pertinent to real estate practitioners. These updates originally appeared as materials for the 32nd Annual Real Estate Symposium in July 2014.

frederick-b-skillernBy Frederick Skillern

CapitalValue Advisors, LLC v. K2D, Inc.
Colorado Court of Appeals, August 15, 2013
2013 COA 125

K2D was a business that required new capital, and it contracted with CapitalValue Advisors for a number of different tasks. CapitalValue entered into an engagement agreement whereby it agreed to either help sell K2D (either a majority or minority interest) or to assist K2D in obtaining debt financing. The rub is that CapitalValue does not have a real estate broker license or a securities license. That is required in order to market the sale of K2D as an entity, as one asset of the company was a leasehold interest in property, or to market its stock under state and federal securities laws.

During the course of its engagement, K2D terminated Capital Value and engaged another company for help. That company obtained a bank loan for K2D — an action which, of itself, does not require a specific license. Since the loan was obtained during the carryover period under the CapitalValue engagement agreement, CapitalValue sued for a 4.5% commission under the terms of its agreement.

The engagement agreement provided:

In executing this Agreement, [CapitalValue] is committing its resources to provide you the best possible representation in the sale of your business, and in turn, you are granting [CapitalValue] the sole, exclusive, and irrevocable right to procure parties (“Buyer(s)”) to purchase, exchange, lease, invest in, loan to, contract for the services of, or otherwise obtain an interest in the Client’s business, its corporate stock, business assets, right and properties or any portion thereof of Client or Client’s affiliates.

(Emphasis added.)

In addition, the Agreement set forth that CapitalValue would earn 4.5% of the total amount secured for “debt financing.”

The district court dismissed all claims on summary judgment, holding that the entire engagement agreement was an illegal contract. CapitalValue does not contest that it lacked either license, and does not appeal the trial court’s finding that two parts of the contract are void under these theories. However, it argues that other contractual obligations in the agreement are lawful, and that those provisions are severable from the “void” agreements, even in the absence of an express contract provision allowing the obligations to be severed. The district court dismissed the complaint on summary judgment, finding that the agreement had no severability clause, so the entire contract was unenforceable.

The court of appeals reverses the summary judgment order, finding that the lack of a severability clause is not determinative as to whether portions of the contract can be enforced.

Where a contract contains multiple provisions, some of which cannot be legally performed, the remaining provisions are not necessarily unenforceable. Rather, “[w]here an agreement founded on a legal consideration contains several promises, or a promise to do several things, and a part only of the things to be done are illegal, the promises which can be separated, or the promise, so far as it can be separated, from the illegality, may be valid.” Reilly v. Korholz, 320 P.2d 756, 760 (Colo. 1958).

The court distinguishes Broughall v. Black Forest Development Co., 196 Colo. 503, 593 P.2d 314 (1978), the leading case on the requirement for a real estate license to sell a business owning real property. That case involved a single agreement — to find a buyer to purchase a business, including its real estate interest. The broker there argued that, although he was not a licensed real estate broker, his commission could be “based on that part of the sale price which did not involve real estate.” The court there ruled that “severing” the contract by simply discounting Broughall’s fee “would allow finders and business brokers to disregard completely the licensing requirement to the detriment of the public whom the statute is designed to protect.”

In contrast, the court here finds that the CapitalValue agreement contains multiple agreements, each of which could be a separate contract. The Agreement provides that CapitalValue would earn (1) 4.5% for a sale of less than a majority interest in K2D, Inc.; (2) 4.0% for a sale of more than a majority interest in K2D, Inc.; or (3) 4.5% for helping K2D obtain debt financing. CapitalValue does not appeal the district court’s rulings that the first and second provisions violate federal and state securities licensing requirements. However, because the Agreement also contains a third provision for payment for securing debt financing that the parties do not contend violates either set of licensing laws, the district court erred in concluding as a matter of law that the Agreement could not be severed. The case is remanded for further proceedings to determine an issue of fact — whether the parties intended the provisions of the contract to be severable.

Frederick B. Skillern, Esq., is a director and shareholder with Montgomery Little & Soran, P.C., practicing in real estate and related litigation and appeals. He serves as an expert witness in cases dealing with real estate, professional responsibility and attorney fees, and acts as a mediator and arbitrator in real estate cases. Before joining Montgomery Little in 2003, Fred was in private practice in Denver for 6 years with Carpenter & Klatskin and for 10 years with Isaacson Rosenbaum. He served as a district judge for Colorado’s Eighteenth Judicial District from 2000 through 2002. Fred is a graduate of Dartmouth College, and received his law degree at the University of Colorado in 1976, in another day and time in which the legal job market was simply awful.

Colorado Supreme Court: No Injury Sufficient to Establish Taxpayer Standing for “Colorado Day of Prayer” Suit

The Colorado Supreme Court issued its opinion in Hickenlooper, Governor of Colorado v. Freedom from Religion Foundation, Inc. on Monday, November 24, 2014.

Preference Clause of Colorado Constitution—Taxpayer Standing—Individual Standing.

In this case, the Supreme Court determined whether respondents, Freedom from Religion Foundation and four of its Colorado members, have standing to sue Governor John Hickenlooper for issuing annual honorary proclamations recognizing a “Colorado Day of Prayer.” The Court held that the use of public funds to cover the incidental overhead costs associated with issuing the honorary proclamations does not, by itself, constitute an injury sufficient to establish taxpayer standing. Furthermore, the psychic harm endured by respondents as a result of media coverage revealing the existence of the honorary proclamations does not, by itself, constitute an injury sufficient to establish individual standing. Accordingly, the Court reversed the judgment of the court of appeals and remanded the case with instructions to return the case to the trial court for dismissal.

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

Colorado Court of Appeals: Adverse Possession Requires Good Faith Belief of Ownership of Property for 18 Years or More

The Colorado Court of Appeals issued its opinion in People v. Gutierrez-Vite on Thursday, November 20, 2014.

Adverse Possession—Defense—Theft—Offering a False Instrument for Recording—Jury Instructions—Testimony.

This case stems from defendant’s alleged attempt to adversely possess a home in Fraser, Colorado. At all relevant times, the home was privately owned by another party, but was unoccupied and in foreclosure. Defendant filed an Affidavit of Adverse Possession with the Grand County Clerk and Recorder’s Office even though she did not own or have permission to be in the home. A jury found defendant guilty of attempted theft and two counts of offering a false instrument for recording.

On appeal, defendant contended that the trial court erred because it denied her request to present a defense based on the adverse possession statute and an affirmative defense of mistake of law based on the adverse possession statute. Under the adverse possession statute, in actions filed on or after July 1, 2008, the party claiming the title must prove, by clear and convincing evidence, that his or her possession was actual, adverse, hostile, under a claim of right, exclusive, and uninterrupted for at least eighteen years. The statute also requires that an adverse claimant establish a good-faith belief that he or she was the property’s actual owner.

Because defendant admitted that she knew the property was owned by someone else and she only possessed the property for five months, she did not meet the requirements to claim adverse possession. Because her adverse possession claim to the property fails, the adverse possession statute could not relieve her of criminal liability. Further, defendant’s mistaken belief regarding adverse possession law does not relieve her of criminal liability. Therefore, the trial court did not err in denying her request to present a defense based on adverse possession and excluding this defense from the jury instructions.

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

Colorado Court of Appeals: Adverse Possession Not Affirmative Defense for Theft and Trespass

The Colorado Court of Appeals issued its opinion in People v. Bruno on Thursday, November 20, 2014.

Adverse Possession—Defense—Theft—Trespassing—Offering a False Instrument for Recording—Jury Instructions—Testimony.

This case stems from Bruno’s alleged attempt to adversely possess a home in Fraser, Colorado. At all relevant times, the home was privately owned by another party, but was unoccupied and in foreclosure. Bruno filed an Affidavit of Adverse Possession with the Grand County Clerk and Recorder’s Office, even though he did not own or have permission to be in the home. A jury found Bruno guilty of theft, trespassing, and two counts of offering a false instrument for recording.

On appeal, Bruno contended that the district court erred in preventing him from raising the defense of adverse possession to the counts of theft and offering a false instrument. Bruno admitted that he knew the property belonged to someone else and he was attempting to begin a claim of adverse possession. Because the General Assembly did not provide and did not intend to create an adverse possession defense in the circumstances presented here, there is no defense of adverse possession to the crimes charged. Further, Bruno’s mistaken belief regarding adverse possession law does not relieve him of criminal liability. The judgment was affirmed.

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

Tenth Circuit: Unpublished Opinions, 11/24/2014

On Monday, November 24, 2014, the Tenth Circuit Court of Appeals issued one published opinion and three unpublished opinions.

Yarbary v. Martin, Prince, Oliver, Wallace & Bauer, LLP

United States v. Taylor

United States v. Heathington

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

Colorado Supreme Court: Announcement Sheet, 11/24/2014

On Monday, November 24, 2014, the Colorado Supreme Court issued one published opinion.

Hickenlooper v. Freedom from Religion Foundation, Inc.

The summary for this case is forthcoming, courtesy of The Colorado Lawyer.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.

Colorado Court of Appeals: No Error to Admit Hearsay Statements for Purpose of Rehabilitating Credibility

The Colorado Court of Appeals issued its opinion in People v. Pernell on Thursday, November 20, 2014.

Restraining Order—Sexual Assault—Challenge for Cause—Jury Selection—Motion for Mistrial—Hearsay—Excited Utterance—Rape.

In violation of a restraining order, defendant went to his ex-wife’s home one evening while she and her boyfriend were inside. Defendant forced his way inside, put a gun to the boyfriend’s head and, after allowing the boyfriend to leave, sexually assaulted his ex-wife. He was convicted of violating a restraining order, first-degree burglary, menacing (two counts), second-degree kidnapping, sexual assault, and commission of a violent crime (three counts).

On appeal, defendant contended that the trial court erred in granting the prosecution’s challenge for cause to prospective Juror H, who indicated that she had doubts about her ability to be fair and impartial because her son had been accused of burglary in connection with a domestic violence incident. Although she agreed with defense counsel that she could follow the court’s instructions and reserve judgment until hearing all of the evidence, the record indicated that she was deeply conflicted about her ability to be fair given her experience with her son’s case. Because her answers were equivocal and conflicting, and because it was not satisfied she would render a fair and impartial verdict, the court acted within its discretion in removing her.

Defendant also contended that the trial court erred in not granting his motion for mistrial based on the erroneous admission of an officer’s testimony in which he recounted the ex-wife’s description of the incident twelve hours after it occurred. After the incident and before reporting it to police, she stayed the night at her boyfriend’s and then went home the next morning to change her clothes. Despite the officer’s description of the ex-wife as “distraught,” “traumatized,” and “terrified,” the evidence indicates that the ex-wife had “several independent interludes of reflective thought” that rendered her statements less than spontaneous. Therefore, the trial court erred in admitting the statements as excited utterances. However, the ex-wife’s statements were admissible as prior consistent statements to rehabilitate her credibility after defendant had attacked it. Therefore, any error was harmless. Any further improper testimony was cured by instructing the jury to disregard it. Finally, the cumulative effect of the matters raised on appeal did not deprive defendant of a fair trial.

Defendant also argued that the district court erred in allowing the ex-wife, her boyfriend, and the prosecutor to use the term “rape” rather than “sexual assault” to describe defendant’s conduct. In a sexual assault case, neither a witness nor a prosecutor is barred from using the term “rape” simply because the term no longer appears in the criminal statutes. Therefore, the court did not err in allowing the witnesses and prosecution to use this term. The judgments were affirmed.

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