July 19, 2019

Archives for November 11, 2014

Colorado Court of Appeals: Participation in Mandatory Arbitration Affirmed Existence of Disputed Contract

The Colorado Court of Appeals issued its opinion in Harper Hofer & Associates, LLC v. Northwest Direct Marketing, Inc. on Thursday, November 6, 2014.

Contract—Arbitration—Waiver—Colorado Uniform Arbitration Act.

Defendants engaged plaintiff to provide expert reports and possible testimony in an unrelated legal matter. The parties exchanged various engagement letters, each containing an arbitration clause. Plaintiff later initiated arbitration proceedings against defendants for the fees and costs associated with the work it performed. Defendants, via e-mail to the arbitrator, requested that a court determine whether the parties had executed a valid contract (and, thereby, had agreed to arbitration). However, defendants also requested that the arbitrator make a determination that no contract between the parties existed and, after receiving an unfavorable ruling on that issue, participated in the arbitration proceedings. Ultimately, the arbitrator found in favor of plaintiff and against defendants, and ordered defendants to pay plaintiff $27,982.24. The district court granted plaintiff’s motion to convert the arbitration award to a civil judgment and denied defendants’ motion to vacate.

On appeal, defendants argued that the trial court erred when it converted the arbitration award to a civil judgment over defendants’ objections at both the arbitration and district court stages based on the nonexistence of a valid contract. Under the Colorado Uniform Arbitration Act, the court, not the arbiter, decides whether a controversy is subject to an agreement to arbitrate. However, defendants waived their objection to the validity of the agreement containing the arbitration clause by actively participating in the arbitration proceeding and not timely seeking judicial review. The judgment was affirmed and the case was remanded to the district court for determination of reasonable attorney fees.

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

Colorado Court of Appeals: Inmate’s Challenge to DOC Policies Not Barred by 30-Day Claims Limit

The Colorado Court of Appeals issued its opinion in Garcia v. Harms on Thursday, November 6, 2014.

Timely Filing—Code of Penal Discipline Claim.

Garcia was charged with assault under the Code of Penal Discipline (COPD) after a corrections officer accidentally pricked herself on a sewing needle he kept in his cell. Garcia was not present at the time, but he was charged and found culpable and disciplined. He was also required to pay restitution.

Garcia challenged his conviction, claiming: (1) his disciplinary hearing did not comply with constitutional due process requirements; (2) the COPD definition of “assault” was unconstitutionally vague on its face as applied to him; (3) the Colorado Department of Corrections (CDOC) exceeded its authority when it ordered him to pay restitution; (4) CRS §17-1-111, which exempts CDOC from certain provisions of the Administrative Procedure Act, violates constitutional separation of powers principles; and (5) the collection of restitution unjustly enriched CDOC. The district court dismissed Garcia’s complaint—filed nearly two years after his COPD conviction became final—as time-barred under CRCP 106.5.

Garcia challenged the dismissal, except as to claims one and five. He arguedthat claims two through four challenged “CDOC’s establishment of policies and general application of those policies” and not his disciplinary conviction and therefore were not barred under CRCP 106.5. The Court of Appeals agreed as to Garcia’s fourth claim and portions of his second and third claims.

Portions of Garcia’s second and third claims challenged only quasi-judicial action. However, the part of claim two asserting that the COPD definition of assault under which Garcia was convicted was unconstitutionally vague on its face, as well as the portion of claim three asserting the CDOC has adopted a monetary restitution policy that violates the Separation of Powers Clause, are not related to quasi-judicial actions. Also, claim four asserted that CRS §17-1-111 facially violates separation of powers principles. The Court held that these claims were covered by CRS §13-80-102(1)(h) as “actions against any public or governmental entity . . . ” insofar as defendants Governor Hickenlooper and the State of Colorado are concerned, and were subject to the one-year statute of limitations under the exceptions listed in CRS §13-80-103 insofar as CDOC officials and employees were concerned.

Accordingly, the Court affirmed the order dismissing Garcia’s as applied constitutional challenges in claims two and three and the remaining clams against the executive director of the CDOC, the warden of the Sterling Correctional Facility, the hearing officer who presided over his disciplinary hearing, and two unnamed correctional officers. It reversed the order dismissing Garcia’s fourth claim against Governor Hickenlooper and the State of Colorado. It also reversed the dismissal of Garcia’s facial constitutional challenge against those defendants in claim two and his facial constitutional challenge to CDOC policies in claim three. The case was remanded for further proceedings.

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

Tenth Circuit: Issue of Federal Law Does Not Confer Federal Jurisdiction Over State Law Claims

The Tenth Circuit Court of Appeals issued its opinion in Becker v. Ute Indian Tribe of the Uintah and Ouray Reservation on Tuesday, October 21, 2014.

Plaintiff Lynn Becker contracted to provide services to the Ute Indian Tribe of the Uintah and Ouray Reservation related to its mineral and energy resource development. A dispute arose regarding Becker’s compensation under the contract, and he brought claims for breach of contract, breach of covenant of good faith and fair dealing, and accounting claims against the Tribe in the U.S. District Court for the District of Utah. The Tribe moved to dismiss for lack of subject matter jurisdiction and failure to state a claim. The district court granted the Tribe’s motion to dismiss, because all Becker’s claims were state law claims.

Becker appealed, asserting that although his claims were state law claims, the district court had federal question jurisdiction because the case raised substantial issues of federal law. The Tenth Circuit disagreed, finding instead that the mere question of a federal issue in a state cause of action does not automatically confer federal question jurisdiction. The district court’s dismissal was affirmed.

Colorado Court of Appeals: Denial of Motor Vehicle Sales License Due to Felony Conviction Improper

The Colorado Court of Appeals issued its opinion in Colorado Motor Vehicle Dealer Board v. Freeman on Thursday, November 6, 2014.

Motor Vehicle Salesperson’s License—Third-Degree Assault—Mandatory Disqualifying Offense.

When Freeman applied for a motor vehicle salesperson’s license, his application was denied on five grounds by the Auto Industry Division of the Board (Division). The Division had found that Freeman’s previous conviction for third-degree assault of an at-risk adult constituted a mandatory disqualifying offense under CRS § 12-6-118(7)(a)(I).

On appeal, Freeman contended that the Colorado Motor Vehicle Board (Board) erred in upholding the Division’s denial of his license application. The statute provides, among other things, that a license shall be denied if an applicant has been convicted of a felony in violation of article 3, title 18 during the previous ten years. Because Freeman’s conviction was a felony conviction under CRS § 18-6.5-103(3)(c), not CRS § 18-3-204(1)(a), which specifies that a conviction for assault in the third degree is a class 1 misdemeanor, his conviction may not be used as a mandatory disqualifying offense under CRS § 12-6-118(7)(a)(I). Therefore, the Board erred and its order was vacated. However, because the Division denied Freeman’s application on four other grounds, the case was remanded to the Board with directions to address the additional grounds.

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

Colorado Court of Appeals: Failure to Exhaust Administrative Remedies Deprived Trial Court of Jurisdiction

The Colorado Court of Appeals issued its opinion in Liberty Bankers Life Insurance Co. v. First Citizens Bank & Trust Co. on Thursday, November 6, 2014.

Subject Matter Jurisdiction—Financial Institutions Reform, Recovery and Enforcement Act—Receiver—Proof of Claim—Doctrine of Administrative Exhaustion—Attorney Fees.

The underlying claims in this case relate to appellant’s (Liberty) participation in two loans with Colorado Capital Bank (CCB) for the purpose of funding the development of a townhome project. CCB was closed by the Colorado Division of Banking on July 8, 2011, and the Federal Deposit Insurance Corporation (FDIC) was named its receiver (FDIC-R). On the same day, First Citizens Bank & Trust Co. (FCBT) purchased the assets and assumed the liabilities of CCB in a purchase and assumption agreement. The FDIC later denied Liberty’s proof of claim, and Liberty thereafter filed suit against FCBT and the FDIC-R in federal court. In the state court proceedings, Liberty filed twelve counterclaims against FCBT, which were dismissed by the court.

On appeal, Liberty argued that the district court incorrectly dismissed its counts 1 through 3 for lack of subject matter jurisdiction. However, Liberty did not properly plead the claims found in its counterclaims in its original proof of claim. Therefore, the district court correctly dismissed those claims for lack of subject matter jurisdiction.

Liberty further argued that the doctrine of administrative exhaustion did not apply in this case. Liberty’s futility argument was based on (1) the transfer of assets and liabilities to FCBT and (2) the FDIC-R’s motion to dismiss in the federal litigation. The jurisdictional bar extends to successors in interest of the failed bank. Further, by failing to properly plead its claims in the proof of claim, Liberty had already failed to exhaust the process provided to it. FDIC-R’s actions in filing a motion to dismiss, therefore, had no bearing on futility. Accordingly, Liberty’s pursuit of relief is not futile “beyond a reasonable doubt,” and does not excuse its failure to exhaust its claims. The district court correctly dismissed those claims for lack of subject matter jurisdiction.

FCBT claimed that it was entitled to reasonable attorney fees incurred on appeal under CRS § 13-17-201. Although Liberty’s counterclaims facially alleged a tort claim of gross negligence and willful misconduct, the overall action was more accurately characterized as a contract action, because all of the counterclaims were based on acts or omissions relating to the alleged breach of the two participation agreements. The essence of Liberty’s action did not sound in tort, so FCBT was not entitled to attorney fees incurred on appeal under CRS § 13-17-201.

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

Tenth Circuit: Unpublished Opinions, 11/10/2014

On Monday, November 10, 2014, the Tenth Circuit Court of Appeals issued two published opinions and no unpublished opinions.

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