April 24, 2019

Archives for August 4, 2015

Colorado Court of Appeals: Actual and Potential Rental Income Properly Used as Measure of Restitution

The Colorado Court of Appeals issued its opinion in Zeke Coffee, Inc. v. Pappas-Alstad Partnership on Thursday, July 30, 2015.

Commercial Lease—Eviction—Erroneous Judgment—Restitution—Discount Rate.

In March 2004, plaintiffs (collectively, Zeke) entered into afive-year lease agreement with Pappas-Alstad Partnership to operate a coffee shop. In September 2008, Zeke notified Pappas-Alstad of its intent to exercise an option to extend the lease for an additional five years. Pappas-Alstad said Zeke had breached a term of the lease and, after Zeke refused to cure the alleged breach, it notified Zeke that the lease had been terminated and converted into a month-to-month tenancy. In June 2009, Pappas-Alstad served a three-day demand for compliance or possession on Zeke. Zeke filed an action in district court seeking a declaratory judgment that the lease remained in effect and that Pappas-Alstad had breached it. Pappas-Alstad served Zeke a notice to quit and included in its amended answer a counterclaim seeking Zeke’s eviction. The district court issued a writ of eviction restoring possession of the property to Pappas-Alstad. A division of this Court of Appeals reversed, finding that Zeke had properly exercised the option to extend the lease and had been wrongfully evicted. In a written order, the district court determined that restitution was the appropriate remedy. Pappas-Alstad was required to restore everything it gained through the erroneous judgment.

On appeal, Pappas-Alstad contended that the district court erred in using its actual and potential rental income from the premises as a measure of the appropriate restitution. Zeke would have had to pay rent to Pappas-Alstad had the erroneous judgment never been entered. However, Zeke also would have been able to maintain its coffee business and the business income opportunities associated with it. Therefore, the district court did not abuse its discretion in not reducing Pappas-Alstad’s rental income by the rent it would have otherwise received from Zeke. The court also was not required to reduce from the award Pappas-Alstad’s expenses or losses in re-leasing the property.

Pappas-Alstad argued that the court erred in selecting the Treasury Bill rate as the discount rate to determine the present value of its future cash flow. The district court determined that the value of all future rent proceeds through the end of Zeke’s lease (from 2014 to 2019) should be calculated using a discount rate. The Treasury Bill rate has been recognized as a valid method for discounting future cash flows to present value. Therefore, the court’s decision to use the Treasury Bill rate was not an abuse of discretion. The order was affirmed and thecase was remanded to district court to award Zeke a reasonable amount of attorney fees incurred on appeal.

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

Colorado Court of Appeals: Medical Evidence of Competency Not Required Under Conservatorship Statute

The Colorado Court of Appeals issued its opinion in In the Interest of Neher v. Neher on Thursday, July 30, 2015.

Special Conservator—Medical Expert—Stipulation—Witness Disclosure—Evidence.

After receiving several unsolicited e-mails asking for money, Galen Neher (father) sent almost $500,000 to anonymous offshore bank accounts. Suspecting fraud, Christopher Neher, his son, petitioned the court to appoint a special conservator over father’s financial affairs. Although there was no medical evidence to support the petition, the court appointed a conservator to oversee father’s financial affairs.

On appeal, father contended that the conservatorship statute requires medical evidence before a court can properly make a determination of whether an individual is impaired. Because the current statute does not include such a requirement and the prior statute was amended to remove language that might have suggested it, father’s argument was rejected.

Father also argued that the trial court committed reversible error by denying his motion to enforce an oral stipulation whereby father would retake control of his financial affairs but would be monitored by an accounting firm for a year. The parties later disagreed over the terms to be included in a written stipulation. Even assuming that the court should have found the oral stipulation enforceable, the court still proceeded consistent with that stipulation by holding a hearing on whether to make the conservatorship permanent. Therefore, the court did not err in denying father’s motion.

Father further contended that the trial court abused its discretion when it denied his motion for a new trial. The court did not deny father a fair trial when it stopped the proceedings and directed counsel into chambers for discussion without the parties present. Further, his son’s late disclosure of an expert witness did not require reversal because father’s counsel failed to request a continuance. Finally, his son presented clear and convincing evidence that father was unable to manage property and business affairs. The orders appointing a permanent conservator over father’s estate and denying his motion for a new trial were affirmed.

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

Tenth Circuit: State Does Not Waive Sovereign Immunity Under ADA by Accepting Federal Funds

The Tenth Circuit Court of Appeals issued its opinion in Levy v. Kansas Department of Social and Rehabilitation Services on Tuesday, June 16, 2015.

Paul Levy was a rehabilitation counselor for the Kansas Department of Social and Rehabilitation Services (SRS). In December 2008, he agreed to serve as a counselor for a blind co-worker, Tina Bruce, who was concerned she was not being properly accommodated. He ordered an assessment from a contractor, Brenda Umholtz, who had done extensive work for both Levy and Bruce at SRS. Umholtz’s report stated that Bruce was not receiving adequate accommodations and could not compete on a level playing field with her co-workers. In February 2009, Levy’s supervisor, Michael Donnelly, sent Levy a letter proposing Levy’s termination due to a violation of SRS’s conflict of interest policy based on Umholtz’s report. The letter provided Levy an opportunity to appear in person and respond to the allegations on February 24, 2009. Levy reported in his interrogatories that he met with Donnelly prior to receiving the termination letter, and in that meeting he told Donnelly that other counselors in the division had served as counselors for co-workers without being punished. He also stated that he informed his supervisor about Bruce’s case in January 2009 and transferred the case to his supervisor immediately when asked to do so. Levy tendered his resignation on February 25, 2009, noting that it became clear to him in the February 24 meeting that Donnelly intended to terminate him regardless of the outcome of the meeting.

Umholtz filed suit against SRS on February 11, 2011. Levy joined the suit on March 2, 2011, and Bruce joined shortly after. In the Second Amended Complaint, Levy alleged SRS retaliated against him in violation of the ADA and requested reinstatement, compensatory damages, attorney fees, and other litigation expenses. Plaintiffs subsequently amended their complaint to include Rehabilitation Act claims for Bruce and Levy, and SRS agreed not to oppose the amendment in exchange for plaintiffs’ agreement that SRS had not waived sovereign immunity. SRS filed for summary judgment on all Levy’s claims on March 23, 2012, arguing Levy’s ADA claim was barred by the Eleventh Amendment and his Rehabilitation Act claim was barred by Kansas’ two-year statute of limitations for personal injury claims. Levy countered that SRS waived its Eleventh Amendment sovereign immunity claim by accepting federal funds and the Rehabilitation Act claims were more appropriately characterized as statutorily created rights subject to Kansas’ three-year statute of limitations. The district court granted summary judgment to SRS on the ADA claim based on sovereign immunity and on the Rehabilitation Act claims due to the expiration of the statute of limitations. Levy appealed.

The Tenth Circuit found Levy’s arguments that the state waived sovereign immunity by accepting federal funds cogent, but ultimately disagreed. Levy contended the waiver provisions of the Rehabilitation Act similarly apply to the ADA because the two acts are closely linked. The Tenth Circuit agreed that the two acts were closely linked, but instead found it appropriate to apply a stringent test to determine whether the state waived its sovereign immunity. The Tenth Circuit decided that, since “Congress does not hide elephants in mouseholes,” the waiver of sovereign immunity under the ADA must be explicitly stated and not “hidden in another statute and only applied to the ADA by implication.” Particularly because the ADA was passed after the Rehabilitation Act’s waiver provisions, the Tenth Circuit found merit in its determination.

Turning next to the statute of limitations issue, the Tenth Circuit agreed that Kansas’ two-year statute of limitations for personal injury actions applied to the analogous Rehabilitation Act claims. Levy argued that the case on which the district court relied was confusing because it made several references to a Kansas statute detailing when a three-year statute of limitations applies, and argued Kansas case law supported the determination that Rehabilitation Act claims should be subject to the three-year statute of limitations because they involved statutorily created rights. The Tenth Circuit found that although the case incorrectly cited the wrong statute twice, the holding of the case was clear that the personal injury analogy should apply to Rehabilitation Act claims. The Tenth Circuit found Levy’s second argument more persuasive, since Kansas courts expressly characterized employment discrimination claims as statutorily based and subject to the three-year statute of limitations. However, the Tenth Circuit was not bound by the Kansas Supreme Court decisions, and chose to uphold its own precedent in finding Rehabilitation Act claims analogous to personal injury claims. The Tenth Circuit determined Levy’s Rehabilitation Act claims were time-barred.

The judgment of the district court was affirmed.

Tenth Circuit: Unpublished Opinions, 8/3/2015

On Monday, August 3, 2015, the Tenth Circuit Court of Appeals issued no published opinion and five unpublished opinions.

Cochran v. Colvin

United States v. Butler

Parker v. Dowling

Kostich v. McCollum

United States v. Dyke

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