October 19, 2018

Archives for September 17, 2018

Colorado Supreme Court: Announcement Sheet, 9/17/2018

On Monday, September 17, 2018, the Colorado Supreme Court issued six published opinions.

James v. People

Johnson v. Schonlaw

Perfect Place, LLC v. Semler

People v. Gutierrez

Lewis v. Taylor

In re People v. Brooks

Summaries of these cases are forthcoming.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions.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

Colorado Supreme Court: Social Host Must Have Actual Knowledge that Specific Guest Underage to be Held Liable for Injuries

The Colorado Supreme Court issued its opinion in Przekurat v. Torres on Monday, September 10, 2018.

Statutory Construction—Colorado Dram Shop Act.

The supreme court affirmed the judgment of the court of appeals. The court held that, under the plain language of C.R.S. § 12-47-801(4)(a), a social host who provides a place to drink alcohol must have actual knowledge that a specific guest is underage to be held liable for any damage or injury caused by that underage guest.

Summary provided courtesy of Colorado Lawyer.

Colorado Supreme Court: Plaintiff Not Entitled to Prejudgment Interest Where Claim Does Not Meet Statutory Factors

The Colorado Supreme Court issued its opinion in Munoz v. American Family Mutual Insurance Co. on Monday, September 10, 2018.

Prejudgment Interest—Statutory Interpretation.

In this case, the Colorado Supreme Court considered whether an insured is entitled to collect prejudgment interest when he settles an uninsured motorist claim with his insurer. The court held that, under the plain language of the prejudgment interest statute, C.R.S. § 13-21-101, an insured is entitled to prejudgment interest only after (1) an action is brought, (2) the plaintiff claims damages and interest in the complaint, (3) there is a finding of damages by a jury or court, and (4) judgment is entered. Because Munoz did not meet all of these conditions, the court concluded he is not entitled to prejudgment interest.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Unpublished Opinions, 9/17/2018

On Monday, September 17, 2018, the Tenth Circuit Court of Appeals issued one published opinion and no unpublished opinion.

Case summaries are not provided for unpublished opinions.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

Colorado Court of Appeals: Amendment to C.R.S. § 30-10- 506 Largely Preserves At-Will Employment Doctrine for Deputy Sheriffs

The Colorado Court of Appeals issued its opinion in Arapahoe County Sheriff’s Office v. Cummings on Thursday, September 6, 2018.

Employment Termination—Wrongful Discharge—Implied Contract of Employment—Summary JudgmentInterlocutory AppealSheriff’s Policies—CRS § 30-10-506.

Cummings was a deputy sheriff in Arapahoe County. The Sheriff terminated Cummings’ employment, asserting that he violated the Sheriff’s employee manual (the Manual) and was dishonest during the investigation of the original charges against him. Cummings exhausted his remedies within the Sheriff’s department and sued for (1) wrongful discharge in violation of public policy, and (2) breach of an implied contract of employment, based on the policies in the Manual. The Sheriff moved to dismiss the wrongful termination claim based on governmental immunity, and the district court dismissed the claim with prejudice. The district court denied the Sheriff’s motion to dismiss the implied contract claim, and the Sheriff moved for summary judgment. The district court denied the motion for summary judgment, holding that there was an implied contract of employment and disputed issues of material fact existed. The Sheriff brought an interlocutory appeal under C.A.R. 42 challenging the denial of summary judgment.

On appeal, the Sheriff contended that the trial court erred in denying his motion for summary judgment. He argued that the at-will employment concept in C.R.S. § 30-10-506 requires the court to hold that all policies promulgated by a sheriff relating to termination of deputy sheriffs’ employment are only precatory, and to conclude otherwise would mean that the sheriff lacks the power to terminate at-will employees. C.R.S. § 30-10-506 requires a sheriff to promulgate written employment policies, and the sheriff must give deputies the rights of notice and opportunity to be heard. A sheriff’s other employment policies may be, but are not required to be, binding. If the sheriff elects to confer binding employment rights on his deputies, those rights are enforceable according to their terms.

The Sheriff next argued that even if C.R.S. § 30-10-506 allows sheriffs to promulgate binding personnel policies, the disclaimers in the Manual and the yearly disclaimers that Cummings signed preclude, as a matter of law, the formation of an implied contract of employment. Except with respect to the rights expressly granted to deputy sheriffs by statute, these clear and conspicuous disclaimers preclude, as a matter of law, Cummings’ implied contract claims. But here, material facts are disputed on whether Cummings received the required notice of the charges that led to his dismissal.

The part of the summary judgment order permitting Cummings to pursue an implied contract claim based on rights conferred in the Manual that effectuate the due process rights granted by C.R.S. § 30-10-506 was affirmed. In all other respects, the summary judgment order was reversed and the case was remanded.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Marijuana Business Cannot Cultivate Marijuana as Accessory Use When Zoning Code Precludes Cultivation for Primary Use

The Colorado Court of Appeals issued its opinion in Colorado Health Consultants v. City & County of Denver on Thursday, September 6, 2018.

Retail MarijuanaCultivation as an Accessory UseVested InterestEquitable EstoppelTaking.

Colorado Health Consultants, d/b/a Starbuds (Starbuds), is a retail marijuana business located in an I-MX-3 zone, which is a special context zone for industrial mixed use. In 2013, the zoning authority issued Starbuds a zoning permit for retail sales. Starbuds separately applied with the Department of Excise and Licenses (Department) for a retail marijuana cultivation (RMC) license, which was issued in 2014. The following year, Starbuds sought renewal of the RMC license and, following an uncontested hearing required by the Denver Revised Municipal Code (DRMC), the license was renewed.

Starbuds again sought renewal in 2016. The DRMC had been revised and a hearing was no longer required, so the Department immediately renewed the RMC license. Several days later the Department discovered that an interested party had requested a hearing on the renewal application. A hearing was held at which Starbuds argued that under DRMC § 6-214(a)(1), the Department was not authorized to conduct a hearing. In a detailed written recommendation the hearing officer recommended the Department deny the renewal request. She found that plant husbandry was not a permitted use in the I-MX-3 zone and the original license had been issued in error. She also rejected Starbuds’ argument that plant husbandry was a permitted “accessory use.” The Department adopted the findings and denied the renewal.

Starbuds filed a C.R.C.P. 106(a)(4) complaint arguing that the Department did not have the authority to hold a public hearing on the renewal application because plant husbandry was a permitted accessory use. It also alleged that the Department was equitably estopped from denying its renewal application and the denial was an unconstitutional taking. The district court affirmed the Department’s order.

On appeal, Starbuds first contended that the Department abused its discretion and legally erred in concluding that plant husbandry is not a permitted accessory use in an I-MX-3 zone and that its zoning permit did not authorize plant husbandry. An RMC license requires that the retail marijuana establishment be located in a zone “where, at the time of application for the license, plant husbandry is authorized as a permitted use under the zoning code,” with a few exceptions. The parties agreed that plant husbandry is not permitted in the I-MX-3 zone. Starbuds argued, however, that marijuana cultivation is a permitted, unlisted accessory use based on the zoning administrator’s issuance of its retail sales permit. The Department rejected this argument because “retail sales” was the only use permitted by the permit. The court of appeals held that because plant husbandry is prohibited as a primary use, it cannot be an accessory use, so the RMC license renewal application was properly denied.

Starbuds then challenged the Department’s subject matter jurisdiction to conduct a hearing under DRMC § 6-214(a)(2) and (3), given that the Department could only have issued the RMC license under § 6-214(a)(1), which contains no hearing provision. The Department separately possessed the discretionary authority to conduct a hearing under DRMC § 32-30. Further, plant husbandry is not a permitted primary or accessory use in an I-MX-3 zone, and therefore Starbuds was never eligible to receive an RMC license in the first instance.

Starbuds further argued that the district court erred in finding that equitable estoppel did not apply to provide it relief, contending that the Department’s decision to hold a hearing caused an injury. First, it was unlikely that Starbuds detrimentally changed its position in reliance on the approval in the nine days between the application approval and its revocation. The record supports the trial court’s finding that the Department mistakenly issued the RMC license in the first place, and Starbuds presented no evidence that its reliance on an unlawfully issued license was reasonable. Moreover, Starbuds was not ignorant of the provision that plant husbandry was not permitted in its zone.

Starbuds last contended that the denial of its RMC license was an unconstitutional taking because it had a reasonable expectation of continued licensure and did not receive due process. There is no vested right in the renewal of a license, and nothing precludes Starbuds’ continued operation as a retail establishment, which was the primary use for which it was zoned. And Starbuds was afforded due process through the renewal hearing. The Department’s denial of Starbuds’ RMC license renewal application did not constitute an unconstitutional taking.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Special District Act Does Not Require Consent of Mineral Estate Owners to Expand Boundaries of District

The Colorado Court of Appeals issued its opinion in Bill Barrett Corp. v. Lembke on Thursday, September 6, 2018.

Preliminary InjunctionSpecial DistrictMineral EstatesPower to TaxSummary Judgment.

In 2009, the Sand Hills Metropolitan District (Sand Hills) included the 70 Ranch within its boundaries and began assessing ad valorem taxes on the oil and gas extracted from the mineral estate. Plaintiffs Bill Barrett Corporation and Bonanza Creek Energy, Inc., and intervenor Noble Energy, Inc. (lessees), challenged these taxes and obtained summary judgment in Weld County District Court. Both sides appealed. In that appeal, the division agreed with the district court that when Sand Hills included the 70 Ranch it was a material departure from its 2004 service plan, which required approval from the Weld County Board of County Commissioners. Because that approval had not been obtained, the division held that Sand Hills lacked taxing authority after 2009.

Following entry of the summary judgment and before the Sand Hills appeal was filed, Lembke and 70 Ranch, LLC (the LLC) (collectively, defendants) petitioned South Beebe Draw Metropolitan District (South Beebe) to include the 70 Ranch. Defendants owned the surface estate where all of lessees’ well heads are located. Lessees were not notified of this action. South Beebe resolved to include the 70 Ranch, and the Adams County District Court approved the inclusion. Lessees filed a motion for a preliminary injunction to prevent South Beebe from taxing oil and gas that lessees produce from the mineral estate underlying the 70 Ranch. The trial court denied the motion and entered summary judgment that under C.R.S. § 32-1-401, the severed mineral estate underlying the 70 Ranch could not be included within South Beebe because all the owners and lessees of that estate did not petition for and consent to inclusion. Lessees obtained a temporary restraining order in the Weld County District Court that prohibited the Weld County Treasurer, who had collected the disputed taxes, from disbursing the monies to South Beebe. Venue was transferred to Adams County and, following an evidentiary hearing on lessees’ motion for a preliminary injunction, the court found lessees had not shown a reasonable probability of success on the merits and denied the motion. Later, the court entered a final judgment against lessees on their C.R.S. § 32-1-401 claim. Lessees appealed and asked that the status quo be preserved by enjoining the treasurer from disbursing taxes collected to South Beebe. A motions division granted the request.

On appeal, lessees argued that without their consent and that of the other mineral estate owners, the 70 Ranch, or at least the underlying mineral estate, could not have been included within South Beebe. South Beebe responded that because the mineral and surface estates were severed, only the surface owners needed to petition for and consent to inclusion, and all of them did. The court of appeals first held that mineral estate owners are “fee owners,” but lessees are not. Next, because the parties agreed and the record supports that not all of the mineral estate owners consented to the 70 Ranch’s inclusion, the court considered whether South Beebe’s services can benefit the mineral estate. Because lessees did not argue that the mineral estate owners would benefit from the inclusion, the court concluded that lack of consent by all mineral estate owners did not preclude South Beebe from taxing lessees. Consequently, the court affirmed the trial court’s entry of summary judgment as to lessee’s C.R.S. § 32-1-401(1)(a) claim.

Lessees also challenged the trial court’s ruling that lessees had not shown a reasonable probability of successfully establishing that South Beebe had violated C.R.S. § 32-1-207(2)(a) by failing to obtain Board of County Commissioners (BOCC) approval for a material change in its service plan, because it had obtained approval from the planning commission. However, the court found that the actions of the planning commission and other officials did not satisfy the requirement that South Beebe had to obtain BOCC approval for a material modification of its service plan. Therefore, lessees have a reasonable probability of success in establishing that South Beebe did not obtain the requisite BOCC approval. Further, the trial court dissolved the temporary restraining order and denied a preliminary injunction on this ground alone, without considering the other factors set forth in Rathke v. MacFarlane, 648 P.2d 648, 651 (Colo. 1982).

Lessees also argued that it was error to conclude that South Beebe’s inclusion of the 70 Ranch was not a material modification. Boundary changes alone are presumptively not material modifications, and the court found that inclusion of the 70 Ranch was just a boundary change. Thus, the trial court acted within its discretion in ruling that lessees had not shown a reasonable probability of success in challenging inclusion of the 70 Ranch as an unapproved material modification.

Finally, lessees argued that under C.R.S. § 32-1-107(2), South Beebe could not levy and collect taxes to support services if those services are already being provided by another special district (in this case, Sand Hills). The court agreed with the trial court that the statute prohibits overlapping services, not merely overlapping territory. Here, no party asked the court to resolve the factual question of overlapping services, thus the question of whether the services were overlapping was not properly before the court.

The summary judgment on lessees’ C.R.S. § 32-1-401(1)(a) claim was affirmed. The order denying lessees’ motion for a preliminary injunction was vacated. The case was remanded for the trial court to make findings on the remaining Rathke factors and reconsider whether to enter a preliminary injunction. The temporary injunction will remain in effect until the trial court enters its renewed ruling on the motion for preliminary injunction.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Unpublished Opinions, 9/14/2018

On Friday, September 14, 2018, the Tenth Circuit Court of Appeals issued no published opinion and five unpublished opinions.

Jennings v. Royal

United States v. Amador

Eldridge v. U.S. Parole Commission

United States v. Quintana-Torres

United States v. Meraz-Martinez

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