October 19, 2018

Archives for October 2, 2018

Colorado Court of Appeals: Satisfaction of Statutory Criteria Qualifies Acquiring Employer as “Successor” for Unemployment Purposes

The Colorado Court of Appeals issued its opinion in Dos Almas LLC v. Industrial Claim Appeals Office on Thursday, September 20, 2018.

Unemployment Tax—C.R.S. § 8-76-104(1)(a)Successor Employer.

Dos Almas LLC began operating a restaurant after it acquired nearly all of the assets of WooPig LLC, which had operated a different restaurant at the same location. After the acquisition, Dos Almas applied for an unemployment compensation insurance account and a determination of employer liability by submitting a form along with a copy of the asset purchase agreement to the Department of Labor and Employment (Department).

A deputy ruled that Dos Almas was a successor employer to WooPig for unemployment compensation tax rate liability purposes because it met the requirements of C.R.S. § 8-76-104(1)(a) due to the acquisition. Dos Almas appealed more than eight months after the applicable 21-day time limit. Nevertheless, a hearing officer ruled that good cause was shown for the delay, and following a hearing the officer found that Dos Almas was not a successor entity to WooPig under the statutory criteria largely because it did not retain the employees as part of the asset sale. A panel of the Industrial Claims Appeal Office (the Panel) reversed. The Panel upheld the factual findings, but based on Dos Almas having acquired 90% of WooPig’s physical and intangible assets, ruled that it had acquired substantially all of WooPig’s assets and thereby met the statutory criteria to be considered a successor employer for unemployment compensation tax rate liability purposes.

On appeal, Dos Almas contended that the Panel erred in ruling that it is a successor to WooPig for unemployment tax rate liability purposes. The hearing officer’s factual findings support the conclusion that Dos Almas is a successor employer to WooPig for unemployment compensation tax rate liability purposes under the applicable statutory criteria in C.R.S. § 8-76-104(1)(a). Further, the lack of employee retention in the asset purchase transaction is irrelevant to the successor issues in this case. The Panel did not err.

The order was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Participation in Contractual Appraisal Does Not Preclude Insured’s Suit for Breach of Contract and Statutory Bad Faith

The Colorado Court of Appeals issued its opinion in Andres Trucking Co. v. United Fire and Casualty Co. on Thursday, September 20, 2018.

InsuranceBreach of ContractStatutory Bad Faith DelayAppraisal.

Andres Trucking Co. (Andres) operated a dump truck that caught fire while it was insured by United Fire and Casualty Co. (United). The parties agreed that the truck was a total loss but disagreed about its value. Ultimately, Andres filed an amended complaint alleging breach of contract and bad faith denial and delay of an insurance claim under C.R.S. §§ 10-3-1115 and -1116 and challenging the enforceability of the contractual appraisal provision. The district court struck the amended complaint on the ground that the insurance policy required an appraisal. Following an appraisal, United paid Andres the truck’s appraised value and moved for entry of judgment under C.R.C.P. 12(b)(5), contending that as a matter of law the appraisal process had resolved Andres’s claims. While this motion was pending, Andres moved to amend its complaint. The district court again denied the motion, reasoning that the appraisal process concluded the issues before the court, and entered judgment for United.

On appeal, Andres argued that the district court erred in dismissing its complaint because the appraisal process did not resolve whether United had breached the insurance policy or unreasonably denied or delayed payment of benefits. The court concluded that the appraisal process did not determine United’s liability for breach of contract or statutory bad faith delay. The district court erred in determining that the appraisal precluded Andres from pursuing these claims.

Andres also raised various challenges to the appraisal process itself. The court rejected the arguments that (1) the appraisal provisions are unconstitutional; (2) United did not properly invoke the appraisal because it never demanded it; and (3) the appraisal process did not result in a binding loss valuation. The appraisal award is a binding determination of the value of the insured property, and thus Andres may not further litigate that issue. The district court did not err in enforcing the appraisal provision.

The court also determined that the district court did not err in awarding United attorney fees, but it denied United’s request for appellate attorney fees.

The order approving the appraisal value was affirmed but the judgment was reversed and the case was remanded for reinstatement of the complaint. The order awarding United costs as the prevailing party was vacated but the order awarding United attorney fees for its response to Andres’ motion for clerk’s entry of default was affirmed.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Unpublished Opinions, 10/1/2018

On Monday, October 1, 2018, the Tenth Circuit Court of Appeals issued no published opinion and two unpublished opinions.

Bills v. Commissioner, SSA

Farr v. Commissioner of Internal Revenue

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