July 20, 2019

Colorado Supreme Court: Trial Courts Must Review Claims in Amended Complaint to Evaluate Eligibility for Jury Trial

The Colorado Supreme Court issued its opinion in Mason v. Farm Credit of Southern Colorado on Monday, June 4, 2018.

ACA—C.R.C.P. 38—Right to a Jury Trial—Legal or Equitable—Basic Thrust Test.

This case concerns the right to a jury trial in a civil case. The supreme court considered whether trial courts must review the claims in a plaintiff’s amended complaint, as opposed to those in its original complaint, to determine whether a party is entitled to a jury trial under C.R.C.P. 38. The court concluded that its prior cases and the Colorado Rules of Civil Procedure require it to answer that question affirmatively. Accordingly, the court held that when a plaintiff amends its complaint and a party properly demands a jury trial under C.R.C.P. 38, the trial court should determine whether the case may be tried to a jury based on the claims in the amended complaint. The court further held that C.R.C.P. 38 permits a case to be tried to a jury when the claims in the plaintiff’s amended complaint are primarily legal, as opposed to equitable. Finally, after examining respondents’ amended complaint, the court concluded that respondents’ claims against petitioner are primarily legal. Thus, petitioner was entitled to a jury trial under C.R.C.P. 38.

The court of appeals’ judgment was reversed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Jurisdiction for Appeal of Final Administrative Action Lies in Court of Appeals, Not District Court

The Colorado Court of Appeals issued its opinion in West Colorado Motors, LLC v. General Motors, LLC on Thursday, June 30, 2016.

Lack of Subject Matter Jurisdiction—Motion to Dismiss—Final Agency Action.

Park Meadows is a franchised Buick and GMC automobile dealership located in Lone Tree. Alpine is also a franchised Buick and GMC automobile dealership located in Denver. General Motors, LLC (GM) is a manufacturer and distributor of automobiles. C.R.S. § 12-6-120.3(1) required GM to provide at least 60-days notice to certain of its franchised dealers if it intended to relocate an existing motor vehicle dealer to a location that was within another motor vehicle dealer’s “relevant market area.” GM provided statutory notice to Park Meadows that it intended to approve the relocation of the Alpine dealership to Littleton. Park Meadows then sent a letter to the Executive Director of the Colorado Department of Revenue protesting the relocation and requesting an investigation, hearing, or cease and desist order. The Executive Director responded, stating that there was no basis to proceed with an investigation. Park Meadows sent another letter to the Executive Director, alleging violations of C.R.S. § 12-6-120.3. The Executive Director responded, again stating there was no basis upon which to proceed with an investigation. Park Meadows then filed a complaint in Denver District Court alleging that GM unreasonably approved Alpine’s relocation in violation of C.R.S. § 12-6-120.3(1.5) and, in the alternative, against the Executive Director to order her to undertake an investigation or other action. The Executive Director filed a motion to dismiss, arguing that her second letter was “final agency action” that was subject to review only in the court of appeals. The district court agreed and dismissed the action as to the Executive Director. It denied a motion by Park Meadows for reconsideration. Alpine filed a motion to dismiss for lack of subject matter jurisdiction, which the district court granted, finding that jurisdiction for any relief lies in the court of appeals.

Park Meadows appealed all three orders, arguing that the Executive Director’s second letter did not constitute “final agency action.” The court disagreed. It found that the letter was clearly final action finding that Park Meadows had no basis on which to proceed. The court then found no abuse of discretion in the district court’s denial of Park Meadows’ motion for reconsideration. The court also affirmed the district court’s dismissal of the claim against Alpine because the court had sole jurisdiction to review the Executive Director’s decision.

The orders were affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: “Plausible on its Face” Standard Applies to Motions to Dismiss

The Colorado Supreme Court issued its opinion in Warne v. Hall on Monday, June 27, 2016.

Civil Procedure—Pleading.

Warne petitioned for review of the Colorado Court of Appeals’ judgment reversing the dismissal of Hall’s complaint, which asserted a claim of intentional interference with contract. Although invited to apply the standard for dismissal articulated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the district court dismissed for failure to state a claim upon which relief could be granted without addressing either Twombly or Iqbal in its written order. By contrast, the court of appeals expressly declined to apply the more recent U.S. Supreme Court jurisprudence governing F.R.C.P. 12(b)(6), finding itself instead bound by the Colorado Supreme Court’s existing precedent, which had heavily relied on the U.S. Supreme Court’s earlier opinion in Conley v. Gibson, 355 U.S. 41 (1957), and particularly its language to the effect that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove “no set of facts” in support of his claim. Declining, therefore, to be influenced by the U.S. Supreme Court’s more recent admonition to the federal courts that “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face,’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570), the court of appeals found the complaint sufficient to state a claim.

The supreme court reversed the judgment of the court of appeals. Because the court’s case law interpreting the Colorado Rules of Civil Procedure in general, and C.R.C.P. 8 and 12(b)(5) in particular, reflected first and foremost a preference to maintain uniformity in the interpretation of the federal and state rules of civil procedure and a willingness to be guided by the U.S. Supreme Court’s interpretation of corresponding federal rules whenever possible, rather than an intent to adhere to a particular federal interpretation prevalent at some fixed point in the past, the Colorado Supreme Court found that its precedent was interpreted too narrowly by the court of appeals. Because it also found that plaintiff’s complaint, when evaluated in light of the more recent and nuanced analysis of Twombly and Iqbal, failed to state a plausible claim for relief, the court found the complaint insufficient under the Colorado Rules of Civil Procedure.

Summary provided courtesy of The Colorado Lawyer.

CJD 11-02, Pilot Project Rules, Repealed and Reenacted by Colorado Supreme Court

On Monday, November 23, 2015, the Colorado Supreme Court issued repealed and amended Chief Justice Directive 11-02, “Adopting Pilot Rules for Certain District Court Civil Cases.” The amendments affect cases filed between January 1, 2012, and June 30, 2015. For all cases filed on or after July 1, 2015, the Colorado Rules of Civil Procedure have been amended to included provisions of the pilot project rules.

For the amended version of CJD 11-02, click here. For all of the Colorado Supreme Court’s Chief Justice Directives, click here.

Tenth Circuit: District Court Within Discretion to Disregard “Unwieldy Mass” of Unnumbered Exhibits

The Tenth Circuit Court of Appeals issued its opinion in Certain Underwriters at Lloyd’s London v. Garmin International, Inc. on Friday, March 27, 2015.

Garmin International was testing a new product in experimental, home-built aircraft, and installed one in Henry Bartle’s airplane. Garmin also sent employees to Bartle’s hanger in order to draw illustrations for a manual for the product. Bartle designed a custom bracket for the product and sold it through his company for use with the Garmin product. While Bartle was flying with his stepdaughter, her friend, and her friend’s daughter, the plane crashed short of the runway and all four were injured. Bartle’s passengers and their friends brought suit in California, alleging claims of strict product liability, negligence, breach of express and implied warranties, and loss of consortium. Bartle claimed that the aircraft was built in a joint venture with Garmin and Garmin’s insurance policy included coverage for such joint ventures. Garmin denied any business relationship with Bartle and denied that he was a covered insured under any of its policies.

Garmin’s insurance provider subsequently brought suit in the U.S. District Court for the District of Kansas under the Declaratory Judgment Act, seeking a declaration that Bartle fell outside the definition of “insured” in any of its policies with Garmin. Bartle submitted over 700 pages of evidence and exhibits, but failed to comply with the court’s numbering and particularity requirements, thus the district court disregarded most of his evidence. The district court granted summary judgment to Garmin, finding Bartle was not covered by the insurance policies.

The Tenth Circuit first addressed whether the district court abused its discretion in disregarding the evidence that did not comply with District of Kansas Rule 56.1. Bartle explained that the court’s e-filing system limited the sizes of exhibits and assigned new document and page numbers to electronically filed exhibits, which made his citations incorrect. Although the Tenth Circuit was sympathetic to Bartle’s explanations of difficulties with the e-filing system, it found the district court was well within its discretion in setting aside Bartle’s “unwieldy mass of data.”

Turning next to the merits of the appeal, the Tenth Circuit found the plain language of Garmin’s policy required Bartle and Garmin to have more than a joint venture. In order to be covered, Bartle would have had to create one of the specifically described business entities and allowed Garmin to exercise control or have an ownership interest. Since there was no evidence of control by Garmin, the district court correctly found Bartle was not insured.

The Tenth Circuit affirmed the district court’s summary judgment.

Tenth Circuit: Qualified Immunity Improperly Denied to Officers Whose Conduct Not Clearly Prohibited by Established Law

The Tenth Circuit Court of Appeals issued its opinion in Quinn v. Young on Friday, March 13, 2015.

Plaintiffs John Quinn and Lavern Gonzalez were arrested after a sting operation. The Albuquerque Police Department (APD) had organized a sting (called the “Tact Plan”) in which they left a backpack containing alcohol, cigarettes, and a laptop next to an ATM and waited to see who would take it. Quinn, Gonzalez, and their child approached the backpack and conversed. The child took the backpack and the three went to a local diner. The police followed. At the diner, Gonzalez opened the backpack and examined its contents. When she opened the laptop, the APD logo appeared and officers arrested Quinn and Gonzalez. They were detained for approximately two days.

Plaintiffs filed a complaint in New Mexico’s federal district court against the officers, Sergeant Armijo, the APD chief, the APD, four APD supervisors, and the City of Albuquerque (collectively, defendants). Plaintiffs alleged that Defendants’ conduct, as well as the Tact Plan, violated their Fourth Amendment right to be free from unlawful seizure under § 1983. Plaintiffs also alleged entrapment and violation of their substantive due process rights by causing them embarrassment and humiliation. Defendants responded with a summary judgment motion, arguing the officers were entitled to qualified immunity, Plaintiffs had stated no constitutional violation by a municipal employee, and Plaintiffs had stated no actionable claim against the police chief or APD.

The district court granted Defendants’ motion in part and denied it in part, finding Plaintiffs had established a genuine issue of material fact as to whether there was probable cause for their arrest. The district court ruled that the officers should have been on notice that they could not arrest for larceny without probable cause and denied qualified immunity on Plaintiffs’ Fourth Amendment claim. Without making requisite findings, the district court denied qualified immunity on all Plaintiffs’ claims, and it did not articulate a basis for ruling on the entrapment claim. The officers timely appealed.

The Tenth Circuit first addressed the Fourth Amendment claim, evaluating whether the officers had probable cause to arrest Plaintiffs for larceny following the sting operation and whether clearly established law at the time of the offense would have placed a reasonable, similarly situated police officer on notice that no probable cause existed. Addressing the second question first, the Tenth Circuit found that any constitutional violation would not have been apparent based on the clearly established law existing at the time of the arrest, and the officers should have been granted qualified immunity. Finding the lack of on-point caselaw significant, the Tenth Circuit evaluated jurisprudence on non-sting larceny cases and found the officers would not have had fair warning that their arrests lacked probable cause. Additionally, two cases decided in 2013—three years after the arrests in issue here—also determined there was a lack of caselaw regarding the constitutionality of sting operations, supporting the Tenth Circuit’s position that the officers would not have had fair warning about the constitutionality of their arrests.

The Tenth Circuit next evaluated the officers’ challenge to the district court’s denial of qualified immunity on the entrapment, malicious prosecution, and due process claims. Recognizing that the district court “painted with broad strokes,” the Tenth Circuit addressed these points. The Tenth Circuit concluded that the entrapment claim was not properly before it on appeal, since Plaintiffs only named the government and not the officers in their entrapment claim, and dismissed it for lack of jurisdiction. The Tenth Circuit likewise exercised its discretion and declined to address the malicious prosecution and due process claims, opting instead for a limited remand with instructions for the district court to explicitly address whether the officers are entitled to qualified immunity on the malicious prosecution and due process claims and then rule on the claims based on the findings.

The Tenth Circuit reversed the summary judgment on the officers’ qualified immunity claim and directed the district court to enter judgment in favor of the officers, dismissed the appeal related to the entrapment claim for lack of jurisdiction, and remanded the malicious prosecution and due process claims with instructions.

Colorado Court of Appeals: Noncooperation Defense Waived When Not Pleaded with Requisite Specificity

The Colorado Court of Appeals issued its opinion in Soicher v. State Farm Mutual Automobile Insurance Co. on Thursday, April 23, 2015.

Insurance—Non-Cooperation Defense—Jury Instructions—Unreasonable Denial—Unreasonable Delay.

In 2009, Manueke, who was uninsured, rear-ended another car, which in turn collided with Soicher’s vehicle. Soicher suffered a concussion in the accident, exacerbating a prior mild traumatic brain injury. At the time, Soicher had a motor vehicle insurance policy with State Farm that provided her $250,000 in uninsured motorist (UM) coverage. Seven months after Soicher filed a claim with State Farm, the insurer closed Soicher’s claim file due to Soicher’s noncooperation. Soicher later filed this action. At trial, State Farm failed to specifically plead the defense of noncooperation, but the court allowed State Farm to proceed on that defense. A jury found in State Farm’s favor.

On appeal, Soicher contended that the trial court erred in entering judgment based on State Farm’s noncooperation defense. State Farm did not plead the issue of noncooperation with the requisite specificity, and the parties did not try the issue by express or implied consent. Thus, State Farm waived the issue, and the trial court erred in entering judgment for State Farm based on that defense.

Soicher also contended that the trial court erred in refusing to instruct the jury that State Farm could be held liable, pursuant to CRS §§ 10-3-1115 to -1116, for its unreasonable denial, as opposed to its alleged unreasonable delay, in processing Soicher’s claim. State Farm did not reject Soicher’s application for benefits. To the contrary, it conceded coverage but disputed the amount that was to be paid. Accordingly, this case did not involve the unreasonable denial of Soicher’s claim.

The case was remanded for entry of judgment for Soicher and against State Farm on her breach of insurance contract claim in the amount of $125,000 plus pre-judgment interest, and entry of judgment for State Farm and against Soicher on its breach of the duty of good faith and fair dealing and violations of CRS §§ 10-3-1115 and -1116 claims.

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

Colorado Supreme Court: Abuse of Discretion Not to Dismiss Lawsuit Filed After Expiration of Statute of Limitations

The Colorado Supreme Court issued its opinion in In re Malm v. Villegas on Tuesday, January 20, 2015.

Civil Procedure—Time for Service of Process.

Villegas petitioned for relief pursuant to CAR 21 from an order of the district court granting Malm’s motion to reopen her personal injury lawsuit. The court denied Villegas’s motion to reconsider and dismiss the action for failure to prosecute, despite the passage of more than seven years between the filing and service of the complaint. Relying largely on Malm’s self-reported efforts to find and serve Villegas, as well as Villegas’s failure to demonstrate prejudice from the delay, the district court found that service was made within a reasonable time. The Supreme Court issued a rule to show cause why the district court had not abused its discretion in declining to dismiss for failure to prosecute.

The Court made its rule absolute and remanded the case with directions to dismiss the action. The delay between filing and service of the complaint extended beyond expiration of the applicable statute of limitations and there were no factual findings that the delay was the product of either wrongful conduct by the defendant or some formal impediment to service. Because the service was not made within a reasonable time, the district court abused its discretion in declining to dismiss the lawsuit for failure to prosecute.

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

C.R.C.P. 26 and 121 Amended Regarding Privilege Claims in Discovery and Motions to Reconsider

The Colorado Supreme Court released Rule Change 2014(11) on Monday, September 22, 2014. Rule Change 2014(11) creates a new subparagraph (B) in C.R.C.P. 26(b)(5), which addresses claims of privilege for information inadvertently disclosed during discovery, as follows:

(B) If information produced in disclosures or discovery is subject to a claim of privilege or of protection as trial-preparation material, the party making the claim may notify any party that received the information of the claim and the basis for it. After being notified, a party must not review, use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and shall give notice to the party making the claim within 14 days if it contests the claim. If the claim is not contested within the 14-day period, or is timely contested but resolved in favor of the party claiming privilege or protection of trial-preparation material, then the receiving party must also promptly return, sequester, or destroy the specified information and any copies that the receiving party has. If the claim is contested, the party making the claim shall within 14 days after receiving such notice present the information to the court under seal for a determination of the claim, or the claim is waived. The producing party must preserve the information until the claim is resolved, and bears the burden of proving the basis of the claim and that the claim was not waived. All notices under this rule shall be in writing.

Rule Change 2014(11) changed C.R.C.P. 121, § 1-15, to add a new subparagraph 11:

11. Motions to Reconsider. Motions to reconsider interlocutory orders of the court, meaning motions to reconsider other than those governed by C.R.C.P. 59 or 60, are disfavored. A party moving to reconsider must show more than a disagreement with the court’s decision. Such a motion must allege a manifest error of fact or law that clearly mandates a different result or other circumstance resulting in manifest injustice. The motion shall be filed within 14 days from the date of the order, unless the party seeking reconsideration shows good cause for not filing within that time. Good cause for not filing within 14 days from the date of the order includes newly available material evidence and an intervening change in the governing legal standard. The court may deny the motion before receiving a responsive brief under paragraph 1(b) of this standard

The committee comment to Rule 121, § 1-15, was amended as well to clarify the limits of subparagraph 11.

Rule 411, “Appeals,” was amended to allow the clerk to certify records.

For the full text of the rule change, click here. For all of the Colorado Supreme Court’s rule changes, click here.

SB 14-048: Requiring Courts to Accept the Most Recent U.S. Census Bureau Mortality Table as Evidence in Civil Actions

On Thursday, January 9, 2014, Sen. Lucia Guzman introduced SB 14-048 – Concerning Use of the Most Recent United States Census Bureau Mortality Table as Evidence of the Expectancy of Continued Life of Any Person in a Civil Action in Colorado. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill requires courts to accept into evidence the most recent United States census bureau expectation of life and expected deaths by race, sex, and age table, as published by the United States census bureau, to establish the continued life expectancy of any person in a civil action in Colorado. The bill repeals Colorado’s preexisting mortality table. The bill passed out of the Senate on Jan. 29 and was assigned to the Judiciary Committee in the House on that same day.

Tenth Circuit: Removal Requirements Under the Class Action Fairness Act of 2005

The Tenth Circuit Court of Appeals published its denial of Petition for Rehearing En Banc and dissent in Dart Cherokee Basin Operating Co., LLC v. Owens on Tuesday, September 17, 2013.

This opinion is a four judge dissent from denial of the petitioners’ Petition for Rehearing En Banc. The denial was a result of an evenly divided vote. The Petitioners removed the case to federal court under the Class Action Fairness Act of 2005 (CAFA) and alleged the amount in controversy to be $8 million. After the Respondent, Owens, moved to remand the case to state court, Petitioners submitted undisputed proof that the amount in controversy exceeded $14 million but the district court granted Owens’s motion. It did so only because the notice of removal itself had failed to provide evidentiary support, “such as an economic analysis . . . or settlement estimates” for the $8 million figure. An divided Tenth Circuit panel denied the Petitioner’s request to appeal. The author of the dissent discusses the procedural requirements for removal in diversity cases under CAFA.

Colorado Supreme Court: Law Firm and Metropolitan District Share a Common Goal in Water Rights Litigation

The Colorado Supreme Court issued its opinion in Concerning the Application for Underground Water Rights of Cherokee Metropolitan District on Monday, July 1, 2013.

Civil Procedure—Intervention as of Right Under CRCP 24(a).

The Supreme Court held that Felt, Monson & Culichia LLC (FMC) did not have a right to intervene under CRCP 24(a) because FMC did not make a compelling showing that Cherokee Metropolitan District may not adequately represent its interest in the underlying litigation. Furthermore, FMC did not establish that the water court abused its discretion in denying its motion for permissive intervention under CRCP 24(b). The Court therefore affirmed the water court’s denial of FMC’s motion to intervene in the consolidated Case Nos. 2005CW06 and 2005CW20.

Summary and full case available here.