July 21, 2018

Colorado Court of Appeals: Single Notice Addressed to Married Homeowners Deemed Constitutionally Adequate

The Colorado Court of Appeals issued its opinion in Cordell v. Klingsheim on Thursday, May 31, 2018.

Tax Sale—Adequate Notice—Treasurer’s Deed—Due Process—Reinstatement Order.

The Cordells owned a tract of land in La Plata County. After they failed to pay taxes for several years, Heller purchased a tax lien for the property and assigned it to Klingsheim, who later requested a deed from the La Plata County Treasurer. Before issuing the deed, the Treasurer sent the Cordells a copy of the notice of application for a treasurer’s deed by certified mail. The notice was mailed to the Cordells in one envelope, using a New Mexico address listed for the Cordells in the county tax records. A return receipt was received indicating the notice had been received by Mr. Cordell’s mother. The Cordells did not redeem, and the Treasurer issued a treasurer’s deed to Klingsheim.

Sometime later the Cordells learned of the notice and filed suit seeking a declaratory judgment that they were the owners of the property and the treasurer’s deed was void. The trial court ruled that the Treasurer had not made a “diligent inquiry” in attempting to notify the Cordells that their land might be sold to satisfy the tax lien and voided the deed. The alternative basis for the decision was that the deed was void because no “separate notice” was mailed to Ms. Cordell. The Court of Appeals previously affirmed the voiding order but did not address the “separate notice” argument. On certiorari review, the Colorado Supreme Court concluded that the Treasurer fulfilled the diligent inquiry duty and the Treasurer’s transmission of the notice by certified mail satisfied due process, and the Court reversed and remanded the case. On remand to the Court of Appeals, the Cordells requested the division to consider the separate notice argument. The division declined to do so, and a mandate was issued reversing the voiding order and remanding the case to the trial court. On remand, the trial court issued a reinstatement order without substantive analysis of its own.

On appeal of the reinstatement order, the Cordells argued that the trial court was not required to reinstate the treasurer’s deed on remand because the Supreme Court’s holding reached only one of the two grounds on which the trial court rested the voiding order. Neither the Supreme Court nor the trial court reached the separate notice issue. Because the issue was not resolved, the Court of Appeals considered whether the trial court’s failure to consider the issue warrants reversal. Here, the Cordells were married and both were receiving mail at the same address. The Court concluded that notice mailed to both record owners in a single piece of mail is constitutionally adequate. Thus, the reinstatement of the treasurer’s deed on remand was proper.

The reinstatement order was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Statute of Limitations Does Not Begin when Party Signs Prepared Document

The Colorado Court of Appeals issued its opinion in Bell v. Land Title Guarantee Co. on Thursday, May 17, 2018.

Buy and Sell Contract—Mineral Rights—Warranty Deed—Negligence—Breach of Contract—Statute of Limitations—Third Party—Cause of Action—Accrual Date.

The Bells hired Orr Land Company LLC (Orr) and its employee Ellerman to represent them in selling their real property. Orr found a buyer and the Bells entered into a buy and sell contract with the buyer, which provided, as pertinent here, that the sale excluded all oil, gas, and mineral rights in the property. Orr then retained Land Title Guarantee Company (Land Title) to draft closing documents, including the warranty deed. In 2005 the Bells signed the warranty deed and sold the property to the buyer. The Bells didn’t know that the warranty deed prepared by Land Title didn’t contain any language reserving the Bells’ mineral rights as provided in the buy and sell contract. For over nine years, the Bells continued to receive the mineral owner’s royalty payments due under an oil and gas lease on the property. In 2014 the lessee oil and gas company learned that the Bells didn’t own the mineral rights, so it began sending the payments to the buyer. After that, the Bells discovered that the warranty deed didn’t reserve their mineral rights as provided in the buy and sell contract. In 2016 the Bells filed this negligence and breach of contract action against defendants Land Title, Orr, and Ellerman. Defendants moved to dismiss, arguing that the Bells’ claims were untimely because the statute of limitations had run. The district court granted defendants’ motion to dismiss.

On appeal, the Bells contended that the district court erred in granting defendants’ motions to dismiss because they sufficiently alleged facts that, if true, establish that the statute of limitations didn’t begin to accrue on their claims until the oil and gas company ceased payment in September 2014, which is when they contended they discovered that the warranty deed didn’t reserve their mineral rights. A plaintiff must commence tort actions within two years from the date the cause of action accrues, and contract actions within three years from the date the cause of action accrues. A cause of action accrues on the date that “both the injury and its cause are known or should have been known by the exercise of reasonable diligence.” The trial court relied on the legal principle that one who signs a document is presumed to know its contents, so the Bells should have known on the day they signed the deed that the mineral rights reservation language was not included, and thus their claims accrued on that date. However, the presumed-to-know principle applies conclusively only where a party (for example, a grantor) seeks to avoid the legal effects of a deed in an action against another party to the conveyance (a grantee), not where a party (a grantor) asserts claims against third parties who failed to conform the deed to an underlying agreement on that party’s behalf. Here, the Bells claims against defendants, who aren’t parties to the deed, don’t seek to avoid the deed, but seek damages for negligent preparation of the deed, and the purpose of the presumed-to-know principle isn’t applicable. Taking the complaint’s factual allegations as true, the Bells filed their negligence and breach of contract claims within the statute of limitations and stated a plausible claim for relief. The court erred in granting defendants’ motions to dismiss.

The order of dismissal was reversed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: District Court Lacks Jurisdiction Over Respondent who Never Received Notice of Protective Proceeding

The Colorado Court of Appeals issued its opinion in In the Interest of Spohr on Thursday, May 17, 2018.

Emergency Guardianship—Non-Emergency GuardianshipPersonal Service of Notice—Jurisdiction—Probate Code.

On July 15, 2016, the Fremont County Department of Human Services (Department) filed a petition for emergency appointment of a guardian for Spohr in the district court. Counsel was appointed for Spohr and an emergency hearing was held three days later. There was no transcript of the hearing and no indication that Spohr was present or that he received notice of the hearing. On July 19 the magistrate issued an order dispensing with notice under C.R.S. § 15-14-312 stating that Spohr would be substantially harmed if the appointment was delayed. The court appointed the Department as emergency guardian and required notice of the appointment to be personally served on Spohr within 48 hours, as required by C.R.S. § 15-14-312(2). There is no proof that service was made. Despite the C.R.S. § 15-14-312(1) requirement that an emergency guardian appointment may not exceed 60 days, the court did not hold another hearing for more than six months and the emergency guardianship remained in place during that time. A permanent guardian was appointed for Spohr at a February 2017 hearing, but there is no indication that he was served with notice of this hearing. The trial court record includes a finding that the “required notices have been given or waived.”

The court of appeals previously remanded this case to the district court to make findings as to whether any of the required notices were ever sent to Spohr. On remand, the Department presented no further information and the court found that the record remained unclear as to service.

On appeal, Spohr argued for the first time that he did not receive personal service of a notice of hearing on the petition for guardianship. As relevant to this case, the Colorado Probate Code requires personal service on the respondent of a notice of hearing on a petition for guardianship. The Probate Code would have allowed the appointment of an emergency guardian to be made without notice to Spohr only if the court found, based on testimony at the emergency hearing, that he would have been substantially harmed if the appointment were delayed. If the protected person was not present at the hearing, he must be given notice within 48 hours after the appointment. While the magistrate made this finding, the requisite notice within 48 hours of the appointment was never made.

The Probate Code does not contain provisions for how a transition is to be made from an emergency guardianship to a non-emergency guardianship. In the absence of such provision, the court concluded that after the 60-day limit on emergency guardianship, if a guardianship is still sought for the protected person, C.R.S. § 15-14-304, governing judicial appointment of a guardian on a non-emergency basis, must be followed. Among other requirements for this process, C.R.S. § 15-14-309(1) requires that a copy of the petition and notice of hearing on the petition must be served personally on the respondent. Further, the notice requirement is jurisdictional, and the lack of notice may therefore be raised at any time. Here, Spohr was not given notice within 48 hours after the appointment of his emergency guardian, nor did he waive notice of the appointment and the ability to request a hearing on the emergency guardian’s appointment. And the emergency guardian served long after 60 days had passed.

The record also fails to show that Spohr was provided with the required notice before his non-emergency guardianship. The failure to personally serve the respondent 14 days before the guardianship hearing is jurisdictional and respondent cannot waive service. Thus the court lacked jurisdiction to appoint a permanent guardian.

The judgment was vacated.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: ICWA Requires Notice to BIA in State with No Designated Tribal Agents

The Colorado Court of Appeals issued its opinion in People in Interest of I.B.-R. on Thursday, May 17, 2018.

Dependency and Neglect—Indian Child Welfare Act Notice—Bureau of Indian Affairs.

In this dependency and neglect proceeding, J.S.R. is the father of one of the four children. He told the Weld County Department of Human Services (Department) that he had Cherokee heritage on his father’s side and his lineage descended from a tribe in Arkansas, but he did not know which tribe. The Department did not notify any tribe or the Bureau of Indian Affairs (BIA) of the dependency and neglect proceeding. Following the filing of their motion to terminate parental rights, the Department sent notice of the termination proceedings to the three federally recognized Cherokee Tribes. Each responded that the child was not a member or eligible for membership. The Department also notified the BIA, but did not mention J.S.R.’s reported affiliation to an unknown tribe in Arkansas. No further inquiry was made and all three parents’ parental rights were terminated.

On appeal, J.S.R. contended that the trial court and the Department did not comply with the Indian Child Welfare Act of 1978 (ICWA) after he asserted Native American heritage. He argued the Department failed to comply with the ICWA’s notice requirements because it did not send notice to any tribes in Arkansas. ICWA-implementing legislation in Colorado requires that in dependency and neglect proceedings, the petitioning party must make continuing inquiries to determine whether the child is an Indian child. When there is reason to know or believe that a child involved in a child custody proceeding is an Indian child, the petitioning party must send notice of the proceeding to the potentially concerned tribe or tribes. The BIA publishes a list of designated tribal agents for service of ICWA notice in the Federal Register each year. There are no federally recognized tribes with designated tribal agents in Arkansas. If the identity or location of a tribe cannot be determined, notice must be given to the BIA. While the ICWA does not require courts or departments of human services to find tribal connections from vague information, it was the BIA’s burden to research whether there could be a tribal connection in Arkansas. However, the notice in this case did not alert the BIA that J.S.R. had reported a tribal connection to Arkansas, so it had no reason to conduct such an investigation.

The case was remanded with detailed directions to proceed with ICWA compliance.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: C.R.C.P. 4(m) Does Not Require Dismissal if Defendants Not Served 63 Days Prior to Filing of Complaint

The Colorado Court of Appeals issued its opinion in Curry v. Zag Built, LLC on Thursday, May 3, 2018.

Construction Defect Action Reform Act—C.R.C.P. 4(m)—Service—Notice—Notice of Claim—Statute of Limitations.

Defendants Zag Built LLC and its owner, Zagrzebski, (collectively, Zag Built) built a house for the Currys. Shortly after the Currys moved into the house in July 2013, they noticed signs of damage, such as cracks in the drywall and sagging doors. In late-June 2015, the Currys filed a complaint naming Zag Built (among others) as defendants and citing the applicability of the Construction Defect Action Reform Act’s (the Act) notice of claim process, C.R.S. § 13-20-803.5. After filing a status report and two updates, the Currys filed an amended complaint in mid-May 2016. In early July 2017, Zag Built filed a motion for summary judgment, contending that the trial court should dismiss the case. The trial court denied the motion. Zag Built then filed a C.A.R. 4.2 motion for interlocutory review.

On appeal, Zag Built asserted that pursuant to C.R.C.P. 4(m) the trial court erred when it did not dismiss the case when the Currys had not served it within 63 days of the filing of the original complaint. C.R.C.P. 4(m) does not require a trial court to dismiss a case if the plaintiff does not serve the defendant within 63 days of when the plaintiff filed a complaint. Instead, applying the plain language of Rule 4(m), if the court is contemplating dismissing the case within that 63-day period, it must provide the plaintiff with (1) notice that it is contemplating dismissing the case, and (2) an opportunity to show good cause why the court should not dismiss the case. If the plaintiff shows good cause, the court must extend the deadline. If the plaintiff does not show good cause, the court has the discretion to dismiss the case without prejudice, or order that the plaintiff serve the defendant within a specified time. Here, the trial court did not give the Currys notice. Further, C.R.S. § 13-20-803.5(9) stayed the case until mid-April 2016. Therefore, the trial court did not err in declining to dismiss the case.

Zag Built also contended that the trial court should have dismissed this case because the Currys did not send it a notice of claim under the Act until after the statute of limitations had run. First, the statute of limitations stops running once a case is commenced by filing a complaint. Here, the Currys filed their complaint in mid-June 2015, before the statute of limitations had expired. Second, the Act’s notice of claim process is not a prerequisite to filing a complaint or commencing an action. If a plaintiff files a complaint before completing the notice-of-claim process, the case is stayed until the plaintiff completes the process. Therefore, the trial court did not err in declining to dismiss the case on this basis.

The order was affirmed and the case was remanded.

Summary provided courtesy of Colorado Lawyer.

HB 17-1142: Allowing Court Clerks to Use Electronic Notice

On February 1, 2017, Rep. Dominique Jackson and Sen. Bob Gardner introduced HB 17-1142, “Concerning Certain Court Proceedings.”

Under current law, the clerk of the court mails notice of the filing of certain petitions and the date and time of hearings on the petition to specified interested parties by registered mail. The bill changes the process so the clerk of the court may send the notice by first-class mail or electronically using the e-filing system of the judicial department.

Under current law, if a respondent in a domestic relations action cannot be personally served and is served by publication, the clerk of the court is required to post a copy of the process on a bulletin board in the clerk’s office for 35 days after the date of publication and may post the notice online on the court’s website. The bill gives the clerk the option of posting the notice online on the court’s website rather than on a bulletin board.

The bill also updates the time frame for holding certain hearings to multiples of 7 days.

The bill was introduced in the House and assigned to the Judiciary Committee. It is scheduled for hearing in committee on February 14, 2017, at 1:30 p.m.

HB 15-1010: Creating Presumption of Notification to Beneficiaries by Trustee

On January 7, 2015, Reps. Tracy Kraft-Tharp and Dan Nordberg and Sen. Cheri Jahn introduced HB 15-1010 — Concerning a Presumption that a Trustee has Notified a Beneficiary when the Trustee has Adopted a Beneficiary Notification Procedure, and, in Connection Therewith, Clarifying that a Trustee May Deliver Information to Beneficiaries Electronically. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Current law requires a trustee to keep beneficiaries of a trust informed about the status of the trust. The bill creates a presumption that a beneficiary has received information or a statement of account when the trustee has procedures in place requiring the mailing or delivery of information or a statement of account to a beneficiary. The presumption applies to electronic notifications if the beneficiary has agreed to receive such electronic delivery or access and to a beneficiary’s receipt of a final account or statement.

The bill was assigned to the House Business Affairs and Labor Committee. The bill passed through the committee unamended and also survived Second and Third Reading in the House with no amendments.

Colorado Supreme Court: “Actual Notice” Means “Actual Knowledge” Under UMDDA

The Colorado Supreme Court issued its opinion in People v. McKimmy on Monday, October 27, 2014.

Uniform Mandatory Disposition of Detainers Act—Actual Notice.

The Supreme Court clarified the process for invoking one’s rights under the Uniform Mandatory Disposition of Detainers Act (UMDDA or Act), CRS §§ 16-14-101 to -108. Even when prisoners do not strictly comply with the UMDDA’s requirements, the Court previously determined that they invoke their rights under the Act if (1) their request substantially complies with the Act’s requirements, and (2) the prosecution receives “actual notice” of their request.

Here, the Court held that, for purposes of substantial compliance under the UMDDA, “actual notice” means “actual knowledge.” Therefore, the Court reversed the judgment of the court of appeals and remanded the case with instructions to return the case to the trial court for further fact-finding. Specifically, the trial court should determine: (1) when the prosecution gained actual knowledge of defendant’s UMDDA requests in each of his cases, at which point defendant would have effectively invoked his rights under the Act; and (2) whether any UMDDA violations subsequently occurred.

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

Colorado Court of Appeals: Treasurer Did Not Undertake Diligent Inquiry as to Actual Residence for Notice

The Colorado Court of Appeals issued its opinion in Cordell v. Klingsheim on Thursday, October 9, 2014.

Tax Lien—Deed—Treasurer—Diligent Inquiry—Notice—Jurisdictional.

Plaintiffs Carl and Wanda Cordell were record owners of a tract of land in La Plata County (Tract 1). Carl Cordell was also the record owner of an adjoining tract (Tract 2). The Cordells failed to pay the taxes owed on the properties, and Brenda Heller purchased the tax liens on the properties. Heller assigned the tax liens to Klingsheim, who later requested and received deeds from the La Plata County Treasurer to the two properties after the Treasurer sent notice to the Cordells. Upon learning of the Treasurer’s deeds, the Cordells filed the present action seeking, as relevant here, a declaratory judgment that the Treasurer’s deeds are void, which the trial court granted.

On appeal, Klingsheim contended that the trial court erred in concluding that the Treasurer had failed to undertake diligent inquiry in attempting to determine Carl’s and Wanda’s residences. The Treasurer sent the notices, by certified mail, to 705 N. Vine, Farmington, New Mexico, which was the address listed for them in the county tax rolls. The return receipts from the mailings, however, indicated that the notices were not delivered to plaintiffs, nor were they delivered to 705 N. Vine. Rather, the receipts indicated that the notices were delivered to Cleo Cordell at 703 N. Vine, and the box for “agent” on the return receipts had not been checked. Despite this discrepancy, the Treasurer conducted no further inquiry to determine whether 705 N. Vine was indeed plaintiffs’ residence.

Such inaction after learning that the notices were not delivered either to plaintiffs or to a person claiming to be their agent does not constitute “diligent inquiry” in attempting to determine their residences. Because a treasurer’s “full compliance” with the requirements of CRS §39-11-128 is jurisdictional, the trial court properly set aside the deeds as void.

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

Colorado Court of Appeals: Notice of Mechanics’ Lien Sufficient when Amended Lien Filed Same Day as Original Lien

The Colorado Court of Appeals issued its opinion in Sure-Shock Electric, Inc. v. Diamond Lofts Venture, LLC on Thursday, August 28, 2014.

Property—Mechanics’ Lien—Contract—Foreclosure—Notice—Equitable Apportionment—Prevailing Party—Costs.

Diamond Lofts Venture, LLC (DLV) was the developer and owner of a building project at 2210 Blake Street in Denver (Blake Street property). Sure-Shock Electric, Inc. (Sure-Shock), as the primary electrical contractor on the project, installed the electrical work throughout the building. Thereafter, Sure-Shock filed a mechanics’ lien for the unpaid contract price. Pursuant to their contract, DLV and Sure-Shock participated in arbitration. The arbitrator determined that Sure-Shock had proved its claims, and awarded it the principal amount claimed in the amended lien statement. The trial court affirmed the arbitrator’s award and entered a decree of foreclosure authorizing the sale of the DLV units to satisfy Sure-Shock’s lien.

On appeal, DLV contended that the trial court erred in allowing Sure-Shock to foreclose on its lien because Sure-Shock failed to comply with the statutory requirements necessary to perfect the lien. The Court of Appeals disagreed. Sure-Shock provided DLV proper notice more than ten days before filing the original lien statement. Sure-Shock was not required to provide an additional notice before it filed its amended lien statement the same day as the original lien to correct the amount claimed. Additionally, although DLV only owned seven of the twenty-nine units in the Blake Street property at that time, Sure-Shock’s lien statement sufficiently identified the property by listing the entire Blake Street property and naming only DLV as the property owner. Finally, Sure-Shock was not required to apportion the unpaid contract price according to the amount due for work on the DLV units, rather than claiming the full amount due.

In its cross-appeal, Sure-Shock contended that the trial court abused its discretion in apportioning the lien. A court may equitably apportion a blanket lien. Here, the trial court determined that an equitable apportionment should be based on the actual benefit enjoyed by each unit. Therefore, Sure-Shock was awarded 33.1% of the lien amount, which corresponded to the total square footage of the DLV units relative to the square footage of the entire Blake Street property. Because Sure-Shock’s electrical work benefited the entire Blake Street property, and Sure-Shock chose to encumber only the DLV units, Sure-Shock may not recover the entire unpaid amount of the contract. Therefore, the trial court’s apportionment was not an abuse of its discretion.

In addition, because Sure-Shock’s lien was determined to be valid, Sure-Shock succeeded on a “significant issue in the litigation.” Therefore, the trial court did not abuse its discretion in concluding that Sure-Shock was the prevailing party and awarding it costs. The judgment was affirmed.

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

Colorado Supreme Court: Delay in Providing Notice to Co-Defendant Permissible Under Relation-Back Doctrine and C.R.C.P. 15(c)

The Colorado Supreme Court issued its opinion in In re Garcia v. Schneider Energy Services, Inc. on Monday, October 22, 2012.

Commencement of Proceedings—Notice—Relation Back—CRCP 15(c)

In this original CAR 21 proceeding, the Supreme Court reviewed the trial court’s grant of summary judgment after it found that seventy-one days was not a reasonable time for purposes of “relating back” an amended complaint under CRCP 15(c). Pursuant to Dillingham v. Greeley Publishing Company, 701 P.2d 27, 31 (Colo. 1985), the proper measure for relation back under CRCP 15(c) is the time between the filing date of the original complaint and the date when the party related back receives notice—in this case, 116 days. Accordingly, the trial court’s judgment was vacated.

Summary and full case available here.