Monthly Archives: August 2013

Premier Members Federal Credit Union, v. Henry Block and South Broadway Automotive Group, Inc., d/b/a Quality Mitsubishi, Inc., v. Darrell Einspahr, 2013COA128 (Aug. 29, 2013)

If you want a jury trial, you have to pay the fee.  (If you file electronically through ICCES, Colorado’s E-filing system, jury trial fees are added automatically). Here, a pro se defendant demanded a jury on his cross-claim but did not pay the jury fee. He later moved under CRCP 6 to pay out-of-time but was denied. The court of appeals affirmed. “According to the rule [CRCP 38] and the statute [CRS 13-71-144], the failure to pay the jury fee at the time of filing of the jury demand constitutes a waiver of a jury trial.” CRCP 6 does not permit a trial court to enlarge the statutory time to pay jury fees. Plaintiff’s cross-claim for indemnification was also dismissed by the trial court.  The court of appeals again affirmed because “an employee-tortfeasor is barred from seeking indemnification from his vicariously liable employer when [ ] that employee knew he was engaging in wrongful conduct.”

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In Re: Interrogatory Propounded by Governor John Hickenlooper Concerning the Constitutionality of Certain Provisions of Article XXI, § 3 of the Constitution of the State of Colorado

“Every vote counts!” (fine print: except in the event of a recall election, in which case said vote may not be counted under certain conditions).

Article VI, section 3 of the Colorado Constitution permits the  the Colorado Supreme Court to give “its opinion upon important questions upon solemn occasions” when requested to do so by the Governor or legislator.

On August 23, 2013, the Governor submitted a question to the Court related to the constitutionality under the US Constitution of a provision in the Colorado Constitution regarding recall elections.

Colorado Constitution Article XXI, Section 3 addresses recall elections. It divides the ballot into 2 parts:

The first question must be “‘Shall (name of person against whom the recall petition is filed) be recalled from the office of (title of the office)?’ Following such question shall be the words, ‘Yes’ and ‘No’.” CO. Const. Art XXI, sec. 3.

The second part of the ballot must ask who should succeed the person sought to be recalled, followed by a list the names of those person nominated as candidates.

But, the Section 3 goes on to state that “no vote cast shall be counted for any candidate for such office, unless the voter also voted for or against the recall of such person sought to be recalled from said office. ” The effect is that a vote for a candidate will not be counted unless the voter also votes “Yes” or “No” on the recall question.

The Fourteenth Amendment to the US Constitution protects voters rights, including the right to have a vote counted.  The First Amendment of the US Constitution protects a voters right not to vote, because requiring a person to vote is unconstitutional compelled speech.

In a challenge related to the recall of California Governor Grey Davis, a United States District Court in the Southern District of California found a provision in the California Constitution that was virtually identical to Article XXI, section 3 of the Colorado Constitution, violated the First and Fourteenth Amendments of the US Constitution in  Partnoy v. Shelley, 277 F. Supp. 2d 1064 (S.D. Cal. 2003).

With these concerns in mind, the Governor asked the Colorado Supreme Court the following question:  “Colorado Constitution Article XXI, § 3 requires an elector who wishes to vote for a successor candidate in a recall election to also cast a ballot on the recall issue. Is this requirement consistent with the First and Fourteenth
Amendments to the United States Constitution?”

In a short ORDER, the Colorado Supreme Court said NO: “The provision in Article XXI, Section 3, of the Constitution of the State of Colorado stating that “no vote cast shall be counted for any candidate for such office, unless the voter also voted for or against the recall of such person sought to be recalled from said office, conflicts with the First and Fourteenth Amendments to the United States Constitution. We therefore answer the Interrogatory in the negative.”

The Court will issue its full opinion at a later date.

On October 21, 2013, the Court issued its full opinion, summarized HERE.

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Filed under Commentary, Constitutional

Major changes to the Federal Rules of Civil Procedure

Colorado courts often look to the Federal Rules of Civil Procedure for guidance when interpreting the CRCP. The reasoning has been that Colorado’s rules are substantially similar to the Federal rules. That may be changing. As noted HERE by the Institute for the Advancement of the American Legal System, the Judicial Conference Advisory Committees on Bankruptcy and Civil Rules have proposed amendments to their respective rules and forms. Specifically, Rules 1, 4, 6, 16, 26, 30, 31, 33, 34, 36, 37, 55, 84, and Appendix of Forms.

HERE is a link to the redline copy of all the changes, including substantial changes to the Bankruptcy Rules.

Three significant changes are:

1) The scope of discovery under Rule 26. The proposed change includes this change to 26(b)(1), which would now read in its entirety as follows:

Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the amount in controversy, the importance of the issues at stake in the action, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

2) A new procedure for early requests for documents would also be added as follows:

(2) Early Rule 34 Requests.

(A) Time to Deliver. More than 21 days after the summons and complaint are served on a party, a request under Rule 34 may be delivered:
(i) to that party by any other party, and
(ii) by that party to any plaintiff or to any other party that has been served.

(B) When Considered Served. The request is considered as served at the first Rule 26(f) conferences.

3) A completely new Rule 37(e) – Failure to Preserve Discoverable (not just electronic) Information. For example, in the event that discoverable information has not been preserved, the court may “impose any sanction listed in Rule 37(b)(2)(A) or give an adverse- inference jury instruction, but only if the court finds that the party’s actions:
(i) caused substantial prejudice in the litigation and were willful or in bad faith; or
(ii) irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation.”

The proposed rule also includes a detailed list of factors to be considered in assessing a party’s conduct.

Other important changes were made to timelines, and the number of requests for admission were presumptively limited.

“All comments on these proposed amendments will be carefully considered by the rules committees, which are composed of experienced trial and appellate lawyers, judges, and scholars. Please provide any comments on the proposed amendments, whether favorable, adverse, or otherwise, as soon as possible but no later than February 15, 2014. Comments concerning the proposed amendments may be submitted electronically by following the instructions at . Hard copy submissions may be mailed to the Committee on Rules of Practice and Procedure, Administrative Office of the United States Courts, Suite 7-240, Washington, D.C., 20544. All comments are made part of the official record and are available to the public.”

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Mountain-Plains Investment Corporation; John Robert Fetters, Jr.; Joann Dransfeldt Fetters; A. Sue Fetters; and John R. Fetters III, v. Parker Jordan Metropolitan District, 2013COA123 (August 15, 2013)

“Sunlight is the most powerful of all disinfectants.” Justice Brandeis. Plaintiffs sought access to emails between a quasi-governmental agency (District), its management company, and its consultants on a water project. Plaintiffs sued for violations of the Colorado Open Records Act (CORA), because the District claimed it did not possess emails sent only between its consultants, and sought $16k for production of the records it did have. CORA defines public record as one “made, maintained, or kept by the state.” The court held that, while emails to or from the District or its management company are public record, those only between its consultants were not made, maintained, or kept by the District. Further, the court found the fee structure of $25/hour for collection of records and segregation and logging of privileged materials reasonable under CORA.

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Filed under Administrative, Government

CapitalValue Advisors, LLC v. K2D, Inc., d/b/a Colorado Premium Foods; Kevin LaFleur; Don Babcock; and Triton Capital Partners, Ltd., 2013 COA 125 (August 15, 2013)

It is the promise, not the paper it’s written on, that makes a contract. Plaintiff is a capital advisory firm. It had an agreement with Defendants to help them find financing. Defendants later contracted with another firm that did secure financing for Defendants. Plaintiff sought to enforce a provision that entitled it to 4.5% of the financed amount. Defendants argued the agreement was void because two of three provisions violated CRS 12-61- 101 (brokerage laws) and CRS 11-51-604 (securities laws), and thus the whole agreement was void. The trial court agreed; the court of appeals did not. Looking to the number of promises in the agreement, the court held that, in essence, each provision was its own “contract” even though they were all memorialized in the same agreement. The two unlawful provisions were severed so the agreement was not void, and judgment for Defendants was reversed.

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Filed under Contracts, Corporations

Walker Stapleton, Colorado State Treasurer v. Public Employees Retirement Association, 2013 COA 116 (Aug. 1 2013)

“Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.” – Groucho Marx. Walker Stapleton, Colorado’s Treasurer and statutory trustee to the Public Employees’ Retirement Association (PERA), sued for unfettered access to members’ records. The trial court denied his request because it was not for the purpose of providing benefits to members. The Court of Appeals rejected Stapleton’s argument that the common law allows a trustee unfettered access to trust records, because CRS 24-51-207 (PERA’s standards of conduct statute) limits trustees to carrying out functions (1) only when solely in the interest of members, and (2) for the exclusive purpose of providing benefits. The court noted, however, that Stapleton may seek access in the future, as long as consistent with a fiduciary purpose.

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Marilyn Marks v. Gessler, Colorado Secretary of State and Judd Choate, [Director of Elections], 2013COA115 (Aug. 1, 2013)

“Nobody will ever deprive the American people of the right to vote except the American people themselves and the only way they could do this is by not voting.” – FDR. Marks filed a complaint with Gessler claiming violations of federal election laws (HAVA). Gessler dismissed the complaint without a hearing for lack of standing. Marks appealed to the district court and won. In a complex ruling, the court of appeals affirmed because 1) the state’s APA provides for judicial review of administrative HAVA determinations; 2) federal and state HAVA laws conflict regarding standing, so the federal rule controls; and 3) HAVA did not create a privately enforceable federal civil right. Procedurally, the court 1) identified the final appealable order; 2) affirmed sua sponte entry of summary judgment; and 3) held state and federal courts have subject matter jurisdiction to review HAVA appeals.

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Filed under Administrative, Appellate Review Challenged, Constitutional, Government

Mid Valley Real Estate Solutions V, LLC, v. Hepworth-Pawlak Geotechnical, Inc.; Steve Pawlak; Daniel Hardin; and S K Peightal Engineers, Ltd., 2013COA119 (August 1, 2013)

Soils swelled, cracking substructure; single-asset subsidiary sues. Residential homebuilders owe an independent duty to homeowners to build a home with reasonable care. In this CAR 4.2 interlocutory appeal, Defendant homebuilders argued that the economic loss rule should prevent a corporate subsidiary of a bank from bringing tort claims that a natural-person homeowner could bring. Rejecting each of Defendants’ arguments, the court of appeals held that the independent duty owed by homebuilders announced in Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041(Colo. 1983) also prevents the economic loss rule from barring a corporate-plaintiff’s construction defect claims. A homebuilder’s duty of care is owed to any subsequent owner of a house because the duty arises from the residential nature of the project, not the nature of the homeowner (corporate or otherwise).



Filed under Contracts, Corporations, Interlocutory Review, Torts

Mauro v. State Farm Mutual Auto Insurance, 2013COA117 (Aug. 1, 2013)

“If the interest of the absentee is not represented at all, or if all existing parties are adverse to him, then he is not adequately represented.” Opinion. In a personal injury case, the parties moved for a protective order to keep certain records confidential. State Farm, defendant’s insurer, moved to intervene and oppose the order. The trial court denied the motion, but the court of appeals reversed. The court agreed with State Farm that: 1) its record-keeping obligations under state law gave it an interest in the outcome of the protective order; 2) there was no other venue in which State Farm could challenge the order; and 3) its interests were not protected by counsel for the insured, even if that counsel was hired by State Farm. The court did not, however, rule on the merits of the protective order. Instead, State Farm was permitted to intervene on remand.

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Filed under Evidence, Insurance, Proceedure, Torts