Tag Archives: Collections

Michael Weinstein; Kenneth Major; Manymajors Managements, Inc.; and Business Mechanic, Inc., v. Colborne Foodbotics, LLC 2013CO33 (June 10, 2013)

“LLCs combine the limited personal liability of a corporation with the single-tier tax treatment of a partnership.” (Opinion). Here, the Court interpreted the Colorado Limited Liability Company Act, CRS 7-80-606 (Act), and concluded that a judgment Creditor of the LLC could not bring suit against either the Managers or the Members of the LLC. The Managers were companies owned by the Members (natural persons). Creditor obtained a judgment against the LLC. Managers then induced the LLC to distribute its assets to the Members. Creditor sued the Members under the Act for an unlawful distribution, and sued the Managers for a common law breach of fiduciary duty claim. The Court concluded that under the express terms of the Act, only an LLC can sue its members for unlawful distributions. And, Act does not extend corporation common law to an LLC in any instance except a veil-piercing claim.

http://www.courts.state.co.us/userfiles/file/Court_Probation/Supreme_Court/Opinions/2010/10SC143.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8977&courtid=2

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Moye White LLP v. David I. Beren, 2013 COA 89 (June 6, 2013)

“We all get a second chance; it’s called tomorrow.” Anon. Moye White (MW) represented David Beren in probate litigation. MW employed and assigned to Beren’s case an attorney with a past of disciplinary proceedings, mental illness, alcoholism, and related arrests. MW sued Beren for its attorneys’ fees; Beren counterclaimed for breach of fiduciary duty claiming he should have been told about the attorney’s history. The court of appeals disagreed; a law firm does not have a duty to disclose such history to a client. Any risk posed by an attorney’s past conduct is speculative, and therefore not material. For the same reason, no ethical duty to disclose such information exists under professional conduct rules 1.4 or 7.1. The court of appeals also upheld costs awarded MW for uploading documents into a document review platform and costs incurred after a pretrial offer of settlement.

http://www.courts.state.co.us/Courts/Court_of_Appeals/Opinion/2013/12CA0954-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8973&courtid=1

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Filed under Attorney Regulation, Contracts, Torts

Fidelity National Title Company, f/k/a Security Title Guaranty Company v. First American Title Insurance Company, 2013COA80 (May 23, 2013)

It was a $1million mistake. A title company (Agent) closed 2 loans, for 2 different banks, 2 months apart, assuring both banks that they were first position lienholders for the same property. The Agent’s underwriter eventually paid over $1 million to resolve the banks’ competing claims over foreclosure proceeds. Underwriter sued Agent, and won. Agent appealed, challenging the interpretation of their contract and the applicability of a statutory defense for reliance on a payoff statement. The court of appeals held: 1) Agent was an “escrow” because it “handled” money during the closings, 2) Agent couldn’t rely on a “payoff statement” under CRS 38-35-124.5, as it didn’t indicate the amounts owed to the actual creditor or holder of the debt, and 3) the contractual phrase “actual prejudice” meant “substantial detriment to the significant interests of the party.” Affirmed.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2013/12CA0722-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8956&courtid=1

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Filed under Appellate Review Challenged, Contracts, Insurance, Property

Oasis Legal Finance, LLC, et. al., and Funding Holding, Inc., d/b/a LawCash v. John W. Suthers, as Attorney General; and Laura E. Udis, as the Administrator, Uniform Consumer Credit Code, 2013COA82 (May 23, 2013)

“You keep using that word. I do not think it means what you think it means.” – Inigo Montoya, Princess Bride. Here, Plaintiffs pay tort plaintiffs while their cases are pending. Repayment depends on the net amount recovered (if any); and if recovery exceeds net proceeds, the debt is increased based on time. The Administrator of the Colorado Uniform Consumer Credit Code, CRS 5-1-101 to 13-103 (UCCC), found the agreements were unlawful “loans.” Plaintiffs disagreed and sued. The court of appeals, like the trial court, found for Administrator. Under the UCCC, a “loan” is a debt created by the lender’s payment, or agreement to pay, money to a consumer. A “debt” is either fixed (a specific sum due) or contingent (not presently fixed but may become fixed in the future). A debt is not, however, an unconditional promise to pay. Here, Plaintiffs’ payments were contingent debts and thus loans.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2013/12CA1130-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8958&courtid=1

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Filed under Administrative, Contracts, Government

In re the Estate of Charles Erroll Hossack, deceased, Gladys Robinson v. Lori Hossack and Kirk Hossack, 2013COA64 (April 25, 2013)

A contempt of court order issued to compel compliance cost $231,300. Before 1995, CRCP 107 limited remedial contempt fines paid to parties; anything in excess of actual damages, costs and fees was outside the court’s jurisdiction. The 1995 amendments and the current rule now permit a fine paid to a party to exceed the damages caused by the contempt. Here, appellant was ordered to return property to decedent’s children; she disobeyed the order. The trial court issued a continuing fine of $100/day that grew to $1000/day after continued non-compliance. She claimed the trial court lacked jurisdiction and, under CRCP 60, the judgment was void. The trial court disagreed. The court of appeals also rejected her arguments and the pre-1995 cases on which she relied because Rule 107 now permits such fines. The trial court had jurisdiction, and thus properly denied relief under CRCP 60.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2013/12CA1465-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8924&courtid=1

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BDG International, Inc., v. Robert J. Bowers and Auxiliary Graphic Equipment, Inc., 2013COA52 (April 11, 2013)

Maritime law applies in Colorado. Defendants (D) bring goods from Australia to CO. Plaintiff (P) is a subcontractor for packing and shipping. D is not paid and then fails to pay P. P asserts a lien against D’s goods, so D enters into a payment agreement (governed by CA law) with P. D breaches, P sues and wins. On appeal, D argued the state courts lack subject matter jurisdiction because the claims were subject to federal Maritime law. The court of appeals held that federal courts have exclusive jurisdiction only for in rem maritime claims, but that state courts have concurrent jurisdiction over these in personsam maritime claims. The court of appeals also then held: 1) judgment was final despite directions regarding post-judgment satisfaction; 2) there was no setoff for judgments against different parties; and 3) the trial court correctly resolved the contract claims under CA law.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2013/11CA1581-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8904&courtid=1

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Filed under Appellate Review Challenged, Contracts, Proceedure

Federal Deposit Insurance Corporation [as Receiver for Community Banks] v. Yale Fisher, 2013CO5 (January 22, 2013)

There is an old saying, “Banks will only lend money to people who don’t need a loan.” Actually, banks normally off-set the risk of non-payment by adding a 36% default interest rate. But in this case, the original agreement did not include 36% default interest. A series of later modifications added a 36% default rate, but without noting it as a changed term. That seemed to make the rate ambiguous. The Supreme Court disagreed, finding the later modifications unambiguously included the 36% rate. The Credit Agreement Statute of Frauds, CRS 38-10-124, allows for extrinsic evidence to be considered to resolve ambiguous credit agreements. Here, extrinsic evidence suggested that the 36% rate was only added later as a computer error. However, as the contract was unambiguous, the statute didn’t apply and the evidence could not be considered. The borrower owed 36% on the defaulted amount.

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Filed under Contracts, Evidence

TCF Equipment Finance, Inc. v. Public Trustee for the City and County of Denver, 2013COA8 (January 17, 2013)

Garnishment defined: He owes me money, you owe him money; where’s my money? Here, a Public Trustee held excess funds following a foreclosure sale and redemption. Creditor did not obtain judgment until after the foreclosure, and the redemption period expired. Creditor sought to garnish the excess from the Public Trustee, who claimed the excess funds cannot be garnished. CRS 38-38-111 dictates distribution of excess funds following a foreclosure, and states that after the redemption period for junior lien holders ends, excess funds are paid to the owner. CRCP 103 permits garnishing funds of a judgment debtor held in escrow by a public entity. The court of appeals held the statute did not bar garnishment because Creditor was not a junior lienor, but a judgment creditor. Thus, the funds were subject to garnishment once the Public Trustee determined the excess funds were due to Debtor.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/12CA0345-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8802&courtid=1

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Filed under Government

David Hiner and Deelila Quick v. Bruce Johnson M.D. and Michael King, M.D., 2012COA164 (October 11, 2012)

Attorneys’ fees, or the denial of them, can add insult to injury. In this case plaintiffs sue a hospital and doctors for a wrongful death during surgery. The hospital settles. The doctors win at trial, but do not assert counterclaims. The prevailing doctors are awarded statutory costs and attempt to secure payment of those costs from plaintiffs’ settlement proceeds by obtaining a writ of attachment. CRCP 102 controls such writs. The court of appeals held that the writ was improper because CRCP 102 does not authorize writs for non-counterclaiming defendants. If a writ is wrongfully issued to a plaintiff, a defendant is entitled to costs for defeating the writ. But, the Rule does not authorize costs to plaintiffs who defeat improper writs obtained by non-counterclaiming defendants. Plaintiffs’ request for fees and costs for defeating the writ was, therefore, properly denied.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/10CA1846-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8689&courtid=1

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Portercare Adventist Health System v. Robert Lego, 2012CO58 (September 24, 2012)

Two months into a three-month hospital stay, a health insurance company stopped paying the bills of the wife of the Respondent. Four years later the hospital sought to collect the amount owed. The Defendant/Respondent claimed that the 3 year statute of limitations should apply and bar the claim. The hospital argued the bill was a “liquidated debt” and therefore subject to the 6 year statute of limitations. The Court reversed the court of appeals citing Rotenberg v. Richards, 899 P.2d 365 (Colo. App. 1995) nine times in a 23 paragraph opinion. It held that in the context of hospital bills, a “liquidated debt” is one ascertainable from the contract itself, or by simple calculation using extrinsic evidence if necessary. Here, because the hospital used a pre-determined market standard and uniform rate subject to disclosure to all patients, the debt was ascertainable using simple math.

http://www.courts.state.co.us/userfiles/file/Court_Probation/Supreme_Court/Opinions/2010/10SC765.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8671&courtid=2

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Filed under Contracts