Colorado Court of Appeals Opinions
October 13, 2011
|The Court of Appeals summaries are written for the Colorado Bar Association by licensed attorneys Teresa Wilkins (Denver) and Paul Sachs (Steamboat Springs). Please note that the summaries of Opinions of the Colorado Court of Appeals are provided as a service by the Colorado Bar Association and are not the official language of the Court. The Colorado Bar Association cannot guarantee the accuracy or completeness of the summaries.|
No. 08CA1174. People v. Cordova.
Attempted Murder—Assault—Harassment—Suppression of Evidence—Preservation of Issues for Appeal.
Defendant appealed the judgment of conviction entered on a jury verdict finding him guilty of two counts of attempted first-degree murder, two counts of first-degree assault, and harassment. The judgment was affirmed.
On June 9, 2007, two men suffered lacerations in a fight with defendant and his friend. Defendant fled, and an arrest warrant was issued. On June 20, 2007, police stopped defendant’s vehicle, arrested him, searched him and his vehicle, and found eleven knives. Before trial, defendant moved to suppress the knives, arguing that they were not relevant other than to prove bad character and, alternatively, that any probative value was outweighed by the danger of unfair prejudice because the evidence was inadmissible character evidence. The motion was denied.
On appeal, defendant argued that the trial court erred in denying his motion to suppress the knives. The Court of Appeals disagreed. The Court reviewed the trial court’s evidentiary ruling for an abuse of discretion and found none. The victims testified that they had suffered lacerations from the fight, and those lacerations were corroborated by ample evidence. Defendant admitted that he and his friend had fought with the victims, but denied he had cut them. The critical issue was whether defendant or his friend had inflicted the cuts.
The evidence of defendant’s possession and ownership of the knives had a tendency to make it more probable that defendant had a knife the night of the stabbing. This inference is independent of an intermediate inference regarding any character trait. Therefore, the Court rejected defendant’s argument that the only possible relevance of the knives was the forbidden inference that he had a violent, knife-wielding character and acted in conformity with that character.
Defendant also argued that the search of his vehicle violated the Fourth Amendment prohibition against unreasonable searches. Because defendant did not raise the issue at trial, however, the Court concluded the issue was waived and not subject to appeal.
No. 08CA2156. People v. Harmon.
Child Abuse—Juror Confusion—Constitutional Right to a Fair Trial.
Defendant James Harmon appealed his conviction for knowing or reckless child abuse. The judgment was reversed and the case was remanded with directions.
Harmon was taking care of his 3-year-old daughter H.H. while his wife was at work. When Harmon picked up his wife from work later that day, she noticed that H.H.’s head was swollen and she seemed unusually lethargic. Harmon’s wife asked Harmon how this happened, and he said he didn’t know. The Harmons ultimately took H.H. to the hospital, where doctors determined she had a skull fracture, fractured ribs, and an injury to her adrenal gland. They also observed a number of bruises on her body. A consulting pediatrician concluded that the injuries were caused by blunt force trauma. Police were called and spoke with Harmon, who eventually told them that he had accidentally dropped H.H. while bathing her. Harmon was charged with one count of knowing or reckless child abuse. His principal defense was that the injuries resulted from an accident.
During the first day of trial, a juror submitted a note to the court asking why it was necessary to call witnesses and scrutinize facts that both sides agreed to in their opening remarks when “the disagreement is only over what level of guilt is indicated.” Harmon’s counsel asked that the juror be excused for cause because the juror had already decided Harmon’s guilt. The court refused to excuse the juror and then denied a motion for a mistrial.
At the close of the evidence, the court instructed the jury on the originally charged offense and a lesser-included charge of criminally negligent child abuse. Harmon continued to assert he was not guilty of any crime. The jury convicted him of the greater charge.
On appeal, Harmon argued that the trial court deprived him of his constitutional right to a fair trial when it failed to take action after receiving the juror note. The Court of Appeals agreed. The note reflected a fundamental misunderstanding of the juror’s role and duty to reserve judgment regarding guilt until jury deliberations. The trial court was required to take some action to ensure that the jury remained fair and impartial. Although the Court did not specify what the trial court should have done, it gave a number of examples of what the trial court could have done in this situation.
The Court then determined that it could not conclude the error was harmless beyond a reasonable doubt and found that defendant was entitled to a new trial. The Court chose not to remand the case because the trial had taken place more than three years earlier and there was no record of the identity of the juror who submitted the note.
No. 08CA2453. People v. Mendoza.
Sexual Assault—Sexually Violent Predator Assessment Screening Instrument—Constitutionality of CRS § 18-3-414.5.
Defendant challenged the district court’s order designating him a sexually violent predator (SVP). The order was affirmed.
Defendant, in connection with numerous alleged assaults of his teenage stepdaughter, was charged with one count of sexual assault on a child, one count of sexual assault on a child as a pattern of abuse, five counts of sexual assault on a child by one in a position of trust, and three counts of habitual criminal. Defendant pleaded guilty to an added count of attempted sexual assault on a child in exchange for dismissal of all other charges.
At sentencing, defendant filed a motion to declare the SVP risk assessment part of the SVP statute unconstitutional, and to exclude his SVP Assessment Screening Instrument (SVPASI). The court denied the motion and found he met the SVP criteria. He was sentenced to a six-year term of imprisonment.
An SVP is an offender (1) who is 18 years of age or older at the time of the offense; (2) who has been convicted of an enumerated sexual offense; (3) whose victim was a stranger or a person with whom the offender established or promoted a relationship primarily for the purpose of sexual victimization; and (4) who is likely to subsequently commit one or more of the enumerated offenses under the circumstances specified in the statute. When convicted of an enumerated offense, the probation department must complete the SVPASI. The court will then determine whether the defendant is an SVP. As a part of the SVPASI, the offender’s probability of re-offending is assessed based on a Sex Offender Risk Scale.
On appeal, defendant argued that the district court erred in relying on the SVPASI because it does not predict likely future commission of an SVP offense but only identifies offenders who are likely to fail treatment or be rearrested for non-sexual violent crimes. The Court disagreed, finding that the Sex Offender Management Board that developed the SVPASI had created a test that had sufficient bases on which to predict the likelihood of committing a future SVP offense.
The Court also rejected defendant’s argument that the SVPASI violated equal protection and due process guarantees. Statutes are presumed to be constitutional. To attack a statute’s validity, the statute must be established unconstitutional beyond a reasonable doubt.
Defendant argued that the SVP statute treats similarly situated people differently because an offender designated as an SVP based on a score of four or more was slightly less likely to be rearrested for an SVP offense than one not designated as an SVP. Although this was correct, the Court noted that the SVP designated offender was much more likely to be arrested for a new violent offense, as well as any new offense. Thus, the Court found the slight difference between the arrest rates of an SVP versus a non-SVP for a sexual offense did not mean that the SVP statute treats similarly situated persons differently.
The Court also rejected defendant’s argument that under the 2010 SVPASI, he would not be designated an SVP. Defendant presented no authority, nor did the Court have any, that he was entitled to be reevaluated under the revised SVPASI.
Finally, the Court rejected defendant’s argument that the district court had erred in designating him an SVP. The Court found ample evidence in the record to support the trial court’s finding.
No. 09CA0400. People v. Grassi.
Blood Alcohol Content—Suppression—Probable Cause to Draw Blood—Fellow Officer Rule.
A division of the Court of Appeals in People v. Grassi, 192 P.3d 496 (Colo.App. 2008) (GrassiI), remanded this case to the trial court for a hearing to determine whether the People had probable cause to draw defendant’s blood. Defendant appealed the trial court’s order entered on remand, which denied his motion to suppress blood alcohol content (BAC) test results. The order was affirmed.
Defendant was the driver in a single-car accident resulting in the death of the vehicle’s passenger. A jury convicted defendant of vehicular homicide, manslaughter, driving under the influence of alcohol or drugs (DUI), and driving with excessive BAC. Before police arrived at the scene, defendant was transported to the hospital. Trooper Duncan went to the hospital so he could take defendant’s blood sample if it appeared that alcohol was involved. When the trooper arrived, defendant was unconscious, and he detected a strong odor of alcohol. The trooper gave an attending nurse a blood draw kit and instructed her to take blood samples. The samples, taken three hours after the accident, indicated defendant’s BAC was 0.163. On remand, the trial court concluded that the police had probable cause to draw the blood.
In Grassi I, the Court held that the police were required to have probable cause to believe defendant had been driving a motor vehicle in violation of any of the laws enumerated in CRS § 42-4-1301.1(2)(a)(I) before drawing blood from him while he was unconscious. Probable cause exists when the facts and circumstances known to the police at the time of the arrest support the reasonable belief that the defendant committed an alcohol-related offense.
On appeal, defendant argued the police did not have probable cause. The Court disagreed, determining there was ample evidence to support a probable cause finding. Two troopers testified that defendant’s car was found more than 200 feet from the roadway; there was no evidence that defendant had applied his brakes; there was no damage or problem with the car that appeared to have caused or contributed to the accident; there was nothing on the roadway that might have contributed to the accident; the weather conditions were dry, clear, and warm; and the vehicle appeared to follow the “fog line” (the white line along the edge of the road) off the road as it curved at an intersection, which is common among intoxicated drivers. Moreover, defendant still had a strong odor of alcohol three hours after the accident.
Defendant also argued that the fellow officer rule does not apply to this case. The Court disagreed. The fellow officer rule provides that a law enforcement officer who does not personally possess a sufficient basis to make an arrest may do so if (1) he or she acts at the direction or as a result of communications with another officer; and (2) the police as a whole possess a sufficient basis to make the arrest. Defendant argued that the observations of the trooper at the accident scene should not enter into the probable cause determination because the trooper at the hospital had no contact with him. The Court noted that the fellow officer rule does not require direct contact for the observations of the trooper at the scene to enter into the probable cause determination. The rule is satisfied if “the police as a whole” have probable cause.
No. 09CA2543. People v. Berry.
Retaliation Against a Judge—CRS § 18-8-615(1)(b)(II)(B).
Defendant Shannon Dillon Berry appealed from his judgment of conviction of retaliation against a judge. The judgment was reversed.
Berry was a recent divorcé. A few months after the judge entered the final divorce decree, Berry asked a friend to drive him to the emergency room. On arrival, Berry told one of the nurses he would kill someone if he were released from the hospital. A mental health evaluator then saw him. Berry told the evaluator he had been thinking about hurting several people, including his ex-wife, her attorney, and the judge who presided over his divorce case.
The evaluator concluded Berry was an imminent danger to himself and others and that she had a duty to inform his purported targets about his statements pursuant to CRS § 13-21-117. The evaluator did not inform Berry that she was under a duty to report any threats he made.
The evaluator committed Berry on an emergency basis. She warned Berry’s ex-wife and the police department of his threats and told the police they should contact the ex-wife’s attorney and the judge. After contacting the judge, the police arrested Berry. At that point, Berry told the police he was not planning to kill anyone.
Berry was charged with and convicted of retaliating against a judge pursuant to CRS § 18-8-615. On appeal, Berry argued that the statute’s requirement that he knowingly made a credible threat means that, if the threat is made to a person who is required to report the threat to the judge, he had to know that the person has such a duty. The Court of Appeals agreed. Without that knowledge requirement, the crime of retaliation against a judge could be committed by a person who has no anticipation that the judge would be made aware of the threat. Because there was no evidence here that Berry knew the evaluator had a duty to report his statements to the judge, the judgment of conviction was reversed.
No. 10CA0363. Westpac Aspen Investments, LLC v. Residences at Little Nell Development, LLC.
Preliminary Injunction—Merger of Title—Prescriptive Easement.
This case presented an issue of first impression as to whether the merger of title doctrine extinguishes a prescriptive easement when the sole owner of the servient estate holds title to the dominant estate in joint tenancy with his spouse. The Court of Appeals concluded it does not.
Westpac Aspen Investments, LLC (Westpac)sued Preston and Betty Henn (the Henns) for injunctive relief requiring the Henns to remove a fence and locked gate blocking access to an express easement, and to quiet title to a prescriptive easement across the Henns’ lot for pedestrian access to Westpac’s property. The trial court entered a preliminary injunction against the Henns prohibiting them from obstructing access to Westpac’s property.
On appeal, the Court was asked to decide whether it was error for the trial court to have granted the preliminary injunction. To decide that, the Court had to determine whether there was error by the trial court regarding the factual and legal conclusions on which the injunction depended. It held there was no error and affirmed.
Westpac and the Henns own neighboring residential lots in the Tipple Woods subdivision at the base of Aspen Mountain, adjacent to the Aspen Resort ski area. The subdivision was created in 1959 and comprised five lots, three of which were on a steep slope inaccessible by motor vehicles. In 1960, to enable access to the upper lots, the original owners created an express easement on which they built a tramway and a staircase. The tram terminated in the highest lot (Lot 3), now owned by the Henns.
In 1984, the owner of the adjacent lower lot divided it into two lots. Westpac now owns Lot 2, adjacent to Lot 3, which Westpac claims enjoys the benefit of a prescriptive pedestrian easement across Lot 3 that had been in use since the early 1960s. The 1984 plat that created Lot 2 and the lower lots also contained the express tram and staircase easement. The terrain prevented direct access to Lot 2 from the easement. Because the tram ended within Lot 3, pedestrian access to Lot 2 was by way of a footpath across a portion of Lot 3. No express easement was created for this path.
The Residences at Little Nell Development, LLC, and related developer entities (collectively, Little Nell) wanted to build luxury condominiums on the three lower lots. In 2005, it filed an Amended Plat that consolidated the three lower lots, designating them the “Residence Lot” and assigning the current numbers to the lots Henn and Westpac now own. Little Nell removed the tram and built a pedestrian staircase that ends within the Henns’ lot in essentially the same location as the historic tram and staircase. They obtained a temporary access easement during construction from adjacent property owners for the benefit of the upper lots.
After construction of the staircase was completed, Westpac resumed accessing its property by way of the footpath across the Henns’ property and, without proper permits, installed a heated sidewalk on the path. The Henns then, also without proper permits, installed a fence and locked gate across the path leading to the Westpac property, thereby preventing access to the staircase. Westpac filed this lawsuit, seeking to quiet title to an easement based on the footpath and to require the Henns to remove the gate and fence. The court granted a preliminary injunction.
On appeal, the Henns argued that Westpac did not demonstrate a reasonable probability that it would prevail on the merits of its claim for a prescriptive easement. The Court disagreed. The Henns did not challenge the findings that the use of the path was open and notorious, but argued Westpac could not establish it was used continuously without effective interruption because it was not used during construction of the new house on Lot 2 in 2000 and during the Little Nell construction in 2005. The Court noted that intermittent use on a long-term basis satisfies the requirement for continuous use. The trial court found that the owners of Lot 2 used the path for at least forty-three continuous and uninterrupted years (from 1962 to 2005); therefore, the prescriptive period was fulfilled in 1980.
The Henns argued that the use was not adverse because the owners of Lot 3 gave permission for the path’s use. The Court noted that an owner’s acquiescence of use is not permission. The trial court found and the testimony reflected that the path was used for forty-three years without permission being explicitly sought or received. Thus, the trial court did not err in finding a reasonable probability that the Henns’ property is subject to a prescriptive easement benefiting Westpac’s property.
The Henns contended that in 1989, the owner of Lot 2 also owned Lot 3, and that under the doctrine of merger, adverse use of the footpath ended, any easement was terminated, and any subsequent use did not qualify for a new prescriptive easement. The Court noted that the common ownership for the doctrine of merger to apply must be absolute and that was not the case here. In 1978, William Yarbrough took title to Lot 3. On June 27, 1989, Yarbrough and his wife, Julia, bought Lot 2 and took title as joint tenants. Eleven days later, on July 7, 1989, the Yarbroughs conveyed Lot 2 to the Julia Kinloch Yarbrough Revocable Trust. On September 5, 1989, Yarbrough sold Lot 3 to a third party. Westpac bought Lot 2 in 2002, and the Henns acquired Lot 3 in 2004. The Henns’ argument was that William Yarbrough’s ownership interest in both lots during the eleven days in July 1989 resulted in a merger of title that terminated the prescriptive easement for the footpath and restarted the prescriptive period. The Court agreed with the trial court that because William Yarbrough was never the sole owner of both lots, the easement was not extinguished.
The Henns also argued that the lack of use of the easement during the construction in 2000 and 2005 extinguished the prescriptive easement. The Court disagreed, finding no evidence of any intent on the part of Westpac or its predecessor to abandon the easement during construction.
The Court rejected the Henns’ argument that the trial court erred by granting a preliminary injunction. The trial court thoroughly analyzed the situation and made findings on each of the Rathke factors, all of which were supported by the record. [Rathke v. MacFarlane, 648 P.2d 648, 653-54 (Colo. 1982).]
No. 10CA0398. People v. Ortega.
Motion for Post-Conviction Relief—Sentencing Range—Aggravated Sentence.
Defendant Louis Ortega appealed the district court’s order denying his motion for post-conviction relief. The order was affirmed.
Pursuant to a written plea agreement, Ortega pleaded guilty to child abuse, knowingly or recklessly causing serious bodily injury to the child. In the plea agreement, Ortega stipulated to a sentencing range of fifteen to twenty years in the Department of Corrections (DOC). He also signed and initialed a Crim.P. 11 advisement form. The court accepted his plea as knowing, voluntary, and intelligent; found he understood the elements of the offense and the penalties associated with his plea; and sentenced him to nineteen years in the DOC.
Ortega filed an unsuccessful Crim.P. 35(b) motion for reconsideration of his sentence. He then filed the motion at issue here, seeking to correct an “illegal sentence” and requesting appointment of counsel and an evidentiary hearing. The court denied the motion and Ortega appealed.
Ortega argued that the nineteen-year sentence exceeded the maximum presumptive sentence for his class 3 felony. He was convicted of a class 3 felony that is both an extraordinary risk crime and a crime for which the court must sentence a defendant to not less than the midpoint of the presumptive range and not more than twice the presumptive maximum. The Court of Appeals concluded that the presumptive range is first increased in accordance with the extraordinary risk of harm statute, and then the mandatory language of CRS § 18-1.3-401(8)(d) is applied to the expanded presumptive range. Here, that results in the maximum presumptive range sentence being increased to sixteen years, which requires a sentence of between ten years (the midpoint between four and sixteen) and thirty-two years (twice the maximum) in the DOC. Thus, nineteen years was well within the range authorized by statute.
Ortega also argued that the court erred in imposing an aggravated sentence because he did not admit in open court to any aggravating factors or waive his right to have a jury determine the existence of any aggravating factors. The Court disagreed. Enhancement of Ortega’s sentence did not require proof of any fact other than the elements of the crime, which were proved beyond a reasonable doubt when he pleaded guilty. Thus, his sentence was not impermissibly aggravated.
Ortega further contended that his plea was not knowing, voluntary, and intelligent because it included the inducement of an illegal sentence and because his plea agreement did not include and he did not understand the penalties of the “extraordinary risk of harm” aggravator. The Court first noted that the sentence was not illegally aggravated. It then found that the record refuted his claim that the sentence was longer than that to which he agreed.
No. 10CA0668. Haralampopoulos v. Kelly, MD.
Medical Malpractice—Wrongful Admittance of Hearsay Evidence.
In this medical malpractice action, plaintiff Vasilios Haralampopoulos, by his guardian, John Haralampopoulos, appealed the judgment entered on a jury verdict in favor of defendants Jason Kelly, MD and Mauricio Waintrub, MD, as well as the order awarding certain costs to defendants. The judgment and order were reversed and the case was remanded with directions.
Plaintiff went into an emergency room with abdominal pain on November 23, 2004. Tests disclosed a cyst on his liver. The surgeon on call ordered a needle biopsy of the cyst the following day. Dr. Waintrub, the internist on call, took plaintiff’s medical history and admitted him for this procedure but did not ascertain the cause of the cyst. On November 24, Dr. Kelly performed the needle biopsy. Shortly after the cyst was pierced, plaintiff suffered a severe allergic reaction, became hypoxic, and stopped breathing. Before he could be revived, he suffered permanent brain injury.
According to plaintiff’s guardian, had the cause of the cyst been determined, a risk would have been recognized that spillage of the cyst’s contents during a needle biopsy could lead to anaphylactic shock. Guardian alleged Dr. Waintrub was negligent by not ordering tests to determine the cause of the cyst or consulting a specialist before admitting plaintiff for the biopsy. Guardian alleged Dr. Kelly was negligent by failing to consider the cause of the cyst and performing the biopsy without taking appropriate precautions against an allergic reaction. A jury verdict was entered in favor of defendants and plaintiff appealed.
Guardian argued that the jury verdict in favor of defendants should be reversed because the trial court erroneously admitted evidence of plaintiff’s alleged cocaine use. The Court of Appeals agreed, finding that the introduction of hearsay testimony about remote drug use derailed the trial proceedings.
Before the first trial in this matter (which ended in a mistrial related to an insufficient number of remaining jurors after several were excused), guardian moved in limine to exclude hearsay statements made during depositions regarding plaintiff’s alleged cocaine use. Defendants argued that the statements fit the medical diagnosis exception, C.R.E. 803(4), and the residual exception, C.R.E. 807. The trial court denied guardian’s motion.
Following the mistrial, the case was assigned to a second judge. Guardian again moved in limine to exclude the hearsay statements because of two changed circumstances concerning additional information about the statements. The court declined to revisit the previous ruling. The trial occurred before a third judge, and in a trial brief, the guardian again raised the hearsay issue. The third judge declined to “revisit the evidentiary rulings that have been made.”
On appeal, the Court first examined the rationale supporting the C.R.E. 803(4) exception to the hearsay rule, which is that statements made to a physician are presumptively reliable because the patient trusts that the “effectiveness of the treatment . . . may depend largely upon the accuracy of the information provided to the physician.” Here, plaintiff was in a vegetative state when plaintiff’s former girlfriend disclosed information about his past cocaine use in the 1990s. This information had no diagnostic value at that time and should have been excluded. The hearsay statements at issue were neither consistent with the purpose of promoting treatment or diagnosis, nor was the content of the statements what is reasonably relied on by a physician in treatment or diagnosis.
The Court also concluded that the testimony regarding plaintiff’s past drug use was not admissible under the residual hearsay exception. The Court could not find that the statements had the necessary guarantees of trustworthiness.
The Court held that hearsay statements relating to fault that are not relevant to diagnosis or treatment are inadmissible under Clark v. People, 103 Colo. 371 (1939). The statements were made when there was no question that the damage to plaintiff was irreversible and there was no hope of restoring his brain function. They could only have been made to find fault.
Finally, the Court held that even if the statements satisfied a hearsay exception, they were highly prejudicial and confusing to the jury and should have been excluded under C.R.E. 403. Accordingly, the judgment was reversed and the case was remanded for a new trial.
No. 10CA1458. Citywide Banks v. Armijo.
Uniform Commercial Code—Foreclosure—Agency
Plaintiff Citywide Banks (Bank) appealed the order denying its motion for sale of the property owned by defendant. The order was affirmed.
In 2003, Dakota Lending, LLC (Dakota) executed a promissory note to Bank in exchange for a revolving line of credit that allowed Dakota to borrow up to $4 million. Dakota used this line of credit to finance its business of buying, selling, and holding real estate mortgages. As security, Bank took assignments of the promissory notes and deeds of trust that Dakota financed or acquired in its course of business.
In 2007, Kimberly Poladsky and RE Services, LLC (collectively, RE Services) executed a promissory note (Note) payable to Jaguar Mortgage Company. The Note was secured by a deed of trust that encumbered the property at issue. After a series of transfers, Dakota acquired the Note. Dakota then assigned all of its rights and interest in the Note and deed of trust to Bank. While Bank held the Note, it allowed Dakota to service the loan and retain for itself periodic payments made on the Note.
In 2008, RE Services sold the property to defendant. Title insurance was purchased from Stewart Title, which conducted the closing. At closing, defendant tendered the purchase price and Stewart Title accepted those funds as closing agent. Stewart Title did not demand production of the Note at closing and did not attempt to determine the identity of the Note holder. Bank alleged that Stewart Title also failed to obtain a release of the deed of trust at closing. Stewart Title issued a check payable to Dakota for the amount listed on the payoff statement, but Dakota never tendered the funds to Bank. Dakota is now defunct and its managers are under criminal indictment. Bank, which still holds the Note, has declared it in default.
Bank brought this action to foreclose its lien on the property based on the unpaid Note balance. The trial court determined that Dakota was Bank’s agent and had authority to receive the payoff of the Note; therefore, Bank was not entitled to foreclose on the property.
On appeal, Bank argued that Colorado’s Uniform Commercial Code (UCC) establishes that Bank’s lien remains enforceable against the property because any payoff made to Dakota was ineffective. The Court of Appeals disagreed. Bank argued that UCC § 4-3-301 required payment to be made to the Note holder. The Court found that the section does not contain an explicit requirement that a “person entitled to enforce” an instrument must be the holder. UCC § 4-1-103 provides that the common law, including the law of agency, supplements the statutory provisions of the UCC. Under Colorado’s common law, payment to a holder’s authorized agent is equivalent to payment to the holder. The Court held that payment to a holder’s agent is equivalent to payment to the holder.
Bank also argued that it was error to find that Dakota was its agent. The Court disagreed, holding that the trial court’s finding was amply supported by the record.
Bank further contended that it was error to find that Dakota was authorized to accept payoff of the Note. The trial court found that Dakota had apparent authority to accept payoff of the Note. The Court upheld the ruling, but found that the facts established Dakota’s implied authority to accept a payoff.
No. 10CA1459. Sterenbuch v. Goss III.
Statute of Limitations—Tortious Interference With Contracts—Civil Conspiracy—Abuse of Process—Unjust Enrichment.
Plaintiff Martin Sterenbuch appealed the district court’s judgment dismissing his claims for tortious interference with contracts, civil conspiracy, unjust enrichment, and constructive trust against defendants E. Warren Goss III, Lyle Smith, and Intercontinental Capital Management, LTD (ICM). Goss, Smith, and ICM cross-appealed the court’s judgment dismissing their abuse of process counterclaim. The judgment was affirmed in part and reversed in part, and the case was remanded with directions.
Sterenbuch and Goss are attorneys. Smith and his company, ICM, are self-proclaimed investment fund recovery experts. In 1999, Sterenbuch agreed to represent, on a contingency basis, approximately twenty-five people who, along with himself, had been victimized by a fraudulent investment scheme. By November 1999, nine of his clients had terminated their agreements with him and entered into new ones with Smith. The new agreements later were superseded by contingency fee contracts with Goss. Sterenbuch eventually came to believe that Smith and Goss had been acting together from the start to obtain his clients.
The case was complicated by the federal government’s instituting an asset forfeiture case against the funds. On March 16, 2007, a consent judgment was entered in that case. The terms of the judgment provided for the distribution of funds to fraud victims, including those clients represented by Sterenbuch and Goss. Goss, Smith, and ICM received $598,710 in fees from Sterenbuch’s former clients.
On March 10, 2009, Sterenbuch filed this action. Goss, Smith, and ICM counterclaimed, alleging Sterenbuch’s lawsuit was an abuse of process. Each side successfully moved for partial judgment on the pleadings dismissing the other’s claims. The district court ruled that Sterenbuch’s claims were time-barred, finding they should have been brought within two years of November 1999, when he first became aware of the other side’s defamatory statements about him, the loss of his clients, and the harm to his reputation. The abuse of process claim was dismissed because of a failure to plead any facts pertaining to an essential element of that tort: an improper use of legal process.
On appeal, Sterenbuch argued it was error to rule his claims were time-barred. The Court of Appeals disagreed with respect to his tort claims but agreed with respect to his equitable claims. As to the tort claim, the Court found that a two-year statute of limitations applied from the date of accrual, which is “the date both the injury and its cause are known or should have been known by the exercise of reasonable diligence.” Sterenbuch argued that his claim for tortious interference with contractual relations could not have accrued until March 16, 2007, when it was determined that his former clients would recover their lost funds. Sterenbuch claimed that he could not have known with any degree of certainty the facts relating to the damages element of his claim until March 2007. The Court noted that an injury is different from the damages that flow from the injuries, and damages do not have to be known before accrual of a claim. It does not matter that the contract breached was a contingency fee contract. Here, the fact of injury or damage was evident as early as November 1999, when Sterenbuch’s clients terminated their agreements with him and, as he alleged, Smith’s defamatory statements caused harm to his professional reputation. Therefore, his tortious interference with contract claim was clearly barred.
The Court similarly rejected Sterenbuch’s argument that it was error to dismiss his civil conspiracy claim. The Court held that civil conspiracy claims share a statute of limitations with the underlying tort and that their accrual dates are linked to the accrual dates of the underlying tort. Because the underlying cause of action is time-barred, the cause of action for conspiracy also is time-barred.
The Court then turned to the equitable claims for unjust enrichment and a constructive trust. These are “technically subject to an equitable laches rather than a legal statute of limitations analysis.” However, absent extraordinary circumstances, a court usually will analogize to the statute of limitations for actions at law of like character.
A constructive trust is only a remedy to prevent unjust enrichment and not a separate cause of action. The Court therefore only considered the unjust enrichment claim. This is a quasi-contract claim, so a three-year statute of limitations for contract actions is applied. An unjust enrichment claimant must prove that the defendant received a benefit at the plaintiff’s expense and under circumstances that would make it unjust for the defendant to retain the benefit without commensurate compensation.
Sterenbuch’s unjust enrichment claim seemed to be his tortious interference of contract claim repackaged; however, he also alleged that he was responsible for the success enjoyed by his former clients and consequently by Goss and Smith. As a result, the claim did not accrue until the alleged unjust retention of fees by Goss and Smith at the end of the litigation. Thus, this claim could not have accrued before March 16, 2007, and his filing of his claim on March 9, 2009 was well within the three-year statute of limitations. This claim was reinstated.
Goss, Smith, and ICM argued it was error to dismiss their abuse of process counterclaim. The Court disagreed. The essential element of an abuse of process claim is the use of a legal proceeding in an improper manner. The allegations against Sterenbuch were that he had improper purposes in bringing the action, not improper use of the process. The Court affirmed the trial court’s finding that the counterclaim failed to allege a cause of action for abuse of process.
No. 10CA1720. Chavez v. Kelley Trucking, Inc.
Workers’ Compensation Act—Settlement Proceeds for Noneconomic Damages.
Plaintiff Pinnacol Assurance (Pinnacol) appealed the trial court’s order denying its motions for forfeiture or apportionment of proceeds from the settlement of noneconomic damages claims between plaintiff Jose Chavez and defendant Kelley Trucking, Inc. (Kelley). The order was affirmed.
Chavez received workers’ compensation benefits from Pinnacol after he was injured in a motor vehicle accident while acting within the course and scope of his employment. Chavez and Pinnacol filed a complaint against Kelley and two other alleged tortfeasors, claiming they negligently failed to control dirt and dust at their earth-moving projects and this obscured visibility on the adjacent roadways and caused the accident. The complaint alleged that Pinnacol had paid medical expenses and temporary disability for Chavez and anticipated liability for permanent disability benefits. It alleged Pinnacol was subrogated to Chavez’s claims and entitled to recover all sums it paid to him and expended on his behalf.
Chavez and Pinnacol settled with the other two defendants, leaving Kelley as the only defendant. Chavez and Pinnacol also entered into a settlement agreement between themselves, resolving the related workers’ compensation case. The settlement provided that, in addition to all benefits already paid, Chavez would receive $100,000 up-front, $2,500 per month for up to twenty years; and a medical custodial account funded with $10,800 per year for life. Pinnacol would retain its subrogation rights.
Chavez also settled with Kelley for $150,000 andexecuted a release of all claims for noneconomic damages. Pinnacol requested a hearing regarding the settlement proceeds, arguing that the settlement was subject to forfeiture because Chavez did not seek written approval before settling and, alternatively, that the settlement was subject to allocation by the court. The trial court found that the settlement and release for noneconomic damages ultimately was a reasonable amount and that there was no attempt to label the settlement to preclude or deny Pinnacol its right to exercise its subrogation interests. Therefore, Chavez was not required to give notice to Pinnacol. Pinnacol proceeded to trial against Kelley, but the jury found that Kelley was not negligent and awarded no damages.
On appeal, Pinnacol argued that Chavez must forfeit the $150,000 pursuant to CRS § 8-41-203(2) because he did not seek and obtain written approval of the settlement from Pinnacol . The Court of Appeals disagreed. Under title 8, article 42 of the Colorado Workers’ Compensation Act, Pinnacol is not liable and does not compensate an employee for noneconomic damages such as pain and suffering. Pinnacol’s payment of benefits operates as an assignment to Pinnacol of the cause of action against the alleged tortfeasor and Pinnacol is subrogated to the rights of the injured employee. Pinnacol is not entitled to recover any sum in excess of the amount of compensation for which it is liable. It is not liable for noneconomic damages.
CRS § 8-41-203(2) provides that “a cause of action assigned to Pinnacol may be prosecuted or compromised by it.” Here, Pinnacol prosecuted the causes of action to which it was subrogated. Nothing in the record indicated that Pinnacol’s ability to prosecute its claims was compromised by Chavez.
Regarding Pinnacol’s claim that the court should allocate the settlement proceeds, the Court determined that the settlement was a reasonable amount for Chavez’s noneconomic damages and not intended to compromise Pinnacol’s subrogation interest. Therefore, Pinnacol was not entitled to a share of the proceeds.
No. 10CA1907. People v. Holt.
Juror Statements as Extraneous Information—C.R.E. 606(b).
The People appealed the trial court’s order vacating a jury’s guilty verdict and ordering a new trial. The order was reversed and the case was remanded with directions.
A jury found defendant guilty of vehicular eluding. Following trial, defendant moved to vacate the verdict and requested a new trial, alleging that extraneous prejudicial information had been brought to the jurors’ attention. He offered affidavits of three jurors stating that (1) a juror claimed that, based on his personal experience, vehicular eluding was a minor traffic violation; and (2) several jurors had looked at or heard a dictionary definition of “elude” during deliberations. The trial court determined that both constituted extraneous prejudicial information. It vacated the verdict and ordered a new trial.
On appeal, the People argued that the juror’s statement regarding the severity of the offense was not extraneous information and therefore could not be used to impeach the jury’s verdict, and that the juror’s use of a dictionary definition is not prejudicial. The Court of Appeals agreed with both arguments.
The Court first noted that C.R.E. 606(b) “strongly disfavors” the use of juror testimony to impeach a verdict. Neither party cited any reported Colorado opinion determining whether a juror’s statement regarding the severity of a charged offense constitutes erroneous information under C.R.E. 606(b). Jurors may apply their general knowledge and everyday life experiences in deliberations. Therefore, such discussions cannot be offered to impeach a verdict. The Court concluded that this general rule also applies to the general knowledge of, and previous personal experiences with, the criminal justice system as a lay juror.
The People conceded that a dictionary definition is extraneous information but argued that defendant was not prejudiced by several jurors’ researching and discussing the dictionary definition of “elude.” The Court agreed. Defendant did not provide evidence as to whether the dictionary definition in any way prejudiced him; thus, it was error to order a new trial based on that conclusion. The order was reversed and the case was remanded to reinstate the jury verdict.
No. 10CA2176. Loofbourrow v. Industrial Claims Appeals Office.
Workers’ Compensation—Temporary Total Disability Benefits.
In a matter of first impression, the Court of Appeals addressed whether a claimant who did not challenge a determination that she had reached maximum medical improvement (MMI) of her work-related injury in an open case could obtain temporary total disability (TTD) benefits where she has experienced a worsening of her original injury. The Court concluded, under the circumstances presented, she could.
Claimant sought review of part of the final order entered by the Industrial Claims Appeals Office (Panel) that set aside the administrative law judge’s (ALJ) award of TTD benefits. Harman-Bergstedt, Inc. and its insurer, Zurich American Insurance Company (collectively, employer), cross-petitioned for review, asking to set aside the Panel’s order insofar as it affirmed the ALJ’s determinations as to compensability, transfer of the right of selection to claimant, and the calculation of claimant’s average weekly wage. The order was affirmed in part and set aside in part, and the case was remanded with directions.
In November 2008, claimant, a manager of a fast-food restaurant, developed back problems after an incident in which the cook walked off the job and claimant was left alone to perform all the store functions. Employer sent her to an authorized treating physician (ATP), who diagnosed her with back strain. The ATP imposed work restrictions and treated her with injections and physical therapy that cured and relieved her symptoms. In December 2008, the ATP placed claimant at MMI with no permanent medical impairment and discharged her from care. Because claimant had lost no time from work, employer did not file either a general admission of liability or a final admission of liability (FAL).
Claimant experienced renewed pain in March 2009. Her personal physician ordered an MRI, which showed a bulging disc and a small annular tear. He prescribed an injection, which she received in June 2009.
In August 2009, claimant experienced worse back pain and went to the emergency room. Her personal physician then placed her on medications and told her she could no longer work. Claimant reported her symptoms to employer. In October 2009, when employer had not provided treatment with the original ATP, claimant filed an application for hearing. Employer did not provide medical care until January 2010 and claimant continued to treat with her personal physician and remained off work.
The ALJ determined claimant had proved she sustained a compensable injury to her lower back and suffered a subsequent worsening of that condition. Because employer had failed to tender medical care, the ALJ concluded the right to select a physician passed to claimant. The ALJ awarded claimant TTD benefits as of the date she stopped working.
On review, the Panel upheld the ALJ’s determinations as to compensability, right of selection, and calculation of claimant’s average weekly wage (AWW). However, because claimant had been placed at MMI in December 2008 with no permanent impairment, it set aside the ALJ’s award of TTD benefits.
On appeal, employer argued that it was error to find claimant’s job activities caused her back condition in November 2008 and the symptoms she experienced in August 2009. The Court of Appeals disagreed, finding substantial evidence in the record to support the ALJ’s finding.
Employer also argued that the ALJ erred in finding the right to select the ATP had passed to claimant even though it had properly designated the ATP at the time of the November 2008 incident. The Court disagreed. If medical services are not timely tendered by an employer or insurer, the right of selection passes to the employee. Here, employer did not tender medical services when the injury recurred and the adjustor told claimant she did not need to return to the ATP. She was therefore free to select her treating physician.
The Court also rejected employer’s argument that the ALJ erred in calculating claimant’s AWW as of the date of the November 2008 injury because he did not take into consideration the reduction in her wages resulting from a demotion or otherwise fairly reflect her wage loss and diminished earning capacity. The default date of AWW determination is the wage on the date of the accident. The other method, referred to as the “discretionary exception,” applies when the default date will not fairly compute the employee’s AWW. The latter method is discretionary and the ALJ’s choice of method will not be interfered with unless it is beyond the bounds of reason. The Panel and the Court found that the ALJ’s use of the default method did not exceed the bounds of reason.
Claimant argued that the Panel erred by determining she was not entitled to TTD benefits despite having demonstrated a worsening of her condition. The Court agreed and reinstated the ALJ’s award of TTD benefits. An ATP’s determination as to MMI and medical impairment cannot be disputed in the absence of a division-sponsored independent medical examination (DIME). However, under CRS § 8-42-107.2(2)(a)(I)(A), the claimant’s time to select a DIME does not begin until an FAL has been mailed by the employer or its insurer. Here, employer never filed an FAL and the 2008 claim remained open. In addition, claimant’s condition worsened and caused her to suffer a wage loss not previously experienced. Because the claim remained open, the previous finding of MMI did not foreclose this later finding that the condition had worsened.
Colorado Court of Appeals Opinions