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Colorado Court of Appeals Opinions
November 23, 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. 08CA1565. People v. Mosley.
Speedy Trial—Extension of Time—Remand.

The People appealed the dismissal with prejudice of its case against defendant on speedy trial grounds. The judgment was reversed.

On February 5, 2004, defendant was convicted of twelve counts of sexual assault on a child by a person in a position of trust and one count of crime of violence. On May 3, 2007, a division of the Court of Appeals reversed the conviction and remanded the case for a new trial. The trial court received the mandate on September 19, 2007, resulting in a speedy trial deadline of March 19, 2008. On October 29, 2007, defendant waived his right to a speedy trial. The speedy trial deadline was recalculated as April 29, 2008, and trial was set to commence on April 8, 2008. Over defendant’s objection, the court extended the speedy trial period by six months and set a new trial date of June 17, 2008. The court granted defendant’s motion to dismiss based on violation of his speedy trial rights.

The People argued that the trial court improperly applied CRS § 18-1-405(2) of the speedy trial statute in extending the speedy trial period over defendant’s objection. The exclusions to the speedy trial computation contained in subsection (6) also apply to subsection (2) and a case set for trial after a remand, regardless of whether the delay on retrial is caused by the actions of the defendant or the needs of the prosecution. Therefore, the trial court correctly applied the speedy trial statute when it continued the trial date. The judgment of dismissal was reversed and the case was remanded for reinstatement of the charges.

No. 10CA1980. People in the Interest of C.L.S., and Concerning T.V.
Paternity—Presumption—Standard of Proof—Preponderance Standard—Clear and Convincing Standard.

Husband appealed the magistrate’s order declaring T.R.S. the presumptive father of C.L.S. The order was affirmed.

Mother and husband were married when C.L.S. was conceived in early 2006. During this time, mother also had a brief, intimate relationship with T.R.S. Mother filed for dissolution of marriage later in 2006, before C.L.S. was born. Mother and T.R.S. began dating in the spring of 2007, about three months after C.L.S. was born. Genetic testing was performed a short time later. It excluded T.R.S. as C.L.S.’s biological father. However, T.R.S. acted as C.L.S.’s father, signed an acknowledgement of paternity, and added his name to the son’s birth certificate as his father.

Husband and T.R.S. each established presumptions of paternity that were not rebutted. The magistrate, after applying the relevant statutes, named T.R.S. the child’s legal father. Reviewing the magistrate’s order based on the preponderance standard, the district court upheld the magistrate’s decision.

On appeal, husband contended that the district court committed reversible error by rejecting the clear and convincing standard in favor of the preponderance standard. Husband established the presumption of paternity by way of marriage during C.L.S.’s birth and a genetic test establishing paternity. T.R.S. established the presumption of paternity by way of receiving C.L.S. into his home and holding him out as his own child and acknowledging paternity in writing.

Once presumptions are established, they may be rebutted by clear and convincing evidence. Husband successfully rebutted T.R.S.’s second presumption by showing husband did not provide written consent for T.R.S. to acknowledge the son as his child. The second step in the process occurs after the presumptions are established and have not been rebutted. According to CRS § 19-4-105(2)(a), when two or more conflicting presumptions arise, the presumption founded on the “weightier considerations of policy and logic” controls. The proper standard of proof to determine this second step is the preponderance of evidence standard. Therefore, the district court used the proper standard. The order was affirmed.

No. 10CA2039. Bristol Bay Productions, LLC v. Lampack.
C.R.C.P. 12(b)(5) Dismissal Based on Issue Preclusion.

Bristol Bay Productions, LLC (Bristol Bay) appealed the district court’s judgment dismissing its tort action against defendants Peter Lampack and Peter Lampack Agency, Inc. (collectively, Lampack), Simon & Schuster, Inc., and Penguin Group USA, Inc. (Penguin). The judgment was affirmed.

Bristol Bay was the producer of a movie based on one of Clive Cussler’s “Dark Pit” adventure novels. Lampack was Cussler’s literary agent, and Simon & Schuster and Penguin were two of Cussler’s publishers.

Bristol Bay and Cussler sued each other in California over the failure to create a commercially successful movie. During discovery, Bristol Bay learned that Cussler had sold 40 million books, not the 100 million Bristol Bay had been led to believe. Bristol Bay added claims of deceit against Cussler, alleging losses in excess of $50 million.

Several weeks later, Bristol Bay filed this action in Colorado based on nearly identical allegations as in the California case. Bristol Bay later amended the complaint to add Simon & Schuster and Penguin, based on allegations that they misrepresented Cussler’s readership, as well as the number of books in print and the number of books sold.

The California jury returned verdicts in favor of Cussler on Bristol Bay’s deceit claims. The Colorado court stayed its proceedings pending an appeal of the California case. The California Court of Appeals affirmed the judgment and the Colorado court granted, on issue preclusion grounds, defendants’ C.R.C.P. 12(b)(5) motion to dismiss the complaint. Bristol Bay appealed and the Colorado Court or Appeals affirmed.

Issue preclusion bars relitigation of a legal or factual matter already decided in a prior proceeding when four conditions are met. In this case, only one element was in question; namely, whether the issue sought to be precluded was identical to an issue actually and necessarily determined in a prior proceeding. Bristol Bay argued that the district court erred in determining that the California jury’s findings on misrepresentation, reliance, and causation precluded it from proceeding in Colorado against Lampack and the publishers.

The Colorado Court of Appeals found that the California jury’s findings precluded Bristol Bay from proceeding against Lampack because it decided, adversely to Bristol Bay, three issues identical to those present in the Colorado case. The Court further held that because the jury found there was no causal relationship between the alleged misrepresentation and Bristol Bay’s losing money on the contract and the movie, Bristol Bay was precluded from arguing that reliance on anyone’s misrepresentation about the number of Cussler’s books sold caused its losses.

Bristol Bay also argued that the case could only have been disposed of in the manner chosen as a summary judgment motion, not for failure to state a claim. The Court disagreed. The Court noted that affirmative defenses may be disposed of through a C.R.C.P. 12(b)(5) motion when the allegations of the complaint reveal that the claim is, as a matter of law, barred, or where no prejudice results to the plaintiff. Bristol Bay argued that it was prejudiced under Rule 12(b)(5) because attorney fees must be awarded when tort cases are so dismissed. The Court was not persuaded. The judgment was affirmed and the case was remanded for awards of appellate attorney fees to Lampack and the publishers.

No. 11CA0026. Treece, Alfrey, Musat & Bosworth, PC v. Department of Finance, City and County of Denver.
Tax Dispute—Use Tax on Costs of Obtaining Medical Records for Litigation.

The Department of Finance of the City and County of Denver (Department) appealed the district court’s judgment reversing a hearing officer’s determination that Treece, Alfrey, Musat & Bosworth, P.C. (law firm) owed use tax on the cost of obtaining copies of medical records from health-care providers for the law firm’s use in litigation. The judgment was affirmed.

The law firm represents clients in civil litigation. As part of its practice, it often must acquire photocopies of medical records. Generally, the law firm receives authorization to release records from the opposing party or its own client, provides the authorization to pertinent health-care providers, receives paper copies, and pays an invoice generated by the health-care provider. The law firm then receives reimbursement from an insurer of its client or directly from the client. The health-care provider does not charge sales tax when providing the records and the law firm does not pay sales tax, nor does it charge a sales tax to its client or the insurer. The records, kept in the law firm’s files, are owned by the law firm, the insurer, or the individual client.

The Department conducted a routine tax audit of the law firm from January 1, 2006 through December 31, 2008 and assessed use tax, penalties, and interest on the law firm’s costs paid to obtain medical records. The law firm contested the assessment and the hearing officer upheld it, concluding that the law firm “purchased tangible personal property for use in Denver in connection with its business and did not pay sales tax.”

The law firm appealed to the district court, which found an abuse of discretion and reversed the hearing officer’s judgment. The Department argued that the hearing officer’s decision was correct, and appealed. The Court of Appeals disagreed and affirmed the trial court’s judgment, albeit on different grounds.

The Court looked to the applicable tax provision, Denver Revised Municipal Code § 53-96, which essentially requires businesses that purchase tangible personal property in Denver for use and do not pay sales tax to pay use tax. The parties agreed that the physical documents obtained from health-care providers constituted tangible personal property. The parties disagreed on three points: (1) whether the copies were “sold” or “purchased at retail” because hospitals and doctors are not in the business of selling medical records at retail; (2) whether the photocopying of records for litigation purposes is a retail sale for consideration because they must be furnished without charge on presentation of authorization and they are not sold; and (3) whether the charge for photocopying reflects provision of a service versus a product.

The Court examined the nature of medical records. It found that a patient or authorized representative who seeks copies of a medical record receives, on payment of reasonable costs, both an item of tangible personal property (the documents) and the services or rights that are other than tangible (the labor involved in physical retrieval and copying, as well as the information in the record).

Neither statutory provisions nor the record allowed for a meaningful separation of the cost of providing the services and intangible property from the cost of providing the actual paper document. The Court therefore applied the “true object” test in which the Court analyzes the “totality of the circumstances” to determine whether the true object, dominant purpose, or essence of the transaction is the acquisition of tangible personal property or the acquisition of intangible services. The Court concluded the obtaining of medical record photocopies is not a transaction for the furnishing of tangible personal property, but that the true object is obtaining intangible information contained within the medical records by purchasing the services necessary to retrieve and copy them.

Colorado Court of Appeals Opinions