Colorado Court of Appeals Opinions
December 27, 2012
|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.|
2012 COA 215. Nos. 11CA1093 & 11CA2210. Banning v. Prester.
Automobile Accident—Injuries—Jury Instructions—Mitigation of Damages—Collateral Source Rule—Testimony.
In this automobile accident case, plaintiff Michelle Banning appealed the judgment awarding her damages following a jury verdict against defendant William Prester. The judgments were reversed and the case was remanded for a new trial.
Prester negligently drove his vehicle, causing a low-speed rear-end collision with Banning’s vehicle. Banning sought medical attention for neck and back pain. Her billed medical expenses eventually reached approximately $140,000.
On appeal, Banning asserted that the trial court erred in instructing the jury concerning Prester’s mitigation of damages defense by allowing the jury to find she failed to mitigate if she “continued to undergo expensive treatment when it was not resolving her pain.” Plaintiffs do not have an affirmative duty to cease medical treatment when it is “expensive” and “fails to resolve a complaint of pain.” Therefore, the court erred in so instructing the jury, and the erroneous instruction was prejudicial to Banning. Accordingly, the case was remanded for a new trial on damages.
Banning also contended that the trial court erred in admitting evidence of amounts her health insurer paid to her medical providers. On remand, the trial court should apply the collateral source rule to this evidence.
Banning further asserted that the trial court erred when it allowed Dr. Lambden, Prester’s expert witness, to provide testimony about the “delta forces” involved in the accident, as well as testimony concerning Banning’s history of being subjected to domestic abuse. Contrary to Banning’s assertion, however, Dr. Lambden did not mention delta forces again after Banning’s objection to this testimony was sustained by the court. Further, the reference to Banning’s history of domestic abuse was relevant to Banning’s claim of depression after the accident and Prester’s assertion that Banning suffered from delayed recovery syndrome. Therefore, the court did not err in this regard.
2012 COA 216. No. 11CA1586. People v. Brosh.
Sexual Assault of a Minor—Sexually Violent Predator Designation—Crim.P. 35(b).
Defendant Jeffrey Brosh appealed the trial court’s order denying his Crim.P. 35(b) motion. The order was affirmed.
Brosh was charged with multiple counts arising from incidents in which he sexually assaulted and provided alcohol to a 12-year-old. Brosh pleaded guilty to one count of sexual assault on a child by one in a position of trust in exchange for dismissal of the other charges.
On appeal, Brosh contended that the trial court should have reconsidered the sexually violent predator (SVP) designation under Crim.P. 35(b) because it is part of his sentence. Sex offender registration is not an element of a defendant’s sentence. Review of an SVP designation is an issue of law, and, unlike the determination of a sentence within the sentencing range, it is not discretionary. Accordingly, discretionary reconsideration of an SVP designation by the trial court under Crim.P. 35(b) is not available.
Brosh also contended that the trial court applied an incorrect legal standard when it determined that it could not grant his Crim.P. 35(b) motion without infringing on the Executive Branch’s authority. The trial court correctly found that it could not modify a sentence based solely on evidence of defendant’s conduct during incarceration. Accordingly, the court did not misapply the law in denying Brosh’s Rule 35(b) motion.
2012 COA 217. No. 11CA1887. Damian v. Mountain Parks Electric, Inc.
Colorado Consumer Protection Act—Deceptive Trade Practices—Extension of Statute of Limitations—Equitable Tolling.
Plaintiffs Ann Damian and John Taylor, Jr. appealed the summary judgment in favor of defendant Mountain Parks Electric, Inc. The judgment was affirmed.
Plaintiffs filed a complaint against defendant, asserting claims under the Colorado Consumer Protection Act (CCPA) for damages allegedly caused by defendant’s deceptive trade practices in the marketing and sale of a heating system. Plaintiffs contended that the district court erred in not applying the one-year extension of the statute of limitations set forth in CRS § 6-1-115. The CCPA provides for a limitations period of three years, but extends that limitations period by one year if the plaintiff proves that the defendant caused the plaintiff to delay or refrain from filing the action. Here, it was not defendant’s conduct that caused the statute to run, but rather plaintiffs’ unexplained eighteen-month delay in instituting the administrative proceeding through the Colorado Public Utilities Commission. Therefore, the district court did not err in ruling that the one-year extension of the statute of limitations was not applicable here.
Plaintiffs also argued that the district court should have held that the statute of limitations was equitably tolled in light of the facts and procedural history of this case. Because the CCPA already provides a one-year extension of the limitations period if a defendant engages in conduct calculated to induce the plaintiff to refrain from or postpone the commencement of the action, application of the equitable tolling doctrine to the CCPA would be redundant. Accordingly, the district court did not err in dismissing plaintiffs’ complaint on statute of limitations grounds.
2012 COA 218. No. 11CA2401. Harner v. Chapman, MD.
Medical Malpractice—Res Ipsa Loquitur Doctrine—CRE 301.
Plaintiff Carolyn Harner appealed the judgment entered in favor of defendant Dr. James Chapman, as well as the denial of her motion for post-trial relief. The judgment was reversed and the case was remanded for a new trial.
This medical malpractice case arose out of the death of Harner’s husband, who died several hours after undergoing an angiogram performed by Chapman, a cardiologist. Harner’s principal argument was that the trial court erred in failing to instruct the jury that the res ipsa loquitur doctrine shifted to Dr. Chapman the burden of proving by a preponderance of the evidence that he was not negligent. The trial court concluded that the res ipsa loquitur doctrine applied, but that the ultimate burden of proof remained with Harner pursuant to CRE 301. However, CRE 301 does not supersede the doctrine of res ipsa loquitur. Accordingly, the trial court erred in refusing to instruct the jury that the res ipsa loquitur doctrine shifted the burden of proof to defendant. Because the question of who had the ultimate burden of proof may well have been dispositive in this case, the error was not harmless. Therefore, the judgment was reversed and the case was remanded for a new trial.
2012 COA 219. No. 11CA2446. Raptor Education Foundation, Inc. v. State of Colorado, Dep’t of Revenue, Division of Motor Vehicles.
Summary Judgment—Impossibility Doctrine—Contracts Clause of U.S. and Colorado Constitutions.
Plaintiff Raptor Education Foundation, Inc. (REF) appealed the trial court’s summary judgment in favor of defendant, the Colorado Department of Revenue, Division of Motor Vehicles (Department). REF also challenged the denial of its CRCP 59(d)(6) motion for a new trial. The judgment was reversed and the case was remanded for further proceedings.
This was a second appeal, following developments after the issuance of the opinion in the first appeal. Between December 1999 and February 2000, the parties executed a “letter of agreement” regarding specialty license plates. The Department agreed to sell the specialty plates only to members of REF. Several months after the agreement, the Department informed REF that its request had been approved but that it would not restrict sales to its members.
REF sued, alleging breach of contract and violation of equal protection resulting from the Department’s sale to unqualified purchasers. A trial judge found the letter of agreement was not a valid contract, but did find a violation of equal protection and ordered sales to be made only to REF members in the future (2002 order). Both parties appealed. In the interim, the General Assembly passed legislation requiring the Department to restrict sales of the specialty plates to REF members. On the Department’s motion, the appeal was dismissed by a division of the Court of Appeals. The Court found that a contract existed between REF and the Department and held it was error to have found otherwise. The case was remanded for a determination of damages, and the parties eventually settled.
In 2009, the General Assembly amended CRS § 42-3-208 to allow members of the Rocky Mountain Raptor Program to also purchase the specialty plates (2009 amendment). REF sued, alleging breach of contract and violation of the 2002 order. As an affirmative defense, the Department cited the 2009 amendment. The parties filed cross-motions for summary judgment. The trial court entered summary judgment in favor of the Department, concluding that the 2009 amendment made it impossible for the Department to comply with its obligations under the contract with REF. REF filed a motion for a new trial pursuant to CRCP 59(d)(6), which was denied without comment.
On appeal, REF argued that the 2009 amendment violated the Contracts Clauses of the U.S. and Colorado Constitutions. The Court agreed. Both Constitutions prohibit the passing of any laws impairing the obligation of contracts. The Contracts Clauses are not absolute prohibitions but allow legislative action that promotes “the common weal, or . . . general good of the public, though contracts previously entered into between individuals may thereby be affected.” The U.S. Supreme Court has held that the inquiry is “whether the change in state law has ‘operated as a substantial impairment of a contractual relationship.’” [Gen. Motors Corp. v. Romein, 503 U.S. 181, 186 (1992)].In Romein, as here, where a contractual obligation of the government is at issue, the examination is more stringent.
REF and the Department entered into a contract whereby the Department would sell specialty license plates only to members of REF. The 2009 amendment impaired that contract. Neither the 2002 legislation nor the 2009 amendment was foreseeable when the parties entered into their contract because they regulated an area never before subject to regulation. The Court found that the 2009 amendment substantially impaired the contract and therefore breached the Contracts Clauses.
The trial court’s judgment in favor of the Department on the breach of contract claim was reversed and the Court remanded the case for assessment of damages. In addition, the trial court’s judgment in favor of the Department on REF’s claim for violation of the court’s 2002 order was reversed. Because the 2009 amendment was unconstitutional, the trial court also must determine on remand what damages should be assessed for violation of the 2002 order.
2012 COA 220. No. 12CA0084. Extreme Construction Co. v. RCG Glenwood, LLC.
Construction Contract—Equitable Estoppel in a Contract Action.
In this action concerning the interpretation of a payment provision in a construction contract, plaintiff Extreme Construction Co. (Extreme) appealed the amount of the monetary judgment that it obtained against defendant RCG Glenwood, LLC (RCG) and the judgment entered in favor of defendant Mike Spradlin. RCG cross-appealed the trial court’s award of attorney fees, costs, and certain prejudgment interest to Extreme, as well as the court’s denial of RCG’s request for fees and costs. The judgment was affirmed in part and vacated in part, and the case was remanded with directions.
RCG, through Spradlin, its owner, negotiated for Extreme to remodel a portion of a building. Extreme provided a budget that estimated the total price and included amounts for superintendence and labor, which were calculated at $68.50 per hour and $38.50 per hour, respectively. The contract that was entered into did not include these hourly rates. Instead, it was a Guaranteed Maximum Price contract that provided for payment of wages of construction workers employed by Extreme, as well as “Builder’s overhead and construction management fee of 5.5%, and Builder’s profit of 5.5%, for a total of 11%.”
Extreme mailed monthly bills reflecting the hourly wage charges noted above. These invoices were paid without objection, but some of RCG’s checks bounced. Each time Extreme discussed the bounced checks with Spradlin, no issues regarding the hourly rates were raised. Notwithstanding the failure of RCG to pay its bills, Extreme completed the project on time, to Spradlin’s satisfaction, and for about $45,000 less than the Guaranteed Maximum Price.
RCG failed to pay in full, and Spradlin proposed a payment schedule and “a promissory note, personally guaranteed.” Based on his request, Extreme did not file a lien and prepared a promissory note, which was never signed.
Extreme sued, claiming breach of contract against RCG and that Spradlin had breached his personal guarantee. RCG and Spradlin asserted Extreme had overbilled RCG, claiming Extreme was not permitted to bill for superintendence and labor on an hourly basis. Extreme replied that the contract was ambiguous and that extrinsic evidence, including the pre-contractual budget, favored its interpretation. In addition, Extreme claimed RCG was estopped from contesting Extreme’s interpretation of the contract.
The trial court found that the contract was ambiguous but that the extrinsic evidence supported RCG and Spradlin’s argument. It rejected the estoppel argument. The court entered judgment in favor of Extreme and against RCG in the amount of $18,523.65. Because this was significantly less than the amount Extreme had sought at trial, RCG argued it was the prevailing party under a fee-shifting provision in the contract. Also, because the amount of the judgment was less than the offer of settlement made under CRS § 13-17-202, any interest awarded to Extreme had to be abated as of the date of the offer, and RCG was entitled to an award of costs. The trial court rejected all of these arguments. Both parties appealed.
Extreme contended that RCG was equitably estopped from contesting Extreme’s interpretation of the contract, and the Court of Appeals agreed. The Court held, as a matter of first impression, that the equitable estoppel doctrine applies to disputes over contract interpretation, at least in cases involving the construction of an ambiguous contractual provision unrelated to insurance coverage.
The Court also agreed with the trial court that the contractual provision regarding wages was ambiguous. For equitable estoppel to apply, the party asserting the doctrine must establish that (1) the other party had full knowledge of the facts, (2) the other party unreasonably delayed in asserting an available remedy, and (3) the party asserting the doctrine relied on the other party’s delay to its detriment.
The trial court found, and the record supported, that the first element was satisfied. The trial court found the second element was not met because if RCG had sought redress, it would have halted the project. The Court found this was error. It is unreasonable for a contracting party who knows of, but secretly disagrees with, the other side’s contract interpretation to delay challenging the interpretation until the other side has completed its performance. This is even more the case where, as here, RCG’s silence induced Extreme’s continued performance. The trial court also erred in finding the third element wasn’t met, because the facts clearly demonstrated that Extreme relied on RCG’s failure to contest its invoices to its detriment. The award of damages was vacated and the case was remanded to the trial court to recalculate the damages.
Extreme argued it was error for the trial court to determine that Extreme never accepted Spradlin’s offer of a personal guarantee. The Court was not persuaded. It agreed with the trial court that although an offer was made by Spradlin, no action was taken that indicated an acceptance by Extreme.
RCG argued it was error to find that under the fee-shifting provision in the contract, Extreme, and not RCG, was the prevailing party. The Court disagreed. RCG was held liable for breach of the contract; therefore, it was the prevailing party for purposes of awarding attorney fees.
RCG also contended it was error for the trial court to reject its assertion that under CRS § 13-17-202, the interest awarded to Extreme should have abated as of the time of the offer of settlement. The Court disagreed, finding that RCG did not address in its briefs the trial court’s finding that RCG did not make a qualifying offer of settlement.
2012 COA 221. No. 12CA1411. People v. Cito.
Theft by Deception—CRS § 16-5-401(4.5).
The People appealed the district court’s order dismissing various theft by deception charges against defendant Kirk Cito. The order was vacated and the case was remanded with directions.
In 2006, Cito, a veterinarian, was hired as the hospital director for an animal hospital. Each month, he sent to the hospital’s certified public accountant (CPA) a packet of documents that included a list of the expenses he had incurred and checks he had written on the hospital’s behalf, receipts for charges made to the hospital’s credit card, and other supporting documents. A monthly report was prepared for the hospital’s owner summarizing this information.
In February 2011, the owner expressed concern to the CPA about the information Cito had been providing. The CPA went back through all five years of packets and concluded Cito had not been truthful in his submitted documentation. Cito was entitled to additional compensation for any unused personal time off, but not if he actually used the personal time. The CPA determined that Cito had paid himself approximately $53,700 for unused personal time off, even though he had actually taken the time off.
On December 5, 2011, Cito was charged with ten counts of theft by deception in violation of CRS § 18-4-401(1) and (4). Four of those counts, and a portion of a fifth, alleged thefts committed more than three years before the charges were filed. Cito moved to dismiss those counts, arguing they were barred by the three-year statute of limitations in CRS § 16-5-401(4.5). In response, the prosecution argued that the limitations period does not commence until the date of discovery, and the theft was not discovered until February 2011.
The district court rejected the prosecution’s argument, finding that “discovery of the criminal act” had occurred at the time Cito received payments from the hospital because all of the information available in February 2011 also was available at the time of the payments. The prosecution appealed.
The People argued that “discovery of the criminal act” did not occur when Cito obtained the money, because this ignores that the theft was by deception and the hospital didn’t discover the deception until February 2011. The Court of Appeals agreed that the district court erred, but for slightly different reasons.
The Court held that “discovery of the criminal act” is an ambiguous phrase. In turning to the legislative history of the act, the Court found no specific guidance, though there was testimony regarding applicability to financial crimes where information may be buried or it may take time to discover. The Court also noted that in the criminal context, this accrual question appeared to be one of first impression. However, in civil cases, Colorado courts have long and consistently held that “discovery” refers to the point at which the aggrieved party knew or in the exercise of reasonable diligence should have known of her claim. The Court held that “discovery” in this instance refers to the point at which the victim or the state knew or through the exercise of reasonable diligence should have known of the theft by deception. The order was vacated and the case was remanded for the district court to reconsider Cito’s motions in light of the Court’s ruling.
Colorado Court of Appeals Opinions