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Colorado Court of Appeals Opinions
February 16, 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 26. No. 10CA1206. People v. Sexton.
Possession—Medical Marijuana—Doctor–Patient Confidentiality—Waiver—Affirmative Defense—Medical Use—Search Warrant—Veracity—Probable Cause—Motion for Acquittal—Right to Remain Silent.

Defendant appealed from the judgment of conviction entered on a jury verdict finding him guilty of possession of eight ounces or more of marijuana. The judgment was affirmed.

Defendant argued that the trial court erred in holding that CRS § 13-90-107, rather than CRS § 18-18-406.3, governs a medical marijuana patient–defendant’s waiver of doctor–patient confidentiality during criminal trial proceedings and that defendant’s written waiver was required for the physician to testify. CRS § 13-90-107(1)(d) protects a patient from unauthorized invasions into his or her private medical affairs. CRS § 18-18-406.3(5) deters those with lawful access to the medical marijuana patient registry from using it for unlawful purposes. By raising the affirmative defense of medical use, defendant validly waived his privilege under CRS § 13-90-107(1)(d). Thus, the physician’s rebuttal testimony concerning his conversations with defendant was a lawful disclosure under CRS § 13-90-107(1)(d). Accordingly, the written waiver requirements of CRS § 18-18-406.3(5) simply did not apply.

Defendant argued that the search warrant was void for lack of veracity and absence of probable cause. The search warrant did not lack veracity or probable cause, because the allegations of possible illegal activity in the affidavit were based solely on the detective’s aerial observations, and the affidavit reflected that the detective had fifteen years of experience and training in identifying marijuana grow operations. Further, the fact that the affidavit concluded that defendant’s grow operation was only “potentially” illegal did not undermine the finding of probable cause.

Defendant also contended that the trial court erred by denying his motions for acquittal. However, the evidence presented was insufficient to reach the conclusion that defendant’s extended plant count was medically necessary.

Finally, defendant contended that one of the witnesses improperly commented on his right to remain silent. However, defendant’s refusal to answer one question did not invoke his right to remain silent as to all questions asked of him.

2012 COA 27. No. 10CA2005. LaFond v. Sweeney.
Limited Liability Company—Attorney—Contingency Fee—Dissolution.

Defendant Charlotte N. Sweeney appealed the trial court’s judgment in favor of plaintiff Richard C. LaFond. The judgment was reversed and the case was remanded to the trial court for further proceedings.

LaFond and Sweeney are attorneys who formed a firm that was organized as an LLC. After forming the LLC, LaFond and Sweeney orally agreed to share equally in all the firm’s profits, without regard to who brought cases into the office or who did work on them. LaFond brought a contingent-fee case (Maxwell) into the law firm, and considerable work was done on the case. The law firm dissolved on June 1, 2008, and LaFond continued to represent Maxwell. However, there was no written agreement that generally described how the law firm’s assets should be distributed after dissolution. The trial court ultimately awarded Sweeney $298,589.94 of the Maxwell settlement, based on an hourly valuation of attorney time and costs expended by the firm as of June 2008.

Sweeney argued that the court employed the wrong legal standard for calculating the value of the Maxwell case, and that she and the law firm are entitled to half the entire contingent fee awarded in the Maxwell case. An attorney who carries on the representation of a client on an existing case after a law firm dissolves does so on the firm’s behalf. Thus, income received by a member for completing any unfinished business belongs to the dissolved firm. Absent a contrary agreement, members of a law firm organized as a partnership or an LLC cannot convert ongoing client matters to new firm business, and a contingent fee earned during the dissolution of an LLC is subject to the fee-sharing arrangement that existed at the time of dissolution. Here, Maxwell did not seek new counsel after the firm dissolved. Rather, LaFond continued to represent Maxwell. By doing so, LaFond had a duty to complete unfinished business of the dissolved law firm, including continuing to represent Maxwell. Additionally, Maxwell was required to pay the contingent fee when the case settled, rather than a fee based on quantum meruit, because the agreed on legal services had been completed. Therefore, the contingent fee allocated to LaFond in the Maxwell case is the law firm’s asset. Because LaFond and Sweeney orally agreed to share equally in all the firm’s profits, without regard to who brought cases into the office or who did work on them, each is entitled to an equal share of the contingent fee obtained by LaFond in the Maxwell case.

2012 COA 28. No. 11CA0317. Vessels v. Hickerson.
Promissory Note—Partial Payment Doctrine—Laches—Statute of Limitations.

In this action brought to recover on a promissory note, plaintiff Thomas J. Vessels, acting as personal representative of the estate of his deceased mother, Mary Walsh Vessels, appealed the trial court’s judgment in favor of defendant Alva J. Hickerson. The judgment was reversed and the case was remanded.

In a promissory note dated April 13, 1989, Hickerson promised to pay plaintiff’s father’s company, Vessels Oil & Gas Company (VOGC), $386,063 to settle an outstanding debt. By its terms, the note was due in full in ten years, on April 12, 1999, and was to be paid in monthly installments of $5,103.75. The note was secured by Hickerson’s royalty interest in an oil and gas lease located in Louisiana. Under the terms of the note, Hickerson agreed to make payments to VOGC from “cash or other proceeds” generated by his royalty interest in the Louisiana oil and gas lease, and Hickerson assigned his royalty interest to VOGC. Thereafter, the operators of the Louisiana oil and gas well made payments on the note directly to VOGC, bypassing Hickerson entirely. Between 1989 and 2009, the well operators, on behalf of Hickerson, made partial payments on the note; however, these payments often were insufficient to cover the amount due under the note’s monthly installment plan.

Eventually, VOGC assigned the note, and the estate of the deceased note holder (Vessels) sued Hickerson for the remaining amount due on the note. Although the trial court found that the lawsuit was timely filed pursuant to the statute of limitations, the court dismissed with prejudice all of Vessels’s claims and entered judgment in favor of Hickerson based on laches.

On appeal, Vessels contended that the trial court erred, as a matter of law, in ruling that laches is available as a defense to his legal claim under the note filed within the statutory limitations period. Under the partial payment doctrine, every time a debtor makes a partial payment, the debtor is acknowledging the existence of the debt for which the law implies a new promise to pay, thus starting the limitations period anew. Here, the fact that Hickerson did not personally make the payments on the note was immaterial, because he had authorized the well operators to make payments on his behalf. Therefore, the well operators’ partial payments were sufficient to invoke the partial payment doctrine. Because the applicable statute of limitations was extended by the partial payment doctrine, not by equitable tolling principles, and the claim was filed within the period of the applicable statute of limitations, the trial court erred in ruling that the equitable defense of laches was applicable to bar Vessels’s claim to recover on a promissory note. The judgment was reversed and the case was remanded for entry of judgment in favor of Vessels and for a determination of Vessels’s reasonable attorney fees as allowed under the terms of the promissory note.

2012 COA 29. No. 11CA0329. Rotz v. Hyatt Corporation.
Premises Liability—Non-Resident Cost Bond—Timeliness—Dismissal—Discretion.

In this premises liability action, plaintiff appealed the trial court’s judgment dismissing her action against defendant Hyatt Corporation for failure to timely file a nonresident cost bond pursuant to CRS §§ 13-16-101 and -102. The judgment of dismissal was reversed and the case was remanded.

Because plaintiff is a resident of Maryland and not Colorado, defendant moved for a cost bond pursuant to CRS §§ 13-16-101 and -102, under which a trial court may require a nonresident plaintiff to file a bond for the payment of the costs of the suit. On August 31, 2010, the trial court granted the motion and ordered plaintiff to file a cost bond in the amount of $5,000 within fourteen days. When plaintiff failed to file the bond or a motion for extension of time, defendant moved to dismiss the action pursuant to CRS § 13-16-102.

On September 23, 2010, plaintiff filed a cost bond and a response to the motion to dismiss. The trial court granted defendant’s motion and dismissed the action, concluding that, unless the plaintiff is indigent or the defendant waives its claim to the cost bond, “the court has no discretion regarding the filing of a cost bond by a nonresident plaintiff, and dismissal for his failure to do so is mandatory.”

Plaintiff contended that the trial court erred in holding that CRS § 13-16-102 mandated dismissal of the action and deprived it of discretion to accept the bond. Where a plaintiff is not a resident of Colorado, the court may order the plaintiff to file a cost bond “on or before the day in such order named.” The trial court retains discretion—even after the time set in an order pursuant to CRS § 13-16-102 expires—to grant additional time to file the bond. When making this determination, the court should consider all relevant facts, including whether plaintiff ultimately filed a cost bond and all circumstances surrounding plaintiff’s failure to file or late filing of the bond. Because the trial court misunderstood the scope of its discretion, the judgment of dismissal was reversed and the case was remanded to the trial court to determine whether plaintiff’s delay in filing the cost bond was the result of neglect.

2012 COA 30. No. 11CA0528. Crowell v. Industrial Claim Appeals Office.
Workers’ Compensation—Medical Review—Failure to Act—CRS § 8-43-305—Rule 16-­10(B).

In this workers’ compensation proceeding, claimant sought review of a final order of the Industrial Claim Appeals Office (Panel) determining that the penalty imposed against Denver West Marriott and its insurer, New Hampshire Insurance Company, (collectively employer) was properly awarded based on a one-time violation, rather than a continuing violation. The order was set aside and the case was remanded.

Claimant suffered a deflated breast implant as a result of a 2008 industrial injury and had the implant surgically replaced in 2009. She gradually developed firmness, distortion, and discomfort in the breast. On March 31, 2010, an authorized treating physician (ATP) recommended further surgery to replace the implant a second time. On April 1, 2010, employer, without first obtaining a medical review by a different physician or other health-care professional, responded that the surgery was elective and not medically required. On October 7, 2010, the administrative law judge (ALJ) issued an order disagreeing with employer and determining that employer was liable for the second surgery. The ALJ imposed a penalty of $500 for employer’s one-time failure to act.

Claimant contended that the Panel erred in affirming the ALJ’s conclusion that employer committed a one-time violation. CRS § 8-43-305 provides that “[e]very day during which any employer . . . fails to comply with any lawful order . . . shall constitute a separate and distinct violation thereof.” The failure to provide medical review under Colorado Department of Labor and Employment Rule 16-10(B) is, as a matter of law, the type of ongoing conduct that triggers application of this continuing violation provision. Here, under the plain language of CRS § 8-43-305, employer’s failure to obtain a medical review constituted a continuing violation as a matter of law. Therefore, employer violated Rule 16-10(B) for 184 days, and the ALJ and the Panel erred in determining otherwise. The case was remanded for the ALJ to reconsider the amount of the penalty at a daily rate over this time period.

2012 COA 31. No. 11CA0604. People in the Interest of C.Y.
Juvenile Sex-Related Acts—Competency—Pyschosexual Management Plan—Self-Incrimination—Due Process.

This case involves C.Y., a boy charged with having committed sex-related delinquent acts. After finding the boy incompetent to stand trial, the magistrate created a management plan requiring the boy to undergo a psychosexual evaluation. On review, the district court held that the boy should not be required to undergo the psychosexual evaluation. The judgment was reversed and the case was remanded with directions.

The boy was 11 years old when his 9-year-old sister reported to the police that he had grabbed her “butt” and “privates” many times over a four-month period. The boy suffers from significant mental and developmental disorders, including a serious brain injury, due in part to complications at birth. He lives with his mother and sister and receives extensive therapy and special education.

The boy was charged with having committed three delinquent acts that would constitute the adult offenses of aggravated incest, unlawful sexual contact, and assault in the third degree. He was released on bond to live with his mother. His sister initially was removed from the home, but after a safety plan was worked out, she returned.

The magistrate granted the request of the boy’s lawyer to have him evaluated to determine whether he was competent to stand trial. The magistrate found he was “incompetent to proceed to adjudication in this matter and cannot be restored to competency.” Following a hearing, a management plan was agreed on, except for a portion of the plan requiring the boy to undergo a psychosexual evaluation.

Several therapists and teachers who worked with the boy testified as to their concerns that he would not understand the evaluation or not be able to respond appropriately. The magistrate decided the boy should have the evaluation. The boy sought review of this decision and the district court agreed that the inclusion of the psychosexual evaluation in the treatment plan was legal error. The People appealed.

The Court of Appeals held that the magistrate’s order for a psychosexual evaluation did not violate the boy’s rights and that the district court erred when it set aside that part of the order. The Court looked to the legislative purposes of the Children’s Code. It also noted that CRS §19-2-1305(3) makes inadmissible evidence that is obtained during an evaluation or treatment related to the juvenile’s competency or incompetency. The privileges against compelled self-incrimination are not violated if, as here, juveniles are given immunity that is coextensive with the protections afforded by the Fifth Amendment.

The boy argued that the court undermined his due process right to be presumed innocent by requiring the psychosexual evaluation. The Court held that because the magistrate found that the boy is incompetent to stand trial and cannot be restored to competency, he will never stand trial. Therefore, the presumption of innocence was not implicated in requiring the evaluation.

Colorado Court of Appeals Opinions

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