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Colorado Supreme Court Opinions
February 4, 2013

2013 CO 10. No. 10SC709. Yale v. AC Excavating, Inc.
Construction—Mechanics’ Liens—Statutory Trusts

The Supreme Court held that an LLC member’s voluntary injection of capital into the company in this case did not constitute “funds disbursed to [a] contractor . . . on [a] construction project” under CRS § 38-22-127(1). Therefore, such money was not required to be held in trust under that provision. The Court further held that the court of appeals erred in remanding the case for further proceedings to determine whether petitioner, a member and manager of the LLC, was civilly liable for theft under CRS §§ 38-22-127(5), 18-4-401, and 18-4-405, for using the funds in a manner inconsistent with the trust obligations of § 38-22-127(1). Accordingly, the judgment of the court of appeals was reversed.

2013 CO 7. No. 11SC496. Cagle v. Mathers Family Trust.
Forum Selection Clauses in Contracts—Colorado Securities Act—Anti-Waiver Provisions.

The Supreme Court held enforceable the forum selection clause in the sales contract in this securities case, requiring the parties to litigate in Texas. The clause is not voided by Colorado public policy as expressed in the Colorado Securities Act (CSA) or by the CSA’s anti-waiver provision, which bars agreements that waive compliance with the substantive provisions of the CSA. The court of appeals’ judgment was reversed, and the case was remanded with instructions to return it to the trial court for reinstatement of the trial court’s grant of the motion to dismiss based on the forum selection clause in the parties’ sales contract.

2013 CO 8. No. 12SA83. In re Liebnow v. Boston Enterprises Inc.
Pro Hac ViceAdmission—Colo. RPC 1.7 and 1.10—Confidential Client Information.

The Supreme Court affirmed the district court’s order disqualifying plaintiff’s motion for pro hac vice admission of out-of-state counsel, where defense counsel previously had consulted out-of-state counsel at the same firm on the same case. The Court held that the trial court did not abuse its discretion in finding that (1) the consultation between defense counsel and out-of-state counsel concerned confidential information, which created a conflict under Colo. RPC 1.7(a)(2); and (2) the conflict was not waivable under Colo. RPC 1.7(b) because allowing the consulted attorney to represent plaintiff would undermine the fairness of the trial. The Court further held that the district court did not abuse its discretion in imputing the conflict to the rest of the firm under Colo. RPC 1.10 and disqualifying the firm.

2013 CO 9. No. 11SC536. Webb v. City of Black Hawk.
Legality of Banning Bicycles on City Streets—Home-Rule Municipality—Local Government Law—Traffic Regulations—CRS § 42-4-109(11)—Matter of State and Local Concern—Preemption.

In this appeal from the Gilpin County District Court, petitioners Jamie Webb, Jeffrey Hermanson, and Michaleen Jeronimus challenged the legality of the City of Black Hawk’s ordinance banning bicycles on certain city streets. Petitioners, a group of bicyclists, were cited and fined for riding their bikes on Gregory Street in Black Hawk, the only street providing access through town from the state highway to Central City. The bicyclists argued that Black Hawk, as a home-rule municipality, lacked the authority to prohibit bicycles on local streets absent a suitable alternative bicycle route as provided by state statute. Both the trial and district courts ruled in favor of Black Hawk, finding that the city had the authority to ban bicycles through both its home-rule and police powers.

The Supreme Court reversed, holding that Black Hawk’s ordinance banning bicycles is a matter of mixed state and local concern, and conflicts with and is preempted by state law. As a home-rule municipality, Black Hawk may enact traffic regulations that cover the same subject matter as the model traffic code, but it may not promulgate regulations that conflict with state statute. Black Hawk’s ordinance banning bicycles on city streets is in conflict with CRS § 42-4-109(11), which requires any municipal bike prohibition to have an available alternate path within 450 feet. Because Black Hawk’s ordinance conflicts with a specific statutory provision in a matter of mixed state and local concern, it is preempted.

Colorado Supreme Court Opinions