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Colorado Court of Appeals Opinions
June 6, 2013

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.

2013 COA 84. No. 08CA0738. People v. Valles.
Juvenile—Direct File Statute—Unconstitutional—Speedy Trial—Continuance—Hearsay—Sentence—Parole.

Defendant Alberto Valles appealed the trial court’s judgment of conviction entered on jury verdicts finding him guilty of one count of first-degree extreme indifference murder and four counts of attempted extreme indifference murder. He also appealed the sentence imposed. The judgment was affirmed, the sentence was vacated, and the case was remanded.

Valles was a member of a gang that was feuding with another gang. When Valles was 17 years old, he fired multiple rifle shots at rival gang members in another car. One of the shots hit R.S., fatally wounding him.

On appeal, Valles argued that a previous version of Colorado’s direct file statute, which allowed prosecutors to directly file criminal charges against certain juveniles in district court, is unconstitutional under Apprendi v. New Jersey, 530 U.S. 466 (2000), and Blakely v. Washington, 542 U.S. 296 (2004). Specifically, Valles contended that a jury was required to make the factual findings required by the direct file statute—that he was a juvenile and that he was alleged to have committed, and was convicted of, a class 1 felon—before the prosecution could file charges in the district court. The direct file statute, however, involves a prosecutor’s pretrial exercise of discretion, not a post-trial finding of fact. Therefore, Apprendi and Blakely do not apply to the direct file statute.

Valles asserted that the trial court violated his statutory and constitutional rights to a speedy trial by granting the prosecution a continuance six weeks beyond his statutory speedy trial date. The record supports the trial court’s findings that (1) a material witness’s live testimony was unavailable; (2) the prosecution used due diligence to secure it; and (3) it would be available at a later date. Therefore, the trial court did not abuse its discretion by extending Valles’s statutory speedy trial date and granting the prosecution’s requested continuance. Furthermore, the trial court did not err by denying Valles’s motion to dismiss for violation of his constitutional right to a speedy trial.

Valles also asserted that the trial court abused its discretion and violated his rights under the Confrontation Clauses of the U.S. and Colorado Constitutions by admitting hearsay evidence that exculpated the co-conspirator/declarant and inculpated Valles. The statement, however, fell within the hearsay exception allowing the introduction of statements against self-interest and was admissible.

Valles contended that the trial court erred by sentencing him to life without the possibility of parole, because the sentence was unconstitutional. The Eighth Amendment of the U.S. Constitution forbids a sentencing scheme that mandates life in prison without possibility of parole for juvenile offenders. Accordingly, defendant’s sentence as to life imprisonment was affirmed, but it was vacated to the extent it denied him the possibility of parole. The trial court was directed on remand to sentence Valles to life in prison with the possibility of parole after forty years.

2013 COA 85. No. 10CA2445. People v. Foster.
Sex Offender Registration—Habitual Criminal Sentence—Undue Delay and Denial of Due Process.

Defendant appealed the judgment entered on a jury verdict finding him guilty of one count for failure to register as a sex offender. He also appealed the proportionality of the twelve-year sentence imposed under the habitual criminal statute. The judgment and sentence were affirmed.

Defendant contended that the trial court erred by admitting evidence of his previous failure to register as a sex offender. Defendant’s knowledge of the registration requirements relates to whether he knowingly failed to register as a sex offender. Because this evidence was relevant and was not unfairly prejudicial, the trial court did not abuse its discretion by admitting this evidence.

Defendant contended that the trial court also erred in deciding that the prior offense sentence enhancer had been proven, rather than submitting a special interrogatory on this issue to the jury. However, defense counsel chose to have the court, not the jury, decide the enhancer. Because of defense counsel’s affirmative conduct, invited error precludes review of the trial court’s decision not to submit the prior conviction aggravator to the jury.

Defendant contended that record evidence was insufficient to support the conclusion that he “established a residence” and was present at his new address. Although defendant introduced evidence to the contrary, the record contains sufficient evidence to support the jury’s verdict, including the fact that defendant told the Department of Corrections more than two weeks before his arrest that he had changed his residence and provided his new address, which he referred to as his home.

Defendant also challenged his twelve-year habitual criminal sentence as “grossly disproportionate” under the Eighth Amendment, alleging that none of his prior felonies was grave and serious. Although defendant’s triggering offense was not grave and serious under the circumstances, the felonies underlying the sentence collectively were grave and serious. Therefore, because defendant’s sentence did not raise an inference of gross disproportionality, the sentence was affirmed.

Defendant further contended that “the excessive and undue delay in the Attorney General’s filing of the Answer Brief” constituted a denial of due process. Because defendant did not demonstrate prejudice, he was not entitled to relief.

2013 COA 86. No. 11CA2338. People v. Moore.
Impeding a Public Official or Employee—Private Employer—CRS § 18-9-110(2).

Defendant appealed the judgment of conviction entered on a jury verdict finding him guilty of impeding a public official or employee in a public building. The judgment was vacated.

Defendant, an attorney, injured a 61-year-old woman security guard when he forcibly passed through the security checkpoint at the Denver City and County Building. The victim was employed by a private security company.

The People argued that the trial court’s denial of defendant’s motion to dismiss was rendered moot by the subsequent trial and was no longer reviewable. However, the trial court construed the statute to permit defendant’s prosecution under the statute as a matter of law. The jury was bound by this determination. Therefore, the jury’s verdict did not render moot the denial of defendant’s motion to dismiss or preclude him from challenging his conviction on appeal.

Defendant contended that his judgment of conviction should be vacated because the victim was not a “public employee,” which is a prerequisite to establishing criminal liability under the statute. Because the victim was not a public employee, but was employed by a private security company, defendant’s conviction under CRS § 18-9-110(2) was vacated.

2013 COA 87. No. 12CA0451. Jordan v. Panorama Orthopedics & Spine Center, PC.
Premises Liability—Common Area—Landowner.

In this premises liability case, defendant Panorama Orthopedics & Spine Center, PC (Panorama) appealed the judgment entered in favor of plaintiff Barbara Jordan. The judgment was reversed.

Plaintiff tripped and fell on a common area sidewalk leading to the building in which Panorama leased office space. She successfully sued Panorama under the Premises Liability Act (Act).

Panorama contended on appeal that the district court erred by determining that it was a landowner under the Act. A party need not hold title to the property to be considered a landowner within the meaning of the Act. A tenant may, depending on the circumstances, be regarded as a landowner. However, Panorama was not a landowner within the meaning of the Act, because there was no evidence that it was in possession of the sidewalk or that it was responsible for creating a condition on the sidewalk or conducting an activity on the sidewalk that caused plaintiff’s injuries. Therefore, the district court’s judgment against Panorama was dismissed.

2013 COA 88. No. 12CA0691. Medical Lien Management v. Allstate Insurance Company.
Breach—Assignment—Personal Injury—Settlement—Notice.

In this breach of assignment action, plaintiff Medical Lien Management, Inc. (MLM) appealed the judgment dismissing its complaint against defendant Allstate Insurance Company (Allstate). The judgment was reversed and the case was remanded.

In October 2005, Fred Martinez was injured in an automobile accident caused by a tortfeasor insured by Allstate. In March 2007, in consideration for payment by MLM of his medical bills, Martinez executed a written agreement granting MLM a lien on, and assigning his rights to, any and all proceeds derived from his personal injury claim in an amount equal to the fees and costs of the medical treatment paid by MLM. MLM eventually paid $9,938 for such treatment. In October 2008, Martinez settled his personal injury claim against the tortfeasor insured by Allstate. Allstate issued payment to Martinez without paying MLM.

MLM asserted that the court erred in granting Allstate’s CRCP 12(b)(5) dismissal motion for failure to state a claim. First, an individual can validly assign the sums to be recovered from his or her personal injury claim before settlement. Here, the language of the agreement was sufficient to withstand a pleadings challenge as to whether the parties intended to affect a present transfer of the proceeds of Martinez’s personal injury recovery. Additionally, the complaint adequately alleged a valid assignment to MLM of Martinez’s rights to proceeds resulting from his injury and notice of the assignment. Once a debtor receives notice of a valid assignment, it is required to pay the assignee. Allstate failed in this regard. Therefore, the trial court erred in granting Allstate’s motion to dismiss for failure to state a claim.

2013 COA 89. Nos. 12CA0954 & 12CA1611. Moye White LLP v. Beren.
Law Firm Fiduciary Duty to Disclose Information About Attorneys.

Defendant David I. Beren appealed the trial court’s judgment and order of costs in favor of plaintiff Moye White LLP, denying, as relevant here, Beren’s counterclaim for breach of fiduciary duty. The judgment and order were affirmed.

Moye White sued Beren for recovery of attorney fees incurred during its representation of Beren in a probate matter form 2009 to 2010. Moye White sought $229,118.10 from Beren on a breach of contract claim. Beren counterclaimed, alleging that Moye White breached its fiduciary duty to him by failing to disclose and intentionally concealing material information related to one of the attorneys working on his case (Attorney A), who had a history of disciplinary proceedings, mental illness, alcoholism, and related arrests. The trial court found in favor of Moye White on all claims. As the prevailing party, Moye White moved for an award of costs totaling $76,637.49 and was awarded $69,975.59.

On appeal, Beren asserted it was error to find no duty existed for Moye White to disclose Attorney A’s medical and arrest history, because the duty exists under common law and Colo. RPC 1.4 and 7.1. The Court of Appeals disagreed. Neither party cited cases in Colorado or other jurisdictions addressing this issue. The Court looked to cases involving other professionals’ fiduciary duty to disclose material information to a principal and concluded no duty existed here, because the failure to disclose did not pose a demonstrable risk to the firm’s ability to represent Beren.

Attorney A was added to the team representing Beren at the recommendation of the partner assigned to the case. Attorney A had a longstanding history of marital, alcohol, domestic violence, and other issues. He self-reported to the Office of Attorney Regulation Counsel (OARC), which, following a full investigation, suspended his license to practice law conditioned on his receiving ongoing substance abuse treatment. He was monitored and tested positive several times. From June 2010 until the date of the trial court’s order in this case, he remained sober. Moye White was aware of these issues but allowed him to return to work and instituted a supervision plan under which his legal work was reviewed by another attorney.

Moye White never advised Beren regarding Attorney A’s medical and arrest history, and his stayed suspension. Beren found out about Attorney A’s history after Moye White moved to withdraw from representing Beren in July 2010; however, the information was of public record.

Beren asserted that had he known about Attorney A’s medical and arrest history, he would have objected to his representation. The Court noted that a fiduciary relationship exists as a matter of law between an attorney and his or her client. To prevail on a claim of breach of fiduciary duty against an attorney, a plaintiff must establish that a particular standard of care existed and that the attorney failed to adhere to that standard. Here, Beren asserted that the common law and Colo. RPC 1.4 and 7.1 established a standard of care that required such a disclosure when any such history has a possibility of interfering with the representation. The Court disagreed.

Under the common law, the information has to be material to require disclosure. The Court found that the information was not material, because the presented evidence demonstrated that Attorney A’s medical and arrest history did not adversely affect the quality of Moye White’s representation. The risk was speculative and not material.

The Colorado Rules of Professional Conduct do not create a fiduciary duty, but they may evidence standards of care. Colo. RPC 1.4 was inapposite because it relates to disclosure of information necessary for a client to give informed consent. There is no requirement for a client’s informed consent before a law firm can allow an additional attorney to work on a case. Moreover, the information was not material.

Colo. RPC 7.1(a)(1) also is inapposite. The rule pertains to attorneys’ advertisements of legal services. Even if it were applicable, it would again not impose a duty to disclose because the information was not material to the representation.

2013 COA 90. No. 12CA1266. Marsico Capital Management, LLC v. Denver Board of County Commissioners.
Special Notices of Valuation—Omitted Property Versus Omitted Value.

Marsico Capital Management, LLC (MCM) challenged the Board of Assessment Appeals’ (BAA) order upholding the Denver Board of Equalization’s (BOE) order denying several of its petitions. The order was affirmed.

MCM is an investment advisory firm that leases office space in a downtown Denver commercial building. In 2004 and 2005, MCM expanded and remodeled its leased office space and made tenant improvements. Following MCM’s filing of its first personal property declaration schedule in February 2006 for the 2005 tax year, the City Assessor issued a special notice of valuation (SNOV) assessing the value of MCM’s personal property.

In 2009 and 2010, the City Assessor audited MCM for tax years 2005 through 2009. The audit revealed that although MCM had timely reported its tenant improvements in its personal property declaration schedules, its tenant improvements were not valued or assessed personal property taxes for tax years 2005 through 2009, because the City Assessor’s computer system had not included them.

MCM filed protests challenging the five SNOVs for the missing assessments. The City Assessor granted the protests for tax years 2005 through 2007 because the statute of limitations had run, but denied the protests for tax years 2008 and 2009. MCM challenged the SNOVs before the BOE. The BOE reduced the overall value on the two SNOVs but denied the petitions. MCM appealed to the BAA, which denied the appeal.

The issue before the Court of Appeals was whether tenant improvements later discovered by a taxing authority are “omitted property” or “omitted value.” If tenant improvements constitute “omitted property,” they are subject to retroactive revaluation; if they are “omitted value,” additional taxes may not be imposed.

Tenant improvements are “personal property” under CRS § 39-1-102(11) and are subject to personal property tax. However, taxing authorities are prevented from imposing additional taxes based on revaluations of property that has already been valued and taxed. The parties disagreed on whether personal property taxes were previously assessed on the tenant improvements.

MCM argued that by retroactively adding the 2004 and 2005 tenant improvements to the assessment rolls for the 2008 and 2009 tax years, the City Assessor included an omitted value of previously taxed property that, once taxed, could not be reassessed.

The BAA and City Assessor countered that the tenant improvements were never included in the computer system due to an error by the City Assessor. Thus, they were not included in the assessment rolls for tax years 2005 through 2009 and could be retroactively assessed because they are “omitted property.” The Court agreed with the Board and City Assessor.

CRS § 39-5-125(1) allows the assessor to add omitted property to the tax rolls “whenever it is discovered that any taxable property has been omitted from the assessment roll of any year or series of years.” Here, the tenant improvements had never been assessed and therefore were “omitted property” that could be retroactively assessed. The BAA’s order was affirmed.

2013 COA 91. No. 12CA1556. Ruiz v. Hope for Children, Inc.
Wrongful Termination—Colorado’s Lawful Activities Statute—Conflict of Interest.

Plaintiff Charlotte L. Ruiz appealed the trial court’s judgment in favor of defendant Hope for Children, Inc. The judgment was affirmed.

Seledonio Rodriguez was ordered by the Pueblo County District Court to attend parenting classes. To comply, he completed a fatherhood program offered by Hope for Children, a small nonprofit organization dedicated to promoting the safety and well-being of children and families by providing clients with educational, counseling, and other social services. Ruiz was the nonprofit organization’s only Family Advocate. She was occasionally subpoenaed to testify in court regarding a client’s participation in a Hope for Children program.

After Rodriguez completed his court-ordered program, he was encouraged to enroll in a parenting skills class. Ruiz assisted him in enrolling, and they began dating shortly thereafter. In October 2010, Ruiz told the executive director, Leslie Kammeier, that she was going on a lunch date with Rodriguez. Kammeier testified that she told Ruiz it was inappropriate for her to date a client and that, if she continued, she could not work for Hope for Children. Ruiz told Kammeier that she did not intend to end her relationship and that she would not resign her position. Kammeier then terminated her.

Ruiz sued Hope for Children for wrongful termination under the Lawful Activities Statute, which, subject to certain enumerated defenses, prohibits terminating an employee for engaging in lawful activity outside work and during nonworking hours. The trial court found Ruiz was terminated “for engaging in a lawful activity outside of work” and that the romantic relationship “raise[d] an obvious issue of an actual conflict of interest, as well as the appearance of a conflict of interest.” The trial court therefore found the termination did not violate the statute. Ruiz appealed.

Colorado is an employment at-will state. There are, however, many exceptions to an employer’s general right to terminate. The Lawful Activities Statute allows for a broad range of off-the-job employee behavior but carves out an exception when the lawful activity presents a conflict of interest or the appearance of a conflict with any responsibilities to the employer.

Ruiz argued the “conflict of interest” defense was inapplicable because there was no financial conflict. The Court of Appeals found no such restriction to financial conflicts in the plain language of the statute.

Ruiz also argued that dating Rodriguez did not interfere with her ability to perform any job-related duty. Again, no such requirement is in the plain language of the statute and, in fact, the mere appearance of a conflict of interest is enough to allow for termination.

Ruiz then argued that the evidence did not support the trial court’s finding of a conflict of interest or appearance of one. The Court disagreed, finding ample support in the record, particularly when viewed as a whole and in the light most favorable to Hope for Children. The judgment was affirmed.

2013 COA 92. No. 12CA1813. Coors Brewing Company v. City of Golden.
Municipal Tax on Personal Property.

Defendant, the City of Golden and its finance director (collectively, City), appealed the trial court’s summary judgment in favor of plaintiffs,Coors Brewing Company, Rocky Mountain Metal Container, LLC, and MillerCoors, LLC (collectively, manufacturer). The City also appealed the trial court’s order regarding calculation of post-judgment interest. The judgment and order were affirmed.

This appeal involved a municipal tax on the use, storage, or consumption of personal property. The manufacturer owns and operates a factory in Golden that makes the ends and tabs of beer cans. It purchases rolled sheets of aluminum in large coils and then punches the ends and tabs out of those sheets. Approximately 20% of the aluminum is scrap because it remains on the sheet after the ends and tabs are punched out. The manufacturer then has a process for collecting the scrap for resale as square, forty-pound briquettes that are sold to aluminum companies.

The City issued a use tax assessment for the scrap, asserting it was resold “used” by the manufacturer in its manufacturing process. The City did not assess a tax on the parts of the sheets that were incorporated into ends and tabs.

The assessment covered the period between 1999 and 2008, and the City claimed it was owed roughly $5 million. The manufacturer objected, an informal hearing was held by the City, and the finance director upheld the assessment and ordered payment of approximately $5.3 million, which included interest.

To stop interest from accruing further, the manufacturer paid the full amount under protest. The manufacturer also filed an action in district court challenging the assessment. The parties agreed there were no issues of material fact and filed cross-motions for summary judgment. The trial court held that the purchases of the parts of the aluminum sheets that became scrap were wholesale and exempt from the use tax. It entered judgment in favor of the manufacturer and ordered the City to repay the manufacturer with 6% interest.

The City tendered the manufacturer a check for approximately $5.5 million to stop additional interest from accruing. The manufacturer refused it, and the trial court allowed it to be deposited in the court registry. Both parties appealed.

The City taxes all purchases of tangible personal property for which the payment of the municipal sales tax is not required. The City exempts “all wholesale sales.” It also exempts, through the “processing clause,” tangible personal property when it is incorporated into a manufactured product.

To determine whether a transaction is retail or wholesale, the Colorado Supreme Court has formulated the “primary purpose” test. The test is objective in nature, though subjective intent is relevant. There are five factors to be considered in applying the test and then, even if a court determines that a purchaser acquired the property “primarily for resale to another,” the use tax would not apply “even if the purchaser were to make minor use of the item.”

Here, the Court of Appeals determined that when the manufacturer purchased the aluminum sheets, it knew that the manufacturing process would create scrap and intended to resell the scrap. As a result, its primary purpose in buying the parts of the aluminum that become scrap was to resell it. Therefore, its purchases of the parts of the aluminum sheets that became scrap were wholesale transactions for purposes of the City’s use tax. The trial court correctly concluded the purchases were not taxable.

In its cross-appeal, the manufacturer argued it was error to toll post-judgment interest when the City’s check was deposited in the registry of the court. It contended that, because the City had already filed its notice of appeal when the court entered the deposit order, the order was void, and because the order came more than sixty-three days after its filing, it was deemed denied under CRCP 59(j).

The Court found that the City’s motion to deposit funds in the court registry did not “challenge the propriety of the judgment itself,” and thus was within the trial court’s jurisdiction notwithstanding the filing of the notice of appeal. The Court also concluded that, because the order was collateral to the judgment, it was not a post-trial motion pursuant to CRCP 59. The judgment and order were affirmed.

Colorado Court of Appeals Opinions