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Colorado Court of Appeals Opinions
September 12, 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 130. No. 11CA0459. People v. Porter.
Robbery—Burglary—Attempted Sexual Assault—Not Guilty by Reason of Insanity Defense—Evidence—Habitual Criminal—Double Jeopardy.

Defendant Reginald Marcus Porter appealed the judgment of conviction entered following a bench trial in which the court found him guilty of first-degree burglary, aggravated robbery, vehicular eluding, and attempted sexual assault. The prosecution cross-appealed the trial court’s dismissal of Porter’s habitual criminal counts. Porter’s conviction was affirmed, and the Colorado Court of Appeals disapproved of the trial court’s dismissal of the habitual criminal counts.

In 2002, Porter robbed and attempted to sexually assault a female casino employee, and then attempted to escape capture in a police chase. The trial court rejected Porter’s not guilty by reason of insanity (NGRI) defense and found him guilty of most of the substantive charges; it later dismissed the habitual criminal counts.

On appeal, Porter contended that the prosecution failed to present sufficient evidence to prove beyond a reasonable doubt that he was sane at the time of the offenses. The record supports that Porter’s behavior was driven in part by his use of drugs and in part by his antisocial nature. Thus, the record also supports a finding that Porter was not insane.

The prosecution contended that (1) the trial court erred in dismissing Porter’s habitual criminal counts; and (2) double jeopardy principles do not prevent the reinstatement of those counts. Here, Porter’s challenge to the habitual criminal counts was based on the same grounds that were asserted and rejected in his previous post-conviction appeal. Thus, the doctrine of collateral estoppel barred Porter from relitigating the issue, and, therefore, the trial court erred in dismissing the habitual criminal counts. However, jeopardy attached for Porter’s substantive counts when the first prosecution witness was sworn in at the bench trial. Consequently, jeopardy attached for Porter’s habitual criminal counts at that time, as well. Therefore, double jeopardy prohibited retrial of the habitual criminal counts.

2013 COA 131. Nos. 11CA1239 & 11CA1582. Stresscon Corp. v. Travelers Property Casualty Company of America.
Construction—Insurance Policy—Notice–Prejudice Rule—No Voluntary Payment Clause—Settlement—Collateral Source Rule—Damages—Attorney Fees.

Plaintiff Stresscon Corporation (concrete company) and defendant Travelers Property Casualty Company of America (insurance company) appealed the trial court’s judgment. The judgment was affirmed in part and reversed in part, and the case was remanded.

In this complex construction case, the general contractor and the concrete company settled their dispute without litigation. Before entering into the settlement, the concrete company did not inform the insurance company of the settlement or obtain its consent.

The insurance company argued that the notice–prejudice rule adopted in Friedland v. Travelers Indemnity Co., 105 P.3d 639, 643 (Colo. 2005), for example, does not apply to breaches of “no voluntary payment” clauses, and insurers are prejudiced as a matter of law whenever an insured settles with a third-party claimant before that third party has filed a lawsuit. “No voluntary payment” clauses in insurance policies prohibit insureds from voluntarily settling claims and making payment, or from assuming certain expenses, without the insurer’s consent, at the risk of losing insurance benefits. The notice–prejudice rule applies to “no voluntary payment” clauses in insurance policies. The notice–prejudice rule provides that (1) if an insured does not provide the insurer with notice of a claim until after the insured has settled, then (2) the insured will lose benefits after the settlement based on a presumption of prejudice, unless(3) the insured rebuts the presumption that the insurer’s interests were prejudiced by the lack of notice, and(4) the insurer does not then prove that it actually was prejudiced by the lack of notice. Further, an insured’s pre-litigation settlement with a third party does not conclusively establish that an insurer was prejudiced. Here, sufficient evidence was presented at trial to support the jury’s finding that the insurance company was not prejudiced. Therefore, the trial court properly applied the notice–prejudice rule in this case, and the record supports the jury’s verdict that the insurance company unreasonably delayed or denied the claim.

The insurance company argued that the trial court should have granted a judgment notwithstanding the verdict because the court had erroneously allowed the jury to consider conduct that occurred before the effective date of CRS §§ 10-3-1115 and -1116, which was August 5, 2008. The insurance company waived this argument, however, because it did not request a limiting instruction.

On cross-appeal, the concrete company, relying on the collateral source rule, argued that the trial court improperly reduced its damages by the amount that the insurer of one of the members of the crane team paid to satisfy the judgment in the first trial. The unambiguous language of the “other insurance” clauses in the insurance policies, however, states that the concrete company contracted away its right to recover benefits from both the insurance company and the insurer of the member of the crane team. Therefore, the trial court did not err when it reduced the damages by the amount that the insurer for the member of the crane team paid to the concrete company to satisfy the judgment in the first trial.

The concrete company also argued that the trial court incorrectly deducted the fees and costs that it incurred in bringing the fee request—namely, the “fees-on-fees”—from its award under CRS § 10-3-1116(1). A request for fees-on-fees in connection with a § 10-3-1116(1) claim is a request for damages, and the trial court erred in denying this portion of the concrete company’s fees claim. The case was remanded to the trial court for a determination of the reasonable amount of attorney fees and costs that the concrete company incurred in defending the judgment on the statutory claim on appeal.

2013 COA 132. No. 12CA1112. Sebastian v. Douglas County.
CRCP 60(b)(1)—K-9 Dog—Intentional Seizure—Excusable Neglect—42 USC § 1983.

Plaintiff Fabian Sebastian appealed from the district court’s order, entered on remand from the Colorado Court of Appeals, denying his CRCP 60(b)(1) motion to set aside the court’s judgment entered in favor of defendants. The order was affirmed.

Deputy Black allowed a K-9 dog to give chase to two other suspects who fled. The dog stopped at a fence that the two suspects had successfully climbed. It returned to the suspect vehicle, where Sebastian remained seated, and proceeded to attack him.

Sebastian asserted that he was entitled to recover damages because the attack violated rights guaranteed him by the Fourth and Fourteenth Amendments to the U.S. Constitution. He claimed that Deputy Black was negligent, and that his conduct was outrageous. Sebastian failed to timely respond to defendants’ motion to dismiss the action for failure to state a claim on which relief could be granted. The court dismissed Sebastian’s complaint and later denied Sebastian’s motion to set aside the judgment of dismissal under CRCP 60(b)(1).

On appeal, Sebastian contended that the district court erred in denying his 60(b)(1) motion. Sebastian’s failure to file a timely response, however, was not excusable based on his attorney’s miscalculation of the deadline. Further, he did not present a meritorious claim. The district court concluded that Sebastian’s allegations would not support a finding of the threshold issue—that is, an intentional seizure—to support his 42 USC § 1983 claim. Although the trial court did not analyze any equitable considerations in favor of granting Sebastian’s 60(b)(1) motion, the district court’s decision refusing to vacate the judgment of dismissal was not manifestly arbitrary, unreasonable, or unfair based on the first two factors. Thus, the court did not abuse its discretion.

2013 COA 133. No. 12CA1197. Riccatone v. Colorado Choice Health Plans.
Bad-Faith Breach of Insurance Contract—Insurer—Motion to Amend.

Plaintiffs Kirsten K. Riccatone, Brian Riccatone, and Ashlee D. Duran appealed from the summary judgments entered by the district court in favor of defendants Colorado Choice Health Plans, doing business as San Luis Valley Health Maintenance Organization (Choice); Gallagher Benefit Services, Inc. (GBS); and CNIC Health Solutions, Inc. (CNIC). The judgment was affirmed.

Plaintiffs were plan participants under the San Luis Valley Combined Educators Health Plan (Plan). The Plan was an employer self-funded healthcare plan. Choice and CNIC were, respectively, the current and former third-party administrators for the Plan. GBS was a broker and advisor for the Plan. Plaintiffs brought claims based on the denial of benefits to Duran based on a provision in the Plan excluding from coverage injuries resulting from the illegal use of alcohol.

Plaintiffs contended that the district court erred in granting summary judgment to defendants on plaintiffs’ common law bad-faith breach of insurance contract and unreasonable denial of insurance benefits claims. The district court properly granted summary judgment in favor of CNIC, Choice, and GBS on plaintiffs’ common law bad-faith breach of insurance contract claims, because these defendants were not the insurer; did not have a financial incentive to deny plaintiff’s claims or coerce a reduced settlement; and, therefore, did not owe a duty of good faith and fair dealing to plaintiffs. Additionally, the district court properly granted summary judgment in favor of GBS and Choice on plaintiffs’ claim for unreasonable denial of insurance benefits under CRS § 10-3-1116(1), because neither GBS nor Choice was a proper defendant under the statute. They were not engaged in the business of insurance, which includes only those individuals or entities against whom a common law claim of bad-faith breach of insurance contract would exist.

Plaintiffs also contended that the district court abused its discretion in denying their motion to amend the complaint to assert new claims against defendants for aiding or abetting a tortious act. The district court did not abuse its discretion in denying plaintiffs’ motion to amend based on plaintiffs’ undue delay and their repeated failure to cure deficiencies in their pleadings through prior amendments.

Colorado Court of Appeals Opinions