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Colorado Court of Appeals Opinions
September 13, 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 149. No.11CA0482. People v. Mulberger.
Challenge for Cause—Compensated Employee—Public Law Enforcement Agency.

Defendant appealed the judgment of conviction entered on jury verdicts finding him guilty of several offenses. The judgment was affirmed.

Defendant contended that the district court erred by denying his challenge for cause of a prospective juror. Specifically, during jury selection, defendant’s counsel challenged for cause a prospective juror on the ground that she was a compensated employee of a public law enforcement agency, because she worked as a nurse employed by a company that provided services to the El Paso County Jail on a contract basis. The court denied the challenge, and defendant’s counsel used a peremptory challenge on that juror and exhausted defendant’s remaining peremptory challenges. Because the prospective juror worked for a third-party contractor and was not subject to the direction and control of a jail representative, she was not a compensated employee of a public law enforcement agency. Therefore, the court did not err in denying defendant’s challenge for cause.

2012 COA 150. No.11CA1872. Chittenden v. Colorado Board of Social Work Examiners.
Petition for Declaratory Order—Final Agency Action—Jurisdiction.

Cora Lea Chittenden, a licensed clinical social worker, attempted to appeal from an order (Order) of the State Board of Social Work Examiners (Board) that declined to rule on her petition for a declaratory order. The appeal was dismissed.

Chittenden provided court-ordered therapy to a minor child. The child’s father filed a complaint with the Board, alleging unlawful, unprofessional, and unethical conduct by Chittenden. The Board found reasonable grounds to believe that Chittenden had violated CRS § 12-43-222(1)(g), (j), and (v). Chittenden submitted a request to the Board for declaratory orders, which the Board declined to decide. Chittenden then filed this appeal.

Chittenden argued that anyorder disposing of a petition for a declaratory order is subject to immediate judicial review with respect to the meaning of § 24-4-105(11). Generally, with limited exceptions not applicable here, § 24-4-105(11) requires final agency action within the meaning of § 24-4-106(2) before an order disposing of a petition for declaratory relief is subject to judicial review. Here, the Order did not mark the consummation of the agency’s decision-making process; did not determine Chittenden’s rights and obligations—and no legal consequences flowed from it; and did not evince any intent by the Board to issue a final order. Because the Order did not constitute final agency action under § 24-4-106(2), the Court of Appeals lacked jurisdiction over this appeal. The Court therefore dismissed it.

2012 COA 151. No.11CA1951. People in the Interest of K.W.
Juvenile Delinquent—Diversion Program—Statute of Limitations—Tolling—Disorderly Conduct—Evidence.

K.W., a juvenile, appealed the judgment adjudicating her delinquent based on findings that she committed acts that, if committed by an adult, would constitute disorderly conduct in violation of CRS § 18-9-106(1)(a). The judgment was affirmed.

The People charged K.W. with one count of interfering with staff or students, a class 3 misdemeanor. As an alternative to prosecution, the case was diverted to the Juvenile Offender Services Program. K.W. agreed to enter the program. Subsequently, K.W. was terminated from the diversion program based on her noncompliance. The People thereafter filed a second petition in delinquency in the district court. This petition encompassed the original interference charge and the additional charge of disorderly conduct. K.W. was found to be delinquent on the disorderly conduct charge.

K.W. contended that the magistrate and the district court erred when they exercised jurisdiction over the disorderly conduct charge. A petition in delinquency must be filed in a “court of competent jurisdiction” within the applicable time period. For petty offenses, the applicable period is six months. However, CRS § 16-5-401(12) tolls the limitations period for charges “brought to facilitate the disposition of the case,” which includes a diversion program. Here, K.W. was initially charged within the six-month statute of limitations period and entered into a diversion program. After she failed the diversion program, and eleven months after the initial date she was charged, the People added a charge. Therefore, the court had jurisdiction to adjudicate the juvenile on the disorderly conduct charge, because the limitations period for bringing the charge was tolled while the Diversion Agreement concerning the same conduct was pending.

K.W. also argued that as a matter of law there was insufficient evidence to adjudicate her on the disorderly conduct offense. K.W. was hostile and threatening; refused to leave the scene; used obscene language; and attempted to reach the students, causing the security officer to intervene and push her back. Therefore, the evidence was sufficient to support the disorderly conduct adjudication.

2012 COA 152. No.11CA2068. Henderson v. City and County of Denver.
Colorado Governmental Immunity Act—Motor Vehicle—Mobile Machinery.

The City and County of Denver (City) appealed from an order denying their motion to dismiss a complaint filed by plaintiff. The order was reversed and the case was remanded.

A street sweeper operated by an employee of the City collided with a car driven by plaintiff. The driver sued the City. She alleged that the City’s immunity was waived under the Colorado Governmental Immunity Act (CGIA) because the street sweeper was a “motor vehicle” within the meaning of CRS § 24-10-106(1)(a). The City moved to dismiss the driver’s claim, arguing that the street sweeper was “mobile machinery” rather than a “motor vehicle,” and thusthe City had immunity under the CGIA. The trial court denied the motion, and the City appealed.

CRS § 42-1-102(58) defines “motor vehicle” as (1) any self-propelled vehicle (2) that is designed primarily for travel on public highways and (3) that is generally and commonly usedto transport persons or property over public highways. CRS § 42-1-102(54) defines “mobile machinery” to be (1) a self-propelled vehicle (2) that is not primarily designed for the transportation of persons or cargo over the public highways, (3) including, but not limited to, wheeled vehicles that are commonly usedin the maintenance of roadways. The evidence in the record supports the conclusion that, under the CGIA, the street sweeper is mobile machinery and not a motor vehicle; therefore, the trial court erred when it concluded otherwise and the order was reversed.

A party that successfully defends an appeal of an action that was dismissed on a pretrial motion to dismiss under the CGIA is entitled to recover its reasonable appellate attorney fees under § 13-17-201. The case was remanded to determine the award of attorney fees to the City.

2012 COA 153. No.11CA2129. Ball Aerospace & Technologies Corp. v. City of Boulder.
Use Tax—Downloaded Software—Online Data Services.

In this use tax assessment dispute, the City of Boulder (City) appealed the trial court’s summary judgment for plaintiff, Ball Aerospace & Technologies Corporation (Ball), reversing a hearing officer’s determination that Ball owed use tax on its acquisition of downloaded computer software and access to online data services. The judgment was reversed and the case was remanded.

The City conducted an audit of Ball and assessed use tax on both downloaded software and online data services. Ball paid the amount owing under the assessment, but protested the City’s application of its use tax to these items. The hearing officer upheld the assessment as to the downloaded software and online data services, and the trial court reversed that decision.

The City argued that the trial court misconstrued the City Code and erred in concluding that neither the downloaded software nor the online data services are subject to City’s use tax. Use tax is levied on the privilege of storing, using, or consuming tangible personal property purchased at retail. The City Code defines “use” as “the exercise, for any length of time, by any person within the City of any right, power, dominion, or control over . . . taxable services when leased or purchased at retail from any person inside or outside the City.” By its plain language, the City Code levies the use tax on computer software (1) leased or purchased at retail; (2) contained on an enumerated form or other machine-readable or human-readable form; and (3) over which the buyer has any right, power, dominion, or control. Further, the City Code does not require the transfer of ownership before the use of software is taxable. By paying to access the online data services, Ball purchased the right to use, from a remote location, the computer software contained on the service providers’ servers; therefore, the trial court erred in holding that downloaded software and remote access to the online service providers’ software are not taxable use of computer software under the City Code.

2012 COA 154. No.11CA2270. Cantina Grill, JV v. City & County of Denver County Board of Equalization.
Ad ValoremProperty Tax—Possessory Interests—CRS § 39-1-103—Constitutionality—Valuation.

In this property tax case, plaintiffs, food and beverage concessionaires at Denver International Airport (DIA) and holders of possessory interests in real property owned by the City and County of Denver (City), appealed the trial court’s judgment affirming the valuation of those possessory interests as assessed by defendants, the City and County of Denver County Board of Equalization (Board) and the County Assessor. The judgment was affirmed.

Plaintiffs serve food and beverages to the traveling public at DIA. The City is the owner of the real estate and improvements at DIA and operates the airport through its Department of Aviation. In May 2010, plaintiffs received notices of valuation for ad valorem property tax purposes for their respective spaces. Plaintiffs contested the valuations by unsuccessfully petitioning the Board. Plaintiffs then sought review in the trial court, which rejected their claims. Plaintiffs appealed that judgment.

Plaintiffs contended that CRS § 39-1-103(17)(a)(II)(A) and (B) is unconstitutional both on its face and as applied to them, because the Colorado Constitution, not the statute, imposes the tax. The statute merely creates a method for valuing a taxable possessory interest in tax exempt property—for ad valorem tax purposes—by the use of the rents and fees paid by the occupier to the owner; therefore, the statute is not facially unconstitutional. Further, plaintiffs’ possessory interests are made taxable by the Colorado Constitution under the test announced by the Colorado Supreme Court in Board of County Commissioners v. Vail Associates, Inc., 19 P.3d 1263 (Colo. 2001). Therefore, the statute, a set of procedures for tax valuation, was not applied to plaintiffs’ properly taxable possessory interests in an unconstitutional manner. Additionally, because the statute’s tax valuation provisions do not infringe on any constitutionally protected right, the statute is not unconstitutionally overbroad.

Plaintiffs also contended that the trial court abused its discretion in concluding that their possessory interests are taxable under the first two prongs of the Vail Associates analysis. To be taxable, the possessory interest must be such that (1) it provides a revenue-generating capability to the private possessor independent of the government property owner; (2) the private owner is able to exclude others from making the same use of the interest; and (3) the private ownership is of sufficient duration to realize a private benefit. Although the City has imposed operational restrictions on plaintiffs relating to the price of their products, hours of operation, and menus, and requires that employees be cleared by security, the record is clear that all, or virtually all, of plaintiffs’ revenue is generated from the traveling public. Thus, the trial court did not abuse its discretion in concluding that plaintiffs’ possessory interests are capable of generating revenue independent of the City. Further, although competition is permissible pursuant to their contract, others may not make the same physical use of the possessory interest as that of plaintiffs. Therefore, the second prong is satisfied.

Plaintiffs further contended that the trial court erred in approving the City’s valuation of their possessory interests. Pursuant to the agreement, plaintiffs must pay to the City rents and fees that are the greater of either a minimum monthly guaranteed rent or a percentage of their monthly gross revenues. The minimum monthly guaranteed rent is the minimum rent for the premises occupied by the plaintiffs, which, presumably, benefits the plaintiff. The trial court properly accepted the City’s valuation of the plaintiffs’ possessory interests, which was the minimum monthly guaranteed rent, reduced for the value of the use of the common area for those plaintiffs with such use, as the reasonably estimated future annual rents or fees.

2012 COA 155. No.11CA2339. Hertz Corporation v. Industrial Claim Appeals Office.
Workers’ Compensation—Subrogation—Malpractice—Interest—Economic Damages.

In this workers’ compensation proceeding, the Colorado Insurance Guaranty Association (CIGA) appealed from the final order issued by the Industrial Claim Appeals Office (Panel), which disallowed it from taking a credit or offset against interest earned on the multiple third-party recoveries obtained by claimant. The order was affirmed. 

Claimant received a workers’ compensation award of ongoing medical benefits and permanent total disability (PTD) benefits. He also received third-party recoveries for malpractice. The interest earned by claimant included both the investment income generated by the several lump-sum malpractice settlements and the interest component embedded in a statutorily required, court-ordered annuity investment. Claimant later moved for an order compelling CIGA to begin payments for PTD and medical benefits on a continuing basis and to pay past-due benefits without offsetting any of the interest earned or any interest contained in the annuitized payments for loss of future earnings and medical costs.

CIGA contended that the Panel erred in interpreting CRS § 8-41-203(1) to preclude a credit or offset against the interest component earned on the judgments against the hospital and physicians who caused claimant’s damages. CRS § 8-41-203(1) provides the workers’ compensation insurance carrier with a subrogation right to the proceeds received by the claimant for economic damages awarded in a third-party lawsuit against the tortfeasor. Here, purchase of the annuities essentially constitutes an investment of claimant’s previous judgment, and the interest earned on the annuity is funded by the original investment, not by the third-party tortfeasor’s liability obligation. Thus, the interest earned on the annuity is not the equivalent of the economic and medical benefits recovered from the tortfeasor or owed by the workers’ compensation provider. Rather, the interest component compensates claimant for the loss of use of funds during the accrual period. Further, CIGA was not entitled to any interest earned on claimant’s lump sum payments from the physicians. If CIGA received a credit or offset for the interest earned on these amounts, it would be permitted to recover a sum in excess of the amount of compensation for which it would be liable, in contravention of the statute. Therefore, the Panel properly determined that CIGA’s subrogation rights did not extend to that part of the periodic payments.

2012 COA 156. No.11CA2431. People v. Simpson.
Preliminary Hearing—Theft—Class 3 Felony—Plea.

The People appealed from a pretrial order dismissing some of the charges they filed against Timothy Wayne Simpson. The order was affirmed.

Simpson was charged with several offenses, including theft and theft by receiving. These two theft counts were charged as class 3 felonies because Simpson was accused of taking property worth $20,000 or more. Following plea negotiations, the parties appeared in court for entry of a plea. Instead of pleading guilty, however, he pleaded not guilty and requested a preliminary hearing on the two theft charges, which the court scheduled. When the parties appeared for the preliminary hearing, the People announced that they would not present evidence of the two thefts, and the court dismissed those charges.

The People contended that the court lacked authority to hold a preliminary hearing on the two theft counts. Contrary to the People’s argument, a defendant is entitled to a preliminary hearing whenever he is charged, by information or complaint, with a class 1, 2, or 3 felony. It does not matter whether the value of the property taken is an element or an enhancer in a prosecution for theft or theft by receiving. What matters is that (1) Simpson was charged with class 3 felonies, and (2) he can be convicted of those class 3 felonies only if the prosecution proves beyond a reasonable doubt that the property taken was worth $20,000 or more. Therefore, Simpson was entitled to a preliminary hearing. Furthermore, under the governing procedural rules, preliminary hearings typically occur before the defendant enters a plea. However, the rules do not suggest that the court loses authority to conduct a preliminary hearing after the plea is entered; on the contrary, they contemplate that the court may order a preliminary hearing afterward. Therefore, Simpson did not waive his right to a preliminary hearing by entering his plea first, and the court did not err in holding the hearing.

Colorado Court of Appeals Opinions