Summaries of Published Opinions
The summaries of Colorado Supreme Court published opinions are provided by the Court; the CBA cannot guarantee their accuracy or completeness. Both the summaries and full opinions, as well as the lists of petitions for rehearing and certiorari and the granted original proceedings pursuant to the Colorado Appellate Rules, are available on the CBA website, www.cobar.org (click on “For Members” and then “Opinions/Rules/Statutes”), and on the Colorado Judicial Branch website, www.courts.state.co.us (click on “Courts/Supreme Court/Case Announcements”).
June 20, 2016
2016 CO 44. No. 14SC998. Colorado Motor Vehicle Dealer Board v. Freeman. Statutory Interpretation—State Agencies—Motor Vehicles.
The Supreme Court considered whether a person who commits third degree assault on an at-risk adult under CRS §§ 18-3-204 and 18-6.5-103(3)(c) is disqualified from obtaining a motor vehicle salesperson’s license under CRS § 12-6-118(7)(a)(I). The Court held that because the felony enhancement provision does not create a separate offense, Freeman was convicted of a “felony in violation of article 3 . . . of title 18,” CRS § 12-6-118(7)(a)(I), and therefore the Colorado Motor Vehicle Dealer Board properly denied his application for a motor vehicle salesperson’s license. The Court of Appeals’ judgment was reversed.
2016 CO 45. No. 13SC768. Hutchins v. La Plata Mountain Resources, Inc. Limitations of Actions—Acknowledgments of Existing Debt—Form and Essential Elements of Acknowledgments.
Hutchins and Gasper petitioned for review of the Court of Appeals’ judgment affirming the district court’s ruling in favor of La Plata Mountain Resources, Inc. (La Plata), in an action brought by La Plata to collect on certain debentures issued by Leadville Mining and foreclose on a deed of trust securing the debts. Although Leadville’s authorized agent had signed documents ac knowledging its obligations for the amounts owed on other similar debentures held by Hutchins and Gasper, which were secured by the same deed of trust, the Court of Appeals reasoned that be cause these documents lacked the two-thirds consent required for modification of the debentures, the included acknowledgments were insufficient to restart the applicable limitations period. The Court of Appeals therefore concluded that the statute of limitations had run on any action by Hutchins and Gasper to collect on the debts or foreclose on the deed of trust.
The Supreme Court reversed. The documents in question were in writing, were signed by Leadville, and contained a clear and un qualified acknowledgment of the debt owed to Hutchins and Gasper. Therefore, they constituted a new promise to pay, establishing a new accrual date and effectively extending the limitations period on collection of the debt.
2016 CO 46. No. 14SC99.American Family Mutual Insurance Co. v. Hansen. Insurance—Ambiguity, Uncertainty, or Conflict—Persons Covered—Unfair Practices—Bad Faith—Penalties.
Respondent Hansen was injured in a motor vehicle accident and presented an underinsured motorist claim to petitioner American Family Mutual Insurance Company (American Family). As proof of insurance, Hansen offered lienholder statements issued to her by American Family’s local agent that identified her as the named in sured at the time of the accident. American Family’s own records, however, indicated that the named insureds on the policy at the time of the accident were Hansen’s mother and stepfather. In re liance upon the policy as reflected in its own records, American Family determined that Hansen was not insured under the policy and denied coverage. Hansen filed an action against American Family asserting, among other things, a statutory bad faith claim for unreasonable delay or denial of benefits under CRS §§ 24 10-31115 and -1116. The trial court ruled that the deviation in the records issued by American Family’s agent and those produced by its own underwriting department created an ambiguity in the in surance policy as to the identity of the named insured, and in structed the jury that an ambiguous contract must be construed against the insurer. The jury found that American Family had de layed or denied payment without a reasonable basis for its action. The Court of Appeals affirmed, finding that the lienholder statements created an ambiguity.
The Supreme Court held that because the insurance contract un ambiguouslynamed Hansen’s mother and stepfather as the insureds at the time of the accident, the trial court and Court of Appeals erred in relying on extrinsic evidence to find an ambiguity in the insurance contract. Accordingly, American Family’s denial of Hansen’s claim in reliance on the unambiguous insurance contract was reasonable, and American Family cannot be held liable under CRS §§ 10-3-1115 and -1116 for statutory bad faith. The judgment was reversed.
2016 CO 47. No. 13SC722. Murray v. Just In Case Business Lighthouse, LLC. Contingent Fees for Witnesses—Summary Witness Testimony—Summary Exhibits.
The Supreme Court held that the violation of an ethical rule does not displace the rules of evidence and that trial courts retain the discretion under CRE 403 to exclude the testimony of improperly compensated witnesses. The Court also held that trial courts may allow summary witness testimony if they determine that the evidence is sufficiently complex and voluminous that a summary witness would assist the trier of fact. It further held that in those circumstances, summary witnesses may satisfy CRE 602’s personal knowledge requirement by examining the underlying documentary evidence on which they based their summary testimony. Finally, the Court held that that under CRE 1006, trial courts abuse their discretion when they admit summary charts that characterize evidence in an argumentative fashion rather than simply organize it in a manner helpful to the trier of fact. The Court reversed the Court of Appeals’ holding remanding the case to the trial court, but affirmed on all other issues.
2016 CO 48. No. 14SC469. Lewis v. Taylor.Uniform Fraudulent Transfer Act—Limitation of Actions—Agreements Tolling Limitation.
Under the Colorado Uniform Fraudulent Transfer Act (CUFTA), CRS §§ 38-8-101 to -112, any action to avoid an intentionally fraudulent transfer is extinguished if not brought within four years after the transfer was made or, if later, within one year after the transfer was or could reasonably have been discovered. Here, the Supreme Court held that these time limitations may be tolled by express agreement. Because the parties to this case signed a tolling agreement, and petitioner’s CUFTA claims were properly brought within the tolling period, the Court concluded that his claims were timely filed and were not barred by CUFTA’s limitations period. Therefore, the Court reversed the judgment of the Court of Appeals.
2016 CO 49. No. 15SC345.Pandy v. Independent Bank. Revocable Trust—Settlor—Judgment Lien.
This case principally concerns whether property titled in the name of a judgment debtor’s co-settled revocable trust is subject to a judgment lien against the debtor. The petitioners are co-settlors and co-trustees of a revocable trust that holds title to certain real property in Colorado. Respondent obtained two judgments against one of the petitioners in another state. After domesticating those judgments and recording transcripts of the Colorado judgments, re spondent filed an action to quiet title and for a decree of foreclosure. The petitioner moved for judgment on the pleadings, arguing that respondent’s complaint was barred by what the petitioner argued was the applicable statute of limitations set forth in CRS §13-80-101(1)(k). The district court denied the motion, a division of the Court of Appeals granted leave to file an interlocutory appeal and affirmed that ruling, and the Supreme Court granted certiorari.
The Court concluded that as a settlor of a revocable trust, the petitioner held an ownership interest in the trust’s assets. Accordingly, respondent could properly seek to enforce its judgment against the petitioner in this case, and its action was not barred by the statute of limitations set forth in CRS § 13-80-101(1)(k).
June 27, 2016
2016 CO 50. No. 14SC176. Warne v. Hall.Civil Procedure— Pleading.
Warne petitioned for review of the Court of Appeals’ judgment reversing the dismissal of Hall’s complaint, which asserted a claim of intentional interference with contract. Although invited to apply the standard for dismissal articulated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the district court dismissed for failure to state a claim upon which relief could be granted without addressing either Twombly or Iqbalin its written order. By contrast, the Court of Appeals ex pressly declined to apply the more recent U.S. Supreme Court jurisprudence governing Fed. R. Civ. P. 12(b)(6), finding itself instead bound by the Colorado Supreme Court’s existing precedent, which had heavily relied on the U.S. Supreme Court’s earlier opinion in Conley v. Gibson, 355 U.S. 41 (1957), and particularly its language to the effect that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove “no set of facts” in support of his claim. Declining, therefore, to be influenced by the U.S. Supreme Court’s more recent admonition to the federal courts that “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for re lief that is plausible on its face,’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570), the Court of Appeals found the complaint sufficient to state a claim.
The Supreme Court reversed the judgment of the Court of Appeals. Because the Court’s case law interpreting the Colorado Rules of Civil Procedure in general, and CRCP 8 and 6 12(b)(5) in particular, reflected first and foremost a preference to maintain uniformity in the interpretation of the federal and state rules of civil procedure and a willingness to be guided by the U.S. Supreme Court’s interpretation of corresponding federal rules whenever possible, rather than an intent to adhere to a particular federal interpretation prevalent at some fixed point in the past, the Court found that its precedent was interpreted too narrowly by the Court of Appeals. It also found that plaintiff’s complaint, when evaluated in light of the more recent and nuanced analysis of Twomblyand Iqbal, failed to state a plausible claim for relief. Thus, the Court held that the complaint was insufficient under the Colorado Rules of Civil Procedure.
2016 CO 51. No. 14SC66. Van Rees v. Unleaded Software, Inc. Economic Loss Doctrine—Conversion and Civil Theft—Public Impact or Interest—Private or Internal Transactions.
After Unleaded Software, Inc. failed to deliver contracted-for websites and services, Van Rees brought suit, alleging various tort theories, civil theft, three breach of contract claims, and a violation of the Colorado Consumer Protection Act (CCPA). The trial court dismissed all but the contract claims, and the Court of Appeals affirmed, holding that the economic loss rule barred the tort and civil theft claims and that Van Rees failed to allege a significant public impact under the CCPA.
The Supreme Court affirmed in part and reversed in part. The economic loss rule applies only if there is no independent tort duty. Here, where Van Rees alleged that Unleaded induced him into entering a contractual relationship when it knew it would not be able to perform the promised services, there was an independent tort duty, and the Court therefore reversed as to Van Rees’s tort claims. The Court did not reach the question of the economic loss rule as it relates to civil theft and instead affirmed the dismissal of that claim because Van Rees failed to adequately allege the knowing deprivation of a thing of value. Finally, the Court affirmed the dismissal of the CCPA claim for failure to allege a significant public impact.
2016 CO 52. No. 16SA92. People v. Zuniga.Probable Cause to Search—Totality of the Circumstances—Marijuana Odor.
In this interlocutory appeal, the Supreme Court reversed the trial court and held that the odor of marijuana is relevant to the totality of the circumstances test and can contribute to a probable cause de termination. Even though possession of one ounce or less of mari juana is allowed under Colorado law, many marijuana-related activities remain unlawful, meaning the odor of marijuana can support an inference that a crime is ongoing. Under the facts of this case, the Court concluded that there was probable cause to search the vehicle for illegal drugs in light of the two occupants’ divergent stories about their time visiting Colorado, their “extreme” nervousness, the strong odor of raw marijuana coming from the vehicle, and a drug-sniffing dog’s alert.
2016 CO 53. No. 15SC87. Pinnacol Assurance v. Hoff.Workers’ Compensation Insurance—Promissory Estoppel—Certificates of Insurance—Notice of Cancellation.
The Supreme Court considered whether an insurer had a contractual or statutory obligation to notify a non-insured holder of a certificate of insurance when the insurance policy evidenced by the certificate was cancelled. Because the certificate said notice of cancellation “will be delivered in accordance with the policy provisions” and the insurance policy did not promise notice to certificate holders, the Court concluded that the insurer had no contractual obligation to provide notice of cancellation to the certificate holder. The Court further concluded that no provision or public policy contained in the Workers’ Compensation Act required the insurer to provide such notice. Therefore, the Court reversed the judgment of the Court of Appeals.