Justia Civil Procedure Opinion Summaries

In 2009, XTO Energy, Inc., filed an interpleader action, seeking to resolve competing claims to oil and gas proceeds held by XTO. XTO named several potential claimants as defendants in the interpleader action, including Seawatch Royalty Partners, LLC (managed by Chester Ellsworth) and several alleged heirs of the record owner of the relevant oil and gas interests. After a bench trial, the court concluded that a group of individuals (deemed the true heirs of the record owner) were entitled to the proceeds. Of relevance to this appeal, the trial court also ruled that Seawatch’s claims and defenses were frivolous; that Seawatch was an alter ego of Ellsworth; and that Seawatch and Ellsworth were jointly and severally liable for any future award of attorneys’ fees. Ellsworth was subsequently joined as a party under C.R.C.P. 21 and served via substituted service. The post-judgment sanctions proceedings continued for another several years. During that time, Ellsworth contested his individual liability, arguing that the court lacked personal jurisdiction over him; that he had been improperly served; and that Seawatch was not, in fact, his alter ego. The trial court rejected these arguments and entered judgment jointly and severally against Seawatch and Ellsworth for approximately $1 million in attorneys’ fees. Ellsworth appealed pro se. In an unpublished opinion, the court of appeals vacated the judgment against Ellsworth, holding that the district court lacked jurisdiction to hold him jointly and severally liable for the attorneys’ fee award because, as a nonparty, Ellsworth did not have notice and opportunity to contest his individual liability. The Colorado Supreme Court concluded Ellsworth had adequate notice and opportunity to challenge the alter ego findings that established his liability, and reversed the appellate court's judgment. View "Stockdale v. Ellsworth" on Justia Law

Petitioner Marin Metropolitan District (the “District”) was a special district created as a vehicle to finance the infrastructure of a proposed residential community. In late 2007, the organizers of the District held an election and approved the creation of the District. At the same time, pursuant to Colorado’s Taxpayer Bill of Rights (“TABOR”), the organizers voted to approve the issuance of bonds and to impose property taxes to pay the bonds on landowners within the District. A group of condominium owners subsequently learned that their properties had been included in the District under what they believed to be suspicious circumstances and that they had been assessed property taxes to pay the bonds. Acting through their homeowners’ association, respondent Landmark Towers Association, Inc., (“Landmark”) the owners brought two lawsuits: one to invalidate the creation of the District and the other (this case) to invalidate the approval of the bonds and taxes and to recover taxes that they had paid to the District, among other things. The district court ultimately ordered a partial refund of the taxes paid by the condominium owners and enjoined the District from assessing future taxes on the owners in order to pay its obligations under the bonds. Both sides appealed, and the court of appeals concluded, in pertinent part, that Landmark’s challenge to the bond and tax election was timely and that the election violated TABOR and applicable statutes. At issue before the Colorado Supreme Court was whether Landmark’s challenge to the bond and tax election was timely and the election was validly conducted. The Supreme Court reversed, finding Section 1-11-213(4), C.R.S. (2017), required a party seeking to contest an election like that present here to file a written statement of intent to contest the election within ten days after the official survey of returns has been filed with the designated election official. Without that statement, no could had jurisdiction over the contest. Landmark’s challenge to the bond and tax election at issue was time barred, and thus, the Court reversed the judgment below and remanded for further proceedings. View "UMB Bank, N.A. v. Landmark Towers Association, Inc." on Justia Law

The issue this case presented for the Colorado Supreme Court’s review centered on whether a juvenile court validly terminated a mother’s parent-child legal relationship without first entering a formal written order adjudicating her children as dependent or neglected. The juvenile court accepted the mother’s admission that her children were neglected or dependent, but did not enter a formal order before it terminated the mother’s parental rights approximately a year later. The court of appeals held that the juvenile court lacked jurisdiction to terminate the mother’s parental rights because it had not entered the order. The Supreme Court disagreed with the court of appeals that the trial court’s failure to enter an order adjudicating the children’s status as neglected or dependent divested the trial court of jurisdiction. Because the trial court accepted the parents’ admission, the Supreme Court concluded the purpose of the adjudicative process was met and the children’s status as neglected or dependent was established, thus permitting state intervention into the familial relationship. Moreover, both the Department and the mother proceeded as if the court had adjudicated the status of the children: the mother participated in subsequent hearings and attempted to comply with the trial court’s treatment plan; she never sought to withdraw her admission; and she never challenged the trial court’s jurisdiction or otherwise objected below to the trial court’s verbal or written termination orders finding that the children had been adjudicated neglected or dependent. Under these circumstances, the Supreme Court concluded the trial court’s failure to enter an adjudicative order confirming the children’s status as neglected or dependent did not impair the fundamental fairness of the proceedings or deprive the mother of due process. View "Colorado in Interest of J.W." on Justia Law

In 2011, OXY USA Inc. (“Oxy”), made a mistake that caused it to overpay its property taxes on oil and gas produced from leaseholds. Oxy failed to deduct certain costs it was entitled to deduct. By the time it realized the mistake, the protest period had expired. The company nonetheless contended it was entitled to abatement and refund of the overpayment pursuant to section 39-10-114(1)(a)(I)(A), C.R.S. (2017). The county board of commissioners maintained that the abatement-and-refund provision did not apply because Oxy was the sole source of the error. Relying on Colorado Supreme Court precedent, the court of appeals held that Oxy couldn't receive abatement and refund for overpayment due to its own mistake. The Supreme Court held section 39-10-114(1)(a)(I)(A) gave taxpayers the right to seek abatement and refund for erroneously or illegally levied taxes resulting from overvaluation caused solely by taxpayer mistake. Therefore, Oxy was entitled to abatement and refund for its overpayment of taxes in the tax year at issue in this appeal. View "OXY USA Inc. v. Mesa County Board of Commissioners" on Justia Law

In 2012, Respondent Allister Boustred, a Colorado resident, purchased a replacement main rotor holder for his radio-controlled helicopter from a retailer in Fort Collins, Colorado. The main rotor holder was allegedly manufactured by Petitioner Align Corporation Limited (“Align”), a Taiwanese corporation, and distributed by Respondent Horizon Hobby, Inc. (“Horizon”), a Delaware-based corporation. Align had no physical presence in the United States, but it contracted with U.S.-based distributors to sell its products to retailers who, in turn, sell them to consumers. Boustred installed the main rotor holder to his helicopter and was injured in Colorado when the blades held by the main rotor holder released and struck him in the eye. He filed claims of strict liability and negligence against both Align and Horizon in Colorado. The issue this case presented for the Colorado Supreme Court's review centered on the stream of commerce doctrine and the prerequisites for a state to exercise specific personal jurisdiction over a non-resident defendant. The Colorado Supreme Court concluded that World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), set out the controlling stream of commerce doctrine, which established that a forum state could assert jurisdiction where a plaintiff showed a defendant placed goods into the stream of commerce with the expectation that the goods will be purchased in the forum state. Applying this doctrine, the Court concluded Boustred made a sufficient showing to withstand a motion to dismiss. View "Align Corporation, Ltd. v. Boustred" on Justia Law

In this products liability case, the issue before the Colorado Supreme Court was whether the trial court erred when it gave a jury instruction that allowed the jury to apply either the "consumer expectation test" or the "risk-benefit test" to determine whether a driver’s car seat was unreasonably dangerous due to a design defect. The court of appeals concluded that the trial court did err by instructing the jury separately on the consumer expectation test, because the test already comprises an element of the risk-benefit test. The Supreme Court affirmed on different grounds. Previously, the Court determined the risk-benefit test was appropriate test to assess whether a product was unreasonably dangerous due to a design defect where the dangerousness of the design is “defined primarily by technical, scientific information.” The consumer expectation test, by contrast, was “not suitable” in such a case. Here, the jury was tasked with determining whether a car seat was unreasonably dangerous due to a design defect - a determination that, as evidenced by the extensive expert testimony at trial, required consideration of technical, scientific information. Thus, the Court surmised the proper test under which to assess the design’s dangerousness was the risk-benefit test, not the consumer expectation test. Therefore it was error for the trial court to instruct the jury on both tests, thereby allowing it to base its verdict on the consumer expectation test alone. Furthermore, the Court held that the jury’s separate finding of negligence did not render the instructional error harmless. View "Walker v. Ford Motor Co." on Justia Law

When Arvada, Colorado police officers responded to a reported domestic disturbance in Terry Ross’s home, Ross went into a bedroom and shot himself. Officers radioed for an ambulance whose crew delivered him to the hospital. There, doctors treated Ross’s wounds as Arvada officers kept watch over him. When Ross, and later his estate, could not pay for his care, the hospital billed the City of Arvada nearly $30,000. The question presented by this case was essentially whether Arvada had to pay the tab. The trial court and court of appeals said yes; both read Colorado’s “Treatment while in custody” statute as entitling the hospital to relief. Relying on Poudre Valley Health Care Inc. v. City of Loveland, 85 P.3d 558 (Colo. App. 2003), the trial court decided the statute assigned police departments (or any agency that detains people) a duty to pay healthcare providers for treatment of those in custody. The court of appeals affirmed on essentially the same grounds. The Colorado Supreme Court, however, concluded the statute did not create any duty to a healthcare provider. Furthermore, the Court concluded that the hospital’s claim for unjust enrichment survived. Because that claim was contractual, the Court concluded the Colorado Governmental Immunity Act did not prohibit it. Therefore, the Court reversed the judgment of the court of appeals in part and remanded for further proceedings. View "City of Arvada ex rel. Arvada Police Department v. Denver Health" on Justia Law

Petitioner Ann Hardegger filed a complaint in the district court seeking contribution from respondents Daniel and Cheryl Clark, for their proportionate share of a payment she made to the Internal Revenue Service (“IRS”) in full satisfaction of the parties’ joint and several tax liabilities. In October 2010, the Clarks filed a joint voluntary Chapter 7 bankruptcy petition and gave notice to their creditors, including the Hardeggers. The Hardeggers did not file a proof of claim in the bankruptcy proceeding, and the bankruptcy court granted the Clarks a discharge. In Hardegger’s case, the district court found the Clarks responsible for one-half of the IRS indebtedness and entered summary judgment in Hardegger’s favor. A division of the court of appeals reversed, however, concluding that Hardegger’s contribution claim constituted a pre-petition debt that had been discharged in the Clarks’ bankruptcy case. Applying the “conduct test,” under which a claim arises for bankruptcy purposes at the time the debtor committed the conduct on which the claim is based, the Colorado Supreme Court concluded that Hardegger’s claim for contribution arose when the parties’ jointly owned company incurred federal tax withholding liability between 2007 and 2009, rendering Hardegger and Clark potentially responsible for that debt. Because this conduct occurred before the Clarks filed their bankruptcy petition in 2010, Hardegger’s claim constituted a pre-petition debt that was subject to discharge. View "Hardegger v. Clark" on Justia Law

In March 2016, Catholic Health Initiatives Colorado (d/b/a Centural Health – St. Anthony North Hospital) filed suit against architectural firm Earl Swensson Associates (“ESA”) after ESA designed Catholic Health’s new hospital, Saint Anthony North Health Campus (“Saint Anthony”). Catholic Health alleged that ESA breached its contract and was professionally negligent by failing to design Saint Anthony such that it could have a separately licensed and certified Ambulatory Surgery Center (“ASC”). In December 2016, Catholic Health filed its first expert disclosures, endorsing Bruce LePage and two others. Catholic Health described LePage as an expert with extensive experience in all aspects of preconstruction services such as cost modeling, systems studies, constructability, cost studies, subcontractor solicitation, detailed planning, client relations, and communications in hospital and other large construction projects. Catholic Health endorsed LePage to testify about the cost of adding an ASC to Saint Anthony. At a hearing, ESA argued that the lack of detail in LePage’s report prevented ESA from being able to effectively cross-examine him. ESA further argued that striking LePage as an expert was the proper remedy because Rule 26(a)(2)(B)(I) limits expert testimony to opinions that comply with the Rule, and LePage offered no opinions in compliance. In 2015, the Colorado Supreme Court amended Colorado Rule of Civil Procedure 26(a)(2)(B) to provide that expert testimony “shall be limited to matters disclosed in detail in the [expert] report.” In this case, the trial court concluded that this amendment mandated the exclusion of expert testimony as a sanction when the underlying report fails to meet the requirements of Rule 26. The Supreme Court concluded the amendment created no such rule of automatic exclusion. Instead, the Court held that the harm and proportionality analysis under Colorado Rule of Civil Procedure 37(c) remained the proper framework for determining sanctions for discovery violations. Because the trial court here did not apply Rule 37(c), the Court remanded for further development of the record. View "Catholic Health v. Swensson" on Justia Law

In 2012, Khalil Laleh brought a forcible entry and detainer action against his brother, Ali Laleh. The litigation later grew so unwieldy that the trial court appointed Gary Johnson as an accounting expert (and later as a special master) to resolve the feuding brothers’ complex accounting claims. The Laleh brothers signed an engagement agreement with Gary C. Johnson and Associates, LLC, setting forth the scope of Johnson’s services and payment. Johnson commenced work, but before he completed his accounting reports for the trial court, the brothers settled their case and the court dismissed the suit. Johnson later informed the trial court that Khalil and Ali refused to pay both his outstanding fees and his costs incurred post-settlement in attempting to collect the outstanding fees. Following a hearing, the trial court issued an order ruling that Johnson’s fees were reasonable, and that he was entitled to the post-settlement costs he incurred in trying to collect his outstanding fees. In reaching the latter conclusion, the trial court relied on language in the engagement agreement stating that the Lalehs “are jointly and severally responsible for the timely and complete payment of all fees and expenses” to Johnson. The Colorado Supreme Court concluded that a separate provision of the engagement agreement authorized the award of the disputed post-settlement collection costs. View "Laleh v. Johnson" on Justia Law