Attached is the December case law update. Note the Civil Access Pilot Project has gone into effect

1. COLORADO LAW UPDATE
The Times They Are A Changin’
Changes are afoot which promise to cause problems for those set in their ways. First, as you
should know, the Civil Pilot program starts on January 1, 2012. Be sure and get familiar with that
program, as the Judiciary strives to find ways to streamline and reduce the cost of litigation. On
the plus side… we hope to try more cases!
In addition, the way to calculate time has changed [for most rules as of January 1, 2012]. Again,
check Lexis, the Supreme Court website or order a new book to find out the changes. Note, since
the rule was only adopted in mid-December, paper books are likely to be in error and need
supplementing.
******
Thanks to the Jurisdiction and Venue Clarification Act of 2011, changes to federal court practice
are coming. The Act contains significant changes to the removal statute, 28 U.S.C. § 1441, and
will affect nearly every new case filed or removed next year invoking the courts’ diversity
jurisdiction. By clarifying the rules affecting the timing of removal in cases with multiple
defendants, determinations of amount in controversy, and venue, Congress hoped to simplified
removal and venue rules for both plaintiffs and defendants in federal court.
The new law provides that each defendant will have 30 days from his or her own date of service
to seek removal. Earlier-served defendants would also be allowed to join in or consent to
removal by another defendant. To avoid further confusion, the law also codifies the “rule of
unanimity,” set forth over a century ago by the Supreme Court, requiring all defendants to
consent to removal. To our benefit, where there is no clear indication of amount in controversy in
the Complaint, defendants may still remove, even after the 30-day period expires, if they receive
discovery from the plaintiff indicating that the jurisdictional amount is met. Cases still can’t be
removed more than one year after commencement unless the court finds that the plaintiff has
acted in bad faith in order to prevent a defendant from removing the case.
Congress also adopted the majority standard that residency is a natural person’s state of
domicile, the same standard used in the determination of citizenship for diversity jurisdiction.
And beginning in 2012, Congress has provided that litigants may stipulate to the transfer of
venue to a district where the lawsuit may otherwise have not originally been brought “for the
convenience of the parties and witnesses and in the interest of justice.” This abrogates the
Supreme Court’s decision in Hoffman v. Blaski, 363 U.S. 335 (1960).
Finally, the statute states that, upon removal, district courts must now sever and remand claims
not within the original or supplemental jurisdiction of the district court (or which are
nonremovable by statute).
The Act will go into effect January 8, 2012.

2. **********
Last, the Colorado Supreme Court has adopted a new way for legal practitioners and parties to
refer to its and the Colorado Court of Appeals’ published opinions in legal briefs and other
documents. It is called the public domain citation format, and “…is to make it easier for
practitioners and self-represented parties who lack the resources to access an electronic research
database or the printed volumes of the Pacific Reporter to locate Colorado case law and to cite to
that case law…” according to Chief Justice Bender.
A citation to an appellate opinion in the Pacific Reporter could look like this: Smith v. Jones, 45
P.3d 1237, 1254 (Colo. 2012). Under the new format, a citation to a Supreme Court opinion
would look like this: Smith v. Jones, 2012 CO 22, ¶¶ 44-45, while a citation to a Court of
Appeals opinion would look like this: Jones v. Smith, 2012 COA 35, ¶¶ 44-45. (These are not
real cases, only examples.) “CO” means Supreme Court and “COA” means Court of Appeals.
The “22” in the first example and the “35” in the second example mean those opinions are,
respectively, the 22nd and the 35th issued by each court in 2012. Both citations point to the
opinion’s 44th and 45th paragraphs. Upon announcement, each opinion selected for publication
will be assigned a public domain citation and internal paragraph numbers.
Practitioners and parties will be permitted to use the public domain citation format or to cite to
the Pacific Reporter, and they will not have to provide parallel citations in either format.
CASE LAW UPDATE
COLORADO SUPREME COURT
Vickery v. Evans – Supreme Court determines that amount of punitive damages that can be
awarded includes interest on the underlying judgment (SC 12/12/11). Monica Vickery sought
review of the reduction of exemplary damages in her defamation suit against the mother and
sister of her deceased husband. Both the district court and court of appeals had limited Vickery’s
exemplary damages to an amount equal to the compensatory damages figure returned by the
jury, before any adjustment for prejudgment interest. The Colorado Supreme Court reversed,
finding that “the amount of the actual damages awarded,” to which exemplary damages are
statutorily limited, refers not to the jury’s assessment of total compensatory damages but to the
total compensatory damages awarded against the defendant, which necessarily include statutorily
mandated prejudgment interest.
Cherokee Metro. Dist. v. Meridian Serv. Metro. Dist. & Cherokee Metro. Dist.v. Upper
Black Squirrel Creek Ground Water Mgmt. Dist. – Supreme Court finds intervention rule
should be liberally applied, even in declaratory judgment action (SC 12/12/11). The Supreme
Court holds that where defendant Meridian had an interest, which could be impaired and no other
party adequately represented its interests, Meridian had a right to intervene in a declaratory
judgment proceeding.
Condo v. Conners – Supreme Court upholds anti-assignment clause in LLC agreement (SC
12/21/11). The Supreme Court held that an attempted assignment of a limited liability company

3. member’s right to receive distributions and effective transfer of voting rights was invalid because
it was made without the consent of the other members of the LLC, in violation of the anti-
assignment clause in the LLC’s operating agreement. The Court reasoned that because the anti-
assignment clause applied to the assignment of “any portion” of a membership interest, the
clause applied to attempted assignments of both rights and duties.
COURT OF APPEALS
Beaver Creek Property Owners Association, Inc. v. Bachelor Gulch Metropolitan Dist. –
Court of Appeals confirms one award of attorney’s fees, reverses another in § 1988 action. (CA
12/08/11). In April 2006, Bachelor Gulch enacted a road regulation that effectively banned
Strawberry Park subdivision construction traffic from its roads. Two groups of homeowners sued
to overturn the regulation. They prevailed and were awarded attorney’s fees. On appeal,
Bachelor Gulch argued that the district court erred in awarding Strawberry Park its attorney fees,
because Strawberry Park’s constitutional claims were not sufficiently “substantial.” When a
party joins state law and constitutional claims but prevails only on the state law claims without
deciding the constitutional claims, a court still may award attorney fees under 42 U.S.C. § 1988
if the constitutional claim was substantial and the state law claim arose from a common nucleus
of operative facts. Here, Strawberry Park was required to establish that the traffic regulation at
issue and the classification that it allegedly established lacked a rational relationship to a
legitimate governmental purpose. There was a substantial evidentiary record in which both sides
presented evidence tending to support their respective positions. In light of this record, and fully
recognizing that a plaintiff seeking to invalidate a regulation on rational basis grounds faces an
uphill battle, it is not apparent that Strawberry Park’s constitutional claims were “obviously
without merit,” as Bachelor Gulch contended. Accordingly, Strawberry Park’s constitutional
claims were sufficiently substantial to warrant an award of attorney fees under § 1988. Bachelor
Gulch also contended that the district court erred in awarding attorney fees to Beaver Creek
because Beaver Creek did not add its § 1983 claims until after the district court had granted
partial summary judgment for plaintiffs. The Court of Appeals agreed, noting that the relation
back doctrine may not be used to create a post hoc basis for an award of attorney fees under §
1988.
Kisselman v. American Family Mutual Ins. Co. – Court of Appeals issues pro-claimant
interpretation of ‘bad faith’ statute (CA 12/08/11). Kisselman was injured in a car accident
caused by an underinsured driver. At the time of the accident, Kisselman was covered by an
American Family insurance policy that included uninsured/underinsured motorist and umbrella
coverage up to $1.1 million. Kisselman settled with the uninsured driver, filed a lawsuit against
American Family to avoid having his legal claims barred by the statute of limitations, and
proceeded to arbitration with American Family to determine Kisselman’s past and future
damages stemming from the car accident. American Family subsequently paid the amount
awarded by the arbitrator for these damages to Kisselman. In interpreting §10-3-1115 and -1116,
the district court found them inapplicable to this action, and Kisselman appealed. [Those sections
create a cause of action for ‘first party claimants’ which entitle them to reasonable attorney fees,
court costs, and “two times the covered benefit” damages in the event an insurer is found to have
unreasonably delayed or denied payment of a claim for benefits owed]. The Court of Appeals
found that the General Assembly intended the statutes to apply prospectively to all post-effective

4. date conduct of insurers, regardless of when the original claim for benefits was made. Therefore,
CRS §§ 10-3-1115 and -1116 apply prospectively to alleged post-effective date acts of
unreasonable delay by an insurer, according to Judge Loeb.
Reigel v. SavaSeniorCare L.L.C. – Court of Appeals makes far-reaching decision on wrongful
death case (CA 12/08/11). Dennis Reigel died shortly after being taken to a hospital emergency
room from a nursing facility owned by Alpine. The Sava Defendants) contended that the district
court erred in denying their motion for directed verdicts on the negligence claim, asserting that
Ms. Reigel did not establish that they owed a duty of care to Mr. Reigel because she did not
present evidence to establish that Alpine employees’ actions could be imputed to the Sava
Defendants. The Court of Appeals agreed, and reversed that portion of the judgment. In addition,
Alpine contended that the evidence was insufficient to support a jury finding of causation in
connection with the negligence claim because the district court erred by giving the jurors an
incorrect test for causation [the “increased risk” test instead of the “but-for” causation test]. The
Court agreed, but found that while remand was necessary, Alpine was not entitled to a directed
verdict on the negligence claim, as there was sufficient evidence would have been sufficient to
support a verdict under the correct test. Therefore a new trial was appropriate under the
circumstances. Defendant Alpine also contended that the district court erred in denying their
motion for directed verdicts on Ms. Reigel’s outrageous conduct claim. Though there is evidence
that Alpine’s employees were abrupt, irresponsible, lacking in sensitivity and inattentive to
Riegel’s condition, the evidence was not sufficient to support an outrageous conduct claim and a
directed verdict on this claim was appropriate. Defendants next contended that the district court
erred in allowing Ms. Reigel to recover punitive damages because the court abused its discretion
in permitting Ms. Reigel to amend her complaint to request punitive damages shortly before trial.
The Court of Appeals disagreed, finding the trial court had not abused its discretion in allowing
the Reigels to amend their complaint. Finally, the decedent’s sons cross-appealed the district
court’s directed verdict in defendants’ favor on their wrongful death claim and its award of costs
to defendants for that claim. The Court of Appeals held that a wrongful death action involves a
shared injury among survivors such that there is no individualized recovery of damages, because
all damages awarded are owned jointly and distributed through the statutes of descent and
distribution. Accordingly, the Court of Appeals found that the district court erred in dismissing
the sons from the case; that the award of costs against the sons premised on that dismissal should
be reversed; and that the sons will be entitled to participate as plaintiffs upon remand of the
negligence claim.
Janicek v. Obsideo, LLC. – Court of Appeals defines equitable defenses and claims in
foreclosure action (CA 12/08/11). In foreclosure action, Homeowners asserted that the equitable
doctrines of (1) equitable estoppel, (2) unclean hands, and (3) judicial estoppels barred lender
from receiving the excess proceeds in foreclosure sale. However, equitable estoppel and unclean
hands are equitable defenses and not offensive theories of recovery, and judicial estoppel does
not apply because homeowners did not contend that lender took inconsistent positions in related
court proceedings. Accordingly, none of the three doctrines affords homeowners a theory of
recovery against Obsideo.
Thyssenkrupp Safway, Inc. v. Hyland Hills Parks and Recreation District - Court of
Appeals interprets indemnity claim against public entity and CRS § 24-91-103.6(4) (CA

5. 12/08/11). Hyland Hills is a Colorado Special District and owns a water park known as Water
World. In May 2006, the general manager of Water World authorized his assistant general
manager, Gary Maurek, to locate a scaffolding company to assist in accessing a light fixture atop
a tall pole that was misaligned. One of the companies contacted was Safway. Safway’s assistant
construction manager visited the premises and was asked to provide a quote for the scaffolding
services. A quote in the form of a proposed contract was faxed to Maurek later that day. It
included an indemnification provision. Maurek prepared a summary of the proposed cost and
gave it to his general manager, who then passed it along to the executive director of Hyland
Hills. The executive director approved the expenditure of approximately $1,800 but did not give
anyone authority to sign a contract. Maurek nonetheless signed Safway’s contract form as
“assistant general manager.” During erection of the scaffolding, the light fixture fell on
Safeway’s employee, causing him to fall and sustain serious injuries. Safway paid workers’
compensation benefits and then commenced this action seeking indemnification from Hyland
Hills. The trial court found that Safway had failed to prove Maurek had any authority to sign the
contract. It also held that the claim was barred by CRS § 29-1-110(1), which essentially voids
any contracts made by a local government that involve expenditures of money in excess of
appropriated amounts. On appeal, the Court of Appeals held that the contract at issue was a
public works contract and that the indemnity provision was a remedy-granting provision that
would trigger the exception. However, the Court rejected Safway’s argument that the trial
testimony under oath by its director of risk management regarding the amounts Safway had paid
to or on behalf of its injured employee met the requirement of a “statement sworn”. The plain
language of the statute requires the foregoing sworn statement be “submitted to the public entity”
not the trial court and held that this must happen sometime before trial.
Mid-Century Insurance Co. v. Robles – Court of Appeals discusses exclusion in auto policy
for regular use of insured vehicle (CA 12/08/11). On January 21, 2008, an automobile accident
occurred between claimant and the tortfeasor. At the time, the tortfeasor was living with his
parents and driving his father’s Oldsmobile, which was insured by Farmers Insurance Exchange.
The tortfeasor’s parents were the named insureds. The tortfeasor owned a Ford Explorer insured
by Mid-Century. Claimant sustained injuries in the accident and filed a lawsuit against the
tortfeasor and received a partial settlement from Farmers. However, claimant also claimed
entitlement to benefits under the liability coverage afforded tortfeasor under Mid-Century policy.
Mid-Century instituted a declaratory action, and the trial court granted Mid-Century’s SJ motion,
concluding that the Oldsmobile was not an “insured car” under the policy and that the “regular
use” or “drive other car” exclusion did not violate public policy. On appeal, claimant contended
that the exclusion did not apply because the tortfeasor did not regularly use the Oldsmobile. The
Court of Appeals disagreed, finding this to be a misinterpretation of the insurance contract
language, which clearly barred coverage by Mid-Century of the tortfeasor’s use of his father’s
vehicle. The Court noted that excluding coverage for a family member’s use of a car that another
family member owns and is separately insured is not uncommon. The Court then considered
whether the Oldsmobile qualified as an “insured car” under the Mid-Century policy. The only
way it could so qualify was if it were a replacement vehicle. Because this term was not defined
in the Mid-Century policy, the Court looked to the common meaning of “replacement” to
determine whether the Oldsmobile was a replacement vehicle for claimant’s Explorer. The Court
held that it was not a replacement vehicle under this definition and, therefore, the Oldsmobile
was not insured by Mid-Century.

6. Wahrman v. Golden West Realty, Inc. – Court of Appeals issues first case interpreting CAR
4.2 Interlocutory Review (CA 12/08/11). Defendants acted as Wahrman’s broker in leasing and
managing her residential rental property. According to Wahrman, tenants significantly damaged
the property during and in connection with the termination of the tenancy. She alleged
defendants were liable due to various wrongful acts. On defendants’ Motion for Determination of
Question of Law, the trial court requested briefing on the economic loss rule and then held that it
barred the breach of fiduciary duty and negligence claims. It then granted Wahrman’s Motion for
Interlocutory Appeal without making any findings as required by the rule. [C.A.R. 4.2 allows an
interlocutory appeal when (1) immediate review may promote a more orderly disposition or
establish a final disposition of the litigation; (2) the order from which an appeal is sought
involves a controlling question of law; and (3) the order from which an appeal is sought involves
an unresolved question of law]. The Court of Appeals found that whether the economic loss rule
applies to claims regarding the duties a residential broker owes to a landlord appeared to be a
question of first impression in Colorado and, therefore, assumed it was an unresolved question of
law. However, the Court found nothing to suggest why the economic loss question is a
controlling question of law in this case and also found that the assertion that immediate review
may support more orderly disposition based on the specter of retrial and attendant additional cost
was not a reason that would support interlocutory review. The petition was denied and the appeal
was dismissed.
Ferguson Enterprises, Inc. v. Keybuild Solutions, Inc. – Mechanic’s lien priority case
remanded for further proceedings (CA 12/20/11). In this mechanics’ lien foreclosure action
involving the priority of liens relative to a deed of trust, defendant Colorado Community Bank
(CCB) appealed the summary judgment in favor of the following lien claimants. Zion
Development, LLC (Zion) borrowed money from FlatIron Bank and hired architects to prepare a
master plan. Zion later defaulted on the FlatIron loan and lost the property through a foreclosure
action. FlatIron then conveyed the property to Water Tower Builders, LLC (Water Tower),
which financed the purchase of the property and construction activities through two loans
obtained from CCB. Water Tower hired subcontractors to perform work on the property and later
defaulted on the loan to CCB and lost the property to a foreclosure sale. The court granted the
lien claimants’ motion, which claimed that its mechanics’ lien had priority over CCB’s deed of
trust because it was entitled to relate its lien back to the date when work performed by the
architects for Zion was filed as a master plan. The Court of Appeals remanded, holding that it
must be determined whether the architects asserted a mechanics’ lien that was superior to the
FlatIron deed of trust as to any improvements. It also held that any architects’ lien must have
been preserved and pursued by appropriate compliance with time limitations for filing the lien
and commencement of foreclosure proceedings.
Hopkins v. Industrial Claim Appeals Office – Court of Appeals finds no reduction appropriate
in unemployment benefit case (CA 12/20/11). Claimant worked for employer, the Colorado
Department of Labor and Employment, from June 1986 to July 31, 2001. Since August 1, 2001,
claimant had been receiving a monthly pension payment of approximately $3,000. Claimant
returned to work for employer on April 6, 2009 through August 4, 2009. During this period of
employment, employer did not contribute to claimant’s pension plan, nor did claimant (nor did
she have the right to). Claimant established an initial claim for unemployment benefits on

7. January 24, 2010, for a weekly benefit amount of $443, which was less than the weekly prorated
amount of her pension. Claimant’s base period ran from October 1, 2008 through September 31,
2009. The hearing officer concluded that because employer did not contribute to claimant’s
pension during her base period employment, no reduction of her unemployment benefits was
required under CRS § 8-73-110(3) (a) (I) (B). The Court of Appeals affirmed the hearing officer,
holding that the Colorado Employment Security Act is a part of a cooperative federal–state
program administered under the Federal Unemployment Tax Act (FUTA). The offset
requirements of CRS § 8-73-110(3) (a) (I) (B) are modeled on the analogous provisions of
FUTA. The legislative history indicated this was Congress’ response to a concern over “double-
dipping” by retirees who actually had withdrawn from the labor force and were being paid both
unemployment and retirement benefits by the same employer. Here, although employer had
contributed to the pension claimant was receiving; employer did not contribute to claimant’s
pension during the base period that is the subject of her current claim for unemployment benefits.
Therefore, claimant would not be “double-dipping” because she would not be collecting both
unemployment and retirement benefits based on the same period of work. Therefore, no
reduction in unemployment benefits was required under CRS § 8-73-110(3) (a) (I) (B).