Colorado Case Law Update

Author: Nathan Berkeley

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September 5, 2018 9:00am

RIGHT TO A JURY TRIAL – CIVIL ACTIONS

Mason v. Farm Credit of Southern Colorado, 419 P.3d 975 (Col. Sup. Ct.)

Between 2008 and 2011, Zachary Mason entered into several loan agreements with Farm Credit of Southern Colorado (“Farm Credit”) wherein he granted Farm Credit a perfected security interest in some of his crops, farm equipment, and other personal property. After he defaulted on the loans, Farm Credit filed a lawsuit, in 2012, on various claims based in contract and tort.

In 2013, Farm Credit amended its complaint to add Zachary Mason’s father, James Mason for replevin and conversion on the grounds he harvested, stored, and sold crops in which Farm Credit held a perfected security interest. In James Mason’s answer to the amended complaint, he demanded a jury trial. In subsequently arguing said motion, Farm Credit argued the claims in plaintiff’s initial complaint are the sole determinant of a defendant’s right to a jury trial. Alternatively, Farm Credit argued the claims contained in its amended complaint were all equitable in nature and thus, not proper for a jury trial. After the trial court and the Court of Appeals ruled in favor of Farm Credit, the Colorado Supreme Court considered the matter to determine whether a trial court must consider claims contained in an amended complaint to determine whether a party is entitled to a jury trial.

Holding and Reasoning

The Colorado Supreme Court held when a plaintiff amends a complaint and otherwise properly demands a jury trial, the court must determine whether the case is entitled to a jury trial based on the claims contained in the amended complaint. Further, Colorado Rules of Civil Procedure, Rule 38, permits a case to be tried to a jury when the issues to be decided on are legal in nature. After acknowledging Farm Credit’s accounting claim was equitable, the Colorado Supreme Court opined the basic thrust of Farm Credit’s action against James Mason was legal because the conversion and replevin claims were more substantive and numerous. As a result, the Colorado Supreme Court reversed the Court of Appeals and held Farm Credit’s claims against James Mason were primarily legal and entitled him to a jury trial.

UNINSURED/UNDERINSURED MOTORISTS COVERAGE – EXCLUDED DRIVERS

Auto-Owners Insurance Co. v. Csaszar, 893 F.3d 729 (10th Cir. 2018)

Auto-Owners (“Auto-Owners”) Insurance Company provided automobile insurance coverage to Frank Csaszar, Nancy Csaszar, and their daughter Jennifer Csaszar. Upon renewal of the subject policy, Auto-Owners notified Frank and Nancy Csaszar it would only agree to renew its policy if Jennifer Csaszar was explicitly excluded. Frank and Nancy Csaszar’s Auto-Owners policy included UM/UIM coverage of up to $500,000. As a result of Jennifer’s exclusion from the Auto-Owners policy, she purchased a separate insurance policy through Geico to cover her use of a vehicle not scheduled under her parents’ Auto-Owners policy. The Geico policy included UM/UIM coverage of $300,000.

While driving the vehicle scheduled under her Geico policy, Jennifer Csaszar was involved in an accident where an uninsured driver rear-ended her vehicle. The uninsured driver was completely at fault. As a result of the accident, Jennifer Csaszar suffered numerous injuries including a serious brain injury. She alleges the accident caused her over $4,000,000 in damages.

After seeking and obtaining the full UM/UIM coverage limit of $300,000 from Geico, Jennifer Csaszar sought $500,000 in UM/UIM coverage from her parents Auto-Owners policy. Auto-Owners denied the claim and sought a declaratory judgment that Jennifer Csaszar was not entitled to any coverage. Jennifer Csaszar argued (1) the excluded-driver provision did not unambiguously bar her from coverage when she drives in an unscheduled vehicle, and (2) if the excluded-driver provision does bar Jennider Csaszar from coverage, such a bar violates Colorado public policy by “attempting to dilute, condition, or limit statutorily mandated coverage.”

Holding and Reasoning

The Colorado Court of Appeals affirmed the District Court’s ruling holding the excluded-driver provision of the Csaszar’s policy unambiguously barred Jennifer Csazar from all coverage (even UM/UIM coverage), under her parents’ car insurance policy. While Jennifer Csazar argued the excluded-driver provision was contrary to public policy, the Court of Appeals disagreed and noted in its opinion Colorado law appeared settled under Massingill v. State Farm Mutual Automobile Insurance (Colo. App. 2007) 176 P.3D 816. If an insurer explicitly excludes a resident relative from liability coverage, it may also extend such exclusion to UM/UIM coverage.

COLORADO GOVERNMENTAL IMMUNITIES ACT

Falcon Broadband, Inc. v. Banning Lewis Ranch Metropolitan District No. 1, 2018 WL 3153752

In 2007, Falcon Broadband, Inc. (“Falcon”) signed a contract entitled a Bulk Services Agreement with Banning Lewis Ranch Metropolitan District No. 1 (“Banning Lewis”) to provide internet and cable services to residents of the Banning Lewis Ranch area. Five years later in 2012, Falcon sued Banning Lewis, the subject developer, and various individuals (all representatives of Banning Lewis), for breach of contract, breach of implied covenant of good faith and fair dealing, promissory estoppel, unjust enrichment, civil conspiracy, and declaratory judgment.

All defendants subsequently sought dismissal under the Colorado Governmental Immunities Act on promissory estoppel, unjust enrichment, and civil conspiracy claims and sought summary judgment on all remaining claims. In response, the district court entered dismissal on promissory estoppel, unjust enrichment, and civil conspiracy claims and entered summary judgment on all remaining claims. Falcon appealed and argued the district court’s application of the Colorado Governmental Immunities Act was improper.

Holding and Reasoning

In ruling on the dismissal of promissory estoppel, unjust enrichment, and civil conspiracy claims, the Colorado Court of Appeals held: (1) the district court properly dismissed the civil conspiracy claim against Banning Lewis because it was undeniably a tort claim; and (2) the district court improperly dismissed the unjust enrichment and promissory estoppel claims because they were grounded in contract.

Though Falcon claimed to have sued the Banning Lewis directors in their individual capacity, the Court ruled the District directors were protected by the Colorado Governmental Immunities Act because the totality of the circumstances surrounding their relationship with Banning Lewis was “necessarily incidental to their public employment.” The conduct, which gave rise to all claims was the cancellation of the Bulk Services Agreement. In this regard, the court reasoned the cancellation of the subject contract was the individual Banning Lewis directors’ decision to stop honoring the Bulk Services Agreement on behalf of Banning Lewis.

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