Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
Brian Kirby appealed his convictions and sentences for reckless vehicular homicide, reckless manslaughter, leaving the scene of an accident resulting in death and careless driving resulting in death.
The Colorado Court of Appeals, citing the Colorado Supreme Court cases Abarca v. People and People v. Chapman, held reckless manslaughter and careless driving resulting in death were both lesser included offenses of reckless vehicular homicide. The appeals court vacated Kirby’s convictions for the two lesser included offenses, remanded the case to the trial court to correct his mittimus, but affirmed in all other regards.
Gene Melendez appealed the postconviction court’s order denying his Colorado Rules of Criminal Procedure 35(c) petition for postconviction relief without a hearing. The Colorado Court of Appeals held the Margerum rule didn’t apply retroactively as it isn’t a watershed rule of criminal procedure, and Melendez’s rights to effective assistance of counsel and to a fair and impartial jury weren’t violated. The appeals court affirmed the decision.
Gilbert Million appealed the trial court’s partial summary judgment dismissing his civil theft claim against Carol Grasse and three of her entities, Chesed, LLC, Rose Valley, LLC and Nugae, LLC. Grasse cross-appealed the trial court’s money judgment in favor of Million. The Colorado Court of Appeals affirmed the partial summary judgment, but reversed the trial court’s money judgment in favor of Million and remanded the case with directions.
Million and Grasse were long-time friends and engaged in a business relationship from the early 2000s until the relationship deteriorated in August 2018. Million located properties to purchase and Grasse financed the purchases. Those properties included three in Boulder, the Sixth Street Property, the Dakota property and the Highland property. Because of the pair’s long friendship, they often didn’t reduce the details of their agreements to writing.
In 2014, Million formed Chesed as a Colorado limited liability company and was the sole member. Chesed then purchased the Sixth Street Property. In the same year, Million needed money to pay his attorney fees in a criminal case. Million’s lawyer, apparently with Grasse’s consent, formed Colorado LLC Nugae, which was wholly owned by Grasse, according to the opinion.
In February 2015, Nugae made two loans to Million and Chesed of $50,000 and $35,000. The money came from Grasse. Million executed promissory notes for both loans to Nugae, and the loans were secured by deeds of trust on the Sixth Street property.
Grasse was the sole member of another Colorado LLC, Rose Valley. In February 2015, Rose Valley made two loans to Million and Chesed of $25,000 and $125,000. The $25,000 loan was to pay Million’s legal fees, and the $125,000 memorialized an earlier loan between the two. The loans were secured by deeds of trust in favor of Rose Valley on the Sixth Street property.
In June 2015, Million transferred his Chesed membership to Grasse, and she became the sole owner of Chesed. In August 2015, Rose Valley paid a $425,000 promissory note relating to Chesed’s Sixth Street property purchase. By August 2015, Nugae and Rose Valley held five deeds of trust on the property, securing five loans for Million’s benefit, totaling approximately $660,000.
In 2018, Million sued Grasse over a dispute concerning a separate property. In 2019, the parties successfully mediated the dispute and signed a settlement agreement. The appeal arises out of the settlement agreement. In the agreement, Grasse agreed to reconvey the title to the Highland Property to Million and to sell the Sixth Street and Dakota properties and divide the sale proceeds with Million. The agreement also obligated Grasse’s attorney to establish a separate trust account to distribute the money and required Grasse or her attorney to confer with Million’s counsel prior to making distributions from the trust account.
In July 2020 and February 2021, the two properties were sold. Grasse claimed the liens held by Nugae and Rose Valley were third-party liens because neither of the companies were a named party to the agreement. Grasse deducted the amount of those liens from the settlement proceeds, leaving nothing to be distributed to Million. Grasse’s attorney also never established the trust account, according to the opinion.
Million sued again, asserting a variety of claims that included breach of contract and civil theft. Million applied the piercing the corporate veil doctrine and contended the liens weren’t third-party liens. The trial court entered written finds that Nugae and Rose Valley were alter egos of Grasse and she improperly deducted those liens from the proceeds of the sales of the properties. The trial court determined Grasse owed Million $634,553.75 in damages plus interest, attorney fees and costs. The trial court dismissed Million’s civil theft claim on Grasse’s motion for partial summary judgment
Million appealed the dismissal of his civil theft claim. He contended the trial court erred when it granted motion for partial summary judgment and the trial court incorrectly applied the law when it ruled Million’s civil theft claim was a breach of contract claim that didn’t fall under the purview of Colorado Revised Statutes Section 18-4-405.
On cross-appeal, Grasse contended the trial court improperly applied the piercing doctrine.
The Colorado Court of Appeals concluded the trial court correctly dismissed the civil theft claim. The appeals court also concluded the piercing doctrine had no proper application in this case
The appeals court also declined to affirm the trial court’s alternative basis for judgment.
The appeals court reversed the money judgment in favor of Million, affirmed the partial summary judgment order dismissing Million’s civil theft claim, remanded to the trial court to redecide the case without reliance on the piercing doctrine and to enter an appropriate judgment and also remanded the case to enter an appropriate award of attorney fees and costs to the prevailing party, as determined by the trial court, both in the trial court and on appeal.
Judge Eric Kuhn concurred in part and dissented in part.
He agreed the trial court didn’t err in its grant of partial summary judgment dismissing Million’s civil theft claim. But, he disagreed with the majority’s conclusion the trial court erred in entering its money judgment in favor of Million. He wrote the trial court may have overextended in its application of the veil piercing doctrine, but he didn’t think it erred in its alternative analysis or final conclusion. He would’ve affirmed the trial court’s money judgment.
Pamela Barrett and Raymond Cossey appealed the district court judgment dismissing their State Administrative Procedure Act action against the Division of Water Resources, the Office of the State Engineer, Kevin Rein in his capacity as state engineer, Harold Priestley, Drue Priestley and the HDP Revocable Trust. The Colorado Court of Appeals affirmed the decision.
Barrett and Cossey owned 13 exempt well permits, which allow them to construct and use 13 residential wells. Those wells are exempt from certain administrative requirements of the Colorado Water Right Determination and Administration Act of 1969.
The Priestleys and the HDP Revocable Trust filed an administrative complaint that sought revocation of the permits on the grounds the applications for the permits had been improperly completed. The state engineer assigned the case to a hearing officer, who granted summary judgment to Barrett and Cossey and dismissed the complaint. But the hearing officer denied the request for damages, attorney fees or other sanctions against the Priestleys because the hearing officer didn’t “find the Priestleys complaint to be frivolous or vexatious,” according to the opinion.
Barrett and Cossey agreed with the hearing officer’s determination of the validity of the permits, but disagreed with other portions of the order and appealed. Cossey requested the state engineer revise the order to clarify the controlling law, accurately represent the Preistleys’ misrepresentations, correct statements regarding the Norwood Water Commission and award damages, costs and attorney fees. The state engineer denied the request.
Barrett and Cossey filed a complaint for judicial review of the decision in district court. They asserted the district court had subject matter jurisdiction under Colorado Revised Statute Section 24-4-106. The district court dismissed the complaint for lack of subject matter jurisdiction under Colorado Rule of Civil Procedure 12(b)(1) and concluded the complaint must be filed in water court. Barrett and Cossey appealed the dismissal.
The Colorado Court of Appeals concluded that because certain of the claims were water matters, the water court has exclusive jurisdiction over all the claims pleaded in the Cossey complaint.
The appeals court affirmed the judgment.
Center for Wound v. Kit Carson
The Center for Wound Healing & Hyperbaric Medicine, LLC appealed the judgment dismissing its complaint against Kit Carson County Health Service District.
The Colorado Court of Appeals concluded the trial court correctly interpreted contractual language intended to ensure compliance with the Colorado Taxpayer’s Bill of Rights when it ruled the district’s liability for certain financial obligations arising after the contract’s termination was contingent on annual appropriations the District never made.
But the the appeals court also concluded factual disputes precluded dismissal of the Center for Wound Healing & Hyperbaric Medicine’s claim for money damages reflecting its loss of the revenue it would’ve received during the fiscal year of the alleged breach had no breach occurred.
The appeals court affirmed the trial court’s entry of judgment to the extent it precludes the center from recovering payments due under the acceleration clause corresponding to years following fiscal year 2021, reversed the trial court’s entry of judgment to the extent it precludes the Center for Wound Healing & Hyperbaric Medicine from recovering unpaid sums the Center claims correspond to fiscal year 2021 and remanded that portion of this matter for further proceedings.