Court Opinions: Colorado Court of Appeals Opinions for July 14

Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.

People of Colorado v. Crabtree

In this case, the Colorado Court of Appeals unanimously reversed in part and affirmed in part a case connected with driving under the influence and the law associated with it.

Charles Crabtree appealed his conviction for a felony DUI. The Court of Appeals argued although his 2019 trial predates the 2020 cases of People v. Viburg and Linnebur v. People, they agree with him that the trial court erred by not requiring the state to prove beyond a reasonable doubt, his prior DUI convictions. That’s what the aforementioned cases had previously concluded. The appeals court reversed his conviction for a felony DUI and remanded for further proceedings. 

The appeals court, however, rejected Crabtree’s challenge to his waiver of a right to counsel, and they affirmed his underlying conviction for misdemeanor DUI. Crabtree had contended his conviction should be reversed because he represented himself without validly waiving his right to counsel. The appeals court disagreed saying Crabtree made the decision knowingly and intelligently.

In re the Marriage of Wenciker and Bolen

In this case, the appeals court unanimously dismissed in part and affirmed in part in a case involving parental responsibilities.

In a post-dissolution of marriage concerning a parental responsibilities action between Kinsey Bolen and Jeffrey Wenciker, Bolen appealed a trial court’s order that modifies parenting time and decision-making authority for the parent’s two children. Since one of the kids is now over age 18, the appeals court dismissed that claim, but it looked into the case involving the younger child.

In his motion to modify, Wenciker was trying to change the parenting time and modify decision making from joint efforts to making him solely the decision-maker. His motion was based mainly on allegations of endangerment he asserted but didn’t prove in connection with an emergency motion to restrict parenting time — a court already denied that. Notwithstanding, the court agreed for his motion to modify.

Bolen argued the Uniform Dissolution of Marriage Act requires motions to modify be based on facts that have come forward since the prior decree or were unknown to the court at the time of a prior decree, thus the court’s denial of Wenciker’s emergency motion for restriction, barred the court from relying on the same facts which granted the motion to modify. 

The appeals court rejected Bolen’s argument and concluded the allegations of endangerment from the failed emergency motion to restrict parenting time can, if proven, be the basis for a subsequent motion aimed at substantially changing parenting time or modifying decision making. 

The appeals court affirmed the order as to the youngest child, and dismissed concerning the older child. The court concluded the record did support the trial court’s endangerment findings.

Matter of Brockman Disability Trust

The appeals court affirmed a case unanimously involving the Colorado Uniform Trust Code

A division of the Colorado Court of Appeals held that a section of the Colorado Uniform Trust Code is not applicable when a trust terminates by its terms and a Department of Health Care Policy and Financing regulation is not inconsistent federal law.

The case focuses on Jason Brockman, who is the trustee of the Mendy Brockman Disability Trust, which a district court magistrate terminated. The appeals court agreed with the magistrate.

Under federal law, states must consider a beneficiary’s interest in a trust in determining the financial eligibility for Medicaid, with some exceptions. A qualifying trust is not considered when determining financial eligibility of Medicaid. The beneficiary of the trust must also be under the age of 65 and defined as disabled. The qualifying disability trust must also provide the state Medicaid agency receive all amounts in the trust upon the death of the individual up to the equal amount of medical assistance paid on behalf of the individual.

Mendy Brockman was injured severely in a car accident and her husband Jason Brockman petitioned to establish the Mendy Brockman Disability Trust, so Mendy could be financially able to receive Medicaid. It was reviewed and approved.

Mendy Brockman was eventually awarded nearly $32 million in a personal injury case with funds placed in the trust. A couple of years later, the El Paso County Department of Human Services determined that Mendy didn’t qualify for Medicaid because she had resources outside the trust that exceeded Medicaid’s $2,000 resource limit. That department demanded the trust be terminated and be reimbursed more than $422,000 for medical assistance paid on behalf of Mendy Brockman.

Mendy Brockman didn’t appeal the Department of Human Services determination, but sought injunctive relief from the U.S. District Court. The federal court dismissed the case for lack of subject matter jurisdiction saying it was a state matter. Mendy Brockman didn’t appeal the federal case.

Once the federal case was dismissed, the department filed to terminate the trust in El Paso County which the district court agreed to. Jason Brockman appealed, among other things, arguing the federal court’s ruling for lack of subject matter jurisdiction required the district court, along with the appeals court, to give the order preclusive effect. The appeals court rejected that the federal court had a preclusive effect.

“Because the federal court’s analysis regarding the merits is legally void, it is not entitled to any preclusive effect, under either the doctrine of issue preclusion or claim preclusion,” wrote Judge Michael Berger. 

The appeals court rejected Jason Brockman’s claims of error and concluded the district court properly terminated the trust.

The opinion was previously announced as not published pursuant to C.A.R. 35(e) on June 9, but has now been designated for publication.

Nation SLP, LLC v. Bruner and Caetano

A division of the appeals court also unanimously reversed a case involving a jurisdiction’s dismissal of an action on forum non conveniens grounds and whether that has a preclusive effect on similar actions brought to Colorado courts.

Nation SLP, LLC appealed a district court’s order dismissing on res judicata grounds its case against Marc Bruner and Michael Caetano. The appeals court held that the dismissal of an action by a court in another jurisdiction on forum non conveniens grounds doesn’t mean a judgment on merits. Thus it doesn’t have a preclusive effect on similar actions in a trial in Colorado courts. 

The case stems from a dispute between investors and businesses that were created to develop gas and oil properties in Australia. Around 2015, a group of investors had a number of exploration permits to develop properties. They didn’t have the funds to develop them, so they created Nation SLP as a fundraising entity, which led to creating a number of connected businesses to manage the investment capital and exploration permits. 

These businesses were called Paltar Petroleum, Nation Energy (Australia) Pty Ltd (Nation Australia), Paltar Nation Limited Partnership, Nation SLP and Nation Energy, Inc.

According to the complaint, Bruner, who was the chair of Paltar Petroleum and Caetano, the president and CEO of Nation Energy and manager of Nation Australia, manipulated the memberships and the decisions of the board of directors of the businesses associated with the oil and gas projects. The complaint contends the goal was to cut Nation Energy and Nation Australia, and by extension Nation SLP, out of its share of the profits.

In a prior case, John Hislop, the founder, shareholder and former director of Nation Energy and director of Nation Australia, filed a complaint in the U.S. District Court for the District of Colorado against several individuals including Bruner and Caetano. 

The federal district court dismissed the action on forum non conveniens grounds as it looked at the pending litigation in Australia. No appeal was taken for the dismissal and Hislop later voluntarily dismissed the Australian case after an affiliate purchased assets in Paltar’s bankruptcy proceeding.

Going back to the present case, Nation SLP alleged Bruner and Caetano fraudulently concealed their plans to exclude Nation SLP from the earnings contracts. Bruner and Caetano moved to dismiss for multiple reasons including arguing the federal court’s dismissal of the prior action on forum non conveniens grounds barred the current suit under res judicata principles. The district court agreed, leading to Nation SLP appealing, arguing the district court erred by dismissing the case because the federal district court dismissed a variation of the same case on forum non conveniens grounds. The appeals court agreed with Nation SLP. 

“The district court did not base its dismissal of the present case on the statute. Instead, it based its decision on the preclusive effect of the federal court’s dismissal of an earlier case on forum non conveniens grounds,” wrote Judge John Dailey.

The case was reversed and remanded for further proceedings.

Nakauchi v. Cowart,

In this case, the Colorado Court of Appeals unanimously affirmed in part and reversed in part, a case involving the 14th Amendment and child support.

The court ruled that under the 14th Amendment’s due process clause, child support obligors involved in direct pay cases must be given notice and an opportunity to be heard before a forward-looking income withholding order is issued. That leads to the division departing from the 1998 case Ortiz v. Valdez and concludes that a post-judgment obligor could be due additional process after a judgment is executed.

Laurie Nakauchi appealed the trial court’s judgment resolving her civil rights claims against employees of the Jefferson County Child Support Services and employees with the Colorado Department of Human Services for violating her due process rights.

The trial court agreed with Nakauchi that the county violated her constitutional right when, without notice, it issued an income withholding order, or an IWO, to satisfy her future child support obligations. Nakauchi argued the court’s statewide injunction, which requires only concurrent notice in these situations, is not adequate.

As due process would require advance notice with an opportunity to be heard, Nakauchi contends the court didn’t actually remedy this constitutional weakness of the no notice policy that was challenged. The defendants cross-appealed arguing the no notice policy was sound constitutionally, adding the court’s injunction is unwarranted.

The appeals court agreed with Nakauchi and reversed the court’s judgment, finding that due process requires only concurrent notice under these circumstances. It remanded the case back to the trial court to modify its injunction to require advanced notice with the opportunity to challenge an IWO. 

The appeals court, however, affirmed the court’s judgment saying the county cannot be held liable for Nakauchi’s due process violation. The court found the county can’t be found liable under Section 1983, sticking with the trial court finding that the county employees were carrying out state policy. 

On remand, the trial court is asked to modify its injunction to mandate pre-deprivation notice and an opportunity to contest the IWO that is consistent with the opinion, while also ruling on Nakauchi’s request for attorney’s fees.

Leonard v. Interquest

The Court of Appeals reversed a decision unanimously in a case involving the Colorado Open Records Act.

The appeals court ruled that when a public entity has a contractual right to get documents from a third party, that entity has directed that third party to have care and control of those documents. If the documents are used for a public purpose, like they were in this case, the documents are public records which fall within CORA and that public entity needs to bring forward those documents upon a CORA request.

Timothy Leonard and the Deepwater Point Company requested documents from the Interquest North Business Improvement District. When the district didn’t provide all of them, Leonard sued. The district court ordered that some of the documents be produced, but denied the request seeking documents the district didn’t have. Leonard appealed.

The district was formed to finance, operate and maintain public improvements. The district has taxing authority and has used public funds.

This district also has a relationship with developer Nor’wood Development Group and its connected entity InterQuest Marketplace LLC. Both companies are referred to in court documents as the developer. Many of the employees and officers of this developer have positions of authority with the district.

When dealing with improvements in the district, the developer contracts for construction of a project. After the construction is done, the developer gets reimbursement from the district for the cost of those public improvements, while the developer pays for the private improvements.

Under the arrangement, the district has reimbursed about $15 million to the developer. A big part of Leonard’s CORA request involved seeking the production of contracts with those performing construction and consulting work for the installation of public improvements paid for by the district, along with invoices and payments made to Nor’wood and Interquest Marketplace, LLC or any other related entity that was working for the district. The district then claimed it produced all responsive documents.

The district court ordered the district to produce any construction related records that it actually had. The court added if the district didn’t have any construction-related records, even if the records exist in possession of Interquest or other businesses that are connected with the improvements, the court didn’t order the district to get those from the private entities. 

Leonard contends the district court’s decision involving CORA is misconstrued by denying his request for construction contracts and payment records on the grounds the documents weren’t in the district’s possession.

The appeals court agreed citing multiple items including focusing on the critical question of whether the district has a right to access the documents, not whether the district acted on its authority.

“To the contrary, the District’s Resolution accepting the engineer’s ‘opinion in lieu of the documentation requirements outlined in the’ Reimbursement Agreement further proves that the District directed the Developer to keep these documents,” wrote Judge Michael Berger. “The Resolution acknowledged that the District had the authority to receive these documents from the Developer and was foregoing that right.”

The appeals court remanded the case for further proceedings including determining whether any statutory redactions to the records are needed while also determining the amount of additional fees for Leonard.

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