Justia Contracts Opinion Summaries

Articles Posted in Colorado Supreme Court
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In a dispute between Adams County and the City and County of Denver over the use of a noise-modeling system instead of a noise-monitoring system at Denver International Airport, the Supreme Court of Colorado held that Adams County's breach-of-contract claim, brought in 2018, was barred by the statute of limitations. The court found that the claim accrued no later than 1995, when Adams County became aware of Denver's breach of their contract by using a noise-modeling system. The court concluded that under Colorado law, a breach-of-contract claim accrues at the time the breach is discovered or should have been discovered by the exercise of reasonable diligence. The court dismissed the argument that the claim only accrued when Adams County became aware of the full extent of its damages and had certainty of harm and incentive to sue in 2014. View "City & County of Denver v. Board of County Commissioners" on Justia Law

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This matter arose out of disputes between Antero Resources Corporation (“Antero”) and Airport Land Partners, Ltd (“Airport Land”) and other royalty owners (collectively, “Royalty Owners”) over whether Antero could deduct certain post-production costs from royalty payments under the applicable leases’ royalty clauses. Royalty Owners alleged that Antero has underpaid royalties in violation of their respective lease contracts. Royalty Owners filed individual breach-of-contract suits against Antero for dates between December 2016 and April 2017. Antero moved to dismiss the suits, arguing that the claims should have been brought before the Colorado Oil and Gas Conservation Commission (“COGCC” or “the Commission”) in the first instance. Statutorily, COGCC lacked jurisdiction under section 34-60-118.5(5), C.R.S. (2022), to engage in contract interpretation to resolve a bona fide dispute between parties under an oil and gas lease. But in 2017, without any intervening change to explain the shift, two district courts changed course, asserting that COGCC had responsibility for resolving contract disputes on the theory either that the contract terms were unambiguous or that settled law compelled a certain interpretation. The Colorado Supreme Court returned to the longstanding statutory mandate that COGCC lacked jurisdiction to resolve bona fide disputes of contract interpretation and held that such a dispute exists where the parties disagree in good faith about the meaning or application of a relevant contract term. View "Antero Resources v. Airport Land Partners" on Justia Law

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Between 2004 and 2008, respondents HEI Resources, Inc. (“HEI”), and the Heartland Development Corporation (“HEDC”), both corporations whose principal place of business is Colorado, formed, capitalized, and operated eight separate joint ventures related to the exploration and drilling of oil and gas wells. They solicited investors for what they called Los Ojuelos Joint Ventures by cold calling thousands of individuals from all over the country. Those who joined the ventures became parties to an agreement organized as a general partnership under the Texas Revised Partnership Act. In 2009, the Securities Commissioner for the State of Colorado (“the Commissioner”) initiated this enforcement action, alleging that respondents had violated the Colorado Securities Act (CSA) by, among other things, offering and selling unregistered securities to investors nationwide through the use of unlicensed sales representatives and in the guise of general partnerships. The Commissioner alleged that HEDC and HEI used the general partnership form deliberately in order to avoid regulation. Each of the Commissioner’s claims required that the Commissioner prove that the general partnerships were securities, so the trial was bifurcated to permit resolution of that threshold question. THe Colorado Supreme Court granted review in this matter to determine how courts should evaluate whether an interest in a “general partnership” is an “investment contract” under the CSA. The Court concluded that when faced with an assertion that an interest in a general partnership is an investment contract and thus within the CSA’s definition of a “security,” the plaintiff bears the burden of proving this claim by a preponderance of the evidence. No presumption beyond that burden applies. Accordingly, the Court reversed the court of appeals’ judgment on the question of whether courts should apply a “strong presumption,” and the Court remanded the case to the trial court for further findings. View "Chan v. HEI Resources, Inc." on Justia Law

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Petitioner Lisa French went to respondents Centura Health Corporation and Catholic Health Initiatives Colorado d/b/a St. Anthony North Health Campus (collectively, “Centura”) for surgery. Upon reviewing French’s insurance information prior to surgery, Centura advised her that she would personally be responsible for $1,336.90 of the amounts to be billed. After the surgery, however, Centura determined that it had misread French’s insurance card and that she was, in fact, an out-of-network patient. Centura then billed French $229,112.13 and ultimately sued her to collect. The Colorado Supreme Court granted certiorari to review: (1) whether here, Centura’s database used by listing rates for specific medical services and supplies, was incorporated by reference into hospital services agreements (“HSAs”) that French had signed; and (2) if so, whether the price term in the HSAs was sufficiently unambiguous to render the HSAs enforceable. The Court concluded that because French neither had knowledge of nor assented to the chargemaster, which was not referenced in the HSA or disclosed to her, the chargemaster was not incorporated by reference into the HSA. Accordingly, the HSA left its price term open, and therefore, the jury appropriately determined that term. The Court reverse the judgment of the division below, and did not decide whether the price that French was to pay was unambiguous, even if the HSA incorporated the chargemaster. View "French v. Centura Health" on Justia Law

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Plaintiff Canuto Martinez successfully sued a car dealership, Defendant Larry H. Miller Chrysler Dodge Jeep Ram 104th (“LHM”), for violating section 6-1-708(1)(a), C.R.S. (2021), of the Colorado Consumer Protection Act (“CCPA”). The issue this case presented for the Colorado Supreme Court's review was whether the judgment was final for purposes of appeal when the district court determined that Martinez, as the prevailing plaintiff, was entitled to an award of attorney fees under the CCPA, but the court had not yet determined the amount of those fees. The Supreme Court resolved the tension between Baldwin v. Bright Mortgage Co., 757 P.2d 1072, 1074 (Colo. 1988) and Ferrell v. Glenwood Brokers, Ltd., 848 P.2d 936, 940–42 (Colo. 1993) by reaffirming the bright-line rule established in Baldwin: a judgment on the merits is final for purposes of appeal notwithstanding an unresolved issue of attorney fees. To the extent the Court's opinion in Ferrell deviated from Baldwin, "its approach lacks justification and generates uncertainty, thus undermining the purpose of Baldwin’s bright-line rule." The Court concluded that both litigants and courts were best served by the bright-line rule adopted in Baldwin. The Court therefore overruled Ferrell and the cases that followed it to the extent those cases deviated from Baldwin’s rule concerning the finality of a judgment for purposes of appeal. Applying the Baldwin rule here, the Court affirmed the judgment of the court of appeals dismissing LHM’s appeal in part as untimely, though under different reasoning. View "LHM Corp v. Martinez" on Justia Law

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Respondent Karl Baker and his business partner sought investors for a company called Aviara Capital Partners, LLC. According to promotional materials that Baker provided to potential investors, investment money would be used to purchase distressed banks that were being shut down and were under the control of the Federal Deposit Insurance Corporation (“FDIC”). In conjunction with the purchase of the distressed banks, Aviara would operate a “distressed assets fund” to purchase the assets of such banks. Aviara would then acquire additional banks under a business plan by which Aviara and its investors would collectively own eighty percent of the banks, while bank management, directors, advisors, and employees would own the other twenty percent. In the course of soliciting potential investors, Baker spoke, independently, with the purported victims in this case, Donna and Lyal Taylor, Dr. Alan Ng, and Stanley Douglas. The alleged victims’ investments did not work out as they claim to have been promised, and a grand jury subsequently indicted Baker on, among other charges, four counts of securities fraud, and three counts of theft. The issue this case presented for the Colorado Supreme Court’s review centered on whether the admission of a deputy securities commissioner’s expert testimony that Baker’s misstatements and omissions were material was reversible error. Because: (1) in presenting such opinions, the deputy commissioner also opined that certain disputed facts were true; (2) such testimony involved weighing the evidence and making credibility determinations, which were matters solely within the jury’s province; and (3) the error in admitting such testimony was not harmless, the Supreme Court agreed with the court of appeals that the admission of this testimony was reversible error. View "Colorado v. Baker" on Justia Law

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Shaun Lawrence met D.B. at a casino, where she worked as a cashier. During their conversations, Lawrence told D.B. that he ran several successful businesses and that he was looking for people to work for him and for investors to help grow a private investigations business called Advert Investigations (“Advert”). The parties eventually signed two “Investment and Business Agreement,” which provided that D.B. would invest cash money in exchange for an ownership interest in Advert. At no time prior to D.B.’s investments did Lawrence tell her that he would use the money to pay for personal and gambling expenses. Nor did he ever advise her that he had outstanding civil judgments against him totaling over $100,000. D.B. filed a complaint with the State Division of Securities, which subsequently referred the case to the district attorney’s office for prosecution. The State then charged Lawrence with two counts of securities fraud, and one count of theft. The jury ultimately convicted Lawrence as charged, and Lawrence appealed. In his appeal, he contended, among other things, that (1) the evidence did not establish that the transaction at issue involved a security (namely, an investment contract); (2) Colorado Securities Commissioner Rome’s expert testimony usurped the jury’s role as factfinder because the Commissioner was improperly permitted to opine on the ultimate factual issues in this case; and (3) Lawrence was entitled to the ameliorative benefit of the amendments to the theft statute and, as a result, he could only stand convicted of a class 1 misdemeanor because that was the lowest degree of theft that the jury’s verdict supported. The Colorado Supreme Court concurred with the appellate court’s determination that: (1) the agreement at issue here was an investment contract, and therefore a security; (2) Commissioner’s testimony was admissible, and any error by the trial court in admitting that testimony was harmless; and (3) the trial court erred in instructing the jury as to the value of the property taken. View "Lawrence v. Colorado" on Justia Law

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The petitioner in this appeal was attempting to enforce an oral agreement she entered into with her husband to exclude the couple’s retirement accounts and inheritances from being considered “marital property,” which was subject to equitable division in a dissolution proceeding. The district court found that an agreement existed, and that ruling wasn’t appealed. The issue this appeal presented for the Colorado Supreme Court's review was whether the agreement was valid despite being oral, and, alternatively, whether the parties’ partial performance could otherwise render the oral agreement valid. There were four statutory exceptions to the rule that property acquired during a marriage was generally considered "marital property." The only exception implicated here was property excluded from the marital estate by a "valid agreement" of the parties. Specifically, the issue was whether the parties' agreement to exclude their retirement accounts and inheritances from the marital estate had to be in writing and signed in order to be a "valid agreement." The Supreme Court held the parties' 2007 oral agreement was not a valid agreement because, at the time, Colorado statutory law required that all agreements between spouses be in writing and signed by both parties. Furthermore, the Court held the court of appeals correctly determined the parties’ conduct after entering into the oral agreement could not be treated as partial performance that satisfied the writing and signature requirements. Accordingly, the court of appeals’ judgment was affirmed and the case remanded with instructions to return the case to the district court for further proceedings. View "In re Marriage of Zander" on Justia Law

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The United States District Court for the District of Colorado certified a question of law to the Colorado Supreme Court. The question centered on proof of equitable estoppel. In 2017, a group of current and former exotic dancers sued the owners of clubs where they performed and the club owners’ corporate parent companies alleging the defendants acted in concert to wrongfully deprive the dancers of basic protections provided by law to employees. The plaintiffs contended they were misclassified as nonemployee “independent contractors” or “lessees” pursuant to “Entertainment Lease” agreements that identified the club-owner defendants as “landlords” rather than employers. According to the plaintiffs’ pleadings, the club-owner and corporate-parent defendants were jointly and severally liable for denying the dancers earned minimum wages and overtime pay, confiscating or otherwise misallocating their gratuities, charging them fees to work, and subjecting them to onerous fines. The club-owner defendants have successfully compelled arbitration of the plaintiffs’ claims based on the arbitration clause included in the agreements the dancers signed with the club owners. The corporate-parent defendants sought to do the same, but because they were not parties to the agreements or to any other written contract with the dancers, they had to find a different hook to compel the dancers into arbitration: that the dancers should be equitably estopped from litigating their claims against one set of defendants because they were in compelled arbitration of the same claims against the other set of defendants. The Colorado Supreme Court held Colorado’s law of equitable estoppel applied in the same manner when a dispute involves an arbitration agreement as it did in other contexts. Thus, a nonsignatory to an arbitration agreement could only assert equitable estoppel against a signatory in an effort to compel arbitration if the nonsignatory can demonstrate each of the elements of equitable estoppel, including detrimental reliance. View "Santich v. VCG Holding Corp." on Justia Law

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A condominium association, Dakota Station II Condominium, filed two claims with its insurer, Owners Insurance Company, for weather damage. The parties couldn’t agree on the money owed, so Dakota invoked the appraisal provision of its insurance policy. The parties each selected an appraiser, putting the rest of the provision’s terms into motion. Ultimately, the appraisers submitted conflicting value estimates to an umpire, and the umpire issued a final award, accepting some estimates from each appraiser. Dakota’s appraiser signed onto the award, and Owners paid Dakota. Owners later moved to vacate the award, arguing that Dakota’s appraiser was not “impartial” as required by the insurance policy’s appraisal provision and that she failed to disclose material facts. The trial court disagreed and “dismissed” the motion to vacate. A division of the court of appeals affirmed. In its review, the Colorado Supreme Court interpreted the policy’s impartiality requirement and determined whether a contingent-cap fee agreement between Dakota and its appraiser rendered the appraiser partial as a matter of law. The Court concluded the plain language of the policy required appraisers to be unbiased, disinterested, and unswayed by personal interest, and the contingent-cap fee agreement didn’t render Dakota’s appraiser partial as a matter of law. Accordingly, the Court affirmed the judgment of the court of appeals with respect to the contingent-cap fee agreement, reversed with respect to the impartiality requirement, and remanded for further proceedings. View "Owners Ins. v. Dakota Station II Condo. Ass'n" on Justia Law