2005 Annual SurveyColorado Civil Law

• Victoria V. Johnson, Esq.• Shannon Wells Stevenson, Esq.

– Davis Graham & Stubbs LLP

Articles in the CLE Survey

• Annual Survey of Colorado Law for 2005• 30 Chapters for 2005

– Colorado federal and state case law– Changes to relevant statutes

Scope of Discussion

• Topics we selected:– Environmental Law– Employment Torts– Real Property & Eminent Domain– Construction Law– Constitutional Law– Intellectual Property

Environmental Law

• One case • Federal district court interpreting Colorado

trespass law • Rocky Flats plutonium contamination of

neighboring properties• Plaintiffs argue continuing trespass theory

to avoid the running of the statute of limitations

Background on “Continuing Trespass”

• Seminal case: Hoery v. United States, 64 P.3d 214 (Colo. 2003).

• If ongoing presence of contamination on property, claim does not accrue until the tortious conduct has ceased.– Statute of limitations begins to run when

tortious conduct ceases.

A Permanent Tort Is An Exception to the Rule on Continuing Trespass

• What is a permanent tort?

–Cook v. Rockwell Int’l Corp., 358 F. Supp.2d 1003 (D. Colo. 2004).

• Not “permanent” if abating tort requires unreasonable measures or an unreasonable cost.

Definition of Permanent Tort

• An ongoing property invasion that:

–will continue indefinitely and – should continue because of the social

benefit conferred

Prospective Damages May Be Awarded for Continuing Trespass

and Nuisance

• Must prove liability and that invasion probably will continue indefinitely.– No reason to expect termination of the trespass

at any time in the future.

Verdict in Feb. 2006

• Total of $352 million for 12,000 class members ($29,000 each before attorneys fees).

• $176,850,340 for reduced property values due to trespass

• $176,850,340 for loss of use and enjoyment.

• Plus punitive damages.

Employment Torts

• Employer Liability for Actions of Employees– Negligent Supervision (sex)– Respondeat Superior (guns)

• Wrongful Termination (drugs)

Negligent Supervision

• Plaintiff must prove four elements of negligence, including “duty.”

Duty

• Premised on the employer’s ability to recognize

– an employee’s attributes of character or prior conduct

– that would create an undue risk of harm – to people the employee comes in contact

with during employment.

Employee’s Acts Must Be “So Connected With the Time and Place”

that the Employer Knows the Harm May Result.

• No duty if sex assaults by employee in same location but at different time.

• Keller v. Koca, 111 P.3d 445 (Colo. 2005).

Impact

• The bar for establishing a negligent supervision claim is extremely high.

• Plaintiff must show that employer was aware of the exact harm that plaintiff suffered.

Respondeat Superior(Vicarious Liability)

• Employer may be liable for employee’s torts committed during the course and scope of employment.

Elements

• Plaintiff must establish:

– employer-employee relationship AND– tortious act occurred during course and

scope of employment

No Formal Employer-Employee Relationship Required If

Sufficient Control

• Is a cattle rancher liable for the shooting committed by his helper during a cattle drive?

• Did cattle rancher have actual control or the right to control helper?

• Colo. Compensation Ins. Auth. v. Jones, 2005 WL 1189843 (Colo. App. 2005), cert. denied.

Impact

• Unlike Keller v. Koca, this case expands employer liability for the acts of employees.

• Plaintiffs proceeding under respondeat superior theory may fare better than those pursuing negligent supervision claims.

Wrongful Termination in Violation of Public Policy

• A provision that permits termination of an at-will employment contract is unenforceable if it violates public policy.

Public Policy Exception Does Not Apply to Employee’s Refusal

to Take Drug Test

• Employee claimed that she was terminated in violation of public policy because she stood up for her constitutional right to privacy.

• Slaughter v. John Elway Dodge, 107 P.3d 1165 (Colo. App. 2005).

Impact

• Public policy exception to termination of at-will employment will be narrowly construed.

Real Property and Eminent Domain

• Adverse Possession– The fence case– The cabin case

• Condemnation– “Public use” taking definition is expanded to

economic development.– RTD can pay less for Fastracks takings.

Fence on Property Believed to Mark Boundary Creates Presumption of

Adverse Possession

• Smith buys property and puts fence delineating wrong property line.

• Welsch buys lot next to Smith and asks Smith to remove the fence. Smith removes fence but statutory period already expired.

• Welsch v. Smith, 113 P.3d 1284 (Colo. App. 2005).

After Title By Adverse Possession Only Abandonment Defeats Title

• No abandonment because Smith continued his adverse possession of the property by removing trees.

Permissive Use Is Not An Affirmative Defense

• Evidence of permissive use rebuts a claim of adverse and hostile possession.

A Vendor-Vendee Exception to Adverse Possession Does Not Bar Claim Against Adjoining Parcel

• Vendor-Vendee Exception: Cannot claim adverse possession against property vendee contracted to buy.

• But, can claim adverse possession against adjacent property.

Facts

• A conveys 120 acre property to B under installment purchase contract.

• While making payments, B splits property into three 40 acre parcels and conveys two parcels to C & D.

• C builds cabin that extends on parcel retained by B.

Importance• Vendor-vendee rule precludes C from

adversely possessing the property it was purchasing from B.

• Rule does not preclude C from adversely possessing property not subject to the purchase contract.

• Sleeping Indian Ranch v. West Ridge Group, 119 P.3d 1062 (Colo. 2005).

Condemnations

Condemnations for Economic Gain Can Be A “Public Use”

• Private property may not be taken for public use without just compensation.

• City condemns private property to develop a mixed use “urban village.”

• City of New London v. Kelo, 125 S.Ct. 2655 (2005).

No Proof of Reasonable Certainty Required

• No required showing that the expected public benefits from the taking would occur.

• Created a backlash, which might not have much of an effect in Colorado because of:– Arvada Urban Renewal Auth. v. Columbine

Prof. Plaza, 85 P.3d 1066 (Colo. 2004).

Construction Law

• Economic Loss Rule• Application of CDARA’s statute of

limitations provision

Economic Loss Rule

• Economic loss rule states that a party suffering only economic loss from the breach of a contractual duty may not assert a tort claim for the breach, unless there is an independent duty under tort law.

Subcontractors Have an Independent Duty to Homeowners

• HOA sued subcontractors in tort for problems with construction of homes.

• A.C. Excavating v. Yacht Club II HOA, 114 P.3d 862 (Colo. 2005).

Impact

• Expanded liability for subcontractors.• Gives homeowners longer period of time to

sue.• Subsequent homeowners may sue because

no need for privity of contract.

CDARA Statute of Limitations

• CDARA provides the scheme for bringing claims against construction professionals.

• C.R.S. § 13-80-104(1)(b)(II) provides that in construction defect actions, claims for contribution and indemnity “shall be brought” within ninety days after the claims arise “and not thereafter.”

Contribution Claims Must Be Brought No Later than 90 Days

After Claim Arises• Defendant in a construction defect action had

cross-claimed against another defendant for contribution.

• CLPF-Parkridge One, LP v. Harwell Invs., Inc., 105 P.3d 658 (Colo. 2005).

Impact

• In a construction defect action, all parties can be joined in the action at one time and all cross-claims can be resolved simultaneously with the underlying action.

Amendment of Eminent Domain Statute C.R.S. § 38-1-114

• “Special benefits” from taking for highway project can offset damages (a) caused to remaining property and (b) up to 50% of property taken.

• Now RTD can offset damages for “special benefits” of Fastracks.

Protest Sign On Highway Overpass Not Protected by the

First Amendment • Denver had an unwritten policy prohibiting

all expressive conduct on overpasses that are visible from traffic below.

• Faustin v. City & County of Denver, 423 F.3d 1192 (10th Cir. 2005).

Intellectual Property Law

Technology Producer Can Be Liable for the Infringing Activities of Third Parties Using Its Products

• Twist on the Napster case.• Defendant Grokster’s free software allowed

Internet users to share copyrighted music and videos.

Sony Safe Harbor Not Applicable

• Sony was not liable for third parties who used VCRs to illegally copy movies.

• Difference is “inducement theory.”

Grokster Rule of Inducement

• Liable if use “clear expression or other steps to foster infringement” which

• Goes beyond “mere distribution with knowledge of third party action”

• Evidence shows “purposeful, culpable expression and conduct.”

• Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 125 S.Ct. 2764 (2005).

Conclusion