torts: 2011 annual survey of colorado law

8/2/2019 Torts: 2011 Annual Survey of Colorado Law

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ANNUAL SURVEYof Colorado Law

2011Torts

John W. Grund, Esq.

Grund Dagner, P.C.

Denver

CONTINUING LEGAL EDUCATION IN COLORADO, INC.COLORADO BAR ASSOCIATION DENVER BAR ASSOCIATION


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INTRODUCTION

What a difference a year makes! Last year, theIntroduction to this chapter characterized the develop-ments in tort law in 2010 as relatively unexciting,except as it concerned what was passed by the legisla-ture. This year, the General Assembly did little to piquethe interests of tort litigators, whereas the Coloradoappellate courts issued opinions covering a wide range oftopics that should be compelled reading for all of us. TheColorado Supreme Court published noteworthy deci-sions interpreting the Dram Shop Statute (Build It &They Will Drink, Inc. v. Strauch) , the ColoradoGovernmental Immunity Act (Henisse v. First Transit,

Inc.), the Civil Theft Statute (Steward Software Co. v.Kopcho), and the Punitive Damages Statute (Averyt v.Wal-Mart Stores, Inc.), as well as several other note-worthy opinions addressing tort and damages issuesthat practitioners in the fields face on a regular basis:Kendrick v. Pippin (res ipsa loquitur doctrine and sud-den-emergency instruction), Day v. Johnson (medical

malpractice), Allen v. Steele (legal malpractice and neg-ligent misrepresentation), Qwest Services Corp. v.

Blood (constitutionality of significant punitive-dam-ages award) and that is not an all-inclusive list. OnOctober 31, 2011, the court also issued several opinions each of which involved tort or insurance claims that addressed the burden of proof as well as some ele-mental issues in the certification of class actions. TheColorado Court of Appeals output likewise produced abroad spectrum of cases of interest that are summarizedbelow, several of which concerned matters of firstimpression or at least had a novel twist to them, includ-ing questions about the proof necessary for but-for cau-sation in a transactional-malpractice case; whether a

parents exculpatory release waived her childs recre-ational-liability claim; the independent nature of a claim for negligent infliction of emotional distress; and thetrade-secret status of a proprietary computer database,to list a few. All and all, it was the year that had some-thing that should interest almost any civil litigator 2012 will be hard-pressed to match it.

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JOHN W. GRUND, ESQ., is managing shareholder at Grund Dagner, P.C., in Denver. He is licensed in state andfederal court in Colorado and Wyoming, the Fifth, Sixth, and Tenth Circuit Courts of Appeal, and practices through-

out the Rocky Mountain region, specializing in the defense of complex and multidistrict litigation and emphasizingproduct liability, recreation/amusement liability, common-carrier and general aviation law, hospital liability, profes-sional negligence, and insurance law. Mr. Grund is an appointed member of the Colorado Supreme Court Committeeon Civil Pattern Jury Instructions (since 1987) and chairs the subcommittee responsible for Product Liability,Professional Malpractice, and Insurance Bad Faith. He is co-author of (and annually supplements) the four-volumePersonal Injury Practice Torts and Insurance (West Group 2d ed. 2000), contributed three chapters to ColoradoCourtroom Handbook Civil Trials (CLE in Colo., Inc. 2012), and is a frequent presenter at seminars concerning trialpractice, tort liability, and risk-management issues for lawyers as well as representatives from all sectors of the amuse-ment and recreational industry. Mr. Grund has been peer-selected each year since 2007 for the Colorado SuperLawyersin the classification of Personal Injury Defense: General, and for The Best Lawyers in America, in the Insurance LawSpecialty.

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John W. Grund, Esq.Grund Dagner, P.C.

Denver


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CASE LAW

Statutes of Limitations

Accrual of Claims Between Counsel. In twodifferent cases, the Colorado Court of Appeals

addressed issues concerning accruals of claims forstatute of limitations purposes where one attorneysued another. InHannon Law Firm, LLC v. Melat, Pressman & Higbie, LLP, 2011 WL 724742 (Colo.App. March 3, 2011), cert. granted, 2011 WL 3855738(Colo. Aug. 29, 2011) (also at 2011 Colo. LEXIS 685),the plaintiff and defendants were law firms whohad contingent-fee agreements with certain clientsin a federal court tort action against a mine owner.Together, they entered into a fee-sharing agree-ment that did not state how the compensationwould be handled if one law firm withdrew. Theplaintiff eventually did withdraw, and some con-siderable period later when the case settled, theclients paid the defendant law firms their fees andcosts as required by the contingent-fee agreement,and one defendant paid the plaintiff for costs ithad incurred before it withdrew, but not for anyservices that the law firm had rendered. The plain-tiff sued less than three years after being notifiedof the settlement, asserting a claim for quantummeruit, and the district court dismissed the case onstatute-of-limitations grounds. The court of appeals

agreed with the plaintiff that its quantum-meruitclaim did not accrue until recovery actuallyoccurred in the underlying case. The court ofappeals disagreed with the defendants contentionthat the claim accrued when the plaintiff last pro-vided legal services to the clients, nearly nine years before the instant suit was filed, because a claimfor quantum meruit accrues when a person discov-ers or reasonably should discover that all elementsof the claim are present, which means when aplaintiff has conferred a benefit upon the defen-dant and the retention of the benefit becomes

unjust. Id. at *2. The accrual standard in C.R.S. 13-80-108(6), concerning breach of implied con-tract, does not apply, because quantum meruitclaims require no proof of any agreement orbreach. Hannon Law Firm, 2011 WL 724742 at *4.Because a claim for attorney fees under a contin-gent-fee contract may accrue only when recoveryactually occurs in the underlying litigation, and awithdrawing attorneys quantum-meruit claim

against former co-counsel cannot accrue earlierthan when that recovery in the underlying actionhappens, that is the earliest time when it could besaid to be unjust for the settling counsel to haveretained the benefit of the withdrawing attorneyswork. Id. at *5. This is one of the issues that the

supreme court has agreed to review on certiorari.See Melat, Pressman & Higbie, LLP v. Hannon LawFirm, LLC, 2011 WL 3855738 (Colo. Aug. 29, 2011).

Another division of the court of appeals fol-lowed the holding in Hannon when one attorneysued another attorney and an investment-fundrecovery expert for unjust enrichment in Steren-buch v. Goss, 2011 WL 4837519 (Colo. App. Oct. 13,2011) (also at 2011 Colo. App. LEXIS 1637). In thatcase, the plaintiff sued for tortious interferencewith contracts and civil conspiracy, and also forunjust enrichment, claiming that the defendantshad stolen clients that the plaintiff represented ona contingency basis in an underlying case alleginga fraudulent investment scheme, which ultimatelyresulted in a consent judgment and distribution offunds to the plaintiffs former clients, among oth-ers. Because a claim for unjust enrichment is equi-table and based on principles that are associatedwith restitution, the court relied on Hannon, andheld that, by analogy, any retention by [defen-dants] for the benefits of [plaintiffs] legal servicescould become unjust only upon a clients recovery

in a contingency fee case. Id. at *9. Thus, theplaintiffs cause of action for unjust enrichmentaccrued only when the defendants obtainedrecovery of their contingency from the distribu-tion following the consent judgment. A differentresult followed, however, as it concerned the tor-tious interference claim. Under the applicablestatute holding that a tort cause of action accrueswhen both the injury and its loss are known orshould have been known by the exercise of rea-sonable diligence, C.R.S. 13-80-108(1), that claimaccrued when the plaintiff knew or should have

known that the defendant attorney had improper-ly induced his clients to terminate their contractswith him, Sterenbuch, 2011 WL 4837519 at *4, and itwas not necessary that the plaintiff know the pre-cise extent of his damages, as opposed to knowingthat he had been injured.

Three-Year Statute of Limitations BarredClaim for Misappropriation of Trade Secrets. TheColorado Supreme Court reviewed and affirmed a

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court of appeals decision in a case of first impres-sion in Colorado, concerning the statute of limita-tions for misappropriation of trade secrets. Gognatv. Ellsworth, 259 P.3d 497 (Colo. 2011), affg224 P.3d1039 (Colo. App. 2009). An action for misappropri-ation of a trade secret must be brought within

three years after the mis-appropriation is discov-ered, or by the exerciseof reasonable diligenceshould have been discov-ered, and importantly,under this provision, acontinuing misappropri-ation constitutes a singleclaim. C.R.S. 7-74-107.In the case, the plaintiffasserted that several defendants were guilty ofmisappropriating a method he claimed to havedeveloped for identifying and extracting oil andnatural-gas reserves, and that he had providedthis information to at least one of the defendantsin the late 1990s. Unfortunately for the plaintiff,the defendants who knew of this informationallegedly failed to pay the plaintiff sufficiently and thus, misappropriated his trade secrets between 1997 and 2001, yet the plaintiff did not filehis complaint until late 2005. The plaintiff, howev-er, argued that his claim did not accrue until he

learned of the defendants inappropriate use ofthis information in a second location, within threeyears of his filing date. Both courts discussed the broad statutory definition of misappropriationand trade secret in C.R.S. 7-74-102(2) and (4),as well as the fact that any continuing misappro-priation is considered a single claim. Nonetheless,the court of appeals broader ruling, essentiallyholding that the statute fixes a single accrual datefor multiple misappropriations of either a singletrade secret, or multiple, related trade secrets, seeGognat, 259 P.3d at 500, was not endorsed by the

higher court. While acknowledging that the lan-guage in the three statutory provisions evidencesa design, or legislative intent, to discourage the dif-ferentiation of various acts of misappropriationand the proliferation of misappropriation claims,id. at 501, the supreme court was unwilling toagree that 7-74-107 necessarily would apply toseparate and distinct misappropriations of differ-ent trade secrets. In the higher courts view, [t]he

statute fixes an accrual date for an action for mis-appropriation of a trade secret and its subsequentreference to a continuing misappropriation isclearly limited to the continuing misappropriationof that same trade secret. Id. at 503 (emphasis inoriginal). Nonetheless, under the facts of the case

at issue, the fact thatthere were different loca-tions involved did notcreate a genuine disputeof fact, and there wereno real significant differ-ences in the designs,processes, procedures,formulas, or improve-ments that were secretin the two areas, and the

trial courts grant of summary judgment based onthe statute of limitations was affirmed. Id. at 504.

Statute of Limitations Applies Equally toLoss-of-Consortium Claimant. As a derivativeclaim, an action for loss of consortium is subject tothe same defenses as the underlying claim, andthat includes a defense of the statute of limitations.A husbands claim for loss of consortium as a resultof injuries his wife suffered in an auto accidentwas subject to the same three-year statute of limi-tations, see C.R.S. 13-80-101(1)(m)(I), that wouldapply to his injured wife. Draper v. DeFrenchi-

Gordineer, 2011 WL 3851738 (Colo. App. Sept. 1,2011) (also at 2011 Colo. App. LEXIS 1435).However, because loss-of-consortium claims areseparate and do not have to be pursued in connec-tion with the injured partys claim, circumstancesthat might toll the statute of limitations for theinjured party do not necessarily toll the statute oflimitations for a spouse who seeks to recover forloss of consortium. Id.

For Purposes of Tolling Statute of Limitations,Ignorance and Reliance Elements of FraudulentConcealment May Be Established With Circum-

stantial Evidence Common to a Class. In BP America Production Co. v. Patterson, 263 P.3d 103(Colo. 2011), the supreme court noted that to toll astatute of limitations based on a defendants fraud-ulent concealment, each plaintiff must prove theelements of that claim. Its prior case law had rec-ognized that the ignorance and reliance elementscould be established with circumstantial evidence,so, the court held, it followed that those elements

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Circumstances that might tollthe statute of limitations for the

injured party do not necessarilytoll the statute of limitationsfor a spouse who seeks to

recover for loss of consortium.


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could be established with circumstantial evidencethat was common to a class. Id. at 110. For purpos-es of class certification, however, it is mandatorythat a trial court rigorously analyze the evidencepresented to determine whether there is evidencecommon to the class to support such an inference,

id at 111, and where the record reflected that thecourt did so, the supreme court upheld its findingof class certification.

Statute of Limitations is Tolled DuringPendency of Class Action. Where a class action iscommenced, that suspends the applicable statuteof limitations as to all asserted members of theclass who would have been parties had the suit been permitted to continue as a class action.Jackson v. American Family Mutual Insurance Co.,258 P.3d 328, 333 (Colo. App. 2011) (quoting from Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554(1974)). In that situation, the statute of limitationsremains tolled for all members of a putative classuntil class certification is denied. Where successiveclass actions are filed, however, that does not per-petually toll the running of the statute of limita-tions, and where a partys claim was untimelyfiled because it was not considered tolled duringthe pendency of a class action where the subjectmatter was not and could not have been adjudicat-ed, the claim in question was barred by the appli-cable statute of limitations. Id. at 334.

Negligence: Standard of Care and Proof

Plaintiff Was Not Entitled to Instruction onRes Ipsa Loquitur. In Kendrick v. Pippin, 252 P.3d1052 (Colo. 2011), the Colorado Supreme Courtaffirmed the court of appeals ruling, see Kendrick v.Pippin, 222 P.3d 380 (Colo. App. 2009), that a plain-tiff who was injured in an automobile accident insnowy weather failed to satisfy the elements nec-essary to implicate the doctrine of res ipsa loquitur.The plaintiff argued that she was entitled to a pre-

sumption that when the defendants car slid intoher stopped vehicle, the defendant was negligent.The trial court and court of appeals rejected thatargument, and the supreme court affirmed. Thecourt conducted a fairly thorough review of thedoctrine, noting that the party seeking to invoke itmust establish that it is more probable than notthat: (1) the event is of the kind that ordinarilydoes not occur in the absence of negligence; (2)

responsible causes other than the defendants neg-ligence are sufficiently eliminated; and (3) the pre-sumed negligence is within the scope of the defen-dants duty to the plaintiff. Kendrick, 252 P.3d at1061. While noting that the doctrine has beenapplied in auto-accident cases where defendants

drove on the wrong side of the road or struckanother vehicle in the rear, see CJI-Civ. 11:10, 11:12(CLE ed. 2011), it observed that in most jurisdic-tions, the mere fact that a vehicle skids or slideson a slippery highway does not in itself constituteevidence of negligence. Id. Ultimately, the courtdetermined that the plaintiff failed to establish, bya preponderance of the evidence, that the accidentthat occurred in this case [was] of the kind thatordinarily does not occur in the absence of negli-gence, thus failing to satisfy the second element,and it did not address the remaining elements ofthe doctrine. Id. at 1062.

Evidence of Building Code Violation Did NotCreate Presumption that Facility Knew ofDangerous Condition. A case that reached thecourt of appeals for a second time did not turn outfavorably for the plaintiff in Lombard v. ColoradoOutdoor Education Center, Inc., 2011 WL 3616755(Colo. App. Aug. 18, 2011) (also at 2011 Colo. App.LEXIS 1401). The plaintiff was a schoolteacher whowas injured at a conference facility while attend-ing an overnight training session, when she fell

while descending a ladder in her unit. When sum-mary judgment had been granted prior to her ear-lier appeals, the supreme court had ultimatelyruled in the plaintiffs favor when discussing therelationship between the Premises Liability Act,C.R.S. 13-21-115, and the common-law doctrineof negligence per se. The court ruled that thestatute was the exclusive remedy for a party seek-ing recovery for premises liability, and although anegligence per se claim may no longer be broughtin that circumstance, proof of the landownersviolation of the statute intended for the plaintiffs

protection, is evidence of the landowners unrea-sonable failure to exercise reasonable care, forpurposes of liability under the Premises LiabilityAct. Lombard v. Colorado Outdoor Educ. Ctr., 187 P.3d565, 574 (Colo. 2008) (quoting from C.R.S. 13-21-115 (3)(c)(I)). Following remand and trial to a jury,the plaintiff claimed error when the trial courtrefused to instruct the jury that if it found that thedefendants had violated the building code provi-

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sion in question, that finding created a conclusivepresumption that the ladder in question was adangerous condition and that the defendant failedto take steps to guard against it. See Lombard, 2001WL 3616755 at *4. Based on the supreme courts2008 holding, the court of appeals rejected that

argument, holding that any conclusive-presump-tion instruction would be contrary to the highercourts holding and rationale, which was that vio-lation of any state or ordinance was merely to beconsidered as evidence of a defendants failure toexercise reasonable care. Id. The jurys finding infavor of the defendants was affirmed.

Negligence: Causation

Common-Law Negligence Claim RequiresProof of But-For Causation. Two Colorado Courtof Appeals cases emphasized that the causationelement of a negligence claim requires proof thatthe claimed injury would not have occurred butfor the defendants negligent conduct. Ludlow v.Gibbons, 2011 WL 5436481 (Colo. App. Nov. 10,2011) (also at 2011 Colo. App. LEXIS 1820);Reigel v.SavaSeniorCare, LLC, 2011 WL 6091709 (Colo. App.Dec. 8, 2011) (also at 2011 Colo. App. LEXIS 2042).

Ludlow involved claims by sellers alleging pro-fessional negligence against both lawyers and bro-kers, and also asserting claims for negligent super-

vision and breach of fiduciary duty. Regarding thenegligence claims, the court observed that the cau-sation element has two aspects, causation in factand legal causation, with the former requiringproof that, but for the negligence, there wouldhave been no damages. In cases involving profes-sional negligence, this has been construed tomean that the plaintiff must prove that but for theprofessional negligence, the plaintiff would haveachieved a better result. Id. at *4. Because a partyis not required to prove causation with certainty(i.e., it may do so by circumstantial evidence), and

because the sellers presented more than specula-tion to support their causation theory that had theybeen appropriately informed by the brokers, theywould not have suffered injury, the court reversedsummary judgment in favor of the defendants.

In Reigel, the defendant appealed from a ver-dict in favor of a woman whose husband died as aresult of the claimed negligence of employees of anursing facility where he had been sent for reha-

bilitation following a surgical procedure. The dis-trict court rejected the defendants tenderedinstruction on but-for causation and instructed the jury that if it found that the defendants negli-gence increased the risk of the decedents deathor deprived him of some significant chance to

avoid death, it could find that the defendants neg-ligence was the cause of the death. Reigel, 2011 WL6091709 at *7. The court discussed the elementalrequirement of proving proximate cause, citedLudlow as it concerned the aspects of factual andlegal causation, and then thoroughly reviewed thecase law, including a recent Tenth Circuit decisionthat had predicted that the Colorado SupremeCourt would not endorse the increased-risk stan-dard addressed in a 1987 court of appeals case. SeeJune v. Union Carbide Corp., 577 F.3d 1234 (10th Cir.2009) (discussingSharp v. Kaiser Found. Health Planof Colo., 710 P.2d 1153 (Colo. App. 1985), affd, 741P.2d 714 (Colo. 1987)). InJune, the Tenth Circuit hadnoted that the Colorado Supreme Court routinelyfollowed the but-for causation test, and that thelower courts opinion in Sharp was inconsistent notonly with that test, but in its out-of-contextreliance on various sections of the Restatement(Second) of Torts. The Reigel court concluded:

As both a logical and practical matter, thefact that a defendants conduct increased

the victims risk of injury does not neces-sarily mean that the defendants conductwas a but-for cause of the injury or a nec-essary component of a causal set of eventsthat would have caused the injury. Putanother way, the victims injury may wellhave occurred regardless of whether thedefendants conduct increased the riskthat it would occur.

Reigel, 2011 WL 6091709 at *8. Holding that the dis-trict court erred in instructing the jury, the court of

appeals reversed the judgment against the defen-dant. Nonetheless, it rejected that defendantsclaim that judgment necessarily had to be enteredin its favor, because there was evidence in therecord from which reasonable jurors could con-clude that the defendants negligence was a but-forcause of the decedents death, so the defendantwas not necessarily entitled to a directed verdicton the negligence claim, and a retrial was ordered.

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torts: 2011 annual survey of colorado law

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