By Letitia Maxfield

The District of Columbia Court of Appeals overturned a 140-year-old precedent earlier this month and joined the majority of jurisdictions in ruling that the contracts of mentally incapacitated persons are merely voidable and not inherently void.[1]

A voidable contract is binding and enforceable unless and until the incapacitated party, or his or her agent, elects to void the contract.[2]

Alternatively, the “void rule” automatically voids a contract if, after the contract is formed, one of the parties is found to have lacked capacity to contract.[3]

This somewhat nuanced legal distinction is best illustrated by an example:

Buyer, who has an undiagnosed mental illness, plans to buy a condominium. On the day the closing documents are to be executed, Buyer is experiencing symptoms related to her mental illness. Before the closing documents are signed, Sellers ask Buyer if she will consent to some additional terms that Buyer had on previous occasions adamantly rejected. Buyer agrees to the additional terms without hesitation. Buyer and Sellers then execute the closing documents. Later that day, Buyer seeks mental health treatment. A few days later, Neighbor, who was out of the country when Sellers listed the condominium for sale, offers to buy the condominium from Buyer for double the price Buyer paid. Buyer receives inpatient treatment for her symptoms and is released several days later. Buyer then sells the condominium.

The “void rule” dictates that if Buyer is found to have lacked the mental capacity to enter into the sales contract, the contract has no legal effect. Neither Buyer nor Sellers can rehabilitate the transaction. Further, the third-party who purchased the property from Buyer in good-faith does not have valid legal title to the property.[4] Sellers would be free to sell the condominium to Neighbor.

However, if the “voidable rule” applies, Buyer has three options: (1) Buyer (upon regaining capacity) or her legal representative can choose to ratify the contract; (2) if Sellers knew Buyer lacked capacity to contract, Buyer can choose to unilaterally void the contract; or (3) if the terms of the contract are unfair, or the contract is otherwise inequitable, Buyer can choose to void the contract.[5] Finally, Buyer’s right to void the contract may be equitably limited by the interests of any third-party, good-faith purchaser.[6]

The “voidable rule” is a well-settled rule[7] followed by the majority of States, including Colorado.[8] Consequently, the D.C. Court’s decision to overturn 140 years of its own precedent is less than groundbreaking for jurisdictions like Colorado, which has applied the “voidable rule” to the contracts of the mentally incapacitated for almost 100 years.

What is noteworthy about the D.C. Court’s opinion is its ardent position that the “void rule” is “based upon an outdated understanding of mental illness and of what it means to ‘protect’ mentally incapacitated persons.”[9]

The Court opines that the historical attitude that incapacity by reason of mental illness is a permanent and unwavering state is no longer tenable.[10] Further, it notes that advances in modern medicine and an evolving understanding of mental illness have led to policies and laws that “focus on protecting the civil and legal rights of people with mental illnesses.”[11]

Ultimately, the Court concludes that the “voidable rule” aligns more closely with modern society and law because it “better balances the competing interests of ensuring the security of transactions and enabling mentally incapacitated persons meaningful participation in society, while still protecting them from unfair imposition.”[12]

By contrast, Colorado courts have routinely taken the position that the primary judicial motivation behind the “voidable rule” as opposed to the “void rule” is its protection of innocent parties and bona fide subsequent purchasers.

Specifically, the Colorado Supreme Court in Davis v. Colorado Kenwoth Corp. relied on the following policy justifications when determining the proper application of the “voidable rule”:

The courts have made reasonably clear the judicial concept which motivates the enforcement of the contracts of an insane person in such situations. They are enforced against the insane person, not because such agreements possess all the legal characteristics of a binding contract, but primarily because the insane party has secured a benefit in the transaction which it would be inequitable to allow him to retain, without first restoring to their original position those who conferred such benefit, or with whom he entered into the agreement. Stated differently, it is grossly unfair to allow a person to repudiate a contract without returning, or offering to return, the benefits which he received thereunder. The rule which conditions a rescission of a contract upon the restoration of the status quo by the person seeking to avoid the obligation on the ground of his insanity in based upon principles of equity, as well as upon public policy and good faith.[13]

Colorado again emphasized the importance of the “voidable rule’s” protection of individuals other than the mentally incapacitated party in its 2008 decision in Delsas ex rel. Delsas v. Centex Equity Co., LLC:

The interest of a good faith purchaser who asserts ownership under a voidable deed will be protected. “[T]he distinction between void and voidable deeds becomes highly important in its consequences to third persons, ‘because nothing can be founded upon a deed that is absolutely void, whereas from those which are only voidable, fair titles may flow.’”[14]

The Restatement (Second) of Contracts recognizes that the “voidable rule” has two conflicting policy justifications: the protection of justifiable expectation and the protection of persons unable to protect themselves against impositions. The Restatement also notes that each policy may prevail to a greater or lesser extent which, consequently, will affect the rule’s judicial application.[15]

In adopting the “voidable rule” as a part of a modern legal trend aimed at better protecting the civil and legal rights of people with mental illness, the D.C. Court has chosen to shift the rule’s equitable focus away from the rights of innocent parties and bona fide purchasers and toward the rights of mentally incapacitated persons.

What, if any, potential affect the D.C. Court’s re-tooling of the “voidable rule” may have on Colorado’s common law applications of the “voidable rule” is at best speculative, but in the author’s opinion, nonetheless worth asking.

Attorney Discipline—Claim Preclusion—Identity of Claims—Same Criminal Episode.

The Attorney Regulation Counsel sought review of the Presiding Disciplinary Judge’s (PDJ) order granting summary judgment in favor of respondent David Jerome Greene. The PDJ found that all of the claims in the complaint for attorney discipline should have been joined and adjudicated along with the claims raised in a previous complaint. Therefore, they were barred according to the doctrine of claim preclusion.

The Supreme Court held that although the doctrine of claim preclusion applies to complaints for attorney discipline, a single claim in that context is analogous to a single “criminal episode” for the purposes of barring sequential prosecutions of the same defendant. Because none of the claims alleged in the instant complaint was identical with any claim that had already been finally adjudicated, according to that standard, the PDJ erred. The Court therefore vacated the order granting summary judgment in favor of Greene and remanded the case for further proceedings on the claims as to which summary judgment was ordered.

Summary and full case available here.

Suppression of Evidence—Consent to Search.

The Supreme Court held that respondent Kim Maurice Fuerst’s decision to silently remain behind a locked door inside his home did not constitute an express refusal of consent to a police search. Therefore, Fuerst’s wife’s free and voluntary consent to the search of the couple’s home was valid as to Fuerst. The trial court’s order granting Fuerst’s motion to suppress evidence obtained during the search was reversed.

Summary and full case available here.

United States v. Taylor

Brown v. McCollum

United States v. Rosas-Gonzalez

Hamlin v. Zavaras

Esparza-Recendez v. Holder

Porter v. Colvin

United States v. Vasquez

No case summaries are provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

The Twentieth Judicial District nominating commission will meet on July 8, 2013, to interview applicants and select nominees for the judgeship. Applicants must have been admitted to practice law in Colorado for five years, and must be qualified electors of the Twentieth Judicial District. Application forms are available on State Judicial’s website or from the ex officio chair of the nominating commission, Justice Brian Boatright.

Applications must be submitted electronically to Justice Boatright no later than 4 p.m. on Wednesday, June 19, 2013. Any person wishing to suggest a candidate for the vacancy must submit a letter to the nominating commission, with a copy to Justice Boatright, no later than 4 p.m. on Wednesday, June 12. Contact information for the members of the nominating commission may be found on State Judicial’s website. For more information about the vacancy, click here.

Officer Shane Prickett of the Florence City Police Department used a taser on Lara Roosevelt-Hennix while Roosevelt-Hennix’s hands were cuffed behind her back and she was seated in the back seat of a police car. Roosevelt-Hennix brought suit pursuant to 42 U.S.C. § 1983, alleging Prickett subjected her to excessive force in violation of the Fourth Amendment. Prickett asserted qualified immunity, which the district court denied, thus giving Pickett the right to this interlocutory appeal.

The district court did not set out which opposing set of facts it relied on in denying Pickett’s motion for summary judgment. Pickett asserted that Roosevelt-Hennix actively resisted an order to place her legs outside the police vehicle so he could “hobble” her; Roosevelt-Hennix asserted that she informed the officers she could not physically move her legs to the requested position due to a back condition. She also asserted that the officers did not attempt to help her move her legs before tasing her. After Pickett forcefully hobbled her, the plaintiff became paralyzed and required surgery the next day.

The Tenth Circuit found that Pickett’s counsel failed in his duty of candor to the court by making factual contentions unsupported by the record. The court also urged district courts to set out which facts they have assumed in deciding summary judgment on qualified immunity grounds. The court drew all reasonable inferences in the plaintiff’s favor in finding “sufficient evidence for a jury to conclude Roosevelt-Hennix informed the officers she was physically unable to comply with their request to move her feet outside the patrol vehicle. It likewise contains sufficient evidence for a jury to conclude the officers never attempted to aid Roosevelt-Hennix in moving her feet before applying the taser.” The denial of summary judgment was affirmed.

People v. Fuerst

In the Matter of Greene

The summaries for these cases are forthcoming, courtesy of The Colorado Lawyer.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.

United States v. Harrison

United States v. Simons

United States v. Whitlow

United States v. Aguilar

United States v. Wilkinson

Watkins v. Rogers

Alexander v. The Attorney General of the State of Colorado

United States v. Bell

Staples v. Chester

United States v. Galvez-Chavez

Chappell v. Jones

United States v. Pantoja-Juarez

Sommers v. Jones

Carranza v. United States

No case summaries are provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

On Tuesday, May 14, 2013, Governor Hickenlooper signed five bills. They are summarized here.

• SB 13-220 - Concerning Adding Emergency Medical Service Providers to the List of Persons Who Must Report Possible Instances of Child Abuse, by Sen. Jeanne Nicholson and Rep. Rhonda Fields. The bill adds all emergency service providers, even volunteers, to the list of mandatory reporters of suspected child abuse and neglect.
• SB 13-231 - Concerning the Creation of the Title IV-E Waiver Demonstration Project, by the Joint Budget Committee. The bill addresses the Social Security Title IV-E waiver program for low-income children, and allocates funds to counties that participate in the waiver demonstration project.
• SB 13-255 - Concerning Child Fatality Review Teams and Increasing the Capacity and Resources, Clarifying the Responsibilities and Processes of State and Local Child Fatality Review Teams in the Departments of Public Health and Environment and Human Services, and Making an Appropriation, by Sens. John Kefalas and Linda Newell and Reps. Jenise May and Jonathan Singer. The bill requires local public health agencies to develop child fatality review teams by January 1, 2015, and to investigate fatalities of children aged 17 and under.
• HB 13-1259 - Concerning Court Orders in Civil Actions for Persons At Risk of Abuse or Neglect and Procedures for Allocating Parental Rights and Responsibilities in the Best Interests of the Child in Cases Involving Child Abuse and Neglect and Domestic Violence; Provisions Relating to Parenting Time Orders; Provisions Relating to Parenting Time Evaluations and Reports; Amending and Relocating Provisions Relating to Civil Protection Orders; and Making an Appropriation, by Rep. Beth McCann and Sen. Linda Newell. The bill changes procedures for allocation of parental rights and responsibilities in actions involving child abuse or domestic violence, and also changes many provisions regarding civil protection orders.
• HB 13-1271 - Concerning Methods to Respond to Initial Contacts to a Child Abuse Reporting Hotline System and Authorizing the State Board of Human Services to Adopt Rules Governing the Hotline System, Providing Consistent Practices in Response to Contacts and to Reports of Known or Suspected Child Abuse or Neglect, and Making an Appropriation, by Reps. Jonathan Singer and Jenise May and Sens. Linda Newell and Jeanne Nicholson. The bill requires the Department of Human Services to develop a steering committee to implement a statewide child abuse reporting hotline. The hotline is expected to be operational and publicized by January 1, 2015.

Governor Hickenlooper also signed 12 bills on Wednesday, May 15, and Thursday, May 16, 2013. Five of the bills are summarized here.

• SB 13-111 - Concerning Abuse of At-Risk Adults and Making an Appropriation, by Sen. Evie Hudak and Reps. Sue Schafer and Amy Stephens. The bill establishes a new class of protection by Adult Protective Services for “at-risk elders.” It also requires mandatory reporters to report suspected abuse of at-risk elders within 24 hours of discovering the abuse.
  
• SB 13-266 - Concerning a Request for Proposals Process to Create a Coordinated Behavioral Health Crisis Response System for Communities Throughout the State, by Sens. Irene Aguilar and Jeanne Nicholson and Reps.  Tracy Kraft-Tharp and Dave Young. The bill directs the Department of Human Services to request proposals for the creation of a behavioral health crisis response system.
• HB 13-1044 - Concerning the Authorization of the Use of Graywater, by Rep. Randy Fischer and Sen. Gail Schwartz. The bill authorizes the Water Quality Control Commission to create standards for the use of graywater.
• HB 13-1138 - Concerning Benefit Corporations and Making an Appropriation, by Rep. Pete Lee and Sen. John Kefalas. The bill authorizes benefit corporations, and establishes requirements for companies to be created as or elect to be treated as public benefit corporations.
• HB 13-1296 - Concerning Civil Commitment Statutes and Creating the Civil Commitment Statute Review Task Force, Redefining Certain Terms Related to Civil Commitment, and Making an Appropriation, by Reps. Beth McCann and Tracy Kraft-Tharp and Sen. Linda Newell. The bill creates a task force to review the civil commitment statutes and prepare recommendations regarding consolidation of civil commitment statutes related to mental health, alcohol, and substance abuse disorders.

It’s not over yet—stay tuned for the latest legislative decisions by Governor Hickenlooper. For a complete list of the bills that have been signed this legislative session, click here.

Kevin Koessel was terminated from his position as a deputy sheriff in Sublette County, Wyoming. In response, Koessel brought a suit in district court against the Sheriff and the County alleging they violated the Americans with Disabilities Act (ADA), breached his employment contract, and violated his substantive and procedural due process rights. The district court granted the defendants’ motion for summary judgment.

Koessel had a stroke in 2001 and was placed on administrative leave while he recovered. He eventually was cleared by his doctor for full-time work with a restriction of no overtime. He worked a desk job, although he was permitted to make traffic stops during his 40-mile commute. After his return to full-time work, some officers complained about Koessel to the Sheriff. One complaint was that he forgot a word during a traffic stop and became flustered. Others complained he lost his temper while on duty. In April 2009, the Sheriff placed Koessel on administrative leave and ordered him to undergo a medical examination by a neurologist, Dr. Moress. Dr. Moress found that “[s]trictly from a neurological standpoint he would be able to work, but there are potential problems to cognitive functioning that may have resulted from the stroke and should be investigated.”

At Moress’s recommendation, Koessel was seen by a psychologist, Dr. Enright, who gave him a standardized test. Koessel’s score was unchanged from when he had taken it pre-stroke. Dr. Enright recommended Koessel be placed in a position without high stress or regular contact with the public because his “‘mild to moderate fatigue, episodes of lightheadedness and episodes of emotional disinhibition (weeping)’ could interfere with the performance of some of his patrol officer duties.”

After returning to a different temporary job for a few weeks, Koessel was again placed on leave and then terminated. The termination letter stated the reason for termination was because Koessel was not medically cleared to perform any available position in the Sheriff’s office. The letter told Koessel he had five days to file a written request for a hearing, which he did not do.

On appeal, Koessel argued that the defendants fired him based on a perceived disability when he was not actually disabled. Despite the fact that this case was filed after the effective date of the ADAAA, the Tenth Circuit used the old definition of perceived as disabled. This ultimately made no difference in outcome because the court decided it need not address whether Koessel was disabled or perceived as disabled because he failed to show he could perform the essential functions of the job. The court also found Koessel failed to identify a vacant position he could have been reassigned to as a reasonable accommodation.

Koessel’s breach of contract claim was based on Wyoming law requiring cause to terminate a deputy sheriff related to ability and fitness to perform his or her duties. The court found that cause was present and he received the required notice and opportunity to be heard. The court rejected Koessel’s procedural due process claim for similar reasons. Finally the court rejected Koessel’s substantive due process claim and affirmed summary judgment on all claims.