In January 2003, the Securities and Exchange Commission (SEC) filed a civil suit against ClearOne Communications (ClearOne), as well as the company’s CEO, Frances Flood, and CFO, Susie Strohm. The SEC alleged that Ms. Flood and her codefendants had employed a scheme to defraud, falsely filed with the SEC, committed securities fraud, kept false records, and aided and abetted false bookkeeping. The law firm of Snow Christensen & Martineau (SCM) was retained to represent Ms. Flood.  The parties were at all times represented by separate counsel. During the SEC proceedings, Ms. Flood, Ms. Strohm, and ClearOne entered into a Joint Defense Privilege and Confidentiality Agreement (Joint Defense Agreement), which enabled them to share documents, litigation strategies, and other information without waiving attorney-client privilege. Ultimately, Ms. Flood settled with the SEC.

Around the same time, Ms. Flood executed an Employment Separation and Indemnification Agreement (Separation Agreement) with ClearOne. Under the Separation Agreement, Ms. Flood agreed to resign as CEO and surrender her stock options in exchange for $350,000 and ClearOne’s promise to indemnify her “for any liability and all reasonable attorneys’ fees and costs incurred by her in connection with the SEC Action or any Related Proceedings.”

Subsequently, the government brought criminal charges against Ms. Flood and Ms. Strohm. SCM continued to represent Ms. Flood, sending invoices for its attorney’s fees to ClearOne. Initially, ClearOne paid SCM’s invoices as they became due. However, in October 2007, ClearOne requested detailed information pertaining to Ms. Flood’s representation. SCM had learned that ClearOne was sharing materials prepared under the Joint Defense Agreement with the government. Accordingly, SCM refused ClearOne’s request, explaining that it would not “disclose work product and attorney-client information.”

In April 2008, ClearOne ceased paying Ms. Flood’s attorney’s fees. Ms. Flood, represented by SCM, brought suit against ClearOne to compel payment. SCM continued to represent Ms. Flood in the criminal proceedings.

In January 2009, the court granted a preliminary injunction against ClearOne, ordering ClearOne to pay Ms. Flood’s attorney’s fees. ClearOne initially complied, but stopped making payments. SCM filed a motion to compel payment. Shortly before the criminal trial concluded, ClearOne made another payment. The jury found Ms. Flood guilty on all counts.

Ms. Flood then filed her § 2255 motion, arguing that she received ineffective assistance of counsel because her attorneys labored under a conflict of interest. The district court denied her motion. Ms. Flood appealed to the Tenth Circuit, arguing that: 1) conflicts of interest adversely affected her trial counsel’s performance; 2) the district court abused its discretion by denying her motions for an evidentiary hearing, discovery, and judicial notice; and 3) she was denied effective assistance of counsel under Strickland.

The Tenth Circuit granted a Certificate of Appealability limited to issues one and two.

The Sixth Amendment guarantees the “right to representation that is free from conflicts of interest.” Wood v. Georgia, 450 U.S. 261, 271 (1981). To prevail on an ineffective assistance claim the defendant must show that her counsel’s performance was deficient and that prejudice resulted. Strickland v. Washington, 466 U.S. 668, 692 (1984). However, “[p]rejudice is presumed only if the defendant demonstrates that counsel ‘actively represented conflicting interests’ and that ‘an actual conflict of interest adversely affected [her] lawyer’s performance.’” Strickland, 466 U.S. at 692.

After a thorough review of the record, the Tenth Circuit found that Ms. Flood offered no evidence that would suggest SCM served ClearOne’s interests instead of hers. The Court simply could not find a conflict of interest based on the facts.

Further, having carefully reviewed the entire record, including the trial transcript, the Tenth Circuit found no abuse of discretion by the district court in denying an evidentiary hearing. Nor did the Court find any abuse of discretion in the district court’s denial of Ms. Flood’s motions for discovery and judicial notice.

AFFIRMED.

In 2008, Plaintiff, a legally blind child with cerebral palsy and cognitive delays, was severely injured while skiing at Breckenridge Ski Resort in Colorado. Before the trip, Defendant sent documents regarding the trip to the participants’ parents, including Plaintiff’s mother, Mrs. Squires. The documents included a Letter to Students and a Release. Plaintiff and her mother signed the Release.

On the first day of skiing, Plaintiff was injured when another skier lost control and skied into the tethers connecting Plaintiff and her instructor. Plaintiff filed this action claiming Defendant’s negligence and gross negligence caused her injuries. Defendant moved for summary judgment, arguing the Release barred Plaintiff’s negligence claim and there was no evidence to support her gross negligence claim. The magistrate judge granted summary judgment in favor of Defendant on Plaintiff’s negligence claim, and denied Defendant’s motion on Plaintiff’s gross negligence claim. This claim proceeded to a jury, which found Defendant not liable. Plaintiff appealed.

On appeal, Plaintiff argued the Release was unenforceable. She reasoned that the Release was invalid under the four-part test articulated in Jones v. Dressel, 623 P.2d 370 (Colo. 1981), and that her mother did not make an informed decision as required by C.R.S. § 13-22-107.

In determining whether an exculpatory agreement is valid, Colorado courts consider four factors: (1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language. Jones, 623 P.2d at 376.

Plaintiff challenged only the magistrate judge’s conclusion on the fourth factor. In making this  determination, Colorado courts examine “the actual language of the agreement for legal jargon, length and complication, and any likelihood of confusion or failure of a party to recognize the full extent of the Release provisions.” Chadwick v. Colt Ross Outfitters, Inc., 100 P.3d 465, 467 (Colo. 2004). The Tenth Circuit found the Release signed by Plaintiff and her mother clearly and unambiguously waived any negligence claims Plaintiff might have brought against Defendant. Contrary to Plaintiff’s argument, Colorado law does not require that exculpatory agreements refer to the specific activity in which the plaintiff participated and was injured.

The Tenth Circuit then turned to whether Mrs. Squires’s consent to the Release was voluntary and informed, as required by C.R.S. § 13-22-107. Plaintiff argued it was not voluntary and informed, because her mother did not understand the risks involved with adaptive skiing and, specifically, the use of bi-skis. Considering not only the language of the Release, but also the information Defendant provided to Plaintiff and Mrs. Squires in connection with the Release, as well as Mrs. Squire’s actual knowledge on the date she signed the Release, the Tenth Circuit concluded Mrs. Squires’s decision to Release Plaintiff’s prospective negligence claims against Defendant was informed. Mrs. Squires had sufficient information from which to evaluate the degree of risk Plaintiff faced.

The Court concluded the Release satisfied both the Jones test and the voluntary and informed requirement of § 13-22-107 and was, therefore, enforceable.

The magistrate judge’s order granting summary judgment to Defendant on Plaintiff’s negligence claim is AFFIRMED.

This case involves the parties’ nearly ten-year legal dispute involving mining operations in the New Mexico Santa Fe National Forest. The claims are based on allegations that the Cooks and Copar removed and used undersized pumice from a mine in violation of a settlement agreement with the United States, the Jemez National Recreation Area Act (“JNRAA”), 16 U.S.C. § 460jjj, and applicable regulations. Although the case remains pending in the district court, the Cooks and Copar have filed an interlocutory appeal from discovery orders requiring their former and present law firms to produce documents containing legal advice counsel gave to them regarding the legality of mining, transporting, processing, and marketing pumice from their mine. Specifically, the Cooks and Copar appeal the denial of their motion for protective order and their motion to quash subpoenas, contending that this court has appellate jurisdiction under the collateral order, Perlman, and pragmatic finality doctrines. The United States has filed a motion to dismiss this appeal for lack of jurisdiction.

This Court’s jurisdiction is limited to review of “final decisions of the district courts.” 28 U.S.C. § 1291. A decision is “‘final’ when it ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” In re Motor Fuel Temperature Sales Practices Litig., 641 F.3d 470, 481 (10th Cir. 2011) (quotation omitted), cert. denied, 132 S. Ct. 1004 (2012). Also, orders for the production of documents during the course of litigation are not ‘final orders’ subject to immediate appellate review. In certain limited circumstances, however, the Court has exercised jurisdiction over an interlocutory appeal under the collateral order doctrine (also known as the Cohen doctrine), the Perlman doctrine, and the pragmatic finality doctrine. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949); Perlman v. United States, 247 U.S. 7 (1918). The Tenth Circuit concluded that none of these doctrines applied to this case.

Accordingly, the Tenth Circuit granted the government’s motion and dismissed the appeal for lack of jurisdiction.

Contempt—Fine as Remedial Sanction for Contempt.

Gladys Robinson appealed the trial court’s order denying her motion to set aside a judgment in favor of decedent’s children and against Robinson in the sum of $231,300. The order was affirmed.

Robinson lived with the decedent, Charles Erroll Hossack, at the time of his death. Following the settlement of his estate, the court ordered her to return specified items of personal property to Lori and Kirk Hossack, decedent’s children. Robinson did not comply.

In a written order issued November 14, 2007, made effective nunc pro tunc August 21, 2007, the court found Robinson in contempt because she did not return the property. Robinson did not timely appeal the contempt order and did not comply with its terms. The fines that were imposed ($100 per day and later $1,000 per day) eventually accumulated to a sum of $231,300.

The decedent’s children moved to reduce this amount to judgment in March 2008. This motion was granted in January 2010, with interest accruing at 8% annually.

Robinson moved under CRCP 60(b)(3) to set aside the judgment. She argued that the amount of the fine should have been limited to any damages the decedent’s children may have suffered. The trial court denied the motion, and Robinson appealed.

CRCP 60(b)(3) allows a court to grant a party relief from a void judgment. Robinson based her argument on cases and language in CRCP 107(d) that limited the amount of a remedial fine to the damages the adverse party suffered. Due to amendments to the rule, effective April 1, 1995, the rule now defines remedial sanctions for contempt to be “[s]anctions imposed to force compliance with a lawful order or to compel performance of an act within the person’s power or present ability to perform.” It also empowers the court to continue to fine a contemnor until an act ordered to be performed is performed.

Robinson also argued that any fine could only be payable to the court and not to decedent’s children. The Court found no authority for this argument. Accordingly, the order was affirmed.

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Building Regulations—Same-Sex Couple Discrimination—Colorado Civil Rights Act—Exhaustion of Administrative Remedies—Inverse Condemnation—Directed Verdict—Section 1983.

Plaintiffs Jason L. Rodgers and James R. Hazel, a same-sex couple, appealed the trial court’s judgment dismissing two of their claims and its entry of a directed verdict in favor of Summit County on their inverse condemnation claim. The judgment was affirmed in part and reversed in part, and the case was remanded with directions.

Plaintiffs built a home in Summit County that included a septic system. County employees found it did not comply with the County’s regulations or the approved building plan obtained by the previous owner. The County found that the septic tank was too small and required a subsurface drain that had not been installed. It also found that during the installation, the subcontractor had damaged wetlands on the property.

Winter was approaching and the issues couldn’t be fixed until spring, so the County offered a temporary certificate of occupancy requiring plaintiffs to fix the septic system, mitigate the wetlands damages, and post a bond for the estimated costs. Plaintiffs did not post the bond, the certificate of occupancy was not issued, and plaintiffs lost their home in foreclosure.

The trial court dismissed three of plaintiffs’ five claims under CRCP 8 and 12(b)(5). The parties agreed to bifurcate the inverse condemnation claim from the 42 USC § 1983 equal protection claim. The court entered a directed verdict on the inverse condemnation claim in the County’s favor during a bench trial. After plaintiffs rested in the jury trial on the § 1983 claim, the court directed a verdict in favor of the County on three of the four actions on the basis of which the plaintiffs asked that the jury be instructed that “taken as a whole collectively establish[] that the County treated them in a discriminatory manner.” The jury returned a verdict for the County on what remained of the § 1983 claim.

Plaintiffs argued it was error to dismiss their first and third claims for relief. The Court of Appeals disagreed. The first claim asserted that County officials discriminated against them by requiring certain actions not required of heterosexual couples before it would issue a certificate of occupancy. This claim seemed to arise under the Colorado Civil Rights Act. Under that Act, any person alleging discrimination must file a complaint with the Colorado Civil Rights Commission (CCRC). Plaintiffs never did so, and therefore it was not error to dismiss this claim for failure to plead exhaustion of administrative remedies.

Plaintiffs’ third claim asserted that the County deprived them of their constitutional rights of due process, equal protection, and freedom of association under the U.S. and Colorado Constitutions. These claims were appropriately dismissed because plaintiffs were not entitled to recover damages through such a direct claim. Section 1983 is the remedy for a person who has been deprived of a constitutional right by state action; under the Colorado Constitution a direct claim for damages will lie only where no other adequate remedy exists.

Plaintiffs then argued it was error to direct a verdict for the County on their inverse condemnation claim and on three of the four actions that formed the basis for the § 1983 claim. The Court affirmed on the inverse condemnation claim but reversed on the § 1983 claim.

Inverse condemnation is a claim for relief against a regulatory taking. The trial court found that the County’s regulations and response regarding the septic issues were reasonably applied to plaintiffs and the County did not deny them an economically viable use of their property. Moreover, the County’s septic regulations were reasonable and contributed to the legitimate public purpose of protecting groundwater and adjoining properties from contamination. The record clearly supported the trial court’s determination that no regulatory or per se taking had occurred.

On the § 1983 claim, plaintiffs alleged the County’s requirements were unreasonable and differed from requirements imposed on similarly situated heterosexual homeowners in four ways. The trial court analyzed each of the alleged discriminatory actions separately and entered a directed verdict in the County’s favor on three of them, allowing only an allegation that it was discriminatory to require plaintiffs to post a bond. It found plaintiffs had not presented sufficient evidence of similar situations, even when taken in the light most favorable to them, that could have established an equal protection claim.

Plaintiffs argued it was error to analyze the County’s conduct as discrete actions, rather than as a pattern of discriminatory conduct. The Court agreed, finding that at the directed verdict stage, the trial court’s role is not to separately weigh individual aspects of the evidence offered to support a single claim; its function is to decide whether the totality of the evidence would permit a reasonable jury to return a verdict against a defendant. The trial court may not “parse evidence presented” and grant a “partial directed verdict” on a claim. The partial directed verdict on the single § 1983 claim was error, and this claim was remanded to be retried.

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Breach of Contract—Summary Judgment—CRS § 38-26-106.

In this breach of contract action, plaintiff Tarco, Inc., a construction contractor, appealed the district court’s grant of summary judgment for defendant Conifer Metropolitan District (CMD). The judgment was affirmed in part and reversed in part, and the case was remanded with directions.

In 2005, Tarco and CMD entered into a series of contracts for construction projects related to the development of a shopping center. Tarco alleged that the work on two of the contracts was substantially complete and that CMD wrongfully withheld payment on them.

Tarco sued, based on nonpayment, and CMD counterclaimed, alleging material breach by Tarco. After two years of litigation, CMD moved for partial summary judgment, asserting that Tarco couldn’t recover under the contracts because it did not satisfy CRS § 38-26-106 (the bond statute). The district court granted the motion. Tarco did not dispute that it did not provide a bond, and the district court concluded that the bond statute barred recovery by contractors failing to post bond.

On appeal, Tarco argued that the court erred by granting summary judgment. Tarco contended that there was a genuine disputed issue of material fact as to whether the contracts at issue were for “public works” projects. If they were not, they were not subject to the bond statute. The Court of Appeals found there was no disputed issue that the projects were public works. The bond statute applies to “any building, road, bridge, viaduct, tunnel, excavation, or other public works for any . . . political subdivision of the state.” The Supreme Court has interpreted “public works” extremely broadly. The contracts at issue were for the construction of a highway overpass and infrastructure components around the shopping center, including sewers, fire hydrants, retaining walls, paving, and roadways. The Court found these clearly to be public works subject to the bond statute, noting that there was no disputed issue of material fact in this regard.

CMD asserted that the bond statute is a “nonclaim statute” that creates an absolute bar to recovery or destroys the claim for relief itself, thus precluding Tarco’s equitable claims of waiver and estoppel. The Court disagreed. Nonclaim statutes deprive a court of subject matter jurisdiction. The Colorado Governmental Immunity Act (CGIA) is a nonclaim statute. CRS § 15-12-803 in the Colorado Probate Code is another. They are rare. The bond claim statute merely provides that unless a bond is provided, “no claim in favor of the contractor arising under the contract shall be audited, allowed, or paid.” It is not a nonclaim statute, and therefore Tarco’s noncompliance does not preclude its assertion of equitable defenses.

Tarco claimed there was a genuine and material factual dispute as to whether CMD affirmatively waived the bond requirement. CMD countered that, as a special district, it did not possess the power to waive the requirement. The Court agreed that a special district does not possess the power to waive the requirement of the bond statute. CRS § 32-1-1001 provides the express common powers of special districts, but does not include the power to waive the bond requirement. The Court will not imply such a power. Therefore, there was no genuine issue of material fact as to whether CMD waived its rights under the bond statute, because it could not.

The Court concluded that there was such an issue of material fact as to whether the doctrine of equitable estoppel applied to CMD’s conduct. A party asserting equitable estoppel must establish that the party to be estopped knew the facts and either intended the conduct to be acted on or so acted that the party asserting estoppel must have been ignorant of the true facts, and the party asserting estoppel must have reasonably relied on the other party’s conduct with resulting injury. Based on the evidence presented, the Court concluded that Tarco had demonstrated a genuine issue of material fact as to whether the foregoing facts were established. Therefore, CMD was equitably estopped by its conduct from asserting the bond statute as a defense to Tarco’s contract claims. The judgment was reversed as to the determination that the bond statute is a nonclaim statute and as to the dismissal of Tarco’s equitable estoppel claim, and the case was remanded for further proceedings.

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Terry Lee Childs, a federal prisoner in Oklahoma, filed this civil rights complaint under 42 U.S.C. § 1983, asserting that defendants, who were all employees of the Lawton Correctional Facility , violated state and federal law by delaying the refilling of his asthma medication prescription in retaliation against him for exercising his federal constitutional right to file administrative grievances about his medical care. Defendants moved to dismiss the complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6), or, in the alternative, for summary judgment. The district court eventually dismissed all of Mr. Childs’ claims and Mr. Childs appealed.

Congress enacted the Prison Litigation Reform Act (PLRA) in 1996 in the wake of a sharp rise in prisoner litigation in the federal courts. The PLRA contains a variety of provisions designed to bring this litigation under control. One of these provisions is 28 U.S.C. § 1915(g), which Congress added to revoke, with limited exception, in forma pauperis privileges for any prisoner who has filed three or more lawsuits that fail to state a claim, or are malicious or frivolous.

Mr. Childs had accumulated three strikes under 28 U.S.C. § 1915(g). Accordingly as soon as the appellate process in this case has been completed, he will be barred from proceeding in forma pauperis in future civil actions or appeals in federal court unless he is “under imminent danger of serious physical injury,” § 1915(g), and he makes “specific [and] credible allegations” to that effect. Kinnell v. Graves, 265 F.3d 1125, 1127-28 (10th Cir. 2001).

AFFIRMED.

Administrative Law—Burdens of Proof—Preponderance of Evidence—CRS § 40-10.1-203.

Mile High Cab, Inc. (Mile High) appealed the district court’s judgment affirming the denial of its application for a Certificate of Public Convenience and Necessity. After a lengthy hearing, the administrative law judge (ALJ) to whom the application had been assigned issued a recommended decision, finding that the several incumbent carriers opposing the application had proved by a preponderance of the evidencethat public convenience and necessity did not require granting the application, and that the issuance of the certificate would be detrimental to the public interest. Although it initially ordered a remand for further evidence, the Colorado Public Utilities Commission (PUC) ultimately granted the intervening carriers’ motions for reconsideration and adopted the ALJ’s recommendation to deny the application. The district court affirmed Mile High’s petition for judicial review.

The Supreme Court reversed the district court’s judgment and remanded the case with directions to return the matter to the PUC for further action. The Court held that the record did not clearly contain the finding statutorily required for a denial of Mile High’s application, and that the issuance of a certificate would actually be detrimental to the public interest.

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Richard Bensinger produced and screened a film about Spacecon Specialty Contractors, LLC. Claiming the film conveyed several defamatory statements, Spacecon filed suit against Bensinger in the United States District Court for the District of Colorado, based on diversity jurisdiction, asserting a state-law claim for defamation per se. The district court granted Bensinger’s motion for summary judgment, concluding the messages conveyed by the film involved matters of public concern and Spacecon did not show Bensinger published the film with actual malice.

“In determining whether statements involve a matter of public concern, [a court] must analyze the content, form, and context of the statements, in conjunction with the motivation or ‘point’ of the statements as revealed by the whole record.” Spacecon focused its arguments on context and motive. The Tenth Circuit held that the film was a matter of public concern based on context. The messages of the film had the potential to impact many groups and the fact that a panel discussion was held after one showing illustrated that the film’s message was one of public concern.

The court then analyzed Bensinger’s motive in making the film. While there was some evidence Bensinger’s motive may have been to harm Spacecon, the fact that the film was a documentary shown to the public and its content and context all supported that it involved matters of public concern.

Spacecon argued the evidence showed Bensinger acted with actual malice. The court disagreed. “[V]iewing the evidence and drawing all reasonable inferences in Spacecon’s favor, no reasonable juror aware of the entire context surrounding the production and dissemination of the film could conclude by clear and convincing evidence that Bensinger included falsehoods in the film knowingly or with a reckless disregard for the truth.”

The court affirmed summary judgment for Bensinger.

Summary Judgment—Underinsured Motorist Benefits.

Plaintiffs Philip and Roberta Jordan appealed the district court’s summary judgment in favor of defendant Safeco Insurance Company of America, Inc. (Safeco) on their claim that Safeco unreasonably denied them underinsured motorist (UIM) benefits. The judgment was affirmed.

In 2009, the Jordans were involved in an automobile accident with J.F., a minor driver. The Jordans were injured and sued J.F. J.F.’s automobile insurance policy covered damages for injury to others up to $100,000 per person or $300,000 per accident. The Jordans settled for $60,000 and $38,500, respectively.

The Jordans sought underinsured motorist (UIM) benefits under their policy with Safeco, asserting that the policy covered all damages unpaid under the settlements, up to the policy limit. Safeco maintained that their UIM coverage would be triggered only if either of them had damages exceeding the $100,000 limit of J.F.’s policy, which neither did.

The Jordans sued Safeco, asserting claims for (1) common law bad faith breach of an insurance contract; (2) unreasonable delay and denial of payment of a claim in violation of CRS §§ 10-3-1115 and -1116; and (3) deceptive trade practice in violation of the Colorado Consumer Protection Act (CCPA). The Jordans moved for summary judgment under their unreasonable delay claims, and Safeco moved for summary judgment on the same claims and the bad faith claim. The parties stipulated that neither could prove damages in excess of $100,000, and the court granted the Jordans’ motion to dismiss their own CCPA claim.

The court granted Safeco’s motion for summary judgment. On appeal, the Jordans challenged only the grant of summary judgment in favor of Safeco under CRS §§ 10-3-1115 and -1116 and conceded that no material facts were disputed.

The Court of Appeals concluded that Safeco’s denial of coverage was permissible under the clear language of the policy, as well as the unambiguous terms of CRS § 10-4-609. The policy language unambiguously provides that payment of UIM benefits are only for damages above the tortfeasor’s insurance policy liability limit. Here, the damages did not exceed those limits.

The Jordans also argued that under CRS § 10-4-609, an insured’s good faith settlement with a tortfeasor necessarily exhausts the tortfeasor’s liability limits. That section, as amended January 1, 2008, requires that UIM coverage “shall be in addition to any legal liability coverage and shall cover the difference, if any, between the amount of the limits of any legal liability coverage and the amount of the damages sustained.” This is plain and unambiguous language. The trigger is the exhaustion of the tortfeasor’s “limits of . . . legal liability coverage.” The judgment was affirmed.

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