Court Rulings

<bold>No. 02SC316</bold>, <bold><underline>People In re J.R.T. v. Martinez</underline></bold><bold>, and No. 02SC317</bold>, <bold><underline>People In</underline></bold><bold><underline>re J.A. v. Martinez</underline></bold> <bold>child support imputation of income voluntarily</bold><bold>unemployed voluntarily underemployed shirking a child support obligation</bold><bold>unreasonably foregoing higher paying employment all relevant factors</bold><bold>termination of employment firing of parent from employment move to</bold><bold>another city Uniform Dissolution of Marriage Act child support</bold><bold>guidelines § <cross_reference>14-10-115</cross_reference>(7)(b)(I), 5 C.R.S. (2002).</bold> This opinion consolidates two cases in which the trial courts modified the amount of child support that Jason Martinez was required to pay for two of his children, J.A. and J.R.T. In both cases, the trial courts held that Martinez was voluntarily underemployed after he had been terminated from two jobs in Denver for knowingly violating company policy and had subsequently taken a lower paying position in Pueblo. The Court of Appeals reversed both trial courts, holding that Martinez was not "voluntarily underemployed" simply because he had been fired. The Court of Appeals held that the trial courts should have examined "the reasonableness of father's attempts, if any, to obtain comparable employment and pay following his firings." The Supreme Court affirms the Court of Appeals. The Supreme Court holds that an income imputation inquiry must start with whether the parent is shirking a child support obligation. Is the parent unreasonably foregoing higher paying employment that he or she could obtain? If not, the child support obligation calculation commences with actual gross income. If the parent is shirking a child support obligation, the trial court must determine what the parent can reasonably earn and contribute to the child's support. The Supreme Court also holds that

This case required the Supreme Court to decide two questions: (1) whether the owner–director of a nonprofit school regulated by various governmental entities is a "public employee" within the meaning of CRS § 18-9-110(1), and (2) whether respondent waived or invited error with respect to a constructive amendment claim when his defense counsel stated that he was "satisfied" with the proposed jury instructions, notwithstanding the fact that the elemental instruction on the charge of interference with the staff, faculty, or students of an educational institution tracked CRS § 18-9-109(1)(b) rather than CRS § 18-9-109(2), which was the subsection charged in the information. As to the first question, the Court concluded that "public employee" means an employee of a governmental entity, and therefore an employee of a nonprofit school is not a public employee. Accordingly, the Court agreed with the Court of Appeals division's decision that respondent's conviction for interference with a public employee in a public building cannot stand. As to the second question, the Court concluded that respondent neither waived nor invited error with respect to his constructive amendment claim because the record does not indicate that he or his counsel either intentionally relinquished a known right or deliberately injected the erroneous jury instruction as a matter of trial strategy. The Court instead construed respondent's general acquiescence to the instructions as a forfeiture and, reviewing for plain error, concluded that the constructive amendment of respondent's charging document constituted plain error necessitating a new trial. The Court affirmed in part and reversed in part the Court of Appeals division's judgment.

Husband moved to modify or terminate his maintenance obligation to wife. He alleged a loss of income resulting from a shoulder injury that rendered him no longer able to perform labor-oriented work. He also alleged he had been diagnosed with stenosis, which would require surgery and affect his ability to work for the rest of his life. Following a hearing, the court denied husband's motion based on its calculation of his monthly income, including imputed rental income from husband's primary residence. On appeal, husband argued that the district court abused its discretion in determining his income for purposes of calculating maintenance. He contended the court miscalculated his self-employment income because it did not accurately calculate the ordinary and necessary business expenses that needed to be deducted from his gross receipts. Here, the district court found that husband's business expenses were offset by in-kind payments he received from his girlfriend's construction company. The court essentially added those payments to his salary and then deducted his business expenses from his salary. Because his monthly business expenses were nearly the same as the monthly in-kind payments for a vehicle, fuel, and cell phone, the district court did not err in calculating husband's self-employment income. Husband also argued that the district court erred in imputing $1,500 per month in rental income to him. Following the parties' dissolution, husband continued living in the marital residence with his girlfriend and her three children as a family. Husband paid the mortgage and his girlfriend paid for utilities and groceries. The district court found that this arrangement was not a fair market exchange and imputed to husband $1,500 per month rental income that he could have generated by renting the house, which was much larger than he needed for himself. No statutory provision addresses whether (1) potential rental income can be imputed to a party for purposes of calculating

The Rio Blanco County Department of Human Services (Department) became involved with the parents in this case as a result of concerns about the children's welfare due to the condition of the family home, the parents' use of methamphetamine, and criminal cases involving the parents. Attempts at voluntary services failed, and on the Department's petition for dependency and neglect, the district court ultimately terminated the parents' rights. On appeal, the parents contended that the Department failed to make reasonable efforts to reunify them with their children. Specifically, the parents contended that the Department did not give them sufficient time to complete the services under their treatment plans and failed to accommodate their drug testing needs. The termination hearing was not held until more than a year after the motion to terminate was filed. For nine months before the motion to terminate was filed, the Department provided numerous services to the parents, including substance abuse therapy, therapeutic visitation supervision, drug abuse monitoring, and a parental capacity evaluation. The Department also provided counseling for the children. Both parents missed drug tests and tested positive during the testing period, and both were arrested for possession of methamphetamine during the pendency of the case. The Department made reasonable accommodations to meet the parents' needs and the parents had sufficient time to comply with their treatment plans. The record supports the trial court's findings that termination was appropriate because (1) the court-approved appropriate treatment plan had not been complied with by the parents or had not been successful in rehabilitating them (2) the parents were unfit and (3) the conduct or condition of the parents was unlikely to change within a reasonable time. Father also contended that the trial court's decision to interview the 9-year-old twin children together in chambers fundamentally and seriously affected the basi

Corporations—Shareholder Derivative Action—Closely Held Corporation—Civil Theft—Piercing the Corporate Veil—Alter Ego—Dividends and Distributions—Statute of Limitations. Father assigned his stock in the Liquor Barn, Ltd. (Liquor Barn) to his son Gary, who was the company's sole director and majority shareholder. The two other Tisch siblings (the Tisch siblings) held nonvoting shares in Liquor Barn. The Tisch siblings filed a complaint against Gary alleging various causes of action related to his fiduciary duties. A jury found that Gary had committed civil theft against the Tisch siblings individually and against Liquor Barn by using the Liquor Barn profits for his private use. It awarded the Tisch siblings treble damages on the civil theft claim. The trial court entered judgment against Gary and Liquor Barn and awarded the Tisch siblings costs and attorney fees. Gary moved to amend the judgment, arguing that the trial court erred in piercing the corporate veil and that this error would prejudice Liquor Barn's creditors. He then filed a combined motion for new trial and relief from judgment, arguing that the trial court erred in disqualifying his expert witness and in piercing the corporate veil. The trial court denied the postjudgment motions and awarded the Tisch siblings attorney fees that exceeded the lodestar. On appeal, Gary contended that the trial court erroneously found that he, as an individual, and the Liquor Barn were "alter egos." Here, the record shows that Gary comingled his personal and other business funds with the Liquor Barn's funds, kept inadequate corporate records, routinely disregarded the legal formalities of declaring shareholder distributions and filing taxes related to payments he made to himself, and used corporate funds for noncorporate purposes and Gary's position as controlling and sole voting shareholder facilitated his misuse of Liquor Barn's funds. The record also shows that Gary used the corporate fiction to defeat the Tisch sibling

Estate—Jurisdiction—Constructive Trust—Testamentary Capacity—Undue Influence—Jury Trial—Contempt. Dr. Arlen E. Owens (the decedent) hired Dominguez as his private caregiver in 2010. The decedent died in July 2013. After the decedent's death, his brother and only living heir, Owens, filed a petition for informal probate of the decedent's will, and later a petition for determination of testacy and for determination of heirs, alleging that the will that the decedent had signed in 2012 was the product of undue influence by Dominguez and that the decedent had lacked the capacity to execute the will. He also filed a complaint for recovery of estate assets and asked the court to invalidate the will and order the decedent's estate to be administered under intestate distribution statutes. In 2015, Owens also filed a petition to set aside non-probate transfers for three bank accounts for which Dominguez was payable-on-death (POD) beneficiary. The court imposed a constructive trust over the POD accounts. The court later upheld the will but found that the decedent had not had the capacity to execute the POD designations and had been unduly influenced by Dominguez. After issuance of the final judgment, the court issued a contempt order against Dominguez for violating the constructive trust that included the condition that she could purge the contempt by paying back the money from the bank accounts. On appeal, Dominguez contended that the district court did not have jurisdiction to set aside the POD designations and impose a constructive trust on the POD accounts because Owens and the estate did not have standing to make such requests. A district court has jurisdiction to determine every legal and equitable question arising in connection with estates. The claims regarding the POD designations arose in connection with and were essential to the estate administration. Thus, the court had jurisdiction to impose a constructive trust, Owens had standing, and the court had jurisdiction

Claimant sustained a back injury at work lifting a hydraulic unit from his truck. Within two months he was back to work and placed at maximum medical improvement. Soon thereafter he complained of excruciating lower back pain, but both his original doctor and a specialist concluded that this new lumbar strain was not work-related but related to normal age-related degenerative changes. Claimant sought temporary partial disability (TPD) benefits from the date of his injury and temporary total disability (TTD) benefits from when his low back pain flared up. An administrative law judge (ALJ) rejected the request for benefits, finding that (1) his lower back pain was unrelated to his work injury, and (2) because he had continued working, claimant had not suffered a wage loss and was not entitled to either TPD or TTD benefits. The ALJ dismissed his requests. The Industrial Claim Appeals Office (Panel) affirmed but remanded the case to the ALJ to determine whether claimant was entitled to change his physician. On appeal, claimant argued the separation of powers doctrine is violated by having workers' compensation cases heard in the executive branch. In rejecting this argument, the Court of Appeals followed Dee Enterprises v. Industrial Claim Appeals Office, which held that the statutory scheme for deciding workers' compensation cases does not violate the separation of powers doctrine. Claimant then argued his equal protection claims should be analyzed under the strict scrutiny standard. The Court held that the rational basis test applies to equal protection challenges in the workers' compensation context. Under that test, "a statutory classification is presumed constitutional and does not violate equal protection unless it is proven beyond a reasonable doubt that the classification does not bear a rational relationship to a legitimate legislative purpose." Claimant argued that his and other workers' compensation litigants' rights to equal protection were violated because wo

Contracts—Attorney and Client—Attorney Fees. The Supreme Court granted certiorari review to determine the preclusive effect of an attorney disciplinary hearing on a subsequent civil suit. Because of admissions made by the party, the Court did not reach this question and vacated that portion of the Court of Appeals' opinion. The Court held that when an attorney enters into a contract without complying with Colo. RPC 1.8(a), the contract is presumptively void as against public policy however, a lawyer may rebut that presumption. The Court additionally held that the trial court did not abuse its discretion in awarding attorney fees at the trial level because the record supports the court's finding that the case was groundless, frivolous, and brought in bad faith. However, the Court held that the issues raised on appeal were legitimately appealable issues and, as such, do not warrant an award of fees against petitioner. The Court affirmed the Court of Appeals' judgment as to the merits on other grounds, affirmed the award of attorney fees at the trial level, and reversed the Court of Appeals' order remanding for a determination of appellate attorney fees.

Buy and Sell Contract—Mineral Rights—Warranty Deed—Negligence—Breach of Contract—Statute of Limitations—Third Party—Cause of Action—Accrual Date. The Bells hired Orr Land Company LLC (Orr) and its employee Ellerman to represent them in selling their real property. Orr found a buyer and the Bells entered into a buy and sell contract with the buyer, which provided, as pertinent here, that the sale excluded all oil, gas, and mineral rights in the property. Orr then retained Land Title Guarantee Company (Land Title) to draft closing documents, including the warranty deed. In 2005 the Bells signed the warranty deed and sold the property to the buyer. The Bells didn't know that the warranty deed prepared by Land Title didn't contain any language reserving the Bells' mineral rights as provided in the buy and sell contract. For over nine years, the Bells continued to receive the mineral owner's royalty payments due under an oil and gas lease on the property. In 2014 the lessee oil and gas company learned that the Bells didn't own the mineral rights, so it began sending the payments to the buyer. After that, the Bells discovered that the warranty deed didn't reserve their mineral rights as provided in the buy and sell contract. In 2016 the Bells filed this negligence and breach of contract action against defendants Land Title, Orr, and Ellerman. Defendants moved to dismiss, arguing that the Bells' claims were untimely because the statute of limitations had run. The district court granted defendants' motion to dismiss. On appeal, the Bells contended that the district court erred in granting defendants' motions to dismiss because they sufficiently alleged facts that, if true, establish that the statute of limitations didn't begin to accrue on their claims until the oil and gas company ceased payment in September 2014, which is when they contended they discovered that the warranty deed didn't reserve their mineral rights. A plaintiff must commence tort actions within two years

<bold>1. Employer and Employee — breach of fiduciary duty — forming rival company</bold> <block_quote> The trial court properly granted summary judgment in favor of defendant Camp on a claim for breach of fiduciary duty arising from defendant leaving plaintiff's employment and starting a rival company, because plaintiff employer failed to establish facts supporting a breach of fiduciary duty when no evidence suggests that defendant's position in the workplace resulted in domination and influence over plaintiff.</block_quote> <bold>2. Employer and Employee — breach of loyalty — forming rival company</bold> <block_quote> The trial court properly granted summary judgment in favor of defendant Camp on a claim for breach of duty of loyalty arising from defendant leaving plaintiff's employment and starting a rival company, because plaintiff failed to establish that any independent tort for breach of duty of loyalty exists under our state law.</block_quote> <bold>3. Wrongful Interference — interference with prospective advantage —</bold> <bold>employees founding rival business</bold> <block_quote> The trial court properly granted summary judgment in favor of defendants Camp and MCC on a claim for tortious interference with prospective advantage arising from defendant Camp leaving<page_number>Page 648</page_number> plaintiff's employment and starting a rival business publishing employment newsletters, because: (1) there is no evidence that defendant Camp induced KFI into entering a contract; and (2) plaintiff employer offers no evidence showing that but for defendant Camp's alleged interference, a contract with KFI would have ensued.</block_quote> <bold>4. Unfair Trade Practices — employee founding rival business — no fiduciary</bold> <bold>relationship — no egregious or aggravating conduct</bold> <block_quote> The trial court properly granted summary judgment in favor of defendants Camp and MCC on a claim for unfair and deceptive trade practices und