Court Rulings

Avicanna Inc. is a Canadian corporation with its principal place of business in Ontario. It contracted with St. J Distribution LLC, a Colorado company, and several of its members to purchase certain assets. The asset purchase agreement included a choice of law and forum selection clause in favor of the laws of the Province of Ontario and the federal laws of Canada. Avicanna sued the contractual counterparties and Laughing Dog Group, LLC, which was owned and/or managed by one or more members of St. J Distribution. Two of the defendants, St. J Distribution and Robinson, then filed cross-claims against the remaining defendants, Mewhinney, Garcia, and Laughing Dog Group (collectively, the Mewhinney defendants) for breach of contract. The Mewhinney defendants moved to dismiss both the complaint and cross-claims for failure to state a claim upon which relief may be granted. Neither motion mentioned the forum selection clause. But in their reply to support their motion to dismiss, the Mewhinney defendants argued the forum selection clause deprived the trial court of jurisdiction over the dispute. Because the forum selection argument was raised in a reply, the district court declined to consider it. But the court sua sponte later invited briefing on the issue, and it granted the motion to enforce the forum selection clause and dismissed the case without prejudice. On appeal, Avicanna argued that the forum selection clause was intended for its sole benefit and Avicanna was therefore entitled to unilaterally waive its protections and file suit in Colorado. A forum selection clause in a contract will be enforced unless the party seeking to avoid its effect proves that enforcement of the clause would be unfair or unreasonable. Avicanna did not argue that the clause would be unfair or unreasonable or that the clause was ambiguous. Rather, Avicanna asserted that it was entitled to unilaterally waive enforcement of the clause because it was the only party that was an Ontario resid

<bold>1. Employer and Employee — negligent hiring — reasonable</bold> <bold>investigation</bold> <block_quote> The trial court erred by granting defendant financial planning company's motion to dismiss plaintiff customer's claim for negligent hiring of plaintiff's son, an insurance agent who misappropriated funds from plaintiff's various insurance and annuity products, because the allegations were sufficient to assert that defendant company could have discovered the unfitness of plaintiff's son had it conducted a reasonable investigation prior to hiring him.</block_quote> <bold>2. Fiduciary Relationship — breach of fiduciary duty —</bold> <bold>insurance agent</bold> <block_quote> The trial court erred by granting defendant financial planning company's motion to dismiss plaintiff customer's claim for breach of fiduciary duty regarding plaintiff's son who misappropriated funds from plaintiff's various insurance and annuity products while employed as an insurance agent of defendant company, because: (1) the complaint sufficiently alleged that a relationship of confidence and trust existed between plaintiff and plaintiff's son, individually and in his capacity as an employee and agent of defendant company; (2) plaintiff was not required to allege wrongful benefit as an element of this claim since it is an element of constructive fraud; and (3) plaintiff sufficiently alleged that he relied upon false representations of the status of his investment accounts provided by his son in his capacity as an employee and agent of defendant company and that plaintiff's son in carrying out his duties as an agent and employee of defendant company converted plaintiff's funds to his own use.</block_quote> <bold>3. Fraud — constructive — motion to dismiss — sufficiency of</bold> <bold>evidence</bold> <block_quote> The trial court did not err by granting defendant financial planning company's motion to dismiss plaintiff customer's claim for constructive fraud, because:

Business Organizations—Limited Liability Companies—Judicial Dissolution—In-Kind Distribution. Paula and Richard Gagne are mother and son. They agreed to a joint business venture in which Paula would buy apartment complexes and Richard would manage them. They created limited liability companies (LLCs) to buy and manage the properties. After years of acrimony, Richard sued, seeking judicial dissolution of the four LLCs and a declaratory judgment as to the parties' respective rights and obligations concerning the LLCs. Ultimately, the trial court ordered dissolution and an in-kind distribution of assets, with Richard and Paula each receiving two of the apartment buildings. On appeal, Paula contended that the court erred, both legally and factually, in ordering dissolution of the LLCs. A limited liability company may be dissolved if it is established that it is not reasonably practicable to carry on its business. A party seeking judicial dissolution must establish that the managers and members of the company are unable to pursue the purposes for which the company was formed in a reasonable, sensible, and feasible manner. In determining whether a party seeking judicial dissolution has met this burden, the court must consider seven nonexclusive factors. Here, the record reflects that the district court expressly addressed each of the seven factors and concluded that the factors weighed heavily in favor of dissolution. Therefore, the district court didn't abuse its discretion in ordering dissolution. Paula also contended that the district court erred in ordering an in-kind distribution of the LLCs' assets, rather than ordering the assets sold and the resulting proceeds distributed to the members. Here, the operating agreements don't bar in-kind distributions, and the process ordered by the court was appropriate. Therefore, the district court didn't abuse its discretion by ordering an in-kind distribution of the LLCs' assets. Next, Paula argued that the district court erred

Mandamus to compel State Employment Relations Board either to find that relator's unfair labor practice charge was timely filed and proceed with a hearing or consider the facts concerning the timeliness question and issue an explanation setting forth its rationale—Writ denied, when.

Arvada police arrested a severely injured man and sent him to Denver Health Medical Center. Denver Health and Hospital Authority (Denver Health) sued Arvada for the cost of care, claiming that CRS § 16-3-401, which says that persons in custody "shall be . . . provided . . . medical treatment," required Arvada to pay the hospital for the detainee's care. Here, the Supreme Court clarified that (1) whether a statute provides a private right of action is a question of standing, and (2) the same test for a private right of action under Allstate Insurance Co. v. Parfrey, 830 P.2d 905 (Colo. 1992), applies for claims against both governmental and non-governmental defendants. Applying Parfrey to Denver Health's statutory claim, the Court held that CRS § 16-3-401 does not provide hospitals a private right of action to sue police departments for the cost of providing healthcare to persons in custody. Accordingly, it concluded that the trial court erred by granting summary judgment to Denver Health on the statutory claim. The Court remanded the case for consideration of Denver Health's unjust enrichment claim based on Arvada's statutory duty to provide care for persons in custody.