Update on Hamilton Electors lawsuit

This afternoon, Presidential Electors Polly Baca and Robert Nemanich filed an emergency appeal with the Colorado Supreme Court, asking the seven justices to vacate a district court order that requires them to vote for Hillary Clinton when the Electoral College convenes at noon on Monday.

In their petition, Baca and Nemanich argue that the state court lacked jurisdiction to enter injunctive relief against presidential electors who are tasked with performing duties under federal law. They further argue that the court committed legal error by deeming the act of voting for a different candidate to be a “refusal to act,” and by adding remedies to the election code that state legislators never intended.

Baca and Nemanich asked the court to set an expedited briefing schedule and issue a ruling before the Electoral College meets.

Jesse Witt of The Witt Law Firm is representing Baca and Nemanich in their supreme court appeal.

Jesse Witt, representing elector Robert Nemanich, speaks to press outside of the courtroom. (Kevin J. Beaty/Denverite)

Jesse Witt, representing elector Robert Nemanich, speaks to press outside of the courtroom. (Kevin J. Beaty/Denverite)

A grandmother’s reflections on Pearl Harbor

To commemorate the 75th anniversary of the Pearl Harbor attack, I wanted to share an old letter I found among my grandmother’s papers this past summer, recalling her own memories of that fateful day. –JHW

December 07, 1994

Today is the 53rd Anniversary of Pearl Harbor, the day that has lived in infamy as FDR referred to it on his address to Congress asking for a declaration of War (there was only one dissention, a Miss Rankin, a Senator, I believe from one of the Southern States.) I was sitting in my home in Sweetwater, Texas. It was a Sunday morning, a sort of day off for Howard with only a few chores at the Saddle Horse. When I heard that practically the entire Pacific fleet had been wiped out it was a time of anguish, and a puzzle too—weren’t Japan’s representatives at that same hour negotiating in Washington?

When FDR convened the Congress the next day—or so—I wanted to hear his address on the battery radio. I called Howard in—and along with him a Mr. Chandler who was working there clearing some land and who when I called asked if he could come in and listen to the radio with us. He was a veteran of WWI—had been with the AEF in Europe. So of course, we invited him in. That familiar voice—Magnificent!—of FDR came over the air ways and we—as a country—were plunged immediately into a time of horror and deprivation which we had never known before. Our way of life changed completely. We were never again to know the sweet soft easy existence we were accustomed to—the death march of Bataan, Leyte Gulf, Tarawa, Iwo Jima—all this lay ahead of us in one screaming thrust of War. It led to so much sorrow, so much loss. We would never be the same as we moved on to Hitler’s Germany and all their atrocities—the Holocaust, the Battle of Dunkirk—and all the time an innocence was lost, never to be regained for two American citizens who were forced to become accustomed to world horror as time marched on.

Jo Witt

This letter was written in 1994, a little over a year after my grandfather Howard had passed away. She wrote many letters in those days, wishing she could still speak to him. Jo lived on until the summer of 2001, and I always felt it was merciful that she did died without having to witness the tragedy that befell us that September. 

She appears to have added more text at some later time, discussing the military service of her three brothers, John, Bid, and Sidney. Portions are in a shakier script and accompanied by a note in the margin reading “in this section I was writing in the dark.” I have copied those below.

I do not want to diminish the efforts of those family members who were involved first hand with the Ultimate devotion. My brother John was a Marine. Bid tried to enlist Navy requesting submarine duty. Sidney regretted being still in high school, wanted to drop out of school and enlist, He said “darn it, the war’ll be over before I get in there.”—

Bid did become part of the Service, military that is, and as part of the U.S. Navy was active in the Pacific Zone, aboard the U.S.S. Lowry, a destroyer—active in the Battle of Leyte Gulf, among others. Sidney upon graduating from High School enlisted in the U.S. Air Force + served for 4 years, he was on active duty in England; this was during the “Korean Conflict.”

I don’t know if my grandmother ever intended this letter to be published, but I know that she understood the importance of learning from history. With that in mind, I have reprinted her words here exactly as she wrote them. Now, perhaps more than ever, we need to remember the sacrifices that prior generations made for us.

Appeals court affirms carrier’s duty to pay costs taxed against insured in construction defect suit

One of the key reasons for builders to maintain liability insurance is to cover the cost of hiring defense counsel and paying litigation costs in the event of a construction defect lawsuit. If a builder loses a lawsuit, it will typically be responsible for paying the plaintiff’s litigation costs. Today, the Colorado Court of Appeals clarified that the “supplementary payments” section of a standard Commercial General Liability (CGL) insurance policy covers such costs, even if the carrier has reserved the right to dispute whether it has a duty to indemnify the actual damages awarded.

This may seem counter-intuitive, insofar as a carrier may end up paying costs even if it does not cover the underlying loss, but the court’s decision is consistent with the plain language of the CGL form that most carriers use. Furthermore, while the court focused on the plain contract language without regard to public policy concerns, the decision may be seen to recognize the role that insurance defense counsel plays in the costs of litigation. If an insurance defense firm eschews offers of settlement and engages in aggressive discovery, for example, it may increase the insured’s chances of winning while also increasing the risk that the insured will face a larger cost bill at the end of the case. In such a scenario, it is fair and equitable to require the carrier to pay costs, regardless of any determination of coverage.

The opinion in Mt. Hawley Insurance Co. v. Casson Duncan Construction, Inc., 2016COA164, is available on the court’s website.

National demand increases for apartments, refuting calls for construction defect immunity in Colorado

For the last four years, the homebuilders’ lobby has been aggressively pushing the idea that consumer protection laws are stifling condominium construction in Colorado. The lobbyists claim that the fear of liability for construction defects has forced many local developers to build apartments instead of condominiums. They have dismissed the notions that the shift to apartments merely reflects supply and demand, or that modern families might actually prefer to rent rather than buy. To support this theory, they have touted high condominium sales in other states. A new story from NPR’s Here & Now refutes this claim, however.

Contrary to what the lobbyists have been saying, data now confirm that large numbers of Americans prefer to rent, not buy, their homes. NPR reported today that home ownership in the U.S. fell to its lowest rate since 1965, while the share of U.S. households who rent is nearing a 50-year high. This trend appears nationwide and can hardly be blamed on consumer protection laws in Colorado.

This boom in apartments, furthermore, has not been bad for the construction industry. On the contrary, the report notes that demand for apartments is fueling a “construction resurgence,” and H.U.D. recently announced a new high in nationwide housing starts. In a recent interview, the chairman of the National Association of Home Builders credited apartment construction for this rise: “New household formations are upping the demand for rental housing, which in turn is spurring the growth of multifamily production…. Meanwhile, single-family housing continues to hold firm.”

Colorado legislators should remember these statistics next session, when the homebuilders make their annual pilgrimage to the Capitol to complain about how the state’s consumer protection laws are killing the construction industry. Just because builders are profiting from record-high demand for apartments does not mean that lawmakers should strip away consumer protections for those who choose to buy new homes.

Obama approves update to FHA condominium approvals

This is great news for both homeowners and HOA’s. The restrictions enacted after the 2008 crisis caused vacancies in communities and delayed sales, leaving many of our clients in dire straits.

https://www.caionline.org/Advocacy/GovernmentAffairsBlog/Pages/Hr3700signed.aspx

Colorado adopts Twombly-Iqbal “plausibility” standard

Last week, the Colorado Supreme Court announced a dramatic shift in its rules of pleading, adopting the federal courts’ requirement that a claim must be “plausible on its face” to survive a motion to dismiss. Although seemingly subtle, this change transfers much more power to district court judges and weakens the right to a jury in civil actions.

For decades in Colorado, courts have held that a plaintiff’s complaint need merely provide a defendant with notice of the transaction that caused an alleged injury. Judges would not dismiss the complaint unless it appeared “beyond doubt” that the plaintiff could prove “no set of facts” which would entitle him or her to relief. See Davidson v. Dill, 180 Colo. 123, 131, 503 P.2d 157, 162 (1972), quoting Conley v. Gibson, 355 U.S. 41 (1957). This was rooted in the notion that the civil jury was the ultimate arbiter of disputed facts in American jurisprudence. Every party was entitled to have his or her “day in court” and present claims to a group of jurors selected from the community, rather than a judge appointed by the governor.

In 2007, however, the United States Supreme Court began a move away from this long-standing rule. In Bell Atlantic v. Twombly, 550 U.S. 544, 547 (2007), Justice Souter wrote for the majority when it held that an antitrust complaint must be pleaded with “enough facts to state a claim to relief that is plausible on its face.” Because the Court found that the plaintiffs “have not nudged their claims across the line from conceivable to plausible,” Souter concluded that “their complaint must be dismissed.”

Two years later, the Court expanded Twombly to dismiss a discrimination claim in Ashcroft v. Iqbal, 556 U.S. 662 (2009). This time, Souter dissented and argued that the majority was misinterpreting his earlier opinion in Twombly to suggest that a judge should “consider whether the factual allegations are probably true” at the motion-to-dismiss stage, an implication he had been careful to avoid in Twombley. See Iqbal, 522 U.S. at 696 (Souter, J., dissenting). Nevertheless, the court’s four conservative members joined Justice Kennedy’s majority opinion, which held 5-4 that the “plausible” standard would henceforth apply to all actions in federal courts.”

At first, Colorado seemed poised to resist this change. In Western Innovations, Inc. v. Sonitrol Corp., 187 P.3d 1155, 1158 (Colo. App. 2008), the Colorado Court of Appeals acknowledged the federal courts’ “plausible” standard but adhered to the state courts’ “no set of facts” precedent. On 27 June 2016, however, the Colorado Supreme Court expressly adopted the holdings of Twombly and Iqbal when it announced Warne v. Hall, 2016CO50.

In Warne, a resident of Gilcrest sued the town’s mayor alleging tortious interference with his contract to sell land to a drilling company. The resident’s complaint contained allegations of the mayor’s misconduct, but the district court concluded that these allegations were not specific enough, dismissed the resident’s case, and awarded attorney fees to the mayor. The court of appeals reversed in an unpublished decision, holding that it was not beyond doubt that the plaintiff could prove no set of facts entitling him to relief. In a divided 4-3 ruling, the state supreme court reversed after adopting Twombly and Iqbal, finding that the resident’s claim was not plausible on its face.

Justice Coats wrote the majority opinion in Warne, ¶¶ 15-20. He reviewed the history of the Colorado Rules of Civil Procedure and noted that they had been drafted to mirror those of the federal courts. Having different pleading standards in the state and federal courts could confuse attorneys and promote forum shopping. In addition, he also relied on “the costs of modern litigation and the inadequacy of discovery and case management alone to weed out groundless complaints.” Considering these factors, the majority held that Twombly and Iqbal represented the better interpretation of the Colorado rules and adopted their standard moving forward.

Justice Gabriel, the newest member of the court, wrote an impassioned dissent. He criticized the majority’s decision to “jettison[] a rule that had stood the test of time for over fifty years” simply to promote uniformity with the federal courts. Warne ¶ 31 (Gabriel, J., dissenting). He expressed concern that “the majority’s preferred standard allows a single district judge, at the incipient stages of a case, to weigh what the judge speculates the plaintiff will plausibly be able to prove, based on the individual judge’s subjective experience and common sense, and then to decide whether the plaintiff’s action is viable.” Id. He emphasized the problem of the “information asymmetry” that exists when a plaintiff must make detailed allegations of facts known only to a defendant. Id. ¶ 39. He also noted the existing protections that already allow judges to weed out unmeritorious claims. Id. ¶ 41.

While the full effect of the court’s ruling in Warne may not manifest for some time, it is quite likely to result in judges dismissing more cases before the jury ever hears the evidence. It is certain to mean more motion practice at the outset of cases. This shift may unfairly penalize the victims of large corporations able to pay large legal bills to keep their dealings private. In an age where civil jury trial rights have already been eroded by ubiquitous consumer arbitration clauses, this is reason for concern. In the past, a plaintiff could at least rely on discovery to determine if a defendant had withheld or concealed details about how a wrong occurred. Now, judges may dismiss meritorious lawsuits at the pleading stage, before a plaintiff ever has any opportunity to access materials that the defendant has kept secret.

Two other problems may arise from Warne. First, the acknowledged “information asymmetry” may have a much more draconian effect in state courts due to their different pre-trial procedures. Although Justice Coats was correct in recognizing that the state rule governing motions to dismiss is nearly identical to the corresponding federal rule, compare Colo. R. Civ. P. 12(b)(5) with Fed. R. Civ. P. 12(b)(6), this similarity does not extend to those rules that govern pre-trial case management. In the federal courts, judges must generally issue scheduling order providing for commencement of discovery within sixty days after a complaint has been served, regardless of whether a defendant has answered or moved to dismiss. See Fed. R. Civ. P. 16(b)(2); see also D.C.COLO.LCivR 16.2. Although federal judges may elect to stay discovery while a motion to dismiss is pending, such stays are “generally disfavored” in the District of Colorado. See, e.g., Wason Ranch Corp. v. Hecla Mining Co., 2007 WL 1655362 (D. Colo. June 6, 2007). Thus, a plaintiff in Colorado federal court facing a motion to dismiss under Iqbal may still have a chance to obtain some discovery and correct deficiencies in his or her pleading before a motion to dismiss is granted. By contrast, the corresponding rule in state court does not allow for any discovery until after the case is deemed “at issue,” which is defined to occur after all motions to dismiss have been ruled on and every party has either answered or been held in default. See Colo. R. Civ. P. 16(b). In state court actions, one may now expect cases to be dismissed under Warne before any discovery takes place.

Second, the expansion of the “plausibility” standard into Colorado courts may indirectly increase the power of state court judges to award attorney fees to defendants, further stacking the deck against some tort victims. Colorado generally follows the “American Rule,” whereby each party pays his or her own lawyer regardless of who wins the case. This tends to promote settlement and discourage parties from suing one another over minor disputes or losses. A statutory exception exists, however, to tort claims dismissed under state Rule 12(b); if a plaintiff’s claim is so weak that a judge can dismiss it without hearing the evidence, Section 13-17-201 of the Colorado Revised Statutes allows a defendant to recover attorney fees. In the past, this exception has been narrow, insofar as the statute itself makes clear that it does not apply to cases where the judge elects to consider the factual basis of a plaintiff’s allegations by treating a motion to dismiss as a motion for summary judgment. Under the new standard announced in Warne, by contrast, this statutory exception may indeed allow judges to award attorney fees when a complaint’s factual basis is deemed to be not “plausible on its face” under the Iqbal test, a huge shift in Colorado jurisprudence. In the Warne case itself, 2016CO50 ¶ 29, Justice Coates spared the plaintiff this penalty by granting him leave to amend his pleadings to meet the new standard, but future litigants may not be so lucky.

For further information about the Warne v. Hall decision or other matters of Colorado law, please contact The Witt Law Firm or visit www.witt.law.

Witt named to 2016 Super Lawyers

The Witt Law Firm is proud to announce that its principal, Jesse Howard Witt, has been recognized as one of Colorado’s Super Lawyers in the field of construction law.

Super Lawyers is a rating service of outstanding lawyers who have attained a high-degree of peer recognition and professional achievement. Super Lawyers selects attorneys using a patented multiphase selection process. Peer nominations and evaluations are combined with independent research. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement. Selections are made on an annual, state-by-state basis. The objective is to create a credible, comprehensive and diverse listing of outstanding attorneys that can be used as a resource for attorneys and consumers searching for legal counsel. Since Super Lawyers is intended to be used as an aid in selecting a lawyer, it limits the lawyer ratings to those who can be hired and retained by the public. This is the fourth time that Super Lawyers has recognized Mr. Witt.