author: Judge RUSSEL.

text:
    BERENERGY CORPORATION, Plaintiff-Appellant and Cross-Appellee, v. ZAB, INC.; Zalman Resources, Inc.; Daven Corporation; and Sport Resources, Inc., Defendants-Appellees and Cross-Appellants.
    Nos. 02CA0009, 02CA1872.
    Colorado Court of Appeals, Div. V.
    June 3, 2004.

      Horowitz & Wake, Jay S. Horowitz, Peter C. Forbes, Robert T. Fishman, Denver, Colorado, for Plaintiff-Appellant and Cross-Ap-pellee.
    Brega & Winters, P.C., Charles F. Brega, Scott T. Rodgers, Denver, Colorado, for Defendants-Appellees and Cross-Appellants.
   Opinion by

Judge RUSSEL.

In this declaratory judgment action, plaintiff, Berenergy Corporation, appeals the trial court’s judgment dismissing its amended complaint. Defendants, Zab, Inc; Zalman Resources, Inc.; Daven Corporation; and Sport Resources, Inc., cross-appeal the court’s order denying attorney fees. We affirm in part, reverse in part, and remand with directions.

Sheldon K. Beren incorporated Berenergy to invest in drilling and acquisition ventures in oil and gas wells. In 1985, each of Beren’s sons formed a corporation to participate in Berenergy’s ventures. These ventures were operated either by Berenergy or a third party, but never by Beren’s sons’ corporations, which are the defendants here. Beren caused Berenergy to charge defendants $150 per well per month for overhead, a rate significantly below the industry standard.

Beren died in 1996. In 1998, Berenergy tried to sell its interests in wells operated with any defendant, but it found that the marketability of its interests was harmed by uncertainty surrounding the $150 arrangement. Berenergy then brought this declaratory judgment action under C.R.C.P. 57 to determine its rights and obligations with respect to defendants and the $150 arrangement.

The trial court dismissed Berenergy’s case on alternative grounds: (1) the court lacked jurisdiction to grant declaratory relief when the dispute concerned the existence or validity of an oral contract; and (2) Berenergy’s amended complaint failed to state a claim on which relief could be granted. The trial court also found that further amendment of the complaint would be futile because Beren-ergy could not cure the defects inherent in its cause of action. The court awarded defendants their costs, but it denied their request for attorney fees.

I. Declaratory Relief on Oral Contract

We first consider the trial court’s jurisdictional ruling. The court held that a declaratory judgment action cannot be used to determine rights under an oral contract. We conclude that this ruling was incorrect.

A. Governing Standards

A declaratory judgment action is appropriate when the rights asserted by the plaintiff are present and cognizable. Lot Thirty-Four Venture, L.L.C. v. Town of Telluride, 976 P.2d 303, 307 (Colo.App.1998), aff'd, 3 P.3d 30 (Colo.2000). A court may refuse to render a declaratory judgment where it would not terminate the uncertainty or controversy giving rise to the proceeding. Section 13-51-110, C.R.S.2003; C.R.C.P. 57(f). A court should not render a declaratory judgment unless it will fully and finally resolve the uncertainty and controversy as to all parties with a substantial interest who could be affected by the judgment. Section 13-51-110; C.R.C.P. 57(f); Constitution Assocs. v. New Hampshire Ins. Co., 930 P.2d 556, 561 (Colo.1996).

The trial court has discretion to determine whether to permit a declaratory judgment action. Constitution Associates v. New Hampshire Ins. Co., 930 P.2d 556, 561 (Colo.1996). An appellate court will overturn the trial court’s decision only for an abuse of that discretion. Troelstrup v. Dist. Court, 712 P.2d 1010, 1012 (Colo.1986).

However, whether a court has jurisdiction under the Uniform Declaratory Judgments Law (UDJL), adopted in Colorado by § 13-51-101, et seq., C.R.S.2003, to determine the existence or validity of an oral contract is a question of statutory interpretation that we review de novo. See City of Colorado Springs v. Conners, 993 P.2d 1167, 1171 (Colo.2000) (whether trial court had subject matter jurisdiction to hear plaintiffs claim under the Governmental Immunity Act was a question of statutory interpretation subject to de novo review); Gorman v. Tucker, 961 P.2d 1126, 1128 (Colo.1998) (interpretation of a statute is a question of law, and an appellate court is not bound by the trial court’s interpretation).

B. Discussion

Berenergy’s case concerns the rate that it charges defendants for operating overhead. Berenergy asked the court to declare that there was no oral contract that would require it to continue charging only $150 per month.

The trial court ruled that it lacked jurisdiction to grant the relief that Berenergy sought. The court based this ruling on language in § 13-51-106, C.R.S.2003, and its corresponding rule, C.R.C.P. 57(b). This language indicates that a person may obtain a declaration of rights under a “written contract”:

Any person interested under a deed, will, written contract or other writings constituting a contract or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder.

(Emphasis added.)

In examining this language, the trial court found that the word “contract,” as it appears in the second clause, impliedly refers back to “written contract” in the first clause. Therefore, the court ruled, “the legislature intended to make declaratory relief available only to persons seeking a determination of their rights or obligations under written instruments.”

Berenergy challenges this ruling. Although it does not take issue with the trial court’s interpretation of the language quoted above, Berenergy argues that the court overlooked other relevant language. Citing § 13-51-109, C.R.S.2003, and C.R.C.P. 57(e), Berenergy argues that declaratory relief is not limited to the enumerated situations, but is broadly available to settle controversies in other situations:

The enumeration in sections 13-51-106 to 13-51-108 does not limit or restrict the exercise of the general powers conferred in section 13-51-105, in any proceeding where declaratory relief is sought, in which a judgment or decree will terminate the controversy or remove an uncertainty.

Section 13-51-109, C.R.S.2003.

We agree with Berenergy. Although § 13-51-106 and C.R.C.P. 57(b) detail situations in which declaratory judgment actions may be brought, they do not restrict the court’s ability to grant declaratory relief in other situations when appropriate. For example, declaratory relief has been held appropriate when the dispute centers, not on the interpretation of a written insurance policy, but rather on factual questions under the policy. See Am. Family Mut. Ins. Co. v. Bowser, 779 P.2d 1376, 1379 (Colo.App.1989).

Courts in other jurisdictions have held that declaratory relief is available under the UDJL to determine the existence or validity of an oral agreement. See, e.g., Dukes v. Pearson, 794 So.2d 1181, 1183 (Ala.Civ.App. 2001) (declaratory judgment is appropriate to construe oral contract before it has been breached); Sorrentino v. Barwick, 412 So.2d 55, 56 n. 1 (Fla.Dist.Ct.App.1982) (court has power to determine rights under an oral contract); Penley v. Penley, 314 N.C. 1, 332 S.E.2d 51, 65 (1985) (court has power to declare rights under an oral contract); Ken Leahy Constr., Inc. v. Cascade Gen., Inc., 329 Or. 566, 994 P.2d 112, 117 (1999) (court has power to determine whether oral contract existed).

Defendants ask that we ignore authorities from other states because Berener-gy failed to invoke the UDJL in its amended complaint. We reject this suggestion. By invoking C.R.C.P. 57 in its amended complaint, Berenergy also invoked the pertinent statute. See People ex rel. Inter-Church Temperance Movement v. Baker, 133 Colo. 398, 403, 297 P.2d 273, 276 (1956)(declaratory judgments statute is incorporated in the rules of civil procedure). And we would be required to consider out-of-state authorities in any event, for the General Assembly has indicated that Colorado’s version of the UDJL should be construed so that it is in harmony with the law of other jurisdictions. See § 13-51-104, C.R.S.2003. These authorities support our conclusion that declaratory judgment actions may be filed to determine the existence of, or rights under, an oral contract.

Defendants also argue that, because the trial court could not reform the contract between Berenergy and defendants, it was powerless to terminate the controversy and thus did not abuse its discretion in declining to exercise jurisdiction. We reject this argument as well. As noted above, Berenergy asked the court to declare that no contract exists. Although Berenergy had initially pled a claim for reformation, it later dismissed this claim.

II. Dismissal under C.R.C.P. 12(b)(5)

We next examine the trial court’s determination that Berenergy failed to state a claim upon which relief could be granted. We conclude that the court erred with respect to Berenergy’s claim for prospective relief.

A. Governing Standards

Motions to dismiss for failure to state a claim under C.R.C.P. 12(b)(5) are “viewed with disfavor and are rarely granted under our ‘notice pleadings.’ ” Dunlap v. Colo. Springs Cablevision, Inc., 829 P.2d 1286, 1291 (Colo.1992) (quoting Davidson v. Dill, 180 Colo. 123, 131, 503 P.2d 157, 162 (1972)). A trial court may not dismiss a complaint for failure to state a claim unless it appears that the plaintiff can prove no set of facts in support of the claim. In addition, the trial court must view the allegations of the complaint in the light most favorable to the plaintiff. Grizzell v. Hartman Enters., Inc., 68 P.3d 551, 553 (Colo.App.2003).

We review the trial court’s order de novo. Scott Sys., Inc. v. Scott, 996 P.2d 775, 780 (Colo.App.2000). Like the trial court, we are required to view the allegations in the light most favorable to the plaintiff. Pub. Serv. Co. v. Van Wyk, 27 P.3d 377, 386 (Colo.2001).

B. Discussion

Berenergy contends that its amended complaint presented four related claims, each of which could have yielded relief. We discuss each of these claims in turn.

1.“Gratuitous Arrangement” Regarding Overhead

Berenergy alleged that, through a “gratuitous arrangement,” Sheldon Beren caused it to charge only $150 per month for each of defendants’ wells. It further alleged that, since Beren’s death, it has been free to charge a different amount, one that reflects the industry standard rate, and it asked the court for a declaration to this effect.

The court rejected Berenergy’s claim on alternative grounds. It first found that, by using the term “arrangement,” Berenergy necessarily alleged that it had entered into an “agreement” to charge only $150 per month. The court then reasoned that, because the agreement was supported by consideration- — defendants’ corresponding agreement to pay $150 per month — Berenergy essentially had alleged that it was party to an enforceable contract.

Alternatively, the court found that the term “gratuitous” meant that the $150 rate was a “gift.” Because this gift had already been given and received in 1986, the court ruled, it was complete and could not be revoked.

We disagree with the court’s view of the amended complaint. The phrase “gratuitous arrangement” can reasonably be construed to mean something that is neither an enforceable contract nor a completed gift. In this context, the phrase contemplates the following: (1) Sheldon Beren caused Berenergy to charge the favorable rate of $150 per month as an act of kindness to his sons; (2) although unable to change the rate for months in which it had already charged and received $150, Berenergy, acting though Beren, was free to increase the rate at the beginning of each new month; and (3) Berenergy, acting through its current officers, remains free to increase the rate now.

We conclude that, on its face, the amended complaint alleges facts that would entitle Berenergy to the declaration it seeks — a determination that it is free to discontinue its practice of limiting overhead charges to $150 per well per month. Accordingly, as to this aspect of Berenergy’s amended complaint, the trial court’s order of dismissal was erroneous and is reversed.

2.Unenforceable Oral Contract

Pleading in the alternative, Berener-gy alleged that, if the $150 rate was not charged pursuant to a “gratuitous arrangement,” and was instead the subject of an oral contract, the contract was unenforceable under the statute of frauds.

The trial court found that, because such a contract could theoretically be performed within one year, the statute of frauds was inapplicable. See § 38-10-112, C.R.S.2003 (unless in writing, an agreement is void if it is not to be performed within one year). The court found that “the agreement with respect to the $150 Rate is contractual in nature, and that this contract remains enforceable to this day.”

These findings are. premature. If, after hearing all the evidence, the court finds that Berenergy and defendants entered into ari oral contract, the court should determine the terms of that contract. Only then can the court determine whether the contract is enforceable under the statute of frauds.

3.Past Undercharges and Unjust Enrichment

Berenergy also sought to recover for its past “undercharges” — that is, the difference between the $150 per month actually charged and. the industry standard market rate, dating back to the death of Sheldon Beren. Berenergy asked the trial court to declare that it could recover this difference under a theory of unjust enrichment.

Because the trial court rejected Berener-gy’s entire claim regarding the $150 rate, it did not separately address whether Berener-gy could recover for these undercharges. But our reading of the amended complaint requires us to consider whether the request for lost income resulting from the undercharges stands in a position different from Beren-ergy’s request for prospective relief.

We conclude that it does. Even when read in the light most favorable to Berenergy, the amended complaint does not contain allegations that would entitle Berenergy to recover for undercharges on a theory of unjust enrichment.

To recover on this theory, Berenergy would have to show that it would be unjust for defendants to retain the benefit of the below-market charges. See DCB Constr. Co. v. Cent. City Dev. Co., 965 P.2d 115, 119-20 (Colo.1998)(to recover for unjust enrichment, plaintiff must prove that defendant received a benefit at its expense under circumstances that would make it unjust for defendant to retain the benefit without paying). But the amended complaint contains no allegation that would support such a showing. For example, Berenergy did not allege that it was induced to charge the $150 rate through fraud, coercion, or mistake. It alleged only that the $150 rate was offered “gratuitously,” and there is nothing unjust about retaining a benefit conferred gratuitously. See Liautaud v. Liautaud, 221 F.3d 981, 988 (7th Cir.2000)(“a party may not recover damages for unjust enrichment pursuant to a gift relationship”); In re Estate of Hill, 492 N.W.2d 288, 295 n. 2 (N.D.1992)(a finding of a gift necessarily defeats a finding of unjust enrichment, absent circumstances of fraud, undue influence', and the like, for equity generally cannot force the repayment of a gift).

Thus, as to past undercharges, the amended complaint alleges nothing more than a series of completed gifts. Berenergy evidenced its intent to make a gift each month when it charged the below-market rate of $150, and this gift was completed each month when defendants paid the $150. See Bunnell v. Iverson, 147 Colo. 552, 557, 364 P.2d 385, 387 (1961)(gift is complete when there is (1) a clear and unmistakable intention to make the gift, and (2) the consummation of such intention by those acts which the law requires to divest the donor and invest the donee with the right of property). Once a gift is completed, it cannot be revoked. Bunnell v. Iverson, supra, 147 Colo. at 557, 364 P.2d at 388.

Accordingly, this aspect of Berenergy’s amended complaint was properly dismissed under C.R.C.P. 12(b)(5).

4. Absence of a Written Operating Agreement

Berenergy contends that the amended complaint presented a claim that is independent of its dispute about the $150 rate. In Berenergy’s view, the amended complaint put at issue the entire operating relationship between Berenergy and defendants. We disagree.

Even when read in the light most favorable to Berenergy, the amended complaint presents no dispute apart from the $150 rate. Although Berenergy claimed that it had been harmed by the absence of a signed operating agreement, the alleged harm centered on the $150 rate:

21. In early 1998, pursuant to an Order of the Denver Probate Court, Berenergy attempted to sell its interest in all operated wells in which it owned working interests with the Beren Sons’ Corporations. Due to the lack of a signed operating agreement between Berenergy and the Beren Sons’ Corporations and the below market COPAS overhead rates which had been gratuitously established by Sheldon K. Beren, Berenergy was unable to complete the sale of its working interests. Essentially, the gratuitous arrangement between Berenergy and the Beren Sons’ Corporations severely limited the marketability of Berenergy’s interests, a situation that was never intended by Sheldon K. Beren.
22. Subsequently, Berenergy was advised that the Beren Sons’ Corporations would each require, at a minimum, a two percent (2%) premium to sell their interests together with Berenergy and thereby allow Berenergy’s interests to be sold. Alternative efforts to have the Beren Sons’ Corporations enter into an operating agreement that would allow Berenergy to market its interest without the concurrence of the Beren Sons’ Corporations have been futile. The marketability and value of Berener-gy’s interests are being held hostage by the gratuitous arrangement entered into by Sheldon K. Beren and the Beren Sons’ Corporations.

(Emphasis added.)

Berenergy contends that the broader claim is contained in its prayer for relief: “Plaintiff requests that the District Court define the legal relationship between Beren-ergy Corporation and each of the Beren Sons’ Corporations.” We reject this argument. A prayer for relief is not considered a component of a plaintiffs claim. Township Homeowners Ass’n v. Arapahoe Roofing & Sheet Metal Co., 844 P.2d 1316, 1318 (Colo. App.1992). And even if it were, Berenergy’s request to “define [its] legal relationship” is based solely on factual allegations asserting uncertainty surrounding the $150 rate.

We therefore conclude that Berenergy did not allege any claim other than the one based on the $150 rate.

III. Further Amendment

Berenergy argues that the trial court erred in ruling that further amendment of Berenergy’s complaint would be futile. In light of our determinations above, we need not address this argument. On remand, the trial court may exercise its discretion in ruling on any motion for further amendment. See Super Valu Stores, Inc. v. Dist. Court, 906 P.2d 72, 77 (Colo.1995).

IV. Attorney Fees and Costs

Defendants cross-appeal from the trial court’s order denying their request for attorney fees. Defendants assert that Ber-energy’s action was both substantially frivolous and substantially vexatious. We disagree.

Section 13-17-102(2), C.R.S.2003, authorizes the court to award reasonable attorney fees against “any attorney or party who has brought or defended a civil action, either in whole or in part, that the court determines lacked substantial justification.” The term “lacked substantial justification” means “substantially frivolous, substantially groundless, or substantially vexatious.” Section 13-17-102(4), C.R.S.2003.

A claim or defense is frivolous if the proponent “can present no rational argument based on the evidence or law” in support of it. W. United Realty, Inc. v. Isaacs, 679 P.2d 1063, 1069 (Colo.1984). A vexatious claim or defense is one brought or maintained in bad faith. Zivian v. Brooke-Hitching, 28 P.3d 970, 974 (Colo.App.2001).

Defendants assert that this action was (1) substantially frivolous because Berenergy’s amended complaint did not entitle it to relief under any legal theory and (2) substantially vexatious because it was brought in bad faith. We disagree. As this opinion demonstrates, Berenergy’s action cannot be characterized as substantially frivolous at this stage of the proceedings. We also find record support for the trial court’s implicit determination that this action was not maintained in bad faith, including evidence to suggest that suit was brought only after other attempts to define the parties’ respective rights and obligations had failed. Accordingly, we affirm the trial court’s ruling regarding attorney fees.

Finally, Berenergy challenges the trial court’s order awarding defendants their costs. We agree with Berenergy. The prevailing party in a motion to dismiss is entitled to recover its costs. Section 13-16-107, C.R.S.2003. In light of our determination that the underlying judgment must be reversed, the award of costs is also reversed. Nichols v. Burlington N. & Santa Fe Ry., 56 P.3d 106, 110 (Colo.App.2002).

The court’s order denying attorney fees is affirmed. The judgment is reversed, as is the order awarding costs, and the case is remanded for further proceedings consistent with this opinion.

Judge VOGT and Judge DAILEY concur.


source: Caselaw Access Project

author: Judge DAILEY.

license: Public Domain

text:
    DEPARTMENT OF TRANSPORTATION, State of Colorado, Respondent-Appellant, v. Bennett A. AUSLAENDER, Petitioner-Appellee.
    No. 03CA0152.
    Colorado Court of Appeals, Div. III.
    June 3, 2004.

      Ken Salazar, Attorney General, Larry D. Tannenbaum, Assistant Attorney General, Denver, Colorado, for Respondent-Appellant.
    Moss & O’Dell, P.C., Edward C. Moss, Denver, Colorado, for Petitioner-Appellee.
   Opinion by

Judge DAILEY.

In this appeal arising out of a contempt proceeding, respondent, the Colorado Department of Transportation (CDOT), challenges the trial court’s order granting in-junctive relief to petitioner, Bennett A. Auslaender. We reverse.

CDOT instituted an eminent domain proceeding to obtain from Auslaender property needed to widen U.S. Highway 285 near Conifer, Colorado. In its condemnation petition, CDOT requested immediate possession of the property, which Auslaender originally planned to contest. However, the parties reached a stipulation agreeing to CDOT’s immediate possession, and after a’ hearing, the trial court entered orders approving the stipulation and granting CDOT immediate access to and possession of the property.

Subsequently, Auslaender initiated the present contempt proceeding, in which he alleged, as pertinent here, that CDOT violated a provision in the stipulation regarding his ability to plow and store snow at the end of his driveway. That provision (paragraph 14) provided that “[CDOT] and Mr. Auslaender will work together during the construction phase of the project to ensure an adequate driveway entrance width for snow placement purposes, as not to interfere with traffic.”

Auslaender alleged that CDOT violated paragraph 14 by granting adjacent property owners a state access permit for the construction of a deceleration lane going through his snow storage area.

Following an evidentiary hearing, the trial court declined to hold CDOT in contempt. In the court’s view, the contempt proceeding was premature because (1) “nothing has been approved at this stage with respect to the placement of the deceleration lane,” namely, “whether it will go in or not” and, if so, the width of its accompanying, potentially interfering shoulder; (2) “we have not gone through the winter yet and everybody is speculating on whether [Auslaender] can or can’t, will or won’t be able to maneuver and place the snow;” and (3) no ruling regarding snow storage and placement would be possible in the absence of those parties who had filed or were otherwise concerned with an application for a deceleration lane.

However, the trial court issued an injunction prohibiting CDOT from “making any final approval ... with respect to the deceleration lane without first joining [the deceleration lane permit applicants] as indispensable parties ... and scheduling a hearing ... so that this Court can decide ... whether or not [the lane] will interfere with paragraph 14.”

I. Subject Matter Jurisdiction

CDOT contends that the trial court had no jurisdiction in this eminent domain case to enter, much less enforce, a stipulated order regarding Auslaender’s snow removal or placement rights. We disagree.

CDOT correctly points out that (1) eminent domain proceedings are special statutory proceedings concerning issues of governmental possession and compensation for the use of private property, see Ossman v. Mountain States Tel. & Tel. Co., 184 Colo. 360, 366, 520 P.2d 738, 742 (1974); Denver Joint Stock Land Bank v. Bd. of County Comm’rs, 105 Colo. 366, 368, 98 P.2d 283, 285 (1940); (2) collateral or extraneous issues that change the scope of eminent domain proceedings are not permitted in such proceedings, Denver Power & Irrigation Co. v. Denver & Rio Grande R.R., 30 Colo. 204, 215, 69 P. 568, 571-72 (1902); cf. Ossman v. Mountain States Tel. & Tel. Co., supra, 184 Colo. at 364, 520 P.2d at 741 (inverse condemnation proceedings); and (3) subject matter jurisdiction cannot be conferred on a court by the agreement of the parties. See Mesa County Valley Sch. Dist. No. 51 v. Kelsey, 8 P.3d 1200, 1206 (Colo.2000).

However, issues pertaining to the government’s right to take immediate possession of condemned property are properly part of eminent domain proceedings. See § 38-1-105(6), C.R.S.2003 (authorizing court to award possession of the condemned property at any stage of the proceedings).

From the record before us, it is clear that the parties entered into the stipulation to resolve the dispute over CDOT's right to take immediate possession of the property. Because the trial court had jurisdiction to decide issues pertaining to the government’s possession of property, it necessarily follows that the trial court also had jurisdiction to accept, interpret, and enforce a stipulation resolving such issues. See State Highway Dep’t v. Swift, 129 Colo. 413, 419-20, 270 P.2d 751, 755 (1954)(interpreting stipulation regarding landowner’s access to public freeway in eminent domain proceeding); Denver Urban Renewal Auth. v. Steiner Am. Corp., 31 Colo.App. 125, 132-33, 500 P.2d 983, 986-87 (1972)(enforcing stipulation regarding compensable nature of property not taken in eminent domain proceeding); cf. Crystal Lakes Water & Sewer Ass’n v. Backlund, 908 P.2d 534, 543 (Colo.1996)(“As a general rule, ‘[o]nce a court takes jurisdiction of an action, it thereafter has exclusive jurisdiction of the subjects and matters ancillary thereto.’ ” (quoting People ex rel. Maddox v. Dist. Court, 198 Colo. 208, 211, 597 P.2d 573, 575 (1979))).

CDOT’s reliance on Tegeler v. Schneider, 49 Colo. 574, 114 P. 288 (1911), is misplaced. In Tegeler, the supreme court held that a trial court did not have jurisdiction in an eminent domain proceeding to quiet title or otherwise protect a neighbor’s rights to wastewater in or flowing from a condemned irrigation ditch. Unlike the present ease, however, in Tegeler the parties had not relied on an agreement about wastewater rights to resolve a core — and disputed — issue of the eminent domain proceeding.

For these reasons, we conclude that the trial court had jurisdiction to enter and enforce the stipulated order, including the provision regarding Auslaender’s snow removal rights.

II. Merger of Order

We reject CDOT’s suggestion that the stipulated order merged into, and thus was extinguished by, the subsequent entry of a final order in the eminent domain case that did not expressly incorporate the stipulated order.

Nothing in the text of the stipulation or in the record indicates that the stipulation was intended to be temporary in nature. The stipulation granted Auslaender a specific right to clear snow from his driveway. This right — akin to an easement or right-of-way — ■ was independent of, and therefore not extinguished by, a final order determining the amount of just compensation for the taking of Auslaender’s property. See, e.g., State Highway Dep’t v. Swift, supra, 129 Colo. at 419-20, 270 P.2d at 755 (interpreting stipulation, entered into prior to final order, regarding landowner’s access to public freeway in eminent domain proceeding).

Accordingly, we conclude that the trial court’s stipulated order was, and is still, enforceable.

III. Injunctive Relief

We agree, however, with CDOT’s contention that the trial court erroneously enjoined it from approving construction of a proposed deceleration lane, pursuant to administrative proceedings subject to judicial review, without a prior hearing in the trial court.

In this contempt proceeding, Auslaender sought, as a remedial sanction for CDOT’s approval of a deceleration lane permit, an order precluding CDOT from making any further decision that would affect his snow storage area. See C.R.C.P. 107(a)(5) (defining remedial contempt sanctions as “[s]anc-tions 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”).

However, remedial contempt sanctions may be imposed only for or in connection with an underlying contempt of court. See C.R.C.P. 107(d)(2) (court may “find ... contempt and order [remedial] sanctions”; in such case, the order must describe “the means by which the person may purge the contempt and the sanctions that will be in effect until the contempt is purged”); In re Estate of Elliott, 993 P.2d 474, 479 (Colo. 2000)(“when remedial sanctions are imposed, the [trial] court must make findings of fact regarding the actions constituting the contempt and the present duty and ability to perform the acts required to purge oneself of contempt”).

Here, because the trial court declined to find CDOT in contempt, there was no contempt for which remedial sanctions could be ordered. Consequently, the trial court’s injunction is not sustainable as a remedial contempt sanction.

Auslaender nonetheless contends that the injunction was properly entered pursuant to the trial court’s inherent power to enforce the stipulated order. We are not persuaded.

“Judicial power to enjoin an executive agency under the doctrine of inherent power is limited.” Rocky Mountain Animal Def. v. Colo. Div. of Wildlife, — P.3d -, -, 2004 WL 583742 (Colo.App. No. 02CA0503, Mar. 25, 2004); see Jones v. Colo. State Bd. of Chiropractic Exam’rs, 874 P.2d 493, 494 (Colo.App.1994)(“The power of the courts to order executive agencies to take any action is extremely limited. Injunctive relief is not generally available against an administrative agency performing the duties delegated to it").

Inherent judicial power to enjoin an executive agency “should be exercised where an agency refuses to obey a court order.” Rocky Mountain Animal Def. v. Colo. Div. of Wildlife, supra, — P.3d at -, 2004 WL 583742. And even where statutorily authorized, “[c]ourts should not grant the equitable remedy of injunction against other branches of government in the absence of convincing proof of threatened and impending wrongful action.” See State Bd. of Chiropractic Exam’rs v. Stjernholm, 935 P.2d 959, 971 (Colo.1997)(quoting City of Pueblo v. Flanders, 122 Colo. 571, 573, 225 P.2d 832, 833 (1950), in the context of deciding a claim for injunctive relief under 42 U.S.C. § 1983).

Here, because the trial court found neither a violation, nor a threatened and impending violation, of its order by CDOT, we conclude that the trial court erred in prematurely issuing an order for injunctive relief.

IV. Other Issues

Because of the manner in which we have resolved this ease, we need not address the other contentions raised by the parties on appeal.

Accordingly, the order granting injunctive relief is reversed.

Judge TAUBMAN and Judge GRAHAM concur.


author: Chief Judge DAVIDSON.

text:
    Laurence WOZNICKI, Plaintiff-Appellee, v. John MUSICK and W/J Ranch, Inc., Defendants-Appellants.
    No. 03CA2505.
    Colorado Court of Appeals, Div. A.
    June 17, 2004.

      Stevens Littman Biddison Tharp & Weinberg, LLC, Mark E. Biddison, Boulder, Colorado, for Plaintiff-Appellee.
    Appel & Lucas, P.C., Garry R. Appel, Denver, Colorado, for Defendants-Appellants.
   Opinion by

Chief Judge DAVIDSON.

Upon consideration of the parties’ responses, this court’s order to show cause entered on February 20, 2004 is discharged.

This case involves several intertwined claims and cross-claims concerning ownership of stock in the Salvation Ditch Company. Because of the large number of parties and claims, a trial to a jury on all issues would have taken more than a month. The trial court ultimately determined that a jury could not be seated for this entire period, and therefore, the court split the determination of the case into five phases.

In September 2003, the trial court conducted Phase I of the trial to a jury. The court entered an order on September 25, 2003, based on the jury verdict resolving claims between the defendants, John Musick and W/J Ranch, Inc., and plaintiff, Laurence Woznicki, and awarding damages to Woznicki (Phase I order). When defendants filed their notice of appeal on December 26, 2003, the trial court had not granted C.R.C.P. 54(b) certification of the Phase I order. While this order completely resolved the claims between defendants and Woznicki, all parties now agree that it was not a final and appealable judgment pursuant to C.R.C.P. 54(a) because of the remaining parties and claims.

Thus, we ordered defendants to show cause why the appeal should not be dismissed without prejudice for lack of a final judgment. In response, defendants provided an order from the trial court entered on February 25, 2004, granting C.R.C.P. 54(b) certification of its September 25, 2003, order. However, no remand was granted by this court to the trial court for consideration of a C.R.C.P. 54(b) motion.

We then deferred ruling upon the order to show cause and asked the parties for further briefing on whether the trial court had jurisdiction to enter the February 25, 2004, certification order once the notice of appeal had been filed.

Meanwhile, the trial court conducted the Phase II trial to a jury without a remand from this court. The resulting order was also certified under C.R.C.P. 54(b) by the trial court on February 25, 2004. A separate notice of appeal regarding Phase II was filed on March 25, 2004. We have deferred action on the Phase II notice of appeal because of the unresolved issue of whether the trial court had jurisdiction to conduct further proceedings on any substantive claim once the Phase I notice of appeal was filed.

I.

The issue we must decide is whether the filing of a notice of appeal from a nonfinal judgment divests the trial court of jurisdiction to consider further substantive issues related to the merits of the case. We conclude that, unlike a perfected appeal from a final judgment pursuant to C.R.C.P. 54(a), a premature notice of appeal does not divest the trial court of jurisdiction.

In Anstine v. Churchman, 74 P.3d 451 (Colo.App.2003), a division of this court concluded that an invalid notice of appeal divests the trial court of jurisdiction to consider substantive matters related to the judgment. First, we consider whether Anstine is inapplicable because the entry of C.R.C.P. 54(b) certification and the trial on Phase II are either collateral to the Phase I judgment or ministerial in nature. Next, while we conclude that these actions were neither collateral nor ministerial, we decline to follow the rule in Anstine and conclude that the trial court had jurisdiction to enter the C.R.C.P. 54(b) certification and conduct the Phase II proceedings. See In re Estate of Becker, 32 P.3d 557, 563 (Colo.App.2000) (“[Wjhile divisions of this court generally have given considerable deference to the decisions of other panels, one panel is not obligated to follow the precedent established by another.”), aff'd sub nom. In re Estate of DeWitt, 54 P.3d 849 (Colo.2002).

A.

Although a trial court retains jurisdiction to act on matters that are not relative to and do not affect the judgment on appeal, see, e.g., People v. Stewart, 55 P.3d 107 (Colo. 2002), neither the entry of C.R.C.P. 54(b) certification nor the trial on Phase II were collateral to the Phase I judgment or ministerial in nature.

C.R.C.P. 54(b) provides in part:

In the absence of [C.R.C.P. 54(b) certification], any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims, or parties and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

Thus, because the Phase I order was not certified under C.R.C.P. 54(b) when the appeal was filed, it remained subject to revision until resolution of the remaining claims.

Moreover, because the decision to certify an order under C.R.C.P. 54(b) is within the sound discretion of the trial court, and that very decision invests the appellate court with jurisdiction, the entry of such an order cannot be classified as either collateral or ministerial. Indeed, that is the rule in jurisdictions that hold a trial court is deprived of jurisdiction by the filing of a premature notice of appeal. See Williams v. Bernhardt Bros. Tugboat Serv., Inc., 357 F.2d 883, 884 (7th Cir.1966)(“the appeal already having been taken to this court, the district court was without jurisdiction to enter the delayed certificate”).

B.

We conclude nevertheless that the trial court retained jurisdiction to enter the C.R.C.P. 54(b) certification and to conduct the Phase II proceedings.

As relevant here, and absent an applicable exception provided by rule or statute, this court has jurisdiction to consider an appeal only from a final judgment. Section 13-4-102, C.R.S.2003. A final judgment is one that “ends the particular action in which it is entered, leaving nothing further for the court pronouncing it to do in order to completely determine the rights of the parties involved in the proceeding.” D.H. v. People, 192 Colo. 542, 544, 561 P.2d 5, 6 (1977)(quoting Stillings v. Davis, 158 Colo. 308, 310, 406 P.2d 337, 338 (1965)); see C.R.C.P. 54(a). Once an appeal is perfected from a final judgment, jurisdiction over the case is transferred from the trial court to the appellate court with regard to the substantive issues that are the subject of the appeal. Molitor v. Anderson, 795 P.2d 266 (Colo.1990).

At issue in Molitor v. Anderson, supra, was whether the trial court retained jurisdiction to deny a C.R.C.P. 60(b) motion after an appeal of a trial court’s final judgment had been perfected by the filing of a notice of appeal. The supreme court determined that the trial court was divested of jurisdiction for all essential purposes with regard to the substantive issues on appeal.

Unlike the division in Anstine v. Churchman, supra, we do not read Molitor to hold that the filing of any notice of appeal deprives the trial court of jurisdiction. Instead, we construe the rule in Molitor to apply only to perfected appeals from final judgments. Molitor v. Anderson, supra, 795 P.2d at 268 (“Once a judgment is final ... trial court proceedings concerning the substance of that judgment are concluded and the appellate court assumes control over all matters pertaining to the propriety thereof.” (emphasis added)).

Significantly, Molitor and the cases it relied on concerned appeals from final orders or judgments. Furthermore, while an appellate court such as ours always has limited jurisdiction to determine the full extent of its jurisdiction, see Davidson Chevrolet, Inc. v. City & County of Denver, 138 Colo. 171, 174, 330 P.2d 1116, 1118 (1958)(“Every court has judicial power to hear and decide the question of its own jurisdiction.”), it is powerless to act on the substantive merits of an appeal in the absence of a final order or judgment.

Consequently, because we have no jurisdiction over the substance of a nonfinal judgment or order, such jurisdiction must remain in the trial court. See Arevalo v. Colo. Dep’t of Human Servs., 72 P.3d 436, 437 (Colo.App.2003)(“A trial court and an appellate court cannot hold concurrent jurisdiction to determine substantive matters that directly affect the judgment of the trial court.”); see Ruby v. Secretary of United States Navy, 365 F.2d 385, 388 (9th Cir.1966)(jurisdiction must reside in either district court or appellate court and “cannot float in the air”). Thus, we have no authority to divest a trial court of jurisdiction over the merits of a case upon the filing of a premature notice of appeal.

As to the “concept of finality” emphasized in Molitor, we appreciate that allowing a trial court to modify a judgment while that judgment is on appeal would undermine the finality of the judgment upon which the appeal is based. See People v. Dist. Court, 638 P.2d 65 (Colo.1981). However, our conclusion that a prematurely filed notice of appeal does not deprive a trial court of continuing jurisdiction does not injure this principle. Rather, it underscores the critical distinction between the type of jurisdiction that transfers to the appellate court once the trial court has issued a final order or judgment and the limited jurisdiction always maintained by the appellate court, even in the absence of a final order or otherwise properly perfected appeal, to determine its own jurisdiction. See USM Corp. v. GKN Fasteners, Ltd., 574 F.2d 17, 18 (1st Cir.1978)(courts of appeal always have jurisdiction to determine whether they have jurisdiction to entertain appeal); Molitor v. Anderson, supra, 795 P.2d at 270 (contrasting authority of court of appeals to decline to exercise jurisdiction over untimely filed appeal with absence of trial court jurisdiction to consider C.R.C.P. 60(b) motion once appeal from final judgment had been filed).

Moreover, if jurisdiction in the trial court continues even though a premature notice of appeal has been filed, it would aid rather than hamper the effective administration of judicial process. The contrary rule would leave the judicial system powerless to prevent delays, whether caused by intentionally dilatory tactics or negligence, obstruct the nonappealing party’s right to continuing trial court jurisdiction, and inhibit the smooth and efficient functioning of the judicial process. See Missouri ex rel. Nixon v. Coeur D'Alene Tribe, 164 F.3d 1102 (8th Cir.1999); Smiley v. Atkinson, 12 Md.App. 543, 280 A.2d 277 (1971), aff'd, 265 Md. 129, 287 A.2d 770 (1972); Holste v. Burlington N. R.R., 256 Neb. 713, 592 N.W.2d 894 (1999).

Importantly, here, were we to hold that the trial court was deprived of jurisdiction by the prematurely filed notice of appeal, we would also have to conclude that the trial court did not have jurisdiction to conduct Phase II of the case or to enter the C.R.C.P. 54(b) certifications.

We recognize that the division in Anstine v. Churchman, supra, sought to create a bright line rule eliminating the need for a trial court to determine in advance whether an order was properly appealed. However, even if we were to assume that we have the authority to adopt such bright line rule, we conclude that any efficiency gained is outweighed by the potential delays and redoubling of efforts caused by such a rule.

Moreover, in most cases, the trial court should have little difficulty identifying a manifestly unappealable order or judgment. Of course, in the interests of judicial economy and fairness to the parties, the trial court may always choose to refrain from further action in a case if a questionable notice of appeal has been filed. And in the event that a party filing a notice of appeal disagrees with the trial court’s determination to proceed with the substance of the case, it may seek relief in the supreme court. See C.A.R. 21; cf. United States v. Hitchmon, 602 F.2d 689, 694 (5th Cir.1979)(“In the rare case where a district court proceeded wrongly, assuming the notice of appeal to be ineffective, the appellant may seek the aid of the court of appeals by applying for a writ of prohibition under 28 U.S.C.A. § 1651.”).

We note that, although the authorities are split on this question, we adopt the position today taken by a majority of federal and state courts. Missouri ex rel. Nixon v. Coeur D’Alene Tribe, supra; Howard v. Mail-Well Envelope Co., 150 F.3d 1227 (10th Cir. 1998); Sheet Metal Workers’ Int’l Ass’n Local Union No. 359 v. Madison Indus., Inc., 84 F.3d 1186 (9th Cir.1996); United States v. Green, 882 F.2d 999 (5th Cir.1989); Robinson v. Tanner, 798 F.2d 1378 (11th Cir.1986); United States v. Bastanipour, 697 F.2d 170 (7th Cir.1982); Cochran v. Birkel, 651 F.2d 1219 (6th Cir.1981); Leonhard v. United States, 633 F.2d 599 (2d Cir.1980); Hodgson v. Mahoney, 460 F.2d 326 (1st Cir.1972); Yaeger v. Vance, 20 Ariz.App. 399, 513 P.2d 688 (1973); Camp v. Jiminez, 107 Idaho 878, 693 P.2d 1080 (Idaho Ct.App.1984); Smiley v. Atkinson, supra; Spaeth v. City of Plymouth, 344 N.W.2d 815 (Minn.1984); Reynolds v. Reynolds, 109 S.W.3d 258 (Mo.Ct.App. 2003); Holste v. Burlington N. R.R., supra; Knox v. Dick, 99 Nev. 514, 665 P.2d 267 (1983); State v. Edmisten, 291 N.C. 361, 230 S.E.2d 671 (1976); United Accounts, Inc. v. Teladvantage, Inc., 499 N.W.2d 115 (N.D. 1993); Sakian v. Taylor, 18 Ohio App.3d 62, 480 N.E.2d 822 (1984); S.C. Pub. Sen. Auth. v. Arnold, 287 S.C. 584, 340 S.E.2d 535 (1986). But see Williams v. Bernhardt Bros. Tugboat Serv., Inc., supra; Chapman v. Universal Underwriters Ins. Co., 549 So.2d 679 (Fla.Dist.Ct.App.1989).

Accordingly, we hold that a premature notice of appeal does not render void for lack of jurisdiction acts of the trial court taken during the interval between the filing of the invalid notice of appeal and the dismissal of the appeal by this court.

II.

Finally, now that the trial court has entered C.R.C.P. 54(b) certification of the Phase I order, we must determine whether the Phase I appeal should be dismissed without prejudice or whether it may proceed. We conclude that although defendants’ notice of appeal was premature, because Woznicki was not prejudiced by the early filing and the jurisdictional defect has now been cured, the appeal may proceed as if filed on February 25, 2004. See Kidwell v. K-Mart Corp., 942 P.2d 1280 (Colo.App.1996); see also Cato v. Fresno City, 220 F.3d 1073 (9th Cir.2000)(appellate court can assume jurisdiction based on a prematurely filed notice of appeal when subsequent events can validate the prematurely filed appeal). But see Century Laminating, Ltd. v. Montgomery, 595 F.2d 563 (10th Cir.1979).

The order to show cause is discharged, and the appeal shall proceed. The record has been received and is accepted. Appellants shall file an opening brief within forty days of the date of this order. A separate scheduling order shall issue for the appeal regarding Phase II.

Judge ROY and Judge LOEB concur.


author: Judge WEBB.

text:
    In re the MARRIAGE OF Kenneth P. WEST, Appellant, and Karianne West, Appellee.
    No. 03CA0749.
    Colorado Court of Appeals, Div. V.
    June 17, 2004.

      Karen S. Renne, Broomfield, Colorado, for Appellant.
    Kevin W. Major, Colorado Springs, Colorado, for Appellee.
   Opinion by

Judge WEBB.

Kenneth P. West (father) appeals from a post-dissolution order modifying parenting time and increasing child support payable to Karianne West (mother). We vacate the order and remand for reconsideration.

In the 1992 permanent orders, the parties were granted joint legal custody of their two minor children. Mother had primary residential custody, and father was granted parenting time. Thereafter, both child support and parenting time were modified in response to changed circumstances.

In a 1998- order, the court adopted the parties’ stipulation as to parenting time and child support. Under this order, father was granted parenting time of one weekend per month, parts of several vacation periods, and eight consecutive weeks during the summer, which totaled ninety-three overnights. Father was ordered to pay child support of $350 per month, which included parochial school tuition; certain arrearages; and his proportionate share of the children’s uncovered medical and dental expenses.

In June 2002, mother filed a motion (later amended) to modify parenting time and increase child support. At a hearing in January 2003, the trial court made certain oral findings, indicated that mother’s motion would be denied, and directed that child support be recalculated to reflect changes in the parties’ financial circumstances.

Mother moved for reconsideration of the court’s oral rulings. She argued that the court wrongly used the endangerment standard in determining that father’s parenting time should not be reduced; that child support should be based on the actual number of nights that the children spent in father’s care, and thus should be calculated using Worksheet A rather than Worksheet B; and that the children’s private school tuition and athletic fees and expenses should have been included in the child support calculation. The trial court granted mother’s motion and, in March 2003, entered an order prepared by mother’s attorney.

I.

Father first contends the trial court abused its discretion in issuing a written order that reversed the oral rulings entered at the conclusion of the evidentiary hearing. Father argues that the trial court’s initial oral ruling was correct, and the court had no basis to grant mother’s motion for reconsideration. We disagree.

An order is not final until it has been reduced to writing, dated, and signed. C.R.C.P. 58; In re Marriage of Hoffner, 778 P.2d 702 (Colo.App.1989). Thus, “[d]espite a court’s characterizations of its oral remarks as ‘findings and conclusions,’ the court has the authority to supplement and modify the opinions it expressed in its oral remarks until the date judgment formally enters.” People in Interest of O.J.S., 844 P.2d 1230, 1233 (Colo.App.1992), aff'd sub nom. D.A.S. v. People, 863 P.2d 291 (Colo.1993).

The trial court’s remarks at the conclusion of the hearing were not reduced to writing, dated, and signed by the court, and thus did not constitute a final order. The court had the authority to modify its earlier findings and orders at any time before issuing a final order. When it did so, the written 2003 order became the court’s final order. Only this order may serve as the basis for an appeal. See People in Interest of O.J.S., supra.

Because father’s allegations of substantive error are directed toward the written order, we will treat them as an appeal of that order.

II.

Father next contends the trial court abused its discretion in reducing his parenting time based on the best interests of the children. We agree that the amount of parenting time authorized for father must be reconsidered.

Modification of parenting time is governed by § 14-10-129, C.R.S.2003. “[T]he court may make or modify an order granting or denying parenting time rights whenever such order or modification would serve the best interests of the child.” Section 14-10-129(l)(a)(I), C.R.S.2003. However, “[t]he court shall not restrict a parent’s parenting time rights unless it finds that the parenting time would endanger the child’s physical health or significantly impair the child’s emotional development.” Section 14-10-129(l)(b)(I), C.R.S.2003. The statute neither defines “restrict” nor offers a test to distinguish an order that restricts parenting time from an order that merely modifies a prior order granting parenting time.

Because the question whether the “best interests” standard or the “endangerment” standard should apply in this case arose below and will arise again on remand, we address it here.

Pursuant to the 1998 stipulated order, father had been entitled to shared parenting time totaling ninety-three overnights per year, although for reasons that are in dispute he has not used all the time allotted to him. The 2003 order reduced father’s summer parenting time by approximately fourteen overnights.

In cases decided under an earlier statutory scheme, divisions of this court applied the endangerment standard where a proposed modification of visitation would have reduced the amount of a father’s parenting time. See Manson v. Manson, 35 Colo.App. 144, 529 P.2d 1345 (1974)(trial court’s finding that visitation rights previously granted would not impair children’s health or significantly impair their emotional development was sufficient to warrant denial of motion for reduction in father’s visitation rights); see also In re Marriage of Velasquez, 773 P.2d 635 (Colo.App.1989).

However, the statute under which these cases were decided entitled the noncustodial parent to “reasonable visitation” unless the court found that visitation “would endanger the child’s physical health or significantly impair his emotional development.” Colo. Sess. Laws, 1971, ch. 130, § 46-1-29(1) at 531 (later codified as § 14-10-129(1)). Since 1987 the statutes concerning child custody and visitation have been extensively revised. Although the use of the best interests and endangerment standards in modifying custody was addressed in In re Marriage of McNamara, 962 P.2d 330 (Colo.App.1998), no appellate opinion decided under the current statute has resolved the tension between the best interests standard and the endangerment standard when a trial court modifies a prior order to reduce or impose restrictions on parenting time.

In the absence of Colorado authority on this question, we are guided by decisions from other states that have enacted the Uniform Dissolution of Marriage Act (UDMA). See § 14-10-104(1), C.R.S.2003 (“This article shall be so applied and construed as to effectuate its general purpose to make uniform the law with respect to the subject of this article among those states which enact it”).

Most of the eases that address “restrictions” in visitation involve outright denial of visitation or require supervised visitation. See, e.g., Turley v. Turley, 5 S.W.3d 162 (Mo.1999)(denial of all overnight visitation); Robinson v. Robinson, 128 S.W.3d 543 (Mo.Ct.App.2003)(supervised visitation). Neither circumstance obtains here.

Minnesota’s statute governing the modification of parenting time is similar to § 14-10-129. See Minn.Stat. § 518.175(5) (2002)(providing in relevant part that the court may modify an order granting or denying parenting time if modification would serve the best interests of the child, but the court may not restrict parenting time unless it finds that parenting time would endanger the child).

Minnesota courts have held that only a substantial alteration of visitation rights constitutes a restriction requiring the use of the endangerment standard. See, e.g., Anderson v. Archer, 510 N.W.2d 1 (Minn.Ct.App. 1993)(out-of-state father had been awarded every weekend and every Tuesday and Thursday “when in Minnesota,” as well as the full term of summer vacation; reduction of his visitation time to alternating weekends, two evenings a week, six weeks during the summer, and alternating holidays upon his resumption of residence in Minnesota was not a restriction of visitation); cf. Clark v. Clark, 346 N.W.2d 383 (Minn.Ct.App.1984)(gradual reduction in father’s visitation from fourteen weeks to five and one-half weeks per year during the four-year period following his child’s removal from Minnesota constituted a restriction of visitation rights). To determine whether a reduction in visitation constitutes a restriction of visitation, Minnesota courts are instructed to consider both the reason for the change and the amount of the reduction. Anderson v. Archer, supra.

Missouri has also adopted the UDMA. Its courts, too, have concluded that a modest reduction in parenting time is not a restriction requiring the use of the endangerment standard. See Searcy v. Searcy, 85 S.W.3d 95 (Mo.Ct.App.2002)(a modest reduction in father’s visitation to accommodate the children’s best interests in performing well in school was not a restriction).

We find these cases well reasoned, and conclude that determining whether to apply the best interests standard or the endangerment standard may involve inquiry into both the quantitative and the qualitative aspects of the proposed change to parenting time, as well as the reason or reasons advanced for the change. And we note that, while endangerment will necessarily encompass best interests, few best interests arguments will show endangerment. However, because this record presents neither a qualitative change in the nature of father’s parenting time, such as a requirement that visitation be supervised, nor a reason for the change that implicates the children’s safety, we need decide only which standard applies to a purely quantitative change, and one of relatively limited magnitude.

Here, the reduction of father’s summer parenting time from eight weeks to six weeks, as suggested by mother, does not constitute a restriction for the purposes of applying the endangerment test under § 14-10 — 129(1)(b)(1). Hence, the court correctly applied the best interests standard in concluding that the children should have “a parenting time schedule which conforms to the reality of the parenting time [father] has historically exercised.”

However, the parties disagree as to the reasons for father’s failure to exercise all the parenting time available to him under the parties’ 1998 stipulation. Mother contends that father -chose not to exercise all his parenting time, while father maintains his failure to use all his parenting time was the result of mother’s interference with his attempts to arrange time with the children. In the March 2003 order, the trial court acknowledged this disagreement, but did not resolve it.

Mother argued that father’s recent assertion of his previously unexercised parenting time was not in the children’s best interests because they needed predictability. However, this argument would not be persuasive if, as father contends, mother in effect caused the instability by scheduling the children’s activities to frustrate his parenting time. Thus, the reasons for father’s historical failure to use all his parenting time should be considered in determining whether it is in the children’s best interest to reduce the amount of parenting time allotted to him.

Accordingly, on remand the trial court should make findings on this issue and reconsider whether it is in the children’s best interest to reduce the amount of parenting time allotted to father to conform to the amount of parenting time historically exercised by him.

III.

Father next contends that the trial court abused its discretion in ordering that parochial school tuition and athletic fees in private programs should be included as extraordinary expenses in calculating his child support obligations. Father argues that the order was not based on adequate findings as to the reasonableness and necessity of the tuition and fees. We agree.

The trial court has discretion to order that the reasonable and necessary costs of a child’s attendance at a private school be divided between the parents in proportion to their income. See § 14 — 10—115(13)(a)(I), C.R.S.2003; In re Marriage of Elmer, 936 P.2d 617 (Colo.App.1997). Attendance at a private school may be approved where it is necessary to meet the particular educational needs of the child. In determining whether private school meets a child’s particular educational needs, the court may consider a number of factors, including the standard of living that the child enjoyed during the marriage and the standard of living that the child would have enjoyed if the parents’ marriage had not been dissolved. See In re Marriage of Payan, 890 P.2d 264 (Colo.App.1995).

A parent may also be required to contribute to the costs associated with a child’s athletic activities in some cases. Similarly, the child’s particular needs and predis-solution standard of living are among the factors to be considered by the court. See In re Marriage of Laughlin, 932 P.2d 858 (Colo. App.1997).

Here, in the 2003 order the court found that both parents agreed that the children benefited from their participation in athletics and that the expense of their athletic activities was reasonable; that the decision to educate the children in parochial schools was made jointly during the marriage; and that the tuition expense was reasonable based on the standard of living that the children would have enjoyed if the marriage had not been dissolved. On this basis, the court ordered that the children’s tuition expenses and their athletic fees and expenses be included in the child support worksheet as extraordinary expenses.

The addition of extraordinary expenses to a parent’s basic child support obligation must be supported by the court’s findings and evidence in the record. See In re Marriage of Finer, 920 P.2d 325 (Colo.App. 1996). If the findings were prepared by the attorney for the successful litigant, the appellate court will “scrutinize them more critically and give them less weight than if they were the work product of the judge himself, or, at least bear evidence that he has given them careful study and revision.” Uptime Corp. v. Colo. Research Corp., 161 Colo. 87, 93-94, 420 P.2d 232, 235 (1966).

Here, the 2003 order was prepared by mother’s attorney. Several of the findings set forth in support of mother’s claim for tuition and athletic expenses lack record support.

For example, the court found both parents agreed that the cost of the athletic activities was reasonable. However, the record does not suggest that father agreed the fees were reasonable. To the contrary, he testified that he had not been consulted about the children’s athletic programs and had not agreed to pay the expenses associated with them. He also testified concerning the adequacy of public athletic programs.

The court found the parties agreed during their marriage that the children would be educated in parochial schools. This finding is contradicted by testimony of both parties. Mother testified only that she and father had agreed that the children would be raised in the Catholic faith. Mother never testified that the parties had agreed that the children would be sent to parochial schools when they reached school age; she said that the parties had “always disagreed” about this. Father testified that he had not been consulted before the enrollment of the children in parochial school. Thus, the decision to send the children to parochial school appears to have been made unilaterally by mother, without father’s knowledge or agreement.

The court also found the children’s tuition expense was reasonable based on the standard of living that the children would have enjoyed had the marriage not been dissolved. The basis for this finding is not stated.

Further, the record provides conflicting and incomplete information on the amount of the children’s tuition. Mother testified that the tuition was $1,800 for both children for the most recent school year. Father testified that he was told by school officials that his son’s tuition would be $2,800 to $3,200 for the next year and his daughter’s tuition would be $5,000. The findings do not indicate which figure (if either) the court accepted as true, nor are they sufficiently explicit to give this court a clear understanding of the basis for the trial court’s conclusion that the amount was reasonable based on the standard of living that the children would have enjoyed if the marriage had not been dissolved.

Mother argues that because father failed to object to paying parochial school tuition for several years, he has waived his right to object now. However, in matters governed by the UDMA, the policies to be furthered by the UDMA take precedence over general contract principles and equitable rules. See In re Marriage of LaFaye, 89 P.3d 455 (Colo.App.2003)(post-nuptial agreement not enforceable under equitable principles or promissory estoppel; UDMA applied). Thus, in determining whether the children’s parochial school tuition should be approved prospectively as a reasonable and necessary expense, the court should consider the parents’ income, the standard of living that the children would have enjoyed if the parents’ marriage had not been dissolved, and other factors as appropriate. See In re Marriage of Payan, supra. The court should not give undue weight to father’s failure to object to the payment of parochial school tuition in the past, particularly where, as here, the record includes evidence that such tuition may have increased significantly.

Because we are unable to conclude that the evidence supports the trial court’s findings regarding the reasonableness and necessity of the children’s tuition and athletic fees, we agree that the court abused its discretion in ordering that they be included in the worksheet as extraordinary expenses. On remand, the trial court is directed to reconsider this issue and make additional findings to support the reasonableness and necessity of any extraordinary expenses that the court approves. See In re Marriage of Finer, supra.

The order is vacated, and the ease is remanded to the trial court for further proceedings consistent with this opinion.

Judge NIETO and Judge RUSSEL concur.


author: Judge VOGT.

text:
    In the Matter of the ESTATE OF Molly E. KOCHEVAR, Deceased. Colorado Department of Health Care Policy and Financing, Petitioner-Appellant, v. Joseph Kochevar, Personal Representative, Respondent-Appellee.
    No. 03CA0609.
    Colorado Court of Appeals, Div. IV.
    June 17, 2004.

      Ken Salazar, Attorney General, Tiffany West Smink, Assistant Attorney General, Denver, Colorado, for Petitioner-Appellant.
    Solem, Mack & Steinhoff, P.C., R. Erie Solem, Peter T. Harris, Englewood, Colorado, for Respondent-Appellee.
   Opinion by

Judge VOGT.

The Colorado Department of Health Care Policy and Financing (Department) appeals the probate court’s summary judgment in favor of the Estate of Molly E. Koehevar (decedent). We reverse and remand for further proceedings.

I.

In October 2001, the Department filed a claim in the probate court, seeking to recover from the Estate $76,109.08, representing Medicaid payments paid on behalf of the decedent before her death in March 2001. The claim stated that it was made pursuant to § 26-4^-403.3, C.R.S.2003, which provides for recovery of payments from the estates of medical assistance recipients in accordance with the requirements of federal law.

At the time it filed its claim, the Department also sent a Notice of Estate Claim to the attorney for the personal representative of the Estate. The personal representative filed a notice of disallowance of the claim, and the Department responded with a petition for allowance.

In May 2002, a division of this court held, in Estate of Schiola v. Colorado Department of Health Care Policy and Financing, 51 P.3d 1080 (Colo.App.2002), that the notice of claim sent by the Department to the Schiola estate was defective in that it did not provide the information required by the State Medicaid Manual, which sets out procedures for administering the states’ Medicaid recovery programs in accordance with federal standards. Because the October 2001 notice sent to the Estate in this case had the same defects as the notice in Schiola, the Department sent the Estate a second notice in July 2002, incorporating the additional information required under Schiola.

In October 2002, the Estate filed a motion for summary judgment. It argued that the notice sent to it by the Department in October 2001 was “fatally defective” for the reasons identified by the Schiola division; that the defects in the notice required dismissal of the Department’s claim; and that the corrected notice sent by the Department in July 2002 could not correct the deficiencies because it was presented outside the one-year claim period set forth in § 15-12-803, C.R.S. 2003. The probate court agreed that the October 2001 notice was defective and that the defects could not be cured by sending a corrected notice beyond the one-year period for presenting claims. Accordingly, the court granted the motion for summary judgment.

II.

The Department contends on appeal that the probate court erred in dismissing its claim because (1) the claim was timely, and (2) the July 2002 corrected notice gave the heirs and other affected individuals a reasonable opportunity to apply for a hardship waiver. We agree.

A.

As an initial matter, we agree with the Department that its claim was timely and that defects in the October 2001 notice sent to the Estate did not render the claim untimely or deprive the probate court of jurisdiction over it.

Section 15 — 12—803(l)(a)(III), C.R.S.2003, provides that all claims against a decedent’s estate that arose before the decedent’s death are barred unless presented within one year after the decedent’s death. The supreme court has held that § 15-12-803(1) does not divest courts of jurisdiction over untimely claims against estates but, rather, operates as a bar to the enforcement of late-filed claims. See In re Estate of Ongaro, 998 P.2d 1097 (Colo.2000).

Section 15-12-804, C.R.S.2003, prescribes the manner of presentation of claims against an estate. Under § 15-12-804(1), C.R.S. 2003, a claimant may either (1) deliver or mail a written statement to the personal representative, or (2) “file a written statement of the claim, in the form prescribed by rule, with the clerk of the court.” The claim is “deemed presented on the first to occur of receipt of the written statement of claim by the personal representative, or the filing of the claim with the court.”

A claim filed in accordance with either of the methods set forth in § 15-12-804(1) must state the basis of the claim, the name and address of the claimant, and the amount claimed. It must also indicate the nature of any uncertainties or contingencies, any property securing the claim, and, if the claim is not yet due, the due date; however, failure to describe these requirements correctly “does not invalidate the presentation made.” Section 15-12-804(1).

The supreme court held in Ongaro that, although a creditor need not comply strictly with each of the formal statutory requirements, the creditor must provide a personal representative with reasonable notice that it could bring a claim against an estate. Such notice is sufficient if it contains “(1) a request or demand for payment from the estate, and (2) sufficient information to allow the personal representative to investigate and respond to the claim.” Ongaro, supra, 998 P.2d at 1100.

Here, the Department filed its written claim in the probate court in October 2001, which was within one year of the decedent’s death. The claim stated the name and address of the Department, the amount claimed, and the basis of claim, namely: “Medical services paid on behalf of the decedent,” in the amount of $76,109.08, from July 3,1992, until March 8, 2001.

Thus, the Department timely filed with the probate court a claim that satisfied the Onga-ro requirements.

B.

When a claim is one for reimbursement of medical assistance payments, federal law requires that additional information, beyond the claim requirements set forth in § 15-12-804, be provided in the notice sent to the estate. In Schiola, the division reviewed the information required under the State Medicaid Manual when the state seeks repayment of Medicaid benefits and concluded that the Department’s notice, which it had served on the personal representative, was defective because it “did not inform the personal representative that it was the heirs or other affected-individuals who had the right to apply for [a] hardship waiver, and it did not direct the personal representative to give the notice to those individuals.” Schiola, supra, 51 P.3d at 1083. Because the Department did not at any time give the estate the notice required under the State Medicaid Manual, the division upheld the probate court’s dismissal of the Department’s claim against the estate.

Although it is undisputed that the notice originally sent to the Estate in this case in October 2001 was defective under Schiola, it does not follow that application of Schiola required dismissal of the Department’s claim. Schiola did not address whether defects in the notice require dismissal of a claim where, as here, (1) a timely claim was filed in the probate court, and (2) a corrected notice was sent to the estate within sufficient time to allow heirs or other affected individuals to contest the claim or seek hardship waivers. We conclude there was no basis for dismissal in such circumstances.

The corrected Notice of Estate Claim sent to the Estate in July 2002 remedied the deficiencies in the original notice and provided the information required under Schiola and the State Medicaid Manual. We do not agree with the Estate that the original defective notice affected the validity of the timely claim filed with the court, or that the corrected notice was ineffective because it was not given before the claim was filed.

In support of the latter argument, the Estate points out that the State Medicaid Manual § 3810(D) requires that affected individuals be provided “advance notice of any proposed recovery.” As discussed below, such notice must be given sufficiently in advance of the proposed recovery to allow affected parties the opportunity to apply for a hardship waiver; however, neither the manual, § 15-12-803, § 15-12-804, nor any other authority of which we are aware requires that notice of the proposed recovery be provided before a claim is filed with the probate court.

The Department’s regulations affect its right to recover from the estates of Medicaid recipients, but the regulations do not affect the manner in which claims are presented against the estates. Thus, even if we construe the “advance notice of any proposed recovery” requirement as a condition precedent to the Department’s right to recover on its claim, the nonoecurrence of that condition does not nullify or invalidate the claim filed with the court.

Further, the Estate’s contention that a claim must state as its basis, not only that the Department paid medical services on behalf of the decedent, but that “the Department has determined that the claim is not subject to waiver” under federal law, is inconsistent with Ongaro’s description, discussed above, of the requirements for stating a valid claim.

C.

Although a Notice of Estate Claim need not precede the filing of a claim in the probate court, due process requires that a proper notice must nevertheless be provided within a reasonable time to allow affected persons to apply for a hardship waiver. If the Department’s corrected notice was provided to the affected parties in sufficient time to afford them a full opportunity to be heard on the matter, there was no prejudice to them and thus no due process violation. See Ongaro, supra; see also Wunder v. Department of Revenue, 867 P.2d 178 (Colo.App.1993)(failure to give driver’s licensee ten days advance written notice of change in location of hearing did not violate licensee’s due process rights where he had full opportunity to participate in adjudication of merits of revocation action).

Here, although the Estate argues that the Department could have acted more promptly in sending out its corrected notice, the record does not reflect that the Estate or the heirs were prejudiced by the asserted delay. Indeed, the record includes an affidavit of the personal representative stating that, as of October 22, 2002 — more than three months after the corrected notice was sent out — no monies from the Estate had been paid on the Department’s claim. A November 2002 affidavit of a Department representative similarly stated that, at all times since October 2001 and July 2002, the heirs and other affected individuals had had the opportunity to apply for an exemption or waiver from Medicaid estate recovery, but they had not done so. It thus appears from the record that the Department’s claim remains pending.

In sum, because the Department’s claim was not time barred and the corrected notice was sent to the Estate in time to allow the affected parties a full opportunity to be heard, the Estate was not entitled to dismissal of the Department’s claim on summary judgment. See C.R.C.P. 56(c).

The judgment is reversed, and the case is remanded for further proceedings on the Department’s claim.

Judge ROY and Judge LOEB concur.


author: Judge PICCONE.

text:
    LIBERTY MUTUAL FIRE INSURANCE COMPANY and Liberty Insurance Corporation, Plaintiffs-Appellants, v. HUMAN RESOURCES COMPANIES, INC., Defendant-Appellee, and HRC/SVL, LLC, Intervenor-Appellee.
    No. 03CA0521.
    Colorado Court of Appeals, Div. II.
    June 17, 2004.

      Gibson, Dunn & Crutcher, LLP, Gregory J. Kerwin, Stephen C. McKenna, Amanda J. Tessar, Denver, Colorado, for Plaintiffs-Appellants.
    Moye Giles, LLC, John E. Moye, Elizabeth H. Getches, Denver, Colorado, for Defendant-Appellee.
    Ireland, Stapleton, Pryor & Pascoe PC, Barbara Weil Laff, Robert S. Anderson, Denver, Colorado, for Intervenor-Appellee.
   Opinion by

Judge PICCONE.

Plaintiffs, Liberty Mutual Fire Insurance Company and Liberty Insurance Corporation (collectively Liberty), appeal from the trial court’s order denying their motion to substitute intervenor, HRC/SVL, LLC, as a defendant. We vacate the order and remand.

In November 1999, Liberty sued Human Resources Companies, Inc. (HRC) for breach of contract after HRC failed to reimburse Liberty for payments made on its behalf under various insurance policies. The court granted summary judgment against HRC for $560,126. Post-judgment discovery revealed that while Liberty’s summary judgment motion was pending, HRC sold all of its assets to HRC/SVL without notifying Liberty.

Liberty moved to substitute HRC/SVL as a defendant pursuant to C.R.C.P. 25(c), arguing that HRC/SVL was HRC’s successor. The court denied Liberty’s motion without explanation.

I. C.R.C.P. 25(c)

Liberty contends the trial court erred as a matter of law by failing to allow the post-judgment substitution of HRC/SVL under C.R.C.P. 25(c). We conclude further proceedings are necessary.

C.R.C.P. 25(e) allows a trial court to join or substitute a corporation that succeeds to the interest of a party in a lawsuit. It states:

In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.

C.R.C.P. 25(c) does not specify a procedure for resolving a motion in cases in which the parties dispute whether the corporation should be substituted for, or joined with, another corporation. No Colorado appellate opinions address this issue. Fed. R.Civ.P. 25(c) is identical to the Colorado rule. We, therefore, look to federal cases discussing Fed.R.Civ.P. 25(c) for guidance. See Am. Water Dev., Inc. v. City of Alamosa, 874 P.2d 352 (Colo.1994).

The rule was created to “allow an action to continue unabated when an interest in a lawsuit changes hands.” See 7C C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 1958, at 554 n. 6 (2d ed.1986). It is procedural only and does not deal with whether an action survives transfer of interest by a party. It “deals only with the mechanics of substitution in an action which does survive under applicable substantive law.” Wright, supra, § 1958, at 554 n. 6. The rule “describes the method by which the original action may proceed if the right of an action survives.” Wright, supra, § 1952, at 526; see ELCA Enters., Inc. v. Sisco Equip. Rental & Sales, Inc., 53 F.3d 186 (8th Cir. 1995).

A transfer of interest of a corporation occurs when one corporation becomes the successor to another. See Alcan Aluminum Corp. v. Elec. Metal Prods., Inc., 837 P.2d 282 (Colo.App.1992)(a successor corporation may be held liable if there is express or implied assumption of liability; the transaction results in a merger or consolidation of the seller; or the transfer is for the fraudulent- purpose of escaping liability). Courts have applied the rule broadly to include transfer of various types of property interests. 6 James Wm. Moore et al., Moore’s Federal Practice § 25.31 (3d ed.2003). “When a defendant corporation has merged with another corporation, for example, the case may be continued against the original defendant and the judgment will be binding on the successor even if the successor is not named in the lawsuit.” Luxliner P.L. Export, Co. v. RDI/Luxliner, Inc., 13 F.3d 69, 71 (3d Cir.1993).

Generally, substitution occurs during litigation. It has, however, been allowed even after litigation has ended as long as the transfer of interest occurred during the pen-dency of the case. Luxliner, supra; see also Panther Pumps & Equip. Co. v. Hydrocraft, Inc., 566 F.2d 8, 23 (7th Cir.1977)(quoting 3B Moore, supra, ¶ 25.03(1), at 25-101 (2d ed. 1977): “Rule 25 has application only to actions pending in the district courts. But this should not preclude substitution after judgment has been rendered in the district court ... for the purpose of subsequent proceedings to enforce ... a judgment.”).

Substitution of parties under C.R.C.P. 25(c) is a matter within the trial court’s discretion. Recreational Dev. Co. v. Am. Constr. Co., 749 P.2d 1002 (Colo.App. 1987); see Luxliner, supra; 7A Wright, supra, § 1958, at 664-54. Determination whether an entity is a transferee of interest, however, requires the trial court to apply the law to the facts. Luxliner, supra. We review the trial court’s factual findings for clear error. Blesch v. Denver Publ’g Co., 62 P.3d 1060 (Colo.App.2002). Our review of questions of law is de novo. E-470 Pub. Highway Authority v. 155 Co., 3 P.3d 18 (Colo.2000).

Here, the trial court set forth no explanation for its denial of Liberty’s motion. Thus, we can only speculate as to its reason. Under these circumstances, we cannot review the trial court’s decision. See In re Estate of Sky Dancer, 13 P.3d 1231 (Colo.App. 2000)(the trial court’s order must contain findings of fact and conclusions of law sufficient to give an appellate court a clear understanding of the basis of its decision).

We reject Liberty’s assertion that because the trial court did not explain its decision to deny the motion for substitution,- this court should review that determination de novo. Liberty relies on Luxliner, supra; Panther Pumps & Equipment Co. v. Hydrocraft, Inc., supra; Alcan, supra; and an unpublished decision of the Fourth Circuit for the proposition that an appellate court may decide the question of successor liability under C.R.C.P. 25(e) as a matter of law where the facts are undisputed. According to Liberty, this case involves “essentially” undisputed facts about the transfer of assets from HRC to HRC/ SVL. However, even if we were to accept Liberty’s interpretation of these cases, we cannot characterize the facts of this case as undisputed.

Accordingly, we remand the case to the trial court for further proceedings.

II. Procedure on Remand

When a motion for substitution is disputed, it implicates the parties’ due process rights. “Before a party may be deprived of a property interest, due process requires, at a minimum, notice and an opportunity to be heard.” Luxliner, supra, 13 F.3d at 72.

This protection is particularly important where, as here, the motion for substitution is not filed until after judgment has been entered. Joining a party without conducting a hearing would deprive that party of the opportunity to present relevant facts before being held liable for another entity’s actions.

In Luxliner, the court ruled that disputes on a Fed.R.Civ.P. 25(c) post-judgment substitution motion cannot be determined on affidavits alone.

Assuming the affidavits filed presented a genuine issue of material fact, to join [a party] on the judgment without conducting a hearing would be to deprive [the party] of its only opportunity to develop the operative facts before being held liable for [another party’s] actions. When competing sworn affidavits may result in one or more genuine issues of material fact, due process requires that a district court judge hear the evidence to assess for him or herself the credibility, or lack thereof, of one side as opposed to the other_[Wjhere competing affidavits focus on a material issue, a district court may not decide factual issues arising in the context of Rule 25(c) motions simply by weighing the sworn affidavits against one another. Instead, at least in a context such as this in which a decision on a Rule 25(c) motion effectively imposes liability, the court must first determine whether the affidavits “show that there is no genuine issue as to any material fact and that the moving party is entitled to [joinder or substitution] as a matter of law.” If they do, the court should grant the motion; if they do not, however, the court should conduct an evidentiary hearing to decide whether the motion should be granted.

Luxliner, supra, 13 F.3d at 72-73 (citations omitted; quoting Fed.R.Civ.P. 56(e)).

We agree with this reasoning and adopt it as our own.

Accordingly, we conclude that because Liberty seeks to use C.R.C.P. 25(c) to substitute HRC/SVL post-judgment, and there is a dispute whether HRC/SVL should be substituted, the trial court shall conduct an evidentia-ry hearing to determine whether HRC/SVL is a successor corporation and set forth its findings of fact and conclusions of law. The court shall then determine whether to allow substitution under C.R.C.P. 25(e) and set forth the reasons for its decision sufficient to allow appellate review.

The order denying substitution is vacated, and the case is remanded for further proceedings consistent with this opinion.

Judge ROTHENBERG and Judge NIETO concur. •