author: EASTAUGH, Justice.

text:
    Geri REICH, Appellant, v. COMINCO ALASKA, INC., Appellee.
    No. S-9717.
    Supreme Court of Alaska.
    Oct. 4, 2002.

      C.R. Kennelly, Stepovich, Kennelly & Ste-povich, P.C., Anchorage, for Appellant.
    Sean Halloran, Hartig, Rhodes, Hoge & Lekish, P.C., Anchorage, for Appellee.
    Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
   OPINION

EASTAUGH, Justice.

I. INTRODUCTION

Geri Reich sued her former employer, Cominco Alaska, Inc., alleging that it subjected her to a hostile work environment at the Red Dog Mine. The mine was operated by Comineo but owned by NANA Regional Corporation. Alaska Rule of Civil Procedure 4T(c)(12) exeludes prospective jurors who have a financial interest in the litigation. Does this rule apply to stockholders of a corporation, such as NANA, which is not a party to the lawsuit but which may be financially affected by the verdict? We conclude that it does, and hold that the superior court did not err by excluding prospective jurors who were NANA shareholders.

The timeliness of Reich's hostile work environment claim potentially depended on the continuing violations doctrine. The trial jury found for Cominco. Because Reich has not demonstrated that the instructions and special verdict form prevented the jury from finding a continuing violation, we affirm Comineo's judgment.

II. FACTS AND PROCEEDINGS

On June 25, 1997 Geri Reich filed a lawsuit in the superior court in Kotzebue against her former employer, Cominco Alaska, Inc. The complaint asserted claims of sexual and racial discrimination, hostile work environment, and unlawful termination, negligent infliction of emotional distress, and intentional infliction of emotional distress. Reich had worked as an electrician at the Red Dog Mine from 1989 until July 17, 1995; she was terminated in August 1995. Cominco operates the mine but NANA Regional Corporation owns the mine and the surrounding land. NANA was created by the Alaska Native Claims Settlement Act; almost all of its members are Inupiat Eskimos, one of the largest ethnic groups in the Kotzebue area.

Per the terms of their Development and Operating Agreement for the mine, NANA and Cominco annually share the mine's net profits. The agreement permits Comineo to subtract from gross revenues its costs of defending lawsuits against it and any judgment against it, unless the judgment is based on a jury award that finds Cominco liable for gross negligence or willful misconduct.

At Comineo's request, the superior court excluded for cause all prospective jurors who owned stock in NANA; it found that each had a direct financial interest in the outcome of the lawsuit. The court relied on Alaska Civil Rule 47(c)(12), which permits parties to challenge for cause prospective jurors who have "a financial interest, other than that of a taxpayer or permanent fund dividend recipient in the outcome of the case." The court found that any verdiet other than one holding Cominco liable for gross negligence or willful misconduct would reduce NANA's share of the mine's profits; it found that even a verdict of no liability would reduce NANA's profits because Cominco could deduct its defense costs so long as there was no finding of liability for fault greater than ordinary negligence. The court therefore concluded that concern about the amount of corporate dividends NANA would pay its shareholders could influence the decision of jurors who were NANA shareholders.

Reich filed a petition for review asking us to reverse the order excluding NANA shareholders. Although we denied her petition, we directed the trial court to examine the prospective jurors before excluding them because Civil Rule 47(c) only permits for cause challenges "[alfter the examination of prospective jurors is completed and before any juror is sworn." We also directed the trial court to decide whether Cominco had standing to assert this challenge based on a showing of a substantial risk of prejudice.

The trial court allowed the prospective jurors to be examined, and exeluded all NANA shareholders-including those who claimed they would not be influenced. The trial court also impliedly found that Cominco had standing to challenge prospective jurors who were NANA shareholders because Cominco demonstrated that, to avoid reduced dividends, those jurors would have incentive to find Cominco grossly negligent or its conduct willful. Reich appeals these rulings.

After Comineo moved for summary judgment, the superior court dismissed Reich's claims of intentional infliction of emotional distress and negligent infliction of emotional distress, but allowed her wrongful discharge and hostile work environment claims to proceed. Reich argued that the continuing violations doctrine applied to her hostile work environment claim. The superior court allowed Reich to rely on the continuing violations doctrine. Her last day at the mine was July 17, 1995 and she filed her lawsuit on June 25, 1997. Reich offered evidence of incidents occurring before June 26, 1995 to support her claim that a hostile work environment continued after June 26, 1995. Question No. 5 on the special verdict form asked the jury whether "Ms. Reich was subjected to a hostile or abusive work environment at Cominco because of her race or sex after June 26, 1995." Reich objected that the quoted language was inconsistent with her hostile work environment claim. Reich claims on appeal that the quoted language in the special verdict form effectively prevented the jury from finding liability unless Reich established that all of the elements of hostile work environment arose after June 26, 1995.

III. DISCUSSION

A. The Superior Court Did Not Abuse Its Discretion by Excluding NANA Shareholders.

1. Standard of review

We review a trial court's interpretation of a rule of civil procedure applying our independent judgment, adopting the rule of law that is most persuasive in light of precedent, reason, and policy."It is well settled that challenges for cause under Rule 4T(c) ... are within the sound discretion of the trial judge, with which we are most relue-tant to interfere." We will reverse a trial court's grant or denial of juror challenges for cause "only in exceptional cireumstances and to prevent a miscarriage of justice. We review the trial court's factual determinations, such as whether a prospective juror is a NANA shareholder, for clear error.

2. Civil Rule 47(c)(12)

Civil Rule 47(c)(12) permits challenges for cause of jurors who have a financial interest in the outcome of the case. Civil Rule 47(c) states:

After the examination of prospective jurors is completed and before any juror is sworn, the parties may challenge any juror for cause.... The following are grounds for challenge for cause: ...
(12) That the person has a financial interest, other than that of a taxpayer or permanent fund dividend recipient in the outcome of the case.

'Does this rule permit-as the trial court held here-the exelusion of shareholders of a corporation which is not a party to the lawsuit but which has a financial interest in the lawsuit's outcome? In Malvo v. J.C. Penney Co., we identified the grounds that require the trial court to determine the existence of certain relationships between jurors and parties to the litigation when a Rule 47(c) challenge is raised. We then held: "Onee facts have been presented establishing such a relationship between the juror and a party, the grounds for challenge have been met. Accordingly, the failure of the trial judge to grant the challenge for those jurors who had a debtor-creditor relationship with J.C. Penney was error. A trial judge does not have discretion to deny a challenge for cause once that relationship has been established.

Thus, as interpreted in Malvo, Rule 4l(c)(12) requires trial courts to presume that prospective jurors with financial relationships with a party to the litigation cannot be impartial and that their interest in the outcome will influence their decision. In these situations, the relationship between the prospective juror and a party to the lawsuit points so sharply to bias in the particular juror that even the juror's own assertions of impartiality must be discounted. When the prospective juror is a stockholder in a company which is a party to the litigation, the prospective juror's impartiality is even more suspect. "That a stockholder in a company which is party to an action is incompetent to sit as a juror is so well settled as to be black letter law. Most courts apply a per se rule barring a shareholder from sitting on a jury "in an action to which the corporation is a party or in which it has a direct pecuniary interest.

In Noey v. Ukpeagvik Inupiat Corp., we extended to Native corporations the rule against seating jurors who are stockholders in a company which is a party to a lawsuit. We held:

This rule [excluding jurors who are stockholders in a company which is party to a lawsuit] extends to village and regional corporations irrespective of whether the shares are freely alienable or are earning dividends at the time of the trial. Ownership of shares in a village corporation constitutes a direct financial interest in that corporation and consequently a financial interest in the outcome of the litigation to which the corporation is a party.

In Noey, the Ukpeagvik Inupiat Corporation (UIC) sued Stephen Noey for rescission and restitution. UIC was the Barrow village corporation and it filed its lawsuit in Barrow. Noey moved to change venue, arguing that he could not get a fair trial because a majority of the jury pool would be UIC shareholders who would be biased against him. The trial court denied the motion, holding that the benefit of having the case decided locally outweighed possible prejudice against Noey. We reversed, holding that UIC stock ownership was a valid ground for challenge for cause.

We now extend Noey and hold that the per se rule that excludes as jurors stockholders in a company which is a party to the litigation also applies to stockholders in a corporation which is not a party but which is nonetheless financially interested in the outcome. We must next decide if the trial court abused its discretion by finding that NANA has a financial interest in this case and excusing its shareholders for cause.

3. The trial court did not ablise its discretion.

a. Cominco had standing to challenge the jurors under Rule 47(c)(12).

We first consider Reich's argument that Cominco did not have standing to challenge the prospective jurors because their bias did not run against it. She asserts that because the prospective jurors are shareholders in a company that does business with Comineo, their prejudice would lie against her.

Civil Rule 47(c)(12) permits a party to challenge a person with a financial interest in the lawsuit. The rule does not require both that the challenged juror have a financial relationship and that the relationship actually influence the juror. The rule simply requires a finding of financial interest. Reich argues that it is unlikely that the challenged jurors knew of the relationship between NANA and Cominco. She argues that it is even more unlikely that jurors who were aware of the relationship would understand its financial implications. But the record demonstrates that some prospective jurors were aware of the relationship and understood that it had an impact on NANA's profits.

For reasons we discuss below NANA, and therefore its shareholders, had a financial interest in the outcome of the lawsuit. Because Cominco would have been prejudiced by jury deliberations influenced by that financial interest, we hold that Cominco had standing to challenge the prospective jurors.

b. The trial court did not clearly err in determining which prospective jurors were NANA shareholders.

The superior court obtained a list of the prospective jurors who were NANA shareholders and allowed Reich's attorney to voir dire them regarding bias. Each prospective juror was examined; those who were found to be NANA shareholders were dismissed. The trial court did not clearly err in deciding which prospective jurors were NANA shareholders.

c. NANA has a direct pecuniary interest in the outcome of this lawsuit.

Reich argues that because NANA is not a party to the litigation, the financial interest of its shareholders is only indirect.

The superior court found that "[the evidence in this case demonstrates that NANA and Cominco have a joint venture agreement concerning the operation of the Red Dog Mine, and that the contractual process of division of costs and profits [creates] a potential for shareholders to compromise their verdicts in this case."

A company's direct financial interest in the outcome of litigation is imputed to its shareholders. NANA and Cominco have an operating agreement specifying their financial relationship. In determining whether NANA had a financial interest in Reich's lawsuit, the superior court relied on the affidavit and testimony of Shelby Stastny, NANA's Chief Financial Officer. Stastny explained the Development and Operating Agreement between NANA and Cominco. Stastny asserted that any damages awarded against Cominco "will affect Comineo's operating costs and, in turn, the net profits for the Red Dog Project. Accordingly, NANA has a direct pecuniary interest in the outcome of the ... litigation." NANA receives a net smelter royalty for the minerals extracted from the Red Dog Mine. After Com-inco recovers operating costs relating to the mine, NANA receives a portion of each year's net profits. The percentage of the net profits that NANA receives increases annually. NANA will ultimately receive fifty percent of the annual net profits.

Cominco may subtract operating costs from gross profits before it calculates NANA's revenue. Legal expenses associated with the mine are included in those deductible operating costs so long as a jury does not find Cominco liable for gross negligence or willful misconduct. Cominco may therefore subtract any costs of defending a lawsuit in which a jury finds that Comineo was not at fault or was simply negligent. Comineo may also deduct a judgment if it is based on fault less serious than gross negligence. These deductions decrease NANA's net profits. A verdict of no liability will reduce NANA's profits, as will a verdict of liability based on simple negligence. The agreement between Cominco and NANA therefore potentially gives NANA shareholders an incentive to find Cominco Hable for gross negligence or willful misconduct. Finding otherwise will reduce NANA's profits and could affect its dividends.

The superior court concluded that "NANA is financially tied to Cominco and the operation of the Red Dog Mine," and that NANA "has a pecuniary interest in the outcome of this litigation." The superior court ruled that this financial interest justified the challenge for cause of NANA's shareholders.

Reich relies on Harmotte v. Bender. The challenged jurors were members of the Roman Catholic Church and were to hear a case involving a Roman Catholic parish in the same diocese. They were challenged because they were "members of the Diocese fund church activities, and could be called upon to reimburse the church" if the appellants recovered a judgment against the church. The trial court ruled that they were not subject to challenge because their interest was too remote; the appellate court held that this ruling was not an abuse of discretion.

To some extent, Harmotta simply reflects the deference given to a trial court when it decides whether to exclude challenged jurors in circumstances permitting an exercise of discretion. But here, once the trial court found that NANA had a "pecuniary interest in the outcome of this litigation," the per se rule of exclusion applied to NANA shareholders, and the trial court no longer had discretion to permit NANA shareholders to sit as jurors. In Harmotta there was only a possibility church members would be called on to reimburse the church. In this case, Reich's lawsuit would reduce NANA's profits unless the jury found willful misconduct or gross negligence. Jurors who are NANA stockholders therefore had incentive to find Com-inco Hable for either willful conduct or gross negligence, and had incentive not to find it free of fault.

Other reported decisions preclude stockholders from sitting on juries in cases in which their company might have any financial interest at all, regardless of the amount of interest or whether the prospective juror claims impartiality.

The stockholders' financial interest in Reich's case was closer to the prospective jurors' interest in Noey than the attenuated interest in Harmotta. The interest here is even clearer than that of a prospective juror who owns shares of a non-defendant insurance company with a financial stake in the outcome of the litigation. "Some courts have gone so far as to disqualify ... relatives within the prohibited degree of relationship to a stockholder in a cause where the corporation is a party or has pecuniary interest.

The trial court conducted voir dire in compliance with Rule 47(c) before dismissing the NANA shareholders for cause. The superior court accepted Stastny's explanation and ruled that the prospective jurors' incentive to protect their dividends justified their exclusion. We hold that the superior court did not err by dismissing NANA shareholders for cause.

B. The Special Verdict Form Did Not Prevent the Jury from Finding that a Hostile Work Environment Existed Within the Two Years Before Reich Filed Suit.

Reich argues that the court prevented the jury from taking the continuing violations doctrine into account when it decided her hostile work environment claim against her. The erux of Reich's argument is her contention that the hostile work environment instruction, the special verdict form, and the court's response to a jury question "essentially told the jury" that it could. not find liability if the employer was given notice of a hostile work environment prior to the two-year limitations period before Reich filed suit. She argues that the court erroneously required her to prove that she gave "additional notice" to Cominco within the limitations period, depriving her of the benefit of the continuing violations doctrine.

We review de novo jury instructions to which timely objection was made." A special verdict form is a type of jury instruction subject to the same standard of review for jury instructions." "A jury instruction containing an erroneous statement of law constitutes reversible error if it prejudice[s] one of the parties; prejudice exists 'if it can be said that the verdict may have been different had the erroneous instruction not been given.' " "In evaluating whether there has been prejudicial error with regard to jury instructions, 'the reviewing court must put itself in the position of the jurors and determine whether the error probably affected their judgment. We review this question de novo."

Reich filed suit on June 25, 1997. Alaska Statute 09.10.070, the two-year statute of limitations, determines the timeliness of her hostile work environment claim. All elements of that claim must have occurred within the two years before she sued, unless she proved a "continuing violation. The continuing violations doctrine allows plaintiffs to establish an ongoing tort through incidents that occurred before the statute of limitations period and that continued into the limitations period. The continuing violations doctrine allows a plaintiff to establish the elements of a hostile work environment claim by relying on incidents that predate the statutory limitations period to prove that a hostile environment continued into the limitations period.

The trial court agreed to apply the continuing violations doctrine to this case. The doctrine's application was potentially critical to Reich's hostile work environment claim because there was a factual dispute whether Cominco was given notice of a hostile work environment within the two years before Reich filed suit, and whether Cominco failed to remedy the alleged condition. There was evidence that Cominco supervisors had been put on notice before June 26, 1995 of a possible hostile work environment.

The special verdict form submitted these questions to the jury:
Do you find from a preponderance of the evidence:
1. That Ms. Reich complained to Cominco management about being harassed or discriminated against in her employment?
2. That complaints made to Cominco management by Ms. Reich were a causal factor in Comineo's decision to discharge Ms. Reich?
5. That Ms. Reich was subjected to a hostile or abusive work environment at Cominco because of her race or sex after June 26, 1995?
6. That such hostile or abusive work environment was created by a supervisor with immediate or successively higher authority over Ms. Reich, or that such a supervisor knew of such conduct and failed to take remedial action calculated to end the harassment?

The jury answered "yes" to Question No. 1, and "no" to Questions No. 2, 5, and 6. It did so after the court, responding to a question from the jury, informed the jury over Reich's objection that the June 26, 1995 "time frame" also applied to Question No. 6.

We discern no error. The instrue-tions, the verdict form, and the court's answer to the jury's question did not prevent the jury from giving effect to the continuing violations doctrine or considering Reich's claim as she presented it. The special verdict form appropriately required the jury to determine whether Reich was subjected to a hostile work environment after June 26, 1995. It did not prevent the jury from considering events occurring or information conveyed before June 26, 1995 in deciding whether a hostile work environment existed after that date. It did not prevent the jury from relying on evidence that the employer had been put on notice before that date that a hostile work environment existed. Comin-co did not claim that notice previously given was no longer effective after June 26. Nor did it claim that it had no duty to remedy a hostile work environment if it was put on notice of that condition before June 26. The jury was not prevented from finding that knowledge gained before June 26 continued after June 26, or that inaction predating June 26 continued after that date.

It is hard to imagine how the Question No. 6 "time frame" dispute could have affected the outcome. The jury answered "no" to Question No. 5, which asked if the jury found "That Ms. Reich was subjected to a hostile or abusive work environment at Cominco because of her race or sex after June 26, 1995." That question did not prevent Reich from relying on pre-June 26 events to prove that she was subjected to a hostile work environment after June 26. But given the jury's answers to Question No. 2 (finding that Reich's complaints to Cominco management were not a causal factor in its decision to discharge her) and Question No. 5, it is difficult to see how the jury could have answered "yes" to Question No. 6 even if the court had not told the jury to apply the June 26 "time frame" when answering Question No. 6.

As Comineo argues, it is irrelevant how the jury interpreted the special verdict form questions because the negative answer to Question No. 5 means that the jury found "that there was no hostile environment at any time after June 26, 1995." Cominco asserts that this finding necessarily means that no preexisting hostile environment continued beyond June 26, 1995, and that no new "improper conduct" created a hostile environment after that date. Cominco thus reasons that "it would have been irrelevant to ... ask the jury to determine whether a supervisor had knowledge of any inappropriate conduct that may have occurred prior to June 26, 1995," because "the jury found ... no improper conduct occurring after that time" and because the jury also "found that [a hostile environment] did not exist afterward." We agree with these propositions.

Furthermore, Reich contended in final argument to the jury that Comineo exposed her to continuous harassment that began soon after she was hired and that culminated in her termination. In light of this approach and the jury's answer to Question No. 5, it is highly improbable that the continuing violation doctrine had any relevance to Reich's case.

We therefore conclude that the trial court did not err in rejecting Reich's objection to answering the jury's inquiry, and that no error in submitting the continuing violations doctrine to the jury prejudiced Reich's hostile work environment claim.

IV. CONCLUSION

Because the superior court correctly applied the per se rule allowing challenges for cause of prospective jurors with a financial interest in the litigation, we AFFIRM the superior court's exclusion of jurors who owned stock in NANA.

Because the special verdict form and the instructions did not erroneously prevent the jury from giving effect to the continuing violations theory of tort lability, we AP-FIRM the judgment for Cominco.

      . Reich is an Inupiat Eskimo.

      . Reich v. Cominco Alaska, Inc., Case No. S-9622, (Alaska Supreme Court Order, March 24, 2000).

      . Reich has not appealed the dismissal of these claims.

      . Brown v. Lange, 21 P.3d 822, 824 (Alaska 2001) (citation omitted).

      . Malvo v. J.C. Penney Co., 512 P.2d 575, 578 (Alaska 1973).

      . Mitchell v. Knight, 394 P.2d 892, 897 (Alaska 1964).

      . Mapco Express v. Faulk, 24 P.3d 531, 535 (Alaska 2001).

      . 512 P.2d 575 (Alaska 1973).

      . Id. at 579.

      . We declined to decide in Joseph v. State, 26 P.3d 459, 464 (Alaska 2001), whether exclusion under Rule 47(c) is mandatory. The trial court there excluded prospective jurors who had been criminally prosecuted by the state. It did not examine the challenged jurors individually and instead relied exclusively on state records. We ruled that it was error to exclude the prospective jurors without examining them individually. That ruling is inapposite here because Reich's jurors were individually examined before they were excused.

      . Noey v. Ukpeagvik Inupiat Corp., 683 P.2d 260, 261 (Alaska 1984).

      . Getter v. Wal-Mart Stores, Inc., 66 F.3d 1119, 1122 (10th Cir.1995) (quotations and citations omitted); see also Gladhill v. Gen. Motors Corp., 743 F.2d 1049, 1050 (4th Cir.1984) ("If, as is the law, the juror is legally disqualified from acting, the juror's analysis of his subjective qualifications is beside the point.").

      . Chestnut v. Ford Motor Co., 445 F.2d 967, 971 (4th Cir.1971) (citations omitted).

      . In re Asbestos Litigation, 626 A.2d 330, 331 (Del.Super.1993) (citations omitted); see also S. Bell Tel. & Tel. Co. v. Shepard, 262 S.C. 217, 204 S.E.2d 11, 12 (1974) ("A stockholder in a corporation is incompetent to serve as a juror in a case in which the corporation is a party or has a pecuniary interest.").

      . 683 P.2d 260 (Alaska 1984).

      . Id. at 261.

      . Id. at 260.

      . Id.

      . Id. at 261.

      . We have held that this is no less true for Native corporations "irrespective of whether the shares are freely alienable or are earning dividends at the time of trial." Noey, 683 P.2d at 261.

      . 411 Pa.Super. 371, 601 A.2d 837 (1992).

      . Id. at 838.

      . Id. at 840-41.

      . Id. at 841.

      . Noey, 683 P.2d at 261; see also Dunipace v. Martin, 73 Ariz. 415, 242 P.2d 543, 545 (1925); Page v. Contoocook Valley R.R., 21 N.H. 438, 438 (N.H.1850); S. Bell Tel., 204 S.E.2d at 11.

      . Gonzalez v. Wells, 213 Ga.App. 494, 445 S.E.2d 332, 333 (1994).

      . Salina v. Commonwealth of Virginia, 217 Va. 92, 225 S.E.2d 199, 200 (1976) (citation omitted); see also Shipman v. Johnson, 89 Ga.App. 620, 80 S.E.2d 717, 721 (1954) (disqualifying prospective jurors who held stock in litigant's husband's insurer).

      . We have held that "[clonduct which unreasonably interferes with work performance ... creates an abusive working environment." French v. Jadon, Inc., 911 P.2d 20, 28 (Alaska 1996) (quoting Ellison v. Brady, 924 F.2d 872, 877 (Oth Cir.1991) (internal quotation marks omitted)). A corporation is vicariously liable for its employees' conduct if "[o)ne or more of [its] supervisory employees encouraged, caused, permitted, ratified, or participated in the conduct; or ... knowing of the conduct, excused it or failed to take remedial action reasonably calculated to end the harassment." Veco, Inc. v. Rosebrock, 970 P.2d 906, 912 (Alaska 1999).

      . Glamann v. Kirk, 29 P.3d 255, 259 (Alaska 2001).

      . Id.

      . Barrett v. Era Aviation, Inc., 996 P.2d 101, 103 (Alaska 2000) (quoting Beck v. State, Dep't of Transp. & Pub. Facilities, 837 P.2d 105, 114 (Alaska 1992)).

      . Cable v. Shefchik, 985 P.2d 474, 479 (Alaska 1999) (quoting Harris v. Keys, 948 P.2d 460, 465-66 (Alaska 1997)).

      . AS 09.10.070 provides in part: "A person may not bring an action ... for any injury to the person ... not arising on contract and not specifically provided otherwise; ... upon a liability created by statute ... unless the action is commenced within two years."

      . The court instructed the jury that it had to find these four elements to find a hostile work environment:
      (1) [The Plaintiff was subject to racially or sexually offensive acts or statements; (2) such acts or statements were unwelcome and had not been invited or solicited, directly or indirectly, by the Plaintiff's own acts or statements; (3) such acts or statements resulted in a work environment that was so severe or pervasive that it altered the conditions of the Plaintiff's employment; (4) a reasonable person would have found the workplace to be hostile or abusive.
      Reich did not object to this instruction and no party argues that it was error to give this instruction.

      . See, eg., Morgan v. Nat'l R.R. Passenger Corp., 232 F.3d 1008, 1014-15 (9th Cir.2000); Sengupta v. Univ. of Alaska, 21 P.3d 1240, 1249 (Alaska 2001) (citations omitted); but of. Hall v. Bodine Elec. Co., 276 F.3d 345, 353 (7th Cir.2002) (holding that plaintiff may not base suit on conduct occurring outside statute of limitations unless reasonable to expect plaintiff to sue before stat-ule ran on conduct, as where conduct could constitute or be recognized as actionable harassment only in light of events occurring later, within statute of limitations period).

      . Richards v. CH2M Hill, Inc., 26 Cal4th 798, 111 Cal.Rptr.2d 87, 29 P.3d 175, 183 (2001); Cuddyer v. Stop & Shop Supermarket Co., 434 Mass. 521, 750 N.E.2d 928, 936-37 (2001); Hall v. Saint Joseph's Hosp., 343 N.J.Super. 88, 777 A.2d 1002, 1009-1010 (2001); Wal-Mart Stores, Inc. v. Davis, 979 S.W.2d 30, 41 (Tex.App.1998).

      . The superior court cited Oaksmith v. Brusich, 774 P.2d 191, 200 n. 10 (Alaska 1989), in support of this ruling. See also Sengupta, 21 P.3d at 1249 (recognizing continuing violations theory under which "certain patierns of discriminatory acts against the same employee can preserve a claim as timely that might otherwise be barred by the statute of limitations"). Cominco argues that Reich is not entitled to invoke the continuing violations doctrine. We do not need to consider this alternative ground for affirming.

      . See Grimes v. Haslett, 641 P.2d 813, 818 (Alaska 1982) ("An erroneous statement of the law in a jury instruction will not constitute reversible error unless it prejudiced one of the parties.") (citing City of Nome v. Ailak, 570 P.2d 162, 172 (Alaska 1977)).

      . Reich also asserts that the trial court required her "to give additional notice" to Cominco within the limitations period, and that "the trial court told the jury that Reich was required to give notice within the statutory limitations period and that notice of the violations prior to that date were [sic] irrelevant." These assertions do not correctly describe what the trial court told the jury.


source: Caselaw Access Project

author: Justice HOBBS

license: Public Domain

text:
    In re Oren L. BENTON, as trustee for June Adams Q-Tip Trust, Plaintiff, v. John R. ADAMS, Defendant/Third Party Plaintiff, and Oren L. Benton, Third Party Defendant.
    No. 02SA158.
    Supreme Court of Colorado, En Banc.
    Oct. 15, 2002.

      Thomas C. Seawell, Denver, Colorado, Attorney for Petitioner John R. Adams.
    Oren L. Benton, Denver, Colorado, Pro Se Respondent.
    Lottner Rubin Fishman Brown & Saul, P.C., Curt Todd, Denver, Colorado, Attorneys for Respondent June Adams Kilkenny.
   Justice HOBBS

delivered the Opinion of the Court.

In this original proceeding under C.A.R. 21, we issued a rule to show cause to review the trial court's denial of petitioner John Adams' motion for leave to amend his answer, add counterclaims, and join a third party to make a claim against her through interpleader.

We now make the rule absolute, holding that (1) the trial court erred as a matter of law in determining that the interpleader amendment is futile, and (2) the trial court abused its discretion in denying leave to amend on grounds of delay and prejudice in the case. j

Although we generally defer to trial courts in their case management decisions, this case is an exception. Nearly a year passed without the case proceeding beyond the complaint and answer phase. While we understand the trial court's desire to move this case toward completion, the trial court should have not expedited the case by denying Adams leave to amend. Adams' interpleader was not futile and the prior lengthy delay in the case was not attributable to him. He offered his answer amendments in a timely manner, and the trial court should have allowed them. Up to that time, virtually nothing had occurred to move the case to trial. No case management order had been entered. No discovery had occurred. Adams made sufficient allegations setting forth a reasonable belief that he would be exposed to double liability for the same obligation if the trial court would not allow his answer amendments. Under the circumstances, we order the trial court to allow Adams' answer amendments.

I.

This case arises from the establishment of the June Adams Qualified Terminable Interest Property Trust in 1983. The Trust's two trustees, John R. Adams (Adams) and Oren Lee Benton (Benton), are parties to the case. Although the complaint did not name the sole beneficiary of the trust, June Adams Kilkenny (Kilkenny), she has filed briefs in this Court-as she did in the trial court-resisting Adams' attempt to add her as a party.

The Trust in 1986 through then co-trustees Benton, Adams, and David Carmichael, and by the agreement of Kilkenny, exchanged all of the assets of the Trust for a special class C limited partnership interest in Energy Fuels, Ltd. ("EFL interest"), a company Adams controlled at that time. The partnership interest included an agreed upon capital account and entitled the Trust to monthly guaranteed payments. Adams agreed to guarantee EFT's obligations to the trust ("1986 Guarantee").

Adams in 1991 transferred EFL to a Benton controlled partnership. In connection with this transaction, Benton agreed to indemnify Adams for all expenses paid pursuant to Adams' 1986 Guarantee ("Benton Indemnification"). EFL made the required payments to the Trust until March 1995, when it filed a bankruptcy petition. Benton and his other related entities filed for bank-ruptey at the same time. When EFL filed for bankruptcy and ceased making payments, Adams' obligations under the 1986 Guarantee effectively became the only asset of the Trust.

Adams failed to meet his obligations to the trust, prompting Kilkenny to file a lawsuit against him. In a September 1997 Confidential Settlement Agreement ("Settlement Agreement"), Adams and Kilkenny resolved that suit. Pursuant to the Settlement Agreement, Adams has been making payments directly to Kilkenny. In return for Adams' performance under the Settlement Agreement, Kilkenny released Adams from liability to the Trust.

Benton filed the present lawsuit in his individual capacity, rather than as trustee, to compel Adams to make payments to the Trust under the 1986 Guarantee. Adams responded on April 19, 2001 by filing a motion to dismiss, arguing that Benton lacked standing to sue in his individual capacity. Adams also filed a third-party complaint against Benton, individually, asserting an indemnity claim against him based on the Benton Indemnification.

Benton had filed his complaint on February 28, 2001. Without holding a hearing, the trial court on June 26, 2002, denied Adams' motion to dismiss and granted the motion Benton had filed to amend his complaint to bring the action in his trustee capacity. C.R.C.P. 121 § 1-15(5) provides in relevant part that "[wlhenever the court enters an order denying or granting a motion without a hearing, all parties shall be forthwith notified by the court of such order." The clerk's entry of the trial court's minute order shows that notice of this order went to Adams but not to Benton or his counsel.

With leave of the court, Benton's counsel withdrew from representing him at the end of July of 2001. Benton then proceeded pro se and did not check on the status of the court's ruling regarding Adams' motion to dismiss and Benton's motion to amend the complaint. The trial court entered an order to show cause on November 11, 2001 why the case should not be dismissed for lack of prosecution. C.R.C.P. 121 § 1-10(@2) provides, in pertinent part:

The court, on its own motion, may dismiss any action not prosecuted with due diligence, upon 30 days' notice in writing to each attorney of record and each appearing party not represented by counsel, or require the parties to show cause in writing why the case should not be dismissed.

Benton responded to the show cause order on the basis that he had no notice of the trial court's order granting him leave to amend his complaint. On December 19, 2001, the court allowed Benton to proceed with the lawsuit.

On January 3, 2002, Benton filed his Amended Verified Complaint, naming himself as trustee in bringing the action against Adams. On January 24, 2002, Adams filed his Answer to the Amended Verified Complaint. On February 3, 2002, Adams sought leave to file an amended answer to (1) assert an interpleader claim against Benton as trustee, and Kilkenny, individually, asserting that Benton's lawsuit exposed him to double liability on the same obligation, because Benton's suit sought to recover on a liability that Adams had already settled with Kilkenny (2) join Kilkenny as an additional party so that he could assert a claim against her; (8) lodge four affirmative defenses to Benton's claims; and (4) amend the third-party complaint against Benton, individually, for indemnity by Benton for the claims Benton asserted in the Amended Verified Complaint.

The trial court ruled that Adams' answer amendments failed to state a claim against Kilkenny and would cause prejudice and delay. The trial court's ruling states as follows, in its entirety:

Courts may properly deny leave because of delay, undue expense or other demonstrable prejudice to an opposing party. In this matter there is both delay and prejudice that would result. Over one year has elapsed since Benton has commenced this case. Additionally the court does not find that there are legally sufficient grounds for the assertion of a third party claim against [Kilkenny]

Adams filed a CAR. 21 petition for an order to show cause to allow his answer amendments, including the interpleader. We issued the Rule and now make it absolute.

IL.

We hold that (1) the trial court erred as a matter of law in determining that the inter-pleader amendment is futile, and (2) the trial court abused its discretion in denying leave to amend on grounds of delay and prejudice.

A. -Standard of Review

An original proceeding is not a substitute for an appeal, but we may act to exercise our discretionary jurisdiction under C.A.R. 21 when an adverse procedural ruling significantly impairs a party's ability to litigate the controversy. Lutz v. Dist. Court, 716 P.2d 129, 181 (Colo.1986).

1, Amending Pleadings

The purpose of our Civil Procedure Rules is to secure a just, speedy, and inexpensive determination of every action. C.RCP. l(a), Eagle River Mobile Home Park v. Dist. Court, 647 P.2d 660, 662 (Colo.1982). Focus is upon resolution of actions on their merits in a reasonable, expeditious manner. 4 Sheila K. Hyatt & Stephen A. Hess, Colorado Civil Rules Amnotated 186 (3d ed.1998). Pleadings should represent the true position of the parties. Zavorka v. Union Pac. R.R., 690 P.2d 1285, 1290 (Colo.App.1984).

In many cases, delay standing alone may justify denial of leave to amend, if active case management has occurred to minimize delay. Delay devalues judgments, creates anxiety in litigants and uncertainty for lawyers, results in loss or deterioration of evidence, and wastes court resources. Burchett v. South Denver Windustrial Co., 42 P.3d 19, 21 (Colo.2002). If a party seeks leave to amend after substantial progress toward trial has occurred, or if granting leave to amend would significantly delay the progress of the case to trial, a trial court may deny leave to amend if it should have been brought earlier.

Granting leave to amend is within the sound discretion of the trial court; our review is for the purpose of determining whether or not the trial court abused its discretion in ruling on the motion to amend. Polk v. Dist. Court, 849 P.2d 28, 25 (Colo.1993). When a trial court denies leave to amend on grounds that the amendment would be futile because it cannot survive a motion to dismiss, we review that question de novo as a matter of law. E.g., Blakely v. United States, 276 F.3d 853, 874 (6th Cir.2002); Watson v. Beckel, 242 F.3d 1237, 1239-40 (10th Cir.2001).

Reflecting a liberal policy toward timely amendments to pleadings, C.R.C.P. 15(a) encourages trial courts to look favorably upon motions to amend. Polk, 849 P.2d at 26; Varner v. Dist. Court, 618 P.2d 1388, 1390 (Colo.1980). A trial court should not impose arbitrary restrictions on making timely amendments.

Whether leave to amend should be allowed or not depends upon the facts and cireumstances. Grounds for trial court denial of a motion to amend pleadings include undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies in the pleadings via prior amendments, undue prejudice to the opposing party, and futility of amendment:

If the underlying facts or cireumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason-such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, ete.-the leave should, as the rules require, be freely given.

Varner, 618 P.2d at 1390 (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)).

2. Interpleader

Our interpleader rule, C.R.C.P. 22, provides as follows:

Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability. It is not ground for objection to the joinder that the claims of the several claimants or the titles on which their claims depend do not have a common origin or are not identical but are adverse to and independent of one another, or that the plaintiff avers that he is not liable in whole or in part to any or all of the claimants. A defendant exposed to similar lability may obtain such inter-pleader by way of cross claim or counterclaim. The provisions of this Rule supplement and do not in any way limit the joinder of parties permitted in Rule 20.

C.R.C.P. 22(a) (emphasis added).

Interpleader serves important state and private interests by efficiently resolving potential multiple actions in the same lawsuit, thereby conserving judicial and party resources. Interpleader allows a person subject to the possibility of competing claims to avoid the risk of double or multiple liability that could result from adverse determinations in different courts. Consequently, while interpleader should not automatically be granted, courts should allow it liberally. State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 533, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967) (applying the Federal interpleader statute); 7 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1704 (Bd ed.2001) ("many decisions hold that the interpleader provisions, both rule and [Federal] statute, are remedial in character and should be applied liberally").

Because of the important efficiency benefits of interpleader, C.R.C.P. 22 permits a defendant to invoke interpleader after being sued by one of the competing claimants. C.R.C.P. 22(1). To make use of interpleader, a defendant must file a cross claim against a co-defendant or a counterclaim against a plaintiff in accordance with C.R.C.P. 22 and C.R.C.P. 18. The defendant may employ C.R.C.P. 13(h) to join a new party to assert a counterclaim or cross claim, if the joinder satisfies CRCP. 19's compulsory joinder provisions or C.R.C.P. 20's permissive join-der provisions. See 4 James Wm. Moore et. al., Moore's Federal Practice 122.02[4] (8d ed.1999). "In virtually every instance of in-terpleader, the absentee claimants to be joined to the counterclaim or cross-claim will satisfy Rule 19 because their non-joinder threatens the stakeholder with multiple or inconsistent obligations." 4 Moore's Federal Practice, swpra at 1 22.02[4].

When a Colorado Rule is similar to a Federal Rule of Civil Procedure, we may look to federal authority for guidance in construing the Colorado rule. Stewart v. Rice, 47 P.3d 316, 321 (Colo.2002); Air Communication and Satellite Inc. v. Echostar Satellite Corp., 38 P.3d 1246, 1251 (Colo.2002). C.R.C.P. 15(a) and Fed.R.Civ.P. 15(a), which govern amendments to pleadings, are almost identical. The doctrine of futility authorizes a trial court to deny leave to amend pleadings if doing so would be futile. 3 Moore's Federal Practice, supra at §15.15[8]. An 663 amendment is futile, if, for example, "it merely restates the same facts as the original complaint in different terms, reasserts a claim on which the court previously ruled, fails to state a legal theory, or could not withstand a motion to dismiss." Id. When deciding whether a motion to amend pleadings is futile, the trial court must accept the moving party's allegations as true. See Pediatric Newrosurgery, P.C. v. Russell, 44 P.3d 1063, 1067 (Colo.2002).

B. Adams' Answer Amendments

In this case, we hold that the trial court erred in determining that Adams' claim of double liability to Kilkenny, individually, and Benton as trustee of a trust for Kilkenny as sole beneficiary, would be futile. The trial court abused its discretion in determining that undue delay and prejudice would result from granting leave for Adams' answer amendments.

In his proposed amended answer, Adams based his counterclaim against Benton and his cross-claim against Kilkenny by way of interpleader on allegations of exposure to double liability. The gist of the double exposure allegation is that Kilkenny, the sole beneficiary of the trust, surrendered her obligations under that trust in exchange for the Adams and Benton settlement agreements, and that Adams' sole obligation to Kilkenny exists under the Adams Settlement Agreement. By seeking Adams' payment to the trust, so Adams alleged, Benton exposed Adams to double liability on the same obligation, because the settlement obligated Adams to pay Kilkenny directly in satisfaction of Adams' liability to the trust.

1. Amendment Not Futile

The trial court ruled that Adams lacked "legally sufficient" grounds to proceed against Kilkenny. The court thus invoked the futility doctrine. Amendments are futile if they are legally insufficient, for example, when a proposed amendment fails to cure defects in previous pleadings, fails to state a legal theory, or would not withstand a motion to dismiss. 8 Moore's Federal Practice, su-pro at 1 15.15[(8].

Adams' interpleader is not futile if it can survive a motion to dismiss the claims underlying the interpleader. Pursuant to C.R.C.P. 22, a person seeking interpleader must sufficiently plead exposure to double liability based on the same obligation, res, fund, or other stake. CRCP. 22(1). The person asserting interpleader must allege facts sufficient to support a reasonable belief that exposure to double or multiple lability may exist. Certainty of exposure to double or multiple lability is not the test; rather, the allegations must meet a "minimal threshold of substantiality." Equitable Life Assurance Soc. v. Porter-Englehart, 867 F.2d 79, 84 (1st Cir.1989); Indianapolis Colts v. Baltimore, 741 F.2d 954, 958 (7th Cir.1984) (rejecting interpleader because stakeholder's characterization of alleged claim against it did not meet "minimal threshold of substan-tiality"); Noey v. Bledsoe, 978 P.2d 1264, 1271 (Alaska 1999).

Here, the trial court erred in determining that Adamg' claim against Kilken-ny would be futile. Adams pled that Benton,, as trustee, was seeking by his complaint to recover payments to the Trust that Adams was making directly to Kilkenny under the Settlement Agreement that, allegedly, resolved his obligation to the Trust. If Benton were to obtain a judgment against Adams in the present action, without resolution of Adams' obligation to Kilkenny, Adams could suffer double liability for the same obligation. Interpleader is designed to get claims of the affected parties to trial or settlement in one lawsuit, rather than through a number of suits that might result in inconsistent judgments. Interpleader is appropriate here.

2. No Undue Delay

The trial court cited delay as a basis for denying Adams leave to amend. Howeyver, the delay occurred in Benton's amendment of the complaint five months after the trial court granted him leave to amend. Benton did not receive notice of the trial court's ruling granting him leave to amend his complaint. Neither Benton's counsel-prior to his withdrawal-nor Benton as pro se afterwards, sought to ascertain the status of the trial court's ruling before the trial court issued its show cause order for lack of prosecution.

This unfortunate delay was not attributable to Adams. Adams filed his answer in a timely manner and filed his answer amendments, including the interpleader claim, twenty days after he answered Benton's amended complaint, also timely. The case had been in suspense awaiting Benton's complaint amendment. No case management order had entered, the parties had not commenced discovery, mandatory disclosures under C.R.C.P. 26 were not yet due, and no trial date had been set. °

Given the embryonic stage of the case, Adams' answer amendments would not have caused undue delay. Adams proceeded diligently in filing his motion to dismiss based on Benton's standing to sue in his individual capacity. Without delay after Benton filed his amended complaint, Adams filed his answer and amended answer, counterclaim, and sought to employ interpleader. Most importantly, Adams' amendments-most notably by interpleading Kilkenny and Benton-were calculated to resolve the merits of the dispute in one lawsuit, the one already under way.

If Adams had sought the amendments outside of case management order timelines, undue delay justifying denial of leave to amend might have resulted. Our Colorado Rules of Civil Procedure contemplate steady progress to trial under court-imposed or rule-imposed deadlines. Parties should join issues and other parties needed for just and efficient resolution of the case as early as practicable in the litigation, so that a case may proceed expeditiously to trial or settlement. Prompt, active trial court and party management of the litigation following its initial filing is essential to just, speedy, and inexpensive determination of the dispute.

3. No Prejudice

Likewise, Benton did not make a sufficient showing of prejudice justifying denial of Adams' answer amendments. Benton did not argue prejudice in his trial court brief. To us, he argues that he might not be able to collect a judgment in his favor if the suit is further delayed. He says that Adams may be transferring or otherwise concealing assets to shield them from creditors. He says that time is running out under domestic and foreign statutes of limitations for recovery of these assets.

The five-month delay in filing his amended complaint stands against Benton's current claim of need for rapidity. Adams had no role in this delay other than timely filing his motion to dismiss. Whether Benton will prevail and obtain a judgment in this case awaits resolution on the merits. His concerns about collecting a judgment in his favor are premature.

Minimal delay would have resulted from granting Adams' motion to amend to add affirmative defenses, interplead Benton and Kilkenny's claims, and make a technical amendment to a counterclaim against Benton. In light of Adams' allegations of suffi-client grounds for reasonable belief of exposure to double liability to Kilkenny and to the Trust for the same obligation, and absence of cognizable prejudice to Benton, the trial court abused its discretion in denying Adams leave to file his answer amendments.

Adams' allegations met the "minimal threshold of substantiality" standard justifying the addition of Kilkenny's claim to the suit to resolve the issue of potential double liability on the same obligation, and no undue delay in the litigation or prejudice to a party would have resulted from granting the amendments.

III.

Accordingly, we make the rule absolute, and direct the trial court to allow Adams leave to file his answer amendments consistent with this opinion.

      . The Trust agreement provides for a third trustee, but when the third trustee resigned in 1995 no one replaced him.

      . Adams designated the interpleader claim as a counterclaim against Benton, trustee, and as a third-party complaint against Kilkenny. Before the trial court ruled on Adams' motion for leave, Adams asked the court to consider his claim against Kilkenny as a cross claim rather than a third-party complaint, and to join Kilkenny as a defendant, rather than as a third-party defendant. Pursuant to Rule 14, third-party complaints may be filed only against "a person not a party to the action who is or may be liable to [the third-party plaintiff] for all or part of the plaintiffs claim [against the third-party plaintiff]." C.R.C.P. 14(a). Adams does not assert that Kilk-enny is liable to him for his liability to the Trust; consequently, C.R.C.P. 14 is not the appropriate avenue to bring Kilkenny into the case.

      . The trial court's order inadvertently refers to Adams rather than Kilkenny.

      . Adams states the question as follows:
      Did the Respondents abuse their discretion by denying Petitioner/Defendant's motion for leave to amend his pleadings by adding an interpleader claim against Plaintiff and a person not yet a party, adding that person as a party on the interpleader claim, adding four affirmative defenses, and making a technical amendment to an existing third-party complaint, where leave was sought 20 days after the filing of the pleading sought to be amended, a Case Management Conference had not been held, a Case Management Order had not yet been entered, no discovery had been conducted, the case had not been set for trial, and no prejudice to any other party was demonstrated.

      . There are some circumstances where a party can amend as a matter of right. C.R.C.P. 15(a). All of the parties assumed that such circumstances were not present here, so we do not consider whether Adams could have made some or all of his amendments without seeking leave of the trial court.

      . Because the trial court must accept Adams' allegations as true for purposes of ruling on his motion to amend, we reproduce for reference Adams' interpleader allegations from his proposed amended answer:
      By virtue of her settlements with Adams and Benton, Individually, Kilkenny surrendered her rights under the Trust in exchange for her rights under the Adams Settlement Agreement and the Benton Settlement Agreement.
      Adams' sole obligations to Kilkenny are those created by the Adams Settlement Agreement. Adams has made substantial payments to Kilkenny under the Adams Settlement Agreement, which Kilkenny has accepted, thereby waiving any right she may have had to require payments from Adams in her capacity as a beneficiary of the Trust.
      By asserting the claims contained in the Amended Verified Complaint, Benton, Trustee, seeks to recover from Adams on obligations owing to Kilkenny by the Trust.
      If Benton, Trustee, is allowed to recover from Adams on the claims contained in the Amended Verified Complaint, and Kilkenny is allowed to recover from Adams on the obligations contained in the Adams Settlement Agreement, Adams will be subjected to double liability for the same obligations.
      The Adams Settlement Agreement calls for Adams to make monthly payments to Kilkenny of $7,500, the next of which is due March 1, 2002 and the last of which is due August 1, 2002, and for Adams to make one final payment to Kilkenny of $250,000 on or before September 1, 2002 ("Remaining Payments").
      If Adams makes the Remaining Payments to Kilkenny, and Benton, Trustee, is allowed to prosecute the claims contained in the Amended Verified Complaint, Adams will be exposed to double liability with respect to those payments.
      Adams is ready, willing and able to pay the amount of the Remaining Payments into the Registry of this Court pending determination by this Court of whether such payments are owing to Kilkenny under the Adams Settlement Agreement or to Benton, Trustee, Pursuant to the claims contained in the Amended Verified Complaint.

      . We recently amended C.R.C.P. 16 to further assure that cases progress quickly to trial or settlement. The new Rule 16(b) establishes a presumptive case management order that will take effect unless the parties act to amend it. Under the old Rule, if a party in the case was proceeding pro se, the Rule obligated the trial court to have a case management conference before entering a case management order. Under revised C.R.C.P. 16, a case management order enters automatically, without court action, even when one or more parties are pro se. Richard P. Holme, Civil Rules 16 and 26: Pretrial Procedure and Discovery Revisited and Revised, Colo. Law., December 2001, at 9, 14-18.

      . In the event of a fraudulent transfer, the Colorado Uniform Fraudulent Transfer Act, §§ 38-8-101 through 38-8-112, 10 C.R.S. (2002), affords a means of pre-judgment creditor protection in particular circumstances. See § 38-8-102(b)(3), 10 C.R.S. (2002) (defining "claim" to include rights to payment, including those rights not reduced to judgment); § 38-8-102(b)(5), 10 C.R.S. (2002) ("creditor" is a person who has a claim); § 38-8-105(1)(a) 10 CRS. (2002) (transfers are fraudulent if made with actual intent to hinder, defraud, or delay any creditor); § 38-8-108, 10 C.R.S. (2002) (identifying creditor's remedies); see also C.R.C.P. 102(a) (procedures for prejudgment attachment).

      . The trial court did not premise its order on potential prejudice to Kilkenny, so we do not consider the possibility of such prejudice here. However, we observe that prejudice to inter-pleaded parties may be a proper consideration when deciding whether to grant leave. A party might be prejudiced if joined in a case late in the proceedings, after important rulings have been issued or substantial discovery taken. However, such prejudice is unlikely in a case like the instant one, were Kilkenny was interpled only twenty days after Adams filed his first answer, and where Kilkenny was apparently aware of the ongoing litigation, as evidenced by her action in filing an opposition to Adams' Motion for Leave to Amend and her counsel's eniry of appearance shortly after Benton filed his original complaint.


author: Justice KOURLIS

text:
    The PEOPLE of the State of Colorado, Petitioner, v. Armando Bailon RAMIREZ, Respondent.
    No. 01SC440.
    Supreme Court of Colorado, En Banc.
    Oct. 15, 2002.

      Ken Salazar, Attorney General, Elizabeth Rohrbough, Assistant Attorney General, Appellate Division, Criminal Justice Section, Denver, Colorado, Attorneys for Petitioner.
    David S. Kaplan, Colorado State Public Defender, Ann M. Aber, Deputy State Public Defender, Attorneys for Respondent.
   Justice KOURLIS

delivered the Opinion of the Court.

In this case, a jury convicted defendant Armando Ramirez of murder in the second degree and first degree criminal trespass, arising out of the death of Maria Ramirez Sanchez, and the trial court sentenced him accordingly. The defendant, Ramirez, appealed his convictions, claiming that the jury improperly failed to fill out the special verdict form indicating whether the murder conviction was for second degree murder or second degree murder-heat of passion. The court of appeals returned the case to the trial court for resentencing, reasoning that the absence of a jury finding concerning the heat of passion mitigator afforded the defendant the benefit of the assumption that the jury intended the lesser felony. People v. Ramires, No. 99CA164 (Colo. App. May 8, 2001) (not selected for official publication). Because we conclude that there was no evidence that entitled the defendant to an instruction on heat of passion, let alone a verdict to that effect, we reverse the court of appeals and reinstate the sentencing order.

I. Facts

The defendant, Armando Ramirez, was a friend of the victim, Maria Ramirez-Sanchez On October 27, 1997, Ramirez stopped by Ramirez-Sancherz's trailer where the victim lived with her eleven-year-old daughter and infant son. Monico Lopez, the man from whom the victim was purchasing the trailer, was also at the trailer conversing with the victim regarding her intention to return to Mexico and the possibility of Lopez providing transportation. After Ramirez arrived, Ramirez and Lopez discussed the trailer's heater, and Lopez subsequently departed.

After Lopez left, Ramirez asked the victim to marry him. The victim stated that she would not marry Ramirez. Ramirez then left. Shortly thereafter, Lopez returned and he and the victim had a brief conversation in his vehicle Again, Lopez departed. Ramirez then returned, this time entering the trailer. He asked the vietim who Lopez was. The victim replied that Lopez was the man selling her the trailer. Ramirez again asked the victim to marry him; the victim replied that "she didn't want [Ramirez] as a boyfriend or a husband, only as a friend."

The victim requested that Ramirez leave because she was tired. Ramirez did not leave but indicated that he wanted to stay. The victim opened the door and pushed Ramirez outside. Ramirez grabbed the victim by the sweater and pulled her outside with him. The victim's daughter followed them outside. Ramirez and the victim yelled at each other. Ramirez then pulled a handgun from his coat and shot the victim. The vice-tim fell to the ground, and Ramirez approached the victim and shot her again. The victim's daughter began struggling with Ramirez. Ramirez shot the victim six to eight more times and the victim died of multiple gunshot wounds. Ramirez fled. The following day, law enforcement officials apprehended Ramirez in New Mexico carrying the gun he had used to shoot the victim.

At trial, the defense psychology expert witness testified that the victim humiliated Ramirez by forcing him to leave her home and also by the substance of the second conversation between the victim and Lopez, which Ramirez claimed to have overheard. The expert gave his opinion that Ramirez had acted as a result of that humiliation and not after deliberation.

At the conclusion of the trial, the judge instructed the jury that it was Ramirez's theory of the case that

he did not murder Maria Ramirez after deliberation. It is further his answer that he acted in a hasty and impulsive manner when he shot and killed Maria Ramirez.
Finally, Armando Ramirez answers that a combination of factors including, emotional rejection, unrequited expressions of love and affection, jealousy, injured self-esteem, and the coincidental presence of a firearm resulted in the deadly, impulsive act.
If you do not find beyond a reasonable doubt that the defendant acted after deliberation, you should find the defendant not guilty of first degree murder, and you should then consider whether he is guilty of the offense of second degree murder or the offense of second degree murder-heat of passion.

The jury instructions further contained two lesser offense instructions, one of which instructed the jury that if they did not find the defendant guilty of first degree murder, they could nonetheless find him guilty of second degree murder; and the second of which instructed the jury that if they did not find the defendant guilty of first degree murder, they could nonetheless find him guilty of second degree murder or second degree murder-heat of passion. In combination among the various instructions, the trial court outlined the elements of first degree murder, second degree murder and second degree murder-heat of passion.

As to the verdict itself, the trial court directed the jury that they could "not find the defendant guilty of more than one of the following offenses: Murder in the first degree[;] Murder in the second degree[;] Murder in the second degree, heat of passion."

Finally, the court instructed, "When you have unanimously agreed upon your verdicts you will select the forms which reflect your verdicts and the foreperson will sign them as the Court has stated. The unsigned form(s) shall also be returned with no markings on them." The court provided five verdict forms. The first one provided signature lines for the foreman to indicate that the jury had found the defendant guilty or not guilty of first degree murder. The second was the same for second degree murder. The third form read: I. We, the jury, find the Defendant, ARMANDO BAILON RAMIREZ, NOT GUILTY of Murder in the Second Degree, Heat of Passion; II. We, the jury, find the Defendant, ARMANDO BAILON RA-MIRAZ, GUILTY of Murder in the Second Degree, Heat of Passion. The fourth form related to the Criminal Trespass charge; and the fifth form was a special interrogatory relating to whether the defendant used a deadly weapon in the commission of the crime.

During closing arguments, the prosecutor urged the jury to find Ramirez guilty of first degree murder after deliberation. In response, the defense counsel asked the jury "to look at the charges of second degree murder, to look at the charge of second degree murder as a passion and come back with an appropriate verdict."

After deliberation, the jury signed verdict forms finding the defendant not guilty of murder in the first degree, guilty of murder in the second degree and guilty of first degree criminal trespass. The court then noted that the jury had only completed a portion of the crime of violence special interrogatory and sent the jury back to complete the form.

The jury did not ever complete the form that directed them to find the defendant either guilty or not guilty of second degree murder-heat of passion. Neither the trial judge nor the parties mentioned that omission. The court discharged the jury and entered convictions for second degree murder and criminal trespass.

During the sentencing hearing, all participants proceeded on the assumption that the trial court should sentence Ramirez for see-ond degree murder-not second degree murder, heat of passion. The prosecutor argued that the jury "said this wasn't heat of passion, Judge. The jury said this was second-degree murder." The defense counsel agreed, arguing the "jury disagreed with the prosecution, that this was a murder that took place after deliberation. They certainly did consider the fact of heat of passion. They came back that it was second, that it was something not planned out, that it was not after deliberation." At the close of the sentencing hearing, the trial court found that there were extraordinary aggravating circumstances and sentenced Ramirez to forty-eight years in prison for the second degree murder conviction and three years for the first degree criminal trespass conviction to run concurrently with the second degree murder sentence.

Ramirez appealed to the court of appeals presenting two claims. First he asserted that the trial court violated his right to constitutional due process because it refused to give an instruction that evidence of his peaceful and law abiding character could support a finding of reasonable doubt; the court of appeals rejected this claim. Ramirez also argued that because the jury did not return a verdict on second degree murder-heat of passion, his case should be remanded with instructions to reduce his second degree murder conviction from the class two felony prescribed for second degree murder, section 18-3-108(8)(a), to the class three felony mandated for second degree murder-heat of passion, section 18-3-103(8)(b). The court of appeals agreed, holding that a jury's failure to complete the second degree murder-heat of passion verdict form required remand for resentencing. People v. Ramirez, No. 99CA164, slip op. at 3 (Colo.App. May 3, 2001). The court of appeals determined that if the trial court discharges the jury before it obtains the jury's verdict concerning heat of passion, the level of the defendant's conviction must be reduced from the higher felony classification to the lower one. Id. at 3-4.

The prosecution sought certiorari from the decision of the court of appeals to this court arguing that the court of appeals erred in concluding that the jury's failure to mark the second degree murder-heat of passion verdict form constituted plain error because there was no evidence in the record to support a heat of passion instruction, let alone a verdict. We accepted certiorari.

IIL Standard of Review

In this case, because neither party objected to the absence of a signature on the second degree murder-heat of passion verdict form, appellate review is limited to determining whether the error or defect constitutes plain error. See, eg., People v. Garcig, 28 P.3d 340, 344 (Colo.2001); People v. Dunlap, 975 P.2d 723, 737 (Colo.1999). A plain error is one which deprives a litigant of fundamental rights. People v. Gallegos, 764 P.2d 76, 77 (Colo.1988); People v. Rollins, 892 P.2d 866, 874 n. 13 (Colo.1995). ("An accused may not withhold his objections until completion of his trial and after conviction, and later complain of matters which, if he had made a timely objection, would have allowed the trial court to take corrective action.")

When the standard of review is plain error, we will reverse a decision only if after reviewing the entire record, we "can say with fair assurance that the error so undermined the fundamental fairness of thé trial itself as to cast serious doubt on the reliability of the judgment of conviction." Wilson v. People, 743 P.2d 415, 420 (Colo.1987); see also Garcia, 28 P.3d at 344.

III. Applicability of Heat of Passion Mitigator to Defendant

The prosecution argues that the jury's failure to mark the second degree murder-heat of passion verdict form could not have rendered the trial fundamentally unfair because the evidence could not support a second degree murder heat of passion verdict. We agree.

A. The Statute

Section 18-38-1088), the statute describing murder in the second degree and the heat of passion mitigator, provides:

(1) A person commits the crime of murder in the second degree if the person knowingly causes the death of a person.
(8) (a) Except as otherwise provided in paragraph (b) of this subsection (8), murder in the second degree is a class 2 felony.
(b) Notwithstanding the provisions of paragraph (a) of this subsection (8), murder in the second degree is a class 3 felony where the act causing the death was performed upon a sudden heat of passion, caused by a serious and highly provoking act of the intended victim, affecting the defendant sufficiently to excite an irresistible passion in a reasonable person; but, if between the provocation and the killing there is an interval sufficient for the voice of reason and humanity to be heard, the killing is a class 2 felony.

Ramirez correctly asserts that this court has recognized that the General Assembly added subsection (8)(b) to the second degree murder statute in 1996 intending the issue of provocation to be a mitigator to second degree murder that would reduce a charge of second degree murder from a class two felony to a class three felony, rather than intending second degree murder-heat of passion to be a separate offense. People v. Garcia, 28 P.3d 340, 345-46 (Colo.2001). Logically, as such, the prosecution does not bear the burden of proving adequate provocation beyond a reasonable doubt, but rather bears the burden of proving a lack of adequate provocation under subsection (8)(b). Id. at 346. Because provocation represents a mitigating factor, rather than a separate offense, as in Garcia, the instructions in this case inaccurately characterized second degree murder-heat of passion.

However, because in this case, the evidence was insufficient to support a jury finding of the heat of passion mitigator, neither the incorrect instruction nor the absence of a signature on the jury verdict form constitutes plain error.

B. Insufficiency of the Evidence

For heat of passion to apply in this case, the victim's actions, taken in the light most favorable to the defendant, must have been "serious and highty provoking act[s] ... affecting the defendant sufficiently to excite an trresistible passion in a reasonable person". § 18-3-103(8)(b) (emphasis added).

Ramirez relies on People v. Harris, 797 P.2d 816 (Colo.App.1990), for the assertion that where the legislature has treated provocation as a mitigator and the jury fails to make a finding as to whether heat of passion applies, the absence of such a finding must operate against the prosecution, and the defendant should be resentenced with the benefit of the heat of passion mitigator. In Harris, the jury found the defendant guilty of first degree assault with intent to commit serious bodily injury by means of a deadly weapon and a crime of violence. Id. at 817. The judge instructed the jury to make a finding as to the applicability of the mitigation of heat of passion to the charge of first degree assault; however, the jury failed to complete a special verdict form indicating its finding on the issue and neither defendant, the trial court, nor the prosecution noticed the oversight prior to the discharge of the jury. Id. The court of appeals determined that a heat of passion defense "admits the doing of the act charged but seeks to mitigate it." Id. at 818. It instructed that once a defendant introduces some credible evidence that the defendant committed the crime "under a heat of passion, the burden shifts to the prosecution to demonstrate the non-existence of cireumstances justifying the heat of passion defense." Id. The court determined that the defendant should be given the benefit of the heat of passion mitigator upon resentencing where the jury failed to make a finding as to that mitigator. Id.

However, Harris differs from the present case: the court of appeals in Harris acknowledged that a defendant must present some credible evidence that the crime was committed in the heat of passion. Id.; see also People v. Suazo, 867 P.2d 161, 168 (Colo.App.1993) (finding that because defendant introduced credible evidence that the offense was committed under a heat of passion, the absence of a jury determination of provocation must operate against the prosecution).

Here, there is no such credible evidence. The victim's refusal of Ramirez's marriage proposal, request that Ramirez leave her home, and subsequent push toward the door when the defendant did not comply, do not, as a matter of law, fulfill the requirement that the victim's act be serious and highly provoking or sufficient to excite an irresistible urge in a reasonable person. Heat of passion is a legal theory that recognizes that sometimes cireumstances conspire to cause even a reasonable person to react passionately and violently. Those cireum-stances do not exonerate the offender, but do mitigate the consequences of the violent acts. However, the refusal of a marriage proposal, and the request or even demand to leave one's home cannot under any construction rise to the level of provocation that would justify a reasonable person in using violence.

We have previously reached similar conclusions. In Coston v. People, 633 P.2d 470, 472-18 (Colo.1981), this court held that (1) evidence of a defendant's long-standing, though illicit, sexual relationship with the victim, (2) his jealousy over her when she began another affair, and (8) her attempt to terminate their relationship, in combination, did not constitute adequate provocation to warrant a heat of passion mitigating instruction to reduce murder to manslaughter. Specifically, this court concluded that the victim's decision to "terminate her relationship with the defendant in this case does not amount to the sort of serious and highly provoking act which is sufficient to excite an irresistible passion in a reasonable person." Id. at 473.

Additionally, in People v. Dooley, 944 P.2d 590, 593 (Colo.App.1997), the court of appeals held that the defendant failed at a minimum to establish any evidence that the victim's acts were sufficient to excite an irresistible passion in a reasonable person sufficient to justify a heat of passion instruction. The defendant and the victim involved were engaged in an intermittently romantic relationship over a one-year period, as the victim spent most of the year moving back and forth between the defendant's household and that of her husband, despite the defendant's displeasure at the situation. Id. at 592. The victim then acquired a separate apartment; during the defendant's visit, the victim denied the defendant's request to come and sit by him, stating that she did "not want to be his whore anymore." Id. at 598. She then walked into the kitchen and sat down at a typewriter; the defendant followed her into the kitchen, ripped the paper out of the typewriter, and then stabbed the victim thirty-three times, killing her. Id.

Courts across the country examining the issue have also generally concluded that a victim's rejection of the defendant's affections is not sufficient to constitute a highly provoking act that would excite an irresistible urge in a reasonable person. See, eg., State v. Hague, 726 AZ2d 205, 209 (Me.1999) (holding that a victim's concurrent refusal to marry the defendant, her desire to terminate their relationship, and her statement that "we [are] just too different," did not constitute a legally adequate provocation as a matter of law and, therefore, did not generate a defense of adequate provocation); Turben v. State, 726 N.E.2d 1245, 1248 (Ind.2000) (determining that the combination of the defendant's stormy marriage, an argument between the defendant and the victim on the night of the murder, the victim's statement that she was obtaining a divorce, the victim's throwing a baby bottle at the defendant, and the defendant's "explosive mood disorder" did not inflame sudden heat sufficient to mitigate murder to voluntary manslaughter); State v. Arnold, 706 So.2d 578, 581, 584 (La.Ct.App.1998) (determining that heat of passion did not exist where the defendant's girlfriend had visited another man, the girlfriend's sister was arguing with the defendant, and the girlfriend's brother requested that the defendant leave the residence and grabbed defendant's arm); State v. Pulsifer, 724 A.2d 1234, 1239 (Me.1999) (deciding the trial court correctly rejected defendant's adequate provocation defense where the defendant claimed extreme anger and fear resulting from the efforts of others to interfere with his romantic relationship because those acts "would not cause a reasonable man to stab the woman who is the object of his affection"); State v. Locklair, 341 S.C. 352, 535 S.E.2d 420, 422, 424-25 (2000) (holding that evidence that the victim, defendant's ex-girlfriend, refused defendant's pleas to get back together with him, and that the victim's mother threw a cigarette case at defendant immediately before he shot the victim was not sufficient to constitute legal provocation); Gaston v. State, 930 S.W.2d 222, 225-26 (Tex.Ct.App.1996) (concluding that defendant's wife's nagging, taunting, and promising a divorcee and property squabble did not provide the necessary evidence of provocation to support a voluntary manslaughter instruction); Commonwealth v. Brown, 387 Mass. 220, 439 N.E.2d 296, 301 (1982) (noting that where the defendant's wife choked defendant with his shirt and supposedly admitted to suspected adulterous acts claiming that she could do what she wanted with her vagina, the facts did not rise to the level of a "sudden provocation" sufficient to reduce murder to manslaughter); Washington v. State, 989 P.2d 960, 966, 968 (Okla.Crim.App.1999) (indicating that the victim's proclamation that she no longer loved the defendant and that she wanted nothing to do with him was insufficient to constitute adequate provocation to justify a first degree heat of passion manslaughter instruction).

IV. Conclusion

The victim's acts here were not sufficiently provocative to support a heat of passion instruction or verdict. The victim's refusal of Ramirez's marriage proposal, her request that Ramirez leave her home, and her action in pushing him toward the door when he did not comply are not serious and highly provoking acts that would excite an irresistible urge in a reasonable person. The absence of reciprocal feelings cannot justify inexcusable acts of violence. Therefore, we hold that the jury's failure to sign the second degree murder-heat of passion jury verdict form did not constitute plain error. We reverse the court of appeals' judgment and remand this case for issuance of a mandate upholding the trial court sentencing order.

      . The parties dispute whether Ramirez and the victim had ever been involved in a sexually intimate relationship. Although a defense witness, a professor of psychology, who examined Ramirez indicated that the relationship was physically intimate, the victim's daughter stated that Ramirez was not her mother's boyfriend, but only a friend. At trial, the trial court referred to Ramirez-Sanchez as "a person who may have been [Ramirez's] girlfriend."

      . Although Armando Ramirez and Ramirez-Sanchez had the same last name, this is purely coincidental; they were not related either by blood or by marriage.

      . At trial, witnesses lestified that Ramirez had made similar proposals to the victim on prior occasions.

      . Ramirez refused to tell anyone the nature of the conversation he claimed to have overheard because it would be too harmful to his pride.

      . § 18-3-103, 6 CR.S. (2002).

      . § 18-4-502, 6 C.R.S. (2002).

      . Specifically, this court granted certiorari on the following:
      1) Whether the court of appeals erred in concluding that the jury's failure to mark the verdict form for second degree murder-heat of passion constitutes plain error undermining the fundamental fairness of the defendant's trial when there was no evidence to support heat of passion.
      2) In the alternative, if that failure constitutes plain error, whether the prosecution should have the option to retry the defendant on the charge of second degree murder.

      . We note that there is some confusion about whether the prosecution objected to the giving of heat of passion instructions. During the trial, the court and counsel briefly discussed jury instructions on the record. When the defense counsel indicated that he would submit an instruction as to heat of passion, the prosecutor indicated that he would probably argue against such an instruction. The court and counsel then reviewed the jury instructions off the record. In a subsequent discussion of jury instructions on the record, neither the court nor the parties mentioned the héat of passion instructions-either as contested or ag uncontested. Because we review this case from the perspective of concerns about the unsigned jury verdict form, we attach no weight to the presence or absence of an objection by the prosecution.

      . Because we answer the first question presented to us on certiorari in the affirmative we need not reach the second issue on which we granted certiorari.