author: Judge MARQUEZ. Judge ROY

text:
    Keith WIDDER, Plaintiff-Appellee, v. DURANGO SCHOOL DISTRICT NO. 9-R, a Colorado school district; and Board of Education of Durango School District No. 9-R, a Colorado school district board of education, Defendants-Appellants.
    No. 01CA1180.
    Colorado Court of Appeals, Div. V.
    June 20, 2002.
    Rehearing Denied July 25, 2002.

    Certiorari Granted Jan. 13, 2003.

      Colorado Education Association, Charles F. Kaiser, Martha R. Houser, Gregory J. Lawler, Cathy L. Cooper, Sharyn E. Dreyer, Denver, Colorado, for Plaintiff-Appellee.
    Semple, Miller & Mooney, P.C., Patrick B. Mooney, Wendy J. Shea, Denver, Colorado, for Defendants-Appellants.

       Roy, J., would grant.

   Opinion by

Judge MARQUEZ.

In this action in mandamus, defendants, Durango School District No. 9-R and the Board of Education of Durango School District No. 9-R, appeal the trial court’s judgment granting plaintiff, Keith Widder, reinstatement and back pay. We vacate the judgment and remand with directions.

While employed as a custodian at a middle school in Durango, plaintiff witnessed a student being pushed by another student and decided to stop the incident. According to plaintiff, when he approached the students, he squatted down to get “eye to eye with them” and accidentally bumped foreheads with one of the students. Later that day, the interim assistant principal informed plaintiff that the student reported that plaintiff had “head butted” him, and plaintiff was served with a notice of suspension. The interim superintendent advised plaintiff by letter that he was recommending to the board that plaintiff be terminated and that plaintiff could request a hearing.

Plaintiff requested a hearing before the interim superintendent. Following the hearing, at which plaintiff appeared with counsel, a different interim superintendent found that she would uphold the recommendation of termination based on evidence that there was a head butt. She also found, based on her assessment of the credibility and weight of the evidence, that plaintiffs actions were deliberate or the result of inappropriate conduct. The board approved the recommendation and dismissed plaintiff,

Plaintiff originally filed a complaint alleging breach of contract and violation of the former § 22-32-110(4)(c) (the immunity statute), Colo. Sess. Laws 1991, ch. 91 at 530 (now codified with amendments as § 22-32-109.1(9)(e), C.R.S.2001). That section provided that “[a] teacher or any other person who acts in good faith and in compliance with the discipline code adopted by the board of education ... shall not ... be subject to any disciplinary proceedings, including dismissal, as a result of such lawful actions.” Defendants moved for judgment on the pleadings pursuant to C.R.C.P. 12(c), which the trial court granted.

However, the court also allowed plaintiff to file an amended complaint based on McIntosh v. Board of Education, 999 P.2d 224 (Colo.App.2000). The amended complaint alleged that he was damaged by the board’s failure to comply with the immunity statute and that he was entitled to relief in the nature of mandamus pursuant to C.R.C.P. 106(a)(2).

Defendants then moved for summary judgment, which the court denied. The court rejected as contrary to McIntosh defendants’ assertion that the board’s actions are reversible only for abuse of discretion and concluded that the court should determine de novo whether plaintiff was discharged in violation of the statute and entitled to a writ of mandamus.

After an evidentiary hearing, the trial court ruled in favor of plaintiff and ordered that he be reinstated and awarded back pay plus statutory interest. Defendants appeal from this judgment.

I.

Defendants first contend that the trial court erred in determining de novo the facts underlying the dismissal decision. In support of this contention, defendants argue that the immunity statute does not divest a school district of its authority to discipline or dismiss an employee if the district determines that the employee’s conduct was inappropriate and that the trial court erred in refusing to defer to the school district’s findings of inappropriate conduct by plaintiff.- We agree that the trial court erred in conducting a de novo hearing.

Mandamus is an extraordinary remedy that may be used to compel performance by public officials of a plain legal duty which devolves upon them by virtue of their office or which the law enjoins as a duty resulting from the office. Mandamus is appropriate upon the satisfaction of three conditions: (1) a clear legal right to the relief sought; (2) a clear legal duty on the part of the district to perform the act requested; and (3) lack of any other available remedy. Board of County Comm’rs v. County Road Users Ass’n, 11 P.3d 432 (Colo.2000); Sherman v. City of Colorado Springs Planning Comm’n, 763 P.2d 292 (Colo.1988).

Mandamus lies to compel the performance of a purely ministerial duty involving no discretionary right and not requiring the exercise of judgment. Board of County Comm’rs v. County Road Users Ass’n, supra.

The board of education has the power, to be exercised in its judgment, to discharge or otherwise terminate the employment of any personnel. See § 22-32-110(l)(h), C.R.S. 2001; Adams County School Dist. No. 50 v. Dickey, 791 P.2d 688 (Colo.1990).

In McIntosh, supra, a division of this court determined that a probationary teacher who had disciplined a student was entitled to pursue mandamus relief to enforce the immunity statute when the school board unilaterally voted not to renew the teacher’s contract. The school board had asserted in a C.R.C.P. 12(b)(5) motion to dismiss that the teacher’s contract was not renewed based on budget considerations. The division determined that the statute creates an exception to the general rule granting school boards discretion to terminate employment and prohibits school boards from basing termination decisions on actions taken in good faith and in compliance with the school board’s discipline codes.

The division in McIntosh concluded that pursuant to the immunity statute, the school board had a specific duty not to refuse to renew the probationary teacher’s contract because of good faith and code compliant disciplinary actions. The division also held that the statute prescribes no avenue of relief for an alleged violation of this duty and that the probationary teacher had not been afforded, and did not otherwise have, the opportunity to have his claim heard by an impartial arbiter.

Because the appeal in McIntosh concerned the trial court’s grant of the school board’s motion to dismiss, the division did not consider the school board’s proffered reason for not renewing the teacher’s contract. Rather, it remanded the case to the district court with directions to conduct an evidentiary hearing to determine that reason. The division stated that mandamus relief requiring the reinstatement of the teacher should be granted only if the trial court determined that the school board’s reason was prohibited by the immunity statute.

Here, defendants argued before the trial court that the immunity statute does not immunize plaintiff from termination if the board determines in its discretion that the methods used to discipline a student are inappropriate and therefore, not in good faith and in compliance with the disciplinary code. The trial court rejected this argument based on its interpretation of Mein- tosh and determined that whether plaintiff was discharged in violation of the statute was an issue to be heard de novo. After hearing testimony from plaintiff, a student who witnessed the incident, an economist, the complaining student, the interim assistant principal, the interim superintendent, and the district’s human resources director, the trial court determined that there was not “any evidence to sustain the notion that the head contact ... was deliberate” and that defendant acted in good faith and in compliance with the discipline code.

We disagree with the trial court’s conclusion that McIntosh required a de novo hearing here.

In McIntosh, the case was remanded to the trial court not to determine whether the teacher acted in good faith and in compliance with the disciplinary code, but rather to determine the reason for the nonrenewal. Whether the teacher acted in good faith during the disciplinary incident does not appear to have been an issue in that case.

Moreover, unlike the teacher in McIntosh, plaintiff here was afforded a hearing before the interim superintendent prior to termination. At that hearing, plaintiff was represented by counsel and had the opportunity to present evidence.

In their brief on appeal, defendants assert that plaintiff was given the opportunity to present whatever evidence he wanted. According to defendants’ brief, plaintiff provided the interim superintendent with only a written statement. The record indicates that the interim superintendent sent a letter to plaintiff outlining the evidence and stating her findings. The letter lists as the evidence reviewed support staff appraisals regarding plaintiff; “thank you notes” to plaintiff; a certificate of achievement; a statement by plaintiff “on speaking to attorney;” plaintiffs suspension; administrative policies on exclusions, corporal punishment, suspension and expulsion of students; a letter from the superintendent on termination and right to request a hearing; an investigative report; statements from plaintiff, students, and teachers; and, Durango Herald records.

On appeal, plaintiff does not contest that he was given the opportunity to present any evidence he wished to offer at the hearing before the interim superintendent. Nor does he assert he was prevented from testifying at the hearing, calling witnesses, or presenting other evidence. During oral argument, plaintiffs counsel stated that denial of due process was not the issue, but “the issue here is whether the statute was violated.” However, plaintiff does not argue that the immunity statute requires an evidentiary hearing before the trial court. Rather, plaintiff relies on McIntosh for that requirement.

We agree that, pursuant to the immunity statute, the board did not have discretion to dismiss plaintiff if his conduct was in good faith and in compliance with the disciplinary code. However, the statute does not divest the board of its discretion to determine whether his conduct in fact was in good faith and in compliance and so whether it warrants dismissal. Additionally, we do not read McIntosh as requiring an evidentiary hearing before the trial court in every case involving disciplinary proceedings based on the statute. Absent circumstances indicating that an employee was not provided an opportunity for a hearing, the more appropriate procedure is to seek review of the board’s decision pursuant to C.R.C.P. 106(a)(4).

Here, it is undisputed that the board’s decision to terminate plaintiff was not a unilateral decision as in McIntosh. Instead, it was based on the interim superintendent’s finding, after an evidentiary hearing, that plaintiff had engaged in deliberate or inappropriate conduct.

Therefore, the trial court erred in determining de novo that plaintiffs conduct was in good faith and in compliance with the disciplinary code. Thus, plaintiff is not entitled to mandamus relief.

II.

Because we conclude that the trial court was not required to conduct a de novo review, we need not address defendants’ contention that the trial court abused its discretion by determining that plaintiff acted in good faith and in compliance with the discipline code.

The judgment is vacated, and the case is remanded with instructions to reinstate the board’s order.

Chief Judge HUME concurs.

Judge ROY dissents.

Judge ROY

dissenting.

I respectfully dissent.

In my view, § 22-32-109.1(9)(e), C.R.S. 2001 (formerly codified at § 22 — 32—110(4)(c)), places a limit on a school board’s general power to discipline and dismiss employees. In this sense, I agree with the holding in McIntosh v. Board of Education, 999 P.2d 224 (Colo.App.2000). Therefore, it seems incongruous to me that the school board is given the initial determination as to whether its action in dismissing an employee is proscribed by the statute and then according that determination judicial deference as the majority holds.

However, I disagree with the division in McIntosh that mandamus pursuant to C.R.C.P. 106(a)(2) is the appropriate remedy under these circumstances. Mandamus lies only when there is a clear legal right, a clear legal duty, and no other available remedy. Mandamus deals with ministerial acts, not acts involving discretion. See Jones v. Colorado State Board of Chiropractic Examiners, 874 P.2d 493 (Colo.App.1994).

I also disagree with the majority that the appropriate remedy here is a judicial review pursuant to C.R.C.P. 106(a)(4). Nor do I agree with the majority that this case should be distinguished from McIntosh by virtue of the fact that here the school district held a hearing. By distinguishing McIntosh, rather than disapproving of it, the majority implies that it is good law in those instances in which the school district did not accord the employee a hearing, a proposition with which I also disagree.

In my view, the discharged or disciplined employee has a remedy under C.R.C.P. 57, in a proceeding for declaratory judgment. In a C.R.C.P. 57 proceeding, the issue is whether the dismissal or discipline was in violation of the statute, and the court may impose injunc-tive relief if it determines that a violation has occurred. Such proceeding would not be a review of the school district’s action, which would be accorded no deference. See C.R.C.P. 57(i).

It is apparent that the General Assembly is concerned about discipline in the public schools and seeks to protect school boards, teachers, and other persons who act in good faith and in compliance with a disciplinary code. The statute protects these entities and persons from civil liability by granting immunity from criminal liability by according an affirmative defense, and from allegations of child abuse by excluding good faith compliance with a disciplinary code from the definition of child abuse. See § 22-32-109.1(9), C.R.S.2001 (formerly codified at § 22-32-110(4)(a)(I)(III), (b)).

Then, § 22-32-109.1(9)(e) gives similar protections to a teacher or any other person from the school board by prohibiting the school board from nonrenewal of an employment contract, taking any disciplinary action, including dismissal, or making any note in an employment record. It is apparent that, for whatever reason, the General Assembly has concluded that these persons need specific protection from the public, prosecutors, and school boards. To make a school board the initial arbiter of whether its action violates the statute, and then to give that decision the deference normally accorded in an administrative review pursuant to C.R.C.P. 106(a)(4) dilutes the protection accorded by the statute and the General Assembly.

Therefore, because the trial court, albeit for the wrong reasons, conducted a full hearing, made appropriate findings of fact and conclusions of law, and ordered plaintiffs reinstatement, I would affirm.


source: Caselaw Access Project

author: Judge DAVIDSON.

license: Public Domain

text:
    EQUITEX, INC. and Henry Fong, Plaintiffs-Appellees, v. Bertrand T. UNGAR, Defendant-Appellant.
    No. 01CA1253.
    Colorado Court of Appeals, Div. III.
    July 5, 2002.
    Rehearing Denied Aug. 22, 2002.
    Certiorari Denied Jan. 13, 2003.

      Block Markus Williams, L.L.C., Gregory L. Williams, Donald J. Quigley, John F. Young, Denver, Colorado, for Plaintiffs-Ap-pellees.
    Bertrand T. Ungar, P.C., Bertrand T. Un-gar, Denver, Colorado; Anne Whalen Gill, P.C., Anne Whalen Gill, Castle Rock, Colorado, for Defendant-Appellant.

       Justice KOURLIS would grant as to the following issues:
      Whether the court of appeals erred in determining that the verdict from a related litigation justified summary judgment on a claim for indemnification when Delaware Business Law provides for permissive indemnification for a director or agent who believes that his actions were in the best interests of the corporation and the issue of whether his actions were in the best interests of the corporation was not considered in the related litigation.
      Whether the petitioner was entitled to rely on the respondent's promise of indemnification, in rela-lion to the misrepresentation, nondisclosure, and fraud claims, because it was within the public policy of the Delaware indemnification statute, and he acted in accordance with instructions fron one of the respondent’s in disbursing the monies.
      Whether a jury verdict based on determination that a person acted wrongfully justifies a subsequent summary judgment on that person's claims for breach of indemnity contract and promissory estoppel on the specific issue of whether the person knew his conduct was wrongful.

       Sitting by assignment of the Chief Justice under provisions of Colo. Const, art. VI, § 5(3), and § 24-51-1105, C.R.S.2001.

   Opinion by

Judge DAVIDSON.

In this declaratory judgment action, defendant, Bertrand T. Ungar, appeals from the trial court’s judgment finding that plaintiffs, Equitex, Inc. and Henry Fong, owe defendant no indemnification. We affirm.

In 1996, a judgment was entered against defendant in favor of Thomas W. Itin on claims under the Rights in Stolen Property statute, § 18-4-405, C.R.S.2001. The claims were based on defendant’s involvement in a 1990 stock transaction in which Fong, acting for his brother, sold Itin stock in a company called Roadmaster; the purchase price was wired to defendant’s trust account; and the stock was not delivered. The jury found that defendant’s transfer of a portion of the funds to an account controlled by Fong constituted theft and a breach of fiduciary duty. The lawsuit did not concern a concurrent sale of Roadmaster stock from Equitex to Itin. At the time of the stock sale, Equitex held a controlling interest in Roadmaster, Fong was chairman and president of Roadmaster and president of Equitex, and Itin was a director of Roadmaster. At various times, not precisely defined in the record, defendant, an attorney, was a director of both Equitex and Roadmaster.

Before filing his lawsuit, Itin had resigned from Roadmaster and entered into a settlement agreement with Fong and Equitex, which, inter alia, covered the stock transaction and was applicable to agents of Equitex. Defendant argued that the settlement barred Itin’s claims against him because he had acted as an agent of Equitex in the stock transaction, but the jury found to the contrary. See Itin v. Bertrand T. Ungar, P.C., 978 P.2d 142 (Colo.App.1998), aff'd in part and rev’d in part, 17 P.3d 129 (Colo.2000).

After judgment was entered against him in the Itin case, defendant sought indemnification from plaintiffs and Roadmaster for the amount of that judgment and certain other costs. He alleged that Fong, on behalf of himself, Roadmaster, and Equitex, orally promised to indemnify defendant for the Itin litigation both when that litigation began and again after the judgment entered. Roadmas-ter posted defendant’s appeal bond in Itin with a reservation of rights. Subsequently, Roadmaster’s obligation was transferred to Equitex.

Plaintiffs filed this action, pursuant to C.R.C.P. 57, seeking a declaration that they owed defendant no indemnification. Defendant filed counterclaims for breach of indemnity contract, promissory estoppel, breach of fiduciary duty, fraud, nondisclosure, and negligent misrepresentation.

The trial court granted plaintiffs’ motion for summary judgment on defendant’s counterclaims and then entered judgment in favor of plaintiffs. It determined, inter alia, that the claim for breach of indemnity contract failed based on public policy considerations; the promissory estoppel claim failed because of defendant’s intentional conduct; the fiduciary duty claim failed because plaintiffs, as client or corporation, owed no such duty to defendant, as their attorney or director; and the remaining claims failed because defendant did not reasonably or justifiably rely on statements made by plaintiffs. Defendant appeals.

Review of a grant of summary judgment is de novo. Aspen Wilderness Workshop, Inc. v. Colo. Water Conservation Bd., 901 P.2d 1251 (Colo.1995). Summary judgment is appropriate if no issues of material fact remain unresolved and the moving party is entitled to judgment as a matter of law. See C.R.C.P. 56(c); Churchey v. Adolph Coors Co., 759 P.2d 1336 (Colo.1988).

I.

Defendant contends that the trial court erred in granting summary judgment on his claims for breach of indemnity contract and promissory estoppel. Specifically, he asserts that he did not act wrongfully in the stock transaction and contends that plaintiffs’ actions should prevent them from raising a public policy defense and that fairness requires enforcement of the promise of indemnity under a promissory estoppel theory. We disagree.

A.

Defendant concedes that he is bound by all findings on issues actually and necessarily decided in the Itin litigation. However, he also asserts that he did not act wrongfully, that he “merely acted as a point of transfer for the funds, following the instructions of Fong and Itin in doing so,” and that the jury made no finding that he acted intentionally. We disagree.

During the Itin trial, the parties disagreed as to whether Itin was entitled to proceed under the Rights in Stolen Property statute or was, instead, limited to a claim of civil conversion. The jury instructions apparently were drafted to permit this issue to be resolved after the jury returned its verdict. Accordingly, the jury was nominally instructed as to the elements of the tort of conversion, but those elements were defined to encompass the definition of criminal theft necessary for a Rights in Stolen Property claim. Thus, the jury’s verdict for Itin on the conversion claim included a finding that defendant knowingly exercised control over Itin’s property, without authorization, and “with intent to permanently deprive [Itin] of the use or benefit of the thing of value.”

Further, the jury returned a verdict for Itin on his breach of fiduciary duty claim and awarded punitive damages. The jury was instructed that:

A fiduciary relationship exists whenever a lawyer (trustee) accepts funds belonging to another (the beneficiary) pursuant to terms of an agreement and deposits them in his trust account where he has a legal power to affect the interests of the beneficiary.
A lawyer when acting as a trustee owes the beneficiary the following duties: 1. To keep the beneficiary of the trust reasonably informed of the trust and its administration; 2. Upon reasonable request to give a statement of the accounts of the trust annually and on termination of the trust; 3. To maintain trust account records and provide copies of them to the beneficiary on demand; 4. To follow the terms of the escrow agreement in disposing of the funds; 5. To not transfer the funds without authorization of the beneficiary.

Although the punitive damages ultimately were set aside as duplicative of the Rights in Stolen Property damages, nonetheless, based on the instructions, the jury indeed found that defendant’s breach of fiduciary duty was “attended by circumstances of fraud or malice or willful and wanton conduct.”

Thus, defendant’s argument to the contrary notwithstanding, the jury found that he had acted wrongfully and intentionally in the stock transaction.

B.

Defendant contends that, because Fong received Itin’s funds without transferring the stock in return and allegedly engaged in self-dealing transactions with his companies, it would be “hypocritical and unfair” to allow Fong to raise public policy as a bar to defendant’s contract and promissory estoppel claims. Defendant also contends that plaintiffs waived any public policy objections by participating, in various degrees, in the Itin litigation. We disagree.

Public policy prohibits “indemnifying a party for damages resulting from intentional or willful wrongful acts.” Bohrer v. Church Mut. Ins. Co., 12 P.3d 854, 856 (Colo.App.2000); see also Metro. Life Ins. Co. v. Roma, 97 Colo. 493, 496, 50 P.2d 1142, 1143 (1935)(“A promise to indemnify another for doing a private wrong or for committing a public crime is against public policy, and is void in law.”); cf. § 13-50.5-102(3), C.R.S. 2001 (“no right of contribution in favor of any tortfeasor who has intentionally, willfully, or wantonly caused or contributed to the injury”). Greater Service Homebuilders’ Investment Ass’n v. Albright, 88 Colo. 146, 293 P. 345 (1930), indicates that this prohibition applies only to some torts. However, the section of Ruling Case Law to which it cites indicates, inter alia, that a promise to indemnify for a tort is valid “unless it is shown that the promisee knew the act to be a [tort.]” See 6 R.C.L., p. 726, § 130.

A court will not enforce a contract that violates public policy even if the failure to do so is “unfair” to one of the parties: “Countless instances might be cited where because of the refusal to enforce contracts which are against public policy one of the parties is left in a peculiarly advantageous position, or the contrary. With that fact the courts do not concern themselves.” Metro. Life Ins. Co. v. Roma, supra, 97 Colo. at 497, 50 P.2d at 1143; see also Potter v. Swinehart, 117 Colo. 23, 28, 184 P.2d 149, 151-52 (1947)(the court leaves the parties where it finds them; quoting Restatement of Contract § 598 cmt. a, “When relief is denied it is because the plaintiff is a wrongdoer, and to such a person the law denies relief.... The court’s refusal is not for the sake of the defendant, but because it will not aid such a plaintiff.”).

Moreover, neither party may waive objections based on illegality or public policy, and equitable doctrines such as promissory estoppel may not be used to enforce an agreement in favor of a wrongdoer. See Menzel v. Niles Co., 86 Colo. 320, 324, 281 P. 364, 365 (1929)(“A contract which is contrary to public policy is void because it is contrary to public policy, and neither party to the contract is estopped from questioning it merely because the other party has parted with a property right or rendered service in reliance upon it.”); see also Topro Servs., Inc. v. McCarthy Western Constructors, Inc., 856 F.Supp. 1461, 1466 (D.Colo.1994)(“The defenses of waiver and estoppel cannot be invoked against an agreement which is void as against public policy.”)(applying Arizona law); Arguelles v. Ridgeway, 827 P.2d 553 (Colo.App.1991)(equitable remedies are subject to the principle that a party may not benefit from his or her wrongful acts).

Thus, regardless of plaintiffs’ level of culpability, the jury’s finding that defendant acted wrongfully and intentionally precludes an indemnity remedy under either a contract or promissory estoppel theory.

II.

Defendant also contends that he is entitled to indemnification based on the Equitex bylaws. The trial court denied defendant’s motion to amend his complaint to add this specific claim, noting that “[defendant has had ample time to seek amendment.” However, the court addressed the bylaws issue in its summary judgment ruling, and both parties have addressed it in their briefs. Therefore, we will consider the issue.

The Equitex bylaws provide that “[t]he corporation shall indemnify its officers, directors, employees and agents to the extent permitted by the General Corporation Law of Delaware.” The latter provides, inter alia, that a corporation has the power to indemnify, against expenses and judgments, a person who is sued by reason of the fact that he or she was a director or agent of the corporation if:

the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation.... The termination of any action, suit or proceeding by judgment ... shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation.

Del.Code Ann. tit. 8, § 145(a) (2001).

Defendant contends that he was acting in good faith when he transferred the funds and is therefore entitled to indemnification. He relies on the language providing that the termination of any action by judgment “shall not, of itself, create a presumption that the person did not act in good faith” and contends that the trial court erred in concluding that his actions were not taken in good faith as a matter of law. We disagree.

The Delaware Code provides for mandatory and permissive indemnification. If a director or agent is successful on the merits in an action, indemnification is mandatory. See Del.Code Ann. tit. 8, § 145(c) (2001). If, however, the director or agent is not successful on the merits, then indemnification is permissive, and the corporation may provide indemnity only if the director or agent acted in good faith and in the best interests of the corporation. See § 145(a). The good faith requirement is related to the duty of loyalty a director or agent owes to the corporation. See Waltuch v. Conticommodity Servs., Inc., 88 F.3d 87 (2d Cir.1996). Thus, good faith toward the corporation is the determinative issue. See Biondi v. Beekman Hill House Apt. Corp., 94 N.Y.2d 659, 709 N.Y.S.2d 861, 731 N.E.2d 577 (2000).

Defendant is correct that a party’s liability for a tort against a third person is not necessarily inconsistent with good faith. See, e.g., Restatement (Second) of Agency § 439 cmt. g (1958)(“[A] principal who reasonably believes that he is entitled to the possession of land or chattels is under a duty of indemnity to an agent who innocently obeys orders in taking possession and is made liable for trespass or conversion to the one entitled to possession.”). In some cases, whether the defendant acted in good faith toward the corporation may be a question of fact.

Here, however, defendant was not found liable for ordinary conversion, but for intentional theft, and the jury also found that defendant’s breach of fiduciary duty was “attended by circumstances of fraud or malice or willful and wanton conduct.” The intentional and willful nature of defendant’s actions precludes a finding that he acted in good faith. See Biondi v. Beekman Hill House Apt. Corp., supra, 94 N.Y.2d at 667, 709 N.Y.S.2d 861, 731 N.E.2d at 581 (“Because the underlying ... judgment establishes that [defendant’s] acts were committed in bad faith, [defendant] is not entitled to indemnification and cannot relitigate the good faith versus bad faith issue here see also In re Landmark Land Co., 76 F.3d 553, 565 (4th Cir.1996)(“An agent who has intentionally participated in illegal activity or wrongful conduct against third persons cannot be said to have acted in good faith, even if the conduct benefits the corporation.”); McLean v. Alexander, 449 F.Supp. 1251 (D.Del.1978)(indemnity under § 145 is subject to the general public policy against indemnifying a party for his intentional wrongdoing), rev’d on other grounds, 599 F.2d 1190 (3d Cir.1979); cf. People v. Kazmierski, 25 P.3d 1207, 1214 (Colo.2001)(“False statements, either intentionally or recklessly made, are the antithesis of-good faith.”); Golden Press, Inc. v. Rylands, 124 Colo. 122, 235 P.2d 592 (1951)(“willful and intentional” actions are distinct from those taken in good faith).

Thus, the trial court did not err in concluding that defendant’s intentional conduct demonstrated a lack of good faith that, as a matter of law, precluded indemnification under the Equitex bylaws.

III.

Defendant’s counterclaim for breach of fiduciary duty alleges that Fong and Equi-tex had a fiduciary duty to include him within the provisions of the settlement agreement with Itin and that they breached that duty by “placing their interests ahead of [defendant’s],” “[r]ather than risk losing a settlement for themselves by clearly making [defendant] a party to the settlement agreement.” The trial court noted that, because defendant was a director of Equitex and provided legal services and business advice to both Equitex and Fong, he owed fiduciary duties to them as his corporation and client. The court determined that plaintiffs owed no fiduciary duties to defendant as a matter of law because fiduciary duties are not mutual.

Defendant now contends that plaintiffs owed him a fiduciary duty arising out of a confidential relationship based upon “his long association with Equitex and Fong as their business advisor and upon [his] close friendship with Fong for many years," and he thus contends that whether plaintiffs owed him a fiduciary duty is a jury question. We disagree.

[I]n order to establish a breach of a fiduciary duty arising from a confidential relationship, there must be proof, among other things, that (1) either the reposing of trust and confidence in the other party was justified, or the party in whom such confidence was reposed either invited, ostensibly accepted, or acquiesced in such trust; (2) the alleged trustee assumed a primary duty to represent the other party’s interest in the subject of the transaction; (3) the nature and scope of the duty that arose by reason of the confidential relationship extended to the subject matter of the suit; and (4) that duty was violated, resulting in damage to the party reposing such confidence.

Jarnagin v. Busby, Inc., 867 P.2d 63, 67 (Colo.App.1993).

Here, there is no evidence that plaintiffs assumed a primary duty to represent defendant’s interests in the settlement with Itin, that any duties arising out of the alleged confidential relationship extended to the settlement, or that defendant was damaged as a result of the confidence he placed in plaintiffs.

To the contrary, the settlement was part of Itin’s larger agreement with plaintiffs to separate their business interests. Although the settlement specifically covered the stock purchase from Fong’s brother, it is not reasonable to assume, based only on defendant’s allegations of mutual trust and friendship, that plaintiffs agreed to act solely for defendant’s benefit in all their business transactions. See Bock v. Brody, 870 P.2d 530, 533 (Colo.App.1993)(“the existence of a confidential relationship, without more, is insufficient to establish a fiduciary relationship”), affd in part and rev’d in part on other grounds, 897 P.2d 769 (Colo.1995).

Defendant does not allege that plaintiffs induced him to believe that they would protect his interests in the settlement. Nor does he allege that, but for his relaxed vigilance, he would have taken action to ensure that he was included in the settlement. Defendant alleges no basis, other than his friendship, for any right to intervene or be included in the negotiations between Itin and plaintiffs.

Further, although the release covered claims against, inter alia, agents, directors, and attorneys of Equitex, the jury in the Itin case found that Itin did not intend to release defendant from any liability. See Itin v. Bertrand T. Ungar, P.C., supra, 978 P.2d at 145.

And, while defendant asserts that the indemnity agreement was not reduced to writing because of the fiduciary relationship, that agreement would be unenforceable even if it were in writing.

Therefore, regardless whether defendant was acting as an attorney or director for plaintiffs, the trial court correctly determined that plaintiffs owed defendant no fiduciary duty. Thus, summary judgment on defendant’s breach of fiduciary duty claim was proper.

rv.

Defendant’s counterclaims for misrepresentation, nondisclosure, and fraud are not specific, but on appeal he alleges that (1) Fong’s promises to indemnify him were made with an intent not to perform and were therefore fraudulent and (2) plaintiffs should have disclosed to him that Fong intended to accept Itin’s funds without delivering the stock and that Equitex might not agree to indemnify him. Defendant further alleges that plaintiffs’ promises of indemnity induced him not to name them as third-party defendants in the Itin suit. Defendant’s alleged damages for these tort claims are the same indemnity for the Itin litigation that he seeks under contract and equitable theories. Defendant contends that the trial court erred in dismissing these counterclaims because the reasonableness of his reliance on the statements is a question of fact. We disagree.

The trial court correctly determined that defendant “cannot be justified in relying upon an alleged promise which is contrary to public policy, and cannot be justified in acting on the concealment of another with actions which were wanton and intentionally wrongful.” As discussed, a contract to indemnify a party for intentional wrongdoing is against public policy, and the court will leave the parties as it finds them, even if one party has detrimentally relied upon the contract. See also Restatement (Second) of Contracts § 198 (1981)(no restitution for performance rendered under promise that is unenforceable where party is not excusably ignorant of the facts or is equally at fault with the party from whom he or she is seeking restitution); cf. Galvin v. Stokes, 68 Colo. 376, 191 P. 117 (1920) (party who entered into contract under duress entitled to restitution because not equally at fault).

Further, no information that plaintiffs provided or withheld relieved defendant of his duty to disburse Itin’s funds according to Itin’s directions, which the jury in the Itin case found defendant had breached. And, plaintiffs’ alleged fraud or misrepresentation regarding their intent to indemnify does not lessen defendant’s responsibility for his intentional wrong, and he is therefore not entitled to restitution for performance or detrimental reliance under the alleged indemnity agreement. Thus, whether plaintiffs would have been found liable for any of Itin’s damages if they had been joined in that action has no bearing on defendant’s claims here. Additionally, we note, defendant is not seeking a determination of his relative fault pursuant to § 13-21-111.5, C.R.S.2001, but is seeking total indemnification for his own wrongdoing.

Based on our disposition of this matter, we need not address the remaining issues raised by the parties.

The judgment is affirmed.

KAPELKE and PIERCE , JJ., concur.


author: Judge VOGT.

text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Edward A. LOWE, Defendant-Appellant.
    No. 01CA1876.
    Colorado Court of Appeals, Div. IV.
    July 18, 2002.
    Certiorari Denied Jan. 6, 2002.

      Ken Salazar, Attorney General, Juliana M. Zolynas, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
    Edward A. Lowe, Pro Se.
   Opinion by

Judge VOGT.

Defendant, Edward A. Lowe, an inmate in the Colorado Department of Corrections (DOC), appeals a trial court order determining that DOC properly withheld money from his inmate account to pay fees and costs imposed as part of his sentence in a 1992 criminal case. We affirm.

Defendant pled guilty in 1992 to second degree sexual assault and was sentenced to sixteen years in DOC. In addition, he was ordered to pay court costs ($30), a victim compensation cost ($100), and a victim assistance surcharge ($100). According to the mittimus, restitution was “reserved.”

In September 2000, after the General Assembly enacted § 16-18.5-101, et seq., C.R.S. 2001 (the Restitution Act), which included new provisions for the collection of unpaid restitution, DOC began withholding twenty percent of the deposits into defendant’s inmate account to apply towards payment of the costs he had been ordered to pay when he was sentenced.

Defendant filed a motion in his criminal case for an order to show cause, arguing that DOC was not entitled to withhold money from his account because he had not been ordered to pay restitution. After ordering and receiving a response from DOC, the trial court concluded that the withholding was authorized under the Restitution Act and, accordingly, denied defendant’s motion.

I.

Defendant contends that, because the sentencing court reserved any ruling on restitution, the Restitution Act did not permit DOC to withhold money from his account. We disagree.

In construing a statute, our primary task is to ascertain and give effect to the intent of the General Assembly. To do so, we must first look to the language of the statute itself. When the language of the statute is clear, so that the legislative intent can be discerned with reasonable certainty, there is no need to resort to other rules of statutory construction. People v. District Court, 894 P.2d 739 (Colo.1995); People v. Moltrer, 983 P.2d 810 (Colo.App.1999).

Because construction of a statute is a question of law, we are not bound by the trial court’s interpretation. Gorman v. Tucker, 961 P.2d 1126 (Colo.1998).

The Restitution Act was enacted to establish procedures to provide for and collect full restitution for crime victims. Section 16-18-101(l)(g)(I), C.R.S.2001. It includes the following provision for collection of restitution from DOC inmates:

During any period of time that a defendant is a state prisoner, ... the executive director of the department of corrections ... may fix the time and manner of payment of restitution and may direct that a portion of the deposits into such inmate’s bank account be applied to any unpaid restitution. At a minimum, the executive director shall order that twenty percent of all deposits into an inmate’s bank account, including deposits for inmate pay, shall be deducted and paid toward any outstanding order from a criminal case or for child support.

Section 16-18.5-106(2), C.R.S.2001.

The Act defines “restitution” broadly:

“Restitution” means any pecuniary loss suffered by a victim, and includes but is not limited to all out-of-pocket expenses, interest, loss of use of money, anticipated future expenses, rewards paid by victims, money advanced by law enforcement agencies, adjustment expenses, and other losses or injuries proximately caused by an offender’s conduct and that can be reasonably calculated and recompensed in money.

Section 16 — 18.5—102(3)(a), C.R.S.2001.

The term “victim,” as used in the definition of restitution and elsewhere in the Act, includes “[a]ny victim compensation board that has paid a victim compensation claim.” Section 16-18.5-102(4)(a)(IV), C.R.S.2001. Further, the last section of the Restitution Act, which addresses the order of crediting payments, provides:

Payments received shall be credited in the following order:

(a) Costs for crime victims compensation fund, pursuant to section 24-4.1-119, C.R.S.;
(b) Surcharges for victims and mtnesses assistance and law enforcement fund, pursuant to section 24-4.2-104, C.R.S.;
(c) Restitution;
(d) Time payment fee;
(e) Late fees; and
(f) Any other fines, fees, or surcharges.

Section 16-18.5-110(1), C.R.S.2001 (emphasis added).

Under the plain language of these provisions, any sums a defendant is ordered to pay as a victim compensation cost or victim assistance surcharge are within the purview of the Restitution Act, even if they are identified separately from “restitution” on the defendant’s mittimus.

Defendant was also ordered to pay court costs of $30. Although court costs do not necessarily fall within the definition of “restitution” in § 16-18.5-102(3)(a), withholding of such costs from an inmate account is authorized under another statute. Section 16 — 11— 101.6(5), C.R.S.2001, provides that DOC may direct that a portion of an inmate’s wages or compensation be applied to “any unpaid fines or fees.” Further, the Restitution Act provision cited above addressing the order of crediting payments contemplates that such payments will be applied to “[a]ny other fines, fees, or surcharges.” Section 16-18.5-110(1)®, C.R.S.2001.

Although defendant’s mittimus indicates that “restitution” was reserved, defendant was specifically ordered to pay a total of $230 for court costs, victim compensation cost, and a victim assistance surcharge. Defendant does not assert that he previously paid any of these sums. DOC was accordingly authorized under the Restitution Act and under § 16-11-101.6(5) to withhold money from defendant’s account to pay them.

II.

We also disagree with defendant’s related contention that the Restitution Act applies prospectively only and thus is inapplicable to the costs and fees he was ordered to pay in 1992.

The Restitution Act took effect September 1, 2000, and was to apply to “orders for convictions entered on or after the applicable effective date of this act and delinquencies of orders existing on or after said date.” Colo. Sess. Laws 2000, ch. 232, sec. 25(2) (emphasis added).

Defendant’s conviction was entered before the effective date of the Act. However, contrary to defendant’s contention, the Act applies in his case because his payment obligation under the existing order was delinquent as of that date.

Defendant asserts, in an affidavit submitted for the first time on appeal, that the sentencing court told him he would not have to pay any costs until he got out of prison. This claim is without any support in the record and is belied both by the mittimus and by the fact that fees and costs are, by statute, payable at the time they are assessed, absent a determination of indigency. See §§ 16-11-101.6, 16-11-501, 24-4.1-119, 24-4.2-104, C.R.S.2001. Accordingly, a delinquency under the 1992 sentence existed on September 1, 2000.

We are also unpersuaded by defendant’s contention that the phrase “delinquencies of orders existing on or after [September 1, 2000]” must be construed to refer only to orders in noncriminal cases, so as not to render the preceding phrase — “orders for convictions entered on or after [September 1, 2001]” — meaningless.

Although the Restitution Act includes provisions for collecting child support, it is part of the criminal code and was enacted for the stated purpose of helping to compensate victims of crime. See § 16-18.5-101, C.R.S. 2001. Moreover, construing “delinquencies of orders” in Colo. Sess. Laws 2000, ch. 232, sec. 25(2) to refer to orders in criminal cases does not leave the preceding phrase meaningless. Under sec. 25, the Restitution Act applies to all convictions entered on or after September 1, 2000, but applies to convictions entered before that date only if sums assessed at the time of sentencing remain unpaid.

Although defendant asks that we apply the rule of lenity to construe the statute as he urges, that rule is inapplicable where, as here, the statutory language is unambiguous. See People v. Saucedo, 796 P.2d 11 (Colo.App.1990).

III.

Defendant next contends that application of the Restitution Act to him violates constitutional prohibitions against ex post facto laws and double jeopardy. Again, we disagree.

A.

A statute that, after a crime is committed, makes punishment for it more burdensome violates constitutional prohibitions against ex post facto legislation. People v. Woodward, 11 P.3d 1090 (Colo.2000).

In Woodward, the supreme court declined to decide whether restitution constituted “punishment” for ex post facto purposes. However, even if we assume that it does, there was no ex post facto violation here.

The Restitution Act provides for additional collection mechanisms, but does not increase the face amount of restitution, costs, or other charges that were part of the original sentence.

Defendant contends that the Act nevertheless contains other “punitive” provisions, such as interest and attorney fees as set forth in § 16-18.5-103(4)(b)-(d), C.R.S.2001, which states:

(b) Any order for restitution made pursuant to this section shall also be deemed to order that:
(I) The defendant owes interest from the date of the entry of the order at the rate of twelve percent per annum; and
(II) The defendant owes all reasonable and necessary attorney fees and costs incurred in collecting such order due to the defendant’s nonpayment.
(c) The entry of an order for restitution under this section creates a lien by operation of law against the defendant’s personal property and any interest that the defendant may have in any personal property.
(d) Any order of restitution imposed shall be considered a debt for “willful and malicious” injury for purposes of exceptions to discharge in bankruptcy as provided in 11 U.S.C. sec. 523.

However, the money being withheld from defendant’s account is to pay fees and costs he was ordered to pay in 1992. The 1992 order was not an “order for restitution made pursuant to [§ 16-18.5-103].” Thus, the provisions quoted above for interest, attorney fees, and the like do not apply to him. Recognizing this, the People have represented that interest has not been and will not be collected from defendant on sums he owes under the sentence imposed in 1992.

Thus, because the Act simply facilitates collection from defendant of the sums he was ordered to pay at the time of his sentencing, its application to him does not constitute an ex post facto violation.

B.

An increase in the amount of restitution ordered after sentence has been imposed and the defendant has begun serving it violates double jeopardy protections. People v. Shepard, 989 P.2d 183 (Colo.App.1999). However, we have concluded that there has been no increase in the amount of restitution ordered here. Thus, there has likewise been no double jeopardy violation.

IV.

Finally, we are not persuaded by defendant’s contention that application of the Restitution Act breached his plea agreement.

The terms of defendant’s plea agreement are not part of the record on appeal. Absent record support for defendant’s contention, we must presume the regularity of proceedings relating to the plea agreement. See People v. Ullery, 984 P.2d 586 (Colo.1999). Therefore, we presume that the agreement did not include any provision to waive fees or costs, which, as noted, could not be waived in any event under the applicable statutes.

Defendant asserts that the plea agreement is not part of the record because the trial court did not grant his request for a transcript of the providency hearing. However, that does not explain the absence of any written record of the plea agreement. More important, defendant accompanied his notice of appeal in this court with a motion to waive preparation of the record, in which he stated that the attachments to his notice of appeal were “all that are necessary for a determination of this appeal.” This statement belies his claim that the providency hearing transcript would support his contention that his plea agreement was breached.

The order is affirmed.

Judge NEY and Judge ROTHENBERG concur.


text:
    TOWN OF FREDERICK, Plaintiff-Appellant and Cross-Appellee, v. NORTH AMERICAN RESOURCES COMPANY, Defendant-Appellee and Cross-Appellant.
    No. 01CA0893.
    Colorado Court of Appeals, Div. IV.
    Aug. 1, 2002.

      Samson, Pipis & Marsh, LLC, Richard E. Samson, Gwyneth Ayers, Longmont, Colorado, for Plaintiff-Appellant and Cross-Appel-lee.
    Kuhn, Carnes & Anderson, P.C., Dennis N. Carnes, Carolyn J. Mitchell, Denver, Colorado; Gretchen VanderWerf, P.C., Gretchen VanderWerf, Denver, Colorado, for Defendant-Appellee and Cross-Appellant.
    Geoffrey T. Wilson, Denver, Colorado, for Amicus Curiae Colorado Municipal League.
    Kenneth A. Wonstolen, Denver, Colorado, for Amicus Curiae Colorado Oil and Gas Association.
    Ken Salazar, Attorney General, Carol J. Harmon, Assistant Attorney General, Denver, Colorado, for Amicus Curiae Colorado Oil and Gas Conservation Commission.
   Opinion by

Judge VOGT.

The issue in this case is whether, and if so, to what extent, a local government may regulate the drilling of oil and gas wells within its boundaries. Plaintiff, the Town of Frederick, appeals the trial court’s summary judgment invalidating certain provisions of its ordinance that required oil and gas operators, including defendant, North American Resources Company (NARCO), to obtain a permit before drilling a well in the Town. NARCO cross-appeals the trial court’s determination on summary judgment that the balance of the ordinance was enforceable and that the Town was entitled to injunctive relief and attorney fees. We affirm.

In 1994, the Town enacted an ordinance, codified at art. V, ch. 16 of the Frederick Municipal Code, prohibiting the drilling of oil and gas wells within the town limits unless a special use permit was first obtained.

The ordinance prescribed procedures for applying for a permit, required payment of a $1,000 application fee, and provided that the Town’s board of trustees had to approve the application if it conformed to the requirements set forth in the ordinance. These requirements included specific provisions for well location and setbacks, noise mitigation, visual impact and aesthetics regulation, and the like.

The ordinance also prescribed penalties for constructing an oil and gas facility without complying with its terms, authorized the town attorney to institute an action to enjoin or remove such unlawful facility, and provided that the Town was entitled to its costs and attorney fees if it prevailed in any such action.

In 1999, NARCO drilled a well in the Town after having been granted a drilling permit by the Colorado Oil and Gas Conservation Commission (COGCC), but without having applied for a special use permit from the Town. The Town filed suit to enjoin NARCO from operating its well and require it to remove the well and pay all fines associated with its violation of the ordinance. NARCO counterclaimed, seeking a declaratory judgment that the ordinance was unenforceable because it was preempted by state law. Both parties moved for summary judgment.

In a detailed written opinion, the trial court granted each party’s motion in part. It concluded that several provisions of the ordinance were invalid because they were in operational conflict with rules promulgated by COGCC, and thus enjoined the Town from enforcing those provisions. However, the court concluded, state law did not preempt the Town’s regulatory scheme in its entirety. Because NARCO had not complied with the valid portions of the ordinance, the Town was entitled to an injunction precluding NARCO from operating its well. The court also awarded the Town its attorney fees and costs pursuant to the terms of the ordinance.

I. Background

A. Applicable statutes, Bowen/Edivards, and Voss

Resolution of the issue presented in this case requires review of the statutes and case law addressing the relationship between local governments’ authority over land use issues within their boundaries and the state’s authority to regulate oil and gas production throughout Colorado.

As a statutory town, Frederick has the power to enact ordinances not inconsistent with state law that are necessary and proper to provide for the health, safety, prosperity, order, comfort, and convenience of the municipality. See § 31-15-103, C.R.S.2001; Minch v. Town of Mead, 957 P.2d 1054 (Colo.App.1998). In addition, the Local Government Land Use Control Enabling Act, § 29-20-101, et seq., C.R.S.2001, grants local governments broad authority to plan for and regulate the use of land within their respective jurisdictions.

The state’s interest in oil and gas development and operations is expressed in the Oil and Gas Conservation Act, § 34-60-101, et seq., C.R.S.2001, whose declared purposes include promoting the development, production, and utilization of oil and gas resources in the state. The COGCC is charged with enforcing that act and promulgating rules necessary to carry out its provisions.

In 1992, the Colorado Supreme Court addressed the effect of these statutes on local governments’ ability to regulate oil and gas operations in two cases, Board of County Commissioners v. Bowen/Edwards Associates, Inc., 830 P.2d 1045 (Colo.1992), and Voss v. Lundvall Brothers, Inc., 830 P.2d 1061 (Colo.1992). In Boiven/Edtuards, the court held that the Oil and Gas Conservation Act did not totally preempt a county’s land use authority over oil and gas operations. In Voss, the court held that a home rule city could regulate various aspects of oil and gas operations within the city, but could not totally ban all drilling.

The Town and NARCO agree that the preemption analysis delineated in those two cases controls resolution of the issue presented here.

Where, as here, the issue is one in which both state and local concerns are present, a three-part analysis is applied to determine whether the local ordinance or regulation is preempted by state law. First, the express language of the state statute may indicate state preemption of all local authority over the subject matter. Second, preemption may be inferred if the state statute impliedly evinces a legislative intent completely to occupy a given field by reason of a dominant state interest. Third, a local law may be partially preempted where its operational effect would conflict with the application of the state statute.

Applying those preemption principles, the supreme court concluded in Bowen/Edwards that the Oil and Gas Conservation Act neither expressly nor impliedly preempted all aspects of a local government’s land use authority over land that might be subject to oil and gas development or operations. Regarding the third, or “operational conflict,” type of preemption, the court articulated the inquiry as follows: “State preemption by reason of operational conflict can arise where the effectuation of a local interest would materially impede or destroy the state interest. Under such circumstances, local regulations may be partially or totally preempted to the extent that they conflict with the achievement of the state interest.” Bowen/Edwards, supra, 830 P.2d at 1059 (citation omitted). Concluding that the operational conflicts question must be resolved on an ad hoc basis under a fully developed evidentiary record, the court remanded the case to the trial court for determination of the issue.

In Voss, the court applied the Bowen/Edwards analysis and further clarified the extent to which a local government may regulate oil and gas drilling. A complete ban was impermissible because it would conflict with the state’s interest in efficient production and development of oil and gas resources in a manner preventing waste and protecting the rights of producers. However, that fact did not foreclose all local regulation:

If a home-rule city, instead of imposing a total ban on all drilling within the city, enacts land-use regulations applicable to various aspects of oil and gas development and operations within the city, and if such regulations do not frustrate and can be harmonized with the development and production of oil and gas in a manner consistent with the stated goals of the Oil and Gas Conservation Act, the city’s regulations should be given effect. We thus do not conclude ... that there is no room whatever for local land-use control over those areas of a home-rule city where drilling for oil, gas, or hydrocarbon wells is about to take place.

Voss, supra, 830 P.2d at 1068-69.

B. The trial court’s application of Bowen/Edwards and Ross

Applying the Bowen/Edwards and Ross analysis in this case, the trial court first rejected NARCO’s argument that post-1992 statutory amendments and rules establish that, contrary to Bowen/Edwards, all local regulation of oil and gas operations is now impliedly preempted. The court then analyzed the Town’s ordinance to determine whether there were operational conflicts between it and the Oil and Gas Conservation Act or the COGCC rules.

The trial court did not agree with NARCO that the entire ordinance was invalid based on operational conflict, but nevertheless concluded that certain sections were in conflict with the state’s interest as set forth in the COGCC rules. While those sections thus could not be enforced, the remaining sections were enforceable.

Because the permitting process as a whole was valid and enforceable, NARCO was required to obtain a special use permit before drilling a well, but admittedly did not do so. Accordingly, the Town was entitled to judgment on its claims to enjoin NARCO from drilling or otherwise operating its nonconforming well and to require NARCO either to remove the well or to obtain a special use permit.

II. Implied Preemption

If, as NARCO contends on cross-appeal, a local government’s ability to require permits for oil and gas drilling is now impliedly preempted in its entirety, we need not reach the specific issues raised by the parties regarding operational conflicts. Therefore, we first address the implied preemption issue.

NARCO contends that the trial court erred in declining to invalidate the ordinance in its entirety, either (1) on the basis that posH992 statutory amendments and COGCC rules governing oil and gas operations establish that state law has now occupied the field, thereby impliedly preempting the Town’s ordinance, or (2) on the basis that the ordinance regulates a technical area of oil and gas operations that, under Bowen/Edwards and Voss, is entirely excluded from the regulatory authority of local governments. We disagree with both contentions.

A. Postal 992 legislation and rules

In Bowen/Edwards, the court of appeals had relied on two subsections of the Oil and Gas Conservation Act, § 34-60-106(4) and (11), as manifesting a legislative intent to regulate all phases of oil and gas activity. The supreme court disagreed, concluding that these provisions, read singly or together, did not establish such an implied total preemption. According to the supreme court, the effect of § 34-60-106(11) — which, in its then-existing version, directed the COGCC to “promulgate rules and regulations to protect the health, safety, and welfare of the general public in the drilling, completion, and operation of oil and gas wells and production facilities,” Colo. Sess. Laws 1985, ch. 272 at 1129 — was simply to vest the COGCC with the authority and responsibility for developing adequate technical safeguards calculated to minimize the risk of injury to the public from oil and gas drilling and production operations.

In 1994, the General Assembly amended § 34-60-106(11) as part of its enactment of S.B. 94-177. Thus, the final phrase of § 34-60-106(11) now reads “in the conduct of oil and gas operations,” rather than “in the drilling, completion, and operation of oil and gas wells and production facilities.” In addition, a broad definition of “oil and gas operations,” enumerating numerous specific activities relating to drilling and other operations, was added to the Act. Section 34-60-103(6.5), C.R.S.2001.

We do not agree that these amendments establish that, contrary to Boiven/Edwards, state law now impliedly preempts all local regulation of oil and gas drilling. The amended language itself does not compel such a conclusion. Further, the legislative declaration at the beginning of S.B. 94-177 includes a statement that “nothing in this act shall be construed to affect the existing land use authority of local governmental entities.” Colo. Sess. Laws 1994, ch. 317, sec. 1 at 1978.

Moreover, in 1996 the General Assembly amended § 34-60-106(15), C.R.S.2001, which addresses the powers of the COGCC, by adding the following language:

No local government may charge a tax or fee to conduct inspections or monitoring of oil and gas operations with regard to matters that are subject to rule, regulation, order, or permit condition administered by the commission. Nothing in this subsection (15) shall affect the ability of a local government to charge a reasonable and nondiscriminatory fee for inspection and monitoring for road damage and compliance with local fire codes, land use permit conditions, and local building codes.

Colo. Sess. Laws 1996, ch. 88 at 346 (emphasis added). The last sentence of § 34-60-106(15) indicates that the General Assembly anticipated that local governments could issue land use permits that included conditions affecting oil and gas operations. This added language further supports the conclusion that the General Assembly did not intend to preempt all local regulation of oil and gas operations.

Following the passage of S.B. 94-177, the COGCC promulgated extensive regulations dealing with oil and gas operations. While these expanded regulations may give rise to additional areas of operational conflict with analogous local regulations, we decline to conclude that they so occupy the field as to establish an implied preemption of all local regulation of such operations.

B. Regulation of technical activities

In support of its argument that the Town’s ordinance is wholly preempted because it regulates technical activities, NAR-CO relies on language from Bowen/Edwards recognizing that

the efficient and equitable development and production of oil and gas resources within the state requires uniform regular tion of the technical aspects of drilling, pumping, plugging, waste prevention, safety precautions, and environmental restoration. Oil and gas production is closely tied to well location, with the result that the need for uniform regulation extends also to the location and spacing of wells.

Bowen/Edwards, supra, 830 P.2d at 1058 (emphasis added)(citing Foss).

We do not agree with NARCO that this statement, without more, shows that the supreme court viewed state law as preempting any local regulation affecting oil and gas drilling.

The Boiven/Edwards court did not say that the state’s interest “requires uniform regulation of drilling” and similar activities. Rather, according to the court, it “requires uniform regulation of the technical aspects of drilling” and similar activities. The phrase “technical aspects” suggests that there are “nontechnical aspects” that may yet be subject to local regulation. Indeed, the supreme court indicated as much when it stated elsewhere in Bowen/Edwards that it found nothing in the relevant statutes to support an implied “total preemption of a county’s authority to enact land-use regulations applicable to oil and gas development and operational activities within the county.” Bowen/Edwards, supra, 830 P.2d at 1059.

Similarly, although the Bowen/Edwards excerpt quoted above cited Voss for the proposition that there was a need for uniform regulation of the location and spacing of wells, Voss itself recognized that a city could still enact “land-use regulations applicable to various aspects of oil and gas development and operations within the city,” as long as the regulations could be harmonized with the state’s goals. Voss, supra, 830 P.2d at 1069.

As discussed below, certain provisions of the Town’s ordinance do regulate technical aspects of drilling and related activities and thus could not be enforced. However, other provisions of the ordinance, such as those governing access roads and fire protection plans, do not purport to regulate technical aspects of oil and gas operations, even though they may give rise to operational conflicts with a state regulation addressing the same subject and thus be preempted for that reason.

Thus, we reject NARCO’s argument that the entire ordinance was preempted under Bowen/Edwards because it regulated technical areas of oil and gas drilling and operations.

III. Operational Conflicts

Having concluded that the Town’s ordinance is not impliedly preempted, we next consider whether operational conflicts between its provisions and the COGCC’s regulations render all or part of the ordinance unenforceable. The Town argues on appeal that the trial court erred in concluding that certain provisions conflicted with state regulations and thus could not be enforced. NARCO contends on cross-appeal that the entire ordinance should have been invalidated based on operational conflicts. We do not agree with either party.

A. The trial court’s ruling

Under Bowen/Edwards, state preemption by reason of operational conflict can arise where the effectuation of a local interest would “materially impede or destroy the state interest.” Bowen/Edwards, supra, 830 P.2d at 1059.

The Bowen/Edwards court concluded that, while the county regulations before it appeared to be designed to harmonize with the state’s interest, a remand was required so that the issue could be resolved on a fully developed evidentiary record. As guidance for the trial court in applying the operational conflicts test on remand, the supreme court stated:

[Tjhere may be instances where the county’s regulatory scheme conflicts in operation with the state statutory or regulatory scheme. For example, the operational effect of the county regulations might be to impose technical conditions on the drilling or pumping of wells under circumstances where no such conditions are imposed under the state statutory or regulatory scheme, or to impose safety regulations or land restoration requirements contrary to those required by state law or regulation. To the extent that such operational conflicts might exist, the county regulations must yield to the state interest.

Bowen/Edwards, supra, 830 P.2d at 1060.

The trial court here noted at the outset that the Town’s ordinance was drafted with Bowen/Edwards and Foss in mind and, like the county regulations in Bowen/Edwards, was intended to harmonize with the state’s objectives and interests in oil and gas development. It then found that certain provisions of the ordinance were invalid under the Bowen/Edwards operational conflicts test, but that the overall scheme did not “impede or destroy the state’s objectives” and was thus enforceable.

Specifically, the court found that the ordinance provisions setting forth the requirements for obtaining a special use permit, §§ 16-113 to 16-116, did not destroy the state’s objectives even though they could result in a delay in the commencement of drilling. The inspection fee included in the ordinance was specifically authorized pursuant to § 34-60-106(15) and thus was not in conflict with state law. The $1,000 application fee also did not conflict with state law, as there was no state rule prescribing the amount that a local government could charge for such a fee.

Citing the supreme court’s admonition in Foss that local regulations should be given effect if they do not frustrate and can be harmonized with the state’s goals, the trial court also upheld ordinance provisions regarding building permits for above-ground structures, access roads, emergency response costs, and the like. It found no corresponding state rule that gave rise to an operational conflict with these provisions.

The court did, however, find that certain sections of the ordinance created “impermissible operational conflicts” with COGCC rules and therefore could not be enforced. The ordinance provision imposing setback requirements for the location of wells within the Town limits, § 16-118, conflicted with COGCC Rule 603(a) and (b), 2 Code Colo. Regs. 404-1, which requires lesser setbacks in non-high-density areas. Similarly, the ordinance provision regulating noise abatement, § 16-120, conflicted with COGCC Rule 802 in that it permitted the Town to require noise abatement measures beyond those required by the state. Ordinance § 16-121, regulating the visual impact of oil and gas operations, likewise included mandatory requirements that conflicted with the detailed requirements in COGCC Rules 318, 803, 804, 1002, and 1003. Finally, the ordinance was preempted on the basis of operational conflict to the extent it incorporated COGCC’s rules and then gave the Town the authority to assess penalties in addition to those provided for by the COGCC for violations of those rules.

B. The Town’s appeal

The Town argues that, in striking down certain provisions of its ordinance, the trial court ignored the requirement of Boiven/Echvards and Boss that courts should attempt to harmonize and give effect to local regulations if possible. Citing Ray v. City & County of Denver, 109 Colo. 74, 121 P.2d 886 (1942), for the proposition that there is no conflict between an ordinance and a statute where the ordinance simply goes further in its prohibition than the statute, the Town contends that the fact that its ordinance goes further than the state regulations in some areas did not give rise to an irreconcilable operational conflict. Similarly, the Town relies on National Advertising Co. v. Department of Highways, 751 P.2d 632 (Colo.1988), for the proposition that there is no operational conflict here because its ordinance does not authorize any act that the state prohibits.

The Town’s reliance on Ray and National Advertising for these propositions is misplaced. The operational conflicts test announced in Bowen/Edwards and Ross controls here. Under that test, the local imposition of technical conditions on well drilling where no such conditions are imposed under state regulations, as well as the imposition of safety regulations or land restoration requirements contrary to those required by state law, gives rise to operational conflicts and requires that the local regulations yield to the state interest. Bowen/Edwards, supra, 830 P.2d at 1060.

Such is the case with the setback, noise abatement, and visual impact provisions invalidated by the trial court here. Thus, the ordinance sections that the trial court invalidated are preempted on the basis of operational conflict.

Because the Town did not raise the issue in the trial court, we decline to address its contention on appeal that the portion of its setback regulation addressing the placement of buildings remains enforceable even if the balance of that regulation is preempted. See Estate of Stevenson v. Hollywood Bar & Cafe, Inc., 832 P.2d 718 (Colo.1992)(argu-ments not presented to trial court will not be considered on appeal).

We are likewise unpersuaded by the Town’s argument that its enforcement of COGCC rules does not conflict with state law, as the trial court found, but in fact supports and bolsters those rules. In support of this argument, the Town cites § 34-60-114, C.R.S.2001, which allows “any person or party in interest adversely affected” to sue to enjoin violations of COGCC rules if the COGCC has failed to do so. However, § 34-60-114 provides that such adversely affected party must first notify the COGCC in writing of such violation and request the COGCC to sue. The Town’s ordinance includes no such notification requirement, but instead simply provides for a $1,000 fine, imprisonment, or both, for any violation of its provisions, and further authorizes the town attorney to sue to enjoin nonconforming structures. Thus, the ordinance does not constitute the sort of private party enforcement contemplated under § 34-60-114.

Further, the imposition by the Town of a fine of up to $1,000 per day conflicts, at least in part, with the COGCC’s schedule of fines for violation of its rules. See COGCC Rule 523.

Finally, § 34-60-106(15) expressly states that the COGCC may not assign its enforcement authority and that “[n]o local government may charge a tax or fee to conduct inspections or monitoring of oil and gas operations with regard to matters that are subject to rule, regulation, order, or permit condition administered by the [COGCC].” In our view, this statute demonstrates that the General Assembly did not contemplate that local governments could assess fees for violations of COGCC rules.

The Town also contends for the first time in its reply brief that its ordinance can be upheld as a valid exercise of its police power. Amicus curiae Colorado Municipal League argues that the trial court’s construction of “operational conflict” impermissibly imputed to the General Assembly a delegation of authority to the COGCC, in violation of Colo. Const, art. V, § 35. Because these arguments were not raised in the trial court, we do not address them. See In re Estate of Stevenson v. Hollywood Bar & Cafe, Inc., supra; Flagstaff Enterprises Construction, Inc. v. Snow, 908 P.2d 1183 (Colo.App.1995)(arguments raised for first time in reply brief will not be considered).

In sum, we conclude that the trial court did not err in invalidating certain provisions of the Town’s ordinance on the basis that they were in operational conflict with state law.

C. NARCO’s cross-appeal

We also reject NARCO’s contention that the entire permitting process, as well as the injunctive relief authorized by the ordinance and awarded by the court, is preempted on the basis of operational conflicts.

NARCO concedes that a local government may have a permitting process if it is limited to local land use concerns, and acknowledges that the Town’s ordinance provisions requiring an operator to obtain building permits for above-ground structures, maintain access roads, submit emergency response and fire protection plans, and regulate the distances that buildings must be set back from existing wells are matters that a local government may legitimately regulate pursuant to its land use authority. However, NARCO argues that the permitting process as a whole conflicts with the COGCC’s broad authority, under the expanded definition of oil and gas operations in § 34-60-103(6.5) and the comprehensive regulations promulgated since 1994, to regulate when, where, and how an operator may drill. We disagree.

We have already concluded that the amended statute and rules do not impliedly preempt all local regulation of anything having to do with oil and gas drilling. NARCO has not identified any additional specific operational conflicts between COGCC rules and the Town’s ordinance provisions, beyond those cited by the trial court, that would support a finding of preemption on the basis of operational conflict.

Nor are we persuaded by NARCO’s argument that the Town’s permitting process impedes the state’s interest in oil and gas development because it allows the Town’s board of trustees to attach conditions to a special use permit without any standards to govern the exercise of their discretion. As noted, § 16-115 of the ordinance provides that the board of trustees “shall approve” an application if the requirements summarized in that section are met. We do not read the ordinance as permitting the board of trustees to impose conditions beyond those specific requirements. Moreover, as the trial court noted, § 16-115 includes procedures allowing an applicant to challenge any condition inconsistent with state requirements. Thus, although the Town’s process may delay drilling, the ordinance does not allow the Town to prevent it entirely or to impose arbitrary conditions that would materially impede or destroy the state’s interest in oil and gas development.

.We likewise do not agree with NARCO that the injunctive relief contemplated in the ordinance and awarded by the trial court results in an operational conflict between the ordinance and state law.

The trial court enjoined NARCO from drilling or operating its well and ordered it to “take steps to either remove the well or obtain a special use permit to continue operation of the well.” In its subsequent order denying NARCO’s motion to amend the judgment, the court rejected NARCO’s argument that such injunctive relief was invalid, stating:

By choosing not to follow the permitting process set forth in the [Frederick Municipal] Code, [NARCO] has violated local law. It necessarily follows that there must be some consequence for such action, and since the law at issue is a land use regulation, injunctive relief is appropriate. The state’s objectives in regulating the oil and gas industry are not in conflict with [or] destroyed or impeded by requiring operators that ignore local regulations to stop operating their wells until such time as the local regulations have been complied with. The state’s objectives do not include condoning violation of local land use regulations.

We agree with the trial court. It is illogical to conclude that a local government retains the authority to regulate in certain areas relating to oil and gas operations, but has no ability to enforce such regulations. Allowing a local government to invoke the assistance of the court to enforce its regulations does not materially impede or destroy the state’s interest in the development of oil and gas resources. Conversely, allowing an operator to disregard legitimate local requirements with impunity would in fact amount to total preemption of local regulation relating to oil and gas operations, contrary to Boiven/Edivards and Voss.

IV. Attorney Fees

Finally, we agree with the trial court that the Town was the prevailing party on its essential claim arising from NARCO’s violation of the ordinance. Thus, it was properly awarded its attorney fees and costs in accordance with § 16 — 130(f) of the ordinance, which authorizes such recovery.

The judgment is affirmed.

Judge NEY and Judge ROTHENBERG concur.


author: Judge STERNBERG.

text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. James D. MUNKUS, Defendant-Appellant.
    No. 01CA1385.
    Colorado Court of Appeals.
    Aug. 15, 2002.
    Certiorari Denied Dec. 23, 2002.
    Ken Salazar, Attorney General, John T. Bryan, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
    James D. Munkus, Pro Se.
   Opinion by

Judge STERNBERG.

Defendant, James D. Munkus, appeals the trial court order denying his Crim. P. 35 motion for posteonviction relief. We affirm.

In 1990, defendant pleaded guilty to aggravated robbery and a crime of violence count in exchange for the dismissal of other charges, including three habitual criminal counts. Under the terms of the plea agreement, defendant was to receive a sentence of between ten and thirty-two years in the Department of Corrections (DOC). The trial court imposed the maximum sentence of thirty-two years in DOC.

Defendant appealed the sentence, and a division of this court affirmed in People v. Munkus, (Colo.App. No. 90CA1269, Apr. 11, 1991)(not published pursuant to C.A.R. 35(f)). The mandate issued on September 12, 1991.

Defendant later filed a petition for writ of habeas corpus alleging that he had not been advised of his right to self-representation. Treating the petition as a Crim. P. 35(c) motion, the trial court denied it.

Defendant appealed the order, and a division of this court affirmed in People v. Munkus, (Colo.App. No. 96CA0296, Sept. 5, 1996)(not published pursuant to C.A.R. 35(f)).

In 1999, defendant filed a second Crim. P. 35(c) motion, in which he: requested a proportionality review of his sentence; argued that his due process rights were violated because the trial court relied on his prior criminal convictions that “were not validated” in imposing the aggravated range sentence; and alleged that his plea counsel had rendered ineffective assistance by not disputing allegedly mistaken facts at the providency and sentencing hearings.

Shortly thereafter, defendant filed a third motion, entitled “Motion to Vacate Judgement [sic] and to make a Withdrawal of Guilty Plea, Pursuant to Rule 11(B) and Rule 35(C), Colorado Criminal Procedure.” In this motion, he argued that his plea had not been knowing, voluntary, or intelligent because the trial court at sentencing mistakenly stated that he was on parole at the time of this offense and that he had used a toy or plastic replica handgun during the crimes, which could not be considered a deadly weapon for purposes of his conviction. He also reiterated the claim that his plea counsel had rendered ineffective assistance, this time alleging that counsel had coerced him into accepting the plea bargain. He argued that these issues were “jurisdictional” and therefore not subject to the time bar for filing posteonviction motions under § 16-5-402(1), C.R.S.2001, and that the late filing was attributable to ineffective assistance of counsel.

The trial court denied the request for a proportionality review, and it concluded that the sentencing court had stated other reasons for imposing the aggravated range sentence and had not relied solely on defendant’s parole status. The court denied the motion as to all other issues as time barred by § 16-5-402(1).

In 2001, defendant filed a fourth motion for posteonviction relief, this time arguing that the Supreme Court’s opinion in Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), rendered his aggravated range sentence illegal and that he should be permitted to withdraw his guilty plea. He alleged that Apprendi provided justifiable excuse or excusable neglect for the late filing of his motion and that his illegal sentence claim could be brought at any time under Crim. P. 35(a).

The trial court denied this motion without a hearing, concluding that Apprendi, supra, is not to be applied retroactively and does not provide relief for defendant under these circumstances.

This appeal followed.

I.

As an initial matter, we note that the parties dispute whether defendant’s motion should be considered under Crim. P. 35(a) or (c) and whether the three-year time limitation in § 16-5-402(1) applies.

However, we elect to decide the merits of defendant’s appeal without resolving the parties’ various procedural contentions. See People v. Gardner, 55 P.3d 231 (Colo.App.2002); see also People v. Kilgore, 992 P.2d 661 (Colo.App.1999)(electing to address merits of Crim. P. 35(c) motion despite its untimeliness).

II.

Defendant contends that his sentence is illegal under Apprendi v. New Jersey, supra, because the crime of violence charge was not proved beyond a reasonable doubt to a jury. Specifically, he argues that there was insufficient evidence that he used or threatened the use of a deadly weapon during the course of the aggravated robbery. We reject this contention.

In Apprendi, the Supreme Court held, “Other than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” Apprendi v. New Jersey, supra, 530 U.S. at 490, 120 S.Ct. at 2362-63, 147 L.Ed.2d at 455 (emphasis added).

Here, defendant pleaded guilty to aggravated robbery and one count of crime of violence. The plea agreement defendant signed provided that, by entering his guilty plea, he was waiving certain rights, specifically the right to a jury trial and “the right to have the prosecution prove each and every element of the offenses charged in this matter beyond a reasonable doubt.” The plea agreement stated that the elements of the crime of violence count included that “defendant ... used or possessed or threatened the use of a deadly weapon.” At the providency hearing, the trial court confirmed these matters with defendant.

Thus, by pleading guilty to the crime of violence charge, defendant waived the right to contest the factual basis for that charge and necessarily admitted beyond a reasonable doubt the elements of that count. Therefore, the facts necessary to subject him to the sentencing range of ten to thirty-two years in DOC, as set forth in the applicable statutes and the plea agreement, were proved beyond a reasonable doubt. See Patton v. People, 35 P.3d 124, 128 (Colo.2001)(when defendant enters guilty plea, he admits committing the substantive crime or crimes charged against him); People v. Schneider, 25 P.3d 755, 759-60 (Colo.2001)(defendant entering a valid guilty plea waives the right to insist that the prosecution establish guilt beyond a reasonable doubt).

Therefore, even assuming Apprendi may be applied retroactively, defendant’s thirty-two-year sentence here was within the range provided by statute for his offense, and Ap-prendi is inapplicable under these circumstances.

In light of this conclusion, we need not address defendant’s additional argument that the trial court violated Apprendi by considering his supposed parole status at the time he committed the offense here. Cf. People v. Broga, 750 P.2d 59, 62 (Colo.1988)(where sentencing court finds several factors justifying an aggravated range sentence, only one factor need be legitimate to support the court’s decision); People v. Vigil, 718 P.2d 496, 507 (Colo.1986)(the circumstances of a crime alone may justify the imposition of a lengthy sentence, even a sentence approaching the statutory maximum).

Therefore, because defendant was properly sentenced within the statutory range for his offense, his Apprendi claims fail.

III.

Defendant also argues that his plea counsel rendered ineffective assistance and that his guilty plea was not knowing, voluntary, and intelligent. We reject these claims.

Similar arguments were rejected by the trial court and this court in the earlier proceedings. Defendant raised the issues of ineffective assistance of counsel, the propriety of his sentencing, and the factual basis for his plea in both the second and third motions. He also raised the issue of the validity of his guilty plea in his third motion.

Therefore, to the extent that defendant raises these claims again in the context of his Apprendi argument, we conclude that these reformulated claims are successive, and we need not address them. See Crim. P. 35(c)(3) (court need not entertain successive motions for similar relief based upon same or similar allegations); People v. Rodriguez, 914 P.2d 230, 249 (Colo.1996)(consideration of argument on appeal will be precluded if its review would be nothing more than a second appeal addressing the same issues on some recently contrived constitutional theory); People v. Hampton, 187 Colo. 131, 133, 528 P.2d 1311, 1312 (1974)(Crim. P. 35 proceedings are intended to prevent injustices after conviction and sentencing, not to provide perpetual review).

Therefore, the order is affirmed.

Judge TAUBMAN and Judge DAILEY concur.

       Sitting by assignment of the Chief Justice under the provisions of Colo. Const, art. VI, § 5(3), and § 24-51-1105, C.R.S.2001.


author: Judge DAILEY.

text:
    Randy SCOTT, Plaintiff-Appellee, v. ART OF OPTIKS CHERRY CREEK, INC., Defendant-Appellant.
    No. 01CA1604.
    Colorado Court of Appeals, Div. IV.
    Oct. 10, 2002.
    As Modified on Rehearing Nov. 7, 2002.
    John H. Case, Aspen, Colorado, for Plaintiff-Appellee.
    Brownstein, Hyatt & Farber, P.C., Stanley L. Garnett, Amy L. Parsons, Denver, Colorado, for Defendant-Appellant.
   Opinion by

Judge DAILEY.

Defendant, Art of Optiks Cherry Creek, Inc., appeals from a judgment denying its motion for attorney fees from plaintiff, Randy Scott. We reverse and remand.

Scott and Farrell Kahn jointly owned optical stores in Aspen and Cherry Creek. The businesses were incorporated, respectively, as Optiks Holding Corp. pursuant to a 1988 corporate shareholder agreement, and Art of Optiks Cherry Creek, Inc. (Cherry Creek) pursuant to a 1999 corporate shareholder agreement. After a disagreement arose about financing for the Cherry Creek store, Kahn bought Scott’s minority shares pursuant to the buy-out provisions in the corporate shareholder agreements, and he terminated Scott’s employment.

Scott sued Kahn, Optiks Holding Corp., and Cherry Creek asserting claims for an accounting, a judicial appraisal of shares, breach of fiduciary duty, breach of contract, defamation, conversion, securities fraud, and deceit. Pursuant to Cherry Creek’s motion, the trial court granted summary judgment in its favor, dismissing all claims asserted against it. Following trial on the remaining claims, the trial court awarded Scott $63,844 on his claim for an accounting, jointly and severally against Kahn and Optiks Holding Corp. See Scott v. Kahn, 2002 WL 1969842 (Colo.App. No. 01CA0657, May 2, 2002)(not published pursuant to C.A.R. 35(f))(reversing judgment against Kahn personally).

Thereafter, the trial court denied Cherry Creek’s post-trial motion for attorney fees, which was filed pursuant to that part of the 1999 corporate shareholder agreement providing attorney fees for “[t]he prevailing party in any suit to enforce any provision of, or for breach of any provision of this Agreement.” The trial court determined that Scott was the prevailing party “within the context” of the lawsuit.

Cherry Creek contends that the trial court erred in determining that Scott was the prevailing party. Cherry Creek argues that, having prevailed on all of the claims asserted against it by Scott, it was the prevailing party, even though Scott prevailed on his claim for an accounting against one other party. We agree.

Colorado courts have addressed the issue of who is the prevailing party where a party receives judgment against other parties on some but not all of its claims. See, e.g., Odenbaugh v. County of Weld, 809 P.2d 1059, 1063 (Colo.App.1990); In re Marriage of Watters, 782 P.2d 1220, 1221 (Colo.App.1989). Our courts have also addressed the issue of apportionment of an attorney fees award among the parties against whom it was entered. See, e.g., Colantuno v. A. Tenenbaum & Co., 23 P.3d 708, 714 (Colo.2001); Newport Pacific Capital Co. v. Waste, 878 P.2d 136, 140 (Colo.App.1994). The issue before us now — who is the prevailing party when one party receives judgment against some, but not all of the other parties — is an issue of first impression.

The few courts that have addressed the issue have concluded that the trial court must consider the judgments obtained by the various parties, not the overall trial result, in determining who is the prevailing party. See Tulsa Litho Co. v. Tile & Decorative Surfaces Magazine Publishing, Inc., 69 F.3d 1041, 1043 (10th Cir.1995); Christie-Lambert Van & Storage Co. v. McLeod, 39 Wash.App. 298, 305, 693 P.2d 161, 166 (1984).

We agree with that conclusion. To hold otherwise would produce an unfair and absurd result, preventing recovery of attorney fees by a party who successfully defends against all claims against it simply because the opposing party prevailed on claims against other parties.

Because the trial court granted Cherry Creek summary judgment against Scott, Cherry, Creek was the prevailing party as between it and Scott. See Dennis I. Spencer Contractor, Inc. v. City of Aurora, 884 P.2d 326, 332 (Colo.1994)(in breach of contract claim, the party in whose favor the decision or verdict on liability is rendered is the prevailing party for purposes of awarding attorney fees). Consequently, we remand the matter to the trial court to determine what, if any, attorney fees should be awarded to Cherry Creek under the contract as the prevailing party on claims brought against it by Scott to enforce the 1999 corporate shareholder agreement. See Grynberg v. Agri Tech, Inc., 985 P.2d 59, 64-65 (Colo.App.1999), aff'd, 10 P.3d 1267 (Colo.2000).

We do not reach Cherry Creek’s contentions concerning the reasonableness and necessity of its attorney fees. These determinations must be made by the trial court on remand.

The judgment is reversed, and the case is remanded to the trial court for further consideration of Cherry Creek’s motion for attorney fees.

Judge DAVIDSON and Judge VOGT concur.