author: Justice COATS

text:
    INDUSTRIAL CLAIM APPEALS OFFICE, Petitioner, v. Linda ZARLINGO and Michael E. Janssen, D.O., Respondents.
    No. 01SC710.
    Supreme Court of Colorado, En Banc.
    Oct. 28, 2002.
    Rehearing Denied Nov. 25, 2002.
    John Baird, First Assistant Attorney General, State Services Section, Denver, Colorado, Attorney for Petitioner.
    Withers, Seidman, & Rice, P.C., Christopher Seidman, Grand Junction, Colorado, Attorney for Respondent Zarlingo.
    Wherry & Carlstead LLC, Edward P. Carlstead, Burton I. Wherry, Denver, Colorado, Attorneys for Respondent Janssen.
   Justice COATS

delivered the Opinion of the Court.

The Industrial Claim Appeals Office petitioned for review of a court of appeals’ decision to entertain an appeal filed one day after the deadline imposed by section 8-43-801(10), 3 C.R.S. (2002). See Janssen v. Industrial Claim Appeals Office, 40 P.3d 1 (Colo.App.2001). The court of appeals held that C.A.R. 26(c) gave Dr. Janssen three additional days to file a notice of appeal from an adverse decision of the ICAO panel. Because C.A.R. 3.1 requires appeals from orders of the ICAO to proceed in the manner and within the time prescribed by statute, the judgment of the court of appeals is reversed.

I.

The claimant, Linda Zarlingo, hired Michael Janssen, D.O., to give a deposition on her behalf in her workers’ compensation hearing. She later complained that the rate Dr. Janssen charged exceeded the statutory limit for expert testimony by physicians. The presiding Administrative Law Judge agreed and ordered Dr. Janssen to repay the claimant the amount that he had overcharged her. Dr. Janssen appealed to the Industrial Claim Appeals Office, which affirmed the ALJ’s decision and mailed its order to the parties as required by statute.

Dr. Janssen filed a notice of appeal in the court of appeals twenty-one days after the date of the certificate of mailing. In reliance on section 8-43-301(10), 3 C.R.S. (2002), which allows a dissatisfied party twenty days after the date of the certificate of mailing within which to appeal from ICAO decisions, the court of appeals initially dismissed, but on rehearing, a majority of the court decided to entertain Dr. Janssen’s appeal. Although prior court of appeals decisions had reached the opposite conclusion with regard to the applicability of C.A.R. 26(c) to ICAO appeals, the court concluded that our decision in Matter of Title, Ballot Title & Submission Clause, 961 P.2d 1077 (Colo.1998), implicitly overruled that line of cases and “intended that parties in all substantive areas, should derive the benefits of C.A.R. 26(c) and be permitted three additional days to proceed following service by mail.” 40 P.3d at 3.

Despite the court of appeals’ ultimate affir-mance of the panel’s decision, the ICAO petitioned this court for a writ of certiorari to determine whether -the court of appeals correctly interpreted the relationship between section 8 — 43-301(10) and C.Á.R. 26(c).

II.

C.A.R. 26 is included among the “General Provisions” of the appellate rules and is entitled “Computation and Extension of Time.” Paragraph (c) of the rule indicates that “[w]henever a party is required or permitted to do an act within a prescribed period after service of a paper upon him and the paper is served by mail, three days shall be added to the prescribed period.” Id. This paragraph also expressly indicates, however, that it does not apply to the time for filing notices of appeal in civil cases governed by C.A.R. 4(a), which runs instead from the date of the mailing of the notice of the judgment, decree, or order being appealed if notice is transmitted by mail.

Appeals from the Industrial Claims Appeals Office are not actually governed by the provisions of C.A.R. 4(a) for the reason that they are governed by the even more specific provisions of C.A.R. 3.1. See C.A.R. 4(a) (Appeals in Civil Cases (Other than Appeals or Appellate Review Within C.A.R. 3.1)). Rule 3.1 makes clear that both the manner and timing of appeals from orders and awards of the Industrial Claim Appeals Office shall be controlled by statute. By statute, the legislature has mandated that notice of ICAO orders be mailed to all parties of record, and like the formula of Rule 4(a) for notices of appeal in other civil cases, the statute limits the time for seeking review in the court of appeals to a specific number of days after the date of mailing. § 8 — 43-301(10) (“twenty days after the date of the certificate of mailing of such order”).

•To. the extent that C.A.R. 26(c)’s own exception for notices of appeal does not also clearly demonstrate an intent to exempt notices of appeal from ICAO orders, C.A.R. 3.1 nevertheless contains the more specific provisions. In contrast to Rule 26(c), which applies generally to papers filed in proceedings governed by the appellate rules, Rule 3.1 specifically addresses a particular kind of appeal and, in conjunction with the statutory standards it incorporates, a particular paper initiating that kind of appeal. As with statutes, specific and general rules of court should be construed harmoniously where possible. See Leajfer v. Zarlengo, 44 P.3d 1072, 1078 (Colo.2002); see also Patterson v. Cronin, 650 P.2d 531, 534 (Colo.1982). But where their provisions are irreconcilable, both rules must be given effect by treating the specific provision as a special case or exception to the general provision. See Zar-lengo, 44 P.3d at 1078; see also § 2-4-205, 1 C.R.S. (2002). The addition of three days to the time otherwise allowed for a party to act, offsetting the likely delay in actual notice to that party caused by mailing, simply cannot be reconciled with a time limit that already accounts for mailing by prescribing a specified number of days, measured from the date of mailing. See § 8-43-301(10).

Nor does our holding in Matter of Title, Ballot Title & Submission Clause, 961 P.2d 1077 (Colo.1998), suggest otherwise. In Title, we applied the provisions of C.A.R. 26(a) to compute the five-day period permitted for petitioning this court to review an action of the Title Board. Among other things, Rule 26(a) articulates in detail the method for computing periods of fewer than seven days that are prescribed by either statute or rule, including the way in which first and last days, holidays, and weekend days should be treated in the calculation. The statute prescribing the five-day period for seeking review in Title offered no directions for the computation of this time period, much less directions contrary to those of the rule. See § 1 — 40-107(2), 1 C.R.S. (2002).

Under those circumstances, the appellate rule provided specific guidance for implementing the statutorily prescribed time period. By contrast, C.A.R. 26(c) directly conflicts with the time period prescribed by section 8-43-301(10). The appellate rule purports to add three days to time periods (not otherwise exempted) to account for service by mail, while the statute already accounts for mailing by expressly limiting the time for appeal of mailed ICAO orders to a specific number of days from the date of mailing. Rather than suggesting that C.A.R. 26 controls over conflicting time provisions of other rules and statutes, or requiring an automatic three-day extension of time after service by mail “in all substantive areas,” see Janssen, 40 P.3d at 3, our decision in Title merely applied a computational rule to a statute that offered no conflicting computational direction of its own.

III.

For these reasons, the judgment of the court of appeals applying C.A.R. 26(c) to extend by three days the period within which to commence an action for judicial review of an order of the Industrial Claims Appeals Office is reversed, and the case is remanded for further proceedings consistent with this opinion.

      . Specifically, the court of appeals referenced its decisions in Lutheran Hosp. & Homes Soc'y v.

        Indus. Comm’n, 710 P.2d 496 (Colo.App.1985); and Digital Equip. Corp. v. Indus. Claim Appeals Office, 894 P.2d 54 (Colo.App.1995).

      . We granted certiorari on the following issue: Whether a party seeking judicial review in a special statutory proceeding is entitled to the additional 3 days provided under C.A.R. 26(c) within which to file a notice of appeal when the final agency decision for which review is sought is served by mail.


source: Caselaw Access Project

author: Judge DAVIDSON.

license: Public Domain

text:
    BRUSH CREEK AIRPORT, L.L.C., a Colorado limited liability company, and Richard A. Landy, Plaintiffs-Appellees and Cross-Appellants, v. AVION PARK, L.L.C., a Colorado limited liability company, and Carlo Cesa, Defendants-Appellants and Cross-Appellees.
    No. 01CA1310.
    Colorado Court of Appeals, Div. III.
    July 18, 2002.

      Wilderson, O’Hayre, Dawson, McGinty & Frazier, P.C., Michael C. Dawson, Robert M. O’Hayre, Gunnison, Colorado, for Plaintiffs-Appellees and Cross-Appellants.
    Law Office of Pete Cordova, P.C., Pete Cordova, Salida, Colorado; Law Office of M. Stuart Anderson, P.C., Stuart Anderson, Sa-lida, Colorado, for Defendants-Appellants and Cross-Appellees.
   Opinion by

Judge DAVIDSON.

In this action involving the parties’ respective rights in an airport runway, terminal, and hangar, defendants, Avion Park, L.L.C. and Carlo Cesa (collectively, Avion Park), appeal from the trial court’s judgment on various claims and counterclaims involving plaintiffs, Brush Creek Airport, L.L.C. and Richard A. Landy (collectively, Brush Creek). Brush Creek cross-appeals the trial court’s award of attorney fees to Avion Park. We affirm in part, reverse in part, and remand.

Brush Creek is a developer of a multi-unit subdivision in Crested Butte, and Landy is its managing member. Cesa is a member of Avion Park. In 1996, Avion Park purchased commercial lot C-2 in Brush Creek’s subdivision under a sales contract. The lot abuts a private runway that runs' diagonally across a larger parcel owned by Brush Creek, and Brush Creek granted Avion Park a nonexclusive easement for use of the runway. A terminal and a hangar building located on the lot weré excluded from the sales contract, but Avion Park leased the buildings from Brush Creek by a separate lease contract.

After the lease term ended, the parties disagreed about removal of the buildings. A separate dispute arose over Brush Creek’s plan to extend a road over a portion of the runway to access and develop the southern portion of the subdivision. Brush Creek asserted that it had retained an easement reserved by its predecessor in interest that allowed it to build the road crossing the runway.

Brush Creek filed this action for replevin of the two buildings and breach of the lease contract. Avion Park filed counterclaims including breach of the sales contract, breach of easement, trespass on the easement, fraud, misrepresentation, fraudulent concealment, breach of the Colorado Common Ownership Interest Act (CCOIA), and claims for declaratory and injunctive relief to require Brush Creek to maintain the runway at its current length and not construct the proposed road. Brush Creek then added claims for, inter alia, breach of the sales contract, interference with easement and trespass, and for declaratory and injunctive relief.

As relevant here, the trial court awarded Brush Creek temporary and permanent possession of the hangar and terminal buildings and also awarded it attorney fees on its breach of lease claim. The trial court found that Avion Park took its easement in the runway subject to Brush Creek’s retained easement for access to the southern portion of the subdivision and subject to the county’s right to regulate safety. The court also found that Brush Creek had not violated the CCOIA. The trial court accordingly awarded Brush Creek nominal damages of $1 on its interference with easement and trespass claims and rejected Avion Park’s fraud, misrepresentation, and trespass claims. However, the court also determined that rescission was the appropriate remedy for Avion Park’s breach of sales contract claim, ordering the return of the purchase price and awarding attorney fees. Finally, the trial court found that Avion Park’s claims for breach of easement, trespass on the easement, and declaratory and injunctive relief were rendered moot by the rescission of the sales contract.

On this appeal and cross-appeal, we reverse those parts of the judgment ordering rescission, awarding attorney fees to both parties, and dismissing as moot Avion Park’s claims for breach and trespass of easement and for declaratory and injunctive relief. Otherwise, we affirm the judgment.

I.

Replevin and Breach of Lease Claims

Avion Park first contends that the trial court erred in awarding Brush Creek possession of the hangar and terminal buddings and attorney fees. We disagree as to possession, but agree as to the fees.

A.

Possession

The lease provided that Avion Park could terminate it on ninety days written notice and that if Brush Creek faded to remove the buildings within the ninety days, the buildings would become the property of Avion Park.

Avion Park admits that it did not give written notice of termination to Brush Creek, but contends, citing Karras v. Trione, 135 Colo. 229, 310 P.2d 560 (1957), that written notice was waived because Brush Creek had actual notice that Avion Park wanted the buildings removed, and Brush Creek was acting on that notice. Alternatively, Avion Park contends that Brush Creek’s failure to entirely remove the buildings by the court-ordered deadline entitles Avion Park to possession. We disagree with both contentions.

A party may not rely on the failure of a contract condition if that party contributed to its failure. See Dupre v. Allstate Ins. Co., -P.3d-, 2002 WL 1220823 (Colo.App. No. 01CA0630, June 6, 2002).

Here, the trial court found that Avion Park’s actions “made the removal at best more difficult, if not impossible.” Avion Park’s argument to the contrary notwithstanding, this finding was supported by the evidence, including testimony that when Lan-dy came to inspect the hangar before removing it, Cesa would not allow him to remain on the property and made various threats against him. Thus, even if the written notice provision had been waived and a ninety-day period had begun to run, the trial court did not err in concluding that Avion Park was not entitled to the buildings.

B.

Attorney Fees Awarded to Brush Creek

Avion Park next contends that the trial court erred in determining that Brush Creek’s replevin claim arose out of the sales contract and in awarding attorney fees on that claim pursuant to the terms of the sales contract. We agree.

The lease contract contained no attorney fees provision. However, the sales contract provided: “If any action or proceeding is brought which arises out of this agreement, its performance, or breach, the prevailing party, in addition to any other rights and remedies, shall be entitled to costs and expenses incurred, and reasonable attorney’s fees.” The sales contract also provided: “[Avion Park] acknowledges that the hangar located on the Property is excluded from this sale. At closing, [Avion Park] and [Brush Creek] shall enter into a lease agreement for the hangar which shall provide, among other things, for at least the following [enumerated provisions nearly identical to some of the provisions in the lease agreement].” A similar provision was included regarding the terminal building.

While reciting many of the terms of the lease, the sales contract merely required the parties to enter into a lease containing those terms. After the parties did so, the obligations under the sales contract relating to the buildings were completed and the lease contract controlled. The sales contract does not state that the contemplated lease is to be incorporated into the sales contract, or vice versa.

Brush Creek argues that Agritrack, Inc. v. DeJohn Housemoving, Inc., 25 P.3d 1187 (Colo.2001), provides authority for importing the attorney fees clause from the sales contract to the lease. However, Agritrack involved an implied contract for work performed in addition to that called for in an express contract, which contained an extremely broad attorney fees clause. Here, there are two distinct, express contracts. Only the lease was breached, and it does not provide for attorney fees. Hence, we conclude that the trial court erred in awarding them.

II.

CCOIA Claims

Avion Park next contends that the trial court erred in concluding that Brush Creek had not violated the CCOIA. Avion Park specifically asserts that the runway was dedicated as a common area in the declaration of restrictions for the subdivision and on the plat recorded with the county and that, therefore, Brush Creek’s failure to fully depict the runway and the retained easement across it violated several provisions of the declaration and the CCOIA, including: § 38-33.3-205(l)(m), C.R.S.2001 (declarations must include recording data for included easements); § 38-33.3-209(2)(b), C.R.S.2001 (plat must include locations and dimensions of existing improvements); § 38-33.3-209(2)(e), C.R.S.2001 (plat must show description of included easements); and § 38-33.3-113, C.R.S.2001 (obligation of good faith imposed on duties under CCOIA). We disagree.

Avion Park relies, in part, on the fact that a portion of the runway appears on the plat for the first filing. However, while that plat states that Brush Creek “hereby dedieate[s] and convey[s] to the owners of lots, tracts or parcels within this subdivision, but not to the public at large, the common right to use streets, alleys, roads and other areas as shown hereon,” the runway is not included within the legal description of “this subdivision.” The legal description states only that the included property is bordered by the runway right-of-way, and the plat does not show the entire width or length of the runway.

Avion Park alternatively contends that, even if the runway were not shown on the plat, the declaration of restrictions for the development, recorded in 1994, also dedicates the runway as a common area and bars Brush Creek from altering the runway. Again, we disagree.

The preamble to the declaration describes the entire large parcel owned by Brush Creek, with exceptions not relevant here, and states that Brush Creek “intends to develop its property above described, as a residential-commercial development centered around the existing airstrip, with the capability of providing fly-in, fly-out service to the development” and that Brush Creek “intends that its Land shall be developed as a staged development, including residential lot sites, multifamily living sites, service businesses, lodging facilities, and an equestrian ranch which will be a residential community affording its residents immediate use of aviation facilities.”

However, the declaration provides that it is applicable only to parcels specifically platted by Brush Creek:

Such parcels within the Land which the Declarant may hereafter subject to this Declaration by filing one or more Plats for record with the Gunnison County Clerk and Recorder, it being the intent of the Declarant to encumber hereunder parcels of land (Subject Land) within the property described in the PREAMBLE and such other contiguous lands which the Declarant may acquire hereafter, as stages of its plan of development are realized through the subdivision process. As Subject Land is platted by the Declarant from time to time and becomes subject to the terms of this Declaration, this Declaration shall be considered to be a part of any and all conveyances, transfers, leases, mortgages, trust deeds and other documents affecting all or any part of such Subject Land whether or not specifically set forth in such documents.

Elsewhere in the declaration, Brush Creek reserved certain development rights, including “the right to create units (Sites) and common elements (Common Areas and Facilities) as part of Declarant’s staged platting process” and “the right to withdraw any part [of the Land] from its plan of development which has not become Subject Land.”

Avion Park particularly relies on Article 14.11(f) of the declaration, located in the section containing disclosures required by the CCOIA, which states: “The Common Areas and Facilities are described in the Plats; however, generally, they consist of the airport runway, the roads, the recreational bike paths and pond areas and the water system.”

However, “[rjestrictive covenants must be construed as a whole and interpreted in view of their underlying purposes, giving effect to all provisions contained therein.” Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70, 75 (Colo.App.1993).

Reading the declaration as a whole, we conclude that the runway was not dedicated as a common area subject to the declaration. While Article 14.11(f) states that the runway is a common element, it also states that common elements must be shown on a plat, and the declaration defines the term “common areas” as “any area within the Land which has been conveyed by the owner thereof to the Association and accepted thereby, or any areas designated as Open Space or Common Area on a Plat.” The runway had not been conveyed to the homeowners association nor, as discussed, had the runway been shown as a common area on the plat for the first filing. Thus, the runway was not “Subject Land” under the provisions of the declaration, and only the reserved development rights are applicable.

Given our conclusion that the runway was not a dedicated common area subject to the declarations, the trial court did not err in denying Avion Park’s CCOIA claims, most of which were based on a failure to depict the runway and the retained easement on the plat.

Avion Park’s claim for breach of § 38-33.3-209(2)(a), C.R.S.2001 (requiring plats to show a general schematic plan of the entire common interest community), was not raised during the trial. Therefore, we will not consider it. See Minto v. Lambert, 870 P.2d 572, 575 (Colo.App.1993)(“In the absence of unusual circumstances, issues raised in the pleadings but not presented at trial will not serve as a basis for review.”).

III.

Breach of Sales Contract and Related Claims

Avion Park next contends that the trial court erred in concluding that there had been no meeting of the minds and in awarding rescission of the sales contract as a remedy for its breach of contract claim. It also contends that the trial court erred in concluding that Avion Park’s claims for trespass and interference with easement and for declaratory and injunctive relief were moot and that Brush Creek’s retained easement over the runway was not extinguished by merger. In its cross-appeal, Brush Creek contends that the trial court erred in awarding attorney fees to Avion Park on its breach of contract claim after finding that the sales contract should be rescinded. We conclude that further proceedings are required to determine whether the easement across the runway was extinguished, but otherwise agree with both parties’ contentions.

A.

Rescission: Meeting of the Minds as to the Easement

Regarding Avion Park’s runway easement, the sales contract provides:

At closing, Seller shall execute and cause to be recorded a covenant respecting the Airplane Landing Strip adjacent to the Property which dedicates the Landing Strip to that use in perpetuity for the benefit of the Property which would permit Buyer to enforce the continuation of such use of the Landing Strip.

The easement executed at closing pursuant to that section of the sales contract states:

Brush Creek ... (“Grantor”), hereby grants a nonexclusive easement over the property described in Appendix A (“Ser-vient Property”) to Avion Park ... to use the Servient Property as a working airplane landing strip or runway for the benefit of ... Lot C-2 ... (“Dominant Property”), and Grantor hereby dedicates the Servient Property to be used as an airplane landing strip or runway, including take-offs, landing, taxiing, and other ordinary uses of an airport runway, for the benefit of the Dominant Property.... Such Easement and Declaration shall not exempt Users from compliance with any reasonable rules of use of the Servient Property, established by the owner or operator of the Servient Property, that do not substantially infringe on the right of Users to use the Servient Property. Grantor hereby covenants that the Ser-vient Property shall be reasonably maintained in an open and usable condition, and that the Servient Property shall not be closed, changed in use or character, or blocked (except for necessary and reasonable maintenance).

This Easement and Covenant shall run with the land and shall be in perpetuity. The legal description contained in Appendix A to the easement included property beyond the boundaries of the existing runway, and the parties refer to the parcel described as the “runway envelope.”

As measured in one direction, the runway envelope is approximately 4700 feet long, but the parties agree that, as originally constructed, the runway was approximately 4500 feet long. A feasibility study submitted with the original application for county approval of the airport was based on a runway length of 4000 feet, and a subsequent sketch plan submitted to the county for the entire subdivision also showed the length of the runway as 4000 feet and showed the proposed road crossing the northern portion of the parcel. Cesa admits that he was shown these documents and testified that the proposed road was the reason that he sought the easement over the runway. Cesa was also shown sales brochures for the subdivision that referred to either a 4500 — or 4700-foot airstrip.

In analyzing Avion Park’s breach of contract claim, the trial court noted that “[f]rom the marketing brochures and other material provided, [Avion Park] could reasonably have concluded that the runway was in fact 4,700 feet long, was open year round, and that the runway would not be utilized for parking vehicles or planes or grazing livestock,” but also found that Avion Park did not object to the title insurance commitment or policy, which evidenced the existence of a retained easement across the runway. The court then concluded, “[T]here was not a meeting of the minds with respect to a central issue in this agreement, that is the length, scope and use of the runway landing strip. , Accordingly, the Court determines that rescission is the appropriate remedy.” The trial court awarded attorney fees to Avion Park in conjunction with this claim.

When there is no mutual assent to a material term of a contract, rescission is the proper remedy. See Bejmuk v. Russell, 734 P.2d 122 (Colo.App.1986).

The general rule is that when parties to a contract ascribe different meanings to a material term of a contract, the parties have not manifested mutual assent, no meeting of the minds has occurred, and there is no valid contract. However, an exception to the general rule is observed when the meaning that either party gives to the document’s language was the only reasonable meaning under the circumstances. In such cases, both parties are bound to the reasonable meaning of the contract’s terms.

Sunshine v. M.R. Mansfield Realty, Inc., 195 Colo. 95, 98, 575 P.2d 847, 849 (1978) (citation omitted). Indefiniteness in a term that would otherwise render the contract unenforceable for failure of mutual assent may be cured by subsequent performance. See Dreazy v. North Shore Publ’g Co., 53 Wis.2d 38, 44, 191 N.W.2d 720, 723 (1971)(“Where it is apparent that the intent of the parties was to enter into a contract, the contract should not fail for indefiniteness if the conduct of the parties will reasonably supply the omissions.”); cf. Michigan Stove Co. v. Pueblo Hardware Co., 51 Colo. 160, 116 P. 340 (1911).

Here, the contract required Brush Creek to execute a covenant dedicating “the landing strip to that use in perpetuity.” This limited description injected indefiniteness into the sales contract because, prior to any perfor-manee, Brush Creek’s interpretation that “the landing strip” meant only the 4000 feet shown in the original application and subsequent sketch plan submitted to the county and Avion Park’s interpretation- that “the landing strip” meant the existing 4500-foot runway were both arguably reasonable.

However, we conclude that the indefiniteness was cured when the parties executed an easement pursuant to the sales contract that contains substantially more descriptive language. The easement covers “the property described in Appendix A,” which includes the legal description of the entire runway envelope, and dedicates that property “to be used as an airplane landing strip or runway, including take-offs, landing, taxiing, and other ordinary uses of an airport runway.”

The parties agree that the easement provided for continued use of at least some portion of the runway envelope as a runway. Avion Park contends that the easement grants it the right to use the 4500-foot existing runway and that any subsequent use of the runway envelope by Brush Creek must not be inconsistent with that use. Brush Creek’s position appears to be that only 4000 feet of runway was originally approved and that, because at least 4000 feet of runway would remain, and the county approved the road for safety so long as the runway was shortened, it may build the proposed road on any other portion of the runway envelope.

However, neither of these positions is consistent with the language of the easement actually granted, which describes the entire runway envelope but also allows for reasonable rules of use that do not “substantially infringe” on Avion Park’s right to use the property. The easement does not refer to either a 4000 — or 4500-foot length or describe the existing runway or the approved runway, and it is not ambiguous.

Based on the unambiguous language of the easement, we disagree with the trial court that there was no meeting of the minds on the length, scope, and use of the runway. To the contrary, the parties here attached the same meaning to a contractual term — the legal description of the runway envelope appearing in the easement — and only later disagreed as to its meaning. Thus, we conclude that the trial court erred in ordering rescission of the sales contract.

B.

Parties’ Respective Rights in Easement

Avion Park next contends that the trial court erred in concluding that its claims for trespass and interference with easement and for declaratory and injunctive relief were moot based on the rescission order and in concluding that the retained easement across the runway was not extinguished by merger. We agree with the first contention and conclude that further proceedings are required on the merger issue.

1.

Mootness

Reversal of the rescission remedy leaves the rights of the parties in the easement unresolved. The language of the easement determines the scope of Avion Park’s rights. However, Brush Creek, as owner of the servient estate, also retained certain rights in the runway, namely to use the runway envelope in a manner that does not unreasonably interfere with the easement granted, as relevant here, to Avion Park. See Lazy Dog Ranch v. Telluray Ranch Corp., 965 P.2d 1229,1234 (Colo.1998)(owner of ser-vient estate “enjoys all the rights and benefits of proprietorship consistent with the burden of the easement”); Skidmore v. First Bank, 773 P.2d 587 (Colo.App.1988)(grantor has right to use nonexclusive easement in common with grantee). Brush Creek also retained the right to impose reasonable rules on the runway envelope that do “not substantially infringe on the right of Users to use the Servient Property.” The trial court also determined that Avion Park took the easement subject to the county’s authority to regulate safety.

The trial court found that shortening the runway to accommodate the road was consistent with enhancing overall safety, but that “any shortening of this runway will reduce the number of types of planes which can utilize this runway, which would have an adverse impact on any aviation-related business.” The trial court also determined that “a runway was contemplated together with an additional use for road access,” and in its briefs on appeal, Avion Park appears to concede that, had the county not required a shortening of the runway, an access road might have been consistent with its easement.

However, the trial court did not explicitly determine whether Brush Creek’s proposed road, with the required shortening of the runway, and the occasional appearance of parked vehicles and planes or stray animals on the runway, are uses consistent with Avion Park’s rights in the easement. Nor did the trial court determine whether shortening the runway to accommodate the proposed road was a “reasonable rule” that did not “substantially infringe” on Avion Park’s rights.

Also unresolved is the effect of a third easement held by a neighbor (Lacy). In 1975, Landy granted Lacy a nonexclusive easement along the western edge of the large parcel. The easement connects the Lacy property south of the large parcel to a road at the north end of the large parcel, which leads to a county road. At the northwest corner of the large parcel, the Lacy easement crosses the runway envelope. The record indicates that the crossing of the proposed road and the runway envelope may coincide with the Lacy easement.

As owner of the runway envelope and the large parcel crossed by the Lacy easement, Brash Creek had the right to use that easement in a manner consistent with the rights granted to Lacy. See Skidmore v. First Bank, supra. However, it is not clear whether the trial court determined that Brush Creek’s right to build the road was based on its reserved easement, the Lacy easement, or both. Thus, further proceedings are required on Avion Park’s claims of trespass on the easement, breach of easement, and for declaratory and injunctive relief, and, therefore, the trial court erred in concluding that these claims were moot.

2.

Merger

The trial court determined that Brash Creek’s easement across the runway was not extinguished by merger and that Avion Park’s rights in the runway easement were therefore subject to that retained easement. We conclude that further proceedings on this issue are also required.

The relevant history of the property and easements is as follows: Landy purchased a 287-acre rectangular parcel of land in 1972, and in 1975, he conveyed the runway envelope to one Rouse. The county thereafter approved an airport on the site, and Rouse constructed an approximately 4500-foot runway on the parcel. The runway envelope runs from the northwest corner to the southeast corner of the larger parcel and completely bisects it. In the conveyance of the runway envelope, Landy reserved three easements for ingress and egress to the separated portions of the larger tract, which the parties refer to as the “pocket easements” or the “Landy easements.”

After several intermediate conveyances, Brash Creek obtained the runway envelope in 1991. In 1992, Landy conveyed the rest of the 287-acre parcel to Brash Creek. In the plans for continued development of the subdivision, Brash Creek relied, at least in part, on one of the Landy easements for its authority to build the proposed road across the runway.

As it pertains to easements, the doctrine of merger provides that when the land burdened by the easement and the land benefited by the easement come into common ownership, the need for the easement is destroyed and the easement is extinguished. See Salazar v. Terry, 911 P.2d 1086 (Colo. 1996).

The doctrine of merger as applied to easements is different from that as applied to mortgages, and, contrary to the trial court’s conclusion, the intent of the common owner is relevant only in the latter case. See Salazar v. Terry, supra. When common ownership of the dominant and servient estates occurs, “the easement is terminated to the extent that the ownership of the servient estate permits the uses authorized by the easement.” Freeman v. Rost Family Trust, 973 P.2d 1281,1284 (Colo.App.1999).

However, an easement will not terminate by merger if others own outstanding interests in the dominant or servient estates.

See Restatement (Third) of Property: Servitudes § 7.5 emt. d (2000); see also Will v. Gates, 89 N.Y.2d 778, 658 N.Y.S.2d 900, 680 N.E.2d 1197 (1997)(“Where, however, only a portion of the dominant or servient estate is acquired, there is no complete unity of title and there remain other dominant owners whose rights are inviolate. The easement rights of these owners cannot be extinguished by a conveyance to which they are not a party.”).

To effect extinguishment by merger, the common ownership of both the dominant and servient estates must be absolute, not defeasible or determinable, and coextensive, rather than owned in different fractions. See Emory Washburn, A Treatise on the American Law of Easements and Servitudes ch. 5 § 1, at 685 (4th ed. 1885); see also Lewitz v. Porath Family Trust, 36 P.3d 120 (Colo.App.2001)(common ownership of dominant and servient estate will not result in merger where one estate is subject to a security interest).

a.

Lacy Easement

Brush Creek contends that the Lacy easement along the western edge of the large parcel was an outstanding interest sufficient to prevent termination of the Landy easements by merger. We disagree.

The Lacy easement does not prevent Brush Creek’s ownership of the dominant estate from being absolute. See Skidmore v. First Bank, supra, 773 P.2d at 589 (“An easement does not carry any title to the land over which it is exercised and the easement does not work a dispossession of the landowner.”)(quoting Barnard v. Gaumer, 146 Colo. 409, 361 P.2d 778 (1961)). Moreover, the Lacy easement does not grant Lacy any right to use the Landy easements. Therefore, Lacy’s easement is not an additional dominant estate benefited by the Landy easements.

b.

Agricultural Lease

Brush Creek also relies on an agricultural lease of the undeveloped property on either side of the runway envelope to support its argument that no merger occurred. While a leasehold interest may be sufficient to postpone the extinguishment of an easement by merger, it is not clear from the record whether that is the case here.

Common possession of the dominant and servient estates is not required to cause merger. See John Leybourn Goddard, A Treatise on the Law of Easements ch. V § 1, at 537 (5th ed. 1896)(“Unity of seisin for estates in fee will in every case cause easements to be extinguished, and it matters not that there has been no unity of possession of enjoyment, as, for instance, that one tenement has been in possession of a tenant during the whole period of unity, for, notwithstanding that, extinction will be effected.”).

However, where the easement is necessary to the enjoyment of the leasehold interest, then extinguishment will not occur during the period of the lease. See W.J. Byrne, A Treatise on the Law of Easements part V, at 460 (10th ed. 1925)(“[W]here A., the owner in fee of the dominant tenement, granted a lease thereof to X. and subsequently sold his reversion in fee to B., who was the owner in fee in possession of the servient tenement, it was held in effect that during X.’s term the easement ... continued, there being no extinguishment. A. could not derogate from his grant so as to interfere with X.’s right to the easement, nor could B. standing in the place of A.”); see also Washburn, supra, at 688 (where “easement was necessary to the enjoyment of the first [leased property], the mere ownership of both [leased properties] in reversion by one and the same man did not create a unity of title and possession to the two in him”).

Here, while the lessee testified that he had leased the large parcel for approximately eighteen years, the only lease agreement in the record is dated after the two parcels came into common ownership and specifically excludes the runway. The lessee also stated that, prior to 1996, he had accessed the two sides of the large parcel by crossing at a cattle guard, rather than at the north end of the runway. The record does not indicate whether the lease in effect at the time of Landy’s conveyance of the large parcel to Brush Creek contained the same terms as the subsequent lease, and, although the testimony indicates that the cattle guard crossing used in 1992 was in a different location than the Landy easement, the record does not disclose its precise location. Thus, whether the Landy easement was necessary for the enjoyment of the agricultural lease and postponed any merger must be resolved by the trial court on remand.

C.

Attorney Fees Awarded to Avion Park

On cross-appeal, Brush Creek contends that the trial court abused its discretion in awarding attorney fees to Avion Park after granting rescission on Avion Park’s breach of contract claim.

In light of our conclusions that the easement was a separate agreement, that rescission of the sales contract was not an appropriate remedy, and that further proceedings are required to resolve the disputes relating to the breach of easement, we agree that the award of attorney fees was not warranted.

IV.

Fraud and Misrepresentation Claims

Avion Park next alleges that Brush Creek fraudulently misrepresented the length of the runway and its intentions regarding the proposed road and contends that the trial court erred in determining otherwise. We disagree.

A trial court’s judgment will not be reversed if it is supported by the evidence. See Fitzgerald v. McDonald, 81 Colo. 413, 255 P. 989 (1927).

Claims for fraud or misrepresentation require reasonable reliance on the statements. See CJI-Civ. 4th 19:1 (Cum. Supp.2001). Reliance is not justified when the party is on inquiry notice: “If the [party] has access to information that was equally available to both parties and would have led to discovery of the true facts, [that party] has no right to rely upon the misrepresentation.” Balkind v. Tellwide Mountain Title Co., 8 P.3d 581, 587 (Colo.App.2000).

Here, while the trial court found that Avion Park could reasonably have believed, based on certain brochures, that the runway was 4700 feet long, it also found that Avion Park took the easement subject to the declaration, the Lacy easement, and the county’s right to impose safety requirements. Cesa admitted that prior to closing, Brush Creek had shown him, or he had obtained for himself, various other documents showing a 4000-foot runway and the location of the proposed road. The sales contract itself includes an acknowledgement that Brush Creek was planning additional development and that the runway was only a planned amenity. Thus, the trial court’s judgment on these claims was supported by the evidence.

V.

Brush Creek’s Interference and Trespass Claims

The trial court found for Brush Creek on its interference with easement and trespass claims based upon Avion Park’s placing rocks on the edge of the runway to block traffic. Avion Park contends that it was privileged to block vehicular access to the runway because Brush Creek had failed to maintain the runway in an open and usable condition. However, Avion Park provides no authority to support this position and we find it unpersuasive.

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

Those portions of the judgment relating to the breach of contract claim, awarding attorney fees to the parties, and finding Avion Park’s claims for breach and trespass of easement and for declaratory and injunctive relief moot are reversed, and the case is remanded for further proceedings consistent with this opinion. In all other respects, the judgment is affirmed.

Judge JONES and Judge STERNBERG , concur.

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


text:
    The PEOPLE of the State of Colorado, Complainant, v. Marilyn Biggs ADKINS, Respondent.
    No. 00PDJ095.
    Office of the Presiding Disciplinary Judge of the Supreme Court of Colorado.
    Aug. 20, 2001.
    Attorney Regulation. The Presiding Disciplinary Judge and Hearing Board disbarred the Respondent, Marilyn Biggs Adkins, from the practice of law. Adkins violated Colo. RPC 1.15(a) by failing to hold a client’s property in her possession separate from her own property, and Colo. RPC 8.4(c) by knowingly converting funds belonging to the estate. Adkins was ordered to pay the costs of the proceedings.
    Opinion issued by the Presiding Disciplinary Judge, ROGER L. KEITHLEY, and Hearing Board members BARBARA WEIL GALL and RICHARD P HOLME, both members of the bar.
   OPINION AND ORDER IMPOSING SANCTIONS

SANCTION: ATTORNEY DISBARRED

A trial in this matter was held on August 9, 2001 before the Presiding Disciplinary Judge (“PDJ”) and Hearing Board members Richard P. Holme and Barbara Weil Gall, both members of the bar. Gregory G. Sapa-koff represented the People of the State of Colorado (the “People”). Craig L. Truman represented the respondent Marilyn Biggs Adkins (“Ms.Adkins”) who was also present.

The Complaint in this action was filed June 13, 2001. Ms. Adkins filed an Answer admitting the factual allegations of the Complaint. On May 31, 2001, the People filed a Motion for Judgment on the Pleadings. Ms. Adkins filed a response stating she had no objection or defenses to the claims in the Complaint. On July 11, 2001, the PDJ granted the People’s Motion. Thus, the facts and the violation of the alleged provisions of the Colorado Rules of Professional Conduct were established and are uncontested.

The PDJ and Hearing Board heard argument of counsel, reviewed the facts and alleged violations of the Complaint, and determined the following findings of fact by clear and convincing evidence.

J. FINDINGS OF FACT

Marilyn Biggs Adkins has taken and subscribed the oath of admission, was admitted to the bar of this court on October 19, 1982, and is registered upon the official records of this court, registration no. 12134.

In early 1999, Ms. Adkins was retained by Janet Cloe Mathias to represent Her in her capacity as personal representative of the estate of W. Imojean Fuller, deceased, in Jefferson County District Court, Case No. 99PR204. At Ms. Adkins’ direction, Ms. Mathias took an inventory of the estate’s personal property, much of which was sold by the estate. Ms. Adkins assisted Ms. Mathias in selling the principle asset of the estate, a condominium. Ms. Adkins deposited the proceeds from the sale of the estate assets into a separate account at Enterprise Bank in the name of the Estate of Imojean Fuller. Ms. Adkins arranged for all statements for the account at Enterprise Bank to be sent to her office address, and Ms. Adkins was the only authorized signatory on the account.

Estate funds totaling between $130,000 and $140,000 were deposited into the account at Enterprise Bank by Ms. Adkins. Ms. Adkins knew that all of the funds deposited into the account at Enterprise Bank were funds belonging to the Estate of Imojean Fuller. Ms. Adkins knew that the funds on deposit at Enterprise Bank did not belong to her or to her law firm, Adkins & Associates. As of the beginning of October 1999, all of the funds belonging to the Estate of Imojean Fuller were still on deposit in the account at Enterprise Bank.

During the month of October 1999, Ms. Adkins wrote several cheeks from the estate account at Enterprise Bank payable to her law office COLTAF account. These checks were for substantially the entire balance on deposit in the Fuller Estate account at Enterprise Bank. After Ms. Adkins deposited the funds belonging to the Fuller Estate into her law office COLTAF account, she transferred the funds out of the COLTAF account and into the general operating account for her law firm, Adkins & Associates. Thereafter, she used all of the funds belonging to the Fuller Estate to pay her law firm’s operating expenses and/or for her own benefit. Ms. Adkins did not advise Ms. Mathias of her actions in advance, nor was she authorized by Ms. Mathias or anyone else with authority to take money out of the estate account for any purpose. While Ms. Adkins utilized funds belonging to the Fuller Estate, the estate proceedings in the Jefferson County District Court remained open, pending the completion of additional paperwork required to close the estate and disburse funds.

In late 1999, Ms. Adkins began the process of forming a new professional corporation with attorneys Thomas D. Smart, Jonathan S. Willett and David A. Mestas. The newly-formed firm was known as Adkins, Smart, Willett & Mestas, P.C. (“ASWM”). In August 2000, ASWM obtained a $200,000.00 line of credit. As de facto manager of ASWM, Ms. Adkins had signature rights on the line of credit and handled the transfer of funds from the line of credit. On or about August 23, 2000, Ms. Adkins transferred approximately $130,000 from the line of credit into the ASWM cost account. From the ASWM cost account, Ms. Adkins distributed funds to the heirs of the Fuller Estate. This distribution was made from the ASWM cost account because there were no longer any funds of the Fuller Estate in the estate account at Enterprise Bank, nor were any of the Fuller Estate funds being held by Ms. Adkins in any other trust account. At all times while Ms. Adkins represented Ms. Mathias in her capacity as personal representative of the Estate of W. Imojean Fuller, Ms. Adkins was obligated to keep funds belonging to the Fuller Estate separate from her own property or from the property of her law firm. Through her conduct as described above, Ms. Adkins failed, for a period of approximately 10 months, to keep the funds of the Fuller Estate separate from her own property and/or that of her own law firm.

At the time Ms. Adkins utilized funds belonging to the Fuller Estate for her own business and/or personal purposes, she knew that she did not have the consent or authority from Ms. Mathias or anyone else to use funds belonging to the Fuller Estate or to borrow from the Fuller Estate. At no time, either while Ms. Adkins was utilizing funds belonging to the Fuller Estate or thereafter, did Ms. Mathias or anyone else ratify or approve Ms. Adkins’ utilization of the funds belonging to the Fuller Estate. By utilizing funds belonging to the Fuller Estate for her own business or personal purposes, Ms. Adkins exercised unauthorized dominion or ownership over funds that she knew belonged to the Fuller Estate.

II. CONCLUSIONS OF LAW

Ms. Adkins’ conduct as alleged above violated Colo. RPC 1.15(a) (in connection with a representation, an attorney shall hold property of clients or third persons that is in the attorney’s possession separate from the attorney’s own property). Through her conduct as described above, Ms. Adkins knowingly converted funds belonging to the Fuller' Estate. Through her knowing conversion of funds belonging to the Fuller Estate, Ms. Adkins violated Colo. RPC 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation).

The Supreme Court in People v. Varallo, 913 P.2d 1,11 (Colo.1996), held:

Knowing misappropriation [for which the lawyer is almost invariably disbarred] consists simply of a lawyer taking a client’s money entrusted to him, knowing that it is the client’s money and knowing that the client has not authorized the taking. In re Noonan, 102 N.J. 157, 160, 506 A.2d 722 (1986). ■ Misappropriation includes not only stealing, but also unauthorized temporary use for the lawyer’s own purpose, whether or not he derives any personal gain or benefit therefrom. In re Wilson, 81 N.J. 451, 455 n. 1, 409 A.2d 1153 (1979). The motive of the lawyer is irrelevant in determining the appropriate discipline for knowing misappropriation.

(Quoting from In re Roth, 140 N.J. 430, 658 A.2d 1264, 1272 (1995), internal quotation marks omitted, bracketed remarks in original).

The Colorado Supreme Court continued: Moreover, “[ijntent to deprive permanently a client of misappropriated funds, however, is not an element of knowing misappropriation.” In re Barlow, 140 N.J. 191, 657 A.2d 1197,1201 (1995).

Id.

The facts in this case demonstrate that Ms. Adkins knew that the funds she withdrew from the Fuller Estate account belonged to the estate and that she was not authorized to distribute those funds to herself. Nothing more is required to conclude that Ms. Adkins engaged in knowing conversion of client funds.

III. IMPOSITION OF SANCTION

Ms. Adkins withdrew approximately $130,000 from the Fuller Estate account. These misappropriated funds comprised virtually all of the moneys which had been deposited in that account in connection with the probate of the estate of Ms. Fuller.

The ABA Standards for Imposing Lawyer Sanctions (1991 & Supp.1992) (“ABA Standards ”) is the guiding authority for selecting the appropriate sanction to impose for lawyer misconduct.

ABA Standard 4.11 provides:
Disbarment is generally appropriate when a lawyer knowingly converts client property and causes injury or potential injury to a client.

The presumptive sanction of disbarment for conversion of client property applies whether there is injury to the client or only threatened injury. Here, Ms. Adkins withdrew some $130,000, undeniably a serious potential monetary injury.

The presumptive sanction recommended by ABA Standards 4.41 (disbarment) and 4.42 .(suspension) are distinguished by the degree of injury or potential injury occasioned by the lawyer’s misconduct. Serious injury as opposed to simple injury suggests disbarment rather than suspension. The PDJ and Hearing Board consider the injury and risk of further injury which the client suffered to constitute serious injury warranting disbarment under the ABA Standards.

There is no question in Colorado that conversion of clients’ funds from an attorney’s trust account for a lawyer’s personal use and benefit without authorization warrants disbarment. See, e.g., People v. Wallace, 936 P.2d 1282, 1284 (Colo.1997); People v. Lavenhar, 934 P.2d 1355 (Colo.1997); Varallo, 913 P.2d at 12. Although the amount of the conversion is not of significance, here it was indeed substantial and continuing over a number of months.

Determination of the appropriate sanction requires the PDJ and Hearing Board to consider aggravating and mitigating factors.

The admitted facts in the Complaint establish several aggravating factors pursuant to ABA Standard 9.22. Ms. Adkins exhibited a dishonest or selfish motive, see id. at 9.22(b); engaged in a pattern of misconduct, see id. at 9.22(c); and has had substantial experience in the practice of law, see id. at 9.22(i).

Ms. Adkins chose not to present any testimony in mitigation. Thus, the only factor in mitigation supported by the evidence in the record is that she has had no record of prior disciplinary action against her. ABA Standards 9.32(a). This factor alone does not call for a sanction less than disbarment. See People v. Skaalerud, 963 P.2d 341 (Colo. 1998). Although her counsel argued several forms of mitigation (Ms. Adkins’ self-reporting of her wrong doing, her cooperation with the Office of Attorney Regulation Counsel, her remorse, her husband’s illness, her subsequent return of the money to the beneficiaries of the estate, her good reputation, her mental anguish and consequent medical treatment, and the likelihood of additional penalties arising out of other proceedings), none of these things, individually or in combination, even had evidence been submitted and had they been proven, would have risen to the level of “extraordinary factors of mitigation” necessary to justify any penalty short of disbarment. See Lavenhar, 934 P.2d at 1369.

IV. ORDER

It is hereby Ordered:
1. Marilyn B. Adkins, registration number 12134 is disbarred from the practice of law effective thirty-one days from the date of this Order, and her name shall be stricken from the roll of attorneys licensed to practice law in the State of Colorado.
2. Ms. Adkins is Ordered to pay the costs of these proceedings; the People shall submit a Statement of Costs within ten (10) days of the date of this Order. Ms. Adkins shall have five (5) days thereafter to submit a response thereto.


author: BOUDREAU, J. OPALA, J.,

text:
    2002 OK 72
    STATE of Oklahoma, ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Stanley Steve PARSONS, Respondent.
    No. SCBD 4659.
    Supreme Court of Oklahoma.
    Sept. 24, 2002.

      Nathan A. Lockhart, Assistant General Counsel, Oklahoma Bar Association, Oklahoma City, for Complainant.
    Stanley Steve Parsons, Oklahoma City, pro se.
   BOUDREAU, J.

I. Procedural History

¶ 1 The Complainant Oklahoma Bar Association (OBA) brought Rule 6 disciplinary proceedings against Respondent attorney, Stanley S. Parsons, alleging one count of professional misconduct. Respondent was admitted to practice law in Oklahoma in 1977 and was so licensed at all times relevant to the events addressed herein. Respondent’s official roster address is 3601 N. Classen, Ste. 108, Oklahoma City, Oklahoma 73118.

¶ 2 The Professional Responsibility Tribunal (Tribunal) conducted a hearing on February 28, 2002, where Respondent stipulated to violations of Rules 1.15(a), (b) and (c) and 8.4(a) and (c) of the Oklahoma Rules of Professional Conduct (ORPC), 5 O.S.1991 Ch. 1, App. 3-A, and Rules 1.3 and 1.4(b) of the Rules Governing Disciplinary Proceedings (RGDP), 5 O.S.1991 Ch. 1, App. 1-A. The Tribunal noted for purposes of mitigation of discipline that Respondent has not been previously disciplined in his 24 years of practice. Upon these findings, the majority of the Tribunal recommends Respondent be suspended for one (1) year and ordered to pay the costs of the investigation and proceedings. The OBA and Respondent agree with this recommendation.

II. Standard of Review

¶ 3 We review the evidence de novo to determine if the allegations of misconduct are established by clear and convincing evidence. See State ex rel. Oklahoma Bar Ass’n v. Thomas, 1995 OK 145, 911 P.2d 907; Rule 6.12(c), RGDP.

III. Count I

¶4 Respondent’s alleged misconduct occurred during his representation of Vernsil and Freeman Reed and their three children (“Reeds”) who were injured in an automobile accident. The Reeds sought medical treatment for their injuries from Brooks Clinic Chiropractic (“Brooks”). After the Reeds failed to pay their medical bills, Brooks filed a lien for its services against any settlement or judgment received by the Reeds.

¶ 5 The Reeds subsequently filed a pro se lawsuit against the other driver and Dub Richardson Ford Leasing, who had leased a rental car to the driver. They secured a default judgment against both defendants. Dub Richardson and its insurance company promptly filed a motion to vacate the default judgment. The Reeds retained Respondent as their attorney at this time. Respondent agreed to vacate the default judgment. Respondent subsequently filed an amended petition, although he never served the driver. During this time, Respondent secured the agreement of Brooks to discount the amount of its claim against the Reeds.

¶ 6 Respondent subsequently settled the Reeds’ claim with Dub Richardson’s insurer for $5,600. The insurer issued settlement checks as follows: $2500 payable to “Law Office of Stanley Parson, Freeman Reed, and Brooks Chiropractor”; $1600 payable to “ Law Office of Stanley Parson, Vernsil Reed, and Brooks Chiropracti(sic)”; and three checks, each in the amount of $500, payable to the “Law Office of Stanley Parson and Freeman Reed and Vernsil Reed as Parents of Shemeka, Nekesha, and Freeman Reed, III.” The checks issued on behalf of the children did not include Brooks as a payee. Respondent did not notify Brooks of the settlement or that the settlement checks had been received.

¶ 7 The Reeds endorsed their respective checks and Respondent endorsed his name on each check. In addition, Respondent, without Brooks’ knowledge or consent, wrote “Brooks Chiropractic — by Stanley Parsons” on the cheeks issued to Vernsil and Freeman Reed. Respondent deposited the entire settlement amount of $5600 into his attorney trust account. Of that amount, Respondent paid $3,800 to the Reeds as their portion of the settlement and wrote three checks payable to “cash” for $1,500, $200, and $100. The memo section of the three checks written for cash stated “fee earned — Reed case”. In total, Respondent received $1,800 as fees. As a result, the total settlement proceed of $5,600 was distributed.

¶ 8 Approximately one year later, Brooks contacted Respondent to discuss payment of the settlement. After Respondent failed to pay, Brooks filed a petition against Respondent alleging fraud and conversion. Respondent ultimately signed and approved a journal entry of judgment which required him to pay Brooks $6,500, to be paid in installments of $1,000 per month. Respondent failed to pay any portion of the judgment except for $194 garnished from his bank account.

¶ 9 At a hearing before the Tribunal, the parties stipulated Respondent’s conduct constituted professional misconduct in violation of the ORPC Rules 1.15(a), 1.15(b), 1.15(c), 8.4(a) and 8.4(c), and Rules 1.3 and 1.4(b) of the RGDP.

¶ 10 Parsons is charged with commingling and conversion of funds by improperly taking money entrusted for a specific purpose and applying it toward a claimed attorney fee. Rule 1.15 requires attorneys who are entrusted with the property of clients and third parties to hold the property with the care required of a “professional fiduciary.” An attorney’s mishandling of funds belonging to a third party is treated no differently from the approach we take to commingling, conversion or misappropriation of funds belonging to a client. See State ex rel. Oklahoma Bar Ass’n v. Stutsman, 1999 OK 62, 990 P.2d 854. In each case, the attorney violates the basic professional duty of trust. Id.

¶ 11 Rule 1.15(a) prohibits an attorney from commingling a client’s or third person’s funds with the attorney’s funds. Upon receiving funds in which a client or third person has an interest, Rule 1.15(b) requires an attorney to promptly notify the interested party. This notification allows the party the opportunity for an accounting and, if necessary, the opportunity to dispute the respective interests before disbursement of the funds. Rule 1.15(e) requires an attorney to keep separate a client’s or third person’s funds in which the lawyer also has an interest until a proper accounting and severance of interests can be made or until any dispute over the quantum of interests in resolved.

¶ 12 We have defined three levels of culpability when evaluating the mishandling of funds: 1) commingling; 2) simple conversion; and 3) misappropriation, i.e., theft by conversion or otherwise. Commingling occurs when a client or third person’s monies are combined with the attorney’s personal funds. See State ex rel. Oklahoma Bar Ass’n v. Taylor, 2000 OK 35, 4 P.3d 1242. Complete separation of the money is required to insure proper accounting. See State ex rel. Oklahoma Bar Ass’n v. Cummings, 1993 OK 127, 863 P.2d 1164, State ex rel. Oklahoma Bar Ass’n v. Johnston, 1993 OK 91, 863 P.2d 1136. Simple conversion occurs when an attorney applies a client or third person’s money to a purpose other than that for which it was entrusted. Rule 1.4(b), RGDP.

¶ 13 The record clearly and convincing establishes (a) Respondent received two settlement checks from the insurance company payable to the Reeds, Brooks and himself, (b) Respondent was aware Brooks had an interest in the funds, (c) Respondent failed to notify Brooks that funds had been received or to promptly deliver the funds to Brooks, (d) Respondent endorsed the settlement checks “Brooks Chiropractic — by Stanley Parsons” without Brooks’ knowledge or consent, (e) Respondent distributed the money from his trust account paying the Reeds $3,800 and paying himself $1,800 before an accounting could be completed and any disputes with Brooks resolved, (f) Respondent failed to pay Brooks the amount it was owed, (g) for a period of a year Respondent never contacted Brooks and only addressed the situation when contacted by Brooks, and (h) Respondent failed to offer any explanation for his actions. Accordingly, the evidence before the tribunal establishes by the requisite clear and convincing evidence standard that Respondent commingled funds by failing to keep his money separate from that due Brooks. Respondent is also guilty of simple conversion by withdrawing money from the trust account and paying himself rather than satisfying Brooks’ claim.

¶ 14 The third, and most serious infraction, occurs when funds are misappropriated. This happens when an attorney purposefully deprives a client or third person of money by way of deceit and fraud. See State ex rel. Oklahoma Bar Ass’n v. Johnston, 1993 OK 91, 863 P.2d 1136. For an attorney to engage in conduct involving dishonesty and deceit is professional misconduct. Rule 8.4(c), ORPC. A finding the attorney intentionally committed such an act requires imposition of the harshest discipline — disbarment. Rule 1.4(c), RGDP.

¶ 15 The record before this Court is not clear as to whether Respondent and Brooks had entered into an agreement as to the manner in which they would divide any recovery in this case, and if so, how the proceeds would be divided. After Respondent negotiated the check, he paid himself an attorney fee of $1800, or one-third (1/3) of the recovery, an amount to which he may have been entitled for securing the settlement. Instead of paying the remaining $3800 to Brooks, he paid that amount to his clients. In explaining his actions in this regard, Respondent testified that his clients were “desperate to get some money out if it”. When Respondent’s clients asked him how Brooks’ glaim would be' paid, Respondent responded “I’ll take care of that”. Although Respondent failed to take care of the matter, we agree with the Tribunal that the record does not establish by the requisite clear and convincing standard that Respondent intended to misappropriate Brooks’ money through deceit and fraud.

¶ 16 Accordingly, the record before us provides clear and convincing evidence Respondent violated Rules 1.15(a), (b), and (c) and 8.4(a) and (c) of the ORPC, and Rule 1.4(b) of the RGDP. Such actions by Respondent were contrary to prescribed standards of conduct and are grounds for discipline under Rule 1.3, RGDP.

IV. Mitigation

¶ 17 There are several factors present in this bar matter that bear on the issue of mitigation. Respondent fully cooperated throughout the course of the investigation and prosecution of the matter. Respondent admitted his conduct did not comply with provisions of the ORPC and RGDP and accepts full responsibility for his actions. Lastly, Respondent has not been previously disciplined in his 24 years of practice. Mitigating circumstances may be considered in evaluating an attorney’s conduct and assessing the appropriate discipline. State ex rel. Oklahoma Bar Ass’n v. Taylor, 2000 OK 35, 4 P.3d 1242, 1255.

V. Discipline

¶ 18 This Court possesses original and exclusive jurisdiction in bar disciplinary proceedings. Rule 1.1, RGDP. The Tribunal’s findings, conclusions of law, or recommendations of discipline are not binding on this Court. State ex rel. Oklahoma Bar Ass’n v. Eakin, 1995 OK 106, 914 P.2d 644, 648. The ultimate responsibility to impose discipline in a case before this court is ours alone. Id.

¶ 19 In imposing discipline, our purpose is not to punish the involved attorney, but to inquire into his continued fitness to practice law with a view to safeguarding the public, the courts and the legal profession. See State ex rel. Oklahoma Bar Ass’n v. Mayes, 1999 OK 9, 977 P.2d 1073.

¶ 20 The majority of the Tribunal has recommended Respondent be suspended from the practice of law for one year and to pay all costs in this proceeding. The OBA and Respondent agree with this recommendation. This Court has imposed varying degrees of discipline on lawyers who are found guilty of commingling and simple conversion. See State ex rel. Oklahoma Bar Ass’n. v. Brown, 1998 OK 123, 990 P.2d 840 (attorney suspended for two years and one day for forging an endorsement on a settlement check and failing to satisfy a lien on the check); State ex rel. Oklahoma Bar Ass’n. v. Wilcox, 1997 OK 87, 942 P.2d 205 (attorney suspended for one year for commingling and mishandling client funds and the unauthorized endorsement of a doctor’s name to a settlement check); State ex rel. Oklahoma Bar Ass’n. v. Farrant, 1994 OK 13, 867 P.2d 1279 (attorney suspended for one year for applying client fundsj which were to be used for payment of expenses incurred in hiring of a private investigator, to claimed attorney fees); State ex rel. Oklahoma Bar Ass’n. v. Johnston, 1993 OK 91, 863 P.2d 1136 (attorney, who paid himself rather than satisfying all care givers, was suspended for four months for commingling and conversion of a client’s funds, making a false statement to the judge, failing to give competent representation, failing to act promptly and failing to communicate with his client); State ex rel. Oklahoma Bar Ass’n v. Cummings, 1993 OK 127, 863 P.2d 1164 (attorney suspended for one year for commingling of client funds and conversion of funds by impermissibly taking money entrusted for a specific purpose and applying it to a claimed attorney fee); State ex rel. Oklahoma Bar Ass’n v. Gasaway, 1991 OK 33, 810 P.2d 826 (attorney suspended for one year for commingling of client funds, using client monies for purposes other than those authorized and failure to make a full and fair disclosure to the Bar).

¶ 21 Respondent’s serious misconduct consisting of commingling, conversion and the unauthorized signature of Brooks compels us to impose a one (1) year suspension from the practice of law. In addition, Respondent is ordered to pay the costs of these proceedings in the amount of $254.11, in accordance with Rule 6.16 of the RGDP.

VI. Conclusion

¶ 22 For the reasons set out in this opinion, Respondent is suspended from the practice of law for one (1) year and is ordered to pay the costs of the investigation and disciplinary proceedings in the amount of $254.11 within ninety (90) days of the effective date of this opinion, pursuant to Rule 6.16 of the RGDP. Respondent’s suspension will begin on the effective date of this opinion.

RESPONDENT IS SUSPENDED FROM THE PRACTICE OF LAW FOR ONE (1) YEAR FROM THE EFFECTIVE DATE OF THIS PRONOUNCEMENT; AND COSTS IMPOSED.

¶ 23 HARGRAVE, C.J., HODGES, LAVENDER, SUMMERS, and WINCHESTER, JJ., concur.

¶ 24

OPALA, J.,

with whom WATT, V.C.J. and KAUGER, J., join dissenting.

I would suspend the respondent’s license for a longer period of time.

      . Brooks’ claim for medical services totaled approximately $9000. According to the stipulations, Respondent secured a settlement of Brooks’ claim for a lesser amount.


author: SUMMERS, J.

text:
    2002 OK 82
    Randy CAFFEY, Petitioner/Appellant, v. SOLORAY, TRAVELERS INS. CO., and the Workers’ Compensation Court, Respondent/Appellees.
    No. 96,081.
    Supreme Court of Oklahoma.
    Oct. 29, 2002.

      Herbert E. Elias, Jr., Elias & Crawford, Tulsa, for Appellant.
    Tenal S. Cooley, III, Looney, Nichols & Johnson. Oklahoma City, for Respondents.
   SUMMERS, J.

¶ 1 Claimant was injured on the job by a third-party tortfeasor. He settled for his injuries with the third-party (Walmart), and paid a portion of his settlement to his employer, who had been paying compensation benefits. The question here is whether a statute, 85 O.S.1991 § 44(a), relieves the employer of paying further comp benefits until the claimant can show a deficiency between the net amount he received in the settlement and the amount to which he is statutorily entitled on his compensation claim. The trial court and three-judge panel held the employer was so relieved, but the Court of Civil Appeals reversed and directed the employer to resume making compensation payments. We have granted certiorari review, and now sustain the original orders of the Workers’ Compensation Court.

¶ 2 The claimant, Randy Caffey, suffered severe accidental injuries in August, 1997, when a new tire came off the company car he was driving for his employer, Soloray. Mr. Caffey sought Workers Compensation benefits, and while his claim was pending, he filed negligence actions against Wal-Mart, which had installed the tire on the car. On June, 1, 2000, a settlement of those suits in the amount of $300,000.00 was reached. Under the terms of the settlement agreement, Solo-ray, and its insurer, Travelers, accepted $85,000.00 out of the proceeds in exchange for the release of their subrogation rights for Workers Compensation benefits in the amount of $128,718.00 which had been paid to Mr. Caffey up to that point.

¶ 3 The pertinent portion of the settlement agreement provides:

Mutual Release between the Caffeys, Solaray (sic) and Travelers. In consideration of $85,000 paid by the Caffreys to Solaray and Travelers Property Casualty Corporation, Solaray(sie) and Travelers hereby release Randy Caffey from any obligation to refund settlement proceeds as may have arisen by operation of 85 O.S. § 44. Solaray(sie) and Travelers agree and acknowledge the sums they are to receive shall constitute full and final settlement of any subrogation interest or right they may have now or in the future as a result of Randy Caffey’s workers’ compensation claim ... Further, the Caffeys hereby release Solaray(sic) Corporation from any obligation it may have by virtue of its employment relationship with Randy Caf-fey, including, but not limited to the allegations made in the [third-party action] and any [other] claims .... Provided, however, that nothing herein shall be deemed to release Randy Caffey’s claims asserted in the worker’s compensation claim ... Further, the Caffeys save and hold harmless Solaray (sic) Corporation and Travelers Property and Casualty Corporation from Farmer’s Insurance Company’s $10,000 lien on the settlement proceeds ...

¶ 4 Soloray and Travelers requested the trial court review the settlement agreement and enter a “Section 44 Order”, holding Mr. Caffey’s claim for additional Workers’ Compensation benefits in abeyance until he was able to establish that a deficiency in excess of $215,000.00 existed. That amount is the net sum the trial court determined Mr. Caffey received after paying the employer/insurer ($85,000) in satisfaction of its subrogation claim.

85 O.S.1991, § 44 provides in relevant part as follows:

(a) If a worker entitled to compensation under the Workers’ Compensation Act is injured or killed by the negligence or wrong of another not in the same employ, such injured worker shall, before any suit or claim under the Workers’ Compensation Act, elect whether to take compensation under the Workers’ Compensation Act, or to pursue his remedy against such other. Such election shall be evidenced in such manner as the Administrator may by rule or regulation prescribe. If he elects to take compensation under the Workers’ Compensation Act, the cause of action against such other shall be assigned to the insurance carrier liable for the payment of such compensation, and if he elects to ‘proceed against such other person or insurance carrier, as the case may be, the employer’s insurance carrier shall contribute only the deficiency, if any, between the amount of the recovery against such other person actually collected, and the compensation provided or estimated by the Workers’ Compensation Act for such case. The compromise of any such cause of action by the worker at any amount less than the compensation provided for by the Workers’ Compensation Act shall be made only with the written approval of the Court. Whenever recovery against such other person is effected without compromise settlement by the employee or his representatives, the employer or insurance company having paid compensation under the Workers’ Compensation Act shall be entitled to reimbursement as hereinafter set forth and shall pay from its share of said reimbursement a proportionate share of the expenses, including attorneys fees, incurred in effecting said recovery to be determined by the ratio that the amount of compensation paid by the employer bears to the amount of the recovery effected by the employee. After the expenses and attorneys fees have been paid, the balance of the recovery shall be apportioned between the employer or insurance company having paid the compensation and the employee or his representatives in the same ratio that the amount of compensation paid by the employer bears to the total amount recovered; provided, however, the balance of the recovery may be divided between the employer or insurance company having paid compensation and the employee or his representatives as they may agree. In the event that recovery is effected by compromise settlement, then in that event the expenses,'attorneys fees and the balance of the recovery may be divided between the employer or insurance company having paid compensation and the employee or his representatives as they may agree. Provided, that in the event they are unable to agree, then the same shall be apportioned by the district court having jurisdiction of the employee’s action against such other person, in such manner as is just and reasonable. (Emphasis added)

¶5 On October 27, 2000, the trial court entered its order holding that under the statute Soloray and Travelers had no obligation to pay additional compensation benefits until a deficiency in excess of $215, 000 was established. In its order the court noted that its inquiry into the matter under Section 44 was directed first by whether the third-party settlement was effected with or without a “compromise settlement,” meaning whether the amount received by the injured worker from the third-party was less than the compensation provided or estimated by the Act. See Prettyman v. Halliburton Co., 1992 OK 63, 841 P.2d 573, and eases cited therein. Since Mr. Caffey had settled his negligence action for an amount in excess of the Workers’ Compensation benefits he had received to that point, the trial court found the legal implications of the settlement in regard to employer’s subrogation rights and Mr. Caf-fey’s entitlement to future Workers’ Compensation benefits, had to be determined under the provisions of Section 44(a) pertaining to settlements without compromise. Pretty-man, supra.

¶ 6 That being so, the court found that under these facts the statute provides that the insurance carrier “shall contribute only the deficiency, if any, between the amount of the recovery against such other person actually collected, and the compensation provided or estimated by the Workers’ compensation Act for such case.”

¶ 7 The court found the provisions of the statute regarding apportionment of expenses necessary to effect a recovery and apportionment by the court or by statutory formula expenses and settlement proceeds were inapplicable since the parties had agreed how the settlement would be apportioned. Section 44(a) recognizes the parties may apportion the recovery by agreement: “provided, however, the balance of the recovery may be divided between the employer or insurance company having paid compensation and the employee or his representatives as they may agree.”

¶ 8 The trial court found the terms of the settlement agreement fully compromised So-loray and Traveler’s subrogation interest in the third-party action as well as Mr. Caffey’s right to have Soloray and Travelers share in expenses and costs of the third party action. In accepting those funds, they agreed to release claimant from “any obligation to refund settlement proceeds as may have arisen by operation of Sec. 44” and agreed that the $85,000.00 payment “shall constitute full and final settlement of any subrogation interest or right they may have now or in the future as a result of Randy Caffey’s workers’ compensation claim ... Provided, however that nothing herein shall be deemed to release [his] claims asserted in the workers’ compensation claim...”

¶ 9 The trial court found its inquiry into the circumstances and effect of claimant’s election to file suit against the negligent third party required recognition of the statute’s second purpose beyond protecting sub-rogation interests of employers and their carriers, which is to guard against an employee receiving a double recovery for his injury. The court concluded that when Mr. Caffey entered into the settlement agreement he elected his remedy for this injury to the extent of his recovery from the third party, and since the provisions of Section 44 prohibit an injured worker from recovering twice for the same injury, Soloray and Travelers had no obligation to pay further Workers’ Compensation benefits until such time as a deficiency is found to exist.

¶ 10 Claimant appealed to the three-judge panel which affirmed the trial court’s order, and claimant then sought appellate review. He argued the terms- of the agreement plainly provided that employer’s receipt of the $85,000 was a release of “all rights” employer had under Section 44, those being, he asserted, both the right to subrogation and the right not to pay additional benefits which would amount to a double recovery for claimant. He contended that the trial court’s application of Section 44 to this case was error and complained that the agreement did not expressly reserve the issue of a “deficiency,” and the court’s ruling was a wrongful expansion of the terms beyond their clear meaning which gave employer more than it was entitled to receive.

¶ 11 The Court of Civil Appeals agreed with claimant’s contention. Under its interpretation of the agreement, the court found Soloray had given up not only its right to subrogation, but also its right to receive what that Court characterized as any “additional sums for reimbursement.” Based on that premise, the court determined that Soloray had “released all other rights it had to the $300,000 settlement when it accepted the $85,000” and the Court concluded Section 44 was therefore inapplicable to the case and ruled a deficiency requirement could not be imposed on the compensation benefits in the future.

¶ 12 On certiorari, Soloray and Travelers point out that they were not seeking any reimbursem.ent of settlement funds beyond the $85,000. Neither were they seeking to be absolved of further responsibility for paying Workers’ Compensation benefits to Mr. Caffey. They wanted only to be relieved of responsibility for paying out further Workers’ Compensation benefits to Mr.Caffey until a deficiency was determined to exist above the $215,000 he received from the tortfeasor for his injury. Employer contends that the Court of Civil Appeals decision was in error. We agree.

¶ 13 In general, the Workers’ Compensation Act was enacted to protect workers in covered employment, and it assures them of receiving legislatively fixed compensation for accidental injuries suffered on the job without regard to negligence. The Act was not intended to abrogate, modify or in any way affect the right of an injured worker to pursue his common law right of action against a negligent' third party who caused his injury. Parkhill Truck Co. v. Wilson, 1942 OK 168, 125 P.2d 203. In a case such as this where injuries are caused by the negligence of a third party, Section 44 is designed to protect the subrogation rights of the employer and its carrier to the extent of the compensation benefits paid the injured worker, and also to guard against the employee receiving double recovery for his injury, one from the employer and one from the tortfeasor. The statute sets out the procedural steps for the employee to follow in bringing his third-party action in a manner which assures the employer or its carrier of notice of the worker’s intention so it may protect its right of subrogation. Prettyman v. Halliburton, supra;

1114 We have long recognized that these provisions of Section 44 exist to protect the employer and its carrier; they were not intended to work to the benefit of the employee or the tortfeasor. Parkhill Truck Co. v. Wilson, supra.

¶ 15 This issue of the employer’s right to be relieved from paying an injured employee’s Workers’ Compensation benefits until a deficiency exists between the settlement amount received from the third-party and the benefits which have been paid or to which employee is entitled, has been addressed by our Court of Civil Appeals twice, and in both decisions the courts reached a result opposite that in the instant case. Milliser v. Mercury Drilling Company, 1987 OK CIV APP 22, 738 P.2d 962, relied on by the trial court below, involved facts virtually identical to those before us today. There an injured worker recovered a greater amount through a judicial apportionment of settlement funds than he had received from his compensation benefits, and the employer, who had accepted funds in satisfaction of his subrogation interest, was successful in his effort to have the trial court terminate the compensation benefits employer was paying the worker.

¶ 16 The Court of Appeals found employer’s responsibility to pay further benefits should be “suspended or deferred awaiting the determination of whether there will be, in fact, a deficiency.” At 963. The Court determined that holding the employer responsible for only the deficiency was consistent with the provisions of Section 44 and decisions thereunder, as the injured worker was not precluded from establishing a deficiency in the future and it insures worker will receive his full entitlement under the Act while it also guards against double recovery.

11.17 Since it rendered the decision in the instant matter, the-Court of Civil Appeals, Division no. 3, decided Keeney v. TTC Illinois, Inc., 2002 OK CIVAPP 48, 46 P.3d 192, which has facts similar to those here. There the Court of Civil Appeals affirmed the Workers’ Compensation Court’s order which deferred employer’s payment of Worker’s Compensation benefits until claimant had exhausted her share of proceeds from the settlement reached with the third-party tortfea-sor. In its resolution of this issue, the court was persuaded by the reasoning of Milliser v. Mercury Drilling Co., supra, and its recognition that suspending the employer’s responsibility to provide benefits until a deficiency is reached, carries out the purposes of the “deficiency” provision of Section 44(a) by insuring employer contributes only the amount for which it is obligated. It further cited our Prettyman case, supra at 577, for the proposition that § 44 “is designed to protect the subrogation rights of the employer”, and to “guard against the employee receiving double recovery.”

¶ 18 Thus, in Milliser and in Keeney the appellate courts correctly determined § 44(a) to be controlling. Likewise, in our case Solo-ray and Travelers are entitled to withhold additional compensation benefits until a deficiency occurs between the net sum recovered by the claimant and the amounts due him under Workers’ Compensation law.

¶ 19 The orders of the trial judge and the three-judge panel of the Workers’ Compensation Court are supported by competent evidence and are not contrary to law. The opinion of the Court of Civil Appeals is vaeat-ed, and the order of the Workers’ Compensation Court is sustained.

¶ 20 HARGRAVE, C.J., WATT, V.C.J., HODGES, LAVENDER, OPALA, KAUGER, WINCHESTER, JJ. — Concur.

¶ 21 BOUDREAU, J. — Dissents.


author: HANSEN, Presiding J. ADAMS, J.,

text:
    2002 OK CIV APP 98
    Della K. GITGOOD, Plaintiff/Appellee, v. HOWARD PONTIAC-GMC, INC. d/b/a Bob Howard Auto Mall, Defendant/Appellant.
    No. 96,544.
    Court of Civil Appeals of Oklahoma, Division 3.
    May 10, 2002.
    As Corrected on Denial of Rehearing June 7, 2002.
    Certiorari Denied Oct. 1, 2002.
    Jeff Hirzel, Guthrie, for Plaintiff/Appellee.
    C. Craig Cole, C. Craig Cole & Associates, Oklahoma City, for Defendant/Appellant.
   HANSEN, Presiding J.

¶ 1 Defendant/Appellant, Howard Pontiac, brings this appeal from an interlocutory order of the district court of Logan County refusing to grant its motion to compel arbitration after the purchase of an automobile by Plaintiff/Appellee Della Gitgood.

¶ 2 On November 9, 2000, Ms. Gitgood purchased a used 2000 Chrysler Sebring from Howard Pontiac, signing a sales agreement reflecting a cost to Ms. Gitgood of $13,380.50, including an extended warranty. Ms. Gitgood tendered a cashier’s check to Howard Pontiac for payment in full. Several days after delivery of the car, a Howard Pontiac salesperson called her and advised her the car had been undersold and she owed an additional $6,000. On November 24, an employee of Howard Pontiac approached Ms. Gitgood at work and demanded the $6,000 or return of the vehicle. On December 4, during the night, Howard Pontiac took the car from Ms. Gitgood’s home.

¶ 3 On December 6, Ms. Gitgood filed a petition in district court seeking damages for trespass and conversion, asking for the price she paid for the car, or in the alternative for replevin of the car including costs and related expenses. She also sought replevin of Christmas gifts, her purse and other personal items she had left in the car.

¶ 4 Howard Pontiac filed its objection to the notice of replevin and order of delivery out of time. At no time did anyone from Howard Pontiac suggest the matter be referred to arbitration prior to the instigation of this lawsuit.

¶ 5 On December 20, Howard Pontiac filed a motion to compel arbitration and stay the proceedings. At the hearing on Ms. Gitgood’s prejudgment replevin, the trial court found the car was taken without authority and ordered its return to Ms. Git-good. The trial court stated it did not perceive the action as an action on the contract. “If it were and if the arbitration provision is what all parties should resort to, then Bob Howard should have resorted to arbitration, rather than taking possession of the vehicle.” Ms. Gitgood posted bond. Howard Pontiac posted a redelivery bond and continues to maintain possession of the vehicle.

¶ 6 Pursuant to a hearing on April 23, 2001, regarding Howard Pontiac’s motion to compel arbitration, the trial court issued its order overruling that motion on June 11, 2001. On that same date, it also issued specific findings of fact and conclusions of law reflecting its decision of December 15, 2000, ordering prejudgment delivery of the car to Ms. Gitgood. It is from this order Howard Pontiac takes its appeal.

¶7 The trial court’s conclusions of law included, inter alia, the following: ■

The purchase agreement entered into between Plaintiff and Defendant on November 9,2000, is unambiguous.
The purchase agreement of November 9,2000, was fully and completely performed on November 13,2000, by payment in full by Plaintiff to Defendant of the purchase price of the automobile which was the subject of the purchase agreement and the delivery of the automobile to Plaintiff. Plaintiff was the owner of the automobile on the night of December 4, 2000, when the automobile was taken from her possession by Defendant.
This action does not involve the completely performed purchase agreement of November 9, 2000, and the arbitration provisions do not apply in this case.
That according to the probable merits of Plaintiffs petition Plaintiff is entitled to an order for prejudgment delivery of the automobile to her.
That the value of the automobile is $11,-7000.00.

¶ 8 The purchase agreement contained the following clause:

Any controversy, claim or dispute between the Purchaser and the Dealer arising out of, or related to this sale and any financing contract or agreement executed by the Purchaser in conjunction with the sale of the vehicle described herein, or any alleged breach thereof, shall be submitted to binding arbitration with the American Arbitration Association pursuant to the Federal Arbitration Act, title 9 U.S.C. § 1 et seq.

¶ 9 On appeal, Howard Pontiac first claims this clause is broad enough to cover the dispute even though the plaintiffs allegations sound in tort rather than on the contract. It also argues it took the car before Ms. Gitgood commenced the court action; thus, it had not waived its right to seek arbitration.

¶ 10 Ms. Gitgood points out the contract was fully executed. All documentation was signed and the contract price paid. Ms. Git-good drove the car home. At that point there was no contract to interpret. There was nothing remaining in the contract to arbitrate. The alleged conversion was not an allegation of breach of that contract.

¶ 11 Long v. DeGeer, 1987 OK 104, 753 P.2d 1327 does hold that language similar to that in the purchase agreement is broad enough to embrace disputes founded in tort as well as contract, as long as the disputes have their roots in the relationship created by the contract. However, in Long a contractual relationship did exist at the time arbitration was sought. Here, the contractual relationship between Howard Pontiac and Ms. Gitgood no longer was present when Howard Pontiac sought arbitration. Performance under the contract had been completed. Ms. Gitgood’s action was strictly a tort action unrelated to the agreement.

¶ 12 Howard Pontiac calls our attention to the six factors Oklahoma courts have set out as evidencing a waiver of the right to arbitrate. Booker v. Sumner 2001 OK CIV APP 22,19 P.3d 904; Towe Hester & Erwin, Inc. v. Kansas City Fire and Marine Ins. Co. 1997 OK CIV APP 58, 947 P.2d 594; Northland Insurance Company v. Kellogg, 1995 OK CIV APP 84, 897 P.2d 1161. It argues these factors are not met in this case. Although none of the cases suggest all of these listed factors need be satisfied to support a finding of waiver, we do not need to reach the problem of waiver. All the above cases involved an existing contract, not a completed one.

¶ 13 Howard Pontiac has produced nothing to support its argument the agreement was intended to cover post contract conversion of the car after Ms. Gitgood had paid for it and driven it home. It is unclear what Howard Pontiac wishes to arbitrate. The contract is fully performed. Parties are not obligated to arbitrate disputes arising after a contract has expired. Falcon Petroleum v. Panhandle Eastern Pipe Line Company, 1990 OK CIV APP 9, 787 P.2d 1297. There is nothing left to arbitrate. The trial court did not err in overruling Howard Pontiac’s motion to compel arbitration.

¶ 14 AFFIRMED

MITCHELL, J., concurs.

ADAMS, J.,

concurs specially.

¶ 15 I concur with the majority opinion, but write separately to identify an essential fact which the majority opinion does not discuss. As its only basis for its claim to the car in the face of the fully executed contract, Howard Pontiac contended that the agreement was a result of a mistake of fact, entitling it to rescind the transaction. This is no dispute about the terms of the contract or its performance but about whether there was any meeting of the minds between these parties. If there was a mistake concerning price so that there was no contract, there can be no arbitration agreement as well. I do not regard this opinion as allowing a trial court to disregard an arbitration agreement on the basis that the contract had been fully performed where part of the dispute relates to whether the contract had been performed according to its terms.

      . 15 O.S.1991 § 817(A)(1), (B) and Rule 1.60(i), Rules of the Supreme Court, 12 O.S. ch. 15, App.

      .Howard Pontiac filed an application to assume original jurisdiction in the Oklahoma Supreme Court in case # 96237 seeking a writ to force the trial judge to order arbitration. The Supreme Court denied the writ. Howard Pontiac also attempted to remove the matter to federal court, but that court remanded the case back to Logan County.

      . Other items that were in the car, including two credit cards and her driver’s license and $700.00 in cash, have never been returned to Ms. Git-good.

      . Ms. Gitgood suggests that if she thought she paid too much for the car, and brought it back to the dealer wanting money back, it is doubtful Howard Pontiac would seek arbitration.