author: Judge MARQUEZ.

text:
    True KIRK, The True Kirk Family Trust, and Marjorie Kirk Family Trust, Plaintiffs-Appellants, v. Stephen KITCHENS and Christine Kitchens, Defendants, Appellees.
    No. 01CA0387.
    Colorado Court of Appeals, Div. IV.
    April 11, 2002.
    Rehearing Denied May 30, 2002.

      MceDaniel, Baty, Miller & Robbins, LLC, Michael W. Baty, Durango, Colorado, for Plaintiffs-Appellants.
    David J. Turner, Durango, Colorado, for Defendants-Appellees.
   Opinion by

Judge MARQUEZ.

In this action seeking declaratory and in-junctive relief, plaintiffs, True Kirk and the True Kirk and Marjorie Kirk Family Trusts, appeal from trial court orders denying their motions for preliminary injunction and to reinstate a temporary restraining order. Plaintiffs contend that the trial court erred in allowing defendants, Stephen Kitchens and Christine Kitchens, to include as "amounts due" in their public trustee foreclosure bid certain interest defendants would have received if the promissory note had been paid off according to its terms. Plaintiffs also contend that the court erred in finding that such amounts were not usurious. We reverse and remand for further proceedings.

Defendants sold to third parties (borrowers) their business, equipment, and real estate comprising an automotive repair garage. Borrowers executed a promissory note and a second deed of trust in the amount of $152,786.89, with interest at 9.5% per annum.

The promissory note, in pertinent part, provided for late charges and also restricted prepayments: .

Borrower shall pay to the Note Holder a late charge of one percent (1.0%) of any payment not received by Note Holder within ten (10) days of the due date thereof, said late charges to be assessed for each day such payment remains unpaid in full beyond ten days.... Note Holder shall not be obligated to accept any prepayment of the indebtedness evidenced by this Note in whole or in part at any time prior to October 15, 2004. With the exception of said prepayment restrictions, Borrower reserves the right to prepay this Note, in whole or in part, at any time and from time to time, without penalty or fee. (emphasis in original)

The note further provided for acceleration, recovery of expenses of collection, and other remedies in the event of default:

[The Note Holder may declare the unpaid principal amount of this Note and any and all interest accrued thereon to be immediately due and payable without notice, at the option of said Note Holder and the Borrower shall pay all costs and expenses of collection of this Note, including without limitation all reasonable trial and appellate attorneys' fees, costs and expenses, paid or incurred by the Note Holder, whether paid or incurred in connection with collection by suit or otherwise....
The indebtedness evidenced by this Note is secured by a Security Agreement and Deed of Trust ... and until released or satisfied said Security Agreement and Deed of Trust contain additional rights of the Note Holder. Such rights may cause Acceleration of the indebtedness evidenced by the Note.

The deed of trust similarly provided for late fees, limitations regarding prepayment, and acceleration:

Borrower is to pay to Lender a late charge of 1.0% of any payment not received by Note Holder within ten (10) days of the due date thereof, said late charge to be assessed for each day such payment remains unpaid in full beyond said ten days ... and Borrower has the right to prepay the principal amount outstanding under said Note in whole or in part at any time without penalty except Note Holder shall not be obligated to accept any prepayment of the indebtedness evidenced by the Note secured by this Deed of Trust in whole or in part at any time prior to October 15, 2004. -
Acceleration; Foreclosure; dies Other Reme-
[UJpon Borrower's breach of any covenant or agreement of Borrower ... at Lender's option, all of the sums secured by this Deed of Trust shall be immediately due and payable (Acceleration).

Borrowers stopped making payments on the note in April 2000. 'In July 2000, defendants initiated a public trustee foreclosure on the real estate. On September 18, 2000, the property was sold by the public trustee to defendants for $161,128.80. Defendants' bid stated, "The following is an itemization of all amounts due the owner of the evidence of debt secured by the instrument being foreclosed." Included in the bid were principal, accrued interest, late charges, expenses, at-tormney fees, payments on the first deed of trust, and the amount of $28,899.11, which was described as a "prepayment penalty" and apparently represented the sum of all interest payments defendants would have received from September 18, 2000, to October 15, 2004, if the promissory note had been paid off according to its terms.

During the redemption period following the foreclosure, the borrowers executed a quitclaim deed conveying their interest in the property to plaintiffs. Five days before the redemption period expired, plaintiffs brought this action for declaratory and injunctive relief to challenge the amount required for redemption, which amount was based on defendants' bid. Plaintiffs claimed that the redemption price was increased to an amount that precluded them from making a profit.

Plaintiffs were granted a temporary restraining order extending the redemption period and restraining the public trustee from issuing a public trustee's deed. However, their motion for preliminary injunction and their motion to reinstate the temporary restraining order were denied. In so ruling, the trial court held that defendants should not be prevented from realizing the benefit of their contract. It is from these orders that plaintiffs appeal.

I. Standard of Review

As a preliminary matter, we note that the parties' briefs address only the merits of the underlying dispute and do not discuss the prerequisites for preliminary injunctive relief, However, because the trial court denied plaintiffs' request for preliminary injunction after concluding they had not demonstrated a reasonable likelihood of success on the merits, we assume that the parties' arguments on appeal focus on the propriety of this determination. Nevertheless, we address only the issues raised here.

Before granting a preliminary injunction, a trial court must find, among other factors, that the moving party has demonstrated a reasonable probability of success on the merits. CR.C.P. Rathke v. MacFarlane, 648 P.2d 648 (Colo.1982).

The grant or denial of a preliminary injunction is a decision that lies within the sound discretion of the trial court. However, where the issue on appeal concerns only legal questions, the trial court's judgment is subject to de novo review. Evans v. Romer, 854 P.2d 1270, 1274 (Colo.1998).

IIL. Future Interest Payments

Plaintiffs contend that the trial court erred in allowing defendants to include in their foreclosure bid as "amounts due" future interest amounts, which they characterize as prepayment penalties not authorized by the promissory note and deed of trust. In plaintiffs' view, upon defendants' acceleration of the entire loan obligation, defendants had waived or were no longer entitled to recover the contested amounts, which would constitute an impermissible prepayment penalty. We agree.

A.

A bid submitted to the public trustee shall set forth, inter alia, an itemization of "all amounts due under the evidence of debt and deed of trust ... and all costs and expenses allowable by the evidence of debt, deed of trust, mortgage, or other lien being foreclosed." Section 88-38-106(2), C.R.8.2001.

To resolve the issue presented here, we must interpret the note and deed of trust. The primary goal of contract interpretation is to determine and give effect to the intention of the parties. The intent of the parties to a contract is to be determined primarily from the language of the instrument itself. Written contracts that are complete and free from ambiguity will be found to express the intention of the parties and will be enforced according to the plain language. USI Properties East, Inc. v. Simpson, 938 P.2d 168 (Colo.1997).

Questions of contract interpretation are questions of law for the court. Radiology Prof'l Corp. v. Trinidad Area Health Ass'n, 195 Colo. 258, 577 P.2d 748 (1978); Holland v. Board of County Comm'rs, 883 P.2d 500 (Colo.App.1994).

If questions raised on appeal can be determined by construction of written documents complete in their terms, this court is not bound by the findings of the trial court. We are bound, however, by the unambiguous language of the documents as written, because they express the intentions of the parties to the contract. Klingensmith v. Serafini, 663 P.2d 1058 (Colo.App.1983).

B.

We disagree with plaintiffs' contention that defendants did not properly accelerate the note because they failed to give borrowers a notice of default accelerating all principal sums outstanding and demanding payment in full.

Rather, we agree with the trial court that no formal notice of acceleration was required under the terms of the note, and commencement of a foreclosure action was sufficient to accelerate the obligation secured by the deed of trust. See Hendron v. Bolander, 101 Colo. 414, 418-19, 74 P.2d 706, 708 (1987)(in the absence of a provision in a promissory note requiring notice of acceleration be given to the debtor, the commencement of foreclosure proceedings is sufficient).

Plaintiffs reason from In re Church, 833 P.2d 813 (Colo.App.1992), that in the absence of the exercise of an option accelerating the terms of the note, there could be foreclosure only as to the delinquent payments. Howeyver, the division in Church addressed only whether the statute of limitations had run on each installment from the day it became due if the option to accelerate was not exercised. Further, it held that a foreclosure action was not precluded and did not hold that only delinquent payments could be foreclosed upon.

C.

Nevertheless, we agree with plaintiffs that upon acceleration of the note, defendants had no right to collect future interest or to include the amounts of such interest in their foreclosure bid as "amounts due." Plaintiffs rely on cases from other jurisdictions generally holding that where a note is accelerated at the option of the holder, a prepayment penalty is not permitted. See Tan v. California Fed. Sav. & Loan Ass'n, 140 Cal.App.3d 800, 189 Cal.Rptr. 775 (1988); Slevin Container Corp. v. Provident Fed. Sav. & Loan Ass'n, 98 Ill.App.3d 646, 54 Ill.Dec. 189, 424 N.E.2d 939 (1981); McCarthy v. Louisiana Timeshare Venture, 426 So.2d 1342 (La.Ct.App.1982); Kilpatrick v. Germania Life Ins. Co., 183 N.Y. 163, 75 N.E. 1124 (1905); American Fed. Sav. & Loan Ass'n v. Mid-America Serv. Corp., 329 N.W.2d 124 (S.D.1983).

The interest defendants elaimed here was not described in the note or deed of trust as a prepayment penalty. While the promissory note provides that "[blorrower reserves the right to prepay" the note at any time "without penalty or fee," this provision is preceded by the words, "[wlith the exception of said prepayment restrictions." This exception refers to the preceding sentence, which states that defendants were not obligated to accept any prepayment at any time prior to October 15, 2004. The effect of this prepayment restriction is that defendants could elect either to allow borrowers' prepayment without penalty or to refuse prepay ment and continue to demand monthly payments of principal and interest to October 15, 2004. See Carpenter v. Winn, 39 Colo.App. 238, 566 P.2d 370 (1977).

Under Carpenter, a note holder may refuse an early tender of the principal balance remaining due, but when the note holder waives the right to refuse early payment, any prepayment penalty or premium must be specifically provided in the contract. See Burks v. Verschuur, 35 Colo.App. 121, 532 P.2d 757 (1974)(if a mortgagee is to seek a premium or penalty upon prepayment, the mortgagee must specifically provide for it in the mortgage instrument).

When borrowers here defaulted, defendants accelerated the note obligation and exercised their right to foreclose. They also sought to include in their foreclosure bid as a "prepayment penalty" an amount representing future interest to October 15, 2004. To determine defendants' right to include such payments, we must first determine whether they constitute a prepayment penalty. We conclude that they do.

Generally, a prepayment penalty is a charge assessed against a borrower who elects to pay off a loan before it is due. Black's Low Dictionary 1201 (7th ed.1999); see Aronoff v. Western Fed. Sav. & Loan Ass'n, 28 Colo.App. 151, 470 P.2d 889 (1970).

Prepayment penalties serve a valid purpose in compensating at least in part for the anticipated interest a lender will not receive if a loan is paid off prematurely. Among other things, a prepayment penalty insures the lender against loss of its bargain if interest rates decline. In re LHD Realty Corp., 726 F.2d 327 (7th Cir.1984).

Prepayment penalties usually consist of the payment of additional interest or a flat predesignated amount. See Aronoff v. Western Fed. Sav. & Loan Ass'n, supro (180 days' interest on the amount prepaid over 20% of the original principal amount of the loan); Burks v. Verschuur, supra (additional $5,000); Tan v. California Fed. Sav. & Loan Ass'n, supra (6 months' interest on the amount prepaid exceeding 20% of the original principal amount of the note); Slevin Container Corp. v. Provident Fed. Sav. & Loan Ass'n, supra (not more than 6 months' advance interest on that part of the aggregate amount of all prepayments on the note in one year which exceed 20% of the original principal amount of the loan); Kilpatrick v. Germania Life Ins. Co., supro ($1,000 in addition to the principal sum and interest).

While not denominated as a prepayment penalty in the note and deed of trust, the future interest payments at issue here, which were included in the foreclosure bid as amounts allegedly owed to defendants, essentially constituted a prepayment penalty. Defendants conceded as much by designating the claimed amount in the foreclosure bid as a "prepayment penalty." We also note that the trial court referred to the interest payments as a "prepayment penalty." More importantly, the amount included in the bid was for future interest payments on the unpaid principal balance. See Aronoff v. Western Fed. Sav. & Loan Ass'n, supra; see also Ferreira v. Yared, 32 Mass.App.Ct. 328, 588 N.E.2d 1370 (1992)(disallowing penalty interest representing the balance of interest to the three-year mark).

D.

Here, the trial court observed that the purpose of the prepayment restriction was not to encourage prompt payment, but to encourage payments at least through October 2004, and reasoned that defendants should not be prevented from realizing the benefit of their contract. In its analysis, the trial court relied on Carpenter v. Winn, supra.

However, we do not read Carpenter so broadly. After making a certain number of payments under an installment land contract, the plaintiffs in Carpenter tendered to the seller the total remaining unpaid principal and demanded a warranty deed. The seller refused and demanded that the plaintiffs pay the total principal plus interest that would have been paid over the term of the contract. The division in Carpenter held that, because the express terms of the contract called for fixed periodic payments, the seller was entitled to demand the consideration she did as an inducement to waive her rights under the contract to receive payments on a fixed periodic schedule.

Here, there is a right to prepay, but it is subject to the exception that defendants were not obligated to accept any prepayment prior to October 15, 2004. Absent an acceleration, if borrowers had attempted to tender payments of principal before that date, defendants, like the seller in Carpenter, could have refused the tender under the terms of the note. But such a tender did not occur here, and Carpenter did not address the effect of acceleration on the lender's right to collect a prepayment penalty.

While courts in Colorado have not ruled on this issue, we are persuaded by those cases from other jurisdictions, cited above, holding that a prepayment penalty is not permitted where a note is accelerated at the option of the holder. The rationale of these cases is that no lability for a prepayment penalty arises from a default; rather, it arises only upon a prepayment as specified in a prepayment penalty provision. Once the note holder accelerated the due date of the loan and demanded full payment, the entire unpaid balance became due under the terms of the note itself, and there was no "prepayment" to which a prepayment penalty would attach. Alternatively, the choice to accelerate constituted a waiver of the right to a prepayment penalty. See In re LHD Realty Corp., supra; Tan v. California Fed. Sav. & Loan Ass'n, supra; McCarthy v. Louisiana Timeshare Venture, supra; American Fed. Sav. & Loan Ass'n v. Mid-America Serv. Corp., supra; see generally Vicki A. Huffman, Annotation, Construction and Effect as to Interest Due of Real Estate Mortgage Clause Authorizing Mortgagor to Prepay Principal Debt, 86 A.L.R.3d 599 (1978).

Although some of the cited cases concern the exercise of a "due on sale" clause, see Slevin Container Corp. v. Provident Fed. Sav. & Loan Ass'n, supra; American Fed. Sav. & Loan Ass'n v. Mid-America Serv. Corp., supra, the same principle prohibiting recovery of a prepayment penalty upon acceleration of a note has been applied in foreclosure cases. See In re Pinebrook, Ltd., 85 BR. 160 (Bankr.M.D.Fla.1988); 3C Associates v. IC & LP Realty Co., 524 NY.S.2d 701, 137 A.D.2d 439 (1988); Rodgers v. Rainier Nat'l Bank, 111 Wash.2d 232, 757 P.2d 976 (1988).

In two cases with similar factual ciream-stances, the courts have declined to allow a party to recover future interest payments upon. acceleration of a note. In Rodgers v. Rainier National Bank, supra, debtors on a promissory note defaulted, and the lender accelerated the maturity date. As a requirement for the debtors to avoid foreclosure sale, the lender demanded unacerued interest for a period for which the note had prohibited prepayment of principal. The note provided that it could not be prepaid in whole or in part during the first four loan years. Thereafter, the loan could be prepaid in full and only by paying a prepayment fee. Upon default, the lender sent the debtors notice of nonjudicial foreclosure and sale. Before sale, the debtors tendered the unpaid principal plus accrued interest and costs. The trustee rejected the tender and demanded the unac-crued interest through the first four years, as well as the prepayment fee. The debtors paid the full amount demanded and then brought suit. The trial court granted a partial summary judgment in the debtors' favor.

In affirming, the court in Rodgers commented that the note prohibited prepayment during the first four loan years, but did not specifically provide for payment of the interest for the entire four years if there were a default and acceleration during that period. It further commented that the note provided an option for the lender, in the event of default, to declare due and payable the entire principal sum and accrued interest. The lender unilaterally chose to exercise that option and, in so doing, negated the prohibition against prepayment of principal and obliterated the fifth loan year prepayment fee.

Similarly, in Ferreira v. Yared, supra, the borrowers defaulted, and the lenders initiated foreclosure proceedings. To avoid foreclosure, the borrowers paid off the mortgage note in full. However, included in the amount required by the lenders for redemption was a sum in penalty interest, representing the balance of interest to the three-year mark. That sum, along with other fees and costs, was paid under protest. The court held that by accelerating the note, the lenders lost the right to collect a prepayment penalty. According to the court, a prepayment premium does not attach when a loan is accelerated because the act of acceleration advances the maturity of the debt, and the debt becomes immediately due and payable. Thus, unless the note otherwise provides, the holder of a note cannot simultaneously accelerate the note and collect a prepayment penalty. The lenders, by accelerating the promissory note, were entitled to no prepayment penalty interest.

Here, our task is to construe the bargain as set forth in the note and deed of trust. These documents do not provide for the collection of future interest in the event of foreclosure. See Rodgers v. Rainier Nat'l Bank, supra. While courts in other jurisdictions have enforced notes that provide for the right to prepayment premiums, even in the event of acceleration following default, see United States v. Harris, 246 F.3d 566 (6th Cir.2001), no such provision was included here, and we express no opinion on the enforceability of such a provision.

Finally, there is no evidence in the record that borrowers intentionally defaulted in order to avoid paying additional interest. See Florida Nat'l Bank v. Bankatlantic, 589 So.2d 255 (F1a.1991)(recognizing an exception to the rule limiting a lender's right to receive a prepayment penalty in the event of intentional default to avoid prepayment penalty). See also In re LHD Realty Corp., supra, 726 F.2d at 381 ("Should such intentional defaults become a problem ... we believe courts could deal with the difficulty by denying the acceleration exception in appropriate cases.").

Having chosen to accelerate, defendants lost their right to the claimed future interest payments. In view of our conclusion, we need not address plaintiffs' remaining contentions.

The orders are reversed, and the case is remanded for further proceedings on plaintiffs' motions consistent with the views expressed in this opinion.

Judge TAUBMAN and Judge VOGT concur. .


source: Caselaw Access Project

author: Judge WEBB. Judge JONES

license: Public Domain

text:
    Ronald E. LEEF, Plaintiff-Appellant, v. BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation, Defendant-Appellee.
    No. 01C0A0535.
    Colorado Court of Appeals, Div. II.
    April 25, 2002.
    Rossi, Cox, Kiker & Inderwish, P.C., John J. Rossi, Janet Stansberry Drake, Aurora, Colorado, for Plaintiff-Appellant.

      Hall & Evans, LLC., Alan Epstein, Walter J. Downing, Denver, Colorado, for Defendant-Appellee.
   Opinion by

Judge WEBB.

Plaintiff, Ronald E. Leef, brought this action as a result of an attack on him by a trespasser while plaintiff worked for defendant, Burlington Northern and Santa Fe Railway Company (BNSF), as a train conductor. He appeals the trial court's entry of summary judgment in favor of BNSF on his claim under the Federal Employers' Liability Act (FELA), 45 U.S.C. § 51, et seq., that BNSF negligently failed to provide him with a safe workplace. The trial court concluded that the attack was not reasonably foreseeable. We affirm.

The circumstances of the attack are undisputed. Early one morning, plaintiff was working on a coal train that had stopped near the Salt Creek Junction, approximately three miles from BNSE's Pueblo depot. Plaintiff and a coworker heard a whistle from one of the two attached locomotives and suspected a trespasser was on the train. They locked the doors and turned off the lights in the cab in the lead locomotive.

The trespasser moved forward to the lead locomotive and unsuccessfully attempted to enter the cab through the rear door. The trespasser then went around to the nose of the locomotive and tried to enter the cab by breaking a small window on the vestibule door. Plaintiff fought off the trespasser by striking his arm whenever he reached through the broken window. Eventually the trespasser withdrew and left the train.

During the attack plaintiff and the coworker called for help on a radio. Other BNSF employees heard the call and relayed the information to authorities. Police officers arrived at the scene within minutes after the trespasser had fled.

The trespasser was arrested shortly thereafter. His statement to police indicates that he was delusional. Exactly when, where, and why he boarded the train are unknown.

Plaintiff contends that BNSF violated FELA by negligently failing to employ sufficient security personnel to prevent unauthorized persons from boarding its trains and attacking train crews, in light of its knowledge of some violence in the vicinity of the attack. He further contends that BNSF failed to institute, oversee, and carry out reasonably safe methods and procedures for responding to unauthorized persons on trains. We are not persuaded that a genuine issue of material fact exists concerning the reasonable foreseeability of an assault on a train crew by a trespasser at this location.

In his notice of appeal and in the trial court, plaintiff also claimed that BNSF failed to provide keys to lock the other locomotives and did not properly glaze the window on the vestibule door. However, plaintiff does not address these issues in his appellate briefs. Therefore, we consider only whether BNSF owed plaintiff a duty to protect him from the trespasser boarding the train and attacking him.

We review a trial court's decision to grant summary judgment de novo. Summary judgment is appropriate only if the pleadings and supporting documents demonstrate no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. The moving party has the burden to establish that no genuine issue of material fact exists; any doubt should be resolved against the moving party. See Aspen Wilderness Workshop, Inc. v. Colorado Water Conservation Bd., 901 P.2d 1251 (Colo.1995).

To recover under FELA for personal injuries, a plaintiff must prove that: (1) the defendant is a common carrier by railroad engaged in interstate commerce; (2) the plaintiff was employed by the defendant with duties furthering such commerce; (8) the injuries were sustained by the. plaintiff while employed by the defendant; and (4) the plaintiff's injuries were the result of the defendant's negligence. Betoney v. Union Pacific R.R., 701 P.2d 62 (Colo.App.1984). State courts apply federal interpretations of FELA in determining the substantive rights of the parties Johnson v. National R.R. Passenger Corp., 989 P.2d 245 (Colo.App.1999).

A plaintiffs prima facie case under FELA must establish each element of a common law negligence action, including reasonable foreseeability of harm. Davis v. Burlington Northern, Inc., 541 F.2d 182 (8th Cir.1976). To be liable, a railroad need not have foreseen the precise form of injury that occurred, as long as a reasonable person should have foreseen that an injury might occur from cireumstances within the railroad's knowledge. Green v. River Terminal Ry., 763 F.2d 805 (6th Cir.1985).

Without foreseeability, however, a railroad's failure to have addressed a cireum-stance causing an injury cannot be negligent. Tennant v. Peoria & Pekin Union Ry., 321 U.S. 29, 33, 64 S.Ct. 409, 411, 88 L.Ed. 520, 524 (1944)(injury to employee during train move reasonably foreseeable because departure from rule requiring bell to be rung "when an engine is about to move" was "clearly dangerous to life and limb").

In determining whether an FELA case should go to the jury, the Supreme Court has explained that "the test of a jury case is simply whether the proofs justify with reason the conclusion that employer negligence played any part, even the slightest, in producing the injury." Rogers v. Missouri Pacific R.R., 352 U.S. 500, 506, 77 S.Ct. 443, 448, 1 L.Ed.2d 493, 499 (1957). Thus, summary judgment would be appropriate only where no material facts are disputed and "fair-minded jurors cannot honestly differ whether fault of the employer played any part in the employee's injury." Rogers v. Missouri Pacific R.R., supra, 352 U.S. at 510, 77 S.Ct. at 451, 1 LEd.2d at 501-02.

Several courts have found no FELA lHability for assaults against railroad employees based on the nature and magnitude of risk arising from the cireumstances within the railroad's knowledge that caused injury. For example, one court entered summary judgment where operation of an all-terrain vehicle trespassing on railroad property injured an employee. Although the railroad had received prior reports of trespass and vandalism at that particular site, no injuries had been reported. The court concluded that "[plrior incidents of sufficient seriousness to put a defendant on notice of a risk are required before the railroad could be liable for negligence." Thomas v. CONRAIL, 971 F.Supp. 620, 622 (D.Mass.1997). See also Green v. River Terminal Ry., supra (directed verdict proper where railroad was not on notice of violent propensities of employee who assaulted coworker during labor dispute); cf. Herold v. Burlington Northern, Inc., 342 F.Supp. 862 (D.Minn.1972)(railroad not liable for unforeseeable assault by an employee's spouse on another employee over an alleged love affair).

Other courts have cireumseribed liability for assault claims under FELA based on proximity between the location of the injury-causing circumstances known to a railroad and the situs where the injury to an employee occurs. One court "limited evidence of prior incidents to those occurring at the exact locus of the incident giving rise to the litigation." Hartel v. Long Island R.R., 476 F.2d 462, 464 (2d Cir.1973). See also Burns v. Penn Central Co., 519 F.2d 512 (2d Cir.1975)(railroad could have been negligent because it knew of at least four prior incidents of stones thrown at trains within three blocks of where employee was shot).

Cases recognizing FELA liability for assaults are distinguishable from the present action. For example, the Supreme Court has held that summary judgment was inappropriate where the railroad "had reason to know" of the danger to a young female who worked at night, in a windowless building in an isolated part of the railyards "frequented by dangerous characters," and who had to open a door to admit railroad employees who were picking up messages. Lillie v. Thompson, 332 U.S. 459, 460, 68 S.Ct. 140, 141, 92 L.Ed. 73, 74 (1947); see Tatham v. Wabash R.R., 412 Ill. 568, 107 N.E.2d 735 (1952)(railroad hired man known to be violent, who injured co-employee).

Plaintiff's reliance on Gallick v. Baltimore & Ohio R.R., 372 U.S. 108, 83 S.Ct. 659, 9 L.Ed.2d 618 (1963), is misplaced. There, an employee injured by an insect bite showed that, to the railroad's knowledge, "At the particular stretch of roadbed where {the employee] was working on that afternoon, there had been for many years a pool of stagnant water, in and about which were dead and decayed rats and pigeons.... Insects had been seen on, over, and about this stagnant pool...." Gallick, supra, 372 U.S. at 109, 83 S.Ct. at 661, 9 L.Ed.2d at 621. Given the risk posed by the pool and its proximity to the location where the employee was working when bitten, the Supreme Court held that the state court of appeals had erred in setting aside the jury's verdict for lack of evidence that the insect had come from this pool, when evidence showed that the pool attracted insects.

Plaintiff argues that a jury should decide foreseeability, pointing to encounters between an armed BNSF policeman and transients on BNSF property in the Pueblo vicinity, newspaper articles about violence involving transients around Pueblo, and a book about transients who have loosely organized into violent railroad gangs distributed by BNSF several years before the attack. We find this evidence insufficient to create a material issue of disputed fact. In our view, and as reflected in the trial court's decision, the undisputed facts are consistent with both lines of cases holding assaults not to be reasonably foreseeable.

First, the attack on plaintiff occurred about three miles from BNSE's Pueblo depot, where some incidents of violence had occurred among transients, and one and one-half to two miles from the Pueblo Junction, where the BNSF policeman most frequently encountered transients. Plaintiff produced no evidence of either violent acts among transients or transient confrontations with BNSF personnel at Salt Creek Junction. In our view, only events at or very near the same location as plaintiff's injury would cereate a factual dispute about foreseeability. See Hartel v. Long Island R.R., supra.

Second, plaintiff presented no evidence of violence by any transient against either a BNSF train or a BNSF train erew. To the contrary, the evidence showed that transients who hopped trains sought to avoid train crews. And, unlike the train crew members' duties, the job of the BNSF policeman, whose patrol area of BNSF property extended far beyond Pueblo, was to interdict and expel trespassers. Thus, even disregarding the distance from Salt Creek Junction to Pueblo Junction and the Pueblo depot, the presence of transients at those locations does not make an assault on a train crew reasonably foreseeable. See Thomas v. CONRAIL, supra.

Plaintiff notes evidence that before the attack, a railroad gang had painted graffiti on BNSF property at the Pueblo Junction. We do not perceive gang-related graffiti as notice of a potential assault on a train crew. Moreover, no evidence indicated that the trespasser belonged to any railroad gang.

At most the evidence showed transients were present intermittently on railroad property, and they sometimes boarded trains. Nothing in the record identified either Salt Creek Junction or the train on which plaintiff worked. as a subject of particular risk that would warrant the heightened security measures argued for by plaintiff, We agree with the trial court that "evidence of ambient crime is insufficient to form a basis for [a claim of] inadequate security."

The judgment is affirmed.

Judge PLANK concurs.

Judge JONES dissents.

Judge JONES

dissenting.

I respectfully dissent. I believe that the record here contains ample evidence from which it can be determined, as a matter of law, that there are genuine issues of material fact as to the reasonable foreseeability of harm.

Under the Federal Employers' Liability Act (FELA), 45 U.S.C. § 51, et seq., a plaintiff must establish each of the elements of a common law negligence action, including reasonable foreseeability of harm. Davis v. Burlington Northern, Inc., 541 F.2d 182 (8th Cir.1976); Johnson v. National R.R. Passenger Corp., 989 P.2d 245 (Colo.App.1999). Generally, as long as a reasonable person should have foreseen that an injury might oecur from circumstances within the railroad's knowledge, the railroad may be liable even if it does not foresee the injury in the precise form in which it occurred. (Green v. River Terminal Ry., 763 F.2d 805 (6th Cir.1985). When the rubric of the leading case on foreseeability under the FELA, Gallick v. Baltimore & Ohio R.R., 372 U.S. 108, 83 S.Ct. 659, 9 L.Ed.2d 618 (1963), is considered, I think it is certain that here, as there, foreseeability is a question for the jury.

Here, the trial court had before it evidence of on-going eriminal activity occurring in and around the junction areas of the railroad tracks. There was media notice of violent attacks in the area both by transients and by gangs of people who apparently reside near the railroad tracks. Evidence showed that such people, unauthorized as they were, frequently boarded trains in that area of Pueblo. The evidence pointed out that railroad personnel were so aware of the dangers in that area that an armed special agent employed to patrol this area in Pueblo was frightened to confront the transients and those who lived nearby.

This evidence plainly presents a genuine issue of fact as to foreseeability of harm, under the entirety of the cireumstances. See Gallick v. Baltimore & Ohio R.R., supra.

Accordingly, I would reverse the judgment and remand the case for further proceedings on plaintiff's complaint.


author: Judge DAVIDSON.

text:
    Larry N. WISEHART, Plaintiff-Appellant, v. ZIONS BANCORPORATION and Brent C. Beichle, Defendants-Appellees.
    No. 01CA0671.
    Colorado Court of Appeals, Div. V.
    April 25, 2002.

      William C. Danks, Denver, Colorado, for Plaintiff-Appellant.
    McNamara Law Firm, P.C., John N. McNamara, Jr., Griffith A. Kundahl, Denver, Colorado, for Defendants-Appellees. .
   Opinion by

Judge DAVIDSON.

In this action for fraudulent nondisclosure in a stock transaction, plaintiff, Larry N. Wisehart, appeals from the judgment of the trial court entered in favor of defendant Zions Bancorporation. He also appeals from the dismissal of his complaint against defendant Brent C. Beichle for failure to state a claim pursuant to C.R.C.P. 12(b)(5). We reverse and remand for further proceedings.

The following facts are undisputed. Plaintiff and Beichle both worked as senior officers at the Independent Bank of Kersey. Both owned shares of Kersey Bancorp (Ker-sey), the holding company of the Independent Bank of Kersey and other banks.

The board of directors of Kersey decided to issue additional stock in the summer or fall of 1997. Plaintiff was not initially invited to purchase stock, but after Beichle asked him if he was interested in purchasing stock, plaintiff expressed interest and Beichle provided plaintiff with a written offer letter. The offer letter was dated August 15, 1997 and signed by the president of Kersey, Larry Neuschwanger. The letter indicated that shares were being offered at $130 per share and that a response should be given by September 1, 1997. It also stated: "If any shareholder should need additional financial information or other data concerning the Bancorp or Independent Bank, please contact [Neuschwanger]."

Beichle purchased 885 additional shares, which were issued in late September. Stock was issued to certain others beyond the September 1, 1997 deadline, as late as December 2, 1997. Plaintiff did not purchase additional shares. e

In February 1998, the board of directors received an offer from Zions Bancorporation to purchase Kersey. In May 1998, a written sale agreement was entered into, which provided for a merger of Kersey into Val Cor Bancorporation, an entity owned by Zions, and valued the Kersey stock at approximately $450 per share. The agreement required the approval of the Kersey sharcholders, which they gave on August 25, 1998.

In February 2000, plaintiff brought this tort action for fraudulent nondisclosure, alleging in his complaint that Beichle, as agent for Kersey, "failed to disclose that the price of stock would soon rise greatly in value because unbeknownst to [plaintiff], the persons who controlled Kersey Bancorp had decided to sell the Kersey Bancorp to a larger banking organization." Zions was named as a defendant because it had assumed the liability of Kersey and its officers under the terms of the merger.

On March 14, 2001, the trial court granted Zions' motion for summary judgment and Beichle's motion to dismiss. On March 28, 2001, plaintiff filed a C.R.C.P. 59 motion, alleging that disputed factual issues remained and seeking to amend his complaint. On April 2, 2001, prior to any response by defendants, the trial court denied that motion. Defendants filed a motion for costs and attorney fees, which the court denied except for the cost of depositions.

I.

Plaintiff first contends that the trial court erred in entering summary judgment in favor of Zions on claims based on its liability for Kersey's alleged nondisclosure. agree in part. We

A motion for summary judgment should be granted only when the moving party has demonstrated that theré is no genuine issue of material fact and that it is entitled to Judgment as a matter of law. See C.R.C.P. b6(ec); Churchey v. Adolph Coors Co., 759 P.2d 1336 (Colo.1988). Review of a grant of summary judgment is de novo. Aspen Wilderness Workshop, Inc. v. Colo. Water Conservation Bd., 901 P.2d 1251 (Colo.1995).

The terms fraudulent concealment and fraudulent nondisclosure are sometimes used interchangeably. See Ackmann v. Merchs. Mortgage & Trust Corp., 645 P.2d 7 (Colo.1982). The two torts require essentially the same elements. See CJI-Civ. 4th 19:2 (Cum.Supp.2000). While the parties refer to plaintiff's claim here as one for fraudulent concealment, it is more properly characterized as one for fraudulent nondisclosure. See CJI-Civ. 4th 19:5, 19:6 (Cum.Supp.2000).

To prevail on a claim for fraudulent nondisclosure, a plaintiff must demonstrate, inter alia, that the defendant failed to disclose a past or present fact that he or she had a duty to disclose, with intent to induce the plaintiff to take a course of action he or she would not otherwise have taken, and that plaintiff justifiably relied on the omission. Mallon Oil Co. v. Bowen/Edwards Assocs., Inc., 965 P.2d 105 (Colo.1998); Ackmann v. Merchs. Mortgage & Trust Corp., supra; CJI-Civ. 4th 19:2.

In granting Zions' motion, the trial court determined that there was no evidence that the board of directors had decided to sell Kersey before it received the offer in February 1998. Specifically, the court determined that the board was only "looking at the viability of selling," and thus there was no failure to disclose a past or present fact, only speculation about future events. The court also determined that there was no evidence that any information was concealed with the intent to keep plaintiff from purchasing shares.

Plaintiff contends that the trial court's determination that the nondisclosures involved only speculative, future events was erroneous. Moreover, plaintiff contends, disputed issues of material fact remain as to whether the board's meetings with potential buyers were material; whether the board intended by its omissions to induce plaintiff to refrain from purchasing shares; and whether plaintiff justifiably relied on the omissions. We agree that certain of the alleged nondisclo-sures were actionable, and as to those, entry of summary judgment at this stage of the proceedings was improper.

A.

As a threshold matter, we reject defendants' argument that the trial court should not have considered affidavits that were not previously in the record when ruling on the motion to reconsider.

This argument was raised for the first time on appeal, and this court will not consider arguments not presented to the trial court. See Estate of Stevenson v. Hollywood Bar & Cafe, Inc., 832 P.2d 718 (Colo.1992).

Here, the trial court in fact considered the affidavits, and they are properly before us as a part of the record. Cf. City of Boulder v. Dinsmore, 902 P2d 925 (Colo.App.1995). See also Bowlen v. FDIC, 815 P.2d 1013 (Colo.App.1991)(trial court has discretion to consider new theories raised in motion to reconsider grant of summary judgment).

B.-

Corporate directors and controlling shareholders of a corporation have a fiduciary duty to "act with an extreme measure of candor, unselfishness, and good faith in relation to remaining shareholders"; in the context of close corporations, as here, this duty is enhanced and requires corporate directors to "fully disclose 'all material facts and circumstances surrounding or affecting a proposed [stock] transaction" with a shareholder. Van Schaack Holdings, Ltd. v. Van Schaack, 867 P.2d 892, 897-98 (Colo.1994). Regardless of materiality, however, only nondisclosure of a past or present fact is actionable as a fraudulent nondisclosure. See Ackmann v. Merchs. Mortgage & Trust Corp., supra.

While plaintiff contends that the board should have disclosed that it had changed its previous plan to sell Kersey in three to five years, we agree with the trial court that the board's intent to sell in three to five years was an estimate and related to the future. Even if the board intended to sell as soon as possible, the eventual sale and its timing were speculative and dependent on future events, and therefore were not past or present facts. See Denver & S.L.R. Co. v. Moffat Tunnel Improv. Dist., 35 F.2d 365 (D.Colo.1929), modified, 45 F.2d 715 (10th Cir.1930). See also Burman v. Richmond Homes Ltd., 821 P.2d 918, 921 (Colo.App.1991)("mere expression of an opinion as to the happening of a future event" is not representation of a past or present fact).

However, the trial court determined that the board also had no duty to disclose alleged "discussions [it] had regarding the possible sale of the bank at some future time." It appears that the court was referring to a portion of Neuschwanger's deposition submitted with the motions, which de-seribes a meeting in the fall of 1997 at which the board gave permission to one of its members to inquire whether another bank and its Nebraska-based parent were interested in purchasing Kersey. Neuschwanger's affidavit, signed on March 17, 2001, indicated that this meeting might have occurred as early as June 1997 and that two weeks after the meeting, the board member informed Neus-chwanger that the president of the bank had talked with its home office and was not interested in acquiring Kersey. Defendants concede that on November 3, 1997, members of the board asked a colleague to "float" Ker-sey's name with Zions and to set up a meeting and that the subsequent meeting led to negotiations resulting in the eventual merger.

The trial court was correct to the extent that the conclusions to be drawn from the meetings and discussions were speculative. However, that the meetings and discussions occurred were past or present facts capable of verification. Depending on their timing, they may also have been "concrete, tangible actions" taken in response to the speculation that a sale was planned. See Van Schaack Holdings, Ltd. v. Van Schaack, supra, 867 P.2d at 900.

Zions argues, nevertheless, that even if properly characterized as past or present facts, the discussions did not trigger a duty to disclose because they were immaterial as a matter of law. We do not agree.

Information is material if "considering the specific factual circumstances involved, [it] would have assumed actual significance in the deliberations of a reasonable shareholder or would have been considered by a reasonable investor as having significantly altered the total mix of the available information." Thorne v. Bauder, 981 P.2d 662, 665 (Colo.App.1998).

Whether preliminary merger discussions are material "will depend at any given time upon a balancing of both the indicated probability that the event will occur and the anticipated magnitude of the event in light of the totality of the company activity." Basic, Inc. v. Levinson, 485 U.S. 224, 238, 108 S.Ct. 978, 987, 99 L.Ed.2d 194, 212 (1988). The probability that a merger will occur is assessed by examining the interest in the transaction at the highest corporate levels, including indicia such as board resolutions, communications with investment bankers, and actual negotiations between principals or intermediaries. Basic, Inc. v. Levinson, supra; see also SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir.1968).

Extensive negotiations, even if unsuccessful, may be material if they demonstrate "that a company's intention to merge or undertake other restructuring has moved beyond its incipient stages and ripened into purposeful action, and that the company has been a plausible merger candidate in the judgment of at least one potential partner." Castellano v. Young & Rubicam, Inc., 257 F.3d 171, 182 (2d Cir.2001). See also SEC v. Gaspar, [1984-1985 Transfer Binder] Fed. Sec. L. Rep. (CCH) ¶ 92,004, 1985 WL 521 (S.D.N.Y.1985)(where negotiations had progressed beyond the exploratory stage and the founder and majority stockholder of the company was "for the first time seriously responding to and negotiating with a potential purchaser ... the mere fact that the meetings were taking place was alone material information").

Here, the record indicates that the reason for the Nebraska bank's lack of interest in purchasing Kersey was internal and did not concern any attribute of Kersey. While the record indicates that the Nebraska bank contacted its headquarters, it does not describe the extent of the discussions. At this point, then, a question of fact remains as to the materiality of the discussions with the Nebraska bank and, thus, Kersey's duty to disclose those discussions. See Castellano v. Young & Rubicam, Inc., supra.

Plaintiff also contends that defendants should have disclosed the November 3, 1997 meeting at which board members asked a colleague to "float" Kersey's name with Zions and that the duty to disclose this information continued until December 2, 1997, the date the last stock certificates were issued. However, a director's duty to disclose material information exists only during a stock transaction with the stockholder. See Vam Schaack Holdings, Ltd. v. Von Schaack, supra. Absent fraud, after a transaction is completed, a director has no continuing duty to inform the shareholder of changed circumstances relating to the transaction. See Jackson v. Maguire, 269 Cal.App.2d 120, 75 Cal.Rptr. 16 (1969).

Here, the offer contained in the August 15, 1997 letter required plaintiff to accept by September 1, 1997. By failing to accept the offer by that date, plaintiff rejected it, and the transaction as to him was completed. Thus, whether Kersey had a duty to disclose the November 3, 1997 request to "float" Ker-sey's name with Zions depends not only on whether the discussions were material, but also on whether the board's failure to disclose the prior discussions with the Nebraska bank when it offered the stock to plaintiff was a fraudulent nondisclosure. If the board's failure to disclose the Nebraska bank discussions was not fraudulent, it would have no responsibility to inform plaintiff of discussions with Zions that occurred after September 1, 1997.

C.

Alternatively, Zions argues that, even if the board had a duty to disclose the meetings involving the possible sale of Ker-sey, nevertheless, the court correctly determined that it is entitled to judgment because plaintiff provided no evidence that the board intended that plaintiff rely on the omissions or that he take a course of action he otherwise would not have taken. We disagree.

Direct evidence of each element of a fraudulent nondisclosure claim is not always required because fraud may be inferred from cireumstantial evidence. See Kopeikin v. Merchs. Mortgage & Trust Corp., 679 P.2d 599 (Colo.1984).

Here, the record indicates that the board had authorized a limited amount of stock and that the four members of the board, their families, and related entities purchased nearly seventy percent of the offered stock, many by borrowing heavily. Although Neuschwan-ger did not have the resources to purchase additional shares, he entered into a twenty-year option agreement with another board member for 769 shares and attempted to keep the option agreement a secret. While defendants claim that stock was offered to all shareholders, plaintiff presented affidavits from some shareholders stating that they were not invited to purchase shares. Affidavits also indicate that certain shareholders were allowed to purchase only a limited number of shares and that relatives of board members who had not previously owned stock purchased some shares.

From these facts, a jury could infer that the board intended that insiders be allowed to purchase the majority of shares issued and that, to facilitate that goal, they did not disclose all material information to plaintiff and other shareholders so as to avoid purchases by minority shareholders.

D.

Similarly, we disagree with Zions that it is entitled to judgment because plaintiff's failure to request additional financial information, as he was invited to do by the August 15, 1997 letter, rendered any reliance on omitted information unjustified.

While Zions raised this argument in its motion, it was not the basis of the trial court's decision. We note, however, that a shareholder is not required to ask the right questions to trigger the duty to disclose and "Irleadiness and willingness to disclose are not equivalent to disclosure." Van Schaack Holdings, Ltd. v. Van Schaack, supra, 867 P.2d at 899. See also Stier v. Smith, 478 F.2d 1205 (5th Cir.1973).

We need not decide whether a shareholder must make some initial inquiry because, notably, when plaintiff learned that the board was issuing new stock, he affirmatively expressed interest in making a purchase by asking for the written offer. Moreover, Beichle admits that he discussed with plaintiff whether plaintiff intended to purchase additional shares, and plaintiff stated in his August 14, 2000 deposition that he spoke with Neuschwanger about the stock offering and that the "gist" of the discussion was that the stock was being offered to raise capital. Thus, there is also a factual dispute as to whether plaintiff availed himself of the invitation to seek additional information.

IL

Plaintiff also contends that the trial court erred in entering summary judgment in favor of Zions on claims based on its respondeat superior liability for Beichle's alleged nondisclosure of his purchase of additional shares of Kersey stock. In affidavits included in his response to Zions' motion for summary judgment, plaintiff alleged that he and Beichle agreed that neither could afford to borrow funds to purchase more stock unless the bank was going to be sold in the near future and, therefore, they entered into an oral agreement that each would inform the other if he purchased more stock. Plaintiff stated in his affidavit; "I would have understood that he may have been bound to secrecy and could not tell me what he knew. By telling me that he was buying stock, I would have known that he knew that the bank was for sale." Plaintiff argues that summary judgment was improper because this agreement created a duty to disclose Beichle's purchase of shares, the breach of which was imputable to Zions in this action. We disagree.

In granting Zions' motion for summary judgment, the trial court stated that such an agreement, even if it existed and créaiged a duty. to disclose, would not have created a duty that arose because of Beichle's status as agent, so any failure to disclose could not be imputed to the bank. The court also determined that there was no evidence that such an agreement existed.

Plaintiff contends that his affidavit that an agreement with Beichle existed and Zions' stipulation that Beichle was acting within the scope of employment at all times were sufficient to raise a question of material fact regarding a duty to disclose that could be imputed to Zions. We agree that the issue of the existence of an agreement was unresolved. However, we conclude that Beichle had no duty independent of the purported contract to disclose his purchase of shares and, thus, any breach was not tortious.

Plaintiff's only asserted basis for Beichle's duty to disclose his purchase of shares was the agreement between the two of them. Thus, while the breach of such agreement might provide plaintiff with a contract action, it is not sufficient to support a tort claim. See H & H Distribs., Inc. v. BBC Int'l, Inc., 812 P.2d 659, 662 (Colo.App.1990)(a claim predicated on "the mere nonperformance of a promise or contractual obligation or ... the failure to fulfill an agreement to do something at a future time" sounds in contract, not in tort). See also Town of Alma v. Azco Constr., Inc., 10 P.3d 1256 (Colo.2000)(independent duty rule maintains the boundary between contract law and tort law).

Here, plaintiff's complaint did not assert claims for breach of contract, nor did plaintiff seek to amend his complaint to add claims other than fraudulent nondisclosure. Thus, on different grounds, we conclude that the trial court properly granted summary judgment to Zions on plaintiff's claim based on respondeat superior lability for Beichle's alleged failure to disclose his purchase of shares. - j

IIL

The trial court dismissed plaintiffs claim against Beichle individually for failure to state a claim under C.R.C.P. 12(b)(5) because plaintiff's complaint did not contain sufficient factual allegations to support all the elements of a fraudulent nondisclosure claim. In his C.R.C.P. 59 motion, plaintiff requested "leave to amend the complaint to set forth each of the elements," which the trial court denied as prejudicial to defendants. Plaintiff contends that the denial was an abuse of discretion. We agree.

The chief function of a complaint is to give notice to the defendant of the transaction or occurrence that is the subject of the plaintiff's claims. Rosenthal v. Dean Witter Reynolds, Inc., 908 P.2d 1095 (Colo.1995). The complaint need not contain a complete recitation of all the facts supporting the claim for relief. Eliminator, Inc. v. 4700 Holly Corp., 681 P.2d 536 (Colo.App.1984). It need only contain a short and plain statement of the claim, the purpose of which is to provide notice to the defendant of the nature of the claim. Smith v. Mills, 123 Colo. 11, 225 P.2d 483 (1950).

Whether to allow an amendment to a pleading is within the discretion of the trial court. See Sandoval v. Archdiocese of Denver, 8 P.3d 598 (Colo.App.2000). However, permission to amend a complaint should be freely given where there is a possibility that the complaint could be amended to, set forth a claim for which relief could be granted. Smith v. Mills, supra. While undue prejudice to the opposing party may justify denying a request to amend a complaint, delay in seeking an amendment is not a sufficient basis if the other party is not prejudiced. See Eagle River Mobile Home Park, Ltd. v. Dist. Court, 647 P.2d 660 (Colo.1982).

Defendants did not argue in the trial court or here that they would be prejudiced by an amendment, and they clearly understood that plaintiff was asserting a claim for fraudulent concealment or nondisclosure. Although they argued that it would be ineffectual, defendants acknowledged, from the time of their first filing in the case, the possibility of an amendment to include allegations on each element. While plaintiff's request to amend the complaint came after the motion to dismiss and grant of summary judgment, it was included within a timely motion for reconsideration under C.R.C.P. 59. Cf. Wilcox v. Reconditioned Office Sys. of Colo., Inc., 881 P.2d 398 (Colo.App.1994)(motion to amend may not be granted after entry of judgment unless judgment is first set aside under C.R.C.P. 59 or 60).

The trial court dismissed plaintiffs claim against Beichle on the grounds that plaintiff failed to allege facts indicating that Beichle knew of Kersey's discussions with other banks, that Beichle had a duty to disclose such information, or that information was concealed with the intent of dissuading plaintiff from purchasing additional shares. Defendants argue that, nevertheless, amendment would have been futile because, even with amendment, plaintiff could not state a claim for fraudulent nondisclosure. We disagree.

Plaintiff's complaint alleges, "Beichle doubled the amount of stock which he owned in the Kersey Bancorp in August September, 1997 based upon insider knowledge of the planned sale of the bank." Although defendants dispute whether Beichle had knowledge of the discussions with potential purchasers, the allegations contained in the complaint must be taken as true.

Furthermore, while Beichle would have had no duty to disclose material information if he were not acting as a representative for the board in the stock transaction, plaintiff's complaint also alleges that Beichle was acting as agent for Kersey when he failed to disclose that the board had decided to sell. Defendants also dispute this allegation, but, taken as true, the alleged agency relationship would result in a duty to disclose material information to plaintiff.

And, although the complaint does not contain an allegation regarding Beichle's intent or awareness of the board's alleged intent, plaintiff submitted evidence from which a jury could infer that Beichle himself intended to dissuade plaintiff from purchasing shares. The record contains affidavits indicating that Beichle knew from discussion .with plaintiff that plaintiff would not purchase shares unless plaintiff had indications that Kersey would be sold in the near future. In conjunction with Beichle's alleged insider knowledge and status as agent, his failure to inform plaintiff of that knowledge leads to an inference that he intended that plaintiff not purchase shares. See Carroll v. CUNA Mut. Ins. Soc'y, 894 P.2d 746, 752 (Colo.1995)("An effect which is the natural and probable consequence of an act or course of action is not an accident. ...").

Thus, if an amendment had been permitted, plaintiff would have been able to allege facts sufficient to state a claim for fraudulent nondisclosure against Beichle. Therefore, we conclude that the trial court abused its discretion in denying plaintiff's motion to amend his complaint to include allegations that Beichle failed to disclose information about the meetings with potential buyers with the intent that plaintiff refrain from purchasing shares.

IV.

Plaintiff also contends that the court erroneously granted judgment to defendants for the cost of depositions. Given our determination that the underlying judgment must be reversed, the award of costs is vacated. See Rossman v. Seasons at Tiara Rado Assocs., 943 P.2d 34 (Colo.App.1996).

The judgment is reversed, and the case is remanded for further proceedings consistent with this opinion.

Judge CASEBOLT and Judge NIETO concur.


text:
    The PEOPLE of the State of Colorado, Petitioner-Appellee, In the Interest of J.P.L., Juvenile-Appellant.
    No. 01CA1199.
    Colorado Court of Appeals, Div. V.
    April 25, 2002.

      Ken Salazar, Attorney General, John T. Bryan, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
    Michael G. Root, Denver, Colorado, for Juvenile-Appellant.
   Opinion by

Judge DAVIDSON.

J.P.L., a juvenile, appeals from the trial court's judgment adjudicating him delinquent based on a finding that he committed acts which, if committed by an adult, would constitute the offense of interference with staff, faculty, or students of an educational institution, a class three misdemeanor under § 18-9-109(2), C.R.S.2001. We affirm.

I.

J.P.L. first contends that the evidence presented at the adjudicatory trial was insufficient. In particular, be contends that the evidence did not establish that he was aware that his acts would interfere with the educational activities of the students. We disagree.

When reviewing the sufficiency of the evidence supporting an adjudication of juvenile delinquency, the standards are the same as those used in a eriminal case. People in Interest of J.M.N., 39 P.3d 1261 (Colo.App.2001). The reviewing court must determine whether the evidence, viewed as a whole and in the light most favorable to the prosecution, is substantial and sufficient to support a conclusion by a reasonable person that the defendant is guilty of the crimes charged beyond a reasonable doubt. Kogan v. People, 756 P.2d 945, 950 (Colo.1988).

It is the duty of the fact finder in a criminal case to determine the credibility of the witnesses, to consider what weight should be given to all parts of the evidence, and to resolve conflicts, inconsistencies, and disputes in the evidence. Kogan v. People, supra.

J.P.L. was found to have committed acts violating § 18-9-109(2), which provides in pertinent part:

No person shall, on the premises of any educational institution or at or in any building or other facility being used by any educational institution ... willfully impede a student of the institution in the lawful pursuit of his educational activities through the use of restraint, abduction, coercion, or intimidation or when force and violence are present or threatened.

The term "willfully" is defined in § 18-1-501(6), C.R.$.2001, as follows:

A person acts ... "willfully" with respect to conduct or to a cireumstance described by a statute defining an offense when he is aware that his conduct is of such nature or that such cireumstance exists. A person acts ... "willfully," with respect to a result of his conduct, when he is aware that his conduct is practically certain to cause the result.

Upon review of the record, we conclude that the evidence presented at trial, along with all reasonable inferences in favor of the prosecution, was sufficient to support J.P.L.'s adjudication. See Kogan v. People, supra.

At trial, one of J.P.L.'s classmates testified that J.P.L. had told her that he had a list of students he was going to kill and that she was "number one" on his list. Another student testified that she heard J.P.L. state that he was going to "kill everybody who told on him." A third student testified that J.P.L. was in the lunchroom pointing out "specific people that he would or would not target." All three students stated that they missed an hour or more of classes in order to discuss these statements with the school principal and police.

In addition, another student testified that she told J.P.L. to stop making threats because he was frightening her friends; J.P.L. "said he didn't care" and did not take her seriously. Also, the school principal testified that the school had a handbook regarding harassment and threats of violence.

The testimony, therefore, established that several students heard J.P.L. making threatening and violent statements. The students were concerned or frightened by the statements and missed class because of them. J.P.L., despite the handbook provisions regarding harassment and threats of violence, was unconcerned that some students were alarmed by his statements. And, these statements occurred after the shootings at Columbine High School, during a heightened state of awareness regarding such conduct. This evidence is sufficient to establish that J.P.L. was aware his intimidation and threats of violence were practically certain to impede the students' pursuit of educational activities.

IL

J.P.L. also contends that § 18-9-109(2) is unconstitutionally vague as applied to him. As applicable here, § 18-9-109(2) specifies that one may not willfully impede students in the pursuit of educational activities by certain actions, namely, restraint, abduction, coercion, or intimidation, or when force or violence are present or threatened. J.P.L. argues that "to include actions that anticipate student's [sic] reactions to statements made by other students does not allow specific warning of what conduct is prohibited." We disagree.

A statute is presumed to be constitutional, and the party challenging its constitutionality must prove its invalidity beyond a reasonable doubt. See People v. Longoria, 862 P.2d 266, 270 (Colo.1993). When a challenge is based on vagueness, a reviewing court must determine whether the statute describes the forbidden conduct in terms such that persons of common intelligence can readily understand its meaning and application. People v. Duncan, 33 P.3d 1180, 1182 (Colo.App.2001).

Section 18-1-501(6) provides that a person acts "willfully" with respect to a result of his or her conduct when the person is aware that the conduct is practically certain to cause the result. Hence, § 18-9-109(2) requires the prosecution to prove that the defendant knew his conduct was practically certain to impede students from pursuing their educational activities. See People v. Pratt, 759 P.2d 676, 687 (Colo.1988)(to avoid construction rendering statute void for vagueness, "may" or "might" interpreted to mean "a reasonable probability that the forbidden result would obtain").

Moreover, the statute does not prohibit all willful conduct that ultimately has the effect of impeding a student in the lawful pursuit of educational activities. Instead, the only prohibited conduct is "the use of restraint, abduction, coercion, or intimidation or when force and violence are present or threatened." Section 18-9-109(2).

The statute therefore gives fair notice of a reasonably narrow range of prohibited conduct, in terms sufficiently precise so that persons of ordinary intelligence need not speculate as to the conduct that is proscribed. See People v. Hickman, 988 P.2d 628 (Colo.1999)(imprecise, but comprehensible normative standard acceptable).

The judgment is affirmed.

Judge CASEBOLT and Judge NIETO concur.


text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Andrew Lee OROZCO, Defendant-Appellant.
    No. 00CA1790.
    Colorado Court of Appeals, Div. IV.
    May 9, 2002.

      Ken Salazar, Attorney General, Michelle L. Prince, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
    David S. Kaplan, Colorado State Public Defender, Shann Jeffery, Deputy State Pub-lie Defender, Denver, Colorado, for Defendant-Appellant.
   Opinion by

Judge MARQUEZ.

Defendant, Andrew Lee Orozco, appeals the judgment of conviction entered upon jury verdicts finding him guilty of unlawful possession of a schedule II controlled substance (methamphetamine), possession of drug paraphernalia, and possession of less than one ounce of marihuana. We reverse and remand for a new trial.

L.

Defendant argues that the trial court erred by denying his challenge for cause to a prospective juror who did not understand the English language. We agree.

Section 13-71-105(2)(b), provides that a prospective juror shall be disqualified if that individual is unable to "read, speak, and understand the English language." Whether a prospective juror should be disqualified under this provision is a question of fact, and the trial court's determination of the issue will not be disturbed on appeal unless it is unsupported by the record. People v. Duncan, 33 P.3d 1180, 1181-82 (Colo.App.2001)(record support for trial court's finding that prospective juror's fluency in English was sufficient for service where prospective juror merely expressed difficulty understanding questions that included legal concepts, without ever stating that she was unable to understand English).

The failure of a prospective juror to meet a qualification for jury service operates as a basis for a challenge for cause rather than as an absolute prohibition to service. Section 16-10-103(1)(a), C.R.S.2001; People v. Crespin, 635 P.2d 918, 920 (Colo.App.1981).

When a trial court erroneously denies a challenge for cause to a prospective juror, the defendant uses a peremptory challenge to remove that juror, and the defendant exhausts all available peremptory challenges, the trial court's ruling affects a substantial right of the defendant and cannot be deemed harmless error. Carrillo v. People, 974 P.2d 478, 486-87 (Colo.1999).

We review a trial court's ruling on a challenge for cause for abuse of discretion. To determine whether the trial court abused its discretion in ruling on a challenge for cause, the entire voir dire of the prospective juror must be reviewed by the appellate court. Carrillo v. People, supra, 974 P.2d at 485-86.

The prospective juror at issue here completed a written questionnaire in which she indicated: "I sometimes have difficulty understanding English (my husband helped fill this out)."

At the beginning of voir dire, the court inquired about the prospective jurors' language abilities:

THE COURT: Are all of you able to read, speak, and understand the English language?
(All prospective jurors replied in the affirmative.)
THE COURT: And the only reason why I ask that, if someone is not-we do have the ability to bring in an interpreter if the circumstances warrant.
(Prospective juror raised hand.)
THE COURT: All right. Téll me your name, ma'am. 1C f
PROSPECTIVE JUROR: [Prospective juror states her name.] |
THE COURT: And, [prospective juror], how long have you lived in the United States?
PROSPECTIVE JUROR: Ten years.
THE COURT: How long?
PROSPECTIVE JUROR: Ten years.
THE COURT: So is English your second language?
PROSPECTIVE JUROR: Yes.
THE COURT: It sounds like you were able to communicate fairly well with us up to now; is that right? .
PROSPECTIVE JUROR: Yes. Sometimes I have-it's hard to understand.
THE COURT: Okay. Well, what you can do, [prospective juror], if there is something that you don't understand, you raise your hand and let us know, either during the questioning now or during the course of the testimony, and we will make sure that the question is repeated or the answer explained to you. We want people from all walks of life and from all kinds of background to serve on our juries.
And if we are able to explain something you don't understand, would you be able to otherwise, do you think, follow the proceeding, if we stop and explain things to you, if needed?
PROSPECTIVE JUROR: Somebody explain. *
THE COURT: Okay. Well, you need to let us know if there is something that occurs that needs explaining, and we will certainly do that. Okay? Thank you, [prospective juror].

The following exchange then occurred during the prosecutor's questioning:

PROSECUTOR: Has anybody here not heard of the drug methamphetamine-
(No verbal response.)
PROSECUTOR:-otherwise referred to crystal meth or crack? Everybody has heard of that drug? [Prospective juror], have you heard of crystal meth? You've heard of that drug?
PROSPECTIVE JUROR: My girlfriend, she is high school, and talked about cocaine and marijuana.
PROSECUTOR: You knew somebody who had a court case where she was accused of having cocaine?
PROSPECTIVE JUROR: No, no, her daughter, high school.
PROSECUTOR: I apologize. I'm not sure if you knew somebody who knew somebody who had cocaine-
PROSPECTIVE JUROR: Yes, and her daughter talked about it.
PROSECUTOR: Okay. And you're familiar with the war on drugs in America?
PROSPECTIVE JUROR: Yes.
PROSECUTOR: Do you mind if I ask where you are from?
PROSPECTIVE JUROR: Korea.
PROSECUTOR: Korea?
PROSPECTIVE JUROR: (Nods head.)
PROSECUTOR: Were drugs illegal there?
PROSPECTIVE JUROR: Yeah.
PROSECUTOR: Also illegal, so you're familiar with that?
PROSPECTIVE JUROR: (Nods head.)
PROSECUTOR: And do you think it's a good idea that drug cases are prosecuted?
PROSPECTIVE JUROR: (Nods head.)

Defense counsel subsequently asked the prospective juror additional questions about her ability to understand the proceedings:

DEFENSE COUNSEL: Does anybody disagree with that or think, "Well, I don't know why they would bring a case against him if he was innocent"? What about you, [prospective juror]?
PROSPECTIVE JUROR: Yes.
THE COURT: [Prospective juror], make sure you keep your voice up so-my court reporter has to be able to hear what you say. Thank you.
DEFENSE COUNSEL: And I'm not trying to single you out, [prospective juror]. Have you been understanding what's happening?
PROSPECTIVE JUROR: Sometimes.
DEFENSE COUNSEL: Are you having a little difficulty?
PROSPECTIVE JUROR: Yes.
DEFENSE COUNSEL: When I'm talking about "presumption of" and "beyond a reasonable doubt," were those terms-are you having a hard time understanding those because of the language?
PROSPECTIVE JUROR: Yes.
DEFENSE COUNSEL: Okay. Are you feeling uncomfortable sitting here and possibly being a juror when you are not understanding everything that is going on?
PROSPECTIVE JUROR: Yes.
DEFENSE COUNSEL: Do you have a serious doubt about your ability to be a good juror in this case?
PROSPECTIVE JUROR: Yes.

Based on these responses, defense counsel challenged the prospective juror for cause on the ground that she did not understand English. The prosecutor did not dispute defense counsel's assessment of the prospective juror's ability to understand English Instead, the prosecutor urged the court to deny the challenge and "get an interpreter."

The following exchange then occurred:

THE COURT: [Prospective juror}, again, we talked before. Have you been able to follow the general context of the conversation up to this point in time?
PROSPECTIVE JUROR: Sometimes, sometime not.
THE COURT: What are you not understanding?
PROSPECTIVE JUROR: So you wish that the Court-in my country that was a lot of words.
THE COURT: 'So it's sort of the legal terms, like the presumption of innocence and some of those kind of things, is that causing you some difficulty?
PROSPECTIVE JUROR: (Shrugs shoulders.)
THE COURT: Don't know.
PROSPECTIVE JUROR: (Shrugs shoulders.)
THE COURT: If you see them on paper, does that help understand it?
PROSPECTIVE JUROR: No. I see paper says-sometimes reading problems. Somebody says what does this mean. Doesn't matter.
THE COURT: Okay. How about if in talking to other people-if in talking to other jurors, do you think if there was something you didn't understand, perhaps discussing it with someone else, they might be able to help you understand it?
PROSPECTIVE JUROR: Maybe.
THE COURT: Is that how-in your daily life, if something comes up that you don't understand, do you talk to somebody about it to try and reach an understanding?
PROSPECTIVE JUROR: Yes. I ask my husband, and he explain it, and sometime he keep explaining it, still he continues, you know.
THE COURT: Okay. Well, there are two things that I want you to be aware of.
First of all, I will give you the instructions on the law, but they will be given to you in writing, also, so that you can take them back to the jury room and study them if you have questions about them.
Secondly, the jury process is a group process, so that the idea is that all of you ean work together to, first of all, find out the facts and, secondly, apply those facts to the law. _
Do you think if you were able to discuss those issues with some of the other jurors, you would be able to get an understanding which would allow you to do what's required of you as a juror?
PROSPECTIVE JUROR: I don't know.
THE COURT: Do you want to be a juror, [prospective juror]?
PROSPECTIVE JUROR: Excuse me?
THE COURT: Do you want to serve on this jury?
PROSPECTIVE JUROR: I am so uncomfortable, I don't know what I'm supposed to do. That's why it's confusing.
THE COURT: All right. All right.
At this point I'm going to deny challenging for cause. I think that with the assistance of the other jurors, that [prospective juror] would be able to perform her duties. I think she would be able to ask questions and with some assistance-
So [prospective juror], you are just going to have to ask for your fellow jurors' help, because I'm not going to exeuse you at this point in time. -

As a preliminary matter, we must determine the nature of the ruling under review. Defendant asserts that the trial court made a finding that the prospective juror was unable to understand English adequately by herself, but determined that she could do so with the assistance of the other jurors. By contrast, the People contend that the trial court made an implicit finding that the prospective juror was able to read, speak, and understand the English language. We agree with defendant and conclude that the People's characterization of the trial court's ruling is not supported. by the record.

The trial court's final remarks essentially reflect a finding that, without assistance, the prospective juror could not understand English well enough to serve as a juror. That finding is amply supported by the record. The prospective juror stated that she had difficulty understanding spoken English without the assistance of others, and she consistently demonstrated this difficulty in her disjointed responses to the questions posed by counsel and the court. The prospective juror also stated that she had difficulty reading the English language, an assertion that was demonstrated by her inability to complete the juror questionnaire without her husband's assistance.

Thus, the question before us is not a factual one concerning the prospective juror's ability to understand English Rather, the issue we must decide is whether the trial court abused its discretion by determining that, because the other jurors could help her understand the proceedings, the prospective juror's inability to understand the English language adequately was not grounds for disqualification. We conclude that the court abused its discretion.

Section 18-71-105(2)(b) establishes qualifications for individual jurors, but it does not allow for those qualifications to be satisfied by reliance upon the abilities of other jurors. Requiring one juror to depend on other jurors in order to understand the proceedings diminishes the role of the dependent juror and undermines the defendant's right to have the charges decided by twelve independent jurors. See State v. Gallegos, 88 N.M. 487, 489, 542 P.2d 832, 834 (Ct.App.1975)("It is self-evident that a juror who does not possess a working knowledge of English would be unable to serve because he cannot possibly understand the issues or evaluate the evidence to arrive at an independent judgment as to the guilt or innocence of the accused."). Consequently, we conclude the trial court abused its discretion by denying defendant's challenge for cause.

Accordingly, because defendant exhausted his peremptory challenges and used one of them to remove the prospective juror who was the subject of the erroneously denied challenge for cause, defendant's conviction must be reversed. See Carrillo v. People, supra.

IL

Because the issue may arise again upon retrial, we address defendant's claim that the trial court erred by refusing his tendered theory of the case instruction. We perceive no error in the trial court's ruling.

A defendant is entitled to an accurate instruction on his or her theory of the case if any evidence, no matter how improbable, supports the theory. However, a trial court may refuse to give a proffered theory of defense instruction if its content is already encompassed in other instructions. People v. Gordon, 32 P.8d 575, 579-80 (Colo.App.2001).

Here, defendant's theory of defense as to the controlled substance charge was that he did not know about the small amount of methamphetamine that was in the pocket of the borrowed pants he was wearing when he was taken into custody.

Defendant tendered the following instruction: "The mere presence of drugs in the pocket of the pants that Andrew Orozco was wearing does not in and of itself prove beyond a reasonable doubt that Andrew Orozco knowingly possessed methamphetamine." The trial court rejected this instruction, concluding that it merely emphasized an element of the offense-knowing possession-that was adequately explained in the other instructions.

'We conclude the trial court properly rejected defendant's tendered instruction because the other instructions precluded any possibility that defendant could be convicted based on unknowing possession. Specifically, the jury was instructed that defendant could be convicted of possession of a controlled substance only if it found beyond a reasonable doubt that he "knowingly" "possessed" methamphetamine. The court also instructed the jury that "[al person acts 'knowingly' with respect to conduct or a circumstance described by statute defining an offense when he is aware that his conduct is of such nature or that such cireumstance exists." Additionally, the jury was instructed that "[plossession' need not be exclusive, provided that each possessor, should there be more than one, actually knew of the presence of the object, or thing possessed, and exercised actual physical control or immediate, knowing dominion or control over it."

The judgment is reversed, and the case is remanded for a new trial.

Judge TAUBMAN and Judge VOGT concur.


author: Judge DAILEY.

text:
    Bonnie SCHERR, Petitioner-Appellee, v. COLORADO DEPARTMENT OF REVENUE, Respondent Appellant.
    No. 01CA0479.
    Colorado Court of Appeals, Div. III.
    May 9, 2002.

      Forrest W. Lewis, P.C., Forrest W. Lewis, Denver, Colorado, for Petitioner-Appellee.
    Ken Salazar, Attorney General, Robert H. Dodd, Assistant Attorney General, Denver, Colorado, for Respondent-Appellant.
   Opinion by

Judge DAILEY.

Respondent, Colorado Department of Revenue (department) appeals the district court judgment reversing an order revoking the driver's license of petitioner, Bonnie Scherr, for a period of three months. We affirm the district court's judgment.

L.

Police stopped petitioner after observing her vehicle weaving. The arresting officer's report notes that petitioner exhibited certain indicia of alcohol intoxication. Petitioner consented to a test of her breath.

The test on a sample of petitioner's breath indicated her breath alcohol content (BrAC) was .103 grams of alcohol per 210 liters of breath. A second breath sample was taken and preserved for petitioner's use. Based on the result of the test conducted by the police, petitioner was given a notice of revocation of her driver's license.

Petitioner then requested an administrative hearing to challenge the revocation. At that hearing, petitioner presented evidence that the Intoxilyzer machine used to test her breath was consistently providing high readings on calibration samples. This uncontro-verted evidence reflected that just before petitioner's breath was tested, the Intoxilyzer machine in question tested a known sample of .10 BrAC as .105 BrAC. It also revealed that fifteen other .10 BrAC sample calibrations conducted before and after petitioner's test each resulted in readings ranging from .105 to .109 BrAC. Thus, in sixteen consecutive calibrations, the Intoxilyzer machine's reading was high by between .005 and 009 BrAC.

Although the hearing officer stated that he was accepting at face value the evidence of the machine's consistently high BrAC readings, he nonetheless upheld the revocation. The hearing officer reasoned that, because the variation in readings was "not very extreme" and the machine was "certified" and "operating within range" or "calibration," petitioner could overcome the presumption of validity attending the test results only by conducting a retest on her other breath sample. Petitioner's evidence that the machine consistently read high, the hearing officer held, served only to establish "a very good foundation" for permitting a retest of the other sample at that late date.

Thereafter, petitioner sought review of the revocation order in the district court. The district court reversed, finding that, based upon petitioner's undisputed evidence that the Intoxilyzer machine was providing consistently inaccurate high readings, there was a "manifest insufficiency" of evidence to support the revocation order:

When [the] machine tested the known [.10] standard solutions, all test results were at least [105]. The only inferences available from the evidence were that the petitioner's test result was also inaccurate and at least [.005] too high, and that the petitioner's [BrAC] was actually below [.10]. Had there been tests on the standard solutions with results of [.103] or below, other inferences could be drawn and the hearing officer's conclusion would have been supported by the evidence. In this instance, the prima facie reliability accorded to test results by the certification and test processes was unquestionably rebutted and overcome by the only available evidence.

The department now appeals from that ruling.

IL.

The department contends that the district court erred in reversing the revocation order because there was substantial evidence to support that order. We disagree.

Judicial review of driver's license revocation orders is governed by § 42-2-126(10)(b), C.R.S.2001. That statute provides that a reviewing court may reverse the department's determination only if the department (1) exceeded its constitutional or statutory authority, (2) erroneously interpreted the law, (8) acted in an arbitrary and capricious manner, or (4) made a determination that is unsupported by the evidence in the record. See Charnes v. Robinson, 772 P.2d 62, 68 (Colo.1989).

While we agree with the district court, we determine that the hearing officer's order was based on an erroneous interpretation of the law and was otherwise arbitrary and capricious under § 42-2-126(10)(b).

In a license revocation proceeding, the burden rests upon the state to establish by a preponderance of the evidence that the licensee drove a vehicle when the licensee's breath had an alcohol concentration of .10 or more grams of alcohol per 210 liters of breath. See § 42-2126(90)(c)(I), C.R.8.2001; Davis v. Charnes, 740 P.2d 534, 535 (Colo.App.1987)(analyzing issue under prior statute). "Intoxilyzer test results are presumed accurate if the test was conducted by a certified operator in accordance with Health Department regulations on a machine shown to be operating correctly at the time of the test." Davis v. Charnes, supra, 440 P.2d at 535. However, under § 424-1301(2)(b), C.R.8.2001, a licensee is entitled to "offer direct and cireurastantial evidence to show that there is a disparity between what the tests show and other facts so that the trier of fact could infer that the tests were in some way defective or inaccurate." See Charnes v. Robinson, supra, 772 P.2d at 67 (quoting identical text from predecessor statute).

Contrary to the hearing officer's assumption, no statute, case, rule, or regulation limits the type of evidence that may be presented to undermine the presumption of accuracy attending Intoxilyzer test results. While a retest of a sample is certainly one way of challenging test results, it is not the only way.

Here, petitioner attempted to undermine the validity of test results by presenting undisputed evidence that, when testing a known .10 BrAC sample, the machine consistently read higher than it did with respect to her own test. However, the hearing officer erroneously interpreted the law and otherwise acted arbitrarily and capriciously in ruling that this evidence could serve no purpose other than as foundation for permitting a late retest of petitioner's BrAC. See Lawley v. Department of Higher Education, 86 P.3d 1239, 1252 (Colo.2001)(administrative action is arbitrary and capricious if administrative entity fails to give candid and honest consideration to evidence before it on which it is authorized to act in exercising its discretion).

Ordinarily, we would remand the matter for further proceedings to give the hearing officer an opportunity to consider petitioner's evidence in a proper light and to weigh it against the evidence proffered in support of the test results obtained by the police. See, e.g., Charnes v. Lobato, 743 P.2d 27, 32 (Colo.1987)(when conflicting testimony is presented in an administrative hearing, the weight to be given the testimony is for the agency to decide). See also Charnes v. Robinson, supra, 772 P.2d at 68 (hearing officer's decision is arbitrary and capricious if. not supported by substantial evidence in the record).

However, here the hearing officer would not have to choose between, or otherwise weigh, conflicting testimony or conflicting test result evidence.

The department's position in this case is supported only by a presumptively accurate test result. Because a presumptively accurate test result is prima facie proof of grounds for revocation, see Swain v. State, 717 P.2d 507, 508 (Colo.App.1985), in many instances it can support a revocation decision even in the face of contrary evidence. See Charnes v. Lobato, supra, 448 P.2d at 32.

However, in our view, this case is one of those rare instances in which a prima facie case is nullified, not just contradicted, by other evidence, and consequently, the matter is subject to resolution as a matter of law rather than fact. See Huntoon v. TCI Cablevision of Colorado, Inc., 969 P.2d 681, 686 (Colo.1998)(discussing directed verdict standards). See also Annotation, Direction of Verdict: Effect of Explanatory or Qualifying Testimony to Nullify Prima Facie Case Made by Plaintiff, 66 A.L.R. 1532, 1536 (1930)("By the great weight of authority, ... the defendant, by explanatory or qualifying evidence of uncontradicted and eredible witnesses, may so nullify the evidence upon which the plaintiff's case depends that it no longer constitutes a prima facie case.").

Here, the unmistakable import of petitioner's explanatory or qualifying evidence was to nullify not only a critical premise underlying a presumption of accurate test results (namely, that the machine was operating correctly), but also any conclusion that petitioner's BrAC could have been .10 or higher. Petitioner's uncontradicted evidence revealed that the Intoxilyzer consistently read known 10 BrAC samples as containing a higher level of alcohol, and the error exceeded the amount by which petitioner's measured alcohol level exceeded the statutory maximum.

The record reflects that the hearing officer was willing to accept petitioner's evidence at face value. Accepting that evidence likewise, and considering it in light of all of the evidence in the record, we determine that reasonable people would be compelled to conclude that petitioner's true BrAC necessarily fell below .10. Because any other decision would, under the cireumstances, be arbitrary or capricious, see generally Colorado State Board of Accountancy v. Paroske, 39 P.3d 1283, 1288-89 (Colo.App.2001), we see no need to require the hearing officer to consider the matter further.

The department contends otherwise, however, relying on various authorities. Unlike here (1) in Swain v. State, supra, there was no showing that the particular machine used by the police to test the driver's breath was inaccurate; and (2) in Charnes v. Robinson, supra, and Charnes v. Lobato, supra, the hearing officers were presented with evidence from different witnesses of different test results from different Intoxilyzer machines and with evidence explaining the discrepancies between the test results. Because of the dissimilar cirenmstances in those cases, we do not find those authorities persuasive here.

Nor do we consider the department's belated and unsupported argument that petitioner's evidence rests upon the fallible assumption that "true" .10 samples were in fact used to test the Intoxilyzer machine in this case. See Board of County Commissioners v. City of Greenwood Village, 30 P.3d 846, 849 (Colo.App.2001)(court will not consider arguments raised for the first time in reply brief or during oral argument).

In sum, although our decision rests on grounds slightly different from the district court's judgment of reversal, we nevertheless conclude that the district court's judgment was correct. See Steamboat Springs Rental & Leasing, Inc. v. City & County of Denver, 15 P.3d 785, 786 (Colo.App.2000)(appellate court may affirm correct judgment based on reasoning different from that relied on by trial court).

The judgment is affirmed.

Judge NEY and Judge ROY concur.