Opinion
23CA0661
05-23-2024
Shawn Erikson, Plaintiff-Appellee, v. Mark Sanders, Defendant-Appellant, and Diana Sanders, Appellant.
Waltz Reeves, Christopher R. Reeves, Yana K. Durell, Denver, Colorado, for Plaintiff-Appellee Levin Sitcoff Waneka PC, Nelson A. Waneka, Denver, Colorado; Conduit Law LLC, Elliot A. Singer, Denver, Colorado, for Defendant-Appellant and Appellant
NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
El Paso County District Court No. 21CV30794 Honorable David A. Gilbert, Judge
Waltz Reeves, Christopher R. Reeves, Yana K. Durell, Denver, Colorado, for Plaintiff-Appellee
Levin Sitcoff Waneka PC, Nelson A. Waneka, Denver, Colorado; Conduit Law LLC, Elliot A. Singer, Denver, Colorado, for Defendant-Appellant and Appellant
Tow and Lipinsky, JJ., concur
OPINION
GROVE JUDGE
¶ 1 In this personal injury case arising from a three-vehicle crash, appellants, Mark Sanders and Diana Sanders, appeal two interlocutory orders that prevented them from asserting claims against one or both of the other drivers who were involved in the crash. The first order denied Mark's motion to amend his answer and assert claims against the other drivers, on the grounds that he filed the motion too late and that granting it would result in extreme prejudice to the other parties. The second order denied Mark and Diana's motion to amend the case management order (CMO) entered on September 29, 2021, to allow Mark to amend or supplement his pleadings, and to join Diana as a party so that she could assert her own personal injury claims. We conclude that the district court properly certified the orders as final and appealable under C.R.C.P. 54(b), but we dismiss Diana's appeal because she is not a party to the case and did not seek leave to intervene in the district court. In all other respects, we affirm.
Because they share the same last name, we will use Mark Sanders's and Diana Sanders's first names throughout this opinion. We intend no disrespect by doing so.
I. Background
¶ 2 The underlying controversy stems from a July 2019 crash involving vehicles driven by Anne Fleming, Shawn Erikson, and Mark Sanders. The collisions occurred while Fleming was attempting to merge onto a highway near a delivery truck that Erikson was driving. Erikson, who was in the right lane, swerved into the left lane, where he collided with a motor home that Mark was driving and that carried Diana as a passenger. Erikson then lost control of the truck, which slid or rolled into Fleming's vehicle before coming to rest beside the highway. All three drivers and Diana were allegedly injured.
¶ 3 In 2021, Fleming sued Erikson, Erikson's employer, and Mark for negligence. Erikson filed a counterclaim against Fleming and a cross-claim against Mark, alleging that both were negligent and responsible for his injuries. In his responsive pleadings, Mark denied that he was liable, but he did not assert claims against either party. Diana was not named as a party or otherwise mentioned in any party's pleadings.
¶ 4 The CMO set a deadline of December 2, 2021, to amend or supplement pleadings and to join additional parties. Over the course of the next year, Erikson's employer was dismissed from the action and Fleming settled her claims against Erikson and Mark, as well as Erikson's counterclaims against her. Thus, the only active claim remaining in May 2022 was Erikson's cross-claim against Mark.
¶ 5 Mark did not assert claims in this case against any other party before the CMO's December 2, 2021, deadline. Mark and Diana did, however, file two lawsuits in federal court against Erikson, Fleming, and Erikson's employer in 2021. They voluntarily dismissed one of these cases, filed in the United States District Court for the Southern District of New York, before any of the defendants responded. The other case, filed in the United States District Court for the District of Colorado, was dismissed for failure to sufficiently allege diversity jurisdiction. Both lawsuits were dismissed by July 2021.
¶ 6 Almost a year later, on May 19, 2022, Mark filed two related motions in this case. The first, captioned "Motion for Leave to Amend Answers," asserted for the first time in this case that both Mark and Diana suffered serious injuries in the crash and that, while they had "retain[ed] counsel in their home state of Texas," that attorney was "not licensed in Colorado state courts" and had unsuccessfully filed suit on their behalf in the federal cases discussed above. Once the federal cases were dismissed, the motion alleged, Mark and Diana contacted a Colorado attorney to pursue their claims in this case. That led to Mark's request to amend his answers to allow him to pursue claims in this case.
Although it is not determinative, we are troubled by counsel's representations in the two motions that Mark's prior attorneys were not admitted in Colorado. Despite the fact that two Colorado attorneys had represented Mark in this case, and the Texas-based attorney who filed the federal lawsuits on behalf of Mark and Diana was also licensed in Colorado, the motions both stated that Mark and Diana "only made contact with an attorney licensed in Colorado state courts - the undersigned - on May 19, 2022, the same day this Motion is filed." After Erikson pointed out this discrepancy, Mark's attorney wrote in a footnote in Mark's reply that the attorney "was initially under the impression that Mr. Sanders' out-of-state counsel was not licensed in Colorado state courts," but that "after investigating the argument raised in Defendant Erickson's [sic] motion, the undersigned now agrees that counsel is, in fact, licensed to practice before this court." It should go without saying that this was an unacceptable explanation. A query on the Office of Attorney Regulation Counsel's Attorney Search & Disciplinary History website would have revealed within seconds whether Mark's prior counsel was or was not admitted to practice in Colorado. We remind Mark's attorney that "[t]he signature of an attorney constitutes a certificate by him that he has read the pleading; [and] that to the best of his knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact." C.R.C.P. 11(a) (emphasis added).
¶ 7 Notably, Mark's motion for leave to amend his answers was unaccompanied by proposed amended answers and did not describe Mark's proposed amendments, what claims he planned to assert, or which parties would be the subject of those claims. Although he urged the district court to adhere to the liberal policy of allowing amendments established by C.R.C.P. 15, he did little to explain why he had waited more than six months after the deadline in the CMO had passed - and nearly a year after the dismissal of the second of his and Diana's unsuccessful federal lawsuits - to seek leave to pursue claims in this case.
¶ 8 The second motion was captioned "Motion to Amend Case Management Order" (motion to amend the CMO). It was filed on behalf of both Mark and Diana - even though Diana had not previously moved to intervene in the case. Allowing an amendment of the CMO, the motion explained, would (1) allow Mark to amend or supplement his answers and assert claims (if the court also granted Mark's motion for leave to amend his answers) and (2) permit Diana "to join as a party to this lawsuit and file a Complaint." As with Mark's motion for leave to amend his answers, the motion to amend the CMO asserted that Mark and Diana were seriously injured in the crash, that they had no other available remedy, and that they had not previously had Colorado counsel. Again, however, Mark and Diana did little else to demonstrate good cause for the delay and mostly focused on the court's extensive discretion to allow late amendments to a CMO under C.R.C.P. 16(c). See Antero Res. Corp. v. Strudley, 2015 CO 26, ¶ 23 ("C.R.C.P. 16(c) accords the parties and the trial court flexibility to modify the presumptive order upon a showing of good cause 'to allow the parties an appropriate amount of time to meet case management deadlines, including discovery, expert disclosures, and the filing of summary judgment motions.'" (quoting C.R.C.P. 16(c))).
¶ 9 Fleming and Erikson opposed the motions. In separate responses, they argued that Mark and Diana had not established good cause for amending the CMO and that Mark had not provided an adequate explanation for his delay in moving for leave to amend his answers. Fleming and Erikson also maintained that allowing the untimely amendments would severely prejudice them by reopening discovery, undoing settlements already reached, and delaying a resolution of the case.
¶ 10 In his replies, Mark (ostensibly joined by Diana regarding the motion to amend the CMO) argued that granting the motions would not prejudice Fleming and Erikson because the court had recently continued the trial date, which would allow the parties time to engage in discovery on the claims he and Diana planned to assert. And, for the first time - and without any accompanying motion to intervene by Diana - they asserted in the reply in support of the motion to amend the CMO that the district court was required to add Diana to the case because she was a person needed for just adjudication as contemplated by C.R.C.P. 19.
¶ 11 The district court denied the motions in two written orders issued on June 15, 2022 (the June 15 orders). (The order denying Mark's motion for leave to amend his answers was the only one that included substantive analysis. Having considered the merits of both motions in that order, the court denied the motion to amend the CMO as moot.) Addressing Mark's explanation for the delay, the court noted that, despite the fact that he had been represented by counsel in the case for more than a year and, through counsel, had actively participated in the proceedings, "[n]o mention was ever made" until five and a half months after the CMO's deadline "that Mr. or Mrs. Sanders were contemplating a request to amend their answer or bring any claims against co-defendant Erikson or Plaintiff Fleming." The court was not persuaded by Mark's attempt to blame his Texas counsel's alleged negligence for the delay, pointing out that, throughout the case, Mark "had a lawyer who was responsible for conducting at least minimal inquiries regarding the accident which would have revealed whether any counterclaims should be filed relating to the manner in which the accident occurred and whether [Mark] suffered any injuries as a result of the accident."
¶ 12 Turning to the impact that granting Mark's motion for leave to amend his answers would have on Erikson and Fleming, the court concluded that "[t]he potential prejudice to the other parties to this case is fairly extreme." Fleming, the court observed, would be particularly prejudiced because she had already settled all of her claims - including those that she had asserted against Mark - and had been dismissed from the suit. And more generally, the court concluded, allowing Mark to amend his answers would not only "completely alter the complexion of this case," but would also undo the "months of work" that had gone into "investigat[ing], negotiat[ing], and settl[ing]" the parties' various claims.
¶ 13 Mark attempted to immediately appeal the June 15 orders, but a division of this court dismissed the appeal for lack of jurisdiction because no final order had been entered. In a minute order issued following a status conference, the district court stated that it would "issue [a] written order intended as a final judgment." Accordingly, the court later certified the June 15 orders as final and appealable pursuant to C.R.C.P. 54(b). This appeal followed.
II. C.R.C.P. 54(b) Certification
¶ 14 At the outset, we must consider whether we have jurisdiction to consider Mark's and Diana's appeals. See Harding Glass Co. v. Jones, 640 P.2d 1123, 1126 (Colo. 1982). We conclude that the district court properly certified its order that denied Mark's motion for leave to amend his answers and the motion to amend the CMO.
¶ 15 Under section 13-4-102(1), C.R.S. 2023, this court has jurisdiction over appeals from final judgments. "Generally, to qualify as a final judgment, 'an entire case must be resolved': 'A final judgment "ends the particular action in which it is entered, leaving nothing further for the court pronouncing it to do in order to completely determine the rights of the parties involved in the proceeding.'"" Rea v. Corr. Corp. of Am., 2012 COA 11, ¶ 6 (citation omitted).
¶ 16 C.R.C.P. 54(b), however, creates an exception to the general rule that an entire case must be resolved by a final judgment before an appeal is brought. The Rule provides, in pertinent part:
[W]hen multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the . . . parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.C.R.C.P. 54(b).
¶ 17 In certifying a decision as final, a trial court generally must make the following three findings: (1) the decision certified rules upon an entire claim for relief; (2) the decision certified is an ultimate disposition of the claim; and (3) there is no just reason for delay in entering a final judgment on the claim. Harding Glass, 640 P.2d at 1125. "An appellate court's jurisdiction to entertain the appeal of a judgment certified pursuant to Rule 54(b) depends upon a correct certification." E. Cherry Creek Valley Water &Sanitation Dist. v. Greeley Irrigation Co., 2015 CO 30M, ¶ 12.
¶ 18 Absent certification under C.R.C.P. 54(b), "litigation involving multiple claims or multiple parties is treated as a single action which is not final and appealable until all of the issues in the litigation are adjudicated." Kempter v. Hurd, 713 P.2d 1274, 1278 (Colo. 1986).
A. Standard of Review
¶ 19 We review de novo whether the district court's ruling is on an entire claim for relief and whether the decision ultimately disposes of the individual claim. Allison v. Engel, 2017 COA 43, ¶ 25. By contrast, we review for an abuse of discretion a district court's determination that there is no just reason for delay. Lytle v. Kite, 728 P.2d 305, 309-10 (Colo. 1986). A court abuses its discretion if its ruling is manifestly arbitrary, unreasonable, or unfair. Gen. Steel Domestic Sales, LLC v. Bacheller, 2012 CO 68, ¶ 42.
B. Analysis
¶ 20 In the motion to amend the CMO, Mark and Diana asked for the extension of three deadlines: (1) the deadline for amending or supplementing pleadings; (2) the deadline for joining additional parties; and (3) "relevant discovery deadlines," which presumably would need to be adjusted should the court grant either of the first two requests.
¶ 21 The district court addressed the motions in a single substantive order. In essence, the court ruled that Mark and Diana had failed to provide a sufficient reason for allowing either late amendments or supplements to Mark's answers or joining Diana as a party, and that Fleming and Erikson would both suffer extreme prejudice if the motions were granted. It then certified its order under C.R.C.P. 54(b), ruling that it had "dispose[d] of both Mark Sanders's and Diana Sanders's individual claims," and that there was "no just reason for delaying the interlocutory appeal of these Orders."
¶ 22 A claim is final if the ruling ultimately disposes of the issue. E. Cherry Creek Valley Water &Sanitation Dist., ¶ 11. By ruling that Mark could not amend or supplement his answers to assert claims and that Diana could not join the case, the court disposed of the claims that they proposed to assert. Thus, we agree that the court's ruling ultimately disposed of an "entire claim for relief" for both Mark and Diana.
¶ 23 Whether there was no just reason for delay in entering a final judgment on the claim is a more complicated question. In its final judgment order certifying the June 15 orders for appeal, the district court explained that "it would be wasteful to proceed to trial under circumstances where the trial may have to be set aside or a second trial involving the same parties may have to later proceed, potentially leading to inconsistent results depending on the appellate court's rulings regarding the counter claims [sic]." The district court also acknowledged the June 15 orders and its belief that the reasoning underlying those orders was sound.
¶ 24 In Allison, a division of this court, considering a similar ruling under C.R.C.P. 54(b), concluded that a district court's desire to avoid inefficiency from multiple trials is "plainly insufficient to justify certification because the same could be said about any case involving multiple claims or parties as to which a dispositive ruling is entered on one claim, or as to one party, before trial." Allison, ¶ 40. To the extent that Allison intended to draw a bright line rule, however, we decline to apply its holding under the circumstances of this case. See Chavez v. Chavez, 2020 COA 70, ¶ 13 (holding that one division of this court is not bound by decisions of other divisions).
¶ 25 In particular, by deciding now whether Mark and Diana will be able to pursue their claims, we will eliminate the possibility of inconsistent outcomes with respect to liability for the crash. Moreover, we will avoid keeping Fleming, who long ago seemingly settled all of the claims involving her, in limbo while Erikson's claims against Mark proceed to trial. Finally, the action has been ongoing for more than three years, and leaving undetermined whether the parties may need to start a second multi-year case years down the line only serves to diminish judicial efficiency. While we acknowledge that limiting piecemeal appellate actions places some limitations on the scope of C.R.C.P. 54(b) certifications, see Wilson v. Kennedy, 2020 COA 122, ¶¶ 18-20, we conclude that, based on the circumstances of this particular case, the district court did not abuse its discretion by deciding that judicial efficiency is advanced more by allowing this appeal to proceed.
III. Diana's Standing to Appeal
¶ 26 We turn next to whether Diana has standing to seek appellate review. We conclude that she does not and therefore dismiss her from the appeal.
¶ 27 Generally, only parties to the case may appeal a district court's order. See AMCO Ins. Co. v. Sills, 166 P.3d 274, 275 (Colo.App. 2007). But Diana is not a party because she never filed a motion to intervene and the court never ordered that she be joined as a party. While her attorney did file the motion to amend the CMO on behalf of her and Mark, as a non-party she had no standing to request an amendment of the CMO. And while this oversight could potentially have been remedied by a late-filed motion to intervene under C.R.C.P. 24, Diana never requested that she be added to the case as a party. Thus, by filing the motion to amend the CMO without first seeking to intervene, Diana put the cart before the horse, and then never attached the horse to it.
To the extent that Mark and Diana's discussion of mandatory joinder under C.R.C.P. 19 in their reply in support of the motion to amend the CMO could be construed as a motion to allow Diana to intervene, we decline to consider it. See Grohn v. Sisters of Charity Health Servs. Colo., 960 P.2d 722, 727 (Colo.App. 1998) (holding that arguments raised for the first time in a reply brief before the trial court are not properly before an appellate court where opposing party was unable to respond and the trial court made no findings or conclusions with respect to that contention).
¶ 28 There are, of course, some circumstances in which a non-party may appeal a district court's order. "To establish standing to appeal, a non-party must show that a trial court's order imposes a 'substantial grievance' on that non-party. A substantial grievance exists when the lower court's decision denies a non-party some claim of right or imposes upon it a substantial burden or obligation." Arapahoe Cnty. Dep't of Hum. Servs. v. People in Interest of D.Z.B., 2019 CO 4, ¶ 8. That is not the situation here. The district court did not deny Diana "some claim of right" because she never filed a motion to intervene, whether as of right or otherwise. Nor did the district court impose upon Diana a substantial burden or obligation. Rather, two days after the motion was fully briefed, the court simply ruled that it was too late to amend the CMO. Unsurprisingly, because Diana was not a party and had not requested to be made one, the court's order barely mentioned her request.
We do not agree that the denial of the motion to amend the CMO imposed any "burden or obligation" on Diana, much less a substantial one. But assuming that the denial of such a motion could be construed as a "burden or obligation," we observe that the district court issued its order denying the motion nearly three weeks before the statute of limitations had run on any claims that Diana might have in connection with the crash. Thus, the order did not foreclose Diana's right to seek relief on her own behalf in a new civil action.
¶ 29 Accordingly, because Diana was not a party in the district court and she is unable to show that she is substantially aggrieved by the district court's order denying the motion to amend the CMO, she does not have standing to appeal and her appeal must be dismissed.
IV. Motion for Leave to Amend
¶ 30 Mark contends that the district court abused its discretion by denying Mark's motion for leave to amend his answers. We are not persuaded.
A. Standard of Review and Principles of Law
¶ 31 We review a district court's ruling on a motion for leave to amend for an abuse of discretion. Polk v. Denver Dist. Ct., 849 P.2d 23, 25 (Colo. 1993). A court abuses its discretion if its decision is manifestly unreasonable, arbitrary, or unfair. Sterenbuch v. Goss, 266 P.3d 428, 440 (Colo.App. 2011).
¶ 32 C.R.C.P. 15(a) provides that, after a responsive pleading has been filed, a party "may amend his pleading only by leave of court or by written consent of the adverse party." Leave to amend should be liberally granted "when justice so requires," id., and a "court should not impose arbitrary restrictions on making timely amendments," Benton v. Adams, 56 P.3d 81, 85 (Colo. 2002). But C.R.C.P. 15(a)'s policy of liberal leave to amend is not without limits. Polk, 849 P.2d at 25. In evaluating a motion for leave to amend, a district court must consider the totality of the circumstances, including "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment." Id. at 25-26 (quoting Varner v. Dist. Ct., 618 P.2d 1388, 1390 (Colo. 1980)). When evaluating undue delay, the court can consider that "the movant carries the burden of demonstrating lack of knowledge, mistake, inadvertence, or other reason for having not stated the amended claim earlier." Id. at 27 (quoting Gaubatz v. Marquette Mins., Inc., 688 P.2d 1128, 1130 (Colo.App. 1984)).
B. Analysis
¶ 33 The district court did not abuse its discretion by denying Mark's motion for leave to amend his answers. Mark waited a year after the lawsuit was filed before attempting to add his claims. He knew he had potential claims against Erikson and Fleming (and perhaps against Erikson's employer, as well) because (1) in his motion for leave to amend his answers, he asserted that he had "sustained extensive injuries, including to his neck, back, and ulnar nerve" in the crash; and (2) he had already attempted to sue Fleming and Erikson and Erikson's employer - twice - in different federal courts. The second of those federal cases was dismissed nearly six months before the CMO's deadline to amend pleadings and nearly a year before Mark sought to amend his answers. Yet despite the fact that he participated fully in this case, and even settled Fleming's claim against him, Mark did not notify anyone that he was contemplating filing claims until nearly six months after the deadline to amend pleadings had passed. And then, when he did file his motion, it was based in part on a false - or at least misleading - representation that Mark had not previously been represented by counsel licensed in Colorado, and moreover did not comply with C.R.C.P. 16(e)'s requirement that the request to extend the deadline specify the proposed amendments and make a "specific showing of good cause for the timing and necessity for each modification sought."
¶ 34 As for prejudice, the district court found that "[t]he potential prejudice to the other parties to this case is fairly extreme." Fleming, for example, had settled all of her claims and the counterclaims against her, and had been dismissed from the action. Allowing Mark to amend his answers to assert claims against her would undo the significant work that went into those settlements. Cf. Benton, 56 P.3d at 88-89 (allowing amendment because the case was still in its "embryonic stage" and prior delays were caused by opposing party). Furthermore, because Mark had never previously indicated that he intended to file claims against Fleming and Erikson, none of the "hundreds of hours" that had gone toward trial preparation had been done with that possibility in mind. Polk, 849 P.2d at 26 (holding that courts may consider case history when considering a motion to amend pleadings). And while some of these concerns could be addressed by reopening discovery, that would come at significant expense and require even more continuances.
¶ 35 In sum, the district court correctly ruled that Mark did not carry his burden of justifying his delay in seeking to amend his answer to assert claims, and that Erikson and Fleming would suffer "fairly extreme" prejudice if he were given leave to amend his answers to assert claims so late in the case. When we consider the extent of the delay, Mark's insufficient justifications for it, and the prejudice that the untimely amendment would cause for other parties in the case, we are persuaded that the totality of the circumstances adequately supports the district court's ruling. Accordingly, the district court did not abuse its discretion by denying Mark's motion for leave to amend his answers.
V. Denial of Motion to Amend the CMO
¶ 36 We reach the same conclusion regarding the court's denial of the motion to amend the CMO. (Recall that we have already concluded that Diana lacks standing to appeal, so we need only address the motion to the extent that Mark appeals issues specific to him.)
¶ 37 Trial courts have discretion over case management issues, including whether to amend or extend deadlines. See Redden v. SCI Colo. Funeral Servs., Inc., 38 P.3d 75, 79-80 (Colo. 2001). A trial court abuses this discretion only when its decision is manifestly arbitrary, unreasonable, or unfair. Green v. Qwest Servs. Corp., 155 P.3d 383, 387 (Colo.App. 2006).
¶ 38 As it pertained to Mark, the motion to amend the CMO was largely duplicative of Mark's motion for leave to amend his answers. That is, if the district court decided to allow Mark to file one or more amended answers, it would also be necessary to amend the CMO to extend various pleading and discovery deadlines. But as the district court recognized, once it had denied Mark's motion for leave to amend his answers, the motion to amend the CMO was "essentially moot" because there was no need to accommodate any new deadlines. As a result, the district court did not abuse its discretion by denying the motion to amend the CMO.
VI. Disposition
¶ 39 The appeal is dismissed as to Diana. The orders are affirmed.
JUDGE TOW and JUDGE LIPINSKY concur.