Source: https://cbaclelegalconnection.com/tag/ucc/
Timestamp: 2019-04-18 15:04:21+00:00

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The Colorado Court of Appeals issued its opinion in Mesa County Land Conservancy, Inc. v. Allen on June 7, 2012.
Conservation Easement—Mutual Ditch Shares—Summary Judgment—Injunctive Relief.
In this dispute over a conservation easement encumbering mutual ditch shares, defendants Sam and Susie Allen appealed the trial court’s judgment (1) granting summary judgment in favor of plaintiff Mesa County Land Conservancy, Inc. (Mesa Land Trust); (2) denying the Allens’ motions for summary judgment; and (3) granting injunctive relief in favor of Mesa Land Trust. The judgment was affirmed.
In 1990, the United States, acting by and through the Farmers Home Administration, granted a deed of conservation easement (1990 Easement) to Mesa Land Trust. The conservation easement covered 140 acres of land and provided that “[a]ll water rights held at the date of this conveyance shall remain with this land.” It was recorded in the Mesa County real estate records. At the time of the conveyance, the United States held nine shares of capital stock in a mutual ditch company, the Big Creek Reservoir Company (Big Creek Shares).
The Allens purchased the property in 1993, subject to the 1990 Easement and their deed specifically referred to the Big Creek Shares. In 2007, the Allens sold the property, but purported to exempt the Big Creek Shares from the conveyance. Mesa Land Trust sought declaratory and injunctive relief against the Allens for violating the terms of the 1990 Easement by attempting to sever the Big Creek Shares from the land.
The Allens filed two motions for summary judgment on grounds that the Big Creek Shares were not encumbered by the 1990 Easement because it did not comply with CRS § 38-30.5-104(5) or with article 8 of Colorado’s Uniform Commercial Code (UCC). Mesa Land Trust moved for summary judgment, seeking a declaratory judgment that the Big Creek Shares could not be exempted from the conveyance. The trial court issued a permanent injunction in favor of Mesa Land Trust, requiring the Allens to convey the Big Creek Shares to the purchasers and prohibiting them from severing them from the property. The Allens appealed.
In 2003, the General Assembly amended certain parts of the conservation easement statutes. The Allens argued that the 1990 Easement is invalid because the definition of “conservation easement” in the relevant statute in effect in 1990 did not authorize encumbrance of water rights; and (2) the 1990 Easement does not comply with the notice requirements of the 2003 amendment of CRS § 38-30.5-104(5). Mesa Land Trust argued that the 1990 Easement is valid because the definition of conservation in the statute in effect when the 1990 Easement was created—the 1976 statute—allowed water rights to be encumbered, and if the 2003 amendment to the notice requirement applies retroactively, it is unconstitutionally retrospective.
The Court of Appeals determined that (1) the statutory language was ambiguous before the 2003 amendments; (2) the legislature intended to clarify, and not to change, the statute; and (3) the statute includes a provision that the 2003 amendment applies to previously created conservation easements. Therefore, the Court held that the legislature intended the statute to apply retroactively. It then considered whether it was unconstitutionally retrospective.
Mesa Land Trust contended that the 2003 amendment is unconstitutionally retrospective solely as to the notice requirement because it impairs Mesa Land Trust’s vested rights in the Big Creek Shares. The Allens responded that Mesa Land Trust does not have any vested rights in the Big Creek Shares because the 1976 statute did not recognize conservation easements encumbering water rights as valid interests in land. The Court disagreed with the Allens, finding that the 1976 statute did authorize the creation of conservation easements encumbering water rights (this was clarified by the 2003 amendment).
The Court also agreed with the trial court that application of the 2003 notice requirement to easements that predated the enactment of that requirement would be unconstitutional. If the requirement were imposed, it would render all pre-existing conservation easements covered by that requirement invalid unless, by chance, a grantor complied with a sixty-day notice provision that did not exist when the easement was created.
Finally, the Allens argued that the Big Creek Shares are securities subject to a previous version of the UCC. The Court rejected this argument, finding that it is well established that the UCC does not apply to mutual ditch shares as they are not corporations in a legal sense but merely vehicles for individual ownership of water rights. Accordingly, the trial court’s judgment was affirmed.
The Colorado Court of Appeals issued its opinion in Maehal Enterprises, Inc. v. Thunder Mountain Custom Cycles, Inc. on July 7, 2011.
Automobile—Manufacturer—Dealer —Amendment of Pleadings—CRS § 12-6-120(1)(d)—Damages.
Defendant Thunder Mountain Custom Cycles, Inc. (TMCC) appealed and Pikes Peak Harley-Davidson (PPHD) cross-appealed various aspects of the trial court’s judgment on PPHD’s claims of (1) violation of statutes regulating automobile dealers; (2) breach of contract; and (3) negligent misrepresentation. The judgment was affirmed in part and reversed in part, and the case was remanded.
This case arises from the parties’ agreement allowing plaintiff Maehal Enterprises, Inc., doing business as PPHD, to act as a dealer of motorcycles manufactured by TMCC. After the State Department of Revenue Auto Industry Division informed PPHD that it was not authorized to sell TMCC’s motorcycles, PPHD brought suit, and the case ultimately proceeded to a bench trial.
TMCC contended that, because the parties did not intentionally and actually try a claim under the Uniform Commercial Code (UCC), the trial court abused its discretion when it permitted PPHD to amend the pleadings after trial to include a claim of breach of implied warranties under the UCC. PPHD did not plead a breach of implied warranties claim under the UCC. It also confirmed before trial that it was not asserting any implied warranties claims. Additionally, neither party mentioned the UCC nor adduced any testimony discussing implied warranties under the UCC at trial. Accordingly, the court abused its discretion by allowing the amendment and entering judgment on the amended claim.
PPHD contended that the trial court erroneously concluded that TMCC did not violate CRS § 12-6-120(1)(d), which makes it unlawful for a manufacturer to cancel a dealer franchise agreement by nonrenewal without just cause. However, there was record support for the trial court’s finding that the one-year dealer contact had been terminated by mutual agreement of the parties. Accordingly, the trial court did not err in its conclusion that there was just cause for nonrenewal of the dealer contract. Thus, TMCC did not violate § 12-6-120(1)(d).
PPHD also contended that the trial court erroneously determined that it was not entitled to recover for its loss or damage caused by TMCC’s and its owner’s violation of the relevant statutes that make it unlawful for a manufacturer to own a motor vehicle dealer. Although the treble damages provision of §12-6-122(2) does not apply to a violation of the independent control of dealer provision, PPHD could recover for its loss or damage caused by TMCC’s and its owner’s violation of the independent control of dealer provision pursuant to §12-6-122(3).
PPHD further contended that the trial court erred in concluding that TMCC was not obligated to repurchase its motorcycles and parts following termination of the dealer contract. Because the franchise agreement expired more than twelve months after PPHD took possession of the motorcycles, TMCC was under no obligation to repurchase the motorcycles. The case was remanded, however, to permit the trial court to consider PPHD’s claim for reimbursement of parts, which is not constrained by the same twelve-month period.
This summary is published here courtesy of The Colorado Lawyer. Other summaries for the Colorado Court of Appeals on July 7, 2011, can be found here.
The Colorado Court of Appeals issued its opinion in Glover, Personal Representative of the Estate of Noren v. Innis on March 3, 2011.
Summary Judgment—Uniform Commercial Code—Defenses of Renunciation and Waiver.
Defendants Norma Innis, Richard Innis, and their son Dain Innis appealed the trial court’s summary judgment in favor of plaintiff, the personal representative of the Estate of Juel Noren (decedent). The judgment was reversed and the case was remanded for further proceedings.
Defendants and decedent, with his wife who predeceased him, owned adjacent residential property in Mesa County. The Norens divided their time between Colorado and Nevada. Defendants contended that they and the Norens become friends and that they looked after the Norens’ property when they were in Nevada. Sometime after the death of Mrs. Noren, decedent and defendants had an attorney draft a promissory note payable by defendants to decedent in the principal amount of $250,000, with a related agreement and warranty deed conveying decedent’s Mesa County property (property). The draft agreement recited decedent had sold his property to himself and Dain and Norma Innis as joint tenants in consideration for the note.
The note and agreement were signed by defendants in November 2003 and sent with the unsigned warranty deed to decedent in Nevada. A year and a half later, decedent signed the agreement and deed and retained the note. The note required defendants to pay the $250,000 in monthly installments commencing January 1, 2007. Decedent died before any payments were due, and defendants never made any payments. Defendants claimed decedent never accepted the note, waived payment under it, and repeatedly expressed his intent to give them the property.
Plaintiff filed this action. The trial court denied plaintiff’s motion for summary judgment that the transaction was illusory, but granted partial summary judgment on the note with interest. The trial court then held a bench trial on breach of a provision in the agreement establishing a bank account and for an accounting. The trial court found in defendants’ favor. Defendants moved for post-trial relief to reduce the amount of prejudgment interest under the note, which the trial court denied.
On appeal, defendants argued it was error to characterize their waiver defense as a renunciation defense under CRS § 4-3-604 and then to reject it. The Court of Appeals agreed.
Defendants pleaded waiver as a defense, and the trial court observed “[w]hat Defendants call a waiver is more commonly called a renunciation.” The trial court held there was no evidence that decedent had renounced his rights under the note and therefore granted plaintiff’s motion for partial summary judgment.
The Court agreed that decedent did not renounce his rights to collect under the note for purposes of § 4-3-604 of the Uniform Commercial Code (UCC). However, § 4-3-601(a) permits the obligation of a party to pay under an instrument to be discharged under the UCC or by any act or agreement that would discharge an obligation to pay under a simple contract.
The defense of waiver, pleaded by defendants, arises when a party to a contract is entitled to assert a particular right, knows the right to exist, and intentionally abandons that right. Waiver may be implied by a party’s conduct. Therefore, the trial court erred by failing to consider defendants’ waiver defense independent of renunciation. The partial summary judgment was reversed and the case was remanded.
This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on March 3, 2011, can be found here.

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