Court Opinion

ID: 4167343
Source: CourtListenerOpinion
Date Created: 2017-05-09 22:11:05.963969+00
Date Added: 2024-06-11T14:38:30.346491
License: Public Domain

COLORADO COURT OF APPEALS                                            2017COA59

Court of Appeals No. 16CA0766
City and County of Denver District Court No. 15CV33990
Honorable Michael A. Martinez, Judge

John Cox,

Plaintiff-Appellant,

v.

Sage Hospitality Resources, LLC,

Defendant-Appellee.

                       JUDGMENT REVERSED AND CASE
                         REMANDED WITH DIRECTIONS

                                 Division V
                           Opinion by JUDGE FOX
                        Román and Booras, JJ., concur

                            Announced May 4, 2017

Killian, Davis, Richter & Mayle, P.C., J. Keith Killian, Andrew S. Petroski,
Grand Junction, Colorado, for Plaintiff-Appellant

Waltz|Reeves, Richard A. Waltz, Christopher R. Reeves, Denver, Colorado, for
Defendant-Appellee
¶1    Plaintiff, John Cox, appeals the Denver District Court’s

 dismissal of his complaint on the basis of forum non conveniens.

 We conclude that potential double recovery — where a resident

 plaintiff is simultaneously suing different defendants in Colorado

 and another state for the same damages — does not constitute

 “most unusual circumstances” under forum non conveniens as

 articulated in McDonnell-Douglas Corp. v. Lohn, 192 Colo. 200, 557
P.2d 373 (1976). We therefore reverse and remand the case with

 directions.

                           I.    Background

¶2    In May 2013, Cox, a Colorado resident, was staying at the

 Hilton San Diego/Del Mar Hotel (the hotel) in California. Cox was

 walking from his room on an outdoor path toward the breakfast

 area of the hotel when he lost his footing and fell, suffering a spiral

 fracture to his femur.

¶3    Defendant, Sage Hospitality Resources, LLC (Sage), owns the

 hotel property. Sage’s members are Colorado residents, and its

 principal place of business is in Denver, Colorado. WS HDM, LLC

 (WS HDM), incorporated in Delaware and licensed to do business in

 California, owns and operates the hotel.

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¶4     Cox simultaneously filed actions against both Sage and WS

 HDM in the United States District Court for the District of Colorado

 and the United States District Court for the Southern District of

 California. Cox voluntarily dismissed his Colorado action after

 learning that the federal court lacked diversity jurisdiction because

 Cox and Sage shared Colorado citizenship. The United States

 District Court for the Southern District of California later dismissed

 Cox’s action against Sage and WS HDM for lack of subject matter

 jurisdiction.

¶5     In November 2015, Cox sued Sage in Denver District Court

 and WS HDM in California state court. Sage moved to dismiss the

 action in Denver District Court under the doctrine of forum non

 conveniens. Sage’s motion asserted that two unusual

 circumstances warranted dismissing Cox’s claim: (1) the incident

 occurred in California, and evidence and witnesses were principally

 located there; and (2) Cox was pursuing a civil action in California

 state court, creating a risk of double recovery for the same damages

 related to his fall.

¶6     In March 2016, the Denver District Court, in a five-page order,

 granted Sage’s motion to dismiss, noting that judicial economy

                                   2
 concerns and the potential for double recovery allowed for dismissal

 under the doctrine of forum non conveniens. Despite the Denver

 District Court’s reasoned order, we reverse based on the Colorado

 Constitution, article II, section 5; the Colorado Citizens’ Access to

 Colorado Courts Act, §§ 13-20-1001 to -1004, C.R.S. 2016; and

 Colorado Supreme Court precedent.

                      II.   Forum Non Conveniens

¶7    Cox argues that the Denver District Court erred in granting

 Sage’s motion to dismiss because there were no unusual

 circumstances sufficient to overcome the strong presumption in

 favor of Colorado courts hearing cases brought by Colorado

 residents. We agree.

               A.   Preservation and Standard of Review

¶8    Cox properly preserved this issue for appeal.

¶9    A district court generally has discretion to dismiss an action if

 it concludes that a more appropriate forum lies elsewhere. PMI

 Mortg. Ins. Co. v. Deseret Fed. Sav. & Loan, 757 P.2d 1156, 1158

 (Colo. App. 1988); see also UIH-SFCC Holdings, L.P. v. Brigato, 51
P.3d 1076, 1078 (Colo. App. 2002). However, a strong presumption

 in favor of a plaintiff’s choice of forum exists in Colorado;

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  accordingly, Colorado courts have extremely limited discretion

  under this doctrine to dismiss an action filed by a resident plaintiff.

  McDonnell-Douglas, 192 Colo. at 201, 557 P.2d at 374; see also

  § 13-20-1002(1)(b), C.R.S. 2016 (“The general assembly finds and

  declares . . . [that] [s]ection 6 of article II of the Colorado

  constitution guarantees citizens of this state access to the courts of

  this state . . . .”); § 13-20-1002(2)(a) (“The general assembly finds

  that the purposes of [the Colorado Citizens’ Access to Colorado

  Courts Act] are . . . [t]o ensure access of Colorado citizens to the

  courts of Colorado . . . .”).

                                   B.       Law

¶ 10   The Colorado Supreme Court has made clear that “the

  doctrine of [f]orum non conveniens has only the most limited

  application in Colorado courts.” McDonnell-Douglas, 192 Colo. at

  201, 557 P.2d at 374; see also Colo. Const. art. II, § 6 (providing

  that “[c]ourts of justice shall be open to every person,” and “right

  and justice should be administered without sale, denial or delay”).1

  1Apparently, from 1976, when McDonnell-Douglas Corp. v. Lohn,
  192 Colo. 200, 557 P.2d 373 (1976), was decided, to 2004, no

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  Under the Colorado Citizens’ Access to Courts Act, courts must

  dismiss an action on forum non conveniens grounds only if:

            (a) The claimant or claimants named in the
            motion are not residents of the state of
            Colorado;

            (b) An alternative forum exists;

            (c) The injury or damage alleged to have been
            suffered occurred outside of the state of
            Colorado;

            (d) A substantial portion of the witnesses and
            evidence is outside of the state of Colorado;
            and

            (e) There is a significant possibility that
            Colorado law will not apply to some or all of
            the claims.

  § 13-20-1004(1) (emphasis added).

¶ 11   Thus, except in “most unusual circumstances,” the choice of a

  Colorado forum by a resident plaintiff will not be disturbed.

  McDonnell-Douglas, 192 Colo. at 201, 557 P.2d at 374 (concluding

  Colorado appellate court upheld a dismissal under this doctrine
  against a resident plaintiff. See N. Reid Neureiter & L. James
  Eklund, Limited Availability of the Forum Non Conveniens Defense
  in Colorado State Courts, 33 Colo. Law. 83, 83 (Nov. 2004). Neither
  party has cited to, nor are we aware of, any legal authority showing
  that a Colorado appellate court has upheld such a dismissal from
  2004 to the present.

                                    5
  that an out-of-state injury, inconvenience, and expense did not

  provide a basis to dismiss the action on forum non conveniens

  grounds); see also Kelce v. Touche Ross & Co., 192 Colo. 202, 203-

  04, 557 P.2d 374, 375 (1976) (concluding that, given Colorado’s

  constitutional access to courts provisions, the expense of securing

  witnesses, the location of the evidence, and the availability of

  another court were not a basis for dismissal under this doctrine);

  Casey v. Truss, 720 P.2d 985, 986 (Colo. App. 1986) (deciding that

  the applicability of non-Colorado law to the controversy,

  inconvenience, and expense did not justify a dismissal on forum

  non conveniens grounds).2

                              C.    Analysis

¶ 12   For the following reasons, the Denver District Court erred in

  dismissing Cox’s action on forum non conveniens grounds based on

  judicial inefficiency and risk of double recovery.

  2 Although Colorado courts have yet to find “unusual
  circumstances” in a case by a resident plaintiff, other jurisdictions
  with a similar legal standard have concluded that if the “resident”
  plaintiff is only a nominal party, such unusual circumstances may
  exist. See Universal Adjustment Corp. v. Midland Bank, Ltd., of
  London, 184 N.E. 152 (Mass. 1933); Atchison, Topeka & Santa Fe
  Ry. Co. v. Dist. Court, 298 P.2d 427 (Okla. 1956).

                                     6
¶ 13   While judicial economy often factors into a court’s forum non

  conveniens analysis, this factor alone does not outweigh a resident

  plaintiff’s constitutionally based interest in having his action heard

  by Colorado state courts. See McDonnell-Douglas, 192 Colo. at 201,

  557 P.2d at 374; see also Firelock Inc. v. Dist. Court, 776 P.2d 1090,

  1101 (Colo. 1989) (Lohr, J., dissenting) (“The lesson of McDonnell-

  Douglas is that we must carefully scrutinize any innovative

  procedure, however well intended, that interferes with the

  fundamental right of every person to obtain access to the courts to

  obtain redress for their legally cognizable grievances.”) (footnote

  omitted). Cox is a Colorado resident and claims to prefer to sue

  Sage in Colorado. Even though Cox filed a related suit in California

  state court, the existence of that lawsuit does not trump Cox’s

  choice of forum in his home state. See Brigato, 51 P.3d at 1079-80

  (concluding that “most unusual circumstances” sufficient to allow

  dismissal on forum non conveniens grounds were not present where

  “similar litigation was pending in French Polynesia”); see also Kelce,
192 Colo. at 203-04, 557 P.2d at 375; Casey, 720 P.2d at 986. The

  California state court suit is against a different defendant, and the

                                     7
  record does not indicate that the joinder of Sage in Cox’s California

  state court suit is mandatory.

¶ 14   Nor does the risk of double recovery overcome the

  presumption in favor of Colorado courts hearing suits filed by

  Colorado resident plaintiffs. We are unaware of any Colorado case

  — and the parties cite none — that included potential double

  recovery as a factor courts must consider when deciding whether to

  dismiss an action under the doctrine of forum non conveniens, or

  that identified potential double recovery as a “most unusual

  circumstance” sufficient to oust a resident plaintiff from his chosen

  forum. See McDonnell-Douglas, 192 Colo. at 201, 557 P.2d at 374;

  see also Brigato, 51 P.3d at 1079-80.

¶ 15   Sage argues that Crane ex rel. Cook v. Mekelburg, 691 P.2d
756, 760 (Colo. App. 1984), shows that Colorado courts include

  potential double recovery in their forum non conveniens

  considerations. We disagree. That division discussed potential

  double recovery only after it concluded its forum non conveniens

  analysis. See id. at 759. Further, it discussed potential double

  recovery and “splitting” cases in the specific context of interpreting

                                     8
  a state’s wrongful death statute, not the doctrine of forum non

  conveniens. Id. at 759-60.

¶ 16   The parties agree that California law governs Cox’s claims.

  The legal framework controlling the calculation of damages is

  substantive law. See Target Corp. v. Prestige Maint. USA, Ltd., 2013
COA 12, ¶ 18 (concluding that the evidence needed to support a

  future damages award is a substantive issue “because damages are

  the measure of a party’s liability”); see also Marine Midland Bank

  v. Kilbane, 573 F. Supp. 469, 470 (D. Md. 1983) (reasoning that

  damages are a substantive matter). Thus, California law applies to

  Cox’s claims and any damages award, even if his case is tried in

  Colorado. And California law, like Colorado law, see Quist

  v. Specialties Supply Co., 12 P.3d 863, 866 (Colo. App. 2000), does

  not allow double recovery for the same injury.3 See Tavaglione

  3 To the extent that Sage referenced, during oral argument, other
  irregularities in California law that could result in Sage and WS
  HDM each being held liable for all for Cox’s damages, Sage did not
  present that argument to the Denver District Court or to this court
  before oral argument. Therefore, we will not entertain those
  arguments on appeal. See Liberty Bankers Life Ins. Co. v. First
  Citizens Bank & Tr. Co., 2014 COA 151, ¶ 25 (“[T]o preserve
  arguments for appeal, ‘the trial court must be presented with an

                                    9
v. Billings, 847 P.2d 574, 580 (Cal. 1993). Colorado courts may

employ various approaches to enforce this rule — including trailing

related litigation, precluding recovery under the doctrine of

collateral estoppel, applying the equitable doctrine of unjust

enrichment, and offsetting the damages award after the judgment

has been entered — but dismissal under forum non conveniens is

not one of them. See US Airways, Inc. v. McCutchen, 569 U.S. ___,

___, 133 S. Ct. 1537, 1545 (2013) (discussing how asserting the

equitable defense of unjust enrichment can prevent double

recovery); see also O’Callaghan v. S. Pac. Co., 20 Cal. Rptr. 708, 712

(Cal. Ct. App. 1962) (“[T]he right to seek equitable setoff after the

entry of judgment has long been recognized by the California

courts.”); Quist, 12 P.3d at 866 (discussing the preclusive effect of a

damages award received after arbitration on a later court

proceeding involving the same parties).

adequate opportunity to make findings of fact and conclusions of
law.’”) (citation omitted); see also Bumbal v. Smith, 165 P.3d 844,
847 (Colo. App. 2007) (declining to consider an argument raised for
the first time during oral argument and not in the briefs on appeal).

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¶ 17   Because we conclude that the Denver District Court

  misapplied the law of forum non conveniens in dismissing Cox’s

  action, we reverse the challenged order. See Patterson v. BP Am.

  Prod. Co., 2015 COA 28, ¶ 67 (noting that a district court abuses its

  discretion when it misapplies the law).

                            III.   Conclusion

¶ 18   The judgment is reversed, and the case is remanded to the

  Denver District Court for further proceedings consistent with this

  opinion.

       JUDGE ROMÁN and JUDGE BOORAS concur.

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