Court Opinion

ID: 9863851
Source: CourtListenerOpinion
Date Created: 2023-09-25 05:55:17.710004+00
Date Added: 2024-06-11T12:04:26.980542
License: Public Domain

Judge VOGT
dissenting.
Although I conclude, for the reasons set forth below, that appellant, Jimmy Sills, is not entitled to relief on his contentions of error, I disagree with the majority's conclusion that he was not substantially aggrieved by the declaratory judgment and therefore lacks standing to appeal.
"A non-party has standing to appeal an order of the trial court following entry of a final judgment if it appears that the nonparty was substantially aggrieved by the order." Bush v. Winker, 907 P.2d 79, 81 (Colo.1995) (non-party appellant was substantially aggrieved by default judgment against his partnerships because it created a conditional liability for him that would mature into an enforceable obligation if partnerships did not satisfy judgment).
AMCO sought a declaratory judgment that its general liability policy did not provide coverage for its insured, Black Jack Construction, Inc., in connection with a construction defect claim. After the declaratory judgment complaint was filed, the homeowners who had made the construction defect claim filed a lawsuit against Black Jack and other parties, including Sills.
AMCO's general liability policy provided that Black Jack's employees were insured for acts within the seope of their employment or while performing duties related to the conduct of the insured's business. Accordingly, when Sills was named as a defendant in the construction defects lawsuit, AMCO provided him with a defense. However, it did not add Sills as a party in the declaratory judgment action.
AMCO subsequently moved for and obtained a default judgment in the declaratory judgment action. Sills asserts on appeal, and AMCO does not dispute, that, upon obtaining its declaratory judgment by default, "AMCO instructed the attorney representing ... Sills [in the construction defects lawsuit] to withdraw from that representation and so advised ... Sills."
In my view, on these facts, Sills was "substantially aggrieved" by the declaratory judgment. As the majority recognizes, a party is substantially aggrieved by a judgment if the judgment imposes a burden or obligation on the party. See Wilson v. Board of Regents, 46 Colo. 100, 100, 102 P. 1088, 1089 (1909). Here, the result of the declaratory judgment was the imposition on Sills of the burden or obligation to provide his own defense in the construction defects litigation-a defense that he otherwise would have received from AMCO if AMCO's policy were deemed to afford coverage.
*280The majority relies on Colorado Permanente Medical Group, P.C. v. Evans, 926 P.2d 1218 (Colo.1996), to support its conclusion that there "is not a sufficiently direct causal connection between the default judgment and [Sills] asserted injury to warrant the conclusion that [Sills] was directly and substantially aggrieved by the judgment." In my view, the majority's reliance on Evans is misplaced. First, the primary basis on which the supreme court relied in finding a lack of standing in Evans was the HMO's failure to seek rehearing-at that time, a prerequisite to certiorari review-of the court of appeals' decision. Moreover, although the court also concluded that the HMO was not substantially aggrieved by the court of appeals' decision, the connection between that decision and the HMO's potential injury was far less direct and substantial than is the connection between the declaratory judgment and the burden imposed on Sills here.
The majority also concludes that Sills claim of a right to a defense under the AMCO policy is not a "claim of right," the denial of which would afford him standing to appeal. Although I am not persuaded that the standing inquiry necessarily turns on what the supreme court meant by the phrase "claim of right" when it used the term in 1909, I consider it unnecessary to decide the issue because I view the burden imposed on Sills as sufficient to establish that he was substantially aggrieved.
Although I conclude that Sills has been substantially aggrieved by the declaratory judgment, I further conclude that, because he failed to raise in the trial court any of the arguments he asserts on appeal, he is not entitled to reversal of that judgment.
It is undisputed that Sills had notice of the pendency of the declaratory judgment action. However, he did not at any time seek to intervene and protect his rights, which he could have done even after the default judgment entered. See Brown v. Deerksen, 163 Colo. 194, 429 P.2d 302 (1967) Senne v. Conley, 110 Colo. 270, 133 P.2d 381 (19483); American National Bank v. First National Bank, 28 Colo.App. 486, 476 P.2d 304 (1970). Had he done so, Sills would have afforded the trial court the opportunity to exercise its discretion to decide whether to set aside the default judgment, see Borer v. Lewis, 91 P.3d 375, 379 (Colo.2004), and, if it set aside the default judgment, to address the substantive coverage arguments Sills raises on appeal.
Although Sills counsel indicated at oral argument that seeking relief in this court would be a "quicker remedy" than moving to intervene and set aside the default judgment in the trial court, that fact, even if true, does not permit Sills to obtain appellate review in this civil case without having first given the trial court an opportunity to rule on his contentions. See Estate of Stevenson v. Hollywood Bar & Cafe, Inc., 832 P.2d 718, 721 n. 5 (Colo.1992) ("Arguments never presented to, considered or ruled upon by a trial court may not be raised for the first time on appeal."); Colorado Compensation Insurance Authority v. Jones, 131 P.3d 1074, 1079 (Colo.App.2005)(same).
In sum, because I believe Sills did not lack standing to appeal, I respectfully dissent from the majority's dismissal of the appeal for lack of standing. I would, instead, affirm the judgment of the trial court on the basis that Sills has not presented cognizable arguments for reversing that judgment.