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November 2016

Gordon & Rees Denver Attorneys Win Three Cases in Colorado Supreme Court on Same Day

On September 26, 2016, attorneys in Gordon & Rees’s Denver office won three cases in the Colorado Supreme Court.

The first case concerned the trial court’s ability to exercise personal jurisdiction over a nonresident parent company based on the in-state contacts of its resident subsidiary. The defendants, represented by Thomas Quinn, Joshua Urquhart, and David Clarke, argued that the trial court erred in finding that it had jurisdiction over the local defendant’s nonresident parent company, and the Colorado Supreme Court agreed, holding that in order to exercise personal jurisdiction over a nonresident parent company consistent with constitutional due process, the trial court must first determine whether it may pierce the corporate veil and impute the resident subsidiary’s contacts with the forum state to the non­resident parent company.

If so, then the court must analyze all of the nonresident company's contacts with Colorado — including the resident subsidiary’s contacts — to determine whether exercising either general or specific personal jurisdiction over the company comports with due process. If, after performing this analysis, the trial court concludes that it may not pierce the corporate veil, then it must treat each entity separately and analyze only the contacts that each parent company has with the state when performing the personal jurisdiction analysis. This opinion brings Colorado law into harmony with the U.S. Supreme Court’s 2014 ruling in Daimler AG v. Bauman, which limited the exercise of personal jurisdiction over nonresident corporations in states where the corporations are not “at home.” Because the trial court did not apply this analytical framework when it determined that the nonresident defendants were subject to personal jurisdiction in Colorado, the Supreme Court remanded to the trial court to make a determination of personal jurisdiction based on its opinion.

Quinn, Urquhart, and Clarke also represented the defendants in the second case, in which the Colorado Supreme Court followed its holding in the first case and ordered the trial court on remand to apply that analysis to deter­mine whether it has personal jurisdiction over the nonresident corporate defendants.

Finally, in the third case, the Colorado Supreme Court ruled in favor of homeowners represented by John R. Mann in a case involving annexation of property under Colorado’s Common Interest Ownership Act. The homeowners, who had been led to believe that their properties were not included in a neighboring common interest community, were notified by the common interest community 10 years after they purchased their properties that their properties had been annexed into the community without their knowledge or consent, and that they owed the community 10 years of prior assessments. After the trial court’s judgment for the community was reversed by the Colo­rado Court of Appeals in an appeal handled by Mann, the Colorado Supreme Court granted certiorari and affirmed the Court of Appeals, holding that Colorado’s Common Interest Ownership Act did not authorize the kind of annexation claimed by the community, and that because the purported annexation did not comply with all of the requirements for valid annexa­tion under Act, it was invalid, so that the homeowners’ properties had not been properly annexed into the community.

 

David M. Clarke
John R. Mann
Thomas B. Quinn
Joshua G. Urquhart



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