07 August 2008

Post-Decree Statute of Limitations Retroactive

Suppose that after you get divorced you discover that some significant marital assets titled in your ex-spouse's name were not disclosed in hte divorce proceeding. As a result, these assets are not divided by the court or a separation agreement, so you don't receive a share of them. How long do you have to complain about omission before it is too late?

The general rule in Colorado is that it is too late to complaint disclosure fraud between parties in litigation, unless the person complaining brings a motion made within six months under the rules of the courts, or a separate lawsuit (generally within a statutory limitations period of three years). But, starting in 2005, the Colorado Supreme Court revised Colorado's court rules to allow non-disclosure of material assets in divorces to be raised up to five years after the divorce.

If the non-disclosure and divorce took place before 2005, and the motion seeking relief from the non-disclosure took place after 2005, does the new deadline or the old one apply?

The Colorado Court of Appeals held today, that the new deadline applies to all motions of this type filed in 2005 or later, and that this rule was constitutional.

The Colorado Court of Appeals reasoned that retroactive changes in remedies and procedures are generally valid, even if retroactive changes in substantive obligations are not. So, because it has always been improper to fail to disclose assets in a divorce proceeding, the rule adopted in 2005 was properly applied to divorces taking place before that date.

The 2005 rule at issue in this case strikes a good balance between finality and getting the right result on the merits, and shows that while courts may have trouble drawing quasi-legislative lines when sitting as common law decision makers, that they are perfectly capable of doing so when sitting in a regulatory capacity assigned to them a court rule makers.

Of course, it bears notice that the decision in this case is still subject to review by the Colorado Supreme Court if further appealed, and that other panels of the Colorado Court of Appeals are not necessarily bound by this opinion (although one other case also decided today reached the same conclusion).

FULL DISCLOSURE: I recently litigated a case raising the retroactivity issue among others, which may be on appeal. At the time I did so, no Colorado case had definitively resolved this issue.

Footnote On Challenges To Court Rules Generally

This case also illustrates a tricky issue of constitutional law. In Colorado, the state supreme court can issue court rules unilaterally. This is good thing. It generally leads to better drafted rules, because the courts can take more time to focus on details that impact the court system than legislators, and also because legislators tend to let minor problems with court rules fester unaddressed in places where there is no unilateral ability to change court rules. It also maintains a status quo in which the legislature is not meddling unduly with the affairs of the judicial branch, which is a separate and co-equal branch of government. The legislature can, of course, enact statutes that trump court rules if necessary. But, historically, these have been mostly unnecessary, because the courts of done a fair job of enacting rules.

But, the downside of this arrangement is that the very Colorado Supreme Court that enacted the rules is also in charge, ultimately, of adjudicating their constitutionality, just as it is in the case of any other law. Similar issues come up when the constitutionality of federal procedural rules is challenged. Rules are particularly vulnerable to constitutional challenge because unlike the vast majority of statutes, they are routinely impact large numbers of litigated cases. And, many constitutional rights are specific to court processes, so it is easy to imagine many constitutionally infirm court rules. Sooner or later, every constitutional argument possible will be put forth.

The highest profile example of such a case to date involved the federal adoption of mandatory disclosures of information in civil cases even before discovery requests are made as part of Rule 26 of the Federal Rules of Civil Procedure. This rule that has since been replicated in states across the country, often with material variations.

Similar concerns have also been raised in challenges to court rules on publication of appellate court decisions, and on admission to the practice of law. You can probably count on your fingers the number of times in U.S. history that court rules promulgated by courts, opinion publication rules or law practice admission rules have been successfully challenged in courts on the merits. The notion that a state or federal supreme court is incompetent to adjudicate these decisions has likewise, to the best of my knowledge, never prevailed, although it has often been raised and discussed at length.

Of course, the people on the Colorado Supreme Court when a rule is enacted may not be the same as the people who are there when its constitutionality is examined, and most of the drafting work is done by committees merely convened by the high court with a final decision rarely deviating significantly from the committee's recommendation. Furthermore, obviously, Colorado Supreme Court justices typically have no personal financial stake or liability fear associated with the outcome of a constitutional challenge to the court rule. Still, there is some sense that the court is judging its own case.

It wouldn't be hard to draft a statute or court rule providing for some alternate body to adjudicate the constitutionality of challenges to court rules, such as an en banc hearing from the Colorado Court of Appeals (which has no say in drafting court rules). But, unless such a change had constitutional statute, the validity of a proposal to undermine the constitutional final authority of the Colorado Supreme Court to decide a point of constitutional law could be questioned.

1 comment:

Sean said...

You urge that, "the downside of th[e fact that the courts make the court rules] arrangement* is that the very Colorado Supreme Court that enacted the rules is also in charge, ultimately, of adjudicating their constitutionality, just as it is in the case of any other law. Similar issues come up when the constitutionality of federal procedural rules is challenged. Rules are particularly vulnerable to constitutional challenge because unlike the vast majority of statutes, they are routinely impact large numbers of litigated cases. And, many constitutional rights are specific to court processes, so it is easy to imagine many constitutionally infirm court rules. Sooner or later, every constitutional argument possible will be put forth."

I disagree, because the courts simply exercise the option to ignore the challenge by issuing an unpublished opinion that doesn't even acknowledge it. For example, in 03CA1825, I issued a challenge to the constitutionality of then CRCP Rule 16.2 and C.R.S. § 14-10-108. I fully complied with C.R.S. § 13-51-115, C.R.C.P. 57(j) and C.A.R. 44(a) in so doing. The court simply ignored the issue.

Similarly, in 05-cv-01858 and 06-1418 (D.Colo. and USCA10, respectively), I challenged the constitutionality of C.R.C.P. 251.9. That, also, was ignored and never addressed in any decision or memorandum (all unpublished, of course).

You know, I'm sure you'll point out that, if I was represented by counsel competent, the challenges would have been addressed. Frankly, Andy, it doesn't matter. If I raised it, I had a constitutional right (petitioning clause, Amendment I, in the case of district court cases) and a statutory right (appeal in civil cases) to have the argument disposed of, even if it was to say, "You failed to preserve the issue;" or "you failed to comply with statutory requirements," or "You don't have standing," or "Your argument is without merit for the following reason[s]."

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* In Colorado, “The supreme court shall make and promulgate rules governing the administration of all courts and shall make and promulgate rules governing practice and procedure in civil and criminal cases.” Colorado Constitution, Art. VI, § 21. Further, the Court has “supervisory power over all other state courts and over all attorneys practicing law in Colorado.” Colorado Judicial Branch, Office of the State Court Administrator, Colorado Courts at a Glance, avail. at http://www.courts.state.co.us/exec/pubed/brochures/newglanceweb.pdf. See also Civil Rules Committee and the Rules of Criminal Procedure Committee, 33 Colo.Law. 8 at 75, avail. at: http://www.aallnet.org/chapter/coall/Lrc/Lrc0804.pdf.