05 August 2015

Commentary on the August 2015 Edition Of The Colorado Lawyer

The 2015 Legislative Session

This month is the annual review of the 2015 legislative session of the Colorado General Assembly, most of whose laws took effect July 1, 2015, and the remainder of which take effect this month.  It notes that 682 bills were introduced, 364 were signed into law, 3 became law without the Governor's signature (a symbolic step with no legal effect which on rare occasions is due to inadvertence), and 3 were vetoed.  Two of the bills vetoed limited use of red light cameras.  The other HB 1390 pertained to Consumer Credit Finance Charges and would have authorized higher interest rates for regulated low dollar consumer loans.

A few bills of note:
* Repeat DUI and DWAI offenses can give rise to a fourth degree felony, even if there is no accident or injury.  Previously, a DUI or DWAI offense was always a misdemeanor even if the offender had a myriad of prior offenses.
* The privilege to engage in marriage by proxy, rather than in person, was limited to members of the military, or civilian government employees or contractors, working in support of the military outside the state of Colorado.  Previously, any adult could use the provision.  The limitation from prompted by concerns about abuse and exploitation and potential sex trafficking.
* Crowdfunding for for profit ventures with an expectation of return is barred by state and federal securities laws.  Colorado passed an exemption to state securities laws allowing for crowdfunding from Colorado investors to Colorado businesses subject to state securities regulation requirements.
* Exemptions from creditors in bankruptcy and the court supervised debt collection process (including homestead dollar amounts) were increased in dollar amount for the first time since 2007.
* Procedures to prevent multiple voter registrations for one person were established (over bar association opposition).
* Mandatory reporting of abuse for adults with a disability was imposed.
* Protections were enacted for people who videotape police conduct.
* A bill clarifying Colorado "wind law" was passed.
* A number of bills only a lawyer could love related to trust administration, access to safe deposits after the owner's death, real estate title when a deed vests title in an entity other than a corporation before it is formed, who owns the attorney-client privilege of prior entities in entity mergers, background checks for related party foster care placements, juvenile delinquency alternative sentencing, electronic foreclosure sale procedures, title insurance regulation, and interstate child support rules were passed.  The statutory authority was granted to redirect the disposition of unclaimed property in attorney trust accounts from the State of Colorado to legal services for the poor.
The bar held up a number of Uniform Laws offered for consideration on various technical grounds, which did not pass as a result (the Uniform Voidable Transactions Act, the Uniform Fiduciary Access to Digital Assets Act, the Uniform Substitute Decision Making Documents Act).

Unwinding Mediated Settlements

What happens when a deal is reached in mediation and then the client doesn't want to sign the final documents?  Does it matter that new evidence or fraudulent statements made in mediation were later discovered?  An article reviews the relevant law and concludes by stating: "There are no easy solutions."

Conservator-Created Wills

Thomas Rodriguez and Brooke W. Brestel spell out the law and best practice of a Colorado law adopted in 2001 that allows a conservator to draft a will for a protected person.  C.R.S. 15-14-411.  I litigated one of the first such cases (it was resolved by a court approved settlement).

Together, they lay out the best practices in getting such a Will approved, and the circumstances under which a context at death is allowed (most obviously, under In re Estate of Romero, 126 P.3d 228 (Colo. App. 2005), a person subject to a conservatorship could execute a later valid will of his or her own).  It illustrates how someone who a close relationship to a protected person (such as a live in girlfriend) with relevant information about the protected person's wishes, can be excluded from the process and may have a difficult time revisited the issue at death even if that person is not formally barred from doing so if he or she did not receive notice of the original probate proceedings (which even a lawyer cannot confirm the existence of, let alone review documents in, without entering an appearance or contacting a court clerk where one is believed to be pending on the pretense of wanting to do so).

The initial impetus for enacting C.R.S. 15-14-411 was to fix technical defects in estate plans focused on tax planning that had become obsolete or ill-advised due to changes in the tax law or changes in the protected person's circumstances.  The use of C.R.S. 15-14-411 to change the status quo regarding the ultimately beneficial owners of an estate, such as the case illustrated in the article, has always been much more deeply problematic.  It is rare that one can be certain that it is a good thing to do so, it creates a new dreadfully expensive elective probate process in an conservatorship estate that is often at grave risk of seeing its funds depleted to litigate court proceedings, and as often as not, the status quo provides a reasonable approximation of justice.  I would favor amending C.R.S. 15-14-411 to disallow Conservator Drafted Wills except to reform an existing estate plan to reflect the same general donative intent in a manner that reflects new tax laws or changes in the protected person's circumstances.  Sometimes the dignity of a protected person is best honored by not trying to second guess the estate plan in place had the protected person died, rather than merely been incapacitated by a disability affecting that person's capacity.

Marijuana Regulation

There is a nice introduction to the legal ethics issues involved in representing someone in Colorado's state legalized, but illegal under federal law, marijuana regulation regime (in which I practice regularly).  In this area, as in the areas of limited representation (e.g. ghostwriting) and firm v. individual attorney representation of clients, the situation is made more complex by the secondary but independent professional regulation authority by the federal courts in addition to state regulation of attorneys.  The federal courts do not contain in their ethical rules an express exemption for marijuana practice found in state court ethical rules.

All of this is a reminder that many people could be exposed to federal prosecution for their de facto legalized conduct if there is a change in the political winds before the federal status of marijuana is reformed, for example, with a new President, despite widespread liberalization of medical marijuana and regulated legalization of recreational marijuana in the District of Columbia and several states in addition to Colorado.  President Obama's approach has allowed the groundswell of state and local support to play out in the laboratory of the states, but that could all be swept away in a single executive order - although people acting in reliance on official federal policy to respect marijuana laws might be spared the gotcha effect of a retroactive change in policy under certain legal doctrines.

Outrageous Conduct

What constitutes "outrageous conduct" in connection with the intentional infliction of emotional distress tort and some similar and related claims is for a jury or the judge in a bench trial to decide, subject to general boundaries imposed by judges.  Part I of a two part article summarizes 21 cases interpreting those standards decided since the last such review of Colorado case law in a 1999 article. In this highly fact specific area of tort law, one relies on general principles to at one's peril.

It is an area where many claims are brought, but few ultimately prevail, and often a means by which emotional distress and punitive damage claims can be presented when they would not have been available under other causes of action such as negligence, breach of contract, and breach of the duty of good faith and fair dealing in connection with a contract (other than an insurance contract which receives special treatment).

How To Draft A Bad Contract

A breezy article sets forth 25 bad contract drafting issues, although it is often a bit cocksure, failing to distinguish between stylistic issues that don't make much difference, and serious drafting oversights.  As is the fashion, it favors contracts that are written in "plain English" and abandon traditional formalities of presentation (e.g. favoring omitting "Whereas" from recitals of fact in the preface to a contract, and "Witnesseth" from signature blocks), and strongly favors brevity without much thought to why the alternative might not be so bad.

Some are obvious, but clearly important such as not including "inconsistent provisions" in your contract (which is easier to do than you might think when using form contracts).  I have my own contract writing checklist which includes some of their issues, while raising others that they do not (e.g. I favor establishing agreement in advance concerning the reasonableness of likely remedies).

Style is nice, but substance matters more, usually even if it makes a contract longer and harder to read.  Also, there is a failure to appreciate that one of the reasons contracts are drafted by lawyers is because the parties want something that seems legalizistic and has weight that rivals its importance.

Contracts that truly involve only two parties can often be to the point.  But, contracts that involve multiple parties (some of whom may not be signatories, such as regulatory agencies and taxing authorities, and third party successors to the drafters) often need to be long and rather complex to be complete in U.S. law where few good default terms are provided by law.

Family Court Judges On Litigating Family Law Cases

It is always good to hear how judges expect lawyers to behave so that lawyers can act appropriately to help their clients.  Domestic relations cases, with relatively loose procedures that don't perfectly fit the traditional adversarial civil action rights enforcement model and often have pro se parties, is a particularly helpful place to have this guidance.

Some of the problems are fundamental, like entrusting a single judge without co-decision makers with almost completely unbound discretion in parenting matters subject only to the mantra of "the best interests of the child" which has a little meaning but only a little.  Wide discretion in other decision making areas (like which property and what debt should be divided how, and what child support and maintenance awards to make) have much more guidance, but still leave a great many ways that any one case can be correctly resolved.  It is little wonder then, that a large share of all domestic relations litigants perceive judicial bias directed at them in these cases.

Alas, while hearing a judge's perspectives on these cases is always desirable, none of the comments from judges address the hard and non-obvious issues that these cases present, foremost among them, the fact that unlike other civil litigation, a divorce is never really completely over; it is a moving target that continues to deal with new circumstances even during the course of the litigation.  Striking a balance between finality and urgent emergent circumstances in these cases is not easy.

Court Rules

Changes to several important court rules (which differed from the versions initially proposed) were formally adopted May 28, 2015, effective for cases filed on or after July 1, 2015, but the formal announcement didn't make it into the Colorado Lawyer until the August, 2015 issue.  The delay is understandable, but unfortunate, given that many lawyers rely on this publication to keep track of rule changes, which proceeds at a steady dribble because of the administrative process by which they are made by the Colorado Supreme Court.

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