Cox v. Sage Hospitality Resources, LLC

2017 COA 59, 413 P.3d 302, 2017 WL 1755975, 2017 Colo. App. LEXIS 533

• Court: Colorado Court of Appeals
• Decided: May 4, 2017
• Docket: 16CA0766
• Status: Published

Opinion

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.

1 ¶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;

3 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

4 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).

10 ¶ 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.