Hudak v. Medical Lien Management, Inc.

2013 COA 83, 305 P.3d 429, 2013 WL 2299371, 2013 Colo. App. LEXIS 779
CourtColorado Court of Appeals
DecidedMay 23, 2013
DocketCourt of Appeals No. 12CA1694
StatusPublished
Cited by5 cases

This text of 2013 COA 83 (Hudak v. Medical Lien Management, Inc.) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hudak v. Medical Lien Management, Inc., 2013 COA 83, 305 P.3d 429, 2013 WL 2299371, 2013 Colo. App. LEXIS 779 (Colo. Ct. App. 2013).

Opinion

Opinion by

Judge DAILEY

1 Defendant, Medical Lien Management (MLM), appeals the district court's judgment dismissing with prejudice its counterclaims against plaintiff, Tammy Hudak, for failure to prosecute. We reverse and remand with directions.

I. Background

€ 2 In 2006, Hudak was injured in an automobile accident. Because she was unable to pay for her medical treatment, she entered into "lien" agreements with various medical providers to obtain that treatment. Pursuant to those agreements, she received medical care in exchange for the providers' right to (1) place liens on any settlement or judgment funds she might obtain in a personal injury action against the alleged tortfeasor and (2) collect from her any amounts owed above that recovered in a settlement or judgment.

T8 After obtaining a $47,000 settlement in her personal injury action, Hudak filed a motion for declaratory and interpleader relief naming MLM, among several others, as an interpleader defendant. MLM, which had accumulated or been assigned a lien balance of $40,430.70, filed breach of contract, unjust enrichment, and account-stated counterclaims against Hudak for any amount owed after distribution of the interpleaded funds.

4 MLM filed a motion for summary judgment, claiming priority over other interpleader defendants to the interpleaded funds, and a right to judgment on its counterclaims. After stating, "I'm not going to deal with [part of MLM's motion for summary judgment] right now," the court determined that, because MLM had second priority, MLM was entitled to recover only $20,353.75 of the interpleaded funds.1 The district court did not, however, subsequently rule on that part of MLM's summary judgment motion relating to its counterclaims; instead, without notice to MLM, it entered an order closing the case.2

[431]*431T5 Thirteen months later, MLM filed a renewed motion for summary judgment with respect to its counterclaims. Upon Hudak's motion, the district court, acting though a different judge, dismissed MLM's counterclaims for failure to prosecute, reasoning:

MLM has not presented a sufficient and reasonable explanation, nor any mitigating cireumstances, to justify its failure to ever contact the Court or do anything else on this case, for over 13 months. MLM contends that it believed that the Court had "bifurcated" its counterclaims from the priority issue and that the case was still ongoing to hear and determine the counterclaims .... But, there is no mention of any "bifurcation"; indeed, the Court closed the case immediately after ordering the distribution of the settlement monies according to the priority schedule ordered by the court, indicating that the court believed the case was completely over, not that it was "an ongoing, unsettled matter" as alleged by MLM Typically[,] counsel call the courtroom clerk to check on a motion that has been fully briefed and not ruled on for several months-apparently this did not occur. Moreover, MLM should have filed a request for clarification, or a preservation of rights, making it explicit that its receipt of the priority distribution was not a settlement of its entire counterclaim. It is unreasonable, and prejudicial to Plaintiff (especially because her attorney has lost contact with her) to treat MLM as if it had properly preserved its claim 18 months later.

IIL Failure to Prosecute

T6 MLM contends that the district court erred in dismissing its counterclaims for failure to prosecute. Under the cireum-stances, we agree.

17 A district court has the discretion to dismiss a claim for failure to prosecute with due diligence. Lake Meredith Reservoir Co. v. Amity Mut. Irrigation Co., 698 P.2d 1340, 1344 (Colo.1985); see CRCP. 41(b)(2), 121 § 1-10(1). We will not reverse a district court's decision to dismiss for failure to prosecute unless the court's decision was manifestly arbitrary, unreasonable, or unfair. See Streu v. City of Colorado Springs, 239 P.3d 1264, 1268 (Colo.2010).

18 In making this assessment, we do not consider whether we would have reached a different result, but only whether the district court's decision fell within the range of reasonable options. See Hall v. Moreno, 2012 CO 14, ¶ 54, 270 P.3d 961 (discussing abuse of discretion standard).

19 In evaluating a motion to dismiss for failure to prosecute, "a trial court must bear in mind that courts 'exist primarily to afford a forum to settle litigable matters between disputing parties,'" and balance the "policy favoring prevention of unreasonable delay in litigation against the policy favoring resolution of disputes on the merits." Lake Meredith Reservoir Co., 698 P.2d at 1344-45 (quoting Mizar v. Jones, 157 Colo. 535, 537, 403 P.2d 767, 769 (1965)). "Dismissal with prejudice is a drastic sanction to be applied Nelson v. only in extreme situations." Blacker, 701 P.2d 135, 137 (Colo.App.1985).

110 Ultimately, the burden is on the plaintiff (or, its functional equivalent, here, the counterelaimant 3) to prosecute a case in due course without unusual or unreasonable delay. Streu, 239 P.3d at 1268. Thus, absent a showing by the plaintiff of mitigating cireumstances or a reasonable excuse for the delay, an unusual delay in prosecution justifies the exercise of the trial court's discretion in dismissing the action. Lake Meredith Reservoir Co., 698 P.2d at 1344; see Streu, 239 P.3d at 1268 ("An unreasonable delay or lack of diligence in prosecution will justify dismissal, unless the plaintiff presents mitigating cireumstances sufficient to excuse the delay.").

111 Under CRCP. 121 § 1-10(G8), if a "case has not been set for trial," a lack of "activity of record in excess of 12 continuous months shall be deemed prima facie failure to prosecute."

[432]*432{12 Here, the case was inactive for thirteen months before MLM renewed its motion for summary judgment with respect to its counterclaims. MLM urges, as a mitigating cireumstance or a reasonable excuse for delay, that it was awaiting a ruling by the district court on its pending motion for summary judgment.

113 We acknowledge that "[a] trial court is required to consider and rule upon a motion within a reasonable time." In re Ramirez, 994 S.W.2d 682, 683 (Tex.App.1998). But we also agree with the general principles, implicit in the district court's decision:

@ "A plaintiff's affirmative duty to prosecute a lawsuit diligently extends to pursuit of motions pending before the court." Ripalda v. Am. Operations Corp., 673 A.2d 659, 663 (D.C.1996); and
® "It is the plaintiff's duty to inquire within a reasonable time about the inaction [on] his claim and take appropriate steps to bring his case to [resolution]." Sitwellv. Gov't Emp. Ins. Co, 263 A.2d 262, 264 (D.C.1970).

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2013 COA 83, 305 P.3d 429, 2013 WL 2299371, 2013 Colo. App. LEXIS 779, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hudak-v-medical-lien-management-inc-coloctapp-2013.