24CA2193 McClaflin v Land Title 04-02-2026
COLORADO COURT OF APPEALS
Court of Appeals No. 24CA2193 City and County of Denver District Court No. 22CV33638 Honorable J. Eric Elliff, Judge
Andy McClaflin, Jacob Hocker, and Laura Hocker,
Plaintiffs-Appellees,
v.
Land Title Exchange Corporation, a Colorado corporation, and Kacey Neer,
Defendants-Appellants.
JUDGMENT AFFIRMED
Division IV Opinion by JUDGE JOHNSON Harris and Schock, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced April 2, 2026
Adams & Reese, LLP, Victoria E. Edwards, Highlands Ranch, Colorado, for Plaintiffs-Appellees
Anderson Notarianni McMahon LLC, Kimberly A. Bruetsch, Denver, Colorado, for Defendants-Appellants ¶1 Land Title Exchange Corporation (Land Title) and Kacey Neer
(Neer) (collectively defendants) appeal the district court’s judgment
entered in favor of Andy McClaflin (Andy), Jacob Hocker (Jacob),
and Laura Hocker (Laura) (collectively the plaintiffs).1 On appeal,
defendants contend that the district court erred by (1) finding them
negligent; (2) awarding damages to Andy based on a nonparty, Gina
McClaflin (Gina), having assigned claims to Andy; and (3) awarding
damages not attributable to the negligence. We affirm.
I. Background
¶2 In 2016, Andy, Gina, Laura, and Jacob (collectively the
couples) formed McHock Real Estate, LLC (McHock) to purchase an
investment property in Breckenridge, Colorado (the Property). The
couples purchased the Property in 2017 and used it as a rental
property for several years. In April 2021, the Property was listed for
sale, and soon after, McHock entered into a purchase and sale
agreement.
1 We refer to most individuals in this opinion by their first name as
several individuals share the same last name. We intend no disrespect by doing so.
1 ¶3 The couples wanted to take advantage of what is known as a
1031 exchange, which allows individuals to defer capital gains from
the sale of a property under 26 U.S.C. § 1031 of the Internal
Revenue Code. Andy’s certified public accountant advised him that
the couples should engage an exchange intermediary — also
referred to as an exchange facilitator — to complete the transaction.
¶4 McHock and Land Title entered into an agreement in which
Land Title would act as a qualified exchange facilitator. While
McHock was the seller of the Property, the couples decided that
they wanted to dissolve the legal entity, split the proceeds from the
sale of the Property, and purchase separate properties by couple.
The couples expressed their desire to complete separate 1031
exchanges to Neer, Land Title’s representative. Neer advised the
couples that they would need to execute quitclaim deeds
transferring the Property from McHock to their individual names
before the sale and that she could help coordinate the deeds to that
effect.
¶5 The sale closed in May 2021. Shortly after, the couples
realized that the quitclaim deeds were missing from the closing
documents and later discovered that Neer had never prepared them;
2 thus, the sale closed in the name of McHock, not the couples’
individual names.
¶6 Thereafter, Neer advised the couples that to comply with
Internal Revenue Service (IRS) guidelines, they would need to
purchase the new properties in McHock’s name. Later, though,
Neer advised the couples that “it shouldn’t be a problem for [them]
to purchase the replacement properties in [their] names rather than
the LLC.” On that same day, Andy’s banker advised him that
having the couples purchase replacement properties in their own
names put the 1031 exchange at risk. Nonetheless, the couples
proceeded to use the Property’s sale proceeds to purchase
replacement properties in their own names. The 1031 exchange
ultimately failed and each couple was subject to a $121,410 tax
liability.
¶7 In the interim, Andy and Gina divorced, and through their
separation agreement, Gina agreed that Andy would be entitled to
any damages he recovered as a result of litigation against Land Title
and Neer. Plaintiffs filed this lawsuit against several defendants,
asserting that Land Title and Neer negligently advised the couples
regarding the sale of the Property and 1031 exchanges, and, as a
3 result, the couples were unable to defer the taxes from the sale.2
Plaintiffs asserted claims for breach of contract, promissory
estoppel, unjust enrichment, negligence, professional negligence,
breach of fiduciary duty, respondeat superior, and vicarious
¶8 Following a bench trial, the district court entered judgment
against plaintiffs on all their claims except for negligence,
professional negligence, respondeat superior, and vicarious liability.
The court determined that plaintiffs were thirty percent at fault,
awarding Jacob and Laura $81,344.70 and Andy $81,344.70
against Neer and Land Title, jointly and severally. The district court
awarded $20,114.21 and $16,824.79 in prejudgment interest to
Jacob and Laura and to Andy, respectively. Plaintiffs were also
awarded their costs in the amount of $52,221.43 and postjudgment
interest in the amount of $23.84 per day starting November 1,
2024.
2 Plaintiffs named other defendants, but Neer and Land Title were
the only defendants remaining when judgment was entered.
4 II. Negligence
¶9 Defendants contend that the district court erred by finding
them negligent because they did not owe plaintiffs a duty of care
and did not cause the 1031 exchange to fail.
A. Standard of Review
¶ 10 We review a district court’s judgment following a bench trial as
a mixed question of law and fact. See Fear v. GEICO Cas. Co., 2023
COA 31, ¶ 15, aff’d on other grounds, 2024 CO 77. We review legal
conclusions de novo, see id., but we review findings of facts for clear
error, see Cronk v. Bowers, 2023 COA 68M, ¶ 12. A court’s findings
are clearly erroneous if there is no record support for such findings.
Id.
B. Analysis
¶ 11 To prevail on a negligence claim, a plaintiff must establish that
(1) the defendant owed the plaintiff a legal duty of care; (2) the
defendant breached that duty; (3) the plaintiff was injured; and (4)
the defendant’s breach caused the injury. N.M. v. Trujillo, 2017 CO
79, ¶ 23.
5 1. Duty of Care
¶ 12 Defendants first argue that the district court erred by finding
that defendants assumed a duty of care to plaintiffs.
¶ 13 Generally, we review de novo a court’s determination that a
duty of care exists. Blakesley v. BNSF Ry. Co., 2019 COA 119,
¶ 12. But the question of whether a party assumed a duty is a
mixed question of law and fact because the court’s legal
determination is based on factual findings. Jefferson Cnty. Sch.
Dist. R-1 v. Justus, 725 P.2d 767, 771 (Colo. 1986).
¶ 14 Whether a duty has been assumed is based on two factual
findings: first, that the “defendant, either through its affirmative
acts or through a promise to act, undertook to render a service that
was reasonably calculated to prevent the type of harm that befell
the plaintiff,” and second, that the plaintiff “either . . . relied on the
defendant to perform the service or . . . defendant’s undertaking
increased plaintiff’s risk.” Id.
¶ 15 The district court entered judgment against plaintiffs on their
contractual claims because the contract to conduct the 1031
exchange was between McHock and Land Title, not the individuals.
But the court reached a different conclusion with respect to the
6 negligence claims. It reasoned that the members of McHock relied
on Neer’s assurance that she was going to help execute the
quitclaim deeds, but she did not, and then Land Title and Neer
continued to provide advice to the individuals following the closing
to try to salvage the 1031 exchange — advice that turned out to be
incorrect. Because Neer was acting within the scope of her
employment with Land Title, that entity in turn owed plaintiffs a
legal duty of care.
¶ 16 Nonetheless, defendants argue that the court’s conclusion is
in error because (1) the court did not explain how the defendants
owed duties to the individual members of McHock, and (2)
defendants did not speak to Laura or Gina at all as part of the
transaction. We disagree with their contentions.
¶ 17 First, the record supports that defendants affirmatively
undertook the responsibility to advise plaintiffs as to how to comply
with the 1031 exchange if the couples wanted to receive the
proceeds of the sale individually and not through McHock. True,
Land Title’s contractual relationship was with McHock, but
defendants were aware that the couples wanted to dissolve McHock
and receive the proceeds in their individual capacities, and Neer
7 specifically volunteered to prepare the quitclaim deeds for the
couples, asking that the couples provide information on how the
individual names should be reflected on the documents. That
advice was for the benefit of the couples, not McHock.
¶ 18 Then, as the district court reasoned, defendants affirmatively
assumed a legal duty to prevent the 1031 exchange from failing
after it was discovered by the couples that McHock was the seller of
the Property, not the individual couples. While defendants argue
that it is unclear when defendants’ duty shifted from advising
McHock to advising plaintiffs, emails between Neer and Andy and
Jacob from May 24-26, 2024 support defendants’ affirmative advice
to the couples. Specifically, those emails support a finding that
Neer was aware of the couples’ intent to conduct the sale through
their individual names, not McHock, so that the couples could
purchase separate properties.
¶ 19 Second, we reject the argument that because defendants did
not speak directly to Laura or Gina, they had not assumed a duty to
the spouses as well. Although Jacob and Andy were primarily
corresponding with Neer, the emails reflected that Land Title was
advising the two men with Jacob’s wife, Laura, and Andy’s ex-wife,
8 Gina, in mind. Specifically, Jacob wrote that “Jacob and Laura will
be doing their own thing” with their half of the proceeds when he
emailed Neer questioning why the closing paperwork was in the
name of McHock.
¶ 20 Likewise, when Neer responded to another email from Jacob,
she forwarded him an email chain between her and Andy in which
she acknowledged she was aware that “[Andy] did specify how
[Andy] and Gina wanted [their] names to read” in the quitclaim
deeds and she apologized that this instruction “was missed and
that a quit claim wasn’t discussed with your closing team.”
¶ 21 Therefore, while it is true that Laura and Gina never had
direct discussions with representatives at Land Title or Neer, the
record supports that Neer was advising the husbands along with
their spouses, with the same legal advice that was intended to
benefit Laura and Gina in the same manner, thus extending any
assumed duty owed to Jacob and Andy to their spouses.
¶ 22 Based on this evidence, we cannot say the district court erred
by holding that defendants owed the individuals a legal duty
because they were aware that Laura’s and Gina’s interests would be
affected by the transaction and thereby “undertook to render a
9 service that was reasonably calculated to prevent the type of harm
that befell [Laura and Gina].” Justus, 725 P.2d at 771.
¶ 23 Likewise, plaintiffs relied on defendants to advise them with
regard to executing 1031 exchanges in their individual names,
knowing that if they gave plaintiffs incorrect advice, the 1031
exchange had an increased risk of failing.
¶ 24 Therefore, we conclude that the district court did not err by
finding that defendants assumed a duty of care to plaintiffs.
2. Causation
¶ 25 Defendants further argue that the district court erred by
finding that defendants were the cause of the 1031 exchange
failing.
¶ 26 “Causation is a question of fact for the [fact finder] unless the
facts are undisputed and reasonable minds could draw but one
inference from them.” Wagner v. Planned Parenthood Fed’n of Am.,
Inc., 2019 COA 26, ¶ 18 (quoting Reigel v. SavaSeniorCare L.L.C.,
292 P.3d 977, 985-96 (Colo. App. 2011)), aff’d, 2020 CO 51.
¶ 27 A plaintiff must establish that the defendant’s breach caused
the injury by demonstrating both “cause in fact” and “proximate
cause.” Garcia v. Colo. Cab Co., 2023 CO 56, ¶ 20 (quoting Rocky
10 Mountain Planned Parenthood, Inc. v. Wagner, 2020 CO 51, ¶ 27).
Cause in fact considers whether, “but for the alleged negligence, the
harm would not have occurred.” Id. (quoting Rocky Mountain
Planned Parenthood, ¶ 28). Cause in fact is satisfied “if the
negligent conduct in a ‘natural and continued sequence, unbroken
by any efficient, intervening cause, produce[s] the result complained
of, and without which that result would not have occurred.’” Deines
v. Atlas Energy Servs., LLC, 2021 COA 24, ¶ 12 (quoting Smith v.
State Comp. Ins. Fund, 749 P.2d 462, 464 (Colo. App. 1987)).
Proximate cause is proved if a plaintiff can establish that the
resulting harm was a foreseeable result of the defendant’s action.
¶ 28 Looking first at cause in fact, the record supports the district
court’s finding that the 1031 exchange ultimately failed because
plaintiffs acted on defendants’ advice to purchase properties in their
individual names. Both parties’ experts testified that the primary
reason for the failure of the 1031 exchange was plaintiffs’ decision
to purchase the replacement properties in their individual names.
¶ 29 And both experts testified that the 1031 exchange could have
been saved if the couples had done a “swap and drop” by
11 purchasing a replacement property in the name of the LLC, holding
onto it for a few years, and then deeding the property from McHock
to the individual parties. We acknowledge that Neer initially
provided plaintiffs with this advice when she and Jacob
corresponded through emails. But after speaking with another
Land Title employee about additional options, Jacob rejected Neer’s
initial advice. Neer then confirmed that plaintiffs’ preferred course
of action to purchase properties in their individual names
“shouldn’t be a problem.” It was the unbroken chain of advice
received from Neer and another Land Title employee that led to the
couples’ purchasing properties in their individual names and that
ultimately caused the 1031 exchange to fail.
¶ 30 Defendants assert that “plaintiffs were required to prove they
otherwise met the criteria for the exchange in order to satisfy the
element of causation.” Defendants offer several hypotheticals as to
why the 1031 exchange would never have been successful. The
court discounted that the couples held the Property for sale or
personal use, as the evidence showed that the couples used the
Property for many years as a vacation investment property.
Therefore, we disagree with defendants that the record necessarily
12 establishes that the 1031 exchange would not have been
successful, even without Neer’s original error with the quitclaim
deeds and subsequent advice. See Gagne v. Gagne, 2019 COA 42,
¶ 17 (“[W]e review any challenges to the court’s underlying factual
findings for clear error.”).
¶ 31 Turning to proximate cause, Neer’s trial testimony supports
that she knew there was a risk of the 1031 exchange failing if the
couples purchased replacement properties in their own names — as
she advised them to do. We acknowledge that there was evidence
that Andy had received contrary advice from his banker, which
could suggest that Land Title and Neer might not have proximately
caused the injury. But, as discussed above, the record also
supports that the couples received advice from another Land Title
employee, which was confirmed by Neer, to proceed in the manner
preferred by the couples, making it foreseeable that the couples
would take the advice, given that they had contracted with Land
Title, Land Title was attempting to salvage the deal, and the parties
wanted to proceed in a manner based on their preferred method if it
meant the 1031 exchange could be successful. See Dahl v. Young,
862 P.2d 969, 971 (Colo. App. 1993) (“If there is sufficient evidence
13 in the record to sustain a trial court’s findings, the reviewing court
is bound by the trial court’s determination, even though it is
possible for reasonable persons to arrive at a different conclusion
based on the same facts.”).
¶ 32 Therefore, we conclude the district court did not err in its
conclusion that defendants caused plaintiffs’ injury.
III. Damages
¶ 33 Defendants contend that the district court erred by (1)
awarding damages to Andy on behalf of Gina, as Gina was a
nonparty; and (2) improperly awarding damages not attributable to
the alleged negligence.
A. Standard of Review and Applicable Law
¶ 34 We review the district court’s damages award for clear error.
Sos v. Roaring Fork Transp. Auth., 2017 COA 142, ¶ 49. The court’s
assessment of damages “will not be set aside unless it is manifestly
and clearly erroneous.” Kroesen v. Shenandoah Homeowners Ass’n,
Inc., 2020 COA 31, ¶ 56 .
B. Damages to Nonparty
¶ 35 Defendants claim that Andy did not have standing to assert
damages on behalf of Gina as a nonparty, and that, even if he had
14 standing, it was error for the court to award him damages for Gina’s
loss. We disagree with both contentions.
¶ 36 To begin, defendants did not raise this argument below. But
we agree that because standing is a jurisdictional prerequisite, it
can be raised at any point, even on appeal. Anderson v. Suthers,
2013 COA 148, ¶ 12.
¶ 37 To prove an individual has standing, a plaintiff must establish
that (1) he suffered an injury in fact, and (2) his injury was to
a legally protected interest. Hickenlooper v. Freedom from Religion
Found., Inc., 2014 CO 77, ¶ 8; see also Wimberly v. Ettenberg, 570
P.2d 535, 539 (Colo. 1977) (establishing the test for standing).
¶ 38 Defendants appear to concede that, if Gina had properly
assigned her litigation claim to Andy, he would have standing to
pursue Gina’s claim. But they claim the document purporting to be
Gina’s assignment is invalid.
¶ 39 We review the validity of an assignment de novo. Hawg Tools,
LLC v. Newsco Int’l Energy Servs., Inc., 2016 COA 176M, ¶ 47. To
the extent that we review the question of division of marital
property, we will defer to the district court’s factual findings unless
15 there is a showing of abuse of discretion. In re Marriage of
Medeiros, 2023 COA 42M, ¶ 28.
¶ 40 “Generally, Colorado law favors the assignability of claims.”
McKenna v. Oliver, 159 P.3d 697, 699 (Colo. App. 2006). And the
right to receive money may be assigned. SDI, Inc. v. Pivotal Parker
Com., LLC, 2014 CO 80, ¶ 21. “No specific formality is required to
execute a valid assignment, but the intent to make an assignment
must be clearly reflected in the plain language of the parties’
agreements.” People v. Adams, 243 P.3d 256, 263 (Colo. 2010).
¶ 41 The record supports the district court’s finding that Andy was
contractually entitled to receive Gina’s share of the damages in this
lawsuit. In January 2023, Andy and Gina entered into a
“Memorandum of Understanding and Mediated Separation
Agreement” (MOU) as part of their dissolution of marriage
proceedings. With respect to Gina, the MOU states that “to the
extent there is any further pursuit against the title company for
what we believe was error, Andy may pursue this lawsuit if he so
chooses” and “Gina does not wish to further pursue this matter.”
We conclude that this allowed Andy to recover Gina’s share of the
damages.
16 ¶ 42 The MOU further states that “damages recovered shall be
solely [Andy’s]” and “[Gina] agrees that any damages received by
Andy shall be free and clear from any demands made by her.”
Defendants argue, without citing specific authority, that there is a
difference between an assignment of interest in litigation and an
assignment of a claim.
¶ 43 Regardless, we must review the entire MOU to give effect to the
parties’ intent. See Johnson-Linzy v. Conifer Care Cmtys. A, LLC,
2020 COA 88, ¶ 24. The MOU also states, “It is our intent that the
division of property specified in this Agreement shall be construed
as a division of co-owned marital property pursuant to Section 1041
of the Internal Revenue Code of 1986, as amended from time to
time . . . .” The MOU continues,
During the pendency of mediation, we paid nearly $300,000 in cash assets from shared bank accounts to satisfy taxes due and owing to the [IRS] and the state. Due to the nature of Andy’s business and in large part because he holds securities licenses, and has a profitable, reputable firm that neither of us wish to compromise or harm; and to avoid adverse actions against us, we agreed to make these payments resulting in the liquidation of nearly all our unencumbered marital cash, notwithstanding the cash held as collateral by IB/SBA.
17 With respect to the 1031 exchange, the MOU says,
There was a lawsuit initiated by Andy and Gina along with the other couple, related to the 1031 exchange which is believed to have been mishandled thereby creat[ing] a large tax consequence for both couples. To avoid a tax lien which would adversely impact Andy’s position as licensed wealth manager, we paid off the tax debt due and owing for the sale of Breckenridge. To the extent there is any further pursuit against the title company for what we believe was an error, Andy may pursue this lawsuit if he so chooses. If he does so, any legal and/or Court fees paid, and damages recovered shall be solely his.
We acknowledge that it does not appear that Gina was ever a
plaintiff in this lawsuit. Even so, in reading these provisions
together, we conclude that the plain language of the MOU
unequivocally reflects that Gina intended to allow Andy to pursue
this claim and recover the damages for any tax liability the couple
paid together when they were married. See In re Estate of Gadash,
2017 COA 54, ¶¶ 40, 45-49 (finding that the parties’ intent was
unambiguous based on the plain language of the contract and
enforcing the contract terms as written). Therefore, the assignment
is valid.
18 ¶ 44 Defendants further argue that even if the assignment is valid,
there is no evidence in the record that would support a claim by
Gina against defendants for negligence. But we have already
addressed above that the court did not err by finding defendants
negligent, even if Gina did not have direct communications with
Land Title or Neer.
¶ 45 Therefore, we conclude that the district court did not err in
concluding that Gina had executed a valid assignment of her claims
and her interest in damages to Andy and, therefore, Andy had
standing to pursue this claim and obtain any award of damages
resulting from a judgment.
C. Damages Amount
¶ 46 We conclude that the record supports the district court’s
assessment of damages.
¶ 47 The district court determined that the appropriate measure of
damages “is the tax that the parties were required to pay as a result
of the failed exchange.” And it further found that each couple’s tax
liability as a result of the failed exchange was $121,410. The court
entered judgment in favor of Jacob and Laura in the amount of
$81,344.70 and another judgment in favor of Andy in the same
19 amount, which presumably reflected a reduction based on the
court’s finding that plaintiffs were thirty percent contributorily
negligent.
¶ 48 Defendants do not challenge the measure of damages or the
amount of the tax that plaintiffs were required to pay. Rather, on
appeal, they argue that the court should have deducted $36,503.01
from the damages awarded to Laura and Jacob because that couple
did not reinvest a portion of the proceeds from the sale of the
Property, as required by IRS regulations, so the couple would have
been taxed on the capital gains of the uninvested portion. Likewise,
they contend that the damages amount should be reduced in half
for Andy because Andy cannot recover damages on behalf of Gina.
We are unpersuaded.
¶ 49 With respect to Laura and Jacob, it is true that defendants
argued below that the couple did not comply with IRS regulations
requiring the couple to reinvest the full amount of the proceeds of
the Property into a new property. Defendants argued below that for
Laura and Jacob to receive the full benefit of the tax deferral, they
would have needed to reinvest $930,000, but they purchased a
20 property valued at only $776,626, leaving $153,374 uninvested to
which they would have been subject to a tax liability.
¶ 50 On appeal, defendants now specifically argue that the court
should have reduced damages by $36,503.01 to reflect the amount
of taxes the couple would have had to pay on the $153,374 that
was not reinvested. At trial, although plaintiffs’ expert testified
about the amount of taxes Jacob and Laura might have owed on
the uninvested amount, defendants never asked the court to reduce
the damages by any specific amount reflecting a potential tax
liability and, as a result, the court did not address that issue.
Accordingly, we conclude that this argument is unpreserved and we
may not address it. See Wisehart v. Zions Bancorporation, 49 P.3d
1200, 1204 (Colo. App. 2002) (In a civil case, “this court will not
consider arguments not presented to the trial court.”).
¶ 51 And as for their argument that Andy’s award should be
reduced by half because he cannot recover Gina’s amount, we have
already determined that Gina’s assignment was valid, so their
contention that damages should be reduced necessarily fails.
¶ 52 Therefore, we conclude that the court did not err in its
21 IV. Conclusion
¶ 53 We affirm the district court’s judgment.
JUDGE HARRIS and JUDGE SCHOCK concur.