Cox v. Sage Hospitality Resources, LLC , 413 P.3d 302 ( 2017 )

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
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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;
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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.
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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).
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¶ 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
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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
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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
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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).
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¶ 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.
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