Canton Oil Corp. v. District Court In and For Second Judicial Dist., s. 85SA446

• Decision Date: 20 January 1987
• Docket Number: 86SA1,Nos. 85SA446,s. 85SA446
• Citation: 731 P.2d 687
• Parties: CANTON OIL CORP., a Delaware corporation, Petitioner, v. The DISTRICT COURT In and For the SECOND JUDICIAL DISTRICT and the Honorable Sandra I. Rothenberg, a Judge thereof, Respondents. THELEEN AND PARTNERS, LTD., a Hong Kong corporation, Petitioner, v. The DISTRICT COURT In and For the SECOND JUDICIAL DISTRICT and the Honorable Sandra I. Rothenberg, a Judge thereof, Respondents.
• Court: Colorado Supreme Court

Page 687

731 P.2d 687

CANTON OIL CORP., a Delaware corporation, Petitioner, v. The DISTRICT COURT In and For the SECOND JUDICIAL DISTRICT and the Honorable Sandra I. Rothenberg, a Judge

thereof, Respondents.

THELEEN AND PARTNERS, LTD., a Hong Kong corporation, Petitioner, v. The DISTRICT COURT In and For the SECOND JUDICIAL DISTRICT and the Honorable Sandra I. Rothenberg, a Judge

thereof, Respondents.

Nos. 85SA446, 86SA1.

Supreme Court of Colorado En Banc.

Jan. 20, 1987.

Rehearing Denied Feb. 9, 1987.

Netzorg & McKeever, P.C., Gordon W. Netzorg, J. Nicholas McKeever, Jr., Hughes, Pelz, Leach & Clikeman, P.C., Harlan P. Pelz, Denver, for petitioner Canton Oil Corp.

Law Offices of John M. Franks, P.C., John M. Franks, Paul R. Wood, Curt Todd, Denver, for petitioner Theleen and Partners, Ltd.

Law Office of Kathleen Mullen, P.C., Kathleen Mullen, Sherman & Howard, Elizabeth J. Greenberg, Peter Lucas, Denver, for respondents.

ROVIRA, Justice.

The petitioners, Canton Oil Corp. and Theleen and Partners, Ltd., seek relief in the nature of prohibition directed against the respondent district court. After a hearing on October 10, 1985, that court set aside a judgment that petitioners had obtained in a civil trial on the ground that jury misconduct had tainted the trial. Petitioners now allege that the court exceeded its jurisdiction and grossly abused its discretion in setting aside the judgment. They request that we prohibit enforcement of the order setting aside the judgment and order its reinstatement. We issued a rule to show cause, and now discharge the rule.

I.

In the underlying action in this case, petitioner, Canton Oil Corp. (Canton), sought relief pursuant to the Colorado Securities Act of 1981 and also asserted several common law claims including fraud, fraudulent concealment and negligent misrepresentation. On February 28, 1985, after a six-week trial, the jury delivered a verdict in Canton's favor against defendants Nordic Petroleums, Inc., Oene "Owen" Miedema, Seahawk Oil Corporation, and Gary MacLellan. On April 5, 1985, the district court entered judgment for Canton of $2,127,000 including interest. An additional defendant, Theleen and Partners, Ltd., (Theleen), settled with Canton during trial, and then prevailed on cross claims against defendants Nordic, Seahawk, and Miedema, receiving a verdict of $1.3 million in actual damages and $750,000 in punitive damages. Theleen's judgment was entered February 28, 1985.

On April 26, 1985, the defendants timely filed a motion for new trial under C.R.C.P. 59, citing, among other errors, gross misconduct on the part of some jurors. After responses were filed, the district court on June 19, 1985, scheduled a hearing on the motion for August 21, and then rescheduled the hearing, on its own initiative, for October 10.

In September 1985, petitioners filed motions claiming that the court had lost jurisdiction to rule on the new-trial motion because the court had not complied with C.R.C.P. 59(j), which required the court to rule on the new-trial motion within 60 days of the date it was filed. Theleen pointed out that that deadline had passed on June 26 and requested that the hearing be vacated and the court's stay of judgment lifted. Canton requested that the record be clarified so it, too, could execute on its judgment.

On October 2, 1985, the defendants moved for relief from the judgment under C.R.C.P. 60(b), incorporating by reference the legal and factual matters contained in their motion for new trial. On October 10, 1985, the respondent district court held a hearing over the objections of petitioners and made oral findings of fact and conclusions of law. It concluded that the defendants' new-trial motion had been denied as a matter of law by operation of C.R.C.P. 59(j). It found that, had it then had the opportunity, it would have granted the new-trial motion. Instead, however, the court decided to set aside the judgment under C.R.C.P. 60(b), concluding that the "gross conduct" of the jurors constituted an "other reason" justifying relief under clause (5) of C.R.C.P. 60(b). The court reaffirmed these findings in its written order issued on November 25, 1985.

On December 6, 1985, Canton filed its petition with this Court seeking relief in the nature of prohibition pursuant to C.A.R. 21. We granted a stay and issued a rule to show cause on December 12. On January 2, 1986, Theleen filed its own petition and moved to consolidate it with Canton's petition. We issued a rule to show cause and granted the motion to consolidate the petitions on January 9. We now discharge the rule.

II.

The evidence of jury misconduct before the district court came in the form of affidavits submitted by the defendants, the testimony of six witnesses, including four jurors, and religious materials mailed to defendant Miedema by Mrs. Adams, ¹ one of the jurors.

In moving for a new trial, the defendants alleged that the jury's verdict was a product of passion and prejudice; that some of the jurors had insinuated a grossly improper "Jewish issue" into the case; that some jurors had perceived a bias on the part of the trial judge, who was Jewish, in favor of defense counsel, who were also Jewish; and that juror Adams, because of her preoccupation with defendant Miedema's religion and her evangelical fervor, was unfit to sit as a juror.

A.

The evidence concerning the jurors' perceptions of a "Jewish issue" in the case was disputed. The defendants' attorneys, in affidavits submitted to the court, alleged that after the trial one of the jurors, Baker, had told them: that some of the jury members but not he, had felt that there was "something going on" between the trial judge and defense counsel, meaning, "You know, the Hebrew thing"; that some jurors felt that some of the court's rulings in favor of the defense were evidence that there was "something going on"; and that some jurors openly discussed their feelings as "you know how those Hebrews stick together."

At the hearing, however, Baker testified that he did not remember any jurors making any comments about religion during the trial, and in particular, any comments about "how those Hebrews stick together." Although he had initially "wondered" about some of the court's rulings, Baker testified that he had not had the impression the judge was favoring any party to the case.

He testified that the defendants' attorneys may have misinterpreted his remarks to them after the trial. On that occasion, Baker said, he had been referring to an incident that occurred in the hallway one morning prior to trial, when he had heard a "testy" attorney say: "What do you have to do to get heard in this court? Do you have to be a Jew or something?" Baker testified that after the incident he asked "some of the rest of them"--jurors apparently--if they had heard the attorney's remark. ²

R. Jon Foster, an investigator for the defendants, however, cast doubt on Baker's testimony. He testified that when he spoke to Baker prior to the hearing about the remarks he had allegedly made to the defense attorneys, Baker had not denied making the comments, but had said only that his remarks had been "just chitchat and said in confidence."

During the hearing the judge also questioned three other jurors about whether the subject of religion had come up in juror discussions during the trial or whether they had perceived any bias on the part of the court. ³

One juror, Mrs. Carr, testified that she had perceived no favoritism on the part of the trial judge toward any of the lawyers. She said she did not remember the subject of religion coming up in juror discussions during the trial except on one occasion. On that occasion, early in the trial, she said, fellow juror Adams had asked her if she knew what nationality the judge was. Carr testified that she had replied that, judging from the judge's name, perhaps Jewish.

However, Foster, the investigator, testified that when he talked to Carr prior to the hearing, she had also remembered one other remark being made "in regards to the fact that the attorneys and Judge were Jewish."

Another juror, Ms. Davis, also testified that the subject of religion had not come up in juror discussions during the trial. However, during questioning about whether she had perceived any bias on the judge's part, she testified that she had thought "something was a little funny" because the judge had "tilted" in favor of the defense on some points. And after the trial, she said, she had been told that the judge and defense counsel had practiced law together (a statement that was not true, the judge told Davis).

Finally, juror Adams testified that she thought the judge had been impartial. However, she said that she had heard other jury members make "slurs" against the defense attorneys on two occasions during discussion while the trial was proceeding. At the hearing, she testified that these "slurs" were not of a religious nature. However, Foster, the investigator, testified that Adams had told him prior to the hearing that she had heard "Jewish slurs."

B.

The evidence concerning the conduct of Adams was largely undisputed. In connection with their post-trial motions, the defendants alleged that Adams had telephoned a synagogue during trial to determine whether defendant Miedema was Jewish and that on the final day of deliberations she had mailed a letter and some religious materials to defendant Miedema, addressed to his son. These religious materials were produced at the hearing. They included a publication from a group called "Jews for Jesus," a publication from the "Faith Prayer & Tract League," a publication of announcements from Redeemer Temple and a Christian board game called "Beat the Devil." ⁴ Affidavits of defendants' attorneys also alleged that Adams had mailed another letter to Miedema after trial. Also, an affidavit of Donna Miedema, the defendant's wife, alleged that a woman who identified herself as Adams had...