AA Wholesale Storage, LLC v. Swinyard

• Decision Date: 08 April 2021
• Docket Number: Court of Appeals No. 19CA2307
• Citation: 488 P.3d 1213
• Court: Colorado Court of Appeals
• Parties: AA WHOLESALE STORAGE, LLC, Plaintiff-Appellant, v. Michael SWINYARD, Defendant-Appellee.

488 P.3d 1213

AA WHOLESALE STORAGE, LLC, Plaintiff-Appellant,

v.Michael SWINYARD, Defendant-Appellee.

Court of Appeals No. 19CA2307

Colorado Court of Appeals, Division A.

Announced April 8, 2021

Brown Dunning Walker Fein PC, Neal K. Dunning, Denver, Colorado, for Plaintiff-Appellant

Van Remortel LLC, Fred Van Remortel, Littleton, Colorado, for Defendant-Appellee

Opinion by JUDGE BERGER

¶ 1 AA Wholesale Storage, LLC (AA) has been unsuccessful in collecting its judgment against Michael Swinyard. During this process, AA learned that Swinyard was in the early stages of litigation against third parties in an unrelated civil action. AA moved under C.R.C.P. 69(g) for a turnover of Swinyard's claims in the hope of applying the proceeds of that litigation to satisfy its judgment. The district court denied the motion, and AA appeals.

¶ 2 We first conclude that we have before us a final, appealable order, conferring appellate jurisdiction. We then conclude that the district court properly exercised its discretion in denying AA's postjudgment motion. We therefore affirm the order.

I. Background

¶ 3 In July 2017, the court entered default judgment against Swinyard in the amount of $49,091.13 (plus interest) for the nonpayment of a debt on a commercial lease. Since then, AA has made multiple unsuccessful attempts to collect the judgment, including garnishment of Swinyard's wages.

¶ 4 At some point, AA discovered that Swinyard was prosecuting a civil action against unrelated third parties for breach of contract, unjust enrichment, and foreclosure of a mechanic's lien. AA moved under C.R.C.P. 69(g) for an order requiring Swinyard to turn over his claims — that is, his choses in action. A chose in action is a "right to receive or recover a debt, or money, or damages for breach of contract, or for a tort connected with contract, but which cannot be enforced without action." Ford v. Summertree Lane Ltd. Liab. Co. , 56 P.3d 1206, 1209 (Colo. App. 2002) (quoting City & Cnty. of Denver v. Jones , 85 Colo. 212, 214, 274 P. 924, 924 (1929) ). AA sought to litigate Swinyard's claims itself and apply any proceeds from the litigation to pay its judgment.

¶ 5 The court held a hearing in October 2019, at which it orally denied AA's motion. The court reasoned:

The mechanic's lien, like malpractice, are claims that are individual or that you are going to need to prove up the value of the services rendered. We no longer allow indentured servitude or can require somebody to prosecute something that they don't want to if in fact that is how it turns out. Obviously, I can enter an order, if properly postured before me, such that net proceeds realized from any collection activities, net of any attorneys fees and out of pocket costs, be turned over to [AA] in [Swinyard's other] case. But because it is a mechanic's lien action and it is personal and the counterclaims against him are such that that is really the only thing I can do.

....

[B]ased on the fact that it gets into the quality and nature and extent of the work performed and it's clearly dependent upon [Swinyard's] testimony as well as defending the counterclaims, it's not something that this Court can see assigning or granting the motion that is properly before the Court right now.

....

[I]f it's still a mechanic's lien claim, it's still the contract with counterclaims it's going to be very fact specific. And I assume you want somebody who wants to work with you.

AA appealed.¹

II. Analysis

A. Jurisdiction

¶ 6 First, we must address the threshold issue of whether we have appellate jurisdiction. Swinyard argues that we do not because the district court's order was not a final judgment.

¶ 7 We review jurisdictional questions de novo. People v. Vargas-Reyes , 2018 COA 181, ¶ 9, 434 P.3d 1198.

¶ 8 Generally, our jurisdiction is limited to the review of final judgments. C.A.R. 1(a) ; State ex rel. Suthers v. CB Servs. Corp. , 252 P.3d 7, 10 (Colo. App. 2010) (final judgment requirement is jurisdictional). "Without a final judgment, we must dismiss the appeal." CB Servs. Corp. , 252 P.3d at 10.

¶ 9 "A final judgment is ‘one that ends the particular action in which it is entered, leaving nothing further for the court pronouncing it to do in order to completely determine the rights of the parties involved in the proceedings.’ " Id. (quoting People v. Guatney , 214 P.3d 1049, 1051 (Colo. 2009) ).

¶ 10 However, a division of this court has recognized that the final judgment rule has distinct contours in the context of postjudgment proceedings. Luster v. Brinkman , 250 P.3d 664, 666-67 (Colo. App. 2010).

¶ 11 In Luster , the plaintiff tried to serve C.R.C.P. 69 interrogatories on the defendant but was unsuccessful. Id. at 666. The plaintiff moved for substitute service on the defendant's counsel. Id. The trial court denied the motion, and the plaintiff appealed. Id.

¶ 12 The Luster division reasoned that, "in postjudgment collection situations, the underlying ‘action’ has already been concluded, by definition, with the entry of a judgment. Nevertheless, part of the action may still be ‘live,’ as when the final underlying judgment has not been satisfied and the judgment creditor seeks court assistance to obtain payment." Id. at 667. The division employed a two-part test for determining finality in the context of postjudgment collection.

¶ 13 First, "[t]he order must end the particular part of the action in which it is entered" and "leave nothing further for the court pronouncing it to do in order to completely determine the rights of the parties as to that part of the proceeding." Id. Under this element, the Luster division remanded to the trial court to "determine whether its substituted service order effectively end[ed] [the plaintiff's] collection efforts." Id. at 668.

¶ 14 Luster is unclear in one respect: Is a postjudgment order final only when there are no other possible avenues of judgment collection, or is a postjudgment order final when one authorized avenue of judgment collection is at an end?

¶ 15 There are multiple tools available to a judgment creditor to collect a judgment, and the ability to collect a judgment using particular tools may change over time. See, e.g. , Berra v. Springer & Steinberg, P.C. , 251 P.3d 567, 569 (Colo. App. 2010) (addressing the "fortuitous occurrence" of the judgment debtor's "decision to ‘sell his property for a price ... large enough to satisfy’ " the judgment, including years of accumulated interest). Therefore, we read Luster to require that the particular, legally authorized method of collecting a judgment has ended, not that judgment collection efforts, of any type, have forever ceased.

¶ 16 Luster ’s second element is that the order must "be more than a ministerial or administrative determination." Luster , 250 P.3d at 667. That is, the order must "affect[ ] rights or create[ ] liabilities not previously resolved by the adjudication of the merits." Id.

¶ 17 We begin our analysis by rejecting the contention, to the extent it is made by either party, that C.R.C.P. 54(b) is the proper lens through which to analyze the finality of the court's order. See Ferla v. Infinity Dev. Assocs., LLC , 107 P.3d 1006, 1008 (Colo. App. 2004) (outlining C.R.C.P. 54(b) ’s finality test). True, the court, at AA's request, stated that its written order was final and appealable under C.R.C.P. 54(b). But this court is not bound by a trial court's C.R.C.P. 54(b) certification. See Carothers v. Archuleta Cnty. Sheriff , 159 P.3d 647, 651 (Colo. App. 2006). C.R.C.P. 54(b) contemplates appeals of fewer than all claims under the circumstances specified in that rule and the cases construing it. None of those circumstances exists here.²

¶ 18 As discussed, a final judgment, resolving the totality of AA's claims against Swinyard, was already entered. This case does not address a situation in which there are multiple claims or parties; it addresses a postjudgment order. The parties have not cited a case, and we have found none, applying C.R.C.P. 54(b) to postjudgment orders. While we do not exclude the possibility that under some circumstances, C.R.C.P. 54(b) might be applicable to postjudgment proceedings, this is not one of those circumstances. Instead, we apply Luster .

¶ 19 Turning to Luster ’s first element, we conclude that the district court's order ended the particular part of the action in which it was entered. AA requested the turnover of Swinyard's choses in action; the court definitively denied that request. There was nothing left for the district court to do as to this particular collection tool.

¶ 20 Swinyard argues that additional claims for relief were still pending before the district court, so the court's order could not have definitely resolved any part of the action. The record refutes this contention. While the court said that it would consider a motion for a lien on the proceeds of Swinyard's litigation, no such motion was filed. A postjudgment order is final if there are no other pending motions relating to "the particular part of the action in which it [was] entered." Sidman v. Sidman , 2016 COA 44, ¶¶ 8-10, 411 P.3d 167 (alteration in original) (quoting Luster , 250 P.3d at 667 ).

¶ 21 Further, AA was under no legal compulsion to move for the relief that the district court invited. Turnover of a chose in action is materially different from a lien on any potential proceeds from the litigation, and AA, as judgment creditor, had a right to seek one but not the other.

¶ 22 Next, addressing Luster ’s second element, we conclude that the court's order was more than ministerial or administrative. See Luster , 250 P.3d at 667. Like the order in Luster , the district court's order "affect[ed] collection rights, which were not previously resolved by the adjudication of the merits." 1Id. at 668.

¶ 23 We therefore hold that the order was final and appealable. We turn to the merits.

B. C.R.C.P. 69(g) Order

¶ 24 "We review a district court's interpretation of the Colorado Rules of Civil...