Hickerson v. Vessels

• Decision Date: 13 January 2014
• Docket Number: Supreme Court Case No. 12SC198
• Citation: 316 P.3d 620
• Parties: Alva J. HICKERSON, a/k/a Al J. Hickerson, Petitioner v. Thomas J. VESSELS, Personal Representative of the Estate of Mary Walsh Vessels, a/k/a Mary W. Vessels, a/k/a Mary Agnes Vessels, a/k/a Mary Vessels, Respondent.
• Court: Colorado Supreme Court

316 P.3d 620

Alva J. HICKERSON, a/k/a Al J. Hickerson, Petitioner

v.Thomas J. VESSELS, Personal Representative of the Estate of Mary Walsh Vessels, a/k/a Mary W. Vessels, a/k/a Mary Agnes Vessels, a/k/a Mary Vessels, Respondent.

Supreme Court Case No. 12SC198

Supreme Court of Colorado.

January 13, 2014

Certiorari to the Court of Appeals, District Court, City and County of Denver, Case No. 09CV532, The Honorable Morris B. Hoffman and William W. Hood III

Andrew M. Low, John M. Bowlin, Davis Graham & Stubbs LLP, Denver, Colorado, Theodore W. Rosen, Lauren E. Mosse, Theodore W. Rosen, P.C., Denver, Colorado, for Petitioner.

J. Nicholas McKeever Jr., Sherman & Howard L.L.C., Denver, Colorado, Clifford L. Beem, A. Mark Isley, Beem & Isley, P.C., Denver, Colorado, William E. Brayshaw Denver, Colorado, for Respondent.

En Banc

JUSTICE HOBBS delivered the Opinion of the Court.

¶ 1 We granted certiorari to review the Court of Appeals' judgment in Vessels v. Hickerson, No. 11CA0317, ––– P.3d ––––, 2012 WL 503664 (Colo.App. Feb. 16, 2012), which held that the doctrine of laches is not available as a defense to an action for collection of a debt that is timely filed within a statute of limitations period.¹ Here, the trial court allowed the laches defense, but the court of appeals ruled that Colorado's separation of powers doctrine prohibits a court from applying laches to shorten the filing period. We determine that the language of the statute of limitations and our case law do not support the court of appeals' decision.

¶ 2 In April 1989, Alva J. Hickerson signed a ten-year promissory note payable to Vessels Oil and Gas Company. Under the terms of the note, the debt was due for full payment as of April 1999. The holder of the note filed this action in January 2009 for collection of the full unpaid amount of the debt, plus interest. The six-year statute of limitations statute would have barred this action after April 2005, but Hickerson made partial payments on the note. Under the partial payment doctrine, the permissible time for filing an action for payment of the remaining unpaid balance is restarted becausea partial payment operates as a promise to repay the remaining debt.

¶ 3 The court of appeals' judgment would prevent a debtor from invoking the doctrine of laches as a defense to an action filed within the original statute of limitations period or any restarted limitations period. We hold that the separation of powers doctrine does not bar application of the defense of laches to a debt collection action filed within the original or restarted limitations period because laches does not conflict with the statute of limitations; and our case law, since early statehood, recognizes the application of equitable remedies to legal claims. Accordingly, we reverse the judgment of the court of appeals and remand this case to it for consideration of issues it did not reach.

I.

¶ 4 Hickerson signed the promissory note at issue on April 12, 1989. The promissory note was payable to Vessels Oil and Gas Company in the amount of $386,063.00. The company later assigned its rights under the note to the owner of the company. Following the owner's death, the note passed to the owner's wife, Mary Vessels, who first initiated this lawsuit. At Mary's death, her son—Thomas Vessels, the Respondent in this case—was substituted as plaintiff at the trial court because of his status as personal representative of Mary's estate.²

¶ 5 The promissory note was due in full on April 12, 1999, and, until then, the note provided that the monthly payments on the note would be paid out of the proceeds from Hickerson's overriding royalty interest in an oil and gas lease in Louisiana. As part of the deal, the payments from the royalty interest were made directly to Vessels, and Hickerson had no part in the payment process. These payments continued, in varying amounts, until the filing of this lawsuit in January 2009. As of August 2010, there was still $335,441.72 in principal and $385,222.91 in interest due on the note.

¶ 6 In determining that the lawsuit was timely filed, the trial court found that the six-year statute of limitations had started anew under the partial payment doctrine each time a royalty payment was made to Vessels. The trial court then entered judgment for Vessels in the amount of $720,664.63. On a motion for reconsideration on the issue of the laches defense, the trial court reversed its previous order and found that laches barred Vessels' claims. ³

¶ 7 The court of appeals held, as a matter of law, that laches is unavailable when a new statute of limitations period starts under the partial payment doctrine and the debt collection action is filed within that period. It reasoned that the separation of powers doctrine precludes a common law doctrine that operates to shorten a legislatively prescribed limitations period: “In deference to the separation of powers doctrine, we are wary of invoking an equitable principle, such as laches, where the legislative branch of government has already made a clear policy judgment.” Vessels, ––– P.3d at ––––, 2012 WL 503664, at *15

¶ 8 We granted Hickerson's petition for review. We reverse the judgment of the court of appeals and remand this case to it for consideration of issues it did not reach on appeal.

II. Analysis

¶ 9 We hold that the separation of powers doctrine does not bar application of the defense of laches to a debt collection action filed within the original or restarted statute of limitations period because laches does not conflict with the statute of limitations; and our case law, since early statehood, recognizesthe application of equitable remedies to legal claims.

A. Standard of Review

¶ 10 We review de novo questions of law concerning the application and construction of statutes. Freedom Colo. Info., Inc. v. El Paso Cnty. Sheriff's Dep't, 196 P.3d 892, 897 (Colo.2008). We also review de novo questions of law concerning the separation of powers doctrine. City of Greenwood Vill. v. Petitioners for Proposed City of Centennial, 3 P.3d 427, 440 (Colo.2000). Where the interaction of common law and statutory law is at issue, we acknowledge and respect the General Assembly's authority to modify or abrogate common law, but only recognize such changes when they are clearly expressed. Lombard v. Colorado Outdoor Educ. Ctr, Inc., 187 P.3d 565, 570 (Colo.2008). Unless a conflict with the statute exists, the pre-existing common law continues to apply. SeeSmith v. Exec. Custom Homes, 230 P.3d 1186, 1192 (Colo.2010).

B. Defense of Laches in a Debt Collection Action

¶ 11 The parties devote considerable attention to the development of law and equity courts in England pre-dating Colorado's statehood, but we need not explore that history in this case. Law and equity have been merged in our state since the earliest times of statehood. Am. Family Mut. Ins. Co. v. DeWitt, 218 P.3d 318, 322 (Colo.2009). The General Assembly recognized this merger in 1877 when it enacted the Code of Civil Procedure.

[T]he distinction between actions at law and suits in equity, and the distinct forms of actions, and suits heretofore existing are abolished, and there shall be in this State but one form of civil action for the enforcement or protection of private rights, and the redress or prevention of private wrongs, which shall be the same at law and in equity, and which shall be denominated a civil action....

Code of Civil Procedure, ch. 1, § 1 (1877); C.R.C.P. 2 (2013). Since the merger, there are very few issues that remain distinguished based on a claim's historical roots. SeeChurchill v. Univ. of Colo. at Boulder, 285 P.3d 986, 1000 n.10 (Colo.2012) (citing Dan B. Dobbs, Law of Remedies § 2.4(1) (2d ed. 1993), for the proposition that one of the only remaining distinctions is the question of the appropriate remedy in a particular case); Am. Family Mut. Ins. Co., 218 P.3d at 322 (“Merger has not eliminated the difference between law and equity with regard to jury trials.”). None of those issues appear in this case. Accordingly, we turn to whether the court of appeals erred in ruling that laches as a defense to Vessels' claim is precluded by the separation of powers doctrine.

¶ 12 “The essential element of laches is unconscionable delay in enforcing a right under the circumstances, usually involving a prejudice to the one against whom the claim is asserted.” ⁴Loveland Camp No. 83 v. Woodmen Bldg & Benevolent Ass'n, 108 Colo. 297, 116 P.2d 195, 199 (1941); see also Calvat v. Juhan, 119 Colo. 561, 206 P.2d 600, 604 (1949); Robbins v. People, 107 P.3d 384, 388 (Colo.2005). “The elements of laches are: (1) full knowledge of the facts; (2) unreasonable delay in the assertion of available remedy; and (3) intervening reliance by and prejudice to another.” City of Thornton v. Bijou Irr. Co., 926 P.2d 1, 73 (Colo.1996) (internal quotations omitted). Laches requires “such unreasonable delay in the assertion of and attempted securing of equitable rights as to constitute in equity and good conscience a bar to recovery.” Loveland Camp No. 83, 116 P.2d at 199; see also Keller Cattle Co. v. Allison, 55 P.3d 257, 260 (Colo.App.2002) (“The doctrine of laches permits a court to deny a party equitable relief.”).

¶ 13 The General Assembly has authority to enact statutes of limitation periods for the filing of claims in Colorado courts. Dove v. Delgado, 808 P.2d 1270, 1274–75 (Colo.1991). “The purpose of a statute of limitations is to promote justice, discourageunnecessary delay, and forestall the prosecution of stale claims.” Id. at 1274. Courts ordinarily enforce a statutorily enacted limitations period. Van Diest v. Towle, 116 Colo. 204, 179 P.2d 984, 989 (1947) (“The modern tendency is to look with favor upon statutes of limitation, which are considered wise and beneficent in their purpose and tendency, ... and are held to be rules of property vital to the welfare of society....”). Colorado statutes of limitation, such as the...