Makeen v. Hailey

• Decision Date: 31 December 2015
• Docket Number: Court of Appeals No. 14CA1781
• Citation: 381 P.3d 337,2015 COA 181
• Parties: Akeem A. MAKEEN, Plaintiff–Appellant, v. George E. HAILEY, Defendant–Appellee.
• Court: Colorado Court of Appeals

381 P.3d 337

2015 COA 181

Akeem A. MAKEEN, Plaintiff–Appellant,

v.George E. HAILEY, Defendant–Appellee.

Court of Appeals No. 14CA1781

Colorado Court of Appeals, Div. I.

Announced December 31, 2015

Rehearing Denied February 4, 2016

Akeem A. Makeen, Pro Se.

The Law Office of Horace A. Lowe LLC, Horace A. Lowe, Aurora, Colorado, for Defendant–Appellee.

Opinion by JUDGE HARRIS

¶ 1 Akeem A. Makeen sued his father, George E. Hailey, over a series of disputed real estate transactions. Mr. Hailey filed various counterclaims, alleging breach of fiduciary duty, fraud, spurious liens, and intentional infliction of emotional distress. After a bench trial, the court found in favor of Mr. Hailey on all claims, awarding damages, costs, and fees.

¶ 2 On appeal, Mr. Makeen contends that Mr. Hailey's first and second counterclaims for breach of fiduciary duty and fraud were not timely filed and should have been dismissed. He also contends that the trial court committed reversible error in its rulings on various procedural issues. We reject each of Mr. Makeen's contentions and affirm the judgment.

I. Background

¶ 3 Mr. Makeen and Mr. Hailey purchased real property in Denver (Utopia Property) as joint tenants. Mr. Makeen alleged that he had an oral agreement with his father pursuant to which he would manage the property while his father was alive, and upon his death Mr. Makeen would become the sole owner. According to Mr. Makeen, Mr. Hailey also promised to give him seven other properties upon Mr. Hailey's death. Mr. Hailey, however, alleged that he never promised Mr. Makeen any property interests, and that Mr. Makeen fraudulently purchased the Utopia Property in both of their names, even though he had agreed to act as Mr. Hailey's agent and to buy the property only in Mr. Hailey's name.

¶ 4 In October 2012, Mr. Makeen sued Mr. Hailey for fraudulent conveyance, breach of contract, and other claims relating to these real estate transactions. He also asserted claims of slander and defamation, alleging that Mr. Hailey had falsely informed various banks and agencies that Mr. Makeen had improperly used Mr. Hailey's credit information.

¶ 5 Although this case was governed by Chief Justice Directive 11–02, Civil Access Pilot Program (reenacted & amended Nov. 2015) (CAPP)¹ , which was intended to enhance judicial efficiency, the case proceeded slowly due to multiple and repeated discovery disputes and four sets of amended pleadings. Both parties initially appeared pro se, but Mr. Hailey engaged legal representation shortly before the case was originally scheduled for trial.

¶ 6 After the original trial date was postponed, Mr. Makeen filed his fourth amended complaint in September 2013. On November 15, 2013, Mr. Hailey responded with his fourth amended answer, which was his first pleading filed with the assistance of counsel. In this answer, Mr. Hailey asserted counterclaims for the first time in the litigation. Mr. Makeen filed a motion to dismiss the first and second counterclaims as untimely, which the court denied. To avoid another continuance, the court severed the counterclaims and proceeded to trial on Mr. Makeen's claims in February 2014, with a separate trial on the counterclaims a few months later.

¶ 7 After both trials, the court found in favor of Mr. Hailey on all claims and counterclaims.² The case turned largely on issues of credibility, and the court concluded that it simply did not believe Mr. Makeen's version of events; indeed, the trial court found Mr. Makeen “to be one of the most [i]ncredible, unbelievable witnesses I have listened to in my going on 15 years on the bench.” He characterized Mr. Makeen as a “bully” and not “an honest litigant.” The court awarded Mr. Hailey $7100 in damages, plus costs and attorney fees, and entered an order extinguishing Mr. Makeen's interest in the Utopia Property.

II. Counterclaims

¶ 8 Mr. Makeen contends that the trial court erred in finding Mr. Hailey's counterclaims for breach of fiduciary duty and fraud timely.³ Although the trial court agreed that the claims were time barred under the substantive statutes of limitations, the court found that section 13–80–109, C.R.S.2015

, revived the stale counterclaims.⁴

¶ 9 According to section 13–80–109

, “[a] counterclaim or setoff arising out of the transaction or occurrence which is the subject matter of the opposing party's claim shall be commenced within one year after service of the complaint by the opposing party and not thereafter.” Thus, this section permits otherwise time-barred claims to be filed as counterclaims, if compulsory, within one year of service of the complaint that includes the claim that gives rise to the counterclaims. See

E–21 Eng'g, Inc. v. Steve Stock & Assocs., Inc., 252 P.3d 36, 40 (Colo.App.2010).

¶ 10 The trial court determined that Mr. Hailey's counterclaims were timely because they were filed within one year of Mr. Makeen's last-filed complaint. Mr. Makeen contends, however, that he pleaded the claims giving rise to Mr. Hailey's counterclaims in his initial complaint, not in his last- filed complaint, and therefore the revival statute's one-year limitations period was triggered upon service of his initial complaint, in October 2012. Because Mr. Hailey did not file his counterclaims until November 2013, over one year later, Mr. Makeen argues that the counterclaims were time barred. For his part, Mr. Hailey acknowledges that his counterclaims arose out of claims that Mr. Makeen pleaded in his initial complaint. But he says that his counterclaims are nonetheless timely because his amended answer, which included his counterclaims, relates back, under C.R.C.P. 15(c)

, to his initial answer, which was filed well within the limitations period.

¶ 11 We review de novo a trial court's application of the statute of limitations where, as here, the relevant facts are undisputed. Sterenbuch v. Goss, 266 P.3d 428, 432 (Colo.App.2011)

.

¶ 12 We disagree with the trial court's conclusion that the revival statute's one-year limitations period runs from the date of the last-filed complaint. As the trial court determined, and the parties do not dispute, Mr. Hailey's counterclaims were compulsory because they arose out of Mr. Makeen's claims regarding the Utopia Property—claims that were pleaded in Mr. Makeen's initial complaint. C.R.C.P. 13(a)

(“A pleading shall state as a counterclaim any claim which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim....”). Under the plain language of the revival statute, the period to bring a stale counterclaim runs from the date of service of the first complaint that contains the claims giving rise to the compulsory counterclaims. In this case, those claims appeared in Mr. Makeen's initial complaint and, therefore, the one-year time period was triggered when Mr. Makeen served Mr. Hailey with that complaint.

¶ 13 Mr. Hailey did not file the compulsory counterclaims until November 2013, when he filed an amended answer to Mr. Makeen's fourth amended complaint. We conclude, however, that the counterclaims were timely because Mr. Hailey's amended answer and counterclaims related back to his initial answer, which was filed within the revival statute's one-year limitations period.

¶ 14 C.R.C.P. 15(c)

provides, in relevant part: “Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading.” Thus, an amended pleading that meets the requirements of Rule 15(c) is treated as if it were filed on the date of the original pleading.

¶ 15 The purpose of the relation back doctrine is to “ease procedural problems when the statute of limitations poses a technical, not substantive, bar to maintaining suit.” Lavarato v. Branney, 210 P.3d 485, 489 (Colo.App.2009)

. Indeed, “[r]elation back is intimately connected with the policy of the statute of limitations,” as the doctrine is designed to ameliorate the effect of such limitations periods. Beaver Creek Prop. Owners Ass'n v. Bachelor Gulch Metro. Dist., 271 P.3d 578, 583 (Colo.App.2011) (citation omitted).

¶ 16 Although there is no Colorado case law addressing whether a previously omitted counterclaim relates back to the original answer, “[b]ecause the Colorado rule and Federal Rules of Civil Procedure 15(c)(1)(B)

are substantially similar as relevant here, case law interpreting the federal rule is persuasive in our analysis of C.R.C.P. 15(c).” Kelso v. Rickenbaugh Cadillac Co ., 262 P.3d 1001, 1003 (Colo.App.2011). Numerous federal courts have held that an amended answer adding a counterclaim relates back to the original answer, even when no counterclaim was originally asserted, if the counterclaim arose out of the same transaction alleged in the earlier-filed answer. See, e.g.,

Banco Para El Comercio Exterior de Cuba v. First Nat'l City Bank, 744 F.2d 237, 243 (2d Cir.1984) ; Perfect Plastics Indus., Inc. v. Cars & Concepts, Inc ., 758 F.Supp. 1080, 1083 (W.D.Pa.1991) ; Local 1316, Int'l Bhd. of Elec. Workers v. Superior Contractors & Assocs., Inc ., 618 F.Supp. 488, 489 (N.D.Ga.1985)

; Milam v. Massey–Ferguson, Inc., 580 F.Supp. 879, 881 (S.D.Miss.1984).

¶ 17 Leading commentators also agree that the counterclaim should relate back to the original answer. See 6 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1496.1 (3d ed.1998)

; 3 James Wm. Moore et al., Moore's Federal Practice § 13.93, at 13–78 (3d ed. 2015) (“[A]n amendment to add a compulsory counterclaim arising out of the same transaction alleged in a timely and previously filed answer relates back to the filing of the answer and is not time barred.”). To rule otherwise would be inconsistent because the relation back doctrine would allow a plaintiff to assert an otherwise time-barred claim...