Premier Members Fed. Credit Union v. Block

• Decision Date: 29 August 2013
• Docket Number: Court of Appeals No. 12CA0906
• Citation: 312 P.3d 276
• Parties: PREMIER MEMBERS FEDERAL CREDIT UNION, Plaintiff–Appellee, v. Henry BLOCK and South Broadway Automotive Group, Inc., d/b/a Quality Mitsubishi, Inc., Defendants–Appellees, and Darrell Einspahr, Defendant–Appellant.
• Court: Colorado Court of Appeals

312 P.3d 276

PREMIER MEMBERS FEDERAL CREDIT UNION, Plaintiff–Appellee,

v. Henry BLOCK and South Broadway Automotive Group, Inc., d/b/a Quality Mitsubishi, Inc., Defendants–Appellees,andDarrell Einspahr, Defendant–Appellant.

Court of Appeals No. 12CA0906

Colorado Court of Appeals, Div. II.

August 29, 2013

Arapahoe County District Court No. 09CV2786, Honorable John L. Wheeler, Judge.

EasonRohde, LLC, Bruce E. Rohde, Denver, Colorado, for Plaintiff–Appellee and Defendants–Appellees.

Joseph A. Peters, Denver, Colorado, for Defendant–Appellant.

Opinion by JUDGE LICHTENSTEIN

¶ 1 Defendant, Darrell Einspahr, appeals the judgment entered after a bench trial, on the fraud claim of plaintiff, Premier Members Federal Credit Union (Premier). He contends the trial court erred by denying him a jury trial. He also appeals the court's dismissal of his cross-claim that sought indemnification from Broadway Automotive Group, Inc., doing business as Quality Mitsubishi, Inc., and its owner Henry Block (collectively Quality). We affirm.

¶ 2 As an issue of first impression, we consider whether C.R.C.P. 6(b)—the civil rule governing enlargements of time—gives a court discretion to grant a party's request for a jury trial upon a showing of excusable neglect for that party's untimely payment of a jury fee. Because C.R.C.P. 6(b) does not apply to the statutory deadline for payment of jury fees, we conclude it does not.

¶ 3 We also address whether an employee who knowingly engages in fraud may have a right to indemnification from his or her employer under a theory of vicarious liability. We conclude such an employee is precluded from seeking indemnification, irrespective of any authorization by the employer.

I. Background

¶ 4 Einspahr was the manager of the special finance department of Quality's car dealership. He and another employee in the department recommended high risk buyers for car loans from Premier. The fraud claim was based on their conduct of “power booking,” in which they artificially inflated the values of vehicles (which would create a better loan to value ratio) to induce Premier to approve the car loans.

¶ 5 After Premier learned that Einspahr and the other employee had “power booked” several of its loans, it sued Einspahr, the other employee, and Quality for fraud.¹ Quality filed cross-claims against Einspahr, and Einspahr filed cross-claims against Quality.

¶ 6

Premier and Quality subsequently reached a settlement and the court “dismissed with prejudice” Premier's claims against Quality and Quality's cross-claims against Einspahr. Premier's only remaining claim—its fraud claim against Einspahr—proceeded to a bench trial. The trial court entered judgment against Einspahr and dismissed Einspahr's cross-claims against Quality.

¶ 7 This appeal followed.

II. Jury Demand

¶ 8 Einspahr contends the trial court erred when it denied his request for a jury trial on the basis that he had failed to timely pay his jury fee. He asserts the trial court should have applied C.R.C.P. 6(b), which governs enlargements of time, and gives courts the discretion to permit an act to be performed after the expiration of a deadline upon a showing of excusable neglect. Because the jury fee deadline is governed by section 13–71–144(1)(c), C.R.S.2012, we conclude that C.R.C.P. 6(b) does not apply. Consequently, we perceive no error.

A. Standard of Review

¶ 9 Ordinarily, we review a trial court's denial of an enlargement of time within which to perform an act for an abuse of discretion. State Farm Fire & Cas. Co. v. Weiss, 194 P.3d 1063, 1069 (Colo.App.2008) (citing C.R.C.P. 6(b)). However, we review the application of the rules of civil procedure de novo. Luebke v. Luebke, 143 P.3d 1088, 1092 (Colo.App.2006). We may affirm a trial court's ruling on any ground that is supported by the record. Thyssenkrupp Safway, Inc. v. Hyland Hills Parks & Recreation Dist., 271 P.3d 587, 589 (Colo.App.2011).

B. Trial Court Proceedings

¶ 10 When Quality filed its answer to Premier's fraud claim and cross-claim against Einspahr, it included a general jury demand and paid the jury fee. Einspahr, who at the time was represented by an attorney, did not pay a jury fee in response to Quality's jury demand, as required by C.R.C.P. 38(c). Subsequently, Einspahr, through counsel, filed an answer and cross-claim (against Quality), which included a jury demand. Again, he did not pay the jury fee, as required by C.R.C.P. 38(b).

¶ 11 At the final pretrial conference, Quality withdrew its jury demand but Einspahr, who was now proceeding pro se, informed the court that he still sought a jury trial. He supplemented this oral request with a written motion asking the court to allow him to pay the jury fee out of time, asserting that his attorney had negligently failed to pay the fee.

¶ 12 The court issued a written order denying his request:

Although Einspahr timely filed his jury demand ... after the [c]ourt granted him leave to file the cross-claims ... Einspahr did not pay the requisite jury fee at any time.

...

Therefore pursuant to Rule 38(b), (c) and (e), Einspahr has waived his right to a jury trial.

...

With no other party demanding trial by jury and paying a jury fee, Quality's withdrawal of its jury demand ... is effective, and the ... trial will be to the [c]ourt.

¶ 13 Einspahr filed two motions to reconsider this ruling, additionally alleging that the court staff and the e-filing system should have charged the fee upon his attorney's filing of the jury demand.

¶ 14 The trial court issued a second ruling, again denying a jury trial:

Since defendant Einspahr ha[d] made a timely jury demand, but did not pay the jury fee as required under Rules 38(b), (c) and (e), the [c]ourt is not able to reinstate defendant Einspahr's right to a jury trial without the written authorization of the other parties in the case ....

Premier and Quality filed a response, stating that they would not authorize the reinstatement of a jury trial.² The case then proceeded to a bench trial.

C. Applicability of C.R.C.P. 6(b)

¶ 15 Colorado Rule of Civil Procedure, Rule 6(b) provides:

When by these rules or by a notice given thereunder or by order of court an act is required or allowed to be done at or within a specified time, the court for cause shown may, at any time in its discretion ... upon motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect ....

¶ 16 Einspahr contends that the trial court should have allowed him to pay his jury fee out of time because under Rule 6(b), the court had discretion to permit an act to be performed after the expiration of a deadline upon a showing of excusable neglect, and he established excusable neglect.

¶ 17 As an initial matter, Premier contends that Einspahr did not preserve this issue because, even though he requested permission to file the jury fee out of time, he never cited Rule 6(b), much less asked the court to decide whether Rule 6(b) applied. Even assuming the substance of Einspahr's motions sufficiently identified Rule 6(b) as the basis for his request, we conclude that, under the applicable statute, the court lacked discretion to enlarge the jury fee filing deadline and hence the case properly proceeded to a bench trial.

¶ 18 Determinative here, the right to a jury trial upon the filing of a jury fee is not only governed by court rule, but also by statute.

¶ 19 Colorado Rule of Civil Procedure, Rule 38(e) states:

[t]he failure of a party to file and serve a demand for trial by jury and simultaneously pay the requisite jury fee as required by this Rule constitutes a waiver of that party's right to trial by jury.

¶ 20 And the statute governing jury fees in civil cases states:

Each party to an action who does not affirmatively waive, in writing, the right to a trial by jury on all issues which are so triable shall pay the jury fee. Failure to pay the jury fee at the time of filing the demand, and no later than ten days after the service of the last pleading directed to any issue triable by a jury, shall constitute a waiver of a jury trial by the demanding, nonpaying party.

§ 13–71–144(1)(c) (emphasis added).

¶ 21 According to the rule and the statute, the failure to pay the jury fee at the time of filing of the jury demand constitutes a waiver of a jury trial. The statute additionally provides that the demanding, nonpaying party waives a jury trial if it fails to meet this requirement within “ten days after the service of the last pleading directed to any issue triable by a jury.” There is no express statutory exception to the deadline, such as a claim of excusable neglect. And Einspahr does not cite, nor have we found, any authority addressing section 13–71–144(1)(c) that permits a trial court to enlarge the statutory time for demanding a jury.

¶ 22 Therefore, even if Rule 6(b) can operate to enlarge the filing deadlines established under the rules of civil procedure, the court otherwise was barred by statute from granting Einspahr's request.

¶ 23 When a statute sets forth a particular deadline or procedure, “court-promulgated rules simply do not apply.” People ex rel. S.M.A.M.A., 172 P.3d 958, 961 (Colo.App.2007); see alsoHernandez v. Downing, 154 P.3d 1068, 1071 (Colo.2007) (insofar as the Colorado Rules of Civil Procedure are inconsistent or conflict with a Colorado statute, they do not govern). Indeed, “[b]y its own terms, C.R.C.P. 6(b) applies only to requests to enlarge deadlines set forth in the rules of civil procedure, a notice under those rules, or a court order. The rule does not apply to statutorily established time periods.” Antolovich v. Brown Grp. Retail, Inc., 183 P.3d 582, 592 (Colo.App.2007).

¶ 24 Thus, because section 13–71–144(1)(c) expressly identifies the deadline beyond which a nonpaying, demanding party waives the right to jury trial, the “excusable neglect” provision of Rule 6(b) does not apply. See Antolovich, 183 P.3d at 592 (“...