SMLL, LLC v. Peak Nat. Bank

• Citation: 111 P.3d 563
• Decision Date: 24 March 2005
• Docket Number: No. 03CA2347.,03CA2347.
• Parties: SMLL, L.L.C., a Colorado limited liability company, Plaintiff-Appellant, v. PEAK NATIONAL BANK and Richard Daly, Defendants-Appellees.
• Court: Court of Appeals of Colorado

111 P.3d 563

SMLL, L.L.C., a Colorado limited liability company, Plaintiff-Appellant, v. PEAK NATIONAL BANK and Richard Daly, Defendants-Appellees.

No. 03CA2347.

Colorado Court of Appeals, Division V.

March 24, 2005.

Fisher, Sweetbaum & Levin, P.C., Alan D. Sweetbaum, E. James Wilder, Heather M. Anderson, Denver, Colorado, for Plaintiff-Appellant.

Senter, Goldfarb & Rice, L.L.C., Eric M. Ziporin, Denver, Colorado; Sloan, Listrom, Eisenbarth, Sloan & Glassman, L.L.C., Stephen D. Lanterman, Alan V. Johnson, Topeka, Kansas, for Defendant-Appellee Peak National Bank.

Richard Daly, Pro Se.

Opinion by: Judge VOGT.

Plaintiff, SMLL, L.L.C., appeals the trial court judgment dismissing its complaint against defendants, Peak National Bank (Peak) and Richard Daly, on statute of limitations grounds. We affirm.

I.

In November 1998, plaintiff filed a lawsuit against various parties involved with the construction and financing of its unsuccessful townhome construction project. In June and July 1999, plaintiff amended its complaint to add claims for civil theft and professional negligence against Daly, its former attorney, and claims for negligence against Peak, which had provided construction loans for the project.

On August 19, 2002, the day trial was to begin, defendant Daly moved to dismiss the action on the basis that plaintiff, a limited liability company, had been suspended in February 2001 for failure to file its annual report. The trial court dismissed the action without prejudice, concluding that plaintiff's suspended status made it incompetent to transact business in the state and deprived it of capacity under C.R.C.P. 17 to go forward with its lawsuit. That dismissal is the subject of a separate appeal to this court, and we express no opinion as to the propriety of the dismissal.

Some two months later, having been reinstated by the secretary of state, plaintiff filed this second action, reasserting its prior claims and adding new claims for breach of fiduciary duty against Daly and breach of contract against Peak. Daly filed a motion for dismissal and Peak moved for summary judgment, both contending that plaintiff's claims were barred under the applicable statutes of limitations. Plaintiff responded that its new action was timely under § 13-80-111, C.R.S.2004, because it was commenced within ninety days after dismissal of the first action. The trial court disagreed with plaintiff, granted defendants' motions, and certified its orders as a final judgment pursuant to C.R.C.P. 54(b).

II.

On appeal, plaintiff does not dispute that its second action was brought more than three years after the claims against these defendants accrued and that the claims would thus be time barred under §§ 13-80-101 and 13-80-102, C.R.S.2004, absent tolling of the limitations period. Plaintiff contends, however, that its claims were timely in light of § 13-80-111, the "remedial revival statute," which tolls the running of an otherwise applicable statute of limitations when an original, timely action has been terminated for lack of jurisdiction and a new action is commenced within ninety days thereafter. We are not persuaded.

We review de novo a trial court's rulings on motions for summary judgment or dismissal on statute of limitations grounds. See Morrison v. Goff, 91 P.3d 1050 (Colo.2004)

; Harrison v. Pinnacol Assurance, 107 P.3d 969 (Colo.App.2004).

A statute of limitations defense may be considered on a motion to dismiss where the bare allegations of the complaint reveal that the action was not brought within the required statutory period. CAMAS Colorado, Inc. v. Board of County Commissioners, 36 P.3d 135 (Colo.App.2001). Where the complaint shows on its face that the claim was brought outside the statute of limitations, a party who contends that the statute of limitations should be tolled has the burden to establish a basis for such tolling. See First Interstate Bank v. Berenbaum, 872 P.2d 1297 (Colo.App.1993)

.

Absent a specific statutory provision, Colorado law does not allow for the tolling of a statute of limitations during the pendency of a prior action. Chilcott Entertainment L.L.C. v. John G. Kinnard Co., 10 P.3d 723 (Colo.App.2000).

A.

Section 13-80-111(1), C.R.S.2004, the statute on which plaintiff relies here to support its tolling argument, states, in relevant part:

If an action is commenced within the period allowed by this article and is terminated because of lack of jurisdiction or improper venue, the plaintiff . . . may commence a new action upon the same cause of action within ninety days after the termination of the original action. . . .

Thus, under the plain language of the statute, if an original action was timely commenced and was then terminated because of lack of jurisdiction or improper venue, a second action brought within ninety days after that termination will be deemed timely. See Sharp Bros. Contracting Co. v. Westvaco Corp., 817 P.2d 547 (Colo.App.1991)

(action was timely because it was filed within ninety days after original federal court action was dismissed for lack of subject matter jurisdiction); Soehner v. Soehner, 642 P.2d 27 (Colo.App.1981) (where wife's fraud claim was dismissed for lack of jurisdiction, trial court erred in not applying remedial revival statute to render timely wife's subsequent independent action seeking same relief).

However, § 13-80-111 does not apply where the original action is dismissed for reasons other than lack of jurisdiction or improper venue. See Nguyen v. Swedish Medical Center, 890 P.2d 255 (Colo.App.1995)

(dismissal of original malpractice action based on plaintiff's failure to file nonresident cost bond was not a dismissal affecting either subject matter jurisdiction or personal jurisdiction; thus, remedial revival statute was inapplicable to plaintiff's second complaint); see also Broker House International, Ltd. v. Bendelow, 952 P.2d 860 (Colo.App.1998) (because dismissal of first action based on expiration of statute of limitations was not a dismissal for lack of jurisdiction, § 13-80-111 did not apply).

Here, plaintiff's first action was dismissed because the court determined that its suspended status rendered it incompetent to transact business under Colo. Sess. Laws 1990, ch. 58, § 7-80-305 at 422 (repealed effective July 1, 2004), which stated in relevant part:

(1) If any domestic limited liability company has failed to pay the fees required by law or to file any report or statement required by law, ... such limited liability company shall be suspended.

(2) Any domestic limited liability company which is suspended under the provisions of this section ... shall be inoperative and no longer competent to transact business in this state.

The original trial court concluded that this inability to transact business amounted to a lack of capacity to sue under C.R.C.P. 17. See Alperstein v. Sherwood International, Inc., 778 P.2d 279 (Colo.App.1989)

(suspended corporation lacked power to file and pursue claim against estate). As noted, the trial court here concluded that the prior dismissal was not a dismissal for either lack of jurisdiction or improper venue and that § 13-80-111 thus did not apply.

B.

Plaintiff contends on appeal that dismissal for lack of capacity is in fact a dismissal for lack of subject matter jurisdiction, and that the trial court therefore erred in ruling to the contrary. We disagree.

Subject matter jurisdiction concerns the court's authority to deal with the class of cases in which it renders judgment. Nguyen v. Swedish Medical Center, supra.

A court has subject matter jurisdiction if the case is one of the type of cases that the court has been empowered to entertain by the sovereign from which the court derives its authority. Paine, Webber, Jackson & Curtis, Inc. v. Adams, 718 P.2d 508 (Colo.1986); Ashton Properties, Ltd. v. Overton, 107 P.3d 1014 (Colo.App.2004).

Once a court's subject matter jurisdiction is properly invoked, a party's failure to comply with a procedural requirement may justify the court's dismissal of the action within its discretion, but such failure does not divest the court of subject matter jurisdiction. Eagle Peak Farms, Ltd. v. Lost Creek Ground Water Management District, 7 P.3d 1006 (Colo.App.1999); see also Mahaffey v. Barnhill, 855 P.2d 847 (Colo.1993)

(neither failure to set trial of election contest within statutory time limit nor failure to file cost bond deprived trial court of jurisdiction to hear the controversy); People in Interest of Clinton, 762 P.2d 1381 (Colo.1988) (failure to follow statutory requirement of forthwith appointment of counsel for allegedly mentally ill person did not deprive court of personal or subject matter jurisdiction in mental health certification proceeding); Hoyman v. Coffin, 976 P.2d 311 (Colo.App.1998) (untimely filing of traverse in garnishment proceeding did not divest trial court of jurisdiction to conduct hearing); People v. Grell, 950 P.2d 660 (Colo.App.1997) (prosecution's failure to file forfeiture complaint within sixty-day time limit was procedural defect that did not divest trial court of subject matter jurisdiction).

"Capacity" refers to a party's personal right to come into court. It deals with the personal qualifications of a party to litigate, and it typically is determined without regard to the particular claim or defense being asserted. Summerhouse Condominium Ass'n v. Majestic Savings & Loan Ass'n, 44 Colo.App. 495, 615 P.2d 71 (1980). Capacity to sue or be sued is addressed in C.R.C.P. 17, a procedural rule providing how a legally constituted entity may bring its action. See Hidden Lake Development Co. v. District Court, 183 Colo. 168, 515 P.2d 632 (1973)

.

Capacity refers not only to the power to bring an action, but also to the power to maintain it. Thus, a corporation may have capacity to sue when it files a complaint and thereafter lose that power under state law. See Mather Construction Co. v. United States, 201 Ct.Cl. 219, ...