Zoline v. Telluride Lodge Ass'n

• Decision Date: 17 February 1987
• Docket Number: No. 85SC140,85SC140
• Citation: 732 P.2d 635
• Parties: Joseph T. ZOLINE and Edwin W. Pauley, Jr., Petitioners, v. The TELLURIDE LODGE ASSOCIATION, a non profit corporation, Respondent.
• Court: Colorado Supreme Court

Page 635

732 P.2d 635

Joseph T. ZOLINE and Edwin W. Pauley, Jr., Petitioners, v. The TELLURIDE LODGE ASSOCIATION, a non profit corporation, Respondent.

No. 85SC140.

Supreme Court of Colorado En Banc.

Feb. 17, 1987.

Coleman, Brown & Jouflas, Joseph Coleman, Dufford, Waldeck, Ruland & Milburn, D.J. Dufford, Grand Junction, for petitioners.

Roath & Brega, P.C., Jack W. Berryhill, Denver, Woodrow, Roushar & Weaver, Frank J. Woodrow, Montrose, for respondent.

VOLLACK, Justice.

The petitioners, Joseph T. Zoline and Edwin W. Pauley, Jr., appeal from the court of appeals' decision, Telluride Lodge Association v. Zoline, 707 P.2d 998 (Colo.App.1985), which held that the trial court properly entered judgment in favor of the respondent Telluride Lodge. We granted certiorari to consider the issues of whether the trial judge's refusal to disqualify himself was properly preserved for appellate review; and whether a judge who (a) owns controlling interest in a bank in which a party to a lawsuit is a substantial depositor, and (b) has a business association with the law firm which initially represented that same party, should be disqualified from presiding over that lawsuit. We find that the issue of disqualification was properly preserved and also conclude that the trial judge should have disqualified himself. We reverse.

I.

The petitioners own units in a condominium complex called The Telluride Lodge. The underlying dispute involved problems with the roof design of the condominium units. The Telluride Lodge Association [hereinafter Association] brought suit to foreclose on liens filed against some of the condominium units, including those owned by the current petitioners and another defendant, Howard V. More, who has since been dropped as a petitioner. The chief judge of the Seventh Judicial District assigned the case in October 1981 to F. Lynn French, a part-time county judge of Delta County. Two months later, the petitioners filed a motion to disqualify the trial judge based on three separate grounds: the judge (1) owned controlling interest in a bank in which a party to the lawsuit was a substantial depositor, (2) had a business relationship with the law firm which initially represented that same party, and (3) had an interest in a case in which the defendant More's attorney was acting as trustee in bankruptcy. One month later, the trial judge recused himself due to his interest in the bankruptcy proceeding, without addressing the other two grounds. When that particular ground later became moot, the chief judge reassigned the case to the original trial judge. After a trial to the court, judgment was entered against the petitioners. The petitioners did not renew their motion for disqualification until filing a motion for new trial, which was denied.

The court of appeals' opinion primarily addressed the issues of the propriety of the judgment entered by the trial court, but also held that the judge's interest in a bank in which a party before him was a customer was not sufficient grounds for disqualification. We granted certiorari on the two issues relating to disqualification of the judge. We reverse and remand for a new trial.

II.

The respondents claim that the disqualification issue was not properly preserved for appellate review because petitioners did not renew their motion for disqualification, after reassignment of the original trial judge, until filing their motion for new trial. The petitioners contend that the motion, as it related to grounds (1) and (2), was denied by the trial judge's acceptance of reassignment to the case after ground (3), the bankruptcy proceeding, became moot.

As a general rule governing appellate review, objections not made at the trial court level are considered waived. Objections not raised at trial cannot be raised for the first time on appeal, Christensen v. Hoover, 643 P.2d 525 (Colo.1982), except when the subject matter is jurisdictional in nature. Paine, Webber, Jackson & Curtis v. Adams, 718 P.2d 508, 513 (Colo.1986). C.R.C.P. 97 governs motions for change of judge, but the timeliness of a motion to disqualify is not specifically addressed in this rule. Rather, our cases have held that "good faith and orderly process dictate that if grounds for disqualification are known at the time the suit is filed and a party desires to proceed thereon, a motion to disqualify should be filed prior to taking any other steps in the case." Aaberg v. District Court, 136 Colo. 525, 529, 319 P.2d 491, 494 (1957). Failure to timely object has been held to constitute waiver, but "a finding of waiver depends upon the facts and circumstances present in each particular case." Johnson v. District Court, 674 P.2d 952, 957 (Colo.1984).

Here, we are asked to determine the effect when grounds of a motion are not expressly denied or granted. Although Colorado has not addressed this issue, other jurisdictions have. In Addington v. Farmer's Elevator Mutual Insurance Co., the Fifth Circuit Court of Appeals found that appellate review of the district court's denial "by necessary implication" of plaintiff's motion was appropriate, because "denial of a motion by the district court, although not formally expressed, may be implied by the entry of final judgment (which is in effect an overruling of pending pretrial motions) or of an order inconsistent with the granting of the relief sought by the motion." 650 F.2d 663, 666 (5th Cir.), cert. denied, 454 U.S. 1098, 102 S.Ct. 672, 70 L.Ed.2d 640 (1981).

The Sixth Circuit Court of Appeals has adopted the same rule, holding that "the determination of a motion need not always be expressed but may be implied by an entry of an order inconsistent with granting the relief sought." Wimberly v. Clark Controller Co., 364 F.2d 225, 227 (6th Cir.1966). See also Mosier v. Federal Reserve Bank, 132 F.2d 710 (2d Cir.1942).

The record shows that this case was assigned to the original trial judge on October 14, 1981. The next pleading filed was petitioners' motion to disqualify the judge, filed December 12, 1981. On January 12, 1982, the trial judge recused himself on just one of the three grounds set forth in the motion (his interest in the bankruptcy proceeding). His minute order did not address the other two issues presented in petitioners' disqualification motion. On May 11, 1982, the chief judge reassigned the case to the original trial judge. Reassignment was evidently based on the fact that the bankruptcy proceeding had settled. The chief judge's minute order also did not address the other two grounds raised by the petitioners; it simply stated that "[t]here is no reason that [the original trial judge] cannot continue on these cases."

The record here establishes an implied denial of the remaining two grounds of the petitioners' motion. The trial judge's original recusal was specifically based on his interest in the bankruptcy proceeding. The chief judge's minute order reassigning the same judge made it clear to the petitioners that there would be no reason to reassert the disqualification motion, and had the effect of denying the petitioners' motion because it was "inconsistent with the granting of the relief sought by the motion." Addington, 650 F.2d at 666. Having found that petitioners' motion was denied, we do not imply waiver by the petitioners. The original motion was timely, and the petitioners' objection was unequivocally stated in the record. Accordingly, we conclude that this issue was properly preserved for appellate review.

III.

Having determined that the petitioners' objection is appropriate for appellate review, we proceed to the merits of the motion to disqualify. C.R.C.P. 97 states:

A judge shall be disqualified in an action in which he is interested or prejudiced, ... or is so related or connected with any party or his attorney as to render it improper for him to sit on the trial, appeal, or other proceeding therein.... [A]ny party may move for such disqualification and a motion by a party for disqualification shall be supported by affidavit.

7A C.R.S. (1973).

Section 13-1-122, 6 C.R.S. (1973), states:

A judge shall not act as such in any...