Farm Credit of Southern Colorado, ACA; and Farm Credit of Southern Colorado, FLCA, Plaintiffs-Appellees,
James C. Mason, a/k/a Jim Mason, Defendant-Appellant.
County District Court No. 12CV63 Honorable Mark A.
& Wilmer L.L.P., Scott C. Sandberg, John O'Brien,
Denver, Colorado, for Plaintiffs-Appellees
M. Croshal, Attorney At Law, James M. Croshal, Pueblo,
Colorado; Mullans Piersel and Reed, PC, Shannon Reed, Pueblo,
Colorado, for Defendant-Appellant
1 After Farm Credit of Southern Colorado, ACA, and Farm
Credit of Southern Colorado, FLCA (collectively, Farm
Credit), refused to loan Zachary Mason additional funds
for his farming operations, Zachary's father, James C.
Mason, took control of crops that constituted collateral for
some of Zachary's loans. Farm Credit sued James, and
James filed counterclaims. The trial court found James liable
for converting the collateral and awarded damages. James
appeals the trial court's orders denying his request for
a jury trial and admitting evidence of Zachary's loan
debt to Farm Credit. He also appeals the judgment. We affirm.
2 Zachary funded his farming operations in Colorado's
Arkansas Valley with Farm Credit loans. By the spring of
2012, Zachary was having difficulty paying his debt to Farm
Credit and had planted crops on seven farms for the coming
harvest. Written agreements between Farm Credit and Zachary
granted Farm Credit a perfected security interest in
Zachary's crops (Crop Collateral) and their proceeds. In
early March, Farm Credit refused to continue funding
Zachary's farming operations.
3 Without additional loans from Farm Credit, Zachary was
unable to cultivate the Crop Collateral. In May, James - who
also funded his farming operations by borrowing from Farm
Credit for about forty-six years - took over the cultivation
of the Crop Collateral. During that time, James also executed
documents to transfer Zachary's United States Department
of Agriculture benefits to himself and began harvesting and
selling the Crop Collateral. James never attempted to
transfer the Crop Collateral or its proceeds to Farm
Credit. Farm Credit became aware that James had
taken control of the Crop Collateral by late spring or early
summer. Without James' cultivation, to which Farm Credit
"acquiesced, " the Crop Collateral would not have
4 On May 21, Farm Credit filed a complaint against Zachary
and other parties, but not James. The complaint contained
claims for judgment on Zachary's notes, foreclosure of
real property collateral, replevin, conversion of insurance
proceeds, civil theft of said proceeds, and fraud. At Farm
Credit's request, the trial court issued a temporary
order to preserve the collateral the complaint described.
This preservation order was to be served on "any third
party . . . that [Farm Credit] determine[d] may be in
possession of or have control over" the property
detailed in the complaint. Farm Credit served this order on
5 On August 1, after the parties engaged in unsuccessful
settlement negotiations and James closed his accounts with
Farm Credit, Zachary filed for bankruptcy, which halted Farm
Credit's efforts to recover the collateral. The
bankruptcy court later allowed Farm Credit to continue its
efforts to replevy personal property collateral and foreclose
real property collateral. On November 13, as part of a
bankruptcy adversary proceeding, Farm Credit filed an amended
complaint alleging that Zachary transferred the Crop
Collateral to James and asserting claims for relief under 11
U.S.C. § 523 (2012).
6 On March 13, 2013, Farm Credit amended the state trial
court complaint to add James as a defendant and include
claims for replevin and conversion against James, accounting
by James, foreclosure, and appointment of a receiver.
7 James' answer raised the affirmative defenses of
waiver, estoppel, abandonment, and consent, and requested a
jury trial. Farm Credit filed a motion to strike James'
demand for a jury trial, which the trial court granted,
finding that the "basic thrust of this action is
8 In November 2013, in response to James'
interrogatories, Farm Credit disclosed the amount of
Zachary's outstanding debt owed to Farm Credit as of June
2013. The response indicated that the debt, including
principal and unpaid interest through June 2013, exceeded $7,
000, 000, and it provided the interest rates that continued
to compound daily. Even though discovery in the underlying
action, bankruptcy proceedings and settlement negotiations
involving other defendants, and Farm Credit's replevin
and foreclosure efforts were simultaneously ongoing, Farm
Credit never supplemented its response or updated the
disclosed amount of Zachary's outstanding debt.
9 Discovery disputes, including the one regarding Farm
Credit's disclosures of Zachary's outstanding debt,
were addressed by a court-appointed special master during a
mediation in March 2014. The record does not indicate that
the special master issued written findings or a written
order, and the transcript does not reflect the entire
proceeding. After the 2014 mediation, Farm Credit never
disclosed an updated calculation of Zachary's debt, to
which James did not object until the middle of trial.
10 Farm Credit's suit against James went to trial in
December 2014. On December 31, 2014 - after the evidence had
been presented but before the trial court issued a judgment -
the bankruptcy court issued its ruling in the adversary
proceeding against Zachary. James promptly filed a motion for
a directed verdict based upon the bankruptcy court's
findings. The trial court denied this motion, concluding that
there was "no identity of the issues actually litigated
and necessarily adjudicated" in the bankruptcy adversary
proceedings and in the trial court proceedings.
11 The trial court subsequently entered a judgment against
James, finding him liable for converting the Crop Collateral
and awarding Farm Credit $251, 435 plus 8% interest accruing
from November 1, 2012, through April 6, 2015, the date of the
Request for a Jury Trial
12 James argues that the trial court erred in striking his
demand for a jury trial. James asserts that, when deciding
whether he was entitled to a jury trial under C.R.C.P. 38(a),
the court should have considered only the claims against
James, not the equitable claims against other parties. We
Preservation, Standard of Review, and Applicable Law
13 The parties agree that James has preserved this issue.
14 We review de novo a party's asserted right to a jury
trial in a civil case. Stuart v. N. Shore Water &
Sanitation Dist., 211 P.3d 59, 61 (Colo.App. 2009).
15 "The right to a trial by jury in civil actions exists
only in proceedings that are legal in nature."
Id.; see also C.R.C.P. 38(a). Courts look
to the "nature of the relief" sought to determine
whether a party is entitled to a jury trial. Stuart,
211 P.3d at 61 (citation omitted). "Actions for money
damages are considered legal, and actions seeking to invoke
the coercive powers of the court are considered
equitable." Id. at 62. But, "not all forms
of monetary relief need necessarily be characterized as legal
relief for purpose of the jury trial requirement."
Watson v. Pub. Serv. Co. of Colo., 207 P.3d 860, 865
(Colo.App. 2008) (citation and alteration omitted). A party
is not necessarily entitled to a jury trial, even where a
plaintiff seeks to recover money damages. People v.
Shifrin, 2014 COA 14, ¶ 17.
16 The original complaint, not any counterclaims or defenses,
fixes the nature of the action. See Carder, Inc. v.
Cash, 97 P.3d 174, 187 (Colo.App. 2003) (considering
only the original complaint, not the amended complaint, when
affirming the denial of a demand for a jury trial). Where a
party seeks legal and equitable remedies, courts "must
determine whether the basic thrust of the action is equitable
or legal." Am. Family Mut. Ins. Co. v. DeWitt,
216 P.3d 60, 63 (Colo.App. 2008), aff'd, 218
P.3d 318 (Colo. 2009).
17 We agree with the trial court that the basic thrust of the
underlying action was equitable.
18 The May 21, 2012, complaint contained claims for judgment
on Zachary's notes, foreclosure of real property
collateral, replevin of personal property collateral,
conversion of insurance proceeds paid after collateral was
damaged or destroyed by fire, civil theft of those proceeds,
and fraud regarding those proceeds. The complaint evidences
that the action involved a debtor in default, and the relief
requested mainly concerned judgment on promissory notes and
the foreclosure and disposition of collateral. Under these
circumstances, Farm Credit's "remedy is in the
nature of a foreclosure, an equitable action which is to be
tried to the court." See W. Nat'l Bank of Casper
v. ABC Drilling Co., 42 Colo.App. 407, 413, 599 P.2d
942, 947 (1979) (The right to a jury trial under C.R.C.P. 38
"is not intended to extend to actions involving the
repossession of collateral by a secured party."). That
such foreclosure-like proceedings typically involve
calculations of debt and "a personal monetary award
against the debtor founded in contract" does not
undercut our conclusion that the basic thrust of the action
was equitable. See First Nat'l Bank of Meeker v.
Theos, 794 P.2d 1055, 1059 (Colo.App. 1990); see
also Shifrin, ¶ 17.
19 We reject James' contention that the trial court erred
in considering the May 21, 2012, complaint's claims
because Farm Credit did not name James as a defendant until
it filed the March 13, 2013, amended complaint. While a party
may invoke its right to a jury trial in a civil action where
all other parties have waived this right, a party may only
assert a demand for a jury trial in actions where it is
entitled to one; if no right to a jury trial exists because
the basic thrust of the action is equitable, as it is here,
no party may invoke that right. See In re Trust of
Malone, 658 P.2d 284, 286 (Colo.App. 1982); see also
Simpson v. Digiallonardo, 29 Colo.App. 556, 488 P.2d 208
20 Accordingly, we conclude that the basic thrust of the
underlying action was equitable and that the trial court did
not err in striking James' demand for a jury trial.
See Stuart, 211 P.3d at 61; see also
DeWitt, 216 P.3d at 63.
Evidence of Zachary's Debt to Farm Credit
21 James asserts that the trial court erred in admitting
evidence of Zachary's debt because Farm Credit did not
disclose it before trial, and this nondisclosure ...