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Scott v. Scott

Court of Appeals of Colorado, Division A

February 22, 2018

Roseann Scott, Plaintiff-Appellant,
v.
Donna Scott, Defendant-Appellee.

         Mesa County District Court No. 15CV30761 Honorable Thomas M. Deister, Judge

         JUDGMENT AFFIRMED IN PART, REVERSED IN PART, ORDER VACATED, AND CASE REMANDED WITH DIRECTIONS Division A

          Reams & Reams, Charles F. Reams, Zachary T. Reams, Grand Junction, Colorado, for Plaintiff-Appellant

          Hoskin Farina & Kampf, P.C., Andrew H. Teske, Grand Junction, Colorado, for Defendant-Appellee

          Rothenberg * and Carparelli [*] , JJ., concur

          OPINION

          LOEB CHIEF JUDGE

         ¶ 1 In this civil action, plaintiff, Roseann Scott (Roseann), appeals the district court's order and judgment granting the motion of defendant, Donna Scott (Donna), to dismiss under C.R.C.P. 12(b)(5) for failure to state a claim upon which relief could be granted, and under C.R.C.P. 12(b)(6) for failure to join a necessary party. Roseann also appeals the court's postjudgment order granting Donna's motion for attorney fees and costs. We conclude that Roseann failed to state a claim for only one of her claims and that she did not fail to join a necessary party. We, therefore, affirm the district court's judgment in part, reverse in part, vacate the court's order granting attorney fees and costs, and remand with directions.

         I. Background and Procedural History

         ¶ 2 Roseann was married to Melvin Scott (Melvin), and the couple dissolved their marriage in 1978. As part of that dissolution, the couple entered into a separation agreement that provided as follows:

The parties agree that [Melvin] is presently insured under several life insurance policies as listed below. These policies will be maintained in their current status until such time as [Roseann] re-marries, and at that time the beneficiaries may be changed to the children of the parties. Upon emancipation of the parties' children, if [Roseann] has re-married, [Melvin] may change the beneficiary to whomever he wishes.

         The policies listed in the separation agreement, as relevant here, included several policies provided to veterans (the veteran policies) and a life insurance policy through Prudential (the Prudential policy). The Prudential policy is the only insurance policy at issue in this appeal.

         ¶ 3 Sometime after Melvin and Roseann dissolved their marriage, Melvin married Donna; Roseann never remarried. Melvin and Donna remained married until Melvin's death. A few years prior to his death, and decades after the separation agreement was executed, Melvin changed the named beneficiary on the veteran policies and the Prudential policy to Donna.

         ¶ 4 Melvin died on August 2, 2015. Donna, as the named beneficiary on the veteran policies and the Prudential policy, received the proceeds from all of these policies. Roseann attempted to apply for the benefits of these policies and discovered they had already been disbursed to Donna. Roseann, through counsel, sent a demand letter to Donna on September 1, 2015, informing Donna of the separation agreement and requesting that the proceeds from the life insurance policies be transferred to her. Donna did not transfer the funds to Roseann, but she eventually put the money from the policies in a trust account pending the outcome of any litigation.[1]

         ¶ 5 Roseann filed a complaint in the Mesa County District Court naming Donna as the sole defendant in November 2015, and she filed an amended complaint a month later. The amended complaint alleged that Roseann was entitled to receive the money from Donna based on the 1978 separation agreement under theories of civil theft, conversion, and unjust enrichment/constructive trust.[2]

         ¶ 6 Instead of filing an answer, Donna removed the case to federal district court based on administration of the veteran policies by the federal government. After the case was accepted by the federal district court, Donna filed a motion to dismiss Roseann's claims based on several theories, including federal preemption law as to the veteran policies. Ultimately, the federal district court concluded that federal legislative intent preempted the 1978 separation agreement, and it dismissed Roseann's claims with prejudice as to the veteran policies only. The federal court remanded Roseann's remaining claims to the Colorado state court for resolution of the claims as to the Prudential policy.

         ¶ 7 After the case was returned to state court, Donna filed a motion to dismiss under both C.R.C.P. 12(b)(5) and C.R.C.P. 12(b)(6), arguing that Roseann's claims failed to state a claim upon which relief could be granted, and that Roseann had failed to join a necessary party - namely, Melvin's estate. After full briefing, the district court summarily granted the motion to dismiss "for the reasons stated by [Donna] in her motion and reply."

         ¶ 8 Donna subsequently filed a motion for attorney fees and costs, which the court granted in total based on its dismissal of the entirety of Roseann's case under C.R.C.P. 12(b).

         ¶ 9 Roseann now appeals the district court's orders granting Donna's motion to dismiss and motion for attorney fees and costs.

         II. Jurisdiction

         ¶ 10 In her answer brief, Donna argues that this court lacks jurisdiction to review Roseann's appeal because the district court "did not adjudicate the merits of Roseann's claims or preclude further proceedings" and, therefore, its order was a dismissal without prejudice, not a final judgment for purposes of appeal. We reject this argument.

         ¶ 11 A final judgment is a jurisdictional prerequisite to review on appeal. Brody v. Bock, 897 P.2d 769, 777 (Colo. 1995). A final judgment for purposes of appeal "ends the particular action in which it is entered, leaving nothing further for the court pronouncing it to do in order to completely determine the rights of the parties involved in the proceeding." Harding Glass Co. v. Jones, 640 P.2d 1123, 1125 n.2 (Colo. 1982) (quoting D.H. v. People, 192 Colo. 542, 544, 561 P.2d 5, 6 (1977)).

         ¶ 12 Ordinarily, the dismissal of a complaint without prejudice is not a final and appealable order because the factual and legal issues underlying the dispute, the merits of the case, have not been resolved. E.g., Brody, 897 P.2d at 777; Harris v. Reg'l Transp. Dist., 155 P.3d 583, 585 (Colo.App. 2006). However, a motion to dismiss under C.R.C.P. 12(b)(5) is an assertion that the plaintiff's complaint is legally insufficient and therefore "mandates that the court analyze the merits of the plaintiff's claims." Hemmann Mgmt. Servs. v. Mediacell, Inc., 176 P.3d 856, 858 (Colo.App. 2007); see also Brody, 897 P.2d at 777 ("If a judgment in fact completely resolves the rights of the parties before the court with respect to a claim and no factual or legal issues remain for judicial resolution, the judgment is final as to that claim."); Harris, 155 P.3d at 585 (noting that the dismissal of a complaint without prejudice is a final and appealable order where the circumstances of the case indicate that the action cannot be saved by an amendment).

         ¶ 13 In her motion to dismiss, Donna argued that Roseann had failed to state a claim upon which relief could be granted because her claims were inapplicable to the procedural and factual circumstances of this case; in other words, they were insufficient as a matter of law.[3] In granting the motion, the district court, without any analysis or findings, simply adopted Donna's arguments and ruled that Roseann's claims failed on their merits as a matter of law. And, indeed, in her reply brief on appeal, Roseann admitted that, if she had been ordered to file a further amended complaint, she would have simply realleged the exact same claims for relief at issue here. Thus, this action would not (and could not) have been saved by an amended pleading. See Harris, 155 P.3d at 585.

         ¶ 14 The order granting the motion to dismiss based on C.R.C.P. 12(b)(5), thus resolved the rights of the parties as to the claims in the amended complaint and left nothing for the court to do. Indeed, the register of actions shows that the district court closed the case the day after entering its order granting the motion to dismiss; the district court was required to reopen the matter only when Donna filed her motion for attorney fees.

         ¶ 15 Because the district court's order granting the motion to dismiss was a ruling on the merits of Roseann's case and left nothing for the court to do to resolve the rights of the parties, we conclude the order was final and appealable, and this court has jurisdiction to hear the appeal.

         III. C.R.C.P. 12(b)(5) Dismissal

         ¶ 16 The district court did not specify whether it was granting the dismissal based on Donna's C.R.C.P. 12(b)(5) arguments or her argument based on C.R.C.P. 12(b)(6). Because the district court adopted all of the reasoning in Donna's motion to dismiss, we consider her Rule 12(b)(5) assertions and those under Rule 12(b)(6) in turn.

         A. Standard of Review and Warne v. Hall, 2016 CO 50

         ¶ 17 We review a trial court's determination on a motion to dismiss for failure to state a claim upon which relief can be granted de novo. E.g., Norton v. Rocky Mountain Planned Parenthood, Inc., 2018 CO 3, ¶ 7. In our review, we accept all factual allegations contained in the complaint as true and view them in the light most favorable to the plaintiff. Id.

         ¶ 18 Until recently, the standard in Colorado on which to judge whether a complaint stated a claim upon which relief could be granted was the "no set of facts" standard: "a complaint should not be dismissed unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of the claim which would entitle him [or her] to relief." Colo. Med. Soc'y v. Hickenlooper, 2012 COA 121, ¶ 29, aff'd, 2015 CO 41.

         ¶ 19 In June 2016, the Colorado Supreme Court replaced that standard with the federal "plausibility" standard announced in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Warne, ¶ 24. Under the plausibility standard, "to survive a motion to dismiss for failure to state a claim, a plaintiff must allege a plausible claim for relief." N.M. v. Trujillo, 2017 CO 79, ¶ 20 (citing Warne, ¶ 9). The plausibility standard emphasizes that facts pleaded as legal conclusions (i.e., conclusory statements) are not entitled to the assumption that they are true. Warne, ΒΆΒΆ 9, 27. Notably, Colorado courts have upheld dismissals because a complaint was conclusory in its allegations long before the supreme ...


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