Larry MARTINEZ, an individual, and Martinez & Allman, a Colorado partnership, Petitioners, v. A. Lonnie BADIS and A. Lynne Badis, individuals, and J & L Ventures, Inc., a Colorado corporation, Respondents.
No. 91SC489.
Supreme Court of Colorado, En Banc.
Dec. 14, 1992.
245, 246, 247, 248, 249, 250, 251, 252, 253, 254
The present case stems from the declaratory judgment action filed by Shelter General against Designer Spas. The Simons are the “complaining party” currently before this court, who appear to be securing a “deep-pocket” defendant, Shelter General, in the event that the appeal perfected by Eaton results in a new trial. While Eaton‘s appeal may result in a new trial wherein Designer Spas may be found liable, such potential for future injury to Designer Spas does not justify review on the merits in the present action where, based on the parties’ arguments, any determination by this court will have no practical legal effect on any dispute between Shelter General and Designer Spas.3 See Jones v. District Court, 780 P.2d 526, 533 (Colo.1989) (Vollack, J., dissenting). The court of appeals judgment should be vacated due to the issues of mootness and ripeness raised by the unique posture of this case.
I am authorized to say that Justice ERICKSON and Justice LOHR join in this dissent.
Thomas J. Tomazin, P.C., Thomas J. Tomazin, Englewood, for petitioners.
White and Steele, P.C., Glendon L. Laird, Allan Singer, Lina George-Sauto, Denver, for respondents.
Justice KIRSHBAUM delivered the Opinion of the Court.
In Badis v. Martinez, 819 P.2d 551 (Colo. App.1991), the Colorado Court of Appeals reversed the trial court‘s judgment dismissing a complaint filed against petitioners Larry Martinez and Martinez & Allman, a partnership (the defendants), by respondents A. Lonnie Badis, Lynne Badis and J & L Ventures, Inc. (the plaintiffs). The Court of Appeals concluded that provisions of
I
On July 6, 1988, A. Lonnie Badis and A. Lynne Badis, owners of J & L Ventures, Inc., filed a civil action asserting three claims against the defendants. The complaint alleged that during 1985 and 1986 Martinez represented the plaintiffs with respect to the sale of Ataraxia Photographics, Inc., a business operated and controlled by the Badises. The transaction also encompassed the sale of a building and certain real property owned by the Badises and the infusion of capital into J & L Ventures, Inc. from the proceeds of the sale. The complaint alleged that Martinez misinformed the plaintiffs about critical aspects of the transaction, that as a result the transaction was renegotiated, and that the plaintiffs suffered damages totaling $350,000 as a result of Martinez‘s conduct.
The complaint set forth three claims for relief: legal malpractice, breaches of fiduciary duties, and breaches of contracts.2 The complaint also contained the following statement:
The foregoing [c]omplaint will be the subject of a certification pursuant to [
§ 13-20-602, 6A C.R.S. (1987) ,] within the time required by that statute.
The complaint was served on the defendants on September 1, 1988. Sixty-two days later, on November 2, 1988, the plaintiffs filed a certificate of review “pursuant [to
Actions against licensed professionals—certificate of review required. (1) In every action for damages or indemnity based upon the alleged professional negligence of a licensed professional, the plaintiff‘s or complainant‘s attorney shall file with the court a certificate of review, as specified in subsection (3) of this section, within sixty days after the service of the complaint, counterclaim, or cross claim against such licensed professional unless the court determines that a longer period is necessary for good cause shown.
(2) In the event of failure to file a certificate of review in accordance with this section and if the licensed professional defending the claim believes that an expert is necessary to prove the claim of professional negligence, the defense may move the court for an order requiring filing of such a certificate. The court shall give priority to deciding such a motion, and in no event shall the court allow the case to be set for trial without a decision on such motion.
(3)(a) A certificate of review shall be executed by the attorney or the plaintiff or complainant declaring:
(I) That the attorney has consulted a person who has expertise in the area of the alleged negligent conduct; and
(II) That the professional who has been consulted pursuant to subparagraph (I) of this paragraph (a) has reviewed the known facts relevant to the allegations of negligent conduct and, based on such facts, has concluded that the filing of the claim, counterclaim, or cross claim does not lack substantial justification within the meaning of [
§ 13-17-102(4), 6A C.R.S. (1987) ].. . . .
(4) The failure to file a certificate of review in accordance with this section shall be grounds for dismissal of the complaint, counterclaim, or cross claim.
§ 13-20-602(1)-(4), 6A C.R.S. (1987) .3
On August 31, 1989, after the plaintiffs’ initial attorney had withdrawn due to a conflict of interest and after several motions had been filed by the parties with respect to discovery matters, the defendants filed a motion to dismiss the complaint pursuant to
On September 21, 1989, the defendants filed a motion to dismiss the action on the ground that the plaintiffs failed to file a certificate of review within the time period required by
On November 7, 1989, the trial court entered a one-sentence order dismissing the action with prejudice for failure to comply with
On appeal, the Court of Appeals first determined that some negligence claims filed against licensed professionals do not require expert testimony. Observing that
II
Several well-established principles of statutory construction aid our resolution of the issues here presented. When interpreting statutes courts must effectuate the intent of the legislature. State Bd. of Medical Examiners v. Saddoris, 825 P.2d 39, 42 (Colo.1992); Triad Painting Co. v. Blair, 812 P.2d 638, 644 (Colo.1991); In re M.S. v. People, 812 P.2d 632, 635 (Colo. 1991); Bynum v. Kautzky, 784 P.2d 735, 737 (Colo.1989). Courts look first and foremost to the language of the statute itself to discern legislative intent. R.E.N. v. City of Colorado Springs, 823 P.2d 1359, 1364 (Colo.1992). It is presumed that the General Assembly intended that the entire statute be effective and that the result be just and reasonable.
A
The defendants’ argument focuses primarily on the language of
Legislative declaration. The general assembly hereby declares that, in enacting this part 6, the general assembly has determined that the certificate of review requirement should be utilized in civil actions for negligence brought against those professionals who are licensed by this state to practice a particular profession and regarding whom expert testimony would be necessary to establish a prima facie case.
This construction of the statute is further supported by a comparison of subsections
The defendants suggest that the provisions of subsection 602(2) are operative only during the sixty-day period designated in subsection 602(1). The statute does not contain any language to that effect. Had the General Assembly intended to require a defendant to exercise the right to demand the filing of a certificate during the same time period the plaintiff is determining whether such certificate is required and, if so, obtaining the necessary expert certification, the General Assembly could have so provided. Furthermore, until the sixty-day period expires, a defendant would have no reason to incur the expense of preparing and filing a motion to compel. One purpose of the statute is to avoid unnecessary costs in defending professional negligence claims. The defendants’ proposed construction of subsection 602(2) would hinder rather than further that purpose.
The defendants also argue that
The language of
It must be conceded that the relationship among subsections 602(1), 602(2) and 602(4) is not precisely delineated by the statute. In such circumstance, the statute should be construed as a whole to avoid any inconsistencies. Climax Molybdenum Co. v. Walter, 812 P.2d 1168 (Colo.1991); A.B. Hirschfeld Press, Inc. v. City and County of Denver, 806 P.2d 917 (Colo.1991); Adams County Sch. Dist. No. 50 v. Dickey, 791 P.2d 688 (Colo.1990). We must also be aware of the realities of the litigation process in seeking a reasonable construction of the statute in furtherance of the legislative intent.
With these principles in mind, we conclude that the statute may be construed as a whole to further the legislative purpose of encouraging early and cost-effective resolution of civil actions alleging claims of professional negligence by giving effect to all of the subsections thereof. Subsection 602(1) requires a plaintiff to file a certificate of review within sixty days of the service of the complaint for any claim based on allegations of professional negligence that requires expert testimony to establish a prima facie case. If a plaintiff
A defendant in such an action need do nothing within the sixty-day period commencing with the service of the complaint. In most cases, the plaintiff will file a certificate or a motion to extend the time for filing within the sixty-day period because, as the General Assembly has recognized, expert testimony is required to establish a prima facie case of professional negligence in the great majority of such claims. In the event neither a certificate nor a motion to extend the filing period is filed within the sixty-day period, a defendant has two options: move, pursuant to subsection 602(4), to dismiss the case; or move, pursuant to subsection 602(2), to require the plaintiff to file a certificate. In either context, the plaintiff may demonstrate that no expert testimony is required. If the defendant files a motion to dismiss the case pursuant to subsection 602(4), the plaintiff may demonstrate that good cause exists for failure to comply with the time requirements of subsection 602(1).
In this case, the defendants filed a motion to dismiss the complaint, pursuant to subsection 602(4), over ten months after the certificate had been filed. The plaintiffs filed a response to the motion, asserting that the motion should be denied because not timely filed and noting that the certificate had been filed by prior counsel two days beyond the sixty-day period provided by subsection 602(1). The trial court‘s one-sentence order does not suggest any reasons for its decision to dismiss the entire complaint. In these circumstances, the trial court‘s order dismissing the plaintiffs’ negligence claim must be vacated and the case must be remanded to that court with directions that the trial
court determine whether, under all relevant circumstances, good cause exists for extending the sixty-day filing period of subsection 602(1) with respect to that claim.
B
The defendants contend that the Court of Appeals erroneously concluded that the provisions of
The filing requirements of the statute are applicable to “every action for damages or indemnity based upon the alleged professional negligence of a licensed professional.”
Negligence claims are based on the premise that persons or entities have certain legislatively or judicially recognized general duties toward others and are required to act reasonably to fulfill those duties. Dare v. Sobule, 674 P.2d 960, 963 (Colo.1984); Lembke Plumbing and Heating v. Hayutin, 148 Colo. 334, 337, 366 P.2d 673, 675 (1961). Breach of fiduciary
Contract claims are based on the premise that parties may create duties to each other and are required by the common law to act reasonably to perform those mutually agreed upon obligations. See Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041, 1043 (Colo.1983); Metropolitan Gas Repair Serv. Inc. v. Kulik, 621 P.2d 313, 317 (Colo.1981); Denver Truck Exch. v. Perryman, 134 Colo. 586, 592, 307 P.2d 805, 810 (1957). The duty to perform mutually agreed upon contractual obligations is not the equivalent of a generally recognized duty of care that forms the essence of negligence claims. See Covert v. Allen Group, Inc., 597 F.Supp. 1268, 1269 (D.Colo.1984).
This description of the three claims asserted in the complaint leads to the conclusion that a breach of fiduciary duty claim arising from a professional relationship may require expert testimony even though the claim is based upon the fact of a professional relationship created by contract. It also suggests that a contract claim may or may not require expert testimony to establish essential elements thereof, depending on the particular duty allegedly breached.6 We thus conclude, contrary to the determination of the Court of Appeals, that some breach of fiduciary duty claims and contract claims may be subject to the provisions of
In this case, the plaintiffs acknowledged on the face of their complaint that the statute applies. They did not, however, specify whether it applied to all three of their claims. As the Court of Appeals aptly observed, the complaint is ambiguous with respect to the basis of the contract claim. We cannot, therefore, determine on the basis of the pleadings whether the statute is applicable to the plaintiffs’ breaches of contract claim.
The complaint is not ambiguous, however, with respect to the basis of the claims of breaches of fiduciary responsibilities. To establish the allegations of those claims, the plaintiffs must establish the extent of the alleged duties and the alleged failure of the defendants to conduct themselves in conformity with those duties by means of expert testimony. We thus conclude that
III
For the foregoing reasons, the judgment of the Court of Appeals is affirmed insofar
ERICKSON, J., specially concurs, and QUINN and VOLLACK, JJ., join in the special concurrence.
Justice ERICKSON, specially concurring:
I concur with most of the analysis of the court of appeals in Badis v. Martinez, 819 P.2d 551 (Colo. App.1991). In my view, the sole issue in this case is whether the failure to file a certificate of review required by
I agree with the majority that the court of appeals improperly concluded that the breach of contract and breach of fiduciary duty claims asserted by the respondent never require the filing of the certificate of review required by
As to the professional negligence claim which admittedly requires a certificate of review to be filed, I would hold that the statute which was in effect at the time the respondent‘s lawsuit was filed does not mandate, but does provide grounds for, dismissal of the respondent‘s claim of professional negligence because the respondent failed to file the certificate of review within sixty days.
Here, the certificate of review required by
If the respondent wilfully failed to comply with the sixty day filing requirement, dismissal of the claim could be ordered. However, because the statute is structured to permit both the respondent and the petitioner access to the court to determine the need for a certificate of review, I believe that under
In my view, the trial judge in this case, applying the law that was then in effect, possessed the same discretion in ruling on the sanctions to be imposed for failure to comply with
I am authorized to say that QUINN and VOLLACK, JJ., join in this special concurrence.
Notes
(1) In every action for damages or indemnity based upon the alleged professional negligence of a licensed professional, the plaintiff‘s or complainant‘s attorney shall file with the court a certificate of review, as specified in subsection (3) of this section, within sixty days after the service of the complaint against such licensed professional unless the court determines that a longer period is necessary for good cause shown.
(2) In the event of failure to file a certificate of review in accordance with this section and if the licensed professional defending the claim believes that an expert is necessary to prove the claim of professional negligence, the defense may move the court for an order requiring filing of such a certificate. The court shall give priority to deciding such a motion, and in no event shall the court allow the case to be set for trial without a decision on such motion.
(3) A certificate of review shall be executed by the attorney for the plaintiff or complainant declaring:
(I) That the attorney has consulted a person who has expertise in the area of the alleged negligent conduct; and
(II) That the professional who has been consulted pursuant to subparagraph (I) of this paragraph (a) has reviewed the known facts relevant to the allegations of negligent conduct and, based on such facts, has concluded that the filing of the claim, counterclaim, or cross claim does not lack substantial justification within the meaning of
(4) The failure to file a certificate of review in accordance with this section shall be grounds for dismissal of the complaint, counterclaim, or cross claim.
(4) The failure to file a certificate of review in accordance with this section shall result in the dismissal of the complaint, counterclaim, or cross claim.
The majority contends that the issues raised in the present case are not moot because “Shelter provided a defense to [Designer Spas] under a reservation of rights” clause. The majority further contends that “we need not be concerned with the question whether these rights will indeed be invoked by Shelter.” Maj. op. at 238 n. 1. At oral argument, the following colloquy occurred:
COURT: Designer Spas paid for its own defense, is that—at the trial? Or did the insurance company—
COUNSEL: Shelter Insurance Company paid for its defense, under a reservation of rights.
COURT: And has Shelter sought recovery from Designer Spas for the cost of its defense?
COUNSEL: Not yet, not to my knowledge, no.
Shelter does not now seek an interpretation of the reservation of rights clause, as the majority notes; as such, the issues remain moot.
Section 13-20-602(4) was amended in 1989 to read as follows: The failure to file a certificate of review in accordance with this section shall result in the dismissal of the complaint, counterclaim, or cross claim.