Miller et al v. McCloud et al

Filing 107

ORDER GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT 88 , 90 , by Judge William J. Martinez on 2/10/2016.(dhans, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 14-cv-1156-WJM-KLM
DANIEL J. MILLER,
TERANCE M. MAHER,
MAHER FINANCIAL SERVICES PPST,
DAVID MICHAUD,
BURRIS A. BRUCE,
WAYNE LARSON, Maurice A. Larson GST Trust,
HUGH THOMAS, JR. IRA 4949,
GARY L. PETERSEN,
MARLAYNE C. MILLER,
DAVID O’BANNON,
DORIS T. REA, Executor of Estate Claudia Rea Browers,
BRUCE LAMBERT REVOCABLE LIVING TRUST,
DANIEL M. LAVIK,
4 D’S INVESTMENT CLUB,
CHESTERFIELD MORTGAGE INVESTORS, INC.,
ESTATE OF CHARLES R. ST. JOHN, St. John Fee Family LLC,
ESTATE OF HARRY A. KIEHL,
ROGER C. CLINE,
PETER VERMEULEN, Vermeulen Family LLC,
JOSEPHINE S. VERMEULEN, Trustee (J.S. Vermeulen Living Trust),
JOSEPHINE S. VERMEULEN, Trustee (GST Exempt Family Trust of A. Vermeulen),
WOLSDORF LIVING TRUST,
DAVID ROOK,
JAMES G. BENNETT,
DORIS M. STROM,
JAMES ROSE,
RON IBSEN, and
WAYNE D. PORTER,
Plaintiffs,
v.
HAROLD S. MCCLOUD,
THOMAS J. POWER, and
CORELOGIC COMMERCIAL REAL ESTATE SERVICES, INC.,
Defendants.

ORDER GRANTING DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT

Plaintiffs bring this action against Defendants Harold S. McCloud (“McCloud”),
Thomas J. Power (“Power”) and CoreLogic Commercial Real Estate Services, Inc.
(“CoreLogic”) (collectively, “Defendants”). (ECF No. 36.) Before the Court are
McCloud’s Motion for Summary Judgment (ECF No. 88) and CoreLogic’s Motion for
Summary Judgment (ECF No. 90). For the reasons set forth below, both motions are
granted.
I. BACKGROUND
The following relevant facts are undisputed, unless otherwise noted. Defendants
McCloud and Power are licensed Colorado appraisers. (ECF No. 88-1 ¶ 5.) In August,
2006, Plaintiff Chesterfield Mortgage Investors, Inc. (“CMI”) hired McCloud and Power
to appraise a property located in Adams County, Colorado at 1300 & 1400 W. 62nd
Avenue and 6155 Lipan Street (the “Property”).1 (Id. ¶¶ 1, 33; ECF No. 90 ¶ 7.)
Plaintiffs provide evidence that Power was an employee of First American Commercial
Real Estate Services (now CoreLogic) at the time he performed the August 2006
Appraisal (the “Appraisal”). (ECF No. 94 ¶ 18; ECF No. 94-2 at 4; ECF No. 94-3 at 4.)
CoreLogic neither admits nor explicitly denies that Power was its employee at that time.
(ECF No. 90 ¶ 66.)

1

It is unclear exactly when the owners of the Property acquired the additional parcel at
6155 Lipan Street. Nevertheless, the parcel was acquired before Defendant’s August 2006
Appraisal, and therefore the exact date of the acquisition does not affect the Court‘s analysis.
(ECF No. 88-1 ¶ 31.)

2

At the time of the Appraisal, the Property was owned by MJR One, LLC. (ECF
No. 88-1 ¶¶ 1, 53, 64.) The Property was located over a former landfill and housed a
building containing a disco and cabaret. (Id. ¶¶ 6, 9.) In December 2003, CMI initially
loaned $2,500,000 to MJR One, LLC, and MJR Two, LLC (collectively, the “Borrowers”),
secured by the Property. (Id. ¶ 7.) Except for eight of the Plaintiffs, all other Plaintiffs
bought participatory interests in the 2003 loan. (ECF No. 90 ¶¶ 2, 26; ECF No. 96
¶ 47.)
In 2006, the Appraisal was conducted and provided a retrospective valuation that
the Property was worth $5,350,000 “as is” as of December 9, 2005. (ECF No. 88-16 at
3.) The Appraisal also contained the following language:
The appraisers have made no investigation into the
presence or absence of . . . hazardous materials in the
subject property. The reader should be aware that no
consideration has been given to the impact, if any, on the
valuation of the subject property if any of these materials
should be present. . . . The site was a former land fill that
has undergone remediation. We make no representations
regarding the landfill or presence or absence of hazardous
materials on this property.
(ECF No. 90 ¶ 54.)
After receiving the appraisal, CMI included it in a 2006 Offering Circular that it
provided to the other Plaintiffs. (ECF No. 88-1 ¶ 40.) The Borrowers refinanced their
original loan with CMI in 2006. (ECF No. 90 ¶ 12.) The refinanced loan (“Loan #2282”)
was in the amount of $3,100,000 and secured by the Property. (Id. ¶ 13.) All of the
Plaintiffs in this case bought participatory interests in Loan #2282. (Id. ¶¶ 2, 26, 29.)
CMI also obtained participatory interests in the loan. (Id. ¶ 38.)

3

In 2007, the Borrowers were in default under the terms of Loan #2282. (ECF No.
88 ¶ 43.) CMI initiated foreclosure proceedings against the Property and ultimately
purchased the Property at the Public Trustee’s sale for $4,000,000. (ECF No. 95 ¶¶ 38,
40.) Because CMI’s lien against the Lipan Street parcel was a second deed of trust, the
holder of the first lien, Brooke Banbury, took title to the parcel and ultimately sold it for
$300,000. (ECF No. 88-1 ¶¶ 64–65.) On February 8, 2012, CMI sold the remaining
portion of the Property to a third party for $1,399,000. (Id. ¶ 66.)
Defendants McCloud and Power are from Colorado. (ECF No. 95 ¶ 1.)
CoreLogic is incorporated in Florida while its principal place of business is in California.
(Id. ¶ 2.) CMI was an asset-based lender based in Seattle, Washington. (Id. ¶ 3.) The
other individual Plaintiffs “are in large part, Washington residents.” (Id. ¶ 4.)
On April 22, 2013, Plaintiff Daniel J. Miller commenced a lawsuit in King County
Superior Court in Washington against McCloud, Power, and their respective wives. (ECF
No. 1-1 at 1, 7–8.) The defendants in that suit removed the action to the United States
District Court for the Western District of Washington, on the basis of diversity jurisdiction.
(Id. at 1–2.) On June 24, 2013, the remaining Plaintiffs joined the suit by filing an
amended complaint. (ECF No. 1-27 at 19.) On February 24, 2014, the Western District
of Washington found that, on the record, it lacked personal jurisdiction over the
defendants in that action. (ECF No. 1-24 at 1.) The court permitted Plaintiffs to conduct
jurisdiction-related discovery; however, Plaintiffs elected not to pursue that option. (ECF
No. 1.) Instead, Plaintiffs consented to transfer the action to this District. (Id.)
On July 11, 2014, Plaintiffs filed a Second Amended Complaint against
Defendants McCloud, Power, and Corelogic. (ECF No. 36.) That complaint brings
4

claims against Defendants for negligence, negligent misrepresentation, constructive
fraud, a violation of the Washington Consumer Protection Act, and a violation of the
Washington Securities Act. (Id. at 10–12.) On June 26, 2015, McCloud and Corelogic
filed the instant motions for summary judgment. (ECF No. 88; ECF No. 90.) Each
motion moves for summary judgment as to all claims against Defendants. Plaintiffs filed
a Response to both of the motions. (ECF No. 95.) McCloud and Corelogic then filed
replies to the Response. (ECF No. 96; ECF No. 98.) Power joins both McCloud’s and
CoreLogic’s motions for summary judgment and their replies to the extent that they are
not inconsistent with his position in the case.2 (ECF No. 89; ECF No. 91; ECF No. 97;
ECF No. 99.) As such, the relief granted to McCloud and CoreLogic will also be granted
as to Power.
II. LEGAL STANDARD
Summary judgment is appropriate only if there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem
Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). Whether there is a genuine dispute
as to a material fact depends upon whether the evidence presents a sufficient
disagreement to require submission to a jury or, conversely, is so one-sided that one
party must prevail as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 248–49
(1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal

2

Power specifies that he does not join CoreLogic’s argument that he was not acting
within the scope and course of his employment with CoreLogic when he performed the
Appraisal. (ECF No. 91 at 1.)

5

Serv., 812 F.2d 621, 623 (10th Cir. 1987).
A fact is “material” if it pertains to an element of a claim or defense; a factual
dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a
reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. The
Court must resolve factual ambiguities against the moving party, thus favoring the right
to a trial. Houston v. Nat’l Gen. Ins. Co., 817 F.2d 83, 85 (10th Cir. 1987).
III. ANALYSIS
A.

Choice of Law
The Court must first determine what law applies to the resolution of Plaintiffs’

claims. Generally, when a district court transfers a case to another forum, the
transferee court must follow the choice of law rules of the transferor court. Doering ex
rel. Barrett v. Copper Mountain, 259 F.3d 1202, 1209 (10th Cir. 2001). However, the
Tenth Circuit has held that when the transferor court lacks personal jurisdiction, the
choice of law rules of the transferee court apply. Id.
In this case, the action was transferred from the Western District of Washington.
(ECF No. 1.) Therefore, the Court should apply Washington choice of law rules unless
the Western District of Washington lacks personal jurisdiction over Defendants. A
federal court obtains personal jurisdiction over defendants in a diversity case as long as
jurisdiction is proper under state law and does not offend due process. Doering, 259
F.3d at 1210. Washington’s long-arm statute extends a court’s personal jurisdiction to
the limits of federal due process. Shute v. Carnival Cruise Lines, 783 P.2d 78, 82
(Wash. 1989). Due process requires that minimum contacts exist between the
defendant and the forum state such that the maintenance of the suit does not offend
6

traditional notions of fair play and substantial justice. Doering, 259 F.3d at 1210. The
minimum contacts standard may be met in one of two ways. Id. First, a court may
exercise “general jurisdiction” if the defendant’s contacts with the forum state are
continuous and systematic. Id. Second, a court may exercise “specific jurisdiction” if
the defendant purposefully directs activities at residents of the forum and the litigation
results from alleged injuries that arise out of or relate to those activities. Id.
In this case, the Western District of Washington found that it lacked personal
jurisdiction over McCloud and Power, based on the record as it existed at that time.
(ECF No. 1-24 at 11–12.) Plaintiffs have not since sought to expand the record on that
subject, and the Court finds nothing in the current record which contradicts the
reasoning of the Western District of Washington. Therefore, the Court finds that the
Western District of Washington lacked personal jurisdiction over McCloud and Power.3
Because the transferor court lacks personal jurisdiction over Defendants, the Court will
apply Colorado choice of law rules. See Doering, 259 F.3d at 1209.
Colorado courts use the “most significant relationship” test to resolve choice of
law issues in tort actions. AE, Inc. v. Goodyear Tire & Rubber Co., 168 P.3d 507, 510
(Colo. 2007); see also Agile Safety Variable Fund, L.P. v. RBS Citizens, N.A., 793 F.
Supp. 2d 1258, 1253–54 (D. Colo. 2011) (applying most significant relationship test to a
state-law securities act claim). Colorado’s choice of law principles consider “the needs

3

The Western District of Washington made no finding as to its jurisdiction over
CoreLogic because CoreLogic was not yet a defendant in the case. (See ECF 1-24.) The
Court finds that the Western District of Washington lacks personal jurisdiction over CoreLogic
for the same reasons that it lacks personal jurisdiction over the other Defendants. Plaintiffs
have presented no evidence that CoreLogic had systematic or continuous contacts with
Washington, nor any evidence that CoreLogic knew the investors would be from Washington.

7

of the interstate and international systems, the relevant policies of the forum and other
interested states, protection of justified expectations, the basic policies underlying the
particular field of law, predictability and uniformity of result, and ease of determination
and application of the law to be applied.” AE, Inc., 168 P.3d at 510 (citing Restatement
(Second) of Conflict of Laws § 6 (1971)). In applying these general principles, the Court
is to consider (1) the place of injury; (2) the place where the injury-causing conduct
occurred; (3) the parties’ residence, place of incorporation, and place of business; and
(4) the place where the relationship, if any, between the parties is centered. Id. (citing
Restatement (Second) of Conflict of Laws § 145).
Under these factors, Colorado has a stronger relationship to this case than
Washington. The appraisal occurred and the appraisal report was drafted in Colorado.
Therefore, the injury-causing conduct occurred in Colorado. (See ECF No. 88-16.)

As

to the residence of the parties, McCloud and Power reside in Colorado, while many of the
Plaintiffs reside in Washington. (ECF No. 95 ¶¶ 1–4.) However, the relationship between
Plaintiffs and Defendants centered around the Property which was located in Colorado.
(Id. ¶ 4.) CMI chose to reach out to and hire Colorado-based appraisers to appraise a
Colorado property. (Id. ¶ 14.) See Ajjarapu v. AE Biofuels, Inc., 728 F. Supp. 2d 1154,
1163–64 (D. Colo. 2010) (finding that Colorado had the most significant relationship to
the plaintiffs’ claims because the conduct that caused the injury occurred in Colorado;
one of the defendants resided in Colorado; and Colorado was the place where the
relationship was centered). Because Colorado has the most significant relationship to
Plaintiff’s claims, the Court finds that Colorado law applies to these claims.
B.

Statutes of Limitation and Repose
8

1.

Negligence

Under Colorado law, tort actions, including negligence claims, must be
commenced within two years after the cause of action accrues. Colo. Rev. Stat. § 1380-102(1)(a). A cause of action for negligence accrues when both the injury and its
cause are known or should have been known by exercise of reasonable diligence. Id.
§ 13-80-108(1).
In our case, Plaintiffs contend that the earliest their claims accrued was August
19, 2010, when CMI sought approval for the final sale of the Property for substantially
less than the value set forth in the Appraisal.4 (ECF No. 90 ¶¶ 59–60; ECF No. 95 at
31.) CoreLogic agrees that the claims accrued no later than that date. (ECF No. 98 at
27.) The Court agrees with the parties and finds that Plaintiffs’ claims accrued on
August 19, 2010, because at that time Plaintiffs knew, or should have known in the
exercise of reasonable diligence, of their alleged injury and the alleged cause.
Plaintiff Daniel J. Miller filed a negligence claim on April 22, 2013. (ECF No. 1-1
at 1.) The remaining Plaintiffs first filed their negligence claim on June 24, 2013. (ECF
No. 1-27 at 19.) Thus, for all Plaintiffs, the negligence claim commenced more than two
years after the claim accrued. Therefore, Plaintiffs’ negligence claim is barred by the
Colorado statute of limitations as to all Defendants.
2.

Negligent Misrepresentation

CoreLogic contends that Colorado law subjects negligent misrepresentation
claims to a two-year limitations period. (ECF No. 90 at 43.) There is precedent for this

4

Plaintiffs make no argument that the date of accrual differs as to any Plaintiff or
Defendant.

9

interpretation. See Trierweiler v. Croxton & Trench Holding Corp., 90 F.3d 1523, 1537
(10th Cir. 1996.) Nevertheless, Colorado statute provides that a three-year limitations
period applies to civil actions for “fraud, misrepresentation, concealment, or deceit . . . .”
Colo. Rev. Stat. § 13-80-101(1)(c). The statute does not specify that the term
“misrepresentation” refers only to intentional misrepresentation. See id. Therefore,
claims for negligent misrepresentation seemingly also fall under § 13-80-101(1)(c). For
this reason, this Court has previously found that the three-year limitations period applies
to claims for negligent misrepresentation. In re Qwest Commc’ns Int’l, Inc. Sec. Litig.,
387 F. Supp. 2d 1130, 1150–51 (D. Colo. 2005).
Prior decisions that do not apply a three-year limitations period to negligent
misrepresentation claims can be distinguished or do not apply to the case at hand.
Some of these decisions applied Colorado statutes which were repealed in 1986. See
Ebrahimi v. E.F. Hutton & Co., Inc., 794 P.2d 1015, 1016–17 (Colo. App. 1989); Zurick
v. First Am. Title Ins. Co., 833 F.2d 233, 235 (10th Cir. 1987). On the other hand, in
Trierweiler, the Tenth Circuit applied the two-year statutory period, but did not reject the
possibility that a three-year period could be applicable. Trierweiler, 90 F.3d 1523, 1537.
In fact, in that opinion the Tenth Circuit chose not to provide any analysis of § 13-80101(1)(c) whatsoever. See id. (citing Callaham v. First Am. Title Ins. Co., 837 P.2d 769,
771 (Colo. App. 1992) which also fails to discuss § 13-80-101(1)(c)).
Consequently, the Court finds that Colorado law subjects negligent
misrepresentation claims to a three-year limitations period. For the same reasons as
provided for the negligence claim, Plaintiffs’ negligent misrepresentation claim accrued
on August 19, 2010. All Plaintiffs had filed their negligent misrepresentation claim by
10

June 24, 2013. (ECF No. 1-1 at 1; ECF No. 1-27 at 19.) Thus the claim was filed less
than three years after the date of accrual, and the Court cannot find that Plaintiffs’
negligent misrepresentation claim is barred by the statute of limitations.5
3.

Colorado Securities Act

Plaintiffs brought their securities claim under the Washington Securities Act.
(ECF No. 36 at 11.) Plaintiffs’ allegations under the Washington Securities Act use
language which exactly mirrors the language of the relevant portion of the Colorado
Securities Act, Colorado Revised Statutes § 11-51-501(1). (See id.) Since the Court
finds that Colorado law applies, the Court will interpret Plaintiffs’ securities claim under
§ 11-51-501(1) of the Colorado Securities Act (“CSA”).
Section 11-51-604(8) of the Colorado Revised Statutes contains a five-year
statute of repose whereby a plaintiff may “in no event” sue under § 11-51-501(1) of the
CSA “more than five years after the purchase or sale” of the pertinent security. In this
case, Plaintiffs’ securities act claim is premised on their purchasing of participatory
interests in Loan #2282.6 (ECF No. 95 at 22.) For their CSA claim to be timely under
the statute of repose, Plaintiffs must have purchased their participatory interests no
more than five years before filing their claim.

5

CoreLogic was not added as a Defendant until Plaintiffs’ Second Amended Complaint
was filed on July 11, 2014. (ECF No. 36.) Although this filing was more than three years after
the date the negligent misrepresentation claim accrued, CoreLogic makes no argument that the
statute of limitations bars this claim because of the later filing date itself. ( See ECF No. 90 at
43.) Therefore, the Court will not consider the impact of this later filing date on its statute of
limitations analysis.
6

Defendants argue that the participatory interests are not securities. (ECF No. 90 at
38.) For the purposes of this statute of repose analysis, the Court assumes that they are
securities.

11

CoreLogic contends that Plaintiffs purchased their interests more than five years
before filing their securities act claim. (ECF No. 90 at 44.) In their Response to the
Motions for Summary Judgment, Plaintiffs do not contest CoreLogic’s assertion that
they had purchased their securities more than five years before filing their securities act
claim. (ECF No. 95 at 31.) Instead, Plaintiffs argue only that Colorado law, and thus
the statute of repose, does not apply. (Id.) The Court has already determined that the
CSA applies. Accordingly, the Court will analyze whether Colorado’s five-year statute of
repose bars Plaintiffs’ securities claim.
In order for the claim to be barred by the statute of repose, the securities must
have been purchased prior to April 22, 2008, for Plaintiff Daniel J. Miller and prior to
June 24, 2008, for all other Plaintiffs. CoreLogic provides documents to demonstrate
the dates when Plaintiffs purchased their participatory interests. (See ECF No. 90-18;
ECF No. 90-19; ECF No. 90-20; ECF No. 90-33; ECF No. 90-36.) All of these dates are
in February 2008 or earlier. (See id.) Accordingly, these dates are more than five years
earlier than Plaintiffs’ filing of their securities claim.
Plaintiffs present evidence that the purchase dates contained in CoreLogic’s
evidence would not necessarily be correct for any individual Plaintiff who “changed their
[sic] mind” after making an initial decision to invest on the dates provided in the
documents. (ECF No. 94 ¶ 27; ECF No. 94-1 at 5–6). However, Plaintiffs provide no
evidence that any of the Plaintiffs changed his or her mind as to the amount that Plaintiff
would be investing in Loan #2282 after June 24, 2008. Therefore, the Court finds that
Plaintiffs did not file their securities claim within five years of purchasing their securities
and their claim is barred by the statute of repose as to all Defendants.
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C.

Negligent Misrepresentation
Plaintiffs allege that Defendants “negligently . . . misrepresented material

information regarding the [Property]” in the Appraisal. (ECF No. 36 at 10.) Under
Colorado law, “[t]o prevail on a claim for negligent misrepresentation,” a plaintiff must
first prove that the defendant “supplied false information in a business transaction.”
Alpine Bank v. Hubbell, 555 F.3d 1097, 1106 (10th Cir. 2009). Plaintiffs’ contend that
this requirement is satisfied because “Defendants falsely represented the fair market
value of the [Property]” in the Appraisal. (ECF No. 36 at 10.) Plaintiffs reason that the
value is false because “environmental conditions, such as the former landfill and
methane gas issues, are absent from the [Appraisal]” and “[t]hose issues should have
been considered in the valuation.” (ECF No. 95 at 17.) Plaintiffs also present
deposition testimony that it was “very likely that the real property value was lower” than
the value contained in the Appraisal. (ECF No. 95-2 at 23.)
However, none of the evidence presented by Plaintiffs is sufficient to prove that
Defendants supplied false information. In fact, the Appraisal itself contained specific
disclaimers that Defendants did not consider “the impact, if any, on the valuation of the
[Property] if any of these [hazardous] materials should be present.” (ECF No. 90 at 24.)
Secondly, the Appraisal states that the appraisers “make no representations regarding
the landfill.” (Id. at 24.) Thus, Defendants agree with Plaintiffs that the Appraisal does
not account for the impact of certain environmental conditions on the valuation.

The appraisal does not assert itself to be the “true” value of the Property absent
all conditions. Instead, the Appraisal only claims to provide the value of the Property
13

subject to the assumptions contained in the above-stated disclaimers. Plaintiffs provide
no evidence that the value represented in the Appraisal was false given the
assumptions explicitly made in the Appraisal itself.7 As a result, the Court finds that
there is no genuine issue of material fact as to this claim and that Plaintiffs fail to prove
the first element of their negligent misrepresentation claim. The Court grants summary
judgment as to Plaintiffs’ negligent misrepresentation claim as to all Defendants.
D.

Constructive Fraud
Plaintiffs allege that Defendants’ conveyance of a value that did not account for

environmental factors constitutes constructive fraud. (ECF No. 36 at 12; ECF No. 95 at
20 n.8.) Colorado law defines “constructive fraud” as “a breach of duty, which,
irrespective of moral guilt, the law declares fraudulent because of its tendency to
deceive, violate confidence, or injure public interests.” Rosales v. AT&T Info. Sys., Inc.,
702 F. Supp. 1489, 1498 (D. Colo. 1988) (quoting Sec. Nat’l Bank v. Peters, Writer &
Christensen Inc., 569 P.2d 875, 880 (Colo. App. 1977)). “Neither actual dishonesty nor
intent to deceive is an essential element of constructive fraud.” Sec. Nat’l Bank, 569
P.2d at 881.

As the Court discussed in its analysis of the negligent misrepresentation claim,
the evidence provided by Plaintiffs is not sufficient to prove that Defendants provided

7

Plaintiffs’ argument, including that the real property value “very likely . . . was lower,” is
based on the notion that a reasonably prudent appraiser cannot exclude consideration of
environmental factors, even if the appraiser explicitly states such an exclusion. That, however,
is a claim for professional negligence, and this Court has already ruled that Plaintiffs’ negligence
claim was not timely filed.

14

false information. The contents of the Appraisal could only tend to deceive or violate
the confidences of a reader who both (a) assumes that the valuations in the Appraisal
will account for hazardous materials and the landfill, and (b) fails to read the disclaimers
contained in the Appraisal which discredit this assumption. Thus, the only type of
person who could be deceived by the appraisal or have their confidence violated or be
injured by it is someone who did not read the entire appraisal. Plaintiffs do not argue
that the constructive fraud doctrine excuses individuals from reading the entire
appraisal.
Since the information contained in the Appraisal is neither false nor misleading,
the Court finds that Defendants conduct—even if it were found to be a breach of an
applicable duty—has no tendency to deceive, violate confidence, or injure public
interests. Therefore, the Court grants summary judgment as to Plaintiffs’ constructive
fraud claim as to all Defendants.
E.

Colorado Consumer Protection Act
To prove a private cause of action under the Colorado Consumer Protection Act

(“CCPA”), a plaintiff must show: “(1) that the defendant engaged in an unfair or
deceptive trade practice; (2) that the challenged practice occurred in the course of the
defendant’s business, vocation, or occupation; (3) that it significantly impacts the public
as actual or potential customers of the defendant’s goods, services, or property; (4) that
the plaintiff suffered injury in fact to a legally protected interest; and (5) that the
challenged practice caused the plaintiff’s injury.” Rhino Linings, USA, Inc. v. Rocky
Mountain Rhino Lining, Inc., 62 P.3d 142, 146–47 (Colo. 2003). Defendants argue, first,
that Plaintiffs allege no facts proving any unfair or deceptive trade practice by
15

Defendants. (ECF No. 88 at 13.) In the alternative, Defendants argue that Defendants’
practices do not significantly impact the public. (Id.)
Colorado Revised Statutes § 6-1-105 contains a list of potential deceptive trade
practices under the CCPA.8 For the same reasons that the Court found that
Defendants’ conduct had no tendency to deceive, the Court now finds that none of the
listed deceptive trade practices in § 6-1-105 apply. See also Henson v. Bank of Am.,
935 F. Supp. 2d 1128, 1142 (D. Colo. 2013) (holding that a deceptive trade practice
under § 6-1-105 requires a showing that defendant knowingly made a false
representation). The Court finds that there is no genuine issue of material fact as to this
claim and that Plaintiffs fail to prove that Defendants engaged in an unfair or deceptive
trade practice. Given this ruling, the Court need not consider Defendants’ alternative
argument that the allegedly unfair or deceptive trade practice did not significantly impact
the public. (ECF No. 88 at 13.) The Court grants summary judgment as to Plaintiffs’
CCPA claim as to all Defendants.
IV. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.

Defendant McCloud’s Motion for Summary Judgment (ECF No. 88), as
joined by Defendant Power (ECF No. 89), is GRANTED as to all claims;

2.

Defendant CoreLogic’s Motion for Summary Judgment (ECF No. 90), as
joined by Defendant Power (ECF No. 91), is GRANTED as to all claims;

8

Plaintiffs do not argue that Defendants committed an “unfair,” as distinguished from a
“deceptive,” trade practice. (See ECF No. 36; ECF No. 95.)

16

3.

The Final Trial Preparation Conference scheduled for May 27, 2016 and
the ten-day jury trial scheduled for June 13, 2016 through June 24, 2016
are VACATED;

4.

The Clerk of Court shall enter judgment in favor of Defendants on all
claims and shall terminate this case; and

5.

Defendants shall have their costs.

Dated this 10th day of February, 2016.
BY THE COURT:

William J. Martínez
United States District Judge

17