No. 92CA1298Colorado Court of Appeals.
Decided December 16, 1993. Opinion Modified, and as Modified Petition for Rehearing DENIED February 10, 1994. Certiorari Denied August 8, 1994. Cross-Petition for Certiorari Granted August 8, 1994.
Appeal from the District Court of Gunnison County Honorable Thomas A. Goldsmith, Judge No. 91CV11
JUDGMENTS REVERSED AND CAUSE REMANDED WITH DIRECTIONS
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LeHouillier Associates, Patric J. LeHouillier, Joseph R. Winston, Colorado Springs, Colorado; Ronald A. Peterson, Colorado Springs, Colorado, for Plaintiffs-Appellants and Cross-Appellees
Quigley Bruce, James M. Bruce, Bruce A. Logan, Denver, Colorado, for Defendant-Appellee and Cross-Appellant
Division I
Pierce and Criswell, JJ., concur
Opinion by JUDGE ROTHENBERG
[1] Plaintiffs, Ronald Grogan and the State of Colorado, appeal the judgment entered in favor of defendant, Lorelei A. Taylor, d/b/a Rocky Mountain Plateau, dismissing plaintiffs’ claims as barred by the statute of limitations. Defendant cross-appeals the trial court’s orders denying her motions for summary judgment and for costs. We reverse and remand for a new trial. [2] This case involves injuries arising out of a propane gas explosion in a motor home. [3] On November 6, 1986, Grogan had the gasoline and propane tanks on his motor home filled at a gas station owned by defendant. Later that night, Grogan, who had been sleeping in the motor home, awoke and lit a cigarette. The motor home exploded into flames, and Grogan was seriously injured. Plaintiff State of Colorado paid for the medical expenses Grogan incurred as a result of his injuries. [4] In late January 1987, Grogan retained attorney Ronald Peterson to investigate any potential claims he might have. Peterson asked Patric LeHouillier to be co-counsel. [5] Peterson contacted Grogan’s insurer, and, in March 1988, Peterson received the investigative reports made by the insurer’s fire and explosion expert (Boh). According to those reports, the explosion was caused by the faulty design of the gasoline venting system and was aggravated by the presence of propane. [6] That same month, Peterson also obtained the investigative report made by the fire chief who had responded to the explosion. According to the fire chief’s report, the explosion had been caused by propane. [7] In March 1988, Grogan’s attorneys contacted another explosion expert (Harrison) to determine whether propane was a cause of the fire. In July, that expert told counsel he disagreed with the first expert. He believed propane played a major role in the explosion, but did not know what caused it. [8] Relying on the first expert’s conclusion that the explosion was caused by faulty design of the gasoline venting system, Grogan filed an action on October 28, 1988, in federal district court against the manufacturers of the motor home and the motor home chassis. Those defendants are not involved in this action. [9] In March 1989, Grogan’s attorneys hired another fire and explosions expert (Romig) to examine and determine the cause of the fire. In October, that expert concluded that it was a propane explosion, but he did not know the cause. [10] In January 1990, Grogan met with Boh and another expert (Romig) to look at a motor home similar to the one that exploded. After looking at the motor home, Grogan told the two experts that on the night of the accident, he had purchased ten gallons of gasoline and ten gallons of propane. Based on Grogan’s statement, the experts immediately concluded the explosion was caused by the overfilling of the propane tank, rather than a gasoline related cause. [11] As a result of the January 1990 information, Grogan dismissed his claim against the chassis manufacturer, and, on August 3, 1990, he amended his federal complaint toPage 1378
add a claim against defendant based upon an alleged negligent overfilling of the propane tank.
[12] In February 1991, the federal action was dismissed because of lack of diversity of citizenship. [13] On March 6, 1991, Grogan filed this action in state court. In June 1991, the State of Colorado was added as a plaintiff; it merely seeks the medical expenses paid on Grogan’s behalf. [14] In its answer, the defendant asserted the affirmative defense of statute of limitations. [15] During the discovery phase of the action, defendant sought to depose both of Grogan’s attorneys on the statute of limitations issue, more specifically, on the issue of whether the attorneys acted with reasonable diligence on Grogan’s behalf between the date of the accident and the date Grogan’s claim was filed against defendant. Grogan’s objection to the deposing of his attorneys was overruled, and both were deposed and named as defense witnesses for trial. [16] Thereafter, the statute of limitations issue was bifurcated and tried first. At the jury trial, again over Grogan’s objection, the defendant was permitted to call both of Grogan’s attorneys as defense witnesses. Both attorneys remained as counsel throughout the trial proceedings and continue to represent Grogan in this appeal. [17] Following a trial on the bifurcated issue, the jury found that plaintiffs’ cause of action had accrued on January 21, 1987, the approximate date when plaintiff had retained attorney Peterson. The trial court, applying a two-year statute of limitations to the jury’s finding, ruled that plaintiffs’ claims were time-barred. Accordingly, it dismissed plaintiffs’ complaint and entered judgment in favor of defendant. I.
[18] We first address both plaintiffs’ claim that the trial court erred in applying a two-year statute of limitations instead of the three-year statute statute of limitations set forth in the Colorado Automobile Accident Reparations Act, § 10-4-701, et seq., C.R.S. (1987 Repl. Vol 4A) (the No-Fault Act). We disagree with plaintiffs’ contention.
II.
[21] Plaintiffs next claim the trial court improperly instructed the jury on when a cause of action accrues. Again, we disagree.
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[24] At trial, the court instructed the jury as follows: [25] Ronald Grogan’s claims against the defendant Lorelei Taylor are deemed to accrue on the date that both his physical injuries and their cause were known or should have been known to him or his attorneys by the exercise of reasonable diligence. However, it is not necessary for the defendant to prove that Ronald Grogan or his attorneys knew the specific acts of the alleged negligence by this defendant or others or that they knew the details of the facts necessary to prove the claims against this defendant or others. It is enough that the plaintiff or his attorneys knew, or may be reasonably charged with knowledge of, sufficient facts to be aware that a claim existed more than two years before it was filed. (emphasis added) [26] Plaintiffs claim there are two errors in this instruction: (1) the first sentence improperly imputes responsibility to plaintiffs’ attorneys; and (2) the rest of the instruction is erroneous in that it should state that accrual occurs when a plaintiff discovered, or should have discovered, that his injuries were caused by defendant. [27] Here, the first sentence of the instruction tracks the language of § 13-80-108(1). The additional language embodied defendant’s theory which was that plaintiff’s attorneys did not use reasonable diligence. We perceive no error in that sentence. [28] Nor do we find error in the last two sentences of the instruction. Although it could have been more specific, it adequately informed the jury the limitations period began to run against this defendant when the plaintiff or his attorneys had reasonable notice that this claim existed, that is, when plaintiff or his attorneys had sufficient facts from which they reasonably could conclude Grogan’s injury was caused by the wrongful conduct of another. See Mastro v. Brodie, supra. III.
[29] The next contention is made only by plaintiff State of Colorado. It asserts that the trial court erred in dismissing its claim based on the statute of limitations defense because the statute does not apply to the State of Colorado. Under these circumstances, we agree.
(Colo. 1992) requires a different result. [32] There, our supreme court held that statutes of limitation run against local governments except when the General Assembly expressly authorizes otherwise. The court did not address whether statutes of limitation run against the state. [33] Thus, we conclude the trial court erred in dismissing the State of Colorado’s claim for medical benefits based upon defendant’s statute of limitation defense, and, on remand, the court should reinstate the State’s cause of action.
IV.
[34] Plaintiff Grogan next contends the trial court erred in finding attorneys Peterson and LeHouillier were necessary witnesses and in allowing defendant to call them as witnesses at trial. He argues that the trial court’s ruling was unfair to him because it placed his attorneys in the untenable position of being forced to supply testimony adverse to their client and in violation of certain ethical rules.
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A.
[36] Initially, we recognize that our supreme court has exclusive jurisdiction over attorney discipline matters and the interpretation of ethical rules governing their conduct. See C.R.C.P. 201 and 241. Nevertheless, we are unable to decide the issues raised by the parties in this appeal without considering the then-applicable portions of the Code of Professional Responsibility; the recently adopted Colorado Rules of Professional Conduct, which became effective January 1, 1993; and relevant supreme court decisions interpreting those ethical standards. See Gold Rush Investments v. Ferrell, 778 P.2d 297 (Colo.App. 1989).
B.
[47] Defendant correctly notes that, although she subpoenaed and called Grogan’s attorneys as defense witnesses at trial, she never moved to disqualify them as counsel. Nor did Peterson and LeHouillier ever move to withdraw as Grogan’s counsel. Based upon these uncontested facts, therefore, defendant asserts that the trial court’s correct resolution of the Williams issue ends our inquiry. We do not agree.
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[48] In Williams, supra, 700 P.2d at 555, the supreme court also stated: [49] Although the prosecution may not have taken the step of actually filing a formal motion to disqualify a defense attorney subpoenaed as a prosecution witness for trial, the act of subpoenaing defense counsel is itself, in our opinion, the functional equivalent of a motion to disqualify. (emphasis added) [50] The court thus recognized that: “[A] lawyer will rarely, if ever, be able to effectively serve as an advocate and give testimony adverse to his client in the same proceeding.” Williams v. District Court, supra, 700 P.2d at 554. See Riley v. District Court, 181 Colo. 90, 95, 507 P.2d 464, 466(1973) (“It is obvious that a lawyer cannot act as an advocate on behalf of his client, and yet give testimony adverse to the interests of that client in the same proceeding.”). See also ABA Comm. on Ethics and Professional Responsibility, Formal Op. 339 (1975) (Any doubt that the lawyer has about the answer to the ethical question, whether it arises when employment is tendered or after representation has been undertaken, should be resolved in favor of the lawyer’s testifying and against his becoming or continuing as counsel). [51] Thus, it is irrelevant that defendant did not formally attempt to disqualify Peterson and LeHouillier, that defendant had no duty to request their withdrawal, or that the two attorneys themselves did not move to withdraw. The defendant’s act of successfully subpoenaing those attorneys to testify against their client constituted a motion to disqualify. Williams v. District Court, supra, 700 P.2d at 554. (“Indeed, the use of the subpoena power solely as a contrivance to disqualify opposing counsel could itself constitute unprofessional conduct prejudicial to the administration of justice in violation of [Code of Professional Responsibility] DR 1-102(A)(5).”). [52] Once the trial court made the necessary finding under Williams that the attorneys’ testimony would be adverse to Grogan, the lawyers were duty bound to withdraw under Code of Professional Responsibility DR 5-102(B). And, upon their failure to do so, under Williams, the trial court was required to disqualify them from proceeding further on Grogan’s behalf, unless they were able to show an exception to the ethical rules allowing them to continue. See Murphy v. People, 863 P.2d 301 (Colo. 1993) (“[W]e also seriously question . . . the failure of appointed counsel to file a motion to withdraw from the case . . . ; a lawyer shall withdraw from the representation of a client if the representation will result in violation of the rules of professional conduct . . . .”). [53] The opening brief filed by the attorneys for Grogan states the reason for their failure to withdraw as follows: [54] The plaintiff considered having both Peterson and LeHouillier withdraw, however, due to the complexity of the case and the additional costs and delay associated with such a course, this option was too onerous. See DR 5-101(B)(4). [55] Counsel’s reliance on Code of Professional Responsibility DR 5-101(B)(4) is misplaced. That rule allowed counsel to remain in a case with the consent of his client after full disclosure if withdrawal “would work a substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case.” However, the exceptions contained in that rule applied only if the lawyer was being called as a witness on behalf of his client. See Code of Professional Responsibility DR 5-102(A). [56] Here, the lawyers were being called as adverse witnesses to Grogan and the critical rule was Code of Professional Responsibility DR 5-102(B). That rule contained no such exceptions and did not allow a lawyer-adverse witness to remain as counsel, even after full disclosure and even with the client’s consent. In other words, under Code of Professional Responsibility DR 5-102(B), if a lawyer was called as a witness “other than on behalf of his client,” once it became “apparent that [the lawyer’s] testimony [was] or may [have been] prejudicial to his client,” the lawyer was required to withdraw. Such was the case here. See Murphy v. People, supra. [57] Accordingly, we conclude that the trial court erred in not disqualifying Grogan’s attorneys once it became apparent they would be called to testify adversely to Grogan.
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[58] Nor can this error be viewed as harmless. In fact, the degree of prejudice to Grogan and the tactical advantage received by the defendant from having these attorneys remain in dual roles as Grogan’s attorneys and as key defense witnesses is apparent from defense counsel’s closing argument: [59] I want to be perfectly clear: Nobody is blaming Mr. Grogan for the late filing of this lawsuit against [the defendant]. No one is claiming he violated the statute of limitations. He didn’t violate it; his attorneys did. [60] You think that because you come back and you find that the statute of limitations has been violated and that Mr. Grogan’s claim or claims against [the defendant] have to be dismissed . . . don’t think that Mr. Grogan’s (sic) being punished . . . . He still has a cause of action against his attorneys. They blew the statute. They committed malpractice. That’s where his remedy lies. (emphasis added) [61] Although it is impossible to predict whether the outcome of the statute of limitations portion of the trial would have been different if Grogan had been represented by independent counsel, it is apparent that by intermingling the functions of advocate and witness, these lawyers’ effectiveness in both roles was diminished. They were placed “in the unseemly position of arguing [their] own credibility to the jury.” Williams v. District Court, supra, 700 P.2d at 553. And, given their multiple conflicting roles, their ability to exercise independent judgment on Grogan’s behalf was seriously jeopardized. For example, their effectiveness in making strategic judgments was impaired because they had to decide when and whether to object to the defendant’s evidence of, and arguments about, their own conduct. [62] Finally, because it can be inferred that the jury necessarily rejected the testimony of these attorneys in reaching their verdict, it is reasonable to infer that their credibility with the jury as Grogan’s advocates also was damaged. As one legal commentator has stated: [63] [I]n fairness to his client, a lawyer who will be a witness should not be converted into a more interested and thus a less effective witness by becoming an advocate as well. [64] [J]ustice in our adversary system of litigation is dependent upon the partisanship of the advocate and the cross-examination of witnesses. The adversary system is at its best when each litigant is represented equally well by a skillful, partisan advocate who discovers and uses every witness and every scrap of evidence helpful to the client’s cause, and who champions the client’s position as strongly as possible under the evidence and the law. When the advocate has a choice between an interested and a disinterested witness, other factors being equal, he selects the disinterested witness; for by cross-examination the bias of the interested witness can be developed, to the client’s detriment in the eyes of the jury. (emphasis added) [65] Sutton, The Testifying Advocate, 41 Tex. L. Rev. 477, 482-83 (1963). [66] For these reasons, we conclude that the trial court’s failure to disqualify Grogan’s attorneys severely prejudiced Grogan and resulted in a trial that was fundamentally unfair to him. Thus, the judgment must be reversed and a new trial granted. See C.A.R. 1(d); Mt. Emmons Mining Co. v. Town of Crested Butte, 690 P.2d 231, 238 (Colo. 1984) (appellate court may notice errors appearing in the record, “especially when these errors are of a fundamental character affecting the reliability of the judgment itself.”). See also Blueflame Gas, Inc. v. Van Hoose, 679 P.2d 579, 587(Colo. 1984) (court addressed issue on its own motion “to prevent a manifest injustice to a litigant and to assure an appellate resolution of a controversy in accordance with correct principles of law”); cf. 4 C. Wright A. Miller, Federal Practice Procedure § 2558 (1971) (appellate court may reverse for plain error not objected to when necessary to prevent a miscarriage of justice).
C.
[67] Since a new trial is necessary, we also must consider the applicability of the Colorado Rules of Professional Conduct to this case. As previously noted, those rules were adopted by our supreme court after this trial
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and became effective January 1, 1993. Certain of those rules differ from the Code of Professional Responsibility which previously governed this case.
[68] Colorado Rules of Professional Conduct Rule 3.7 now addresses the same subject matter previously discussed in Canons 5 and 7, and DR 5-102; that is, when a lawyer may act as a witness. Rule 3.7 no longer specifically distinguishes between lawyers who testify on behalf of and adversely to their clients. Rather, it now states: [69] (a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness except where: . . . (3) disqualification of the lawyer would work substantial hardship on the client. (emphasis added) [70] Thus, the requirements of new Colorado Rules of Professional Conduct Rule 3.7 do not appear to be as stringent as the absolute prohibition contained in Code of Professional Responsibility DR 5-102(B). [71] The comment to this rule also recognizes that the combination of roles, i.e., advocate and witness, may create an incurable conflict of interest which cannot be waived. That issue must be determined by Colorado Rules of Professional Conduct Rule 1.7. [72] Colorado Rules of Professional Conduct Rule 1.7, the new general conflict of interest rule, states that: [73] (b) A lawyer shall not represent a client if the representation of that client may be materially limited by . . . the lawyer’s own interest, unless: [74] . . . . [75] (2) the client consents after consultation. [76] . . . . [77] (c) For the purposes of this Rule, a client’s consent cannot be validly obtained in those instances in which a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances of the particular situation. (emphasis added) [78] Here, since the thrust of the defense is that attorneys Peterson and LeHouillier allowed the statute of limitation to run, they clearly remain adverse witnesses to their client. And, presumably, if indeed the jury on remand again finds the statute of limitations has run because of their failure to exercise reasonable care, as was urged by defense counsel in his closing argument, Grogan may have an action against his own counsel. Under these circumstances, it is inconceivable that a disinterested lawyer would conclude that Grogan should agree to their continued representation. [79] Accordingly, we hold that, under Colorado Rules of Professional Conduct Rule 1.7, the conflict of interest between Grogan and his attorneys is not waivable and that Grogan’s consent to continued representation by these attorneys in this proceeding cannot be validly obtained. [80] In summary, we interpret Colorado Rules of Professional Conduct 3.7 to require that trial courts follow certain procedures in future cases in which the court, under Williams, permits one party to call the opposing party’s attorney as an adverse witness against his or her own client. [81] In such cases, the trial court must treat the act of subpoenaing counsel as “the functional equivalent of a motion to disqualify.” Williams v. District Court, supra. Thus, if an attorney remains as counsel after having been named as an adverse witness to his or her client, the trial court must conduct a hearing and make appropriate findings as to whether disqualification is required or whether any exception to the disciplinary rules would allow this to occur. That procedure must be followed even when the subpoenaed attorney-adverse witnesses have not moved to withdraw as counsel and the opposing party has not moved for an order disqualifying them. [82] Here, in view of our resolution of the conflict issue and our conclusion that disqualification of the attorneys is required, we do not reach the issue of whether the requirements of the new “substantial hardship” exception of Rule 3.7 could be met in this case. Cf. Warrilow v. Norrell, 791 S.W.2d 515 (Tex.Civ.App. 1989).Page 1384
V.
[83] Since other issues raised may recur on retrial, we address them here.
A.
[85] Plaintiffs contend the court abused its discretion in allowing defendant’s expert witness to explain to the jury what a statute of limitations is and to testify about when a cause of action accrues. Plaintiffs argue this testimony improperly invaded the province of the trial court as the giver of law. We agree.
B.
[94] Plaintiffs next claim the court erred in allowing into evidence testimony concerning
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Grogan’s alcohol consumption on the day of the accident. Plaintiffs contend such testimony was irrelevant and prejudicial.
[95] Evidence is relevant if it tends to make the existence of a material fact more or less probable than it would be without the evidence. Quigley v. Jobe, 851 P.2d 236 (Colo.App. 1992). [96] The determination of whether proffered evidence is relevant is within the sound discretion of the trial court, and an abuse of that discretion will be found only when such determination is manifestly arbitrary or unreasonable. See Boettcher Co. v. Munson, 854 P.2d 199 (Colo. 1993). [97] At trial, defendant introduced testimony concerning Grogan’s alcohol consumption to show that it impaired his ability to remember the events leading up to the explosion. According to defendant, Grogan’s attorneys should not have relied exclusively upon Grogan’s memory and their decision to do so evidenced their lack of reasonable diligence. [98] We conclude the evidence was arguably relevant, provided that defendant can lay a proper foundation, that is, if defendant can show a reasonable basis for concluding the amount of alcohol allegedly consumed by Grogan was likely to have caused an impairment of his memory. [99] We also note that, here, the court instructed the jury to consider evidence of Grogan’s alcohol consumption only as it relates to his memory of the events. If evidence of alcohol is admitted upon retrial, the court should give a similar limiting instruction.VI. [100] CROSS-APPEAL
[101] Defendant claims on cross-appeal that the trial court erred in denying her motion for summary judgment. However, the denial of a motion for summary judgment may not be considered on appeal after final judgment. See Manuel v. Fort Collins Newspapers, Inc., 631 P.2d 1114 (Colo. 1981); Askew v. Gerace, 851 P.2d 199 (Colo.App. 1992).