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Nelson v. United States

United States Court of Appeals, Tenth Circuit

February 12, 2019

JAMES NELSON; ELIZABETH VARNEY, Plaintiffs - Appellees,
v.
UNITED STATES OF AMERICA, Defendant-Appellant.

          Appeal from the United States District Court for the District of Colorado (D.C. No. 1:11-CV-02953-WYD-CBS)

          Joshua M. Salzman, Appellate Staff Attorney, Civil Division (Chad A. Readler, Acting Assistant Attorney General; Bob Troyer, United States Attorney; and Mark B. Stern, Appellate Staff Attorney, Civil Division, with him on the briefs), United States Department of Justice, Washington, D.C., for Defendant - Appellant.

          Robert T. Fishman, Ridley, McGreevy & Winocur, PC, Denver, Colorado (David P. Hersh, Steven G. Greenlee, Burg Simpson Eldredge Hersh & Jardine, PC., Englewood, Colorado, with him on the brief), for Plaintiffs - Appellees.

          Before MATHESON, PHILLIPS, and McHUGH, Circuit Judges.

          McHUGH, Circuit Judge.

         In 2008, Mr. James Nelson was seriously injured while riding his bicycle on United States Air Force Academy land. He and his wife, Elizabeth Varney, [1] sued the Academy under the Federal Tort Claims Act ("FTCA"), seeking damages. The district court ruled in their favor and awarded them approximately $7 million in damages. In a previous appeal, we reversed that decision, holding that the Colorado Recreational Use Statute (the "CRUS") shielded the Academy from liability. But we remanded on the issue of whether an exception to the statute's liability shield applied. On remand, the district court held that an exception did apply and reinstated its prior judgment. The Academy then brought this appeal.

         Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

         I. BACKGROUND

         On September 3, 2008, Mr. Nelson was involved in a bicycle accident while riding on an asphalt path on Academy land. Nelson v. United States ("Nelson III"), 256 F.Supp.3d 1136, 1141 (D. Colo. 2017). He struck a sinkhole, "lost control of his bicycle," and "was flung onto the asphalt path," suffering severe injuries. Id. The asphalt path ran parallel to Interstate 25 and was within an easement held by the Colorado Department of Transportation ("CDOT"), though CDOT was not responsible for maintaining the path. See id. at 1141-42. At both entrances to the path were two signs-one that read, "Bicycle Path, No Motorized Vehicles," and another, less visible, that prohibited entry onto Academy property. See id. at 1145; Nelson v. United States ("Nelson II"), 827 F.3d 927, 929 (10th Cir. 2016). The Academy did not post the bicycle-path signs, nor did it otherwise designate the path as a recreational trail. Nelson III, 256 F.Supp.3d at 1144-45. In fact, the Academy considered public users to be trespassers. Id. Yet, despite knowing the public used the path, the Academy did not take any affirmative steps to preclude the public or remove the bicycle-path signs prior to Mr. Nelson's accident. See id.

         The sinkhole that Mr. Nelson encountered "encompassed the entire width of the path" and was created by "wash-out/erosion problems in the area." Id. at 1143. Despite its size, the sinkhole was difficult to see by users of the path. See id. The sinkhole was first discovered on August 20, 2008, by Dr. Brian Mihlbachler, a biologist with the Fish and Wildlife Service. Id. at 1145-46. Dr. Mihlbachler "had [the] responsibility for managing the natural resources on the Academy's" land, particularly monitoring "serious erosion and sedimentation issues" and "reporting to the appropriate party if issues were identified." Id. at 1146. Dr. Mihlbachler was an employee of the Academy and "had responsibilities related to Academy safety and security and reporting safety concerns." Id. at 1147. He found the sinkhole while monitoring erosion "along [the Academy's] boundary." Id. at 1146. Dr. Mihlbachler photographed and documented the sinkhole but "did not report the sinkhole or show the photographs to anyone." Consequently, he was the only Academy employee who was actually aware of the sinkhole before Mr. Nelson's accident. Id. at 1146-47. Despite knowing the path was being used at least occasionally "for recreational purposes," id. at 1144, 1161, Dr. Mihlbachler did not take any steps to warn of, fill in, or cordon off the sinkhole prior to the accident, id. at 1147-49.

         Mr. Nelson and his wife filed suit against the Academy in district court, seeking damages under the FTCA. Id. at 1140. The district court found that Mr. Nelson was an invitee or licensee and that the Academy was liable for his injuries. Id. The district court awarded him approximately $7 million for his injuries and losses and awarded Ms. Varney $401, 425 for loss of consortium. Id. The Academy had argued the CRUS shielded it from liability, but the district court held the CRUS was inapplicable. See id. The Academy appealed, and we reversed the district court, concluding the CRUS did apply. Nelson II, 827 F.3d at 929. But we did not reach the question of whether an exception to the CRUS applied. Instead, we remanded to the district court to make that determination in the first instance. Id. at 933. On remand, the district court held that "the Academy and Dr. Mihlbachler" were not shielded from liability under the CRUS because, per an exception to the CRUS relevant here ("the CRUS exception"), they "willfully ignored the dangerous condition on the path and chose not to take steps to warn or guard users like Mr. Nelson against that danger." Nelson III, 256 F.Supp.3d at 1165; see also Colo. Rev. Stat § 33-41-104(1). The district court also held alternatively that even if the Academy's and Dr. Mihlbachler's actions were not considered collectively, "Dr. Mihlbachler acted willfully" and thus the Academy was liable. See id. The Academy brought this appeal.

         We agree with the district court that Dr. Mihlbachler's actions and knowledge alone are sufficient to support a finding of liability against the Academy.[2]

         II. DISCUSSION

         In reviewing the district court's conclusion that Mr. Nelson's claim falls within the CRUS exception, we first provide an overview of that exception under Colorado law. Then, we review the district court's decisions in some detail to assess whether the court's conclusion is correct according to Colorado law, and whether it is supported by the district court's factual findings. Ultimately, we determine that judgment in favor of the Nelsons is proper, and we affirm the decision of the district court.

         A. The CRUS and the CRUS Exception

         The Colorado General Assembly adopted the CRUS "to encourage owners of land to make land and water areas available for recreational purposes." Colo. Rev. Stat. § 33-41-101. It attempts to accomplish this goal "by limiting [landowner] liability toward persons entering thereon for [recreational] purposes." Id. Accordingly, the CRUS provides a near complete liability shield to landowners "who directly or indirectly invite[] or permit[], without charge, any person to use [their] property for recreational purposes." Id. § 33-41-103(1). But this broad liability shield is only nearly complete. Relevant here, the CRUS exception states that "[n]othing in [the CRUS] limits in any way any liability which would otherwise exist . . . [f]or willful or malicious failure to guard or warn against a known dangerous condition, use, structure, or activity likely to cause harm." Id. § 33-41-104(1).

         The core legal issue in this case is a question of state law-the proper interpretation of the CRUS exception. "In FTCA cases, we review the district court's determination of state tort law de novo." Nelson II, 827 F.3d at 930. "When the federal courts are called upon to interpret state law, the federal court must look to the rulings of the highest state court, and, if no such rulings exist, must endeavor to predict how that high court would rule." Johnson v. Riddle, 305 F.3d 1107, 1118 (10th Cir. 2002). When interpreting a statute, Colorado courts "first look to the statutory language and give words and phrases their plain and ordinary meaning." Climax Molybdenum Co. v. Walter, 812 P.2d 1168, 1173 (Colo. 1991). They also examine "the statute as a whole and strive to give 'consistent, harmonious, and sensible effect to all parts.'" Reno v. Marks, 349 P.3d 248, 253 (Colo. 2015) (quoting Denver Post Corp. v. Ritter, 255 P.3d 1083, 1088-89 (Colo. 2011)). If a statute grants immunity in derogation of the common law, Colorado courts construe the grant of immunity narrowly and exceptions to that grant broadly. See Burnett v. State Dep't of Nat. Res., 346 P.3d 1005, 1008 (Colo. 2015). But throughout the statutory construction inquiry, the "touchstone remains the intent of the legislature." St. Vrain Valley Sch. Dist. RE-1J v. A.R.L. ex rel. Loveland, 325 P.3d 1014, 1019 (Colo. 2014).

         We agree with the district court that "Colorado appellate courts," including the Colorado Supreme Court, "have not specifically construed" the CRUS exception. See Nelson III, 256 F.Supp.3d at 1149. Thus, we have the responsibility to predict how the Colorado Supreme Court would interpret it in the first instance. See Johnson, 305 F.3d at 1118. Before considering the text of the statute, however, we must determine whether the CRUS derogates the common law such that we are required to construe the CRUS's liability shield narrowly and the CRUS exception broadly. See Burnett, 346 P.3d at 1008. The Academy argues this doctrine is inapplicable here because the CRUS "does not displace the common law, but rather the Colorado Premises Liability Act [("CPLA")]." Appellant's Br. at 23-24. The CPLA sets out the circumstances under which landowners may be liable to entrants on their property, see Colo. Rev. Stat. § 13-21-115(2)-(5), and aspects of it represent "substantial departure[s] from the common law," see Larrieu v. Best Buy Stores, L.P., 303 P.3d 558, 565 & n.9 (Colo. 2013); Colo. Rev. Stat. § 13-21-115(1.5)(e) (explaining that the purpose of the CPLA is, among other things, "to protect landowners from liability in some circumstances when they were not protected at common law"). The Academy suggests that because the CPLA displaced the common law, any further changes to landowner liability displace only the CPLA. This, is at least in part because the CPLA "was designed to enhance protections for landowners." See Appellant's Br. at 23-24 (citing Colo. Rev. Stat. § 13-21-115(1.5)(e)). We are not convinced.

         The Academy's argument suffers from at least two flaws. First, it assumes without authority that multiple statutes cannot, either working in tandem or separately, derogate the same general area of common law. Second, it overlooks that the CPLA and the CRUS have consonant purposes. The CRUS was passed to "encourage owners of land to make land and water areas available for recreational purposes by limiting their liability toward persons entering thereon for such purposes." Colo. Rev. Stat. § 13-41-101. And, as the Academy notes, the purpose of the CPLA is "to create a legal climate which will promote private property rights and commercial enterprise and will foster the availability and affordability of insurance" by "protect[ing] landowners from liability in some circumstances when they were not protected at common law." Id. § 13-21-115(1.5)(d)-(e). In short, the CRUS did not displace the CPLA but furthered its purpose. So the CRUS, either on its own or working in tandem with the CPLA, derogates the common law. Thus, its liability shield must be construed narrowly and the CRUS exception must be construed broadly.

         We now move to the text of the statute. The parties do not dispute most of the district court's construction of the CRUS exception-neither party claims that the term "malicious" applies here nor that we are considering a dangerous "use, structure, or activity." See Colo. Rev. Stat. § 33-41-104(1)(a). The CRUS exception's remaining relevant text indicates that a landowner is liable for injuries on its land that result from a "willful . . . failure to guard or warn against a known dangerous condition . . . likely to cause harm." See id. The Academy also has not disputed the district court's findings that the sinkhole was a dangerous condition likely to cause harm, see Nelson III, 256 F.Supp.3d at 1150-52, that Dr. Mihlbachler knew the path was being used for recreational purposes, id. at 1144, 1161, that Dr. Mihlbachler failed to warn or guard against the dangers inherent in the sinkhole on a known bike path, id. at 1147-49, 1162-65, or that Dr. Mihlbachler knew about the sinkhole prior to Mr. Nelson's accident, id. at 1146-47; see also Appellant's Reply Br. at 13 (explaining that the Academy is not "challeng[ing] the district court's findings" of fact).

         This leaves us with two disputes: whether Dr. Mihlbachler knew the sinkhole was a "dangerous condition likely to cause harm" and whether his failure to warn or guard against that dangerous condition was "willful." Before addressing those issues, we define the terms "known" and willful" under Colorado law. We then proceed to apply that law to the facts found by the district court.

         1. Knowledge ...


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