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Longmont Attorney Ted Bendelow General Counsel

General Counsel.  I get asked all the time, what does that mean?  I describe it as a cross between traffic cop, family physician and paramedic.  I represented a major auto racing organization, with 50,000 members, for 25 years.  I have represented a motorcycle racing organization with 5,000 members for over 20 years, since its formation.  I represent a Korean high tech company in its US operations.  I have represented a variety of construction companies, small manufacturers, limited liability companies and sole proprietors.  In short, pretty much every type of entity.

What do I do?  You name it.  From contract to complex litigation.  From insurance coverage to trademarks (one client owned over 50 registered trademarks).  I have litigated cases in Florida, New York, Texas, Minnesota, California and Colorado.  I have handled negotiations that went on for days with some of the major figures in American industry.  I have been involved in deals in the beginning, in the middle when I took over from someone else or, too commonly, at the end when problems have arisen and there is panic in the air.  What do we do!?

But, that’s the fun and the challenge.  Identify the problem, find a solution.  Generally negotiations work but the variety of courts listed suggests, not always.  Sometimes the “traffic cop” requires finding a varieties of experts or attorney specialists and pointing them in the right direction; monitoring their efforts and their billings but hopefully not “herding cats”, though sometimes it feels like that.

Colorado Ditch Company Water Supply Law

A recent effort of Bendelow Law Office was to successfully simplify the operations of a mutual ditch company that supplies water to numerous Front Range farmers and a few subdivisions. A history of Colorado is incomplete without an understanding of the role of ditch companies in development of Colorado agriculture and indeed, the growth of Colorado cities and towns. As a semi-arid climate, there is simply insufficient rainfall to support the agriculture necessary to feed our citizens. That water need is met by an elaborate serpentine ditch system with brings water from the mountains to the Front Range. In Boulder County alone, one author suggests there are over 150 ditch companies.

Most of the ditch companies were formed many years ago, with water rights established in the late 1800’s. The companies commonly have corporate documents as old as their water rights. The growth of the Front Range has obviously brought great change and complexity both in uses of the land and relationship with adjoining parties. Contracts, responsibilities and government requirements have changed.

In summary, they needed to change. In this example, we were able to merge three companies into one. Contracts and obligation that have existed between the companies since 1904 were addressed. Multiple reporting and tax obligation were addressed. In this age of increased complexity, we were able to simplify.

Sewer Plant Construction Law Colorado

Bendelow Law Office recently represented a local municipality in Colorado on a four year battle with a developer over construction of a new sewer plant.  The developer wanted to prohibit construction of the facility so it could control development.  The Colorado town (left unnamed here for legal reasons), was facing regulatory penalties over an aged and non-compliant facility, sought to control its future in providing municipal services.  Through multiple judicial forums and administrative proceedings, we fought with court hearings, briefs and experts.  In the end, the plant was built and is operating as designed, in full compliance with all health and regulatory requirements.  Meanwhile, several members of the development group have asked to connect to the new facility.

Here, a win-win situation wasn’t possible, but the local Colorado town municipality overcame enormous opposition, not from the community, but from a development group who perceived its interests as different from the town.  I believe the opposition was misguided and not in its own long range economic best interest, but they certainly have the right to their own opinions and decisions.  Presented with the need to defend the town, I did so.  If we couldn’t negotiate, I was successfully able to litigate.

Small Business Development in Longmont

I represented a small manufacturer that was interested in opening a facility in Longmont.  On the other hand the community was obviously interested in providing local Longmont employment.  Local jobs build a stronger community; keep wealth closer to home with local purchases helping other businesses.  The community as a whole gains the taxes paid, both property and sales.  In short, it is a win-win for everyone.

The task is always to find the middle ground between incentives available from the community and incentives sought by the manufacturer.

Numerous communities, small, medium and large, are competing for primary employers.  On the other hand these communities need to make reasoned decisions about the incentives they can provide.

My goal was to find that middle ground and mold it into an agreement that was acceptable to all concerned.  I am not a contractor, or an economist, or a planner.  What I was able to do was assemble the necessary resources and with their input, forge a reasonable compromise.

I am pleased to report that we succeeded.  The community and the manufacturer reached an agreement, property was purchased and the stage was set for construction.  Now we have to wait for the economy to turn around so the building can be built, people hired and plans turned into reality.

Renters: Protect Your Security Deposit

Just before ski season each year, a shuffle ensues. Most of us are familiar with this ritual. It generally consists of the frantic search for housing, schlepping one’s personal belongings around town, leaving old roommates, and learning the habits and moods of new ones. Frequently, the shuffle’s aftermath confronts residential landlords and tenants with the following security deposit issues.

How long can a landlord withhold a security deposit?
A landlord has until 30 days after expiration or termination of the lease to return a security deposit or provide a written accounting of any withholding, unless the lease provides for more time. In no case may a landlord hold a security deposit for more than 60 days without reason.

What must a landlord do to keep all or a portion of a security deposit?
If a landlord plans to keep all or a portion of a security deposit, he or she must give written notice to the tenant within the 30 to 60 day time period after lease termination. The landlord is only responsible for sending notice to a tenant’s last known address. Thus, former tenants should notify their former landlords of address changes. The notice must list the exact reasons for retaining any amount of the security deposit and must be accompanied with a refund of any amount of the deposit not being retained. If such notice is not given, the landlord forfeits any right to the security deposit.

For what kinds of damage can a landlord deduct from a security deposit?
A landlord may only withhold for nonpayment of rent, abandonment of the premises, nonpayment of utility charges, repair work or cleaning contracted for by the tenant, and damages exceeding normal wear and tear. What is “normal wear and tear” is not described in the Security Deposit Act and is one of the grayer areas of landlord tenant law. Generally, damage caused by a tenant to something which would not have otherwise deteriorated or would not have fallen into disrepair during the term of the lease, if the premises had been occupied by a reasonably prudent tenant and in compliance with the lease, exceeds normal wear and tear.

What can a tenant do if their landlord wrongfully withholds their security deposit?
Victims of wrongful withholdings may be vindicated in small claims court. Wrongful withholding of a security deposit occurs when a landlord retains a deposit in bad faith. Deliberate improper withholding is considered bad faith. A landlord who keeps all or a portion of a deposit in bad faith may be held liable for the tenant’s attorney’s fees, costs and “treble” damages (three times the amount of the security deposit wrongfully withheld). Prior to calculating treble damages, however, a court will generally offset the amount of damages to the premises caused by the tenant. In many cases, the cost (including time and effort) of recovering a wrongfully withheld security deposit exceeds the amount recovered.

What can be done to help prevent disputes over security deposits?
A lease should fairly and comprehensively address the expectations of the parties concerning the condition of the premises upon lease expiration and/or termination. Further prevention may take the form of a written inventory and photographic record of any defects or damages existing when the tenant moves in. The tenant and landlord should both sign off on such list.

As always, readers must understand that this column is not intended as advice. The purpose of this article is merely to explain general mechanics of the Security Deposit Act. Each lease situation presents a different set of facts to take under consideration.

History of Dealing with Legal Remedies for Property Owners with Polybutylene

Anyone whose business or interests lie in real estate would want to know about a product liability case that effected property values nationwide. It concerns the Qest Quik Sert plastic (polybutylene) plumbing system that was installed in the supply lines of a large number of single family homes condominiums, town homes, apartments, mobile homes, and manufactured homes throughout the United States. It is estimated that between 20,000 and 40,000 properties in Colorado have this system.
The plastic system is a component plumbing system which is manufactured from polybutylene and celcon resins (i.e. plastic). It is assembled with a combination of plastic tubing, plastic fittings, and metal crimp rings. The system was installed in homes built between approximately 1978 through 1993, however, in 1987, the plastic fittings were replaced by metal. Experts have testified that the system is defective (i.e. the fittings crack causing leaks, pipes and fittings pull apart, plastic resins chemically react to chlorine which causes the pipes to erode, continuously circulating hot water weakens the pipes causing leaks and under freezing conditions the pipe/fittings connections loosen).
The system was developed, manufactured, and marketed by U.S. Brass and Vanguard Plastics, Inc. in conjunction with Shell Oil Company, Hoescht-Celanese Corporation, and E.I. du Pont de Nemours & Company. U.S. Brass, Vanguard and other manufactures designed, manufactured, and sold the polybutylene plumbing system. The system was marketed nationally to plumbing manufacturers and cities and counties were lobbied in order to put polybutylene plumbing systems on the list of approved products, despite knowledge of numerous failures and ongoing litigation involving the system. The plastic was marketed as a material suitable for use as fittings for plumbing applications, despite conclusive data that was available in the 1960s and 1970s that chlorinated tap water could erode the fittings. Juries in numerous court cases have found that the manufacturers sold the system despite knowledge of the problems and that they misrepresented their products, knowingly engaged in deceptive trade practices, and acted with gross negligence.
The system is identifiable by looking under a kitchen or bathroom sink, and/or at the plumbing leading to and from the water heater. The piping and fittings are light grey in color and the letters Q-E-S-T, or simply the letter Q are often embossed on a valve or fitting. The piping and fittings are connected with an aluminum, copper or brass crimp ring which is approximately one-half inch wide.
This plumbing has affected property value. Owners and realtors have had difficulty selling property because of the problems associated with the plumbing. Plumbing leaks have damaged and stained carpets, walls, and baseboards. Vinyl flooring curls up at the edges or the seam. Insulation, sheet rock, furniture, and rugs have been ruined. In some cases, ant, spider, roach, and termite problems have developed due to wood rot.
Other damages include the loss of personal time and wages to deal with plumbing problems. Some property owners have had to pay hotel bills while their tenants were turned out of their homes while repairs were being made to the property. Some people have experienced an increase in insurance premiums and utility bills. Many plumbers refuse to work on the polybutylene plumbing system.
In 1989, I became involved in litigation involving the system almost everywhere it was installed and became a national problem. This system was the subject matter of a “60 Minutes” segment in 1990 and was also highlighted on the “Good Morning America” show on March 11, 1993.
I researched and handled claims regarding serious problems with this defective plastic plumbing system for several years. After extensive negotiations with the manufacturers of this product we settled the claims of over 10,000 single-family home, town home, condominium, apartment, manufactured, and mobile home owners which were plumbed with the system throughout Colorado. We were part of a national settlement of $1.2 billion in 1993, the largest property settlement in history as of that time.

A Story About the Colorado 500 Motorcycle Ride

“Do you believe in magic? . . . . “It’s like trying to tell a stranger ‘bout rock-n-roll” c. Loving Spoonful. That’s what it’s like trying to describe the Colorado 500 to a non-participant. I’ve given up trying to describe it to a non-motorcyclist. I’ve ridden the dirt ride something like 24 years and the street ride I think 14 times. (The second thing that goes is your memory – I forgot what the first was).
Anyway, as I try to recount our adventures on the street ride, I struggle with the real essence of the ride – the spirit, the camaraderie, the friendships that I have developed. All from four days of riding with people that I may not see for another year, or may bump into at a race track somewhere, or ski our butts off together, or see how fast the rental snowmobiles will go or practice hand brake turns in our rental cars. You get the idea – classic type-A personalities. It’s not the amount of time we spend together, it’s the quality, the intensity.
Since it is so hard to convey feelings by the written word, or describe the smell of the Douglas fir as we sweep around yet another fast corner, I’m reduced to telling you what we did, so maybe the “non-believer” can understand how we feel. What we did, was travel to country that most of us had never seen before – to Northern New Mexico. Country that is rich in Indian, Spanish, New-Age, and Anglo culture and heritage. Country that is the land of the Anazasi, “The Milagro Bean Field War,” the Unser family, the Vietnam War Memorial, Michael Martin Murphy, Los Alamos, the Atomic bomb, two of the greatest art centers in the world, the Apache, the Mountain Ute, the Hopi, the Dallenbachs. In short, it was hard to ride because there was so much to see and do – but ride we did. ON and ON and ON. To see what was over the next horizon, around the next corner, beyond that little rain shower, through the desert valley. “No matter where you go, there you are.”
There were a few glitches, but to 500 riders, they were opportunities, not problems. A few folks got to room with people that they hadn’t met before – not strangers on the ride, strangers. What happened? New friends. One couple did have problems staying aboard their cycle – a Honda ST 1100. First, they were stopped for speeding. When the “driver” got off the motorcycle to “schmooze” the County Mountie, he put down the sidestand, leaned the bike over, and got off. What he forgot was that the ground has to be beneath the sidestand in order for it to work. It wasn’t. There we stood and watched his ST as it gracefully fell over into a rock pile. Being the resourceful Colorado 500 rider that he was however, after the four or more of us righted his cycle, he whipped out his duct tape (naturally, color coordinated to his black motorcycle), and performed band aid surgery. Soon we were ready to go. However, we can’t end this little sage without noting that his buddy, who had been riding first, had just waved him by as his radar detector suggested the County Mountie was nearby. What are friends for?
The next get-off was unfortunately more serious – remember these things can bite. Our “road rocket” was sweeping through a fast left hander, when he got a bit wide, into the “marbles”, and ended up in a “tank slapper.” The wife, she was “flying through the air with the greatest of ease.” I happened to be the first bike behind them and so I stopped. The “driver” appeared fine, but I couldn’t find his wife. H’mm. The side of the road dropped off quickly, into a meadow of high grass – “Strawberry Fields forever…” No wife. Wait! There’s a rustling in the grass – a snake, a coyote? You guessed it, a wife. “What are you doing down there, are you OK?” Of course I’m OK, I’ve had to go to the bathroom all morning. Seemed like a good spot, since I was down here.” Whew, was I relieved (bad pun).
This time we did serious damage to the duct tape. Mirrors, windshield, side covers, etc, etc. When we were done (I say we, because every Colorado 500 rider stops to help his buddy, and we gathered a large number of buddies), the “driver” was chauffeuring one of the slickest band aid jobs you have ever seen. It was no longer duct tape, it was racer’s tape! Mama had made it up the hill and we decided that we would let the “driver” take his racer’s tape on a test ride into the next town. Bike was great, “driver” was fine, and we had a wonderful lunch, pit racing the events of the morning.
Or the time at the marina-Apache Reservoir, where the “road warriors” dueled it out with ice cream cones (sorry Pepi, no pie), while basking in the summer sun. Or the “tight-lipped” Buell rider whose high tech creation pooped out and he walked around it for hours, refusing to talk to anyone (remember, we were in Indian country – perhaps a war dance would help). Or another “High-techie” among us also pooped out in the middle of nowhere – but he got it fixed with screw drivers and bailing wire – unfortunately not in time to attend the cocktail party he sponsored. Thanks, Jim, we sure enjoyed the hors d’ouevres.
The “shop tell you drop” crowd were in Virgin country (I use that term loosely – another bad pun). Crystals, world class art, and jewelry – buy, buy, buy, charge, charge, charge. Anyway, we learned why so many women prefer Gold Wings – storage capacity. The trip back from Taos to Red Mountain was sort of like the St. Patrick’s Day parade, with plastic bags of every color tied on, hooked on, and held on. Some Gold Wingers were really pros at this – their tanks were full and they had bags tied everywhere. It was a built in speed governor – if you went too fast, the bags ripped, and one of our crowd was picking up treasures for a half-mile.
Pie. I tease Wally and Pepi about it every year. Little did I know. I bought one of the chase vehicles after the 500 in the fall – I’m still getting the pie crust out of the seat cushions – UMM, UMM, Good.
Hopes for the future? Neil Diamond has sponsored two cocktail parties. Perhaps he will get to ride with us one of these years. Next year it’s back to Durango!

What are the rights of a ditch company in maintaining a ditch?

The right to a ditch easement is recognized under the Colorado Constitution and statutory law. The Colorado Supreme Court has held a ditch easement includes the rights to “inspect, operate, maintain and repair the ditch” and the rights of ingress and egress over the burdened estate.

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A ditch easement can arise by condemnation, grant or prescription. When an easement arises by grant, one must look to the document creating the easement to establish the rights of the dominant and servient estates. If the document is silent regarding maintenance, the owner of the easement has the right to maintain it. When an easement arises by prescription, history plays a role in determining the dominant estate’s maintenance rights but is not dispositive.

Absent a writing setting forth the dimensions of the right of way, the easement extends to the bed of the ditch with sufficient ground on either side to operate the ditch properly, depending on the particular circumstances. As long as the owner of the ditch easement does not expand the easement, the owner can do “whatever is reasonably necessary” to maintain the ditch. The owner of the ditch easement may do whatever is reasonably necessary to permit “full use and enjoyment of the easement including the exercise of rights of ingress and egress for maintenance, operation, and repair.” It is not trespassing to enter land to maintain a ditch. But the owner of the easement cannot put a greater burden on the land than that which existed when the ditch was constructed or was reasonably necessary to operate it. At the same time courts have recognized the right to modernize the methods and tools of maintenance.

The owner of the burdened estate may also make certain uses of the easement as long as he or she does not “damage the ditch or unreasonably inhibit the benefited estate owner’s ability to maintain the ditch.”

Ditch companies not only have the right to maintain ditches, but also the duty. Willful interference with a company’s ditch or road easement is a misdemeanor and gives rise to damages and costs in the event of a suit.

Colorado courts have recognized particular ditch maintenance rights. The holder of the ditch easement may operate machinery and other appliances and may remove obstructions. The holder of the easement may travel on the access road and spray and burn weeds. It may use a dragline to remove weeds and vegetation to retain the normal grade and cross section of the ditch. It may clean ditches of silt.

Courts in other states also have recognized specific ditch maintenance rights. The Supreme Court of Montana found that installation of a culvert and bridge across a ditch by a property owner unreasonably interfered with the ditch company’s maintenance rights because it made bringing in a bulldozer difficult. The Supreme Court of Washington ordered a property owner to remove trees and sprinklers within 20 feet of a lateral centerline to allow the ditch company to safely bring in and operate backhoes, slopers, and mowers. The Supreme Court of Idaho held a ditch company could clean the ditch and put the dirt on the banks as long as the ditch wasn’t enlarged or deepened. An appellate court in New Mexico ordered a property owner to remove a fence that interfered with operation of a tractor and other ditch-cleaning equipment.

As the case law from Colorado and other jurisdictions shows, the right to do “whatever is reasonably necessary” should encompass all normal ditch maintenance. Ditch riders may drive along the ditch to open head gates and to monitor the ditch. If there is a problem with water flow, they may use equipment necessary to repair leaks or open blockages. The removal of weeds and other debris from the ditch should be considered reasonably necessary. Burning brush should be allowed. The ditch company is allowed to use heavy equipment as necessary but not to increase the historical burden on the land. The company is allowed to adjust flows and to maintain embankments. If a landowner sets up an obstacle or obstruction in the easement, such as a gate, bridge or trees, the question will be whether it unreasonably interferes with maintaining the ditch. A wise course is to investigate the circumstances before removing the obstacle. Whether extraordinary activities are allowed as part of maintenance will depend on the circumstances of the case and a balancing of the servient owner’s rights. In the Shrull case, cited above, the court approved blasting to open a ditch, but in that case there was a history of opening the ditch with explosives. Swampy land prevented the use of heavy equipment. If the land had been dry, the court might have required a different method for opening the ditch. Activities that are the standard in the industry will likely be found reasonable and necessary.

Conclusion

A ditch company may do whatever is reasonably necessary to maintain its ditch as long as it does not expand the burden on the servient owner’s estate. In considering activities of the servient estate owner that interfere with the ditch company’s maintenance rights, courts will weigh whether the interference is reasonable or unreasonable given the property owner’s right to a noncompeting use of the easement.

From: Ditch Company

To: Ditch Rider

Re: Right to Maintain the Ditch

As a ditch rider, you have the right to do whatever is reasonably necessary to inspect, operate, repair and maintain the ditch as long as you do not expand the ditch bed or the historical burden on the land. The ditch company’s right of way extends from the ditch bed to sufficient ground on either side of the ditch to operate the ditch properly. You have the right to drive along the ditch in the right of way to operate, inspect and monitor the ditch, to perform maintenance, and to repair the ditch. If necessary, you can bring in appliances and equipment, including heavy equipment. You can remove obstructions from the ditch and the right of way. However, if an obstruction, such as a gate, a tree, or a bridge, does not unreasonably interfere with your ability to access or maintain the ditch, it should not be removed. If you believe it does interfere, you should consult with the company before removing it. You may clean ditches of silt. You can remove weeds (by spraying or burning) and other vegetation and debris from the ditch. If there is a problem with water flow you may do whatever is reasonably necessary to plug leaks or open blockages. The company and you have the right and obligation to maintain the ditch including the embankments. If you are uncertain whether certain actions are permissible, always check with the ditch company.

Business Law-Intellectual Property

The last blog talked about Patents and Trademarks. Before we move on, another comment about Trademarks. The Patent and Trademark Office (PTO) has an extensive web site that allows the filing of a Trademark Application on line. Before going through the process (which is somewhat self-explanatory), I urge folks to find out if the proposed name to be trademarked is actually available.

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There are two companies: Thompson and Thompson, and Corsearch, which will conduct a national search to find out whether there are other uses of the proposed name. Please understand that actual use is the strongest trademark and you may trademark a name, only to find that it is already being used somewhere, thereby minimizing if not defeating your trademark.
Also, the ability to trademark and the strength of the trademark depends heavily on the “strength” of the name: is it unique, generic, merely descriptive, fanciful? Has it acquired secondary meaning? What does the name identify-product, category? The word “Apple” cannot be trademark to name a fruit, but it can be used to identify a computer. It is a common name used in an uncommon way. There are many “tricks” to trademarking, so before you go online to file an application, and spend the non-refundable fees, it is a good idea to better understand the world of trademarks. We will move on the Copyrights, the Right of Publicity and Tradenames, next time.

Construction Law-Insurance

I represented an owner who hired a contractor to build a large equestrian center. The roofing was put on upside down! The result was that water leaked into the building, soaking the insulation, which in turn fell on the floor in great sheets, damp, smelly and a general mess. The resulting litigation involved the owner, the contractor, the architect, the roofing sub-contractor, and the roofing material supplier. That’s another story.

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The point here is that when a claim was made to the insurance carrier of the general contractor, who in turn made a claim to the insurance carrier of the roofing subcontractor for the roof which had to be redone, the carrier denied coverage, based on the “your work” exclusion. The carrier would cover the damage caused by the water leak but not the cost of redoing the roof. Why? Because the “your work” exclusion means that insurance coverage does not cover poor/improper/negligent work. Damages from the work-yes. The redo of the work, no. Contractors commonly think that if they have insurance, they are covered for everything. No. They are only covered for damage caused by their poor work. The solution to the owner is to require a performance bond. It is not a cure all, but it is better than trying to recover from a contractor who has nothing, or in this case, filed bankruptcy. The reason why the roof was put on upside down is another