The Colorado Supreme Court recently ruled in Mercy Housing Management Group Inc. v. Bermudez that there is a right to a jury trial on factual disputes in forcible-entry-and-detainer (“FED”) actions, in stark contrast to customary practice in county courts.
This ruling is likely to increase the time and cost involved in litigating FED actions, although the exact impact is hard to forecast. Although the majority opinion acknowledged fears that jury trials in FED actions could overwhelm county courts and create delays, especially in denser cities like Denver, the court ultimately determined that those concerns are overstated and are not reason alone to invalidate what the court determines is a right granted by the FED statute.
CASE BACKGROUND
The case arose when Mercy Housing Management Group Inc. (“Mercy Housing”), a low-income housing complex, sought early termination of a lease with a tenant, Naomi Bermudez, alleging multiple violations of the lease based on the alleged behavior of what Mercy Housing claimed was an unauthorized guest. Bermudez did not vacate the property, and Mercy Housing then filed a FED action to regain possession of the property without seeking monetary damages.
In response, Bermudez disputed that the alleged events occurred, and argued that, even if they did, that they did not violate the lease or provide adequate grounds for termination under applicable law. Bermudez timely requested a jury trial and paid the required fee. The county court denied her request and set the case for bench trial, the prevailing practice statewide in eviction cases. Bermudez appealed, arguing that there is a right to trial by jury on the facts, as there is no meaningful difference between the old common law action of ejectment (for which there was a statutory right to a jury trial) and modern statutory FED actions.
Mercy Housing argued that Colorado law does not grant a right to a jury trial in FED cases where possession only (not any monetary damages) is sought, and further argues that permitting jury trials in such instance would be impractical, if not impossible, to implement given the required time frame for proceedings required by FED statutory framework.
THE COURT’S REASONING
Although there is no constitutional right in Colorado to a jury trial in civil actions, the court concluded that the right does exist for FED actions by way of statute and judicial rule, even if only possession (not monetary damages) is sought. The court cited case law back to the 12th century in its reasoning, noting that one of the “earliest forms” of possessory actions, known as “the assize of novel disseisin,” was intended to give those dispossessed of their tenement a way to quickly recover their property but still included a jury process. The court also cited a 1974 U.S. Supreme Court opinion affirming the importance of jury trials in possessory actions, emphasizing the importance of a “fair opportunity” for both parties in landlord-tenant disputes to present their cases. Based on this and other precedent, the court dismissed Mercy Housing’s premise that a jury trial right is at odds with the intended summary proceedings notwithstanding that some delay is inherent in a jury trial.
In addition to case law, the court looked to the Colorado Rules of Civil Procedure (“CRCP”) 338(a) and Section 13-40-119 of the FED statute. CRCP 338(a) provides that parties are entitled to a jury trial in civil cases “including actions for the recovery of specific real ... property, with or without damages” if they request it and pay the fee, as long as state statute establishes the right. According to the court, the FED statute provides such right (discussed further below). Mercy Housing argued that FED actions for “possession” differ from actions involving “recovery” and are therefore not covered by the CRCP rule and contended that the old common law action of ejectment (which historically allowed defendants to request jury trials) is distinct from current-day FED possession actions. Mercy Housing also argued that the state’s FED statute and the CRCP rule are incompatible, and that the FED statute (which Mercy Housing argues does not establish a right to a jury trial) preempts the CRCP rule.
In rejecting Mercy Housing’s first argument, the court emphasized that there is an “unbroken thread” between old common law ejectment cases and FED possession actions, with “no substantive difference” between them, and since the former was an action for the recovery of specific real property (as that phrase is used in the CRCP rule), which is legal, rather than equitable, in nature, so is the latter. The court also dismissed the idea that the use of the word “specific” in the CRCP rule excludes FED possession actions, as federal and state courts have consistently interpreted the term broadly to encompass FED-possession actions.
In rejecting Mercy Housing’s second argument, the court reasoned that the FED statute and the CRCP rule are not incompatible, but rather, work together. The court stated that Section 13-40-119 of the FED statute broadly applies the CRCP to FED actions unless a specific exception exists, with no such exceptions having been identified by Mercy Housing or the county court. The court then explained that Section 13-40-115 of the FED statute has two subparts that work in tandem as a binary choice, based upon whether or not a defendant was personally served, rather than on whether or not monetary damages are sought. Subpart 1 of the statute covers cases where defendants are not personally served, in which case the statute does not include any reference to a jury, but rather indicates that a court enters judgment in an action for unlawful detainer (this is the subpart that Mercy Housing’s argument relies on). However, the court observes that subpart 2 of the statute provides a separate path for actions where defendants are personally served. In those cases, the court notes that the statute specifically references a jury two times. It provides that in such cases, a court or jury may try the issue of unlawful detainer, and if a court finds that a defendant has committed unlawful detainer, the court will enter judgment for the plaintiff, and that the court or jury will find the amount of rent and damages, if any, sustained by the plaintiff. The court determined that subpart 2 of the statute, which applies when defendants are personally served (as Bermudez was here), explicitly contemplates jury trials for FED actions, which aligns with the rights outlined in CRCP 338(a). However, the court clarifies that the statute only allows for a jury to decide the “issue of unlawful detainer,” which the court contends refers only to factual disputes, whereas the ultimate determination as to whether “the defendant has committed unlawful detainer” remains a legal question that a court must resolve.
As for Mercy Housing’s policy arguments that it would be impractical or impossible to implement jury trials for FED actions given the large volume of cases and the quick timeline within which the FED statute provides for proceedings to occur (i.e., 7–10 days after a defendant’s answer is filed), and the concern that tenants could abuse the jury right to create delays, the court argued that difficulty of administering a law is not grounds for invalidating it. The court also reasoned that the burden would be tempered by the fact that, although there are tens of thousands of FED possession cases filed each year, many are not eligible for a jury trial as no factual disputes are at issue or the tenant has waived its right to a jury trial in its lease, and furthermore, many cases result in a default judgment, dismissal, judgment on the pleadings or settlement, or tenants do not choose jury trials due to the requirement to pay the associated fee. The court also pointed out that dozens of other states recognize a right to a jury trial in FED actions for possession, including states with a rate of eviction filings that surpass those of Colorado and states with similar short time frames for proceedings to occur, showing that it is possible to administer.
DISSENTING OPINION
Justice Hood wrote a dissent to the majority, joined by Berkenkotter, arguing that Colorado’s FED statute does not intend to provide a right to a jury trial in eviction cases focused solely on possession. The dissent emphasizes that the right to a jury trial in such cases should only exist if explicitly granted by statute and concludes that the FED statute is ambiguous and therefore insufficient to imply a statutory right.
The dissent also made similar arguments to Mercy Housing regarding the incompatibility of jury trials with the quick timing for proceedings contemplated by the FED statute and the potential to overwhelm court dockets and lead to strategic abuses by litigants seeking delays. The dissent concludes that it should be up to the legislature to clarify the intent of the statute.
KEY TAKEAWAYS
The court concluded that there is a right to jury trials in FED possession cases, even if monetary damages are not sought, but only with respect to determination of factual disputes, if any, and only if the defendant timely requests a jury trial and pays the required fee. It remains up to the court, not a jury, to make any legal determinations.
As a result of this ruling, landlords should expect notable increases in the amount of time and money it takes to regain possession of a property from a tenant if a case involves any factual disputes. There are, however, a few things landlords can do to mitigate this risk. As a preliminary step, landlords should establish screening procedures to try to identify qualified tenants who are more likely to perform under their leases. As further protection, landlords should include provisions in their leases awarding costs (including reasonable attorneys’ fees) to the prevailing party in an action (note that, per C.R.S. Section 38-12-801(3)(a)(II), the provision must be a mutual prevailing party provision; one way fee shifting clauses are not permitted). Finally, notwithstanding the court’s determination that a right to a jury trial is established by statute, the court acknowledged that, under C.R.S. Section 38-12-801(3)(a)(III)(A), it is possible to waive that right for possession actions by lease provision. However, while C.R.S. Section 38-12-801(3)(a)(III)(A) permits a waiver of jury trial specifically in the context of actions for possession (and certain other limited contexts), it otherwise broadly prohibits jury trial waivers in residential leases and declares them void and unenforceable. The statute does not make clear whether a jury trial waiver needs to be expressly stated to only apply to possession actions in order to be enforceable, or if any jury trial waiver is enforceable specifically in the context of possessory actions, even if the waiver provision is drafted to apply generally to the entire lease. Therefore, to mitigate the risk of a jury waiver provision being held unenforceable by a court, landlords may want to consider drafting the provision to be expressly specific to possession actions.
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