Background
E.B. is a cognitively impaired, blind adult who uses a wheelchair and relied on MKBS, LLC — a taxi company — for transportation to a day-program center. During one trip, E.B.’s regular driver, Jesus Manuel Ortiz, allegedly sexually assaulted her. J.B., E.B.’s legal guardian and personal representative, filed suit against both MKBS and Ortiz, asserting direct tort claims against Ortiz and negligence-based claims against MKBS including negligent hiring, retention, supervision, and respondeat superior liability.
Ortiz never responded to the complaint and the district court entered a clerk’s default against him under C.R.C.P. 55(a), deemed to establish his liability. A parallel criminal prosecution for the same incident resulted in Ortiz’s acquittal. When J.B.’s civil case against MKBS proceeded to trial, MKBS called Ortiz as a witness in its own defense. The district court denied J.B.’s motion to bar Ortiz from testifying contrary to the facts admitted by his default, and the jury found that Ortiz had not sexually assaulted E.B. and that E.B. suffered no injuries or damages. After trial, J.B. moved for default judgment against Ortiz and the court entered a nearly $700,000 judgment against him — which the court subsequently set aside on Ortiz’s pro se motion, finding excusable neglect. The court then entered judgment in Ortiz’s favor based on the jury’s verdict in the MKBS trial.
J.B. appealed. A divided Court of Appeals panel affirmed, and the Colorado Supreme Court granted certiorari.
The Court’s Holding
The Colorado Supreme Court, 6-1, affirmed on all three contested issues. First, the court held that the district court did not abuse its discretion by permitting MKBS to call Ortiz as a witness even though his testimony contradicted his default admissions. Because no rule of law prohibits a non-defaulting codefendant from subpoenaing a defaulting defendant as a fact witness, and because Ortiz was the only eyewitness other than E.B., excluding his testimony would have materially prejudiced MKBS’s defense and thwarted the truth-seeking function of the legal system. The court drew on the Second Circuit’s decision in Henry v. Oluwole, 108 F.4th 45 (2d Cir. 2024), involving nearly identical facts, as persuasive authority.
Second, the court held that the district court properly set aside the default judgment under C.R.C.P. 60(b). Applying the three-factor Goodman test, the court found excusable neglect because a person of modest legal sophistication could reasonably have believed his employer’s counsel was representing him; that Ortiz demonstrated a meritorious defense through the jury verdict and criminal acquittal; and that equity favored relief because Ortiz moved to vacate just three weeks after the default judgment was entered and J.B. had waited two years to even seek a default judgment.
Third, the court adopted and expanded the rule from Frow v. De La Vega, 82 U.S. 552 (1872), holding that courts should enter judgment in a defaulting defendant’s favor when a jury verdict on the merits directly conflicts with the factual allegations underlying the default, provided the defendants are similarly situated or share closely related defenses. Because the MKBS jury found no assault and no damages, entering judgment against Ortiz on those same allegations would produce an “unseemly and absurd” inconsistency.
Key Takeaways
- A non-defaulting codefendant may call a defaulting defendant as a trial witness, even if the testimony contradicts facts deemed admitted by the default, so long as no constitution, rule, or statute prohibits it — and the court may instruct the jury that the witness remains liable by default.
- Colorado courts should liberally apply the three C.R.C.P. 60(b) factors — excusable neglect, meritorious defense, and equitable considerations — in favor of setting aside default judgments, which are disfavored and reserved for extreme circumstances.
- Colorado now formally adopts the Frow anti-inconsistency rule and extends it beyond joint-liability situations to similarly situated defendants with closely related defenses: when a jury verdict on the merits negates the factual basis of a default, the default judgment must yield and judgment may be entered for the defaulting party.
- A plaintiff’s delay in seeking a default judgment — here, nearly two years — weighs heavily against a finding of detrimental reliance when the defaulting party moves to vacate.
Why It Matters
This decision significantly shapes how Colorado trial courts manage cases involving both defaulting and non-defaulting defendants. By permitting a defaulted party to testify for a codefendant and then leveraging that testimony and the resulting verdict to escape default entirely, the ruling expands the practical reach of the Frow doctrine well beyond its original joint-liability context. Defense practitioners in multi-defendant civil cases now have a powerful argument that a favorable jury verdict on shared operative facts can extinguish a codefendant’s default liability.
Chief Justice Marquez’s dissent raises a pointed concern that will likely animate future litigation: the majority’s analysis is arguably circular, allowing Ortiz to testify precisely because his liability was “not at issue” in the MKBS trial, while simultaneously permitting him to weaponize that testimony to demonstrate a “meritorious defense” under Rule 60(b). Critics may argue the ruling rewards procedural noncompliance and forecloses a plaintiff’s ability to ever obtain a trial on the merits against a defaulted defendant when a codefendant secures a favorable verdict.