Nelson v. Elway

State Court (Pacific Reporter)12/11/1995
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908 P.2d 102 (1995)

Mel T. NELSON and Metro Auto, Inc., Petitioners/Cross-Respondents,
v.
John A. ELWAY, Jr.; Rodney L. Buscher; J.R. Motors Company, a General Partnership; and J.R. Motors Company South, a General Partnership, Respondents/Cross-Petitioners.

No. 94SC453.

Supreme Court of Colorado, En Banc.

December 11, 1995.
Rehearing Denied January 16, 1996.

*104 Jean E. Dubofsky, P.C., Jean E. Dubofsky, Boulder, Podoll & Podoll, P.C., Richard B. Podoll, Robert A. Kitsmiller, Denver, for Petitioners/Cross-Respondents.

Brownstein Hyatt Farber & Strickland, P.C., Stanley L. Garnett, Patrick F. Carrigan, Denver, for Respondents/Cross-Petitioners.

*103 Chief Justice VOLLACK delivered the Opinion of the Court.

We granted certiorari to review the decision by the court of appeals in Nelson v. Elway, No. 93CA0629 (Colo.App. May 26, 1994), affirming in part and reversing in part the trial court's grant of summary judgment in favor of the respondents. The court of appeals affirmed the trial court's entry of summary judgment in the respondents' favor as to the petitioners' allegations of breach of *105 contract, fraud and misrepresentation, dual agency, civil conspiracy, and punitive damages. The court of appeals reversed the trial court's entry of summary judgment as to the promissory estoppel count in the petitioners' complaint, ruling that there existed a material issue of fact as to this count. We reverse the court of appeals decision reversing summary judgment as to the promissory estoppel claim and affirm in all other respects.

I.

Mel T. Nelson (Nelson) was the president and sole shareholder of two car dealerships, Metro Auto and Metro Toyota, Inc. General Motors Acceptance Corporation (GMAC) provided all the financing for both dealerships. In the first half of 1990, both dealerships were experiencing financial difficulties. In July of 1990, Nelson retained John J. Pico and the Aspen Brokerage Company (Pico) to represent him in the selling or refinancing of one or both of the dealerships.

In early 1991, Pico, acting on behalf of Nelson and Metro Toyota, began negotiations with John A. Elway, Jr. (Elway) and Rodney L. Buscher (Buscher) regarding the sale of Metro Toyota and the property upon which it was situated. On March 14, 1991, pursuant to those negotiations, Elway and Buscher signed a "Buy-Sell Agreement" and a separate real estate contract to purchase Metro Toyota. The closing was scheduled for April 15, 1991.

Soon after the signing of these documents, Pico asked Nelson if he would be willing to sell both Metro Auto and Metro Toyota to Elway. Nelson stated that he would be willing to sell both dealerships along with the land upon which they were located if he received sufficient personal remuneration. Pico then began negotiating with Elway and Buscher regarding the sale of both dealerships. Through these negotiations it became apparent that Elway and Buscher were unwilling or unable to pay the full purchase price for the dealerships and the land upon which they were located.

In order to consummate the transaction, Pico suggested to Nelson that Elway and Buscher reimburse Nelson for his interest in Metro Toyota by paying Nelson $50 per vehicle sold by both dealerships for a period of seven years commencing on May 1, 1991. In exchange for this compensation arrangement, Elway and Buscher would purchase Metro Auto from Nelson at a greatly reduced purchase price. These terms, referred to by the parties as the "Service Agreement," were reduced to writing but never signed by the parties. Subsequently, on March 16, 1991, the parties signed a "Buy-Sell Agreement" and a separate real estate contract for the purchase of Metro Auto. This written, signed agreement did not incorporate the terms of the Service Agreement.

By early 1991, the dealerships owed GMAC over $3 million. In order to protect its security interests, on April 3, 1991, GMAC required Nelson to execute agreements referred to as "keeper letters," allowing GMAC significant control over the dealerships. GMAC imposed this requirement as consideration for its agreement to pay in excess of $890,000 in debt owed by Metro Auto and Metro Toyota at the closing of the sale of the dealerships to Elway and Buscher. Nelson knew that execution of these letters would preclude his ability to file for bankruptcy protection and proceed through re-organization. He alleges that he thus sought and received assurances from Elway and Buscher that the orally agreed upon, but as yet unsigned, Service Agreement would be honored.

On April 8, 1991, after the execution of the keeper letters, Pico, Elway, and Buscher met at Pico's office. During this meeting, GMAC telephoned Pico's office and informed Pico, Elway, and Buscher that as a condition to its agreement to finance the acquisition of the land and assets of the dealerships by Elway and Buscher, Nelson was not to receive any proceeds from the sale of the dealerships. The respondents then informed Nelson they would not be able to enter into the Service Agreement with him, and the Service Agreement was therefore not executed at the closing on April 12, 1991. After closing, Nelson demanded that the respondents honor the Service Agreement. When the respondents refused, Nelson filed the instant action.

*106 In his complaint, Nelson sought damages from Elway and Buscher for breach of contract, promissory estoppel, fraud, conspiracy, and dual agency. Additionally, Nelson sought exemplary damages. The respondents then moved the trial court for summary judgment, which the court granted as to all counts. The court of appeals affirmed with respect to all counts except for promissory estoppel. On that claim the court of appeals held there was a genuine issue of material fact and remanded the case to the trial court for trial on that issue alone.

II.

Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Cung La v. State Farm Auto. Ins. Co., 830 P.2d 1007, 1009 (Colo.1992). The burden to show that there exists no genuine issue of material fact is on the moving party, id., and the court must resolve all doubts as to whether an issue of fact exists against that party. Id.

III.

The first issue is whether the court of appeals erred in ruling that the petitioners failed to allege facts sufficient to support the unlawful overt act element of a civil conspiracy claim. The petitioners assert that Pico breached his fiduciary duty, and that this breach constituted the requisite unlawful overt act to give rise to liability for civil conspiracy. The respondents maintain that no valid conspiracy claim exists here because the petitioners failed to show an unlawful overt act. Moreover, the respondents contend that even if Pico breached his fiduciary duty to the petitioners, this is insufficient to impose liability upon the respondents in the absence of evidence that the respondents either committed an unlawful overt act or conspired with Pico to do so. The court of appeals held that:

the negotiations cited by plaintiffs which allegedly gave rise to a civil conspiracy contain no reference to any unlawful overt acts necessary to support a civil conspiracy....
Here, the parties entered into negotiations which culminated in the signing of the buy-sell agreements and contracts for the sale of real estate. After those negotiations, GMAC informed defendants that Nelson was not to receive any proceeds from the sale, and defendants promptly informed plaintiffs about this condition. There is no evidence that Elway or Buscher engaged in unlawful overt acts in negotiating this sale.

Nelson, slip op. at 10.

We agree with the court of appeals. To establish a civil conspiracy in Colorado, a plaintiff must show: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) an unlawful overt act; and (5) damages as to the proximate result. Jet Courier Serv., Inc. v. Mulei, 771 P.2d 486, 502 (Colo.1989). The court will not infer the agreement necessary to form a conspiracy; evidence of such an agreement must be presented by the plaintiff. More v. Johnson, 193 Colo. 489, 494, 568 P.2d 437, 440 (1977). Additionally, the purpose of the conspiracy must involve an unlawful act or unlawful means. A party may not be held liable for doing in a proper manner that which it had a lawful right to do. Contract Maintenance Co. v. Local No. 105, 160 Colo. 190, 194-95, 415 P.2d 855, 857 (1966).

In this case, as was held by the trial and appellate courts, the petitioners alleged no facts giving rise to any unlawful overt act required to support a conspiracy claim. In their brief, the petitioners claim that "Elway and Pico either prompted GMAC or conspired with GMAC to impose an additional condition, eliminating compensation for Nelson." The petitioners' amended complaint, however, is devoid of such an allegation. Indeed, the record contains no support at all for such an assertion.

While the petitioners do allege that Pico, as the agent of Metro Toyota, breached his fiduciary duty to the petitioners, this alone does not give rise to a claim for relief against the respondents. Without an allegation that the respondents committed, or participated in the commission of, an unlawful overt act, conspiracy liability may not be imposed *107 against them. The record indicates that the respondents negotiated, at arm's length, the best deal they could for the purchase of the dealerships. We decline to impose liability upon the respondents for doing in a proper manner that which they had the lawful right to do: attempt to obtain the most advantageous position for themselves in purchasing the dealerships. We thus hold that the court of appeals correctly affirmed the trial court's entry of summary judgment in favor of the respondents on this issue.

IV.

The next issue is whether the court of appeals erred in upholding the trial court's entry of summary judgment on the petitioners' claim of breach of contract. The petitioners' claim for breach of contract is based on the alleged March 15, 1991, Service Agreement orally agreed upon by Nelson, Elway and Buscher.

A.

The first issue with regard to the breach of contract claim is whether the merger clauses in the Buy-Sell Agreements precluded the consideration of evidence that the parties intended the Service Agreement to be part of the overall agreement to sell the dealerships.[1] The petitioners argue that the court of appeals erred by ruling that the merger clauses precluded the consideration of the intent of the contracting parties. The respondents assert that the merger clauses wholly manifest the intention of the parties that only those terms of the transaction reduced to writing and signed at the closing would be enforceable terms of the agreement.

We agree with the court of appeals that the merger clauses preclude consideration of extrinsic evidence to ascertain the intent of the parties. Integration clauses generally allow contracting parties to limit future contractual disputes to issues relating to the express provisions of the contract. Keller v. A.O. Smith Harvestore Prods., 819 P.2d 69, 72 (Colo.1991). Therefore, the terms of a contract intended to represent a final and complete integration of the agreement between the parties are enforceable, and extrinsic evidence offered to prove the existence of prior agreements is inadmissible. Id.; Sentinel Acceptance Corp. v. Colgate, 162 Colo. 64, 66, 424 P.2d 380, 382 (1967). Even when extrinsic evidence is admissible to ascertain the intent of the parties, such evidence may not be used to demonstrate an intent that contradicts or adds to the intent expressed in the writing. KN Energy, Inc. v. Great Western Sugar Co., 698 P.2d 769, 777 n. 9 (Colo.1985).

In this case, the merger clauses plainly and unambiguously manifest the intent of the parties that the Buy-Sell Agreements executed on March 16, 1991 constitute the entire agreement between the parties pertaining to the subject matter contained therein. Where, as here, sophisticated parties who are represented by counsel have consummated a complex transaction and embodied the terms of that transaction in a detailed written document, it would be improper for this court to rewrite that transaction by looking to evidence outside the four corners of the contract to determine the intent of the parties.

The petitioners and respondents signed the March 16, 1991 Buy-Sell Agreements after extensive negotiation and numerous drafts of documents. By doing so, all parties expressly agreed, pursuant to the merger clauses, that the terms of those Buy-Sell Agreements would control the transaction and that all other agreements, oral or written, would be void. We will not step into a commercial transaction after the fact and attempt to ascertain the intent of the parties when that intent is clearly manifested by an express term in a written document. We thus conclude that the merger clauses in the March 16, 1991, Buy-Sell Agreements are *108 dispositive as to the intent of the parties in this case. As there is no dispute as to any material fact with regard to this issue, the court of appeals correctly affirmed the trial court's order of summary judgment in favor of the respondents on this issue.

B.

The next issue with regard to the breach of contract claim is whether the court of appeals erred in ruling that the doctrine of part performance did not bar application of the statute of frauds to preclude the petitioners' breach of contract claim against the respondents based on the alleged oral Service Agreement. In so holding, the court of appeals stated the standard for determining the applicability of the part performance doctrine as follows:

[A]n oral contract otherwise unenforceable under the statute of frauds may substitute for a writing if there is part performance of the oral contract.... However, such performance must be at least substantial part performance and must be required by, and referable to, no other theory than that of the alleged oral agreement.

Nelson, slip op. at 5 (citations omitted).

The petitioners argue that the court of appeals applied the incorrect standard to determine that the doctrine of part performance was inapplicable here. The respondents contend that the standard applied by the court of appeals was proper, as was the application of that standard to the facts of the case.

We agree with the respondents. Section 38-10-112(1)(a), 16A C.R.S. (1982), provides that an oral agreement is unenforceable if, by its terms, it is not to be performed within one year after its formation. See also McCrea & Co. Auctioneers, Inc. v. Dwyer Auto Body, 799 P.2d 394, 397 (Colo.App.1989). When applicable, the part performance doctrine operates to preclude the application of the aforementioned statute. Id. The part performance doctrine will apply if there is part performance of an oral contract which is: (1) substantial; and (2) required by, and fairly referable to no other theory besides that allegedly contained within the oral agreement. L.U. Cattle Co. v. Wilson, 714 P.2d 1344, 1347 (Colo.App.1986).[2]*109 This rule is based on the premise that the conduct constituting the partial performance must convincingly evidence the existence of the oral agreement. John D. Calamari & Joseph M. Perillo, Contracts § 19-15, at 799 (3d ed. 1987).

In this case, Nelson's conduct does not fulfill the requirements for invocation of the part performance doctrine. The petitioners allege that Nelson's conduct in selling the dealerships constituted part performance of his obligations under the alleged March 15 oral agreement. The petitioners further allege that Nelson engaged in part performance by taking preliminary steps to create a new consulting corporation. The steps allegedly taken were Nelson's selection of a corporate name, Nelson's being "in the process of incorporating," and Nelson's providing information about the corporation to his attorney. This conduct, however, does not meet the requirement of the part performance doctrine that the conduct be fairly referable to no other theory besides that allegedly contained within the oral agreement. Moreover, even assuming arguendo that Nelson's allegations of conduct involving formation of a new corporation were referable to the alleged agreement, it would not be substantial enough to constitute part performance.

Here, Nelson's actions in selling the dealerships were referable to the written agreements signed on March 16, and thus cannot constitute part performance of the oral Service Agreement. Because the March 16 written Buy-Sell Agreements required that Nelson sell the dealerships and land to Elway and Buscher, the fact that Nelson actually did so is not probative of the existence of the alleged March 15 oral agreement. Additionally, the fact that Nelson received a commitment from GMAC to pay in excess of $890,000 of the dealerships' debt upon closing of the March 16 written Buy-Sell Agreement is consistent with the existence of the March 16 written agreement rather than the March 15 oral agreement.

Moreover, Nelson's allegations of conduct involving formation of a new corporation were not clearly referable to the alleged Service Agreement. Nelson merely alleges in his affidavit accompanying his response to Elway's summary judgment motion that he chose a corporate name, was "in the process" of incorporating, and had spoken to his attorney regarding the alleged Agreement and the new corporation. Such ambiguous conduct falls below the standard set by our cases that conduct must be fairly referable to the alleged contract in order to fall within the part performance exception to the statute of frauds. Moreover, even were we to hold that this conduct on Nelson's part was referable to the alleged Service Agreement, it would still be too insubstantial to trigger application of the part performance doctrine.

We therefore hold that the petitioners failed to establish facts indicating substantial part performance of the alleged Service Agreement, and the court of appeals thus correctly entered summary judgment in favor of the respondents on the ground that the petitioners' breach of contract action was barred by the statute of frauds.

V.

The respondents argue, in their cross-petition, that the court of appeals erred by holding that summary judgment was precluded because genuine issues of material fact exist as to the petitioners' promissory estoppel claim. The respondents urge this court to adopt Restatement (Second) of Contracts § 91, and to hold that the conditional nature of any promise made to the petitioners by the respondents precludes the petitioners' promissory estoppel claim as a matter of law. The petitioners argue that the court of appeals correctly determined that the existence of a genuine issue of material fact with respect to the petitioners' promissory estoppel claim precluded entry of summary judgment in favor of the respondents on that claim.

We agree with the respondents that section 91 is applicable to the facts of this case. We thus reverse the holding of the court of appeals, and hold that the conditional nature of the alleged promise the respondents made to the petitioners regarding the March 15 Service Agreement precludes application of *110 the promissory estoppel theory embodied in Restatement (Second) of Contracts § 90.

This court, in Vigoda v. Denver Urban Renewal Auth., 646 P.2d 900, 905 (Colo.1982), adopted the doctrine of promissory estoppel, articulated in section 90.[3] The elements of a claim for promissory estoppel are: (1) a promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee; (2) action or forbearance induced by that promise; and (3) the existence of circumstances such that injustice can be avoided only by enforcement of the promise. The presence of these elements will prevent the lack of a written contract from defeating a plaintiff's claim. Chidester v. Eastern Gas & Fuel Associates, 859 P.2d 222, 225 (Colo.App.1992).

The essence of section 90 is the plaintiff's reasonable reliance on the defendant's representations. Section 91 states:

Effect of Promises Enumerated in §§ 82-90 When Conditional
If a promise within the terms of §§ 82-90 is in terms conditional or performable at a future time the promisor is bound thereby, but performance becomes due only upon the occurrence of the condition or upon the arrival of the specified time.

Section 91 interlocks with section 90, and relates to the reasonableness of the plaintiff's change of position based on promises of the defendant. It would be manifestly unreasonable for a party to rely on a promise that may or may not bind the promisor depending on whether or not a condition occurs. We hold that when a defendant makes a conditional representation to a plaintiff, as contemplated by section 91, any detrimental change of position on the part of the plaintiff prior to the occurrence of the condition is unreasonable as a matter of law.[4] This holding is consistent with prior Colorado cases which hold that promissory estoppel may not lie where the asserted reliance is not justified or reasonable. Kiely v. St. Germain, 670 P.2d 764, 767 (Colo.1983); Hansen v. GAB Business Servs., Inc., 876 P.2d 112, 114 (Colo.App.1994).

In this case, the promise upon which the petitioners purport to rely as grounds for their promissory estoppel claim is the alleged March 15 oral Service Agreement. This promise was made expressly conditional on GMAC's approval of the sale. In this regard, the court of appeals stated:

According to Nelson, on March 15, 1991, Elway and Buscher agreed that if the sale could be structured so Elway's cash investment would be limited to $1.2 million, and if General Motors Acceptance Corporation (GMAC) approved of the sale, then Elway and Buscher would buy the dealerships and Nelson would receive his compensation through the Service Agreement.

Nelson, slip op. at 10 (emphasis added). This is consistent with Nelson's affidavit sworn on November 24, 1992 in which he stated:

I agreed with Mr. Elway and Mr. Buscher on March 15, 1991, that if a sale of my Dealerships' assets and my land could be structured so that Mr. Elway's cash investment was limited to 1.2 million dollars, and if Mr. Elway and Mr. Buscher could obtain GMAC approval of the Agreement, then Mr. Elway and Mr. Buscher would buy both of my Dealerships and the land upon which they were located, and I would receive, through a separate side deal agreement, $50.00 for every new or used retail vehicle sold by the Dealerships for the next seven years commencing May 1, 1991.

Nelson Aff. at ¶ 12.

This demonstrates not only that the alleged oral Service Agreement of March 15 *111 was conditioned on GMAC approval, but also that Nelson was aware of the conditional nature of the promise. We thus hold, as a matter of law, that it was unreasonable for Nelson to rely upon the alleged representations made to him by Elway and Buscher on March 15. We thus reverse the court of appeals' ruling on this issue and remand for proceedings consistent with this opinion.

VI. For the foregoing reasons, the court of appeals is reversed in part and affirmed in part. The case is thus remanded to the court of appeals with directions to remand to the trial court to enter judgment in favor of the respondents.

LOHR, J., dissents, and KIRSHBAUM and SCOTT, JJ., join in the dissent.

Justice LOHR dissenting:

Petitioners Mel T. Nelson and Metro Auto, Inc. (collectively "Nelson") appealed a trial court ruling dismissing their claims on summary judgment grounds. The Colorado Court of Appeals affirmed the trial court's dismissal of all of Nelson's claims except a claim based on promissory estoppel. Nelson v. Elway, No. 93CA0629 (Colo.App. May 26, 1994) (not selected for official publication). On certiorari review in this court, the majority holds that Nelson's civil conspiracy, breach of contract, and promissory estoppel claims were all properly dismissed by the trial court on summary judgment.

I respectfully dissent. Summary judgment is a severe remedy. As the majority notes, in summary judgment proceedings courts must resolve all doubts as to the existence of genuine issues of material fact against the moving party. Maj. op. at 105. In view of the record and the procedural posture of this case, I would hold that Nelson's civil conspiracy, breach of contract, and promissory estoppel claims were improperly dismissed. I would therefore reverse the judgment of the court of appeals upholding dismissal of the civil conspiracy and breach of contract claims, and would affirm the judgment of that court overturning the dismissal of the promissory estoppel claim.

I.

The following facts are derived from the record in this case, resolving all doubts against the party moving for summary judgment, as we must. See infra part II. Mel T. Nelson was the president and sole shareholder of both Metro Toyota, Inc. ("Metro Toyota") and Metro Auto, Inc. ("Metro Auto"). Nelson also owned the land upon which the dealerships were located. Although Metro Auto was historically profitable, Metro Toyota was less successful. After hiring John J. Pico and Aspen Brokerage Co. (collectively "Pico") to serve as his agent and negotiator, Nelson agreed to sell Metro Toyota to John A. Elway, Jr., Rodney L. Buscher, J.R. Motors Company, and J.R. Motors Company South (collectively "Elway").[1] The parties signed buy-sell and real estate contracts for the Metro Toyota concern on March 14, 1991, and set a closing date in April of 1991.

Soon after the Metro Toyota contracts were executed, Pico approached Nelson with the idea of selling Metro Auto to Elway as well. The parties agreed that any successful deal would have to meet two conditions: John A. Elway's total cash contribution would have to be limited to approximately $1.2 million dollars, and Nelson would have to receive enough personal compensation to make a sale of the historically profitable Metro Auto worthwhile. On March 15, 1991, Elway and Nelson agreed that if Nelson made the up-front concessions envisioned by Elway regarding the sale price for the real estate and dealership assets, Nelson would receive deferred personal compensation through a side agreement ("service agreement") *112 providing that Nelson was to receive $50.00 for every new or used vehicle sold by the dealerships for the next seven years. Both buy-sell agreements noted that sale of the dealerships was contingent on GMAC approval. The parties subsequently signed buy-sell and real estate contracts for Metro Auto on March 16, 1991.

Anticipating the pending sale of the dealerships, GMAC insisted that Nelson relinquish control over the dealerships on April 3, 1991. Since Nelson and Elway had yet to sign the service agreement, Nelson contacted Rodney L. Buscher and received assurances that the service agreement would be honored before relinquishing control to GMAC.

On April 8 or 9, 1991, Pico and Elway met at the Landmark Hotel to discuss the sale of Nelson's dealerships. During the meeting, GMAC called Pico and told Elway that they would not finance the deal if Elway signed a side agreement with Nelson. Despite Nelson's understanding that Elway would honor the service agreement, Elway informed Nelson on April 8 or 9, 1991, that the service agreement would not be signed.

The parties disagree as to why Elway did not sign the service agreement. Elway contends that GMAC refused to approve the sale if the service agreement was executed. Nelson, on the other hand, alleges that Pico and Elway prompted GMAC to impose such conditions. Nelson suggests that Pico was interested in sabotaging the service agreement because of a fee dispute between Pico and Nelson. Nelson further contends that Elway realized that even if a portion of the money earmarked for the service agreement was diverted to pay Pico a commission, the total payout under any side agreements would be less if Nelson's compensation under the service agreement was eliminated. Nevertheless, Nelson proceeded with the sale of the dealerships because he already had turned control over to GMAC and thereby eliminated a bankruptcy reorganization alternative that was previously under consideration.

The parties' present dispute revolves around the enforceability of the service agreement. The district court dismissed Nelson's claims in a summary judgment proceeding, and the court of appeals affirmed in part but reversed as to Nelson's promissory estoppel claim. The court of appeals held that there were "genuine issues of material fact precluding the entry of summary judgment on [Nelson's] claim for promissory estoppel." Nelson, slip op. at 11. Nelson then petitioned this court for certiorari review of the court of appeals' affirmance of the trial court's summary judgment ruling regarding his civil conspiracy and breach of contract claims, and Elway cross-petitioned regarding the court of appeals' ruling on Nelson's promissory estoppel claim.

II.

Summary judgment is a "drastic remedy." Rael v. Taylor, 876 P.2d 1210, 1228 (Colo. 1994); Churchey v. Adolph Coors Co., 759 P.2d 1336, 1339 (Colo.1988). C.R.C.P. 56(c) requires that the moving party "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law" before a court can grant a summary judgment motion. C.R.C.P. 56(c). Furthermore, in determining whether summary judgment is proper, the nonmoving party is entitled to the benefit of all favorable inferences that may reasonably be drawn from the undisputed facts, and all doubts as to the existence of a disputed material fact must be resolved against the moving party. Jafay v. Board of County Comm'rs, 848 P.2d 892, 900 (Colo.1993); Cung La v. State Farm Auto Ins. Co., 830 P.2d 1007, 1009 (Colo.1992); Churchey, 759 P.2d at 1340. Where reasonable people could disagree as to material facts, summary judgment is inappropriate. Jafay, 848 P.2d at 900.

III.

I address Nelson's claims in the order of resolution by the majority, beginning with the dismissal of the civil conspiracy claim. Nelson contends that Elway conspired with Pico to undermine Pico's fiduciary duty to Nelson during the negotiations surrounding the service agreement. The majority affirms the summary judgment ruling with respect to Nelson's civil conspiracy claim, holding that it will not "infer" an agreement between *113 Elway and Pico to undermine Pico's fiduciary duty where "the petitioners alleged no facts giving rise to any unlawful overt act required to support a conspiracy claim." Maj. op. at 106.

In view of the record and the summary judgment posture of this case, I respectfully disagree. First, the court of appeals is incorrect that Elway could not have engaged in the requisite unlawful act as a matter of law. Second, the record contains sufficient undisputed material facts to support the inference that Elway colluded with Pico to undermine Pico's fiduciary duty to Nelson. Finally, even if Nelson's allegation that Elway colluded with Pico to undermine Pico's fiduciary duty to Nelson is a matter in dispute, summary judgment is inappropriate where reasonable parties could disagree on the material facts of the case.

Elway's engagement in an unlawful act for civil conspiracy purposes was not precluded as a matter of law. A civil conspiracy claim requires: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) an unlawful overt act; and (5) damages as the proximate result thereof. Jet Courier Inc. v. Mulei, 771 P.2d 486, 502 (Colo.1989). To support a civil conspiracy claim, Elway must have either committed an unlawful act, id. at 502, or engaged in a concerted effort or agreement with another conspirator to pursue some unlawful action. See, e.g., United States v. Kane, 23 F. 748, 751 (C.C.D.Colo. 1885); Huckleberry v. M.C. Dixon Lumber Co., Inc., 503 So.2d 1209, 1210-11 (Ala.1987); Nicolet, Inc. v. Nutt, 525 A.2d 146, 150 (Del. 1987).

In fact, as long as there is a "concert of action" or "an agreement to do some unlawful thing," and the alleged conspirators meet "to carry that purpose into effect, then every man, by virtue of uniting in that preconceived purpose to do the unlawful thing, makes himself responsible for what any one does." Kane, 23 F. at 751, 752; see also Ex parte Richards, 117 F. 658, 666-67 (C.C.S.D.W.Va.1902) (citing Kane approvingly); United States v. Weber, 114 F. 950, 953 (C.C.W.D.Va.1902) (if an otherwise legal group employs illegal methods, "the persons who combine in such efforts are conspirators," and it is a "well-settled doctrine that each of the confederates is liable for all such illegal acts of the others as may be reasonably anticipated as incidental to the intended act"); United States v. Sweeney, 95 F. 434, 451 (C.C.W.D.Ark.1899) (citing Kane for the proposition that "where a party of men combine with the intent to do an unlawful thing, and in the prosecution of the unlawful intent one of the party goes a step beyond the balance of the party, and does acts which the balance do not themselves perform, all are responsible for what the one does"); Huckleberry, 503 So.2d at 1210-11; Southern Cal. Iron & Steel Co. v. Amalgamated Ass'n of Iron, Steel & Tin Workers, 186 Cal. 604, 200 P. 1, 3 (1921) (quoting 12 Corpus Juris, 610 in holding that "`[w]here two or more persons enter into a conspiracy, any act done by either in furtherance of the common design and in accordance with the general plan becomes the act of all, and each conspirator is responsible for such act. This is true even though the results were not specifically intended or the means specifically agreed on.'"); Nicolet, 525 A.2d at 150. In sum, "`one who is present, encouraging, aiding, abetting, or assisting, or who is ready to aid, abet, or assist the other in the perpetration or commission of the offense, is a guilty [civil conspiracy] participant, and in the eye of the law is equally guilty with the one who does the [unlawful] act.'" Huckleberry, 503 So.2d at 1211 (quoting Stokley v. State, 254 Ala. 534, 49 So.2d 284, 291 (1950)).

Elway did not owe a fiduciary duty to Nelson. Nevertheless, Pico owed a fiduciary duty to Nelson as his agent and representative, and a breach of that fiduciary duty satisfies the unlawful act element of a civil conspiracy charge. See Resolution Trust Corp. v. Heiserman, 898 P.2d 1049, 1056 (Colo.1995) ("a breach of the fiduciary duty is a tortious act which satisfies the element of unlawful act associated with the definition of civil conspiracy"); Jet Courier, 771 P.2d at 502. Nelson contends that Pico violated this fiduciary duty when he allegedly negotiated with Elway and GMAC to precondition GMAC approval on a disavowance of the service agreement in return for Elway's *114 agreement to provide Pico with a fee garnered from funds that were previously earmarked for Nelson. Although Pico and Elway may have met to discuss a variety of otherwise legal considerations, the record supports an inference that they decided to create an alternative fee arrangement where Pico would be paid by Elway to the detriment of Nelson, creating an illegal dual-agency situation and a breach of Pico's fiduciary duty. Albeit true that Elway never breached a fiduciary duty owed directly to Nelson, he may be responsible for his alleged collusion in Pico's breach of fiduciary duty. See Kane, 23 F. at 751, 752.

Nelson's civil conspiracy complaint contained undisputed facts supporting the inference that Elway did indeed engage in a collusive breach of Pico's fiduciary duty to Nelson. Although the majority purports to apply our well-defined summary judgment standard, it curiously notes that Nelson's complaint was "devoid" of any allegation that Elway conspired with Pico to breach Pico's fiduciary duty to Nelson. Maj. op. at 106. I disagree.

There is ample evidence in the record of allegations that Elway actively abetted and participated in Pico's breach of fiduciary duty. The allegations appear in the complaint and amended complaint and are reaffirmed by Nelson in an affidavit filed in response to Elway's motion for summary judgment. In his initial complaint, Nelson alleged that Pico breached his fiduciary duty by dividing his loyalty between Nelson and Elway and negotiating a fee arrangement with Elway to the detriment of Nelson.[2] Specifically, Nelson asserted:

Defendants Pico and Pico Corporation breached their fiduciary duties to [Nelson] through the following acts and omissions, without limitation: ... (c) by dividing their loyalty between [Nelson] and Defendants Elway and Buscher; (d) by negotiating the Pico Consulting Agreement with Defendants Elway and Buscher, during the course of negotiations for the sale and purchase of the Dealerships and the real property upon which they were located, and formalizing such agreement after [Nelson] was committed to going forward with the sale of the Dealerships and the property upon which they were located.

Nelson's breach of fiduciary duty claims incorporated even more specific contentions that Elway and Pico agreed to divert proceeds to Pico that were otherwise earmarked for Nelson:

Defendants Elway and Buscher refused to honor their promise to enter into a separate Service Agreement with Plaintiff and to pay [Nelson] Fifty Dollars ($50.00) per car under the Service Agreement, but instead agreed to pay a portion of the money which they had committed to pay to [Nelson] to [Nelson's] broker, Pico Corporation, in the form of a Seven Hundred Forty Thousand Dollar ($740,000.00) fee payable at the rate of Fifty Dollars ($50.00) per car.

Nelson also took care to incorporate these allegations into his conspiracy claim, describing the aforementioned contentions as "combined and concerted actions," which "constituted unlawful acts and/or lawful acts accomplished by unlawful means."

Furthermore, in his amended complaint Nelson again emphasized Elway's participation in Pico's breach of fiduciary duty:

Although they acted as Plaintiff's broker and agent, Defendants Pico and Pico corporation also acted as the agent and broker for Defendants Elway and Buscher in the same transaction and worked closely with Defendants Elway and Buscher in negotiations with GMAC which led to a greatly reduced purchase price for the Dealerships and land.

Nelson clarified in his amended complaint his allegation that instead of honoring his service agreement with Nelson, Elway "diverted the sum of Fifty Dollars ($50.00) per retail car sold to pay Pico Corporation a Seven Hundred *115 Forty Thousand Dollar ($740,000.00) fee."

Lastly, Nelson supported the allegations in his complaint and amended complaint in his response to Elway's summary judgment motion:

Defendant GMAC allegedly called Defendant Buscher, in the presence of Defendants Elway and Pico and informed Defendant Buscher that its approva

Additional Information

Nelson v. Elway | Law Study Group