Crossroads Commercial Center, Ltd., LLLP v. Kraft

Filing 9

ORDER granting Motion to Amend Counterclaims and Add Parties, signed by Jefferson County District Court Judge, Jane A. Tidball, on 4/13/11. (lyg, )

Small Claims
County Court
Probate Court
Juvenile Court
Jefferson County, State of Colorado
100 Jefferson County Parkway
Golden, Colorado 80401

District Court
Water Court
EFILED Document
CO Jefferson County District Court 1st JD
Filing Date: Apr 13 2011 3:25PM MDT
Filing ID: 37025621
Review Clerk: Beth B

COURT USE ONLY

Plaintiff:
BANK OF CHOICE, A COLORADO CORPORATION,

Case Number:
2010CV5138

Defendants:

Div.: 3 Ctrm: 4F

CROSSROADS COMMERCIAL CENTER, LTD., LLLP, a
Colorado limited liability limited partnership, and
RANDOLPH G. CURRIER, an individual.
ORDER
This matter comes before the Court on Defendants Crossroads Commercial Center, Ltd.,
LLLP (“Crossroads”) and Randolph G. Currier’s (“Currier”) (collectively “Defendants”) Motion
to Amend Counterclaims and Add Parties and Plaintiff Bank of Choice’s (“BOC”) Motion for
Summary Judgment. The Court, having considered the Motions, Responses, Replies, Sur-Reply,
the case file and the applicable legal authority, enters the following Order.
I. INTRODUCTION
BOC alleges Crossroads executed a promissory note, guaranteed by Currier, in the
principal amount of $3,145,000, which Crossroads then used to purchase commercial real estate.
BOC asserts Crossroads failed to make the payments as required under the terms of the note and
that Currier has failed to repay BOC for the debt owed. Defendants allege BOC is attempting to
collect upon a fraudulent promissory note, and that BOC conspired with others to misrepresent
and inflate the real estate’s value. Defendants argue they were induced into acquiring the real
estate at an exaggerated price through BOC’s alleged misrepresentations, and that Defendants’
overpayments relieved BOC from realizing any losses in connection with BOC’s arrangement
with the real estate’s prior owner. Defendants now move this Court for leave to amend their
counterclaims and add parties.
BOC argues Defendants’ proposed counterclaims are
unsubstantiated and insupportable and are designed to either delay judgment or posture for
settlement. BOC moves for summary judgment on its First and Second claims for relief and on
Defendants’ counterclaims.
II. DEFENDANTS’ MOTION TO AMEND COUNTERCLAIMS AND ADD
PARTIES
Granting leave to amend a pleading is within the trial court’s discretion. Polk v. Denver
Dist. Ct., 849 P.2d 23, 25 (Colo. 1993). Motions for leave to amend are viewed favorably and
should be freely granted under Rule 15(a). See C.R.C.P. 15(a); Varner v. Dist. Ct., 618 P.2d

1388, 1390 (Colo. 1980). However, this liberal policy is not without limits. A court may deny
leave to amend where the opposing party would be prejudiced, the amendment is futile, or the
moving party has unduly delayed in moving to amend. Akin v. Four Corners Encampment, 179
P.3d 139, 146 (Colo. App. 2007).
Here, Defendants seek to amend two of their original counterclaims (fraudulent and
negligent misrepresentation) and add seven others, including deceit by concealment, civil
conspiracy, negligence (not addressed to BOC), breach of contract, consumer protection,
violation of Colorado’s Organized Crime Control Act, and violation of the Racketeer Influenced
Corrupt Organizations Act. BOC argues Defendants’ proposed amendments and additions are
unsubstantiated and insupportable, are being asserted to cause delay, and would otherwise be
subject to immediate dismissal if asserted. BOC cites Niccoli v. Ayala for the proposition that
“[w]here a proposed defense is so legally insufficient as to be immediately susceptible to a
motion to strike or a motion to dismiss, leave to amend may properly be denied on that basis.”
501 P.2d 138, 140 (Colo. App. 1972) (emphasis added). BOC asserts this standard is equally
applicable when a court considers whether to allow a party leave to amend its counterclaims.
This Court agrees. However, as Niccoli makes clear, denial of leave to amend is not mandatory
under such circumstances. Further, this Court declines to determine at this time whether
Defendants’ proposed amendments and additions are so legally insufficient as to warrant
immediate dismissal. The Court finds that there is no suggestion of prejudice, futility, or undue
delay. Accordingly, under the liberal framework of Rule 15, the Court finds that allowing
Defendants’ leave to amend and add parties is appropriate and will therefore grant Defendants’
motion.
III.

BOC’S MOTION FOR SUMMARY JUDGMENT

Summary judgment is a drastic remedy that is warranted only on a clear showing that
there is no genuine issue as to any material fact and the moving party is entitled to judgment as a
matter of law. USA Leasing, Inc. v. Montelongo, 25 P.3d 1277, 1279 (Colo. App. 2001); see
also C.R.C.P. 56(c). The burden of establishing the lack of a genuine issue of material fact is on
the moving party, and all doubts as to the existence of a genuine issue of material fact must be
resolved against that party. USA Leasing, Inc., 25 P.3d at 1279. If the moving party makes a
convincing showing that there are no genuine issues of material fact, then the opposing party
must set forth specific facts demonstrating that there is a genuine issue for trial. Id. at 1278.
BOC argues there are no genuine issues of material fact relating to its First and Second
claims for relief, and that it is therefore entitled to summary judgment on both claims. Further,
BOC argues it is likewise entitled to summary judgment on Defendants’ counterclaims. In their
Response, Defendants voluntarily withdrew their Third, Fourth, Fifth, and Sixth original
counterclaims. Accordingly, only Defendants’ First and Second original counterclaims are
subject to BOC’s motion. However, this Court has allowed Defendants leave to amend those
two original counterclaims, and BOC addresses them, as modified, in its Reply. As such, this
Court may properly consider whether granting summary judgment in favor of BOC is
appropriate with respect to Defendants’ two remaining original counterclaims, as amended.

A. BOC’s First and Second Claims for Relief
BOC argues it is entitled to summary judgment on its First and Second claims for relief
regarding breach of contract because there is no dispute that the first three elements of those
claims have been unequivocally established. Defendants essentially concede this in their
Response. However, BOC argues Defendants seek to dispute the damages element of those
claims by asserting various affirmative defenses and attempting to assert several counterclaims
which, if established, would reduce or eliminate BOC’s damages. If the elements of a breach of
contract claim are proven by a preponderance of the evidence, an affirmative defense may
nonetheless invalidate the agreement at issue. See CJI–Civ. 4th 30:1 (2010). Also, damages
under a breach of contract claim may be reduced by a counterclaim, if one is established. Here,
the Court has allowed Defendants leave to amend their counterclaims. Further, the Court finds
disputed issues of material fact exist relating to, among other things, the terms of the
Commitment Letter and the nature of BOC’s representations. (See, e.g., Resp. Ex. I; Sur-Reply
Ex. C & D). As such, the Court declines to grant summary judgment in favor of BOC on their
First and Second claims for relief.
B. Defendants’ Remaining Original Counterclaims, as Amended
BOC argues Defendants’ First and Second remaining, yet amended, original
counterclaims (now titled Deceit by Misrepresentation and Negligent Misrepresentation) are
barred by C.R.S. § 38-10-124, Colorado’s Credit Agreement Statute of Frauds. Further, BOC
argues Defendants’ Negligent Misrepresentation counterclaim is barred by the two year statute of
limitations set forth in § 13-80-102(1)(a) because Defendant Currier should have discovered any
alleged negligent misrepresentations of BOC and others prior to the date the note and guaranty
were executed. Defendants contend the Commitment Letter meets the writing requirements of
§ 38-10-124. Further, Defendants assert that the question of Defendants’ knowledge of the
alleged misrepresentations and resulting duty to investigate is a disputed question of fact. As
discussed above, the Court finds disputed issues of material fact exist as to the terms of the
Commitment Letter and the nature of BOC’s representations. Further, the Court finds disputed
issues of material fact exist regarding whether Defendants should have discovered any alleged
misrepresentations prior to the date of execution. See Murry v. GuideOne Specialty Mut. Ins.
Co., 194 P.3d 489, 491 (Colo. App. 2008) (stating that unless the undisputed facts clearly show
when a party should have discovered the damage or conduct, the point of accrual is usually a
question of fact). As such, the Court declines to grant summary judgment as to Defendants’ First
and Second remaining counterclaims, as amended.
IV.

CONCLUSION

IT IS THEREFORE ORDERED that Defendants’ Motion to Amend Counterclaims and
Add Parties is hereby GRANTED, and BOC’s Motion for Summary Judgment is hereby
DENIED. Further, the Court deems Defendants’ Amended Counterclaims filed as of the date of
this Order.
SO ORDERED.

Dated this 13th day of April, 2011.

BY THE COURT:

________________________
Jane A. Tidball
District Court Judge