Alzado v. Blinder, Robinson & Co., Inc.

• Decision Date: 16 February 1988
• Docket Number: No. 85SC370,85SC370
• Parties: Lyle ALZADO, Petitioner, v. BLINDER, ROBINSON & CO., INC., A Colorado corporation, and Arnold Tinter, Respondents.
• Court: Colorado Supreme Court

Page 544

752 P.2d 544

79 A.L.R.4th 401

Lyle ALZADO, Petitioner, v. BLINDER, ROBINSON & CO., INC., A Colorado corporation, and Arnold Tinter, Respondents.

No. 85SC370.

Supreme Court of Colorado,

En Banc.

Feb. 16, 1988.

Davis, Graham & Stubbs, Charles L. Casteel, Anthony J. Shaheen, Timothy M. Tymkovich, Denver, for petitioner.

Phillip E. Lowery, P.C., Phillip E. Lowery, Denver, for respondent Blinder, Robinson & Co., Inc.

Breit, Best, Richman and Bosch, John L. Breit, Susan Smith Fisher, Denver, for respondent Arnold Tinter.

KIRSHBAUM, Justice.

In Blinder, Robinson & Co. v. Alzado, 713 P.2d 1314 (Colo.App.1985), the Court of Appeals affirmed in part and reversed in part several judgments entered on jury verdicts in a civil action arising from disputes among promoters of an exhibition boxing match between petitioner Lyle Alzado (Alzado) and Muhammed Ali (Ali). ¹ The jury returned one verdict for respondent Blinder, Robinson & Co., Inc. (Blinder-Robinson) and against Alzado on Blinder-Robinson's complaint alleging a breach by Alzado of a written guaranty agreement. The Court of Appeals in effect approved this verdict by affirming a trial court order that denied a post-trial motion filed by Alzado for judgment notwithstanding the verdict.

The jury also returned verdicts for Alzado against Blinder-Robinson on counterclaims filed by Alzado alleging breach of a personal services contract by Combat Associates, a limited partnership of which Blinder-Robinson was allegedly the general partner, and breach of an oral release and indemnity agreement by Blinder-Robinson. The Court of Appeals reversed the judgments entered on those verdicts and concluded that the evidence was insufficient to support Alzado's indemnity claim.

The Court of Appeals also reversed a judgment entered on a verdict for Alzado against respondent Arnold Tinter (Tinter) on a claim filed by Alzado alleging fraudulent misrepresentation. Finally, the Court of Appeals determined that the verdict for Blinder-Robinson on its guaranty agreement claim against Alzado was irreconcilable with the verdict for Alzado on his indemnity agreement claim against Blinder-Robinson. Accordingly, it ordered a new trial on both claims.

We granted certiorari to review these determinations. ² We now affirm in part and reverse in part and remand the case for further proceedings.

I

In the spring of 1979, Alzado, Alzado's former accountant, Tinter, and Alzado's former agent, Ronald Kauffman (Kauffman), formed Combat Promotions, Inc. to promote an eight-round exhibition boxing match in Denver, Colorado, between Alzado and Ali. Alzado, Tinter and Kauffman were the directors and sole shareholders of the corporation. Ali had agreed to engage in the match on the condition that prior to the event his attorneys would receive an irrevocable letter of credit guaranteeing payment of $250,000 to Ali.

Combat Promotions, Inc. initially encountered difficulties in obtaining the letter of credit. Ultimately, however, Meyer Blinder (Blinder), President of Blinder-Robinson, expressed an interest in the event. Blinder anticipated that his company's participation would result in a positive public relations image for its recently opened Denver office. Blinder-Robinson ultimately agreed to provide the $250,000 letter of credit.

Blinder-Robinson insisted on several conditions to protect its investment. It required the formation of a limited partnership with specific provisions governing repayment to Blinder-Robinson of any sums drawn against the letter of credit. It also required Alzado's personal secured guarantee to reimburse Blinder-Robinson for any losses it might suffer. Alzado and Combat Promotions, Inc. accepted these conditions.

On June 25, 1979, an agreement was executed by Combat Promotions, Inc. and Blinder-Robinson creating a limited partnership, Combat Associates. Under the terms of the agreement, Combat Promotions, Inc. was the general partner and Blinder-Robinson was the sole limited partner. Blinder-Robinson contributed a $250,000 letter of credit to Combat Associates, and the partnership agreement provided expressly that the letter of credit was to be paid off as a partnership expense.

On the same day, June 25, 1979, Alzado executed a separate guaranty agreement with Blinder-Robinson. This agreement provided that if Ali drew the letter of credit, Alzado personally would reimburse Blinder-Robinson for any amount Blinder-Robinson was unable to recover from Combat Associates under the terms of the limited partnership agreement. As security for his agreement, Alzado placed a general warranty deed to his residence, an assignment of an investment account and a confession of judgment in escrow for the benefit of Blinder-Robinson. Thereafter, a separate agreement was apparently executed by Alzado and Combat Associates providing that Alzado would receive $100,000 in compensation for the exhibition match but subordinating any payment of that sum to the payment of expenses of the match, including, if drawn, the letter of credit. ³

Approximately one week before the date of the match, Alzado announced that he might not participate because he feared he might lose the assets he had pledged as security for the guaranty agreement. Alzado informed Blinder of this concern, and the two met the next day in Blinder-Robinson's Denver office. Tinter, Kauffman and Ali's representative, Greg Campbell, were also present. Subsequently, on July 14, 1979, the event occurred as scheduled.

Few tickets were sold, and the match proved to be a financial debacle. Ali drew the letter of credit and collected the $250,000 to which he was entitled. Combat Associates paid Blinder-Robinson only $65,000; it did not pay anything to Alzado or, apparently, to other creditors.

In January of 1980, Blinder-Robinson filed this civil action seeking $185,000 in damages plus costs and attorney fees from Alzado pursuant to the terms of the June 25, 1979, guaranty agreement. Alzado denied any liability to Blinder-Robinson and asserted several affirmative defenses to the complaint. His fifth defense asserted that Blinder-Robinson had waived and released any claims under the guaranty agreement. His eighth defense asserted that Blinder-Robinson was estopped from enforcing the terms of the guaranty agreement.

Alzado also filed two counterclaims against Blinder-Robinson. The first alleged that because of its conduct Blinder-Robinson must be deemed a general partner of Combat Associates and, therefore, liable to Alzado under the agreement between Alzado and the partnership for Alzado's participation in the match. The second counterclaim alleged that in July of 1979 Blinder-Robinson orally agreed to release Alzado from his obligations under the guaranty agreement and to indemnify him against any economic loss he might incur as a result of the match. Alzado also filed crossclaims alleging breaches of fiduciary duties and fraudulent misrepresentations against Tinter and Kauffman and filed a third party complaint against Blinder personally. The third party complaint was dismissed by the trial court at the close of the evidentiary portion of the case; that order has not been appealed.

The jury returned a verdict in favor of Blinder-Robinson and against Alzado in the amount of $185,000 on Blinder-Robinson's complaint. The jury also returned two verdicts in favor of Alzado and against Blinder-Robinson, as follows: $92,500 on Alzado's claim that Blinder-Robinson, as a general partner, was responsible for Combat Associates' debt to Alzado, and $100,000 on Alzado's claim of an oral agreement of waiver and indemnification. Finally, the jury returned verdicts in favor of Alzado in the amount of $100,000 each on his crossclaims against Kauffman and Tinter. ⁴

Alzado filed motions for amendment of judgment on his second counterclaim, pursuant to C.R.C.P. 59(e), and for judgment notwithstanding the verdict, pursuant to C.R.C.P. 50, with regard to the verdict awarding Blinder-Robinson $185,000. In the C.R.C.P. 59(e) motion he asserted that the jury's $100,000 verdict for indemnification should be raised to $185,000 to fully indemnify Alzado for the sum the jury found he owed Blinder-Robinson. In his C.R.C.P. 50 motion he argued, inter alia, that Blinder-Robinson's claim should have been dismissed because the guaranty agreement is unenforceable under the Uniform Limited Partnership Law of 1931. ⁵ The trial court denied these motions.

Blinder-Robinson also filed a motion for judgment notwithstanding the verdict or, alternatively, for new trial with regard to the two verdicts entered against it on Alzado's counterclaims. Blinder-Robinson asserted that the evidence failed to establish that it exercised sufficient control of Combat Associates' activities to be deemed a general partner thereof or that it entered into any release and indemnification agreement with Alzado. It also argued that the jury's verdict in its favor on the guaranty agreement claim was inconsistent with the verdict in favor of Alzado on his second counterclaim. The trial court denied the motion. Blinder-Robinson, Tinter and Kauffman then filed appeals, and Alzado filed a cross-appeal.

The Court of Appeals affirmed the trial court's denial of Alzado's C.R.C.P. 50 motion directed to Blinder-Robinson's $185,000 judgment against Alzado, concluding that the June 25, 1979, guaranty agreement was neither void nor unenforceable, and also affirmed the trial court's denial of Alzado's motion for judgment notwithstanding the verdict regarding this claim. The Court of Appeals reversed the trial court's denial of Blinder-Robinson's motion for judgment notwithstanding the verdict with respect to Alzado's first counterclaim, concluding that the evidence failed to establish that Blinder-Robinson's conduct constituted control of Combat Associates, and reversed the verdict against Tinter on the ground that essential elements of deceit by false representation had not been proved. ⁶...