Bator v. Mines Development, Inc.

• Citation: 513 P.2d 220,32 Colo.App. 320
• Decision Date: 05 June 1973
• Docket Number: No. 72--055,72--055
• Parties: George T. BATOR, Plaintiff-Appellee, and Cross-Appellant, v. MINES DEVELOPMENT, INC., Defendant-Appellant and Cross-Appellee, and Susquehanna Western, Inc., and the Susquehanna Corporation, Defendants-Appellants. . II
• Court: Colorado Court of Appeals

Page 220

513 P.2d 220

32 Colo.App. 320

George T. BATOR, Plaintiff-Appellee, and Cross-Appellant, v. MINES DEVELOPMENT, INC., Defendant-Appellant and Cross-Appellee and Susquehanna Western, Inc., and the Susquehanna Corporation Defendants-Appellants.

No. 72--055.

Colorado Court of Appeals, Div. II.

June 5, 1973.

Rehearing Denied June 26, 1973.

Van Cise, Freeman, Tooley & McLearn, Edwin P. Van Cise, Denver, for plaintiff-appellee and cross-appellant

Helmick, Conover & Burkhardt, Walter I. Auran, John B. Moorhead, Denver, for defendants-appellants and cross-appellee.

PIERCE, Judge.

George Bator brought this action against the Susquehanna Corporation (Susquehanna) and two of its subsidiaries, Mines Development, Inc., (Mines) and Susquehanna-Western, Inc. (Western). Bator contended that Mines had breached his employment contract by discharging him without This dispute has a long and involved history. In 1954, Bator and Allen Grey formed the Mines corporation with the intention of constructing a uranium mill in Edgemont, South Dakota. In order to finance their venture, they transferred all the stock to a financier, Mr. Carmack, in return for employment contracts that provided them with compensation based on a percentage of the corporation's net income. Carmack subsequently transferred all the Mines stock to Susquehanna, making Mines a wholly-owned subsidiary of Susquehanna. Thereafter, Grey negotiated new employment contracts with the new Mines management team for himself and for Bator.

cause. The claim against Susquehanna and Western was for recovery in quantum meruit for services Bator allegedly rendered the two corporations.

Mines opened operations under a contract with the Atomic Energy Commission. Bator's contract was to 'be in force and effect for the term of the contract between Mines and the Atomic Energy Commission' and provided that he was to 'at all times conduct the operations of Mines and render services . . . under the general supervision and direction of the Board of Directors or chief executive officers of Mines, and in a manner which will further the best interests of Mines.' He was 'to devote such of his time and attention to the business and affairs of Mines as shall from time to time be requested of him by the Board of Directors and the chief executive officers of Mines.' By the terms of the contract, he could only be discharged for cause.

Once the mill at Edgemont was in operation, there was little for Bator to do. Thereafter, the management at Susquehanna began plans for another mill to be constructed in the Riverton, Wyoming, area by another wholly-owned subsidiary, Western. Eventually, a contract with the Atomic Energy Commission was secured by Western. This mill and a sulfuric acid plant at the same location, both Western enterprises, were put into operation only after considerable contribution of services by Bator. Although Bator was not under contract with Susquehanna or Western for the services rendered at Riverton, there were indications from the then management of Susquehanna that he would be compensated for his efforts.

As the result of a proxy fight, control of Susquehanna changed in 1958. New management attempted to purchase from Grey and Bator their contracts with Mines. Only Grey accepted. Thereafter, Bator was asked to do less and less. Finally, effective March 1, 1960, Bator was discharged from Mines on the grounds that he was engaged in operations with another corporation interested in milling uranium, which, according to Susquehanna officials, were contrary to the best interest of Mines.

By this action, Bator contended that he was discharged without cause from his employment with Mines, contrary to the terms of the contract. He sought an accounting from Mines for moneys due him under the contract, both for his last year on the job and for the subsequent years that Mines continued to mill in Edgemont under the initial Atomic Energy Commission contract and its subsequent renewals. The quantum meruit claim against Susquehanna and Western was based on the services rendered to Susquehanna and Western that resulted in making the Riverton mill operational.

The matter was tried to the court, and judgment was entered in favor of Bator on both counts. Since payment under Bator's contract with Mines was to be based upon a percentage of the net income of the corporation, and since the parties could not agree on an accounting method, it became necessary, subsequent to the hearing on liability, to have a hearing on the accounting methods to be employed in arriving at the net income figure. From the two hearings extensive findings of facts and conclusions of law were filed by the court, and judgment was entered thereon.

Susquehanna and Western appeal from the judgment entered on Bator's quantum

meruit claim. Mines appeals [32 Colo.App. 325] from the determination that Bator's contract was breached, contending that he was discharged for cause pursuant to the terms of the contract. Mines further contends that even if he were not discharged for cause, the AEC contract expired in 1962 and Bator was not entitled to any compensation under a new contract that Mines had with the AEC, which contract was allegedly materially different. Bator cross-appeals, contending that the court erred in the accounting phase of the trial by allowing certain deductions from corporate gross income, thereby reducing the income payable to him.

LIABILITY

I.

We turn first to the contention of appellants Susquehanna and Western, that the evidence will not support a recovery under quantum meruit. The basis of this contention is the allegation that Bator was a volunteer during the time he was performing services in the Riverton area and did not anticipate payment. The trial court, however, concluded that Bator performed the alleged services at the request of and for the benefit of the corporations, and that both he and management anticipated compensation for the services rendered.

Recovery in quantum meruit is based upom the principle that services rendered under circumstances where compensation is reasonably expected should be paid for. Kellogg v. Gleeson, 27 Wash.2d 501, 178 P.2d 969. The intention to pay and the expectation to be paid, can be reasonably inferred from the circumstances. Bean v. Wilson, 120 Cal.App.2d 58, 260 p.2d 134 Thus, it is ultimately a question of fact as to whether a claim in quantum meruit has been established. Payne v. Bank of America National Trust & Savings Ass'n, 128 Cal.App.2d 295, 275 P.2d 128. Here, there was adequate evidence to support the trial court's determination that Bator was acting at the insistence of officers of the corporation, not as a volunteer, and that both parties anticipated a payment of compensation. We will not, therefore, disturb the findings on appeal. Larson v. American National Bank, 174 Colo. 424, 484 P.2d 1230.

II.

We turn next to appellant Mines' contention that Bator was discharged for cause, and that, therefore, he was not entitled to an accounting for the disputed years. The contention has two facets. It is first argued that Bator breached his employment contract with Mines by failing to give an opportunity of first refusal to Susquehanna on a business venture in which Bator became interested. Alternatively, it is argued that even if the terms of the contract were not breached, Bator breached his fiduciary duty to Mines by taking a corporate opportunity unto himself.

The same factual incident is offered as support for both contentions. Specifically, in late 1959 Bator involved himself with a business entity known ias Golden Enterprise Corporation to develop a uranium ore property. It was intended that a uranium mill be located at a site in Wyoming. Mines contends that by so pursuing him personal interests, Bator was guilty of misconduct, contrary to the best interest of Mines and that thus, he could be discharged.

From these facts, the court made the following conclusions. With regard to the contract the court determined that by its terms, Bator was only to devote such of his time and attention to the business of Mines as was requested of him, and that he had in fact, done all that was requested of him. As to a breach of fiduciary duty, the court concluded that while Bator's personal self-dealing was not in the best interest of Susquehanna or Western, it was totally unconnected with Mines. We affirm the trial court on both counts.

Turning first to the contract, Mines contends that Bator had a duty to do more than just what was requested of him. It is contended that a letter addressed to Bator from the president of Susquehanna on the Furthermore, the trial court concluded that Bator had done all that was required of him by the contract. Determination of whether a party has performed under a contract is ultimately a question of fact. Little Thompson Water Ass'n v. Strawn, 171 Colo. 295, 466 P.2d 915. Here, the facts support a determination that Bator did all that was requested of him under the terms of the instrument. This being the case, the determination will not be reversed on appeal.

day the contract was executed contained certain terms which were incorporated into the contract. This letter advised Bator that he was free to pursue any interest on behalf of himself so long as he informed Susquehanna of every such opportunity and gave it the first right of refusal. When Bator received this letter, the contract had been executed. The question is essentially one [32 Colo.App. 327] of determining whetheR bator agreed to the terms stated in the letter. it is axiomatic that a court cannot remake a contract for the parties, adding terms that are not contained therein. Yamin v. Levine, 120 Colo. 35, 206 P.2d 596. Rather, it is the court's duty to ascertain the intent of the parties from the terms of the contract, Coulter v. Anderson, 144 Colo. 402, 357 P.2d 76, and courts should be hesitant to imply any conditions or terms into a...