Beebe v. Pierce
| Decision Date | 29 April 1974 |
| Docket Number | No. C--416,C--416 |
| Citation | 521 P.2d 1263,185 Colo. 34 |
| Parties | N. L. BEEBE, Petitioner, v. Jesse W. PIERCE et al., Respondents. |
| Court | Colorado Supreme Court |
Hill & Hill, Alden T. Hill, Fort Collins, for petitioner.
Duncan J. Cameron, Denver, for respondents.
We granted certiorari to review the decision in Beebe v. Star-Stop, Inc., Colo.App., 513 P.2d 743. The Court of Appeals held that the trial court awarded exemplary damages in connection with its finding of fraud even though the trial court did not specify that the award was for exemplary damages. From the record, we find that the Court of Appeals improperly regarded this award as one for exemplary damages, but that the reversal thereof was, nevertheless, proper for reasons not described by the Court of Appeals.
A brief resume of the facts will suffice for the purpose of this opinion. The action was brought by petitioner Beebe to compel Star-Stop, Inc. and its officers and directors, including Pierce, Wine, Widdifield and Fenimore, to allow him access as a stockholder to corporate records pursuant to C.R.S.1963, 31--5--17.
The complaint was later amended to allege fraud on the part of the defendants in the sale of stock to petitioner Beebe. The case was tried to the court which found that the respondents Pierce and Wine had not participated in the fraud but that respondent Widdifield and Fenimore were guilty of fraud. Fenimore is not a respondent before this court. Accordingly, the trial court entered a judgment against respondent Widdifield and Fenimore for a sum of $10,000 compensatory damages plus interest. We are not concerned here with this judgment or with the other judgments imposed pursuant to C.R.S.1963, 31--5--17 for refusal to permit access to corporate records.
At the time the above described judgments were entered, petitioner Beebe was directed to submit to the trial court a bill of expenses incurred in this litigation, including a statement of his attorney fees. Thereafter, a bill for costs and attorney fees was submitted to the trial court. It itemized court costs of $969 and attorney fees of $4,562. The trial court thereupon entered a joint and several judgment against Pierce, Wine, Widdifield and Fenimore in the amount of $4,562 'for costs and attorney fees.' In entering this judgment, the trial court may have overlooked the item of $969 set forth as 'court costs' in the bill for costs and attorney fees, but this is of no consequence because of our disposition with reference to this judgment.
The Court of Appeals ruled that the trial court erred when it imposed this $4,562 judgment against respondents Pierce and Wine. It therefore reversed this judgment as to them on the ground that it was for exemplary damages and therefore could not be upheld against respondents Pierce and Wine because the trial court made a finding that they had not participated in the fraudulent sale of stock to petitioner Beebe. C.R.S.1963, 41--2--2 allows exemplary damages only in those cases where the wrong done is attended by circumstances of fraud, malice, insult, or a wanton and reckless disregard of the injured party's rights and feelings.
Petitioner Beebe maintains that the Court of Appeals may have improperly classified this $4,562 judgment as being for exemplary damages and therefore the Court of Appeals erroneously reversed this judgment as to respondents Pierce and Wine. We hold that this $4,562 judgment against Pierce and Wine was properly reversed by the Court of Appeals but for the wrong reason.
It was improper for the Court of Appeals to treat the judgment for $4,562 as an exemplary damage award when the trial court did not specify that it was an award of this character or make any findings to indicate its intention to impose punitive damages. It is generally held that the basic purpose of entering a judgment for exemplary damages against a defendant in a civil action is to punish and penalize him for certain wrongful and aggravated conduct and to serve as a warning to other possible offenders. See 22 Am.Jur. 2d Damages § 237. The record reveals, and petitioner Beebe states in his brief, that such damages were neither prayed for by the petitioner in the trial court nor discussed during the trial court's procedures.
We do not intend...
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