Bush v. Winker

• Decision Date: 20 November 1995
• Docket Number: No. 94SC363,94SC363
• Parties: Charles BUSH, Cliff Schroeder, James Yeros, Dennis Fish, Moreno Giannasi, Patricia Giannasi, and I. Leroy Likes, Petitioners, v. Kent WINKER, Respondent.
• Court: Colorado Supreme Court

Page 79

907 P.2d 79

Charles BUSH, Cliff Schroeder, James Yeros, Dennis Fish Moreno Giannasi, Patricia Giannasi, and I. Leroy Likes, Petitioners, v. Kent WINKER, Respondent.

No. 94SC363.

Supreme Court of Colorado En Banc.

Nov. 20, 1995.

Rehearing Denied Dec. 11, 1995.

Bader & Villanueva, P.C., Gerald L. Bader, Jr., Randolph S. Dement, Denver, for Petitioners Charles Bush, James Yeros, Dennis Fish, Moreno Giannasi, Patricia Giannasi, and I. Leroy Likes.

Clifton P. Schroeder, P.C., Clifton P. Schroeder, Denver, for Petitioner Cliff Schroeder.

Robinson, Waters, O'Dorisio and Rapson, P.C., Peter A. Robinson, Martha J. Bohling, Denver, for Respondent.

Chief Justice VOLLACK delivered the Opinion of the Court.

We granted certiorari to review the decision by the court of appeals in Bush v. Winker, 892 P.2d 328 (Colo.App.1994), as modified on denial of reh'g (May 19, 1994), reversing the default judgment entered by the trial court in favor of the petitioners, Charles Bush, Cliff Schroeder, James Yeros, Dennis Fish, Moreno Giannasi, Patricia Giannasi, and I. Leroy Likes, and against the respondent, Kent Winker. We affirm the decision of the court of appeals.

I.

The petitioners brought an action against numerous individuals, partnerships, and corporations to recover losses they incurred after investing in a limited partnership. The defendants included the general partnerships of Wins-Quince, Mid-America Resources (MAR), and C & I Partnership (C & I). Kent Winker was named as a defendant, both individually and as a general partner of Wins-Quince and G & W Partnership (G & W). G & W was designated as a general partner of MAR, and MAR also was named as a defendant. The case proceeded to trial on several individual claims ¹ asserted by the petitioners against Winker, and a jury verdict was entered against him in the amount of $23,750 for aiding and abetting a breach of fiduciary duty. Winker did not appeal this verdict.

Before the trial, the petitioners had filed a motion for default judgment against C & I, Wins-Quince, and MAR based on those partnerships' failure to file answers to the complaint. After the trial, the petitioners amended the motion, requesting that joint and several judgment be entered against the partnerships, and against Winker individually. The amended motion also requested that petitioners be able to execute against Winker's non-partnership assets for the judgments against the partnerships if the petitioners were unable to obtain satisfaction from the partnerships.

The trial court held an evidentiary hearing on these motions on October 23, 1991. Winker appeared at this hearing through counsel, who objected to the entry of a default judgment against the separate property of Winker. Pursuant to this hearing, the trial court entered joint and several judgment on June 10, 1992, against C & I, Wins-Quince, and MAR in the amount of $453,497.54. The court further ordered that the judgment be enforceable against the separate property of Winker, including G & W assets, upon a showing that the assets of C & I, Wins-Quince and MAR did not satisfy the judgment. ²

In a separate order, the trial judge held that Winker was a general partner in MAR and G & W and also held that G & W was a partner in C & I and Wins-Quince. The court then concluded that because Winker was served with a copy of the summons and the complaint, Wins-Quince, C & I, and MAR were also properly served. The court also held that G & W was a named party in the suit because the caption of the complaint stated that Winker was being sued as a partner in G & W.

On August 6, 1992, Winker filed a motion in the trial court requesting that it set aside its orders pursuant to C.R.C.P. 60(b). Thereafter, on September 18, 1992, Winker filed a notice of appeal before the trial court could rule on the post-judgment motion. The court of appeals then remanded the case to allow the trial court to rule on the motion. On October 21, 1993, the trial court denied the motion and granted a motion filed by the petitioners ordering that a separate judgment be entered against Winker in a specified amount in accordance with the court's previous orders regarding default judgment. ³

On November 2, 1993, Winker and G & W filed a notice of appeal. Wins-Quince, MAR, and C & I did not appeal. The court of appeals denied a motion by Winker and G & W to consolidate this appeal with the notice of appeal filed by Winker alone on September 18, 1992. The court of appeals then reversed the trial court's order pursuant to the first appeal and dismissed the second appeal with prejudice for mootness.

In reversing the trial court's order, the court of appeals first rejected the petitioners' claim that the court of appeals lacked jurisdiction over the appeal. The court held that jurisdiction was proper because Winker was substantially aggrieved by the order regarding the default judgment against the partnerships and thus had standing to challenge those rulings.

The court next held that G & W was not a named party defendant, and that Winker therefore could not be held liable through G & W for the judgment against C & I and Wins-Quince. Additionally, the court held that C & I and Wins-Quince were not served properly, and the default judgments against these entities were therefore void. Finally, the court of appeals held that the trial court's factual findings regarding Winker's legal relationship with MAR were unclear. The court therefore remanded for an evidentiary hearing on this issue.

II.

The petitioners first contend that the court of appeals erred in determining that it had jurisdiction to consider arguments advanced by Winker on behalf of the partnerships named in the default judgment of June 10, 1992, and in reversing the judgments against them because those partnerships did not file a notice of appeal. Winker argues that he had standing to appeal because he was substantially aggrieved. Winker further argues that once he had standing to appeal the default judgment against the partnerships, he was entitled to argue any applicable grounds for reversal on appeal, and therefore was advancing arguments on his own behalf rather than on behalf of the partnerships.

We agree with Winker. A non-party has standing to appeal an order of the trial court following entry of final judgment if it appears that the non-party was substantially aggrieved by the order. Roberts-Henry v. Richter, 802 P.2d 1159, 1161 (Colo.App.1990). Once the non-party has appealed the order, it is axiomatic that he may substantively advocate reversal of the order. To hold otherwise would render the standing granted by the Richter rule meaningless.

In the instant case, Winker was a party to the initial action in the trial court. He is a non-party to the order at issue because judgment was entered primarily against the partnerships, and against Winker only if the partnerships did not satisfy the judgment. Hence, Winker may only appeal that order if he was substantially aggrieved thereby. The language of the order itself indicates that Winker was substantially aggrieved by the default judgment against the partnerships, because it created a conditional liability for Winker, maturing into an enforceable obligation if the partnerships did not satisfy the judgment. ⁴ Thus, applying the rule articulated in Richter, Winker is entitled to appeal that order, and the court of appeals therefore had jurisdiction to consider the merits of Winker's arguments advocating reversal.

III.

The petitioners next assert that the court of appeals erred by holding that, because G & W was not named as a defendant in the petitioners' Second Amended Consolidated Complaint, G & W was not a party defendant. The petitioners argue that even though G & W was not specifically named as a defendant, the fact that the complaint named Winker individually and as a general partner of Wins-Quince and G & W should have been sufficient for the trial court to obtain jurisdiction over G & W as a party defendant. Winker maintains that because the complaint makes no reference to G & W as a defendant at any time, nor makes a single claim against G & W, the trial court may not exercise jurisdiction over G & W as a party defendant.

We agree with Winker that the reference in the complaint to G & W was insufficient to provide notice to G & W that it was being haled into court as a party defendant. The very purpose of pleading is to inform the adverse party of the cause of action so as to provide it with the opportunity to prepare for and defend against the action at trial. Southerland v. Argonaut Ins. Co., 794 P.2d 1102, 1105 (Colo.App.1990); Soden v. Murphy, 42 Colo. 352, 356, 94 P. 353, 354 (1908). With regard to drafting a complaint against a partnership, "[a] partnership may be sued either in its common name or by naming its partners." Frazier v. Carlin, 42 Colo.App. 226, 228, 591 P.2d 1348, 1350 (1979); see also § 13-50-105, 6A C.R.S. (1987) (providing that a partnership may be sued in its common name).

In the case at bar, the petitioners' Second Amended Consolidated Complaint did not meet the required standard to provide notice to G & W that it was the subject of a cause of action. Although the caption of the complaint names Winker as an individual and as a general partner of Wins-Quince and G & W, it neglects to name the partnership itself or to name all of its partners. ⁵ Moreover, nowhere in the body of the complaint does the petitioner refer to G & W as a defendant. Although the complaint sets forth sixteen claims for relief, there is no specific reference to G & W in any of the claims. The court of appeals aptly noted:

While certain claims are asserted against "all defendants," there is no allegation to alert the reader that G & W is for some reason included in this group.... The summons and complaint fail to indicate that a claim has been made against G & W as a separate entity, and it is undisputed that all of the partners of G & W have...