Colo. Cmty. Bank v. Walter E. “gene” Hoffman & Oxford Res. & Mgmt., Inc.

• Decision Date: 07 November 2013
• Docket Number: Court of Appeals No. 12CA1713
• Citation: 338 P.3d 390
• Parties: COLORADO COMMUNITY BANK, Plaintiff–Appellee and Victor Harshberger, Kenneth Adelberg, and Robert Williams, Intervenors–Appellees, v. Walter E. “Gene” HOFFMAN and Oxford Resource & Management, Inc., Defendants–Appellants.
• Court: Colorado Court of Appeals

338 P.3d 390

COLORADO COMMUNITY BANK, Plaintiff–AppelleeandVictor Harshberger, Kenneth Adelberg, and Robert Williams, Intervenors–Appellees,

v.Walter E. “Gene” HOFFMAN and Oxford Resource & Management, Inc., Defendants–Appellants.

Court of Appeals No. 12CA1713

Colorado Court of Appeals, Div. VI.

Announced November 7, 2013

Affirmed.

El Paso County District Court No. 09CV7189 Honorable Larry E. Schwartz, Judge

Bloom Murr Accomazzo & Siler, PC, Joseph A. Murr, Daniel R. Delaney, Denver, Colorado, for Plaintiff–Appellee

Silver & DeBoskey, A Professional Corporation, Thomas M. Haskins III, Robert R. Marsh, Ruba M. Forno, Kevin J. Burns, Denver, Colorado, for Intervenors–Appellees

Miller & Law, P.C., James F. Scherer, Littleton, Colorado, for Defendants–Appellants

Opinion by JUDGE GABRIEL

¶ 1 In this action arising from the judicial dissolution of certain companies in the course of a receivership proceeding, defendants, Walter E. “Gene” Hoffman and Oxford Resource & Management, Inc., attempt to appeal from orders certified as final under C.R.C.P. 54(b) and appeal from orders granting summary judgment to intervenors, Victor Harshberger, Kenneth Adelberg, and Robert Williams, on defendants' counterclaims for abuse of process and civil conspiracy. We conclude that we lack jurisdiction over the orders certified as final under C.R.C.P. 54(b) because defendants did not appeal those orders within forty-five days of the certification. We further conclude that the district court did not err in granting summary judgment to the intervenors on defendants' counterclaims. Accordingly, we dismiss the appeal in part and affirm the judgment in all other respects.

I. Background

¶ 2 Hoffman was the president and chief executive officer of Oxford. Oxford and intervenors Adelberg and Williams owned equity membership interests in KDGC Holdings, LLC (Holdings). Holdings, in turn, was the parent of three operating subsidiaries (collectively, the subsidiaries), which served as the ownership structure for three golf courses. Hoffman served as general manager of all of the entities owned by Holdings.

¶ 3 Plaintiff, Colorado Community Bank (the Bank), made several loans to finance Holdings' acquisitions of two of the golf courses. As pertinent here, Hoffman and one of the subsidiaries jointly executed a promissory note and related loan documents in favor of the Bank in connection with one of the loans. Hoffman and the subsidiary, however, subsequently defaulted on this loan.

¶ 4 In addition, allegations surfaced that Hoffman, personally and through Oxford, among other entities, had mismanaged Holdings and its related entities, had engaged in self-dealing, and had breached his fiduciary duties by, among other things, diverting substantial assets of these companies to his personal use.

¶ 5 As a result of the foregoing, the Bank sued Hoffman, Oxford, and various other entities for breach of the above-described loan documents and sought the appointment of a receiver. The intervenors joined in the request for a receiver and asserted various additional claims against Hoffman, Oxford, and several of their related entities. The district court subsequently granted the request for the appointment of a receiver.

¶ 6 Thereafter, Hoffman and, ultimately, Oxford filed counterclaims against, among others, the intervenors for, as pertinent here, abuse of process and civil conspiracy. In their counterclaims, Hoffman and Oxford alleged that in pursuing claims and remedies against them, the intervenors had an ulterior purpose of obtaining a receiver in order to oust defendants from the control and management of, and to deprive them of their ownership and equity interests in, Holdings.

¶ 7 Subsequently, the receiver sought authority to sell the assets of Holdings and the three subsidiaries to Tri–Lakes Golf, LLC, a company formed and operated by the intervenors and one of their business associates. As part of this transaction, Tri–Lakes would assume all of the subsidiaries' secured liabilities, as well as certain liabilities of the subsidiaries that intervenors Adelberg and Harshberger had previously assumed. In support of his application to conduct this proposed sale, the receiver asserted that the subsidiaries had no ability to be self-sufficient or profitable and that under the circumstances, such an asset sale would be “the most practical and useful solution.”

¶ 8 After a hearing, the district court granted the receiver's application, ultimately issuing two written orders (the sale orders). In so ruling, the court reasoned that its power to grant the application was derived not from its general equity authority, but from its power to effect a judicial dissolution. The court further opined that such a dissolution was appropriate because the subsidiaries were in a “deadlock,” were insolvent, and were unable to continue to operate absent an appropriate change in their circumstances.

¶ 9 As a result of the foregoing transactions, Tri–Lakes appears to have acquired the Bank's claims against defendants. Moreover, although the record is unclear, Tri–Lakes appears to have then been substituted for the Bank as plaintiff and to have withdrawn all claims brought by the Bank, other than those concerning the receivership.

¶ 10 After the assets of Holdings and the subsidiaries were sold, the intervenors moved to certify the sale orders as final under C.R.C.P. 54(b). Over Hoffman's objection, on December 13, 2010, the district court granted the intervenors' motion. As pertinent here, the court concluded that (1) the sale orders arose from an aggregate of operative facts relating to the appointment of a receiver and the disposition of assets under the jurisdiction and control of the court and the receiver; (2) the claims determined by such orders were separate and distinct from the other claims in the case; (3) there was nothing further to be done with respect to the claims for the appointment of a receiver and the sale of the assets; and (4) the sale orders reflected the ultimate disposition of the claims related therein, and there was no just reason for delay in entering final judgment. Defendants, who were proceeding pro se at the time, did not file an appeal of this order within forty-five days.

¶ 11 Thereafter, the receiver submitted his final report and requested that the court discharge him from any further responsibilities. The district court granted this request.

¶ 12 The intervenors then moved for summary judgment on defendants' counterclaims for abuse of process and civil conspiracy, and the court ultimately granted these motions. As pertinent here, the court concluded that the intervenors had engaged in no wrong because they had merely pursued rights that they were accorded by law and agreement.

¶ 13 Thereafter, the intervenors stipulated to the dismissal of their remaining claims against defendants, and the court dismissed those claims with prejudice. At that point, there were no remaining claims pending among the parties, and the judgment became final.

¶ 14 Within forty-five days of the dismissal, defendants filed their notice of appeal.

II. The Sale Orders

¶ 15 Defendants contend that the district court erred in numerous ways when it issued the sale orders. The Bank and the intervenors assert, however, that we should not consider these arguments because defendants' appeal of the sale orders was untimely, having not been filed within forty-five days of the district court's C.R.C.P. 54(b) certification. Toward that end, the Bank and the intervenors have moved to dismiss that portion of this appeal.

¶ 16 Defendants respond that because the sale orders were not properly subject to certification under C.R.C.P. 54(b), the certification was a nullity. They thus contend that their time to appeal did not begin to run until after all of the claims in this case were finally resolved.

¶ 17 As an apparent matter of first impression in Colorado, we conclude that the district court properly certified the sale orders under C.R.C.P. 54(b) because, in our view, those orders constituted the resolution of a single and separable claim for relief within the meaning of the rule. In light of this ruling, we further conclude that defendants' appeal of the sale orders was untimely, and we dismiss that portion of their appeal.

A. C.R.C.P. 54(b) and Standard of Review

C.R.C.P. 54(b) provides, in pertinent part:

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.

¶ 18 This rule thus provides an exception to the general rule that an entire case must be resolved by a final judgment before an appeal is brought. Richmond Am. Homes of Colo., Inc. v. Steel Floors, LLC, 187 P.3d 1199, 1202 (Colo.App.2008).

¶ 19 To determine whether to issue a C.R.C.P. 54(b) certification, a district court must engage in the following three-step process:

First, the decision certified must be a ruling upon an entire claim for relief. Second, the decision certified must be final in the sense of an ultimate disposition of an individual claim. Third, the trial court must determine whether there is just reason for delay in entry of a final judgment on the claim.

Lytle v. Kite, 728 P.2d 305, 308 (Colo.1986).

¶ 20 Although the question of whether there is “no just reason for delay” is committed to the district court's sound discretion, that court's determinations regarding the other two requirements are “not truly discretionary.” Id.; accord Harding Glass Co. v. Jones, 640 P.2d 1123, 1125 (Colo.1982). But cf. Richmond Am. Homes, 187 P.3d at 1203–04 (stating that “we review de novo the legal sufficiency of the trial court's ...