Colorado Inv. Services, Inc. v. Hager, 81CA0773

• Decision Date: 14 June 1984
• Docket Number: No. 81CA0773,81CA0773
• Citation: 685 P.2d 1371
• Parties: COLORADO INVESTMENT SERVICES, INC., a Colorado corporation, Plaintiff-Appellant and Cross-Appellee, v. Dennis K. HAGER, Paul Sherrod, and Vail Run Realty, Inc., a Colorado corporation, Defendants-Appellees and Cross-Appellants. . II
• Court: Colorado Court of Appeals

Page 1371

685 P.2d 1371

COLORADO INVESTMENT SERVICES, INC., a Colorado corporation Plaintiff-Appellant and Cross-Appellee, v. Dennis K. HAGER, Paul Sherrod, and Vail Run Realty, Inc., a Colorado corporation, Defendants-Appellees and Cross-Appellants.

No. 81CA0773.

Colorado Court of Appeals Div. II.

June 14, 1984.

Bradley, Campbell & Carney, P.C., Victor F. Boog, Golden, for plaintiff-appellant and cross-appellee.

Pendleton & Sabian, P.C., Alan C. Friedberg, Denver, for defendants-appellees and cross-appellants.

BERMAN, Judge.

Plaintiff, Colorado Investment Services, Inc. (CIS) appeals: (1) the trial court's finding of plaintiff's breach of its lease with defendants of condominium unit 7-E at Vail Mountain Resort Community and its award to defendants of $100 nominal damages for that alleged breach, and (2) the trial court's award to defendants of $5,300 for real estate commissions for plaintiff's alleged failure to proceed with an agreement regarding the time share estates in condominium unit # 221 of the same resort. Defendants, Dennis K. Hager, Paul Sherrod, and Vail Run Realty, Inc. (collectively, VRR) cross-appeal: (1) the trial court's granting of possession of condominium unit 7-E to CIS, (2) the trial court's awarding of only $100 in damages for CIS's alleged breach, and (3) the trial court's denial of defendants' motion for new trial pursuant to C.R.C.P. 59(a)(1). We affirm in part and reverse in part.

On March 22, 1978, CIS executed a lease with VRR for commercial condominium unit 7-E of the Vail Run Resort Community located in Vail, Colorado. The term of the one-year lease was to run from July 1, 1978, through June 30, 1979. Regarding VRR's option to extend the term of the lease, the agreement provided as follows:

"If at the end of the Basic Term of the Lease, Tenant is not in default in any of its obligations under this Lease, Tenant shall have the right to extend the term of this Lease for an additional five (5) year term at the rental provided for in paragraph 3 hereof, payable in like manner and subject to all the remaining terms contained in this Lease. Tenant shall exercise its first option by giving Landlord notice of its intention to do so at least one (1) year prior to the expiration of the original term." (emphasis added)

The lease further provided:

"This Lease along with any exhibits and attachments hereto constitutes the entire agreement between Landlord and Tenant relative to the Leased Premises and this Lease and the exhibits and attachments may be altered, amended or revoked only by an instrument in writing signed by both Landlord and Tenant." (emphasis added)

There was some conflicting evidence at trial suggesting that, following the execution of the lease, CIS orally modified the lease with VRR to allow VRR to give notice exercising the option at any reasonable time prior to the expiration of the original term of the lease. However, any such oral modification was not reduced to writing. VRR did not give written notice on July 1, 1978, of their intent to extend the lease beyond the base period and in fact did not give such notice until March 2, 1979.

In July 1979, CIS commenced this action seeking a judgment for possession of the leased premises. VRR counterclaimed for $4,000 in damages for an alleged breach of the lease for removal of a sign by the lessor, and for $5,300 in real estate commissions for the sale of time-share weeks 32, 33, and 51, 52 and 1 of unit # 221 of the Vail Run Resort Community by VRR for CIS and for which VRR allegedly produced ready, willing, and able buyers.

With respect to the issue of the sign, the lease provided as follows:

"Tenant shall not erect or install any exterior signs or window or door signs, advertising media or window or door lettering or placards without Landlord's prior written consent."

However, the lease further provided:

"Except as limited elsewhere in this Lease, wherever in this Lease, Landlord or Tenant is required to give its consent or approval to any action on the part of the other, such consent or approval shall not be unreasonably withheld. In the event of failure to give any such consent, the other party shall be entitled to specific performance at law and shall have such other remedies as are reserved to it under this Lease but in no event shall Landlord or Tenant be responsible in monetary damages for failure to give consent unless said failure is withheld maliciously or in bad faith."

VRR had placed a sign for Vail Run Realty on the leased premises. After receiving notification that the sign was in breach of the lease, VRR removed the sign and, on October 22, 1978, requested permission from CIS to reinstall the sign. CIS did not respond to that request. Although there was testimony at trial that the lack of the sign caused Vail Run Realty to lose two customers to other businesses because those customers could not find Vail Run Realty, the trial court concluded that there was no proof by a preponderance of the evidence as to the extent of any monetary loss caused by CIS's breach of contract in removing VRR's sign. Thus, the trial court awarded nominal damages of $100.

Insofar as VRR's counterclaim for the real estate commission, the trial court found that there was an agreement between CIS and VRR regarding time share estates, and that the agreement was for commissions in the amount of $5,300. The trial court made no other findings regarding the substance of that agreement.

Specifically, defendant Hager testified that the weeks in question were originally owned by a person named Johnson; that CIS bought the weeks back from Johnson at an agreed upon price; and that it was agreed between a representative of CIS and Hager that Hager would attempt to sell the weeks. Hager further testified that there was no writing which revealed the terms of the contractual arrangement and that "[t]here was no commission agreed." However, Hager testified that what CIS and VRR "substantially agreed on" was that, when all five units were sold, CIS would leave Hager with the proceeds of the last sale, which proceeds would amount to $5,300 on a $39,000-plus sale.

Hager obtained full down payments for sales of the time share weeks, and, in one case, received a full cash check in a broker's escrow account, but he had no opportunity to complete the sales. Hager did not send a copy of the time share sale contracts to CIS and, in response to direct examination on this issue, responded "Are you kidding? Give a guy a contract before he agreed to give you a commission? You've got to be crazy."

I.

CIS first contends that it did not breach the lease with VRR by removing VRR's sign; and that, even if a breach did occur, nominal damages, by definition, should amount to no more than $1. VRR contends, in contrast, that the court erred in awarding only $100 in nominal damages because it produced evidence at trial that it incurred loss of income damages in the amount of $4,000.

Our review of the record reveals support for a finding that CIS did breach the lease with regard to causing removal of the sign and not permitting its reinstallation. Hence, this finding is binding on appeal. Page v. Clark, 197 Colo. 306, 592 P.2d 792 (1979).

Furthermore, the trial court's finding that the proof was insufficient to establish, by a preponderance of the evidence, damages for VRR must be upheld on review because "the trial judge's presence during the presentation of testimonial evidence provides an unparalleled opportunity to determine the credibility of the witnesses and the weight to be afforded the evidence which is before the court." Page v. Clark, supra.

However, as to the amount of damages awarded, where, as here, the evidence has been found insufficient to support an award of compensatory damages, the damages awarded must be "nominal." Doyle v. McBee, 161 Colo. 130, 420 P.2d 247 (1966). "Nominal damages is a trivial sum such as one cent or one dollar awarded to a [party] whose legal right has been invaded but who has failed to prove any compensatory damages." Gould v. Mountain States Telephone & Telegraph Co., 6 Utah 2d 187, 309 P.2d 802 (1957). We agree with Colo. J.I. 30:35 (2d ed.1980) that:

"If you find in favor of the plaintiff, but do not find any actual damages, you shall nonetheless award him nominal damages in the sum of one dollar." (emphasis added)

We therefore hold that one dollar is nominal damages, as a matter of law. Hence, on remand, the trial court is instructed to modify the award of nominal damages to the "trivial sum" of one dollar.

II.

CIS next contends that VRR did not produce purchasers to complete the purchase for time-sharing units 32, 33, 51, 52 and 1; that the sale of those units was not defeated by CIS's refusal or neglect to consummate the sale as agreed upon; and thus, that the trial court erred in finding that VRR is entitled to a $5,300 commission. We disagree.

CIS also apparently does not contend that VRR failed to submit offers for weeks 32 and 33 to CIS, which offers...