Colorado Real Estate & Development, Inc. v. Sternberg

• Decision Date: 13 November 1967
• Docket Number: No. 21907,21907
• Citation: 164 Colo. 184,433 P.2d 341
• Parties: COLORADO REAL ESTATE & DEVELOPMENT, INC., a Delaware corporation, Yosemite Development Corp., a Colorado corporation, and Great Western Real Estate Corporation, a Colorado corporation, Plaintiffs in Error, v. Eugene D. STERNBERG, Defendant in Error.
• Court: Colorado Supreme Court

Page 341

433 P.2d 341

164 Colo. 184

COLORADO REAL ESTATE & DEVELOPMENT, INC., a Delaware corporation, Yosemite Development Corp., a Colorado corporation, and Great Western Real Estate Corporation, a Colorado corporation, Plaintiffs in Error, v. Eugene D. STERNBERG, Defendant in Error.

No. 21907.

Supreme Court of Colorado, In Department.

Nov. 13, 1967.

Richard N. Graham, Stewart A. Shafer, Jr., Englewood, for plaintiffs in error.

Williams, Erickson, Brown & Wallace, Denver, for defendant in error.

DAY, Justice.

We will refer to the defendant in error as Sternberg. He brought the action to enforce payment of a claimed architect's fee due under a contract with Colorado Real Estate Development, Inc., to which we will refer as CREDCO. The other plaintiffs in error, Yosemite Development Corp. and Great Western Real Estate Corporation, will be referred to as Yosemite and Great Western, respectively.

Great Western was made a defendant because it assumed the assets and liabilities of CREDCO during the pendency of the litigation and assumed to pay this particular obligation if it was determined that CREDCO owed the fee. Yosemite Development Corp. was the successor in title to certain real estate which was the subject matter of the contract between Sternberg and CREDCO.

Sternberg had filed a mechanics' lien on the property, and Yosemite counterclaimed for $2000 damages on the ground of slander of title, alleging Sternberg had recorded his mechanics' lien wrongfully.

Judgment of the trial court was entered in favor of Sternberg and against CREDCO and Great Western jointly and severally for the sum of $9000, the balance of which the trial court found was owed on the architect's contract. The mechanics' lien foreclosure was dismissed. The claim of Yosemite for damages was dismissed. A counterclaim for $2000 asserted by CREDCO and Great Western was not allowed.

CREDCO and Great Western offered the following defenses to Sternberg's claim: (a) that the contract provided for arbitration of disputes between the parties and that a decision by the arbitrators was a condition precedent to the right of legal action; that the trial court, therefore, lacked jurisdiction to try the matter until the parties had either complied with or waived the arbitration requirement; (b) that Sternberg had not fully performed the contract and that he had, in fact, been overpaid $2000 (this was the basis of the counterclaim which was dismissed).

The court's findings and judgment adverse to these contentions are challenged in this writ of error. Yosemite in its assignment of error claims that the notice of commencement of the action was knowingly and maliciously recorded several months after the expiration of the right to foreclose a mechanics' lien under the applicable statutes and that the cloud thus created on the title required them to borrow to be able to deposit in escrow the sum of $16,000 in order to sell the property. They assert error by the trial court in dismissing their claim for slander of title.

On the question whether arbitration was a condition precedent to the bringing of the action by Sternberg, the court found that the only dispute between the parties was for money judgment for the balance due pursuant to the contract and the schedule of payments provided therein. It was stipulated by the parties that if this were the situation the dispute over the amount owing was not subject to arbitration. It is the rule that...