First Nat. Bank of Meeker v. Theos

• Decision Date: 18 January 1990
• Docket Number: Nos. 88CA0299,88CA0332,s. 88CA0299
• Citation: 794 P.2d 1055
• Parties: FIRST NATIONAL BANK OF MEEKER, Plaintiff-Appellant and Cross-Appellee, v. Mike THEOS, Defendant-Appellee and Cross-Appellant, v. C.J. WILSON, Counterclaim Defendant-Appellant and Cross-Appellee. . I
• Court: Colorado Court of Appeals

Page 1055

794 P.2d 1055

FIRST NATIONAL BANK OF MEEKER, Plaintiff-Appellant and Cross-Appellee, v. Mike THEOS, Defendant-Appellee and Cross-Appellant, v. C.J. WILSON, Counterclaim Defendant-Appellant and Cross-Appellee.

Nos. 88CA0299, 88CA0332.

Colorado Court of Appeals Div. I.

Jan. 18, 1990.

Rehearing Denied March 8, 1990.

Certiorari Denied July 30, 1990.

Delaney & Balcom, P.C., Lawrence R. Green, Glenwood Springs, for plaintiff-appellant and cross-appellee First Nat. Bank of Meeker.

Coleman, Brown & Jouflas, Joseph Coleman, Grand Junction, for defendant-appellee and cross-appellant Mike Theos.

Vinton, Slivka & Panasci, Michael J. Healey, Denver, for counterclaim defendant-appellant and cross-appellee C.J. Wilson.

Opinion by Judge HUME.

Plaintiff, First National Bank of Meeker (Bank), appeals a judgment entered upon jury verdicts that awarded damages to defendant, Mike Theos, on his counterclaims for interference with business advantage, deceit, breach of contract, and negligence. Theos cross-appeals a judgment and decree of foreclosure entered in favor of the Bank. C.J. Wilson, counterclaim-defendant, filed a separate appeal from a judgment entered on a jury verdict that awarded Theos damages against Wilson for breach of fiduciary duty. The separate appeals have been consolidated here. We reverse and remand with directions.

The Bank's complaint, filed in October 1984, sought judicial foreclosure of a lien allegedly created by a deed of trust given by Mike and Toula Theos to secure indebtedness evidenced by several promissory notes. Mike Theos answered admitting his execution of the notes and security instruments as alleged by the Bank and his failure to make payments as required by the notes. He contested the amount due and payable on the notes and the validity of the asserted lien. He also counterclaimed for damages allegedly resulting from the Bank's breach of an implied covenant, breach of fiduciary duty, intentional interference with a contractual relationship, negligence, and deceit, and asserted a demand for a jury trial.

Approximately seventeen months after the commencement of the action, Theos requested leave to add Wilson as an additional "counterclaim defendant." That motion was granted by the court. Still later, on March 28, 1986, Theos commenced a separate action against the Bank and Wilson by filing a complaint which asserted the same claims he had previously asserted in his answer and counterclaim. Simultaneously with that filing, Theos filed a motion in the Bank's action seeking to consolidate the two actions in which he stated that the sole purpose of his separate action was to insure his previously asserted right to a jury trial on the counterclaims. The motion to consolidate was granted.

Although the Bank consistently opposed and moved to strike Theos' demand for jury trial, the record does not reflect any similar opposition to a jury trial by Wilson.

I.

We reject Theos' contention that the Bank's right to appeal is precluded by its action in seeking appointment of a receiver to manage the property after entry of judgment in the trial court.

Theos' reliance upon Wilson v. Automotive Owners Association Insurance Co., 152 Colo. 431, 382 P.2d 815 (1963) is misplaced. In that case, our supreme court analyzed and adopted the general rule that a judgment creditor's acceptance of an award or legal advantage under a judgment constitutes a waiver of the creditor's right to review of such judgment. A party asserting waiver of a right of review under the Wilson rule must establish that: 1) The judgment creditor actually received a benefit or advantage pursuant to the judgment he seeks to appeal, and 2) a possible result of the appeal may remove the creditor's entitlement to the benefit he had taken or received under the judgment.

In Wilson, the judgment creditor had withdrawn the debtor's funds deposited into the court registry and executed a satisfaction of her judgment. Thus, the creditor had actually received the benefit of the judgment that was the subject of the appeal. The court reasoned that since the judgment creditor's appeal could result in the vacation of the judgment which she had already accepted, either the doctrine of waiver or estoppel precluded her right to appeal.

Here, the Bank has received no benefit or advantage under the court's judgment. No execution has issued and no money or property has been conveyed to the Bank as a result of the trial court's judgment. Both Theos and the Bank have sought and obtained stays of execution preventing enforcement of their respective judgments pending resolution of this appeal.

Although the Bank's motion for appointment of a receiver was granted after the entry of judgment, the Bank has yet to receive any benefit or advantage from the receivership. The money and property placed under the control of the receiver remains subject to such disposition as is ultimately determined by the court upon final determination of all the issues in the case.

Hence, we conclude that a reversal of the judgment on appeal will not affect the Bank's entitlement to a benefit that it actually received under the judgment, and that the Bank's appeal is not precluded.

II.

The Bank contends that the court erred in denying its motions to strike Theos' jury demand; that the verdicts were so inconsistent as to manifest the jury's misunderstanding of the instructions and the law; that the damage verdicts were based upon the jury's speculation and passion rather than upon the evidence and the law; and that the court erred in admitting certain evidence offered by Theos. We agree that the court should have rejected Theos' request for a jury trial, and reverse the judgments insofar as they represent the court's adoption of jury verdicts as to issues between the Bank and Theos.

A.

There is no constitutionally guaranteed right to a jury trial in a civil proceeding conducted before Colorado state courts. Kaitz v. District Court, 650 P.2d 553 (Colo.1982). Rather, such right is derived from C.R.C.P. 38 only in actions at law, in contrast to those brought in equity. Setchell v. Dellacroce, 169 Colo. 212, 454 P.2d 804 (1969).

It is the character of the complaint, rather than that of any counterclaims or defenses subsequently asserted, that fixes the nature of the suit and determines whether it should be tried in equity or at law. Miller v. District Court, 154 Colo. 125, 388 P.2d 763 (1964). And, if both legal and equitable claims are joined in a plaintiff's complaint, the trial court must determine whether the basic thrust of the action is legal or equitable in nature. Miller v. Carnation Co., 33 Colo.App. 62, 516 P.2d 661 (1973).

Actions seeking judicial foreclosure of liens have traditionally been considered equitable proceedings. Miller v. District Court, supra; Neikirk v. Boulder National Bank, 53 Colo. 350, 127 P. 137 (1912). Although such actions typically involve determinations of the existence and amount of indebtedness, and although any ensuing foreclosure decree typically includes a personal monetary award against the debtor founded in contract, the basic thrust of foreclosure proceedings has nevertheless been held to be equitable. Miller v. District Court, supra.

Here, the Bank made a timely pretrial request to strike Theos' jury demand, renewed the motion after it was initially denied, and thereafter unsuccessfully attempted to initiate original proceedings to require a trial to the court. Thus, the Bank cannot be deemed to have consented to a jury trial. See Mountain States Telephone & Telegraph Co. v. DiFede, 780 P.2d 533 (Colo.1989).

Although a trial court may empanel an advisory jury over the objections of a party in an equitable action, the jury's findings in such advisory capacity do not constitute final or binding resolutions of disputed issues. Rather, the court remains the ultimate fact-finder and is required to make findings and conclusions in support of its judgment. See C.R.C.P. 39(c) and C.R.C.P. 52(a). See also Mountain States Telephone & Telegraph Co. v. DiFede, supra; Young v. Colorado National Bank, 148 Colo. 104, 365 P.2d 701 (1961).

Here, the court did not empanel the jury in an advisory capacity, nor did it make findings and conclusions to support the judgment. Instead, the court accepted the jury's verdicts as binding determinations of the issues submitted and entered judgments on those verdicts.

Hence, we conclude that the court committed reversible error in denying the Bank's motion to strike Theos' jury demand, and in treating the jury's verdicts as determinative of the issues framed by the pleadings between Theos and the Bank.

B.

Since this matter must be remanded for the trial court's reconsideration and its entry of findings of fact and conclusions of law, we decline to consider the Bank's contentions concerning the inconsistency of the verdicts and whether those verdicts were supported by competent and admissible evidence.

III.

On cross-appeal, Theos first contends that the court erred in entering a directed verdict determining that the Bank held an enforceable lien based upon the recording of its collateral deed of trust. Although entry of a directed verdict was unnecessary since that issue was properly determinable by the court, nevertheless, our review of the record reveals no substantive error in the court's determination.

The court's findings and conclusions that the parties intended the collateral deed of trust as a security instrument for the indebtedness owed to the Bank are amply supported by evidence in the record. However, since those findings and conclusions were made by the court in ruling upon a motion for directed verdict, it will be necessary that they be included in the findings and conclusions supporting the final judgment to be entered upon remand. In addition, the court will be required to determine and make findings as to the amount of Theos' indebtedness under the notes and security instrument...