Fuqua Homes, Inc. v. Western Sur. Co., 79CA0805
| Decision Date | 01 May 1980 |
| Docket Number | No. 79CA0805,79CA0805 |
| Citation | 44 Colo.App. 257,616 P.2d 163 |
| Parties | FUQUA HOMES, INC., a Delaware Corporation, Plaintiff-Appellee, v. WESTERN SURETY COMPANY, a South Dakota Corporation, Defendant-Appellant, and Leon Taylor, Lakewood Mobile Homes Sales, Inc., a Colorado Corporation, Sheridan Savings & Loan Association, a Colorado Corporation, Defendants. . I |
| Court | Colorado Court of Appeals |
Lohf & Barnhill, P. C., Dennis A. Graham, Denver, for plaintiff-appellee.
Treece, Zbar, Schieman, Webb & Hickey, William K. Hickey, James L. Treece, Littleton, for defendant-appellant.
Defendant, Western Surety Company (Western), appeals the summary judgment entered in favor of plaintiff, Fuqua Homes, Inc., (Fuqua) and against Western in the sum of $15,000 plus interest. We affirm.
Fuqua's claim against Western is based upon a surety bond which Western furnished to Leon E. Taylor and Selma A. Taylor, as motor vehicle dealers, pursuant to "Art. 11, Chapter 13, C.R.S. 1963, as amended." This bond covered the period July 1, 1975, to June 30, 1976, and provided indemnity up to $15,000 to all persons:
"for any loss suffered by reason of fraud or fraudulent representations made, or through the violation of any of the provisions of said Art. 11, Ch. 13 C.R.S. 1963 as amended."
In August 1975, a rider changing the principals' name to "Lakewood Mobile Homes Sales, Inc." (Lakewood) was attached to the bond. This rider specifically provided that it did not vary or extend the terms of the bond.
In 1976, Fuqua sued the Taylors, Lakewood, and Western for losses sustained in connection with supplying mobile homes to Lakewood. The claim against Western was predicated on the bond. In 1978, while this suit was pending, the Taylors and Lakewood separately filed bankruptcy petitions in Colorado. Fuqua objected to their discharge from its claim. The bankruptcy court found that Mr. Taylor and Lakewood had wilfully and maliciously converted the property of Fuqua, refused to discharge the claim, and entered judgment in favor of Fuqua in the amount of $45,725. The bankruptcy court specifically declined to address the issue of "false pretenses or false representations in obtaining the property."
Based upon the bankruptcy court findings and judgment, Fuqua filed a motion for summary judgment in the instant suit against Western and a supporting affidavit attaching the bankruptcy court findings and judgment. Western failed to respond thereto. After hearing on this motion, the court recognized the bankruptcy court judgment, found that Western, as surety for the judgment debtors, was liable for the "defalcations" of the debtors, and entered judgment against Western in the amount of $15,000, the amount of the bond, plus interest. The court also entered a C.R.C.P 54(b) order to allow appeal.
Western alleges three grounds for reversal: (1) the bond covering "business of motor vehicle dealers" does not apply when the subject matter of the action concerns mobile homes; (2) if the bond is applicable, there is no evidence in the record to support a finding of the surety's liability; and (3) the findings of the bankruptcy court are not binding on Western because it was not a party to the bankruptcy proceedings.
Although the bond was furnished in 1975, the language contained therein expressly incorporates C.R.S. 1963, 13-11-1 et seq., as amended. A surety is entitled to have its contract construed according to the plain meaning of its terms. See People ex rel. Western Acceptance Co. v. Southern Surety Co., 76 Colo. 141, 230 P. 397 (1924). Thus, the issue as to whether the mobile home transactions are covered under the surety contract is governed by C.R.S. 1963, 13-11-1 et seq., as amended.
The statute underlying the bonds, 1971 Perm. Supp., C.R.S. 1963, 13-11-11, provides that prior to the issuance of a motor vehicle dealer license, the applicant for such license must procure a corporate surety bond conditioned on the same terms as the bond furnished by Western. This section specifically states that "one of the purposes of said bond is to provide the reimbursement for any loss or damage suffered by any person by reason of the issuance of a certificate of title by a motor vehicle dealer. . . ."
It is true that the definitions designated for use in the article entitled "Dealing in Motor Vehicles," are consistent with Western's contention. That is, 1971 Perm. Supp., C.R.S. 1963, 13-11-2, provides in pertinent part:
However, C.R.S. 1963, 13-6-11, provides, inter alia, that upon sale by a dealer of a new motor vehicle the...
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Edmonds v. Western Sur. Co.
...A surety is entitled to have its contract construed according to the plain meaning of its terms. Fuqua Homes, Inc. v. Western Surety Co., 44 Colo.App. 257, 616 P.2d 163 (1980). In ascertaining the intent of the parties, a court must consider the bond and other instruments to which the bond ......