Gorsich v. Double B Trading Co., Inc., s. 93CA1784

• Decision Date: 17 November 1994
• Docket Number: 94CA0162,Nos. 93CA1784,s. 93CA1784
• Citation: 893 P.2d 1357
• Parties: Fred GORSICH, Estate of Frank Cadwell, Woodrow Cawlfield, Joe Centa d/b/a Centa Dairy Farm, Dave Centa, Dallas Cooper, Donald Cooper, Richard Delong, Arthur Fillmore, Larry Fillmore, Gary Hanagan, Ed Jersin, Klun Farm and Cattle, a Colorado Partnership, Joe Lopresti, Sr., Joe Lopresti, Jr., Frank Nesselhuf, Ray Pieper, Joe Pritekel, Phil Prutch, Tony Thomas, Clyde Wilcox, William H. Sheard, Jr., George Guagliardo, Leon Golden, Edith Johnson, Dale Muth, Roy McCown, Plaintiffs-Appellees and Cross-Appellants, v. DOUBLE B TRADING COMPANY, INC., William Bolster, and Klein Brothers, Ltd., Defendants-Appellants and Cross-Appellees. . IV
• Court: Colorado Court of Appeals

Page 1357

893 P.2d 1357

Fred GORSICH, Estate of Frank Cadwell, Woodrow Cawlfield,

Joe Centa d/b/a Centa Dairy Farm, Dave Centa, Dallas Cooper,

Donald Cooper, Richard Delong, Arthur Fillmore, Larry

Fillmore, Gary Hanagan, Ed Jersin, Klun Farm and Cattle, a

Colorado Partnership, Joe Lopresti, Sr., Joe Lopresti, Jr.,

Frank Nesselhuf, Ray Pieper, Joe Pritekel, Phil Prutch, Tony

Thomas, Clyde Wilcox, William H. Sheard, Jr., George

Guagliardo, Leon Golden, Edith Johnson, Dale Muth, Roy

McCown, Plaintiffs-Appellees and Cross-Appellants, v. DOUBLE B TRADING COMPANY, INC., William Bolster, and Klein

Brothers, Ltd., Defendants-Appellants and Cross-Appellees.

Nos. 93CA1784, 94CA0162.

Colorado Court of Appeals,

Div. IV.

Nov. 17, 1994.

Rehearing Denied Feb. 2, 1995.

Certiorari Denied May 8, 1995.

Gradisar, Trechter, Ripperger & Groshal, James M. Groshal, Pueblo, Peterson & Fonda, P.C., Kathleen K. Hearn, Pueblo, for plaintiffs-appellees and cross-appellants.

Montgomery, Green, Jarvis, Kolodny & Markusson, P.C., Kevin F. Amatuzio, Robert N. Clark, Denver, for defendants-appellants and cross-appellees Klein Bros., Ltd. and Double B Trading Co., Inc.

Chrisman, Bynum & Johnson, P.C., Robert L. Matthews, F. Christopher Chrisbens, Boulder, for defendant-appellant and cross-appellee William Bolster.

Opinion by Judge ROTHENBERG.

Plaintiffs are twenty-six farmers who suffered serious financial losses after they stored their crops of pinto beans with Boone Bean and Elevator, an agricultural warehouse facility. They brought this action to recover those losses premised on allegations of improper dealings between Boone Bean and defendant Double B Trading Co. and Double B's owners, defendants Klein Brothers, Ltd., and William Bolster. From a judgment entered on a jury verdict in favor of plaintiffs, defendants appeal, and we affirm.

In 1986, Bolster, as president of Double B and on its behalf, entered into an exclusive marketing agreement with Boone Bean, giving Double B a right of first refusal on all beans offered for sale by Boone Bean.

Between 1986 and 1988, defendants engaged in a series of transactions in which Boone Bean sold plaintiffs' beans to Double B without plaintiffs' permission. To cover Boone Bean's subsequent inventory shortages, Bolster entered into contracts with James Tomlinson, the operator of Boone Bean, so that when Boone Bean was audited by the Department of Agriculture, it appeared that Boone Bean still had plaintiffs' beans. However, beans were never actually shipped and money was not exchanged. Later, Tomlinson and Bolster entered into a new contract in which Tomlinson sold beans back to Bolster, again, without shipping the beans or exchanging money. A transaction of this kind was known as a "washout."

In July 1988, the State Department of Agriculture closed Boone Bean after audits showed that Boone Bean did not have sufficient beans to meet its storage obligations. Boone Bean ultimately filed for bankruptcy. Tomlinson pled guilty to theft of plaintiffs' beans and the court ordered him to pay restitution.

Plaintiffs filed this action against the defendants here plus Boone Bean and Tomlinson seeking compensatory, punitive, and treble damages for negligence, conspiracy, theft, conversion, and violation of the Farm Products Act. Plaintiffs claimed, inter alia, that: (1) Tomlinson or Boone Bean was the agent of Double B; (2) Tomlinson and Bolster conspired to steal the beans; (3) Boone Bean and Tomlinson attempted to cover up shortages in the beans by creating documents reflecting fictitious sales of beans; (4) Double B, Bolster, and Klein Brothers assisted Boone Bean in covering up the shortages; (5) Double B, Bolster, and Klein Brothers knew that Boone Bean and Tomlinson had converted the beans owned by plaintiffs for defendants' own use or benefit; (6) Double B knowingly purchased and took possession of the stolen beans; and (7) Double B was the alter ego of Klein Brothers.

At trial to a jury, defendants stipulated that Bolster was acting within the scope and course of his employment as an agent for Double B. At its conclusion, the court entered a default judgment against Tomlinson and he is not a party in this appeal. Similarly, by virtue of its bankruptcy, Boone Bean is no longer a party.

In special verdict forms, the jury found: (1) Bolster was liable for negligence, conversion, theft, and violation of the Farm Products Act, but he had not engaged in civil conspiracy; (2) Double B was the alter ego of Klein Brothers; (3) Tomlinson or Boone Bean was acting as the agent of Double B at all times relevant to plaintiffs' injuries or damages; (4) the Colorado Department of Agriculture, a designated non-party, was negligent and such negligence was a partial cause of plaintiffs' injuries or damages; and (5) the percentage of negligence charged to Tomlinson was 55%, to Bolster 35%, and to the Colorado Department of Agriculture 10%. The jury awarded plaintiffs compensatory and punitive damages.

The parties filed several post-trial motions including a motion for order of judgment on jury verdicts to include treble damages, statutory interest, costs, and attorney fees. The trial court granted plaintiffs' motion awarding costs, attorney fees, and treble damages in lieu of the punitive damages awarded by the jury.

I.

Defendants claim the Farm Products Act does not create a private right of action, but merely establishes licensing requirements and regulates the conduct of farm products dealers, agents, and transporters. Thus, according to defendants, the jury verdict on that claim must be reversed. We disagree.

In support of their contention, defendants rely upon § 12-16-115, C.R.S. (1991 Repl.Vol. 5A) setting forth various types of activities creating unlawful conduct; § 12-16-114.5, C.R.S. (1991 Repl.Vol. 5A), providing for fines determined by the Commissioner of Agriculture that are paid into the General Fund; and § 12-16-116, C.R.S. (1991 Repl.Vol. 5A), providing for civil suits and criminal prosecutions brought by the attorney general or district attorney. None of these statutes expressly provides for a private right of action by plaintiffs. See L & M Enterprises, Inc. v. Golden, 852 P.2d 1337 (Colo.App.1993) (explicit language of statute does not provide a remedy for its violation); Silverstein v. Sisters of Charity, 38 Colo.App. 286, 559 P.2d 716 (1976) (no private right of action existed for employment discrimination against physically disabled persons where statute provided criminal penalty for violations but did not expressly provide for civil actions for damages).

Here, however, plaintiffs rely upon § 12-16-106(1)(d)(I), C.R.S. (1991 Repl.Vol. 5A), then in effect, which expressly provided that:

Any producer, owner, or other dealer within the state of Colorado claiming to be injured by the fraud, deceit, willful negligence, or failure to comply with the provisions of this part 1 of any dealer may seek to recover the damages caused by such fraud, deceit, willful negligence, or failure to comply with the provisions of this part 1. If the licensee has elected to file a bond pursuant to this section, the injured party may bring an action, with the prior written consent of the commissioner, for collection against both principal and surety in any court of competent jurisdiction.

It is uncontroverted that plaintiffs are producers and defendants are dealers. See § 12-16-103(4)(a), C.R.S. (1991 Repl.Vol. 5A) (defining "dealer") and § 12-16-103(9), C.R.S. (1991 Repl.Vol. 5A) (defining "producer"). Also, plaintiffs' claims arise from defendants' alleged failure to comply with the provisions of the Farm Products Act. Plaintiffs received the written consent of the commissioner and they "seek to recover the damages caused by [defendants'] fraud, deceit, [and] willful negligence...." Thus, under these circumstances, we hold that the Act creates a private right of action. See Boettcher & Co. v. Munson, 854 P.2d 199 (Colo.1993) (statute specifies conduct giving rise to civil liability for prospectus fraud and expressly creates a private right of action in favor of defrauded investor).

II.

Defendants next contend the jury verdict finding that Tomlinson or Boone Bean was the agent of Double B Trading is not supported by the evidence. We disagree.

Sufficiency of the evidence and inferences and conclusions drawn therefrom must be viewed in the light most favorable to the prevailing party in the trial proceedings. Such findings will not be disturbed if they are supported by evidence in the record. Winston Financial Group, Inc. v. Fults Management, Inc., 872 P.2d 1356 (Colo.App.1994).

The existence of an agency relationship is ordinarily a question of fact. Stortroen v. Beneficial Finance Co., 736 P.2d 391 (Colo.1987).

An agent is generally one who acts for, or in place of, another, or is entrusted with the business of another. And, the existence of an agency relationship turns on the intention of the parties and is evidenced by their acts, not on what the relationship is called. What is critical is that the parties materially agree to enter into a particular relation to which the legal consequences of agency attach even though those consequences might not have been contemplated by the parties at the time of their agreement. Moses v. Diocese of Colorado, 863 P.2d 310 (Colo.1993).

Although the control a principal exercises over the manner of work performed by an agent is evidence that an agency relation exists, no one factor, including control, is determinative. The most important factor in determining whether a person is an agent is "the right to control, not the fact of control." Moses v. Diocese of Colorado, supra, at 324.

Here, there is sufficient evidence in the record to support the jury's finding that Tomlinson or Boone Bean was the agent of Double B. The testimony showed that Bolster, while acting within the scope of his employment and as the president of Double B, approached Tomlinson with an...