Harrison v. Luse
| Citation | 760 F. Supp. 1394 |
| Decision Date | 29 March 1991 |
| Docket Number | Civ. A. No. 85-S-2599. |
| Parties | Stephen HARRISON, Patricia Harrison, and Stonebridge Management, Inc., Plaintiffs, v. Alwyn F. LUSE, Jr., Defendant. |
| Court | U.S. District Court — District of Colorado |
COPYRIGHT MATERIAL OMITTED
Thomas Hill, Krabacher, Schiffer & Hill, P.C., Aspen, Colo., for plaintiffs.
Eugene Deikman, Denver, Colo., for defendant.
THIS MATTER came on for trial on August 13, 1990 on the Defendant's Counterclaims against the Plaintiffs for outrageous conduct, malicious prosecution, and for attorneys' fees and costs pursuant to Fed.R. Civ.P. 11, 28 U.S.C. § 1927, and Colo.Rev. Stat. § 13-17-101 (1987 Repl.Vol.) for the bringing of a substantially frivolous and groundless action. Final arguments were heard on October 24, 1990 and the court took the matter under advisement. Having heard the testimony of the parties and the arguments of counsel during the three-day trial, having reviewed the substantial number of depositions and exhibits, and being fully advised in the premises, the court makes the following Findings of Fact, Conclusions of Law, and Order.
During all times relevant to this litigation, Defendant Alwyn F. Luse and his wife were owners of units in the Stonebridge Inn, a condominium complex in Snowmass Village, Snowmass, Colorado. The Plaintiffs, Stephen and Patricia Harrison, also owned units at the Stonebridge Inn. The Harrisons were members of the Board of Directors of the Stonebridge Inn during the years 1982, 1983, and 1984. Mr. and Mrs. Harrison were also principals in the Plaintiff Stonebridge Management, Inc., a Colorado corporation. Stonebridge Management, Inc. was engaged as the management company for the Stonebridge Inn condominium complex from 1979 through October of 1987. The Harrisons were also principals in a Florida corporation known as Whitney Centers, Inc., which was controlled by another corporation known as Horizon Ventures, Inc., which in turn was wholly owned by the Harrisons.
The controversy giving rise to this case began in late March or early April of 1984 when Mr. Luse and his wife were vacationing at their condominiums. At this time, the Harrisons were managing the Stonebridge Inn. Mr. and Mrs. Luse were very disappointed in the way the complex was being managed and expressed their disappointment to the Harrisons. After returning to his home in late April of 1984, Mr. Luse wrote letters to the other owners of units at the Stonebridge Inn criticizing the Harrisons' management of the Stonebridge Inn. (Defendant's Exhibit F).
Mr. Luse then attended the directors meeting of the Stonebridge Inn Association, a non-profit corporation organized as an association of the owners for the formal management of the Stonebridge Inn complex. This meeting was held at the Stonebridge Inn on April 30, 1984. Mr. and Mrs. Harrison, other members of the Board, and several other owners attended the meeting. Mr. Luse expressed his opinions concerning the management of the Stonebridge, particularly concerning his perception that Stephen and Patricia Harrison had a conflict of interest which should disqualify them from serving on the Board of Directors of the Stonebridge Inn Association. At that time, the Harrisons and Stonebridge Management, Inc. controlled at least three votes out of the five-member board of the Stonebridge Inn Association.
Mr. and Mrs. Harrison believed that their ownership interest through Stonebridge Management, Inc. made it appropriate that they serve on the Board and take an active part in the management of the Stonebridge. The Harrisons attempted to convince Mr. Luse and the other owners in attendance that they were working for the benefit of all the owners. As a result of the allegations made by Mr. Luse at the meeting, there was at least one heated verbal exchange between Stephen Harrison and Mr. Luse. Mr. Luse left the meeting convinced that he would run for a seat on the Board of Directors and, if elected, attempt to remedy the problems he perceived with respect to the Harrisons and their company, Stonebridge Management, Inc.
On September 18, 1984, Mr. Luse wrote a letter to the Board of Directors of the Stonebridge Inn Association, Mr. Ollie Fields, Ms. Pat Simeone, Mr. Belton Fleisher, Mr. Stephen Harrison, and Mrs. Patty Harrison, concerning a new contract for management of the Stonebridge Inn. (Defendants' Exhibit P). In that letter, Mr. Luse noted that the existing contract with the owners of the Stonebridge Inn Association terminated on September 30, 1984. He indicated that a new contract had been prepared by a committee appointed at the Board Meeting in April and would be considered at the next meeting of the Board. He raised several points for consideration prior to approval of the extended contract. First, he noted that the management company was owned and controlled by the Harrisons, who were members of the Board. He accused the Harrisons of an "extreme conflict of interest" and "conduct in the past ... considered ... as unprofessional." He indicated his concern about the management of the complex and the competence of the staff. He accused the management of "extreme arrogance and contempt for owners whose interest and trust they are supposed to give first consideration," harassment and intimidation of owners, obscenities, and filing of a lawsuit against one owner. He objected to the approval of the two-year contract under consideration. He represented that he was speaking not only for himself but for many of the owners with whom he had consulted and corresponded. Copies of the letter in question were sent to all the owners of units in the Stonebridge Inn. Mr. Luse sought to obtain a seat on the Board with a slate of directors who purportedly shared his views. Mr. Luse and his slate of directors were elected to the Board of Directors in December of 1984.
The management agreement which had been the subject of the previous year's controversy came up for renewal in the summer of 1985. Mr. Luse, who by this time had been elected President of the Stonebridge Inn Association, was active in the operation of the Association. The Board, under his direction, sent out proposals in 1985 for a management contract. The Board received replies from several companies. Several meetings were held to discuss the management of the complex and the awarding of a new contract. A meeting concerning the management contract was held with representatives of the Plaintiffs' corporation, Whitney Centers, in Denver, Colorado on August 6, 1985.
After this meeting, the Board determined that the Harrisons and their company would not be offered the contract. The contract was instead offered to Village Property Management Company of Snowmass, Colorado. The Board then requested that the Harrisons and their management company vacate the premises. The Harrisons refused and in November of 1985, the Stonebridge Inn Association filed an action to evict them. This action was filed in the Pitkin County Court and was subsequently transferred to the Pitkin County District Court because of a counterclaim filed by the Plaintiffs. In the meantime, on October 7, 1985, Mr. Luse wrote to all of the owners of the Stonebridge Inn concerning the rental agreements on their individual units with Stonebridge Management, Inc. (Defendant's Exhibit S). Representing himself as President of the Stonebridge Inn Association, Mr. Luse advised the other owners as follows:
Believing that Mr. Luse was attempting to interfere with the contractual relationship between their company and the owners, the Plaintiffs commenced litigation against Mr. Luse for defamation and interference with contract. That lawsuit was filed on November 20, 1985 in the Pitkin County District Court and became Case No. 85-CV-368. The Plaintiffs were represented by Thomas C. Hill and Herbert S. Klein of Klein, Seigle & Krabacher, P.C.. At some point, Mr. Klein left the firm of Klein, Seigle & Krabacher, P.C. and continued to represent the Plaintiffs as co-counsel with Mr. Hill of Krabacher, Schiffer & Hill, P.C. Mr. Klein eventually was allowed to withdraw from representation of the Plaintiffs on April 12, 1988 because he was to be called as a witness at trial.
Case No. 85-CV-368 was then removed to this court by petition filed by Defendant Luse on December 10, 1985. That complaint is the original complaint in the case now before the Court. Defendant Luse filed his Answer and original counterclaims on December 30, 1985.
Subsequent to the filing of the first lawsuit in Pitkin County, the Harrisons allegedly learned of other instances of defamation by Mr. Luse. Stephen Harrison then filed a second action for defamation in Pitkin County on December 11, 1985, Case No. 85-CV-383. (Defendant's Exhibit DD). This second action alleged that on or about December 15, 1984, Mr. Luse communicated defamatory statements to one or more Stonebridge Inn owners, including Arne Marthinsson.
Pursuant to a stipulation approved by Judge Carrigan on February 3, 1986, the Plaintiffs amended their complaint in Civil Action No. 85-C-2599 to withdraw the first and second claims for relief, to modify the third claim for relief, and to include the allegations set forth in the Second Amended Complaint in Case No....
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