K-R Funds, Inc. v. Fox, K-R

• Decision Date: 05 November 1981
• Docket Number: K-R,No. 80CA0003,80CA0003
• Citation: 640 P.2d 257
• Parties: FUNDS, INC., Ontario, a limited partnership, Plaintiff-Appellee, v. S. Ross FOX, Defendant-Appellant. . I
• Court: Colorado Court of Appeals

Page 257

640 P.2d 257

K-R FUNDS, INC., Ontario, a limited partnership, Plaintiff-Appellee, v. S. Ross FOX, Defendant-Appellant.

No. 80CA0003.

Colorado Court of Appeals, Div. I.

Nov. 5, 1981.

Rehearing Denied Dec. 10, 1981.

Lamm & Schader, Robert K. Schader, Houston Lee Morrow, Boulder, for plaintiff-appellee.

J. Lorin Yeates, Sartore, Hoyt & Graveley, William J. Graveley, Denver, for defendant-appellant.

STERNBERG, Judge.

The determinative issue in this appeal is whether, under the facts presented, the trial court abused its discretion in denying a defendant leave to amend an answer so as to assert potentially valid affirmative defenses. We hold that there was an abuse of discretion in this regard and, therefore, reverse the judgment entered against the defendant and remand the cause for a new trial.

The defendant, S. Ross Fox, a resident of the state of Washington, subscribed to a limited partnership drilling fund of plaintiff K-R Funds, Inc., a Colorado corporation, in 1969. Because of other financial problems, Fox filed a petition in bankruptcy in Washington in 1973, but did not list the indebtedness which is the subject of this suit assertedly because he felt that he had no personal financial liability in this matter. He was discharged in due course.

On June 25, 1975, just prior to the running of the statute of limitations on its claim against Fox, K-R Funds, Inc., filed this suit to recover some $87,000 allegedly due under the subscription agreement. Proceeding through counsel no longer involved in this case, Fox filed a general denial of the allegations in the complaint. By agreement of counsel, this suit was delayed in order to allow Fox time to seek to reopen his bankruptcy action to amend the schedule of debts and thereby discharge any obligation to K-R Funds. The bankruptcy court in Washington subsequently denied leave to reopen, and this suit became active again.

Trial was set for April 14, 1978, but on March 10, 1978, Fox moved that the trial date be vacated, and for leave to amend his pleadings to raise certain affirmative defenses. The trial judge to whom the case was then assigned denied the motion to amend because it was late; however, he granted the motion to vacate the trial date and set trial for October 30, 1978.

Prior to this date that trial judge retired, the case was assigned to a second judge, and trial did not actually proceed until September 12, 1979. At that time, Fox again sought to amend his answer but the court denied the motion, believing that it was bound by the first judge's order in that regard. We do not agree that the first judge's ruling bound the second under the facts present here. See Sunshine v. Robinson, 168 Colo. 409, 451 P.2d 757 (1969); Denver Electric & Neon Service Corp. v. Phipps, 143 Colo. 530, 354 P.2d 618 (1960). See also Moon v. Platte Valley Bank, Colo.App., 634 P.2d 1036 (1981). Compare C.R.S.1963, 37-4-17 with § 13-5-132, C.R.S.1973.

The trial proceeded to the court during which Fox attempted to introduce evidence tending to prove his affirmative defenses. Based on K-R Funds' continuing objections that the evidence could not be received because it related to affirmative defenses not pled, the court refused to consider such evidence. The court did note that this evidence "would appear to be a complete defense of the plaintiff's claim." At the conclusion of this non-jury trial the court entered judgment in favor of K-R Funds in the amount of $82,332.50.

We agree with the trial court that the defenses in question are...