LaFond v. Basham
| Decision Date | 24 May 1984 |
| Docket Number | No. 81CA0908,81CA0908 |
| Citation | 683 P.2d 367 |
| Parties | Rene E. LAFOND and Gloria J. LaFond, Plaintiffs-Appellees, v. Charles BASHAM, Defendant-Appellant. . I |
| Court | Colorado Court of Appeals |
Moye, Giles & O'Keefe, Teryl R. Gorrell, Denver, for plaintiffs-appellees.
George Alan Holley & Associates, P.C., Dennis B. Polk, Golden, for defendant-appellant.
Defendant, Charles Basham, appeals the trial court's judgment entered against him for breach of contract. We affirm.
In May 1978, plaintiffs, Rene and Gloria LaFond, entered into a $19,000 home remodeling contract with Colorado Builders of Englewood, Inc., and made a $9,500 down payment. Work began on the project, but was abandoned a short time later. The value of the work done was $2,842.71, and the LaFonds were later required to satisfy a mechanic's lien from a materials supplier.
The LaFonds sued Colorado Builders of Englewood, Inc. (Builders), Colorado Patio and Awning Co. (Patio), Charles Basham, and Mark C. Basham, his son. The corporate defendants admitted liability, and the only issue tried as to them was damages. The claim against Mark C. Basham was dismissed during trial. After trial to the court, judgment was entered against Builders, Patio, and Charles Basham, individually, for $7,670.29 plus interest at 8 percent from the date of the breach.
On appeal, Basham asserts that the trial court erred in holding him individually liable since (1) he claims he was given inadequate notice of the LaFonds' claim against him for personal liability; (2) he was not a stockholder in either Builders or Patio; (3) the evidence was insufficient to impose individual liability as to him; and (4) the award of prejudgment (moratory) interest was improper.
Basham's assertion that he was given inadequate notice of the LaFonds' personal liability claim against him is unsupported by the record.
A pleading in Colorado need only serve notice of the claim asserted, Blake v. Samuelson, 34 Colo.App. 183, 524 P.2d 624 (1974), since the substance of the claim rather than the appellation applied to the pleading by the litigant controls. Central City Opera House Ass'n v. Brown, 191 Colo. 372, 553 P.2d 64 (1976); Maes v. Tuttoilmondo, 31 Colo.App. 248, 502 P.2d 427 (1972). Thus, if under the facts, the substantive law provides relief on any theory, the cause should proceed to judgment. D'Amico v. Smith, 42 Colo.App. 369, 600 P.2d 84 (1979).
The pleadings here put Basham on notice that the LaFonds sought to hold him personally liable based on equitable principles. While several paragraphs of the complaint contained factual allegations that Basham was the "alter ego" of the corporations, the complaint also alleged that: "[A]dherence to the separate existence of the corporate defendants and the individual defendants would, under the circumstances, sanction a fraud or promote an injustice against plaintiffs." Thus, there were sufficient facts and theories alleged to conform to the requirements of C.R.C.P. 8.
Basham asserts that the trial court properly concluded that only shareholders can be liable for corporate debts, and, since he was not a shareholder in either Patio or Builders, the court correctly ruled he was not liable under § 7-5-114, C.R.S. However, he argues neither the facts nor the law support the trial court's imposition of liability on him based on a common law theory. We disagree.
Section 7-5-114(9), C.R.S., provides that corporate directors are liable under all situations enumerated in § 7-5-114, C.R.S., "in addition to any other liabilities imposed by law on directors of a corporation." A corporate entity may be disregarded and corporate directors may be held personally liable if equity so requires. Rosebud Corp. v. Boggio, 39 Colo.App. 84, 561 P.2d 367 (1977); see also Gutheil v. Polichio, 103 Colo. 426, 86 P.2d 972 (1939); Nix v. Miller, 26 Colo. 203, 57 P. 1084 (1899). If adherence to the corporate fiction would promote injustice, protect fraud, defeat a legitimate claim, or defend crime, the invocation of equitable principles for the imposition of personal liability may occur. Fink v. Montgomery Elevator Co., 161 Colo. 342, 421 P.2d 735 (1966); Hill v. Dearmin, 44 Colo.App. 123, 609 P.2d 127 (1980).
Here, the trial court found that Charles Basham ran the business of both Patio and its subsidiary, Colorado Builders, as he saw fit, was a member of the board of directors, was an officer, and clearly dictated all policy and activity on the part of both Patio and Colorado Builders. The record shows, and the trial court found, that Basham testified that "he ran the companies," and that no one could overrule his decisions except the Board of Directors, of which he was a member. The court further found, based on uncontradicted...
To continue reading
Request your trial
-
IN RE AIR CRASH DISASTER AT STAPLETON INTERN.
...the corporate form, and the underlying public policy on which it is based, lies in equity. Micciche, 727 P.2d at 373; Lafond v. Basham, 683 P.2d 367, 369 (Colo.App.1984). "A court will disregard the corporate entity where fraud or illegal or inequitable conduct is the result of the use of c......
-
John Buckley & Mama Gramm's Bakery, Inc. v. Abuzir
...he has avoided owning stock in his own name and assuming a corporate title such as officer or director.” See also LaFond v. Basham, 683 P.2d 367, 369–70 (Colo.App.1984) (shareholder status not required for veil-piercing), overruled on other grounds by Weinstein v. Colborne Foodbotics, LLC, ......
-
Lowell Staats Min. Co., Inc. v. Pioneer Uravan, Inc.
...Co., 161 Colo. 342, 350, 421 P.2d 735, 739 (1966); Gutheil v. Polichio, 103 Colo. 426, 431, 86 P.2d 972, 974 (1939); La Fond v. Basham, 683 P.2d 367, 369 (Colo.App.1984); Krendl & Krendl, supra at Micciche, 727 P.2d at 372-73. A variety of factors are to be considered by the court in making......
-
In re Saba Enterprises, Inc.
...the imposition of personal liability may occur." Sheffield Services Co., 211 P.3d 714, 2009 WL 1477003 at *5 (quoting LaFond v. Basham, 683 P.2d 367, 369-70 (Colo.App.1984)). In the present case, upholding the corporate fiction of the Debtor, Alexi Holdings Limited and All Round Management ......
-
Rule 8 GENERAL RULES OF PLEADING.
...200 Colo. 221, 614 P.2d 357 (1980); A.R.A. Mfg. Co. v. Brady Auto Accessories, Inc., 622 P.2d 113 (Colo. App. 1980); LaFond v. Basham, 683 P.2d 367 (Colo. App. 1984). III. DEFENSES. Law reviews. For note, "Pleading a Claim Barred by Statute of Limitations by Way of Recoupment", see 7 Rocky ......
-
Chapter 5 - § 5.1 • NEGLIGENCE
...80 P.3d 863, 868 (Colo. App. 2003).[244] Gorsich v. Double B Trading Co., 893 P.2d 1357, 1362 (Colo. App. 1994).[245] LaFond v. Basham, 683 P.2d 367, 369-70 (Colo. App. 1984).[246] Swinerton Builders v. Nassi, 2012 COA 17, ¶¶ 13-18 (holding veil piercing proper where court finds: (1) corpor......
-
Chapter 14 - § 14.5 • TORT CLAIMS ARISING FROM THE CONSTRUCTION AND SALE OF A HOME
...80 P.3d 863, 868 (Colo. App. 2003).[1241] Gorsich v. Double B Trading Co., 893 P.2d 1357, 1362 (Colo. App. 1994).[1242] LaFond v. Basham, 683 P.2d 367, 369-70 (Colo. App. 1984).[1243] Swinerton Builders v. Nassi, 2012 COA 17, ¶¶ 13-18 (holding veil piercing proper where court finds: (1) cor......
-
Chapter 14 - § 14.3 • POTENTIAL DEFENDANTS IN RESIDENTIAL CONSTRUCTION DISPUTES
...689 P.2d 724, 725-26 (Colo. App. 1984) (individual defendant liable for his own torts committed on behalf of builder); LaFond v. Basham, 683 P.2d 367, 370 (Colo. App. 1984) (imposing personal liability against home contractor's corporate president proper to avoid fraud or injustice); Saltir......