Lexton-Ancira Real Estate Fund, 1972 v. Heller

• Decision Date: 10 March 1992
• Docket Number: LEXTON-ANCIRA,No. 90SC588,90SC588
• Citation: 826 P.2d 819
• Parties: REAL ESTATE FUND, 1972, a California limited partnership; Lexton-Ancira Incorporated, a Kansas corporation; Merchandise Mart Associates, Ltd., a Colorado limited partnership, Petitioners, v. Murray HELLER, Personal Representative of the Estate of Jo Hixson (by substitution for Jo Hixson, successor-in-interest to Hixson Trade Shows, Ltd., formerly known as Trade Shows, Ltd., a California corporation), Respondents.
• Court: Colorado Supreme Court

Page 819

826 P.2d 819

LEXTON-ANCIRA REAL ESTATE FUND, 1972, a California limited partnership; Lexton-Ancira Incorporated, a Kansas corporation; Merchandise Mart Associates, Ltd., a Colorado limited partnership, Petitioners, v. Murray HELLER, Personal Representative of the Estate of Jo Hixson (by substitution for Jo Hixson, successor-in-interest to Hixson Trade Shows, Ltd., formerly known as Trade Shows Ltd., a California corporation), Respondents.

No. 90SC588.

Supreme Court of Colorado En Banc.

March 10, 1992.

Baker & Hostetler, Bruce D. Pringle, Todd L. Lundy, Joan Burleson, Vinton, Waller, Slivka & Panasci, William C. Waller, Kevin D. Allen, Denver, for petitioners.

Holland & Hart, John S. Castellano, Timothy M. Rastello, Marcy G. Glenn, Denver, for respondents.

Justice VOLLACK delivered the Opinion of the Court.

We granted certiorari to consider the court of appeals' opinion in Heller v. Lexton-Ancira Real Estate Fund, 1972, 809 P.2d 1016 (Colo.App.1990), reversing the district court's order which reduced the jury's award from $10 million to $6 million. In reinstating the jury's award, the court of appeals first concluded that awards of compensatory damages on both a common-law claim for misappropriation and a statutory claim for deceptive trade practices under the Consumer Protection Act, §§ 6-1-101 to -115, 2 C.R.S. (1973 & 1991 Supp.) (the "Act"), were not duplicative, and concluded secondly that a punitive-damage award on the misappropriation claim was not precluded by an award of statutory treble damages awarded pursuant to section 6-1-113, 2 C.R.S. (1991 Supp.), of the Act. We reverse the judgment of the court of appeals and remand the matter to that court with directions to reinstate the judgment of the district court.

I.

Hixson Trade Shows, Limited, and Jo Hixson (Hixson) operated gift and jewelry shows in several cities, including Denver. ¹ Hixson's Denver show, the "Denver Gift and Jewelry Show," was held at the Denver Merchandise Mart (the Mart). Hixson leased show space from the Mart and then subleased space to exhibitors. Hixson also received revenues from exhibitors' fees. In 1975, Hixson and the Mart entered into a lease which provided for a ten-year term with three five-year options to renew. The renewal option required written notice to the Mart at least two years prior to the lease's expiration.

In August 1985, Hixson had not provided written renewal of the lease. The Mart notified Hixson in writing that the lease was expiring and that the Mart would produce its own gift shows commencing in 1986. The Mart notified show exhibitors that it was concluding its long relationship with Hixson and that it would sponsor and direct its own show, the "Denver Merchandise Mart Gift & Jewelry Show."

In March and August, 1986, Hixson scheduled the "Denver Gift and Jewelry Show" at the Denver Coliseum. These shows were not successful. Subsequently, Hixson sold the Phoenix, Los Angeles, and Honolulu shows. Hixson Trade Shows was dissolved, and its assets were distributed to Jo Hixson.

Four months prior to its dissolution, Hixson filed suit against the Mart, alleging breach of contract, misappropriation, intentional interference with prospective advantage, misrepresentation, unfair competition, and bad faith. Neither the complaint nor the amended complaint contained a claim for deceptive trade practices under the Act. However, they did contain a claim for unfair competition, which essentially mirrored the misappropriation claim.

In April 1988, a jury trial was held. The claim of misappropriation of Hixson's trade name, goodwill, and commercial advantage or opportunity was submitted to the jury. The court also granted Hixson's request that a claim for deceptive trade practices pursuant to sections 6-1-101 to -114, 2 C.R.S. (1973 & 1991 Supp.), be submitted to the jury. ² Both Hixson's proposed jury instructions and the final jury instructions indicate that the deceptive trade practice claim and the misappropriation claim were predicated on the same conduct. Hixson contended that the Mart (1) had used a similar trade name which confused exhibitors and purchasers as to the source or origin of the show, (2) had led others to believe that the new show was affiliated with or a continuation of the Denver Gift and Jewelry Show, and (3) had informed Hixson's exhibitors and buyers that she would no longer be producing the Denver Gift and Jewelry Show.

Under the Act, Hixson could recover her actual damages, while under the misappropriation claim, she could recover her actual damages or the profits made by the Mart. Hixson offered expert testimony that Hixson's actual damages were between $1.6 and $2.1 million. This expert also testified that the Mart's profits from the alleged misappropriation were $3.9 to $4.7 million. The Mart's expert testified that the actual damages were between $150,000 and $600,000.

On the misappropriation claim, the jury awarded Hixson $2 million in compensatory damages and $2 million in punitive damages. On the deceptive trade practice claim, they also awarded her $2 million in compensatory damages. The district court, pursuant to section 6-1-113(2)(a), 2 C.R.S. (1991 Supp.), trebled the $2 million deceptive trade practices award. Section 6-1-113(2)(a) provides that any person who engages in a deceptive trade practice "shall be liable in an amount equal to the sum of: (a) Three times the amount of actual damages sustained or two hundred fifty dollars, whichever is greater."

The total judgment at trial was $10 million. In its judgment and order, however, the district court found the compensatory damage awards on the separate claims to be duplicative and reduced the award to $8 million. In Hixson's motion for post-trial orders, she argued that the separate compensatory damage awards were not duplicative because the evidence supported a jury verdict awarding $4 million in compensatory damages. She also argued that the awards of treble damages and punitive damages were not duplicative because these awards served different purposes. The Mart argued, in response, that the district court was correct in finding the compensatory damage awards duplicative. They also argued that Hixson could not recover both the punitive damage award and the treble damage award because both awards served the purposes of punishment and deterrence.

The district court ruled that the compensatory damage awards came from the same "corpus of money" and concluded that the two awards were duplicative. The court stated:

For whatever reason, the Court is faced with the inescapable conclusion and recollection that we indicated on the verdict forms that the jury should not be concerned with duplication and that we would make that determination post trial.... So the court finds that under either of the two theories or both the award is still 2 million dollars in favor of the plaintiff and against the defendants.

The court also ruled that the punitive damage award was duplicative. The court stated: "But it seems to me that in the final analysis a treble damage award is made to sanction conduct which the legislature feels is inappropriate, verging on dishonesty or excessively sharp business practice."

The court of appeals reversed the district court on both rulings. The court stated that section 6-1-105(3), 2 C.R.S. (1973), provides that deceptive trade practice claims "are in addition to and do not limit the types of unfair trade practices actionable at common law." The court concluded that because evidence established that the jury could find $4 million in damages, "and because of the language of the Act itself," the district court erred in finding the compensatory damage awards duplicative.

The court also held that the punitive damage and treble damage awards were not duplicative. The court concluded that an award of punitive damages arising from the same facts as an award of treble damages under the Act was not precluded "because the damage awards serve different purposes." The court noted that punitive damages serve to punish and deter. They did not indicate the purpose of treble damages.

II.

First, the Mart contends that, because the claims were premised on the same facts and because the purpose of the punitive damages is served by the award of treble damages in this case, Hixson should not be permitted to recover both the treble damage award and the punitive damage award. We agree.

Generally, a plaintiff may not recover both treble damages and punitive damages premised on the same facts because such damage awards serve similar purposes. See Central Telecommunications, Inc. v. TCI Cablevision, Inc., 610 F.Supp. 891, 910 (W.D.Mo.1985) (punitive damages have similar purpose to treble damages and parties may not collect both), aff'd, 800 F.2d 711 (8th Cir.1986), cert. denied, 480 U.S. 910, 107 S.Ct. 1358, 94 L.Ed.2d 528 (1987); Eastern Star, Inc. v. Union Bldg. Materials Corp., 6 Haw.App. 125, 712 P.2d 1148, 1159 (1985) (awards of treble damages under deceptive trade practices act and punitive damages on fraud claim constitutes improper double recovery); Ellis v. Northern Star Co., 326 N.C. 219, 388 S.E.2d 127, 132 (1990) (plaintiff may recover either treble damages for deceptive trade practices or punitive damages on common-law claim, but not both); Birchfield v. Texarkana Memorial Hosp., 747 S.W.2d 361, 367 (Tex.1987) (awards of treble damages under deceptive trade practices act and punitive damages under common-law claim amounts to double recovery); see also Browning Ferris Indus. v. Kelko Disposal, Inc., 492 U.S. 257, 109 S.Ct. 2909, 2913, 106 L.Ed.2d 219 (1989) (affirming punitive damage award from judgment requiring plaintiff to choose between treble damage award and punitive damage award); Superturf, Inc. v. Monsanto Co., 660 F.2d 1275, 1284 (8th Cir.1981) (recovery of treble and punitive damages is duplicative); John Mohr & Sons, Inc. v. Jahnke, 55 Wis.2d 402, 198 N.W.2d 363, 367 (1972) (to...