Northwest Development, Inc. v. Dunn, s. 71--028
| Decision Date | 13 April 1971 |
| Docket Number | 24036,Nos. 71--028,s. 71--028 |
| Citation | 29 Colo.App. 364,483 P.2d 1361 |
| Parties | NORTHWEST DEVELOPMENT, INC., a Colorado corporation, Robert C. Goehl, Avis B. Goehl, William A. Hoover, Phyllis B. Hoover, Kenneth L. Kroh, Maxine F. Kroh, Martin Romain, and Lorraine L. Romain, Plaintiffs in Error, v. Chauncey M. DUNN and C. M. Dunn, Inc., a Colorado corporation, Defendants in Error. . I |
| Court | Colorado Court of Appeals |
Hutchinson, Black & Hill, James W. Buchanan, Robert G. Mistler, Boulder, for plaintiffs in error.
Alperstein & Plaut, Arnold Alperstein, Lakewood, for defendants in error.
This case was transferred from the Supreme Court pursuant to statute.
The parties appear here in the order of their appearance in the trial court and are referred to by their trial court designations or by name.
On October 9, 1968, a complaint was filed by Northwest Development, inc., and the individual plaintiffs against Chauncey M. Dunn and C. M. Dunn, Inc. Defendants filed a motion to dismiss, which was sustained by the trial court. Plaintiffs seek reversal of the judgment dismissing the action.
The complaint alleges that Northwest Development, Inc., was a Colorado Corporation organized March 22, 1962, and dissolved October 5, 1967; that the corporation is authorized to prosecute this action in its corporate name by C.R.S.1963, 31--8--22; and that the individual plaintiffs are stockholders of the corporation. The complaint alleges that at the time of the transactions complained of, Chauncey M. Dunn was a stockholder, officer and director of Northwest, and that Dunn also controlled the defendant corporation, C. M. Dunn, Inc., a real estate brokerage firm.
The complaint, in seven separately stated claims, seeks recovery for damages allegedly sustained by the corporation as a result of certain transactions with respect to the real estate owned by the corporation, by which the defendant Dunn allegedly defrauded the corporation. It is alleged that Dunn, acting in his fiduciary capacity on behalf of Northwest, and as an agent for defendant C. M. Dunn, Inc., negotiated a sale of a tract of Northwest's land to an oil company for $47,500. Dunn represented to the corporate officers that the land sold comprised two tracts described in the complaint, when, in fact, only one tract was sold to the oil company. Dunn then induced the corporate officers to execute two deeds which contained to legal description. He represented that he would insert the appropriate descriptions in the deeds, and that he would use one deed to close the sale with the oil company and the other to convey a strip of land to the county for a road. Instead, Dunn used the second deed to convey to himself one of the tracts of land which he had represented was to be conveyed to the oil company. The complaint alleges that the tract so acquired by Dunn had a market value of $25,000.
It is alleged that when the stockholders decided to liquidate the corporation, Dunn purchased a tract of land described in the complaint for the sum of $15,000, which sum he represented was a fair market price; that the tract, in fact, had a fair market value of $38,000; that the representation was made by Dunn with the knowledge that it was false and with the intent to induce the corporation to sell the land to him for less than its full value; and that Northwest, in reliance upon the representation, sold the tract of land to Dunn for $15,000, and was thereby damaged in the amount of $23,000.
The complaint also alleges that because of Dunn's breach of his fiduciary duty in connection with the transaction, Northwest is entitled to recover the $4,750 commission collected by C. M. Dunn, Inc., on the sale of the property to the oil company.
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