Norton v. Leadville Corp., 79CA0438
| Decision Date | 28 December 1979 |
| Docket Number | No. 79CA0438,79CA0438 |
| Citation | 610 P.2d 1348,43 Colo.App. 527 |
| Parties | , Blue Sky L. Rep. P 71,555, Fed. Sec. L. Rep. P 97,522 Charles W. NORTON, and Ruby W. Norton; Charles W. and Ruby W. Norton, Inc., an Iowa Corporation; Investment Securities Company, an Iowa Corporation; William B. Norton, Individually, and as Custodian for Bradley L. Norton; Florence N. Bates, and Leslie W. Bates; Lucille Yedlik, and Edwin G. Yedlik; Charles Wesley Norton and Macine M. Norton; Carl J. Mealy, and Alice N. Mealy; Harold D. Norton, and Brenda S. Norton; Miriam N. Baumann, and Robert W. Baumann, Plaintiffs-Appellants, v. LEADVILLE CORPORATION, a Colorado Corporation, Defendant-Appellee. . II |
| Court | Colorado Court of Appeals |
Gorsuch, Kirgis, Campbell, Walker & Grover, Stephen Klein, David S. Steefel, Denver, for plaintiffs-appellants.
Cosgriff, Dunn & French, Timothy H. Berry, Peter Cosgriff, Leadville, for defendant-appellee.
Plaintiffs appeal the granting of defendant Leadville Corporation's motion for summary judgment in plaintiffs' action for violations of federal and state securities laws and for common law fraud. We affirm in part and reverse in part.
From 1971 to 1974 plaintiffs acquired in excess of 160,000 shares of stock in Leadville. As a result of these acquisitions and loans made by plaintiffs to Leadville, plaintiff Charles Norton was elected to Leadville's board of directors in July 1972. In August 1973, Leadville's attorneys resigned, citing as the reason Leadville's failure "to meet the standards of a prudent management attempting to comply with the securities laws." In October 1973, plaintiffs hired their own counsel to investigate Leadville; and in January 1974, plaintiff Norton resigned from the board of directors, declaring that plaintiffs were concerned that they "may have invested on the basis of false and misleading information and that similar false and misleading information might also be given to the investing public."
In February 1975, after the other Leadville stockholders approved a proposal which plaintiffs opposed, plaintiffs demanded payment from the corporation for the value of their stock. Upon being informed by Leadville's attorney that their shares "were worth little or nothing on February 6, 1975," plaintiffs instituted an action for an appraisal of their stock.
In May 1977, Leadville began voluntary bankruptcy proceedings. Throughout those proceedings, plaintiffs, as a major secured creditor, attempted unsuccessfully to obtain discovery of documentation concerning the value of Leadville's properties.
Plaintiffs were finally successful in obtaining discovery of this documentation in April 1978, during the course of their stock appraisal action. Based on the information contained in these documents, plaintiffs amended their complaint in the stock appraisal action to include, among other things, claims alleging common law fraud and violations of 15 U.S.C. § 77q (1976), i. e., § 17 of the Securities Act of 1933, and § 11-51-125, C.R.S.1973.
The trial court granted Leadville's amended motion for summary judgment, holding that all of the claims in plaintiffs' amended complaint were barred by the applicable statutes of limitation.
On appeal, plaintiffs contend that it was error to grant summary judgment with respect to their claims because material factual issues exist concerning when plaintiffs should have known of the alleged misrepresentations and omissions giving rise to their claims.
Section 11-51-125(5), C.R.S.1973, states that "(n)o person may sue under this section more than two years after the contract of sale." Plaintiffs contend that this statute should be construed so as to incorporate a "discovery rule" which would make the two year period begin to run from the date fraud is or should have been discovered. However, the statute specifically requires that the two year period begin to run from the time of the contract of sale.
When the meaning of a statutory provision is plain and free from ambiguity and no absurdity is involved, the language is not subject to construction. Hill v. Sleep Products, Inc., 41 Colo.App. 133, 584 P.2d 93 (1978). Here, it is undisputed that all plaintiffs' stock was purchased prior to 1975 and that plaintiffs' amended complaint asserting a claim under § 11-51-125, C.R.S.1973, was not filed until 1978, more than two years later. We therefore affirm the summary judgment for defendant on plaintiffs' claim under § 11-51-125, C.R.S.1973.
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