Overland Development Co. v. Marston Slopes Development Co.

• Decision Date: 20 April 1989
• Docket Number: No. 87CA1612,87CA1612
• Citation: 773 P.2d 1112
• Parties: OVERLAND DEVELOPMENT COMPANY, Plaintiff-Appellant, v. MARSTON SLOPES DEVELOPMENT COMPANY, Defendant-Appellee. . V
• Court: Colorado Court of Appeals

Page 1112

773 P.2d 1112

OVERLAND DEVELOPMENT COMPANY, Plaintiff-Appellant, v. MARSTON SLOPES DEVELOPMENT COMPANY, Defendant-Appellee.

No. 87CA1612.

Colorado Court of Appeals,

Div. V.

April 20, 1989.

Baker & Hostetler, Fred M. Winner, Andrew B. Prosser, Denver, for plaintiff-appellant.

Timothy J. Flynn, Englewood, for defendant-appellee.

CRISWELL, Judge.

Plaintiff, Overland Development Co., appeals from the judgment dismissing its claims of contract violation, fraud, and negligent misrepresentation against defendant, Marston Slopes Development Co., a land developer. It asserts that (1) the trial court's findings mandate the entry of a judgment for money damages and attorney fees under its contract claim, (2) the exclusion of certain testimony of an expert proffered by plaintiff was prejudicial error, and (3) the trial court applied the wrong legal standard in dismissing its claim for negligent misrepresentation. We affirm in part and reverse in part.

Pursuant to two written agreements, plaintiff purchased five building sites from defendant in Marston Slopes Subdivision, a subdivision that defendant had previously developed. By these agreements, defendant undertook to landscape certain areas within the subdivision, although no time for the completion of the landscaping was set. As of the date of trial, this landscaping had not been completed.

These agreements also provided that, should any litigation result between plaintiff and defendant relating to the agreements or their subject matter, the "prevailing party" would be "entitled" to an award of reasonable attorney fees as damages.

During the negotiations leading to the execution of these agreements, the question of the continued existence of a neighboring trap shooting range operated by a recreation district was discussed. Plaintiff was shown a letter from the United States Department of Interior which indicated that the range would be moved to another location by 1987, and defendant's agent expressed the opinion that the shooting range would be removed in the reasonably near future. At the same time, defendant had knowledge of another letter from an official of the recreation district which said that, while another site for the range was available, there were "real and pragmatic concerns of financing and location" with respect to its relocation. The range had not been relocated as of the date of trial.

After plaintiff's acquisition of the building sites, it proceeded to build residences on two of them which it sold for less than it had expended to build them. Thereafter, it initiated this action based on defendant's failure to complete the landscaping of the area or to enforce certain restrictive covenants upon the property and on the failure of the shooting range to be relocated as represented by defendant. It claimed as damages the difference between their sale prices and the construction costs and expenses, plus the amount it had paid defendant for the sites.

After a bench trial, the district court found generally in defendant's favor. While it concluded that defendant had breached the obligation that it owed to install certain landscaping, it found that the losses sustained by plaintiff from its erection and sale of the two residences were the result of unfavorable market conditions and other factors for which defendant was not responsible. It also found that the opinion expressed by defendant respecting the relocation of the shooting range was not a material consideration to plaintiff at the time of the execution of the agreements. Further, it found and concluded that defendant was not guilty of fraud or negligent misrepresentation because it entertained the good faith opinion that the shooting range was to be relocated within a reasonable time and, based on all of the information in its possession, defendant had not acted unreasonably in forming or expressing this opinion.

In addition, the court awarded defendant a judgment for some $129,000, representing the principal and interest due on a purchase money note and deed of trust, together with attorney fees called for by those instruments.

I.

Plaintiff argues that, because the trial court found that defendant had breached its obligation to landscape some of the areas it had agreed to landscape, plaintiff was entitled, as a matter of law, to recover the actual damages it sustained or, at the least, nominal damages. Further, it asserts that, since it "prevailed" upon this issue of contract violation, the provisions of the agreements required that it be awarded its attorney fees. While we agree that plaintiff was entitled to a judgment for nominal damages, we conclude that the trial court's denial of actual damages is supported by the record. We also conclude that plaintiff is not entitled to an award of attorney fees.

A.

Relying upon the well-accepted principle that a damage award will not be withheld when it is only the amount, and not the fact, of damage that is uncertain, plaintiff asserts that the record here required the trial court to enter a judgment for actual damages to compensate plaintiff for defendant's failure to landscape. We disagree.

The principle, reiterated by this court in Hein Enterprises, Ltd. v. San Francisco Real Estate Investors, 720 P.2d 975 (Colo.App.1985), is that, if the "fact of damage and the issue of causation is resolved in plaintiff's favor, difficulty or uncertainty in determining the precise amount of damage does not prevent an award of damage." (emphasis supplied)

Here, the trial court, with substantial record support, found that any losses that plaintiff may have sustained in the construction and sale of its two residences were caused by adverse market conditions and other factors over which defendant had no control, and not by any action or inaction of defendant. Thus, even if plaintiff's damage evidence would otherwise have been sufficient to sustain a monetary award (an issue we do not address), the trial court's factual finding of a lack of causation prevented that court from entering any judgment for actual damages.

B.

On the other hand, proof of actual damages is not an essential element of a claim for breach of contract. Thus, if a plaintiff's evidence proves such a violation, he is entitled to an award of nominal damages, even in the absence of the proof of any actual damages. See Northwest Water Corp. v. Westminster, 164 Colo. 61, 432 P.2d 757 (1967); Comfort Homes, Inc. v. Peterson, 37 Colo.App. 516, 549 P.2d 1087 (1976).

Because the trial court found that defendant violated its contractual obligation to landscape, plaintiff was entitled, as a matter of law, to the entry of a judgment in its favor in the amount of one dollar. See Colorado Investment Services, Inc. v. Hager, 685 P.2d 1371 (Colo.App.1984).

C.

Plaintiff also asserts that, because the trial court found that defendant violated its duty to landscape, it was the "prevailing party" under the agreements' provision for the recovery of attorney fees. Again, we disagree.

The agreements here do not define the term "prevailing party," nor do they set forth the criteria that a litigant must meet in order to be considered to be such a party. And, we are unaware of any commonly accepted meaning that has been given to that term by the Colorado courts.

There are several Colorado statutes that provide for an award of attorney fees to the "prevailing party." See § 6-15-103, C.R.S. (1988 Cum.Supp.); §§ 7-70-108(3), 7-70-111(2), and 7-74-105, C.R.S. (1986 Repl.Vol. 3A); §§ 13-21-109(2), 13-40-123, and 13-52-102(4)(b), C.R.S. (1987 Repl.Vol. 6A); § 14-14-107(9)(e), C.R.S. (1987 Repl.Vol. 6B); § 18-4-702(3), C.R.S. (1986 Repl.Vol. 8B); § 19-1-117 (1988 Cum.Supp.); §§ 32-4-545(2), 32-9-160(2), and 32-11-816, C.R.S.; § 38-12-209(3), C.R.S. (1982 Repl.Vol. 16A); and § 42-11-109(3), C.R.S. (1984 Repl.Vol. 17).

However, few instances have arisen under these statutes in which the question whether a party prevailed was presented. See Keeton v. Rike, 38 Colo.App. 505, 559 P.2d 262 (1977) (if plaintiff is granted money judgment under wage statute based on unpaid commissions, he is "winning" party under statute). Further, no state court decision has adopted any general rule to be used to determine when a party may be considered to be a prevailing party.

On the other hand, the question whether a plaintiff has "prevailed" for the purpose of an award of attorney fees under the Civil Rights Attorney's Fees Awards Act, 42 U.S.C.A. § 1988 (West 1981), has arisen in a number of instances. As a result, the United States Supreme Court held that, to be considered to be a prevailing party under this statute, the applicant for fees must have succeeded upon a significant issue presented by the litigation and must have achieved some of the benefits that he...