author: Judge JONES.

text:
    Vincent FORD and Sheelagh Ford, Plaintiffs-Appellants, v. SUMMERTREE LANE LIMITED LIABILITY COMPANY, Woodside Realty Co., Phil Shell, Van Wedgwood, Charles S. Ochsner, and Kenny Pulsiani, Defendants-Appellees.
    No. 01CA1146.
    Colorado Court of Appeals, Div. II.
    June 20, 2002.
    Certiorari Denied Nov. 4, 2002.

      Icenogle, Norton, Smith, Blieszner & Miller, Edward J. Blieszner, Sara Wagers-Johnson, Denver, Colorado, for Plaintiffs-Appellants. . j 6C "
    Holley, Albertson & Polk, P.C., Dennis B. Polk, Eric E. Torgersen, Golden, Colorado, for Defendant-Appeliee Summertree Lane Limited Liability Company.
    White & Steele, P.C., Glendon L. Laird, James M. Meseck, Denver, Colorado, for Defendants-Appellees Woodside Realty Co., Phil Shell, Van Wedgwood, Charles S. Ochs-ner, and Kenny Pulsiani. |
   Opinion by

Judge JONES.

Plaintiffs, Vincent Ford and Sheeiagh Ford, appeal the judgment dismissing their claims for fraud, nondisclosure and concealment, negligent misrepresentation, and promissory estoppel against defendants, Summertree Lane Limited Liability Company, Woodside Realty Co., Phil Shell, Van Wedgwood, Charles S. Ochsner, and Kenny Pulsiani. We vacate the judgment and remand.

The Fords purchased a residential building lot overlooking a lake created by a dam, and they constructed a new home there. The home is in the Summertree Lane subdivision, of which defendant Summertree Lane was the developer. Defendants Shell, Wedgwood, Ochsner, and Pulsiani were brokers in the sale of the property to the Fords and were employees of defendant Woodside. At the time of trial, some individual defendants were members of defendant Summertree Lane as well.

The Fords bought the lot because it featured views of the lake and was located adjacent to the water. Not long after the Fords occupied their home, the lake was drained. Upon investigation, the Fords learned that before their purchase of the property, government officials had issued warnings that the dam holding the water in the lake was deficient and either it would have to be replaced or the lake would have to be drained. Defendants did not provide this information to the Fords before their closing. Before initiating this action, but after the lake was drained, the Fords sold the property in question.

The Fords and other purchasers, who are not parties to this appeal, commenced a civil action alleging fraud, nondisclosure and concealment, negligent misrepresentation, and promissory estoppel arising from defendants' failures to disclose the unstable condition of the dam, even though defendants had marketed the lots as having lake views. The Fords sought, among other damages, the difference between their actual sales price and the price for which they could have sold their property had the lake not been drained.

In their motion for summary judgment, defendants argued that, when the Fords conveyed their interest in the real property, the deed also conveyed all claims for relief that the Fords had asserted. The trial court agreed with defendants and dismissed the Fords' claims.

The other purchasers claims were not dismissed, and the trial court stayed their claims pending this appeal. The buyers of the Fords' property are not parties to this action.

The Fords contend that the trial court erred in granting summary judgment because a general warranty deed conveying a parcel of real property cannot inadvertently convey tort or contract claims that arise from the defendants' alleged misrepresentations in connection with the earlier purchase and sale of the real property. 'We agree.

Grants of summary judgment are reviewed de novo. Aspen Wilderness Workshop, Inc. v. Colorado Water Conservation Bd., 901 P.2d 1251 (Colo.1995). "[Slummary judgment is a drastic remedy and should only be granted upon a clear showing that there is no genuine issue of material fact. The moving party has the burden of establishing that no triable issue exists and all doubts should be resolved in favor of the non-moving party. In addition, the non-moving party is entitled to all favorable inferences that may be drawn from the facts. A reviewing court must apply these same standards when determining whether summary Judgment was proper." Smith v. Boyett, 908 P.2d 508, 514 (Colo.1995) (citations omitted).

The General Assembly has provided that "[alny person ... entitled to hold real estate, or any interest in real estate whatever, shall be authorized to convey the same to another ... by deed." Section 38-30-101, C.R.9.2001. A "conveyance" is a transfer of title to land by a deed. Stagecoach Prop. Owners Ass'n v. Young's Ranch, 658 P.2d 1378 (Colo.App.1982).

The general rules of construction for written instruments apply to the construction of deeds. Terry v. Salazar, 892 P.2d 391 (Colo.App.1994), aff'd, 911 P.2d 1086 (Colo.1996). It is generally conceded that a deed is to be construed most strongly against the grantor and most favorably to the grantee. "It is the language of the grantor, and the principle of self-preservation and self-interest are (sic) supposed to make him sufficiently careful not to prejudice his own interest." Brown v. State, 5 Colo. 496, 504 (1881).

The "paramount purpose in construing any deed is to ascertain the parties' intent." Notch Mountain Corp. v. Elliott, 898 P.2d 550, 557 (Colo.1995)(citing Percifield v. Rosa, 122 Colo. 167, 220 P.2d 546 (1950). "In construing a deed, the preferred construction is that which renders all provisions of the instrument operative and effective and which carries out the intentions of the parties." Hornsilver Circle, Ltd. v. Trope, 904 P.2d 1353, 1357 (Colo.App.1995)(citing First Nat'l Bank v. Allard, 31 Colo.App. 391, 506 P.2d 405 (1972), aff'd, 182 Colo. 297, 513 P.2d 455 (1978)). Unambiguous deeds are construed using the plain language of the document, while "tak{ing] care to consider the entire deed, and not portions presented in isolated sentences and clauses." Notch Mountain Corp. v. Elliott, supra, 898 P.2d at 557.

Here, the deed states in pertinent part:

[GIrantor ... has granted, bargained, sold and conveyed ... all the real property, together with improvements, if any, situate, lying and being in the County of Jefferson and State of Colorado, described as follows: LOT 44, SUMMERTREE LANE, COUNTY OF JEFFERSON, STATE OF COLORADO.
TOGETHER with all and singular heredit-aments and appurtenances thereunto, reversion and reversions, remainder and remainders, rents, issues and profits thereof, and all the estate, right, title, interest, claim and demand whatsoever of the grantor, either in law or equity, of, in and to the above bargained premises, with the hereditaments and appurtenances.

The Fords argue that the trial court erred in determining that, by way of warranty deed, they conveyed their rights of action in tort and contract against defendants as well as their interests in the real property. We agree.

A "covenant of general warranty ... is a guarantee that the grantor is vested of an estate in fee simple with full power to convey, that the property is free of all encumbrances except as listed in the deed, and that the grantor will guarantee title and peaceful possession and will defend the grantee's title to the property." O'Brien v. Village Land Co., 794 P.2d 246, 251 (Colo.1990); see § 38-30-113, C.R.S.2001.

The right to bring an action for damages, based in tort, is a "chose in action." 73 C.J.S. Property § 22 (1988); see Baker v. Young, 798 P.2d 889 (Colo.1990). A chose in action is personal property, not real property, 73 C.J.S. Property § 22 (1983), and is defined as, "[al right to receive or recover a debt, or money, or damages for breach of contract, or for a tort connected with contract, but which cannot be enforced without action." City & County of Denver v. Jones, 85 Colo. 212, 214, 274 P. 924, 925 (1929). Thus, a "chose in action" is "a personal right not reduced into possession, but recoverable by a suit at law." City & County of Denver v. Jones, supra, 85 Colo. at 214, 274 P. at 924-925 (quoting 2 Words & Phrases, Third Series, 37), see also Simmons v. Simmons, 773 P.2d 602, 606 (Colo.App.1988)(concluding that sound policy precludes consideration of interspousal tort claims, identified as "choses in action" by dissent, in dissolution of marriage proceedings).

Choses in action belong to the party who suffered the injury. See Micheletti v. Moidel, 94 Colo. 587, 32 P.2d 266 (1934); A.R.A. Mfg. Co. v. Cohen, 654 P.2d 857 (Colo.App.1982)(determining that any loss caused by wrongful attachment of assets was a loss to bankrupt debtor and cause of action belonged to debtor and to its trustee in bank-ruptey); Piper v. Pueblo C.R. Co., 4 Colo.App. 424, 36 P. 158 (1894). They are transferable, Webb v. Dessert Seed Co., 718 P.2d 1057 (Colo.1986), and, specifically, choses in action in tort for damage to property, such as the fraudulent transfer of land, are transferable and may be assigned. Micheletti v. Moidel, supra.

"[Tjo constitute an assignment there must be a purpose to assign the ... chose in action, and the subject matter ... must be described with such particularity as to render it capable of identification." 6A C.J.S. Assignments § 46 (1975). To be sufficient, a description of the matter to be assigned must identify with certainty the property and such description may be aided by competent extraneous evidence. But a vague and indefinite extraneous description will not be considered sufficient identity of the chose in action. See Russell v. Texas Consol. Oils, 120 F.Supp. 508, 512 (D.N.M.1954)(no implication that assignment intended where letter neither identified specific item to be assigned nor gave indication of attempt to bring about actual and present transfer of title).

Moreover, in Colorado, when real estate is conveyed, and personal property is also transferred or used as security with that real property, two separate documents accomplish the two tasks. See House v. Smith, 117 Colo. 305, 187 P.2d 587 (1947)(deed for real property and bill of sale for personal property prepared); Estate of Doerfer, 100 Colo. 304, 67 P.2d 492 (1937)(assignment of personal property and deed for real property prepared as distinct documents); Martynes & Assocs., No. 1 v. Devonshire Square Apartments, 680 P.2d 246 (Colo.App.1984)(promissory note and deed of trust executed to secure earlier purchase of same real property; each assigned through execution of separate document).

Here, the warranty deed contains only traditional language used to convey real property. See Knight v. Lawrence, 19 Colo. 425, 425, 36 P. 242, 242 (1894)(deed included "claim and demand whatsoever of the said party of the first part either in law or equity of, in and to the above bargained premises"); see also Blair v. Bruns, 8 Colo. 397, 8 P. 569 (1885).

Thus, we are not persuaded by defendants' argument that the words "claim and demand whatsoever of the grantor, either in law or equity, of, in and to the above bargained premises" encompass not only the title of the real property, but also personalty having a connection to the real property, including choses in action lying in tort.

Further, the deed neither sets forth a description of the choses in action nor any compensation for the tort claims. Nor does the record contain any extrancous evidence that would provide a sufficient description of the claims so that a court could conclude that the Fords had assigned any certain rights of action to the buyers.

Finally, the record does not contain a separate document conveying the choses in action to the buyers.

Taking the evidence in the light most favorable to the Fords as the nonmovants, we conclude that the trial court erred in granting summary judgment in favor of defendants.

Therefore, the judgment is vacated, and the case is remanded to the trial court for further proceedings consistent with this opinion.

Judge PLANK and Judge WEBB, concur.


source: Caselaw Access Project

author: Judge NEY.

license: Public Domain

text:
    Albert S. FISHER, Plaintiff-Appellant, v. COLORADO DEPARTMENT OF CORRECTIONS, Joseph Ortiz, L. Dennis Kleinsasser, and Peggy Heil, Defendants-Appellees.
    No. 01CA1532.
    Colorado Court of Appeals, Div. IV.
    Aug. 15, 2002.

      Albert S. Fisher, Pro Se.
    Ken Salazar, Attorney General, Alisha M. Burris, Assistant Attorney General, Denver, Colorado, for Defendants—Appellees.
   Opinion by

Judge NEY.

Plaintiff, Albert S8. Fisher, appeals from the judgment of the district court dismissing sua sponte his claims against defendants, Colorado Department of Corrections, Joseph Ortiz, L. Dennis Kleinsasser, and Peggy Heil (collectively DOC). We reverse and remand.

Fisher is an inmate at the Huerfano County Correctional Facility in the custody of the DOC, serving a sentence on a conviction for aggravated motor vehicle theft. Pursuant to the DOC's Sex Offender Treatment and Monitoring Program (SOTP), the inmate was classified as an S-4 (out of a possible 5) on the sexual violence seale. As a result, to receive the maximum earned time eredits towards parole, the inmate was required to admit to being a sex offender and to participate in a treatment program for sex offenders.

This classification originally was based on: (1) the inmate's conviction in 1987 for public indecency, a class one petty offense; (2) a disputed charge of third degree sexual assault in 1987; and (8) the factual basis of a charge of harassment in 1981. The inmate contends that the third degree sexual assault charge was the result of a clerical error by a police officer. The DOC appears to have conceded that the sexual assault charge and the harassment charge are not grounds relied upon for the classification; instead it relies on the 1987 public indecency conviction as the only basis for the classification.

The inmate filed this action pursuant to C.R.C.P. 106(a)(4), alleging that such classification without a hearing was an abuse of discretion and violated his right to due process and the prohibition against ex post facto punishment. This action was dismissed sua sponte by the district court.

We review the district court's dismissal de novo. Springer v. City & County of Denver, 18 P.3d 794 (Colo.2000). A claim may be dismissed only if, accepting the allegations as true, it appears beyond a reasonable doubt that the plaintiff can prove no set of facts that would entitle him or her to relief, Dunlap v. Colorado Springs Cablevision, Inc., 829 P.2d 1286 (Colo.1992).

I.

The inmate first contends that the district court erred in determining that it lacked Jurisdiction to review the actions of the DOC. We agree.

The district court dismissed the case relying on Kort v. Hufnagel, 729 P.2d 370 (Colo.1986), and concluded that any district court order that intrudes on the DOC's discretion in classifying inmates is invalid. This conclusion, however, misconstrues the authority of the district court to review the quasi-judicial actions of an administrative agency for an abuse of discretion.

Authority to review quasi-judicial actions taken by the DOC is derived from C.R.C.P. 106(a)(4), which provides for review to determine if such agency actions exceeded the agency's jurisdiction or constituted an abuse of discretion. See Kodama v. Johnson, 786 P.2d 417, 419 (Colo.1990)(DOC actions are reviewable pursuant to C.R.C.P. 106(a)(d)).

An action is quasi-judicial if the governmental decision is likely to adversely affect the protected interest of an individual by application of preexisting legal standards to facts presented to the governmental body. Dill v. Board of County Commissioners, 928 P.2d 809 (Colo.App.1996). Such reviewable actions are not limited to official hearings or other trial-like procedures and include any agency action taken pursuant to statute. See Baldauf v. Roberts, 37 P.3d 483, 484-85 (Colo.App.2001)("We perceive no meaningful distinction between the DOC's disciplinary procedures and its administrative segregation procedures in terms of the quasi-judicial nature of these actions"). However, such reviewable action do not include quasi-legislative disciplinary actions applicable generally to all prisoners. See Jones v. Colorado Department of Corrections, 53 P.3d 1187 (Colo.App.2002).

Here, the agency's action affected a protected liberty interest of the inmate, as discussed below in section ILA. It involved the classification of the inmate through the application of a statute to the facts of his particular situation and not the issuance of a rule of general applicability. Thus, such classification by the DOC falls within the realm of reviewable quasi-judicial activity, and review of such action under C.R.C.P. 106(a)(4) is appropriate.

IL

The inmate contends that the district court erred by failing to consider existing law regarding procedural due process in inmate classifications. We agree.

A.

In Chambers v. Colorado Department of Corrections, 205 F.3d 1237 (10th Cir.2000), the court reviewed the actions of the DOC in classifying an inmate as a sex offender under the SOTP. The Chambers court held that the conditioning of earned time credits by the DOC, combined with the inchoate stigmatization resulting from such a label, implicated a protected liberty interest that required procedural serutiny.

Other jurisdictions also have found a protected liberty interest in classification for the purposes of sex offender treatment programs. See Kirby v. Siegelman, 195 F.3d 1285 (11th Cir.1999); Neal v. Shimoda, 131 F.3d 818 (9th Cir 1997); State v. Bani, 97 Hawai'i 285, 36 P.3d 1255 (2001).

Here, we have facts similar to those in Chambers. The classification of the inmate results in the loss of earned time credits if he does not participate in a treatment program. The classification results in the same stigmatization as in Chambers. Thus, we conclude that the classification of the inmate implicated a protected liberty interest and requires due process.

B.

Because procedural due process is implicated, we must now determine whether the inmate received adequate procedural safeguards in his classification. We conclude that he did not.

Both parties agree that the inmate failed to receive a formal hearing on his classification. However, while the DOC concedes that an inmate who has never been convicted of a sex offense is entitled to procedural due process before being classified as a sex offender, it asserts that the inmate's conviction of public indeceney provided him with the proper due process. We disagree.

The DOC correctly asserts that an inmate who has been convicted of a sex offense in a prior adversarial setting has received the due process required for his classification. Neal v. Shimoda, supra. Yet, the crime that the DOC relies upon as the predicate for the inmate's classification here is not included as a sex offense under the statute authorizing the creation of the SOTP or the subsequent regulations. See § 16-11.7-102(3), C.R.S.2001 (enumerating sex offenses); DOC Admin. Reg. 700-19.

The DOC argues that it has authority to classify the inmate as a sex offender based on his conviction of public indecency because its regulations provide that the S-4 classification is proper for "misdemeanor convictions ... for sex offenses." Section 16-11.7-102(8) does not, however, provide unlimited discretion to classify misdemeanor offenses as sex offenses. It clearly enumerates the misdemeanor offenses, such as indecent exposure, that are properly considered sex offenses for the purposes of classification.

We do not determine whether the DOC has the authority under § 16-11.7-102 to classify as a sex offender an inmate not found guilty of either a listed sex offense or an offense of which the underlying factual basis was a listed sex offense. However, even assuming that the DOC may have such authority, due process require that an inmate be afforded a hearing when the basis for such classification is not a listed sex offense of which he stands convicted. See Chambers v. Colorado Department of Corrections, supra; Neal v. Shimoda, supra.

Here, in basing its classification on a crime that is not a sex offense and not affording the inmate a hearing, the DOC failed to provide him with the required procedural due process. The failure to provide due process is an abuse of discretion, see, e.g., Tepley v. Public Employees Retirement Ass'n, 955 P.2d 573, 578 (Colo.App.1997), and therefore we conclude that the DOC abused its discretion in its classification of the inmate as a sex offender.

We therefore remand for a hearing to determine if the inmate should be classified as a sex offender based upon the appropriate statutory standards. Based upon our resolution the inmate's due process claims, we need not reach the inmate's argument that participation in the SOTP constitutes ex post facto punishment.

The judgment is reversed, and the case is remanded for further proceedings consistent with this opinion.

Judge ROTHENBERG and Judge VOGT concur.


author: Judge TAUBMAN.

text:
    In re MARRIAGE OF Danielle VILLALVA, n/k/a Danielle Chapmon, Appellant, and Mario Villalva, deceased, and Concerning Ray Villalva and Magdelena Villalva, Grandparents-Appellees.
    No. 01CA2087.
    Colorado Court of Appeals, Div. II.
    Aug. 29, 2002.
    Law Office of Kevin C. Flesch, LL.G., Kevin C. Flesch, Englewood, Colorado, for Appellant.
    Law Office of Al Cabral, Al Cabral, Denver, Colorado, for Grandparents-Appellees.

       Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.$.2001.

   Opinion by

Judge TAUBMAN.

In this post-dissolution proceeding, Danielle Villalva (mother) appeals from the order of the trial court granting visitation to Ray and Magdelena Villalva (paternal grandparents). We affirm.

Mother and Mario Villalva (father) were divorced by decree in 1997. Pursuant to their separation agreement, which was incorporated into the decree, mother received sole custody of the parties' two young children, and father was granted supervised parenting time.

Father died in a car accident in 2000. His parents, Ray and Magdelena Villalva, filed a motion in the dissolution action in March 2001, seeking visitation pursuant to § 19-1-117, C.R.S.2001. In May 2001, mother filed an objection contending that the trial court was without jurisdiction to consider the grandparents' motion under § 19-1-117(2), C.R.8.2001, because she and the children no longer lived in Jefferson County, where the dissolution action had been commenced. She requested that the case be transferred to the county of her residence, the City and County of Denver. In the alternative, she argued that granting visitation would not be in the children's best interests because they had had no contact or bond with the grandparents.

The court conducted a hearing on the grandparents' motion. It first denied mother's objection, holding that the requirement in § 19-1-117(2) for filing "in the district in which the child resides" was not jurisdictional and that the legislature had intended that a request for grandparent visitation could be tried in an existing dissolution action to avoid multiplicity of litigation. The court then found that the children's best interests would be served by granting visitation with the grandparents. The court appointed a legal representative to develop a schedule that would permit the children to see their grandparents at least five hours every other week.

Mother appeals, contending that the trial court erred in denying her objection and lacked jurisdiction to consider the grandparents' motion. She does not challenge the visitation order on substantive grounds. With respect to the issue of jurisdiction, we find no reversible error.

The grandparent visitation statute, § 19-1-117(1), C.R.98.2001, permits a grandparent to seek a court order granting reasonable visitation rights when there is or has been a child custody case or a case concerning the allocation of parental responsibilities relating to the child. As pertinent here, § 19-1-117(1)(a) and (c), C.R.S.2001, define the phrase "child custody case" to include a dissolution of marriage action or the death of the child's parent who is the child of the grandparent. Section 19-1-117(2) then mandates that the grandparent submit a motion for visitation and a supporting affidavit to the "district court for the district in which the child resides" (emphasis added).

We must determine whether § 19-1-117(2) specifies venue or limits subject matter jurisdiction. That question is one of statutory construction. See U.M. v. Dist. Court, 631 P.2d 165, 167 n. 3 (Colo.1981).

Subject matter jurisdiction concerns a court's authority to deal with the class of cases in which it renders judgment. Dallos Creek Water Co. v. Huey, 933 P.2d 27 (Colo.1997); Minto v. Lambert, 870 P.2d 572 (Colo.App.1993). A court has jurisdiction over the subject matter if the case is one of the types of cases that the court has been empowered to entertain by the sovereign from which the court derives its authority. Williamson v. Williamson, 39 P.3d 1199 (Colo.App.2001).

In contrast, venue refers to the place of trial or the locality where an action may be properly brought. If the court has subject matter jurisdiction, bringing an action in an improper county is not a jurisdictional defect. State v. Borquez, 751 P.2d 689 (Colo.1988).

Insofar as § 19-1-117(2) specifies the place where the visitation motion must be filed, we conclude that it concerns venue. See U.M. v. Dist. Court, supra (concluding that provision of the' Uniform Parentage Act that specified where a paternity action could be brought was a venue statute). We also conclude that the visitation request authorized under § 19-1-117 represents the general sort of custody or related matter decided in the district courts. See also § 14-10-123.3, C.R.S.2001 (requests for parental responsibility for a child by grandparents).

Ordinarily, a dissolution court will retain jurisdiction over child custody issues or matters pertaining to the allocation of parental responsibilities until the child is emancipated. In re Marriage of Hartley, 886 P.2d 665 (Colo.1994). In some cireumstances, moreover, a grandparent may file a petition seeking allocation of parental responsibilities under the Uniform Dissolution of Marriage Act. See § 14-10-128(1)(b), C.R.S.2001.

Even though the filing requirement in § 19-1-117(2) is mandatory, that fact alone does not dictate that the statute be regarded as jurisdictional. Thus, in People, In Interest of T.L.D., 809 P.2d 1120 (Colo.App.1991), a division of this court held that a statutory requirement that a dependency and neglect case be filed in the county of the child's residence or where the child was present was subject to waiver.

We conclude that the trial court here correctly determined that the filing requirement set forth in § 19-1-117(2) did not affect the court's subject matter jurisdiction. Instead, § 19-1-117(2) is a venue provision and, as such, is subject to waiver. See Brisbin v. Schauer, 176 Colo. 550, 492 P.2d 835 (1971)(when statute does not contain procedure for change of venue, party must use procedure contained in applicable procedural rules).

Under C.R.C.P. 98(e), a motion to change venue must be filed within the time permitted for the filing of motions under C.R.C.P. 12(b)(1) to (4), that is, within twenty days after the service of the summons and complaint. Otherwise, the objection is deemed waived. State v. Dist. Court, 635 P.2d 889 (Colo.1981).

Here, the record demonstrates that mother's objection and request for transfer were not timely filed. Further, she has not alleged any prejudice to her substantial rights as a result of the court's decision not to transfer this matter to Denver, where she now resides. Accordingly, we conclude that mother waived any objections she had to venue in Jefferson County. See Keohane v. Wilkerson, 859 P.2d 291 (Colo.App.1993)(error in granting a change of venue did not constitute reversible error where no prejudice alleged), aff'd sub nom. Keohane v. Stewart, 882 P.2d 1293 (Colo.1994).

The order is affirmed.

DAILEY and CRISWELL , JJ., concur.


author: Judge METZGER.

text:
    The PEOPLE of the State of Colorado, Petitioner-Appellee, In the Interest of C.C.V., Respondent-Appellant.
    No. 01CA1805.
    Colorado Court of Appeals, Div. I.
    Aug. 29, 2002.
    Ken Salazar, Attorney General, Matthew S. Holman, Assistant Attorney General, Denver, Colorado, for Petitioner-Appellee.
    S. David Kutinsky, Woodland Park, Colorado, for Respondent-Appellant.
   Opinion by

Judge METZGER.

The issue in this case is whether the time limitations in § 18-3-412.5(8), C.R.8.2001, allow a petition to discontinue the duty to register as a sex offender independent from the time limitations for such petitions in § 18-8-412.5(7), C.R.8.2001. We hold that § 18-8-412.5(7) controls and, therefore, affirm the trial court's order denying the petition of C.C.V.

In 1996, then sixteen-year-old C.CV. was granted a deferred adjudication on one count of sexual assault in the first degree, a class three felony. Six months later, the deferred adjudication was revoked, C.C.V. was adjudicated a juvenile delinquent, and he was sentenced to two years probation. C.C.V. successfully completed the terms of his probation in 1999.

In 2001, C.C.V. petitioned the court to discontinue his duty to register as a sex offender and, after a hearing, the magistrate granted his request. On appeal by the prosecution, the trial court reversed that order, ruled that C.C.V. had a continuing obligation to register under $ 18-3-412.5(7), and denied his petition.

C.C.V. contends the trial court erred in determining that § 18-3-412.5(7), and not § 18-3-412.5(8), controls here. We find no error.

Our role in determining the meaning of a statute is to give effect to the intent of the General Assembly. See Pierson v. Black Canyon Aggregates, Inc., 48 P.3d 1215 (Colo.2002). If the plain language of the statute clearly expresses the legislative intent, then we must give effect to the ordinary meaning of that language. Likewise, we should avoid interpreting the statute in a way that defeats the obvious intent of the General Assembly. Whitaker v. People, 48 P.3d 555 (Colo.2002).

We must read the statute as a whole and interpret it to give a consistent, harmonious, and sensible effect to all its parts. People v. Andrews, 871 P.2d 1199 (Colo.1994).

The interpretation of statutes is a matter of law subject to de novo review. Hendricks v. People, 10 P.3d 1231 (Colo.2000).

Both parties agree that, pursuant to § 18-3-412.5, C.R.8.2001, C.C.V. was required to register as a sex offender.

Section 18-3-412.5(T)(a@)(D), C.R.8.2001, upon which the trial court relied, provides that certain persons required to register as a sex offender may petition to discontinue that requirement on the following conditions:

Except as otherwise provided in subpara-graphs (IV), (V), and (VT) of this paragraph (a), if the offense that required such person to register constituted or would constitute a class 1, 2, or 3 felony, after a period of twenty years from the date of such person's final release from the jurisdiction of the court for such offense, if such person has not subsequently been convict, ed of any offense involving unlawful sexual behavior.

The offense for which C.C.V. was adjudicated would be a class 3 felony had he been convicted as an adult. Further, the provisions of § 18-3-412.5(7)(a)(IV), (V), and (VT) concern deferred adjudications, persons who were less than sixteen years old when adjudicated, and Internet postings respectively, and they do not apply to C.C.V. Therefore, according to § 18-3-412.5(7)(@)(I, C.C.V. would be ineligible to petition the court to discontinue the registration requirement until 2019, twenty years after his release from the court's jurisdiction.

C.C.V. nevertheless asserts that $ 18-3-412.5(8), which concerns juvenile offenders, provides him an additional right to petition for discontinuance of the registration requirement. 'We disagree.

As relevant here, that subsection states:

The provisions of this section shall apply to any person adjudicated as a juvenile based on the commission of [specified sexual offenses] ... except that, with respect to subparagraphs (I) to (V) of [§ 18-3-412.5(7T)(a)l, a person may petition the court for an order to discontinue the duty to register as provided in those subpara-graphs but only if the person has not subsequently been adjudicated as a juvenile or convicted of any offense involving unlawful sexual behavior.

We reject C.C.V.'s argument that this language allows one to apply at any time to be released from the duty to register if, as in his situation, the applicant has no later adjudications of any description and no later convictions involving unlawful sexual behavior. The only reference to the discontinuance of registration in § 18-3-412.5(8) directs the applicant to § 18-3-412.5(7)(a)(I) to (V) and states "a person may petition the court for an order to discontinue the duty to register as provided in those subparagraphs" (emphasis added). In effect, C.C.V 's argument would render this provision meaningless, in contravention of the mandate of § 2-4-201(1)(b), C.R.S.2001, that "(tlhe entire statute is intended to be effective." See also People v. Andrews, supra.

The order is affirmed.

Judge CASEBOLT and Judge WEBB concur.


text:
    GEICO GENERAL INSURANCE COMPANY, Plaintiff-Appellee, v. PINNACOL ASSURANCE, Defendant-Appellant.
    No. 01CA2205.
    Colorado Court of Appeals, Div. I.
    Sept. 12, 2002.
    Chad J. Hessel, Colorado Springs, Colorado, for Plaintiff-Appellee.
    Ritsema & Lyon, P.C., Karen L. Spauld-ing, Denver, Colorado, for Defendant-Appellant.
   Opinion by

Judge METZGER.

In this subrogation action, defendant, Pin-nacol Assurance, appeals the trial court's order which denied its motion to dismiss and held that the claims of plaintiff, GEICO General Insurance Company, seeking recovery of PIP benefits are not barred by the Colorado Governmental Immunity Act, § 24-10-101, et seq., C.R.8.2001 (CGIA). We affirm.

In March 1999, GEICO's insured was involved in an automobile accident on his way home from a doctor's appointment. The insured was being treated for injuries he had received in a 1995 work-related accident for which Pinnacol was paying workers' compensation benefits. GEICO paid personal injury protection (PIP) benefits to its insured under § 10-4-701, et seq., C.R.S$.2001, for the automobile accident.

In February 2001, GEICO filed an action against Pinnacol seeking reimbursement of the PIP benefits it had paid. Relying on the CGIA, Pinnacol moved to dismiss pursuant to C.R.C.P. 12(b)(1) and (5). It argued, first, that GEICO had failed to give proper notice and, second, that because GEICO's claims lie in tort or could lie in tort, Pinnacol was immune from suit.

The trial court determined that GEICO's complaint did not lie in tort, but was instead "an equitable action brought pursuant to statute." Accordingly, it held the CGIA did not apply, and it denied Pinnacol's motion to dismiss.

Pinnacol contends that GEICO's equitable subrogation claims are barred by the CGIA and the trial court erred in ruling to the contrary. We disagree.

Pinnacol agrees that personal injuries which occur on the way to or from a physician's office for treatment of an industrial injury are considered to have occurred within the scope of the employee's work and are, therefore, compensable under the Workers' Compensation Act (the Act). Employers Fire Insurance Co. v. Lumbermens Mutual Casualty Co., 964 P.2d 591 (Colo.App.1998).

Pinnacol also agrees that, under the "primacy rule" created by § 10-4-706(1)(b)-(e), the workers' compensation insurer is primarily liable for the benefits due under the Act. However, to the extent that the employee would be entitled to benefits under the Act, any carrier under the Act must reimburse the PIP carrier for all amounts paid by it. Employers Fire Insurance Co. v. Lumbermens Mutual Casualty Co., supra, 964 P.2d at 594.

Governmental immunity raises a jurisdictional issue. Where, as here, the facts are undisputed and the issue is purely one of law, we review de novo. Springer v. City & County of Denver, 13 P.3d 794 (Colo.2000).

GEICO acknowledges that Pinnacol is a political subdivision of the State of Colorado. See § 8-45-101, C.R.8.2001. Consequently, the CGIA applies to it and its employees. See § 24-10-1023, C.R.S.2001. The CGIA provides that "[a] public entity shall be immune from liability in all claims for injury which lie in tort or could lie in tort." Section 24-10-106(1), C.R.8.2001.

To determine whether a particular claim seeks compensatory relief for personal injuries and therefore lies or could lie in tort for purposes of the CGIA, a court must examine the nature of the injury claimed and the remedy sought. If the plaintiff does not seek compensation for personal harm, the claims do not lie in tort for purposes of the CGIA. City of Colorado Springs v. Conners, 993 P.2d 1167, 1176 (Colo.2000).

In its complaint, GEICO sought reimbursement only for the PIP benefits it had paid pursuant to its contract with its insured after his automobile accident. It did not seek any compensatory damages for personal harm. Therefore, GEICO's complaint did not lie in tort, and it is not barred by the CGIA. Cingoranelli v. St. Paul Fire & Marine Insurance Co., 658 P.2d 863 (Colo.1983).

We disagree with Pinnacol that GEICO's equitable subrogation claim is analogous to the tort claim of equitable estoppel and is thus barred by the CGIA. Pinnacol's reliance on Olsen & Brown v. City of Englewood, 867 P.2d 96, 100 (Colo.App.1993), aff'd, 889 P.2d 673 (Colo.1995), is misplaced. There, the equitable estoppel claim was based on the tort of misrepresentation. Here, in contrast, neither misrepresentation nor equitable es-toppel was alleged.

Accordingly, GEICO's claim for equitable subrogation is not a claim in tort, nor could it lie in tort. See City of Colorado Springs v. Conners, supra. Instead, the claim is a creature of equity whose purpose is to reach an equitable adjustment by securing the ultimate discharge of a debt by one who in equity and good conscience should pay it. See United Security Insurance Co. v. Sciarrota, 885 P.2d 273 (Colo.App.1994).

We deny Pinnacol's request for attorney fees and costs under § 13-17-201, C.R.S. 2001.

The order is affirmed

Judge CASEBOLT and Judge WEBB concur.


author: Judge VOGT.

text:
    Darryl HARWIG and Cheryl Harwig, Plaintiffs-Appellants, v. Elvin D. DOWNEY and Gail R. Downey, Defendants-Appellees.
    No. 01CA1946.
    Colorado Court of Appeals, Div. IV.
    Sept. 12, 2002.
    Garrett Sheldon, Walsenburg, Colorado, for Plaintiffs-Appellants.
    Karrick A. Burrows, Pueblo, Colorado, for Defendants-Appeliees.
   Opinion by

Judge VOGT.

Plaintiffs, Darryl Harwig and Cheryl Har-wig, appeal the trial court's order denying their request for attorney fees as prevailing third-party beneficiaries in their breach of contract action against defendants, Elvin D. Downey and Gail R. Downey. We affirm.

Plaintiffs sold pasture land to defendants' predecessors in interest, the Rays, and the Rays leased the property back to plaintiffs for grazing. As lessors, the Rays were required to pay for all repairs to the existing well and solar pump systems. Defendants purchased the property from the Rays subject to the lease, executed a lease assignment, and thereby assumed the Rays' obligations with respect to the well and solar pump systems.

Plaintiffs subsequently brought this action for specific performance and damages, alleging that defendants had breached the lease by failing to maintain a solar pump and supply water to plaintiffs' cattle. They also asserted a claim for attorney fees. Although there was no attorney fee provision in the lease or the lease assignment, plaintiffs sought fees pursuant to a fee provision in the sales contract between the Rays and defendants, alleging that they were third-party beneficiaries of that contract.

After a bench trial the trial court found that defendants had breached their obligations under the lease and the sales contract. It awarded plaintiffs damages of $1811.66 and ordered defendants to reinstall the solar pump system they had removed and to make all repairs required by the lease. However, it denied plaintiffs' request for attorney fees, noting that there was no statutory authority for fees and that the lease contained no fee provision. Regarding plaintiffs' claim that they were third-party beneficiaries of the sales contract between the Rays and defendants, the court stated:

That contract's provisions regarding an award of attorney fees for litigation relating to this contract cannot support an award of attorney fees. The contract is a standard contract to buy and sell vacant farm land and its intent was not to confer the right to receive an award of attorney fees upon a third party such as Plaintiffs, who were lessees of the subject property. Other provisions of the contract, such as the one requiring mediation, did not bind Plaintiffs and they cannot pick and choose which provisions of the contract they wish to enforce while ignoring others. The Court has been unable to locate any case allowing for attorney fees in this situation.

I.

Plaintiffs contend that they were entitled to recover attorney fees as third-party beneficiaries under the sales contract and that the trial court erred in ruling to the contrary. We disagree.

Colorado follows the American Rule with regard to the award of attorney fees. This rule provides that, in the absence of a statute, court rule, or private contract to the contrary, attorney fees are not recoverable by a prevailing party in either a contract or a tort action. See Adams v. Farmers Ins. Group, 983 P.2d 797 (Colo.1999); Littlefield v. Bamberger, 32 P.3d 615 (Colo.App.2001).

Here, because no statute or rule provided for attorney fees and the lease on which plaintiffs' breach of contract claim was based included no fee provision, plaintiffs were entitled to attorney fees only if they were third-party beneficiaries of the fee provision in the sales contract between defendants and the Rays.

A person not a party to an express contract may bring an action on the contract if the parties to the agreement intended to benefit the nonparty, provided that the benefit claimed is a direct and not merely an incidental benefit of the contract. While the intent to benefit the nonparty need not be expressly recited in the contract, the intent must be apparent from the terms of the agreement, the surrounding circumstances, or both. Parrish Chiropractic Centers, P.C. v. Progressive Cas. Ins. Co., 874 P.2d 1049 (Colo.1994); Glover v. Southard, 894 P.2d 21 (Colo.App.1994).

A.

We first consider whether the language of the sales contract evidences an intent to afford plaintiffs the benefit of its attorney fee provision. We conclude that it does not.

The interpretation of language in a contract is a question of law that we review de novo. In interpreting a contract, our goal is to determine and give effect to the intent of the parties. That intent is to be determined primarily from the contract language itself. Ad Two, Inc. v. City & County of Denver, 9 P.3d 373 (Colo.2000).

The attorney fee provision in the sales contract states:

In the event of any arbitration or litigation relating to this contract, the arbitrator or court shall award the prevailing party all reasonable costs and expenses, including attorney fees.

We agree with plaintiffs that, in light of the broadly worded phrase "any ... litigation relating to this contract," the provision would apply in litigation between the contracting parties concerning a breach of the lease to which the sales contract was subject. See Agritrack, Inc. v. DeJohn Housemoving, Inc., 25 P.3d 1187 (Colo.2001). However, that conclusion does not end the inquiry. Because the provision contemplates an award of fees to "the prevailing party" and plaintiffs were not parties to the sales contract, the contract language or the cireumstances must show that the contracting parties intended to benefit plaintiffs with the provision.

In arguing that the contract language shows such intent, plaintiffs point out that the sales contract uses the terms "seller" and "buyer" in most of its other provisions. Thus, they contend, because the fee provision refers to a "prevailing party" rather than a "prevailing buyer or seller," it shows an intent to award fees to any prevailing party, including a third-party beneficiary. We are not persuaded. j

Although the sales contract refers most frequently to "buyer" and "seller," other paragraphs of the contract besides the fee provision also refer to the "party" or "parties." Upon reviewing these provisions, we conclude that the contract uses "party" and "parties" to refer only to the signatories unless the reference is specifically to "third parties."

Paragraph 4(a) states that "the parties" authorize delivery of the earnest money deposit to the eloging company at or before closing. The mediation provision, paragraph 21, requires "the parties" to mediate any dispute relating to the contract. Paragraph 25 states that the contract is "the entire contract between the parties." Paragraph 26 requires that documents with original signatures be provided earlier than closing "upon request of any party." Paragraph 28, regarding notice of acceptance, refers to the "offering party" and permits a copy of the document to be executed "by each party separately."

The parties referred to in these paragraphs can logically be only the direct parties to the contract, that is, the buyers and sellers, not the potentially larger group of parties to litigation arising out of or relating to the contract.

Conversely, where the reference is to parties other than the buyers and sellers, those parties are called "third parties," as in paragraphs 8b) and 12(c), addressing rights of third parties in the property.

In addition, the contract contains an express provision for attorney fees for certain parties who are not signatories to the contract. Paragraph 22 provides that a broker or closing company may file an interpleader action in the event of an earnest money dispute and that the broker or closing company shall recover attorney fees in such circumstances. The inclusion of this express attorney fee provision further counsels against inferring rights for nonparties under the "prevailing party" fee provision.

In sum, we find nothing in the language of the contract itself to indicate that the parties intended to benefit plaintiffs with the attorney fee provision. Thus, we conclude that the terms of the agreement do not support a conclusion that plaintiffs may enforce that provision as third-party beneficiaries.

We note that our conclusion is consistent with that of another division of this court that declined to assess attorney fees against a third-party beneficiary under a contractual provision awarding fees against "any party" who filed an action that should have been submitted to arbitration. See Parker v. Center for Creative Leadership, 15 P.3d 297 (Colo.App.2000).

Our analysis and conclusion are also consistent with those of other courts that have addressed the applicability of contractual "prevailing party" fee provisions to third-party beneficiaries. See Int'l Brotherhood of Electrical Workers, Local Union No. 134 v. Chicago & N.E. Ill. Dist Council of Carpenters 149 F.SuppRd 452, 459 (N.D.Ill.2001)(declining to award attorney fees under prevailing party provision to defendant claiming third-party beneficiary status, and concluding that reference in standard form contract to prevailing party "logically refers to whichever signatory to the contract prevailed, not to a third-party beneficiary"); Harris v. Richard N. Groves Realty, Inc., 315 So.2d 528 (Fla. of entire contract indicated that term "prevailing party" in attorney fee provision contemplated formal party to contract, ie, buyer or seller, and not broker seeking to recover attorney fees under that provision); Wardley Corp. v. Welsh, 962 P.2d 86 (Utah Ct.App.1998)(because purchase agreement used words "party" and "parties" in other provisions to refer only to signatories, it evidenced no intent to benefit broker, who successfully sued for commission as third-party beneficiary, with an award of attorney fees under its "prevailing party" provision); Watkins v. Restorative Care Center, Inc., 66 Wash App. 178, 831 P.2d 1085 (1992)(contractual provision granting attorney fees to prevailing party could not be enforced against losing party who had alleged third-party beneficiary status).

B.

We next consider whether there was evidence of surrounding circumstances that would show that the contracting parties intended to afford plaintiffs the benefit of the attorney fee provision. 'We conclude that the circumstances as shown in the record suggest there was no such intent.

The sales contract was a standard form contract to buy and sell vacant farm or ranch land. While the parties added certain provisions to the form contract, the standard attorney fee provision was not altered.

The absence of any attorney fee provision in the lease or the lease assignment also suggests that there was no intent to benefit plaintiffs with the fee provision in the sales contract. See Dravo Corp. v. Robert B. Kerris, Inc., 655 F.2d 503 (3d Cir.1981)(fact that other contracts allowed appellant's recovery under their express provisions was evidence that parties to contract at issue did not intend appellant to be a third-party beneficiary of their contract).

C.

The trial court's order also indicates that plaintiffs were seeking to enforce the attorney fee provision of the sales contract while declining to be bound by its provision requiring the parties to mediate disputes relating to the contract. Although plaintiffs argue that whether they were bound by the mediation clause is irrelevant, we agree with the trial court that they could not "pick and choose" which provisions of the sales contract they wanted to enforce. See Parker v. Center for Creative Leadership, supre (third-party beneficiary must accept contract's burdens along with its benefits; thus, party seeking to enforce defendant's contractual obligations was also bound by contract's arbitration provision).

IL

Relying on the trial court's statement that defendants' counterclaim was "wholly without merit," plaintiffs also assert that they are entitled to attorney fees pursuant to § 13-17-102, C.R.S$.2001, on the basis that the defense was frivolous and groundless. However, because they did not raise this argument in the trial court, we do not address it. See Estate of Stevenson v. Hollywood Bar & Cafe, Inc., 832 P2d 718 (Colo.1992)(issue not presented to trial court may not be raised for first time on appeal).

The order is affirmed.

Judge NEY and Judge ROTHENBERG concur.


text:
    LOGIXX AUTOMATION, INC. and Laser Products, Inc., Plaintiffs-Appellees, v. LAWRENCE MICHELS FAMILY TRUST and Estate of Lawrence Michels, Defendants-Appellants.
    No. 01CA1222.
    Colorado Court of Appeals, Div. II.
    Sept. 12, 2002.

      Markusson, Green & Jarvis, P.C., James K. Green, Denver, Colorado, for Plaintiffs-Appellees.
    Gorsuch Kirgis, L.L.P., Dudley P. Spiller, Ellen E. Stewart, Denver, Colorado, for Defendants-Appellants.

       Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S.2001.

   Opinion by

Judge TAUBMAN.

In this dispute involving a covenant not to compete and the design and manufacture of machinery used to make illuminated signs, defendants, the Lawrence Michels Family Trust and the Estate of Lawrence Michels (Michels), appeal the judgment entered on a jury verdict in favor of plaintiffs, Logixx Automation, Inc. and Laser Products, Inc. (companies), for breach of contract and conspiracy. We affirm and remand for an award of the companies’ attorney fees associated with this appeal.

I. Background

At issue in this case is a product called the Preformer, a machine that automates the production of neon signs made of metal letters called “returns.” It includes three components: an uncoiler, a roll former, and a notcher. These three components manipulate metal sheets into the form of letters for signs. The notcher component includes a computer software package.

During the 1990s, the companies designed, built, marketed, sold, and leased the Pre-former, distributing forty-four of them. The product’s sales price was approximately $150,000 per unit.

In the early 1990s, Lawrence Michels joined the boards of directors of the companies, serving until 1995. He, among others, including another member of the boards, subsequently filed an involuntary Chapter 11 bankruptcy proceeding against the companies. The companies opposed the bankruptcy proceeding on the basis that they did not owe Michels and the other board member any money and that they were not insolvent. The companies also filed a complaint against Michels and the other board member for business interference.

Michels, the other board member, and the companies ultimately settled the bankruptcy dispute in February 1996. In return for the companies’ purchase of their stock, Michels and the other board member signed a covenant not to compete. As pertinent to this appeal, the covenant not to compete included the following terms:

(b) He, she or it shall not, for a period of three (3) years from the date of Closing:
(iv) engage, directly or for hire, as a proprietor, stockholder, partner, director, officer, employee, independent contractor or otherwise, design, build, sell, distribute or market any:
(I) roll forming machine for metal fabrication;
(II) bending machine for bending random shapes and random sizes in metal fabrication;
(III) bending machine for neon tubes;
(TV) creasing machine for metal fabrication;
(V) software directly competitive with the “Logixx Programmer”; or
(VI) software of any kind incorporate [sic] “Roman curves.”

The settlement agreement also prohibited Michels from influencing any employees of the companies to leave their employment to work for a competitor and from using any confidential information from the companies. The agreement also required that Michels return to the companies all confidential information related to the Preformer.

In March 1996, Michels and the other board member formed a partnership that eventually developed a machine called the “Return Shop,” which utilized computer software to cut notches in sheet metal to make signs. It also included other components that bent and facilitated uncoiling the metal. The Return Shop was distributed through Arete Corporation, a company formed by Michels and the other board member. The Return Shop was significantly smaller than the Preformer and sold for approximately $60,000 per unit. Arete began selling the Return Shop in 1998.

In 1999, the companies filed this suit against Arete and Michels, alleging, among other things, breach of the settlement agreement. In 2000, the companies filed an amended complaint alleging (1) conspiracy to violate the settlement agreement and misappropriate trade secrets and (2) misappropriation of trade secrets. After a lengthy trial, a jury found Michels liable for breach of contract and conspiracy and awarded $1,170,000 in lost profits to the companies. The jury found Arete not liable on the misappropriation of trade secrets claim. The trial court awarded $559,287.24 in statutory prejudgment interest. The parties stipulated to an award of $290,000 in attorney fees to the companies, subject to this appeal. The trial court also awarded costs to the companies in the amount of $22,445.

This appeal followed.

II. Evidentiary Support for Damages Award

Michels' principal contention is that the companies did not provide a reasonable basis for the computation of damages and that the evidence was too speculative to support the damages awarded. Specifically, Michels contends that the evidence did not provide an adequate basis for the jury to determine net profits. We disagree.

The fact finder has the sole prerogative to assess the amount of damages, and its award will not be set aside unless it is manifestly and clearly erroneous. Sonoco Prods. Co. v. Johnson, 28 P .8d 1287 (Colo.App.2001).

However, a damage award may not be based on speculation or conjecture. Wojtow-ics v. Greeley Amesthesia Servs., P.C., 961 P.2d 520 (Colo.App.1997).

The breach of a covenant not to compete gives rise to damages for a purchaser's loss of profits attributable to the breach. DBA Enters. Inc. v. Findlay, 928 P.2d 298 (Colo.App.1996).

However, a claim for profits may not be sustained by evidence that is speculative, remote, imaginary, or impossible of ascertainment. Damages for lost profits are measured by the loss of net profits, meaning net earnings or the excess of returns over expenditures, not lost gross profits or gross sales revenues. Wojtowicg v. Greeley Ames-thesia Servs., P.C., supra; see also Lee v. Durango Music, 144 Colo. 270, 855 P.2d 1083 (1960)(profits means net earnings, or the excess of returns over expenditures, and relates to any excess which remains after deducting from the returns the operating expenses, depreciation of capital, and interest on the capital employed); Black's Law Dictionary 1227 (Tth ed.1999)(net profits means "[tlotal sales revenue less that cost of the goods sold and all additional expenses").

When recovery of lost net earnings is sought, it is sufficient for the plaintiff to provide a reasonable basis for computation, using the best evidence obtainable under the cireumstances that will enable the trier of fact to arrive at a fairly approximate estimate of the loss. Evidence of past performance may form the basis for a reasonable prediction of future profits. Airborne, Inc. v. Denver Air Ctr., Inc., 882 P.2d 1086 (Colo. App.1992).

However, there is no per se rule requiring a showing of past profits. See Western Cities Broad. Inc. v. Schueller, 849 P.2d 44 (Colo.1993)(plaintiff had no history of prior profitability and had never operated at a profit under its present ownership; court declined to adopt a per se rule requiring a showing of past profits); Cope v. Vermeer Sales & Serv., Inc., 650 P2d 1807, 1309 (Colo.App.1982)("[allithough a plaintiff seeking to enter evidence of loss of profits in a newly established business does not have a 'prior track record' to ground a claim upon, this does not create a 'per se' exclusion of such loss if other competent evidence is proffered").

Documentary evidence of profit loss is preferred, but damages may be determined based on testimony by the plaintiff or other witnesses. Roberts v. Holland & Hart, 857 P.2d 492 (Colo.App.1998).

Furthermore, damages are not recoverable for losses beyond an amount that a plaintiff can establish with reasonable certainty by a preponderance of the evidence. Thus, the plaintiff must submit substantial evidence, which together with reasonable inferences to be drawn therefrom, provides a reasonable basis for computation of the damages. Pomeranz v. McDonald's Corp., 848 P.2d 1378 (Colo.1993).

However, despite difficulty or even uncertainty in ascertaining damages with mathematical precision, the trier of fact must, by utilizing all the evidence and the reasonable inferences therefrom, devise a fair method for assessing such damages. Peterson v. Colo. Potato Flake & Mfg. Co., 164 Colo. 304, 485 P.2d 237 (1967).

Onee the fact of damage has been established with the requisite degree of certainty, uncertainty as to the amount of damages will not bar recovery. Sonoco Prods. Co. v. Johnson, supra; see also Power Equip. Co. v. Fulton, 32 Colo.App. 480, 518 P.2d 284 (1978)(plaintiff testified as to the costs of his business and his gross sales, and from this testimony, the jury could arrive at a net profit figure).

Finally, guided by a presumption favoring the validity of the jury's findings, we review the record for evidence to sustain the verdict. See Varcoe v. Form & Pour Co., 480 P.2d 591 (Colo.App.1971)(not published pursuant to CAR. 35(f); see also City of Aurora v. Loveless, 689 P.2d 1061, 1063 (Colo. 1981)("[Jlury verdicts will not be reversed for inconsistency if a reading of the record reveals any basis for the verdicts"; court's task "is to examine the record and determine whether there was competent evidence from which the jury could have logically reached the verdict in this case").

Our review of the record reveals sufficient evidence from which the jury could determine the lost net profits.

First, the companies' expert testified that each sale of the Return Shop was a sale lost to the companies. The evidence demonstrated that by September 1999, Michels had sold fifty-four Return Shops. Accordingly, the jury could have concluded that by 1999, the companies could have sold an additional fifty-four Preformers. At a selling price of $150,000 per unit, the jury could have determined that the companies lost $8.1 million in gross sales.

Second, an expert in lost profit analysis testified extensively for the companies about the amount of Arete's "net bottom line profits." Evidence regarding Arete's projected net bottom line profits was also available to the jury in Arete's business plan, which doeu-mented a thirty-one to forty-one percent net profit margin for certain fiscal years and indicated these profit margins were similar to those of other companies in the automation industry. The president of the companies similarly testified that the companies operated at a thirty-five to forty percent profit margin.

Generally, it may be preferable to establish lost net profits by providing the jury with the complaining company's financial statements detailing costs and expenses. Here, howeyer, because there was evidence that the companies had never made a profit because of initial research and development costs, and their sales had decreased once Michels began developing the Return Shop, the jury could have reasonably determined the companies' lost profits by considering testimony regarding Arete's net profits. Also, the measure of the companies' lost profits was supported by testimony of its president, as well as by testimony concerning Arete's net profits. Accordingly, we cannot conclude that the evidence was too speculative, remote, imaginary, or impossible of ascertainment to support the jury's verdict.

Furthermore, Michels' reliance on Lee v. Durango Music, supra, is misplaced. Unlike here, in Lee one plaintiff testified only to his lost gross profits, and this figure did not include expenses.

Finally, Michels contends that the damages amount is erroneous because it includes future damages. To support this contention, Michels states that the companies' expert projected damages to the year 2008, nine years past the expiration of the settlement agreement. However, we conclude that substantial evidence supported the jury's award without considering such future damages.

III. Limiting Damages Because of Bankruptcy Proceeding

Michels contends that the trial court erred by not limiting damages as a result of the bankruptcy proceeding. Relying on Gibson v. Eberle, 762 P.2d TT? (Colo.App.1988), Michels contends that a covenant not to compete becomes unenforceable onee the business that is protected by the noncompete clause has ceased operations. Consequently, Michels argues, because Logixx filed for bankruptey in April 2000 and ceased operations in November 2000, the trial court should have limited damages to those occurring before its cessation of business. We disagree.

As stated above, there was ample evidence from which the jury could have determined that the companies suffered the damages awarded as of September 1999 when Michels had sold fifty-four Return Shops. Further, while there was conflicting evidence presented, some testimony indicated that Logixx was still an ongoing business at the time of trial.

Under these circumstances, we conclude the trial court did not err in allowing the jury's damage award to stand.

IV. Allocation of Damages to Each Plaintiff

Michels next contends that the trial court erred when it divided the damages equally between Logixx and Laser. The companies argue that any error in apportioning the verdict between the two companies was harmless. We agree with the companies.

Michels has not shown how he was prejudiced by the trial court's apportionment of damages. Michels is responsible for payment of the entire verdict regardless of the apportionment. In this situation, only the companies could have objected to the equal apportionment of the damages, and the ree-ord reflects that they agreed to it. Thus, we reject Michels' contention. See Leek v. City of Golden, 870 P.2d 580 (Colo.App.1993)(a trial court judgment will not be reversed unless the errors complained of are shown to prejudice the substantial rights of the complaining party).

V. Prejudgment Interest

Michels contends that the trial court erred as a matter of law in awarding prejudgment interest. We disagree.

First, Michels argues that the damages awarded do not fall within § 5-12-102(1)(b), C.R.S.2001, because they are consequential damages and not money or property "wrongfully withheld." We disagree.

In cases other than personal injury tort actions, a prevailing party may recover prejudgment interest under § 5-12-102(1), C.R.S.2001:

Exeept [in certain tort actions], when there is no agreement as to the rate thereof, creditors shall receive interest as follows:
(a) When money or property has been wrongfully withheld, interest shall be an amount which fully recognizes the gain or benefit realized by the person withholding such money or property from the date of wrongful withholding to the date of payment or to the date judgment is entered, whichever first occurs; or, at the election of the claimant,
(b) Interest shall be at the rate of eight percent per annum compounded annually for all moneys or the value of all property after they are wrongfully withheld or after they become due to the date of payment or to the date judgment is entered, whichever first occurs.

In Mesa Sand & Gravel Co. v. Landfill, Inc., 776 P.2d 362, 365-66 (Colo.1989), the supreme court determined that the phrase "wrongfully withheld" is ambiguous and held that § 5-12-102(1)(b) is to be given a broad, liberal construction to effectuate the legislative purpose of compensating parties for the loss of money or property to which they are entitled.

In Westfield Development Co. v. Rifle Investment Associates, 786 P.2d 1112 (Colo. 1990), the supreme court awarded prejudgment interest on lost profits associated with a tortious interference with contract claim. Cf South Park Aggregates, Inc. v. Northwestern Nat'l Ins. Co., 847 P2d 218 (Colo. to award prejudgment interest on an entire award of compensatory damages and only awarding interest on the amount of damages that reflects the benefit to plaintiff under the contract).

In light of this precedent, we conclude that the trial court properly awarded prejudgment interest on the full damages amount, which reflected the total of lost net profits the companies would have realized but for breach of the settlement agreement.

Nevertheless, Michels argues that the prejudgment interest was excessive because the damages award was improperly based on future damages. While we agree that a trial court may not award prejudgment interest on future damages, there was evidence in the record from which the jury could have determined the damages award without considering future damages. See Curragh Queensland Mining Ltd. v. Dresser Indus., Inc., - P.3d --, --, 2002 WL 725656 (Colo.App. No. 00CA1049, Apr. 25, 2002)("prejudgment interest is allowed only on past, not future, losses").

Finally, Michels contends that the trial court erred in awarding prejudgment from March 31, 1996, even though no damages occurred until 1998 when the first Return Shop was sold. We disagree.

A nonbreaching party is entitled to recover prejudgment interest from the time of the breach. Mesa Sand & Gravel Co. v. Landfill, Inc., supra.

Here, the trial court concluded that the breach occurred in March 1996. This finding is supported by evidence in the record that in March 1996, Michels and the other board member formed the partnership under which they developed the Return Shop. Thus, we conclude that the trial court did not err.

VI. Covenant Not to Compete

Michels next contends that the settlement agreement is unenforceable because it contains an overbroad covenant not to compete. We conclude that, as applied to this case, the covenant not to compete is not overly broad.

The interpretation of a contract is a matter of law, which we review de novo. State Farm Mut. Auto. Ins. Co. v. Stein, 940 P.2d 384, 387 (Colo.1997).

Covenants not to compete are disfavored in Colorado, and exceptions to the general rule are narrowly construed. Nat'l Propane Corp. v. Miller, 18 P.3d 782 (Colo. App.2000).

Here, the covenant not to compete was not overly broad as it applied to the Preformer and the Return Shop product lines and the market area of sign manufacturing. -It specifically identified the functions of the machine (roll forming, metal uncoiling and bending, and related software) and the prohibited activities (design, sell, build, distribute, or market).

Michels contends that the agreement is overly broad because it could be construed to apply to other areas of manufacturing, such as the airline and automobile industries. However, we decline to speculate as to whether the agreement would be overly broad in a different setting because, here, Michels marketed the Return Shop as a direct competitor to the Preformer in the same market area-manufacturing illuminated signs.

VII. Economic Loss Rule

Michels contends that the conspiracy claim is barred by the economic loss rule and that the trial court erred in ruling otherwise. We conclude any error was harmless.

In Town of Alma v. Azco Construction, Inc., 10 P.3d 1256 (Colo.2000), and its companion case, Grynberg v. Agri Tech, Inc., 10 P.3d 1267 (Colo.2000), the supreme court expressly adopted the economic loss rule in Colorado to maintain a distinction between contract and tort law. The essential difference between tort and contract obligations is the source of the parties' duties. Tort obligations arise from duties imposed by law and are designed to protect all citizens from the risk of physical harm to their persons or to their property. These duties are imposed by law without regard to any agreement or contract. In contrast, contract obligations arise from promises made between parties. Contract law is intended to enforce the expectancy interests created by the parties' promises so that they can allocate risks and costs during their bargaining. Town of Alma v. Azco Constr., Inc., swpra.

The economic loss rule provides that a party suffering only economic loss from the breach of an express or implied contract may not assert a tort claim for such a breach absent an independent duty of care under tort law. Town of Alma v. Azco Constr., Inc., swpra. Accordingly, the companies cannot maintain a conspiracy claim associated with the breach of contract unless an independent duty of care exists.

Here, in effect, the companies argue that because Michels, was a party to the settlement agreement, he had an independent duty not to enter into a civil conspiracy with another party to the contract to breach the contract, particularly when the alleged coconspirator was a former board member of the companies. ~

Under Ageo, our analysis focuses on whether Michels had an independent duty not to conspire to breach a contract with another signatory to that contract. See Grynberg v. Agri Tech, Inc., supra (the focus in an analysis under the economic loss rule is on the source of the duties alleged to have been breached). If he did, the conspiracy charge was not barred by the economic loss rule. However, if no independent duty existed, then under the economic loss rule, the conspiracy claim was invalid.

As discussed below, we conclude that a conspiracy to breach a contract claim cannot be maintained when the two parties alleged to have participated in the conspiracy are signatories to the contract. Therefore, Michels had no independent duty not to conspire to breach the settlement agreement with another signatory to that agreement. Thus, the conspiracy claim is barred by the economic loss rule, and the trial court erred by submitting this claim to the jury.

The parties agree that no case law in Colorado has addressed whether there can be a conspiracy by two or more parties to a contract to breach that contract.

In Nelson v. Elway, 908 P.2d 102, 106 (Colo.1995), the supreme court addressed the elements of civil conspiracy in conjunction with the tort of breach of fiduciary duty: "To establish a civil conspiracy in Colorado, a plaintiff must show: (1) two or more persons; (2) an object to be accomplished; (8) a meeting of the minds on the object or course of action; (4) an unlawful overt act; and (5) damages as to the proximate result."

However, the court did not address a civil conspiracy claim in conjunction with a breach of contract claim where the only damages alleged were for breach of contact.

In Applied Equipment Corp. v. Litton Saudi Arabia Ltd., 7 Cal4th 508, 28 Cal. Rptr.2d 475, 869 P.2d 454, 459 (1994), the California Supreme Court considered a conspiracy to interfere with a contact claim, rather than a conspiracy to breach a contract claim, and concluded that a contracting party only owes a duty to perform the contract according to its terms. After discussing the differences between contract and tort law, as the Azco court did, it refused to expand tort liability in a way that obliterated "vital and established distinctions between contract and tort theories of liability by effectively allowing the recovery of tort damages for an ordinary breach of contract." Applied Equip. Corp. v. Litton Saudi Arabia Ltd., supra, 28 CallRptr.2d 475, 869 P.2d at 457. Based on this analysis, the court concluded that a party could not conspire to interfere with his or her own contract.

We find this analysis persuasive and conclude that because the only duty a contracting party owes is to perform the contract according to its terms, a contracting party has no independent duty not to conspire to breach its own contract with another signatory to that contract. Accordingly, we conclude that there can be no conspiracy by two or more parties to a contract to breach that contract.

This conclusion bas also been reached by courts in other jurisdictions and is supported by the policy considerations announced in Azco and Grynberg. See Harris v. Equitable Life Asswrance Socy, 147 F.Supp. 478 (D.Iowa 1957); Callahan v. Gutowski, 111 AD.2d 464, 488 N.Y.9.24 519 (N.Y¥.App.Div. 1985).

The companies urge us to follow cases from other jurisdictions that have applied civil conspiracy tort liability to breach of contract cases. However, these cases are inapposite either because one of the conspiring parties was a stranger to the contract or because the court found an independent duty based on a special relationship such as a partnership. See Nat'l Linen Serv. Corp. v. Clower, 179 Ga. 186, 175 S.E. 460 (1934); Sorenson v. Chevrolet Motor Co., 171 Minn. 260, 214 N.W. 754 (1927); Boyles v. Thompson, 585 S.W.2d 821 (Tex.App.1979); Fox v. Deese, 234 Va. 412, 362 S.E.2d 699 (1987).

Nevertheless, the companies contend that Michels had an independent duty to engage in good faith business practices that prohibit a prior board member of a corporation from interfering with the corporation's business relations. However, we need not address this issue because the companies did not allege the tort 'of interference with business relations in their complaint.

Moreover, although Colorado courts have recognized that some special relationships, such as attorney-client, physician-patient, and insured-insurer, by their nature automatically trigger an independent duty of care that supports a tort action even when the parties also have a contractual relationship, the relationship between a former board member and the corporation is not so recognized. See, eg., Town of Alma v. Azco Constr., Inc., supra (collecting cases where special relationship created independent duty); Colo. Homes, Ltd. v. Loerch-Wilson, 43 P.3d 718 (Colo.App.2001)(recognizing a duty imposed on a builder, independent of any contract, to construct a home without latent defects for the benefit of subsequent purchasers).

In any event, as the companies argue, any error in allowing the conspiracy claim to go to the jury was harmless because the damages the jury awarded to the companies were supported by evidence related to the breach of contract claim.

Here, the jury verdict form allowed the jury to find Michels separately Hable for the breach of contract and conspiracy claims without determining the damages associated with each claim. We cannot tell from this jury verdict form how much the jury awarded for breach of contract and how much for conspiracy. Although Michels submitted a jury verdict form that would have allowed the jury to make a separate damages determination for each claim, the trial court rejected this form.

Nevertheless, the record reflects that the only evidence of damages presented by the companies was for lost profits related to the breach of contract claim. The companies did not argue in closing that they were entitled to any damages under the conspiracy claim beyond their request for lost profits under the breach of contract claim. Further, the trial court instructed the jury that if it found Michels liable on more than one claim, it could not award duplicative damages. Accordingly, under these cireumstances, Mi-chels was not prejudiced by the jury's consideration of the conspiracy claim.

The judgment is affirmed. The case is remanded to the trial court to determine and award the attorney fees associated with this appeal to which the companies are entitled.

Judge DAILEY and Judge PLANK concur.