978-1285770178 Case Printout Case CPC-01-04 Part 3

subject Type Homework Help
subject Pages 15
subject Words 4407
subject Authors Roger LeRoy Miller

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facts.
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told important facts by the defendant which were untrue.
Plaintiffs further argue that “advertising designed to lure members of the public into a fraudulent concealment
scheme demonstrates the potential that consumers could be impacted in the same manner as plaintiffs were.” They
point out that in Hall only two persons were adversely affected by the misrepresentation that the lots being sold had
access rights over adjoining land. Plaintiffs' reliance on Hall is misplaced because there the defendants “widely ad-
a false impression by nondisclosure of material information.FN16
To hold that every such informational posting satisfies the public impact requirement, if it fails to include all “mate-
rial information concerning goods, services, or property,” § 6-1-105(1)(u), C.R.S.2009, would significantly expand
the CCPA. For example, a notice of public auction would have to disclose all latent defects in the goods being of-
Turning to the second factor, plaintiffs did not attempt to prove the relative sophistication and bargaining power of
the persons who read the Internet posting. Even assuming that such a profile could be inferred from information
about either the 500 to 635 persons who responded or the 68 persons to whom information packets were sent, plain-
tiffs offered no evidence of the demographics of either group.
impact.FN17
IV. The Jury Waiver Was Properly Enforced
[16] Plaintiffs next contend that because the trial court erred in striking their jury demand based on a waiver in the
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© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
the evidence was disputed, we cannot say that these findings are clearly erroneous.
[24] However, as discussed more fully in subsection II(D) above, the trial court also found that “Peaberry actively
concealed material financial facts from the Plaintiffs” and that these facts were “withheld with the intent that the
Plaintiffs purchase their franchises ignorant of the true facts.” These findings create a dilemma over who acted with
such intent, because “a corporation can only act through it agents.” Dallas Creek Water Co. v. Huey, 933 P.2d 27, 47
(Colo.1997).
The decision begins by defining the “Peaberry Defendants” to include the parent company, PCFI, Tointon, and Orr.
However, in its total rewrite of subsection H(1)(b), the trial court used both “Peaberry” and “the Peaberry Defend-
ants.” The language that the court struck included:
• Mr. Orr was not involved in the decision whether to disclose [the parent company's] financial information....
• Accordingly, [Orr] has no personal liability with respect to Plaintiffs' Third Claim for Relief.
[25][26] Whether the corporate identity should be disregarded under the alter ego doctrine is a question of fact. Cf.
McCallum Family L.L.C. v. Winger, 221 P.3d 69, 73 (Colo.App.2009) (corporate veil piercing is fact specific). Ap-
pellate courts review a trial court's legal conclusions in finding alter ego status de novo, and examine its related find-
ings of fact for clear error. United States v. Funds Held in Name or for Benefit of Wetterer, 210 F.3d 96, 106 (2d
ciples, and PCFI's books were independently audited on an annual basis....
Further, the court noted the absence of “evidence supporting a disregard of corporate formalities for the purpose of
using the corporate form to perpetrate a fraud.” This finding is consistent with its earlier finding, which plaintiffs do
not challenge, that “Plaintiffs have failed to produce precise and indisputable evidence that PCFI was formed for a
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© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
against Perkins Coie.
A. Fraudulent Nondisclosure
Plaintiffs assert that “[t]his court cannot act as a finder of fact regarding issues relating to Perkins Coie's participa-
nondisclosure and aiding and abetting.
B. Negligent Misrepresentation
Plaintiffs argue that the negligent misrepresentation claim “must be reinstated and remanded to the trial court” be-
as an established viable company with an established business model” does not persuade us to reinstate the negligent
misrepresentation claim against Perkins Coie.
[30] The trial court dismissed the negligent misrepresentation claim for the same reasons discussed in subsection
II(B) above that it dismissed the fraudulent nondisclosure claim: exculpatory clauses in the transactional documents
for the company stores and, as discussed in subsection II(B)(1) above, contained various warnings. Other than by
disclosing only gross sales, plaintiffs do not explain how Exhibit J affirmatively misrepresented anything.
Second, although we have concluded that nondisclosure of the parent company's losses could support a fraud claim,
our analysis here is limited to what Perkins Coie affirmatively represented, not what it failed to disclose. See
affirmative misrepresentation, and we are unwilling to search its 139 pages. Erskine, 197 P.3d at 232. Further,
plaintiffs cite no authority, nor have we found any in Colorado, that would support expanding negligent misrepre-
sentation to include such a general portrayal.
Accordingly, we conclude that the trial court properly dismissed the negligent misrepresentation claim against Per-
told important facts by the defendant which were untrue.
Plaintiffs further argue that “advertising designed to lure members of the public into a fraudulent concealment
scheme demonstrates the potential that consumers could be impacted in the same manner as plaintiffs were.” They
point out that in Hall only two persons were adversely affected by the misrepresentation that the lots being sold had
access rights over adjoining land. Plaintiffs' reliance on Hall is misplaced because there the defendants “widely ad-
a false impression by nondisclosure of material information.FN16
To hold that every such informational posting satisfies the public impact requirement, if it fails to include all “mate-
rial information concerning goods, services, or property,” § 6-1-105(1)(u), C.R.S.2009, would significantly expand
the CCPA. For example, a notice of public auction would have to disclose all latent defects in the goods being of-
Turning to the second factor, plaintiffs did not attempt to prove the relative sophistication and bargaining power of
the persons who read the Internet posting. Even assuming that such a profile could be inferred from information
about either the 500 to 635 persons who responded or the 68 persons to whom information packets were sent, plain-
tiffs offered no evidence of the demographics of either group.
impact.FN17
IV. The Jury Waiver Was Properly Enforced
[16] Plaintiffs next contend that because the trial court erred in striking their jury demand based on a waiver in the
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
the evidence was disputed, we cannot say that these findings are clearly erroneous.
[24] However, as discussed more fully in subsection II(D) above, the trial court also found that “Peaberry actively
concealed material financial facts from the Plaintiffs” and that these facts were “withheld with the intent that the
Plaintiffs purchase their franchises ignorant of the true facts.” These findings create a dilemma over who acted with
such intent, because “a corporation can only act through it agents.” Dallas Creek Water Co. v. Huey, 933 P.2d 27, 47
(Colo.1997).
The decision begins by defining the “Peaberry Defendants” to include the parent company, PCFI, Tointon, and Orr.
However, in its total rewrite of subsection H(1)(b), the trial court used both “Peaberry” and “the Peaberry Defend-
ants.” The language that the court struck included:
• Mr. Orr was not involved in the decision whether to disclose [the parent company's] financial information....
• Accordingly, [Orr] has no personal liability with respect to Plaintiffs' Third Claim for Relief.
[25][26] Whether the corporate identity should be disregarded under the alter ego doctrine is a question of fact. Cf.
McCallum Family L.L.C. v. Winger, 221 P.3d 69, 73 (Colo.App.2009) (corporate veil piercing is fact specific). Ap-
pellate courts review a trial court's legal conclusions in finding alter ego status de novo, and examine its related find-
ings of fact for clear error. United States v. Funds Held in Name or for Benefit of Wetterer, 210 F.3d 96, 106 (2d
ciples, and PCFI's books were independently audited on an annual basis....
Further, the court noted the absence of “evidence supporting a disregard of corporate formalities for the purpose of
using the corporate form to perpetrate a fraud.” This finding is consistent with its earlier finding, which plaintiffs do
not challenge, that “Plaintiffs have failed to produce precise and indisputable evidence that PCFI was formed for a
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
against Perkins Coie.
A. Fraudulent Nondisclosure
Plaintiffs assert that “[t]his court cannot act as a finder of fact regarding issues relating to Perkins Coie's participa-
nondisclosure and aiding and abetting.
B. Negligent Misrepresentation
Plaintiffs argue that the negligent misrepresentation claim “must be reinstated and remanded to the trial court” be-
as an established viable company with an established business model” does not persuade us to reinstate the negligent
misrepresentation claim against Perkins Coie.
[30] The trial court dismissed the negligent misrepresentation claim for the same reasons discussed in subsection
II(B) above that it dismissed the fraudulent nondisclosure claim: exculpatory clauses in the transactional documents
for the company stores and, as discussed in subsection II(B)(1) above, contained various warnings. Other than by
disclosing only gross sales, plaintiffs do not explain how Exhibit J affirmatively misrepresented anything.
Second, although we have concluded that nondisclosure of the parent company's losses could support a fraud claim,
our analysis here is limited to what Perkins Coie affirmatively represented, not what it failed to disclose. See
affirmative misrepresentation, and we are unwilling to search its 139 pages. Erskine, 197 P.3d at 232. Further,
plaintiffs cite no authority, nor have we found any in Colorado, that would support expanding negligent misrepre-
sentation to include such a general portrayal.
Accordingly, we conclude that the trial court properly dismissed the negligent misrepresentation claim against Per-

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