Opinion
Rehearing Denied Aug. 8, 1973.
Anthony F. Zarlengo, Howard M. Kirshbaum, Denver, for the defendants-appellees and cross-appellees.
Bradley, Campbell & Carney, Leo N. Bradley, William J. Campbell, Golden, for the plaintiffs-appellees and cross-appellants.
Tinsley & Frantz, Lakewood, for the defendant-appellant.
Page 77
PIERCE, Judge.
Defendant Montview Acceptance Co. (Montview), a wholly-owned subsidiary of Peoples Bank & Trust Co. (Bank), as titleholder of record of a mountain resort known as 'Troutdale,' entered into a receipt and option contract with pliantiffs, agreeing to convey the property to plaintiffs upon the satisfaction of certain conditions. When Montview subsequently refused to convey the property, although the conditions were alleged to have been satisfied, plaintiffs brought this action seeking specific performance of the option. Defendant Robert B. Spizzo (Spizzo), intervened, counterclaiming against plaintiffs and crossclaiming against defendants, asserting that Montview was without power or authority to convey the property and that it had breached a trust obligation to him by contracting to do so. Spizzo's contention is that Montview had falsely and maliciously claimed interest in the property when in fact, the property was held in trust for him.
The following facts pertinent to the issues on appeal were disclosed at the trial of this matter. In 1967, Spizzo purchased Troutdale from the Raskin family by paying a cash down payment and executing a promissory note for the balance, secured by a deed of trust. He then organized Chateau Troutdale, Inc., and conveyed the property in question to the corporation. In 1968, Bel Air Investment Company purchased Troutdale from Chateau Troutdale, Inc. During the time that each held the property, neither Spizzo, Chateau Troutdale, Inc., nor Bel Air Investment Company made any payments to the Raskins.
To avoid foreclosure, Spizzo, who remained the primary obligor on the note to the Raskins, obtained a loan from the Bank to purchase the original note and deed of trust from the Raskins. The note and deed of trust were directly assigned to the Bank as security for Spizzo's loan. It was agreed between Spizzo and the Bank that, if the original note were paid in full, Spizzo's loan would be satisfied and any excess money received from any sale of the property would be paid to him.
Bel Air Investment Company defaulted on the original note and deed of trust, and Spizzo and the Bank agreed that the property should be foreclosed and sold to satisfy his loan. To expedite this plan, the Bank assigned the original note and deed of trust to its subsidiary, Montview, which instituted the foreclosure proceedings which culminated in a sheriff's sale at which Montview purchased the property. There being no redemption, Montview was issued a sheriff's deed to the property in 1969.
While there is a great deal of controversy as to the understanding between Montview and Spizzo as to what tactic the parties would adopt in disposing of the property, the trial court determined that it was understood by the parties that each would exert his and its best effort to sell Troutdale and that Spizzo's note would be satisfied from the proceeds. In the fall of 1969, plaintiffs began negotiations with Montview to purchase the property. The negotiations culminated in April of 1970, when plaintiff Dailey, on behalf of plaintiff Winegard, executed with Montview the disputed option to purchase the property.
Thereafter, Montview and plaintiffs decided that plaintiffs' attorney, on behalf of Montview, would institute a quiet title action to correct certain defects which a title search had disclosed. Spizzo intervened in the quiet title action and asserted essentially the same claim of breach of trust against Montview and the Bank which he claims in the present action. By stipulation, made in open court, Spizzo's then attorney consented to the dismissal of the breach of trust claim, with prejudice.
On October 298 1970, the title defects had been cured, and plaintiffs began arrangement for the closing. At that time, Montview refused to convey, claiming that the option which had been entered into on
On October 29, 1970, the title defects limitation within which the title should be made merchantable, had expired and that plaintiffs had, therefore, failed to perform under the terms of the option agreement. This lawsuit was then initiated.
The trial court ordered, among other things:
1) That Montview and the plaintiffs proceed to consummate the sale and that the proceeds be paid into the registry of the court pending further orders;
2) That Spizzo's breach of trust and fraud claims challenging Montview's title to the property be dismissed;
3) That Spizzo should have judgment against Montview for any moneys received from any sale of the property after satisfaction of the loan and the payments of costs assessed against him in this action;
4) That plaintiffs' motion to amend their complaint to state a claim for damages in addition to specific performance against Montview was denied; and
5) That the damage claims of plaintiffs against Spizzo be set for trial, but that, pursuant to C.R.C.P. 54(b), judgment would enter on the order at this point to determine the legal issues raised prior to the determination of those damage claims.
Spizzo brings this appeal contending that the trial court erred by not recognizing his interest in the property. Plaintiffs cross-appeal against Montview, contending that the court erred in not allowing it to seek damages in addition to specific performance for failure to perform pursuant to the receipt and option contract. Neither the Bank nor Montview appeal from the determination that they must convey the property to plaintiffs. We affirm.
I.
The trial court held that Spizzo was estopped from prosecuting his claim against plaintiffs due to his acquiescence in the efforts by Montview to sell the property to plaintiffs and from several other acts and omissions on his part which led plaintiffs to believe that Montview was the sole owner of the property. While this would be a sound basis for the ultimate determination, there is an even stronger justification for the result reached; namely, res judicata as pled by plaintiffs. Plaintiffs, when they brought the quiet title action, had no actual or constructive notice of any alleged trust agreement between Montview and Spizzo, until Spizzo raised the issue when he intervened in that suit. The issue was disposed of when he placed it before the court and then stipulated to have it withdrawn, with prejudice. Spizzo now maintains that his attorney had no authority to allow his claim to be dismissed with prejudice. The record is not persuasive as to this contention, but even if he had established this fact, his remedy was to appeal from the quiet title suit. This he did not do. In the two actions there exist identity of subject matter; identity of claims for relief; identity of parties or those in privity with parties; and identity of capacity of persons for whom or against whom res judicata is asserted. The quiet title suit was, therefore, res judicata as to Spizzo's claim against the plaintiffs in this action. Barnett v. Clouse, 167 Colo. 562, 448 P.2d 959; Newby v. Bock, 120 Colo. 454, 210 P.2d 985; Murphy v. Northern Colorado Grain Co., 30 Colo.App. 21, 488 P.2d 103.
Spizzo further argues that the dismissal in the quiet title action was not a final judgment, on the ground that the stipulation of dismissal was not signed by all parties who had appeared in the action. If the stipulation of dismissal had been entered without order of court, the argument might be valid. However, in this instance, the matter was disposed of by order of court, and was, therefore, properly terminated. C.R.C.P. 41(a)(2). See Hartford Accident & Indemnity Co. v. Colorado National Bank, 96 Colo. 127, 40 P.2d 254.
II.
By cross-appeal, plaintiffs claim that the trial court erred in refusing to grant them a hearing on damages against Montview and the Bank. Again, we affirm the trial court. Plaintiffs filed the complaint for specific performance. They made no specific prayer for any other relief. The record is clear that the case was tried on this theory. At the conclusion of the testimony, plaintiffs sought to amend to include the damage claim against Montview. This motion was denied by the trial court. This ruling was a matter of discretion with the trial court and our review of the record discloses no abuse of that discretion. C.R.C.P. 15(b). See Quandary Land Development Co. v. Porter, 159 Colo. 8, 408 P.2d 978.
The other specifications of error made by the parties have been examined and are found to be without merit.
The judgment of the trial court as to all issues presented on appeal is hereby affirmed.
SILVERSTEIN, C.J., and COYTE, J., concur.