Opinion ID: 1121444
Heading Depth: 1
Heading Rank: 4

Heading: liability of the remaining partners

Text: Relying on Normandy Estates, LPMCA and Usher now contend that the value of the medical office building should be set at $2,825,000.00, the value set on the approximate date upon which the hospital district took possession of the building. LPMCA and Usher do not contend that the district court ruling amounts to an abuse of discretion. [10] Rather, LPMCA and Usher contend that the hospital district should have the option to either retain the property and pay $2,825,000 (and not $1,140,000), plus interest, or to return the property. Their contentions misconstrue the application of Normandy Estates to the facts of this case and are unpersuasive. As previously noted, Normandy Estates did not contemplate a fact pattern wherein a private corporation deals, not with a municipal entity acting alone, but with a limited partnership wherein a municipal entity is one of several partners. In Normandy Estates, after the recreation district was released from liability under the second purchase agreement, no additional defendants remained liable. In the present case, however, the district court found that LPMCA and Usher remained liable on the promissory note after the hospital district was released from liability. Accordingly, Normandy Estates does not dictate that any equitable relief should be afforded to the partners, LPMCA and Usher, who remain liable on the promissory note. Generally, the power to fashion equitable remedies lies within the discretion of the trial court. Restatement (Second) of Contracts § 357 cmt. c (1981) (The granting of equitable relief has traditionally been regarded as within judicial discretion.); see Dan B. Dobbs, Law of Remedies § 2.1-2.4 (2d ed. 1993). Such rulings will not be disturbed on appeal absent a showing of abuse of discretion. Colorado Nat'l Bank of Denver v. Friedman, 846 P.2d 159, 166-67 (Colo.1993) (quoting Nagy v. District Court, 762 P.2d 158, 161 (Colo.1988) ([A] trial court's actions amount to an abuse of discretion when the actions are `manifestly arbitrary, unreasonable, or unfair.')). The district court's equitable ruling in the present case does not amount to an abuse of discretion. As previously noted, the district court gave the hospital district the option of either retaining the building by paying the market value of $1,140,000, or conveying title to the building to First Federal. The district court stated that using the value of $2,825,000 would substantially provide the lender under an equity solution with the relief heretofore determined nonavailable due to statutory and constitutional prohibitions. The district court additionally noted that using the value of $1,140,000 provides a fair and workable means of avoiding unjust enrichment to the [hospital d]istrict, unreasonable forfeiture by the lenders [First Federal], and compliance with the constitutional and statutory constraints upon governmental entities. In its equitable order, the district court gave LPMCA and Usher a partial satisfaction of that judgment, greatly reducing the amount owed by them. Were we to adopt LPMCA and Usher's contentions and find that the district court's valuation of the medical office building should be set at $2,825,000, LPMCA and Usher would receive a partial satisfaction of the judgment entered against them in that amount. Their liability would be reduced from $1,796,054.60 to $111,054.60. Such a result would not produce equitable results in the present case, since the district court correctly determined that this result would impermissibly accomplish in equity that which could not be accomplished at law, and since First Federal would not then be fully compensated, as is required by Normandy Estates. We are not persuaded that the district court's equitable ruling amounts to an abuse of discretion in light of the facts of this case. In selecting a value that did not attempt to accomplish through equity that which could not be achieved at law, the district court acted reasonably. We thus affirm the court of appeals ruling with respect to the equitable remedy.