Court Opinion

ID: 9791310
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:08:49.114381+00
Date Added: 2024-06-11T07:37:35.363873
License: Public Domain

Judge TURSI,
specially concurring.
I agree that the summary judgment as entered in this matter failed to address contested questions of fact on whether Merco ratified the contract at issue after discovery of the dual agency, a material issue raised by Governor’s Ranch in defense of Merco’s right to rescission, and therefore concur in the result. However, because I disagree with the majority’s holding that the trial court erred when it relied in part on the evidence received on the motion for mandatory preliminary injunction, I write specially.
Governor’s Ranch’s verified motion for mandatory preliminary injunction was presented to the trial court at a contested hearing which covered approximately three full days of testimony. Merco’s resistance to the motion placed the issue of dual agency squarely before the court. At the conclusion of the testimony, the trial court stated that though it was not trying to resolve all the issues between the parties, nevertheless, it was required to, and did, address the issue whether David Schore had been a dual agent.
The trial court found the evidence showed that Schore was hired and paid by Merco to assist them in negotiating this lease and that he had been so employed from the very beginning as far as Merco was concerned. Further, it found it to be clear that Schore had an ongoing relationship with Bradley Zieg, and it was uncontested that Schore received substantially one-half of the sum received by Zieg as the commission paid by Governor’s Ranch in this project. Further, the trial court rejected as being incredible the testimony of both Schore and Zieg in explanation of why Schore received the payment from Zieg.
After additional discovery by the parties, the trial court heard Merco’s motion for summary judgment. The trial court held, pursuant to C.R.C.P. 65(a)(2), that the evidence received on the application for mandatory preliminary injunction had become part of the record and that it need not be repeated on trial. Determining that the dispositive issue — Schore having acted as a dual agent — had been established at the prior hearing and remained unrebutted as viewed in a summary judgment posture, the trial court held the transaction between the parties to be voidable at the election of either principal. See Newton v. Mann, 111 Colo. 76, 137 P.2d 776 (1943).
Further, the court held that, rescission being equitable in nature, the claim was triable by the court and not by a jury. Therefore, it granted Merco’s motion for summary judgment with respect to rescission of lease agreement and awarded it a return of its security deposit and rents paid under protest.
*654C.R.C.P. 65(a)(2), in pertinent part, provides:
“[A]ny evidence received upon an application for a preliminary injunction which would be admissible upon a trial on the merits becomes part of the record on the trial and need not be repeated upon the trial, this subsection (a)(2) shall be so construed and applied as to save the parties any rights they may have to trial by jury.”
I agree with the trial court’s conclusion that under the pleadings and facts of this case, the trust of the claims was in equity and, thus, Governor’s Ranch was not entitled to trial by jury.
Inasmuch as there had been a full adversary hearing on the question of dual agency, and no disputed evidence of material fact to the dual agency having been developed in subsequent discovery, no right to a jury trial exists. See Ridgeway v. Kiowa School District C-2, 794 P.2d 1020 (Colo. App.1989) (allowing a disputed issue of fact to be disposed of in an adversarial hearing prior to entry of summary judgment). Hence, I find no error here in the trial court’s determination of that narrow issue based on the evidence in the record.
Governor’s Ranch contended that Mer-co’s knowledge of Schore’s prior relationship with Zieg constituted a disclosure of the dual agency which bars rescission. I disagree.
It is not enough for an agent to put a principal on inquiry concerning his dual status. Rather an agent must disclose such material facts as are unknown to the principal as will enable the principal to form a reasonably correct opinion and conclusion to its best interest. McNeill v. Dobson-Bainbridge Realty Co., 184 Tenn. 99, 195 S.W.2d 626 (1946); Spratlin, Herrington & Thomas, Inc. v. Hawn, 116 Ga. App. 175, 156 S.E.2d 402 (1967). Here, the-evidence is uncontested that full disclosure was not made to either principal, and although an agent may with full knowledge of both principals represent principals having adverse interest, such is not the case before us.
There is undisputed evidence in the record that when Merco questioned Schore about his prior relationship with Zieg, Schore denied that there was any continuing relationship between them. Further, there were unrebutted admissions by the principals of Governor’s Ranch that they were also unaware of Schore’s functioning as a dual agent.
On its entry of summary judgment, the trial court found that Governor’s Ranch failed to present any evidence indicating an awareness by Merco that Schore was in fact acting as dual agent and that not only had he been paid over $20,000 by Merco but also had received $20,000 from Zieg’s commission on the deal. Hence, the trial court did not err in granting summary judgment denying this defense. To place this matter in'proper perspective, it must be remembered that Governor’s Ranch in its request for mandatory preliminary injunction was not seeking to maintain the status quo, but rather was seeking to force an immediate change in it.
Cases relied upon by Governor’s Ranch are inapposite. None of the cases cited by the majority arose from entry of summary judgment. In all of them, the losing party on the requesting preliminary injunction was denied the right to introduce evidence on material issues not germane to the preliminary injunction.
Here, Governor’s Ranch was given the opportunity to discover and present such evidence. And, although it failed to develop any evidence to dispute the dual agency, it did develop evidence which created a dispute concerning the material issue of ratification of the dual agency by waiver after learning of the relationship.
Therefore, I agree that the matter must be remanded to the trial court for further proceedings. See Gladden v. Guyer, 162 Colo. 451, 426 P.2d 953 (1967).