Court Opinion

ID: 5158081
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:27:39.31713+00
Date Added: 2024-06-11T08:25:29.060438
License: Public Domain

Judge TAUBMAN
concurring in part and dissenting in part.
I agree with the majority's conclusion in part II of its opinion that district and county courts have concurrent jurisdiction over *109claims brought under part 6 of the Colorado Civil Rights Act, sections 24-84-601 to -605, C.R.9S.2010. I also agree with the majority's analysis of fees and costs and appellate jurisdiction in parts V and VI, respectively. I write separately, however, because I disagree with the majority's conclusion in part IILA that the trial court did not err in dismissing the breach of express contract claim of plaintiff, April Arnold, against defendants, Anton Cooperative Association (the Association), Chester Kenney, and Louanne Kenney for denying her the right to shop at the Association store. Accordingly, I would reverse that part of the trial court's judgment and remand for further proceedings in which Arnold would have an opportunity to prove her breach of contract claim.
The dual purposes of agricultural cooperatives in Colorado are to provide a mechanism for agricultural producers to market their goods and services and to obtain services and supplies. In my view, the Association's articles of incorporation and bylaws, together with state statutes, establish a contract that entitles Arnold both to market her goods and to shop at the Association's store under the cireumstances presented here.
I. Background
Arnold alleged in her complaint that for approximately nine years she was a member of the Association and bought from its store various materials and supplies for her business and personal use. She alleged that her problems began when Ms. Kenney confronted her in October 2005, asserting that Ms. Kenney did not want to do business with her because Mr. Kenney was seeking to have a relationship with Arnold.
Arnold further alleged that Mr. and Ms. Kenney sought to make it difficult for Arnold to do business with the Association. This worsening relationship, Arnold contended, culminated in an April 2006 letter from Mr. Kenney to Arnold advising her that she could no longer shop at the Association store.
The Association and the Kenneys contend in their answer brief that Arnold's relationship with the Association was professional until May 2004, when Arnold separated from her then husband. Defendants assert that over an extended period of time Arnold's conduct was confrontational and disruptive and that she failed to timely pay her debts to the Association. Defendants maintain that as a result of Arnold's conduct, together with the need to provide a peaceful environment for employees, customers, and the public, the Association sent Arnold a letter in May 2006 requesting that she no longer use the Association's services.
The Association's contentions 'were based on depositions that were not presented to the district court because it determined that the articles, bylaws, and state statutes did not create an enforceable contract. Consequently, the trial court did not address or resolve the parties' conflicting versions of what led the Association to bar Arnold from shopping at the Association store.
IIL Procedural Anomalies
At the outset, I note two procedural anomalies which make the posture of this case different and complicate the legal analysis of the breach of contract issue.
First, although Arnold was represented by counsel when she filed her complaint and is currently represented by counsel on appeal, she proceeded without counsel when the trial court dismissed her breach of contract claim. Thus, when Arnold was responding to the motion in limine filed by defendants on the eve of trial, she did not have the benefit of counsel. Partly for this reason, the Association correctly notes in its brief that defendants moved to dismiss Arnold's breach of contract claim on September 4, 2009, and the motion was granted that same day by the trial court.
Because of Arnold's difficulties faxing her response to defendants' motion to the trial court, the trial court considered Arnold's authorities four days later, but nevertheless reaffirmed its original dismissal of Arnold's breach of contract claim.
Second, as noted above, the trial court effectively dismissed Arnold's breach of contract claim based on defendants' motion in limine. Because that motion was filed only four days before the scheduled trial date, the normal periods for responding to motions *110were not available. Ogawa v. Riley, 949 P.2d 118, 119 (Colo.App.1997) (under C.R.C.P. 121 § 1-15(1), party has fifteen days to respond to motions involving a contested issue of law unless court provides for greater or lesser time to respond).
Indeed, on September 8, the parties and the court were confused as to whether the court had received Arnold's faxed response to defendants' motion to dismiss. Further, Arnold stated that she did not receive the court's faxed order on September 4, but only received it over the weekend prior to trial, when it was faxed to her by defendants' counsel.
More significantly, the confused procedure which led to the dismissal of Arnold's breach of contract claim has extended to the standard of review on appeal with respect to this issue. The parties have addressed the standard of review based on the trial court's granting a motion to dismiss under C.R.C.P. 12(b)(5). However, that standard is clearly not applicable, as Arnold's counsel conceded during oral argument, in part because the complaint alleged that Arnold had been terminated as a member of the Association, while the Association's counsel stated to the trial court that she was still a member. Further, the trial court went beyond the four corners of the complaint, considering the articles of incorporation and bylaws to determine whether Anton's contractual rights had been violated. Schwindt v. Hershey Foods Corp., 81 P.3d 1144, 1148 (Colo.App.2003) (motion to dismiss based on C.R.C.P. 12(b)(5) must be decided based on "matters within the four corners of the pleading").
IIL Standard of Review
Given the cireumstances described above, it appears that defendants' motion in limine was the functional equivalent of a motion for summary judgment. See Geiger v. American Standard Ins. Co., 192 P.3d 480, 482 (Colo.App.2008) (standards for summary judgment motion). Accordingly, I agree with the majority that we may use the summary judgment standard here in addressing Arnold's breach of contract claim, particularly given Arnold's lack of objection to the procedure in the trial court and the lack of material facts in dispute. See C.R.C.P. 56(c).
IV. Breach of Contract Claim
Arnold contends that the trial court erred in dismissing her breach of contract claim." 1 agree.
A. Standard of Review
I agree with the majority that a reviewing court interprets contract terms de novo. Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155, 1159 (Colo.App.2006).
B. Basis for Contract
As the majority notes, the trial court and the parties assumed that the Association's articles of incorporation and bylaws and the state statutes would provide the source of Arnold's breach of contract claim.2 Although no published Colorado appellate case has so held, this conclusion is consistent with Southeastern Colorado Cooperative v. Ebright, 38 Colo.App. 326, 563 P.2d 30 (1977), where a division of this court considered a cooperative's bylaws to determine the rights of coop members. As one treatise noted,
Onee a cooperative is formed, the relationship between the cooperative and its members is defined by several sources including state law and the cooperative's bylaws *111and articles of incorporation. Under the common law of most states, the bylaws are deemed to create a contractual relationship between the cooperative and its members.
Charles T. Autry & Roland F. Hall, The Law of Cooperatives § V.E., at 68 (American Bar Association 2009).
Additionally, in other contexts, state statutes are incorporated into private contracts. See § 4-2-814(1), C.R.S.2010 (a warranty that goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind); § 4-2-315, C.R.S.2010 (for certain contracts there may be an implied warranty that goods shall be fit for a particular purpose); Benham v. Pryke, 744 P.2d 67, 72 (Colo.1987) (contracts must be interpreted by the requirements imposed by state statute); Ortiz v. Hawkeye-Security Ins. Co., 971 P.2d 233, 235 (Colo.App.1998) (the No-Fault Act was incorporated into every insurance policy issued in Colorado).
Accordingly, I conclude that the trial court properly determined that state statutes, the articles of incorporation, and the bylaws form the basis for any contract between a cooperative and one of its members.
C. Scope of Review
To adequately preserve an issue for appeal, the grounds on which the objection is made must be reasonably apparent to the trial court. Blades v. DaFoe, 704 P.2d 317, 322, 323 (Colo.1985) (court considered plaintiffs' objections to peremptory challenges notwithstanding that they did not cite C.R.C.P. 47(h)); BS & C Enterprises, L.L.C. v. Barnett, 186 P.3d 128, 130 (Colo.App.2008) (court addressed defendant's argument regarding motion to set aside default judgment, even though he did not cite C.R.C.P. 55(b), concluding that his argument "sufficed to focus the trial court's attention on the correct issue"); see also Robinson v. Colo. State Lottery Div., 179 P.3d 998, 1008 (Colo.2008) (although appellate courts generally do not address issues raised for the first time on appeal, court addressed unpreserved legal issue of contract construction where no material facts were in dispute).
Because the parties and the trial court agreed that the articles of incorporation, bylaws, and state statutes constituted the basis for Arnold's breach of contract claim, these sources were subsumed within Arnold's comment at the September 8 hearing, "I guess, you know, I assumed that, you know, if you're going to become a member of a coop that has the ability to buy and sell agricultural products, that is the crux of the entire contract, is your ability to be able to, do that." 3
Accordingly, in the substantive analysis below, I rely on portions of the articles of incorporation, bylaws, and statutes specifically relied on by Arnold, as well as on other provisions she did not cite specifically, because the basis for Arnold's contention was reasonably apparent to the trial court.
D. Enforceable Contract Exists
I agree with Arnold that the trial court erred in concluding that the articles of incorporation, bylaws, and state law did not give her an enforceable right to purchase goods and services from the Association.
Familiar principles guide the question of contract interpretation. Contract interpretation is a question of law for the court to decide, and matters of contract interpretation are reviewed de novo. Copper Mountain, Inc. v. Industrial Systems, Inc., 208 P.3d 692, 697 (Colo.2009). The primary goal of contract interpretation is to determine and effectuate the intent and reasonable expectations of the parties Thompson v. Md. Cas. Co., 84 P.3d 496, 503 (Colo.2004). The primary source of contractual intent is the language of the contract itself. Ad Two, Inc. v. City & Cty. of Denver, 9 P.3d 373, 376 (Colo.2000).
When a contract is set forth in more than one instrument, the documents must be construed together to determine the parties' intent as if the entire agreement were con*112tained in a single document. Bledsoe v. Hill, 747 P.2d 10, 12 (Colo.App.1987).
I begin by examining pertinent provisions of state law, which establish the context for consideration of the articles of incorporation and bylaws.
Section 7-56-102(1)(a), C.R.8.2010, the legislative declaration of the Colorado Cooperative Act, sections 7-56-101 to -901, C.R.S. 2010, provides in relevant part:
The General Assembly finds and declares that ... [the cooperative form of doing business provides an efficient and effective method for persons to market their goods and services and to obtain services and supplies and it is in the best interests of the people of the state of Colorado to promote, foster, and encourage the utilization of cooperatives in appropriate instances.
(Emphasis added.)
Similarly, section 7-56-209(1), provides, with respect to agricultural marketing cooperatives, such as the Association, "that the public interest demands that producers of agricultural products be encouraged to attain a more efficient system of marketing their products and procurement of the mecessary equipment and supplies through cooperatives." (Emphasis added.)
Thus, the twin purposes of agricultural marketing cooperatives are to provide a mechanism for members to market their agricultural products and to provide a means for members to purchase equipment and supplies from the cooperative.
Additionally, section 7-56-801(1), C.R.S. 2010, specifically relied on by Arnold, provides in relevant part that subject to the provisions of this section and the terms of the articles of incorporation and bylaws, "a cooperative may limit admission as members . only to persons engaged in a particular business or utilizing the goods or services provided by or through the cooperative," or "may admit as members ... any person meeting uniform terms or conditions stated in [the] articles or bylaws." In addition, the statutory provision concerning bylaws, seetion 7-56-208(8)(a), C.R.9.2010, provides that the bylaws of a cooperative shall include "[t]he qualifications for membership ... and conditions for suspension, withdrawal, or expulsion."
I conclude that, together with these statutory provisions, the articles of incorporation and the bylaws provide an enforceable contract that entitles Arnold to purchase goods and supplies at the Association's store.
The sixth article provides: "This Association shall be operated on a cooperative basis for the mutual benefit of its members as producers, and membership in the Association shall be restricted to producers, who shall patronize the Association." (Emphasis added.) Thus, the Association exists for the mutual benefit of its members as producers. Based upon the legislative declaration noted above, the purposes of an agricultural coop are to assist agricultural producers in marketing their produce and to provide a means for them to obtain goods and services. Because the sixth article provides that members "shall patronize the Association," the articles provide an enforceable right for them to benefit as members of the Association.
This is clear from the statutory definition of the word "patron": a person "who may, but need not, be a member of a cooperative who utilizes the services of the cooperative through the purchase or sale of property or services to or from the cooperative." § 7-56-108(13), C.R.S8.2010. Therefore, one who patronizes the Association is one who utilizes its services to buy or sell property to or from the Association.
To the extent a member of the Association is not permitted to obtain goods from the Association store, that person is unable to obtain the full benefit of membership in the cooperative.
This conclusion is consistent with the four provisions of the bylaws on which Arnold relies. First, article 1, section 1(a) provides that any agricultural producer who sells products or buys supplies handled by or through the cooperative, who agrees to purchase a membership certificate for ten dollars, who meets such other uniform conditions as prescribed by the board of directors, and who agrees to abide by such rules and regulations of the cooperative as established *113by the members or the board of directors, may apply for admission as a member of the cooperative. There is no question here that Arnold satisfied the qualifications for membership and has been a member of the Association for many years.
Second, article 1, section 1(b) provides that the Association shall admit to membership every applicant who satisfies the above conditions. Significantly, this section provides that the Association may refuse admission to an applicant if the board of directors finds, "based on reasonable grounds, that the applicant's admission would prejudice the interests, hinder or otherwise obstruct, or conflict with any purpose or operation of the cooperative." However, this provision does not address the suspension or limitation of rights of a member of the Association.
Third, article 1, section 8(c) provides for termination of membership in the Association in specified cireumstances including, as relevant here, if the board of directors finds that a member has ceased using the cooperative's facilities or services for a period of three years. Although the board of directors conceivably could terminate Arnold on this basis, because she has not been able to purchase items at the Association's store for more than three years, it has not yet chosen to do so. Significantly, while this provision discusses the Association's right to suspend a member's voting right, it does not provide for suspending the right of a member to shop at the Association's store.
Fourth, article 1, section 3(e) concerns a member's entitlement to repayment of his or her equity capital following withdrawal or termination of membership. This provision relates to Arnold's contention that the payment of equity capital to her has been severely limited because of her inability to shop at the Association's store.
In addition, while the bylaws provide qualifications for membership and grounds for termination of membership in the Association, neither the articles nor the bylaws set forth conditions for suspension, withdrawal, or expulsion, as required by section 7-56-208(8)(a). If such provisions existed, Arnold would have been on notice of specified grounds for suspension of her right to shop at the Association's store, as well as the length of such suspension. Instead, she has effectively been suspended from using the Association's store for more than five years.
In sum, the Colorado statutes, together with the Association's articles and bylaws, provide an enforceable right for Arnold to shop at the Association's store. This conclusion is supported by the discussion in the treatise, The Law of Cooperatives, regarding the differences between members of a cooperative and corporate shareholders. The treatise notes that "unlike a shareholder who can be an owner without being a consumer of the corporation's products and services, one cannot be an owner of a cooperative without also being a consumer of the cooperative's products or services." The Law of Cooperatives, § 5(A)(1), at 54. Further, the treatise notes that unlike shareholders, who are interested in obtaining a profit, a cooperative member's objective is not economic return, even though he or she may be entitled to receive patronage refunds when cooperative revenues exceed costs. Rather, ownership focuses on the acquisition of the services or goods provided by the cooperative. Id.
Thus, the very essence of cooperative membership includes the right to purchase goods from the cooperative's store.
While the Association's board of directors could have promulgated bylaws or rules and regulations concerning the suspension or forfeiture of rights of members in particular situations, it has not done so. Consequently, Arnold has been prevented for some five years from shopping at the Association's store, without any express provision authorizing the board to limit her membership rights.
For the reasons stated, I conclude that Arnold has established a valid claim for breach of contract and, therefore, I would reverse the trial court's judgment in that regard and remand for further proceedings on her claims for breach of contract and interference with contract.

. Although Arnold's complaint only alleged a claim for breach of contract, defendants asserted that she had not stated a claim for breach of an express contract or breach of an implied contract. Because I agree that Arnold adequately stated a claim for breach of an express contract, I do not address the issue of breach of an implied contract. However, because I believe that Arnold stated a claim for breach of contract, I would also reverse the dismissal of her derivative claim for interference with contract.

. Although Arnold does not rely on her Membership Certificate, that document appears to establish a contract between her and the Association. It provides that in return for her payment of the required $10 membership fee, she "is a member of the ANTON COOPERATIVE ASSOCIATION . and as such is entitled to the rights and privileges of membership and is likewise bound by and subject to the obligations and conditions pertaining thereto, all as set forth in the articles of incorporation and bylaws thereof, now or hereafter in effect."

. Arnold relies on this statement in support of her claim for breach of express contract, as well as her claim for breach of an implied contract. The majority discusses this statement in connection with the implied contract claim.