Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
Wanda Bertoia and her company, WPB Hospitality LLC, appealed several orders and the judgment entered by the trial court on their claims against Galaxy Management Company LLC, Jagmohan Dhillon, Denver Gateway LLC and Frisco Acquisition LLC. Frisco cross-appealed the trial court’s award to Bertoia of bankruptcy funds that were previously interpleaded into the court registry.
The WPB contract contained an indemnity provision and Bertoia argued on appeal that the trial court erred by failing to find that Frisco breached the indemnity provision as a matter of law. More specifically, Bertoia asserted that because Frisco failed to close on the WPB contract, Frisco failed to perform the contract, thus triggering its obligation to indemnify Bertoia for the resulting losses.
As a threshold matter, the Colorado Court of Appeals noted it disagreed with Bertoia’s argument that the trial court initially granted her partial summary judgment on Frisco’s liability under the indemnity provision.
Four days after entering its summary judgment order and three days before trial, the trial court clarified that it had only ruled that the indemnity provision was valid and enforceable, not that Frisco was liable under it. The court also made clear that there were disputed issues of fact regarding whether Frisco breached the contract, or frustrated its purpose, and that the jury would resolve those factual issues. This order should have resolved any confusion Bertoia had about the scope of the initial summary judgment order.
But Bertoia reasserted this same argument in her post-trial motion to amend the judgment. In denying that motion, the trial court unequivocally rejected Bertoia’s interpretation of its summary judgment order, characterizing it as a “tortured or self-serving interpretation.” As the court again noted, its order merely recognized that the WPB contract, including the indemnity provision, was valid and enforceable and that the jury had to resolve whether either party had breached the agreement.
Turning to the substance of Bertoia’s argument, the appeals court wrote that she relied on the second part of the indemnity provision’s disjunctive trigger. In other words, she didn’t argue that Frisco breached the WPB contract; rather, she argued that Frisco failed to perform the WPB contract by failing to execute it. Bertoia argued that a failure to perform cannot constitute a breach because that would render the “failure to perform” language superfluous. Bertoia asserted Frisco is liable for not closing on the WPB contract, regardless of whether its decision to terminate was justified by the contract’s terms. The appeals court disagreed.
The Colorado Court of Appeals affirmed the orders and judgment, and remanded the case to the trial court to determine Frisco’s appellate fees and costs.