Geringer v wildhorn ranch inc case brief

United States District Court, D. Colorado.

Diane GERINGER, individually, and as parent and next best friend of Tara Geringer, and as surviving spouse of William Geringer, decedent, and mother

of Jared Geringer, decedent, Plaintiff(s), v.

WILDHORN RANCH, INC., a Colorado Corpor- ation, M.R. Watters and Les Bretzke, Defendants.

Civ. A. No. 87–F–1213. Dec. 14, 1988.

Widow and mother of resort guests who died in boating accident brought action against the resort, its owner, and others. Following jury verdict in fa- vor of plaintiff, the District Court, Sherman G. Fin- esilver, Chief Judge, held that: (1) evidence warran- ted application of the corporate alter ego doctrine; (2) punitive damages could be awarded against cor- poration which was found negligent, even though zero percent of the negligence was attributed to it; and (3) Colorado premises liability statute does not apply to act of landowner in supplying chattel to an invitee.

Ordered accordingly.

See also 706 F.Supp. 1452.

West Headnotes

[1] Corporations and Business Organizations 101 1044

101 Corporations and Business Organizations 101II Disregarding Corporate Entity; Piercing

Corporate Veil 101k1042 Factors Considered

101k1044 k. Domination or control by shareholder. Most Cited Cases

(Formerly 101k1.4(4))

Corporations and Business Organizations 101 1048

101 Corporations and Business Organizations 101II Disregarding Corporate Entity; Piercing

Corporate Veil 101k1042 Factors Considered

101k1048 k. Non-observance of corporate formalities. Most Cited Cases

(Formerly 101k1.4(4)) Theory of corporate alter ego requires plaintiff

to show that an individual consistently disregarded the formalities of the corporate form and so domin- ated the affairs of the corporation, in a manner which injured the plaintiff, that to acknowledge the legal fiction of the corporation would promote in- justice and harm public convenience.

[2] Innkeepers 213 10.27

213 Innkeepers 213k10 Injury to Person of Guest

213k10.27 k. Recreational areas and activit- ies; swimming pools. Most Cited Cases

(Formerly 213k10.3) Duty owed to guests by owner and operator of

resort ranch with respect to condition of paddle- boats provided for guests did not arise out of rela- tionship between landowner and invitee and thus did not come within purview of Colorado premises liability statute. C.R.S. 13–21–115.

[3] Negligence 272 1079

272 Negligence 272XVII Premises Liability

272XVII(C) Standard of Care 272k1079 k. Standard established by stat-

ute or other regulation. Most Cited Cases (Formerly 272k31) Colorado premises liability statute does not es-

tablish a feudal realm of absolute protection from liability for simple negligence based only on a de- fendant's status as a landowner. C.R.S. 13–21–115.

Page 1 706 F.Supp. 1442 (Cite as: 706 F.Supp. 1442)

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[4] Negligence 272 259

272 Negligence 272IV Breach of Duty

272k259 k. Violations of statutes and other regulations. Most Cited Cases

(Formerly 272k31) Colorado premises liability statute does not re-

flect an intention to extend the application of premises liability doctrine to the negligent supply of a chattel by a landowner. C.R.S. 13–21–115.

[5] Federal Civil Procedure 170A 674

170A Federal Civil Procedure 170AVII Pleadings

170AVII(B) Complaint 170Ak674 k. Theory of claim. Most Cited

Cases

Pleading 302 49

302 Pleading 302II Declaration, Complaint, Petition, or State-

ment 302k49 k. Theory and form of action. Most

Cited Cases Federal and Colorado pleading rules require

only that defendant be afforded adequate notice of the claims against him; under the federal rule, plaintiff need not plead all of the elements of a spe- cific theory but need only notify the defendant of an intent to prove liability for injuries. Fed.Rules Civ.Proc.Rule 15, 28 U.S.C.A.

[6] Federal Civil Procedure 170A 836

170A Federal Civil Procedure 170AVII Pleadings

170AVII(E) Amendments 170Ak835 Conforming to Proof

170Ak836 k. Time for amendment. Most Cited Cases

If defendant had sufficient notice of the focus of the evidence at trial, court has discretionary au- thority to allow posttrial amendment to conform to the evidence, and that amendment should be gran-

ted freely. Fed.Rules Civ.Proc.Rule 15, 28 U.S.C.A .

[7] Federal Civil Procedure 170A 842

170A Federal Civil Procedure 170AVII Pleadings

170AVII(E) Amendments 170Ak839 Complaint

170Ak842 k. Theory or form of action. Most Cited Cases

Complaint which alleged that defendant was the “owner” of resort and, as the owner, was vicari- ously liable for the deliberate negligence of his em- ployees gave defendant adequate notice of plaintiffs' intent to use corporate alter ego as legal theory to support allegations of personal and vicari- ous liability.

[8] Federal Civil Procedure 170A 842

170A Federal Civil Procedure 170AVII Pleadings

170AVII(E) Amendments 170Ak839 Complaint

170Ak842 k. Theory or form of action. Most Cited Cases

There can be no prejudice in allowing amend- ment of complaint to assert corporate alter ego the- ory where chairman of the board and president of a closely held corporation has four months to gather corporate minutes, promissory notes, or documenta- tion of the purchases sought prior to trial.

[9] Federal Civil Procedure 170A 2252

170A Federal Civil Procedure 170AXV Trial

170AXV(K) Trial by Court 170AXV(K)1 In General

170Ak2252 k. Advisory jury. Most Cited Cases

Where parties to action with jury triable issues do not agree that an equitable issue should be presented to the jury, court may substitute its own findings of fact for those of the jury, if necessary,

Page 2 706 F.Supp. 1442 (Cite as: 706 F.Supp. 1442)

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but there is no error in submitting the issue to the jury.

[10] Corporations and Business Organizations 101 1086(6)

101 Corporations and Business Organizations 101II Disregarding Corporate Entity; Piercing

Corporate Veil 101k1079 Actions to Pierce Corporate Veil

101k1086 Evidence 101k1086(4) Weight and Sufficiency

101k1086(6) k. Justice and equity in general. Most Cited Cases

(Formerly 101k1.7(2)) Court must view record as a whole to determ-

ine whether corporate form has been used to defeat public convenience so that corporate alter ego the- ory should be applied.

[11] Corporations and Business Organizations 101 1058

101 Corporations and Business Organizations 101II Disregarding Corporate Entity; Piercing

Corporate Veil 101k1057 Particular Occasions for Determin-

ing Corporate Entity 101k1058 k. In general. Most Cited Cases

(Formerly 101k1.6(13)) Corporate alter ego theory would be applied to

impose liability on owner of corporation in view of his domination and control of the corporation, his business cards which represented that he was the owner of corporation property, his use of funds from another corporation to make purchases for the corporation, and his personal involvement with the instrumentalities which caused the harm to the plaintiffs.

[12] Damages 115 87(2)

115 Damages 115V Exemplary Damages

115k87 Nature and Theory of Damages Ad- ditional to Compensation

115k87(2) k. Necessity of actual damage. Most Cited Cases

Colorado exemplary damages statute is de- signed to distinguish exemplary damages from pure penalties by requiring that the plaintiff successfully prove an underlying claim for damages caused by the defendant's conduct; statute only allows for award of exemplary damages in conjunction with underlying independent civil action in which actual damages are assessed for some legal wrong to the injured party. C.R.S. 13–21–102(1)(a).

[13] Damages 115 87(2)

115 Damages 115V Exemplary Damages

115k87 Nature and Theory of Damages Ad- ditional to Compensation

115k87(2) k. Necessity of actual damage. Most Cited Cases

In the absence of finding that the plaintiff has suffered damages, defendant may not be penalized merely for wrongful conduct. C.R.S. 13–21–102(1)(a).

[14] Corporations and Business Organizations 101 2507

101 Corporations and Business Organizations 101IX Corporate Powers and Liabilities

101IX(E) Torts 101k2507 k. Exemplary damages. Most

Cited Cases (Formerly 101k498) Having found that conduct of corporation was

negligent and that its conduct caused the plaintiff to suffer actual damages and the misconduct was wan- ton and willful, jury could award exemplary dam- ages against it even though it attributed zero per- cent of the negligence to the corporation. C.R.S. 13–21–102(1)(a).

*1444 Douglas E. Bragg, James A. Cederberg, Denver, Colo., for plaintiff.

Donald E. Cordova, Denver, Colo., for defendant

Page 3 706 F.Supp. 1442 (Cite as: 706 F.Supp. 1442)

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Wildhorn Ranch, Inc.

Sheldon E. Friedman, Christopher T. Macaulay, Miles Cortez, Englewood, Colo., for defendant M.R. Watters.

Deana Willingham, Wheatridge, Colo., for defend- ant Les Bretzke.

MEMORANDUM OPINION AND ORDER ON POST–TRIAL MOTIONS

SHERMAN G. FINESILVER, Chief Judge. This matter comes before the court on motions

of defendants for judgment notwithstanding the verdict, for new trial pursuant to Rule 59 of the Federal Rules of Civil Procedure, and for amended judgment. On September 28, 1988, the jury re- turned a verdict against defendants for damages arising out of a boating accident at the Wildhorn Ranch Resort. The court considered many of the is- sues raised in defendants' post-trial motions prior to and during trial. We have considered defendants' motions collectively and individually and conclude that neither a new trial, judgment notwithstanding the verdict, nor amended judgment is warranted. The evidence supports the jury's verdict. The sever- al motions are DENIED for the reasons stated be- low.

I. Plaintiff Diane Geringer brought this action in

her own name and as guardian of her minor- daughter Tara Geringer, pursuant to Colorado law, seeking damages for personal injuries and the wrongful death of her husband William Geringer and minor-son Jared Geringer. Jurisdiction before this court is based on diversity of citizenship. 28 U.S.C. § 1332.

During August of 1986, the Geringer family was vacationing at the Wildhorn Ranch Resort, a guest ranch located in Teller County, Colorado.FN1

William and Jared Geringer drowned during a boat- ing accident on a lake at the Ranch. Paddleboating was among the recreational activities offered by the

Resort.

FN1. Our statements are drawn from testi- mony and arguments of counsel at trial.

At trial, the liability evidence focused on the maintenance and condition of the paddleboats, op- eration of the Resort, and plaintiffs' conduct in pro- curing and operating the boat. Plaintiffs' case fo- cused on repairs made a short time prior to the acci- dent and defendants' knowledge that the *1445 boats leaked, filled with water, and became un- stable. Defendants' case for comparative or contrib- utory negligence argued that the Geringers took out a boat that had been secured to the shore and acted unreasonably in not wearing life jackets. Plaintiffs' rebuttal raised conflicting evidence as to whether the boats had indeed been secured to discourage their unsupervised use and whether life jackets were available.

Defendant M.R. Watters originally owned the Ranch, but claimed to have deeded it over to Wild- horn Ranch, Inc. Wildhorn Ranch, Inc. operated the Resort and provided management services to the homeowners association time-share cabins. The corporation was owned by the three members of its Board of Directors, M.R. Watters, son David, and wife Doris. Defendant Les Bretzke was an inde- pendent contractor whose company provided repair and construction services to the Resort and the homeowners association. Evidence presented at tri- al showed that Bretzke was significantly involved in the operations of the Resort through management meetings and the supervision of Resort employees. Bretzke supervised the repair of the boats. M.R. Watters inspected the boats and determined they were fit for return to the water. The boats were re- paired by a Resort employee with the assistance of a ranch-hand. The ranch-hand was employed by a firm contracted to operate horseback riding facilit- ies at the Ranch.

[1] Evidence was also presented at trial on the issue of corporate alter-ego. The theory of corpor- ate alter-ego requires plaintiff to show that an indi-