Nelson v. Elway

908 P.2d 102 (Colo. 1995)

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Nature of the Case

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Facts

P was the president and sole shareholder of two car dealerships. Both dealerships were experiencing financial difficulties. P retained Pico to represent him in the selling or refinancing of one or both of the dealerships. Pico began negotiations with Ds regarding the sale of Metro Toyota and the property upon which it was situated. Ds signed a 'Buy-Sell Agreement' and a separate real estate contract to purchase Metro Toyota. The closing was scheduled for April 15, 1991. Pico then asked P if he would be willing to sell both Metro Auto and Metro Toyota to Ds. Ds were unwilling or unable to pay the full purchase price for the dealerships and the land upon which they were located. Pico suggested Ds should reimburse P for his interest in Metro Toyota by paying $50 per vehicle sold by both dealerships for a period of seven years commencing on May 1, 1991. Ds would purchase Metro Auto from P at a greatly reduced purchase price. These terms, referred to by the parties as the 'Service Agreement,' were reduced to writing but never signed by the parties. The parties signed a 'Buy-Sell Agreement' and a separate real estate contract for the purchase of Metro Auto. This written, signed agreement did not incorporate the terms of the Service Agreement. The dealerships owed GMAC over $3 million. GMAC required P to execute agreements referred to as 'keeper letters,' allowing GMAC significant control over the dealerships. P knew that execution of these letters would preclude his ability to file for bankruptcy protection and proceed through re-organization. P alleges that he thus sought and received assurances from Ds that the orally agreed upon, but as yet unsigned, Service Agreement would be honored. After the execution of the keeper letters, they met at Pico's office. GMAC telephoned Pico's office and informed Pico, and Ds that as a condition to its agreement to finance the acquisition of the land and assets of the dealerships by Ds, P was not to receive any proceeds from the sale of the dealerships. Ds then informed P they would not be able to enter into the Service Agreement with him, and the Service Agreement was therefore not executed at the closing on April 12, 1991. After closing, P demanded that Ds honor the Service Agreement. Ds refused and P sued. P sought damages for breach of contract, promissory estoppel, fraud, conspiracy, and dual agency. Ds then moved the trial court for summary judgment, which the court granted as to all counts. The court of appeals affirmed with respect to all counts except for promissory estoppel. On that claim, the court of appeals held there was a genuine issue of material fact and remanded the case to the trial court for trial on that issue alone. This appeal resulted.