International Network, Inc., a Colorado corporation, Plaintiff-Appellee,
Michael W. Woodard, Defendant-Appellant.
County District Court No. 13CV30038 Honorable Michael J.
Announced April 6, 2017 Reynolds Gillette LLC, Brian R.
Reynolds, Patrick Gillette, Denver, Colorado, for
Richard J. Banta, P.C., Richard J. Banta, Denver, Colorado;
Robinson Waters & O'Dorisio, P.C., Tracy L. Ashmore,
Denver, Colorado, for Defendant-Appellant
1 This case involves the admitted breach of a clause
contained in an exclusive right-to-sell real estate listing
agreement obligating the seller to "conduct all
negotiations for the sale of the property only through
Broker, and to refer to Broker all communications received in
any form from . . . prospective buyers . . . or any other
source" (referral provision). Defendant, Michael W.
Woodard (seller), appeals the judgment in favor of plaintiff,
International Network, Inc., the real estate broker (broker),
in the amount of the commission that would have been payable
under the listing agreement had seller not breached the
above-quoted clause. We affirm.
2 In April 2006, seller, who owned a ranch consisting of
approximately 100 acres, signed an exclusive right-to-sell
listing agreement with broker. As pertinent here, the
agreement established a list price of $4.5 million and
provided for a percentage commission to be paid to broker
upon sale. The parties agreed to a six-month listing period,
but seller could cancel the agreement at any time upon
3 Approximately four months into the listing period, seller
began negotiating with an attorney who represented a group of
potential buyers. Seller did not disclose his negotiations to
broker and admitted at trial that he had intentionally
concealed the discussions to avoid payment of a commission.
4 About a month after negotiations started, seller cancelled
the listing agreement without providing a reason. Broker
ceased any sales activity concerning the property. After the
listing period had expired, but within a ninety-day holdover
period set forth in the agreement, seller and the buyers
finalized an agreement, resulting in the sale of the property
for $3.6 million.
5 Almost seven years later, broker initiated this action
against seller for breach of contract based upon seller's
failure to comply with the referral provision.
6 Following trial, a jury found in favor of broker and
awarded $252, 000 in damages - the commission that would have
been owed under the listing agreement.
Statute of Limitations
7 Seller contends that the trial court erred in denying his
motion for directed verdict and his post-trial motion for
judgment notwithstanding the verdict because broker's
breach of contract claim was barred by the statute of
limitations. We disagree.
Standard of Review
8 We review de novo a trial court's rulings on motions
for directed verdict and judgment notwithstanding the
verdict. Hawg Tools, LLC v. Newsco Int'l Energy
Servs., Inc., 2016 COA 176M, ¶ 18. When the motion
concerns a factual matter, we view the evidence in the light
most favorable to the nonmoving party and draw all reasonable
inferences from the evidence in that party's favor.
Hall v. Frankel, 190 P.3d 852, 862 (Colo.App. 2008).
Such motions should be granted only when the evidence
"compels the conclusion that reasonable jurors could not
disagree and that no evidence or inference therefrom had been
received at trial upon which a verdict against the moving
party could be sustained." Boulders at Escalante LLC
v. Otten Johnson Robinson Neff & Ragonetti PC, 2015
COA 85, ¶ 19.
9 A breach of contract claim "shall be commenced within
three years after the cause of action accrues." §
13-80-101(1)(a), C.R.S. 2016. In this context, a cause of
action accrues "on the date the breach is discovered or
should have been discovered by the exercise of reasonable
diligence." § 13-80-108(6), C.R.S. 2016.
10 The cause of action is discovered when the party obtains
knowledge of the facts essential to the claim, not knowledge
of the legal theory supporting it. Murry v. GuideOne
Specialty Mut. Ins. Co., 194 P.3d 489, 492 (Colo.App.
2008). Such knowledge includes information that would lead a
reasonable person to inquire further. Id.
11 When a claim accrues and whether it is barred by the
statute of limitations are generally questions of fact for
the jury to resolve. Sterenbuch v. Goss, 266 P.3d
428, 432 (Colo.App. 2011). But "when the material facts
are undisputed and reasonable persons could not disagree
about their import, these questions may be decided as a
matter of law." Id.
12 It is undisputed that seller breached the referral
provision in 2006. But the date when broker discovered or
should have discovered seller's breach is not so clear
13 Seller argued at trial that the abrupt manner in which he
cancelled the listing agreement, the circumstances
surrounding the cancellation, and the recording of a deed
transferring the property a few months later gave rise to a
duty on broker's part to inquire further into the sale.
Upon broker's investigation, seller asserted it would
have discovered the facts essential to its claim. Thus, the
argument proceeded, through the exercise of reasonable
diligence, broker should have discovered the breach of
contract in 2006, and because broker filed this action more
than seven years later, the statute of limitations barred its
14 Broker agreed that seller cancelled the listing agreement
in 2006. But it asserted that this cancellation provided no
indication that seller had been negotiating with the buyers
in violation of the agreement. Instead, broker asserted that
it had no knowledge of seller's actions until 2011, when
broker's agent heard seller's testimony in another
lawsuit. In that case, seller testified that he had
negotiated the sale of his property with the buyers'
attorney in violation of the listing agreement and that he
had intentionally concealed this negotiation from broker to
avoid paying a commission. According to the agent, only upon
hearing this testimony did he discover seller's breach.
The agent also testified that, before hearing such testimony,
he did not have any knowledge or suspicion that seller had
breached the agreement. Broker therefore asserted that its
commencement of this action in 2013, within three years of
its discovery of the breach, was timely.
15 These arguments were presented to the jury, and it
rejected seller's statute of limitations defense. Based
upon the record, we cannot conclude that the evidence -
viewed in the light most favorable to broker - compels a
16 Seller had the absolute right to terminate the listing
agreement at any time. Hence, the cancellation some four
months into the six-month period did not, contrary to
seller's contention, place broker on notice of a
potential claim as a matter of law. And contrary to
seller's additional contention, the recording of the deed
conveying the property, by itself, did not put broker on
notice of the ...