23CA2094 Elite Storage v Dan Brennan 12-12-2024
COLORADO COURT OF APPEALS
Court of Appeals No. 23CA2094 Weld County District Court No. 21CV30550 Honorable Shannon D. Lyons, Judge
Elite Storage Holdings, LLC, a Colorado limited liability company,
Plaintiff-Appellant,
v.
Dan Brennan, LLC, a Colorado limited liability company,
Defendant-Appellee.
JUDGMENT AFFIRMED AND CASE REMANDED WITH DIRECTIONS
Division VII Opinion by JUDGE SCHUTZ Tow and Pawar, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced December 12, 2024
Nelson Mullins Riley & Scarborough, LLP, Blake A. Gansborg, Denver, Colorado; Nelson Mullins Riley & Scarborough, LLP, Terrance W. Anderson, Jr., Boca Raton, Florida, for Plaintiff-Appellant
Flanders, Elsberg, Herber & Dunn, LLC, Mark A. Herber, Andrew N. Dunkin, Longmont, Colorado, for Defendant-Appellee ¶1 Elite Storage Holdings, LLC (Elite) appeals the trial court’s
judgment on its breach of contract claims brought against Dan
Brennan, LLC (Brennan). We affirm the judgment and remand the
case so that the trial court may determine and award Brennan its
reasonable attorney fees incurred on appeal.
I. Background
¶2 After a bench trial, the court made findings of fact and
conclusions of law that reveal the following.
¶3 Dan Brennan was the sole member and manager of Brennan,
LLC and sole shareholder of Highway 85 Self-Storage, Inc. (Highway
85). Highway 85 owned and operated a self-storage business, and
Brennan owns the land on which the business is located.
¶4 Cory Herman-Calvin (Calvin1) owned several companies.
While the parties negotiated the contracts in question, he created
and became the sole member and manager of Elite.
1 During his testimony at trial, Calvin gave his legal name as Cory
Herman-Calvin. However, throughout proceedings at the trial court, and the briefs and oral argument to this court, he was referred to by all parties as Cory Calvin. We adopt this convention. ¶5 Brennan, Highway 85, and Elite2 entered into contracts for
Elite to purchase both the assets of Highway 85 and the associated
land. The sale was divided into two contracts: one for the purchase
of the self-storage business, called the Asset Purchase Agreement
(APA); the second for the land purchase, called the Purchase and
Sale Agreement (PSA). Each contract included a purchase price of
$4 million, for a combined purchase price of $8 million, with $1.6
million due from Elite at closing. Although the purchase price was
divided equally between both transactions — apparently for tax
purposes — the vast majority of the value encompassed by the
combined purchase price was attributed to the land.
¶6 The parties spent months completing the contractually
required delivery of documents and due diligence. The PSA
contained a sixty-day inspection period, during which Brennan was
required to deliver specific documents and information to Elite.
¶7 The contracts specified that the closing date was to be held
within thirty days of the completion of the inspection period. Elite
had the right to extend the closing date by one day for each day
2 The rights associated with the subject contracts are Elite’s only
asset. that Brennan delayed providing the specified documents. Elite also
had the right to delay the closing period one time for a period not to
exceed sixty days. The contracts contained no mechanism by
which the inspection period could be reopened once it was closed
without objection.
¶8 During the inspection period, Elite made two objections. First,
it asserted that Brennan had not provided three specified
documents. Brennan later provided those documents, and Elite
made no further objection with respect to them.
¶9 Second, Elite objected to an unresolved dispute related a
thirty-foot access easement on the property. Because the easement
issue needed to be resolved, the parties extended the inspection
period multiple times, with the final amendment stating that the
inspection period would end the earlier of June 15, 2021, or the
date a new easement was recorded.
¶ 10 Because the parties could not close until the inspection period
was finished, the closing date was moved each time the inspection
period was extended. A mutually acceptable revised easement was
recorded on June 24, 2021. Thus, the inspection period ended on June 15, 2021. By mutual agreement, the parties set a closing date
of July 19, 2021.
¶ 11 During the prolonged inspection period, Calvin attempted to
raise funds to close the contracts. He eventually obtained investor
support, but then told the investors that he did not intend to go
through with the purchases. Instead, he moved forward alone.
¶ 12 The night before the scheduled closing, Calvin informed
Brennan that Elite would not be going through with closing on
either contract, raising several purportedly unresolved issues.
¶ 13 Elite failed to close as scheduled, even though Brennan and
Highway 85 were ready, willing, and able to close. The trial court
found that on July 19, 2021, Elite did not have the funds necessary
to close the purchase.
¶ 14 Elite initially sued Brennan and Highway 85 for breach of the
APA and PSA, requesting specific performance and declaratory
relief. Elite subsequently dismissed its claims against Highway 85
under the APA but continued the suit against Brennan for
enforcement of the PSA, demanding that he be allowed to purchase
the land for $4 million. ¶ 15 Upon completion of the trial, the court entered findings of fact
and conclusions of law by which it rejected Elite’s claims and
entered judgment in favor of Brennan. The court subsequently
awarded Brennan its costs and attorney fees incurred in the trial
court pursuant to the PSA’s prevailing party attorney fees provision.
Elite now appeals the trial court’s judgment.
II. Analysis
A. Trial Court’s Adoption of Proposed Findings and Conclusions
¶ 16 Elite initially argues that the trial court adopted Brennan’s
proposed findings of fact and conclusions of law “without
modification” and later in the brief asserts that the trial’s court’s
order was “virtually unchanged” from what Brennan submitted.
Despite the conflicting language, we understand Elite’s argument to
be that the trial court basically adopted Brennan’s proposed
findings and conclusions without adequate consideration. Based
on this contention, Elite argues that we should apply heightened
scrutiny in reviewing the trial court’s findings of fact.
¶ 17 Brennan concedes that the trial court adopted its proposed
findings and conclusion in large part, but notes that the court also made material changes before entering its findings of fact and
conclusions of law.
¶ 18 We review a trial court’s conclusions of law de novo. People v.
Owen, 122 P.3d 1006, 1007 (Colo. App. 2005). The interpretation
of a contract generally presents a question of law that we also
review de novo. Gagne v. Gagne, 2019 COA 42, ¶ 41.
¶ 19 Typically, we defer to a trial court’s factual findings, reviewing
them only for clear error. Id. at ¶ 17. However, if a trial court
adopts a party’s proposed findings and conclusions verbatim, those
findings and conclusions are subjected to heightened scrutiny.
Trask v. Nozisko, 134 P.3d 544, 548-49 (Colo. App. 2006); Uptime
Corp. v Colo. Rsch. Corp., 420 P.2d 232, 235 (Colo. 1966). Although
a district court has discretion to direct one or more parties to craft
proposed findings of fact and conclusions of law, see C.R.C.P. 121,
§ 1-16; Aztec Mins. Corp. v. State, 987 P.2d 895, 899 (Colo. App.
1999), the court should not adopt those findings “without apparent
review,” Trask, 134 P.3d at 549. After all, “[t]he task of the trial
court is not limited to picking winners and losers.” Trask, 134 P.3d
at 549. ¶ 20 When reviewing whether there is evidentiary support for the
trial court’s factual findings, our job is not to reweigh the evidence
or the credibility of witnesses. People v. Poe, 2012 COA 166, ¶ 14.
Nor is it our role to act as an independent fact finder to determine
how we would have resolved the disputed evidence if we were sitting
in the fact finder’s chair. See People v. Harrison, 2020 CO 57, ¶ 33
(“An appellate court may not serve as a thirteenth juror and
consider whether it might have reached a different conclusion than
the jury.”). Indeed, compared to appellate courts, trial court judges
are uniquely situated to determine the credibility of witnesses and
their testimony. See Owners Ins. Co. v. Dakota Station II Condo.
Ass’n, 2021 COA 114, ¶ 50. (“It’s the trial court’s sole province to
resolve factual issues, determine witness credibility, weigh evidence,
and make reasonable inferences from that evidence.”). These
venerable standards are applicable whether our review of the
factual findings is made through the lens of the traditional clear
error standard or heightened scrutiny.
¶ 21 In this case, the trial court did not adopt Brennan’s proposed
findings of fact and conclusions of law verbatim. Our review of the
proposed and issued documents confirms that they are indeed substantially similar. But the trial court clearly reviewed and
modified Brennan’s proposed findings and conclusions before
issuing its own findings of fact and conclusions of law. For
example, it added a number of paragraphs, modified some proposed
findings, and deleted others.
¶ 22 Given the trial court’s edits and substantive additions and
deletions, we conclude the court sufficiently considered the
proposed findings and conclusions and, thus, no heightened
scrutiny on our part is required.
B. Breach of Contract Claims
¶ 23 At trial, Elite contended that the inspection period had not yet
concluded when it informed Brennan that it would not close
because Brennan had failed to provide several material documents.
Specifically, Elite noted that, despite its specific request, Brennan
had not provided it copies of fully executed advertising contracts for
two billboards located on the property, and all certificates of
occupancy for the property. Elite also claimed that the easement
and related property description remained outstanding issues at the
time of the scheduled closing. 1. Standard of Review and Applicable Law
¶ 24 A breach of contract claim requires proof of a contract,
performance by the plaintiff or a justification for nonperformance,
failure to perform by the defendant, and resulting damages to the
plaintiff. Marquardt v. Perry, 200 P.3d 1126, 1129 (Colo. App.
2008).
¶ 25 Interpretation of an unambiguous contract presents a
question of law that we review de novo. Pres. at the Fort, Ltd. v.
Prudential Huntoon Paige Assocs., 129 P.3d 1015, 1017-18 (Colo.
App. 2004). The scope of the parties’ respective duties and
obligations is controlled by the language of the contract. See Sims
v. Sperry, 835 P.2d 565, 571 (Colo. App. 1992) (“In accord with the
rules of contract interpretation, we look to the [contract] language
to determine the rights and obligations of the parties.”).
Interpretation of a contract is a question of law that we review de
novo. French v. Centura Health Corp., 2022 CO 20, ¶ 24 (citing Fed.
Deposit Ins. Corp. v. Fisher, 2013 COA 5 ¶ 9). In interpreting a
contract, our primary goal is to determine and give effect to the
parties’ intent. Id at ¶ 25. 2. Inspection Period
¶ 26 Elite attempts to explain and excuse its failure to timely close
on the contracts by arguing that Brennan did not deliver several
material documents. Based on these alleged failures, Elite argues
that it had the right to extend the closing date indefinitely and was
therefore not in breach of the PSA.
¶ 27 In contrast, Brennan argues that the timely objections Elite
made before the close of the inspection period and setting of the
closing date were adequately addressed. Brennan also argues that
the additional claims of non-delivery or breach asserted after the
closing date were pretextual attempts to excuse its failure to timely
close the purchase.
¶ 28 We address the parties’ specific contentions, and the trial
court’s findings with respect thereto, more fully below.
3. Billboard Contracts
¶ 29 Section 5(A)(1) of the PSA required Brennan to deliver to Elite
“fully executed copies of all storage contracts, [and] all other
contracts to include the billboard contracts.” Elite contends that
Brennan never provided fully executed copies of the leases between
Highway 85 and the company that owns the two billboards. It argues that obtaining fully executed copies of the leases was a
material term of the PSA because they represented a material
amount of revenue for the storage business and property and that
signed leases would be critical to any action to enforce them.
¶ 30 Brennan counters that it was only obligated to produce that
which existed, that the income associated with the leases was not
material to the operation of the business, and that the lessor had
been paying rent pursuant to the lease for the previous three years.
Brennan also notes that Elite first raised the absence of signed
leases over a year after the scheduled closing and its filing of this
lawsuit. In short, Brennan argues that Elite raised the absence of
signed billboard leases as a pretext to justify its failure to timely
close on the contracts.
¶ 31 The trial court found Brennan leased the two billboards to an
advertising company, but that the leases provided minimal income.
The trial court also found Brennan provided the original lease that
it had in its possession at the time of delivery. Those documents
had Dan Brennan’s signature, but not a signature for the
representative from the advertising company. ¶ 32 The trial court found there was no evidence that fully executed
contracts had ever existed. The court also found that Elite never
objected to the billboard contract documents delivered, did not
notify Brennan that the leases were incomplete, or list the billboard
leases as a reason for its refusal to close.
¶ 33 We conclude that the trial court’s findings on this issue are
supported by the record and that its related legal conclusions were
correct. The lease agreements admitted at trial listed the annual
rent for each billboard as $1,875.00 and $3,000.00. Those
documents also clearly show only Dan Brennan’s signature on the
leases. Fully executed copies were not offered into evidence, and
the trial court heard no testimony that the lease agreements were
ever fully executed.
¶ 34 Based on this extensive record support, we perceive no error in
the trial court’s determination that Brennan’s failure to provide fully
executed lease agreements for the billboards was not a breach of
the contract or an excuse for Elite’s belated effort to extend the
contract closing date. See Gravina Siding & Windows Co. v.
Gravina, 2022 COA 50, ¶ 14 (“Whether a party has materially
breached a contract is a question of fact, and a court’s determination of such a question may not be disturbed on appeal
unless it is so clearly erroneous as to find no support in the
record.”) (citation omitted).
4. Certificates of Occupancy
¶ 35 Section 5(A)(6) of the PSA required Brennan to deliver to Elite
fifteen categories of documents related to the property. Among
those deliverables were “copies to all certificates of occupancy (COs)
issued by governmental authorities for use or occupancy of the
property.” Elite argues that Brennan materially breached this
provision because it provided only one CO, when the public record
suggested that more than one existed. Brennan denies breaching
this delivery obligation and asserts that Elite waived any objection
to this requirement.
¶ 36 The trial court found that Brennan provided Elite the only CO
in its possession more than six months before the closing date. The
court also found that, in response to Elite’s initial objection, Dan
Brennan contacted the county to secure copies of other COs but
was unsuccessful. Brennan provided that information to Elite.
Calvin subsequently sent Brennan’s attorney an email stating that he “called Weld County” and “they were able to give [him] what [he]
needed” for additional COs.
¶ 37 Based on this evidence, the trial court concluded that Brennan
substantially performed its obligation with respect to delivery of the
COs. The court also found that Brennan’s inability to provide any
additional COs was not material to Elite’s failure to close. Finally,
the court found that Elite, through its affirmative representation to
Brennan that the County had provided what Elite needed with
respect to the COs, waived any objection it may have once had with
respect to the CO issues.
¶ 38 Because these facts are supported by the record, we discern
no error in the trial court’s finding that Brennan fulfilled its delivery
obligation with respect to the COs. We also discern no error in the
court’s conclusion that if there ever was any basis for claiming
Brennan did not fulfill its obligations concerning the COs, any such
claim was waived by Elite’s affirmative representation that it had
what it needed. See, e.g., Richmond v. Grabowski, 781 P.2d 192,
194 (Colo. App. 1989) (“In contract, waiver as a matter of law may
occur when the contract establishes that an obligation by one party
is a condition precedent to that of the other, and it is undisputed that the latter has proceeded in spite of the former’s failure to fulfill
the condition.”).
5. The Easement
¶ 39 At trial, Elite raised various arguments with respect to the
alternative access easement and whether the original legal
description in the PSA was ever properly amended. Elite argues
these issues provided additional grounds for extending the closing
date indefinitely. The trial court rejected these arguments for
various reasons.
¶ 40 On appeal, Elite argues in its opening brief that Brennan failed
to perform because Brennan renegotiated to relocate the access
easement to a different area on the property and conveyed the
former access easement to a third party. Based on those events,
Elite argued that Brennan no longer had the legal authority to sell
the property as defined under the PSA (which encompassed the
original easement and was not amended to include the renegotiated
easement). Elite’s argument on appeal is contained in one
paragraph near the end of its opening brief.
¶ 41 Elite’s opening brief provided no legal authority or explanation
of how this asserted omission materially impacted its ability to close the purchase. Moreover, while attempting to discount the trial
court’s added factual findings regarding the access easement, Elite’s
reply brief affirmatively represents that it “has not raised the access
easement as an issue” on appeal. Since we do not review issues
that are not raised on appeal or otherwise fully developed, we do not
address this issue further. See, e.g., Woodbridge Condo. Ass’n v. Lo
Viento Blanco, LLC, 2020 COA 34, ¶ 41 n.12 (“We don’t consider
undeveloped and unsupported arguments.”), aff’d, 2021 CO 56.
C. Specific Performance and Affirmative Defenses
1. Specific Performance
¶ 42 Specific performance is a remedy potentially available when
there has been a material breach of a contract. Air Sols., Inc. v.
Spivey, 2023 COA 14, ¶ 48. The remedy is in lieu of a damage
award and is intended to place the parties in the position they
would have occupied if the contract had been fully performed. Id.
But specific performance is not an available remedy when there has
not been a material breach by the defending party. As discussed
above, we find no error in the trial court’s determination that
Brennan did not breach the PSA. Therefore, there is no basis for a
remedy, including specific performance. 2. Brennan’s Affirmative Defenses
¶ 43 An affirmative defense is “not merely a denial of an element of
a plaintiff’s claim, but rather it is a legal argument that a defendant
may assert to require the dismissal of a claim, notwithstanding the
plaintiff’s ability to prove the elements of that claim.” Soicher v.
State Farm Mut. Auto. Ins. Co., 2015 COA 46, ¶ 18. Thus, if all the
elements of a claim have not been proved, there is no need to
consider an affirmative defense. See State Farm Mut. Auto. Ins. Co.
v. Goddard, 2021 COA 15, ¶ 60.
¶ 44 Because the trial court did not err by finding and concluding
that Brennan did not breach the PSA, we need not consider Elite’s
affirmative defenses.
D. Attorney Fees
¶ 45 If attorney fees are recoverable for an appeal, the principal
brief of the party claiming attorney fees must include a specific
request, and explain the legal and factual basis, for an award of
attorney fees. C.A.R. 39.1.
¶ 46 Because Brennan is the prevailing party, it is entitled to
recover its attorney fees and related costs incurred on appeal
pursuant to the fee-shifting provision in the PSA. We reject Elite’s request for attorney fees both because it was asserted for the first
time in its reply brief and because it is not the prevailing party on
appeal. Pinnacol Assurance v. Laughlin, 2023 COA 9, ¶ 22 (“[T]he
issue was raised for the first time in her reply brief, so it is not
properly before us.”); see C.A.R. 39. Because the trial court is
uniquely suited to undertake the fact finding necessary to
determine such an award, we exercise our discretion under C.A.R.
39.1 and C.A.R. 39(c)(1) and remand to the trial court to determine
and award Brennan its reasonable appellate attorney fees and
related costs.
III. Disposition
¶ 47 The judgment is affirmed, and the case is remanded to the
trial court to determine Brennan’s reasonable appellate attorney
fees and related costs.
JUDGE TOW and JUDGE PAWAR concur.