General Steel Domestic Sales, LLC v. Bacheller

2012 CO 68, 291 P.3d 1, 2012 Colo. LEXIS 903
CourtSupreme Court of Colorado
DecidedNovember 27, 2012
DocketNo. 10SC403
StatusPublished
Cited by18 cases

This text of 2012 CO 68 (General Steel Domestic Sales, LLC v. Bacheller) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
General Steel Domestic Sales, LLC v. Bacheller, 2012 CO 68, 291 P.3d 1, 2012 Colo. LEXIS 903 (Colo. 2012).

Opinions

Chief Justice BENDER

delivered the Opinion of the Court.

T1 In this appeal, we review the court of appeals' unpublished decision in Bacheller v. General Steel Domestic Sales, LLC, No. 09CA1383, 2010 WL 1611081 (Colo.App. Apr. 22, 2010) (not published pursuant to C.A.R. 35(f)), to determine the applicability of Protect Our Mountain Emvironment, Inc. v. District Court, 677 P.2d 1361 (Colo.1984) ("POME") to this case and the propriety of the trial court's decision to treble an exem[3]*3plary damages award. In POME, we held that a plaintiff must meet a "heightened standard" when suing a defendant for the alleged "misuse or abuse of the administrative or judicial processes of government." Id. at 1868-69. Our holding was grounded in the First Amendment's guarantee of the right to petition the government for a redress of grievances and United States Supreme Court precedent recognizing that this right necessarily includes the right of access to the courts. Id.

12 Here, Bacheller sued General Steel, Discount Steel, and those companies' presidents for abuse of process, malicious prosecution, and civil conspiracy, based on their filing an arbitration complaint against him. The court of appeals held that the trial court did not abuse its discretion by refusing to include additional elements reflecting POME's heightened standard in the jury instruction for Bacheller's malicious prosecution claims. The court of appeals also held that the trial court did not abuse its discretion by trebling an exemplary damages award against General Steel and Discount Steel.

13 We affirm the court of appeals. After reviewing POME, the federal case law on which that decision is based, and our precedent, we hold that POME does not apply where, as here, the underlying alleged petitioning activity was the filing of an arbitration complaint that led to a purely private dispute. Given our holding, the trial court did not err in by refusing to include the additional elements reflecting POME's heightened standard in the jury instruction for Bacheller's malicious prosecution claims. We also hold that the trial court did not abuse its discretion by trebling the exemplary damages award against General Steel and Discount Steel. We remand to the court of appeals with directions to return the case to the trial court to enter final judgment consistent with this opinion.

I. Facts and Procedural History

{4 General Steel Corporation ("General Steel") and Discount Steel Buildings, LLC ("Discount Steel") are separate companies that market and sell pre-engineered steel buildings. Jeffrey Wayne Knight is the sole shareholder and president of General Steel, and Nathan Wright is the sole shareholder and president of Discount Steel.

1 5 Harold Bacheller worked as a salesman for General Steel during two separate periods between September 2002 and April 2005. Bacheller never worked for Discount Steel. Bacheller eventually quit General Steel and began working as a salesman for Universal Steel Buildings Corporation ("Universal Steel"), another company that sells pre-engi-neered steel buildings.

11 6 After Bacheller began working for Universal Steel, General Steel and Discount Steel filed an arbitration complaint against Bacheller and seven of his coworkers at Universal Steel pursuant to a binding arbitration clause in their employment contracts. Ba-cheller and his coworkers had all previously worked for either General Steel or Discount Steel. The complaint asserted claims against Bacheller for breach of contract, intentional interference with business relations, and civil conspiracy. The claims were based on the allegation that Bacheller had violated his employment contract with General Steel by misappropriating confidential information to benefit his new employer, Universal Steel.

17 Following a hearing, the arbitrator found in Bacheller's favor on all three claims asserted against him. Bacheller then sued General Steel, Discount Steel, Knight, and Wright ("Defendants"), asserting claims for abuse of process, malicious prosecution, and civil conspiracy, based on their filing of the arbitration complaint against him. Bacheller sought actual and exemplary damages against Defendants for all three claims. See § 13-21-102(1)(a), C.R.S. (2012) (permitting the jury to award reasonable exemplary damages in civil actions where the plaintiff's injury is attended by circumstances of "fraud, malice, or willful and wanton conduct").

T8 At trial, following Bacheller's case-in-chief, Defendants moved for a directed verdict, arguing that they were entitled to judgment as a matter of law on Bacheller's abuse of process and malicious prosecution claims under POME's heightened standard. In [4]*4POME, we recognized that the First Amendment, and specifically its guarantee of the right to petition the government for a redress of grievances, "necessarily includes the right of access to the courts." POME, 677 P.2d at 1365. To protect this right, we held that, when confronted with a motion to dismiss based on the First Amendment right to petition, a plaintiff bringing suit for "alleged misuse or abuse of the administrative or judicial processes of government" must meet a heightened standard showing that the defendant's petitioning activities (in POME, the filing of a lawsuit against a governmental entity) were not immunized from liability under the First Amendment. Id. at 1368-69. The trial court denied Defendants' motion.

T9 After the close of evidence, and during the jury instruction conference, the parties disputed whether the jury instructions should include additional elements reflecting POME's heightened standard for Bacheller's abuse of process, malicious prosecution, and civil conspiracy claims. Defendants argued that the jury instructions for all three claims should include the additional elements. The trial court initially stated that its "impression" was that "POME doesn't apply to this case at all because this is a purely private dispute," but it felt "compelled" to include additional elements reflecting POME's heightened standard in the jury instruction for Bacheller's abuse of process claims. (The trial court's decision to include additional elements reflecting POME's heightened standard in the abuse of process jury instruction is not a subject of this appeal.) The court refused to include the additional elements for the malicious prosecution and civil conspiracy claims because it was unaware of any Colorado case applying POME to such claims. Thus, the jury instructions for Bacheller's malicious prosecution and civil conspiracy claims did not include any additional elements reflecting POME's heightened standard.1

1 10 The jury returned a verdict in Bachel-ler's favor on his malicious prosecution claims against all Defendants, awarding both actual and exemplary damages. For Bacheller's malicious prosecution claims against the corporate defendants, the jury awarded Bachel-ler $15,000 in actual damages and $60,000 in exemplary damages against General Steel, and $5,000 in actual damages and $35,000 in exemplary damages against Discount Steel.2 The jury returned a verdict in Bacheller's favor on his abuse of process claims against Discount Steel and Wright, again awarding both actual and exemplary damages. For Bacheller's abuse of process claim against Discount Steel, the jury awarded Bacheller $5,000 in actual damages and $25,000 in exemplary [5]*5damages.3

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Bluebook (online)
2012 CO 68, 291 P.3d 1, 2012 Colo. LEXIS 903, Counsel Stack Legal Research, https://law.counselstack.com/opinion/general-steel-domestic-sales-llc-v-bacheller-colo-2012.