Health Grades, Inc. v. Boyer

2012 COA 196M, 369 P.3d 613, 2012 Colo. App. LEXIS 2148, 2012 WL 5457419
CourtColorado Court of Appeals
DecidedNovember 8, 2012
DocketNo. 11CA1829
StatusPublished
Cited by5 cases

This text of 2012 COA 196M (Health Grades, Inc. v. Boyer) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Health Grades, Inc. v. Boyer, 2012 COA 196M, 369 P.3d 613, 2012 Colo. App. LEXIS 2148, 2012 WL 5457419 (Colo. Ct. App. 2012).

Opinion

Opinion by

Judge RICHMAN.

¶ 1 Plaintiff, Health Grades, Inc., appeals the trial court’s judgment following a jury verdict in favor of defendants, Christopher Boyer and Patrick Singson, on their abuse of process counterclaim. We reverse the judgment and remand the case with directions. Although defendants filed a notice of cross-appeal, they did not brief the issues on which it was based. Accordingly, we do .not address defendants’ cross-appeal.

I. Background

¶ 2 The facts pertinent to this appeal are not in dispute. ■ Health Grades is a web-based information resource that provides healthcare information and provider ratings online. Defendants are former Health Grades employees who resigned over a dispute as to whether websites they created improperly competed with Health Grades’ business.

¶ 3 Health Grades filed suit against defendants, asserting five claims for relief: breach of duty of loyalty, misappropriation of trade secrets, interference with prospective business advantage, conversion, and breach of contract. In the same lawsuit, defendants asserted a counterclaim for abuse of process based on the theory that • Health Grades’ claims against them amounted to “sham litigation,” and defendant Singson individually [616]*616asserted a counterclaim for tortious interference with contract, alleging that his employment was affected by a letter Health Grades sent to a potential employer.

(4 Before trial, defendants moved for summary judgment on all of Health Grades' claims, and Health Grades moved for summary judgment on all of defendants' counterclaims. Health Grades argued that there were no genuine issues of material fact, that its complaint was not a sham, and that defendant Singson's employment was not affected by the letter it had sent. Defendant Singson agreed to dismiss the tortious interference counterclaim.

T5 In one written order, the trial court denied both motions for summary judgment. The court found that "genuine issues of material fact do exist with respect to defendants' abuse of process counterclaim." The court noted that to prove abuse of process, a party need not show that it was successful in the proceedings where a legal process was abused. Thus, it denied Health Grades' motion for summary judgment on the abuse of process counterclaim.

6 With respect to defendants' motion for summary judgment, Health Grades argued that there were genuine issues of material fact as to each claim, and the court "agree[d] with respect to each of Health Grades' claims." Thus, it concluded that defendants were not entitled to summary judgment.

T7 The case proceeded to trial before a jury. At the close of evidence, defendants moved for a directed verdict on Health Grades' four tort claims based on the economic loss doctrine. They argued that the doctrine barred the tort claims because Health Grades had failed to show that defendants owed a duty to Health Grades independent of their contractual obligations as employees. Defendants did not argue for a directed verdict as to the contract claim, nor did they specifically argue that there was insufficient evidence to support amy of the five claims. '

18 The court denied the motion as to the breach of fiduciary duty claim, stating, "I think that's an independent duty for which, viewing the evidence in the light most favorable to Plaintiff, the jury could find that the Defendants have breached their fiduciary duty of loyalty." It also denied the motion as to the misappropriation of trade secrets claim, noting that it was a statutory claim that imposed a "different duty." At that time, the court reserved ruling on the conversion claim, which was ultimately submitted to the jury, and the tortious interference claim, which Health Grades withdrew before the case was submitted to the jury.

T9 Thereafter, Health Grades moved for'a directed verdict on defendants' abuse of process counterclaim, arguing that defendants failed to show that its claims were "devoid of reasonable, factual support or lacked any basis in law" and therefore did not constitute "sham litigation," a showing that is required by the First Amendment when an abuse of process claim is based on the filing of a lawsuit. Defendants responded that there was disputed evidence regarding whether there was "actual competition" by defendants, whether defendants' websites had identical technical features, and whether defendants' activities had any impact on Health Grades' revenues.

{10 The court cut off defendants' argument and denied the motion, stating, "I believe that when viewing the evidence in the light most favorable to Defendants on their counterclaim that there is evidence sufficient that the jury could find for the Defendants."

{11 The jury was instructed on the four claims submitted by Health Grades. It was also instructed that if it found in favor of Health Grades on any of those claims, it must find against defendants on their abuse of process counterclaim, which was submitted to the jury on separate verdict forms for each defendant.

€ 12 The jury was further instructed that to find for defendants on their counterclaim, it must find, by a preponderance of the evidence, that _

1. Health Grades intentionally filed the claims consisting this lawsuit; and
2, The principal reason for . Health Gradeg' filing of its claims was not for the proper legal purpose that-such process is used, in that Health Grades claims were [617]*617devoid of reasonable factual support, or, if so supportable, lacked any cognizable basis in law; and
3. Health Grades actions caused Mr. Boyer and Mr. Singson injuries, damages and/or losses.

{13 The jury returned verdicts in defendants' favor on all four of Health Grades claims and on defendants' counterclaim for abuse of process, awarding each defendant $200,000.

{114 Health Grades moved for judgment notwithstanding the verdict. It argued that the verdict against it on the conversion claim should be reversed because it was contrary to the evidence, and consequently, the judgment on defendants' abuse of process counterclaim should also be reversed. It further argued that it was entitled to a judgment notwithstanding the verdict on the abuse of process counterclaim because defendants failed to prove that all of Health Grades claims were devoid of reasonable factual support or pursued for an improper objective. Thus, it argued that there was insufficient evidence to prove that its claims constituted "gham litigation."

1115 After full briefing on the motion, the court issued a written order stating merely that 'it could not conclude that "reasonable persons could not reach the same conclusions as the jury." It declined to enter judgment notwithstanding the verdict on any claim or counterclaim,

II. Issues on Appeal

[ 16 Health Grades contends that the trial court erred by denying its motions for directed verdict and judgment notwithstanding the verdict as to defendants' abuse of process counterclaim because, it contends, onee its claims survived motions for summary judgment and directed verdict, they could not, as.

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Bluebook (online)
2012 COA 196M, 369 P.3d 613, 2012 Colo. App. LEXIS 2148, 2012 WL 5457419, Counsel Stack Legal Research, https://law.counselstack.com/opinion/health-grades-inc-v-boyer-coloctapp-2012.