Court: Colorado Court of Appeals; February 18, 1999; Colorado; State Appellate Court
James A. Magin appeals a summary judgment favoring defendants Marcum Natural Gas Services, Inc. and its subsidiary DVCO Fuel Systems, Inc. on his claim of civil conspiracy to defraud a creditor. The case arises from a 1990 sale of two corporations by Magin to Shoreline Compression, Inc., which involved promissory notes guaranteed by Doug and Sarah Till. After defaulting on the agreement, the Tills sought investors and considered bankruptcy as Magin's lawsuit against them progressed. In November 1992, Shoreline engaged in confidentiality agreements with potential investors, including Marcum. Following a jury verdict in Magin's favor amounting to approximately $489,000, the Tills proposed Marcum’s acquisition of Shoreline, which was declined. Shortly thereafter, Magin's employment was terminated. Shoreline and the Tills filed for Chapter 7 bankruptcy, after which Marcum acquired Shoreline's assets for $37,000, while Magin collected only about $181,000 from the bankruptcy proceedings. Magin subsequently filed a civil conspiracy claim against Marcum, but the defendants obtained summary judgment. Magin argues that there is a genuine issue of material fact regarding the existence of a civil conspiracy, which the court agrees warrants reversal of the summary judgment.
Appellate review of summary judgment motions is conducted de novo, requiring courts to examine pleadings, depositions, and affidavits to determine the appropriateness of such motions. The nonmoving party benefits from all favorable inferences drawn from undisputed facts. To prove civil conspiracy, a plaintiff must demonstrate: 1) a specific objective, 2) an agreement among two or more parties to pursue that objective, 3) unlawful acts performed in furtherance of that objective or lawful acts aimed at an unlawful goal, and 4) damages resulting from the conspiracy. Magin argues that a material fact issue exists regarding whether the defendants conspired to misuse lawful bankruptcy proceedings to defraud him. Evidence shows Marcum negotiated to buy Shoreline, acquired assets at a low value, and secured favorable contracts post-bankruptcy, suggesting a potential conspiracy to defraud Magin. Despite the defendants' lawful actions, the purpose may have been unlawful, akin to precedents where defendants acted to defraud creditors. The court finds that Marcun’s and the Tills’ actions warrant further examination, and Magin is entitled to pursue his civil conspiracy claim in state court, regardless of his lack of contestation in bankruptcy court. Consequently, the previous summary judgment in favor of the defendants is reversed, and the case is remanded for additional proceedings. Judge NEY and Judge RULAND concur, while Justice SCOTT does not participate.
