The Colorado Court of Appeals issued its opinion in Bristol Bay Productions, LLC v. Lampack on November 23, 2011.
C.R.C.P. 12(b)(5) Dismissal Based on Issue Preclusion.
Bristol Bay Productions , LLC (Bristol Bay) appealed the district court’s judgment dismissing its tort action against defendants Peter Lampack and Peter Lampack Agency, Inc. (collectively, Lampack), Simon & Schuster, Inc., and Penguin Group USA, Inc. (Penguin). The judgment was affirmed.
Bristol Bay was the producer of a movie based on one of Clive Cussler’s “Dark Pit” adventure novels. Lampack was Cussler’s literary agent, and Simon & Schuster and Penguin were two of Cussler’s publishers.
Bristol Bay and Cussler sued each other in California over the failure to create a commercially successful movie. During discovery, Bristol Bay learned that Cussler had sold 40 million books, not the 100 million Bristol Bay had been led to believe. Bristol Bay added claims of deceit against Cussler, alleging losses in excess of $50 million.
Several weeks later, Bristol Bay filed this action in Colorado based on nearly identical allegations as in the California case. Bristol Bay later amended the complaint to add Simon & Schuster and Penguin, based on allegations that they misrepresented Cussler’s readership, as well as the number of books in print and the number of books sold.
The California jury returned verdicts in favor of Cussler on Bristol Bay’s deceit claims. The Colorado court stayed its proceedings pending an appeal of the California case. The California Court of Appeals affirmed the judgment and the Colorado court granted, on issue preclusion grounds, defendants’ C.R.C.P. 12(b)(5) motion to dismiss the complaint. Bristol Bay appealed and the Colorado Court or Appeals affirmed.
Issue preclusion bars relitigation of a legal or factual matter already decided in a prior proceeding when four conditions are met. In this case, only one element was in question; namely, whether the issue sought to be precluded was identical to an issue actually and necessarily determined in a prior proceeding. Bristol Bay argued that the district court erred in determining that the California jury’s findings on misrepresentation, reliance, and causation precluded it from proceeding in Colorado against Lampack and the publishers.
The Colorado Court of Appeals found that the California jury’s findings precluded Bristol Bay from proceeding against Lampack because it decided, adversely to Bristol Bay, three issues identical to those present in the Colorado case. The Court further held that because the jury found there was no causal relationship between the alleged misrepresentation and Bristol Bay’s losing money on the contract and the movie, Bristol Bay was precluded from arguing that reliance on anyone’s misrepresentation about the number of Cussler’s books sold caused its losses.
Bristol Bay also argued that the case could only have been disposed of in the manner chosen as a summary judgment motion, not for failure to state a claim. The Court disagreed. The Court noted that affirmative defenses may be disposed of through a C.R.C.P. 12(b)(5) motion when the allegations of the complaint reveal that the claim is, as a matter of law, barred, or where no prejudice results to the plaintiff. Bristol Bay argued that it was prejudiced under Rule 12(b)(5) because attorney fees must be awarded when tort cases are so dismissed. The Court was not persuaded. The judgment was affirmed and the case was remanded for awards of appellate attorney fees to Lampack and the publishers.