Donner v. Nicklaus
- Summarized by William Wallo , Bakke Norman, S.C.
- 9 years 10 months ago
- Citation:
- Donner. v. Nicklaus, Appeal No. 13-4057 (10th Cir. February 19, 2015)
- Tag(s):
-
- Ruling:
- The Court of Appeals reversed a district court decision dismissing misrepresentation and other claims, and found that creditor's settlement with debtor in bankruptcy did not constitute an inconsistent election of remedies.
- Procedural context:
- Plaintiffs brought claims for intentional misrepresentation, negligent misrepresentation, and violation of the Interstate Land Sales Full Disclosure Act arising out of failed golf course development. The district court dismissed all claims. On appeal, the 10th Circuit reversed in part, finding the plaintiffs adequately alleged certain misrepresentation claims, and their decision to settle with bankrupt real estate development company did not constitute an election of remedies that prevented them from recovering from the defendants for alleged misrepresentation. Affirmed in part, reversed in part.
- Facts:
- Plaintiffs invested in a golf course development, ostensibly (according to their complaint) because of Jack Nicklaus' purported involvement in the project. The brochure and other materials mentioned his decision to become a "charter member" of the facility, which was arguably untrue because he had paid nothing for his "honorary" membership. Prior to bringing suit, the plaintiffs had settled with the developer's parent company in its bankruptcy proceedings. The lawsuit alleged intentional misrepresentation, negligent misrepresentation, and violations of the Interstate Land Sales Full Disclosure Act. The district court dismissed the complaint in its entirety. On appeal, the 10th Circuit concluded that the Interstate Land Sales Full Disclosure Act claims were properly dismissed because the agreement did not involve a "lot" as defined in the statute. The 10th Circuit also found that the plaintiffs were barred from pursuing negligent misrepresentation by the economic loss doctrine, and that they had failed to plead some of their intentional misrepresentation claims. However, the court ruled that claims regarding alleged misrepresentations about Nicklaus' membership status were adequately asserted and should not have been dismissed. The court also ruled that the district court's alternative ruling - that the plaintiffs had reached an election of remedies by entering into a stipulation in the bankruptcy case -was in error, as the plaintiffs did not affirm or repudiate any contracts through the settlement. In the bankruptcy case, the plaintiffs accepted a lot if the development was ever completed; this was acquired through settlement with a debtor in bankruptcy, not through a judgment based on a successful contract claim. Affirmed in part, reversed in part.
- Judge(s):
- Briscoe, Kelly, and Bacharach
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