Opinion
April 29, 1975.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 1227
Grant, Shafroth, Toll & McHendrie, P.C., John E. Burrus, Denver, for plaintiff-appellee.
Michael M. Laden, Wheat Ridge, for defendant-appellant.
COYTE, Judge.
Defendant appeals a judgment against him for breach of contract and the denial of him counterclaims. We affirm in part and modify in part.
Defendant Sullivan was a salesman of household goods on the installment plan who financed his business in part by selling the retail installment sales contracts to plaintiff Beneficial Finance Company of Arvada. Defendant had originally signed a 'Master Dealer Agreement' with Beneficial Finance Company of Colorado whereby Beneficial of Colorado would buy defendant's contracts, with recourse, and retain 10% Of the face amount of each contract as a reserve in case of non-payment by the original debtors. Defendant was to buy back contracts in default. This agreement contained a clause granting the same rights to any affiliated or associated companies of Beneficial of Colorado. In 1966, defendant and Beneficial Finance Company of Denver signed a 'Master Dealer Agreement' with terms similar to the first contract. In 1967, defendant shifted his business to Beneficial Finance Company of Arvada, a company affiliated with both beneficial of Colorado and Beneficial of Denver in that all three were wholly owned subsidiaries of Beneficial Corporation. Defendant and Beneficial of Arvada continued doing business together until October of 1969 when defendant refused to repurchase certain of the contracts which were in default.
During this period, Beneficial of Arvada furnished Beneficial Corporation a list of loan and installment sales customers. The list included the names of some customers who had initially contracted with Sullivan and whose contracts had been bought by Beneficial of Arvada. Beneficial Corporation allowed access of the list to Consumer Home Services (CHS), another wholly owned subsidiary of Beneficial Corporation which would then solicit these customers for mail order purchases of various items of merchandise.
Plaintiff sued defendant for the difference between the balance owing on the contracts in default and the amount in the reserve account. Defendant counterclaimed, alleging that Beneficial's disclosure of the customer list amounted to conversion, unfair competition, and illegal restraint of trade. On trial to the court, plaintiff was awarded $2,803.06, and defendant's counterclaims were dismissed. Defendant appeals on the issue of damages and on the dismissal of his counterclaims.
I.
Defendant contends that plaintiff did not offer sufficient evidence to prove losses of $2,803.06 because the award was based upon hearsay testimony of the former manager of Beneficial of Arvada. This contention is without merit. The total amount owing to plaintiff was evidenced by its ledger cards which were admitted into evidence without objection, after proper foundation, as records made in the ordinary course of business. See Empire Diesel, Inc. v. Brown, 146 Colo. 477, 361 P.2d 964. These records adequately support the trial court's finding of the amount of damages.
II.
Defendant also asserts error in the manner of dismissal of his counterclaim with prejudice based on breach of fiduciary duty. Defendant orally moved to strike his third claim for relief after plaintiff had filed its reply and just prior to commencement of trial. Thus, this motion is governed by the voluntary dismissal provision of C.R.C.P. 41(a)(2). That rule provides that:
'. . . Unless otherwise specified in the order, a dismissal under this subsection (2) is without prejudice.'
The dismissal is noted in the record three separate times: In the trial transcript, on the face of amended answer and counterclaim, and in an order dated October 24, 1973. In none of these places is any qualification specified that the dismissal was with prejudice. The plaintiff, according to the transcript, had no objection to the claim being stricken before trial. Therefore, according to the rule above, the dismissal was without prejudice, and the court had no authority thereafter to enter any further order as to this counterclaim.
III.
Next, defendant contends that the trial court erred in dismissing his sixth claim for relief. Premising his claim upon the fact that plaintiff supplied a list of some of his customers to Beneficial Corporation, he contends that plaintiff was in violation of the Unfair Practices Act, s 6--2--101 et seq., C.R.S.1973 (C.R.S.1963, 55--2--1 et seq.) and that defendant suffered damages therefrom. However, to establish a violation of that act, it is necessary to demonstrate, Inter alia, that the alleged violator acted with an intent or purpose to destroy competition. Olin Mathieson Chemical Corp. v. Francis, 134 Colo. 160, 301 P.2d 139; Perkins, Director of Revenue v. King Soopers, Inc., 122 Colo. 263, 221 P.2d 343.
Evidence to prove that Beneficial of Arvada intended to destroy or injure competition by supplying the list of previous customers to Beneficial is lacking in the record of this case. While intent is a difficult element to prove and circumstantial evidence must often be used to prove it, Garcia v. People, 172 Colo. 329, 473 P.2d 169, the fact that CHS was in the business of soliciting mail orders for household goods is not sufficient to support an inference of an intent to destroy competition by Beneficial or by CHS. Furthermore, the trial court found, on substantial evidence, that there was no evidence of any sales made by CHS to any of Sullivan's customers and that CHS was not in competition with Sullivan.
Sullivan also contends that he has been discriminated against by Beneficial giving CHS more favorable credit terms than they gave to him, and that this favoritism also was violative of provisions of the Unfair Practices Act. Again, however, even assuming such difference in credit terms do exist and that defendant and CHS were of the same class, no intent to destroy competition was shown, and thus no violation of either s 6--2--103, or s 6--2--108, C.R.S.1973, was shown. We uphold the findings of the trial court in its dismissal of all of defendant's counterclaims asserted under s 6--2--101 et seq., C.R.S.1973 (C.R.S.1963, 55--2--1 et seq.).
IV.
In his fourth claim for relief defendant asserted that the list of customers was his property which Beneficial Finance Company of Arvada converted when it gave the list to Beneficial Corporation, and he contends dismissal of that claim was error.
Conversion is any distinct unauthorized act of dominion or ownership over the personal property of another. Byron v. York Investment Co., 133 Colo. 418, 296 P.2d 742. However, the cases which have treated the subject have held that lists of customers, bakery routes, or laundry routes are not property subject to conversion. Illinois Minerals Co. v. McCarty, 318 Ill.App. 423, 48 N.E.2d 424; Adkins v. Model Laundry Co., 92 Cal.App. 575, 268 P. 939; Stern v. Kaufman's Bakery, Inc., Sup., 191 N.Y.S.2d 734. Also, absent a showing of fraud, the Colorado Supreme Court has refused to enjoin the use of a customer list by a former employee as an unfair business practice. Suburban Gas of Grand Junction, Inc. v. Bockelman, 157 Colo. 78, 401 P.2d 268.
The list supplied to CHS included all of the responsible customers of Beneficial. The persons who had been Sullivan's customers became Beneficial's customers when the contracts were sold to Beneficial. Thus, the counterclaim for conversion was properly dismissed.
V.
Defendant contends that the trial court erred in concluding that defendant failed to prove that the acts of plaintiff were an illegal restraint of trade in violation of s 6--4--101 et seq., C.R.S. 1973 (C.R.S.1963, 55--4--1 et seq.). The evidence fails to sustain this contention.
Defendant, who has the burden of proof, has failed to show how plaintiff's use of his customer list would of necessity prevent him or anyone else from making sales of household goods nor has he demonstrated that Beneficial monopolizes or attempted to monopolize such sales. See Shotkin v. General Electric Co., 171 F.2d 236 (10th cir.); Denver Petroleum Corp. v. Shell Oil Co., 306 F.Supp. 289 (D.Colo.). Moreover, he has not shown that there is any harm to the public interest which was generated by plaintiff's actions. Feddersen Motors, Inc. v. Ward, 180 F.2d 519 (10th cir.). And finally, the trial court specifically found that defendant and plaintiff were not in competition with each other and this finding is supported by the evidence that defendant was selling goods while plaintiff was purchasing contracts from defendant in carrying on its business of making personal loans.
Since, as we ruled above, defendant failed to establish any violations of the Unfair Practices Act, we need not consider his allegations of error as to damages sustained thereunder.
Judgment affirmed except that the judgment dismissing the third claim for relief contained in the counterclaim is modified to dismissal without prejudice.
SILVERSTEIN, C.J., and VAN CISE, J., concur.