Opinion
As Modified on Denial of Rehearing April 25, 1972.
Page 702
Ward, McKibben, Constantine & Pred, Ronald S. Pred, Denver, for plaintiffs-in-error.
Carroll & Bradley, P.C., John S. Carroll, Denver, for defendants-in-error.
SMITH, Judge.
This case was transferred from the Supreme Court pursuant to statute.
At the conclusion of plaintiffs' evidence, in a trial to the jury, the court directed a verdict for the defendants, Mutual Supply Company and its officers, on plaintiffs' claims for breach of contract and fraud. The defendants counterclaimed for accounts receivable due. After hearing evidence on the counterclaim, the court also directed a verdict for defendants on the counterclaim. Certain of the plaintiffs, whose names appear on franchise agreements with Mutual, appeal from the directed verdicts of the trial court. We reverse.
On review of a directed verdict, we must determine whether the evidence, viewed in the light most favorable to the plaintiff, presented facts and circumstances upon which a jury, under proper instructions, could find for the plaintiff. Palmer Park Gardens, Inc. v. Potter, 162 Colo. 178, 425 P.2d 268. If a jury could find for the plaintiff, the trial court committed error in granting a directed verdict for the defendants. In addition, the withdrawal of a case from the jury may be justified only where the material facts compel the conclusion that reasonable minds could not be in disagreement and that no evidence has been presented upon which a jury's verdict against the moving party could be sustained. McGlasson v. Barger, 163 Colo. 438, 431 P.2d 778.
Concerning the directed verdict on the defendants' counterclaim, the defendants were allowed to show that the plaintiffs were listed on the defendants' books as owing certain amounts. The plaintiffs were not permitted to assert as defenses any claims contained in their case-in-chief, but were only allowed to deny generally that they owed the money. The defendants' motion for directed verdict was granted. This was error. The question of whether the money was indeed owed by the plaintiffs to the defendants was one upon which reasonable minds could differ and was therefore solely for the consideration of the jury.
Plaintiffs' claims arose from franchise agreements enacted in substantially similar form between each of the plaintiffs and Mutual. The document representing each franchise agreement is not an integrated contract, for it states only the duties of the franchisee without specifying what the reciprocal obligations of Mutual shall be. Where a writing is not a complete and integrated contract, the contract itself may be defined by parol evidence. Von Riesen v. Greeley Finance Co., 142 Colo. 210, 350 P.2d 340. Hence, a brochure and oral statements made by Mutual's agents were properly admitted into evidence not only to show what representations were made by Mutual to prospective franchisees, but also to show what the parties intended their obligations to be under the franchise agreement. Mutual represented itself, through the brochure and its agents, to be a financially strong company which, by means of its capable personnel and mass merchandising methods, could support relatively inexperienced franchisees by supplying them with management advice and balanced inventories at competitive prices.
From the evidence it could reasonably be concluded that, although Mutual did provide the franchisees with an initial inventory and aid in matters concerning store openings, they did not: (1) offer a balanced supply of quality wholesale merchandise at low competitive prices, (2) meet seasonal merchandise demands, (3) provide adequate sales counseling, and (4) continue in business long enough to give meaningful support to the franchisees. Therefore, the jury could have found that Mutual did not substantially perform its contract with the plaintiffs.
To support an action on false representations, a plaintiff must establish that there were representations of a past or present fact, made with knowledge of their falsity and made with the intent that the plaintiff act in reliance on these misrepresentations, representations, and that they were relied on to the plaintiff's damage. Morrison v. Goodspeed, 100 Colo. 470, 68 P.2d 458. In addition, a promise concerning an act in the future, when coupled with a present intention not to fulfill the promise, can be a misrepresentation upon which an action for fraud may be based. Paiva v. Vanech Heights Construction Co., 159 Conn. 512, 271 A.2d 69. See W. Prosser, Torts s 104 at 744 (3d ed.) For actions accruing prior to July 1, 1971, fraud in a deceit action required proof by clear and convincing evidence. Wiley v. Byrd, 158 Colo. 479, 408 P.2d 72. (For actions accruing after that date, see Colo.Sess.Laws 1971, Ch. 138, s 1.) Even by this standard there was sufficient evidence of fraud to require the submission of that issue to the jury.
We reverse and remand for a new trial on all issues.
COYTE and PIERCE, JJ., concur.