Rosenthal v. Dean Witter Reynolds, Inc.

Rudy L. and ROSENTHAL Howard Bettmann, behalf of them

Judy J. situated, similarly and all others

selves

Petitioners/Cross-Respondents, INC.; REYNOLDS, WITTER

DEAN III; Walker; Vickers, A. B. Frank Jack Graham; Kutak Rock & B.

William Respondents/Cross-Petition-

Campbell,

ers, Company, Helen Land

Castle Pines Larry Coulson, and

McMaster

Reichert, Respondents.

No. 94SC403. Colorado,

Supreme Court of

En Banc. 18, 1995.

Dec.

Rehearing Jan. Denied Vellone, P.C.,

Vinton Nissler Allen & Pat- Vellone, Denver, Roseman, rick D. Spector & P.C., Eugene Spector, Scarlato, A. Paul J. Kahn, Philadelphia, Debra M. Pennsylvania, for Petitioners/Cross-Respondents. Winters, P.C., Brega & Brega, Charles F. Birge, Thomas D. Cathryn Mayers, B. Den- ver, Respondent/Cross-Petitioner for Dean Reynolds, Witter Inc.

Kerr, Friedrich, Brosseau, Bartlett, L.L.C., Friedrich, Denver, Andrew J. for Re- spondents/Cross-Petitioners Frank B. Walk- er, Vickers, III, Jack A. and William B. Graham. Rock, Fields, Denver,

Kutak Diana C. Pat- Griffin, Omaha, Nebraska, rick Respon- for Camp- Kutak Rock dent/Cross-Petitioner & bell. Norton, General,

Gale A. Attorney Stephen ErkenBrack, K. Deputy Attorney Chief Gen- eral, Timothy Tymkovich, M. Solicitor Gener- al, Shields, General, Deputy Attorney Merrill Djokic, Richard Attorney First Assistant General, Section, Regulatory Denver, Law 170,000. offering primary purpose A Feigin, Philip Securi- A. Amicus Curiae maturity, refunding, was for in advance of Colorado. for the State ties Commissioner Bonds, Obligation Ser- District’s General Opinion aggregate principal delivered the SCOTT ies issued Justice 1990, $22,000,000. February In the Court. amount of encountering dif- began financial District or omissions misrepresentations A seller’s 1990, a September bondholders ficulties. In fact, deceptive practices, or fraud- of material “there meeting [were] called was because sale of a in with the acts connection ulent payment full for sufficient funds available 11—51— security are actionable under section payments of bond scheduled bondholders 125(2) Act 1981. Pursu- of of Securities 1, Novem- on December 1990.” On be made certiorari,1 must grant de- to our of ant 14, 1990, bankrupt- for the District filed ber pleading requirements sufficient termine cy- 12(b)(5) motion to a C.R.C.P. to overcome standing re- We also address the dismiss. a July, In of Howard Rosenthal filed 11-51-127(1). quirements section complaint in fraud class action securities Douglas County against: District Court I (1) (the Company “Land Castle Pines Land Rosenthal, petitioners, Howard In developer Company”), primary Bettmann, Judy and Rudy L. J. Bettmann (2) Walker, District; Vick- Frank B. Jack A. securities, bought general (purchasers) obli- ers, III, Coulson, William Helen MeMaster bonds,2 gation municipal by the issued Castle Reichert, Graham, Larry B. and the elected (District). Metropolitan North District Pines District; for the Witter directors Dean corporation quasi-municipal District The (Dean Witter), Reynolds, Inc. “Broker” state, political locat- and subdivision underwriter;3 Camp- Rock Kutak & within the southern suburbs of and “with ed (Kutak), bond for the 1986 bond bell counsel easy accessibility” City County to the (Sher- issuance; and & Sherman Howard purposes organized It was for the Denver. man), disclosure counsel to the District.4 water, providing for the construction Specifically, alleged Rosenthal the de- sewer, sanitary improvements and street fendants, issuing general obligation in 1,603 approximately within its acres of land District, violated 11- bonds for the sections County, Douglas located Colorado. 51-123(1) (1987), 11-51-125(2), 4B C.R.S. 1, §§ repealed by eh. 11-51-101 municipal The District its sec. offered bonds -802, Laws and recodi- sale under an 1990 Colo. Sess. for Official Statement dated $38,- July raising gross §§ 11—51— proceeds of as 11-51-501 and amended fied $20,590,000, eight granting order forth the sued in the amount of 1. Our certiorari set fol- lowing Metropolitan issues: percent Pines District Castle North Appeals Bonds, Whether the Colorado Court of erred Obligation Improvement 1. Series General affirming court’s dismissal of the $17,580,000. the district B, issued the amount municipal purchasers by bond fraud claims of improperly require- interpreting pleading "Broker” 3. The Act of 1981 defines a §of of the Colorado ments ties Act. 11-51-123 Securi- engaged "any person effect- as ing in the business of for the account transactions securities adopt- Whether erred in 2. the court here, others,” l-51-102(2)(a), § 1 ing the fraud-created-the-market doctrine as a fact, If, pur- Dean Witter the District. pleading reliance under substitute for actual and sold chased the securities from District provisions the anti-fraud of the Colorado Secu- account,” Act of 1981. them Dean Witter is rities for its “own Act of 51—102(2)(b). Whether the Colorado Securities 3. Although § defined “Dealer.” 11— 11-51-127(1), applies set forth in statutes, Act of federal the Securities purchase when the offer and both securities sale term "underwriter.” does not define the place take outside the of Colorado. state use title "Securities Act of 1981" in this We The due 4. District was as defendant not named opinion. Bankrupt- stay provisions to the automatic eight percent municipal bonds The consisted of cy in the Code. Other were named defendants Metropolitan Pines North District General Castle Obligation complaint, initial but dismissed. were A, Bonds, Refunding is- Series (1995 payment its Supp.). The class ac- which the District would meet 4B C.R.S. municipal obligations bonds. complaint was filed on behalf class tion entities, consisting persons of all other addition, purchasers alleged In that defen- defendants, purchased who the Dis- than the dants made and omitted mate- misstatements bonds, general obligation Series 1986 trict’s releases, presenta- “press rial facts B, offering the date of the A and between ¶ investing public.” tions to the bankrupt- and the date the District filed “ ‘cautionary’ Official also included Statement cy. the Bettmanns were In November language” specifically indicating is diffi- “[i]t plaintiffs. as named added predict cult the rate which future devel- purchasers’ complaint alleged that the However, opment may purchas- occur.” conspired “issue[ ] and did ma- defendants alleged portrayed ers the Official Statement and information terial misstatements which positive “a regarding scenario” the District’s know they knew had reason to were false “ability payment make on the 1986 misleading, and and omitted state material Bonds,” if even “there were insufficient funds necessary facts to make statements not those from ... collected taxes on District levied misleading.” Am. Action Compl. First Class ¶¶ 44, property.” Id. 45. ¶ 63. In addition misstatements to these and alleged Purchasers that the defendants omissions, purchasers alleged that “defen- “proceeds that offering] misstated from [the joined dants initiated a course and/or $19,488,039.66 in the amount of and certain designed” of conduct which and was intended of other funds the District in amount of the (1) investing public to: regarding deceive the $8,034,805.91 deposited” were to be in escrow Company’s prospects the for comple- Land pay principal and “to used the and interest planned development tion of the and the ¶ required” municipal on the bonds. Id. 51. ability payments District’s on to make the Purchasers claimed investors led to were be- bonds; (2) introduce bonds into the the pay- lieve funds “would be available to make although the bonds market were “otherwise ¶ Yet, ment.” Id. 52. “[a]s October (3) marketed”; not entitled to be cause class $912,000 approximately there was avail- purchase acquire members the 1986 payment able for of the December (4) prices; permit bonds at inflated and the (the payment on the repay- 1986 Bonds total Company Land development to continue its ¶ $3,535,612.00).” required was Id. 58. profit and to activities from the sale of land Finally, among allegations, purchasers other developers and other homes individu- that, although claimed defendants stated that ¶ purchasers. al Id. 15. The $22,000,000 proceeds would be used to alleged that the defendants’ misstatements “pay-off maturity, the 1984 Bonds” before and omitted material facts caused them fi- adequately “defendants failed to disclose” ¶¶ 69, injury. nancial that reason prepayment for such “was alleged The misstatements and omissions experiencing because District was undis- appeared in prelim- or were omitted from the would, problems closed financial which and inary Official Statement and the definitive did, materially payment affect on the 1984 Official July Statement dated 1986.5 The ¶ 63(e). Bonds.” Id. Statement, Official seventy-eight pages long form, with its addenda in final prepared Walker, was Vickers, Graham, Defendants by or investing public Witter, disseminated to the by Kutak, Dean Company and the Land Statement, the defendants. The Official immediately filed motions to dismiss. The principal selling document for the sale of granted part district court the motions in bonds, municipal District’s described: portions complaint pursuant dismissed District, municipal sale, bonds offered for 12(b)(5), holding C.R.C.P. pur- body; governing and its development chasers sufficiently failed to allege reliance community, including the Castle Pines pri- on the defendants’ misstatements or material construction; vate home order, basis omissions fact.6 aIn later the court to the collectively 5. We refer two statements In February its order dated the district the "Official Statement.” court stated: We reverse purchase. certification, thal’s securities holding class denied remand to part, plain part, apply to affirm of 1981 did Act Rosenthal, that it return appeals with directions claims because tiff Rosenthal’s with instructions Pennsylva trial court case to the of the Commonwealth resident dismissing its court vacate order bonds in Colorado. the trial nia, his purchase did court, 11—51— claim under sections pursuant purchasers’ district 125(2) pro- judgment a final and for further 54(b), entry of directed 12(b)(5) opinion. ceedings dismissal with this on the C.R.C.P. consistent The court denying class certification. order part, dismissal II appeals affirmed the di with part, and remanded

reversed with disfavor C.R.C.P. We view class certi for reconsideration rections 12(b)(5) failure to state motion to dismiss for Reyn v. Dean Witter fication. Rosenthal grant uphold a trial court’s a claim Inc., olds, (Colo.App. P.2d appears beyond only motion if “it such a 1994). no prove can set doubt court of concluded support facts of his claim doctrine “should “fraud-created-the-market” Dunlap him to v. Colorado entitle relief.” Rosenthal, imported into Colorado law.” be Inc., Cablevision, Springs However, court of 883 P.2d at 526. the (Colo.1992)(citation quota internal 1291 complaint not suffi- appeals held did omitted). grant We the of tion marks review (1) ciently allege reliance because: the doc- using a motion to dismiss the same standards fraud-created-the-market, of trine while “accept all aver- as district court the available, pur- inapplicable was because fact in com ments of material contained elements, improperly pleaded its chasers id. plaint Shapiro true.” v. as & Meinhold 526-28; pre- Ute Affiliated (Colo.1992). Zartman, 120, 823 P.2d “ sumption apply purchas- did not because the 12(b)(5) rarely grant motions ‘are ’ ” pleaded primarily rather ers misstatements pleadings.” Dunlap, ed under our “notice court than omissions. Id. at 528-29. The Dill, (quoting 829 P.2d at 1291 Davidson v. appeals applied also held that Colorado law (1972)). 123, 157, 131, 180 162 Colo. 503 P.2d claims that to Rosenthal’s the statute of review, allega our standard of Under repose did not bar the Bettmanns’ claims. “must viewed in the complaint tions in the be Rosenthal, Accordingly, 883 P.2d at 529-32. light plaintiff.” Id. most favorable appeals the court of remanded the case for Also, that, in passing is fundamental “[i]t reexamination class certification. upon complaint, motion to dismiss only stated there court can consider matters appeals Purchasers claim the court of go beyond confines of in and must not interpreting pleading re- erred: v. Lakewood pleading.” McDonald and 11—51— quirements of sections 11-51-123 Club, 355, 360, P.2d 461 Country 170 Colo. 125(2) 1981; Act of the Securities (1969). 437, 440 failing to properly apply the fraud-created- complaint is to Respondents doctrine. claim chief function of a the-market erroneously give the transac defendant of determined notice subject of applies Act of 1981 to Rosen- tion the Securities or occurrence (Count 3), construing law Judicial federal claim common authorities secu- and the highly persuasive interpreting (Count 4). rities acts are for fraud applying portions "[ijnasmuch relevant the Colorado as held district court then Act; accordingly, the court should Securities [purchasers] establish reliance under cannot to the decisions of federal courts look when States, v. [Citizens either the Ute United Affiliated deciding defendants' motions. 128, 1456, 741 406 U.S. (1972) 31 L.Ed.2d market ] standard the fraud created the or [purchasers'] is an element of Reliance doctrine, Complaint their to state claims fails under section of the Colo- claims 11-51-125(2),” and dis- relief under section (Count 1), Act the claim under rado portions complaint. missed those negligent misrepresentation law for common scheme, (a) device, or Wilson, any employ Kluge To v. 167 Colo. plaintiffs claims. defraud; artifice to 526, 528-29, 448 P.2d Such (b) any be dismissed on motion statement complaint should not To make untrue long mate- claim so omit to state a for failure to state a material fact “ any necessary in order to make the ‘upon some relief rial fact pleader is entitled to ” made, Jones, light circum- Hinsey statements theory the law.’ made, (1966) (em- which stances under 411 P.2d Colo. court) misleading; or Hinsey (quoting phasis added (c) act, any Rickenbaugh engage practice, Weick v. Cadillac Colo. To (1956)). operates 303 P.2d Under course business upon standard, operate as a turn to fraud or deceit we now the Securities any person. plain language Act of 1981 and the applicable informs our statutes that review.7 Although previously we have held that feder precedent persuasive construing

al simi laws, language lar in our People securities Ill (Colo.1985), Riley, 708 P.2d we plain language should first look to the A controlling statutes under our law.8 When 11-51-125(2) of Section the Securi statute, construing a Colorado securities ties Act of provides: employ statutory principles of fundamental resorting construction re before case law Any person recklessly, knowingly, who garding similar federal law. A statute or with an buys intent to defraud sells or give should so be construed we full effect security in violation section 11-51-123 is legislature. the intent of Blood United person buying liable to or selling (Colo. Quintana, Servs. v. security in with connection the violation for 1992); Gallegos Phipps, 856, v. 779 P.2d 861 legal equitable such or relief which the Boom, (Colo.1989); 665, v. 766 P.2d Charnes appropriate, including deems rescis- (Colo.1988). 667 in legislative To determine sion, damages, actual at interest the statu- tent, we to look first the words used in the rate, tory costs, attorney and reasonable Warner, 1187, People statute. 801 v. P.2d fees. (Colo.1990). 1190 125(2) Section express creates an private so, doing In note that we neither section right of action. Noland v. Gurley, 566 125(2) 123(1) explicitly requires purchas- nor 210, F.Supp. (D.Colo.1983); 215 Cathy ers to claim that relied on a defendant’s Krendl, Stricklin The Securities Act 1981: of or “untrue omission of statement” “material A Reduction Duplicate Regulations, 10 fact” to In be entitled relief. the absence (1981). 2158, Colo. Law. Section 11- express language, unwilling of such we are 51-123(1) provides: read such pleading require- into our statute a any person, It is unlawful for Hence, connection ment. conclude that un- we a claim offer, sale, purchase with any of der section is not lost a where security, directly indirectly: allege fails to direct but reliance 9(b) requires 7. C.R.C.P. that "[i]n all spring grown averments 1933 did not full from the brow of mistake, of fraud or the circumstances constitut- any generation New Deal It Zeus. followed a ing fraud particu- be mistake shall stated with Loss, regulation....” state Louis Fundamentals Malice, intent, larity. knowledge, and other (1983). Regulation 1 Securities It is not person condition may a mind of be averred progeny state laws that of the federal generally.” Fidelity Groff, See also Fin. Co. v. outset, anything, statutes. If at least at the Con- 223, 226, 994, 124 Colo. 996 gress, Commission, the Federal Trade first reliance, Other than the issues here raised as to acts, agency to administer federal and the parties the larity dispute particu- do not whether the Exchange Securities and Commission looked 9(b) requirements by were met states, regulation ”[s]ecurities where in this purchasers' complaint. country addition, began.” at 8. In there 11-51-125(2). analog no federal 8. As elegantly Professor Louis Loss so stated ago, more than a "[t]he decade Securities Act of

HOI Cir.1981) (“The (2d Moreover, of reliance 92 element sufficiently causation. pleads 10b-5, potentially limitless to restrict adopted serves rule under federal even to those situations Exchange Commission thrust of rule 10b-5 the Securities 10(b) in fact authority section causation between which there exists pursuant its Act,9 Exchange plaintiffs inju 1934 act Securities the defendant’s necessarily require put di have ry.”) courts do As two noted commentators federal Basic, it, Inc. v. in a proof requirement of reliance. See is reasonable rect “a reliance 978, Levinson, 243, 10b-5, 108 S.Ct. Rule private 485 U.S. action under since (1988); Raney 194 T.J. & qualify, 99 L.Ed.2d ‘is to as between aim of the Rule Cobb, Sons, Irrigation seller], Inc. Fort Okla. of caveat [purchaser and doctrine (10th Cir.1983), Auth., F.2d Fuel emptor to establish scheme inves —not ” 1026, 104 denied, 465 U.S. S.Ct. cert. Selig Louis insurance.’ Loss & Joel tors’ (1984); (3d see also Bank Denver L.Ed.2d 687 man, Regulation 4385 ed. Inc., Capital Group, omitted). (footnote v. Southeastern 1992) (D.Colo.1991) F.Supp. (“My read analyzing private of action un- In cause ing complaint of the amended reveals no 125(2), plain language section utilized der obtained, allegation [plaintiff] read Assembly controlling. by our General We pur official when it or used the statement allegations conclude reli- therefore the bonds. direct reliance is chased Such necessary support or causation are ance fatal, however.”); Krendl, necessarily supra, claim. id. at 4385-89. cognizable See 2172 n. 64. at Basic, Inc., 243, 108 at In 485 U.S. at S.Ct. any purpose require reliance 989-90, Blackmun, writing for Justice “provide[] requisite is to causal majority, stressed: misrepre connection between defendant’s is, however, Basic, way There more than one plaintiffs injury.” sentation and a Inc., 989; causal connection. In- demonstrate the U.S. 108 S.Ct. see (“[Reli deed, previously dispensed with a Raney, also T.J. 717 F.2d at 1332 reliance, requirement positive proof causal ance thus the nexus between the plaintiffs injury.”), duty defendant’s conduct and the to disclose informa- where material denied, breached, rt. concluding U.S. had tion been ce (1984); necessary plaintiffs’ L.Ed.2d 687 Wilson Com nexus between the Corp., wrongful tech and injury Telecommunications F.2d the defendant’s con- 10(b) begin- tary One commentator the I 9. illustrated modest and I and looked looked Section ning together, put of Rule 10b-5: at Section and I them and the only "in we had there was where discussion appropriate I think it would be for me now purchase connection the or sale” should with actually to make a brief statement of what be, and we it be at the end. decided should happened adopted, when 10b-5 was where it got We and we on the called the Commission be would be written down and available to calendar, remember whether and I don't everybody, just willing people the who not are morning got We there or after lunch. that listen me. to piece paper passed a around to all the day year It was in the I I one believe. read All the commissioners commissioners. my building sitting was in office in the S.E.C. table, it the indicat- the rule and tossed on Philadelphia I in and received a call form Jim Nobody anything except ing approval. said Treanor who was then the Director of the Trading said, "Well,” said, he “we said, Sumner Pike who Exchange and Division. He "I fraud, against are aren't That is how it we?” just telephone been on the Paul with Rowen,” happened. Regional who was then the S.E.C. Boston, absolutely right Louis that I never [Loss] is in "and he me Administrator has told years thought twenty-odd later it would be that president company about the of some in Bos- biggest thing happened. It the ever going buying up had who ton is around the stock of power give was company intended to Commission his from his own shareholders at share, problem. deal with no relation in telling a this It had $4.00 and he has been them whereas, private doing badly, contemplation to company very Commission’s fact, proceedings. earnings going quadru- in to be Freeman, coming $2.00 Milton V. pled will be a share for this Codification Conference Laws, anything year. we can the Federal 22 Bus. Law. Is there do about it?” upstairs my he came and I called in So secre- Similarly, way, of 1981 Securities Act does duct had been established.... require proof that form of Rath- we did not material become a investor insurance. proxy er, or a sub- only omissions misstatements it sanctions behavior that has decisively voting, affected statement be- stantial on an actions result- effect investor’s proxy ... solicitation itself cause ing in harm. an essential link the transac-

served as markets, tion. ... The modern securities B chang- literally involving millions shares purchasers’ complaint sufficient ing daily, hands differ from the face-to-face ly upon may a claim which relief be states contemplated early transactions fraud 12(b)(5) granted cases, to survive a mo understanding our Rule 10b- 5 n reliance corners, tion. its four complaint Within requirement must encompass asserts claims under section as these differences. “upon serting offering rationale, purchasers’ Based on this com- plaintiffs Bonds were entitled assume plaint only allege need or causation. reliance rely ... upon [an] Official [that] Statement However, in stages proceeding, later did not misstate fact or material omit regarding admission evidence reliance necessary fact state a to make the state necessarily causation involves factual misleading.” ments therein First Am. inquiry materiality. into See Goss v. Clutch ¶ Compl. Class Action 53. In their com Exch., (Colo.1985) Inc., (“A plaint, purchasers’ “By maintain: reason of misrepresented or omitted fact is considered conduct, wrongful such liable defendants are if material there is a substantial likeli- 11-51-123, pursuant §§ to C.R.S. 11—51— hood that a reasonable investor would consid- 125(2) ll-51-125(5)(b). As a direct important making er the matter an invest- conduct, proximate wrongful result of their decision.”); (“A 19:4 CJI-Civ.3d fact plaintiffs and the other members of the class material if a person reasonable under the damages in suffered connection with their importance circumstances attach it purchase during of the District’s securities action.”). determining his or her course of ¶ Moreover, period.” the class proof causation, Actual of reliance or very language by purchasers utilized in their materiality, factual,10 centers on highly complaint directly is taken from 11- section going burden forward in some eases See, ¶¶ 63, e.g., 51-123. id. may shift to the defendant.11 Therefore, trial, order state a claim required prove At when reli pursuant 11-51-125(2), to section causation, plaintiff ance or must establish allege must following: plain that the that a defendant’s omission misstatement purchaser tiff ais security; seller was a determining substantial factor in security “security”; is a plain course of conduct that resulted scienter; requisite defendant with acted Raney, tiffs loss. T.J. 717 F.2d at 1332. (4) that the defendant’s conduct was in con Supreme The United States Court has devel purchase nection with the oped or sale of a securi presumptions various in order to aid ty; that the plaintiffs defendant’s conduct inwas prove in their to efforts reliance 11-51-123; violation of section 10b-5. Loss Seligman, rule See 9 & plaintiff upon relied supra, defendant’s conduct to example, at 4392-93. For in Affiliat detriment, his or her or that States, defendant’s ed Ute Citizens v. United 406 U.S. plaintiffs injury. conduct caused 153-54, In this 92 S.Ct. 31 L.Ed.2d Hazen, 10. Thomas Lee Treatise on the Law essentially judicial economy reliance] is a of rule of 13.5, Regulation (2d at convenience, ed. designed impracti avoid to ("As 1990) materiality, questions is case with cality requiring plaintiff that each shareholder highly of reliance are factual and thus courts are testify element.”), concerning the reliance cert. properly pleadings.”) reluctant to on the dismiss denied, 454 U.S. 102 S.Ct. 70 L.Ed.2d 11. Panter v. Marshall Field & 646 F.2d Cir.) (7th ("The presumption [of Mills-Ute and are procedure civil rules of our a ments (1972), presumption created the Court pursuant to a motion overcome ma to sufficient withheld the defendant where of reliance 12(b)(5). plaintiff. See from information terial (5th Sklar, 462, 468 647 F.2d Shores also Cir.1981) estab Affiliated, Ute (stating that IV possible it made presumption lished a showing A to meet their burden plaintiffs for denied, 1102, 103 reliance), 459 U.S. cert. “that the concluded The court of (1983). Likewise, 722, 74 L.Ed.2d 949 presumption reli- rebuttable Ute Affiliated is an theory of fraud-created-the-market here, [pur- inapplicable because is ance shifting the burden other mechanism primarily mis- complaint pleads chasers’] plaintiff. Under the reliance from a proving Rosenthal, statements,” not omissions. theory, a court fraud-created-the-market Ute, However, at P.2d Affiliated on may presume plaintiff a relied premised analysis its Supreme Court security marketability of the fundamental a relationship existing bank its between purchased plaintiff it. Alter when the transactions which customers face-to-face (D.Colo. Inc., DBLKM, F.Supp. obligation an disclose resulted 1993). the bank withheld or omitted state time evidentiary in na- presumptions are These Ute, 406 material facts. See U.S. Affiliated place produc- ture and serve to the burden (“[Defendants may 92 S.Ct. at 301; particular party. a See tion on C.R.E. duty not stand mute” in the face 3:5, They 3:5A. as eviden- CJI-Civ.3d serve disclose). tiary plaintiffs constructs to facilitate effort Here, among complaint alleges, other prove reliance causation. See Loss acquired things, purchasers that the securi- Seligman, supra, at 4392-93. Because & through involving ties market transactions they procedural tools are delineate brokers, including use defendant Dean trial, evidentiary parties at burdens of the Witter, Point Memo- which utilized Sales they consequence not of while consider- regarding bonds. randum ing motions It under C.R.C.P. Ute, omissions, In in addition to plead necessary to these theories even Affiliated Supreme presumed Court reliance be- plead support facts that would such theories “relationship of trust and confi- cause sufficiently complaint. in a To claim entitle- its the bank and customers. dence” between ment to relief under section in a totally inapplicable to the Ute complaint, only allege that a need Affiliated present case. defendant made material misstatements or plaintiffs omissions that caused the harm. B ease, sufficiently purchasers alleged

In this 11- facts to establish a claim under section factually Assuming Ute Affiliated 51-125(2). purchasers alleged that case, present we consider the applied to the conspired defendants issued untrue di appeals’ misstatemenVomissions published or statements and disseminated chotomy. Supreme has held Court misleading statements in omitted prerequi “positive proof of reliance” First Am. Action material facts. Class recovery site to in a fraud case securities ¶ Compl. alleged 63. The further involving of fact. a material omission Affili defendants’ ma- misstatements and Ute, ated 406 92 at 1472. U.S. S.Ct. misleading which omissions created terial necessary “All is that the facts with that is statements, them financial harm. caused materia] held be in the that a reason sense ¶ 69. able might investor have considered them Thus, fully although important making a in of under more devel- this decision. purchasers’ might obligation ease not sur- This withhold oped to disclose this record summary ing requisite judgment, a these motion material fact establish the vive 153-54, pleading allegations satisfy require- notice element of in causation fact.” Id. at 1104 omitted). statutes, (citations plain language of our howev-

92 at 1472 Some er, person draws no distinction between held Ute federal courts have Affiliated a ma- See, any “make[s] who untrue statement applies only “pure” in omissions cases. fact,” (4th one who to state “omit[s] terial versus Collins, F.3d e.g., Cox v. 7 necessary to make FDIC, material fact order Cir.1993); 868 F.2d Grubb misleading.” ... made not (10th statements Cir.1989). 1163 51—123(l)(b).Therefore, to we refuse 11— difficulty in recognize distinguish We recognize a dichoto- misstatements/omissions ing between misstatements omissions. my disapprove any-reading Most could be misstatements characterized 1981 that Securities Act of results in such as either half-truths half-omissions. See practice. 1302, 1305 Little v. 532 F.2d n. First Cal. complaint Because we conclude that (9th Cir.1976) categories 4 of ‘omission’ “The sufficiently forth a claim sets section ‘misrepresentation’ mutually are not ex 11-51-125(2), do not question we reach the misrepresentations clusive. All also non- are by court appeals addressed as to disclosures, at least to extent that there whether doc- fraud-created-the-market is a which failure to disclose facts in the imported trine should be into Colorado law. representation are not true.” Id. However, to appeals’ the extent the court of pure opinion A case of omissions is difficult to read to assume that that doctrine law, imagine, part is a disapprove even the facts of our Ute Affiliated opinion. disclose,” involved “primarily a failure to (emphasis U.S. at 92 S.Ct. at add

ed), only not to disclose. failure See Gru V Waterhouse, F.Supp. ber Price (E.D.Pa.1991). by “The labels them court The district certi denied class selves, therefore, help. little What is based, part, upon fication holding its important is to understand rationale for a standing Rosenthal had no claim assert a presumption of in fact in causation like cases under the Securities Act of 1981 because he Ute, positive no which state purchased in Pennsylvania. Affiliated the bonds ments practical exist: reliance as matter is held that “there is a trans impossible prove.” Wilson v. Comtech actional nexus between Rosenthal and Colo Corp., Telecommunications 648 F.2d 93 rado” because defendants issued the Of (2d Cir.1981).12 thereby ficial Statement Colorado and complaint Nonetheless we note fre- ments and omissions described would herein quently refers to omissions or failures to adversely dis- integrity affect mar- See, e.g., close material facts. First Am. Class ket....”); ("[T]he ¶ id. defendants issued ¶ ("Defendant Compl. Action rectly Dean Witter di- material misstatements and which information wrongs complained assisted in the ... they knew or had reason to know were false by failing herein disclose the material facts misleading, and omitted to state material ¶ herein....”); alleged ("[Defendant] as id. necessary facts make those statements directly wrongs Kutak in the ... assisted com- ("The misleading.”); misleading id. false and plained by failing of herein to disclose the mate- statements of material facts to the District's herein....”); ¶ rial ("[Defendant] alleged facts as id. community, bondholders and to the investment directly Sherman assisted in the and the material facts which defendants failed wrongs complained ... by failing herein disclose, prospects omitted to related to the herein....”); alleged disclose the material facts and risks of the District and include the follow- ¶ ("[Defendant] directly id. Calkins assisted ing....”); ("[T]he ¶ id. true nature of wrongs in the ... complained of herein fail- risk payment to on the 1986 Bonds ing to alleged disclose the material facts subjected be herein-"); ("The was concealed from id. V17 Individual Defen- plaintiffs....”); ¶67 ("[Defendants] id. made recklessly disregard- dants were aware of untrue of material ed the statements facts and omitted contained misstatements therein and therefrom, necessary state omissions material facts and were aware order of their nature.”); made, ¶ ("Each materially make the misleading light cir- id. 23 statements made, recklessly of the defendants either knew or cumstances dis- under which were regarded misleading misleading....”). the fact that the state-

H05 Rosenthal, of bonds to Rosenthal ing the offer and sale 883 P.2d to sell. created an offer that, therefore, Pennsylvania in occurred agree. at 530.13 We court of apply. law The did Colorado provides: “Sec Act of 1981 The Securities reading disagreed with this appeals 11-51-107, 11-51-116, 11-51-105, 11- tions Simms, court pointing out that the Simms 51-123, persons to who apply 11-51-125 ultimately that the transaction had concluded an offer to sell or to sell when sell offer with Colorado a sufficient territorial nexus buy is an offer to state or when made this alleged “that plaintiff had because the § 11—51— in this state.” accepted made and offer, ... occurred in acceptance, or both (1987), 127(1), repealed by eh. 4B C.R.S. (cita- Rosenthal, P.2d at 530 Colorado.” -802, 1990 1, §§ 11-51-101 to Colo. Sess. sec. omitted). marks quotation tion and internal at Laws amended recodified appeals court of concluded The (1995 11-51-102(1), Supp.). § 4B C.R.S. “ requirement that “the transaction Simms every contract of sale or ‘sell’includes ‘Sale’ place take referred to must Colorado” of, sell, disposition security or contract to Id. at In the offer or the sale. either value,” security for an or in a interest against a Colora- context of a suit either every attempt includes or “‘[o]ffer to sell’ who assisted the offeror do offeror those of, dispose to or solicitation of an offer offer offer, § agree. making See 11- we buy, security security in a for to or interest 51-127(1). ll-51-102(10)(a)-(b), value.” 4B C.R.S. (1987), §§ see. 11—51— repealed eh. agree We and hold that the Securi -802, to 1990 Colo. Sess. Laws expressly applies “every Act of ties 51—201(13)(a), §at as amended 11— recodified of, attempt dispose solicitation offer (1995 Supp.). 4B C.R.S. security buy,” of an offer value when The court on district relied Simms Invest- §§ 11- offer made within Colorado. F.Supp. Co. v. E.F. Hutton & 51-102(10)(b), 11-51-127(1); Raymond see (M.D.N.C.1988), interpreted Colo- Comm’n, 36 Org., Lee Inc. Colo. v. Securities Sky rado protect law and stated: “Blue laws (1975), App. rev’d 543 P,2d First, public policies. two distinct the laws grounds, other 556 P.2d 1209 192 Colo. securities, protect purchasers of resident language, a Under this sufficient origin regard security. without to the transactional between Rosenthal nexus exists Second, protect legitimate the laws resident application of and Colorado sustain the by exposing illegitimate issuers is- resident District, Act of 1981. The located regard liability, suers to without mar- to the Colorado, bonds.14 The Dis issued the agree. kets of Id. at 545. the issuer.” We assistance, trict, pre with the defendants’ Statement, pared also wherein the Simms stated: “There the Official Accordingly, requirements jurisdictional purchasers allege for in- fraud. three First, voking Sky language of section plain Blue laws. conclude that the Colorado Second, has or ‘sale.’ and that Rosenthal there must be an ‘offer’ controls ‘security.’ standing under Colorado bring must involve Fi- a claim transaction nally, place transaction must take within law. court must reconsider the The district considering the state.” Id. 546. The district court issue of class before certification any remaining this that the events case concluded surround- claims. prospective participation also

13. The court of reversed the district in- the distribution holding which barred the court's Bettmanns Statement investors in of the Official Colorado Rosenthal, suing representatives. from as class subjects application of defendants to holding This 531-32. not an issue Securities Act of 1981. Likewise, for review on this certiorari. the suffi- argue that the offer sell to defendants ciency purchasers' conspiracy claims is Pennsylva- Rosenthal Witter in came from Dean not before us. nia and not in Colorado. from the defendants Although not a the District is defendant be- Dean Witter’s or dealer of the role as a broker bankruptcy, purchasers' cause its com- District's origin. not affect offer's securities does alleges conspiracy plaint between the District Thus, the defendants. defendants' and the other 1106 -802, 1, 82, §§ 11-51-101 to by ch. sec.

VI 700, Laws and Colo. Sess. recodified appeals’ determi- the court We reverse 11-51-604, 4B §§ 11-51-501 and amended at not suffi- purchasers have nation that (1995 Accordingly, I dissent. Supp.). C.R.S. for violations un- ciently claims pleaded their 11-51-125(2) 11-51-123(1) and der sections I Because it Act of 1981. of the Securities unnecessarily doctrine of addressed the majority opinion on whether The centers fraud-created-the-market, disapprove of we plead to establish plaintiff must reliance appeals’ holding that the doc- the court of and 11—51— claim sections 11-51-123 into law. We imported is Colorado trine 125(2) Act. This Securities the Colorado appeals’ court of determination affirm the properly us on this certio-r issue is not before governs claims law Rosenthal’s that Colorado certiorari, petition ari.1 In for writ their in this ease. We against the defendants challenge whether purchasers did not appeals court of with return this ease required, but whether reliance reliance was district court instructions to remand presumed in this case. Colora could be proceedings consistent with this for further Commissioner, acting as ami- do Securities opinion. cus, argued express that “there is no statuto 123(1) § ry requirement under the 1981 ERICKSON, J., part concurs in and proven.” pleaded Act that reliance be VOLLACK, C.J., part, joins dissents argu purchasers subsequently adopted this concurrence and dissent. response in a It footnote to their brief. improper for this court to consider new concurring part Justice ERICKSON by amici. Farmers’ issues introduced Union dissenting part: Co., Ditch v. Rio 37 Colo. Co. Grande Canal agree majority I with the that the Colora P, 512, 522, 1042, Accord applies do Act to Howard Securities Rosen- Improvement Tunnel Dist. v. Denver Moffat that, agree thal’s claims. I also on this rec 715, (1930), Ry. & S.L. 45 F.2d cert. ord, presumption reliance Affiliated denied, 837, 485, 283 U.S. 51 S.Ct. 75 L.Ed. States, Ute Citizens United 406 U.S. Russell, (1931); Eugene Cervi & v.Co. (1972), 31 L.Ed.2d 741 inap Colo.App. 506 P.2d plicable, and that this court need not address (1972), aff'd, 184 Colo. 519 P.2d 1189 availability of the doctrine fraud-creat (1974). By deciding necessity pleading However, disagree ed-the-market. I with reliance an action under the Colorado Se majority’s three of the conclusions: Act, majority curities skirts the issues question necessity pleading by parties only raised addresses reliance under the Colorado Act interjected by new issue the amicus brief. court; properly before this appropriately evidentiary cannot consider II presumptions stage proceed at this ings; al by majority, As stated with view leged 12(b)(5) sufficient facts sustain them claims disfavor motion to dismiss claim, under sections 11-51-123 and Dunlap failure state v. Colora- §§ Colorado Cablevision, Inc., Securities Act. Springs 11-51-123 do 11-51-125(2), (1987),repealed (Colo.1992), 4B C.R.S. uphold a district court’s granted 1. The issues on which we pleading certiorari are: stitute for actual reliance under the appeals Whether the court of provisions erred affirm- anti-fraud of the Colorado Securi- ing 11-51-123, the district court's dismissal the fraud (1987 § ties Act of 4B C.R.S. municipal purchasers by claims of bond im- Supp.). & 1994 interpreting pleading properly require- Whether the Colorado Securities Act of of section ments Securities 11-51-123 of the Colorado 11-51-127(1), (1987 as set forth in 4B C.R.S. Act, -908, §§ 11-51-101 to 4B Supp.), applies & purchase to a securities (1987 Supp.). & 1994 C.R.S. place when both the offer and sale take outside adopting the court of Whether the fraud-created-the-market erred in of the state of Colorado. as a sub- doctrine

H07 general allegations appears presume “that embrace only if “it a motion grant of such necessary to prove specific no facts that are plaintiff can those beyond that the doubt claim which support support Lujan of his claim.” v. National Wild- the set facts (citation Federation, 871, 889, to him relief.”2 would entitle 497 U.S. S.Ct. life omitted). (1990). See quotation 3177, 3189, marks and internal 111 L.Ed.2d 695 However, where “matters maj. op. at 1099. dissent, in Part IV of this the As discussed presented to are and pleading the outside pointed an absence defendants here [12(b)(5) court, motion by ] the the excluded support in the of evidence record summary judg as one for shall be treated 11-51-123 purchasers’ case under sections 12(b); v. Morri Alexander ment.” C.R.C.P. 11-51-125(2) of the Colorado Securities 118, 444 P.2d Colo. son-Knudsen Act, purchasers have failed to estab- denied, (1968), 1063, 89 cert. 393 U.S. Consequently, lish a basis for 715, real relief. 21 L.Ed.2d 706 Here the summary judgment for should be plead motions record contains “matters outside granted. ing,” including the Official Statement and excerpts in

deposition which Rosenthal ad directly rely mits he did not on the Official Ill Thus, the motions Statement. defendants’ summary should be as motions for treated may appropriately This court evi- consider judgment. stage dentiary presumptions at this summary judgment A motion is proper- for proceedings. majority correctly The states affidavits, ly granted pleadings, “when presumptions “procedural tools to depositions, or show that is admissions there evidentiary delineate the burdens of the genuine any no as to issue material fact and parties maj. op. at trial.” See moving party judgment entitled However, evidentiary at trial and standards as a matter of law.” Civil Serv. Comm’n v. to be on a for evidence considered motion Pinder, (Colo.1991). 645, 812 P.2d See summary judgment easily are not so sev- 56(c). carry C.R.C.P. The movant must ered. establishing burden of the nonexistence of a ruling summary judg- [I]n on motion for fact, Pinder, genuine issue of material ment, judge must view evidence 649, “may satisfy by P.2d at this burden through presented prism sub- demonstrating that an there is absence of evidentiary conclu- stantive burden. This support evidence the record to the non- by of this sion is mandated the nature Id.; moving party’s Corp. case.” see Celotex question determination. here Catrett, 317, 322, v. 477 U.S. 106 S.Ct. reasonably jury could find either whether that, (holding 91 L.Ed.2d 265 plaintiff by his proved ease when the nonmovant bears the burden required quality quantity of evidence trial, proof summary judgment is warrant- ' governing that he did not. law or showing if the nonmovant “fails to make ed reasonably jury find for could Whether sufficient to establish the existence an however, case”). party, cannot either be defined [its] element essential “whole- governing evi- except by the criteria what summary utility” judg- some of a motion for “is, trial, test, jury find for dence would enable the advance not as defendant: It formerly either the or the on bare found in contentions say jury that a could jargon pleadings, makes no sense legal but on the intrinsic merits, reasonably party actuality find for without whether there real either gov- what standards relief defense.” Sullivan v. some benchmark as to basis Davis, 172 Colo. ern its and within what deliberations (citation fall, quotation must internal marks boundaries its ultimate decision omitted). 12(b), Unlike rule rule 56 does these standards and boundaries are 54(b), nying Pursuant to C.R.C.P. class the district court certification. The court’s action un- entry judgment der on the rule 54 enabled directed final to obtain 12(b)(5) appellate delay. on the order de- review without dismissal and which results of conduct mining the course evidentiary applicable by the provided fact Cobb, Raney Fort & Sons loss.” T.J. standards. Auth., 717 F.2d Irrigation Fuel Okla. Inc., 477 U.S. Liberty Lobby,

Anderson (citation Cir.1983) (10th and internal L.Ed.2d 254-55, 106 S.Ct. denied, omitted), cert. marks quotation majority’s con (1986). Contrary to the 202 1285, 1026, L.Ed.2d 687 79 104 S.Ct. U.S. may be presumption clusion, evidentiary an See, e.g., motion. pre-trial of a determinative 247, 108 224, Levinson, 485 U.S. Basic Inc. v. causal the Proof of demonstrates reliance (allow (1988) 194 99 L.Ed.2d S.Ct. fraud and a a connection between defendant’s pre-trial for a ing presumption a of reliance id.; Storage Tech loss. In re plaintiffs See motion). also Michael See class certification 1072, F.Supp. Corp. Litig., 630 nology Sec. 2333, 110, D., 109 S.Ct. 491 U.S. H. v. Gerald Barrack, (D.Colo.1986)(citing Blackie 1077 (1989) (affirming grant a L.Ed.2d 91 denied, (9th Cir.1975), cert. 524 F.2d 891 upon a conclusive summary judgment based (1976)) 57, 50 L.Ed.2d 97 S.Ct. U.S. presumption presumption paternity). required 10b- (discussing under rule reliance invoked, reliance, and “sub if is rebuttable Krendl, 5); The Securities Cathy Stricklin any, if adjustment, as ject on to such remand Regu Duplicate A Reduction in Act 1981: Basic, demand.” developing circumstances lation, (Sept. Law. Colo. 250, 108 993. at 485 U.S. at 1981). “allegations majority holds that necessary to or causation are of reliance IV cognizable Maj. op. at support claim.” a event, majori1 disagree I with the any In disagree that al 1101-1102. I and conclude purchasers need ty’s conclusion that the presumed legations of direct or reliance are plead only “that a made material defendant satisfy necessary to the threshold level or omissions that caused the misstatements which, turn, necessary sup causation plaintiffs harm” to their claims under sustain is, pur That port cognizable a claim. 11-51-125(2) sections 11-51-123 allege must that reliance on the chasers their maj. op. Act. at Colorado Securities See misrepresentations caused the defendant’s relief, purchasers 1103. To be entitled purchasers to a financial loss. See suffer on the defendants’ must establish reliance -125(2). 11-51-123, §§ 3 Edward J. Dev- Cf. or omissions as an statements material ele al., Jury itt Practice and Instruc et Federal private ment of their claims under sections (4th 1987).4 tions 101.02 ed. 11-51-125(2). 11-51-123 and See Boettcher (Colo. Munson, & Co. v. 854 P.2d Supreme has The United States Court 1993).3 “positive proof held that of reliance” is not a recovery prerequisite to in a securities fraud Traditionally, damages private action for Ute, at case. 406 U.S. plaintiffs on a predicated 10b-5 is under rule Affiliated However, ap- that court has S.Ct. at 1472. misrepresen direct reliance on defendant’s proved only presumptive two theories of reli- plaintiff A tations or material omissions. (1) presumed proves by showing misrep ance: reliance on material reliance “the (2) id.; omissions, factor in presumed resentation is substantial deter reliance scheme, defraud; Although explic- misrepresented section does not or artifice to or reliance, itly require we have held that that sec- a material fact or omitted to state a material fact Boettcher, parallels tion federal rule 10b-5. See necessary in order to make the statements 208; People Riley, P.2d at misleading, light were made not of the circum- (Colo.1985). requires Rule reliance. 10b-5 stances; engaged in a fraud or deceit Lafferty See O’Connor v. R.F. & 965 F.2d purchase connection with the of a securi- sale (10th Cir.1992). (3) (4) ty; knowingly; acted the defendant plaintiff justifiably upon that the defen- relied federal lists the essential ele- (1) 4. The instruction conduct; dant’s that the suffered of a 10b-5 claim: that the defendant ments damages as a result of the defendant's conduct. instrumentality of interstate commerce an used Devitt, supra § facility exchange; 101.02. national securities or a that device, employed a defendant either

H09 material,” were misrepresentations of fraud-on-the-market.5 the doctrine reasonable, i.e., “induce at Basic, at 108 S.Ct. 485 U.S. See misjudge the value relying the doc- approved investor courts federal Some “(3) shares;” a third were traded shares trine of fraud-created-the-market See, e.g., market;” plain- “that reliance.6 theory presumptive an efficient All three theo- Raney, F.2d 1330. shares between time T.J. tiff traded reliance, presumed are theories time ries made misrepresentations were revealed”). causation. or actual presumed truth was us, before On record of fraud-created-the-market The elements admittedly read Official State- did not include, minimum, legal or economic and, thus, allege prove direct cannot unmarketability of issue. the securities reliance, pur- direct reliance. Absent Co., May 27 F.3d v. Zima & See Ockerman prove facts allege and sufficient chasers must Cir.1994).7 (6th action This 1159-60 presumption of allow a reliance. motion sum- simply withstand a for cannot agree majority pre- that the I with the mary presumption of judgment based on the totally inappli- sumption of Ute is “Affiliated complaint at fraud-created-the-market. The Maj. op. ease.” at 1103. present cable to the allege sufficiently hand not the unmark- does purchasers do not the raise doctrine bonds, etability of the nor does record the Finally, as discussed fraud-on-the-market. Rather, unmarketability. establish that the below, alleged purchasers the not have complaint alleges had a “[defendants that proven sufficient facts to otherwise invoke duty to and promptly disseminate accurate fraud-created-the-market, presumption the truthful information ... so that the market theory applicable. were hold even we to price of District’s 1986 Bonds be the would presumption To invoke the of fraud-creat- and based on truthful accurate information.” ed-the-market, purchasers allege must the all ¶ Compl. First Am. Class Action 24. The Basic, of its various elements. See U.S. complaint alleges purpose also that the n. at (holding at 248 108 S.Ct. 993 n. 27 effect of the OfficialStatement was: presumption in order to invoke the (i) motion, pre-trial market otherwise unmarketable fraud-on-the-market “(1) bonds, plaintiff allege: price the must that the inflate the of the 1986 Bonds defen- (2) public dant made misrepresentations; the facts concern- to conceal adverse (1983), pre- 5. Fraud-on-the-market creates a rebuttable doctrine fraud- L.Ed.2d 949 sumption theory plaintiff requires of reliance based es- on the created-the-market price security open developed knowingly in an con- tablish "that defendants available, by spired bring market is determined all the market which material securities onto information, marketed, misinformation, intending and omissions. were entitled to be Basic, 241-47, reasonably purchasers, plaintiff] at U.S. at 108 S.Ct. 988-92. [the defraud "Accordingly, availability mar- [under fraud-on-the-market relied on the [securities’] theory,] any misrepresentation apparent genuine- fraudulent ket ness, as an indication of their price damage omission will taint to the the scheme to defraud result of buyers regardless personal plaintiff] Id. [the or sellers of their loss.” at 469-70 suffered a DBLKM, Inc., (footnote knowledge omitted), quoted Raney, or reliance.” v. F.2d Alter in T.J. (D.Colo.1993). F.Supp. at 1332. security economically 6. doctrine of fraud-created-the-market “is 7.A "if no unmarketable because, theory rely buy assuming based on the that investors not on the it full dis- investor would closure, integrity price, integrity security the market but on the patently See worthless.” Alter, Ockerman, F.Supp. "security legal- the market itself." A 27 F.3d fraud, if, Consequently, ly regulatory the doctrine holds that investors unmarketable absent rely agency issuing municipality be able to on the fact that have "should local or the would authorize, governments required by prevent would not been underwriters law or forbid the security.” would not If finance brokers offer to issuance of the would “proves they were knew unmarketable.” Ock bonds sell bonds no more than that the would rate, May higher price Zima & 27 F.3d been offered or a v. at a lower erman Cir.1994). (6th by articulated rather never As Fifth Cir than that have been Cir.1981), Sklar, (5th Shores, marketed, 647 F.2d 462 issued he recover.” cannot in Shores cuit denied, 459 U.S. F.2d at 470. rt. ce payments

ing to which would be the risks (ii) maintain an artificial- subjected, and The PEOPLE of State price Colorado, 1986 Bonds ly high Complainant, market for the concealing nature of the risk to the true subjected. payment would be which the KUNTZ, Jr., Samuel Osborn ¶ Although purchasers’ complaint Id. 66. Attorney-Respondent. “unmarketable,” the substance uses the term No. 95SA366. complaint involves the market value of their bonds, marketability. not their Like- Colorado, Supreme Court of wise, in this case fails to reveal the record En Banc. unmarketability of economic the bonds. 8, 1996. Jan. Further, allege do not legal not reveal unmarketa- record does i.e., bility, misrepre made “defendants issuing or omissions to the munici

sentations that, agency

pality regulatory or to a such made, govern

had full disclosure been entity required by

mental would have been deny

law the bonds’ issuance.” See Ocker

man, 1160; Raney, 27 F.3d at T.J. 717 F.2d

at 1333. summary

The defendants are entitled to

judgment on this record because have

pointed to the absence of evidence in the support part

record to reliance on the

purchasers because

failed to genuine demonstrate either that a precludes entry

issue of material fact

summary judgment or that a real basis for Thus, respectfully

relief exists. I dissent portion majority’s

from that opinion purchasers’

which allows the claims under

sections 11-51-123 and proceed

Colorado Securities Act to on the

allegations purchasers’ made in the first complaint.

amended class action On the rec- us, entry

ord I affirm before

judgment for the defendants. Counsel, Donnelly, Disciplinary

Linda I am say authorized to Coyle, Chief James Disciplinary Justice C. Assistant Coun- sel, joins Denver, VOLLACK in this concurrence and Complainant. dissent. Kuntz, Jr., Samuel Osborn Colorado

Springs, Pro Se.

PER CURIAM. respondent lawyer discipline this proceeding, Kuntz, Jr., Samuel Osborn has admitted in stipulation, agreement, misconduct, conditional admission 241.18, seriously neglected that he

Case Details

Case Name: Rosenthal v. Dean Witter Reynolds, Inc.

Court Name: Supreme Court of Colorado

Date Published: Dec 18, 1995

Citation: 908 P.2d 1095

Docket Number: 94SC403

Court Abbreviation: Colo.