80 P.3d 863

Colorado Court of Appeals,
Div. III.
Doug T. HOANG, Hieu T. Van, Gregory Storbakken, Joan Storbakken, Allan Walts,
and Marsha Walts, Plaintiffs-Appellants,
v.
Jack D. ARBESS, Defendant-Appellee.
No. 02CA0417.
April 10, 2003.
Certiorari Denied Dec. 1, 2003. [FN*]

FN* Justice KOURLIS would grant as to the following issue:

Whether the court of appeals has created a vague, unworkable and unpredictable standard for determining the personal liability of corporate officers by announcing that they may be personally liable if they "cooperate" or are "involved" in the negligent conduct of the corporation, including the conduct of other employees, agents or subcontractors for the corporation.

Home purchasers brought action against home building company and its manager, alleging negligence, negligent misrepresentation, negligent nondisclosure or concealment, violation of the Consumer Protection Act, and violation of statutory disclosure requirements for damages that homes suffered as a result of being built on expansive soils. After the District Court, Jefferson County, Frank Plaut, J., directed verdict in favor of manager, a jury found in favor of purchasers and against company and awarded damages. Purchasers appealed. The Court of Appeals, Davidson, J., held that: (1) purchasers did not waive their right to appeal by relying on the court's directed verdict during a subsequent garnishment proceeding; (2) issue of whether manager was personally liable for alleged negligence under corporate officer responsibility doctrine was for jury; (3) issue of whether manager violated Consumer Protection Act was for jury; (4) statute requiring information disclosure to home purchasers applied to manager acting on behalf of company; (5) purchasers established standard of care for home construction which applied to manager; and (6) specification of damages was a jury function and not a requirement for purchasers.
Reversed and remanded with directions.

West Headnotes

[1] KeyCite Notes

30 Appeal and Error
30IV Right of Review
30IV(B) Estoppel, Waiver, or Agreements Affecting Right
30k153 k. Inconsistent Position or Action in General. Most Cited Cases

Home purchasers did not waive their right to appeal directed verdict in favor of manager of home building company with respect to claims of negligence, negligent misrepresentation, negligent nondisclosure or concealment, violation of the Consumer Protection Act, and violation of statutory disclosure requirements, even though purchasers argued in a garnishment proceeding against company's insurer that trial court's directed verdict in favor of manager indicated company did not act intentionally, where purchasers' reliance on court's directed verdict as a basis for legal argument in garnishment proceeding was not an award or legal advantage under the trial court's judgment, the court's ruling in the garnishment proceeding did not indicate that it relied on purchasers' argument, and purchasers raised no argument in current appeal that manager expected or intended damages to occur. West's C.R.S.A. §§ 6-1-113, 6-6.5-101.

[2] KeyCite Notes

30 Appeal and Error
30IV Right of Review
30IV(B) Estoppel, Waiver, or Agreements Affecting Right
30k160 Acceptance of Benefits
30k161 k. In General. Most Cited Cases

Accepting an award or legal advantage under a judgment generally waives a party's right to appeal that judgment when the appeal may result in a determination that the party is not entitled to what has been accepted; the doctrine precludes a party who accepts a legal advantage under a judgment from seeking review which may again put in issue his right to the benefit which he has accepted.

[3] KeyCite Notes

30 Appeal and Error
30IV Right of Review
30IV(B) Estoppel, Waiver, or Agreements Affecting Right
30k160 Acceptance of Benefits
30k161 k. In General. Most Cited Cases

Formulating a legal argument in a different proceeding from a court's ruling, without more, is not a tangible benefit and is not the kind of legal advantage contemplated by the waiver principle, which precludes a party who accepts a legal advantage under a judgment from seeking review which may again put in issue his right to the benefit which he has accepted.

[4] KeyCite Notes

272 Negligence
272XVII Premises Liability
272XVII(G) Liabilities Relating to Construction, Demolition and Repair
272k1205 Liabilities of Particular Persons Other Than Owners
272k1205(2) k. Developers and Builders. Most Cited Cases

A builder has a duty to use reasonable care and skill in construction of a home, and the failure to do so constitutes negligence.

[5] KeyCite Notes

101 Corporations
101X Officers and Agents
101X(B) Authority and Functions
101k306 k. Individual Liability on Corporate Contracts, and for Unauthorized or Illegal Acts. Most Cited Cases

While an officer of a corporation cannot be held personally liable for a corporation's tort solely by reason of his or her official capacity, an officer may be held personally liable for his or her individual acts of negligence even though committed on behalf of the corporation, which is also held liable.

[6] KeyCite Notes

101 Corporations
101X Officers and Agents
101X(B) Authority and Functions
101k306 k. Individual Liability on Corporate Contracts, and for Unauthorized or Illegal Acts. Most Cited Cases

Fact that a corporate officer is at all times acting on behalf of the corporation does not relieve him of liability for individual acts of negligence.

[7] KeyCite Notes

101 Corporations
101I Incorporation and Organization
101k1.6 Particular Occasions for Determining Corporate Entity
101k1.6(13) k. Torts. Most Cited Cases

The corporate veil need not be pierced where a tort action is brought against an officer or director and the elements of the tort are proved.

[8] KeyCite Notes

101 Corporations
101X Officers and Agents
101X(B) Authority and Functions
101k306 k. Individual Liability on Corporate Contracts, and for Unauthorized or Illegal Acts. Most Cited Cases

To be found personally liable to third persons for a tort, the officer of a corporation must have participated in the tort.

[9] KeyCite Notes

101 Corporations
101X Officers and Agents
101X(B) Authority and Functions
101k306 k. Individual Liability on Corporate Contracts, and for Unauthorized or Illegal Acts. Most Cited Cases

At a minimum, personal liability attaches to a corporate officer who was directly involved in the tortious conduct through conception or authorization, while other direct involvement, such as active participation or cooperation, specific direction, or sanction of the conduct, also may be sufficient.

[10] KeyCite Notes

101 Corporations
101X Officers and Agents
101X(D) Liability for Corporate Debts and Acts
101k350 Actions to Enforce Liability
101k363 k. Trial. Most Cited Cases

Whether a corporate officer approved of, directed, actively participated in, or cooperated in the negligent conduct of the corporation, so as to support a finding of personal liability on part of officer, is a question of fact for the jury.

[11] KeyCite Notes

272 Negligence
272XVIII Actions
272XVIII(D) Questions for Jury and Directed Verdicts
272k1692 k. Duty as Question of Fact or Law Generally. Most Cited Cases

Whether a court should recognize a legal duty in a particular situation is a question of law.

[12] KeyCite Notes

388 Trial
388VI Taking Case or Question from Jury
388VI(A) Questions of Law or of Fact in General
388k139.1 Evidence
388k139.1(5) Submission to or Withdrawal from Jury
388k139.1(17) k. Insufficiency to Support Other Verdict; Conclusive Evidence. Most Cited Cases

388 Trial KeyCite Notes
388VI Taking Case or Question from Jury
388VI(D) Direction of Verdict
388k178 k. Hearing and Determination. Most Cited Cases

A directed verdict is proper only if, after viewing the evidence in the light most favorable to plaintiffs and considering every reasonable inference therefrom, reasonable persons could not disagree that the outcome should be for defendant.

[13] KeyCite Notes

101 Corporations
101X Officers and Agents
101X(D) Liability for Corporate Debts and Acts
101k350 Actions to Enforce Liability
101k363 k. Trial. Most Cited Cases

Issue of whether manager of home building company was personally liable for alleged negligence under the corporate officer responsibility doctrine was for jury, in home purchasers' action against manager and company, alleging negligence, negligent misrepresentation, and negligent nondisclosure or concealment in connection with construction of homes on expansive soils.

[14] KeyCite Notes

92H Consumer Protection
92HII Remedies of Consumer
92Hk36 Actions
92Hk36.1 k. In General. Most Cited Cases

Issue of whether manager of home building company knew or should have known that the construction techniques implemented in constructing homes on expansive soils were insufficient to protect homes from damage and that manager, therefore, should not have directed the sales persons to represent otherwise was for jury, in home purchasers' action against manager under Consumer Protection Act. West's C.R.S.A. § 6-1-105(1)(g).

[15] KeyCite Notes

92H Consumer Protection
92HII Remedies of Consumer
92Hk35 k. Persons Liable. Most Cited Cases

101 Corporations KeyCite Notes
101X Officers and Agents
101X(D) Liability for Corporate Debts and Acts
101k325 k. Nature and Grounds in General. Most Cited Cases

241E Limited Liability Companies KeyCite Notes
241Ek24 Rights and Liabilities of Members or Stockholders
241Ek27 k. Liability for Corporate Debts and Acts. Most Cited Cases

Individual liability of corporate officers and agents is proper under the Consumer Protection Act; this principle applies to an officer of a limited liability company (LLC). West's C.R.S.A. § 6-1-113(1).

[16] KeyCite Notes

92H Consumer Protection
92HI In General
92Hk8 k. Real Estate Sales or Leases. Most Cited Cases

Statute which requires that a developer, builder, or representative supply the home purchaser with certain information regarding soil conditions and building and maintenance methods applies to an individual acting on behalf of a corporate developer. West's C.R.S.A. § 6-6.5-101.

[17] KeyCite Notes

157 Evidence
157XII Opinion Evidence
157XII(F) Effect of Opinion Evidence
157k569 Testimony of Experts
157k571 Nature of Subject
157k571(3) k. Due Care and Proper Conduct. Most Cited Cases

272 Negligence KeyCite Notes
272XVIII Actions
272XVIII(C) Evidence
272XVIII(C)5 Weight and Sufficiency
272k1667 Premises Liability
272k1672 k. Liabilities Relating to Construction, Demolition and Repair. Most Cited Cases

Home purchasers established the standard of care for home construction that was applicable to manager of home building company, in action against manager for negligence; where purchasers' expert testified to the standard of care applicable to "builders" in the state, that standard applied equally to company and to its managers, and manager admitted that his standard of care would have been to read carefully and follow the recommendations of the soils engineer, that he had ultimate responsibility to identify discrepancies in the construction, and that he had an obligation to construct homes in a good workmanlike manner so they would be habitable and suitable for their intended purpose.

[18] KeyCite Notes

101 Corporations
101X Officers and Agents
101X(B) Authority and Functions
101k306 k. Individual Liability on Corporate Contracts, and for Unauthorized or Illegal Acts. Most Cited Cases

The same standard of care that applies to a corporation also applies to an officer, manager, or agent of a corporation who individually approves, directs, or actively participates or cooperates in the negligent conduct.

[19] KeyCite Notes

272 Negligence
272XVIII Actions
272XVIII(C) Evidence
272XVIII(C)5 Weight and Sufficiency
272k1667 Premises Liability
272k1672 k. Liabilities Relating to Construction, Demolition and Repair. Most Cited Cases

Expert witness testimony is not necessary to establish a builder's standard of care in construction defect case involving claims of negligence.

[20] KeyCite Notes

92H Consumer Protection
92HII Remedies of Consumer
92Hk36 Actions
92Hk38 k. Pleading. Most Cited Cases

115 Damages KeyCite Notes
115VIII Pleading
115k146 k. Loss of or Damage to Property. Most Cited Cases

184 Fraud KeyCite Notes
184II Actions
184II(C) Pleading
184k47 k. Damage from Fraud. Most Cited Cases

Specification of what damages were caused by home building company and what damages were caused by company's manager individually was a function of jury, and not a requirement of home purchasers, in purchasers' action against company and manager alleging claims of negligence, negligent misrepresentation, negligent nondisclosure or concealment, violation of the Consumer Protection Act, and violation of statutory disclosure requirements, in connection with construction of homes on expansive soils. West's C.R.S.A. §§ 6-1-113, 6- 6.5-101.
*865

Vanatta, Sullan, Sandgrund & Sullan, P.C., Scott F. Sullan, Ronald M. Sandgrund, Joseph F. Smith, Greenwood Village, CO, for Plaintiffs-Appellants.
White & Steele, P.C., Glendon Laird, John M. Lebsack, Denver, CO, for Defendant-Appellee.

Opinion by Judge DAVIDSON.
In this residential construction defect case, plaintiffs, Doug T. Hoang, Hieu T. Van, Gregory Storbakken, Joan Storbakken, Allan Walts, and Marsha Walts, appeal from the trial court's judgment entered on a directed *866

verdict dismissing their claims against defendant, Jack D. Arbess. We reverse and remand.
Plaintiffs purchased homes built by Monterra Homes (Powderhorn), LLC, whose members consisted of defendant and other LLC's. Defendant also was Monterra's manager. He hired a construction superintendent and some sales and support staff, but used subcontractors to do all the construction.
Plaintiffs' homes were built on a geological formation known as the Deeply Dipping Bedrock Area. The building sites contain angled layers of Pierre Shale and other soils that, when exposed to water, expand and exert pressure on surface structures. These expansive soils and the upturned bedrock require special construction techniques to lessen the risk of the soils damaging homes built on the land.
Defendant had not previously built homes in Colorado and was unfamiliar with the risks of expansive soils. He hired a soils engineer to provide engineering recommendations and a structural engineer to implement those recommendations. The soils engineer advised defendant in person and in a written report of the dangers of building in the area and recommended specific construction and landscaping techniques to mitigate those risks.
The homes were not constructed in accordance with these engineering and landscape recommendations and, as a result, suffered serious damage. Plaintiffs presented evidence that although they were told that their homes were built on expansive soils, they were not told of the specific geological conditions of their land and were told that Monterra constructed the homes to avoid damage from the expansive soils.
Plaintiffs brought suit against Monterra and defendant for negligence, negligent misrepresentation, negligent nondisclosure or concealment, and violation of the disclosure requirements of § 6-6.5-101, C.R.S.2002, and of the Colorado Consumer Protection Act. Monterra and defendant brought a third-party claim against the structural engineer.
After presentation of all the evidence, the court directed a verdict in favor of defendant on all claims, finding that the evidence revealed no circumstances which would deny defendant the protection of the corporate structure. The court found that defendant acted only as a corporate employee and that the facts did not create a legal duty with regard to defendant individually.
The jury found in favor of plaintiffs and against Monterra and awarded significant damages to each homeowner. The jury also found the structural engineer negligent, but found Monterra completely liable for the damages.
Plaintiffs appeal from the directed verdict in favor of defendant, arguing that, contrary to the trial court's ruling, defendant can be held individually liable for his negligent conduct and for statutory violations. We agree with plaintiffs.

I.

[1] As a threshold matter, we deny defendant's motion to dismiss this appeal and reject defendant's contention that plaintiffs waived their right to appeal by relying on the court's directed verdict during a subsequent garnishment proceeding.
Plaintiffs have pursued their judgment against Monterra through a garnishment proceeding against Monterra's insurer. In the garnishment proceeding, the insurer contended that because Monterra "expected or intended" the damages to occur, its policy provided no coverage. As part of their argument for coverage, plaintiffs suggested to the trial court that, because the court had directed a verdict in favor of defendant on plaintiffs' negligence claim, the court necessarily found that defendant did not act intentionally or, in the words of the insurance policy, did not "expect or intend" damages to occur. And, as plaintiffs' reasoning went, if defendant, Monterra's sole actor, did not expect or intend damages to occur, neither did Monterra.
Defendant argues here that plaintiffs received a benefit from the directed verdict by relying on it in making this argument and have therefore waived their appeal of that verdict. We are not persuaded.
*867

[2] Accepting an award or legal advantage under a judgment generally waives a party's right to appeal that judgment when the appeal may result in a determination that the party is not entitled to what has been accepted. The doctrine precludes a party who accepts a legal advantage under a judgment from seeking review "which may again put in issue his right to the benefit which he has accepted." HealthONE v. Rodriguez, 50 P.3d 879, 886- 87 (Colo.2002) (quoting Farmers Elevator Co. v. First Nat'l Bank, 181 Colo. 231, 234, 508 P.2d 1261, 1263 (1973) ); see DiFrancesco v. Particle Interconnect Corp., 39 P.3d 1243 (Colo.App.2001).
However, plaintiffs' reliance on the court's directed verdict as a basis for a legal argument in the garnishment proceeding is not an "award or legal advantage" under the judgment.
[3] Formulating a legal argument from a court's ruling, without more, is not a tangible benefit and is not the kind of legal advantage contemplated by the waiver principle. See DiFrancesco v. Particle Interconnect Corp., supra; First Nat'l Bank v. Theos, 794 P.2d 1055 (Colo.App.1990). Here, defendant does not contend that the garnishment court relied on plaintiffs' argument in deciding that Monterra did not expect or intend damages to occur. Indeed, the court's ruling does not include any such reasoning.
Moreover, plaintiffs' successful appeal will have no effect on either the verdict against Monterra or plaintiffs' ability to collect from the insurer through the garnishment proceeding. Plaintiffs raise no argument in this appeal that defendant expected or intended damages to occur; all of plaintiffs' claims against defendant sound in negligence. See Hecla Mining Co. v. N.H. Ins. Co., 811 P.2d 1083 (Colo.1991) (recovery will be barred only if the insured intended the damages, or if it can be said that the damages were, in a broader sense, "intended" by the insured because the insured knew that the damages would flow directly and immediately from its intentional act).

II.

Plaintiffs contend that the trial court erred by directing a verdict in favor of defendant on their claims for negligence, negligent misrepresentation, and negligent nondisclosure. Specifically, plaintiffs argue that, contrary to the trial court's ruling, it was for the jury to determine whether defendant is liable for his own individual torts. Defendant argues that, as a matter of law, only Monterra, and not defendant acting in his capacity as a corporate manager or officer, had a duty to the home purchasers. We agree with plaintiffs.
[4] A builder has a duty to use reasonable care and skill in construction of a home, and the failure to do so constitutes negligence. See Cosmopolitan Homes Inc. v. Weller, 663 P.2d 1041, 1042, 1043 (Colo.1983) ("An obligation to act without negligence in the construction of a home is independent of contractual obligations such as an implied warranty of habitability." "A contractual obligation gives rise to a common law duty to perform the work subject to the contract with reasonable care and skill.").
[5] The issue here is whether such a duty applies to defendant. While an officer of a corporation cannot be held personally liable for a corporation's tort solely by reason of his or her official capacity, an officer may be held personally liable for his or her individual acts of negligence even though committed on behalf of the corporation, which is also held liable. Snowden v. Taggart, 91 Colo. 525, 531, 17 P.2d 305, 307 (1932) ("To permit an agent of a corporation, in carrying on its business, to inflict wrong and injuries upon others, and then shield himself from liability behind his vicarious character, would often both sanction and encourage the perpetration of flagrant and wanton injuries by agents of insolvent and irresponsible corporations."); see Sanford v. Kobey Bros. Constr. Corp., 689 P.2d 724 (Colo.App.1984) (corporate representative found jointly and severally liable for construction defects he authorized). The parties do not dispute that this principle applies equally to a manager of a limited liability company. See generally § 7-80-101, et seq., C.R.S.2002; Thompson, The Limits of Liability in the New Limited Liability Entities, 32 Wake Forest L.Rev. 1, 21 (1997).
*868

[6] [7] Moreover, that a defendant is at all times acting on behalf of the corporation does not relieve the defendant of liability. See Galie v. RAM Assocs. Mgmt. Servs., Inc., 757 P.2d 176 (Colo.App.1988); Sanford v. Kobey Bros. Constr. Corp., supra. And the corporate veil need not be pierced where a tort action is brought against an officer or director and the elements of the tort are proved. See Sanford v. Kobey Bros. C