On April 23, 2012, the Commercial Litigation team of Byeongsook Seo and Ross Hoogerhyde obtained a $1.5 million judgment for their clients, the estate of a deceased cattle investor from Denver, Colorado (Cecil Hart), along with the widow (Elizabeth Severson) and a cousin (Don Smart) of another deceased cattle investor from Utah (the "Investors"), against Vernon E. Wagner and Wagner-Meyers Enterprises, LLC (the "Ranchers"). The dispute arose out of the Ranchers' failure to adequately manage "invested" cattle.
Until 2011, the Ranchers had owned and operated a beef-cattle ranch that covered hundreds of thousands of acres in Park County, Colorado, a high-altitude, agricultural region of the state. Starting in 2000, the Investors entered into cattle lease agreements with the Ranchers to allow them to lease and breed the Investors' cattle and to auction off the calves born from the cattle each year, known as the "calf-crop." By 2009, the Investors' provided the Ranchers with 1211 cows and 60 bulls.
In exchange for the right to breed the Investors' cattle and auction off the annual calf-crop, the Ranchers agreed to maintain the quality and amount of the Investors' cattle investment and to provide an annual return to the Investors equal to the market value of a certain number of calves. By 2009, the Ranchers had agreed to pay the Investors the equivalent of 363 calves from each calf-crop. The Ranchers suggested that the annual return on the investment would equal close to 17%. The Ranchers were allowed to keep any proceeds generated from the calf-crop, above and beyond the annual returns owed to the Investors.
The Investors, who seldom visited the ranching operations, had received the promised annual payments until 2007. Unbeknownst to the Investors, however, the Ranchers were incapable of adequately funding their cattle operations. In fact, by 2007, the Ranchers convinced one of the Investors, who had been suffering from the late stages of cancer, to lend them hundreds of thousands of dollars to pay for the costs associated with operating their ranch, which they never repaid. Then, in May 2010, the Investors learned that the Ranchers had allowed hundreds of their cattle to die or become malnourished to the point of violating Colorado's animal protection laws. The health of the Investors' surviving cattle was so poor that the Colorado Department of Agriculture seized and auctioned off the Investors' cattle. This led the Investors to sue the Ranchers to recover the value of their lost investment and their promised annual returns.
The Ranchers countersued for breach of contract and argued that the contracts were amended in their favor through oral and course of performance modifications by certain cattle investors who had died in 2008 and 2010, before trial. The Ranchers claimed that the modification took place over a period covering 2000-2009. The surviving Investors, unfortunately, were not as involved in dealings with the Ranchers as the deceased investors.
After two years of chasing the Ranchers through injunctive, bankruptcy and receivership proceedings, Byeongsook and Ross were able to finally try the case. After Byeongsook and Ross introduced evidence mostly through cross-examining the Ranchers, the Court ruled in favor of the Investors on their breach of contract, promissory note and unjust enrichment claims. Not only did the Court award prejudgment interest and the right to recover attorneys fees and costs, the Court awarded the Investors damages down to the penny Byeongsook and Ross asked for.