The Principles of Principals

Davis Graham & Stubbs didn't 'create a false impression' in energy asset purchase, Colorado Supreme Court affirms

A lawsuit against Denver firm Davis Graham & Stubbs appears to be resolved after the Colorado Supreme Court issued a ruling in its favor last week.

Rocky Mountain Exploration Inc., an oil and gas company that was opposite a DGS client in a transaction, had sued the law firm and one of its partners, Gregory Danielson, for breach of fiduciary duty, fraud and civil conspiracy. DGS’ client, Tracker Resource Exploration, had used an agent company to acquire oil and gas assets from RMEI, and RMEI claimed the law firm had misrepresented that the agent was its client and not Tracker. But on June 11 the supreme court upheld the district and appellate courts’ decisions that ruled in favor of DGS on all claims.

RMEI v. Davis Graham & Stubbs hinged upon the Restatement (Third) of Agency that governs contract practices. Under those principles, the supreme court found that while Tracker’s identity was concealed in the transaction, its involvement was not, so RMEI could not avoid its contract with Tracker’s agent. Justice Richard Gabriel delivered the majority opinion while Justice Monica Márquez dissented, with Justice Nathan Coats joining the dissent.

To read this story and other complete articles featured in the June 18, 2018 print edition of Law Week Colorado, copies are available for purchase online.