Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

Articles Posted in Contracts

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Plaintiff Jared Trent Cowen’s 2000 Peterbilt 379, a commercial truck, was in need of repair. To cover the cost, Cowen borrowed money from Defendant WD Equipment, which is owned and managed by Defendant Aaron Williams, in exchange for a lien on the truck and the promise of repayment. After the Peterbilt broke down again only a few weeks after the repairs, it was towed to a local repair company, which estimated that fixing the truck again would cost more than Cowen could afford. Because his Peterbilt was in the shop, Cowen could not make installment payments to WD Equipment. So, in early August, 2013, Cowen began taking steps to refinance the loan. Williams gave Cowen several, contradictory responses as to how much Cowen would need to pay to settle the debt, and he accelerated the payoff date several times, before ultimately setting a deadline. Around the same time, Cowen defaulted on another loan secured by another one of his trucks, a 2006 Kenworth T600. This loan was owed to Defendant Bert Dring, the father-in-law of Williams, who held a purchase-money security interest in the truck. Dring lured Cowen under false pretenses to his place of business to repossess the Kenworth. Cowen filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code on the day of the deadline for paying off the Peterbilt, and which was within the ten-day cure period for the Kenworth. He notified Defendants of the filing and requested the immediate return of both trucks. But Defendants refused. Cowen moved the bankruptcy court for orders to show cause why Defendants should not be held in contempt for willful violations of the automatic stay. The bankruptcy court granted the motions and ordered Defendants to “immediately turn over” the trucks to Cowen. When Defendants did not comply with the bankruptcy court’s turnover order, Cowen filed an adversary proceeding for violations of the automatic stay. A few months later, the bankruptcy court dismissed the underlying bankruptcy case because, without the trucks, Cowen had no regular income, which rendered him ineligible for Chapter 13 relief. However, the bankruptcy court expressly retained jurisdiction over the adversary proceeding. During the adversary proceeding, Defendants again asserted that Cowen’s rights in the trucks had been properly terminated by Defendants before the bankruptcy petition was filed, and so they could not have violated the automatic stay. The court disagreed, and Defendants timely appealed this decision to the district court, which reversed on the calculation of damages but otherwise affirmed the bankruptcy court’s order. Defendants then appealed to the Tenth Circuit, arguing, among other things, that the bankruptcy court exceeded its jurisdiction, that it lacked constitutional authority to enter a final judgment in this adversary proceeding, and that the bankruptcy court misinterpreted section 362 (the automatic stay provision). The Tenth Circuit agreed, reversed and remanded. View "WD Equipment v. Cowen" on Justia Law
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LeGrand Belnap, M.D., was a surgeon at the Salt Lake Regional Medical Center (“SLRMC”). Dr. Belnap and SLRMC entered into a Management Services Agreement under which he would provide consulting services to help SLRMC develop a new surgical center. The Agreement contained an arbitration provision, including an agreement to arbitrate questions of arbitrability. SLRMC subsequently disciplined Dr. Belnap for alleged misconduct and then reversed course and vacated the discipline. As a result, Dr. Belnap brought various claims against SLRMC, its alleged parent company, and several of its individual employees. These Defendants moved to compel arbitration on the basis of the arbitration provision in the Agreement. The district court determined that most of the claims fell outside the scope of the Agreement, and granted in part and denied in part the motion. Defendants appealed the portions of the district court’s order denying their motion to stay litigation and to compel arbitration, arguing: (1) because the parties agreed to arbitrate arbitrability, the district court erred when it failed to submit all questions of arbitrability to an arbitrator; and (2) even if the parties did not agree to arbitrate arbitrability, the district court erred when it found that any of Dr. Belnap’s claims fell outside the scope of the Agreement, despite also finding that the Agreement’s dispute-resolution provision was broad. The Tenth Circuit found that by incorporating the JAMS Rules into the Agreement, Dr. Belnap and SLRMC evidenced a clear and unmistakable intent to delegate questions of arbitrability to an arbitrator. Nevertheless, the Tenth Circuit concluded the district court reached the right outcome regarding Dr. Belnap’s first claim against SLRMC (compelling that claim to arbitration) and upheld that portion of its order. The Court felt “constrained,” however, to reverse the order as to the remainder of the SLRMC claims. The Court remanded, instructing the court to compel all of Dr. Belnap’s claims against SLRMC to arbitration. With respect to Defendants wh did not sign the Agreement, the Court held they were not entitled to enforce the arbitration provision of the Agreement. Thus, the Court affirmed the district court’s order in this respect. View "Belnap v. Iasis Healthcare" on Justia Law

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Defendants-Appellants Ultegra Financial, its CEO Muhammad Howard, (collectively Ultegra Defendants) and Clive Funding, Inc., appealed a district court’s order denying their motion to compel arbitration. In 2013, Ragab entered into business relationship with the Ultegra Defendants. The parties had six agreements. The agreements contained conflicting arbitration provisions; the conflicts involved: (1) which rules would govern, (2) how the arbitrator would be selected, (3) the notice required to arbitrate, and (4) who would be entitled to attorneys’ fees and on what showing. In 2015, Ragab sued the Ultegra Defendants for misrepresentation and for violating several consumer credit repair statutes. The district court found that Ragab’s claims fell within the scope of all six agreements. The Ultegra Defendants moved to compel arbitration. The district court denied the motion to compel, concluding that there was no actual agreement to arbitrate as there was no meeting of the minds as to how claims that implicated the numerous agreements would be arbitrated. The Ultegra Defendants appealed that finding, and seeing no reversible error in the judgment, the Tenth Circuit affirmed. View "Ragab v. Howard" on Justia Law

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Terrill Graf, bought his fiancee a van for her 50th birthday. Celebrating the birthday and new purchase, Graf drank liquor and then gathered four friends in the van. Plaintiff Wendy Peden was one of those friends. She says that she expected Graf only to show off the van and to photograph the group. But Graf drove away with his friends in the van, crashing it, and causing serious injuries to Peden. She obtained $240,000 in insurance benefits. But Peden claimed more under her insurance policy for underinsured-motorist benefits. The insurer (State Farm) initially denied the claim, but ultimately paid her an additional $350,000, the maximum amount that she could receive under the underinsured-motorist coverage. Peden sued State Farm under Colorado’s common law and statutory law, claiming an unreasonable denial or delay in paying benefits. The issue this case presented for the Tenth Circuit’s review was whether a reasonable fact-finder could conclude that State Farm unreasonably denied or delayed payment of benefits. The district court answered “no.” But the Tenth Circuit disagreed after careful consideration of the facts of this case, and reversed the grant of summary judgment to State Farm. The denial of Peden’s motion for partial summary judgment was vacated, and the entire matter remanded for further proceedings. View "Peden v. State Farm Mutual Auto Ins Co" on Justia Law

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Plaintiff-Appellee Century Surety Company (“Century”) issued a commercial lines policy to Defendant-Appellant Shayona Investment, LLC covering commercial property and business income coverage. Shayona submitted claims, Century paid them, and then Century sought a declaratory judgment in the district court as to whether the claims were fraudulent. At trial, the jury found in favor of Century, awarding it both the amount the company paid Shayona under the policy and the sum it spent investigating the claims. Shayona appealed, arguing that the standard of proof the court instructed the jury to use was wrong. Finding no reversible error, the Tenth Circuit affirmed the district court's entry of judgment on the verdict. View "Century Surety Co. v. Shayona Investment" on Justia Law

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This case centered on a dispute between SOLIDFX, LLC, a software development company, and Jeppesen Sanderson, Inc., a subsidiary of Boeing that developed aviation terminal charts. SOLIDFX sued Jeppesen, asserting antitrust, breach-of-contract, and tort claims. The district court granted partial summary judgment on the antitrust claims, but the remaining claims proceeded to trial. A jury ultimately found in favor of SOLIDFX and awarded damages in excess of $43 million. Jeppesen appealed, challenging only the district court’s ruling that SOLIDFX could recover lost profits on its contract claims. SOLIDFX cross-appealed the district court’s summary judgment order in favor of Jeppesen on the antitrust claims. After review, the Tenth Circuit concluded the License Agreement at issue here unambiguously precluded the recovery of lost profits, irrespective of whether they were direct or consequential damages. But the Court also determined that, even if the agreement could be read to allow the recovery of direct lost profits, the lost profits awarded by the jury here were consequential damages and therefore not recoverable. Because the Court held that SOLIDFX was contractually precluded from recovering the amounts awarded for lost profits, it did not reach the question of whether SOLIDFX proved those lost profits with reasonable certainty, nor did it address the admissibility of expert testimony offered by SOLIDFX to establish the amount of its lost profits. Finally, the Court agreed with the district court that Jeppesen was entitled to summary judgment on SOLIDFX’s antitrust claims. View "Solidfx v. Jeppesen Sanderson" on Justia Law

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Vehicle Market Research, Inc. (VMR) sued Mitchell International, Inc. (Mitchell) to recover royalties Mitchell allegedly owed pursuant to a software licensing agreement. The jury returned a verdict for Mitchell, and VMR appealed. VMR argued: (1) the district court erred by allowing Mitchell, contrary to the law of the case doctrine, to cross-examine VMR’s sole shareholder on the value of VMR as he stated in his personal bankruptcy; and (2) the district court erred in omitting part of VMR’s proposed jury instruction on Rule 30(b)(6) witnesses. Finding no error, the Tenth Circuit affirmed. View "Vehicle Market Research v. Mitchell International" on Justia Law

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Zachery Edens was killed in when an oncoming car turned in front of his motorcycle. David Edens, Zachery's father and the Chief Executive Officer of Edens Structural Solutions LLC (Edens LLC), and Rhonda Edens, Zachery's mother, sent a demand letter to The Netherlands Insurance Company, claiming that Zachery was an insured under Edens LLC’s Netherlands insurance policy and demanding $1,000,000 in underinsured motorist benefits. After Netherlands denied coverage, David, Rhonda, and Edens LLC sued Netherlands. On summary judgment, the district court concluded that David was an insured under the policy because he was an executive officer of Edens LLC, and that Zachery was an insured as David's family member. Despite this, because David and Rhonda Edens owned Zachery's motorcycle, the district court concluded that the Netherlands policy didn’t cover his accident. David, Rhonda and Edens LLC appealed, arguing, among other things, that the policy’s coverage terms were ambiguous and should be construed in their favor. Finding no reversible error in the district court's judgment, the Tenth Circuit affirmed. View "Edens v. Netherlands Insurance" on Justia Law

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ACE Fire Underwriters Insurance Company appeals the district court’s declaration that a policy ACE issued offered total coverage up to $2 million for an accident involving two insured vehicles: a tractor and trailer. The trailer detached from the tractor. The driver pulled off the roadway to reattach, then hoped to make a quick u-turn and continue down the road. But before he could complete the turn, another vehicle collided with the trailer, killing the vehicle's driver. As the insurer of the tractor and the trailer, ACE reached a settlement with the Estate of the vehicle's driver. But the parties conditioned the settlement upon litigating the available limits of the policy. ACE maintained that the policy provisions limited its liability to $1 million per accident, regardless of the number of covered autos involved. The Estate, on the other hand, insisted that ACE’s liability under the policy was $1 million per covered auto involved in each accident. That interpretation of the policy would cap ACE’s liability in this case at $2 million because, according to the Estate, the tractor and the trailer were both involved in the accident. Under the terms of the settlement, ACE initially paid the Estate $1 million. But it agreed to pay it an additional $550,000 if the court accepted the Estate’s interpretation of the policy. Because the Tenth Circuit agreed with ACE that the policy instead limits its liability to only $1 million, it reversed. View "ACE Fire Underwriters v. Romero" on Justia Law

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At the heart of this case was a 2004 oil and gas lease with a five-year term between Trans-Western Petroleum, Inc. and United States Gypsum Co. (“USG”). Trans-Western contacted USG to lease its land at the conclusion of an existing lease between USG and Wolverine Oil & Gas. USG and Trans-Western agreed to terms, and Trans-Western recorded its lease. Wolverine protested the recording of the new lease, claiming that its lease with USG remained valid under pooling and unitization provisions contained in its lease. In response to the protest, USG, in writing and by phone, rescinded the Trans-Western lease. Trans-Western sued for a declaration that the Wolverine lease expired. The district court determined that the Wolverine lease had expired. As part of their agreement, USG and Trans-Western executed a ratification and lease extension. Armed with the determination that the Wolverine lease was no longer in effect, in 2010, Trans-Western also filed a second amended complaint, seeking a declaratory judgment that its lease with USG was valid and damages for breach of contract and breach of the covenant of quiet enjoyment, among other claims. The district court granted partial summary judgment to Trans-Western, determining that USG had breached the lease but denied attorney’s fees due to disputed material facts on damages. During a bench trial on damages, Trans-Western contended that it was entitled to expectation damages for both breach of contract and breach of the covenant of quiet enjoyment because USG deprived it of the opportunity to assign the lease during its five-year term. USG contended, inter alia, that damages for the breach of an oil and gas lease, like any real property, were measured at the date of breach and not pegged to a hypothetical sale at the market’s peak. The district court rejected Trans-Western’s damages theories, finding that Trans-Western was entitled only to nominal damages based on the value of the contract on the date of breach, which had not increased since the date of execution. The Tenth Circuit certified a question of how expectation damages for the breach of an oil and gas lease should have been measured to the Utah Supreme Court. The Utah Supreme Court held that general (or direct) and consequential (or special) damages were available for the breach of an oil and gas lease and should be measured in “much the same way as expectation damages for the breach of any other contract.” In light of the Utah Supreme Court’s holding, the Tenth Circuit remanded this case to the district court for consideration of damages. View "Trans-Western Petroleum v. United States Gypsum Co." on Justia Law