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

Appellants Sikora Nelson and Paul Dorsey challenged the district court’s order requiring them to post an appeal bond of $1,007,294 in order to pursue their appeals objecting to a class action settlement. Plaintiffs initiated the underlying class action suit against Defendants Western Union Company and Western Union Financial Services, Inc. (collectively, “Western Union”), based on the fact that, at any given time, Western Union maintains between $130 and $180 million in wire transfers sent by Western Union customers that fail for some reason. These funds belong to Western Union’s customers, but Western Union returns this money (minus administrative fees) only when a customer requests a refund. Frequently, however, the customer is unaware that the wire transfer failed and thus does not know to ask Western Union to return his money. And Western Union, although possessing the customer’s contact information, does not notify the customer that his wire transfer failed, but instead holds the unclaimed money and earns interest on it. Eventually, after several years, the law of the state where the customer initiated the wire transfer requires Western Union to notify the customer that his unclaimed funds will soon escheat to the state. At that time, Western Union uses the contact information it had on record to give the customer this required notice. If the customer still fails to claim his money, those funds (minus the administrative fees) escheat to the relevant state, which then holds the funds until the customer claims them. Finding no reversible error in the district court's decision to impose the appeal bond, the Tenth Circuit affirmed, but reduced the amount of that bond. View "Tennille v. Western Union Co." on Justia Law

Seneca Insurance Company paid $1 million to settle a lawsuit in which its insured alleged Seneca had mishandled insurance claims for hail damage to the insured’s property. Seeking to recoup the costs of defending and settling the lawsuit, Seneca brought this action for implied equitable indemnity and negligence against its insurance adjuster, Western Claims, Inc., and Western Claims’ agent Lou Barbaro. The district court allowed Western Claims to discover and admit as evidence at trial correspondence containing advice from Seneca’s lawyers regarding the underlying hail damage claim and litigation. It concluded Seneca put the advice at issue in this lawsuit, thereby waiving any attorney-client privilege or work-product protection. The jury ultimately found in Western Claims’ favor. On appeal, Seneca sought a new trial, arguing the district court erred in concluding Seneca put the legal advice at issue. Western Claims cross appealed, arguing that even if the district court erred, Western Claims was nevertheless entitled to judgment as a matter of law on both of Seneca’s claims. After review, the Tenth Circuit concluded that because Seneca cited “advice of counsel” to justify settling with its insured in the underlying action, Seneca could not shield that advice from Western Claims. Accordingly, the Court affirmed the district court's decision that Seneca waived any attorney-client privilege or work-product protection. The Court did not reach Western Claims’ cross appeal. View "Seneca Insurance Co. v. Western Claims" on Justia Law

Two companies, Derma Pen, LLC and 4EverYoung, entered a sales distribution agreement. Under the agreement, Derma Pen, LLC obtained the exclusive right to use the DermaPen trademark in the United States. 4EverYoung had a contractual right of first refusal, allowing purchase of Derma Pen, LLC’s U.S. trademark rights upon termination of the distribution agreement. Derma Pen, LLC terminated the agreement, and 4EverYoung wanted to exercise its contractual right of first refusal. The parties reached an impasse, and 4EverYoung started using the DermaPen trademark in the United States. Derma Pen, LLC sued and requested a preliminary injunction to prevent 4EverYoung’s use of the trademark. The district court declined the request, concluding that 4EverYoung was likely to prevail. This appeal to the Tenth Circuit followed, presenting the question: whether Derma Pen, LLC was likely to prevail on its claims of trademark infringement and unfair competition by proving a protectable interest in the trademark. The Court concluded Derma Pen, LLC was likely to prevail by satisfying this element. The district court was reversed and the case remanded for further proceedings. View "Derma Pen v. 4EverYoung Limited" on Justia Law

Plaintiffs DISH Network Corporation and DISH Network LLC sought a declaratory judgment that their commercial general liability and excess liability insurers (collectively the Insurers), Arch Specialty Insurance Company, Arrowood Indemnity Company, Travelers Indemnity Company of Illinois, XL Insurance America, Inc., and National Union Fire Insurance Company of Pittsburgh, Pa., had a duty to defend and indemnify plaintiffs in an underlying patent infringement action. The district court granted summary judgment in favor of the Insurers, plaintiffs appealed, and the Tenth Circuit reversed and remanded for further proceedings. On remand, the Insurers moved again for summary judgment, but on different grounds. The district court granted the Insurers’ motions, and plaintiffs appealed. Finding no reversible error this time, the Tenth Circuit affirmed the district court's judgment. View "Dish Network v. Arch Specialty Insurance" on Justia Law

In 2008, Wells Fargo extended a $14 million line of credit to Gorsuch, Ltd., a ski equipment, apparel, and home furnishing company. In 2009, when Gorsuch's winter sales were lower than expected, Wells Fargo suspended the line of credit. Gorsuch, Ltd. and several Gorsuch Entities (Gorsuch, Ltd., B.C.; Gorsuch, Limited at Aspen; Gorsuch, Limited at Keystone Mountain; and Gorsuch Cooper, LLC) sued Wells Fargo for damages. The Gorsuch Entities argued they were intended third-party beneficiaries of the Credit Agreement and were not subject to a clause precluding third-party beneficiaries from bringing suit. The district court disagreed and dismissed them from the litigation. After Gorsuch, Ltd. and Wells Fargo proceeded to arbitration, Gorsuch Cooper and Gorsuch, Limited at Aspen sought to amend the complaint to add additional tort claims. The district court denied the motion, finding: (1) Gorsuch Cooper and Aspen were no longer parties; and (2) they had not shown good cause to amend after the deadline established in the scheduling order. On appeal, the Gorsuch Entities challenged the order dismissing them from the case. Gorsuch Cooper and Aspen appeal the denial of their motion to amend the complaint. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Gorsuch, LTD. v. Wells Fargo" on Justia Law

Plaintiffs-appellees John Niemi, Robert Naegele, III, and Jesper Parnevik claimed that defendants-appellants Erwin Lasshofer and three companies affiliated with him, along with other co-conspirators, perpetrated a fraudulent financing scheme that caused the collapse of Plaintiffs’ large-scale real estate development project in Breckenridge, Colorado. The district court rejected Defendants’ challenges to standing, jurisdiction, and venue, and entered a default judgment of approximately $185 million in favor of Plaintiffs. Upon review of that judgment, the Tenth Circuit affirmed the district court with two exceptions: (1) the Court reversed as to personal jurisdiction over Innovatis Immobilien GmbH; and (2) vacation of the district court's contempt order. View "Niemi v. Lasshofer" on Justia Law

Plaintiff-Appellant, Security Service Federal Credit Union (“SSFCU”), appealed a district court’s summary judgment in favor of Defendants- Appellees, including First American Mortgage Funding, LLC (“FAM”) and First American Mortgage, Inc.; and Stewart Title of California, Inc., Orange Coast Title Company of Southern California, and Lawyers Title Company (together, the “Closing Agents”). In August 2003, SSFCU’s predecessor in interest, New Horizons Community Credit Union, entered into a Funding Service Agreement with FAM, under which FAM originated 26 loans to individual borrowers for the purchase and construction of residential properties in Colorado and California. The Closing Agents performed closing procedures. SSFCU maintained that the FAM Defendants and Closing Agents, through a variety of acts and omissions, wrongfully induced New Horizons to fund these loans to straw borrowers. SSFCU further contended that the loan transactions were a vehicle to misappropriate some $14 million in loan proceeds. The issue this appeal presented for the Tenth Circuit's review centered on whether SSFCU had the right to pursue those claims pursuant to a 2007 Purchase and Assumption Agreement (“PAA”) between SSFCU and the National Credit Union Administration (“NCUA”), as the liquidating agent for New Horizons. Both the NCUA and SSFCU argued that under the terms of the PAA, the NCUA transferred the “right, title and interest” in the loans and various other assets to SSFCU, including the claims at issue. As the parties to the agreement, the NCUA and SSFCU both understood that a transfer of “the right, title and interest” in the loans was intended to transfer any and all claims relating to those loans. On the other hand, the PAA also provided that “except as otherwise specifically provided” the NCUA retained the “the sole right to pursue claims . . . and to recover any and all losses incurred by the Liquidating Credit Union prior to liquidation.” According to the Defendants, absent a valid assignment from the NCUA, SSFCU could not sue on the claims contained in its Fourth Amended Complaint. The district court agreed with the Defendants. According to the district court, the NCUA retained all claims associated with New Horizons’ losses, it could rely upon the cooperation of SSFCU in pursuing those claims, and, therefore, SSFCU was not a proper party to pursue those claims. The district court did not address an affidavit from the NCUA (through its agent) that cast considerable doubt on its interpretation. The district court held that SSFCU was not a proper plaintiff to assert the claims set forth in its Fourth Amended Complaint and dismissed those claims with prejudice. The Tenth Circuit reversed, finding that the Defendants were neither parties to (or in privity with any party to) nor third-party beneficiaries of the PAA. "The PAA reflects no intent to benefit the Defendants, let alone allow them to enforce it. Essentially, the Defendants are seeking to enforce a right they contend the NCUA has—an exclusive right to the claims asserted by SSFCU3—which is contrary to the doctrine of prudential standing." View "Security Services v. First American Mortgage" on Justia Law

Lynn Becker contracted with the Ute Indian Tribe of the Uintah and Ouray Reservation (Tribe) to provide services related to the Tribe's development of its energy and mineral resources. Following a dispute concerning Becker's compensation under the contract, Becker brought breach of contract, breach of covenant of good faith and fair dealing, and accounting claims against the Tribe in the United States District Court for the District of Utah. All of Becker's claims were state law claims. Nevertheless, Becker's complaint asserted that the district court had federal question jurisdiction because the case raised substantial issues of federal law. Becker appealed the district court's dismissal of his complaint for lack of subject matter jurisdiction. Finding no reversible error, the Tenth Circuit affirmed. View "Becker v. Ute Indian Tribe of the Uintah" on Justia Law

In October 2004, Cellport Systems, Inc. and Peiker Acustic GMBH & Co. KG entered into an agreement concerning Cellport’s technology for the hands-free use of cellphones in cars. In 2009, Cellport filed suit against Peiker, alleging breach of that agreement and sought royalties for seven Peiker products. The district court awarded Cellport royalties on only two of the products, interpreting an acknowledgment in the license agreement as "a rebuttable presumption." Cellport appealed, and Peiker filed a conditional cross-appeal. Upon review, the Tenth Circuit affirmed in part, reversed in part, and remanded. The Court found that section 1.17(i) of the License Agreement created a category of products on which royalties are due regardless of whether any of Cellport’s patents were infringed; Peiker owed Cellport royalties on those products. On remand, the district court was directed to calculate the damages due Cellport for those two products. Because the district court only briefly addressed the relationship between the "BTPSC" and the "'456 Patent" the Tenth Circuit remanded to allow the district court to determine whether additional royalties were owed to Cellport. With respect to Peiker's cross-appeal, the Tenth Circuit agreed with Cellport that the issue was not ready for appellate review and further held that it was not ripe for review by the district court. View "Cellport Systems v. Peiker Acustic" on Justia Law

David Richison began a payroll processing company in the 1990s in Oklahoma with his niece and nephew, Shannon and Chad Richison. The company was called "Ernest Group, Inc." and did business under the name "Paycom Payroll." David wrote two software programs for use at the company. The first program, ("BOSS") was assigned to Ernest Group in 1999. The second was called "Independence." David left Ernest Group and moved to Maryland where he formed his own payroll company, "Period Financial Corporation." David wrote a third program, "Indy," based in part on Independence. In 2009, Ernest Group filed a copyright infringement suit against David and Period, alleging that Indy infringed on Ernest Group's copyright in BOSS. Shortly after filing its complaint, Ernest Group registered a copyright in Independence, calling it a work-for-hire. By 2011, David had written a fourth program, "Cromwell," which would become a new basis for Ernest Group's lawsuit. The parties ultimately settled and agreed to the entry of a consent decree. All of Ernest Group's claims were released, except a claim for injunctive relief based on infringement. All rights to Independence were assigned to Ernest Group, and the parties agreed that a special master be assigned to determine whether Cromwell infringed on BOSS or Independence. The parties could not agree, however, which version of Cromwell should have been the subject of the special master's analysis. The special master ultimately found copyright infringement occurred, and the district court adopted the special master's report. David and his company appealed. Upon review, the Tenth Circuit found the special master did not document his application of each step of the abstraction-filtration-comparison test, and that "[h]is report reads consonantly with the misconception that an infringement analysis begins and ends with 'copying in fact.'" The Court therefore vacated the district court's order adopting the report and remanded with instructions for the district court to request a more thorough report with which to analyze Ernest Group's infringement claim.View "Paycom Payroll, et al v. Richison, et al" on Justia Law