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

The issue at the heart of this appeal to the Tenth Circuit centered on indemnity stemming from a promise by Martin K. Eby Construction Company’s predecessor to build a water pipeline. Eby engaged another company (the predecessor to Kellogg Brown & Root, LLC), promising to indemnify claims resulting from Eby’s work. While building the water pipeline, Eby accidentally hit a methanol pipeline, causing a leak. At the time, no one knew about the leak. It was discovered over two decades later, and the owner of the methanol pipeline had to pay for the cleanup. The owner of the methanol pipeline sued to recover the expenses from Kellogg and Eby. Kellogg and Eby prevailed, but Kellogg incurred over $2 million in attorneys’ fees and costs. Kellogg invoked Eby’s indemnity promise, suing Eby and its liability insurer, Travelers Casualty and Surety Co. The district court granted summary judgment to Eby and Travelers, leading Kellogg to appeal. To resolve the Kellogg-Eby portion of the appeal, the Tenth Circuit focused on the enforceability of Eby’s promise of indemnity: the promise was broad enough to cover the pipeline owner’s claims against Kellogg for its inaction after Eby caused the leak, but the indemnity clause was not conspicuous; thus, it was unenforceable. The Kellogg-Travelers appeal turned on Kellogg’s argument that Travelers’ insurance policy covered liabilities assumed by its insured (Eby). The Tenth Circuit concluded that because the indemnity clause was unenforceable, it is as if Eby never agreed to assume Kellogg’s liabilities. In the absence of Eby’s assumption of Kellogg’s liabilities, Travelers did not insure Kellogg. Accordingly, Kellogg was not entitled to indemnity from Eby or insurance coverage from Travelers, and Eby and Travelers were entitled to summary judgment. View "Martin K. Eby Construction v. OneBeacon Insurance" on Justia Law

Colorado Golf Club Holding Company LLC (CGC Holding), Harlem Algonquin LLC and James Medick proposed certification of a class action suit. They alleged a group of lenders conspired to create a fraudulent scheme to obtain non-refundable up-front fees in return for loan commitments , and misrepresented their ability and their objective to make good on the promises to meet certain financing obligations as part of a scheme to entice borrowers to pay the up-front fees. The class intended to offer generalized proof that the lenders concealed the financial history of Sandy Hutchens, the principal defendant, and his use of pseudonyms, to preserve the superficial integrity of the operation. The borrowers argued that had they known about this pretense, no putative class member would have taken part in the financial transactions that caused each to lose its up-front fees, amounting to millions of dollars of cumulative losses. The ultimate issue this case presented for the Tenth Circuit's review centered on whether the class could pursue claims under the Racketeer Influenced and Corrupt Organizations Act (RICO). In opposing the claims, the lenders argued that each class member would have to demonstrate that it relied on the lenders’ misrepresentations or omissions to satisfy RICO’s causation element, making a single trial unwieldy and unworkable. The Tenth Circuit held that the lenders were wrong in this respect: RICO class-action plaintiffs are not entitled to an evidentiary presumption of a factual element of a claim. The Court agreed with the district court that a class could be certified in this context. Plaintiffs' theory sufficiently allayed any concerns about Rule 23(b)(3)’s requirement that common issues predominate over those idiosyncratic to individual class members. The Tenth Circuit affirmed certification of the class, but reversed the district court with regard to certification decision as to the lenders’ law firm and lawyers, Broad and Cassel, Ronald Gache and Carl Romano. Because several claims were not properly before the Court in this interlocutory appeal, the Court declined to address: (1) whether plaintiffs’ claims constituted an impermissible extraterritorial application of RICO; (2) whether the plaintiffs could prove proximate cause; or (3) whether the district court properly exercised personal jurisdiction over certain defendants. View "CGC Holding v. Gache" on Justia Law

Westar Energy was an electric company based in Topeka, Kansas that owned several sources of electricity, including the Jeffrey Energy Center (JEC). The JEC was a coal-fired power plant composed of three units: Unit 1, Unit 2, and Unit 3. In 2005, Westar began a project to upgrade the JEC’s existing flue gas desulfurization (FGD) system. Wahlcometroflex Inc. (Wahlco) was a Delaware corporation that designed and manufactured a number of products including FGD dampers. On December 22, 2006, Westar and Wahlco entered into a contract under which Wahlco agreed to manufacture and deliver dampers to Westar for Units 1, 2, and 3. This case involved a dispute over the meaning and application of a liquidated damages in that contract provision under Kansas law. The district court held that Westar did not need to establish that Wahlco's late delivery of the equipment actually delayed Westar’s production schedule in order to recover contractual liquidated damages. Finding no error in that judgment, the Tenth Circuit affirmed. View "Wahlcometroflex v. Westar Energy" 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

Plaintiffs Brett Woods and Kathleen Valdes were state employees and representatives of a class of New Mexico state and local government employees who alleged they paid for insurance coverage through payroll deductions and premiums pursuant to a policy issued by Standard Insurance Company (Standard), but did not receive the coverage for which they paid and, in some cases, were denied coverage entirely. Plaintiffs filed suit in New Mexico state court against three defendants: Standard, an Oregon company that agreed to provide the subject insurance coverage; the Risk Management Division of the New Mexico General Services Department (the Division), the state agency that contracted with Standard and was responsible for administering benefits under the policy; and Standard employee Martha Quintana, who Plaintiffs allege was responsible for managing the Division’s account with Standard and for providing account management and customer service to the Division and state employees. Plaintiffs' ninety-one-paragraph complaint, stated causes of action against Standard and the Division for breach of contract and unjust enrichment; against Standard for breach of fiduciary duty, breach of the implied duty of good faith and fair dealing, and Unfair Practices Act violations; and against Standard and Ms. Quintana for breach of the New Mexico Trade Practices and Fraud Act. The issue this appeal presented for the Tenth Circuit's review centered on whether remand to the state court pursuant to the Class Action Fairness Act (CAFA) was required under either of two CAFA provisions: the state action provision, which excludes from federal jurisdiction cases in which the primary defendants are states; or the local controversy exception, which requires federal courts to decline jurisdiction where, among other things, there is a local defendant whose alleged conduct forms a significant basis for the claims asserted by plaintiffs and from whom plaintiffs seek significant relief. The Court concluded that neither provision provided a basis for remand, and therefore reversed the decision of the magistrate judge remanding the case to state court. But because the Tenth Circuit could not determine whether Defendants have established the amount in controversy required to confer federal jurisdiction, the case was remanded to the district court for the resolution of that issue. View "Woods v. Standard Insurance Co." 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

Headwaters Resources, Inc. carried commercial liability insurance issued by two insurance companies: Illinois Union Insurance Company and ACE American Insurance Company. Headwaters sought reimbursement for its litigation costs arising from a case brought by landowners in Virginia, alleging that Headwaters had caused personal injury and property damage during the construction of a nearby golf course. The complaint alleged that fly ash used in the construction process caused air and water pollution that devalued their homes and created health risks to the homeowners. The insurance companies told Headwaters that defense costs related to Headwaters’ pollution were outside the scope of the coverage and denied the claim. Headwaters sued, and the district court eventually granted summary judgment in favor of the insurance companies, finding that the pollution exclusions in the insurance policies precluded coverage. Jurisdictions that have addressed the scope of a "total pollution exclusion" were either: (1) courts that applied the pollution exclusions as written because they find them clear and unmistakable; or (2) courts that narrowed the exclusions to "traditional environmental pollution," because they found the terms of the exclusion to be ambiguous due to their broad applicability. The Utah Supreme Court had not yet weighed in on this debate, and the federal district court did not pick a side on its behalf. Instead, the district court found that certain of the at-issue pollution exclusions unambiguously applied to bar coverage and that the remaining pollution exclusions, although possibly ambiguous, still applied because the complaints unquestionably alleged traditional environmental pollution. As a result, the complaints triggered the pollution exclusions in all of the policies, and the district court granted summary judgment in favor of the insurance companies. Upon review, the Tenth Circuit found that each of the pollution exclusions was unambiguous, and affirmed the district court’s grant of summary judgment. View "Headwaters Resources v. Illinois Union Insurance Co." 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

Lisa Knitter worked as a "handyman" for Lewis General Contracting, Inc. (LGC) from March to October 2010. During this time, LGC's sole client was Picerne Military Housing, LLC (Picerne), now known as Corvias Military Living, LLC. Knitter performed handyman services exclusively on Picerne properties. She sued Picerne under Title VII of the Civil Rights Act of 1964, alleging: (1) she was paid lower wages than her male counterparts; (2) Picerne effectively fired her in retaliation for her complaints of sexual harassment and wage discrimination; and (3) after she was fired, Picerne denied her application for vendor status in retaliation for her prior complaints of discrimination. The district court granted summary judgment to Picerne, dismissing Knitter's Title VII action because Picerne was not her employer. The district court also dismissed her claim for retaliatory denial of vendor status because Knitter did not apply for employment with Picerne when she applied to be a vendor. Knitter appealed to the Tenth Circuit Court of Appeals. Finding no reversible error, however, the Tenth Circuit affirmed. View "Knitter v. Picerne Military Housing" on Justia Law

MMS Construction & Paving, L.L.C. entered into a subcontract with Head, Inc. to pave asphalt runway shoulders at Altus Air Force Base in Oklahoma. The project was delayed and MMS, expressing concern that Head had not been making agreed payments, quit the job. MMS also complained that completing the job would be more expensive than it originally believed because certain requirements were being imposed that Head said would be waived. After MMS quit, Head finished the job, relying on other subcontractors. MMS sued Head on state-law claims of breach of contract, tortious breach of contract, quantum meruit, and misrepresentation, and brought a claim under the federal Miller Act on Head’s surety bond for the project. Head filed a counterclaim, alleging that MMS breached the contract. After a jury trial, MMS was awarded damages and attorney fees. Head filed a motion for judgment as a matter of law or for a new trial, both of which the district court denied. Head appealed, arguing: (1) the evidence at trial was insufficient to show that Head breached the contract; (2) if there was a breach, it was not material; (3) an Oklahoma statute limited MMS’s breach-of-contract damages to the amount unpaid plus interest; (4) the evidence was not sufficient to establish MMS’s alleged lost-profits damages for breach of contract; (5) MMS did not present sufficient evidence to prove misrepresentation or any damages from misrepresentation, MMS waived the misrepresentation claim, and the award of misrepresentation damages duplicated the award of damages for breach of contract; and (6) MMS was not entitled to attorney fees from Head because the Miller Act does not allow recovery of those fees. Upon careful consideration of the district court record, the Tenth Circuit reversed damages award based on the misrepresentation claim because the jury’s award was not supported by any evidence at trial. On all other issues, the Court affirmed. View "MMS Construction & Paving v. Head, Inc., et al" on Justia Law