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

In 1999, Christopher Sullivan learned through a business acquaintance, Robert Weaver, acquired all interests in a particular oil and gas lease. The then-current operators of the wells on the lease, QEP Energy, made regular payments to Mr. Sullivan for several years. In early 2006 QEP determined that the total payments to Mr. Sullivan by all operators on the lease exceeded his interest in the leases. QEP therefore ceased further payments and sought reimbursement of the overpayment from Mr. Sullivan. He disputed the claim, asserting that QEP owed him additional payments. QEP brought this action in Utah state court, seeking a declaration of the amounts due Mr. Sullivan. It also sought recovery from Mr. Sullivan for the alleged overpayment. Both parties filed motions for partial summary judgment on their claims for declaratory relief. The district court held that the terms of Mr. Sullivan's interest (from when he acquired the original interest in the lease) unambiguously described he should have only received a three percent production-payment. The court granted partial summary judgment in favor of QEP, and dismissed Mr. Sullivan's claims with prejudice. Mr. Sullivan appealed. Upon review, the Tenth Circuit agreed with the district court's analysis of the leases in question and affirmed its decision in favor of QEP.

In this interlocutory appeal, Defendants Medtronic, Inc. (and several of its subsidiaries) appealed a district court's denial of their motion to compel Plaintiff Lenox MacLaren Surgical Corporation (LM) to arbitrate its antitrust claims against them even though none of the Defendants signed the distribution and licensing agreement containing the arbitration provision. Upon review of the district court record, the Tenth Circuit concluded that even if LM's antitrust claims either expressly or implicitly alleged collusion between subsidiary Medatronic Danek USA and one or more of the other Medtronic subsidiaries, they were not "intimately founded in or intertwined with" the obligations in the agreement at issue in this case. "In sum, equity does not demand that LM be compelled to arbitrate its antitrust claims against the Medtronic Defendants. The district court therefore did not err in denying the Medtronic Defendants’ motion to compel arbitration."

Carolina Internet Ltd. appealed the entry of default judgment against it in favor of TW Telecom Holdings Inc. for more than three million dollars. During the pendency of this appeal, Carolina Internet filed a voluntary Chapter 11 bankruptcy petition. The Tenth Circuit had previously interpreted the automatic stay provisions in section 362 of the Bankruptcy Code as not preventing a Chapter 11 debtor-in-possession (like Carolina Internet) from pursuing an appeal even f it was an appeal from a creditor's judgment against the debtor. Nine other circuit courts disagreed with the Tenth Circuit's interpretation, holding that a bankruptcy filing automatically stays all proceedings, even appellate proceedings where the debtor has filed an appeal from a judgment entered in a suit against the debtor. The Court overruled its prior interpretation of the automatic stay provisions in the Bankruptcy Code, which prevented it from proceeding with Carolina Internet's appeal of the default judgment against it. This case was stayed pending bankruptcy court proceedings.

This appeal stemmed from an explosion that severely injured Robbie Griffin at a worksite in Stephens County, Oklahoma. At the time of the explosion, Mr. Griffin was working as an independent contractor for S&W Transports, Inc. Through a settlement agreement, S&W agreed to pay Mr. Griffin for his injuries. The issue before the Court was which of S&W’s insurers had a duty provide coverage for that payment. Mid-Continent Casualty Company covered S&W under a general commercial insurance policy. Union Insurance Company covered S&W under a commercial umbrella insurance policy. Mid-Continent and Union agreed that if Mr. Griffin caused, in whole or in part, his injuries, Mid-Continent must provide coverage. If not, Union provided coverage. Both companies moved for summary judgment in the district court. The court held that Mr. Griffin caused his injuries under Oklahoma insurance law and granted summary judgment for Union. Mid-Continent appealed. Because, after its review, the Tenth Circuit agreed that Mr. Griffin caused, at least in part, his injuries, the Court affirmed the district court's judgment in favor of Union.

In a prior appeal in this case, the Tenth Circuit reversed the district court’s judgment in favor of Union Pacific Railroad Company. The Court remanded to the district court with instructions to dismiss Union Pacific’s breach-of-contract claim without prejudice for lack of jurisdiction. On remand, Union Pacific filed a motion seeking transfer of the claim to the Court of Federal Claims. The district court denied the motion and this appeal followed. On remand, the Tenth Circuit's mandate did not give the district court any discretion, but instead gave a specific instruction to dismiss. "Instead of asking the district court to transfer the case after remand, Union Pacific should have filed a timely motion [with the Tenth Circuit] to recall the mandate." The Court held that Union Pacific's request in its reply brief was not the proper way to seek to recall the mandate. The Court concluded that Union Pacific failed to show good cause of its delay in seeking such relief, and accordingly, the Court denied Union Pacific's request. "The district court acted in accordance with our mandate in denying Union Pacific's transfer motion." The Court affirmed the district court's decision.

The issue before the Tenth Circuit in this case centered on whether property damage caused by a subcontractor's faulty workmanship is an "ocurrence" for purposes of a commercial general liability (CGL) insurance policy. The issue arose from the appeals of Plaintiffs-Appellants Greystone Construction, Inc., The Branan Company, and American Family Mutual Insurance Company (American) who all appealed the district court’s grant of summary judgment in favor of Defendant National Fire & Marine Insurance Company (National). Greystone was the general contractor that employed multiple subcontractors to build a house in Colorado. As is common along Colorado’s front range, the house was built on soils containing expansive clays. Over time, soil expansion caused the foundation to shift, resulting in extensive damage to the home’s living areas. The homeowners sued Greystone for damages, alleging defective construction by the subcontractors who installed the foundation. Greystone was insured under CGL policies provided by two insurers. American provided policies for 2001 to 2003, and National provided policies for 2003 to 2006. The American and National policy periods did not overlap. Greystone tendered a claim to American and then National. National denied it owed Greystone any defense. In district court, the builders and American sought to recover a portion of their defense costs from National. Upon review, the Tenth Circuit concluded that damage arising from a poor workmanship may fall under a CGL policy’s initial grant of coverage, even though recovery may still be precluded by a business-risk exclusion or another provision of the policy. The case was remanded to the district court for further proceedings.

Marcus Food Company, a Kansas corporation based in Wichita, entered into an oral agreement in 1999 with Robert DiPanfilo, a citizen of Canada, under which DiPanfilo served as an independent sales and purchasing agent for the company. The agreement included a provision that rendered DiPanfilo liable to Marcus Food for 45% of any net losses on his accounts. After the parties’ relationship ended 10 years later, Marcus Foods attempted to collect on debts allegedly owed it under the agreement by suing DiPanfilo in the federal district court. A default judgment was entered against DiPanfilo following his failure to appear or respond to the complaint. DiPanfilo then moved to set aside the default judgment six-and-a-half months later on the grounds that it was void for lack of jurisdiction and/or because his delay was due to excusable neglect. After a hearing, the court denied DiPanfilo’s motion, finding personal jurisdiction over DiPanfilo, subject matter jurisdiction over the case, and insufficient support for his excusable-neglect argument. DiPanfilo appealed. Upon review of the district court's record and the applicable legal authority, the Tenth Circuit found no error in the district court's judgement and affirmed its judgement in favor of Marcus Foods.

Plaintiffs DISH Network Corporation and DISH Network LLC (Dish) filed a diversity action in the District of Colorado seeking a judgment declaring that Dish's insurers had a duty under Colorado law to defend Dish in a patent infringement suit. The district court held that the underlying complaint did not allege an "advertising injury" under the policies issued to Dish by the five defendant Insurers. The court granted Insurers' motion for summary judgment, and Dish appealed. In its amended complaint, Ronald A. Katz Tech. Licensing (RAKTL, the Plaintiff in the underlying suit) alleged that Dish had infringed one or more claims in each of twenty­ three patents. Applying Colorado law, the district court concluded that a claim for patent infringement could "properly give rise to coverage, or even the specter of coverage, such that an insurer will have a duty to defend." For purposes of the summary judgment motion, the court ruled that RAKTL's reference to "customer service functions" in its complaint was sufficient to allege that Dish engaged in "advertising." The court granted summary judgment for Insurers without addressing the third element of its test-­- causation --or the additional arguments certain insurers had raised under their individual policies. Upon review, the Tenth Circuit concluded that the RATKL complaint potentially alleged advertising injury arising from the misappropriation of advertising ideas. The Court therefore reversed and remanded for further proceedings: "the scope of advertising injury coverage in this case is at least ambiguous with regard to patent infringement allegations. Although the cases are rare in which an allegedly infringed patent is itself an advertising idea rather than merely an advertised product, ... we hold that '[d]epending on 'the context of the facts and circumstances of th[e] case,' patent infringement can qualify as an advertising injury if the patent 'involve[s] any process or invention which could reasonably be considered an 'advertising idea.'"

This was the second appeal in litigation arising from the Secretary of Health and Human Services' (HHS) decision not to enter into a self-determination contract with the Southern Ute Indian Tribe (Tribe). In an initial order, the district court ruled that HHS's decision was unlawful, granted summary judgment to the Tribe, and directed the parties to prepare a proposed order for injunctive relief. After the parties were unable to agree on the proposed order, the district court issued an interlocutory order in which it endorsed HHS's approach to the contract’s start date and contract support costs. The Tribe appealed, and the Tenth Circuit dismissed the appeal for lack of jurisdiction. On remand, the district court issued a final order, directing the parties to enter a self-determination contract including HHS's proposed language regarding the contract start date and contract support costs and denying the Tribe’s request for damages. Both parties appealed. Upon review, the Tenth Circuit affirmed the district court's determination that HHS was required to contract with the Tribe and regarding the contract start date, but reversed the court's decision regarding contract support costs.

Third-party defendant Providence Holdings, Inc. appealed a partial summary judgment that awarded Skilstaf, Inc. and Park Avenue Property & Casualty Insurance Company, Inc. (PACA) damages arising out of a loan dispute. Providence is an insurance holding company. Skilstaf and PACA loaned Providence $3.1 million under three “surplus loan agreements” to help one of its subsidiaries carry out its insurance business and “meet regulatory requirements as to capital and surplus.” Providence was required to repay Skilstaf and PACA “when and as interest and principal are received on the . . . surplus note[s],” In 2005, Providence canceled the surplus certificates and converted them to paid-in capital. In 2008, Providence sold its subsidiary. At some point thereafter, the subsidiary was placed into receivership and liquidated. Providence made interest payments under the surplus loan agreements to Skilstaf and PACA through November 2009, but failed to repay any principal. Skilstaf and PACA sued Providence, and moved for summary judgment, arguing that the surplus loan agreements mandated repayment of the loans when Providence converted the surplus certificates to paid-in capital. The district court agreed, stating that “the indebtedness represented by the surplus notes was discharged by the conversion and that this discharge/conversion effected a repayment of the surplus notes within the meaning of the surplus loan agreements.” Upon review, the Tenth Circuit affirmed the lower court for substantially the same reasons.