Articles Posted in US Court of Appeals for the Tenth Circuit

by
PetroChina Canada bought ten large heat-exchanger units from Kelvion’s Oklahoma plant for use in PetroChina’s oil and gas operations. Their contract included a mandatory forum-selection clause subjecting the parties to Canadian jurisdiction. After a dispute over unanticipated delivery costs that PetroChina refused to pay, Kelvion brought suit in Oklahoma. It asserted quantum meruit and unjust enrichment claims, arguing the forum-selection clause did not apply to its equitable claims. The district court disagreed, concluding the forum-selection clause applied, and dismissed the suit under the doctrine of forum non conveniens. Finding no error in judgment, the Tenth Circuit affirmed the district court’s dismissal for forum non conveniens. View "Kelvion, Inc. v. PetroChina Canada Ltd." on Justia Law

by
The Bill Barrett Corporation and YMC Royalty Company were oil and gas companies who held mineral rights in northeastern Colorado. In 2013, they had the opportunity to jointly develop two oil wells. To facilitate the drilling operations, YMC executed documents authorizing joint expenditures, accepting responsibility for costs, and electing to participate and share in the revenues. But after depositing nearly $150,000 in revenues, YMC asserted it had never entered into an enforceable joint operating agreement with Barrett and declined to pay its share of the costs. Barrett sued for breach of contract. A jury ultimately found in favor of Barrett. The district court denied YMC’s motions for judgment as a matter of law and for a new trial. After its review of the matter, the Tenth Circuit concluded the parties formed an enforceable contract under Colorado law and a reasonable jury could conclude the parties should be held to their bargain. The Court also found no reversible error in the district court's administration of trial, and affirmed that court's judgment. View "Bill Barrett Corporation v. YMC Royalty Company" on Justia Law

by
Defendant-Appellant and Cross-Appellee First American Title Insurance Co. appealed a district court’s orders granting summary judgment in favor of and attorneys’ fees to Plaintiff-Appellee and Cross-Appellant Banner Bank (“the Bank”). The district court held that First American had a duty to defend and indemnify its insured, the Bank, breached the implied covenant of good faith and fair dealing, and was responsible for attorneys’ fees in this case. This resulted in an award of damages ($675,000) plus attorneys’ fees in an underlying lawsuit ($159,288), and consequential damages of attorneys’ fees in this case ($130,411.50). The Bank cross-appealed in the event that the award of consequential damages was procedurally incorrect. The Tenth Circuit concluded First American did not breach its duty of good faith and fair dealing, so any award of damages arising from that implied term was improper. Because it was error to award attorneys’ fees, arguments whether the Bank should have been awarded fees under its renewed motion for attorneys’ fees or under Rule 54(d) were moot, and the Bank’s cross-appeal under Rule 60 should have been dismissed. Because the Court concluded there was no duty to defend or indemnify, nor a breach of the implied duty of good faith and fair dealing, the damages awards could not stand. On remand, the district court was ordered to vacate its orders and judgments to the contrary and enter judgment in favor of First American. View "Banner Bank v. First American Title Insurance" on Justia Law

by
At issue in this appeal were commercial general liability policy exclusions that barred coverage for damage to “that particular part” of the property on which an insured is performing operations, or which must be repaired or replaced due to the insured’s incorrect work. The Tenth Circuit concluded the phrase “that particular part” was susceptible to more than one reasonable construction: it could refer to the distinct component upon which an insured works or to all parts ultimately impacted by that work. The Court surmised the contract had to then be interpreted consistent with the mutual intent of the parties, with the ambiguity resolved most favorably to the insured and against the insurance carrier. The Court adopted the narrower interpretation of the phrase “that particular part,” under which the exclusion extends only to the distinct components upon which work was performed. This conclusion was contrary to the district court's interpretation, and therefore reversed and remanded for further proceedings. View "MTI v. Employers Insurance Co." on Justia Law

by
Dennis Woolman, former president of The Clemens Coal Company, challenged a district court’s determination that Liberty Mutual Fire Insurance Company didn’t breach a duty to him by failing to procure for Clemens Coal an insurance policy with a black-lung disease endorsement. Clemens Coal operated a surface coal mine until it filed for bankruptcy in 1997. Woolman served as Clemens Coal’s last president before it went bankrupt. Federal law required Clemens Coal to maintain worker’s compensation insurance with a special endorsement covering miners’ black-lung disease benefits. Woolman didn’t personally procure insurance for Clemens Coal but instead delegated that responsibility to an outside consultant. The policy the consultant ultimately purchased for the company did not contain a black-lung-claim endorsement, and it expressly excluded coverage for federal occupational disease claims, such as those arising under the Black Lung Benefits Act (the Act). In 2012, a former Clemens Coal employee, Clayton Spencer, filed a claim with the United States Department of Labor (DOL) against Clemens Coal for benefits under the Act. After some investigation, the DOL advised Woolman that Clemens Coal was uninsured for black-lung-benefits claims as of July 25, 1997 (the last date of Spencer’s employment) and that, without such coverage, Woolman, as Clemens Coal’s president, could be held personally liable. Woolman promptly tendered the claim to Liberty Mutual for a legal defense. Liberty Mutual responded with a reservation-of-rights letter, stating that it hadn’t yet determined coverage for Spencer’s claim but that it would provide a defense during its investigation. Then in a follow-up letter, Liberty Mutual clarified that it would defend Clemens Coal as a company (not Woolman personally) and advised Woolman to retain his own counsel. Liberty Mutual eventually concluded that the insurance policy didn’t cover the black-lung claim, and sued Clemens Coal and Woolman for a declaration to that effect. In his suit, Woolman also challenged the district court’s rejection of his argument that Liberty Mutual should have been estopped from denying black-lung-disease coverage, insisting that he relied on Liberty Mutual to provide such coverage. Having considered the totality of the circumstances, the Tenth Circuit Court of Appeals concluded the district court didn’t err in declining Woolman’s extraordinary request to expand the coverages in the Liberty Mutual policy. “Liberty Mutual never represented it would procure the coverage that Woolman now seeks, and the policy itself clearly excludes such coverage. No other compelling consideration justifies rewriting the agreement— twenty years later—to Woolman’s liking.” View "Liberty Mutual Fire Insurance v. Woolman" on Justia Law

by
The issue raised on appeal in this matter centered on a trespass claim by Plaintiffs-Appellants Marvin and Mildred Bay that Defendants-Appellees Anadarko E&P Onshore LLC and Anadarko Land Corp. (together, “Anadarko”), that through a lessee, exceeded the scope of an easement by using excessive surface land to drill for oil and gas. The district court had diversity jurisdiction over the case and entered final judgment against the Bays pursuant to Federal Rule of Civil Procedure 54(b). The Tenth Circuit was presented with an issue of whether a deed reserving mineral rights in land (and the specific right to use the surface as “convenient or necessary” to access the minerals) requires applying a different test than the one prescribed in Gerrity Oil & Gas Corp. v. Magness, 946 P.2d 913 (Colo. 1997), to evaluate whether the mineral owner’s use of land constitutes a trespass. The Court concluded it did not, and reversed and remanded for further proceedings. View "Bay v. Anadarko E&P Onshore" on Justia Law

by
Husky Ventures, Inc. (“Husky”) sued B55 Investments Ltd. (“B55”) and its president, Christopher McArthur, for breach of contract and tortious interference under Oklahoma law. In response, B55 filed counterclaims against Husky. A jury reached a verdict in Husky’s favor, awarding $4 million in compensatory damages against both B55 and McArthur and $2 million in punitive damages against just McArthur; the jury also rejected the counterclaims. In further proceedings, the district court entered a permanent injunction and a declaratory judgment in Husky’s favor. After the court entered final judgment, B55 and McArthur appealed, and moved for a new trial under Federal Rule of Civil Procedure 59(a) or, in the alternative, to certify a question of state law to the Oklahoma Supreme Court. The court denied the motion in all respects. On appeal, B55 and McArthur contended the district court erred in denying their motion for a new trial and again moved to certify a question of state law to the Oklahoma Supreme Court. In addition, they appealed the permanent injunction and declaratory judgment and argue that the district court erred in refusing to grant leave to amend the counterclaims. The Tenth Circuit dismissed B55 and McArthur’s claims relating to the motion for a new trial for lack of appellate jurisdiction and denied their motion to certify the state law question as moot. The Court otherwise affirmed the district court’s judgment on the remaining issues. View "Husky Ventures v. B55 Investments" on Justia Law

by
Billy Hamilton appealed a district court’s order granting summary judgment in favor of defendant Northfield Insurance Company as to Hamilton’s claim for breach of the implied duty of good faith and fair dealing and his accompanying request for punitive damages. In March 2015, Hamilton purchased a Northfield insurance policy for a commercial building in Council Hill, Oklahoma. Northfield had a third party inspect the property for underwriting purposes; the underwriting survey report concluded the risk was “Satisfactory with Recommendation Compliance” and identified eight recommendations for repairs. A tenant informed him the roof was leaking in December 2015, and Hamilton reported the leak and the resulting interior damage to Northfield. Northfield denied the claim because a claims adjuster saw no evidence of damage. Hamilton had made repairs, but the adjuster did not see evidence of them, and did not ask whether any were made. A week after receiving the denial, Northfield informed Hamilton it would not renew his policy when it expired. Hamilton was unsuccessful in his suit against Northfield, challenging on appeal the outcome with respect to breach of the implied duty of good faith and fair dealing (he won a jury verdict on his breach of contract claim). The Tenth Circuit found no abuse of the trial court’s discretion in its rulings on Hamilton’s claims, and affirmed. View "Hamilton v. Northfield Insurance Company" on Justia Law

by
Wakaya Perfection, LLC and its principals sued Youngevity International Corp. and its principals in Utah state court. The Youngevity parties responded by bringing their own suit against the Wakaya parties in a California federal district court, then removing the Utah case to federal court. These steps resulted in concurrent federal cases sharing at least some claims and issues. The California litigation progressed; and in November 2017, the federal district court in Utah ordered dismissal. The issues presented for the Tenth Circuit's review centered on whether: (1) the federal district court should have abstained from exercising jurisdiction under the Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976) test; and (2) and arbitrator would have needed to decide the arbitrability of Wakaya's claims. The Tenth Circuit reversed on both grounds: the federal trial court applied the wrong abstention test and erroneously ruled that an arbitrator should have decided whether Wakaya's claims were arbitrable. View "Wakaya Perfection, LLC v. Youngevity International" on Justia Law

by
This appeal grew out of a battle between the majority and minority owners of units in an investment vehicle. The majority unitholder wanted to merge, but this would require the minority to sell their units or convert them to shares in a newly created entity. The minority unitholders balked because they wanted to retain their original units, but the majority unitholder approved the merger, terminating the minority’s units in the process. The termination of these units led the minority to sue. The issue presented for the Tenth Circuit’s review reduced to one of “classic” contract interpretation: did the contract empower the majority unitholder to approve a merger that eliminated and replaced the minority unitholders’ units without providing an opportunity for a class vote? The district court concluded “yes,” and the Tenth Circuit concurred. View "Stender v. Archstone-Smith" on Justia Law