Boxer F2 v. Bronchick ( 2018 )

FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
January 22, 2018
TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
BOXER F2, L.P., a Texas limited
partnership,
Plaintiff - Appellee,
v. No. 16-1360
(D.C. No. 1:14-CV-00317-PAB-MJW)
(D. Colo.)
WILLIAM BRONCHICK,
Defendant - Appellant.
and
FLAMINGO WEST, LTD., doing
business as Legalwiz Publications;
BRONCHICK & ASSOCIATES; and
BRONCHICK & ASSOCIATES, P.C.,
Defendants.
ORDER AND JUDGMENT *
Before TYMKOVICH, Chief Judge, PHILLIPS, and MORITZ, Circuit Judges.
This case arises from a commercial lease dispute involving Flamingo West,
Ltd., a real estate management and consulting firm, and its landlord, Boxer F2,
*
This order and judgment is not binding precedent except under the doctrines
of law of the case, res judicata and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
L.P. Boxer sued Flamingo West and other persons and entities associated with
Flamingo West, including Flamingo West’s president, William Bronchick, over
their failure to pay completely and timely on leased office space.
Mr. Bronchick challenges multiple rulings by the district court during the
course of the bench trial. First, he challenges the district court’s imposition of
sanctions for failure to cooperate in discovery. He also attacks the sufficiency of
Boxer’s evidence supporting the court’s decision to pierce Flamingo West’s
corporate veil and hold him personally liable. Finally, he objects to the amount
of damages assessed against him on Flamingo West’s behalf.
We affirm. The district court did not err in upholding the magistrate
judge’s discovery sanctions order. Likewise, the record and evidence presented at
trial provided an adequate basis for the court to hold Mr. Bronchick liable for
Flamingo West’s breach of contract. Finally, the district court did not abuse its
discretion when it solicited final damages calculations from the parties after trial,
nor was it wrong to award damages based on those calculations.
I. Background
From April 2012 through September 2016, Flamingo West, Ltd. neglected
to pay rent on time or in full for office space it was leasing in Aurora, Colorado.
Flamingo West’s landlord, Boxer F2, L.P., brought this action to recover the
unpaid rent and late fees. Though it originally named Flamingo West as the one
and only defendant, Boxer soon realized it likely could not obtain full recovery
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from Flamingo West’s assets. It thus amended its complaint to include Bronchick
& Associates and Bronchick & Associates, P.C. as defendants. The lease had
once listed Bronchick & Associates as a trade name for Flamingo West, but Boxer
alleged that it was a separate entity and a party to the lease. Accordingly, Boxer
alleged that Bronchick & Associates had breached the lease as well. As for
Bronchick & Associates, P.C., Boxer believed that company had actually
occupied a portion of the leased office space and thus unjustly enriched itself at
Boxer’s expense. Boxer further alleged that Bronchick & Associates, P.C. had
assumed responsibility for Bronchick & Associates’ breach as its successor.
Finally, Boxer also named William Bronchick as a defendant. Mr.
Bronchick played some role in all three of these entities, and had signed the lease
in his official capacity as president of Flamingo West. Boxer now alleged that
Flamingo West was Mr. Bronchick’s corporate alter ego, a vehicle for transacting
his personal affairs. Moreover, Boxer accused Mr. Bronchick of deliberately
draining Flamingo West’s assets to frustrate Boxer’s chances of recovering on the
broken lease.
Boxer set out to gather evidence of Mr. Bronchick’s relationship with
Flamingo West through discovery. Mr. Bronchick, however, refused to fully
cooperate. This led Boxer to file a motion to compel discovery responses, which
the magistrate judge overseeing discovery granted. But in supplementing the
discovery responses, the defendants made little effort to expand or clarify them.
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The magistrate judge accordingly entered a conditional order of sanctions in
February 2015. Mr. Bronchick would have two weeks to divulge the accounting
information Boxer sought; if he failed to do so, the magistrate judge made clear
that sanctions would be imposed.
Yet again, Mr. Bronchick did not fully cooperate. Several untimely or
incomplete productions, another court order, an on-site inspection, and a full
evidentiary hearing later, the magistrate judge granted Boxer’s request for
sanctions.
Mr. Bronchick objected, asking the district court to overturn the sanctions
order. But the court summed up Mr. Bronchick’s briefing on the objection as
offering little more than “unsupported assertions” and “an invitation . . . to parse
the record” to make his various arguments for him. Aplt. App. 219. The court
thus overruled Mr. Bronchick’s objection.
Meanwhile, Boxer moved for summary judgment against Flamingo West on
the breach of contract claim. Flamingo West did not oppose the motion, and the
court granted it in the amount of $2,428,625. With the breach thus conclusively
established, the other defendants’ portion of the blame for it would be decided at
a three-day bench trial.
At trial, Boxer failed to prove its claims that Mr. Bronchick and Bronchick
& Associates were parties to the lease. It also failed to prove the claim it had
asserted against Bronchick & Associates, P.C. for unjust enrichment. Finally, it
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failed to prove its claims against Mr. Bronchick and Flamingo West for fraudulent
transfers. What Boxer did prove was that equity required piercing Flamingo
West’s corporate veil and holding Mr. Bronchick personally accountable for the
unpaid rent.
But the district court also found the damages awarded against Flamingo
West by default at the summary judgment stage did not accurately reflect the
amount of unpaid rent and fees. In light of its own interpretation of the lease, the
court decided to solicit new damages calculations for the veil-piercing remedy
against Mr. Bronchick. Boxer submitted a new proposal; Mr. Bronchick did not,
although he challenged some of Boxer’s new calculations. The court found some
of Mr. Bronchick’s points persuasive, and reduced damages accordingly. In the
end, the court rendered judgment against Mr. Bronchick for $720,130.
II. Analysis
Mr. Bronchick brings five claims of error. 1 The first two relate to the
magistrate judge’s sanctions order. Mr. Bronchick contends the district court
erred by reviewing the order for clear error instead of de novo. And even
reviewed de novo, he argues the order should have been overturned. Next, Mr.
1
Mr. Bronchick has also moved for permission to supplement his appendix.
We GRANT this motion only because Boxer abandoned any objection to it at oral
argument. See Oral Arg. at 27:27 (“We don’t have any reason to object to a
supplemental appendix coming in.”). But see Appellee Boxer F2, L.P.’s Resp.
Appellant’s Am. Mot. Leave File Suppl. App. (opposing the motion).
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Bronchick challenges the court’s decision to pierce the corporate veil and hold
him personally liable for Flamingo West’s breach of the lease. Finally, Mr.
Bronchick asserts that Boxer should only have received nominal damages. He
argues Boxer failed to prove damages with sufficient certainty at trial, and that
the district court should never have solicited a new damages calculations after the
close of evidence.
As we explain in turn, none of these purported errors warrant reversal.
A. The District Court’s Review of the Sanctions Order
Mr. Bronchick brings a twofold challenge against the magistrate judge’s
discovery sanctions order. First, he contends the district court reviewed the order
under an overly deferential standard. Second, he asserts the sanctions should not
have passed muster even under that standard.
By failing to include his objection to the sanctions order in his appendix,
Mr. Bronchick likely has not shown he preserved either of these issues for our
review. See 10th Cir. R. 10.3(D)(2); see also Valley Improvement Ass’n, Inc. v.
U.S. Fid. & Guar. Corp., 129 F.3d 1108, 1119 (10th Cir. 1997). Nevertheless, for
the sake of clarity we explain why we find his arguments on appeal unpersuasive.
1. The District Court’s Standard of Review
Federal district courts utilize non–Article III magistrate judges to hear and
determine a host of pretrial matters. See 28 U.S.C. §§ 631, 636. But the district
court presiding over the action reserves the power to review and overturn the
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magistrate judge’s orders. See id. § 636; see also Fed. R. Civ. P. 72. Ordinarily,
the court will defer to the magistrate judge on nondispositive matters unless the
order is “clearly erroneous or contrary to law.” Id. at 72(a). But the court will
review such orders de novo when they completely dispose of a claim or defense.
See id. at 72(b)(3).
Discovery sanctions typically fall into the former, “nondispositive”
category. See Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1462 (10th Cir.
1988). Nevertheless, the standard of review depends on an order’s actual effect
on the litigation. Gomez v. Martin Marietta Corp., 50 F.3d 1511, 1519 (10th Cir.
1995). The district court must therefore conduct de novo review of any discovery
sanction that effectively grants or dismisses a claim or defense. See Ocelot Oil,
847 F.2d at 1463.
Mr. Bronchick asserts the sanctions order upheld by the district court was
dispositive, claiming in his briefing that the order disposed of the veil-piercing
issue by providing definitive support for the court’s finding that Flamingo West
was his alter ego. At oral argument, however, Mr. Bronchick abandoned the veil-
piercing argument and instead contended the sanctions order disposed of the
fraudulent transfer claim Boxer failed to prove at trial. See Oral Arg. at 28:10
(“The sanctions order was dispositive of the fraudulent transfer claim. . . .
Whether or not it was also dispositive of other claims really doesn’t matter.”).
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Neither argument acknowledges what actually happened below. First, the
district court concluded that Mr. Bronchick’s “failure to explain [his] arguments”
on the standard of review was itself “sufficient to overrule [that] aspect of [his]
objection.” App. 222. Moreover, the court determined the standard of review did
not matter anyway; Mr. Bronchick’s “failure to explicate [his] argument” on the
merits of the order rendered his objection “insufficient to establish reversible
error” even on de novo review. Id.
We cannot reverse the district court’s choice of standard under these
circumstances—indeed, we see nothing to reverse. Mr. Bronchick wanted de
novo review, but his objection would have failed no matter what. He did not give
the court below—nor has he given us—any substantiated explanation of how the
sanctions order actually disposed of a claim or defense. And even had he done
so, it would not have cured his failure to provide adequate briefing to the district
court regarding the merits of his objection. His failure to file a fully-formed
objection when he had the chance cannot entitle him to a do-over in this court.
2. The District Court’s Decision on the Merits
In light of the above, Mr. Bronchick’s assertion that the district court
should have deemed the sanctions order erroneous has no merit.
We typically review district court discovery orders—including those
imposing sanctions—under an abuse of discretion standard. See Lee v. Max Int’l,
LLC, 638 F.3d 1318, 1320 (10th Cir. 2011). Neither party has directed us to any
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precedent indicating we should alter that standard when the court below affirms a
magistrate judge’s sanctions order, rather than deciding the issue in the first
instance. And we have used an abuse of discretion standard in these
circumstances before—albeit in a nonprecedential, unpublished opinion. See
Porter Bridge Loan Co. v. Northrop, 566 F. App’x 753, 755–56 (10th Cir. 2014)
(unpublished) (citing Lee, 638 F.3d at 1320). Moreover, we see nothing in the
law respecting magistrate judges that compels or implies any modification to our
review of district court decisions on account of a magistrate judge’s involvement.
See 28 U.S.C. § 636; Fed. R. Civ. P. 72.
But even without that procedural quirk, Mr. Bronchick’s appeal of this
issue fails under de novo review. The Federal Rules of Civil Procedure permit
district courts to enter findings on disputed facts as punishment for violating a
discovery order. See Fed. R. Civ. P. 37(b)(2)(A)(i) (“If a party or a party’s
officer, director, [or] managing agent . . . fails to obey an order to provide or
permit discovery . . . the court where the action is pending may issue further just
orders . . . includ[ing] . . . directing that matters embraced in the order or other
designated facts be taken as established for purposes of the action, as the
prevailing party claims.”).
In sum, the district court did not err in upholding the sanctions order
against Mr. Bronchick.
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B. Piercing the Corporate Veil
We next consider Mr. Bronchick’s challenge to the district court’s decision
to pierce Flamingo West’s corporate veil and hold him personally liable for the
breach. 2
We review the district court’s findings of fact for clear error. See Sw.
Stainless, LP v. Sappington, 582 F.3d 1176, 1183 (10th Cir. 2009). “A finding of
fact is clearly erroneous if it is without factual support in the record or if the
appellate court, after reviewing all the evidence, is left with the definite and firm
conviction that a mistake has been made.” Nieto v. Kapoor, 268 F.3d 1208, 1217
(10th Cir. 2001) (quoting Tosco Corp. v. Koch Indus., Inc., 216 F.3d 886, 892
(10th Cir.2000)). But veil piercing is an equitable remedy. See Great Neck
Plaza, L.P. v. Le Peep Rests., LLC, 37 P.3d 485, 490 (Colo. App. 2001); Gorsich
v. Double B Trading Co., 893 P.2d 1357, 1362 (Colo. App. 1994). Thus, we
2
Our rules make clear that “[w]hen sufficiency of the evidence is raised,” as
Mr. Bronchick has done here, “the entire relevant trial transcript must be provided.”
10th Cir. R. 10.1(A)(1)(a). The full trial transcript in this case runs for 497 pages
over three volumes. Even with his supplement, Mr. Bronchick’s appendix omits
pages 3–13, 15–22, 338–86, 390–95, 401–417, 424–65, and 484–97. He contends
that he was “[t]he only witness to testify concerning the facts to support the alter ego
claim,” and that his full testimony was included in the appendix. Aplt. Br. at 39 n.9.
But the rule requires the entire relevant transcript. It is not for Mr. Bronchick to
pick and choose what portions of the trial related to veil-piercing issue and what
portions did not. See Roberts v. Roadway Express, Inc., 149 F.3d 1098, 1104–05
(10th Cir. 1998). Moreover, Mr. Bronchick has omitted from the appendix several
exhibits that the trial court relied on in its analysis. This failure to designate an
adequate appendix frees the court of any obligation to consider his appeal of this
issue. Id. at 1105. Again, however, we exercise our discretion to reach this claim
of error because it does not affect the outcome.
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review the district court’s ultimate decision to pierce the veil for abuse of
discretion. See Clark v. State Farm Mut. Auto. Ins. Co., 433 F.3d 703, 709 (10th
Cir. 2005).
To support veil piercing, Boxer had to make three distinct showings by
clear and convincing evidence. 3
First, Boxer had to show that Flamingo West was the “alter ego” of Mr.
Bronchick—that is, “a mere instrumentality” for carrying out his affairs. Griffith
v. SSC Pueblo Belmont Operating Co., 381 P.3d 308, 313 (quoting In re Phillips,
139 P.3d 639, 644 (Colo. 2006)). Under Colorado law, that showing hinged on
eight nonexclusive factors geared toward identifying abuse of the “corporate
form.” Phillips, 139 P.3d at 644. In considering the alter-ego prong, the court
asks “whether (1) the corporation is operated as a distinct business entity, (2)
funds and assets are commingled, (3) adequate corporate records are maintained,
(4) the nature and form of the entity’s ownership and control facilitate misuse by
an insider, (5) the business is thinly capitalized, (6) the corporation is used as a
‘mere shell,’ (7) shareholders disregard legal formalities, and (8) corporate funds
or assets are used for noncorporate purposes.” Id.
3
Colorado law only requires proof by a preponderance of the evidence. See
Griffith v. SSC Pueblo Belmont Operating Co., 381 P.3d 308, 313 & n.3 (Colo.
2016); see also McCallum Family L.L.C. v. Winger, 221 P.3d 69, 72–73 (Colo. App.
2009) (explaining why the Colorado Supreme Court’s invocation of the clear and
convincing evidence standard in dicta was at odds with Colorado positive law).
Apparently neither party ever apprised the district court of this lower burden.
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But an alter-ego finding does not automatically lead to veil piercing. Boxer
also had to prove two more elements. First, Boxer needed to show that Mr.
Bronchick used “the corporate fiction,” id., of Flamingo West “to perpetuate a
wrong.” Griffith, 381 P.3d at 313. Second, Boxer had to prove that
“disregarding” Flamingo West’s separate legal status “would achieve an equitable
result.” Id.
1. The Alter-Ego Finding
Mr. Bronchick offers numerous theories as to why the evidence could not
possibly support the findings necessary to establish Flamingo West was his
corporate alter ego. He notes first that the district court relied “predominantly, if
not entirely,” on the sanctions order to reach its determination. Aplt. Br. at 39.
He then proceeds to attack the findings established by sanction, and the court’s
use of those findings to favor Boxer on the alter-ego analysis. Next he attacks the
court’s discussion of commingled assets and the use of corporate funds for
noncorporate purposes. Specifically, he asserts the court had insufficient
evidence of commingled assets because transactions between himself and
Flamingo West were properly documented. His argument against the court’s
finding on the use of corporate funds for noncorporate purposes is twofold. First,
he asks us to create a de minimis exception for that consideration. Second, he
specifically challenges the court’s finding that Flamingo West made his brother’s
car payments.
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a. The Sanctions Order
As Mr. Bronchick acknowledges, the findings entered under the discovery
sanctions order provided some of the evidence to support Boxer’s claim. With
regard to the first prong, those findings helped establish Flamingo West’s lack of
distinctiveness, inadequate record keeping, structural facilitation of abuse, and
thin capitalization.
Mr. Bronchick makes several assertions challenging the district court’s
reliance on the sanctions order.
First, Mr. Bronchick claims the evidence does not support the findings
entered by sanction. But that was precisely the point of the sanctions. Because
Mr. Bronchick failed to fulfill his discovery obligations, the district court entered
findings that did not require any support in evidence. This was appropriate
because Mr. Bronchick’s decisions to withhold evidence from Boxer frustrated its
preparation for trial.
Next, Mr. Bronchick claims the district court made inconsistent factual
determinations. He bases this argument on the theory that the sanctions order
contradicts some of the court’s findings from trial related to allegedly fraudulent
transfers between Flamingo West and himself. Again, his position betrays a
misunderstanding of the sanctions order. The sanctions order included general
findings that Flamingo West made transfers to Mr. Bronchick—and possibly
others—under conditions that satisfy several theories of fraudulent transfer. This
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did not mean that every transfer Flamingo West made was fraudulent. Nor did it
imply that the specific real-estate transactions Mr. Bronchick points to in support
of his inconsistency argument were fraudulent. It was therefore not inconsistent
for the district court to find that Flamingo West made fraudulent transfers, but
that Boxer had not proven particular transfers were fraudulent.
Finally, Mr. Bronchick employs a legal argument to fight the district
court’s sanctions-supported factual finding that Flamingo West was inadequately
capitalized. He suggests the court should only have considered Flamingo West’s
capitalization at the time of corporate formation, not at the time of the breach of
contract. But Colorado’s alter-ego test looks to a corporation’s present capital,
not its initial capitalization. See Griffith, 381 P.3d at 313 (explaining the test as
whether the business “has grossly inadequate capital” (emphasis added) (quoting
Luckett v. Bethlehem Steel Corp., 618 F.2d 1373, 1378 n.4 (10th Cir. 1980));
Leonard v. McMorris, 63 P.3d 323, 330 (Colo. 2003) (characterizing the inquiry
as focused on “absence of corporate assets and undercapitalization” (emphasis
added) (quoting Newport Steel Corp. v. Thompson, 757 F. Supp. 1152, 1157 (D.
Colo. 1990)). And for good reason, as the term “thin capitalization” denotes
“[t]he financial condition of a firm that has a high ratio of liabilities to capital.”
Capitalization, Black’s Law Dictionary (10th ed. 2014).
A corporation can become thinly capitalized over time regardless of its
initial capitalization. This could happen if it lets assets dwindle, allows liabilities
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to increase, or both. It does not matter how much capital a corporation had at
formation, although that could be evidence supporting a finding of
undercapitalization. What matters is whether the defendant is deliberately using a
subservient corporation incapable of satisfying liabilities it has or expects to
incur.
b. Commingled Assets
Mr. Bronchick also challenges the court’s finding that he and Flamingo
West commingled assets. Specifically, the court found Mr. Bronchick and
Flamingo West “frequently loaned money to each other” but kept no record of
those loans apart from a running total balance reflected on tax returns. App. 607.
Moreover, the court noted Mr. Bronchick’s claim that he expended roughly
$160,000 of personal credit on behalf of Flamingo West for which he never
secured a promissory note or produced receipts. Mr. Bronchick argues the loans
were also documented on Flamingo West’s balance sheets, and belabors the point
that Flamingo West owed him money and was not paying him a salary for some
time. He does not negate the district court’s finding that the loans between
himself and Flamingo West lacked the traditional indicia of arms-length
transactions.
c. Use of Corporate Funds for Noncorporate Purposes
Next we address Mr. Bronchick’s challenges to the court’s finding that
Flamingo West used corporate funds for noncorporate purposes. Mr. Bronchick
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accepts the court’s finding that Flamingo West used its own funds to cover
personal expenses such as “Amazon Video[s] on Demand, . . . Netflix, . . . iTunes
Music Store [purchases], . . . NutriSystem, [and] clothing,” as well as purchases
from “Sam Ash Music, . . . American Musical, . . . Classmates.com, . . . Weis
Supermarkets, and . . . Cheaper Than Dirt, a firearm supply retailer.” App. 612.
The court also found Flamingo West made car payments for Mr. Bronchick’s
brother.
Mr. Bronchick contests these findings, asking us to forgive them since they
were relatively small amounts that did not affect Flamingo West’s business
operations. Again, Mr. Bronchick offers no law or logic to support his argument,
and we have found none. The amount of corporate funds devoted to personal
expenses does not matter so much as the fact that corporate funds were devoted to
personal expenses. Though Mr. Bronchick testified that at least some of the
personal expenses were recorded as distributions, the district court did not have to
believe him.
2. Use of the Corporate Form to Perpetrate a Wrong
The second prong of the veil-piercing analysis looks to the result achieved
by the misuse of the corporate form. Boxer alleged that the wrong perpetrated by
Mr. Bronchick was siphoning off Flamingo West’s assets—in some cases into Mr.
Bronchick’s own pocket—to ensure that Boxer could never recover the unpaid
rent. The financial particulars of the situation—which Mr. Bronchick’s appeal
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focuses on—do not matter. The record supports the district court’s determination
on this prong.
3. Equitable Result
Third and finally, Mr. Bronchick’s arguments on whether or not veil
piercing would yield an equitable result is unavailing. He offers no citations to
the record or legal authority to support his view of the equities. He merely
attacks the sanctions order’s fairness to him.
But the record establishes that Flamingo West signed an expansive, long-
term lease; breached that lease; and racked up hundreds of thousands of dollars in
unpaid rent and fees that it could not possibly satisfy, all while continuing to pay
Mr. Bronchick and his personal expenses. As sole owner, operator, officer and
shareholder of Flamingo West, Mr. Bronchick was responsible for its conduct.
The district court did not err in concluding that Mr. Bronchick took advantage of
Flamingo West’s corporate form while failing to honor its formal distinctiveness
from himself. In these circumstances, we cannot say that the district court abused
its discretion in weighing the equities.
***
In sum, Mr. Bronchick has failed to identify reversible error in the district
court’s decision to pierce the corporate veil.
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C. Damages
Lastly, we consider Mr. Bronchick’s argument that the district court erred
by awarding Boxer compensatory damages. 4 His argument raises two questions,
which we address in turn. First, did the district court have sufficient evidence to
find and reasonably calculate Boxer’s damage? Second, did the district court
abuse its discretion by soliciting new damages calculations several months after
trial?
1. Proof of Damage at Trial
Because it turns on a question of fact, see Tull v. Gundersons, Inc., 709
P.2d 940, 943 (Colo. 1985) (en banc); Interbank Invs., L.L.C. v. Vail Valley
Consol. Water Dist., 12 P.3d 1224, 1231 (Colo. App. 2000), we review the district
court’s finding on damages for clear error, see Niemi v. Lasshofer, 770 F.3d 1331,
1354 (10th Cir. 2014).
In Colorado, the victim of a contract breach must prove “by a
preponderance of the evidence that he has in fact suffered damage” and “provide[]
a reasonable basis for a computation” of that damage. Riggs v. McMurtry, 400
P.2d 916, 919 (Colo. 1965) (emphasis added); see W. Distrib. Co. v. Diodosio,
841 P.2d 1053, 1058 (Colo. 1992) (en banc); see also Tull, 709 P.2d at 943
4
Mr. Bronchick’s arguments regarding damages suffer from the same
appendix and preservation deficiencies that plague his other arguments. Again, we
consider them even though we have no obligation to do so.
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(applying Riggs to breach of contract); List v. Dahnke, 638 P.2d 824, 825–26
(Colo. App. 1981) (discussing calculation of damages for unpaid rent).
We see no obvious error in the district court’s damages finding. The court
found at trial that Mr. Bronchick was personally liable for Flamingo West’s
breach of the lease. The court had already granted summary judgment on that
breach claim for an uncontested sum of $2,428,625. The district court therefore
rightly concluded in its decision following the bench trial that Boxer had proven
damages from the breach.
The district court also had ample support following the bench trial to
calculate Mr. Bronchick’s personal liability. 5 But the district court concluded that
additional briefing would help with the final damages calculation, inviting the
parties to submit post-trial arguments on what they thought the correct amount
should be. We do not interpret the court’s request as a finding that damages had
not been proven at trial, but as indicating its objective to reach the correct figure
in light of the evidence submitted.
5
We question whether Mr. Bronchick actually reserved the right to contest
damages at trial. The district court thought he had, but only cited Bronchick &
Associates, P.C.’s motion opposing summary judgment to support this point. See
App. 619. Of course, that filing preserved Bronchick & Associates, P.C.’s right to
contest damages, but not Mr. Bronchick’s right. See Def. Bronchick & Associates,
P.C.’s Resp. Opp’n Pl.’s Mot. Partial Summ. J., Doc. 105 at 1 n.1.
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2. The District Court’s Request for Recalculation
In any event, a “district court has broad discretion to reopen a case to
accept additional evidence and that decision will not be overturned on appeal
absent an abuse of that discretion.” Smith v. Rogers Galvanizing Co., 148 F.3d
1196, 1197–98 (10th Cir. 1998). In exercising this power, “[t]he court should
consider the time the motion [if any] is made, the character of additional
testimony and the potential prejudicial effect in granting or denying the motion.”
Id. at 1198 (quoting Joseph v. Terminix Int’l Co., 17 F.3d 1282, 1285 (10th
Cir.1994)). At bottom, however, the ultimate question is whether or not
reopening evidence is fair to both parties. Id.
Mr. Bronchick contends that the passage of time, as well as the additional
opportunities it afforded Boxer to prove damages, makes the district court’s
reopening of evidence unfairly prejudicial. He refuses to acknowledge, however,
that the district court had already found in favor of Boxer on the damages issue.
Indeed, the court disagreed only with the amount of actual damage Boxer had
argued for based on its reading of the lease. Contrary to Mr. Bronchick’s
assertions, we do not see the additional briefing on this issue as an ex parte
communication, an additional opportunity to prove damages, or a violation of the
scheduling order. Perhaps Mr. Bronchick should have been allowed to cross-
examine Boxer’s expert regarding his final calculation, but Mr. Bronchick never
requested such an opportunity. And indeed, Mr. Bronchick’s objections do not
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come close to a sufficiently developed argument that he was denied due process.
In sum, we think the district court was merely attempting to give Mr. Bronchick
an opportunity to argue for reduced damages based on the court’s final reading of
the contract. Mr. Bronchick has no room to claim unfairness under these
circumstances. If anything, the additional submissions allowed the court to reach
a more fair damages figure that incorporated the court’s final interpretation of the
lease.
III. Conclusion
For the forgoing reasons, we AFFIRM the district court with respect to
each of Mr. Bronchick’s issues on appeal.
ENTERED FOR THE COURT
Timothy M. Tymkovich
Chief Judge
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