CCC Corporate Services, Inc. v. Snell & Wilmer , 99 F. App'x 215 ( 2004 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
MAY 27 2004
TENTH CIRCUIT
PATRICK FISHER
Clerk
CCC CORPORATE SERVICES, INC., a
Texas corporation, as assignee of Lone Star
Electronics Corp., a Texas corporation,
Plaintiff-Counter-Defendant - No. 03-4045
Appellant, (D. Utah)
(D.Ct. No. 2: 01-CV-684-PGC)
v.
SNELL & WILMER, L.L.P.,
Defendant-Counter-Claimant -
Appellee.
ORDER AND JUDGMENT *
Before TACHA, Chief Circuit Judge, BRORBY, Senior Circuit Judge, and
KELLY, Circuit Judge.
Appellant CCC Corporate Services, Inc. (“CCC”) appeals from the district
court’s decision granting summary judgment under Federal Rule of Civil
Procedure 56 in favor of the defendant law firm, Snell & Wilmer, L.L.P. (“Snell”)
*
This order and judgment is not binding precedent except under the doctrines of
law of the case, res judicata and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
and dismissing CCC’s cause of action for lack of standing. CCC’s suit against
Snell arose from Snell’s legal representation of Lone Star Electronics Corporation
(“Lone Star”) in a Utah state court receivership proceeding. The district court
determined CCC lacked standing to pursue its malpractice claim, finding Lone
Star never assigned any of its malpractice claims against Snell to CCC. We have
jurisdiction over this appeal pursuant to 28 U.S.C. § 1291 and affirm.
I.
In October 1998, Lone Star, through its president and chief executive
officer John Cunningham, and corporate counsel William Van Fleet, retained
Snell to represent Lone Star in a Utah state court receivership proceeding against
DES, Inc. (“DES”). After allegedly having problems with Snell’s representation,
Mr. Cunningham terminated Snell in October 1999. As a result of Snell’s alleged
misrepresentation, CCC asserts Lone Star lost substantial monies collectable from
DES in the receivership proceeding before DES filed for bankruptcy.
In January 2000, the Board of Directors of Lone Star executed a written
resolution assigning Lone Star’s claims deriving from the DES bankruptcy to
CCC. The assignment was authorized by Lone Star chief executive officer and
president Mr. Cunningham, who was also president of CCC, and stated in relevant
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part:
Lone Star Electronics Corporation does hereby assign, transfer and
convey to CCC Corporate Services, Inc., all rights, titles and
interests in and to any and all of its claims and causes of action
against David Chang, Agama Systems, Inc., DES, Inc., Eric Chen,
Eugene Chen, Chen Enterprises, L.L.C., Green Emerald Enterprises,
Inc., Becky Taylor and Mark Hashimoto, together with any and all
claims and causes of action against any person or entity affiliated
with any of the foregoing persons and entities, together with any and
all proceeds of any and all such causes of action against such persons
and entities.
(Emphasis omitted.) Subsequent to this assignment, in April 2000, Modus Media
International, Inc. (“Modus Media”) purchased the stock ownership of Lone Star,
effectively merging Lone Star into Modus Media.
Thereafter, CCC brought a malpractice action against Snell in Utah state
court, for negligence, breach of fiduciary duty, breach of contract, fee forfeiture,
and violations of Utah’s Consumer Sales Practices Act, asserting Lone Star
assigned its malpractice claim to CCC through the January 2000 assignment.
Snell then removed the case to federal district court in Utah under diversity
jurisdiction. After discovery and examination of the January 2000 assignment,
Snell moved for summary judgment, arguing the January 2000 assignment
unambiguously did not assign any of Lone Star’s claims against Snell to CCC, but
only assigned claims against persons or entities and their affiliates specifically
named in the assignment. Snell asserted it was not specifically named or an
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affiliate of any named person or entity in the assignment.
In response, CCC filed multiple briefs in opposition, as well as a number of
affidavits and other documents in support of its position. Contrary to Snell’s
assertions, CCC argued the assignment was ambiguous and, therefore, the district
court must consider establishing Lone Star’s intent to transfer claims against
Snell to CCC through the January 2000 assignment. Specifically, CCC submitted
deposition testimony by Mr. Cunningham and Mr. Van Fleet stating they intended
to include claims against Snell in the January 2000 assignment. In the alternative,
CCC also asserted Snell was included in the assignment as an “affiliate” of Lone
Star and Mark Hashimoto, the court-appointed receiver.
At the August 26, 2002 summary judgment hearing on Snell’s motion, after
hearing argument from both parties, the district court found the January 2000
assignment by Lone Star to CCC unambiguously did not assign to CCC any
malpractice claims against Snell. However, the district court provided CCC with
thirty days to allow a proper party to assign to CCC any of Lone Star’s potential
claims against Snell.
Subsequently, CCC filed an “amended assignment” dated September 2002,
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which was identical to the January 2000 assignment but specifically added Snell
as an additional entity against whom claims were assigned. This amended
assignment was only authorized by Mr. Cunningham, the former chief executive
officer and president of Lone Star. Filed along with the amended assignment was
a post-hearing affidavit of Mr. Cunningham asserting his authority to amend the
January 2000 assignment to include by name claims against Snell. Additionally,
for the first time, Mr. Cunningham also generally asserted in conjunction with the
January 2000 assignment, that he and Lone Star’s Board of Directors orally
agreed to assign Lone Star’s claims against Snell to CCC.
At the subsequent November 20, 2002 hearing held to discuss the validity
of the amended assignment, the district court granted Snell’s motion for summary
judgment, reaffirming its earlier finding the January 2000 assignment was
unambiguous and did not transfer any of Lone Star’s potential legal claims
against Snell to CCC and finding the amended assignment invalid. In discussing
the original assignment, the district court restated its finding Snell was not an
affiliate of Mr. Hashimoto, a forensic accountant who only dealt with Snell in his
position as the state court receiver in Lone Star’s action against DES and a
Chapter 7 trustee in a prior bankruptcy proceeding involving Snell. The district
court explained that in both positions, Mr. Hashimoto was required to act as a
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disinterested party and therefore could not be an “affiliate” of Snell. Further, the
district court found CCC’s argument Snell was an affiliate of Lone Star irrelevant
because the January 2000 assignment did not specifically name either Lone Star
or Snell.
Next, in addressing the validity of the September 2002 amended
assignment, the district court determined the amended assignment was invalid
because Mr. Cunningham lacked authority to amend the original assignment as
evidenced by Mr. Cunningham’s January 7, 2000 deposition testimony stating he
no longer possessed any legal interest in Lone Star. Because Mr. Cunningham
lacked any interest in Lone Star, the district court reasoned his signing of the
amended assignment in September 2002 lacked legal force to affect the claims in
question. For the amendment to have validity, the district court stated the
amended assignment needed authorization by Modus Media or another entity
currently possessing Lone Star’s interest in the potential claims against Snell.
Because the amended assignment lacked validity, the district court found the
assignment inadmissible as parol evidence, and again determined the original
assignment was unambiguous in that it “specifically names the individuals and
entities involved in the claims that were effectively signed.”
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Finally, the district court addressed CCC’s arguments raised at the hearing
that the amended assignment could be used to reform the earlier assignment. In
disagreeing with CCC, the district court found the amended assignment could not
reform the January 2000 assignment because (1) it was not a reformation but a
change to the assignment; (2) the parties never raised an allegation of mistake in
the making of the original assignment; and (3) a valid reformation required the
authority of someone with a current valid interest in Lone Star, namely, Modus
Media.
Finding CCC failed to meet its burden of proving a valid claim against
Snell, the district court granted Snell’s motion for summary judgment and
dismissed CCC’s complaint with prejudice.
On appeal, CCC makes substantially the same arguments made during the
proceedings before the district court. However, its appeal primarily rests on its
general and previously alternative contention Lone Star “orally” assigned CCC its
claims against Snell on the same day it executed the written assignment and,
therefore, the district court erred in failing to address this issue, including
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examination of parol evidence and state law in support thereof. 1
II.
We review the district court’s grant of summary judgment de novo,
applying the same legal standards used by the district court. Amro v. Boeing Co.,
232 F.3d 790, 796 (10th Cir. 2000). Summary judgment is appropriate "if the
pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of
law." Fed. R. Civ. P. 56(c). Further, "[w]hen the procedural posture of the case
is a Federal Rule of Civil Procedure 56 motion for summary judgment and
plaintiff['s] standing is at issue, to prevail on such a motion a plaintiff must
establish that there exists no genuine issue of material fact as to justiciability, and
mere allegations of injury, causation, and redressability are insufficient."
Essence, Inc. v. City of Fed. Heights, 285 F.3d 1272, 1280 (10th Cir. 2002)
(quotation marks and citations omitted); cf. Lujan v. Nat'l Wildlife Fed'n, 497
U.S. 871, 883-84 (1990). We also review de novo the district court’s
1
CCC also requests this court to rule, as a matter of law and for the purpose of
judicial economy, that legal malpractice and related claims validly may be assigned in a
business setting under Utah and Texas law. We decline to make such a ruling, in part
because it is not relevant to our disposition of this case.
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determination of standing. Loving v. Boren, 133 F.3d 771, 772 (10th Cir. 1998).
"Plaintiffs bear the burden of proving standing with the manner and degree of
evidence required at the particular stage of the litigation." Hutchinson v. Pfeil,
211 F.3d 515, 519 (10th Cir.) (quotation marks and citation omitted), cert. denied,
531 U.S. 950 (2002). Finally, we may affirm the district court’s summary
judgment dismissal “on any grounds for which there is a record sufficient to
permit conclusions of law, even grounds not relied on by the district court.” SEC
v. Cochran, 214 F.3d 1261, 1267 (10th Cir. 2000).
III.
We have carefully reviewed the parties’ pleadings and briefs, the record on
appeal, the district court’s decision, and considered them in conjunction with the
applicable law. We note the district court issued a thorough and well-reasoned
Order granting summary judgment and conclude CCC asserts no reversible
substantive errors on appeal. In sum, we conclude the district court correctly
determined the January 2000 assignment unambiguously did not assign any
potential claims of Lone Star against Snell to CCC and, therefore, properly did
not consider parol evidence submitted by CCC. Furthermore, the district court
correctly determined CCC’s amended September 2002 assignment did not validly
assign the contested claims to CCC. Given the thoroughness of the district
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court’s Order, we will not further articulate the facts, applicable law or reasoning
applied by the district court in granting summary judgment, other than to more
fully discuss CCC’s contention the district court erred in granting Snell’s
summary judgment in spite of CCC’s proffered evidence a valid collateral oral
assignment by Lone Star to CCC of its claims against Snell existed.
On appeal, CCC contends the district court erred by failing to address its
oral assignment argument, including Utah and Texas law allowing parol evidence
to support such oral assignments. For the following reasons, the district court did
not err in granting summary judgment.
During the course of the proceedings, it is clear CCC generally raised its
oral assignment argument only as an alternative theory or “basis” for finding an
assignment of the Snell claim to CCC. After the district court prohibited the use
of parol evidence to establish the parties’ intent behind the unambiguous, written
assignment, CCC relied on general statements in Mr. Cunningham’s affidavit to
support its oral assignment argument. In his affidavit, Mr. Cunningham generally
stated he intended for the January 21, 2000 written assignment to include
assignment of the Snell claim to CCC, and on the same day the written
assignment was executed, he, the Lone Star board and CCC “had agreed orally to
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transfer the claims of Lone Star against Snell ... to CCC.”
To withstand summary judgment, CCC is required to come forward with
“‘specific facts showing that there is a genuine issue for trial.’” Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed. R. Civ.
P. 56(e)). Although the district court did not expressly address CCC’s alternative
oral assignment argument in its final order, the record clearly shows CCC failed
to provide any specific evidence establishing the existence of an oral assignment,
except for Mr. Cunningham’s self-serving statement that he, the Lone Star board
and CCC orally agreed to transfer the Snell claim to CCC. Simply put, CCC’s
references to an alleged oral assignment in its briefs and Mr. Cunningham’s
affidavit only allege generally the existence of an oral agreement to transfer the
Snell claim to CCC. Such unsupported conclusory allegations do not create a
genuine issue of fact. Harrison v. Wahatoyas, 253 F.3d 552, 557 (10th Cir.
2001); Lantec, Inc. v. Novel, Inc., 306 F.3d 1003, 1019 (10th Cir. 2002) (holding
amended complaint insufficient to be considered an affidavit or to establish
existence of an oral agreement where it was conclusory, vague and lacking in
foundation). Because CCC failed to allege specific facts regarding the alleged
oral assignment, we conclude the district court did not err in granting summary
judgment in favor of Snell, and therefore, find it is unnecessary to remand the
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issue to the district court for the purpose of specifically addressing the oral
assignment issue and lack of facts in support thereof. Furthermore, we note
CCC’s reliance on an alternative oral assignment argument so late in the district
court proceedings simply demonstrates a last minute attempt to keep its
unmeritorious written assignment claim against Snell alive, after it appeared parol
evidence regarding the parties intent may be prohibited. 2
Accordingly, we AFFIRM the challenged district court decision granting
Snell’s motion for summary judgment for substantially the same reasons stated by
that court in its November 20, 2002 oral ruling and January 13, 2003 Order, and
further articulated herein.
Entered by the Court:
WADE BRORBY
United States Circuit Judge
2
CCC’s oral assignment argument was first only vaguely mentioned in its third
brief submitted to the district court, and after Snell filed its motion for summary
judgment. Again, CCC never alleges specific facts supporting this claim. Additionally,
in deposition testimony submitted earlier in the proceedings, Mr. Van Fleet testified he
was unaware of any potential claims against Snell at the time he drafted the January 2000
assignment, contrary to CCC’s later assertions.
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