F I L E D
                                                                    United States Court of Appeals
                                                                            Tenth Circuit
                      UNITED STATES COURT OF APPEALS
                                                                         December 5, 2005
                             FOR THE TENTH CIRCUIT
                                                                           Clerk of Court

    NATIONAL AMERICAN
    INSURANCE COMPANY, an
    Oklahoma corporation,

                 Plaintiff-Appellant,                     No. 04-1507
                                                  (D.C. No. 02-M-1990 (MJW))
     v.                                                    (D. Colo.)

    J.R. MISKEN INSURANCE
    SERVICES, INC., a California
    corporation; SIGNATURE
    UNDERWRITERS, INC., a Colorado
    corporation; JAMES R. MISKEN, an
    individual,

                 Defendants-Appellees.


                             ORDER AND JUDGMENT            *




Before LUCERO , ANDERSON , and BRORBY , Circuit Judges.



          After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of




*
      This order and judgment is not binding precedent, except under the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.
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.

      National American Insurance Company (NAICO) appeals from the district

court’s findings of fact and conclusions of law, made after a bench trial in this

litigation alleging breach of contract, breach of fiduciary duty, negligent

misrepresentation, and constructive fraud by defendants (collectively, Misken).

We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

                                          I

      NAICO issues payment and performance bonds for construction

contractors. Pursuant to a Surety Producer Agreement (SPA) effective April 1,

1999, Misken had authority to underwrite contract bonds for NAICO. This

litigation involves five particular bonds underwritten by Misken: four

guaranteeing performance and payment by A & B Enterprises in certain

drywalling projects in Las Vegas, Nevada (the A & B Bonds), and one

guaranteeing performance and payment by Tri-Vest LLC in connection with the

construction of an apartment building in Medford, Oregon (the Tri-Vest Bond).

                                    A & B Bonds

      Robert and Asenath Kemp owned A & B Enterprises, which performed

commercial painting and drywall work in Las Vegas. A & B bid on and won

subcontracts for framing and drywalling at four new Las Vegas elementary


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schools. Misken, on behalf of NAICO, issued four single instrument performance

and payment bonds to A & B, one for each school.

      The projects did not go well. The schools were prototypes, and there were

numerous change orders. Because of A & B’s inexperience and poor

recordkeeping, the general contractor rejected many of the change orders and

denied A & B payment for that additional work. Also, there may have been

problems with A & B’s bids, and its profit margin plummeted.

      When A & B encountered cash flow problems beyond the Kemps’ ability to

finance, it requested that Misken consent to the release of funds by the general

contractor to enable A & B to make payroll. On November 2, 2000, Misken,

without NAICO’s knowledge or consent, issued a consent to release contract

funds on behalf of NAICO and A & B (the Consent). The general contractor duly

began to release funds to A & B.

      On January 11, 2001, however, the general contractor issued a notice of

default to NAICO and Misken, advising that A & B was in default with certain

union payments, that A & B would be removed from the jobs the following day,

and that the general contractor would stop releasing funds to A & B and would

replace it with another subcontractor. NAICO first learned of the Consent as a

result of this notice. A sub-contractor related to the general contractor completed




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the projects. Ultimately, NAICO paid approximately $2.2 million in settlement,

costs, and expenses associated with the A & B projects.

                                   Tri-Vest Bond

      The Oregon job went more smoothly, in the sense that no claim was ever

made on the Tri-Vest Bond. In that transaction, though, there was a dispute over

the payment of NAICO’s bond premium.

      The bond arrangements were made through MBE Services, a company that

assisted minority contractors. Misken underwrote a $500,000 bond that he

believed covered preliminary site preparation and excavation work by Tri-Vest for

a price of less than $500,000. Documents provided to NAICO showed the

contract price to be $500,000. But this was incorrect; the real final contract price

for the entire project was $3,031,258.

      Misken received a bond payment of $10,000, two percent of $500,000, and

paid NAICO its 70 percent share of the premium. When NAICO learned that the

contract price for the project greatly exceeded $500,000, it argued that, under the

SPA, Misken was responsible for paying NAICO its share of the entire earned

premium, whether or not he received payment of any increased bond premium.

                             District Court Litigation

      NAICO brought suit against Misken for breach of contract, breach of

fiduciary duty, negligent misrepresentation, and constructive fraud. The district


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court held a bench trial. With regard to the A & B Bonds, the district court found

that NAICO had shown that Misken breached the SPA and breached a fiduciary

duty to NAICO by issuing the Consent and by failing to inform NAICO about

A & B’s cash-flow problems in November 2000. But the district court further

found that NAICO had “failed to provide any basis for apportioning losses that

may be attributable to that letter from its total loss,” Aplt. App. at 89, and that it

had failed to show that any of the potential courses of conduct that it allegedly

could have taken had it known of A & B’s problems in November 2000 were

sufficiently feasible to allow calculation and an award of damages. The district

court entirely rejected NAICO’s fraud and negligence claims.

      With regard to the Tri-Vest Bond, the district court found that the owner of

the project paid MBE Services a premium based on the entire contract price. It

further found, though, that Misken never received the difference between the

premium MBE Services received and the $10,000 premium Misken received. It

held that “[t]he evidence is that someone involved in this transaction other than

Misken changed documents,”      

and that NAICO had not shown that it was

ever liable for more than $500,000, as stated on the face of the issued bond.

Thus, it found that NAICO’s breach of contract claim for non-payment of

premium failed for lack of proof.

                                           II


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       Where the district court has conducted a bench trial, we review a district

court’s factual findings for clear error and its legal conclusions de novo    . Sanpete

Water Conservancy Dist. v. Carbon Water Conservancy Dist.           , 

,

1177-78 (10th Cir. 2000);    see also Fed. R. Civ. P. 52(a) (“Findings of fact,

whether based on oral or documentary evidence, shall not be set aside unless

clearly erroneous, and due regard shall be given to the opportunity of the trial

court to judge of the credibility of the witnesses.”). “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 , 

, 1217 (10th Cir. 2001)

(quotation omitted).

       On appeal, NAICO argues that the district court erred in: (1) finding that

NAICO did not prove its damages from Misken’s breach of contract and breach of

fiduciary duty in issuing the Consent, and (2) holding that NAICO’s claim for

non-payment of the premium for the Tri-Vest Bond failed for lack of proof. In

this diversity action, the district court applied Colorado law, and neither party has

appealed that decision.

                                       A & B Bonds

       NAICO argues that the district court erred in finding that NAICO had not

proven its damages with regard to Misken’s breach of the SPA and breach of


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fiduciary duty. It contends that Colorado law permits the approximation of

damages where the fact of damage is certain, though the precise amount is not. It

further argues that, under the SPA, “Misken is liable for all losses resulting from

his misuse of authority.” Aplt. Br. at 21. It then asserts that “Misken is required

to indemnify NAICO for its total loss due to the violations or misuse of the

power-of-attorney granted Misken in the SPA.”       

the “plaintiff in a breach of contract action must [present]

evidence of both the existence and the cause of damages.”       City of Westminster v.

Centric-Jones Constructors , 

, 477 (Colo. Ct. App. 2003),       cert.

granted , No. 03SC712, 

(Colo. Nov. 8, 2004). “[A] claimant

must establish that the damages he seeks are traceable to and are the direct result

of the wrong sought to be redressed.”   Husband v. Colo. Mountain Cellars, Inc.      ,

, 59-60 (Colo. Ct. App. 1993) (quotation omitted). “The plaintiff

must also provide the factfinder with a reasonable basis for calculating actual

damages in accordance with the relevant measure.”         City of Westminster , 100 P.3d

at 477.

      Moreover, “[t]o prove a claim for breach of fiduciary duty, it is the

plaintiff’s burden to demonstrate, inter alia, that he or she has incurred damages

and that the defendant’s breach of fiduciary duty was a cause of the damages

sustained.” Aller v. Law Office of Carole C. Schriefer, PC      , __ P.3d __, 2005 WL


                                          -7-
1773878, at *2 (Colo. Ct. App. July 28, 2005). “The element of causation is

satisfied when the plaintiff proves that the defendant’s conduct was a substantial

contributing cause of the injury.”     

v. Clayton Brokerage Co. of

St. Louis, Inc. , 

, 1112 (Colo. 1987)).

       NAICO’s argument requires a finding that Misken’s issuance of the

Consent and failure to inform NAICO about A & B’s cash-flow problems in

November 2000 led directly to all of NAICO’s expenditures on the A & B Bonds.

As determined by the district court, though, it does not necessarily follow that     all

of NAICO’s damages resulted from the Consent and/or the failure to inform

NAICO about the need for the Consent. The district court believed that NAICO

did not present it with sufficient means to determine which portion of its

expenditures actually were caused by the Consent or the failure to inform. On

this record, that decision was within its prerogative as the factfinder.     See Neece ,

41 F.3d at 1399-1400. Further, while NAICO’s witnesses testified that NAICO

could have taken certain actions to minimize its losses had it known of the

issuance of the Consent before January 2001, the district court identified reasons,

supported in the record, why this testimony failed to establish damages. After

reviewing the appellate record, we do not believe that the district court’s decision

is unsupported, and we are not “left with the definite and firm conviction that a

mistake has been made.”      Nieto , 268 F.3d at 1217 (quotation omitted).


                                             -8-
      Finally, NAICO argues that Misken breached his obligation to inform

NAICO about A & B’s credentials, and had he properly and timely informed

NAICO, it might never have issued the A & B bonds in the first place, thus

avoiding all loss. The district court rejected this theory, finding that the evidence

did not support NAICO’s position. We find no reason to disturb the district

court’s determination on this issue.

                                     Tri-Vest Bond

      NAICO also argues that, under the SPA, it is entitled to an additional

premium for the Tri-Vest Bond. “Interpretation of an unambiguous contract is

. . . a question of law[,]” but “when the trial court’s interpretation is aided by

extrinsic evidence, we review the interpretation under the clearly erroneous

standard.” Sanpete Water Conservancy Dist.       , 226 F.3d at 1178 (quotation

omitted).

      The SPA provides that “[t]he Agent shall be responsible for the payment of

all earned premiums whether or not collected.” Aplt. App. at 150. NAICO

argues that trial testimony established that the bond premium is properly

calculated as two percent of the final contract price. Consequently, it asserts,

Misken still owes NAICO its portion of a bond premium calculated according to

the $3,031,258 final contract price. It contends that the district court’s finding

that its claim failed for lack of proof is against the evidence and must be reversed.


                                           -9-
       The SPA does not specify how a premium is to be calculated. Thus,

NAICO’s argument requires the district court to accept testimony presented at

trial. As the factfinder in this bench trial, however, “a judge does not necessarily

have to believe everything that a witness may testify to.”    Neece v. IRS , 

, 1399 (10th Cir. 1994).

       Further, the district court specifically found that Misken was not aware of

the discrepancies between the contract price as presented ($500,000) and the final

contract price. It found that “[t]he evidence is that someone involved in this

transaction other than Misken changed documents.” Aplt. App. at 91. NAICO’s

argument on appeal, however, rests on the opposite premise, that “Misken was

aware of the contract price.” Aplt. Br. at 17. This court does not disturb the

district court’s factual findings except in cases of clear error. Here, we do not

believe that the district court made unsupported findings and we are not “left with

the definite and firm conviction that a mistake has been made.”     Nieto , 268 F.3d

at 1217 (quotation omitted). Consequently, we will accept the factual findings of

the district court. Given those findings, we do not believe that the district court

erred in its judgment for Misken regarding the non-payment of the Tri-Vest

premium.

                                            III




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       Misken requests in its answer brief that this court determine this appeal is

frivolous and assess damages and costs against NAICO under Fed. R. App. P. 38.

That rule, however, requires a separately filed motion; it is not sufficient to

include a request for sanctions in a brief.     See Smith v. Kitchen , 

,

1030 (10th Cir. 1997) (citing Rule 38, advisory committee note (1994

amendment)). Accordingly, we do not address this request.

       The judgment of the district court is AFFIRMED.

                                                         Entered for the Court



                                                         Stephen H. Anderson
                                                         Circuit Judge




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