Elawyers Elawyers
Washington| Change

Boxer F2 v. Bronchick, 16-1360 (2018)

Court: Court of Appeals for the Tenth Circuit Number: 16-1360 Visitors: 12
Filed: Jan. 22, 2018
Latest Update: Mar. 03, 2020
Summary: 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 J
More
                                                                            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         This order and judgment is not binding precedent except under the doctrines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

                                         -2-
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.

                                         -3-
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

                                         -4-
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).

                                         -5-
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


                                         -6-
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.”).




                                         -7-
      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


                                          -8-
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.




                                           -9-
       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.

                                         -10-
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.

                                         -11-
      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.


                                        -12-
                       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


                                         -13-
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


                                          -14-
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


                                         -15-
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


                                        -16-
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.




                                           -17-
         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.

                                          -18-
(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.

                                         -19-
             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


                                        -20-
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




                                         -21-

Source:  CourtListener

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer