Harriman et al v. Smart
Filing
88
ORDER denying 81 Motion for Reconsideration: For the reasons stated in the attached Order, Plaintiffs have failed to demonstrate an intervening change in the controlling law, new evidence previously unavailable, or the need to correct clear error or prevent manifest injustice. The Court, therefore, ORDERS the Motion to Reconsider is DENIED.Based on the Court's discussion with the parties at the prior Final Pretrial Conference, the Court FURTHER ORDERS that Plainti ffs shall have through and including October 30, 2024, to file a notice of dismissal of the remaining claim under Fed. R. Civ. P. 41(a)(1)(A)(ii), or a notice indicating they intend to try their remaining claim to this Court notwithstanding the reduced amount in controversy.By Judge S. Kato Crews on 10/23/2024.(Crews, S.)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
District Judge S. Kato Crews
Civil Action No.: 1:22-cv-01883-SKC
GREG HARRIMAN,
ANDREW KAMBICH, and
ELIZABETH KAMBICH,
Plaintiffs,
v.
JOHN SMART,
Defendant.
ORDER DENYING PLAINTIFFS’
MOTION FOR RECONSIDERATION (DKT. 81)
The above Motion is now before the Court. In relevant part, on July 30, 2024,
the Court granted Defendant’s Motion for Summary Judgment (Dkt. 57) insofar as
Plaintiffs alleged a breach of Section 3.03 of the December 31, 2021 Stock Purchase
Agreement (SPA) between the parties. Dkt. 77 (“MSJ Order”). Under the SPA,
Plaintiffs purchased all the issued and outstanding shares of 411 Flash Corporation
(“411 Flash”) from Defendant. At all relevant times, 411 Flash was party to an
agreement (“Transportation Agreement”) with Modivcare Solutions LLC. Modivcare’s
subscription riders were 411 Flash’s only source of revenue.
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With their Motion, Plaintiffs contend the Court made a clear error of law in
granting summary judgment on their claim that Defendant breached Section 3.03 of
the SPA. The Court has considered the Motion, Defendant’s Response, and Plaintiffs’
Amended Reply. Dkts. 81, 82, and 85, respectively. No hearing is necessary. The
Motion is denied as explained below.
LEGAL PRINCIPLES
“The Federal Rules of Civil Procedure do not specifically provide for motions
for reconsideration.” Rivera v. Exeter Finance Corp., No. 15-cv-01057-PAB-MEH,
2019 WL 6173666, at *1 (D. Colo. Nov. 19, 2019) (citing Hatfield v. Bd. of Cnty.
Comm’rs for Converse Cnty., 52 F.3d 858, 861 (10th Cir. 1995)). The bases for granting
reconsideration are extremely limited: “[g]rounds warranting a motion to reconsider
include (1) an intervening change in the controlling law, (2) new evidence previously
unavailable, and (3) the need to correct clear error or prevent manifest injustice.
Thus, a motion for reconsideration is appropriate where the court has
misapprehended the facts, a party’s position, or the controlling law. It is not
appropriate to revisit issues already addressed or advance arguments that could have
been raised in prior briefing.” Servants of the Paraclete v. Does, 204 F.3d 1005, 1012
(10th Cir. 2000) (citations omitted). These motions are committed to the trial court’s
discretion. See Phelps v. Hamilton, 122 F.3d 1309, 1324 (10th Cir. 1997).
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ANALYSIS
Plaintiffs argue the Court “made a clear error of law because it failed to address
Plaintiffs’ argument that the Transportation Agreement was not ‘regarding the same
subject matter’ as Part A and therefore did not supersede it.” 1 Dkt. 81, pp.1-2. As a
result, they argue “the Court should reconsider and reverse its order because it
inadvertently ignored a material dispute of fact that prevented the entry of summary
judgment against Plaintiffs on their claim for breach of Section 3.03 of the SPA.” Id.
at p.6. Plaintiffs frame the issue like so: “Whether Part A and the Transportation
Agreement Concerned the ‘Same Subject Matter’ Is a Material Dispute of Fact
Inappropriate for Resolution on Summary Judgment.” 2 Id. at p.7. And they claim the
Court erred because it “simply accepted Defendant’s assertion that the
Transportation Agreement superseded Part A.” Id. at p.9.
But Plaintiffs’ arguments miss their target because they recast the Court’s
MSJ Order to claim clear error over a finding the Court never made—i.e., that the
Transportation Agreement supersedes the Part A Disclosure. See generally Dkt. 77.
The Court’s finding, in relevant part, was that Plaintiffs could not use the separate
Part A Disclosure to vary or contradict the terms of the Transportation Agreement as
a matter of parol evidence. Thus, any purported factual dispute over whether the Part
The Part A document is titled “Part A: Disclosure of Ownership and Control
(Required by 42 C.F.R. § 455.104).”
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The trial of this matter will be to the Court.
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A Disclosure and the Transportation Agreement cover the “same subject matter” is a
red herring and not a disputed issue of material fact for purposes of the Court’s MSJ
Order. But let’s take a step back to find the fly in the ointment of Plaintiffs’
arguments.
First, the issue on summary judgment was whether the undisputed material
facts supported Plaintiffs’ breach of contract claim alleging a breach of Section 3.03
of the SPA. This Court noted in its MSJ Order that “[w]hether Defendant breached
Section 3.03 depends on the interpretation of [Section 3.03] because it is undisputed
Defendant neither provided Modivcare notice of the change in 411 Flash’s ownership
nor received its consent to the change.” Dkt. 77, p.9. The Court then found the
“undisputed material facts demonstrate there are no triable issues over whether
Defendant breached [Section 3.03]” for three reasons: (1) nothing in the
Transportation Agreement required 411 Flash to notify Modivcare of a change in
ownership or required Modivcare to consent to a change in ownership; (2) there is no
evidence the SPA or Defendant’s lack of notice to Modivcare resulted in a breach,
default, or other violation of the Transportation Agreement—indeed, 411 Flash
remained a party to the Transportation Agreement and the agreement remained in
full force and effect through Modivcare’s subsequent request to Plaintiffs to enter a
new transportation agreement; and (3) there is no evidence the change in 411 Flash’s
ownership created any right in Modivcare to accelerate, terminate, modify or cancel
the Transportation Agreement, or that it resulted in these actions in light of
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Plaintiffs’ decision to voluntarily agree to enter a new transportation agreement with
Modivcare. Id. at pp.11-12.
The Court summarized these findings saying: “[T]here is no evidence in the
summary judgment record that the change in ownership created some additional
right in Modivcare to seek changes to the existing Transportation Agreement such
that Defendant breached the SPA when he failed to notify Modivcare of the change.”
Id. at p.12. And because of these findings, the Court found “Plaintiffs’ reliance on the
Part A ownership disclosure Defendant provided to Modivcare is inapposite.” Id. at
p.13. Thus, even assuming the Part A Disclosure is not superseded by the
Transportation Agreement neither alters the result on summary judgment nor leads
to disputed issues of material fact. This conclusion is bolstered by the Court’s
additional findings of undisputed material facts in its MSJ Order, to wit:
[T]he undisputed evidence shows that after the change in ownership,
Modivcare told 411 Flash (then under Plaintiffs’ ownership) that its
senior director requested 411 Flash sign a new transportation
agreement. Dkt. 70-1, ¶21; Dkt. 57-9. 411 Flash, through Plaintiffs,
voluntarily complied with this request because it did not want to lose its
only revenue source. Id. This resulted in Modivcare temporarily
suspending its use of 411 Flash’s services, in its discretion, while it got
the new transportation agreement in place. Id. at ¶¶22, 23. . . . [T]here
is no evidence in the summary judgment record that the change in
ownership created some additional right in Modivcare to seek changes
to the existing Transportation Agreement such that Defendant breached
the SPA when he failed to notify Modivcare of the change. Id. at ¶¶3637.
Id. at p.12.
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Second, on summary judgment, Plaintiffs first argued the Transportation
Agreement and the Part A Disclosure “comprise one Agreement.” Dkt. 71, p.4 n.3; see
also Dkt. 58-1, p.9 (arguing “[I]f the Company fails to provide notice of a change in
the ownership and control information—as required by Part A—it constitutes a
breach of the Transportation Agreement.”). Here, the Court found the plain terms of
the Transportation Agreement were unambiguous and further found the
Transportation Agreement “does not contain any provision that required Defendant
to notify Modivcare of any change to Part A, nor does it incorporate Part A by
reference.” Dkt. 77, p.11 n.5, p.14. Implicit in these findings is that the
Transportation Agreement and the Part A Disclosure are separate documents and
not one agreement.
Third, on summary judgment, Plaintiffs argued in the alternative that the Part
A Disclosure “survives the [Transportation Agreement’s] integration clause because
[Part A] is not ‘regarding the same subject matter’ as the Transportation
Agreement[,]” and the Part A Disclosure “is unaffected by the ‘entire agreement’
clause of the Written Transportation Agreement. . ..” Dkt. 71, pp.13-14. Here, the
Court found “Plaintiffs cannot use the Part A document to vary the terms of the
unambiguous Transportation Agreement or the SPA.” Dkt. 77, p.14. This finding was
a matter of the Court applying the parol evidence rule. Applying the parol evidence
rule required no analysis over whether the Part A Disclosure and the Transportation
Agreement covered the same subject matter. See Sisters of Color United for Educ. v.
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ACM Park Hill JV VII, LLC, No. 23CA1785, 2024 WL 4235188, at *5 (Colo. App. Sept.
19, 2024) (“‘[W]hen a contract has been expressed in writing, to which both parties
have assented as a complete and accurate expression of their agreement, evidence,
whether parol or otherwise, of antecedent understandings and negotiations is not
admissible for the purpose of varying or contradicting the terms of the writing.’”)
(quoting Miller v. L. C. Fulenwider, Inc., 362 P.2d 570, 574 (Colo. 1961)). To be sure,
because Plaintiffs alternatively argued the Part A Disclosure does not regard the
same subject matter as the Transportation Agreement and because they offered the
disclosure to vary and contradict the plain and unambiguous terms of the
Transportation Agreement, application of the parol evidence rule was manifest.
Fourth, the Court never found that the Transportation Agreement superseded
the Part A Disclosure, as Plaintiffs contend. Nor was that finding necessary. Whether
the Transportation Agreement superseded the Part A Disclosure had no bearing on
the Plaintiffs’ effort to utilize the Part A Disclosure to vary and contradict the
unambiguous terms of the Transportation Agreement. The Court referenced the
integration clause merely to note the parties to the Transportation Agreement agreed
it represented their final and complete agreement, thus supporting application of the
parol evidence rule. See Nelson v. Elway, 908 P.2d 102, 107 (Colo. 1995) (“[T]he terms
of a contract intended to represent a final and complete integration of the agreement
between the parties are enforceable, and extrinsic evidence offered to prove the
existence of prior agreements is inadmissible. Even when extrinsic evidence is
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admissible to ascertain the intent of the parties, such evidence may not be used to
demonstrate an intent that contradicts or adds to the intent expressed in the writing.”
(citations omitted)); Keller v. A.O. Smith Harvestore Prod., Inc., 819 P.2d 69, 72 (Colo.
1991) (“[T]he terms of a contract intended to represent a final and complete
integration of the parties’ agreement are enforceable and parol evidence offered to
establish the existence of prior or contemporaneous agreements is inadmissible to
vary the terms of such contract.”).
Because Plaintiffs claim error over a finding the Court never made, nor needed
to make, their Motion must be denied.
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*
*
Plaintiffs have failed to demonstrate an intervening change in the controlling
law, new evidence previously unavailable, or the need to correct clear error or prevent
manifest injustice. Thus, for the reasons shared above, the Court ORDERS the
Motion to Reconsider is DENIED.
Additionally, at the September 20, 2024 Final Pretrial Conference, the parties
indicated the amount in controversy on Plaintiffs’ remaining claim for relief is capped
at around $40,000, with Plaintiffs already holding $20,000 of the capped amount as
an indemnification holdback allowed by the SPA. Plaintiffs’ counsel agreed with the
Court that it seems an inefficient use of everyone’s resources to try this case over
$20,000. See Fed. R. Civ. P. 1 (“These rules . . . should be construed, administered,
and employed by the court and the parties to secure the just, speedy, and inexpensive
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determination of every action and proceeding.). Therefore, it is FURTHER
ORDERED that Plaintiffs shall have through and including October 30, 2024, to
file a notice of dismissal of the remaining claim under Fed. R. Civ. P. 41(a)(1)(A)(ii), 3
or a notice indicating Plaintiffs intend to try their remaining claim notwithstanding
the reduced amount in controversy.
DATED: October 23, 2024
BY THE COURT:
____________________________
S. Kato Crews
United States District Judge
See Kristina Consulting Grp., LLC v. Debt Pay Gateway, Inc., No. 21-5022, 2022 WL
881575, at *2 (10th Cir. Mar. 25, 2022) (discussing exceptions and stating
“[g]enerally, a party may not ‘manufacture finality by obtaining a voluntary dismissal
without prejudice of some claims so that others may be appealed.’”) (citing Spring
Creek Expl. & Prod. Co. v. Hess Bakken Inv. II, LLC, 887 F.3d 1003, 1015 (10th Cir.
2018)).
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