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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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Fl LED 

Uoited Scates (pJ,.irt t;lf Appeals 

UNITED STATES COURT OF APPEALS Tenth Cir:ui! 

FOR THE TENTH CIRCUIT FEB '1 1991 

ROBERT L HOECKER 

Clerk JAMES F. COTTER, 

Plaintiff-Appellee, 

v. 

SANDY BUSH; ALBERT COHEN; COHEN 

REALTY, INC., 

Defendants-Appellants, 

and 

THOMAS H. GRANT; TROY MATCHEN; 

ABILENE, LTD., 

Defendants, 

v. 

THOMAS H. GRANT, 

Third-party-plaintiff. 

JAMES F. COTTER, 

Plaintiff-Appellant, 

v. 

THOMAS H. GRANT; TROY MATCHEN; 

ABILENE, LTD., 

Defendants. 

and 

SANDY BUSH; ALBERT COHEN; COHEN 

REALTY, INC . , 

Defendants-Appellees, 

v. 

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No. 89-6037 

(D.C. No. CIV-86-1354-T 

(W.D. Okla.) 

) No. 89-6068 

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Appellate Case: 89-6257 Document: 010110098437 Date Filed: 02/04/1991 Page: 1 
THOMAS H. GRANT 

Third-party-plaintiff. 

JAMES ·F. COTTER, 

Plaintiff-Appellee, 

v. 

THOMAS H. GRANT; TROY MATCHEN; 

ABILENE, LTD., 

Defendants, 

and 

SANDY BUSH; ALBERT COHEN; 

COHEN REALTY, INC., 

Defendants-Appellants, 

v. 

THOMAS H. GRANT, 

Thi~d-party-plaintiff. 

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) No. 89-6257 

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ORDER AND JUDGMENT* 

Before TACHA, EBEL, Circuit Judges, and JOHNSON,** District Judge. 

**Honorable Alan 

District Court 

designation. 

* 

B. Johnson, District Judge, United States 

for the District of Wyoming, sitting by 

This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppal. 10th Cir. R. 

36.3. 

2 

Appellate Case: 89-6257 Document: 010110098437 Date Filed: 02/04/1991 Page: 2 
These consolidated appeals arise from the breach of 

management and lease agreements governing the operation of Shady 

Oaks nursing home in Abilene, Texas. Plaintiff James F. Cotter is 

the owner of the nursing home facility. Defendants Stuart A. Bush 

and Albert Cohen are business associates who were involved in a 

limited partnership formed to operate and manage Shady Oaks. Two 

other men, Troy Matchen and Thomas Grant, were also involved in 

the partnership, but are not parties to this appeal. 1 

Cotter originally filed suit against Matchen, Grant, and the 

partnership after they defaulted on the lease and management 

agreements in the spring of 1985. He later amended his complaint 

to add Cohen and Bush. After a bench trial, the district court 

entered judgment against Bush and Cohen for $187,152.00 in 

contract damages and $56,205.22 in attorney's fees. Bush and 

Cohen appeal these rulings. Cotter appeals the court's denial of 

his claim for unpaid wages at Shady Oaks. We affirm the district 

court in all respects. 

Background 

James Cotter began negotiations to purchase Shady Oaks in 

early 1983. Bush and Cohen initially became involved as the real 

estate brokers on the deal. After two closing attempts failed, 

Cotter made known his requirement that a tenant be in place prior 

1 Troy Matchen never appeared in the case and is 

The partnership, Abilene, Ltd., is also in default. 

was dismissed by stipulation. 

3 

in default. 

Thomas Grant 

Appellate Case: 89-6257 Document: 010110098437 Date Filed: 02/04/1991 Page: 3 
to finalizing the sale. Bush proposed Troy Matchen. Because 

Cotter was concerned about Matchen's financial strength, Bush 

presented Thomas Grant as a potential guarantor. Bush and Cohen 

then decided to join the group as limited partners. Cotter agreed 

to this arrangement. 

A partnership agreement was drafted and executed in January, 

1984. However, it was backdated to November 22, 1983. In it, 

Troy Matchen was identified as the general partner. Grant, Bush, 

and Cohen were identified as limited partners. The purpose of the 

partnership was stated as follows: 

Business of the Partnership. The business of the 

Partnership is to acquire a lease on the Shady Oak 

Nursing Center Number 1 and the Shady Oak Nursing Center 

Number 2, both in Abilene, Texas, together with the 

improvements thereon,. and personal property incidental 

thereto, and to operate such nursing homes, and to do 

any and all things necessary, proper or incidental to 

the operation of such nursing homes. 

Addendum to Appellee's Brief at tab A. Cotter became the Shady 

Oaks owner on December 30, 1983. In January, 1984, Troy Matchen 

took over management of the facility. It was not until March 9, 

1984, however, that the limited partnership filed a certificate 

with the Oklahoma Secretary of State. 

Prior to closing the nursing home sale, Cotter entered into 

management and lease agreements with Matchen and Grant which 

governed the Shady Oaks operation. The lease outlined the duties 

and obligations arising from the nursing home tenancy. Rent was 

approximately $20,000 per month. The management contract gave 

Thomas Grant and Troy Matchen sole control and discretion in 

operating the nursing home. Neither the management nor lease 

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Appellate Case: 89-6257 Document: 010110098437 Date Filed: 02/04/1991 Page: 4 
agreements were signed by Bush, Cohen, or ·the partnership. 

Matchen and Grant signed each document individually. 

Matchen defaulted under the terms of the lease in the spring 

of 1985. On May 1, 1985, Cotter, Matchen, and Grant entered into 

a conditional release which terminated the lease contingent on 

Cotter locating a new tenant. Matchen and Grant agreed to remain 

on the premises until a new tenant was found. Cotter was able to 

lease the nursing home, and the parties executed an "Agreement of 

Financial Release" on June 1, 1985. 

signed each release individually. 

Again, Matchen and Grant 

On June 20, 1986, Cotter filed suit against Grant, Matchen, 

and Abilene, Ltd. for damages relating to the breach of the lease 

and management contracts. In January, 1987, Cotter filed an 

amended complaint adding claims against Cohen, Bush, and their 

realty company. At the time of trial, Cohen, Bush, and Cohen 

Realty were the only represented defendants in this case. The 

court found in favor of Cotter on his claim for unpaid rent, 

taxes, and operating expenses. It found in favor of Cohen and 

Bush on other claims, including one for unpaid wages from the 

nursing home. The court also ordered Cohen and Bush to pay 

attorney's fees pursuant to the lease agreement. 2 

On appeal, Cohen and Bush make three principal arguments 

including: 1) that they cannot be held liable on lease and 

2 Bush and Cohen's appeal on the merits is No. 89-6037. Cotter 

cross-appealed regarding the unpaid wage claim (No. 89-6068). 

Bush and Cohen filed a second appeal after the court issued its 

order regarding attorney's fees (No. 89-6257). All three appeals 

were consolidated upon motion of the parties. 

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Appellate Case: 89-6257 Document: 010110098437 Date Filed: 02/04/1991 Page: 5 
management agreements which neither they, nor the partnership, 

signed, 2) that there was insufficient damage evidence, and 3) 

that the trial court abused its discretion in awarding Cotter 

forty-five percent of his attorney's fees. In his appeal, Cotter 

asserts the district court erred in denying his claim for unpaid 

wages. We address each of these arguments below. 

Appeal No. 89-6037 

Bush and Cohen assert the district court erred in finding 

them liable on the two contracts because they were not signed in a 

representative capacity. The issue the district court was 

required to address was twofold. First it determined the status 

of the partnership at the time the agreements were signed. 

Second, it looked at whether the two contracts were partnership 

documents. These issues are mixed questions of law and fact. 

Because they are primarily factual, however, we review them under 

the clearly erroneous standard. Supre v. Ricketts, 792 F.2d 958, 

961 (10th Cir. 1986). 

In order to form a limited partnership in Oklahoma, a 

certificate of compliance must be filed with the Secretary of 

State. Okla. Stat. tit. 54, § 143(a)(2) (1979). 3 Although this 

partnership was formed in November, 1983, it did not file a 

certificate until March, 1984. As a consequence, Abilene, Ltd. 

was not a limited partnership at the time the management and lease 

3 The cited statutes are those in 

events took place. 

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effect at the time these 

Appellate Case: 89-6257 Document: 010110098437 Date Filed: 02/04/1991 Page: 6 
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contracts were signed in December, 1983. From November, 1983 

through March, 1984, the business relationship of these parties 

was a general partnership. See Okla. Stat. tit. 54, § 206 

(1979)(defining general partnerships). As a result, Cohen and 

Bush do not have limited liability for debts arising from these 

contracts if they were made on behalf of the partnership. 

The district court found these were partnership contracts. 

We agree. The stated business purpose of the partnership was to 

acquire a lease on and manage the Shady Oaks nursing home. That 

is exactly what the management and lease agreements purported to 

do. The contracts were made in furtherance of partnership goals. 

As general partners, Cohen and Bush are liable for any damages 

resulting from the breach of these contracts. The district 

court's findings on these issues are not clearly erroneous. 

Bush and Cohen also contend that regardless of their 

liability on the contracts, Cotter did not present sufficient 

damage evidence and therefore cannot recover. Pursuant to the 

lease and management contracts, the issue is governed by Texas 

law. In Texas, "uncertainty as to the amount of recovery will not 

defeat a recovery." 

657, 664 (Tex. Ct. 

-=T .... e=rm=i=n=1.=· x=--=I=n=t;...'-=l .... ,........,I=n=c:::;..:... _...a;v-'.'---'L=u=c=c=i, 6 7 0 S. W. 2d 

App. 1984). The evidence presented is 

sufficient if it affords a reasonable basis for determining the 

loss. See Vance v. My Apartment Steak House of San Antonio, Inc., 

677 S.W.2d 480, 484 (Tex. 1984). Texas does not require that 

damage figures be established with mathematical certainty. See 

Gill v. Guy Chipman Co., 681 S.W.2d 264, 270 (Tex. Ct. App. 1984). 

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Appellate Case: 89-6257 Document: 010110098437 Date Filed: 02/04/1991 Page: 7 
I 

Bush and Cohen argue that Cotter did not establish his 

damages with reasonable certainty, resulting in a speculative 

damage award. We disagree. Cotter presented both testimonial and 

documentary evidence regarding damages. He introduced a ledger 

outlining payments made and received. The damage figures were not 

speculative. They were based on losses directly resulting from 

the failure to make payments under the undisputed terms of the 

lease. This evidence was sufficient for the court to make a 

finding. We will not disturb that finding here. 

Appeal No. 89-6068 

In his cross appeal, Cotter asserts the district court erred 

in finding that he was not obligated to pay past due wages of 

Shady Oaks employees in order to obtain a new tenant. This is a 

finding of fact which we review under a clearly erroneous 

standard. See Raydon Exploration, Inc. v. Ladd, 902 F.2d 1496, 

1499 (10th Cir. 1990)(district court findings are presumed correct 

and should not be set aside unless clearly erroneous). 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 a definite and firm conviction that a 

mistake has been made". Id. 

Cotter asserts the unpaid wages constitute consequential 

damages which are recoverable under the lease. At trial, however, 

Cotter testified he did not believe he was legally obligated to 

meet the May, 1985, payroll obligations. The lease did not 

obligate him to make these payments following default. 

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Further, 

Appellate Case: 89-6257 Document: 010110098437 Date Filed: 02/04/1991 Page: 8 
A 

the unpaid wages were debts incurred after Cotter executed the 

conditional release. Our review of the evidence leads us to 

conclude that the district court's finding is not clearly 

erroneous. 

Finally, 

challenging 

Appeal No. 89-6257 

we turn to Bush and Cohen's separate appeal 

the court's award of attorney's fees. We review this 

issue under an abuse of discretion standard. Bee v. Greaves, 910 

F.2d 686, 689 (10th Cir. 1990). The management and lease 

contracts included a provision allowing for an award of fees to 

the prevailing party. After trial, Cotter submitted affidavits 

outlining his attorney's fees and the court, relying on Ramos v. 

Lamm, 639 F.2d 559 (10th Cir. 1980), cert. denied, 450 U.S. 1041 

(1981), made various reductions to account for his limited 

success. 

Cotter's amended complaint stated seven claims for relief. 

The most significant were those for breach of the management and 

lease contracts and for breach of fiduciary obligations. Cotter 

did not prevail on the fiduciary claim. The district court took 

this into account when it reduced the fees amount to forty-five 

percent of the total requested. The court also took into account 

Cotter's limited success on the other asserted claims. It was 

entirely appropriate for the court to make these adjustments. See 

Bee, 910 F.2d at 689; see also Hensley v. Eckerhart, 461 U.S. 424, 

436-37 (1983). District courts may reduce fees based on a party's 

limited success by either attempting to identify specific attorney 

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Appellate Case: 89-6257 Document: 010110098437 Date Filed: 02/04/1991 Page: 9 
hours for elimination or by reducing the entire award. Hensley, 

461 U.S. at 436-37. The court here reduced the entire award. No 

abuse of discretion occurred. 

Accordingly, the judgments of the United States District 

Court for the Western District of Oklahoma are AFFIRMED. 

ENTERED FOR THE COURT 

PER CURIAM 

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