Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-14-01010/USCOURTS-ca10-14-01010-0/pdf.json

Parties Involved:
Diebold Enterprises Security Systems, Inc.
Appellant
Low Voltage Wiring, Ltd.
Appellee

Document Text:

UNITED STATES COURT OF APPEALS 

 TENTH CIRCUIT

DIEBOLD ENTERPRISES SECURITY 

SYSTEMS, INC., a New York 

corporation, 

 Plaintiff - Appellant, 

v. 

LOW VOLTAGE WIRING, LTD., a 

Colorado corporation, d/b/a LVW 

Electronics, Inc., 

Defendant - Appellee. 

No. 14-1010 

(D.C. No. 1:13-CV-00505-REB-KLM) 

(D. Colo.) 

ORDER AND JUDGMENT*

Before LUCERO, MURPHY, and McHUGH, Circuit Judges. 

I. INTRODUCTION 

 The question in this case is whether Diebold Enterprises Security Systems, Inc. 

(Diebold) is entitled to recover sales taxes it claims to have incurred in performing work 

 

* After examining Appellant=s brief and the appellate record, this panel has 

determined unanimously that oral argument would not materially assist the determination 

of this appeal. See Fed. R. App. P. 34(a)(2) and 10th Cir. R. 34.1(G). The case is 

therefore ordered submitted without oral argument. 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. 

FILED 

United States Court of Appeals 

Tenth Circuit 

January 6, 2015

Elisabeth A. Shumaker 

Clerk of Court

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pursuant to a subcontract with Low Voltage Wiring (Low Voltage). Exercising 

jurisdiction under 28 U.S.C. § 1291, we conclude Diebold unambiguously released all of 

its claims related to the subcontract and is therefore not entitled to any additional amounts 

for sales tax. As a result, we affirm the grant of summary judgment in favor of Low 

Voltage, but on a different basis than that relied upon by the district court. 

II. BACKGROUND 

A. Factual Background 

 Low Voltage contracted with the United States Army Engineering and Support 

Center (the Government) to install certain security systems at Fort George G. Meade, 

Maryland (the Project). In January 2010, Low Voltage hired Diebold to perform some of 

the work on the Project under a separate subcontract (the Subcontract). 

1. Subcontract Provisions 

 Of relevance here, the Subcontract contained a number of provisions which impact 

the total amount due, including contractual provisions in the body of the Subcontract 

itself, as well as exhibits and contract provisions incorporated into the Subcontract by 

reference. The provisions in the main body of the Subcontract do not expressly address 

sales tax, but otherwise limit the Subcontract price. However, government contractor 

provisions and an exhibit that are incorporated into the Subcontract by reference do make 

express reference to sales tax. We briefly describe the relevant contract language. 

 Section C, paragraph (8) of the Subcontract, entitled “Limitation of Funds” 

contains five subparagraphs, (a) through (e). Joint Appendix (J.A.) 301–302. 

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Subparagraph (a) establishes the “cumulative total sum presently available for payment 

and allotted to this Subcontract” as the amount of $6,813,511.58. Subparagraph (a) also 

states: “Diebold’s Pricing Proposal is attached as Exhibit C, Section J and hereby 

incorporated by reference.” Id. at 301. In turn, Exhibit C is a “Pricing Proposal 

Summary,” which states a “Total Project Material & Installation with Maintenance & 

Monitoring” price of “$6,813,511.58,” the same amount included in the body of 

subparagraph (a). Id. at 301, 353. Subsequent change orders increased the $6,813,511.58 

cumulative total sum allotted to the Subcontract to $7,889,051.49. 

 Subparagraph (b) of Section C (8) of the Subcontract provides, “The 

Subcontractor agrees to perform the work on this Subcontract as set forth in the attached 

Statement of Work incorporated herein as Attachments, Exhibits A and B.” J.A. 301. 

Thus, subparagraph (b) incorporates two exhibits by reference into the Subcontract. Only 

the first, Exhibit A, is relevant to the issues on appeal. Exhibit A is a “Fort Meade 

Statement of Work from Diebold” and contains a description of the work to be performed 

under the Subcontract. Id. at 219. The first section of Exhibit A is the “Diebold Executive 

Summary,” id., which includes “Conditions,” “Clarifications,” and “Exclusions.” Id. at 

243–44. Of significance here, the third-numbered Exclusion states: 

Taxes-All prices for items are exclusive of taxes such as . . . sales . . . taxes 

which may be imposed by any taxing authority. If such taxes must be paid 

by Diebold or if Diebold is liable for the collection of such tax . . . , [t]he 

amount thereof shall be in addition to the amounts at which Diebold offers 

to sell items herein. Customer agrees to pay all such taxes or to reimburse 

Diebold for such taxes. 

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Id. at 244. This same “Exclusion” appears in two other sections of Exhibit A: the “Duress 

Executive Summary” and the “Training Plan.” Id. at 251, 290. 

 Subparagraphs C (8)(c) and C (8)(d) also relate to the amount due under the 

Subcontract: 

c. The Subcontractor agrees to perform work as specified within this 

Subcontract up to the point at which the total amount paid and 

payable by [Low Voltage] pursuant to the terms of this Subcontract 

equals, but does not exceed the total amount actually allotted to the 

Subcontract. 

d. No notice, communication or representation in any other form or 

from any person other than written notice from the [Low Voltage’s] 

Contracts Administrator shall affect the amount allotted to the 

Subcontract. In the absence of the specified written notice, [Low 

Voltage] shall not be obligated to reimburse the Subcontractor for 

any costs in excess of the total amount then allotted to the 

Subcontract, whether those excess costs were incurred during the 

course of the Subcontract or as a result of termination. Any costs 

incurred by Subcontractor in excess of the amount allotted shall not 

be an allowable cost of the Subcontract if the allotment is 

subsequently increased, unless the specified notice by [Low 

Voltage’s] Contracts Administrator specifically states that such costs 

are allowable. . . . Change orders issued pursuant to the Changes 

clause, or any other clause of this Subcontract, shall not be 

considered an authorization to the Subcontractor to exceed the 

amount allotted to the Subcontract in absence of a statement in the 

change order, or other contractual modification, increasing the 

amount allotted. 

Id. at 301–302. 

 The next provision of relevance is found in the “Subcontract Clauses” section of 

the Subcontract. Paragraph 52, incorporates various Federal Acquisition Regulations 

(FAR): “This Subcontract incorporates the following clauses by reference, with the same 

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force and effect as if they were given in full text. . . . 52.229-1[:] State and Local Taxes 

. . . 52.229-[3][:] Federal, State And Local Taxes.”1 Id. at 311–13. FAR 52-229-3 

provides: 

Federal, State, and Local Taxes (FEB 2013) 

. . . 

(b) (1) The contract price includes all applicable Federal, State, and 

local taxes and duties, except as provided in subparagraph (b)(2)(i) 

of this clause. 

(2) Taxes imposed under 26 U.S.C. 5000C may not be— 

(i) Included in the contract price; nor 

(ii) Reimbursed. 

48 C.F.R. § 52.229-3 (emphasis added).2

 But the Subcontract also incorporates FAR 

52.229-1, which states: 

State and Local Taxes (APR 1984) 

Notwithstanding the terms of the Federal, State, and Local Taxes clause, 

the contract price excludes all State and local taxes levied on or measured 

by the contract or sales price of the services or completed supplies 

furnished under this contract. The Contractor shall state separately on its 

invoices taxes excluded from the contract price, and the Government 

 1

 The Subcontract actually lists Government Acquisition Regulation 52.229-6, but 

the district court and both parties agree this is a scrivener’s error, and that the correct 

provision on Federal, State and Local Taxes is 52.229-3. We therefore include provision 

52.229-3, rather than 52.229-6 in our description of the Subcontract. 

2

 The omitted language from 52.229-3 defines various terms, excludes trivial tax 

increases, and addresses federal taxes that may be imposed after the parties have agreed 

to the contract, excise taxes, and the consequences of failing to provide notice. 

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agrees either to pay the amount of the taxes to the Contractor or provide 

evidence necessary to sustain an exemption.

Id. § 52.229-1 (emphasis added). 

 In summary, neither the Subcontract itself nor Exhibit C, the Pricing Proposal, 

expressly discusses sales tax. Instead, they both identify a specific dollar amount as the 

amount proposed to perform the Subcontract and the amount allocated to the Subcontract. 

The Subcontract further provides that Low Voltage “shall not be obligated to reimburse 

the Subcontractor for any costs in excess of the total amount then allotted to the 

Subcontract . . . .” J.A. 301–302. But the Subcontract also incorporates Exhibit A, the 

Fort Meade Statement of Work, which in three places states the contract price is 

exclusive of sales taxes and the amount of any sales tax paid or to be collected by 

Diebold will be paid by the “Customer.” Finally, the Subcontract incorporates by 

reference two FAR provisions: FAR 52.229-3, which states the contract price is inclusive 

of sales tax, and in apparent contrast, FAR 52.229-1, which provides that 

“notwithstanding” FAR 52.229-3, the contract price is exclusive of sales tax. 

2. Request for Equitable Adjustment and Pass-Through Agreement 

 Upon completion of its work under the Subcontract, Diebold asked Low Voltage 

to submit a Request for Equitable Adjustment (REA) to the Government, requesting that 

the Government reimburse Diebold for additional costs incurred on the project. Low 

Voltage agreed to submit a Revised REA, pursuant to a Pass-Through Agreement 

between Low Voltage and Diebold. The Pass-Through Agreement includes two 

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paragraphs relevant to the issues on appeal. The first is found in paragraph 5 of the PassThrough Agreement and contains Diebold’s release of all claims against Low Voltage 

except for those made in the contemporaneous REA and any then-outstanding invoices: 

5. Except for the instant REA and any outstanding invoices and as 

otherwise provided in this Agreement, Diebold releases, discharges and 

agrees to hold [Low Voltage] harmless from any and all REAs, demands, 

charges or claims of any kind or nature whatsoever, from any and all 

damages, actions or causes of action, either in law or in equity, which it 

may now have, which are known or unknown by Diebold at the time of 

execution of this Agreement, that relate to the Project. 

J.A. 129. 

 Paragraph 6 of the Pass-Through Agreement states that upon resolution of 

the REA and the payment of Diebold’s outstanding invoices, the release contained 

in paragraph 5 shall become absolute and final as to all of Diebold’s claims against 

Low Voltage: 

6. It is the purpose of this [Pass-Through] Agreement, except for the 

conditions set forth above, forever to settle, adjust, and discharge all REAs 

or claims of whatever kind or nature that Diebold may have accrued against 

[Low Voltage] which relate to the Project. Upon resolution of Diebold’s 

REA and final [Low Voltage] payment of Diebold’s outstanding invoices, 

the release described in Paragraph 5 shall thereupon become absolute and 

final as to all of Diebold’s claims against [Low Voltage]. 

Id. Low Voltage submitted the REA on behalf of Diebold, but the Government rejected 

it. The REA did not include any amounts for sales tax. All the invoices Diebold 

submitted to Low Voltage as of the time of the Pass-Through Agreement have been paid. 

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3. Final Release 

 After the Government denied the REA, Diebold submitted final Invoice #082830 

to Low Voltage on May 18, 2012 (the Invoice). The Invoice requested a final installment 

payment of $930,995.43, which, when added to the installment payments previously paid, 

would total the cumulative total sum of $7,889,051.49 allotted to the Subcontract. In 

addition, the Invoice sought $470,646.15 in sales taxes Diebold claimed it had paid to the 

State of Maryland in connection with the project. 

 A few days later, on May 21, 2012, Diebold and Low Voltage executed a Final 

Release of Claims. Low Voltage then paid $830,995.43 to Diebold—the $930,995.43 

installment payment requested in the Invoice minus $100,000 related to warranty issues 

not at issue in this case—but did not pay the amount invoiced for sales tax. Low Voltage 

eventually paid the $100,000 it had withheld from the final contract installment, but it 

refused to pay the $470,646.15 Diebold had requested for reimbursement of sales tax. 

B. Procedural Background 

 On February 26, 2013, Diebold sued Low Voltage for breach of contract based on 

its failure to pay the sales tax. Three months later and before discovery was completed, 

Low Voltage filed a motion for summary judgment, arguing Diebold had waived and 

released all claims against Low Voltage in the Final Release and in the Pass-Through 

Agreement. Diebold opposed summary judgment, claiming both releases were 

conditional releases premised on payment of the sales taxes at issue in the lawsuit. To 

support its position, Diebold pointed to the language of the Final Release indicating the 

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parties entered into it pursuant to the terms of the Subcontract and to induce payment of 

the Invoice. Diebold asserted that because both the Subcontract and the Invoice required 

payment of sales taxes, the Final Release did so as well. 

 In reply, Low Voltage continued to assert that the Pass-Through Agreement and 

Final Release plainly waived Diebold’s claim. Low Voltage also claimed that Diebold 

was never entitled to sales tax under the Subcontract. Low Voltage advanced three 

arguments in support of this position: (1) the Subcontract expressly rejects different or 

additional terms, so Exhibit A was an unconsented-to variance from the terms of the 

Subcontract; (2) incorporation of the Federal Acquisition Regulations shows the contract 

price already included sales tax; and (3) the plain language of the pricing provision caps 

Diebold’s reimbursement to the allotted Subcontract price. 

 Diebold moved to strike the newly-raised arguments in Low Voltage’s reply and, 

in the alternative, moved for leave to file a surreply to address the question of whether the 

Subcontract provided Diebold a right to sales tax. Although Diebold had briefed its 

position that the Subcontract obligated Low Voltage to reimburse Diebold for sales tax in 

addition to paying the Subcontract price, it claimed it had been given no opportunity to 

respond to Low Voltage’s reliance on the Federal Acquisition Regulations raised for the 

first time in reply. The district court denied the motion to strike but granted the motion to 

file a surreply. Diebold’s surreply focused only on whether the Federal Acquisition 

Regulations were incorporated by reference into the Subcontract. 

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 Ultimately, the district court granted Low Voltage’s motion for summary 

judgment. But instead of ruling on the grounds Low Voltage raised in the initial 

motion—that Diebold had released all claims against it in the Pass-Through Agreement 

and in the Final Release—the district court held the terms of the Subcontract clearly and 

unambiguously limited the total amount available to Diebold to the cumulative total sum 

allocated to the Subcontract. Accordingly, the district court concluded Diebold had no 

contractual right to request reimbursement for sales tax in excess of that sum. It declined 

to address as moot whether Diebold had released all claims against Low Voltage. Diebold 

now appeals. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm, but on the 

alternative ground that Diebold released all claims against Low Voltage. 

III. DISCUSSION 

A. Standard of Review 

 We review a grant of summary judgment de novo, applying the same standards as 

the district court. Merrifield v. Bd. of Cnty. Comm’rs, 654 F.3d 1073, 1077 (10th Cir. 

2011). In a diversity case, we apply state law to the underlying claims while federal law 

governs the propriety of a grant of summary judgment. Reid v. Geico Gen. Ins. Co., 499 

F.3d 1163, 1167 (10th Cir. 2007). “Therefore, the substantive law of [Colorado] applies 

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and governs as we review the issues raised on appeal in this case.” Kovnat v. Xanterra 

Parks & Resorts, 770 F.3d 949, 954 (10th Cir. 2014) (internal quotation marks omitted).3

 

 Summary judgment shall be granted if “there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 

56(a). When reviewing summary judgment, “[w]e examine the record and all reasonable 

inferences that might be drawn from it in the light most favorable to the nonmoving 

party.” Merrifield, 654 F.3d at 1077. 

B. Analysis 

 “[I]t is well established that ‘we are free to affirm a district court decision on any 

ground for which there is a record sufficient to permit conclusions of law, even grounds 

not relied upon by the district court.’” Okla. ex rel. Office of State Fin. v. United States, 

292 F.3d 1261, 1264 (10th Cir. 2002) (brackets omitted) (quoting United States v. 

Sandoval, 29 F.3d 537, 542 n.6 (10th Cir. 1994)). Affirming on an alternative basis is 

appropriate “so long as the appellant has had a fair opportunity to address that ground.” 

 3

 The Final Release does not include a choice of law provision that could invoke 

another forum’s law. The Subcontract does. The Subcontract is to be governed, to the 

extent possible, by “the law of US Government contracts as set forth by statute and 

applicable regulations and decisions by the appropriate courts and the Boards of Contract 

Appeals,” and beyond that, by the laws of Colorado. The Supreme Court has held that 

ordinary government contracts are generally governed by the rules applicable to contracts 

between private parties. United States v. Winstar Corp., 518 U.S. 839, 914 (1996). Thus, 

irrespective of whether the choice of law provision in the Subcontract is applied to the 

Final Release, we rely on Colorado law to interpret both contracts. 

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Merrifield, 654 F.3d at 1077. We do so here and hold the Final Release unambiguously 

bars Diebold from seeking further recovery under the Subcontract.4

 

 “A release is the relinquishment of a vested right or claim to a person against 

whom the claim is enforceable.” Neves v. Potter, 769 P.2d 1047, 1049 (Colo. 1989). “A 

general release is an instrument by which one party relinquishes all its claims against 

another for consideration. Once a claim is released, the release bars the injured party from 

seeking further recovery.” CMCB Enters., Inc. v. Ferguson, 114 P.3d 90, 96 (Colo. App. 

2005).5

 

Releases are interpreted using normal tools of contract interpretation. Neves, 769 

P.2d at 1053. The purpose of contract interpretation is to determine the mutual intent of 

the parties. See E. Ridge of Fort Collins, LLC v. Larimer & Weld Irrigation Co., 109 P.3d 

969, 973 (Colo. 2005); Neves, 769 P.2d at 1055 (endorsing United States Supreme Court 

cases that “viewed intent as the polestar to determining the scope of a release.”). Our 

 4

 Because we reach this conclusion, we need not address the alternative grounds 

Low Voltage offers for affirming the district court’s decision, including: whether the 

Subcontract required Low Voltage to compensate Diebold for sales tax; whether Diebold 

failed to comply with the Subcontract’s invoicing requirements by billing Low Voltage 

for all incurred sales tax over seven months after Diebold completed its work under the 

Subcontract, rather than by the tenth day of the month following the month in which the 

expense was incurred; and whether Diebold waived its claim by failing to ask for sales 

tax in the Request for Equitable Adjustment. 

5

 Although we are not bound by the opinions of state intermediate courts of 

appeals in diversity cases, their opinions provide guidance. Martin K. Eby Const. Co. v. 

OneBeacon Ins. Co., ___ F. 3d ___, No. 13-3076, 2014 WL 6910685, at *4 (10th Cir. 

Dec. 9, 2014). 

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starting point is the plain language of the contract. May v. United States, 756 P.2d 362, 

369 (Colo. 1988). That plain language must be examined and construed according to the 

generally accepted meaning of the words used. Lake Durango Water Co. v. Pub. Util. 

Co., 67 P.3d 12, 20 (Colo. 2003). In determining a contract’s meaning, we must examine 

the entire instrument instead of viewing clauses or phrases in isolation. Allstate Ins. Co. v. 

Huizar, 52 P.3d 816, 819 (Colo. 2002). We strive to harmonize different parts of a 

contract to give all relevant provisions effect. Level 3 Commc’ns, LLC v. Liebert Corp., 

535 F.3d 1146, 1154 (10th Cir. 2008) (applying Colorado law). In this endeavor, “a more 

specific provision controls the effect of general provisions.” Id. (quoting E-470 Pub. 

Highway Auth. v. Jagow, 30 P.3d 798, 801 (Colo. Ct. App. 2001), aff’d, 49 P.3d 1151 

(Colo. 2002)). 

 “When a contractual provision unambiguously resolves the parties’ dispute, the 

interpreting court’s task is over.” Id. at 1154. On the other hand, if a contract is 

ambiguous, then extrinsic evidence of the parties’ intent is admissible. E. Ridge, 109 P.3d 

at 973. A contract is ambiguous “if it is fairly susceptible to more than one 

interpretation.” Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 912 (Colo. 1996). 

 In the present case, the Final Release provides: 

Pursuant to the terms of Master Subcontract # 1521, for value received, and 

in order to induce payment of final invoice #082830, and in consideration 

of the total sum of the subcontract in the amount of $7,889,050.18 which 

has been received and paid for in accordance with the contracted Terms and 

Conditions under Master Subcontract # 1521 for the benefit of the Fort 

Meade DISA Project said Subcontractor, Diebold Enterprise Security 

Systems, Inc., does remise, release, and discharge [Low Voltage], its 

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officers, agents and employees, of and from all liabilities, obligations, 

claims, and demands whatsoever under or arising from the said 

Subcontract, including modifications. 

NO ADDITIONAL INVOICE (S) WILL BE SUBMITTED AND NO 

FUTURE CLAIMS WILL BE MADE; CONSIDER THIS 

SUBCONTRACT CLOSED. 

J.A. 175. 

 By its terms, the Final Release contains four relevant clauses: that it was (1) 

entered into “Pursuant to the terms of [the Subcontract],” (2) entered into “in order 

to induce payment of final invoice #082830,” (3) entered into “in consideration of 

the total sum of the subcontract in the amount of $7,889,050.18 which has been 

received and paid for,” and (4) entered into in exchange for Diebold’s promise to 

“remise, release, and discharge [Low Voltage] . . . of and from all . . . claims . . . 

arising from the said Subcontract.” To give each of these clauses effect, the Final 

Release must be interpreted such that Diebold has released all claims against Low 

Voltage, including any claim for sales tax. See Level 3 Commc’ns, 535 F.3d at 

1154. 

 To begin, the Final Release references the terms of the Subcontract, indicates 

value has been received, and states “in order to induce payment of final invoice 

#082830.” These recitals provide context for the release by acknowledging the dispute 

between the parties over the terms of the Subcontract as they relate to payment of the 

Invoice. See Rocky Mountain Ass’n of Credit Mgmt. v. Hessler Mfg. Co., 553 P.2d 840, 

842 (Colo. App. 1976) (A release must be “construed in light of the manner in which its 

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terms relate to all of the circumstances surrounding the transaction.”). As explained, Low 

Voltage claimed the Subcontract limited the amounts due to Diebold to the cumulative 

total sum allotted to the Subcontract, which was initially $6,813,611.58, but later 

increased to $7,889,051.49. The $930,995.43 installment payment requested in the 

Invoice, if paid, would bring the total amount Low Voltage had paid to Diebold under the 

Subcontract to that $7,889,051.49 cumulative total sum. But the Invoice also includes 

Diebold’s request for sales tax, which, if paid, would have exceeded the cumulative total 

sum allocated to the Subcontract by $470,646.15. Instead of creating binding obligations, 

the introductory clauses of the Final Release merely place it in context by generally 

identifying the Subcontract and indicating that for an unspecified “value received,” 

Diebold was entering into the Final Release to induce payment of the Invoice. 

 Next, the Final Release makes specific reference to the amount of 

“consideration” given in exchange for Diebold’s release of claims. It states, “in 

consideration of the total sum of the subcontract in the amount of 

$7,889,050.18 . . . , [Diebold] does remise, release, and discharge [Low Voltage] 

. . . from all liabilities, obligations, claims, and demands whatsoever under or 

arising from the said Subcontract . . . .” Unlike the general prior reference to 

“value received,” the following clause expressly defines the “consideration” paid 

for the release of claims as “the total sum of the subcontract in the amount of 

$7,889,050.18.” As a result, the Final Release resolves the dispute concerning 

payment of the Invoice in favor of the position asserted by Low Voltage. As 

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discussed, if Low Voltage paid the $930,995.43 Diebold requested in the Invoice 

as the final contract installment, but not the $470,646.15 Diebold requested as 

sales tax, the cumulative sum total paid under the Subcontract would equal 

$7,889,051.49.6

 Thus, by identifying the consideration for the Final Release as that 

sum, the parties excluded the amount Diebold requested for sales tax. Otherwise, 

the consideration identified for the release of claims by Diebold would have been 

$8,359,696.33 ($7,889,050.18 + $470,646.15). 

 The last relevant provision of the Final Release is the bolded and 

capitalized sentence: “NO ADDITIONAL INVOICE (S) WILL BE 

SUBMITTED AND NO FUTURE CLAIMS WILL BE MADE; CONSIDER 

THIS SUBCONTRACT CLOSED.” This final statement leaves no doubt that 

upon receipt of the stated consideration of $7,889,050.18, Diebold was not entitled 

to any other amounts under the Subcontract, including amounts it claimed for sales 

tax. 

In summary, the first three clauses of the Final Release identify the Subcontract 

and the outstanding Invoice. The operative language of the Final Release is found in the 

latter two clauses, which expressly identify the dollar amount of the consideration 

exchanged for Diebold’s release of all claims against Low Voltage. Diebold concedes 

 6

 The parties agree the total sum owed under the Subcontract, after change orders, 

was $7,889,051.49, not the $7,889,050.19 identified in the Final Release. Neither party 

has attached any significance to this $1.30 discrepancy, and we agree that it is 

unimportant. 

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that Low Voltage made the final installment payment of $930,995.43, and thus Low 

Voltage paid the $7,889,050.18 identified in the Final Release. In exchange, Diebold 

released all claims against Low Voltage arising from the Subcontract and the Subcontract 

was closed. Under the plain language of the Final Release, Low Voltage is entitled to 

summary judgment on Diebold’s claim to recover any additional amounts. 

In reaching that conclusion, we reject Diebold’s argument that the Final Release 

was contingent upon the payment of sales tax. According to Diebold, the statements that 

the release was entered into pursuant to the Subcontract and to induce payment of the 

Invoice indicate that all amounts due under the Subcontract and the full amount requested 

in the Invoice must be paid before the release is effective. We reject this interpretation. 

First, there is nothing in the Final Release that expressly makes it conditional on 

any future event. “[A] condition precedent in a contract is not favored and will not be 

given effect unless established by clear and unequivocal language.” Main Electric, Ltd. v. 

Printz Servs. Corp., 980 P.2d 522, 526 (Colo. 1999). Rather than being contingent upon 

future payment of sales tax, the Final Release states that upon the payment of the full 

Subcontract price, which is specifically defined as $7,889,050.18, Diebold “does 

. . . release” all of its claims against Low Voltage and the Subcontract is closed. If the 

reference to the Subcontract in the Final Release was intended to allow Diebold to sue 

Low Voltage for an alleged breach of the Subcontract, such as failure to pay sales tax, 

then Diebold’s promise to “remise, release, and discharge [Low Voltage] of and from all 

. . . claims . . . arising from the said Subcontract” would have been limited accordingly. 

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But there is nothing in the express language of the Final Release that supports any 

limitation to the general release of all claims arising from the Subcontract. Here, there is 

no clear or unequivocal language making the general release of claims conditional upon 

Low Voltage’s payment of the $470,646.15 that Diebold requested for sales taxes. 

Second, a general statement that the Final Release is entered into pursuant to the 

Subcontract does not incorporate a requirement to pay sales tax, because the parties 

disagreed on whether the Subcontract permitted Diebold to seek reimbursement from 

Low Voltage for such expenses. Thus, a reference to the Subcontract does not reflect a 

meeting of the minds to make the Final Release conditional on the payment of sales tax. 

Instead, it simply identifies the subject matter of the Final Release as the dispute about 

the payment of the Invoice under the Subcontract. To interpret the “pursuant to” language 

as Diebold suggests—making the release conditional to Low Voltage’s performance of 

its obligations under the Subcontract—would directly contradict the broad language of 

the Final Release which discharges all claims “under or arising from the Subcontract.” 

Accordingly, we reject this interpretation. See Level 3 Commc’ns, 535 F.3d at 1154 

(providing that we interpret contracts to give effect to all provisions). 

Similarly, although the Final Release indicates it was entered to induce payment of 

the Invoice, it does not state the Invoice would be paid “in full.” And by negative 

implication, the language suggests Low Voltage had refused to pay the Invoice prior to 

Diebold’s execution of the Final Release. See Shams v. Howard, 165 P.3d 876, 880 

(Colo. Ct. App. 2007) (providing that negative implications are useful when interpreting 

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contract terms); Ball Corp. v. Fisher, 51 P.3d 1053, 1062 (Colo. Ct. App. 2001) (same). 

Although this clause highlights the parties’ dispute concerning the Invoice, it does not 

indicate a resolution based on the payment of consideration other than that specifically 

identified in the Final Release. Accordingly, we reject Diebold’s argument that the 

references to the Subcontract and the Invoice implicate a promise to make some future 

payment of the sales taxes claimed in the Invoice. 

In addition, Diebold’s interpretation would effectively read out the consideration 

clause of the Final Release, which states “in consideration of the total sum of the 

subcontract in the amount of $7,889,050.18 . . . Diebold . . . does remise, release, and 

discharge [Low Voltage] . . . from all liabilities, obligations, claims, and demands 

whatsoever under or arising from the said Subcontract . . . .” We reject interpretations of 

a contract that do not give effect to relevant clauses. See Level 3 Commc’ns, 535 F.3d at 

1154. Diebold’s reading would also ignore the specific amount of consideration stated in 

the Final Release. In contrast, our interpretation enforces that unambiguous statement 

identifying the amount exchanged for the release of claims, while also giving meaning to 

the opening clauses as placing the agreement in context. But even if those opening 

clauses could be construed to be a general reference to Diebold’s rights under the 

Subcontract, the more specific clause setting forth the specific amount of consideration 

paid for the release of all claims under or arising from the Subcontract would take 

precedence. See Green Shoe Mfg. Co. v. Farber, 712 P.2d 1014, 1016 (Colo. 1986) 

(“[S]pecific provisions in contract express more exactly what parties intend than broad or 

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general clauses.”) (citing Denver Joint Stock Land Bank v. Markham, 107 P.2d 313 

(Colo. 1940)). 

For these reasons, we conclude Diebold unambiguously released all of its claims 

against Low Voltage under or arising from the Subcontract, including its claim for the 

reimbursement of sales taxes. 

IV.CONCLUSION 

Therefore, we AFFIRM the judgment of the district court granting summary 

judgment, but on the alternative ground that the Final Release entitles Low Voltage to 

judgment as a matter of law. 

ENTERED FOR THE COURT 

Carolyn B. McHugh 

Circuit Judge 

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