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Parties Involved:
Charterhouse Financial Ltd., Inc., a Texas corporation
Appellee
Gary D. Rogers
Appellee
The Stein Garden, Inc., a Colorado corporation
Appellant

Document Text:

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. FILED 

Ututed States Co 

UNITED STATES COURT OF APPEALS ~ ~nofAp.PeaJs A emh Circuit 

FOR THE TENTH CIRCUIT NOV 21990 

ROBERT L. flOECKE 

THE STEIN GARDEN, INC., a Colorado 

Corporation, 

Plaintiff-Appellant, 

v. 

CHARTERHOUSE FINANCIAL LTD., INC., 

a Texas Corporation; GARY D. ROGERS, 

individually, 

Defendants-Appellees. 

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ORDER AND JUDGMENT * 

Clerk R 

No. 89-1360 

(D.C. No. 86-B-2560) 

(D. Colo.) 

Before McKAY, LOGAN, and ANDERSON, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App . P . 

34(a); 10th Cir. R. 34.1.9. 

submitted without oral argument. 

The case is therefore ordered 

Plaintiff, The Stein Garden, Inc., owned a twenty-year 

leasehold interest in 1,100 square feet in the lobby of a hotel in 

Vail, Colorado, which it operated as a lounge/restaurant facility. 

* 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. 

Appellate Case: 89-1360 Document: 010110047473 Date Filed: 11/02/1990 Page: 1 
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Defendant, Charterhouse Financial Ltd., Inc., entered into a 

contract to buy the leasehold in connection with a proposed 

redevelopment of the entire hotel premises. Defendant paid 

$15,000 cash for the lease and gave plaintiff a promissory note 

for $220,000. To secure the note, defendant executed an 

assignment of lease back to plaintiff which provided for strict 

foreclosure in the event of default. Defendant defaulted on the 

first payment, and the lease reverted. Plaintiff sold the 

leasehold eighteen months later for $125,000. 

Plaintiff commenced this diversity action against 

Charterhouse and defendant Rogers, the sole shareholder, director, 

and officer of Charterhouse, for the entire amount due on the note 

plus interest. Defendants admitted default but alleged they were 

entitled to credit based on the value of the leasehold at the time 

of default. The district court granted plaintiff's motion for 

summary judgment in part holding that defendants were liable to 

plaintiff but held that a genuine issue of material fact existed 

as to the net amount owed. After trial to the court, the court 

held that the value of the leasehold when it reverted back to 

plaintiff was "equal to or greater than the balance remaining on 

the note and consequently as a matter of law the plaintiff has 

failed to prove damages." Tr. at 181. 

On appeal, plaintiff argues that the district court erred in 

finding the value of the leasehold was equal to or greater than 

the balance remaining on the note because the court did not take 

into account the effect of the foreclosure of the entire hotel 

property, the testimony of defendants' expert witness was not 

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Appellate Case: 89-1360 Document: 010110047473 Date Filed: 11/02/1990 Page: 2 
credible, and the "~otential" existed that plaintiff's rights 

under the lease would be extinguished by virtue of Colo. Rev. 

Stat.§ 38-39-110. 1 Plaintiff also argues that the district court 

erred in holding plaintiff had failed to mitigate its damages. 

At trial, defendants presented evidence via an expert 

qualified to testify as to the value of the lease at the time it 

reverted back to plaintiff. He testified that the value of the 

lease was approximately $275,000 with $317,338 being his high 

estimate and $224,089 his low estimate. On rebuttal, the 

president of The Stein Garden testified that his personal opinion 

was that the lease had no market value at the time it reverted 

back, primarily because "nobody knew what was going on with the 

property," tr. at 129, since the entire redevelopment project was 

in foreclosure. 

When two witnesses give opposing views of the evidence, the 

district court must make its findings based on its evaluation of 

the credibility of the witnesses. We review those findings under 

the clearly erroneous standard. Fed. R. Civ. P. 52(a). 

applying that standard, we are required to give 'due regard 

to the opportunity of the trial court to judge 

"In 

the 

credibility of the witnesses.'" Cascade Energy & Metals Corp. v. 

Banks, 896 F.2d 1557, 1569 (10th Cir.)(quoting Rule 52(a)), cert. 

denied, 1990 WL 99771 (U.S. Oct. 1, 1990)(No. 90-81). "[O]nly the 

trial judge can be aware of the variations in demeanor and tone of 

1 We note that plaintiff did not raise this last argument to 

the district court. Arguments not raised below will not be 

addressed on appeal. Baker v. Penn Mut. Life Ins. Co., 788 F.2d 

650, 663 (10th Cir. 1986). 

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Appellate Case: 89-1360 Document: 010110047473 Date Filed: 11/02/1990 Page: 3 
voice that bear so heavily on the listener's understanding of and 

belief in what is said." Anderson v. City of Bessemer City, 470 

U.S. 564, 575 (1985). This finding "can virtually never be clear 

error." The expert testified he based his opinion on 

information normally relied upon by individuals in the real estate 

field in evaluating such properties. The district court found the 

expert's testimony most credible. We find no error. 

Having found the expert's testimony most credible, the 

district court held that plaintiff had failed to prove damages. 

Supra at 2. Because of this holding, the district court did not 

need to reach the issue of mitigation. However, we find no error 

in the court's holding that plaintiff failed to mitigate because 

no "reasonable effort" had been made to sell the leasehold after 

defendants' default. 

The judgment of the United States District Court for the 

District of Colorado is AFFIRMED. 

ENTERED FOR THE COURT 

PER CURIAM 

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Appellate Case: 89-1360 Document: 010110047473 Date Filed: 11/02/1990 Page: 4