## F I LED United States C ourt of Appeals Tenth Circuit 

### N ove m b e r7,2006 Elisab eth A. Shumaker C l erk of C ourt UNI TED S TATES CO URT O F AP PEALS

T E N T H C IR C U IT
CHAVEZ P ROP ERT I ES
- AI RP ORT P A R K IN G A L B U Q U E R Q U E , L P , a G eor gi a l i m i t ed part ner s hi p; P AR KI NG C OM P ANY OF A M E R IC A , IN C ., a G e o rg ia corpor at i on, P l ai nti ffs-A pp el l ees/ C ross A pp el l ants , v. J O H N L O R E N T Z E N , i n d i v i d u a l l y; PA R K A N D SH U T T L E , I N C
. , a N ew M e x i c o c o rp o r a t i o n ; WES GOL DE N, i n d i v i d u a l l y, D efen dan t s- A pp el l ants / C ross A pp el l ees. CHAVEZ P ROP ERT I ES
- AI RP ORT P A R K IN G A L B U Q U E R Q U E , L P , a G eor gi a l i m i t ed part ner s hi p; P AR KI NG C OM P ANY OF A M E R IC A , IN C ., a G e o rg ia corpor at i on, P l ai nti ffs-A pp el l ants , v. J O H N L O R E N T Z E N , i n d i v i d u a l l y; PA R K A N D SH U T T L E , I N C
. , a N ew M e x i c o c o rp o r a t i o n ; WES GOL DE N, i n d i v i d u a l l y, N os . 04- 2338 and 04- 2339 ( D. C. No. CI V- 0 2
- 0 1 4 5
- J P/AC T)

(D .N .M .)

N o. 05- 2053 ( D. C. No. CI V- 0 2
- 0 1 4 5
- J P/AC T)

(D .N .M .)T hi s or derand j udgm enti s notbi ndi ng pr ece dent , exce ptundert he * d o ctri n es o f law o f th e c ase , res jud icata, and co ll ateral estop p el. T h e c o u rt gener al l ydi s favor s t he ci t at i on of or der s and j udgm ent s ; nevert hel es s , an or der and j udgm entm aybe ci t ed undert he t er m s and condi t i ons of 10t h C i r . R
. 36. 3. 2 D efen dan t s- A pp el l ees. CHAVEZ P ROP ERT I ES
- AI RP ORT P A R K IN G A L B U Q U E R Q U E , L P , a G eor gi a l i m i t ed part ner s hi p; P AR KI NG C OM P ANY OF A M E R IC A , IN C ., a G e o rg ia corpor at i on, P l ai nti ffs-A pp el l ees,
v. J O H N L O R E N T Z E N , i n d i v i d u a l l y; PA R K A N D SH U T T L E , I N C
. , a N ew M e x i c o c o rp o r a t i o n ; WES GOL DE N, i n d i v i d u a l l y, D efen dan t s- A pp el l ants . N o. 05- 2388 ( D. C. No. CI V- 0 2
- 0 1 4 5
- J P/AC T)

(D .N .M .)

ORDE R AND J UDGM EN T *
B efor e LU CE RO , BA LD OCK , and HA RTZ , C i rcui tJudg es.

T hi s cas e ar i s es fr om t he fa i l ed uni on of t w o par ki ng l otoper at i ons pr ovi di ng par ki ng s er vi ces fort he A l buquer que I nt ernat i onal A i rpor t . Pl ai nt i ff C havez Pr oper t i es - A i rpor tPar ki ng A l buquer que, L P ( C PA PA ) , ow nerand3

oper at orof A i rpor tFas tPar k, and D efe ndantJ ohn L or ent zen, ow nerand oper at or of D efe ndantPar k and Shut t l e, I nc. ( PSI) , ent er ed i nt o a J oi ntV entur e A gr eement j oi ni ng t hei rt w o par ki ng l ot s . I n tur n, t he J oi ntV entur e ent er ed i nt o a contr act
w ith P lai n ti ff

P ark ing C o m p an yo f A m erica (P C A ) t o m an ag e the Jo int V en ture par ki ng l ot . For a hos tof r eas ons , t he dea l fel l t hr ough and the part i es fi l ed
num er ous cl ai m s agai ns tone another
. A ft era benc h t r i al , t he di s t r i ctcour tfound forPl ai nt i ffs butaw ar ded onl ynom i nal damages
. T he di s t r i ctcour tt axed P lain tiffs’ c o sts o n D e fe n d a n ts b u t re f u se d to a w a rd a tto rn e yfe e s. D e fe n d a n ts appea l t he di s t r i ctcour t ’ s j udgm entas w el l as t he aw ar d of cos t s . Pl ai nt i ffs
c r o s s - a p p e a l t h e d i s t r i c tc o u r t ’ s d a m a g e a w a r d a n d d e n i a l o f a t t o r n e yfe e s . We h a v e ju risd ictio n p u rsu a n t to 2 8 U .S .C . § 1 2 9 1 . W e a p p lyN e w M e x ico law in t hi s di ver s i t yact i on, aff i r m i ng i n par tand r emandi ng i n par tforaddi t i onal fin d in g s o f

fa c t a n d c o n c lu s io n s o f la w . I. O n J anuary1, 2000, C PA PA and Lore nt zen ve rbal l yent er ed i nt o a J oi nt V entur e A gr eement , t he pr i m arypurpos e of w hi ch w as t o cons ol i dat e expe ns es there b yincre asin g the p rofit ab il ityo f th eir pa rkin g lots. T h e Jo int V en ture A gr eementdes i gnat ed M anual C havez , J r . and R ober tC havez , par tow ner s of C PA PA , and Lore nt zen a s m anage r s of t he J oi ntV entur e. T he agr eement
r equi r ed the manager s t o unani m ous l yagr ee t o al l m anage m entdeci s i ons , exce pt th o s e d e le g a te d to th e m a n a g e m e n t c o m p a n yd e s ig n a te d in a s e p a ra te a g re e m e n t.N ot abl y , t he part i es di d nots i gn t he J oi ntV entur e A gr eementort he 1 Par ki ng M anage m entA gr eementunt i l M ar ch 1, 2001. D es pi t e the del ay , t he p a rt ie s a c k n o w le d g e b o th a g re e m e n ts b e c a m e e ffe c tiv e o n J a n u a ry 1 , 2 0 0 0
. A dd i t i on al l y , t he p art i es agree both con t ract s ext end ed fo r a per i od of ten y ears . 4 T he agr eementpr ovi ded the part i es s pl i tpr ofi t s w i t h C PA PA r ece i vi ng 57% and PSI r ece i vi ng 43%
. T he part i es bas ed thi s di vi s i on of pr ofi t s on t he number of p a rk in g sp a c e s e a c h c o n trib u ted to th e Jo in t V e n tu re p a rk in g lo t. T o avoi d dai l ym anage m enthas s l es , t he j oi ntventur er s ent er ed i nt o a Par ki ng M anage m entA gr eementw i t h PC A , an ent i t yof C PA PA , t o m anage t he
c o mb i n e d p r o p e r t i e s . Th e P a r k i n g M a n a g e me n tAg r e e me n tp r o v i d e d t h a tP CA 1
w o u ld m an ag e the co m b ined p rop erti es fo r t h e b en efito f th e Jo int V en ture par t ner s . D efe ndantW es G ol den, PC A ’ s empl oy ee, s er ved as t he parki ng oper at i ons s i t e managerfort he J oi ntV entur e parki ng l otunt i l D ece m ber2001
w h e n P C A d e c id e d to re m o v e h im f ro m site o p e ra tio n s m a n a g e r a n d tra n sfe r h im t o t he mar ket i ng m anage rpos i t i on. T he Par ki ng M anage m entA gr eement sp e c ified th e p a rk in g m a n a g e r’s d u ties in c lu d in g o p e ra tio n o f th e lo t, pa y in g a ll
e x p e n se s, c o llec tin g a ll rev e n u e , p ro v id in g fin a n c ial re p o rts, a n d m a k in g m o n th ly pr ofi tdi s t r i but i ons t o t he J oi ntV entur e part ner s . T es t i m onyatt r i al m ade c l ear PC A ’ s funct i on w as t o m anage t he dayt o dayact i vi t i es of t he l otw hi l e the J oi nt V e n tu re m a n a g e rs p ro v id e d h ig h lev e l m a n a g e m e n t. A lm o st f

ro m th e b e g in n in g o f

th e Jo in t V e n tu re , L o re n tze n b e g a n to expr es s di s s at i s fac t i on w i t h t he J oi ntV entur e A gr eementand the Par ki ng5

M anage m entA gr eement . W i t hi n t he fi r s tfew m ont hs of t he J oi ntV entur e, L o re n tze n se n t lette rs to R o b e rt C h a v e z e x p re ss in g h is d isc o n ten t w ith c e rta in i t ems bi l l ed t o t he J oi ntV entur e, compl ai ni ng aboutPC A ’ s m anage m ent d e c isio n s, a n d re q u e stin g m a n a g e m e n t fe e s fo r h im se lf o r a m o re fa v o ra b le
ow ner s hi p s pl i t . A compl et e br eakdow n of t he r el at i ons hi p began i n l at e 2001
w hen Lore nt zen w r ot e a s er i es of l et t er s obj ect i ng t o cert ai n char ges t o t he J oi nt V e n tu re a n d o bje c tin g to P C A ’s d e c is io n to re p la c e G o ld e n a s th e s ite m a n a g e r. L o re n tze n th re a ten e d to ter m in a te th e a g re e m e n ts if R o b e rt C h a v e z a n d P C A d id
n o t c o m p ly w ith h is d e m a n d s . I n ear l yJ anuary2002, L or ent zen putt he pr overbi al nai l i n t he coffi n w hen h e re m o v ed P C A ’s cred itca rd m ac h ines fro m the J o int V en ture lot, too k P C A ’s
m achi nes t o hi s hom e, and i ns t al l ed hi s ow n cr edi tcar d m achi nes , t hus di ver t i ng
o v e r $ 7 0 ,0 0 0 o f

J o in t V e n tu re f

u n d s to a n a c c o u n t e x c lu s iv e ly u n d e r h is c o n tr o l. L or ent zen’ s act i ons pr om pt ed R ober tC havez and Ti m C havez , Seni orO per at i ons M a n a g e r fo r P C A , to tr a v e l to A lb u q u e rq u e in a tte m p t to re c tif yth e s itu a tio n . R o b e rt C h a v e z a n d L o re n tze n sp e n t se v e ra l d a y s try in g to w o rk o u t th e ir di ffe r ence s . D ur i ng t he cour s e of thei rm eet i ngs , L or ent zen de m anded
m odi fi cat i on of t he J oi ntV entur e A gr eementand the Par ki ng M anage m ent A gr eement . Speci fi cal l y , L or ent zen de m anded Southw es tR eal t y , w hi ch he
ow ned and ope r at ed, be s ubs t i tut ed forPC A as t he managerof t he J oi ntV entur e. H e a lso d e m a n d e d a 5 0 /5 0 p ro fit sp lita n d d e m a n d e d W e s G o ld e n re m a in th e siteA lth o u g h P C A fire d G o ld e n th e d a yh e c a lled p o lice a n d h a d its 2 r epr es ent at i ves es cor t ed off t he pr oper t y , he r emai ned i n contr ol of t he parki ng l ot oper at i on due t o hi s r el at i ons hi p w i t h L or ent zen. A ccor di ng t o t he t es t i m onyat t r i a l , h e o ffi c i a l l yb e g a n wo r k i n g fo rLo r e n t z e n t h e d a yP CA fi r e d h i m. 6 o p e ra tio n s m a n a g e r o r t h a t P C A b u yh im o u t a t th re e tim e s h is a n n u a l s a la ry. N eedles s t o say , R ob ertC hav ez did no taccep tt he p roposed m od i fi cat i on s. O n Ja n u a ry2 5 , 2 0 0 2 , af ter tw o d a y s o f

u n su c c e ss f

u l n e g o tiatio n s w ith L o re n tze n , R o b e rt C h a v e z , alo n g w ith o th e r P C A re p re se n tativ e s a ttem p ted to
rem o v e the cre d itca rd m ac h ines L o ren tzen install ed an d reinstall P C A ’s
m achi nes . G ol den, w i t h t he as s i s t ance of ot her s , pr event ed r e- i ns t al l at i on of P CA’ s ma c h i n e s . Go l d e n c a l l e d t h e p o l i c e a n d h a d Ch a v e z a n d t h e P CA
r epr es ent at i ves es cor t ed off t he pr oper t y . PC A r epr es ent at i ves w er e notal l ow ed on t he pr oper t yunt i l February11, 2002, w hen PC A and C PA PA r ece i ved a t empora r yr es t r ai ni ng or der( T R O ) al l ow i ng t hem t o t ake ba ck contr ol of t he p ro p e rtya n d re su m e m a n a g e m e n t o f th e Jo in t V e n tu re p a rk in g lo t. A ft erPC A r egai ned management contr ol , t heydi s cover ed G ol den r emoved
sev era l i tem s d u ri n g their ab sen ce
— n am elyco m p u ters co n tai n ing P C A ’s pr opr i et aryi nfor m at i on i ncl udi ng bi l l i ng i nfor m at i on, fr equentpar ker i nfor m at i on, and contr act par ker i nfor m at i on. A ddi t i onal l y , PC A di s cover ed 2 L or ent zen e nt er ed i nt o s ever al unauthor i zed c ont r act s on behal f of the J oi nt V en ture. F inally , the testi m o n yat t ri al sh o w ed that ev en af ter th e d istri ct co u rt ent er ed the TR O , L or ent zen a nd G ol den r emai ned on the pr oper t y , r eeki ng havoc7

among P C A empl oy ees . I n par t i cul ar , G ol den and Lor ent zen c ont i nued t o gi ve
comm ands t o PC A empl oy ees r es ul t i ng i n gr eatconfus i on among t he empl oy ees
as t o w ho w as i n char ge. Sever al w i t nes s es att r i al des cr i bed the atm os pher e as
v e ry “ te n s e .” A l s o of par t i cul ari m por t ance t o t hi s appea l , aft erPC A i nfor m ed G ol den he
w as bei ng r emoved as oper at i ons m anage ri n D ece m berof 2001, he ent er ed i nt o a
c o n tr a c t o n b e h a lf

o f P C A w ith A irp o rt S h u ttle , a c o m p a n yo w n e d b yL o re n tz e n . A ccor di ng t o t he contr act , PC A agr eed t o pr ovi de ei ght een pa r ki ng s pace s on t he J oi ntV entur e l otforA i rpor tShut t l e’ s us e. A tt he t i m e G ol den s i gned the contr act , PC A pr ovi ded contr actpar ki ng att he J oi ntV entur e l otfor$50 per
m ont h. B ut , t he contr actG ol den exe cut ed cha r ged A i rpor tShut t l e onl y$20 per
m o n th p e r sp a c e . A d d iti o n a lly , the c o n tra c t o n lyp ro v id e d th a t A irp o rt S h u ttl e
w oul d occupyei ght een s pace s w hen i n fac t , i toccupi ed fi ft ys pace s . PC A never
r ece i ved paym entforA i rpor tShut t l e’ s us e of the fi ft ys pace s . T he contr actw as
n e v e rd i s c u s s e d w i t h a n yo n e a tP C A a s r e q u i r e d b y i t s p o l i c y, a n d s e v e r a l d a ys aft erhe w as fi r ed fr om PC A i n J anuaryof 2001, G ol den w entt o w or k for L or ent zen. C PA PA and PC A br oughts ui tagai ns tL or ent zen, G ol den and PSI cl ai m i ng br eac h of contr act ; cons pi r acyt o di ves tfunds , as s et s , and cus t om er s ; and br eac h of fi duci arydut y . D efe ndant s fi l ed a s epar at e s ui t( l at ercons ol i dat ed w i t h t he i ni t i al l aw s ui t ) cl ai m i ng acc ount i ng ( cl ai m s of w as t e and mi s m anage m ent ) , actual8

o r c o n stru c tiv e f

ra u d a n d c o n sp ira c yto d e f ra u d , tor tio u s in ter fe re n c e w ith b e n e ficia l b u sin e ss re latio n s, b re a c h o f fid u c iar yd u ty , co n v e rsio n o f c o rp o ra te f u n d s a n d o p p o rt u n itie s , d a m a g e to c re d it r e p u ta tio n , a n d a tto rn e yfe e s a n d c o s ts . In M ayo f 2 0 0 2 , af

ter th e T R O b ec am e e ffec ti v e b u t befo re tri al, the c o u rt assi gn ed an arbi t er t o the case. T he arbi t er functi on ed to keep t he b usi ness oper at i ng i n an or der l yfas hi on pendi ng t r i al
. I f ei t herpar t ydi s agr eed w i t h a
rul i ng i s s ued byt he arbi t er , i thad the opt i on of pr es ent i ng t he i s s ue t o t he di s t r i ct
c o u rt. U se o f

th e a rb iter b e c a m e u n n e c e ss a ryw h e n th e p a rties a g re e d to t er m i nat e the J oi ntV entur e and the Par ki ng M anage m entA gr eementeffect i ve D ece m ber1, 2003. T her eaf t er , t he part i es s epar at ed the J oi ntV entur e l otand
res um ed runn i ng t heirseparat e bu si nesses. T he ca s e pr ocee ded t o a benc h t r i al i n N ovember 2003. A ft ert hr ee da y s of t es t i m ony , t he courtdel ay ed the tr i al beca us e Pl ai nt i ffs ’ couns el beca m e i l l
. T he t r i al r es um ed foran addi t i onal ei ghtday s i n M ar ch 2004. A tt he conc l us i on of t he tr i al , t he di s t r i ctcour ti s s ued a w r i t t en or derfi ndi ng i n favorof Pl ai nt i ffs on t heircl ai m s of breach o f fi du ci arydu t yand breach o f con t ractand against D efe ndant s on t hei rcl ai m s . I n par t i cul ar , t he courtfound D efe ndantG ol den br eac hed hi s fi duci arydut yt o hi s empl oy erPC A
. T he courtal s o found Lore nt zen and PSI br eac hed thei rfi duci arydut yt o t he J oi ntV entur e, and br eac hed the J oi nt V entur e A gr eementand the Par ki ng M anage m entA gr eement . T he courtfur t her fo u n d G o ld e n , alth o u g h a n e m p lo y e e o f P C A , join e d fo rc e s w ith L o re n tze n in9

effo rtt o term i nate orm od i fyt he JointV entur e. D espi t e D efen dan t s’ tra n sg re ss io n s, th e c o u rt re f u se d to a w a rd P lain tiffs d a m a g e s, sa v e fo r $ 1 in
no m i nal dam ages. T he co urtenter ed tw o ad dit i on al orders , on e t axing P l ai nti ffs’
cos t s agai ns tD efe ndant s , and the otherdeny i ng Pl ai nt i ffs ’ m ot i on forat t or ney fees. T hes e cr os s - appea l s fol l ow ed. I n an appe al fr om a benc h t r i al , w e r evi ew t he di s t r i ctcour t ’ s l egal concl us i ons de novo, and i t s fac tual fi ndi ngs forcl ear
err or . W e w i l l r ever s e onl yi f t he di s t r i ctcour t ’ s fi ndi ngs ar e w i t houtfac tual
s uppor ti n t he r ecor d ori f, aft err evi ew i ng al l t he evi dence , w e ar e l eftw i t h a d e fin ite a n d firm c o n v ictio n th a t a m ista k e h a s b e e n m a d e . S e e K e y s Y o u th S erv s. , Inc
. v . C ityo f O lat h e, 24 8 F
. 3 d 1 2 6 7 , 1 2 7 4 (10 th C ir
. 2 0 0 1 ). II. D e fe n d a n ts c h a llen g e se v e ra l o f th e d istric t co u rt’s fin d in g s o n a p p e a l. Speci fi cal l y , D efe ndant s ar gue t he di s t r i ctcour terr ed i n fi ndi ng: 1) Pl ai nt i ffs di d not b re a c h th eir fidu ciaryd u ti es to D efen d an ts; 2 ) P lai n ti ffs d id n o t t o rt iou slyinterfe re
w ith D e fe n d a n ts’ b e n e ficia l b u sin e ss re latio n sh ip s; 3 ) D e fe n d a n ts a re n o t en tit led to
an ac count i ng; 4) D efe ndant s r at i fi ed Pl ai nt i ffs ’ al l eged m isco nductpr i ort o M ar ch 2 0 0 1 ; 5) G o lden co n sp ir ed w ith L o ren tzen to b rea ch the c o n tr ac ts; 6 ) D efen d an ts are
n o t en tit led to d a m a g e s, c o sts a n d le g a l fe e s; a n d 7 ) P lain tiffs d id n o t co m m it a p rim a faci e t ort . In a separat e app eal , D efen dan t s cl ai m t he di stri ct cou rt err ed in
a w a rd in g P la in tiffs $ 1 9 ,9 8 0 .6 6 in c o s ts .10 A. D efe ndant s fi r s tar gue the di s t r i ctcour terr ed i n det er m i ni ng Pl ai nt i ffs di d not b re a c h th e irfid u c ia ry d u tie s to D e fe n d a n ts . L ik e p a rt n e rs in a p a r t n e rs h ip , a fid u c iar yre latio n sh ip e x ists b e tw e e n p a rties to a jo in t v e n tu re . L ig h tse yv . M a rsh a ll, 992 P. 2d 904, 908 ( N
. M
. A pp. 1999)
. T hi s dut yr equi r es j o int v en turers t o “dea l hones t l yand fa i r l yw i t h eac h ot heri n acc ount i ng forpr ofi t s and l os s es of t he j o int
v e n tu r e . ” I d
. D e fe n d a n t s c l a i m P l a i n t i ffs b r e a c h e d t h i s d u t y i n s e v e r a l w a ys inclu d ing : 1 ) a sses sing a p o rt ion o f the co st o f th e H u m m ing b ir d co m p u ter sof tw are p a c k a g e to th e Jo in t V e n tu re ; 2 ) a ss e ss in g A irp o rt F a st P a rk ’s v a n re n tal e x p e n se to t he J oi ntV entur e; 3) as s es s i ng l os s es fr om t he H y at tR egenc yT amay a contr actt o t he J oi ntV entur e; 4) r efus i ng t o pr ovi de ce r t ai n fi nanci al document s an d repor t s ; 5) fa v o ri n g A irp o rt F ast P ark v eh icl es o v er P S I’s ve h icl es fo r m ainten an ce an d rep air; 6) fai l i n g t o p a y v e n d o r s ; 7 ) o v e rp a y i n g fo r i n s u r a n c e c o v e r a g e ; 8 ) v i o l a t i n g t he
arbi t er ’ s rul i n g s; 8) fai l i ng t o es t abl i s h an oper at i ng budget ; and 9) gener al
m i s m anage m ent . T he di s t r i ctcour tdi s pos ed of D efe ndant s ’ compl ai nt s , fi ndi ng t hey i nvolved m anage m entdeci s i ons s peci fi cal l yappoi nt ed t o PC A i n t he Par ki ng M anage m entA gr eement . T h u s, accor di ng t o t he di s t r i ctcour t , t he dec i s i ons , good
orbad, di d notamount t o br eac hes of fi duci arydut y . W e agr ee w i t h t he di s t r i ct
cour t ’ s as s ess m entt hatm os tof D efe ndant s ’ compl ai nt s i nvol ved management deci s i ons as s i gned t o PC A p ur s uantt o t he management agr eement . For i ns t ance , PC A ’ s deci s i on t o pur chas e addi t i onal i ns ur ance , i t s bi l l i ng pr act i ces , t heD efe ndant s r el i ed on Pl ai nt i ffs ’ al l eged f ai l ur e t o pr oduce c er t ai n fi nanci al 3 document s t o s uppor ti t s cl ai m foracc ount i ng. I n par t i cul ar , D efe ndantL or ent zen c o mp l a i n e d h e d i d n o tr e c e i v e Da i l yOp e r a t i n g Re p o r t s ( DOR s )
. Be c a u s e we a g re e w ith th e d istric t co u rt th a t P lain tiffs’ d iss e m in a tio n o f fin a n c ial re p o rts i nvol ved management deci s i ons and bec aus e the r ecor d i ndi cat es L or ent zen r ece i ved al l i nfor m at i on neede d t o per for m hi s funct i on as a managerof t he J oi nt V e n tu re , w e su m m a rilyfin d n o e rro r in th e d istric t co u rt’s d e c isio n re f u sin g to or deran ac count i ng. 11 m a in ten a n c e a n d re p a ir sc h e d u le fo r th e v a n s, d iss e m in a tio n o f fin a n c ial s tate m e n ts
a n d b u d g e t i n g we r e a l l ma n a g e me n t i s s u e s e n t ru s t e d t o P CA
. 3 D e fe n d a n t s ’ o t h e rc l a i m s a l s o d o n o ta m o u n tt o b r e a c h e s o f fi d u c i a r y d u t y. L or ent zen’ s compl ai nt s reg ard ing t he J oi ntV entur e’ s paym entfora por t i on of t he H um m i ngbi r d s oft w ar e i ns t al l ed atPC A ar e not act i onabl e as t he evi dence pr es ent ed att ri al s how ed PC A cr edi t ed the J oi ntV entur e w i t h t he cos tof t he s oft w ar e af t er L orent zen o bject ed. A dd i t i on al l y , at t ri bu tin g the l ease exp ense fo r A i rportF ast P ark ’s va n s to the Jo int V en ture w as also no t a bre ac h o f fidu ciary d u ty . T h e re co rd show s L orent ze n k n e w att he ti m e he en t ered i nto t he ag reem ent the leas e exp ense
w as par tof t he A i rpor tFas tPar k’ s expens es abs orbed i nt o t he J oi ntV entur e. T he expens e w as ful l ydi s cl os ed i n t he fi nanci al di s cl os ur e document s L or ent zen r ece i ved d u rin g d isc u ss io n s le a d in g u p to th e Jo in t V e n tu re . D e sp ite h is k n o w led g e o f th is expens e, he ent er ed i nt o t he J oi nt V en tur e verbal l yand l at erfor m al i zed the document s i n M ar ch of 2001. W e ca n har dl ys aychar gi ng t he Jo int V en tur e foran expens e D efe ndantw as aw ar e of pr i ort o for m i ng t he J oi ntV entur e w as a br eac h ofD efe ndant s ’ ar gum entt hatt he di s t r i ctcour tm i s appl i ed the doctr i ne of 4 r at i fi cat i on has no appl i cat i on i n t hi s cas e. T he di s t r i ctcour tfound t hata cha r ge t o t he J oi ntV entur e D efe ndantknew abouteven be for e the i ncept i on of t he J oi nt V entur e i s notevi dence of Pl ai nt i ffs al l eged br eac h of fi duci arydut y . Pr i or know l edge doe s noti m pl i cat e the doctr i ne of r at i fi cat i on. 12 fid u c iar yd u ty . D e fe n d a n ts’ c o m p lain ts re g a rd in g P la in tiffs’ a lleg e d fa ilu re to 4
co m p lyw ith the a rb ite r’s ruli n g s are also n o t sup p o rt ed b ythe re co rd. T h e re co rd
s how s t hatforeac h al l eg ed i ns t ance of non- compl i ance , Pl ai nt i ffs appea l ed t he
a rb ite r’ s ru lin g to th e d is tr ic t c o u rt , a n a c tio n f u lly w ith in th e irri g h ts . Fi nal l y , D efe ndant s ’ al l egat i on t hat Pl ai nt i ffs br eac hed t hei rfi duci arydut yby char gi ng t he l os s on t he Tam ay a co n tr actt o t he J oi ntV entur e i s nota bas i s for
r ever sing the di s t r i ctcour t ’ s deci s i on. A di s put ed i s s ue of factar os e as t o w het her t he Tam ay a contr actw as par tof t he J oi ntV entur e. T he di s t r i ctcour t , s er vi ng as t he fac tfi nder , obvi ous l ybel i eved Pl ai nt i ffs ’ w i t nes s D al e Loseyw hen he t es t i fi ed t he contr actw as a partof t he J o int V entur e and, t her efor e, anyl os s orpr ofi tw as at t r i but abl e t o t he J oi ntV entur e. T he di s t r i ctcour t ’ s co n clusi on cert ai nl yi s not
unr eas onabl e i n l i g h t o f the factbot h L or ent zen a nd G ol den s i gned the contr act , an
a c t th a t b o u n d th e J o in t V e n tu re to th e te rm s o f th e c o n tr a c t. S e e K e y s Y o u th S e rv s ., 248 F. 3d at 1274 ( “[W ] e w i l l r ever s e t he di s t r i ctcour t ’ s fi ndi ng onl yi f i ti s w i t hout fa c tu a l s u p p o r ti n t h e r e c o r d
. . . . ” ) ( i n t e r n a l q u o t a t i o n ma r k s o mi t t e d )
. I n s u m, we fi nd no err ori n t he di s t r i ctcour t ’ s concl us i on thatPl ai nt i ffs ’ conductdi d notamount t o a b r e a c h o f

t h e fi d u c i a r y d u t y. B.13

D efe ndant s nextar gue the di s t r i ct cour t err ed i n fi ndi ng i ns uffi ci entevi dence t o s u p p o rt th e irc la im o f to rt io u s in te rfe re n c e w ith b e n e fic ia l b u s in e s s re la tio n s . T he el ement s of t or t i ous inte r fer ence ar e ( 1) i nt er fer ence i n a r el at i ons hi p or t r ans act ion ; ( 2) w i t h an i m pr operm ot i ve orbyi m pr operm eans ; or( 3) w i t hout ju s tific a tio n o r p ri v ile g e . Q u in ta n a v . F ir s t In te rs ta te B a n k , 7 3 7 P .2 d 8 9 6 , 8 9 8 (N .M
. A pp. 1987)
. D efe ndant s cl ai m PC A fai l ed t o pay bi l l s t o var i ous vendor s i n at t empt to e ro d e D e fe n d a n ts’ re latio n sh ip w ith th o se v e n d o rs. A lth o u g h P lain tiffs a d m itt e d ly had s om e pr obl ems w i t h t hei rbi l l i ng pr act i ces , w e fi nd n o thing in t he r ecor d ( nor does D efe ndant poi nt us t o anyevi dence ) i ndi cat i ng PC A ’ s del ayi n pay i ng bi l l s w as
m ot i vat ed bys om e i nt entt o i nt er fer e w i t h D efe ndant s ’ bus i nes s r el at i ons hi ps . See M & M T ool s v . M il chem, I nc. , 612 P. 2d 241, 246 ( N
. M
. A pp. 1980) ( not i ng a d e fe n d a n t ac ts w ith a n “ im p ro p e r m o tiv e ” fo r pu rp o se s o f p ro v in g a in ter fe re n c e w ith b u sine ss relati o n s claim w h en the de fe n d an t’ s so le pu rpo se is to h arm the p lai n ti ff). A ccor di ngl y , w e conc l ude the di s t r i ctcour tdi d n o t err in f i ndi ng D efe ndant s fai l ed to s h o w P la in tiffs to rt io u s ly in te rfe re d w ith th e irb u s in e s s re la tio n s . C. F in a lly , D e fe n d a n ts a rg u e th e d istric t co u rt sh o u ld h a v e c o n sid e re d th e ir c laim t hat Pl ai nt i ffs comm i t t ed a pr i m a faci e t or t . T he di s t r i ctcour ts um m ar i l ydi s m i s s ed D efe ndant s ’ pr i m a fa ci e t or t cl ai m al ong w i t h s ever al ot her s i n i t s w r i t t en or der
. T he elem en ts of

p ri m a fa cie tort are 1 ) a n inten ti o n al a n d law fu l act, 2 ) an inten t t o injure t he p l a i n t i ff, 3 ) i nj u r y t o t h e p l a i n t i ff a s a r e s u l t o f t h e i n t e n t i o n a l a c t , a n d 4 ) t heB eca us e w e fi nd t he di s t r i ctcour tpr oper l ydet er m i ned D efe ndant s fai l ed 5 t o pr ove anyof i t s cl ai m s , w e nee d notaddr es s D efe ndant s as s er t i ons t he di s t r i ct cou rterr ed in r ej ect i ng i t s expert s cal culat i on of d am ages, fai l i ng t o assess p u n it ive d am ag es a g ains t Plainti ffs, an d fa il ing to aw ard D efen d an ts th eir co u rt c o s ts a n d le g a l fe e s . 14 abs ence of j us t i fi cat i on fort he i nj ur i ous act . Schm i t z v. Sm ent ow s ki , 785 P. 2d 726, 7 3 4 -35 (N
. M
. 1 9 9 0 ). “P ri m a fac ie t o rt is n o t inten d ed to p rov ide a re m ed yfo r ev ery in ten tio n a llyc a u se d h a r m , r a th e r, itis a re m e d yfo r a c ts c o m m itt e d w ith in ten t to i nj ur e the pl ai nt i ff a nd w i t houtj us t i fi cat i on. ” K i t chel l v. Publ i c Ser v. C o. , 972 P. 2d 3 4 4 , 3 4 8 (N
. M
. 1 9 9 8 ). A n aly zing li ab il ityreq u ir e s b alan cing the in tent to injure D efe ndant s agai ns tbot h t he j us t i fi cat i on for t he i nj ur i ous act and t he seve r i t y of t he i nj ur y . I d. B ut , i f a pa r t ycl ai m i ng a pr i m a fa ci e t or tpr es ent s no ev iden ce o f an i nt ent t o i nj ur e, as i s t he cas e her e, t he cour t need not conduct t he bal anci ng t es t . I d. D e fe n d a n ts b rie f

d o e s n o t p o in t to a sh re d o f e v id e n c e sh o w in g P lain tiffs’ a c ted w ith t he i nt entt o i nj ure D efendant s . D efe ndant s s i m pl yconcl ude i n t he cour s e of thr ee
s ent ence s t hatt he di s t r i ctcour ts houl d have c ons i der ed w hetherPl ai nt i ff c om m i t t ed
a p rim a fa c ie to r t b e c a u se th e ylo st o n th e ir o th e r c laim s. S u c h a b a ld a ss e rtio n is in su fficie n t fo r co n sid e ra tio n o n a p p e a l. A ld e r v. W a l-M a rt, 1 4 4 F .3 d 6 6 4 , 6 7 9 (1 0 th C ir. 1 9 9 8 ). A c c o rd in g ly , D e fe n d a n ts w a iv e d th is a rg u m e n t. 5 D. G o lden also ap p ea ls th e d istri ct co u rt ’s co n clus ion h e b rea ch ed h is fidu ciary d u tyw h en h e a n d L o ren tzen joine d fo rce s to term inate o r m o d ify th e Jo int V en ture A gr eement . G ol den ar g u es h e di d notow e Pl ai nt i ffs a fi duci arydut y , andW e not e, contr aryt o D efe ndant s ’ cont ent i ons i n i t s br i ef, t he di s t r i ct 6 c o u rt d id n o t fin d G o ld e n a n d L o re n tze n e n ter e d in to a “ c o n sp ira c y ” a s th e ter m is under s t ood i n t he t echni cal l egal s ens e. I ns t ead, t he courtfound G ol den and L or ent zen w or ked t ogethert o des t r oyt he J oi ntV entur e and i n doi ng s o t heyeac h b re a c h e d th e irre s p e c tiv e fid u c ia ry d u tie s . 15 i ns uffi ci entevi dence s uppor t s t he di s t r i ctcourt ’ s fi ndi ng he ent er ed i nt o a cons pi r acy
w i t h D efe ndantL or ent zen t o dest roy the Joi ntV entur e. W e ar e notper s uaded. 6 F i r s t , t h e d i s t r i c tc o u r tfo u n d Go l d e n o we d a fi d u c i a r yd u t yt o h i s e mp l o y e r , P CA and/ ort he J oi ntV entur e, by vi r tue of bei ng an empl oy ee. G ol den does notchal l enge t his fi nd i ng on app eal
. H e i nst ead argu es he d id n o t o w e a fi du ci arydu t ybecau se h e d id n o t sig n th e Jo in t V e n tu re A g re e m e n t o r th e P a rk in g M a n a g e m e n t A g re e m e n t. B eca us e G ol den fa i l s t o ci t e anycas e law o r adequat el yexpl ai n how t he di s t r i ct
co u rterred in it s ruli n g , w e fin d G o lden w aive d this argu m en t on ap p ea l. S ee A lder, 1 4 4 F
. 3 d at 67 9 (arg u m en ts i n ad eq u atelyb ri efed in the o p en ing b ri ef are w aive d ). Second, t he di s t r i ctcour t ’ s or deradequa t el yl ay s out the ev idence s how i ng G ol den and Lor ent zen a ct ed t ogethert o t er m i nat e orm odi fy the Joi ntV entur e. N ot abl y , G ol den al l ow ed Lore nt zen to sign contr act s bi ndi ng t he J oi ntV entur e for
w hi ch Lore nt zen ha d no author i t y , and he di d notpr eventL or ent zen f r om r emovi ng
c re d it ca rd m a c h in e s in sta lled b yP C A , thu s d iv e rtin g J o in t V e n tu re f u n d s in to L or ent zen’ s ow n acc ount . A l s o, G ol den phy s i cal l y pr event ed PC A empl oy ees fr om
r emovi ng L or ent zen’ s cr edi tcar d m achi nes and re
- i ns t al l i ng PC A ’ s m achi nes . A nd,
as t he di s t r i ctcour tr ecogni zed, G ol den w as i nvol ved i n “pi r at i ng t he har d dr i ves and comput eri nfor m at i on m ai nt ai ned byPC A in the m anage m entof t he j oi ntventur e,16

t h u s d e p r i v i n g PCA o f i t s u s e whi l e t h e p a r t i e s c o mme n c e d o v e r t w o y ear s of l i t i g a t i o n . ” I n a p p a r e n te x c h a n g e fo rGo l d e n ’ s l o y a l t y , Lo r e n t z e n d e ma n d e d P CA
c o n tin u e to e m p lo yG o ld e n a s site o p e ra tio n s m a n a g e r a f ter it d e c id e d to d e m o te h im t o m ar ket i ng m anage r . O r , i n t he al t ernat i ve, L or ent zen de m anded PC A buyout G ol den’ s contr actat thr ee t i m es hi s y ear l ys al ary . Such act s s uppor tt he di s t r i ct
cour t ’ s fi ndi ng t hatL or ent zen a nd G ol den w orke d t ogethert o ei t herm odi fyor term inate the Jo int V en ture A g ree m en t and as a resu lt , G o lden b rea ch ed h is fidu ciary du t i es. A ccordi ng l y , w e fi nd no err or i n the di stri ctcou rt ’s con cl usi on s. E. D efe ndant s fil ed a s epar at e appe al chal l engi ng t he di s t r i ctcour t ’ s aw ar d of
cos t s t o Pl ai nt i ffs
. T he di s t r i ct cour t ’ s or der , dat ed N ovember 10, 2005, ta xed D efe ndant s w i t h cos t s i n t he am ount of $19, 980. 66. D efe ndant s compl ai n Pl ai nt i ffs
ar e not “pr evai l i ng par t i es ” and t hus t he di s t r i ctcour ts houl d nothave a w ar ded them
cos t s . A ddi t i onal l y , D efe ndant s compl ai n t he di s t r i ctcour ts houl d nothave a w ar ded P lai n ti ffs co sts fo r th e fir s t three d ay s o f tri al t ran scripts an d co sts fo r t h e c o u rt
a p p o i n t e d a p p r a i s e r ’ s fe e s . An a wa r d o f co s t s un d e r2 8 U. S
. C. § 1 9 2 0 a n d F e d
. R. C i v. P. 54( d) ( 1) r es t s i n t he sound di s cr et i on of t he t r i al cour t . A l l i s on v. B ank O neD en v er, 28 9 F
. 3 d 1 2 2 3 , 1 2 4 8 (10 th C ir
. 2 0 0 2 ). “T o h o ld tha t th e d istri ct co u rt
a b u se d its d isc re tio n , [th is c o u rt ] m u st h a v e a d e fin ite c o n v ictio n th a t th e [ trial]
c ou r t , up on w e i gh i ng r e l e va ntfa c t or s , c l e a r l ye r r e d i n i t s j ud gmen t . ” G or do n v . U
. S. S teel C o rp., 7 2 4 F
. 2 d 1 0 6 , 1 0 8 (10 th C ir
. 1 9 8 3 ).T hes e ca s es s ugges ta more l eni ents t andar d for“pr evai l i ng par t y ” s t atus 7 fo rp u rp o s e s o f

a w a r d i n g c o s t s t h a n t h o s e c a s e s d i s c u s s i n g “ p r e v a i l i n g p a r t y” s t atus forpurpos es of aw ar di ng at t or ney ’ fee s . See, e. g. , G udenkauf v. St auffer C om m un s. , 15 8 F
. 3d 10 74 , 10 76 (10t h C i r. 19 98 ). A ccordi ng l y , D efen dan t s’ r el i ance on cas es di s cus s i ng “pr evai l i ng par t y ” s t atus forpurpos es of at t or ney fee s i s unper s uas i ve. D efe ndant s ’ ar gum entt hatt he part i es r es ol ved one of t he maj or 8 cont ent i ons befor e tr i al i n a j oi nts t i pul at i on, t hus r obbi ng Pl ai nt i ffs of “ p re v a ili n g p a rty ” sta tu s, is e q u a llyu n a v a ili n g . T h e jo in t stip u latio n D e fe n d a n ts r efe r r ed t o cal l ed fort he t er m i nat i on of t he J oi ntV entur e. D efe ndant s cont end t he s epar at i on of t he parki ng l ot s “t ook up t he mostener gyand expe ns e. ” (c o n tin u e d ...) 17 D e fe n d a n ts a rg u e P lain tiffs d id n o t p re v a il b e c a u s e th e y rec e iv e d o n ly$ 1 in damages and b ec au se t he part i es ent er ed i nt o a j oi nts t i pul at i on pr i ort o t r i al
r eso lving o n e of t he more cont ent i ous cl ai m s . W e ar e notconvi nced. Fi r s t , for purpos es of R ul e 54(d) ( 1) , “the l i t i ganti n w hos e fa vorj udgm enti s r ender ed i s t he p re v a ili n g p a rty. . . . ” B a rb e r v . T .D . W ill iam s o n , I n c ., 2 5 4 F .3 d 1 2 2 3 , 1 2 3 4 (1 0 th C i r . 2001) ( ci t at i ons and quot at i ons om i t t ed) ; s ee a l s o H ead v. M edfor d, 62 F. 3d 351, 3 5 4 (11 th C ir
. 1 9 9 5 ) (“C ase s f ro m this an d o ther c ir cu it s co n sist en tl ysu p p o rt
s hi ft i ng cost s i f t he pr evai l i ng par t yobt ai ns j udgm enton even a fr act i on of t he claim s ad v an ce d
. ”) (interna l qu o tat ion s o m itted). In th is case , th e d istri ct co u rt 7
e n ter e d ju d g m e n t in fa v o r o f P lain tiffs. T h a t P lain tiffs fa iled to su b m it relia b le
e v id e n c e o f

d a m a g e s, re su lti n g in a n o m in a l d a m a g e a w a rd , d o e s n o t alte r th e ir pr evai l i ng par t ys t atus forpurpos e of Rul e 54( d) ( 1)
. Fur t her m or e, Pl ai nt i ffs
s ucce s s ful l ydefe nded themsel ves agai ns t al l of D efe ndant s ’ count er cl ai m s , m aki ng t hem t he p revai l i ng part yon al l t heo ri es. 8(
. . . cont i nued) 8 D efe ndant s s t at ementm aybe true as t o pr e- t r i al m at t er s , butt he cos t s w hi ch the dis t ri ctcou rti m po sed (i
. e. t ri al t ranscr i pts , w i t ness t ravel and subsi st ence c ost s, cost s i ncu rr ed b ycou rtapp oint ed ex pert , and dep osi t i on exp enses for t ho se w itn e ss e s w h o tes tifie d a t trial) w e re d ire c tlyre late d to iss u e s re so lv e d a t trial. 18 D efe ndant s s peci fi cal l yobj ectt o the di s t r i ctcour t ’ s aw ar d of cos t s fort r i al tr an scri pt s fr om t he fi r s tt hr ee da y s of t r i al , and the fe es fort he courtappoi nt ed app rai ser . T ri al beg an in N ov em ber 200 3. A ft er three day s o f tr i al , P l ai nti ffs’ at t or neybeca m e qui te ill an d coul d notcont i nue. T he di s t r i ctcour tcont i nued the t r i al unt i l M ar ch 2004 w hen tr i al w as compl et ed aft er an addi t i onal ei ght day s . T he d istric t co u rt a w a rd e d P lain tiffs’ c o sts fo r th e e n tire tria l tran sc rip t. D e fe n d a n ts cont end the di s t r i ct cour t abus ed i t s di s cr et i on i n aw ar di ng Pl ai nt i ffs t he cos t s fort he tr ial tr an scripts fro m the th ree d ay s o f tri al i n N o v em b e r b e c a u se D efen d an ts w ere nott o bl ame fort h e del ay . T hi s m ays eem l i ke a l egi t i m at e compl ai ntbutt he fa ct i s Pl ai nt i ffs w er e ent i t l ed t o cos t s for t he ent i r e t r i al t r ans cr i pt w het h er t r ans cr i bed in N o v e m b e r o r M a rc h . P u rsu a n t to 2 8 U .S .C . § 1 9 2 0 (2 ), a p r e v a ili n g p a rtyis
e n tit led to re c o v e r “fe e s fo r th e c o u rt re p o rte r fo r all o r an y p a rt o f th e ste n o g ra p h ic t r ans cr i ptnece s s ar i l yobt ai ned foruse i n t hi s cas e. ” The di s t r i ctcour taw ar ded t he cost for t he t ri al t ranscr i pt on t he b asi s the tr anscri pt w as “obtai ned for Plai nti ffs use i n pr epar i ng fort r ial an d t o as s i s tt he att orney s and the C our ti n pr epar i ng fi ndi ngs of fa ct an d co n clus i ons of l aw . ” I n addi t i on t o pr opos ed fi ndi ngs of fa ctand concl us i ons of l aw , the di s t r i ctj udge al s o r eques t ed w r i t t en cl os i ng ar gum ent s and p o st-tria l b rie fs a t th e c lo se o f trial. B e c a u se P lain tiffs u se d th e tr ia l tra n sc rip t to19

a ss ist in p re p a rin g th e s e item s, th e d istric t co u rt d id n o t ab u se its d isc re tio n in
a w a rd in g c o sts fo r th e e n tire tra n sc rip t. T h e c o u rtalso d id n o t abu se it s d iscreti o n in tax ing the c o sts of the c o u rt appoi nt ed appr ai s ert o D efe ndant s . Pur s uantt o 28 U
. S. C
. § 1920( 6), t he di s t r i ct
cour tm ayt ax as cos t s , “compens at i on of cour tappoi nt ed expe r t s . ” D efe ndant s ar gue P l ai nti ffs shou l d n ot be aw arded co st s for the servi ces of the app rai serbecau se D e fe n d a n ts b e n e fitt e d f ro m th e c o u rt’s ad o p tio n o f th e a p p ra isa l re p o rt. N o th in g in t he s t atut e r equi r es t he courtt o cons i derw ho benef i t te d fr om t he courtappoi nt ed
e x p e r t s fi n d i n g s a n d D e fe n d a n t s c i t e n o a u t h o r i t y fo r s u c h a n a s s e r t i o n . A c c o r d i n g l y, t he di s t r i ctcour t ’ s cos taw ar d w i l l be uphel d. III
. W e nextaddr es s Pl ai nt i ffs ’ cl ai m s on appea l
. Pl ai nt i ffs chal l enge the di s t r i ct
c o u rt’s $ 1 d a m a g e a w a rd , the d istric t co u rt’s a p p a re n t n e g lec t o f P lain tiffs’ c laim
conce r ni ng t he A i rpor tShut t l e contr act , and the di s t r i ctcour t ’ s deni al of t hei rm ot i on forat t or neyfee s . W e addr es s eac h ar gum enti n tur n. A. W e r evi ew t he amount of a da m age a w ar d forcl earerr orand ques t i ons of l aw d e novo. See, e. g. , D i l l v. C i t y of E dm ond, O kl a. , 155 F. 3d 1193, 1209 (10 th C ir
. 1998)
. “The m ethodol ogya di s t r i ctcour tus es i n cal cul at i ng a damage aw ar d, s uch
a s d e ter m in in g th e p r o p e r e lem e n ts o f th e a w a rd o r th e p ro p e r sc o p e o f re c o v e ry , is a que sti on of l aw . ” See Sout hern C o. M R I v. M ed- A l l i ance , 166 F. 3d 1094, 110020

( 10t h C i r . 1999) ; s ee a l s o I n r e A i rC r as h D i s as t erN earC err i t os , C al
. , on A ugus t31, 1986, 982 F. 2d 1271, 1275 ( 9t h C i r . 1992) ( “W hen a l egal det er m i nat i on s uch as t he p ro p e r e le m e n ts o f

a n a w a rd o f

d a m a g e s is re v iew e d , a d e n o v o sta n d a rd is ap p li ed
. ”). In cases s uch as t his , w here profi t i s an induc em ent t o m aking a co ntr act , “l oss of pr ofi t s as a r es ul tof t he br eac h i s gener all y co n sider ed t o be w i t hi n t he cont empl at i on of t he par t i es and r ecove r yforl os tpr ofi t s w i l l be al l ow ed as damages if ca u sati o n is pro v ed w ith rea so n ab le ce rt aint y .” C am ino R ea l M o b il e H o m e P ark P a rtn e rsh ip v . W o lfe , 8 9 1 P .2 d 1 1 9 0 , 1 2 0 0 (N .M . 1 9 9 5 ). T h e c o u rt c o n sid e rs c e rta in fact ors i ncludi ng “ th e p re- exis t i ng or hi st ori c profit s of an est abli shed b usi ness, t og et her w i t h o t her fact s and cir cum st ances” in ar ri ving at an est i m at i on of the l ost pr ofi t s r es ul t i ng fr om t he br eac h of cont r act . R anche r s E xpl or at i on & D ev. C orp. v. M iles , 6 9 6 P .2 d 4 7 5 , 4 7 7 (N .M . 1 9 9 5 ). W h e r e a p a rtye sta b lish e s a leg a l rig h t to d a m a g e s, th e fa c t lo st p ro fits m a yn o t b e c o m p u ted w ith e x a c t m a th e m a tica l ce rta in ty does notpr eventt he pl ai nt i ff fr om r ecove r i ng. I d. “Even t hough t he amount of damages need notbe pr oven w i t h m athemat i cal cert ai nt y , nei t hercan i tbe bas ed on
s ur m i s e, conj ectur e ors pecul at i on. ” C ami no R eal , 891 P. 2d at1201. A tt r i al , Pl ai nt i ffs at t empt ed t o es t abl i s h l os t pr ofi t s t hr ough t he t es t i m onyof M a rtin a n d R o b e rt C h a v e z , an d E x h ib it 2 7 1 , w h ich R o b e rt p r e p a re d . R o b e rt, w ith t he assi st ance o f E xh i bit27 1, t est i fi ed to t he am ou nt of exp ense savings C P A P A l ost
as a r es ul tof t he fa i l ur e of the J oi nt V en ture. R ober texpl ai ned the ac tual aver age21

m ont hl yexpens es of t he J oi ntV entur e w er e $117, 027. 54. H e then su b tr ac te d t hat fi gur e fr om t he ave r age mont hl yexpens es pr i ort o t he J oi ntV entur e, r es ul t i ng i n a di ffe r ence of $23, 276. 88 i n expens e s avi ngs perm ont h. M ul t ipli ed byt w el ve, t he t ot al annual expens e s avi ng amount ed t o $279, 313. 56. R ober tt hen ca l cul at ed C P A P A ’s percentage i nter esti n the Joi nt V entur e (57% ) i n the t otal ann ual expen se
s avi ngs , and came up w i t h $159, 151. 73 as C PA PA ’ s aver age y ear l yexpens e s avi ngs
re su lti n g f

ro m its in v o lv e m e n t w ith th e Jo in t V e n tu re . F in a lly , R o b e rt m u lti p lied th is fig u r e b y six , the n u m b e r o f y e a rs r e m a in in g in th e Jo in t V e n tu re , res u lti n g in $9 54 , 91 0. 38 i n tot al l ostexp ense savings. A ppar ent l yal ar m ed w hen th e d is t r i ctcour tm ade c om m ent s conce r ni ng t he i nadequa cyof R ober t ’ s t es t i m ony , Pl ai nt i ffs cal l ed M ar t i n C havez t o t es t i fy
. M ar t i n,
w ho i s t he pr es i dentof PC A an d par t i al ow nerof C PA PA , t es t i fi ed as t o t he dim i nu t i on i n the val ue o f C P A P A as a r e su lt o f D e fe nd ants ’ br each. Like l ost pr ofi t s , damages m eas ur ed bydi m i nut i on of val ue fl ow “‘ fr om t he di s appoi nt m ent of a s peci al purpos e for t he s ubj ect m at t er of t he contr act ’ ” w hen thats ubj ectm at t er is k n o w n to b o th p a rt ie s . Id . a t 1 2 0 0 (q u o tin g W a ll v . P a te , 7 1 5 P .2 d 4 4 9 , 4 5 0 (N .M
. 1 9 8 6 )). S ee also E ateries, Inc
. v . J. R
. S im p lo t C o . , 3 4 6 F
. 3 d 1 2 2 5 , 1 2 3 6 (10 th C ir
. 2003) ( not i ng damages m aybe meas ur ed bydi m i n u ti o n in va l ue w hen a pa r t yl os es a bu si ness due t o the w rongf ul actof an other ). M art i n u sed t he 1 99 8 p rofi tand l oss
s t at ement fr om C PA PA and the pr ofi tand l os s s t at ement s gener at ed dur i ng t he J oi nt Ve n tu r e t o make h i s c a l c u l a t i o n s . He c a l c u l a t e d t h e d i ffe r e n c e b e t we e n t h e i n c o me22

and expe ns es , bot h pr e and pos t Jo int V ent ur e, and then appl i ed a 9. 5 per cent capi t al i zat ion rate to val ue the bus i nes s pr i ort o t he J oi ntV entur e and a tt he concl us i on of t he Join t V entur e. Fi nal l y , M ar t i n s ubt r act ed the pr e and pos tJ oi nt V entur e val ues and conc l uded C PA PA s uffe r ed a s i gni fi cantl os s r es ul t i ng fr om t he fai l ur e of the J oi ntV entur e. T he d i stri ctcou rtaw arded P l ai nti ffs $1 i n d am ages, rej ect i ng P l aint i ffs’ d am ag e e v iden ce as sp ec u lat ive a n d co njectura l. T h e c o u rt fo u n d R o b ert’s cal cul at i on fl aw ed bec aus e i tdi d notes t abl i s h C P A PA ’ s actual l os tpr ofi t s , but i ns t ead onl yfocus ed on C PA PA ’ s expens es befor e and dur i ng t he J oi ntV entur e. T he
c o u r tn o t e d R o b e r tC h a v e z “ d i d n o tt r y t o c a l c u l a t e t h e f u tu r e p r o fi t s o f

t h e c o m p a n y,
no r di d he determ i ne the pres ent val ue o f t he ex pen se savi ng s he cal culat ed. ” T hu s, t he di s t r i ctcour tdet er m ined h i s t es t i m onyw as m er el y“s ur m i s e, conj ectur e or
s pecul at i on. ” The cour tal s o found M ar t i n’ s at t empt t o s how l os s i n val ue of the
c o m p a n yw a s e q u a llyfla w e d
. T h e c o u rt f u rth e r fo u n d th a t if M a rtin a ttem p ted to
s how l os tpr ofi t s , h e fa il ed t o es t abl i s h t he pr es entval ue of s uch pr ofi t s and fa i l ed t o s how w hatpor t i on of t hos e pr ofi t s C PA PA w oul d have r eal i zed w hi l e oper at i ng i t s bus i nes s s epar at el y . W e agr ee w i t h the di s t r i ct cour t and fi nd nei t herR ober tnor M ar t i n C havez ’ s t es t i m onypr ovi ded the tr i erof fa ctw i t h an adequat e bas i s upon
w h ic h to c a lc u la te lo s t p ro fits
. Pl ai nt i ffs ar gue on appea l t he di s t r i ct cour t err ed beca us e i t hel d R o b ert and M arti n C h av e z , w h o test ifi ed as lay m en , to the sam e stan d ard itw o u ld ex p ert23

econ om i st s. A tt he o u tse t, w e agree w i t h the gen eral propo si t i on t hat l aypersons, esp ec ial lyb u sine ss o w n ers, are q u ali fied to testi f y re g a rdin g lost pro fit s. R an ch ers E x p l or at i on, 696 P. 2d at478. B ut , s uch w i t nes s es ar e s t i l l r equi r ed t o pr es ent t es t i m onyw hi ch ena bl es t he tr i erof fa ctt o pr oper l ycal cul at e damages
. Such w as nott he ca s e her e. I n t he ca s e of Rober t ’ s t es t i m ony , he fa i l ed t o even ment i on h isto ric a l p ro fits o r es tim a te f u tu re p ro fits in h is l o st pr o fits c a lcu la ti o n . A b a sic pr i nci pl e of acc ount i ng i s t hat pr ofi t s ar e det er m i ned onl y aft er operat ing ex pens es
ar e deduc ted fro m incom e. L os tpr ofi t s ar e, byt hei rdefi ni t i on, t he r ece i pt s or in c o m e o n e w o u ld re c e iv e a f ter e x p e n se s a re d e d u c ted . H e re , P la in ti ffs o n ly pr es ent ed evi dence of expens es , noti ncome. W i t houtanythi ng t o compar e them t o, evidence o f exp enses are i rr el evan t . In cal culat i ng l ost p ro fits, evi den ce of gross p ro fits a lo n e h a s n o e v id e n tiary v a lu e a n d fa ilu re to p re se n t e v id e n c e o f e x p e n se s is detr i m ent al t o t he c la i m . See, e. g. , D eat on, I nc. v. A er ogl i de C orp. 657 P. 2d 109, 1 1 4 (N .M . 1 9 8 2 ) (p la in ti ff ’ s fa ilu re to in tro d u c e e v id e n c e o f e x p e n se s re n d e re d its cl ai m forl os tpr ofi t s s pecul at i ve)
. W e have no r eas on t o as s um e the conve r s e i s not t rue— at t empt i ng t o comput e l os tpr ofi t s w i t h evi dence of expens es butno evi dence
o f in com e l acks t he ev i den t i aryt hrustnecessaryt o p rove on e’s cl ai m for dam ages. T hus , we fi n d t h e d i s t r i c t c o u r t d i d n o t e r r i n c o n c l u d i n g Rob e r t ’ s fa i l u r e t o pr es ent evi dence of C PA PA ’ s pr ofi t s w as fat al t o t he l os tpr ofi t s cal cul at i on. W e al s o agr ee t hat M ar t i n’ s t es t i m ony di d notpr ovi de a s uffi ci entbas i s upon
w h ich th e d istric t co u rt c o u ld c a lcu late d a m a g e s. T o th e e x ten t M a rtin a ttem p ted toC PA PA ’ s ar gum entt hati tus ed the 1998 expe ns e fi gur es beca us e the 9 p a rt ie s u s e d th o s e fig u re s d u ri n g c o n tr a c t n e g o tia tio n s is u n p e rs u a s iv e . C al cul at i on of di m i nut i on i n val ue r equi r es an eva l uat i on of t he company ’ s val ue im m e d ia tely p ri o r t o the c o n tr ac t, n o t th e v alue o f th e c o m p an yo n e y ea r or m o re p rio r to th e c o n tra c t. 24 s how di m i nut i on i n v alue , h e di d notus e the corr ectdat a. Such a s how i ng r equi r ed
an asse ssm en t of

C P A P A ’s fa irm ark et va lue im m ed iat elyp ri o r t o the J o int V en ture and i t s fai r m ar ket val ue i m m edi at el y fol l ow i ng t he t er m i nat i on of t he J oi ntV entur e. See gene r al l yJ ones v. L ee, 971 P. 2d 858, 862 ( N
. M
. A pp. 1998) ; E at er i es , I nc. , 346 F. 3d at1236. M ar ket val ue i s “‘ t he pr es ent val ue of a pr oj ect ed pr ofi ts t r eam. ’ ” I d. (qu o ti n g R
. E
. B
. , Inc
. v . R alst o n P u ri n a C o . , 5 2 5 F
. 2 d 7 4 9 , 7 5 4 -55 (10 th C ir
. 1 9 7 5 )). P rojec tin g a p ro fit stre a m re q u ire s a n a n a ly sis o f f u tu re p ro fits . Id . F u tu re p ro fits
ar e c alcu lat ed byt aki ng t he di ffe r ence betw een e xpect ed r evenue and expe ct ed expens es . I d. (cit ing B l ack’ s L aw D i ct i onary1226 ( 7t h ed. 1999) )
. “Fai rm ar ket
v alue , there fo re, i n co rpo rates ex p ec ted ea rnin g s an d ex p en ses.” Id
. (cit ing P rotec tors Ins. S erv . v . U n it ed S tat es F id. & G u ar. C o . , 1 3 2 F
. 3 d 6 1 2 , 6 1 5 (10 th C ir
. 1 9 9 8 )). In ar ri ving at t he p re- Joi nt V entur e value, M art i n used t he 19 98 profi tand l oss
s t at ement t o cal cul at e C PA PA ’ s pr e- J oi nt V en tur e expe ns es even though t he 1999 fi gur es w er e mostr el evant . A nd, i ns t ead of us ing the pr e- J oi ntV entur e hi s t or i cal 9 pr ofi t s t o cal cul at e t he pr e- J oi nt V entur e m ar ket val ue, he aver aged the J o int V entur e’ s pr ofi t s overt he cour s e of the ent i r e J oi ntV ent u re an d then ca r ved out C P A P A ’s p e rc e n tag e o f th e p ro fits. F a ilu r e to u se h isto ric a l p ro fits a n d fa ilu re to
us e t he m os t r el evant expens e fi gur es t o cal cul at e pr e- J oi nt V entur e m ark et va l ueT o t he ext entM ar t i n at t empt ed t o s how l os tpr ofi t s bys ubt r act i ng t he 10 1998 expens e fi gur es fr om C PA PA ’ s por t i on of t he J oi ntV entur e pr ofi t s , and m u lti p ly in g b ysix (th e n u m b e r o f y e a rs r e m a in in g in th e Jo in t V e n tu re ), h is c a l c u l a t i o n s w e r e s i m i l a r l y fa u l t y. Ja c k H e n d e rso n , L o re n tze n ’s e m p lo y e e , ex e c u ted th e c o n tra c t o n b e h a lf 11 of A i rpor tShut t l e. A ccor di ng t o H ender s on’ s t es t i m onyatt r i al , L or ent zen a s ked hi m t o s i gn t he contr actforfea rt hati f Lore nt zen s i gned i thi m s el f a c onfl i ctof i nt er es tm i ghtar i s e. 25 sk e w e d h is e n tire c a lcu latio n . M a rtin a p p lied a c a p italiz a tio n ra te to th e se fa u lty
n u m b ers a n d th en su b tr ac ted th at figu re f rom the c ap it ali ze d p o st- Jo int V en ture val ue. E ven as s um i ng his p o s t - J oi ntV entur e val ue fi gur es w er e corr ectand the capi t al i zat i on r at e M ar t i n chos e w as cor r ect , fai l ur e t o acc ur at el ycal cul at e the pr eJo int V en ture v alue fla w e d th e e n ti re c alcu lat ion
. A cc o rdin g ly , the d istri ct co u rt
corr ect l ydecided n ot t o rel yon t hese nu m bers t o calcul at e dam ages. 10 B. N e x t, w e a d d re ss P lain tiffs’ c laim th a t th e d istric t co u rt fa iled to c o n sid e r its cl ai m r egar di ng t he A irp o rtShut t l e contr act . A s not ed above , on J anuary15, 2002, G ol den exe cut ed a c ont r actpurpor t edl yon behal f of the J oi ntV entur e, pr ovi di ng par ki n g s p a c e s t o Ai rp o r tSh u t t l e , a c o mpa n yo wne d b yLo r e n t z e n . Th e c ont r act 11 pr ovi ded A i rpor tShut t l e unl i m i t ed us e of e i ght een s pace s on t he J o int V en tur e l ot
a t a d e e p lyd isc o u n ted ra te o f $ 2 0 p e r m o n th . N o t o n ly w e re th e ra tes sig n ifica n tly l ow ert han the us ual rat e of $50 pe rm ont h, t he contr actfavor ed A i rpor tShut t l e as it p ro v id e d o n lyA irp o rt S h u ttl e c o u ld c a n c e l th e c o n tra c t. T h e re c o rd re flec ts G ol den exe cut ed the contr actaft erPC A n o ti fi ed hi m he w oul d notl ongers er ve as26

oper at i ons m anage rfor t he J oi nt V entur e, and t hat even i f G ol den cont i nued t o s er ve
a s o p e r a t i o n s ma n a g e r , h e h a d n o a u t h o r i t yt o s i g n t h e c o n t r a c to n b e h a l f of P CA
w i t houtpr i or appr oval fr om corpor at e hea dquar t er s . O f fur t heri m por t ance , G ol den
w ent t o w or k for L or ent zen t en day s aft erhe s i gned the contr act . T es t i m onyatt r i al al s o r evea l ed A i rpor tShut t l e eve ntual l yus ed fi ft y sp ac es on t he l ot , i ns t ead of t he ei ght e e n s p a c e c o n t e mpl a t e d b yt h e c o n t r a c t , a n d t h e J o i n tVen tu r e n e v e rr e c e i ved paym entforA i rpor tShut t l e’ s us e of the parki ng s pace s . D es pi t e thi s evi dence i n t he
rec o rd, t h e d istri ct co u rtm ad e n o m en ti o n o f P lai n ti ffs’ claim in it s w ri tt en o rde r. C P A P A claim s it w a s d am ag ed b ythe u n au tho ri ze d co n tr ac t w ith A irp o rt Shut t l e i n t he amount of $32, 775. T hi s am o u n t co n st i tut es C PA PA ’ s 57% of t he $57, 500, t he amount A i rpor t Shut t l e s houl d have pai d t he J oi ntV entur e att he us ual
r at e of $ 5 0 p er m o n th forfi ft ys pace s dur i ng t he t er m of t he contr act . T he di s t r i ct
cour t ’ s fai l ur e t o rul e on t hi s m at t er pr ecl udes m eani ngful appel l at e r evi ew . R amey C ons t r . C o. , I nc. v. A pache T r i be, 616 F. 2d 464, 466- 67 ( 10t h C i r . 1980) ( not i ng t hat F .R
. C
. P
. 52 (a) ’s requi rem ents t hat t he tri al j ud ge “fi nd fact s speci al l y and sta te
s epar at el yi t s conclusion s of l aw ” s er ves t o ( 1) engende rcar e on the partof t r i al jud g es i n asc ertaining the fac ts; an d (2) m ak e p o ssible m ea n ing fu l app ell ate rev iew ). A ccor di ngl y , r emand i s r equi r ed forthe di s t r i ctcour tt o m ake f i ndi ngs of fa ct s and
c o n c lu sio n s o f

th e law re g a rd in g th e A irp o rt S h u ttl e c o n tra c t. C. Fi nal l y , Pl ai nt i ffs cl ai m t he di s t r i ct cour t err ed i n r efus i ng t o i m pos e att or ney27

fee s agai ns tD efe ndant s under par agr aph 1. 08 of t he J oi nt V entur e A gr eement . T hat paragraph st at es: U nauthor i zed A ct s . E i t herPar t yher et o act i ng orpurpor t i ng t o actfor oron behal f of the otherPar t yher et o i n vi ol at i on of t he t er m s and p rov isi o n s of t hi s A gr eements hal l be ac t i ng w i t houtauthor i t yand the Par t yact i ng orpurpor t i ng t o acts hal l i ndemni fyand hold the ot her Par t yhar m l es s fr om and aga i ns tanyand al l cl ai m s , l os s , l i abi l i t yor exp ense, w hich m i gh tari se or r esul tfro m anysuch ac tor act s, in c lu d in g , w ith o u t li m itatio n , all a tto rn e y s’ fe e s a n d e x p e n se s a c tu a lly i ncurr ed. T h e d e t e r mi n a t i o n o f

a c o n t r a c t u a l t e r m i s a q u e s t i o n o f l a w t h a tt h i s c o u r tr e v i e ws d e n o v o . S ee C arlan d v . M etrop o li tan L ife Ins. C o . , 9 3 5 F
. 2 d 1 1 1 4 , 1 1 2 0 (10 th C ir
. 1 9 9 1 ). R eadi ng t he pr ovi s i on i n t he cont extof t he J oi ntV entur e A gr eementw e agr ee
w i t h t he di s t r i ct cour t and fi nd t he pr ovi s i on onl yr el at es t o l i abi l i t i es t o t hi r d par t i es
cre ated b ythe u n au tho ri ze d co n d u ct of o n e o f th e p arti es to the J o int V e n ture A greem ent. T he p rovi si on do es not appear t o set asi de the “A m eri can R ule” atl east
as i t ap p li es to l i t i gat i on betw een the part i es t o the J oi ntV entur e A gr eement . See M cC l ai n C o. v. Page & W i r t z C ons t r . C o. , 694 P. 2d 1349 ( N
. M
. 1985) ( N ew M exi co fol l ow s t he “A m er i can Rul e” i n that ea ch par t ybear s t he fi nanci al bur den of l i t i g a t i n g a c i v i l c l a i m , a b s e n ta s t a tu t e o ra g r e e m e n tt o t h e c o n t r a r y)
. A c c o r d i n g l y, t he di s t r i c t c ou r t di d no t e r r w he n i t de ni e d Pl a i nt i ffs ’ a pp l i c a t i on fo r a t t orney fees. Fo rt h e fo r e g o i n g r e a s o n s , t h i s ma t t e r i s AFFI RM ED i n p a r ta n d REM AN DED28

i n par tfort he di s t r i ctcour t ’ s cons i der at i on as s t at ed her ei n.

E n ter e d fo r th e C o u rt,

B obbyR
. B al dock C i r cui tJ udge