* This order and judgment is not binding precedent, except under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### MAY 21 2001 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

McCURDY GROUP, LLC, a Virginia limited liability company, Plaintiff-Appellee,

v. No. 00-6183 AMERICAN BIOMEDICAL GROUP, INC., an Oklahoma corporation, Defendant-Appellant, and JAMES K. BURGESS, III, an individual, Defendant. No. 00-6332 (D.C. No. 97-CV-1081-T) (W.D. Okla.)

ORDER AND JUDGMENT *

Before BRISCOE , BALDOCK , and LUCERO , Circuit Judges.2

Defendant American Biomedical Group, Inc., (ABGI) appeals from a final judgment, entered after a jury verdict, award ing plaintiff McCurdy Group, LLC, (MG) $228,406.82 on its claim for breach of co ntract, and $148,800.00 on its claim for quantum meruit. ABGI has also fil ed a separate appeal challenging the district court’s award of attorney fees in favor of MG. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.
I. Dave McCurdy is a former Oklahoma Congressman, havi ng served in the United States House of Representatives from 1980 until January 1995. In March 1995, McCurdy formed MG, a Virginia limited l iability company, with its principal office and place of business in Virgi nia. McCurdy’s intent was for MG “to be a business consulting and investment group,” and “not a lobbying group” or “a political group.” Aplt. App. (00-6183 ) at 218. On April 7, 1995, McCurdy, on behalf of MG, signed a written agreement with ABGI, an Oklahoma corporation with i ts principal office and place of business in Oklahoma. ABGI provided hospi tals and other healthcare providers with systems to reduce equipment maintena nce expenses. Prior to entering into the agreement with MG, ABGI had unsuc cessfully attempted to obtain contracts with federally-run hospitals. ABG I’s purpose in entering into the agreement with MG was to have MG assist in mark eting ABGI’s products3

and services to federal government officials. The April 7 agreement between MG and ABGI stated th at McCurdy would become a director of and consultant to ABGI. In return for his role as director, McCurdy was to receive an annual fee of $ 24,000. MG was to perform the following services for ABGI:

(1) establish an office for ABGI in the Washington, D.C. area; (2) provide and direct a marketing strategy and eff ort to secure additional business for ABGI with the Veterans Administration (VA), other hospitals under the Department of Defense (DOD), Indian Health Services, and other pu blic, government, and private sector hospitals identified in advance and agreed to by ABGI and MG; (3) consult with Jim Burgess and ABGI regarding lon g-range planning, capital information, potential mergers an d acquisitions, and future public offering or sale of ABGI; (4) perform such other duties and services as may b e requested by ABGI and agreed to be performed by MG; and (5) report no less than monthly on its efforts in f ulfilling the above-outlined contractual obligations. Aplee. App. (00-6183) at 299-300. MG was to receiv e the following compensation:

(1) a marketing/consulting fee equal to 2.0% of the VA/DOD and other identified contract business obtained and completed by ABGI and entered into by ABGI during the term of th e contract or any extension thereof and renewals of these contrac ts; (2) a monthly office and staff overhead fee of $16, 600; and (3) reimbursement of out-of-pocket travel and busin ess expenses. Id. at 301-02. In addition, MG was granted an option to acquire up to 5% of4

the outstanding common stock of ABGI, either by pur chase of such stock or by waiver of MG’s consulting/marketing fee on an equal dollar-waived to dollaracquired basis. Lastly, the contract provided thateither party could terminate the contract upon 120 days’ written notice. Upon signing the agreement, both parties began perf orming their respective obligations. In particular, McCurdy and MG began efforts to market ABGI’s products and services to various government officials and organizations (e.g., VA hospitals located on the ea st coast). In return, ABGI helped establish an office for MG in Washington, D. C., and began paying MG the amounts of compensation set forth in the agreem ent (except for the director’s fee to be paid to McCurdy). ABGI contin ued to make payments to MG through June 1996, when the payments from ABGI t o MG ceased. According to McCurdy, the only reason given by Burg ess for ABGI’s failure to pay was cash flow problems, and that at no time did Burgess or anyone else at ABGI indicate the parties’ written agreement had be en terminated. Notwithstanding ABGI’s failure to pay, MG continued to perform its obligations under the written agreement. Indeed, M G continued to market ABGI’s products and services to potential customers through approximately August 1997. Beginning in the fall of 1996 and continuing into August 1997, MG repeatedly asked ABGI why payments had not been made under the5

agreement and, according to McCurdy, Burgess repeat edly attributed the failure to ABGI’s alleged cash flow problems. MG filed this diversity action on July 1, 1997, and the case proceeded to trial in April 2000. At the conclusion of all the evidence, the jury returned a verdict in favor of MG on its claim for breach of c ontract and awarded MG damages in the amount of $228,406.82. The jury als o returned a verdict in favor of MG on its claim for quantum meruit and awarded MG damages on that claim in the amount of $148,800. The district court granted MG’s request for attorney fees in the amount of $221,921.51, but den ied its request for prejudgment interest.
II.
No. 00-6183 Quantum meruit - jury instructions According to the record, MG’s primary theory at tri al was that the April 7 agreement was not terminated until after this law suit was filed and that ABGI was therefore liable for damages under the agreemen t through that time period. The district court, however, chose to instruct the jury that a breach of contract on the part of ABGI (e.g., failure to pay MG) would result in triggering the1 According to MG, “[s]ince ABGI’s payments ceased af ter the June, 1996 payment . . . , the 120 day period under the court’ s ruling ended with October, 1996.” Aplee. Br. at 13. Because the record on app eal does not include the complete trial transcript, the complete jury instru ctions, or the verdict form, it is impossible to verify this.

2 The agreement specifically provided that either party could terminate the agreement “on 120 days written notice,” and that, “ [u]pon termination, both parties w[ould] account for and settle all charges and accounts due under the marketing/consulting fee agreement including future business booked as a direct result of McCurdy efforts, including rent, overhead , expenses and fees due under the consulting/marketing [agreement] and any outsta nding claims due ABGI.” Aplt. App. at 29. 6 120-day notice provision and the ultimate terminati on of the contract. 1 Apparently concerned whether this instruction was c orrect, and also concerned that this would limit the amount of damages recover able by MG, the district court allowed MG to pursue, in addition to its brea ch of contract claim, a quantum meruit theory under which the jury could aw ard MG damages for any services that MG rendered to ABGI after terminationof the contract. ABGI contends it was improper for the district court to permit MG to recover on its quantum meruit claim. According to ABGI, quantum meruit is only appropriate where there is no contract in plac e covering the transactions at issue. Here, ABGI argues, MG should have been limi ted to damages that accrued during the 120-day notice period set forth in the parties’ written agreement 2 and should not have been permitted to recover any damages that accrued after that period.7

We review de novo the question of whether the distr ict court’s jury instructions, considered as a whole, correctly stat ed the governing law and provided the jury with an ample understanding of th e issues and applicable standards. Brown v. Gray , 227 F.3d 1278, 1291 (10th Cir. 2000). Since this is a diversity action, the question is whether the dis trict court’s jury instructions correctly stated the governing standards under Okla homa law. See generally Wood v. Eli Lilly & Co. , 38 F.3d 510, 512 (10th Cir. 1994) (“A federal cou rt sitting in diversity must apply the law of the foru m state, in this case Oklahoma, and thus must ascertain and apply Oklahom a law with the objective that the result obtained in the federal court shoul d be the result that would be reached in an Oklahoma court.”). Oklahoma law recognizes a legal action for quantum meruit. “[T]he common law doctrine of ‘quantum meruit’ . . . is fo unded on a Latin phrase meaning, ‘as much as he deserves,’ and in law has b een defined as ‘a legal action grounded on a promise that the defendant wou ld pay to the plaintiff [for his services] as much as he should deserve.’” Mart in v. Buckman , 883 P.2d 185, 193-94 (Okla. Ct. App. 1994). “Where a personperforms services without a written contract, the law implies an agreement to pay what is reasonable, meaning thereby what he reasonably deserves.” Brown v. Wrightsman , 51 P.2d 761, 763 (Okla. 1935).8

It is true, as noted by ABGI, that the Oklahoma Sup reme Court has held “the rule of ‘quantum meruit’ applies only where th ere is no express contract.”
Brown , 51 P.2d at 763. ABGI, however, reads too much into this holding. Contrary to ABGI’s arguments, Oklahoma law does notappear to preclude a plaintiff from recovering under a quantum meruit cl aim, even though the plaintiff had an express contract with the defendant, as long as the quantum meruit claim involved obligations outside the scope of the express contract. Although there are no Oklahoma cases directly on po int, the Oklahoma Supreme Court has indicated, in dicta, that a quant um meruit action can be brought “despite the existence of an express contra ct,” and that evidence of the express contract can be admitted “as a circumstance indicating” the “value of the services” rendered by the plaintiff to the defe ndant. Reynolds v. Conner , 123 P.2d 664, 668 (Okla. 1941); see also Shumaker v. Hazen , 372 P.2d 873, 875 (Okla. 1962) (“‘There cannot be an express and an implied contract for the same thing existing at the same time.’”). Cases fr om other jurisdictions, although not controlling here, support this conclus ion. E.g. , Turner Assoc., Inc. v. Small Parts, Inc. , 59 F. Supp. 2d 674, 683 (E.D. Mich. 1999) (concluding plaintiff, who sought to recover post-t ermination commissions, would be foreclosed from doing so under a quantum m eruit theory “only if it is first established that a valid and enforceable cont ract governed defendant’s9

payment of post-termination commissions”); Mary Matthews Interiors, Inc. v. Levis , 617 N.Y.S. 2d 39, 41 (N.Y. App. Div. 1994) (“Reco very in quantum meruit is not warranted when the services rendered by the plaintiff were required by the terms of an express contract betwee n the parties.”); Gen. Homes, Inc. v. Denison , 625 S.W.2d 794, 797 (Tex. App. 1981) (indicating that a person can recover, under a quantum meruit theory , the reasonable value of services rendered outside the scope of an express c ontract). The district court’s jury instructions were consist ent with these general principles. The district court’s initial instructi on on the theory of quantum meruit informed the jury that, “[i]n appropriate ci rcumstances, a party may have an obligation to pay another party for service s rendered, even where there is no actual contract requiring payment.” Aplt. Ap p. at 179 (Instruction 34). This same instruction further informed the jury that MG was seeking to recover under a theory of quantum meruit “for services rend ered after the date of termination of the contract.” Id. In its second quantum meruit instruction, the district court informed the jury that, “[i]f you fi nd that plaintiff continued to render services to defendant after the date of term ination of the contract, plaintiff may recover under the doctrine of quantum meruit for the reasonable value of those services.” Id. at 181 (Instruction 35). More specifically, the instruction stated:10 Plaintiff is here claiming that it should be compen sated for services reasonably provided after the date of term ination. As I will explain later, you must determine when the contract was breached and consider the date of termination of th e contract to be 120 days past that date. With respect to this theo ry of quantum meruit recovery, you must limit your consideration to services rendered after the date you decide was the date of termination of the contract. Id. at 182. In short, the district court’s jury instr uctions limited MG’s recovery on its quantum meruit theory to the reasonable valu e of services it rendered to ABGI outside the scope of the parties’ written agre ement (i.e., those services rendered to and accepted by ABGI after expiration o f the 120-day notice period).
Quantum meruit - sufficiency of evidence ABGI contends that, even if it was proper for the d istrict court to allow MG to proceed on its quantum meruit claim, the evid ence presented at trial was insufficient to support the jury’s damage award in favor of MG. More specifically, ABGI contends “[t]here was insufficie nt evidence presented at trial to establish that [MG] conferred benefits on ABGI after October 1996 [the expiration of the 120-day notice period] to justify ” the jury’s award “of $18,600 per month ($16,600 for overhead expenses an d $2,000 for director’s fees) . . . from October 1996 to July 1997.” Aplt. Br. at 16. According to ABGI, McCurdy was never a director of ABGI and thus was never entitled to a11

director’s fee. Further, ABGI argues that “overhea d expenses” are not recoverable under a theory of quantum meruit. We “review a damage award challenged on the basis o f insufficient evidence under a clearly erroneous standard, ‘viewi ng the evidence in the light most favorable to the prevailing party.’” Vining v . Enter. Fin. Group, Inc. , 148 F.3d 1206, 1216 (10th Cir. 1998) (quoting Rainbow T ravel Serv., Inc. v. Hilton Hotels Corp. , 896 F.2d 1233, 1239 (10th Cir. 1990)). We will “ affirm the judgment below if there is substantial evidence ten ding to support the jury’s damage award.” Id. There are two procedural problems that prove fatal to ABGI’s argument. First, although it appears that ABGI moved for judg ment as a matter of law at the conclusion of MG’s evidence and again at the co nclusion of all the evidence, it did not file any type of post-trial mo tion challenging the jury’s damage award on the quantum meruit claim (e.g., mot ion for remittitur or new trial on the issue of damages). Thus, the specific issue ABGI now seeks to assert was not raised in the district court and it has been waived for purposes of appeal. See Walker v. Mather , 959 F.2d 894, 896 (10th Cir. 1992). Second, even if ABGI’s motion for judgment as a matter of l aw was somehow sufficient to preserve the issue for purposes of appeal, ABGI has failed to provide the court with a sufficient record to decide the issue. Tenth Circuit Rule3 We have reviewed the trial transcript excerpts sub mitted by ABGI and

MG and, based upon the evidence contained therein, it appears the jury’s damage award on the quantum meruit claim was supported by sufficient evidence. Although it is true that McCurdy was never formallymade a director of ABGI, the evidence indicates that ABGI repeatedly informe d potential clients that McCurdy was a director of ABGI. Further, evidence of the payments made by ABGI to MG for overhead expenses was relevant for p urposes of determining the reasonable value of the services provided by MG to ABGI after the termination of the parties’ agreement. 12 10.1(A)(1)(a) provides that “[w]hen sufficiency of the evidence is raised, the entire relevant trial transcript must be provided.” Here, however, ABGI has included only selected excerpts from the trial tran script. 3

Legality of the parties’ agreement ABGI contends the district court erred in denying i ts motion for judgment as a matter of law on the issue of whetherthe parties’ written agreement was illegal. In ruling on cross motions for summary judgment in which each party sought summary judgment on the que stion of whether the contract at issue was an illegal contract under 41 U.S.C. § 254(a), the district court concluded the challenged contingent fee provi sion was illegal “unless it is found that MG is excepted from Section 254(a) an d a bona fide established commercial or selling agency maintained by ABGI forthe purpose of securing business.” Order filed Aug. 11, 1999, at 3. Accor ding to ABGI, the agreement violated § 254(a) and was therefore invalid because (1) it provided for the4 Even if we were to overlook the record deficienci es, we are not

persuaded by the dissent's position. Based on whatit describes as “the historical backdrop against which 41 U.S.C. § 254(a) and the r elevant [implementing] regulations were promulgated,” the dissent suggests a bona fide established commercial or selling agency cannot exist if there exists a “special risk that improper influence will be exerted.” Dissenting op . at 8. Aside from our skepticism about this theory, we note it has never been propounded by defendant, either in the district court or on appeal, and the jury was never instructed on it. (continued...) 13 payment of a commission to MG for the procurement o f government contracts, and (2) MG did not qualify as a bona fide establish ed commercial or selling
agency. “We review de novo a district court’s disposition o f a motion for judgment as a matter of law, applying the same stan dard as the district court.” Ballard v. Muskogee Reg’l Med. Ctr. , 238 F.3d 1250, 1252 (10th Cir. 2001). Judgment as a matter of law “is warranted only if t he evidence points but one way and is susceptible to no reasonable inferences supporting the party opposing the motion.” Id. Again, ABGI’s failure to provide a complete copy of the trial transcript prevents our review. As previously noted, ABGI has included in its appendix only selected excerpts from the trial transcript. Although MG has filed its own appendix which includes additional excerpts, we do not have a complete record of the trial and it is impossible to determine fromthe record on appeal all of the evidence that was presented at trial. 44 (...continued)

Thus, even assuming its legitimacy, it cannot provi de a basis for reversal in this case. 14 District court’s ruling that April 7 agreement cons tituted a final, enforceable contract On the first day of trial, prior to commencement of ABGI’s case, the district court conducted an evidentiary hearing on MG’s motion in limine to exclude evidence of oral statements regarding terms extrinsic to the April 7 agreement. At the conclusion of the hearing, the d istrict court concluded, as a matter of law, that the April 7 agreement was a val id enforceable contract. Accordingly, the district court granted MG’s motionin limine and subsequently instructed the jury that the agreement was a valid enforceable contract. On appeal, ABGI contends the district court erred in f inding as a matter of law that the parties’ April 7 agreement constituted a final, enforceable contract. According to ABGI, the issue should have been submi tted to the jury for consideration (ABGI contends the April 7 writing wa s merely a preliminary letter of intent that required further finalizationto be effective). In concluding that the agreement was an enforceable contract, the district court was acting upon MG’s motion in limine and dec iding whether Oklahoma’s parol evidence rule would prohibit ABGI’ s introduction of oral statements made by the parties prior to signing the agreement. In a diversity15

case such as this, the so-called “substantive” stat e rules of evidence, including the forum state’s parol evidence rule, apply. Blan ke v. Alexander , 152 F.3d 1224, 1231 (10th Cir. 1998). We apply a de novo re view. See Betaco, Inc. v. Cessna Aircraft Co. , 32 F.3d 1126, 1131 (7th Cir. 1994); Brinderson-Ne wberg Joint Venture v. Pacific Erectors, Inc. , 971 F.2d 272, 277 (9th Cir. 1992); United States Fire Ins. Co. v. Gen. Reinsurance Corp. , 949 F.2d 569, 571 (2d Cir. 1991). Oklahoma’s parol evidence rule provides that “[t]he execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concernin g its matter, which preceded or accompanied the execution of the instrument.” O kla. Stat. tit. 15, § 137. Applying the rule, the Oklahoma Supreme Court has i ndicated that “[w]here . . . a contract is complete in itself and, when vi ewed as a totality, is unambiguous, its language is the only legitimate ev idence of what the parties intended. That intention cannot be determined from the surrounding circumstances, but must be gathered from a four-cor ners’ examination of the instrument.” Lewis v. Sac & Fox Tribe of Okla. Hou s. Auth. , 896 P.2d 503, 514 (Okla. 1994). After reviewing the April 7 written agreement, we a gree that it constitutes a final, enforceable contract. The agr eement sets forth in detail5 The compensation provisions twice refer to a “Sched ule ‘A,’” which was

apparently intended to outline in greater detail (a ) what the agreed-upon “monthly office and staff overhead fee” would cover, and (b) what “out-of-pocket travel and business expenses” would be reimbursable. Aplt . App. at 27-28. Although Schedule A was not included with the agreement when signed, we are not persuaded that is sufficient to create an ambiguity in the agreement or to otherwise nullify the effect of the agreement. 16 what it describes as the “essential terms” to whichthe parties agreed, including the nature of the relationship between the parties (i.e., that McCurdy “will become a Director and Consultant to ABGI” and that MG “will be granted an option to purchase” the stock of ABGI, Aplt. App. at 26), the term of the agreement (five years, subject to the right of eith er party to terminate), the services to be performed by MG on behalf of ABGI (e .g., establishing an office in the Washington, D.C. area, performing marketing activities), the compensation to be paid by ABGI to MG and McCurdy, 5 MG’s option to purchase stock of ABGI, the conditions under which a party could terminate the agreement, and confidentiality and non-compete prov isions. Perhaps most importantly, the agreement expressly states that it“supersedes all previous discussions and agreements and is the entire Agreem ent between the parties.” Aplt. App. at 29. Lastly, the agreement contains t he signatures of Burgess (on behalf of ABGI) and McCurdy (on behalf of MG).17

Discovery dispute - computer and disc drives ABGI contends the district court abused its discret ion in refusing to order MG to return to ABGI computer and disc drives that ABGI supplied to MG at the start of the parties’ relationship. We apply an abuse of discretion standard in reviewing a district court’s denial of a motion to compel discovery. See Munoz v. St. Mary-Corwin Hosp. , 221 F.3d 1160, 1169 (10th Cir. 2000). During discovery, ABGI requested that MG “[p]roduce all computer disc drives, including back-up computer disc drives for plaintiff from 1995 to the present.” Aplt. App. at 95. MG objected on the gr ounds that the request was “overly broad and unduly burdensome” and would requ ire the disclosure of confidential communications (e.g., letters from MG to its counsel) and other communications unrelated to ABGI or the lawsuit. I d. at 99-100. Subject to these objections, MG agreed to produce a copy of th e printouts from McCurdy’s hard drive for nonprivileged documents re lated to ABGI, plus a zip drive of those same documents. Dissatisfied with MG’s response, ABGI moved to comp el production of the computer disc drives. In support of its motion , ABGI asserted that it should be permitted to examine the disc drives to d etermine whether they contained any memoranda referring to Burgess’ March 6, 1996, letter, which MG denied receiving. ABGI also asserted that it sh ould be permitted to18

examine the disc drives to determine whether they c ontained any “memoranda or correspondence” to ABGI’s competitors. Id. at 100-01. Finally, ABGI asserted that it was the owner of the computer equi pment and that MG had agreed to return the equipment after the conclusionof the lawsuit. In its response, MG asserted that it had “produced a print out of all of the documents on Dave McCurdy’s hard-drive which related to his w ork for ABGI,” and had also granted ABGI permission to inspect a “zip-driv e . . . taken directly from Dave McCurdy’s computer.” Aplee. App. at 18. MG f urther asserted that it had agreed to produce the requested disc drives to a third party (Tri Logic Systems, Inc., of Grand Prairie, Texas) for inspect ion. Id. at 19-20. Finally, MG asserted that the disc drives contained “substantial information protected by the attorney-client and trade secret privileges. ” Id. at 20-21. The magistrate judge denied ABGI’s motion after a h earing. ABGI filed written objections to the magistrate judge’s order. The district court denied ABGI’s objections, concluding that ABGI had “failed to show that the [magistrate judge’s] order was either clearly erron eous or contrary to law.” Aplee. App. at 82. The district court noted that “ the deadline for designation of trial exhibits ha[d] passed and [ABGI] failed to list the . . . computer equipment as exhibits.” Id. We are not persuaded the district court abused its discretion in denying19

ABGI’s objections to the magistrate judge’s order. ABGI has never explained, either in the district court or on appeal, why it s hould be allowed to conduct a physical inspection of MG’s computer hard drive(s). Although ABGI was apparently skeptical that MG produced copies of all relevant and nonprivileged documents from the hard drive(s), that reason alone is not sufficient to warrant such a drastic discovery measure. Further, ABGI ha s not explained why inspection of the zip drive and/or inspection of th e hard drive by Tri Logic would not have been sufficient to satisfy its conce rns. No. 00-6332 ABGI challenges the district court’s post-trial award of attorney fees to MG. We generally review an award of attorney fees for abuse of discretion. Chesapeake Operating, Inc. v. Valence Operating Co. , 193 F.3d 1153, 1157 (10th Cir. 1999). In doing so, we review de novo any statutory interpretation or other legal analysis underlying the district cou rt’s decision concerning attorney fees. Id. The district court awarded fees to MG pursuant to O kla. Stat. tit. 12, § 936, which provides:

In any civil action to recover on an open account, a statement of account, account stated, note, bill, n egotiable instrument, or contract relating to the purchase orsale of goods, wares, or merchandise, or for labor or services, un less otherwise provided by law or the contract which is the subjec t to the action,20

the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as c osts. ABGI’s primary contention on appeal is that MG’s ac tion (in particular its breach of contract claim) was not for “labor orservices” as contemplated by § 936. In support of its contention, ABGI cites Ru ssell v. Flanagan , 544 P.2d 510 (Okla. 1975). In Russell , the plaintiff hired the defendant to service his sewer line for a fee of $24.50. Less than thirty d ays after the service, plaintiff experienced sewer line problems and requested that defendant return and perform additional work without charge, but defenda nt refused. Plaintiff filed a small claims action against defendant for “breachof warranty on labor contract.” Id. The case proceeded to trial and a jury found in f avor of defendant. Defendant subsequently moved for an awa rd of attorney fees pursuant to § 936, but the request was denied. The Oklahoma Supreme Court agreed that fees were not available to the defendan t under § 936. In doing so, the court interpreted § 936 narrowly, finding that the phrase “labor or services” fell “within the initial category of ‘a civil actio n’” but not “the antecedent classification of a ‘contract relating to.’” Id. at 512. According to the Oklahoma Supreme Court, “the addition of the phrase ‘or for labor or services’ by amendment to the statute in 1970 was intended bythe legislature to be limited to those situations where suit is brought f or labor and services21

rendered,” and “an improper and unintended meaning would result if . . . th[e] clause were construed to allow attorney fees in the all encompassing field of ‘contracts related to . . . , labor or services.’” Id. Although Russell would appear at first glance to support ABGI’s argument, the Oklahoma Supreme Court has since clar ified its holding in Russell . In Burrows Construction Company v. Independent S chool District , 704 P.2d 1136 (Okla. 1985), the court explained what was intended by the holding in Russell :

It is the underlying nature of the suit itself whic h determines the applicability of the labor and services provisi ons of section 936. If the action is brought for labor and servic es rendered, the provisions of section 936 apply. If the nature of the suit is for damages arising from the breach of an agreement rel ating to labor and services the provisions of this section do not necessarily apply . The question is whether the damages arose direct ly from the rendition of labor or services, such as a failu re to pay for those services, or from an aspect collaterally relating t o labor and services, such as loss of profits on a contract inv olving the rendition of labor and services. Id. at 1138 (emphasis added and footnotes omitted). I n accordance with this clarification, the Oklahoma Supreme Court has since held, for example, that attorney fees are recoverable under § 936 in a suitto recover the unpaid balance on a yellow pages advertising contract (the court having held that advertising is a “service”). Southwestern Bell Tel . Co. v. Parker Pest Control,
Inc. , 737 P.2d 1186, 1187-88 (Okla. 1987). Likewise, i n Strickland Tower22

Maintenance, Inc. v. AT&T Communications, Inc. , 128 F.3d 1422, 1429 (10th Cir. 1997), this court concluded attorney fees are recoverable under § 936 in a breach of contract action alleging that defendant f ailed to properly calculate the amount of compensation owed to plaintiff for servic es it performed under the parties’ written agreement. Based upon these authorities, it is clear that § 93 6 allowed for recovery of attorney fees in this action. The essence of MG ’s suit (including both its breach of contract and quantum meruit claims) was t hat it performed services for ABGI (i.e., marketing and business consulting s ervices), but that ABGI failed to pay for those services. In other words, the damages alleged by MG arose directly from its rendition of services to AB GI, and not “from an aspect collaterally relating to labor and services.” Burr ows , 704 P.2d at 1138. ABGI attempts to nitpick MG’s breach of contract cl aim by arguing that the various components of damages recovered thereun der by ABGI were not for labor or services rendered. For example, ABGI atta cks the components of the damage award which effectively constituted reimburs ement for commissions due under the agreement and the retainer for overhe ad expenses due under the agreement. As the district court aptly noted, howe ver, both of these items “were to be paid in exchange for acts collectively described in the contract as ‘consulting and marketing services.’” Aplt. App. at243. Thus, contrary to23

ABGI’s assertions, these two items were integral co mponents of the overall compensation package that MG was to be paid in retu rn for services rendered
to ABGI. ABGI asserts several other arguments, none of whichhave merit. ABGI contends that MG “took the position that it was ent itled to payment by ABGI for overhead fees, director’s fees, travel expenses and commissions during the term of the alleged agreement, regardless of whethe r any services were rendered to ABGI and regardless of whether contract s were obtained through [MG’s] efforts.” Aplt. Br. at 14. This contentionis apparently based upon the fact that MG’s complaint requested damages for the four-month period following the date the lawsuit was filed, even thou gh MG performed no services for MG during at least three of those mont hs. The contention is ultimately meritless, however, because, under the d istrict court’s instructions, MG was only allowed to recover damages for the time period that it actually performed services for ABGI. ABGI also complains t hat MG’s complaint did not include a claim for quantum meruit, and that th is claim was only added near the end of the litigation, based upon the dist rict court’s ruling that it would limit contractual damages to the 120-day peri od following ABGI’s breach of the agreement. Regardless of when the cl aim was first raised, however, it is clear that the district court allowe d it to go forward and the jury24

found in favor of MG on that claim. Thus, it can c learly be considered as one of the bases for an award of fees under § 936. ABG I contends that the damages awarded on the quantum meruit claim were no t for labor or services rendered. This contention is patently incorrect. A review of the available portions of the trial transcript indicates that MG continued to perform marketing and consulting services for ABGI through the summer of 1997, and the jury obviously based its quantum meruit damage award on what it determined to be the reasonable value of those serv ices. The judgment of the district court is AFFIRMED. Entered for the Court Mary Beck Briscoe Circuit Judge1 In Providence Tool , the Court observed that contingent fee arrangemen ts

“tend to introduce personal solicitation and person al influence, as elements in the (continued...) 00-6183, 00-6332, McCurdy Group, LLC v. Am. Biomed. Group

LUCERO , Circuit Judge, dissenting. Because the majority’s decision can not be squared with a clear reading of 41 U.S.C. § 254(a), and because I am concerned with the majority’s summary dismissal of ABGI’s challenge to the arrangement’s legality, I respectfully dissent. Contrary to the majority, I conclude thatthe record before us adequately demonstrates the illegality of the parties’ agreeme nt and thus would reach and consider the question of the legality of contingentfee arrangements with selling agents to obtain government contracts. On my revie w of the record, I conclude there was no legally sufficient evidentiary basis f or the jury to find that McCurdy Group fell under § 254(a)’s exception for bona fide established selling agencies as the exception traditionally has been understood.
I A. Judicial Beginnings The broad and long-standing policy against continge nt fees was articulated by the Supreme Court in Providence Tool Co. v. Norris , 69 U.S. (2 Wall.) 45, 54–56 (1865). The prohibition promoted efficiency by preventing the use of personal influence in obtaining public contracts; i n the Court’s view, the rule was fundamental to good government. 1 According to the Court’s precedent, it was1 (...continued)

procurement of contracts; and thus directly lead to inefficiency in the public service, and to unnecessary expenditures of the pub lic funds.” 69 U.S. (2 Wall.) at 54. The matter was put more bluntly in Meguire v. Corwine , 101 U.S. 108, 111–12 (1879) (internal citations omitted):

The law touching contracts like the one here in que stion has been often considered by this court, and is well se ttled by our adjudications. . . . Frauds of this class to which the one here disclosed belongs are an unmixed evil. Whether for bidden by a statute or condemned by public policy, the result i s the same. No legal right can spring from such a source. They ar e sappers and miners of the public welfare, and of free governmen t as well. The latter depends for its vitality upon the virtue and good faith of those for whom it exists, and of those by whom it is admi nistered. Corruption is always the forerunner of despotism.

-2- irrelevant that improper influence was not exerted in a give n case, for “‘[t]he objection to [contingent fee arrangements] rests in their t endency, not in what was done in the particular case. . . . The court will not inquire wh at was done. If that should be improper it probably would be hidden, and would not appear.’” United States v. Miss. Valley Generating Co. , 364 U.S. 520, 550 n.14 (1961) (quoting Hazelton v. Sheckels , 202 U.S. 71, 79 (1906)). The exception for established commercial or selling agenci es maintained by the contractor for the purpose of securing business was firs t recognized in Oscanyan v. Arms Co. , which distinguished “contingent compensation in the obnoxious sense of that term” from “rates established by merchants for legitimate services in the regular course of business”—in other words, “the ordinary2 Subsequently, the Supreme Court, through Justice Holmes, reaffirmed its

approval of the public policy against contingent fe e arrangements:

The general principle was laid down broadly in Providence Tool Co. v. Norris that an agreement for compensation to procure a contract from the government to furnish its supplie s could not be enforced, irrespective of the question whether impr oper means were contemplated or used for procuring it. And it was said that there is no real difference in principle between agreement t o procure favors from legislative bodies, and agreements to procure favors in the shape of contracts from the heads of departments. [We have] said that all contracts for a contingent compensation fo r obtaining legislation [a]re void . . . . Hazelton , 202 U.S. at 79 (internal citations omitted); see also Miss. Valley Generating , 364 U.S. at 550 n.14 (citing Hazelton with approval); Acme Process Equip. Co. v. United States , 347 F.2d 538, 548 (Ct. Cl. 1965) (“Though the uncompromising rule stated in the Norris case has been tempered in the intervening years . . . , its basic rationale was a ccepted and elaborated by Mr. Justice Holmes, speaking for a unanimous court . . . .”); Bradley v. Am. Radiator & Standard Sanitary Corp. , 6 F.R.D. 37, 40 (S.D.N.Y. 1946) (“The language of the Supreme Court in the Providence Tool Co. and Hazelton cases is explicit and rather sweeping.”).

3 Acme Process Equip. , 347 F.2d at 549 n.10 (citing Barron & Munves, The Government Versus the Five-Percenters: Analysi s of Regulations Governing Contingent Fees in Government Contracts , 25 Geo. Wash. L. Rev. 127 (1957)).

-3- brokerage commission.” 103 U.S. 261, 276 (1880). The exception was a narrow one and applied only to contingent fees “allowed by establis hed custom of commission merchants and brokers.” 2 Id.
B. Executive Actions Covenants against contingent fees were included in government procurement contracts as a matter of course beginning in World War I. 3 At the-4-

start of World War II, Executive Order 9001 required that all military procurement contracts include a warranty that the contract or “has not employed any person to solicit or secure this contract upon any agreem ent for a commission, percentage, brokerage, or contingent fee.” Exec. Order No. 9001, 1941 U.S. Code Cong. Serv. 992, 994 (Dec. 27, 1941). Excepted from the Order ’s warranty requirement were “commissions payable by contractors upon contracts or sales secured or made through bona fide established commercial orselling agencies maintained by the contractor for the purpose of securing business.” Id. The Executive Order’s prohibition and its exception broke n o new ground. Its purpose was plain: “it reflect[ed] the public policy lon g enunciated by the courts, and add[ed] to it a thrust comparable to that of statutory law.” Le John Mfg. Co. v. Webb , 222 F.2d 48, 50 (D.C. Cir. 1955); United States v. Paddock , 178 F.2d 394, 396 (5th Cir. 1949) (“Executive Order No. 9001 w as a declaration of public policy, and its purpose was to preserve the contrac tual integrity of the United States.”). In interpreting the exception to the warranty requirement, courts properly focused on its purpose and plain language. See Reynolds v. Goodwin-Hill Corp. , 154 F.2d 553, 555 (2d Cir. 1946) (L. Hand, J.); see also Paddock , 178 F.2d at 395–96. As the Second Circuit put it, the exception for “bona fide co mmercial or selling agencies maintained by the contractor for the purpo se of securing-5-

business” created a “privileged class who may receive conti ngent fees for securing government contracts, while others may not.” Bradley v. Am. Radiator & Standard Sanitary Corp. , 159 F.2d 39, 40, 41 (2d Cir. 1947) (per curiam). “Not only should grants of special privileges be jealously restr icted, but such a restriction is also in the interest of maintaining the integ rity of governmental contracting procedure.” Id. at 41. C. Congressional Enactment Congress made the prohibition on contingent fees a matter of statutory law with the passage of the Armed Services Procurement Act of 1947, ch. 65, § 4, 1947 U.S. Code Cong. Serv. 20, 22, and the Federal Property and Administrative Services Act of 1949, ch. 288, § 304(a), 1949 U.S. Code Cong. Serv. 372, 388–89. Pursuant to the latter enactment, 41 U.S.C. § 254(a ) states: Every contract awarded after using procedures otherthan sealed-bid procedures shall contain a suitable warranty, as de termined by the agency head, by the contractor that no person or se lling agency has been employed or retained to solicit or secure such contract upon an agreement or understanding for a commission, percen tage, brokerage, or contingent fee, excepting bona fide employees orbona fide established commercial or selling agencies maintain ed by the contractor for the purpose of securing business . .

. . The Congressional Reports on the Federal Property and Administrative Services Act are mostly silent regarding the propriety of contingent fees. However, it is noteworthy that § 254(a) was enacted against the backdrop of a late 1940s Congressional investigation of the unlawful a ctivities of “five-percenters”4 For a discussion of the quoted terms, see Subcomm . on Investigations,

Comm. on Expenditures in the Executive Dep’ts, The 5-Percenter Investigation , S. Rep. No. 81-1232, at 3–5 (1950).

5 S. Rep. No. 81-1232, at 3–5, listed a number of f actors, including the following: (1) “The 5-percenter emphasizes whom he knows and attempts to create the impression that to be successful in dealing wit h the government you must know the right people.” Id. at 5. (2) “Generally, the 5-percenter will discuss in so me detail how he succeeded in other cases in defeating his client’s competitors by knowing just where to exert the proper pressure.” Id. (3) “Usually he will apply the social technique to the problem to impress the client.” Id. -6- and “influence peddlers.” 4 A resulting Senate Report concluded that the “mod us operandi of these individuals differed, but basical ly they had one thing in common—the commodity they had for sale was collusio n with Government officials. The mere existence of such a condition tends to destroy good government.” S. Rep. No. 81-1232, at 1 (1950). Ba sed on the Congressional investigation, the report listed a number of tests that were considered relevant in distinguishing “bona fide representatives” from “influence peddlers.” 5 D. Regulatory Gloss Federal regulations issued pursuant to the Federal Property and Administrative Services Act give meaning to the exc eption for bona fide established commercial or selling agencies. Accord ing to 48 C.F.R § 3.401, “bona fide agency” means an established commercial or selling agency, maintained by a-7-

contractor for the purpose of securing business, that neith er exerts nor proposes to exert improper influence to solicit or obtai n Government contracts nor holds itself out as being able to ob tain any Government contract or contracts through improper influen ce. “Improper influence” is defined as “any influence that indu ces or tends to induce a Government employee or officer to give consideration or to act regarding a Government contract on any basis other than the merits of the matter.” Id. A regulation provides a number of tools to be used in “determi ning whether an agency is a ‘bona fide established commercial or selling a gency maintained by the contractor for the purpose of securing business.’” 41 C .F.R. § 101-45.313- 4(e)(2). It acknowledges that the factors are necessarily incapable of exact measurement or precise d efinition and it is neither possible nor desirable to prescribe the rel ative weight to be given any single factor as against any other factor or as against all other factors. The conclusions to be reached in a given ca se will necessarily depend upon a careful evaluation of the agreeme nt and other attendant facts and circumstances. Id.
II The party wishing to invoke the § 254(a) exception for established commercial or selling agencies bears the burden of showing that it applies.
See Bradley , 159 F.2d at 40. The exception requires more than the existence of an agency relationship that sells. Puma Indus. Consul ting Inc. v. Daal Assocs., Inc. , 808 F.2d 982, 985 (2d Cir. 1987); cf. Reynolds , 154 F.2d at 555. A contrary6 The majority notes that this legal conclusion “cannot provide a basis for

reversal in this case” because the “theory . . . ha s never been propounded by defendant, either in the district court or on appea l, and the jury was never instructed on it.” Slip op. at 14 n.4. I disagree and make some general observations. As a preliminary matter, failure to object to a jury instruction in the district court does not necessarily foreclose its review on appeal. See Zimmerman v. First Fed. Sav. & Loan Ass’n , 848 F.2d 1047, 1054 (10th Cir. 1988) (“Therefore, ‘[t]his court will not review instructions given to which no objections were lodged before the jury retired for deliberation unl ess they are patently plainly erroneous and prejudicial.’” (quoting Moe v. Avions Marcel Dassault-Breguet Aviation , 727 F.2d 917, 924 (10th Cir. 1984)). As we have said in another context, “[p]arties to adispute cannot stipulate to the law and assume that the court will follow bl indly an incorrect interpretation of the law.” Carlile v. S. Routt Sch. Dist. Re-3J IN , 739 F.2d 1496, 1500 (10th Cir. 1984). This is particularly true when a case primarily involves a matter of high public importance. Cf. Sussman v. Patterson , 108 F.3d (continued...) -8- reading would render meaningless the general prohibition t hat “no person or selling agency [be] employed or retained . . . upon [a] . . . con tingent fee.” 41 U.S.C. § 254(a). McCurdy Group correctly suggests that 41 C.F.R. § 101-45.31 3-4(e)(2) provides useful tools for making this determination, but ou r evaluation must take into account the historical backdrop against which 41 U.S.C . § 254(a) and the relevant regulations were promulgated. Cf. Puma Indus. , 808 F.2d at 985. In light of that history, I conclude that the exception for esta blished commercial or selling agencies carries a specific meaning. It contemplat es a relationship that by its very nature does not pose a special risk that improper inf luence will be exerted. 6 Counted in the class of established commercial orselling agents are the6 (...continued)

1206, 1210 (10th Cir. 1997) (considering the import ance of public policy in reaching the merits of issue not raised in the dist rict court). Unlike run-of-themill contract cases, which predominantly implicate the rights and obligations of private parties, we are dealing with a broad and lo ng-standing policy intended to protect the integrity of public institutions.

7Cf. Puma Indus. , 808 F.2d at 985 (“The consideration and applicati on of these enumerated factors can be meaningful only in light of the policies underlying § 254(a).”); 48 C.F.R. § 3.408-2(c) (199 5) (“However, the guidelines are not individually or collectively inviolable rul es. The contracting officer must evaluate each arrangement in its totality, includin g attendant facts and circumstances.”). -9- man who sells cars for an auto dealership, the woman who sells hardware at a major department store, and the college student who sells mo bile telephones at an electronics shop. When the exception applies, there is by no means a complete absence of temptation to cheat, defraud, or connive, but that risk is tolerably low. The jury, in considering the evidence before it, could have f ound that the parties’ arrangement fit 41 C.F.R. § 101-45.313-4(e)(2)’s description of a bona fide established commercial or selling agency maintained b y the contractor for the purpose of securing business. That circumstance can not be d ispositive, for, as we have seen, the record evidence must be considered in light of the public policy served by § 254(a)—the prohibition on the use of improper inf luence. 7 The record on appeal is sufficient for us to conclu de that the evidence points in only one direction—the parties’ relations hip by its very nature posed a special risk that improper influence would be exert ed. During trial, McCurdy-10-

testified: Q. And, in fact, even before you and Jim signed what I call the l etter of intent, you arranged meetings between Mr. Burgess and government officials in Washington; correct? A. Yes, sir.

. . . . Q. And you told Jim, among other things, did you not, that you f elt you could gain access to critical decision makers at a higherlevel than ABGI had been dealing with up to that time. A. Well, I believe I proved that in our first meetings. (Appellant’s App. at 234–35.) In a memorandum prepared by McCurdy entitled “Ten Reasons why the Burgess/McCurdy Team is a Winner,” Reason No. 2 stated: “Two great minds are better than one! Combine vision, skills and contacts to make a successful partnership.” (Id. at 329.) Reason No. 8 stated: “McCurdy’s access to the Administration, Congress and other key officials is invalu able.” (Id. at 330.) Asked about that document during trial, McCurdy stated thathe had contacts and knew people across the nation in both—in all the areas that we were looking at, whether it was the Department o f Defense, Veterans Affairs, or the private sector, includin g the investment community. . . . Q. Well, that’s right. McCurdy’s access to the administrati on, Congress and other key officials is invaluable, you said; ri ght? A. That’s in addition to. Yes.-11-

. . . . Q. Which administration are we talking about here when it say s you had access to the administration? Which one? A. The term, “administration” refers to the current adminis tration. Q. Which was what? A. The Clinton Administration.

. . . . Q. Did you tell Jim Burgess that some of these officials owed y ou favors? A. Nope. Absolutely not. None of them owe me favors. There are no favors. (Id. at 238, 240.) In a memorandum dated January 2, 1996, McCurdy wrote: I also spoke to Senator Al Simpson from Wyoming who is the chai r of the Veteran’s Committee. He is a friend and I want to get the cost comparisons to him at some point to put the political pressur e on the department. Once we get real numbers from both DOD and VA, we can mount a serious effort to get Congress engaged in “saving money”. (Id. at 355A.) Based on McCurdy’s testimony, I conclude that McCurdy Group did not fit the statutory exception to the contingent fee prohibition. The parties’ contract contemplated exploitation of McCurdy’s influence, includ ing his valuable contacts, gained during his years in public service. We mustkeep in mind that “[i]t is the threat of persons selling government influence or access to government-12-

officials” that 41 U.S.C. § 254(a) protects against. Puma I ndus. , 808 F.2d at 985. “[A] restrictive approach . . . is necessary in order to preve nt the excepting clause from utterly defeating the purpose and effect of the warranty itself.” Le John Mfg. , 222 F.2d at 51. It is of no consequence that, in addition to us ing his contacts, McCurdy also pitched ABGI’s services on the merit s. Selling on the merits when the agency contract contemplated exertion of improper influence does not cure the contract’s infirmity. See Miss. Valley Generating , 364 U.S. at 550 & n.14; Hazelton , 202 U.S. at 79. Thus, I would hold that the contingent fee arrangement violated public policy and was unenforceable.
III Under Tenth Circuit Rule 10.1(A)(1)(a), appellant m ust provide the Court “the entire relevant trial transcript” when the suf ficiency of the evidence is challenged. Pursuant to that provision, the majori ty holds that “ABGI’s failure to provide a complete copy of the trial transcript pre vents our review” and summarily dismisses ABGI’s challenge to the arrange ment’s legality. Slip op. 13. For the reasons previously expressed, I believe the record before us amply demonstrates the illegality of the parties’ agreeme nt, and it is without reservation that I respectfully dissent.