* This order and judgment is not binding precedent, e xcept under the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

### OCT 29 2003 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

ALEX MIRROW; ED GUMMELT,

Plaintiffs-Appellants,

v. HECTOR V. BARRETO, Administrator, United States Small Business Administration,

Defendant-Appellee. No. 02-1433 (D.C. No. 01-WM-1872 (CBS))

(D. Colo.)

ORDER AND JUDGMENT *

Before TACHA , Chief Judge, BRORBY , Senior Circuit Judge, and HARTZ , Circuit Judge.

After examining the briefs and appellate record, th is panel has determined unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument.-2-

Plaintiffs Alex Mirrow and Ed Gummelt appeal the di strict court’s dismissal of their breach of contract claim for fai lure to state a claim. We affirm. This case involves a piece of property in Grand Jun ction, Colorado. In 1997, the original borrowers, Monument Mortuary Co. and Personal Property LLC, obtained a loan from Mesa National Bank (Mesa) to purchase the subject property. The borrowers’ obligation to Mesa was se cured by a first deed of trust on the property. The borrowers also obtained a loa n from a state development agency. This second loan was guaranteed by the Uni ted States Small Business Administration (SBA), and was secured by a second d eed of trust on the property. After the borrowers defaulted, Mesa foreclosed on i ts loan, and purchased the property at the foreclosure sale on February 3, 199 9. Because no one redeemed the property within the time allowed under Colorado law, the public trustee issued a deed to Mesa in April 1999. Federal law provides that if the United States hold s a lien on property and a lienholder senior in time forecloses upon the prope rty, the United States has one year from the date of sale to redeem the property. See 28 U.S.C. § 2410(c). The parties agree that under this statute, the SBA, as an agent of the United States, had until February 3, 2000, to exercise its redempt ion rights.-3-

On January 28, 2000, plaintiff Mirrow offered to pu rchase the SBA’s right of redemption for $30,000. This offer was refused. On February 2, 2000, the SBA made a counter offer to Mirrow, using the follo wing language: Conditioned upon the successful redemption by the Small Business Administration from the Mesa County Public Trustee . . . SBA proposes to assign its Certificate of Redemption to Alex Mirrow for the consideration stated below. . . . The consider ation paid by Mr. Mirrow shall include the amount due the Public Trustee for redemption of the first deed of trust plus $60,000 cash payable to SBA. It shall be the responsibility of Mr. Mirrow to transfer the necessary funds to the Public Trustee and the SBA w ithin the deadline for redemption. Aplt’s App. at 34 (emphasis added). Mirrow accepte d the offer, subject to his approval of the redemption amount. Id. at 35. Mirrow and his partner, plaintiff Gummelt, transferred the money to the Public Trustee on February 3, 2000. However, when the SBA attempted to redeem the property, it was informed that the Publi c Trustee lacked authority to take any action regarding the property because it h ad already issued a deed to Mesa. Upon the SBA’s request for reconsideration, counsel for the Public Trustee again informed the SBA that the Public Trus tee lacked the authority to implement the proposed redemption. Id. at 36-37. The Public Trustee’s counsel informed the SBA that the only way it could obtain the property was to institute a quiet title action against Mesa. The Public Truste e subsequently returned plaintiffs’ money.1 Plaintiffs do not challenge the district court’s di smissal of their promissory

estoppel claim. -4- In mid-February, the SBA referred the action to the United States Attorney’s Office for review. The United States Attorney’s Office decided that it was not in the United States’ best interests to lit igate the matter, and settled with Mesa instead. Accordingly, the SBA never redeemed the property. On September 21, 2001, plaintiffs initiated this ac tion against the SBA, raising claims of breach of contract and promissoryestoppel. The district court granted the SBA’s motion to dismiss the action on the ground that plaintiffs’ complaint failed to state a claim upon which relief could be granted. See Fed. R. Civ. P. 12(b)(6). The court ruled that pla intiffs did not state a breach of contract claim because the successful redemption of the property was an unfulfilled condition precedent which discharged th e parties’ performance. The court ruled that plaintiffs’ claim of promissory es toppel failed because the parties had actually formed a contract. On appeal, plaintiffs challenge the district court’ s ruling that the SBA’s successful redemption of the property was a conditi on precedent. 1 They argue that this language did not establish a condition pr ecedent, but instead, represented a promise by the SBA to redeem the property. Becau se the SBA did not institute a quiet title action against Mesa, plaintiffs argue that the SBA breached its-5-

promise. Plaintiffs also argue that if the languag e was ambiguous, the Restatement of Contracts required an interpretation that the language created a contractual promise. We review de novo the district court’s dismissal of a complaint under Rule 12(b)(6) for failure to state a claim. Ledbetter v. City of Topeka , 318 F.3d 1183, 1187 (10th Cir. 2003). Such a dismissal is appropriate only when it is apparent that plaintiffs can prove no set of facts which would entitle them to relief. Id. As this case arises directly under federal law and is not a diversity action, we apply federal common law to interpret the contra ct. See King v. United States , 301 F.3d 1270, 1275-77 (10th Cir. 2002), cert. denied, 123 S. Ct. 2572 (2003); Pirkheim v. First Unum Life Ins. , 229 F.3d 1008, 1010-11 & n.3 (10th Cir. 2000). Under federal contract principles, if the terms of a contract are not ambiguous, we determine the parties’ intent from the language of the agreement itself. See Anthony v. United States , 987 F.2d 670, 673 (10th Cir. 1993). Further, the contract will be construed to give meaning to every word or phrase. See United States v. Brye , 146 F.3d 1207, 1211 (10th Cir. 1998). Here, we agree with the district court that the lan guage of the SBA’s counter offer unambiguously created a condition pre cedent, and not a promise to redeem the property. The parties’ language clearly conditioned the SBA’s-6-

transfer of the certificate of redemption on its su ccessful redemption of the property from the Public Trustee. To interpret the language simply as a promise to redeem would make the word “successful” superflu ous. Further, the condition is limited to redeeming the property “ from the Mesa County Public Trustee .” Aplt’s App. at 34 (emphasis added). This language clearly does not encompass a duty to bring a quiet title action against Mesa. Finally, it is nonsensical to believe that the SBA would contractually agree to institute a quiet title action when it lacked th e legal authority to do so. See 28 U.S.C. 516 (providing that the decision whether to litigate on behalf of a United States agency is reserved exclusively to the United States Attorney General). For these reasons, we conclude that the SBA’s successfu l redemption of the property was a condition precedent to the parties’ performan ce, and that the SBA’s inability to redeem the property discharged the parties’ obligations under the contract. Therefore the district court did not errin ruling that plaintiffs failed to state a claim for breach of contract. Plaintiffs also argue that a successful redemption occurred as a matter of Colorado law. Because they did not make this argum ent to the district court, we will not address it on appeal. See Lyons v. Jefferson Bank & Trust , 994 F.2d 716, 720-21 (10th Cir. 1993) (holding that we will not c onsider arguments raised for the first time on appeal).-7-

The judgment of the United States District Court fo r the District of Colorado is AFFIRMED.

Entered for the Court

Wade Brorby Senior Circuit Judge