F I L E D

United States Court of Appeals

Tenth Circuit

JUN 11 2002

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

SDJ INSURANCE AGENCY, L.L.C., 

Plaintiff-Appellant,

STEVE JARVIS,

Plaintiff-Counter-DefendantAppellant,

v. No. 00-1441

AMERICAN NATIONAL

INSURANCE COMPANY,

Defendant-Appellee, 

AMERICAN NATIONAL PROPERTY

AND CASUALTY COMPANY,

Defendant-Counter-ClaimantAppellee.

 

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

(D.C. No. 99-B-578)

Mark K. Osbeck of Yates & Leal, LLP, Denver, Colorado (Sandra Z. Brown of

Reinhart, Boerner, Van Deuren, Norris & Rieselbach, P.C., Denver, Colorado,

with him on the briefs), for Appellants.

Perry L. Glantz of Holland & Hart, LLP, Greenwood Village, Colorado, and Mark

E. Haynes of Pryor, Johnson, Montoya, Carney & Karr, P.C., Englewood,

Colorado (Arnold R. Thomas of Holland & Hart, LLP, Greenwood Village,
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Colorado, and Robert W. Carney of Pryor, Johnson, Montoya, Carney & Karr,

P.C., Englewood, Colorado, with them on the brief), for Appellees.

Before TACHA, Chief Judge, McKAY and ANDERSON, Circuit Judges.

McKAY, Circuit Judge.

Appellants SDJ Insurance Agency and Steve Jarvis appeal the United States

District Court for the District of Colorado’s grant of summary judgment pursuant

to Rule 56 to the Appellees on Appellants’ breach of contract claim. Appellants

also challenge the district court’s grant of summary judgment to American

National Property and Casualty (ANPAC) on ANPAC’s counterclaim for the

repayment of advances made by ANPAC to SDJ Insurance Agency.

I. Introduction

Mr. Jarvis signed an agency agreement with American National Insurance

Company (ANICO) on December 30, 1997. Subsequently, on January 2, 1998,

Mr. Jarvis entered into an exclusive agency agreement with ANPAC. Both

contracts envisioned that either party could terminate the agreement unilaterally

by giving written notice to the other at least thirty days prior to the date fixed for

termination. The ANPAC Agent Agreement also permitted ANPAC to terminate

Mr. Jarvis’ binding privileges without notice.
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On January 14, 1998, Mr. Jarvis and ANPAC signed an Agent Advance

Agreement (AAA). Pursuant to this agreement, ANPAC advanced SDJ $18,000 a

month to enable Mr. Jarvis to meet the expense of establishing insurance offices. 

After signing the contracts, Mr. Jarvis opened insurance offices in Colorado

Springs, Castle Rock, Bennett, and Parker, Colorado, to facilitate the sale of

ANPAC and ANICO policies. ANPAC advanced SDJ a total of $108,000 under

the AAA.

ANPAC terminated Mr. Jarvis’ agreement in a letter dated June 30, 1998. 

While termination was not effective until August 5, 1998, ANPAC immediately

withdrew Mr. Jarvis’ ability to bind new business. After termination, Appellants

brought suit for breach of contract in Colorado state court. Appellees removed

the case to the United States District Court for the District of Colorado and

brought a counterclaim for the repayment of advances made to SDJ. Appellees

moved for summary judgment on Appellants’ breach of contract claim and

Appellees’ counterclaim. The district court granted the Rule 56 motions;

Appellants appealed to this court.

II. Choice of Law

As a preliminary matter, we must determine which state’s law applies to the

current dispute. The Agency Agreement specifically states, “[T]he validity,

construction, and performance of this Agreement shall be controlled by and
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construed under the laws of the State of Missouri.” Aplt. Rec. at 84. Colorado

applies the law of the state “chosen by the parties unless there is no reasonable

basis for their choice or unless applying the law of the state so chosen would be

contrary to the fundamental policy of a state whose law would otherwise govern.” 

Hansen v. GAB Bus. Serv., Inc., 876 P.2d 112, 113 (Colo. Ct. App. 1994). 

Because neither of the exceptions set forth in Hansen are present here, we would

normally apply Missouri law to this appeal. 

However, neither party argued in the district court that Missouri law

applied. Furthermore, Appellants’ argument on appeal that Missouri law should

apply was equivocal and limited to a footnote in Appellants’ brief. See Aplt. Br.

at 9. Because the parties failed to argue that Missouri law applied at the district

court, that issue has been waived. See Mauldin v. Worldcom, Inc., 263 F.3d

1205, 1211-12 (10th Cir. 2001) (holding that weak protest against application of

Texas law amounted to waiver of argument that Nebraska law should apply). 

Accordingly, we apply Colorado law to this appeal.

III. Discussion

There are two issues for us to resolve on appeal. The first issue is whether

the district court erred in granting summary judgment to Appellees on Appellants’

breach of contract claim. The second issue is whether the district court erred in

granting summary judgment on Appellees’ counterclaim that, under their contracts
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with Appellants, Appellees could hold Mr. Jarvis personally liable for the

repayment of advances Appellees made to SDJ.

“We review the district court’s grant of summary judgment de novo,

applying the same legal standard used by the district court.” Simms v. Oklahoma

ex rel. Dep’t of Mental Health, 165 F.3d 1321, 1326 (10th Cir. 1999). “When

applying this standard, we view the evidence and draw reasonable inferences

therefrom in the light most favorable to the nonmoving party.” Id.

A. Breach of Contract Claim

The parties agree that the ANPAC Agent Agreement provides that either

party may terminate the agreement “without cause at any time by giving written

notice to the other party at least thirty (30) days prior to the date fixed for

termination.” Aplt. App. at 85. The ANPAC Agent Agreement also specifically

reserves the right of ANPAC to “withdraw or limit the Agent’s authority to bind

risks either in whole or in part.” Id. at 84. Appellants do not contest that

ANPAC gave them the requisite notice prior to unilaterally terminating the

agreement. Despite the contract’s explicit terms, Appellants challenge the district

court’s grant of Appellees’ motion for summary judgment on their breach of

contract claim on two grounds.

First, Appellants argue that they had been orally promised two years to

meet ANPAC’s production requirements before ANPAC would terminate the
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agent agreement. Appellants assert that because of various statements made to

them by ANPAC’s representatives, ANPAC should be equitably estopped from

exercising its privilege to unilaterally terminate the agreement with thirty days

notice. Appellants specifically waived any promissory estoppel argument and are

precluded from asserting a promissory estoppel claim on appeal. See Aplt. Reply

Br. at 11. Instead, Appellants choose to pursue their claim as an equitable

estoppel claim. 

“While the doctrine of promissory estoppel is applicable to promises, the

doctrine of equitable estoppel is applicable to misstatements of fact.” Board of

County Comm’rs v. DeLozier, 917 P.2d 714, 716 (Colo. 1996). Appellants’

equitable estoppel claim is essentially a tort claim for misrepresentation of facts. 

Under Colorado law, equitable estoppel claims consist of two elements. “[T]he

party to be estopped must know the facts and either intend the conduct to be acted

on or so act that the party asserting estoppel must be ignorant of the true facts,

and the party asserting estoppel must rely on the other party’s conduct with

resultant injury.” Committee for Better Health Care v. Meyer, 830 P.2d 884, 891-

92 (Colo. 1992). Plaintiffs who premise their equitable estoppel claims on

promises relating to future events face an additional requirement of proving that

the party making the future promise had no present intent to fulfill the promise. 

See DeLozier, 917 P.2d at 716; see also Mehaffy, Rider, Windholz & Wilson v.
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Central Bank Denver, N.A., 892 P.2d 230, 237 (Colo. 1995); High Country

Movin’, Inc. v. U.S. West Direct Co., 839 P.2d 469, 471 (Colo. Ct. App. 1992).

Appellants argue that Jeffrey Johnson, a multiline general agent for

ANPAC and ANICO who recruited Mr. Jarvis on ANPAC’s and ANICO’s behalf,

promised Mr. Jarvis that he would be given two years to reach required

production levels despite the contract’s clear language permitting either party to

terminate the relationship at will. This two-year promise was allegedly affirmed

by other individuals acting on ANPAC’s behalf. See Aplt. Reply Br. at 13. In

defending Appellants’ breach of contract claim, Appellees rely on the contract’s

unambiguous provision that either party can terminate the parties’ relationship at

anytime with thirty days notice.

The district court rejected Appellants’ reliance upon this allegation as

sufficient to create an equitable estoppel claim because Appellants failed to

prove, as required under Colorado law, that Appellees had no intention of keeping

their promise to allow Appellants two years to reach required production levels

when that promise was made. See DeLozier, 917 P.2d at 716. We agree. 

Appellants’ failure to submit any evidence showing Appellees’ present lack of

intent to fulfill its promises of future conduct is fatal to Appellants’ equitable

estoppel claim.

Appellants’ second basis for their breach of contract claim is that Appellees
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breached the Agent Agreement by immediately revoking Appellants’ ability to

bind new business. Appellants argue that the provision regarding Appellees’

ability to withdraw Appellants’ binding authority is ambiguous and that the better

reading of the contract makes this clause subject to the thirty-day notice

requirement “since total withdrawal of binding authority . . . destroys the agent’s

ability to write new business.” Aplt. Reply Br. at 14. 

The district court correctly determined that Appellees’ ability to withdraw

binding authority was unambiguous. Appellees specifically reserved the right

under the Agent Agreement to “withdraw or limit the agent’s authority to bind

risks either in whole or in part.” Aplt. Rec. at 96. As the district court indicated,

“[n]otably absent from this provision is any notice requirement.” Id. at 45. While

the ability to immediately bind a policy makes the sale of insurance easier, the

withdrawal of that ability does not make the sale of policies impossible. In fact,

many relationships between insurance agents and insurers begin without an agent

possessing the ability to immediately bind insurance policies. We reject

Appellants’ contention that Appellees breached the Agent Agreement by

immediately withdrawing binding authority.

B. ANPAC’S Counterclaim

ANPAC advanced to SDJ $108,000 pursuant to the AAA. Appellants

allege that the purpose of the advances was to enable Appellants to open offices
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in several Colorado towns to facilitate the sale of Appellees’ policies. At the time

of termination, the district court found that Appellants had not yet repaid

$97,709.74 of the advances made to them. Appellees counterclaimed for the

unpaid advances arguing that the AAA obligated Mr. Jarvis to repay the

outstanding balance from his personal assets. The district court granted summary

judgment to the Appellees on their counterclaim.

Colorado law, similar to the law of the majority of the states, has adopted

the principle that “[r]egular advances to an agent are presumed to be in the nature

of compensation. In the absence of an express or implied agreement to the

contrary, advances in excess of earned commissions are not recoverable.” 

Slabodnik v. Travelers Ins. Co., 489 P.2d 604, 605 (Colo. Ct. App. 1971); see

also 32 A.L.R.3d 802 (1970). Therefore, absent a contractual provision expressly

holding Mr. Jarvis personally liable for advances, Appellees must show that Mr.

Jarvis, by his conduct, exhibited an intent to be held personally liable for the

repayment of the advances. See Argonaut Builders, Inc. v. Dare, 359 P.2d 366,

368 (Colo. 1961) (“intent of the parties[] gathered from all of their dealings . . .

lead[s] to the contrary conclusion . . . that the defendant should be liable to the

extent that the charges exceeded the payments to him”).

The Agency Agreement as amended by the AAA contains two provisions

discussing the repayment of advances. The first provision, contained in the AAA
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itself, states:

This Agent Advance Agreement may be terminated at anytime by the

Company with or without cause. The termination shall be effective

immediately upon the Company giving written notice to the Agent. 

Said Agreement shall automatically be terminated when the advance

payment of compensation deficit is repaid in full.

Aplt. App. at 101. This provision in no way holds Mr. Jarvis personally liable for

advances left owing after termination. Instead, this provision simply indicates

that Appellees could terminate the agreement at anytime and that the agreement

would terminate on its own volition once the advances had been repaid in full. 

Certainly once the entire amount of the advances had been deducted from

commissions Appellants earned, the need for the continued payment of advances 

ceases.

The district court based its grant of summary judgment on Section C(7) of

the Agent Agreement, which reads in part, “You agree to repay to the Company,

on demand, any unearned commissions and all other compensation received by

you for or with respect to premiums or payments returned to policy or contract

owners by the Company for any reason.” Aplt. App. at 82. The district court held

this repayment provision contained two separate obligations. According to the

district court, the Appellants agreed to pay upon demand any unearned

commissions, which would include advances. Appellants, per the district court,

also agreed to reimburse Appellees for all other compensation received from
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premiums eventually returned to policyholders.

Appellants contest this reading of the repayment provision of the contract. 

Appellants argue that the entire provision refers only to premiums or payments

returned to policyholders by Appellees for any reason and has no application to

the repayment of advances. Under Appellants’ interpretation, Appellants agreed

to return the commissions they earned but were no longer entitled to because all

or part of the policy premium had been returned to policyholders by Appellees. 

Additionally, Appellants agreed to return any other compensation (such as

bonuses, vacation trips, points towards retirement plans, etc.) given the

Appellants by Appellees based on premiums later returned to policyholders. The

district court rejected Appellants’ view of the repayment provision holding that

such a reading of the contract “would read the first clause out of the contract and

render it surplusage.” Aplt. Rec. at 48. 

Absent a tortured reading of the plain language of the commission

repayment provision, we cannot read the contract in the manner indicated by the

district court. The phrase “received by you for or with respect to premiums or

payments returned to policy or contract owners by the Company” modifies the

Appellants’ duty to pay back any unearned commissions and all other

compensation. Advances made to SDJ were unrelated to any premium or payment

returned to policy or contract owners by Appellees.
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At most, the repayment of commissions contract provision is ambiguous

and should be interpreted against the Appellees as the contract’s drafters. The

parties could have easily provided that Mr. Jarvis assume personal liability as a

borrower by so stating in the contract. Considering the contract as a whole, it

does not appear that the parties intended to hold Mr. Jarvis personally liable for

the advances made.

While our reading of the contract precludes the grant of summary judgment

to Appellees on their counterclaim, it does not foreclose the possibility that

Appellees could ultimately prevail. As noted previously, Colorado law provides

an exception to its general rule if Appellees can prove that Mr. Jarvis, by his

conduct, exhibited an implied personal liability to pay. Upon remand, the

Appellees should be permitted to put forth any evidence they may have regarding

Mr. Jarvis’ conduct that would imply assumption of a personal liability to repay.

IV. Conclusion

Reviewing the evidence in a light most favorable to the non-moving party,

we find that there are no genuine issues of material fact as to Appellants’ breach

of contract claim, and we AFFIRM the district court’s grant of summary

judgment to Appellees on that claim. However, we REVERSE the district

court’s decision regarding the repayment of advances and REMAND for further

disposition in accordance with the principles set forth in this opinion.
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AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.