* The Honorable Thomas M. Reavley, Senior Circuit Jud ge, United States

Court of Appeals - Fifth Circuit, sitting by design ation. 

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

### SEP 28 2001 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

ECHO ACCEPTANCE CORP., a Colorado corporation and ECHOSPHERE CORPORATION, a Colorado corporation,Plaintiffs - Appellees - CrossAppellants,

vs. HOUSEHOLD RETAIL SERVICES, INC., a Delaware corporation,Defendant - Appellant - CrossAppellee. Nos. 00-1167 and 00-1190

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO (D.C. No. 95-WY-605-WD)

T. Wade Welch (Ross W. Wooten, with him on the brie fs), T. Wade Welch & Associates, Houston, Texas, for Plaintiffs - Appell ees. Bruce A. Featherstone (John A. DeSisto, with him onthe briefs), Featherstone, DeSisto, L.L.P. Denver, Colorado, for Defendant - Appellant.

Before KELLY , MCWILLIAMS , and REAVLEY * , Circuit Judges.1 Both EAC and Echosphere are subsidiaries of EchoSt ar Communications

Corporation. J.A. 2331 (Tr. at 245-46).- 2 - KELLY , Circuit Judge.

Defendant Household Retail Services, Inc. (“HRSI” o r “Household”), appeals from a jury verdict in favor of Plaintiffs Echo Acceptance Corporation and Echosphere Corporation (collectively, “Echo”) o n Echo’s breach of contract claim. The district court’s jurisdiction was based on 28 U.S.C. § 1332. We have jurisdiction under 28 U.S.C § 1291 and we affirm.
Background The plaintiffs in this case are Echosphere Corporat ion (“Echosphere”), which manufactures and sells home satellite televis ion systems, and Echo Acceptance Corporation (“EAC”), an Echosphere subsi diary organized to facilitate the financing of such sales. 1 While some Echosphere customers no doubt make their own financial arrangements, Echosp here referred many of its customers to EAC. EAC would then enter a loan agre ement with the customer, pursuant to which EAC agreed to finance the system for the customer. EAC then sold the loan agreements to an ultimate financier. Until 1989, that financier was the Central Bank of Denver, which purchased the agr eements from EAC for a flat,- 3 -

up-front fee. J.A. 249. On July 7, 1989, EAC entered a Merchandise Financin g Agreement (“MFA”) with the defendant, Household, a private la bel credit card company. Pursuant to the MFA, a customer interested in purch asing Echosphere equipment on credit submitted an application to Echosphere, w hich was transmitted to EAC and then to Household for credit approval. Upon ap proval, EAC purchased the customer’s financing contract, then resold and assi gned that agreement to Household, which thereafter assumed the credit relationship with the customer. Upon assignment, the MFA typically relieved EAC fro m liability for the customer’s default. Household then issued a creditcard to the approved customer to be used for future purchases of Echosphere equip ment. The customer’s contract provided for finance charges on the creditaccount. Household also offered credit insurance to customers, for a separate charge. Through the arrangement just described, Household provided fund ing for credit purchases of Echosphere equipment. The customers made monthly p ayments on their account balances toward principal, finance charges, and in some cases, insurance premiums. Aplt. Br. at 4. In its initial pricing letter, HRSI confirmed the e xecution of the MFA and reiterated that it would “purchase from time to tim e revolving credit contracts at the price agreed upon from time to time and as outl ined below:- 4 -

1) The consumer Annual Percentage Rate will be 17.8 8% with a per contract discount of .85% [charged by HRSI]. 2) HRSI will pay EAC 8% (eight percent) of billed f inance charges monthly. 3) HRSI will pay EAC a percent of billed finance ch arges equivalent to 30% (thirty percent) of billed insura nce charges. 4) HRSI understands that EAC does not initiate reta il installment sales or revolving credit sales directly to the con sumer. However, HRSI will respond to EAC as though EAC ini tiates all contracts per the Merchandise Financing Agreeme nt. J.A. 3013 (Pl. Ex. 6); see also id. at 3006-07 (Pl. Ex. 3) (Merchandise Financing Agreement). Collectively, the credit agreements or iginated by EAC and sold to HRSI were referred to as the “EAC Portfolio”. Id. at 2333 (Tr. at 254). Echo contends, and the district court agreed, that merchant and insurance participation payments were part of the price HRSI paid for EAC’s accounts. Aplee. Br. at 40-43; J.A. 1907-08. Accordingly, th e court held that payments on each individual account by HRSI to EAC were to cont inue for the life of that particular financing arrangement – i.e. , as long as HRSI continued to receive revenue from the account. J.A. 1906-07. On the ot her hand, HRSI maintains that the payments were designed merely as incentives to encourage sales. Aplt. Br. at 38. In HRSI’s view, its payment obligation ended w ith its interest in encouraging future sales – i.e. , when it stopped purchasing new accounts from EAC. Id.2 Echo’s First Amended Complaint stated claims for: (1) breach of contract,

(2) misrepresentation/fraudulent concealment, (3) p romissory estoppel, and (4) wanton and willful misconduct. J.A. 66-74. - 5 - Procedural History As the district court aptly noted: “The word ‘simpl e’ should not be used in any sentence involving this case. [T]here’s nothin g simple about this. It’s convoluted and . . . it’s a beast with a strange he artbeat.” J.A. 2449 (Tr. at 633). We will attempt to simplify the procedural history nonetheless, reciting only those motions, orders, and proceedings relevant to our an alysis. Of the four causes of action alleged in Echo’s First Amended Complaint, 2 only a portion of the first claim – for breach of contract – is at issue in thi s appeal. Specifically, we are concerned with Echo’s contention that HRSI was contractually obligated to make merchant participation and insurance percentage pay ments for the life of each individual loan in the EAC portfolio, and that HRSI ’s failure to make any such payments after the termination of the MFA constitut ed a breach. Id. at 66-69. In December 1995, Echo moved for partial summary ju dgment on that portion of its breach claim, id. at 136-70 [hereinafter “Echo’s Breach Motion”]; in February 1996, HRSI filed a cross-motion for summary judgment on the same issue. Id. at 472-510 [hereinafter “HRSI’s Cross-Motion”]. S imultaneous with its Cross-Motion, HRSI also filed a separate motionfor summary judgment, arguing that all four claims were barred by Colo. R ev. Stat. § 38-10-124, the3 At about the same time, HRSI also moved to dismiss Count IV in part,

J.A. 940-42, and for summary judgment as to Count I II. Id. at 866-83. Those motions are not relevant to this appeal. - 6 - statute of frauds for credit agreements. Id. at 443-61 [hereinafter “HRSI’s Statute of Frauds Motion”]. 3 Three years later, the district court entered an order on the foregoing and other motions, denying HRSI’s Statute of Frauds Motion, granting Echo’s Breach Motion, and denying HRSI’s Cross-Moti on. Id. at 1899-1919. In pertinent part, the court held that § 38-10-124 was inapplicable to Echo’s claims as a matter of law. Id. at 1903-04. The court also found that the MFA unambiguously provided for payments to continue pos t-termination, and that HRSI’s failure to make such payments was a breach o f contract. Id. at 1906-08. Finally, the court noted that the determination of the applicable rates for posttermination payments was “a question of fact, appro priately decided by a jury . . . .” Id. at 1913. Prior to trial, Echo filed a preemptive Motion in L imine, requesting the exclusion of evidence relating to certain defense t heories that the court had already rejected as a matter of law. Id. at 2147-54. The court granted the motion in part, confirming that it would not admit evidenc e or allow arguments concerning: (1) HRSI’s statute of frauds defense, o r (2) HRSI’s claim that posttermination payments were intended as incentives, r ather than part of the purchase price. Id. at 2230-31 (Order on Mot. in Limine); cf. id. at 1903-04, 1907-08- 7 -

(Order on Mots. for Summ. J.). The remainder of Ec ho’s motion was taken under advisement. Id. at 2231-32 (Order on Mot. in Limine). In a conference with counsel at the close of Echo’s case, the court clarified that “the only fact issue here is what’s the percen tage that applies.” Id. at 2446 (Tr. at 623). In HRSI’s view, this announcement co nstituted a “restructuring” of the trial, which prejudiced its case in a variety o f ways. Aplt. Br. at 18-19, 44-50. Accordingly, HRSI moved the court: (1) for a “curat ive instruction,” advising the jury to disregard evidence relating to the monetary amount of damages, J.A. at 2459, 2488 (Tr. at 672-75, 788-89) (oral motion); ( 2) to strike specified testimony and exhibits relating to the amount of damages, id. at 2461-62, 2488 (Tr. at 683- 86, 788) (oral motion); see also id. at 2431-41 (brief); and (3) to declare a mistrial. Id. at 2487-88 (Tr. at 786-89); see also id. at 2755-2814 (brief). HRSI also moved that the court enter judgment in its fav or as a matter of law, arguing that Echo had failed to establish any agreement between the parties as to posttermination rates. Id. at 2485-86 (Tr. at 779-81) (oral motion); see also id. at 2731-54 (brief). Subject to the foregoing motions, HRSI rested its case. Id. at 2489 (Tr. at 792). All four motions were denied. Id. at 2882-89 (denying motions for mistrial and for judgment as a matter o f law); id. at 2462, 2527 (Tr. at 684-86, 798-99) (denying motions to strike and for curative instruction). But cf. id. at 2626 (Inst. 15: “You need not be concerned with the actual monetary- 8 -

amount owed by HRSI to EAC . . . .”). In response to a special interrogatory, the jury fo und that Echo “had proven, by a preponderance of the evidence, that th e applicable merchant participation rate was 10% and the applicable insur ance participation rate was 30%, as agreed upon by the parties and evidenced by a letter from Defendant [.]” Id. at 2523 (emphasis added). The court then applied the jury’s percentage to the stipulated value of the portfolio, granted Echo’s m otion for prejudgment interest, and entered judgment for Echo in the amount of $4,8 40,609 – $3,965,534 in past damages, $730,824 in prejudgment interest, and $144 ,251 in future damages. Id. at 2991-92. The court awarded prejudgment interestat the statutory rate of eight percent, but reduced the interest award by one-thir d “in the interest of fairness,” due to the court’s delay in ruling on the parties’ motions for summary judgment. Id. at 2887. Both parties filed motions to alter or a mend the judgment. See Fed. R. Civ. P. 59(e). HRSI objected to the court’s met hodology in calculating damages. J.A. 2896-2914. Echo objected to the pre judgment interest award, contending that the court abused its discretion by failing to award “moratory interest” at a rate higher than the statutory minim um, and reducing the total interest award. Id. at 2960-66. HRSI’s motion was granted; Echo’s was denied. Id. at 2980-87. This appeal followed.- 9 - Discussion On appeal, HRSI claims that the court erred – as a matter of law and of procedure – in holding that the MFA is not subject to Colo. Rev. Stat. § 38-10- 124. Second, HRSI contests the district court’s ho lding that the MFA unambiguously provides for merchant participation and insurance percentage payments to continue after the MFA has itself been terminated. Based on the foregoing arguments, HRSI insists that it was entit led to summary judgment on the portion of the breach claim at issue. Third, H RSI argues that the evidence adduced by Echo did not provide the jury with an ad equate basis to determine damages, and that HRSI was therefore entitled to ju dgment as a matter of law. In the alternative, HRSI claims that the uncertainty o f Echo’s damages precluded any award beyond nominal damages. Fourth, HRSI claims that various trial errors caused such prejudice to its case that they resulte d in a mistrial. Echo disagrees with each of the foregoing arguments, and cross-app eals from the court’s prejudgment interest award on the same grounds asse rted in its Rule 59(e) motion. I. HRSI’s Statute of Frauds Defense Under Colo. Rev. Stat. § 38-10-124, claims “relatin g to a credit agreement involving a principal amount in excess of twenty-fi ve thousand dollars” are barred unless the credit agreement is in writing. Colo. R ev. Stat. § 38-10-124(2). According to HRSI, the MFA is a “credit agreement,” and the statute therefore4 On August 11, 2000, HRSI moved this court to certi fy the question of

whether the MFA and letters incorporated therein “c onstitute a ‘credit agreement,’ between a statutory ‘debtor’ and ‘creditor,’ to whi ch § 38-10-124, C.R.S. applies” to the Colorado Supreme Court. On February 8, 2001 , HRSI filed an unopposed motion to withdraw its Motion to Certify. The Moti on to Withdraw is granted. As is evident from our analysis above, the parties’ dispute as to the propriety of the arguments contained in the Motion to Withdraw i s moot. - 10 - bars Echo’s claims “relating to” the MFA. 4 Aplt. Br. at 25-29. In the alternative, HRSI contends that even if the MFA is not a credit agreement, § 38-10-124 is still applicable because Echo’s claims “relate to” the in dividual credit agreements assigned to HRSI. Id. at 29. In its order on the parties’ respective mo tions for summary judgment, the district court concluded thatthe § 38-10-124 was inapplicable as a matter of law. J.A. 1903-04. Up on de novo review, see Medina v. City & County of Denver , 960 F.2d 1493, 1500 (10th Cir. 1992), we agree wi th the district court’s conclusion. HRSI must establish three elements to invoke § 38-1 0-124: (1) that at least one plaintiff is a statutory “creditor or debtor,” (2) that Echo’s claims relate to a credit agreement, and (3) that the underlying credi t agreement involves a principal amount in excess of $25,000. Colo. Rev. Stat. § 38 -10-124(2) (“[N]o debtor or creditor may file or maintain an action or a claim relating to a credit agreement involving a principal amount in excess of twenty-fi ve thousand dollars unless the credit agreement is in writing and is signed by the party against whom enforcement is sought.”). Both at trial and on app eal, the parties’ primary focus5 We decline to address HRSI’s conclusory assertion that Echosphere is

“not a proper party on the claim for post-terminati on participation,” which only appears in a footnote to HRSI’s opening brief. Apl t. Br. at 29 n.3. We have consistently held that “[a]rguments inadequately br iefed in the opening brief are waived . . . .” Adler v. Wal-Mart Stores, Inc. , 144 F.3d 664, 679 (10th Cir. 1998). - 11 - has been the second element: whether the claims rel ate to a credit agreement. 5 A. Echo’s Claims Do Not Relate to a Credit Agreemen t The MFA plainly indicates that HRSI is purchasing c ommercial paper (“Contract and Slips”). See J.A. 3006 (“Seller [EAC] desires [Household] to purchase from time to time said Contracts and Slips at the price agreed upon from time to time by Seller and Household and evidenced by Household’s letter.”). Thus, the claims in this case relate to the purchas e of commercial paper. As the defendant conceded at oral argument, there is no Co lorado authority to support the construction of the MFA itself as a credit agre ement, and in the absence of such authority, we decline to treat it as one. Sec tion 38-10-124 defines “credit agreement,” in pertinent part, as “[a] contract, pr omise, undertaking, offer, or commitment to lend, borrow, repay, or forbear repay ment of money, to otherwise extend or receive credit, or to make any other fina ncial accommodation. . . .” Colo. Rev. Stat. § 38-10-124(1)(a)(I) (emphasis add ed). In HRSI’s view, our interpretation of the phrase “financial accommodati on” is not limited by the other terms in the definition. See Aplt. Br. at 25 (“[T]he statutory definition is no t- 12 -

limited only to a lending of money or an extension of credit . . . .”). We disagree. Colorado courts interpret statutory language to “re ach a reasonable result consistent with the General Assembly’s intent, and . . . [to] give harmonious effect to all of the statute’s parts.” Sky Fun 1 v . Schuttloffel , 27 P.3d 361, 370 (Colo. 2001) (internal quotations and citation omitted); see also Colo. Dept. of Revenue v. Cray Computer Corp. , 18 P.3d 1277, 1281 (Colo. 2001) (“[W]e consider statutes as a whole in order to effectuate legislative intent, and give consistent, harmonious, and sensible effect to all the statute’s parts.”) (internal quotations, citation, and alteration omitted). The Colorado Supreme Court has held that the purpose of § 38-10-124 is to “discour age lender liability litigation and to promote certainty [in] credit agreements inv olving sums of more than $25,000.” Schoen v. Morn’s , 15 P.3d 1094, 1098 (Colo. 2000). Because HRSI’s broad construction of “financial accommodation” wou ld effectively graft an allencompassing catch-all onto an otherwise specific s tatute, thereby eviscerating the statute’s focus on credit agreements, we must r eject it. See Matter of Title, Ballot Title & Submission Cl., & Summ. for 1997-98 No. 62 , 961 P.2d 1077, 1079 (Colo. 1998) (“We must read and interpret statutory language in its context.”). An agreement for the purchase of commercial paper, such as the MFA, is not a “financial accommodation” as that term is use d in § 38-10-124. “Financial- 13 -

accommodation” must be construed in light of the ov erall purpose of the statute, in a manner that is consistent with the rest of the statutory language. That language is clearly concerned with transactions and agreements that involve the extension or receipt of credit, and “financial acco mmodation” cannot be read without that context in mind. Cf. Beecham v. United States , 511 U.S. 368, 371 (1994) (“That several items in a list share an attr ibute counsels in favor of interpreting the other items as possessing that attribute as well.”). We therefore agree with the district court’s conclusion that the MFA is not a credit agreement. J.A. 1904, 2071. B. Echo’s Claims Do Not “Relate To” the Underlying Customer Credit Agreements for Purposes of § 38-10-124 In the alternative, HRSI argues that even if the MF Aitself is not a credit agreement, Echo’s claims still “relate to” a creditagreement in that the claims “relate to” the MFA, which in turn, “relates to” th e individual credit agreements and the balances assigned to HRSI. Cf. Univex , 914 P.2d at 1358. This argument also fails. We agree with the district court’s leg al conclusion that the onceremoved connection between Echo’s claims and the cr edit agreements is too attenuated to justify the application of § 38-10-12 4. J.A. 1904. To permit such a broad reading of the phrase “relating to a credit a greement” would be inconsistent with the statute’s exclusive concern with discourag ing lender liabilitylitigation and promoting certainty in credit agreements . Schoen , 15 P.3d at 1098; see6 HRSI’s once-removed theory also fails because the individual credit

agreements at issue involved principal amounts in t he $2200 to $2500 range – far below the statutory threshold of $25,000. J.A. 301 4 (Pl. Ex. 18) (showing average new sales on a monthly basis from Sept. 198 9 to May 1990); id. at 3017 (Pl. Ex. 24) (same, for 1990); id. at 3035 (Pl. Ex. 80) (same, for 1991 and 1992); id. at 3038 (Pl. Ex. 81) (same, for 1993 and 1994); id

. at 3044 (Pl. Ex. 82) (same, for 1994 and 1995). There is nothing in the record to indicate that any individual credit agreement entered by EAC and sold to HRSI un der the MFA involved a principal amount in excess of $25,000, and the indi vidual agreements cannot be aggregated to meet the statutory minimum. Cf. J.A. 454 (Def. Mot. for Summ. J. on All Claims Pursuant to C.R.S. § 38-10-124: “[T]h e principal amount is not, and should not be, calculated by reference to amoun t of any individual consumer loan. Rather, the amount is determined by the enti re principal sum of the financial accommodation between defendant and plain tiffs.”). The plain language of the statute indicates that the phrase “involving a principal amount in excess of twenty-five thousand” qualifies the term “credit ag reement,” not “claim.” Colo. Rev. Stat. § 38-10-124(2); accordSchoen , 15 P.3d at 1098 (noting legislative purpose of promoting certainty with respect to “cre dit agreements involving sums of more than $25,000”). - 14 - generallyStephanie J. Shafer, “Limiting Lender Liability Th rough the Statute of Frauds,” 18 Colo. Law. 1725 (1989). Accordingly, we do not believe the Colorado Supreme Court would adopt the interpretati on urged by HRSI, and we affirm the district court’s conclusion that Colo. R ev. Stat. § 38-10-124 is inapplicable. 6
C. No Procedural Error Finally, HRSI contends that the district court “err ed in granting summary judgment against HRSI without notice.” Aplt. Br. at 31. This argument is also unavailing, in part because it mischaracterizes the district court’s ruling as to § 38-10-124. The court denied HRSI’s Statute of Frau ds Motion on purely legal- 15 -

grounds. Given the obviously legal nature of the c ourt’s ruling, we cannot fathom how an additional opportunity to present statute of frauds-related evidence could have furthered HRSI’s case, nor do we understand why HRSI expected to be able to press its statute of frauds argument to the jury . Although the district court’s ruling as to § 38-10-124 did not become the “law of the case” until the entry of final judgment, see United States v. U.S. Smelting Refining & Min. Co. , 339 U.S. 186, 199 (1950); In re Unioil, Inc. , 962 F.2d 988, 993 (10th Cir. 1992), it is axiomatic that the jury’s role is as fact-finder. Juries are not empowered to decide questions of law. See, e.g. , Jones v. United States , 526 U.S. 227, 247 n.8 (1999) (“The principle that the jury were the judge s of fact and the judges the deciders of law was stated as an established princi ple as early as 1628 . . . .”); see also Byrd v. Blue Ridge Rural Elec. Cooperative, Inc. , 356 U.S. 525, 537 (1958) (“An essential characteristic of [the federal] syst em is the manner in which, in civil common-law actions, it distributes trial func tions between judge and jury and, under the influence – if not the command – of the Seventh Amendment, assigns the decisions of disputed questions of factto the jury.”). II. Post-Termination Participation Echo’s claim for post-termination participation enc ompasses three subissues. First, what is the duration of the defenda nt’s participation obligation? Echo contends that the obligation continues throughthe life of the individual- 16 -

loans; HRSI claims that its obligation ended with t he termination of the MFA. Second, assuming a post-termination obligation, what are the applicable merchant participation and insurance percentage rates? Echo argues that the applicable rates are 10% and 30%, respectively; HRSI insists that the parties never reached any agreement as to post-termination rates, and that it was therefore entitled either to judgment as a matter of law or to an inst ruction that the jury could only award nominal damages. See infraSection III. Third, assuming a posttermination obligation and an agreement as to the applicable rates, how should those rates be applied to the EAC Portfolio to comp ute Echo’s total damages? Echo claims that the rate must be applied to the ou tstanding balance of the entire EAC portfolio, while HRSI contends that different r ates apply to different accounts, depending on when each account was create d by EAC or sold to HRSI.
See infraSection IV(C). In this section, we deal only with the first issue: the duration of HRSI’s participation obligation. In its summary judgment order, the district court h eld that the MFA “as a whole and the circumstances surrounding its making unambiguously display an intent to continue payments until the termination o f the loan agreements.” J.A. 1907. We agree. Participation payments are clearl y part of the price HRSI agreed to pay for the revenue-producing accounts (revolvin g credit contracts) it purchased from EAC between 1989 and 1994. We are n ot persuaded by the- 17 -

defendant’s contention that the MFA’s silence as to the duration of HRSI’s duty to make participation payments demonstrates the parties’ intent to make the participation obligation co-terminous with the MFA. Aplt. Br. at 33-35. “A fundamental rule of contract law is that the cou rt should strive to ascertain and give effect to the mutual intent of t he parties.” Pepcol Mfg. Co. v. Denver Union Corp. , 687 P.2d 1310, 1313 (Colo. 1984) (citation omitte d). “[T]he intent of the parties to a written instrument must be determined primarily from the written terms.” KN Energy, Inc. v. Great Western S ugar Co. , 698 P.2d 769, 776 (Colo. 1985) (citations omitted). In general, the interpretation of a contract is a question of law, Pepcol , 687 P.2d at 1313, and where the evidence consists exclusively of documents, as in this case, the “law is clear that the determination of their effect is a matter of law.” Radiology Pro fessional Corp. v. Trinidad Area Health Ass’n, Inc. , 577 P.2d 748, 750 (Colo. 1978) (citations omitted ). “Whether an ambiguity exists is also a question of law.” Pe pcol , 687 P.2d at 1314. With these principles in mind, we turn to the contr act at issue. In pertinent part, the MFA provides as follows: Undersigned [EAC] (herein called Seller) regularly sells merchandise and desires to offer a plan whereby a qualified cus tomer may elect to make purchases from us from time to time on a revol ving credit account (herein called Account). . . . An Account i s established by customer execution of a master agreement (herein ca lled Contract) describing his rights and obligations with respect to all purchases made from us on such Account. Once established, pu rchases may be made on such Account from time to time by means of written7Each of the documents referenced in this section appear at least twice in

the record on appeal: first as summary judgment exh ibits, and second as trial exhibits. The citations in this section refer to t he summary judgment exhibits. - 18 - memoranda (herein called Slips). Each [S]lip . . . shall describe . . . the total amount of credit extended. Seller desires Household Retail Services, Inc. (her ein called “Household”), to purchase from time to time said Co ntracts and Slips at the price agreed upon from time to time by Selle r and Household and evidenced by Household’s letter. Id. at 638 (Pl. Ex. 3). 7The MFA does not define the word “price,” but the first pricing letter outlined the structure of the “price ” as including: 1) The consumer Annual Percentage Rate will be 17.8 8% with a per contract discount of .85% [charged by HRSI]. 2) HRSI will pay EAC 8% (eight percent) of billed f inance charges monthly. 3) HRSI will pay EAC a percent of billed finance ch arges equivalent to 30% (thirty percent) of billed insura nce charges. Id. at 645 (Pl. Ex. 6). The second pricing letter, dated April 16, 1992, also speaks in terms of “pricing”. Id. at 3028 (Pl. Ex. 33). We recognize that the third letter, dated January 2 1, 1993, uses the word “incentive” rather than “price”. Id. at 3030-31. Nonetheless, we do not believe that a subtle and unilateral choice of words in a s ingle letter is sufficient to alter the inherent nature of HRSI’s participation commitm ent as part of the price it had agreed to pay for EAC’s Contracts and Slips. Even a cursory reading of the 1993- 19 -

letter reveals that HRSI’s use of the phrase “incen tive structure” did not refer to the payment of merchant and insurance participation as a general matter. Clearly, “incentive structure” referred specifically to the multi-tiered system outlined in the letter, according to which participation percen tages would increase proportionately with total credit volume. Id. at 3030. To the extent that the district court relied on ext rinsic evidence – i.e. , “the circumstances surrounding [the contract’s] making –to reach the conclusion that the contract was unambiguous as to duration, such r eliance was consistent with Colorado law. See, e.g. , KN Energy , 698 P.2d at 776-77 (holding that courts may consider extrinsic evidence, including “the circums tances surrounding the making of the contract,” in order to determine whether a c ontractual ambiguity exists). In this case, the summary judgment record included num erous affidavits as to the circumstances surrounding each new pricing arrangem ent, all of which indicate that participation payments were considered part of the price. For example, James DeFranco of EAC stated that HRSI offered two option s for the 1991 pricing agreement – (1) an up-front payment equal to 1% of the opening account balance or (2) merchant participation payments equal to 5% of billed monthly finance charges. E.g. , J.A. 245, ¶¶ 4-5 (DeFranco Aff.). Mr. DeFranco a lso stated that HRSI represented that the two options were financia lly equivalent, and demonstrated that point by comparing the up-front p ayment to the participation- 20 -

payments, “paid at 5% each month until the account balance reached $0.00. ” Id. at ¶¶ 6-7 (emphasis added); accordid. at 252-53, ¶¶ 7-11 (Fears Aff.); see also id. at 249, ¶¶ 6, 8 (Ergen Aff., describing initial neg otiations in 1989 and declaring that HRSI stated that participation payments were p art of the purchase price). In sum, the duration of HRSI’s participation obligation was obvious from the nature of the contract, and confirmed by the te rms of the incorporated pricing letters and the circumstances surrounding the execution of the contract. The price of each revolving credit contract sold by EAC to HR SI included a percentage of billed monthly finance charges. Implicit in any ar rangement to pay a purchase price in installments is the expectation that payme nts will continue until the entire balance is paid. The fact that the MFA and pricing letters do not explicitly affirm that common sense expectation does not create an am biguity. See Cheyenne Mountain School Dist. No. 12 v. Thompson , 861 P.2d 711, 715 (Colo. 1993) (“Silence does not by itself necessarily create amb iguity as a matter of law.”); see also Radiology Professional Corp. , 577 P.2d at 751 (“The mere fact that there is a difference of opinion between the parties does not of itself create an ambiguity.”). Accordingly, we affirm the district court’s conclus ion that the contract, including the MFA and the pricing letters incorporated therei n, are unambiguous as to the duration of HRSI’s participation obligation. Such payments were part of the ongoing price that HRSI agreed to pay for the accou nts it acquired from EAC, and- 21 -

accordingly, the discontinuation of those payments in January 1995 constituted a breach of contract. III. HRSI’s Motion for Judgment as a Matter of Law: Damages At the close of Echo’s case, HRSI moved for judgment as a matter of law under Rule 50(a), arguing that because the evidence did not show any agreement between the parties as to the rate of post-terminat ion participation, any damages award would be necessarily speculative and therefor e void under Colorado law. In the alternative, HRSI argued that plaintiffs cou ld not recover anything beyond nominal damages. A. Echo’s Damages Were Not “Impossible of Ascertain ment” “Where claims for damages are premised on breaches of contracts, damages that are merely speculative, remote, imaginary, or impossible of ascertainment[] cannot be recovered.” Colo. Nat. Bank of Denver v. Friedman , 846 P.2d 159, 174 (Colo. 1993) (internal quotations, citations, and a lteration omitted). This rule is cited most frequently with respect to claims for lo st profits. E.g. , Western Cities Broad., Inc. v. Schueller , 849 P.2d 44, 47- (Colo. 1993) (vacating lost prof its award based on testimony of “econometrician,” an expert in “applying statistical and mathematical tools to” general economic data in order to “make predictions or forecast or attempt to examine economic behavioror what makes an economy tick,” based on “six different hypothetical models” ); Master Palletizer Sys., Inc.- 22 -

v. T.S. Ragsdale Co. , 725 F. Supp. 1525, 1535 (D. Colo. 1989) (“Lost pr ofits are not recoverable if either the amount of the profit that would have been earned or the fact that the plaintiff would have earned them is too speculative, remote, imaginary, or impossible to ascertain.”) (citing, i nter alia , Prutch v. Ford Motor
Co. , 618 P.2d 657 (Colo. 1980)). In this case, HRSI argues that there was no evidence of any pricing agreement after 1993. Thatclaim is not supported by the record. The parties stipulated that between June 29, 1989, and January 7, 1995, HRSI made monthly merchant and insurance participat ion payments to EAC at the following rates: • June 29, 1989 - December 7, 1990: merchant partici pation was paid at 8% and insurance participation at 30%; • December 8, 1990 - August 7, 1993: merchant partic ipation was paid at 5% and insurance participation at 30%; • August 8, 1993 - October 7, 1993: merchant partici pation was paid at 7% and insurance participation at 30%; • October 8, 1993 - January 7, 1995: merchant partic ipation was paid at 10% and insurance participation at 30%. J.A. 2353 (Tr. at 334-35). Throughout this time pe riod, merchant participation payments were calculated by multiplying the applica ble rate by the finance charges billed on the total outstanding balance of all loans within the EAC Portfolio. Id. at 2353-54 (Tr. at 335-36). Similarly, insurance participation- 23 -

payments were calculated by multiplying the applica ble rate by the total insurance charges billed on all loans within the EAC Portfoli o. Id. at 2354 (Tr. at 336). Not every “pricing letter” between Echo and HRSI se t forth specific numbers. The 1992 pricing letter, for example, mer ely confirmed that there would be no change in the parties’ existing arrange ment. J.A. 3028 (Pl. Ex. 33); see also id. at 2468-69 (Tr. at 710-14) (testimony of Frank Nar di, acknowledging Pl. Ex. 33 as pricing letter). Similarly, HRSI’s l etter dated January 12, 1994, noticing its intent to terminate the MFA, failed to enumerate any specific numbers in connection with its pledge to honor its current participation commitment. Specifically, the January 1994 letter promised thatHRSI would “continue to provide [EAC] with the same quality service until M ay 1, 1994 under our existing agreement and honor our current participation commi tment.” Id. at 3033 (Pl. Ex. 51) (emphasis added). A reasonable jury could have read the foregoing sentence as evidencing two separate agreements, only one of which was to expire on May 1, 1994. In our view, the jury was entitled to int erpret the January 1994 letter as a dual promise by HRSI: first, to continue to purch ase Contracts and Slips through May 1, 1994; and second, to “honor [its] cu rrent participation commitment” – i.e. , to pay 10% merchant and 30% insurance participati on – through the life of each revolving credit contract. There are no doubt alternative ways to read this and subsequent letters from HRSI. Yet the ultimate question- 24 -

presented in HRSI’s Rule 50 motion was whether the facts were so clear that the law requiredthe entry of judgment in HRSI’s favor. See Weisgram v. Marley
Co. , 528 U.S. 440, 448 (2000). In this case, the fact s were far from clear, and the court was correct in submitting the case to the jury. Nor do we agree that the evidence was insufficient to support an actual damages award. In their constitutional capacity as triers of fact, jurors are necessarily required to resolve close factual quest ions to the best of their ability. Obviously, not every evidentiary uncertainty render s a damage award impermissibly speculative. See, e.g. , Bohrer v. Church Mut. Ins. Co. , 965 P.2d 1258, 1267 (Colo. 1998) (“[W]e instruct jurors to ‘ use [their] best judgment based on the evidence’ when uncertainty arises regarding the amount of damages to be awarded.”). Indeed, Colorado courts have consistently held that “once the fact of damage has been established with the requisite degr ee of certainty, uncertainty as to the amount of damages will not bar recovery.” T ull v. Gundersons, Inc. , 709 P.2d 940, 943 (Colo. 1985); accordWestern Cities Broad. , 849 P.2d at 48. It is equally well-established that “a plaintiff will notbe barred from recovery for failing to prove the amount of loss with mathematic al certainty . . . .” Pomeranz v. McDonald’s Corp , 843 P.2d 1378, 1382 (Colo. 1993). Thus, in lightof the evidence recited above, we hold that the court prop erly denied HRSI’s motion for judgment as a matter of law.- 25 -

B. Nominal Damages To recover an award beyond “nominal damages for bre ach of contract a plaintiff must prove that he suffered a loss result ing from the defendant's actions.” Isaac v. American Heritage Bank and Trus t Co. , 675 P.2d 742, 745 (Colo. 1984); see also Doyle v. McBee , 420 P.2d 247, 250 (Colo. 1966) (“[I]n an action for breach of contract, only nominal damages can be recovered, if there is no evidence produced from which the facts necessaryto determine the damages under the proper rule can be determined.”). Becaus e there is no question that the plaintiffs in this case made the threshold showing required to obtain damages in excess of nominal damages, the court did not err in refusing to limit Echo’s
recovery. IV. Alleged Trial Errors The trial errors alleged by HRSI are as follows: (1 ) the court’s “midstream” determination that the jury would only decide the applicable rates of posttermination payments, not the total monetary amountof damages; (2) the preliminary instruction’s reference to HRSI’s liabi lity; (3) Instruction 15’s reference to course of performance evidence; (4) th e multiple choice format of the special verdict form; (5) the court’s rejection of various instructions tendered by HRSI; and (6) the exclusion of three defense exhibi ts on hearsay grounds. We reject each assignment of error.- 26 -

A. Court’s Determination that Jury Would Only Decid e Rate of PostTermination Merchant Participation and Insurance Pe rcentage HRSI claims that “[l]ate in the plaintiff’s case an d without adequate prior notice, the District Court restructured the trial t o withdraw certain damages issues from the jury.” Aplt. Br. at 44. According to the defendant, its trial strategy was based on its belief that the jury would not only co nsider the applicable rate of post-termination payments, but also the total amoun t of damages. Id. On the contrary, we find that the court’s plan never chang ed. From the entry of summary judgment on March 2, 1999, it was clear to all part ies that the only issues left for the jury were the applicable rates of merchant and insurance participation. See,
e.g. , J.A 1913 & n.1 (summary judgment order: character izing jury issue as “which was the last pricing letter from Defendant t o which the parties agreed,” and noting “that the present record would not suppo rt a jury determination of Plaintiff’s damages at less than the 5% rate”); id. at 2248 (Tr. at 62-63) (court’s Statement of the Case, read to venire members durin g voir dire on July 26, 1999: “There is a question of fact in this case appropriately decided by you, the jury regarding which was the applicable pricing letter f or purposes of calculating plaintiffs’ share.”); id. at 2344 (Tr. at 296) (statement by court during th e crossexamination of Echo’s first witness on July 27, 199 9: “[T]here’s only one limited purpose for which this jury is going to sit. They’ re going to decide what the rate is, period.”). At the pretrial motions hearing on July 26, 1999, defense counsel- 27 -

himself proposed that the court’s Statement of the Case be modified to state that the court “found that the obligation continue[d] bu t that the issue as to the rate, if any, of that obligation is for the jury to decide .” Id. at 2234 (Tr. at 5) (emphasis added). In short, HRSI’s professions of “surprise” when the court reiterated its position two days later is flatly contradicted by t he record. B. Jury Instructions: Preliminary Instruction (Stat ement of the Case) and Instruction 15 HRSI claims that the district court’s Statement of the Case “deprived [it] of the right to a fair and impartial jury” by: (1) stating that HRSI had breached the contract, thereby casting the defendant as “a wrong doer from the outset,” (2) failing to state that the “plaintiffs had the burde n to prove their damages,” and (3) “improperly suggest[ing] that plaintiffs were entit led to some amount of actual damages.” Aplt. Br. at 51. HRSI also objects to I nstruction 15’s failure to reference certain defense theories, and to its implicit reliance on “course of performance” evidence for the proposition that the rate at which post-termination payments should be calculated was the rate set fort h in the “last (most recent) agreed pricing letter concerning participation . . . .” Id. at 51-52. “When considering a party’s challenge to jury instruction s, our initial inquiry is whether the party properly preserved that issue for appeal by objecting at the district court level to the instruction on the same grounds raised on appeal.” Comcoa, Inc. v. NEC Tel., Inc. , 931 F.2d 655, 660 (10th Cir. 1991). This inquiryis mandated by8 But cf. J.A. 2267 (Tr. at 138) (voir dire by defense couns el: “[Y]ou’ve

heard from the judge that he made a finding that my client breached the contract and that we’re here now to determine matters pertai ning to damages. So the first thing I need to know . . . is whether there’s anybo dy here who somehow feels predisposed to award damages against my client beca use of anything you heard the judge say about this case?”). - 28 - Rule 51 of the Federal Rules of Civil Procedure, wh ich provides that “[n]o party may assign as error the giving or the failure to gi ve an instruction unless that party objects thereto before the jury retires to co nsider its verdict, stating distinctly the matter objected to and the grounds o f the objection.” Fed. R. Civ.
P. 51.Although the defendant did raise a number of object ions to the court’s proposed Statement of the Case, see J.A. 2233-35 (Tr. at 4-11); id. at 2276 (Tr. at 173), its current objections were not among them. 8 Similarly, while HRSI did raise its current objections to Instruction 15 at t he penultimate charge conference, id. at 2446-50 (Tr. at 620-38), it failed to do so the following day at the final instruction conference. Id. at 2529 (Tr. at 808-09). At the final conference, HRSI requested only two changes to the court’s revi sed Instruction 15, both of which the court agreed to make. Id. Upon inquiry, HRSI stated that it had no additional objections to the court’s proposed Instruction 15. Id. (Tr. at 809). Accordingly, HRSI waived its current objections to the Statement of the Case and to Instruction 15, and we find no plain error.- 29 -

C. Special Verdict Form Next, HRSI objects to the Special Verdict form, cla iming that it “left the jury with no choice but to find a single rate of me rchant participation applicable during the entire damages period to all balances in the EAC portfolio, thereby [] depriving HRSI of its right to have its positions c onsidered on the issue of rates.” Aplt. Br. at 52. We view this objection as includi ng two components: (1) that the verdict form forced the jury to select one of the t hree rates given, and (2) that the verdict form did not permit the jury to consider wh ether different rates might apply to different accounts. Both are without meri t. See Webb v. ABF Freight System, Inc. , 155 F.3d 1230, 1249 (10th Cir. 1998) (noting thatthe language of a special verdict form is reviewed under the “same ab use of discretion standard that we apply to jury instructions”). First, the Specia l Verdict form consisted of three nearly identical questions, which differed only in terms of the merchant participation percentage: “Has the Plaintiff prove n by a preponderance of the evidence, that the applicable merchant participatio n rate was 10% [or 7%, or 5%] and the applicable insurance participation rate was 30%, as agreed upon by the parties and evidenced by a letter from Defendant? (Yes or No ).” J.A. 2523-24 (emphasis added). Nothing in the Special Verdict f orm prevented the jury from answering “No” to all three questions. As to the court’s determination that a single rate applied to all outstanding- 30 -

loans, it is important to note the parties’ stipulation that “HRSI calculated merchant participation payments to EAC by multiplyi ng the agreed-upon rate in effect at the time by the finance charges billed on the total outstanding balance of the loans within the portfolio.” J.A. 2613, ¶ 13; see also id. at ¶ 14 (comparable stipulation as to insurance participation payments) . We recognize that the stipulation refers only to past practice, but the t rial court was legally entitled to rely on the stipulation in order to eliminate any p ossible ambiguity as to the appropriate method of calculating post-termination payments. Under Colorado law, “[w]hen a contract or agreement has been given a practical construction, as reflected by the conduct and acts of the parties in its performance, such construction may, and perhaps even should, be consi dered by the court in eliminating any ambiguity, and in ascertaining the mutual meaning of the parties at the time of contracting.” Pepcol , 687 P.2d at 1314 (internal quotations and citation omitted); see also KN Energy , 698 P.2d at 779 (“The parties’ course of performance following execution of the contract is [] relevant to the interpretation of the agreement.”) (citations omitted). The elim ination of contractual ambiguity is a matter for the trial court, not for the jury. Pepcol , 687 P.2d at 1313 (“Whether an ambiguity exists is [] a question of l aw.”). We find no error in the court’s legal determination that the MFA and incorp orated pricing letters required that all payments (both pre- and post-termination) by HRSI to EAC be calculated9 In the record, the copy of Defendant’s proposed in struction regarding

amendments is not numbered, indicating that HRSI ad ded the number later for the sake of clarity on appeal. Compare J.A. 2297 (unnumbered instruction regarding “Amendments”); withAplt. Br., Att. E (purporting to excerpt J.A. 2297 , but including number “9”).

10 As with Proposed Instruction 9, see supranote 9, Defendant’s proposed instruction regarding extrinsic evidence is not num bered in the record. Compare J.A. 2306; withAplt. Br., Att. E (purporting to excerpt J.A. 2306 ). - 31 - by applying a single participation rate to the enti re portfolio, regardless of the dates on which the individual loans originated. D. Rejection of Defendant’s Tendered Instructions HRSI also complains that the district court erred i n refusing to give: • Defendant’s Proposed Instructions 2 and 3, J.A. 25 08-09, requiring the jury to “award only nominal damages” if it foun d that the parties had failed to agree on merchant participation or in surance participation rates for any period of time; • Defendant’s Proposed Instructions 5-7, id. at 2511-13, regarding contract formation; • Defendant’s Proposed Instruction 9, Aplt. Br., Ex. E (copy of J.A. 2297 9 ), stating that “[o]nce agreed upon, the terms of a n agreement on participation under the Merchandise Financing Ag reement may be changed only by a subsequent amendment between HRSI and EAC, which is evidenced by a letter from HRSI;” • Defendant’s Proposed Instruction 13, Aplt. Br., Ex . E (copy of J.A. 2306 10 ), regarding the use of extrinsic evidence; and • Defendant’s Proposed Instruction No. 16, J.A. 2500 , regarding HRSI’s lack of consideration defense. Aplt. Br. at 52-54.- 32 -

“[I]t is not error to refuse to give a requested in struction if the same subject matter is adequately covered in the general instruc tions.” F.D.I.C. v. Schuchmann , 235 F.3d 1217, 1222 (10th Cir. 2000) (internal qu otations, citations, and alteration omitted). As to Proposed Instructio ns 2 and 3, we have already explained that nothing in the Special Verdict form required the jury to find that the parties had agreed to applicable rates. See supraSection III(C). The subject matter of Defendant’s Proposed Instructions 5-7 – i .e. , how to determine the parties’ agreement as to post-termination participation rates – was adequately addressed in the court’s Instruction 15, which requ ired the jury to determine “which was the last pricing letter from the Defenda nt to which the parties agreed,” J.A. 2626, as required by the MFA. Id. at 3006 (Pl. Ex. 3); see also J.A. 2523 (Special Verdict Form, requiring jury to find that the applicable rates were “agreed upon by the parties and evidenced by a lett er from Defendant”). Instruction 15 and the Special Verdict Form also ad equately addressed the subject matter of Defendant’s Proposed Instructions 9 and 1 3: the requirement of the MFA. Finally, given that the court’s summary judgm ent order had already rejected HRSI’s lack of consideration argument as amatter of law by finding that post-termination payments were part of the price of the Contracts and Slips assigned to HRSI, the court did not err in rejectin g Defendant’s Proposed Instruction 16, which attempted to resurrect that t heory at trial. In sum, we find11 HRSI’s fifth argument, that the letters were admis sible to show its state

of mind, was never raised to the district court and is therefore waived. United States v. Barbee , 968 F.2d 1026, 1031 (10th Cir. 1992) (“Where a pa rty has shifted his position on appeal and advances arguments available but not presented to the trial court and where a party has had ample opportunity to make the point in the trial court in a timely manner the issue will n ot be entertained on appeal.”) (internal quotations and citations omitted).

- 33 - no error in the court’s rejection of Defendant’s Pr oposed Instructions 2-3, 5-7, 9, 13, and 16. E. Exclusion of Defense Exhibits 21, 23, and 25 Finally, HRSI claims that the district court erred in sustaining Echo’s hearsay objections to the admission of three 1994 l etters from HRSI. In its opening brief to this court, HRSI claims that the l etters were not offered for the truth of the matter asserted, but rather: (1) as ve rbal acts with independent legal significance, (2) to provide context for various le tters that had already been admitted, and (3) to show notice “of HRSI’s positio n.” HRSI also claims that the letters were admissible as business records. 11 Evidentiary rulings are reviewed for abuse of discretion. General Elec. Co. v. Joiner , 522 U.S. 136, 141-42 (1997). We see no abuse of discretion here.

1. Non-Hearsay: Verbal Acts The Federal Rules of Evidence define “hearsay” as a n out-of-court statement “offered in evidence to prove the truth o f the matter asserted.” Fed. R.- 34 -

Evid. 801(c). By contrast, “[i]f the significance of an offered statement lies solely in the fact that it was made, no issue is ra ised as to the truth of anything asserted, and the statement is not hearsay.” Fed. R. Evid. 801 advisory committee’s note (1972). According to HRSI, the ex cluded exhibits were not proffered as evidence of the truth of the statement s therein, but rather, for their independent legal significance. Aplt. Br. at 54-56 . Specifically, HRSI claims that defense exhibits 21, 23, and 25 were offers, a nd therefore admissible as verbals acts. We disagree. The verbal acts doctrine applies only where the out -of-court statement actually “affects the legal rights of the parties, or where ‘legal consequences flow from the fact that the words were said.’” U.S. v. Pungitore , 965 F. Supp. 666, 673 n.1 (E.D. Pa. 1997) (quoting Black’s Law Dictio nary1558 (6th ed. 1990)). Thus, it is not enough to simply characterize a statement as an offer. Only “utterances by the parties . . . constituting the o ffer and acceptance which brought the contract into being ” qualify as verbal acts. McCormick on Evidence § 249 (5th ed. 1999) (emphasis added). In this case, HRS I candidly acknowledges that EAC rejected the “offers” contained in defense exhi bits 21 and 23 (dated March 28, 1994, and April 27, 1994, respectively). Aplt. Reply Br. at 29-30 (citing J.A. 3001, 3003). Similarly, there is no evidence that EAC or Echosphere ever accepted the “offer” contained in defense exhibit 2 5, dated April 29, 1994, which- 35 -

appears to have been superseded on December 19, 199 4 (if not earlier), by a subsequent HRSI letter. J.A. 3005 (Def. Ex. 26). Accordingly, it is clear that none of the excluded exhibits “brought the contractinto being,” McCormick§ 249, “affect[ed] the legal rights of the parties,” Pungitore , 965 F. Supp. at 673 n.1, or had any legal consequences independent of i ts substantive content. Compare United States v. Montana , 199 F.3d 947, 950 (7th Cir. 1999) (explaining difference between verbal acts such as “a promise, offer, or demand,” which “committhe speaker to a course of action,” and hearsay st atements, which “narrate, describe, or otherwise convey information , and so are judged by their truth value”) (emphasis added), andTrepel v. Roadway Exp., Inc. , 194 F.3d 708, 717 (6th Cir. 1999) (upholding exclusion of stateme nt as hearsay where statement “was not an offer to sell” but rather, a declaratio n of the price range the owner “would be willing to take . . . should someone make an offer to buy”); withPuma v. Sullivan , 746 A.2d 871, 874-76 (D.C. 2000) (holding that or al statement containing an offer, which statement’s proponents h ad accepted , was admissible for consideration on summary judgment as a “verbal act”). The district court did not abuse its discretion by sustaining Echo’s hears ay objection against HRSI’s proffer of the exhibits as verbal acts.

2. Non-Hearsay: Context/Completeness Given our standard of review, HRSI’s argument that the excluded exhibits- 36 -

were admissible to provide context is also unpersua sive. The trial court was familiar with the evidence in this case, and we dec line to second-guess its judgment as to whether the excluded exhibits were n ecessary to provide context or completeness. See, e.g. , VII Wigmore on Evidence § 2104 (1978 ed.); United
States v. Catano , 65 F.3d 219, 225 (1st Cir. 1995). The case upon which HRSI relies, United States v. Catano , arose on very different facts. Because the question of whether a document is necessary to put another in context “will depend upon the circumstances of each case and the character of each document,” factually distinct cases have minimal persuasive va lue, if any. VII Wigmore on Evidence § 2104. Unlike the written correspondence at issu e here, Catano involved an audio tape of oral conversations betwee n a criminal defendant and an informant. 65 F.3d at 224-25. In that case, the c ourt held that the informant’s portions of the conversations were admissible to pr ovide context for the defendant’s portions because they “served as recipr ocal and integrated utterance(s), reasonably required to place [the def endant’s] admissions into context and make them intelligible to the jury.” Id

. at 225 (internal quotations and citations omitted); see also, e.g. , United States v. McDowell , 918 F.2d 1004, 1007 (1st Cir. 1990) (“Nor can a defendant, having made admissions, keep from the jury other segments of the discussion reasonably re quired to place those admissions into context.”); United States v. Gutierrez-Chavez , 842 F.2d 77, 81- 37 -

(5th Cir. 1988) (holding that statements on tape re cording were admissible “for the limited purpose of putting the responses of the [defendant] in context and making them intelligible to the jury and recognizab le as admissions”) (internal quotations and citation omitted). The “intelligibi lity” difference between a recorded conversation that has been edited to omit every other line (as in Catano , McDowell , and Gutierrez-Chavez ) and selected pieces of business correspondence (as in the instant case), is obvious. We find no a buse of discretion in the trial court’s ruling. Further, the exhibits that HRSI seeks to put in context were either stipulated exhibits, see J.A. 2315 (Tr. at 182-83) (Pl. Ex. 51), or introdu ced by HRSI itself. See id. at 2395 (Tr. at 484) (Def. Ex. 19); id. at 2403 (Tr. at 515-16) (Def. Ex. 22); id. at 2480 (Tr. at 758-59) (Def. Ex. 24). In HRSI’s view, the circumstances under which the exhibits were admitte d are irrelevant to its allegedly absolute right to introduce otherwise ina dmissible hearsay in order to provide context. Aplt. Reply Br. at 31 (“No such l imitation exists in the Federal Rules of Evidence. A party is entitled to put into context any and all evidence.”). This assertion is patently incorrect. The rule of completeness provides that “the opponen t, against whom a part of an utterance has been put in , may in his turn complement it by putting in the remainder, in order to secure for the tribunal a co mplete understanding of the12 Even if HRSI was entitled to invoke the rule of co mpleteness, it is not

clear whether the rule trumps the prohibition on he arsay statements. See Rainey , 488 U.S. at 173 n.18 (avoiding the question); Unite d States v. Pendas-Martinez , 845 F.2d 938, 944 & n.10 (11th Cir. 1988) (“[T]here are conflicting Circuit Court decisions on whether [Rule 106] makes admissible parts of a document that - 38 - total tenor and effect of the utterance.” Beech Ai rcraft Corp. v. Rainey , 488 U.S. 153, 171 (1988) (citation omitted, emphasis added); see also Fed. R. Evid. 106 (“When a writing or recorded statement or part ther eof is introduced by a party, an adverse party may require the introduction at th at time of any other part or any other writing or recorded statement which ought in fairness to be considered contemporaneouslywith it.”) (emphasis added). The rule of complete ness, both at common law and as partially codified in Rule 106, f unctions as a defensive shield against potentially misleading evidence proffered b y an opposing party. See United States v. Collicott , 92 F.3d 973, 981 n.9 (9th Cir. 1996) (“Only if th e evidence by one party needs to be met or explained away by the other side does its mere introduction provide independent warrant f or the introduction of other evidence.”) (quoting J. Weinstein & M. Berger, Wein stein's Evidence , ¶ 106[02] at 106-18 (1986)); United States v. Corrigan , 168 F.2d 641, 645 (2d Cir. 1948) (“The rule is protective, merely. It goes only so far as is necessary to shield a party from adverse inferences . . . .”) (internal q uotations, citation, and alteration omitted). The rule does not allow a party to intro duce otherwise inadmissible hearsay on the coattails of its own or stipulated e xhibits. 12 “[I]f evidence isotherwise would be inadmissible under the Rules of Evidence . . . .”) (collecting

cases); I Hon. Joseph M. McLaughlin, Hon. Jack B. W einstein, & Margaret A. Berger, Weinstein’s Fed. Evidence § 106.03[1], at 106-15 (2d ed. 2001) (noting that language of Rule 106 is ambiguous as to “wheth er it authorizes the admission of otherwise inadmissible evidence”); cf. 21 Charles Alan Wright & Kenneth W. Graham, Jr., Fed. Practice & Procedure § 5071, at 337-40 (West 1977) (noting Congress’ failure to take any action in response to the Justice Department’s request that a clause be added to Rule 106 to requi re “that evidence adduced under the Rule be otherwise admissible”). - 39 - misleading in a way that harms the case of the prop onent, he can cure this by not introducing it.” 21 Charles Alan Wright & Kenneth W. Graham, Fed. Practice & Procedure § 5076, at 362 (1977). Accordingly, the circumsta nces under which Pl. Ex. 51 and Def. Ex. 19, 22, and 24 were admitted ar e critical to HRSI’s standing to invoke the rule of completeness. We find no abu se of discretion in the trial court’s rejection of HRSI’s proffers on completenes s grounds.

3. Non-Hearsay: Notice HRSI’s final “non-hearsay” argument is that the exc luded letters were admissible to show “notice from HRSI advising plaintiffs of HRSI’s position.” Aplt. Br. at 55. It is true that an out-of-court s tatement may be admitted over a hearsay objection if the statement is offered not f or the truth of the matter asserted in the statement but merely to show that aparty had knowledge of a material fact or issue. E.g. , Marsee v. U.S. Tobacco Co. , 866 F.2d 319, 325 (10th Cir. 1989) (ruling, in product liability action, th at articles regarding health problems associated with “smokeless tobacco” were n ot hearsay because they- 40 -

“were not admitted to prove the truth of the matterasserted,” but only “on the issue of whether the defendant had notice of the po tential dangers its product posed to consumers”); Benford v. Richards Med. Co. , 792 F.2d 1537, 1540 (11th Cir. 1986) (sustaining admission of deposition test imony that deponent heard defendant-manufacturer’s former president advise cu rrent representative against use of cast stainless steel in product because test imony was offered to show notice of associated dangers, not for the truth of the matter asserted). We believe that doctrine is inapplicable in this case. HRSI’s enti re notice argument comprises only a sentence fragment in its opening brief; it i s not referenced at all in the reply brief. Aplt. Br. at 55. Without further dev elopment, we fail to see the relevance of whether or not Echo had notice of “HRS I’s position” on March 28, April 27, or April 29, 1994. Cf. Craven v. Univ. of Colo. Hosp. Auth. , --- F.3d -- -, ---, No. 99-1519, 2001 WL 909203, at *4 (10th Ci r. Aug. 13, 2001) ( “We will not manufacture arguments for an appellant, and a b are assertion does not preserve a claim, particularly when, as here, a hos t of other issues are presented for review.”) (internal citation omitted); Adler , 144 F.3d at 679 (“Arguments inadequately briefed in the opening brief are waived . . . .”) . Accordingly, we conclude that the district court did not abuse its discretion in rejecting notice as a basis to admit the exhibits at issue.

4. Rule 803(6): Business Records Exception- 41 -

The district court also rejected HRSI’s proffer of the letters under the business records exception to the hearsay rule. Se e Fed. R. Evid. 803(6). The court determined that the letters constituted legal “posturing,” drafted by lawyers in anticipation of litigation, and that Rule 803(6) was therefore inapplicable. J.A. 2399 (Tr. at 497-98) (Def. Ex. 21); see also id. at 2480 (Tr. at 758) (Def. Ex. 23); id. at 2481 (Tr. at 763) (Def. Ex. 25). Rule 803(6) “ requires that the custodian or other qualified witness testify that (1) the record s were made contemporaneously with the events and ‘kept in the course of a regula rly conducted business activity,’ and (2) ‘it was the regular practice of that busine ss activity to make the [record].’” United States v. Samaniego , 187 F.3d 1222, 1224 (10th Cir. 1999) (quoting Fed. R. Evid. 803(6)) (footnote omitted). Business records are inadmissible, however, where “the source of information or the method or circumstances of preparationindicate lack of trustworthiness.” Fed. R. Evid. 803(6) (emphasis added); see also id. advisory committee notes (1972) (describing rationale underlying exception as “[t]h e element of unusual reliability . . . said variously to be supplied by systematic c hecking, by regularity and continuity which produce habits of precision, by ac tual experience of business in relying upon them, or by a duty to make an accurate record as part of a continuing job or occupation”) (citation omitted). Thus, the motivation of a record’s author is relevant to admissibility. Id

.- 42 -

Not every item of business correspondence constitut es a business record. See, e.g. , Breeden v. ABF Freight System, Inc. , 115 F.3d 749, 754 (10th Cir. 1997) (sustaining exclusion of letter from chiropra ctor proffered as “medical business record”); Timberlake Const. Co. v. U.S. Fi delity & Guar. Co. , 71 F.3d 335, 342 (10th Cir. 1995) (holding that court erredin admitting letters “written in anticipation of litigation” as business records). “It is well-established that one who prepares a document in anticipation of litigati on is not acting in the regular course of business.” Timberlake , 71 F.3d at 342 (citing Palmer v. Hoffman , 318 U.S. 109, 114 (1943); Fed. R. Evid. 803(6) advisorycommittee’s note); see also Certain Underwriters at Lloyd’s, London v. Sinkovic h , 232 F.3d 200, 204 n.2 (4th Cir. 2000) (noting that documents “prepared in viewof litigation[] are not admissible as business records under Rule 803(6) an d illustrate . . . that such documents prepared specifically for use in litigati on are ‘dripping with motivations to misrepresent’”) (citing Hoffman v. P almer , 129 F.2d 976, 991 (2d Cir. 1942)); Noble v. Ala. Dep’t of Envtl. Mgmt. , 872 F.2d 361, 366 (11th Cir. 1989) (holding that court erred in admitting letteras business record where “testimony was not adequate to establish that the l etter was compiled as a matter of regular practice, as opposed to one prepared in anticipation of litigation”). Upon a thorough review of the exhibits and the test imony surrounding their proffer, we have found nothing to satisfy the found ational requirement that they- 43 -

were “kept in the course of a regularly conducted b usiness activity.” Fed. R. Evid. 803(6). Like the letters we found inadmissib le in Timberlake , the exhibits at issue in this case “have all the earmarks of bei ng motivated and generated to further [HRSI’s] interest, with litigation . . . no t far around the corner.” 71 F.3d at 342. We see no abuse of discretion in the court ’s refusal to admit defense exhibits 21, 23, and 25 as business records under Rule 803(6). V. Cross-Appeal as to Prejudgment Interest The district court granted Echo’s post-trial motion for prejudgment interest, awarding interest at a rate of eight percent per an num. J.A. 2887. “[I]n the interests of fairness,” however, the court reduced the total interest award by onethird, noting that “Defendant’s withholding was notwrongful for one-third of the prejudgment period due to the Court’s substantial d elay in ruling on the parties’ cross motions for summary judgment.” Id. ; see also id. at 2982 (Order denying Echo’s Rule 59(e) Motion). In its cross-appeal, Ec ho contends that the district court abused its discretion by reducing the total award and by failing to award interest at a rate higher than eight percent, the s tatutory minimum. Aplee. Br. at 19-26. Echo argues for a higher rate based upon HR SI’s shareholders’ overall, pre-tax return on equity or, in the alternative, HR SI’s average yield on receivables. As a preliminary matter, we must address HRSI’s pen ding Motion to Strike- 44 -

Plaintiffs’ December 12, 2000 Reply Brief, filed De cember 19, 2000. As noted in that motion, Echo’s Reply Brief addresses not only the cross-appeal, but also the merits of HRSI’s appeal. Thus, Echo’s Reply Brief effectively constitutes two briefs: (1) Cross-Appellant Echo’s Reply Brief, and(2) Appellee Echo’s SurReply Brief. Only the first of the two is authoriz ed by the Federal Rules of Appellate Procedure. Fed. R. App. P. 28(a)-(c) (pr oviding that appellant may file an opening brief and a reply brief, that appellee m ay file an answer brief, and that “[u]nless the court permits, no further briefs may be filed”). If the latter portion of Echo’s “Reply Brief” had been submitted to the C lerk of Court under the correct title, “Appellee’s Sur-Reply Brief,” it wou ld not have been accepted for filing. See Fed. R. App. P. 28(c). Accordingly, HRSI’s Motionto Strike is granted as to all portions of the brief that addres s the merits of HRSI’s appeal. We now turn to the merits of the cross-appeal. In pertinent part, the Colorado statute governing prejudgment interest in contract suits provides that: (a) When money or property has been wrongfully with held, interest shall be an amount which fully recognizes the gain or ben efit realized by the person withholding such money or property from the date of wrongful withholding to the date of payment or to t he date judgment is entered, whichever first occurs; or, at the elec tion of the claimant, (b) Interest shall be at the rate of eight percent per annum compound ed annually for all moneys or the value of all property after they are wrongfully withheld or after they become due to the date of payment or to the date judgment is entered, whichever firstoccurs. Colo. Rev. Stat. § 5-12-102(1) (emphasis added). W e refer to prejudgment- 45 -

interest awarded pursuant to subsection (1)(a) as “ moratory interest,” see Chaparral Res., Inc. v. Monsanto Co. , 849 F.2d 1286, 1291 n.4 (10th Cir. 1988), and interest awarded pursuant to (1)(b) as “statuto ry interest”. A. Reduction of Statutory Interest Award Where a party breaches a contract by failing to mak e required payments, the money owed under the contract has been “wrongfully withheld” for purposes of § 5-12-102(1)(a). Mesa Sand & Gravel Co. v. Landfill , Inc. , 776 P.2d 362, 366 (Colo. 1989). Thus, Echo was entitled to receive p rejudgment interest at a minimumof eight percent per annum. Ballow v. PHICO Ins. Co. , 878 P.2d 672, 684 (Colo. 1994). Section 5-12-102 is not punitive in nature. Cf. Great Western Sugar Co. v. KN Energy, Inc. , 778 P.2d 272, 276 (Colo. Ct. App. 1989). The statute merely “recognizes the time value of money” in order to “discourage a person responsible for payment of a claim to stall and delay payment until judgment or settlement.” Mesa Sand & Gravel , 776 P.2d at 364. Regardless of the factors that contributed to the length of time during which prejudgment interest was accruing in this case, it is indisputa ble that HRSI retained Echo’s money during that entire period. Under the plain l anguage of § 5-12-102(1)(b), Echo is entitled to the time value of those funds d uring the period in which they were wrongfully withheld. Id. The Colorado General Assembly has adopted a rate of at least eight percent per annum, and the d istrict court had no discretion to- 46 -

modify the statute in that respect. We appreciate the district court’s attempt to ameliorate the damages that could be perceived to h ave resulted from the delay, yet we are constrained by the statute. We hold that the court abused its discretion by reducing the statutory interest award, and that portion of the district court’s judgment is hereby vacated. B. Denial of Moratory Interest Without an Evidentia ry Hearing The plaintiffs also contend that the court abused i ts discretion by rejecting their application for moratory interest without an evidentiary hearing. Aplee. Br. at 19; see also J.A. 2221 (statement by court during pre-trial status conference, indicating intent to have post-trial hearing on mor atory interest). Echo claims that statutory interest is insufficient to “fully r ecognize[] the gain or benefit realized” by HRSI during the period in which paymen ts were withheld. Aplee. Br. at 19 (quoting Colo. Rev. Stat. § 5-12-102(1)(a )). “[I]n order to receive the higher interest rate,” i t is well-settled that “the claimant must specificallyprove that the withholding party actuallybenefitted” in an amount greater than eight percent per annum. No rthwest Cent. Pipeline Corp. v. JER Partnership , 943 F.2d 1219, 1229 (10th Cir. 1991) (emphasis ad ded) (citing Lowell Staats Mining Co. v. Pioneer Uravan, Inc. , 878 F.2d 1259, 1270-71 (10th Cir. 1989)). The statute’s “specific proof” requirement is extremely demanding and, accordingly, moratory interest award s under § 5-12-102(1)(a) are13 The record on appeal includes an internal documententitled “Reserve

Definition,” J.A. 3089 (Pl. Ex. 70), prepared by HR SI in March 1995 and - 47 - very rare. Atlantic Richfield Co. v. Farm Credit B ank of Wichita , 226 F.3d 1138, 1159 (10th Cir. 2000). Compare Great Western Sugar , 778 P.2d at 273-74, 275- 76 (endorsing sophisticated economic model used to determine gain realized on the specific property withheld), andDavis Cattle Co. v. Great Western Sugar Co. , 393 F. Supp. 1165, 1194-95 (D. Colo. 1975) (finding sufficient specificity where claimant showed that the offending party “was able to leave $23-million of [its] credit line untapped” and thereby save 11.5% in int erest), aff’d , 544 F.2d 436 (10th Cir. 1976); with, e.g. , Atlantic Richfield , 226 F.3d at 1158-59 (rejecting return on equity analysis as too speculative where underlying balance sheets failed to distinguish between corporate entities an d were based, in part, on investments made outside the relevant time period), andBallow , 878 P.2d at 683- 84 (Colo. 1994) (vacating moratory interest award at 9.4%, the United States Treasury rate at the time, because “there [was] no evidence in the record to support [that] interest rate as the gain or benefitrealized” by the defendant). In support of its motion for moratory interest, see J.A. 2683-87, Echo submitted the following evidence: (1) HRSI’s financial statements, see J.A. 2688-2700; (2) excerpts of deposition testimony by HRSI repres entative Joseph Hoff that a release of a reserve amount 13 would result in an increase ininadvertently produced to Echo during discovery. I d. at 2421 (Tr. 585). In

Echo’s view, the document indicates that “HRSI set up a reserve fund of 10% of billed finance charges in regard to EAC’s claim.” Aplee. Br. at 21 n.1. Notably, the Reserve Definition was never admitted into evid ence, nor was it submitted in connection with the plaintiffs’ motion for prejudgm ent interest. Early in the proceedings, the court specifically noted its conce rns regarding the Reserve Definition and instructed Plaintiffs’ counsel not t o refer to it in his opening statement. J.A. 2315 (Tr. at 182). After a discus sion with counsel outside the presence of the jury, the court ruled that it would not receive the document into evidence. Id. at 2421 (Tr. at 587). As Echo’s reference to the Reserve Definition in its opening brief makes no mention of this tortu red history, we are compelled to remind counsel of their ongoing duty of candor t o the court. - 48 - shareholders’ equity because the amount of the rese rve had previously served to reduce income, and calculating shareholders’ average, pre-tax return on equity, see id. at 2713-18; and (3) an affidavit by Echo’s expert witness, Steven W illiams, explaining that “at a minimum . . . the economic benefit [HRSI ] derived from the use of [wrongfully withheld funds] is commensur ate with the yield [HRSI] was generating on [the EAC Portfolio]. ” Aplee. Br. at 21. Despite the plaintiffs’ insisten ce that they have made the specific showing we found to be lacking in Atlantic Richfield , Aplee. Br. at 20- 21, we see no meaningful distinction between the ev idence in that case and the evidence presented to the district court in supportof Echo’s motion. As in Atlantic Richfield , the evidence upon which Echo relied was of a gene ral nature; the plaintiffs’ arguments, like those that failed t o persuade the Atlantic Richfield court, are entirely based on ratios derived from fi nancial statements – i.e. , the Average Return on Equity and Average Return on Rece ivables – without any specific proof as to how the withheld amounts were deployed. Compare J.A.- 49 -

2685-86 (Echo’s motion), andAplee. Br. at 21-23; withAtlantic Richfield , 226 F.3d at 1158-59. Indeed, Echo’s own expert noted h is “understanding that [HRSI] did not escrow the[] withheld monies and such funds were commingled with the working capital of the corporation.” J.A. 2729; cf. Atlantic Richfield , 226 F.3d at 1159 (recognizing that the specific proof requireme nt has the effect of permitting large corporate defendants to shield themselves “ag ainst claims for moratory interest simply by co-mingling funds with other corporate assets”). Echo not only failed to carry its own burden of pro of under § 5-12- 102(1)(a), see Chaparral Res. , 849 F.2d at 1291 n.4, but also failed to respond to the evidence submitted by HRSI to contradict Echo’s “forced investment” theory. Aplee. Br. at 22. That uncontroverted evidence sho wed that HRSI used the participation funds at issue to repay its debt and finance Echo’s credit programs. J.A. 2830-34 (Hoff Aff.), 2841-45 (Hoff Dep.); see also id. at 2831, ¶ 5 (“HRSI operates its lending business . . . by borrowing mo ney at one rate, from external sources, and then lending it at a higher rate. . . . The difference or spread between the finance charges received from customers and HRS I’s borrowing costs is its gross profit.”). Accordingly, the record indicates that the gain HRSI actually realized from the withheld funds was in the nature of six percent – the approximate rate at which HRSI borrowed money from external sources during the time period in question. Id. at 2834, ¶ 15.- 50 -

Finally, Plaintiffs claim that the district court a bused its discretion by denying their request for moratory interest on the basis of the documentary evidence alone, without conducting an evidentiary h earing. Aplee. Br. at 20. The only point at which Echo requested an evidentiary h earing on this issue was during a telephonic hearing on August 5, 1999. J.A . 2723 (Tr. at 18-19). During the August 5 hearing, counsel for Echo succinctly d escribed the evidence to be presented at the moratory interest hearing: “We wou ld onlyhave one witness, and that would be Steve Williams and then the depositio n offerings from the CEO of [HRSI], Joseph Hoff, as well as their financial statement.” Id. (Tr. at 19) (emphasis added). The deposition excerpts and fina ncial statements had already been submitted in support of Echo’s motion, id. at 2688-2718; HRSI submitted additional financial statements and excerpts from M r. Hoff’s deposition in opposition to Echo’s motion. Id. at 2835-45. As for Mr. Williams’ testimony, Echo filed an affidavit which incorporated a letterby Mr. Williams to Mr. Moskowitz shortly after the telephonic hearing. Id

. at 2725-30. Because all of the evidence that Echo sought to present at the evi dentiary hearing had already been submitted for the court’s consideration, the c ourt did not abuse its discretion by rendering a decision on the basis of the documen ts alone. In sum, we see no error in the district court’s refusal to award prej udgment interest in excess of the eight percent required by Colo. Rev. Stat. § 5-12-1 02(1)(b).- 51 - Conclusion The district court’s judgment is REVERSED as to the one-third reduction of the pre-judgment interest award, AFFIRMED in all other respects, and REMANDED to the district court for proceedings cons istent with this opinion.