* This order and judgment is not binding precedent, except under the doctrines of

law of the case, res judicata, and collateral estoppel. This court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. 

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

### NOV 24 1998 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

ASIA STRATEGIC INVESTMENT ALLIANCES, LTD.,

Plaintiff-Appellant/CrossAppellee,

v. GENERAL ELECTRIC CAPITAL SERVICES, INC. and EMPLOYERS REINSURANCE CORPORATION,

DefendantsAppellees/CrossAppellants. Nos. 97-3236 & 97-3259 (D. Ct. No. 95-2479-GTV) (D. Kan.)

ORDER AND JUDGMENT *

Before TACHA , McWILLIAMS , and LUCERO , Circuit Judges.

Plaintiff Asia Strategic Investment Alliances (“Asi a”), an Australian corporation, sued General Electric Capital Services (“GE Capital”) and Employers Reinsurance Corporation. (“ERC”) in the United Stat es District Court for the- 2 -

District of Kansas for allegedly violating a busine ss agreement between the parties to pursue an insurance investment opportuni ty in China. The district court granted summary judgment for the defendants. We ex ercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm. I. Background In 1993, Asia executives developed an alternative w ay for western companies to gain access to the heavily regulated C hinese insurance market. They envisioned forming an insurance joint venture between western insurance companies and the state-owned People’s Insurance Co mpany of China (“PICC”). The joint venture would be structured as a subsidiary of PICC, with western companies providing capital and holding a minority interest in the subsidiary. By taking advantage of PICC’s existing license, western companies could bypass the Chinese government’s multi-year waiting period for new licenses. Asia believed that the Chinese insurance market provided a good i nvestment opportunity for western companies. Asia identified GE Capital, a financial services co mpany, and ERC, a reinsurance company and indirect subsidiary of GE C apital, as promising investors and approached them with the PICC joint v enture idea. From July 1994 through early 1995, executives from the three compa nies met numerous times to discuss the proposed joint venture. GE Capital andERC decided to end their- 3 -

involvement with the project in the Spring of 1995. Asia filed suit on October 20, 1995, alleging breach of contract and claiming $61. 23 million in damages. On February 5, 1997, Asia sought leave to amend its co mplaint to add a breach of fiduciary duty claim. The motion was referred to amagistrate judge who denied the request because it was untimely. On January 15, 1997, after completion of discovery, the defendants moved for summary judgment. They assumed, for the purpos es of the motion only, the existence of an agreement between the parties and a rgued that the relationship was a single joint venture “to pursue and participate in the proposed joint venture company.” Appellant’s App. at 51. Defendants asse rted that the joint venture agreement was for an indefinite period of time and was therefore, under Kansas law, terminable at will. Defendants also argued th at Asia’s damage claims were not compensable as a matter of law. Asia responded to the defendants’ motion by asserti ng that the deal actually comprised two joint ventures: one between Asia, GE Capital, and ERC to pursue the deal with PICC, and the second between these co mpanies and PICC to conduct insurance business in China. Asia argued the parti es created the first joint venture specifically to pursue an agreement with PI CC, and, under Kansas law, it was terminable only when they completed that purpos e. Alternatively, Asia argued that, under defendants’ single joint venture theory, the joint venture- 4 -

between the parties was governed by Chinese law, wh ich limits the duration of joint ventures to thirty years. Thus, because the joint venture had a fixed time period, it was not terminable at will. Finally, As ia asserted that its damages were legally compensable. Defendants addressed Asia’s “two joint venture” the ory in their reply brief, contending that the parties’ relationship failed to meet the definition of joint venture under Kansas law and that defendants were e ntitled to summary judgment under this theory as well. Asia did not object to defendants’ argument for summary judgment on the two joint venture theory orrequest leave to reply to this argument. The district court granted defendants’ motion for s ummary judgment. It adopted the two joint venture theory and found no e vidence of a first joint venture between Asia, GE Capital, and ERC. Asia appealed, alleging four grounds for error: (1) inadequate notice that the district court would rule on the two joint venture theory, which defendants did not raise in t heir initial motion; (2) failure of the district court to consider Asia’s claim thatit had an implied contract, not a joint venture agreement, with GE Capital and ERC; ( 3) the district court’s misinterpretation of Kansas joint venture law; and (4) the inability of the magistrate judge to rule on Asia’s motion to amend its complaint because the ruling involved a dispositive motion.- 5 - II. Discussion We review the district court’s grant of summary jud gment de novo, applying the same legal standard used by the distri ct court. See Seymore v. Shawver & Sons, Inc. , 111 F.3d 794, 797 (10th Cir. 1997), cert. denied , 118 S. Ct. 342 (1997). Summary judgment is appropriate “i f the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any mater ial fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). An issue of material fact is genuine if a reasonable jury co uld return a verdict for the
nonmovant. See Seymore , 111 F.3d at 797. We examine the factual record a nd reasonable inferences therefrom in the light most f avorable to the nonmoving party. See id. A. Inadequate Notice It is well-settled that a district court may grant summary judgment on grounds other than those raised in the motions as l ong as the nonmoving party had adequate notice that it would have to come forward with its evidence on the issue.
See Howell Petroleum Corp. v. Leben Oil Corp. , 976 F.2d 614, 620 (10th Cir. 1992); see also Celotex Corp. v. Catrett , 477 U.S. 317, 326 (1986) (noting that “district courts are widely acknowledged to possess the power to enter summary judgments sua sponte , so long as the losing party was on notice that sh e had to- 6 -

come forward with all of her evidence”); Sports Rac ing Servs., Inc., v. Sports Car Club of Am., Inc. , 131 F.3d 874, 892 (10th Cir. 1997) (same). Asia contends that it had insufficient notice that the court would dec ide the case on the two joint venture theory because defendants did not include t he theory in their opening brief. We find Asia had adequate notice. Asia itself introduced the two joint venture theoryin its memorandum in support of its opposition to summary judgment. Thi s fact distinguishes this case from those cited by Asia where the movant raised anissue for the first time in a reply brief, denying the nonmovant an opportunity t o address the issue. Indeed, this is a case where the “[p]laintiff may not be he ard to complain that [it] did not receive ‘an adequate opportunity to respond to [a] new issue.’” Jarvis v. Nobel/Sysco Food Servs. Co. , 985 F.2d 1419, 1424 (10th Cir. 1993) (quoting Prospero Assocs. v. Burroughs Corp. , 714 F.2d 1022, 1028 (10th Cir. 1983) (McKay, J., dissenting)). Asia argued that the evidence it had produced conce rning the dealings between the parties established material issues of fact regarding the existence of a “first” joint venture. Asia’s submitted voluminous evidence consisting of thousands of pages of documents and transcripts. B ecause Asia based its case on the two joint venture theory and produced its evide nce accordingly, we find that Asia had ample notice and opportunity to come forward with its evidence on this- 7 -

theory. See Howell Petroleum , 976 F.2d at 620 (holding plaintiff had notice of issue when plaintiff implicitly raised it in motion for partial summary judgment and defendant responded with winning argument); cf. Sports Racing Servs. , 131 F.3d at 892-93 (suggesting that, where moving partymistakenly interpreted franchise law requirements in its motion for summary judgment, nonmoving party had notice that application of the law was in quest ion, and court’s ruling based on the correct interpretation was therefore proper); M adewell v. Downs , 68 F.3d 1030, 1048 (8th Cir. 1995) (finding nonmovant had n otice that Rule 12(b)(6) motion would be converted to Rule 56 motion when he offered materials outside the pleadings in response to a 12(b)(6) motion). I n addition, we find the parties have fully developed the facts in this case and that Asia suffered no prejudice. Thus, the district court appropriately granted summ ary judgment on the two joint venture theory. See Wilder v. Prokop , 846 F.2d 613, 626 (10th Cir. 1988) (finding district court ruling against nonmoving party on claim arguably not raised in summary judgment motions proper because f acts were fully developed and the nonmoving party suffered no prejudice). We find the district court committed no procedural error by basing its ruling on the two joint venture theory. B. Asia’s Claim of Implied Contract Appellants argue the district court erred by failin g to decide whether an- 8 -

implied contract existed between the parties. Asiamay have arguably raised the simple “implied contract” argument in its initial c omplaint and in the pretrial order. However, Asia failed to raise the implied c ontract theory in its memorandum in support of its opposition to defendants’ motion for summary judgment. In opposing summary judgment, Asia alternatively relied on the “two joint venture” theory and the “one continuing jointventure” theory. It never argued on summary judgment that the agreement with GE Capital and ERC constituted a simple contract. Instead, it consist ently referred to the parties’ alleged agreement as one for a joint venture. Appellate courts will not consider points raised be low but not argued or pursued in the district court, except in cases invo lving jurisdiction, sovereign immunity, manifest injustice, or other exceptional circumstances. See, e.g. , Rademacher v. Colorado Ass’n of Soil Conservation D ists. Med. Benefit Plan , 11 F.3d 1567, 1571-72 (10th Cir. 1993); Lyons v. Jeffe rson Bank & Trust , 994 F.2d 716, 721-22 (10th Cir. 1992). Underlying this rule are serious concerns about finality of judgments and judicial economy. See Okland Oil Co. v. Conoco Inc. , 144 F.3d 1308, 1314 n.4 (10th Cir. 1998); Lyons , 994 F.2d at 721. The rule applies not only to the failure to raise issues at trial, but also the failure to raise issues on summary judgment or in opposition to a mo tion for summary judgment.
See Geoffrey E. Macpherson, Ltd. v. Brinecell, Inc. , 98 F.3d 1241, 1246 (10th- 9 -

Cir. 1996); Rademacher , 11 F.3d at 1571. Asia’s failure to press its implied contract theoryat the summary judgment stage precludes it from asserting that claim now. Even construing Asia’s summary judgment filings generously, we find no dir ect reliance on the simple implied contract theory. The best we can say is th at the implied contract argument lurks somewhere beneath the surface of Asi a’s memorandum. However, “vague, arguable references to [a] point in the dis trict court proceedings do not . . . preserve the issue on appeal.” Lyons , 994 F.2d at 721 (quoting Monarch Life Ins. Co. v. Elam , 918 F.2d 201, 203 (D.C. Cir. 1990). In addition, the fact that Asia may have raised the issue in its complaint or could have argued it at trial is not dispositive. Failure to raise an issue on summ ary judgment constitutes waiver of that issue. See Grenier v. Cyanimid Plastics, Inc. , 70 F.3d 667, 678 (1st. Cir. 1995) (“Even an issue raised in the complaint but i gnored at summary judgment may be deemed waived.”); Vaughner v. Pulito , 804 F.2d 873, 877 n.2 (5th Cir. 1986) (“If a party fails to assert a legal reason w hy summary judgment should not be granted, that ground is waived and cannot be con sidered or raised on appeal.”); Lazarra v. Howard A. Esser, Inc. , 802 F.2d 260, 269 (7th Cir. 1986) (“A contention included in an answer, but not pressed b efore the district court, may not be presented on appeal as a ground for reversal .”). We find this case does not present the kind of manifest injustice or other exc eptional circumstances that- 10 -

would excuse Asia’s waiver. Thus, we will not revi ew the merits of its implied contract claim.
C. Joint Venture The district court found that, under Kansas law, no evidence supported the existence of a joint venture agreement between Asia , GE Capital, and ERC. Asia asserts that the district court erred in its interp retation of Kansas joint venture law and that, under the correct legal standard, there i s sufficient evidence for a reasonable jury to find the existence of a joint ve nture. Kansas law defines a joint venture as “an associati on of two or more persons or corporations to carry out a single busin ess enterprise for profit; it may be found in the mutual acts and conduct of the part ies.” Modern Air Conditioning, Inc. v. Cinderella Homes, Inc. , 596 P.2d 816, 823 (Kan. 1979); see also George v. Capital S. Mortgage Invs., Inc. , 961 P.2d 32, 44 (Kan. 1998); Goben v. Barry , 676 P.2d 90, 96 (Kan. 1984). Kansas law does notdefine precisely the requirements of a joint venture. Ins tead, it merely lists various factors, none of which is singularly controlling, that are indicative of a joint
venture. See Modern Air Conditioning , 596 P.2d at 823. These factors are: (1) the joint ownership and control of property; (2 ) the sharing of expenses, profits and losses, and having and exercising some voice in determining the division of the net earnings; (3) a community of co ntrol over and active participation in the management and direction of th e business enterprise; (4) the intention of the parties, express or implie d; and (5) the fixing of salaries by joint agreement.- 11 -

Id. Asia contends that the negotiations and meetings of the parties between July and December of 1994 created an implied agreem ent to operate as a joint venture, and it cites various facts that it claims provide enough evidence for a reasonable jury to conclude a joint venture was for med. Asia’s facts are as follows: (1) GE Capital and ERC asked for and recei ved a ninety day exclusivity agreement from Asia at the end of July 1994; (2) As ia funded all project efforts during the period in question; (3) ERC agreed, at aNovember 3, 1994 meeting, to begin funding Asia’s expenses, provided Asia could arrange a meeting between ERC and a high-level PICC official to satisfy ERC t hat PICC was serious about its support for the project; (4) Asia prepared and presented to ERC a detailed business plan which ERC then forwarded to PICC alon g with a letter expressing ERC’s and GE Capital’s commitment in principle to t he project; (5) the business plan provided for Asia to have an equity share of t he insurance joint venture; (6) Asia, ERC, and GE Capital discussed strategy and ke pt each other apprised of their dealings regarding the project; and (7) each party contributed something different to the deal. Even taking all this eviden ce as true and viewing it in the light most favorable to Asia, we agree with the dis trict court that a reasonable jury could not have found the existence of a joint venture under Kansas law. The record indicates that, even if the parties had formed an agreement to- 12 -

work toward the insurance joint venture, that agree ment did not itself constitute a joint venture. Applying the Modern Air Conditionin g factors, there was no joint ownership or control of property, nor was there joi nt fixing of salaries. In addition, the parties did not share expenses. Asiaadmits that it funded all project efforts, and ERC’s November 3 agreement to fund Asi a’s future expenses was, in Asia’s own words “subject to [ERC] being satisfied of the serious intent of PICC to support the insurance joint venture.” Appellant ’s Addendum at 39. Asia arranged for a meeting with a PICC official on Dece mber 5, 1994, but after that meeting, ERC was not sufficiently satisfied to comm it to the cost sharing, as it indicated in a January 17, 1995 letter to Asia. GE Capital and ERC broke off further discussions with Asia soon after this lette r. Because of the conditions set forth at the November 3 meeting, the parties clearl y had no agreement to share expenses prior to the December 5 meeting with the P ICC official. Furthermore, ERC’s actions suggest that it never agreed to share expenses after the December 5 meeting either. Even if we give Asia the benefit o f the doubt and find an agreement to share expenses after the December 5 me eting, this by itself is not enough to establish a joint venture. See PulseCard, Inc. v. Discover Card Servs.,
Inc. , 917 F. Supp. 1478, 1485 (D. Kan. 1996) (finding that sharing of expenses alone will not suffice to establish a joint venture between parties to a business contract).1 We note that the business plan only addressed the second joint venture with PICC,

not the alleged first joint venture with Asia. - 13 - Asia also provides no evidence of agreement to shar e profits and losses or of joint participation in the management and direct ion of the business enterprise. In fact, there were no profits to be had from the a lleged first joint venture because its objective was simply the pursuit of a second jo int venture. As for the management of the alleged business venture, the rec ord shows that the parties discussed strategy, but we find no indication of jo int decisions other than the November 3 decision to pursue a meeting with PICC and the November 3 letter from ERC to PICC expressing commitment in principle to the project. We hold that this evidence is inadequate to prove the exist ence of a joint venture. Perhaps most importantly, we find insufficient evid ence of the intent of the parties to form a joint venture. Asia theorizes th at we must infer intent from the actions of the parties. However, those actions ind icate negotiations, not agreement. No actions of the parties prior to Nove mber 3 can reasonably be construed as creating a joint venture. The initial meetings, exclusivity agreement, and efforts by both sides to keep the other informe d are the kind of actions parties typically take in evaluating and negotiating a pote ntial business deal. Asia contends that the November 3 meeting, ERC’s conditi onal agreement to fund Asia’s efforts, ERC’s approval of the business plan , 1 and its letter to PICC show- 14 -

an agreement. We disagree. Although support for aproposal and a commitment in principle may show ERC’s interest in the project , they hardly evidence an agreement to go forward in a joint venture relation ship with Asia. When we construe the evidence in the light most fav orable to Asia, we find that, at best, the parties might have legally agree d to pursue the insurance joint venture and to ERC’s payment of Asia’s costs after December 5, 1994. No reasonable jury could find this agreement rose to t he level of a joint venture. In the absence of any joint ownership, sharing of prof its, joint management of the enterprise, fixing of salaries, and clear intention of the parties, we find no error in the district court’s grant of summary judgment. Se e Southwest Nat’l Bank of Wichita v. ATG Constr. Management., Inc. , 736 P.2d 894, 897 (Kan. 1987) (upholding trial court’s finding that no joint venture existed between bank and general contractor where parties did not agree to s hare property ownership or profits); Flight Concepts Ltd. Partnership v. Boein g Co. , 38 F.3d 1152, 1158 (10th Cir. 1994) (applying Kansas law and affirming summary judgment on the grounds that no joint venture was formed where part ies did not jointly own property, fix salaries, share expenses or control o f the project); Nature’s Share, Inc. v. Kutter Prods., Inc. , 752 F. Supp. 371, 383 (D. Kan. 1990) (granting summary judgment motion and finding no joint ventur e where parties to business contract had no agreement to share profits).2Asia erroneously relies on Clark v. Poulton , 914 F.2d 1426 (10th Cir. 1990), to

support its contention that magistrate jurisdiction is nonwaivable. That decision was vacated and replaced by the current rule in Clark v. Poulton , 962 F.2d 1361 (10th Cir. 1992). - 15 - D. Motion to Amend the Pleadings Finally, Asia claims that the assignment of its Feb ruary 5, 1997 Motion for Leave to Amend Complaint to a magistrate judge cons titutes reversible error because the motion was dispositive and therefore be yond the magistrate’s jurisdiction as set forth in Federal Rule of Civil Procedure 72 and 28 U.S.C. § 636(b)(1)(A). The magistrate denied Asia’s motion, and Asia filed no objection to the ruling with the district court. Asia’s argu ment is foreclosed by this court’s rule that failure to timely object to a magistrate’ s authority constitutes waiver.
See In re Griego , 64 F.3d 580, 583 (10th Cir. 1995); Clark v. Poult on , 963 F.2d 1361, 1366-67 (10th Cir. 1992). 2 In Clark , this court determined that a magistrate’s “jurisdiction” to hear a case was not the same as nonwaivable subject matter jurisdiction and that objections to this jur isdiction are waived if not properly raised with the district court. See 963 F.2d at 1367. Asia admits that it made no objection to the district court. Therefore , Asia has waived its right to- 16 -

raise the issue of the magistrate’s authority befor e this court.
AFFIRMED. ENTERED FOR THE COURT,

Deanell Reece Tacha Circuit Judge