*

This order and judgment is not binding precedent except under the

doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,

however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th

Cir. R. 32.1.

FILED

United States Court of Appeals

Tenth Circuit

March 24, 2009

Elisabeth A. Shumaker

Clerk of Court

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

WILLIAM STUART ANAPOELL,

M.D., on behalf of himself and others

similarly situated ,

Plaintiff - Appellant,

No. 08-4114

v. (D. Utah)

AMERICAN EXPRESS BUSINESS

FINANCE CORPORATION, a Utah

corporation; KEY EQUIPMENT

FINANCE, a Michigan corporation,

Defendants - Appellees.

(D.C. No. 2:07-CV-00198-TC)

ORDER AND JUDGMENT*

Before KELLY, ANDERSON, and BRISCOE, Circuit Judges.

After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist in the determination

of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.
1

Dr. Anapoell styles this case as a class action, but, as the district court

observed, “no motion to certify the proposed class has been filed with the court,

so no class has been approved.” 5/28/08 Order at 1 n.1, Appellant’s App. Vol. 1

at 117.

-2-

Plaintiff and appellant William Stuart Anapoell, M.D., acting on behalf of

himself and a proposed class,1

 filed his second amended complaint in this contract

dispute with defendants, American Express Business Finance Corporation

(“AEBF”) and Key Equipment Finance, Inc. (“Key”). The district court granted

defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss for failure to state a claim. 

Anapoell appeals the dismissal, which we affirm.

BACKGROUND

On February 18, 2004, Dr. Anapoell entered into a lease for medical

equipment from AEBF. The lease transaction was documented by the Master

Lease Agreement, the Equipment Schedule to the Master Lease Agreement and

the Purchase Order (collectively, the “Agreement”). On October 22, 2004, Key

assumed AEBF’s lease with Dr. Anapoell.

The Agreement included a provision requiring that the leased medical

equipment be insured:

Insurance; Indemnification:

Lessee shall at all times maintain liability, fire, damage, casualty

(covering death and personal injury) and theft insurance on the

Equipment in amounts and with insurers acceptable to Lessor, and

shall list Lessor and each Assignee as an additional and loss payee
-3-

thereon. Such insurance policies shall require the insurer to provide

Lessor with at least 30 days prior written notice of any material

change in or cancellation of such insurance. In the event that Lessor

determines that any such insurance is not in effect, Lessor may (but

shall not be required to) obtain such insurance at Lessee’s expense.

Agreement at ¶ 8, Appellant’s App. Vol. 1 at 35. The Agreement provided that

Utah law governs its terms. Although the Agreement gave Dr. Anapoell the

option to obtain insurance for the medical equipment, he did not do so. 

Accordingly, AEBF obtained insurance for the equipment leased by Dr. Anapoell

and sent to Dr. Anapoell monthly invoices as follows: $157.35 for property

insurance and $90.48 for liability insurance, for a total of $247.83 per month. 

After Key acquired the lease from AEBF, it continued to send the same monthly

invoice to Dr. Anapoell. For a period of time, Dr. Anapoell paid the monthly

invoices without incident.

At some point, Dr. Anapoell determined that he was paying too much for

the insurance. He therefore brought this action, alleging that “[t]he charges were

more than Defendants’ expense to obtain insurance coverage.” First Amended

Compl. ¶ 33, Appellant’s App. Vol. 2 at 34. Dr. Anapoell further alleged that

“the charge bears no correlation or reasonable relationship to any contractual

obligation of its customers or the cost of insurance coverage.” First Amended

Compl. ¶ 22, id. at 33. He claimed that “Defendants’ insurance charge . . .

includes amounts other than for coverage obtained by Defendants, in that

Defendants retain a part of the insurance charge as a service fee and/or interest, or
2

Dr. Anapoell alleged several fraud claims, including fraudulent

concealment and violations of the Utah Unfair Practices Act, the UCC and the

California Business and Professions Code through fraudulent business practices.

-4-

Defendants . . . receive payments from insurance agents or insurance companies

under the guise of reinsurance cessations, service fees, commissions or rebates.” 

First Amended Compl. ¶ 19, id.

Dr. Anapoell brought this action on behalf of himself as well as a proposed

national class and a proposed subclass of similarly situated persons in California,

although, as indicated, he has not filed a motion to certify a class. He originally

filed his suit in the United States District Court for the Southern District of

California, but that court ruled that venue was improper, based upon a valid

forum selection clause in the Agreement, and transferred the case to the district

court in Utah.

Dr. Anapoell asserted ten causes of action in his First Amended Complaint,

including breach of contract and breach of the implied covenant of good faith and

fair dealing. Defendants brought motions to dismiss the entire complaint on the

basis that Dr. Anapoell had not alleged claims upon which the court could grant

relief and that his fraud allegations did not meet the heightened pleading standard

required by Fed. R. Civ. P. 9(b).2

 The district court dismissed Dr. Anapoell’s

claim for breach of contract without prejudice, stating: “[g]iven the silence of the

Agreement regarding the amount Defendants could charge, the court simply

cannot find that Dr. Anapoell has stated a claim for breach of contract with the
-5-

vague and conclusory allegations he provides. . . . To the extent he can validly

allege a breach with more definiteness, then the court will consider granting leave

to amend.” 11/29/07 Order at 8, Appellees’ Supp. App. at 60. The court

similarly dismissed Dr. Anapoell’s implied covenant claim without prejudice,

stating “[h]is current allegations, which do not contain any detail concerning his

claim, are simply too vague and conclusory to satisfy his pleading burden.”

11/29/07 Order at 10, id. at 62. Dr. Anapoell’s remaining claims were dismissed

with prejudice.

Dr. Anapoell filed a motion for leave to amend, which defendants did not

oppose. The district court accordingly granted the motion. Dr. Anapoell then

filed his Second Amended Complaint, in which he alleged:

Defendants’ monthly insurance charge includes amounts over the true

insurance premium plus reasonable expenses to obtain that insurance

in that the monthly insurance charge includes a “billing and

collecting” fee (with no corresponding cost to Defendants) and/or

undisclosed interest at grossly excessive rates for Defendants’

“financing” of the premium (with rates well over the cost of any

actual funds advanced); and/or that the monthly charge includes

amounts over the true insurance premium and reasonable expenses to

obtain that insurance because Defendants (or their alter ego

affiliates) receive payments from insurance agents or insurance

companies under the guise of reinsurance cessations, service fees,

commissions or rebates with no corresponding costs or risk.

Second Amended Compl. ¶¶ 16, 24, Appellant’s App. Vol. 1 at 15, 16.

Dr. Anapoell asserted, alternatively, that the “Defendants breached the

Agreement by failing to ascertain their expense for obtaining insurance by
-6-

charging [Dr. Anapoell] and class members some random amount.” Second

Amended Compl. ¶ 34, id. at 19. He further alleged that:

The charges assessed for insurance are so disproportionate with the

true expense of obtaining insurance that the purpose of the charge

could not have been related to insurance as mandated by the

contract’s terms, but instead is a disguised profit center allowing

Defendants to secretly charge more for leasing the equipment to

Plaintiffs than Plaintiffs agreed to pay.

Second Amended Compl. ¶ 39, id. at 20.

AEBF and Key responded with another motion to dismiss, contending that

Dr. Anapoell’s Second Amended Complaint should be dismissed with prejudice

because he does not state a claim for which relief may be granted. The district

court granted defendants’ motions, concluding, with respect to the breach of

contract claim:

The court finds that the language of the Insurance Provision is

unambiguous. The provision allows the Defendants, without

limitation or qualification, to obtain insurance upon [Dr. Anapoell’s]

failure to do so and to charge [Dr. Anapoell] for the expense of

obtaining the insurance. . . . 

. . . Essentially, Dr. Anapoell interprets “Lessee’s Expense” to

mean “Lessor’s Actual Cost and No More.” But Dr. Anapoell cannot

and does not point to any express term in the Agreement to support

his interpretation. . . .

Dr. Anapoell is reading language into the Agreement that does

not exist, and he does not allege any course of dealing between the

parties or usage of trade that would suggest the limitation he now

advocates. The court need not, and does not, accept Dr. Anapoell’s

interpretation of the Agreement because it is contradicted by the

express terms of the Agreement.
-7-

5/28/08 Order at 7, Appellant’s App. Vol. 1 at 123. After determining that other

allegations relating to the breach of contract claim were conclusory, the court

found that “Dr. Anapoell alleges breach of a promise that was never made and

fails to meet his pleading burden concerning a promise that was made. For these

reasons, his claim for breach of contract is dismissed with prejudice for failure to

state a claim for relief that may be granted.” 5/28/08 Order at 9, id. at 125. The

court further observed that “allowing further amendments would be futile.” Id.

n.5.

With respect to Dr. Anapoell’s claim for breach of implied covenant of

good faith and fair dealing, the district court found, applying Utah law, that:

. . . the implied covenant may not be interpreted to make a better deal

for the party than he made for himself.

When determining whether a party has breached the implied

covenant of good faith and fair dealing the court looks to the express

contractual provisions as well as the course of dealings between the

parties. . . .

He contends that the Defendants breached the covenant by

charging grossly excessive fees. Not only is this conclusory, but it

attempts to establish new, independent rights or duties not agreed

upon by the parties—namely, an unwritten requirement that the

Defendants may only “pass on” their actual insurance-related

expenses to Dr. Anapoell.

. . . [Further], the express terms of the Insurance Provision (Dr.

Anapoell’s right and obligation to obtain insurance on his own)

imposed a limitation on Defendants’ exercise of discretion.

In short, Dr. Anapoell’s expectations are not justified. Taking

the well-pleaded non-conclusory allegations as true, Dr. Anapoell’s

right to receive the fruits of the contract was not destroyed by the

Defendants. And that is what must be shown to survive the

Defendants’ motions to dismiss.
-8-

5/28/08 Order at 10-12, id. at 126-28. The court again found that “[g]iven the

number of chances [Dr. Anapoell] has had to satisfactorily plead his claims,

granting further leave to amend would be futile.” 5/28/08 Order at 12 n.6, id. at

128. The district court accordingly dismissed Dr. Anapoell’s claims for breach of

contract and breach of the implied covenant of good faith and fair dealing with

prejudice, for failure to state a claim. This appeal followed.

Dr. Anapoell argues that district court misinterpreted the “contractual

provision requiring Defendants to charge only their ‘expense’ of obtaining

insurance and nothing more”; that he “alleged violations of the insurance

provision with sufficient factual elaboration”; and that the district court

“misapplied standards relating to the implied covenant of good faith and fair

dealing.” Appellant’s Op. Br. at i-ii. We disagree, and affirm the district court’s

dismissal of the Second Amended Complaint with prejudice.

DISCUSSION

“Because the sufficiency of a complaint is a question of law, we review de

novo the district court’s grant of a motion to dismiss pursuant to Federal Rule

Civil Procedure 12(b)(6), applying the same standards as the district court.” 

Russell v. United States, 551 F.3d 1174, 1178 (10th Cr. 2008) (quotations

omitted). 
-9-

In the Rule 12(b)(6) context, we look for plausibility in the

complaint. In particular, we look to the specific allegations in the

complaint to determine whether they plausibly support a legal claim

for relief. Rather than adjudging whether a claim is improbable,

factual allegations in a complaint must be enough to raise a right to

relief above the speculative level.

Kay v. Bemis, 500 F.3d 1214, 1218 (10th Cir. 2007) (citations and quotations

omitted).

We have thoroughly reviewed the record in this case, and we affirm the

district court’s order for substantially the reasons contained in that order. We

also conclude that the district court did not abuse its discretion in determining

that further amendment of the complaint in this case would be futile.

CONCLUSION

For the foregoing reasons, we AFFIRM the order of the district court.

ENTERED FOR THE COURT

Stephen H. Anderson

Circuit Judge