* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

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

### MAY 30 2000 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

FLANNERY PROPERTIES, a California general partnership; MICHAEL FLANNERY,Plaintiffs-Counter-ClaimDefendants - Appellants - Cross-Appellees,

v. RON BYRNE; BMS VAIL LIMITED PARTNERSHIP, a Colorado Limited Partnership; BMS VAIL GENERAL PARTNERSHIP, a Colorado general partnership; RON BYRNE & ASSOCIATES REAL ESTATE, Defendants-Counter-Claimants - Appellees - Cross-Appellants. Nos. 98-1122 & 98-1134 (D.C. No. 95-Z-1870) (D.Colo.)

ORDER AND JUDGMENT *

Before BRORBY, HOLLOWAY, and BRISCOE , Circuit Judges .1 Flannery Properties is a partnership with Flannery and his three children.

The distinction between Flannery Properties and Flannery individually was not relevant at trial and we will refer to both as “Flannery.”

2 The distinction between Ron Byrne individually an d BMS Vail Limited Partnership, BMS Vail General Partnership, and Ron Byrne & Associates was not relevant at trial and we will refer to all as “Byrn e.” 2 In this diversity action, plaintiffs Flannery Prope rties and Michael Flannery appeal the jury verdict rejecting their fraudulent misrepresentation claim. Flannery also appeals the district court’s denial o f prejudgment interest on the jury’s damage award for negligent misrepresentation . Defendants Ron Byrne, BMS Vail Limited Partnership, BMS Vail General Partnership, and Ron Byrne & Associates cross-appeal the jury verdict against th em on their counterclaim for abuse of process. We exercise jurisdiction pursuan t to 28 U.S.C. § 1291 and affirm both the appeal and the cross-appeal.
I. In 1991, Michael Flannery, a resident of California , became interested in purchasing property in Colorado. 1 In October 1991, Mark Cadmus, a real estate broker, showed Flannery a house at 146 Forest Road owned by Ron Byrne. 2 Cadmus and Flannery later looked at the house with Byrne. According to Flannery, Byrne told him the eastern property line “was just below the light columns [] just where the driveway intersects the s treet.” Aplt. App. II at 428- 30. Byrne denied telling Flannery that the property ran from the light posts.3

Byrne owned the adjacent property, Lot 5, and told Flannery that he planned to build a single-family home on the back part of the lot. Flannery claimed Byrne told him an easement would keep the house on Lot 5 “far out of the view from anything at this house.” Id. at 432. Flannery believed that “everything betwee n the light columns to the house was included in this property, including the deck and walkway that went from the patio out on to this property.” Id. at 433. Byrne testified that he never pointed out the property li ne to Flannery. Much of the area that Flannery believed was part of the 146 Forest R oad property was actually part of Lot 5. In October 1991, Flannery offered to buy the house at 146 Forest Road for $4 million. Byrne rejected the offer and made a co unter-offer of $4.5 million, which Flannery rejected. Flannery then purchased ahouse at 636 Forest Road for $2 million. Shortly after Flannery moved into the 636 Forest Road house, Byrne and Flannery agreed to an exchange of houses – Flan nery would give Byrne the 636 Forest Road house and pay Byrne $2.1 million in exchange for the 146 Forest Road house. Flannery again looked at the 14 6 Forest Road house the next day. According to Flannery, Byrne assured him thatany development on Lot 5 would be on the back part of the lot. Flannery did not have a survey done on the property. On November 18, 1991, Flannery and Byrne completed the exchange of real estate.3 The district court dismissed Flannery’s three cla ims for specific

performance of covenants and his claim for promisso ry estoppel. At trial, the district court dismissed Flannery’s claims for refo rmation of deed due to mutual mistake of the parties, constructive trust, and bre ach of contract. Flannery voluntarily dismissed his claim for trespass. None of these claims are at issue on appeal. 4 According to Flannery, Byrne approached him at vari ous times from early 1992 through 1993 to discuss Flannery’s purchase of Lot 5. In the fall of 1993, Flannery made an offer of $2.35 million for Lot 5, which Byrne rejected. Flannery testified that in October 1994, he discove red the property line between 146 Forest Road and Lot 5 was next to his house. F lannery told Byrne that if they could not resolve the property line issue, he would initiate litigation against Byrne. In November 1994, Flannery instituted a law suit against Byrne in California. Flannery testified that after the laws uit was filed, he became aware that construction was beginning on Lot 5 and that B yrne planned to build a duplex and an employee housing unit only 20 to 25 f eet from Flannery’s house. After Flannery filed another lawsuit, Byrne built the duplex farther back from the property line. In June 1996, Flannery filed a third amended compla int against Byrne in Colorado federal district court, raising claims, inter alia , of fraud and negligent misrepresentation. 3 Byrne raised counterclaims, inter alia , of slander of title,4 The district court dismissed Byrne’s counterclaimfor business

disparagement. This claim is not at issue on appea l.

5 The parties do not appeal the verdicts on Byrne’s slander of title and trespass counterclaims. 5 abuse of process, and trespass. 4 Flannery also filed a lis pendens against Lot 5. In January 1998, a jury found against Flannery on h is claims of fraudulent misrepresentation and fraudulent concealment, but i n favor of Flannery on his claim that Byrne made a negligent misrepresentation of material fact and awarded Flannery damages of $60,000. The jury found agains t Byrne on his counterclaims for slander of title and abuse of pro cess, but for Byrne on his counterclaim for trespass and awarded Byrne damages of $1.00. 5 The district court denied Flannery’s motion to amend the judgmen t to include prejudgment interest.
II. District court’s evidentiary rulings – appeal and c ross-appeal Flannery argues the district court erred in two evi dentiary rulings: (1) allowing Byrne’s counsel to cross-examine Byrne with leading questions, and (2) excluding documents from the Colorado Real Estate C ommission. In the crossappeal, Byrne argues the district court erred in ex cluding evidence that Flannery previously used litigation improperly. We review e videntiary rulings for abuse of discretion. Woodworker’s Supply, Inc. v. Principal Mut. Life Ins. Co. , 170 F.3d6

985, 992 (10th Cir. 1999). Leading questions on cross-examination. Flannery called Byrne as a witness in his case-in-chief. Before beginning cro ss-examination, Byrne’s attorney stated: “I intend to cross only on those points raised by the plaintiffs, reserving the right to recall Mr. Byrne in the defe ndant’s case-in-chief.” Aplt. App. III at 846. After cross-examination began, Fl annery objected to Byrne’s counsel asking leading questions because Byrne was not an adverse witness. The district court ruled Byrne’s counsel could ask lead ing questions because it was cross-examination. Federal Rule of Evidence 611(c) states: Leading questions should not be used on the direct examination of a witness except as may be necessary to develop the w itness’ testimony. Ordinarily leading questions should be permitted on cross-examination. When a party calls a hostile wi tness, an adverse party, or a witness identified with an adverse party, interrogation may be by leading questions. The advisory committee notes to Rule 611(c) state that “[t]he purpose of the qualification ‘ordinarily’ is to furnish a basis fo r denying the use of leading questions when the cross-examination is cross-exami nation in form only and not in fact, as for example the ‘cross-examination’ of a party by his own counsel after being called by the opponent.” Cross-examination b y leading questions is not a matter of right when a party is being cross-examined by his own counsel. Shultz v. Rice , 809 F.2d 643, 654 (10th Cir. 1986).7

Under the abuse of discretion standard, this court will not disturb the district court’s ruling unless this court has a “de finite and firm conviction that the [district] court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances.” Hidalgo v. Fagen, Inc. , 206 F.3d 1013, 1020 (10th Cir. 2000) (internal quotations omitted). See Shultz , 809 F.2d at 655 (finding district court did not abuse its discretio n when it allowed leading questions on cross-examination of a client that wer e “archetypical of those allowed during direct examination to develop testim ony and expedite entry into evidence of time-consuming foundational information ”). Some of Byrne’s counsel’s leading questions went to the substance o f the case, but our review of the transcript does not establish that this affecte d Flannery’s substantial rights.
See Hidalgo , 206 F.3d at 1020 (noting that a party is entitledto a new trial only if the error affected his substantial rights). Alt hough the district court erred in stating that cross-examination by leading questions was a matter of right, we are convinced this did not rise to an abuse of discretion. See Fed. R. Ev. 611(c), advisory committee’s notes (noting that “[a]n almos t total unwillingness to reverse for infractions has been manifested by appe llate courts”). Admission of documents from Colorado Real Estate Commission . Flannery sought to admit redacted factual findings by the . . . Commission that find . . . that probable cause and reasonable grounds exist[] that [] Byrne violated6 The district court also concluded the Commission ev idence was

inadmissible under Federal Rule of Evidence 408 as evidence of conduct or statements made in compromise negotiations. We conc lude the district court abused its discretion in excluding the evidence und er Rule 408 because there is no indication that the Commission matter involved o ffers of compromise or settlement by Byrne or Flannery. 8 the real estate licensing laws by misrepresenting t he location of the eastern boundary from approximately 1989 to 1991, and that as a result of that, [they recommended] . . . Byrne’s re al estate license be publicly censured for a six-month period, and that he admit to the public and the real estate community that he engage d in those misrepresentations. Aplt. App. I at 243. The district court refused to admit the evidence as hearsay, concluding that it was not a factual finding from an investigation of a public agency admissible under Federal Rule of Evidence 803(8)(C). 6 Flannery unsuccessfully sought to admit the Commission evide nce numerous times during trial. The Commission found there was probable cause to re fer Flannery’s complaint against Byrne to a hearing for violation of the real estate licensing law. The investigative report of the Commission consiste d of a summary of various statements from individuals. Flannery argues the C ommission evidence was admissible under Federal Rule of Evidence 803(8)(C) . Rule 803(8)(C) is an exception to the hearsay rule, which allows the adm ission of “[r]ecords, reports, statements, or data compilation, in any form, of pu blic offices or agencies, setting forth . . . (C) in civil actions and proceedings . . ., factual findings resulting from9

an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness.” There are three requirements for a document to be a dmissible under Rule 803(8)(C): (1) the report was prepared “pursuant t o authority granted by law”; (2) the evidence constitutes “factual findings”; an d (3) circumstances do not indicate the report is untrustworthy. Perrin v. Anderson , 784 F.2d 1040, 1046-47 (10th Cir. 1986). The term “factual findings” is c onstrued broadly and includes “conclusions and opinions found in evaluative reports of public agencies.” Id. at 1047. Byrne argues the Commission has no authorityto make factual findings but can only impose sanctions on real estate licens ees found to have violated the licensing law. See Colo. Rev. Stat. § 12-61-114(1) (stating that “[e] xcept as otherwise provided in this section, all proceedings before the commission with respect to disciplinary actions . . . shall be cond ucted by an administrative law judge”). The Colorado Supreme Court has stated that “the Commission is not the fact-finder in the agency process, and the Commissi on is not required to make findings regarding the relationship between the con duct, the public need and the sanction.” Colorado Real Estate Comm’n v. Hanegan , 947 P.2d 933, 936-37 (Colo. 1997). Further, the evidence Flannery sough t to admit does not contain factual findings. The district court did not abuse its discretion in not admitting7At oral argument, Flannery contended the Commission evidence was also

admissible under Federal Rule of Evidence 803(8)(A) as a record setting forth the activities of a public office or agency. Flannery did not raise this issue with the district court or in his appellate brief and we wil l not consider it for the first time on appeal. See Tele-Communications, Inc. v. Commissioner , 104 F.3d 1229, 1232 (10th Cir. 1997) (noting that “[g]enerally, an appellate court will not consider an issue raised for the first time on appe al”). 10 the Commission evidence under Rule 803(8)(C). 7 Flannery contends these evidentiary rulings amounte d to cumulative error requiring reversal. “‘A cumulative-error analysis merely aggregates all the errors that individually have been found to be harmless, and therefore not reversible, and it analyzes whether their cumulative effect on the outcome of the trial is such that collectively they can no longer be determined to be harmless.’” McCue v. Kansas Dept. Human Resources , 165 F.3d 784, 791 (10th Cir. 1999) (quoting United States v. Rivera , 900 F.2d 1462, 1470 (10th Cir.1990) (en banc)). The record does not indicate that the rulings amounted to cumulative error. Flannery was able to introduce evidence that Byrne acted fraudulently in representing the property lines to him and he was able to fully exam ine Byrne on the matters elicited during Byrne’s cross-examination. Exclusion of evidence that Flannery previously used litigation coercively

. Byrne contends the district court erred in excludin g four items of evidence: (1) Byrne’s testimony that Flannery’s attorney said Flannery would sue Byrne if he did not sell Flannery Lot 5, (2) newspaper advertis ements placed by Flannery11

publicizing the lawsuit, (3) testimony of William D orricott that Flannery breached an agreement, then sued him, and (4) testi mony of David Black that Flannery breached an agreement, then sued him. The district court excluded Byrne’s testimony that Flannery’s trial attorney, Dale Kinsella, told Byrne that if he did not give F lannery part of Lot 5 Flannery would make his life miserable. The district court excluded the testimony under Federal Rule of Evidence 403, finding that “the pre judicial effect and the disruption to the trial in having Mr. Kinsella have to argue his own credibility outweighs the possible probative effect.” Aplt. Ap p. IV at 1590. Under the facts of the case, the district court did not abuse its d iscretion. Byrne testified that Flannery threatened him with litigation; the testim ony concerning Kinsella repeating that threat was not necessary and would h ave been more prejudicial than probative under the circumstances. The district court granted Flannery’s motion in lim ine to exclude the newspaper advertisements as irrelevant. The advert isements, which publicized the lawsuit between Flannery and Byrne and sought f act witnesses, are not relevant to whether Flannery engaged in abuse of pr ocess. Further, Byrne presented other evidence of Flannery’s state of min d in filing the lawsuit. Byrne sought to admit the testimony of Dorricott an d Black under Federal Rule of Evidence 404(b), which allows evidence of p rior acts to show, among12

other things, the actor’s motive, intent, or state of mind. Byrne argues this testimony would support the inference that Flannery ’s motive in filing the lawsuit was to avoid the terms of his agreement with Byrne. However, Byrne testified to this motive and Dorricott testified to limited fact s surrounding Flannery’s lawsuit against him. Although it may have been relevant, t he district court did not abuse its discretion in excluding evidence of prior litig ation by Flannery.

District court’s denial of Flannery’s motion for ju dgment as a matter of law on Byrne’s abuse of process counterclaim We review de novo the district court’s denial of a motion for judgment as a matter of law. Baker v. Barnard Constr. Co. , 146 F.3d 1214, 1220 (10th Cir. 1998). Judgment as a matter of law “is warranted o nly if the evidence points but one way and is susceptible to no reasonable inferen ces supporting the party opposing the motion.” Baty v. Willamette Indus., Inc. , 172 F.3d 1232, 1241 (10th Cir. 1999) (internal quotation omitted). We do not “weigh the evidence, pass on the credibility of the witnesses, or substi tute our conclusions for [those] of the jury,” but we “must enter judgment as a matt er of law in favor of the moving party if ‘there is no legally sufficient evi dentiary basis . . . with respect to a claim or defense . . . under the controlling law.’” Id. (quotations omitted). We view the evidence and any inferences to be drawn th erefrom most favorably to the non-moving party. Id.13

Flannery moved for judgment as a matter of law on B yrne’s counterclaim after the close of evidence, pursuant to Federal Ru le of Civil Procedure 50(a). Byrne’s abuse of process counterclaim concerned Flannery’s filing of a lis pendens against Lot 5. In addressing Flannery’s ar gument that there was no evidence that he used the process in an improper way, the district court stated that “[Byrne’s] position is that it was to force [] Byrne to sell the property to [] Flannery.” Aplt. App. IV at 1647, 1650. The distr ict court denied Flannery’s motion for judgment as a matter of law and the juryeventually found for Flannery on the counterclaim. To establish a claim for abuse of process under Col orado law, Byrne must prove: “(1) an ulterior purpose for the use of a j udicial proceeding; (2) willful action in the use of that process which is not prop er in the regular course of the proceedings, i.e., use of a legal proceeding in an improper manner; and (3) resulting damage.” Lauren Corp. v. Century Geophysical Corp. , 953 P.2d 200, 202 (Colo. App. 1998). Flannery contends there was no evidence that he filed the lis pendens in an improper manner. A litigant’s motive is relevant in determining whether there was an ulterior purpose for the use of the process, but the plainti ff must still establish there was an objectively improper use of the process. James H. Moore & Assoc. Realty, Inc. v. Arrowhead at Vail , 892 P.2d 367, 373 (Colo. App. 1994). “Classic14

examples of the requisite improper use include the use of process to accomplish a coercive goal which is not the intended legal purpose of the process.” Id. Byrne contended the actual purpose of Flannery’s action w as to force Byrne to sell Lot 5 to Flannery. Byrne testified that just before Fl annery sued him, Flannery said that “if I did not sell him this lot for his price or give him the property that he would sue me, my life would be miserable, and I wou ld not be able to sell it to anyone.” Aplt. App. IV at 1581-82. This is eviden ce of an improper purpose. Although the filing of a lis pendens relates to a r ight of possession, use, or enjoyment of real property, “[t]he intended purpose for filing a notice of lis pendens is to provide notice to anyone who may acqu ire an interest in the property during the pendency of the litigation so t hat he or she will be bound by its outcome.” Moore , 892 P.2d at 373. Flannery could have had a prope r purpose in filing the lis pendens, but there was al so evidence that he used the lis pendens for the improper purposes of preventing oth er individuals from purchasing Lot 5 and forcing Byrne to sell the prop erty to him. The district court did not err in denying the motion for judgment as amatter of law and allowing the jury to decide the claim.
District court’s denial of prejudgment interest on the jury’s award for negligent misrepresentation Flannery asserts the district court erred in denyin g him prejudgment15

interest on the damages awarded for his negligent m isrepresentation claim. We review the district court’s decision to deny prejud gment interest for abuse of discretion. United Phosphorus, Ltd. v. Midland Fumigant, Inc. , 205 F.3d 1219, 1236 (10th Cir. 2000). Because this issue involves prejudgment interest on a state law claim, the propriety of interest is determined by Colorado law. See id. After trial, Flannery filed a motion to amend the j udgment to include prejudgment interest of $96,443.80. The district c ourt summarily denied the motion. Colorado statutes provide that at the clai mant’s election, “[i]nterest shall be at the rate of eight percent per annum compounde d annually for all moneys or the value of all property after they are wrongfullywithheld or after they become due to the date of payment or to the date judgment is entered, whichever first occurs.” Colo. Rev. Stat. § 5-12-102(1)(b). Flann ery contends the “time of the wrong” was no later than November 18, 1991, when he acquired the 146 Forest Road property. The jury awarded Flannery $60,000, but did not spec ify the nature of the damages. “Damages recoverable for negligent misrep resentation include (1) the difference between the value of what the plaintiff received and its purchase price or other value given for it (out-of-pocket expenses ); and (2) other pecuniary loss suffered as a consequence of the plaintiff’s relian ce upon the misrepresentation (consequential damages).” Western Cities Broadcasting, Inc. v. Schueller , 84916

P.2d 44, 49 (Colo. 1993). The trial testimony show ed that the fair market value of the property was equal to or greater than the pr ice paid by Flannery. Based on the testimony, there was no evidence of a negative difference between the value Flannery received and the purchase price he paid. Because there was no evidence of out-of-pocket expe nses for the negligent misrepresentation, Flannery is left with consequent ial damages for the negligent misrepresentation. Flannery testified he spent $60 ,000 for Byrne to move the planned house on Lot 5; the jury awarded Flannery $ 60,000 in damages for his negligent misrepresentation claim. Flannery did no t testify when he incurred those damages. Prejudgment interest for consequent ial damages may only be awarded from the time the damages were incurred. Pegasus Helicopters, Inc. v. United Tech. Corp. , 35 F.3d 507, 513 (10th Cir. 1994) (applying Color ado law). Flannery has presented no evidence of when the cons equential damages were incurred.

III. We AFFIRM on all issues raised in both the appeal and the cross-appeal.17 Entered for the Court Mary Beck Briscoe Circuit Judge