* This order and judgment is not binding precedent, e xcept under the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

### JAN 19 2001 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

RAY EUGENE WILCOX,

Plaintiff-Appellee,

v. BARBER-COLMAN COMPANY,

Defendant-Appellant. No. 00-2042 (D.C. No. CIV-99-125-BRB/LFG)

(D. N.M.)

ORDER AND JUDGMENT *

Before TACHA, Chief Judge, EBEL , and BRISCOE , Circuit Judges.

After examining the briefs and appellate record, th is panel has determined unanimously that oral argument would not materiallyassist the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). Th e case is therefore ordered submitted without oral argument.2

Defendant-appellant Barber-Colman Co. appeals the d istrict court’s grant of summary judgment to plaintiff Ray Eugene Wilcox on his breach of contract suit. Our jurisdiction arises under 28 U.S.C. § 1291, andwe reverse. Because the parties are familiar with the details o f this matter, we begin with the sale, in October 1997, of Mr. Wilcox’s bus iness, DataTalk, to Barber-Colman. The October sale was structured thr ough a Share Purchase Agreement which provided for a maximum purchase pri ce of approximately $4,500,000. Two months later, the parties executeda “Consulting Agreement,” the effective term of which was from October 1, 199 7, through October 2000, and provided for annual compensation to Mr. Wilcox of $ 340,000 and for certain performance incentive bonuses. When combined, the amounts from the Share Purchase Agreement, the consulting fees, and the pe rformance bonuses would approach, and could exceed, the $6,000,000 Mr. Wilc ox had consistently demanded for the sale of his business. After working as a consultant under the agreement f or approximately one year, Mr. Wilcox notified Barber-Colman of his inte ntion to terminate the contract. When Barber-Colman refused to pay him th e annual compensation of $340,000 per year for the remaining two years, Mr. Wilcox brought suit. The Consulting Agreement provides in relevant part: The Sieve Environmental Controls (“S.E.C.”) divisio n of Barber Colman Company hereby agrees to use the serv ices of Ray E.3

Wilcox (“Consultant”) for the management and techni cal direction of the Development Engineering efforts of the group fo rmerly operated as DataTalk Development Corporation. The following terms and conditions shall apply: 1. Term. This agreement shall become effective October 1st, 1997 and continue in effect until Octo ber 2nd, 2000. 2. Termination of Agreement. S.E.C. and Consultant s hall have the right to terminate this agreement, with orwithout cause, with the issuance of a 90 day written notice of ter mination. In the event of such termination, Consultant shall be enti tled to receive from S.E.C. the remaining balance of the compensati on terms outlined below unless the termination is for wilful misconduct. 3. Payment. For services rendered hereunder, S.E.C. shall pay Consultant the compensation set forth in the attached Schedule A, which is incorporated herein by reference. 4. Task Assignment and Effort. Consultant agrees to serve faithfully and exclusively to the best of his abili ty, energy, skill and specialized knowledge in the execution of this agre ement.

. . . . 9. Entire Agreement. This agreement contains all commitments and major understandings between the parties hereto and with respect to the subject matter hereof and m ay not be modified except in writing and signed by Consultantand the duly authorized representative of S.E.C. 10. Other Agreement. The existence, performance or no nperformance of this agreement shall not effect [sic ] the obligations of the parties under the Share Purchase Agreement exec uted concurrently herewith.1 Confusingly, there are two schedule A’s to this Agr eement: one designated

simply Schedule A and the other Schedule “A.” Schedule “A” is the relevant schedule for our immediate purposes; the other Sche dule A defines various incentives based on identified deliverables. 4 Schedule “A” 1 provides:

1. Annual compensation of $340,000, plus applicable N ew Mexico gross receipts tax, payable on a monthly bas is. 2. Wilcox may earn an additional performance incentiv e of $152,000 for the first year for achieving certain p erformance goals. For the first year of the agreement, the goals are as set forth in page 2 of this Schedule “A”. For the remaining two year s of the agreement, Wilcox may earn an additional incentive of $100,000 per year for achieving certain performance goals. Barb er-Colman and Wilcox will agree, in good faith, to suitable and r easonable performance goals regarding this performance incent ive for the remaining two years. Appellant’s App. Vol. I at 41. The crux of the problem resulting in this lawsuit i s the language in paragraph number 2 of the consulting agreement, rel ating to termination. Mr. Wilcox argues that, in the event of termination by either party, he was entitled to the remaining balance of the compensati on; Barber-Colman maintains that only if it terminated the agreement could Mr. Wilcox rightfull y make such a claim. Otherwise, Barber-Colman argues, Mr. Wilcoxhad to perform under the agreement in order to be paid.2 The district court applied New Mexico law in accord ance with the

assumption of the parties. “Because the parties pr oceed on the assumption that [New Mexico] substantive contract law applies, we apply that law without further analysis.” Neustrom v. Union Pac. R.R. Co. , 156 F.3d 1057, 1062 (10th Cir. 1998). 5 After examining the surrounding circumstances, see Mark V, Inc. v. Mellekas , 845 P.2d 1232, 1235 (N.M. 1993), 2 the district court determined that the contract was unambiguous and that a reasonable person could reach only one conclusion as to its meaning. It therefore constru ed the contract as a matter of law and held that, upon termination by either party , Mr. Wilcox was entitled to receive the remaining balance of the compensation. The court then denied Barber-Colman’s motion for summary judgment and granted summary judgment to Mr. Wilcox. We review the grant of summary judgment de novo to determine whether there are any genuine issues of material fact and w hether the movant was entitled to judgment as a matter of law. Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs. , 165 F.3d 1321, 1326 (10th Cir.), cert. denied , 528 U.S. 815 (1999). “An issue of material fact is genuine if a reasonable jury could return a verdict for the non-movant.” Neustrom , 156 F.3d at 1062 (quotation omitted). We also subject the district court’s construction o f the contract as a matter of law to the same de novo review. Id.6

In New Mexico, the question of ambiguity is one of law and involves “whether a contractual term or provision is suscept ible to reasonable but conflicting meanings.” C.R. Anthony Co. v. Loretto Mall Partners , 817 P.2d 238, 243 (N.M. 1991).

Ambiguity, as it has been used in [New Mexico], is best understood as a proxy for describing lack of clarity in the parties’ expressions of mutual assent. The term, as it has been employed, incorporates a variety of conceptual problems inclu ding the distinctive notions of ambiguous syntax, ambiguous terms, vagueness, and general lack of clarity. Id. at 243 n.2. Based on these standards, we disagree with the district court’s conclusion that the termination provision of the co nsulting agreement is unambiguous. It is clear from the first sentence of the terminat ion paragraph that either side can terminate the agreement without cause uponproper notice. The ambiguity is created by the first phrase of the sec ond sentence: “In the event of such termination.” Does that mean termination by e ither party, referencing back to the termination discussed in the first sentence? If that is the true meaning, then Mr. Wilcox could terminate the agreement and still get paid the “remaining balance of the compensation.” This was the conclus ion of the district court. Or does the phrase “[i]n the event of such terminat ion” contemplate only termination by Barber-Colman upon proper notice, inwhich case Mr. Wilcox gets paid only if Barber-Colman terminates but not if he does? This interpretation7

makes some sense given other language in the contract. See Nearburg v. Yates Petroleum Corp. , 943 P.2d 560, 570 (N.M. Ct. App. 1997) (“In interpreting a contract, the court must consider the contract as awhole and give significance to each part.”). In the first paragraph, Barber-Colman promises to u se the services of Mr. Wilcox for management and technical direction; in paragraph three, Barber-Colman promises to pay Mr. Wilcox “for servi ces rendered” according to the compensation package specified in an attached s chedule; Mr. Wilcox promises in paragraph four “to serve faithfully andexclusively to the best of his ability, energy, skill and specialized knowledge . . . .” Appellant’s App. Vol. I at
41. Additionally, the “wilful misconduct” language at the end of the second sentence is difficult to understand in the context of termination by Mr. Wilcox. If “such termination” in the first phrase of the se cond sentence is read as termination by either party, and if the defendant c orporation were somehow guilty of “wilful misconduct,” then Mr. Wilcox woul d not be entitled to the remainder of the compensation due if he were to terminate--surely an incongruous result. In that context, the terminat ion referred to in the last phrase of the second sentence seems to refer only to termi nation of Mr. Wilcox by Barber-Colman.8

Because the phrase, “in the event of such terminati on,” is “susceptible to reasonable but conflicting meanings,” see C.R. Anthony , 817 P.2d at 243, we hold that it is ambiguous under New Mexico law and that the district court erred in determining it to be otherwise. Having found the term to be ambiguous, it is now th e province of a fact-finder to determine the meaning of the termination provision. See Mark V,
Inc. , 845 P.2d at 1235. Had there been no conflicting evidence regarding the circumstances surrounding the execution of the agre ement, the court would be free to determine the meaning of the termination pr ovision as a question of law by resorting to grammar, syntax, and traditional canons of contract construction. Id. at 1236. Here, however, the record is replete with conflicting evidence from the parties regarding their intent in entering into the consulting agreement. Plaintiff’s evidence indicates that the intent of t he parties was to ultimately pay the Wilcoxes $6,000,000 for DataTalk so that th ey could realize approximately $4,000,000 after taxes. Appellant’s App. Vol. II at 164-65, 170. One of defendant’s employees, Mr. Armbrust, acknowl edged that he knew Mr. Wilcox wanted $ 6,000,000 for his business, id. at 189-90, and would not consider selling for less than that, id. at 193. He also remembered that “putting those two events together” (presumably the stock pu rchase and the consulting agreement), would get Mr. Wilcox close to $6,000,000. Id. at 194. Mr. Wilcox’s9

evidence could further establish that when defendant could not come up with the $6,000,000 without approval from its board of direc tors, the parties crafted the consulting agreement as a vehicle to funnel additio nal monies to Mr. Wilcox. Vol. I at 100; Vol. II at 222, 227. The consulting agreement was simply another way of allocating funds to Mr. Wilcox that defendan t could justify internally, Vol. I at 128, without a lengthy corporate approval proc ess, Vol. II at 192-93. The sale of the business and the consulting agreement w ere tied together and represented a total package payment for DataTalk. Vol. I at 102; Vol. II at 172. Further, the letter of intent to sell the business provided that Mr. Wilcox would be employed by Barber-Colman for three years at $200,0 00 per year, Vol. I at 46, and that delivery of employment contracts for Mr. W ilcox and nine other engineers was part of Mr. Wilcox’s consideration in the sale of DataTalk, id. Mr. Wilcox testified that he felt he could sign the consulting agreement and then immediately tender his resignation and still be pai d the monies specified in the agreement. Id. at 55. On defendant’s side, the evidence is that Mr. Wilco x had to work as a consultant in order to be eligible for the monies specified in the agreement. Id. at 134. Barber-Colman wanted Mr. Wilcox to help with product development and to generally contribute to the business, id. at 52; Vol. II at 342, and specifically expected him to run the Albuquerque office during the term of the contract, id. at10

197. All acquisitions by defendant had to be appro ved, not just those over $3,000,000, id. at 205, and defendant’s president had not previous ly experienced problems from corporate superiors in exceeding $3,000,000 for an acquisition, id. at 93. The consultant fees contemplated in the agr eement were not intended to compensate Mr. Wilcox for the share purchase. Id. at 233. Mr. Wilcox was to be paid for his services, id. at 336, and the second sentence of the termination paragraph was to protect him from being fired arbitrarily by Barber-Colman, id. at 342. In summary, we hold that the termination paragraph of the consulting agreement is ambiguous and, because of the conflict ing evidence in the record, the meaning of that paragraph must be resolved by afact-finder. The judgment of the United States District Court for the District o f New Mexico is REVERSED, and this case is REMANDED for further proceedings c onsistent with this order and judgment.

Entered for the Court

Deanell Reece Tacha Chief Judge