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

### NOV 6 2000 

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

TENTH CIRCUIT

AG SERVICES OF AMERICA, INC., an Iowa corporation, Plaintiff, v. JOHN D. NIELSEN, also known as Jack Nielsen, and DIAMOND HILLS FARMS, CLOVIS, INC., a New Mexico Corporation, Defendants-Third-PartyPlaintiffs-Third-Party CounterDefendants-Appellees,

v. TERRY LUNDELL,Third-Party Defendant- ThirdParty Counter-ClaimantAppellant. No. 99-2094

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW MEXICO (D.C. No. CIV-96-1637-JC/WWD)

Submitted on the briefs: Terry Lundell, Pro Se. Stephen S. Hamilton, Montgomery & Andrews, P.A., Santa Fe, New Mexico, and**1** The Honorable H. Dale Cook, Senior United States Di strict Judge for the

Northern District of Oklahoma, sitting by designati on.

**2** After examining the briefs and appellate record, th is panel has determined unanimously to honor the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34 (f). the case is therefore sub mitted without oral argument. -2- Laurice Margheim, Curtiss, Moravek, Curtiss & Maghe im, Alliance, Nebraska, for Defendants-Appellees.

Before MURPHY andHOLLOWAY , Circuit Judges, and COOK , District Judge. 1

HOLLOWAY , Circuit Judge.

This appeal is brought by Mr. Terry Lundell, who wa s a third-party defendant and counter-claimant in the action below. The only district court ruling at issue in this appeal is the grant of summary judgment agains t Lundell on his third-party counterclaim. Our review is de novo. 2 Ag Services of America, Inc. (Ag Services) brought an action in the district court against Mr. John Nielsen and Diamond Hills Farms, Clovis, Inc. (DHFC), seeking to hold them liable for the unpaid agricult ural loan which Ag Services had made to Lundell for the 1992 growing season. That primary controversy is the subject of a related opinion filed this day in No. 99-2081, Ag Services of America, Inc. v. Nielsen, et al. , where a more complete review of the underlying fact s may be**3** The theories of relief asserted in the eight counts wer e breach of the implied

covenant of good faith and fair dealing, breach of fiduciary duty, negligent misrepresentation, fraud, violation of the New Mexi co Unfair Practices Act, prima facie tort, tortious interference with contractual relations, and economic coercion.

**4** Lundell’s counterclaim was alleged against both Nielsenand DHFC, and his notice of appeal named both of those parties. In h is briefs, however, Lundell has included only Nielsen in the caption and has presented no argument directed to DHFC’s involvement, if any, in the facts giving ris e to his claims. We therefore deem the appeal as to DHFC to have been abandoned b y Lundell. -3- found.Nielsen and DHFC filed a third-party complaint agai nst Lundell, alleging that Lundell should be liable to them for indemnity for any judgment in favor of plaintiff Ag Services. Lundell then filed a counterclaim aga inst Nielsen and DHFC. Lundell sought recovery of damages against Nielsen and DHFC in eight counts. 3 Nielsen and DHFC moved for summary judgment against Lundell on the issues raised in his counterclaim. The district court granted the motio n for summary judgment, and when final judgment disposing of all claims had bee n entered, Lundell brought this appeal. 4
II All of the claims except one alleging tortious inte rference with contractual rights were based entirely on the events of 1992, w hen Nielsen and Lundell had formed DHFC and engaged in a potato farming venture in the Clovis, New Mexico area, events which are reviewed in much more depth in our opinion in the related, primary appeal, No. 99-2081. For present purposes only a much truncated overview-4-

of the underlying facts is necessary. Lundell had borrowed operating funds from Ag Servic es in previous years. In the second half of 1991 he became interested in lea sing a large farm in the Clovis area from Jeff Jorde and in growing potatoes on part of that farm. Eventually Ag Services agreed to loan up to $800,000.00 for this venture, at least partially in reliance on Nielsen’s association with the project, which was perceived as valuable because of Nielsen’s experience in the more than us ually risky business of potato farming and his contacts with potato chip companies which could contract in advance to buy large quantities of the crop. Although the potato crop turned out fairly well, th e Ag Services loan remained unpaid. Nielsen had not been reimbursed for most o f his large contributions to the effort, and Nielsen believed that Lundell had taken a substantial amount of the proceeds for his personal use. Eventually, in Dece mber 1992, Lundell acknowledged these facts and executed a promissory note to Niels en in the amount of $355,001.11. Lundell failed to pay the note, and in June 1993, N ielsen sued Lundell on the note in state court in Arizona. Nielsen took judgment b y default against Lundell in that action in December 1993. In the instant case, the district court determined that the Arizona default judgment barred all of Lundell’s claims, except the tortious interference claim, under the doctrine of res judicata . The district judge held that under the Full Fait h and-5-

Credit Act, 28 U.S.C. § 1738, the Arizona judgment should be given the same effect that it would be given by the courts of Arizona, citing Matsushita Elec. Indus. Co. v. Epstein , 516 U.S. 367 (1996). He then determined that def ault judgments are given the same preclusive effect under Arizona law as judgments on the merits, citing Technical Air Products, Inc. v. Sheridan-Gray, Inc. , 445 P.2d 426 (Ariz. 1968). Furthermore, the district court noted, also on the authority of Technical Air Products , that judgment by default bars any claims of the d efaulting defendant which were compulsory counterclaims in the first proceedi ng. The judge went on to find that all of Lundell’s counterclaims, except the tortious interference claim, clearly arose out of the same transaction on which Nielsen’ s Arizona lawsuit had been based, and the court accordingly held those counter claims barred. On appeal, Lundell’s pro se brief devotes only one sentence to this part of th e district court’s ruling, asserting that the distric t court should have applied New Mexico law to determine the preclusive effect to by given to the Arizona judgment. This contention is erroneous. The district court c orrectly held that the law of Arizona must govern the preclusive effect to be given to the Arizona judgment. See Kremer v. Chemical Const. Corp. , 456 U.S. 461, 466 (1985). Because appellant makes no other argument, we need not consider this point further, but we do note that not only did the judge apply the correct law, he appears to have applied it correctly.**5** As it turned out, Nielsen leased only about 500 acr es of the more than 4,000

acre farm for 1993. -6- III When Lundell leased the Jorde farm for the 1992 gro wing season, he signed a five-year lease. In January 1993, Lundell had still failed to pay the second half of the lease payment for 1992 and was in default. Jor de terminated the lease. Lundell’s tortious interference claim is based on the allegat ion that Nielsen improperly influenced Jorde to declare default so that he, Nie lsen, could lease the farm for 1993. He produced evidence that Jorde and Nielsen had dis cussed Lundell’s possible default before the end of the first lease year in asingle conversation, and that Nielsen had expressed an interest in leasing the farm for 1993 if the default did

occur. 5 The district court found, however, that the undis puted evidence was that Jorde terminated Lundell’s lease only because of Lu ndell’s default, not because he wanted to lease to Nielsen instead of Lundell. On appeal, Lundell argues that Jorde’s motivation p resented a genuine issue of material fact precluding summary judgment. In e ssence, this is an argument that the finder of fact could have found Jorde’s testimo ny untrue, because Lundell does not identify any evidence supporting his allegation s. As the district court apparently recognized, this is not the same thing as producing evidence to support the claimed interference. In any event, we conclude that the s ummary judgment was properly-7-

granted because, if for no other reason, Lundell fa iled even to allege, much less to show evidence of, an essential element of this clai m, a breach of his contract by Jorde as a result of the alleged interference. Even if Lundell’s allegations are taken as true, wh ich would be an overly generous assumption in conflict with the summary judgment framework of Rule 56, Lundell still could not prevail on this claim. Lun dell defaulted on the lease. Jorde therefore did not breach the lease when he declared Lundell to be in default. Lundell has not shown any legally cognizable injury from th e alleged interference because there is no evidence that he otherwise would have b een able to pay the rent and to be entitled to remain in possession of the farm. See Wolf v. Perry , 339 P.2d 679 (N.M. 1959) (“There must be some . . . overt act wh ich influences the promisor to breach his contract.”). Mr. Lundell has not even alleged that Mr. Jorde bre ached the contract, nor has Lundell directed us to any evidence tending to showthat, absent the alleged interference, he would have been able to perform an d thus retain the leasehold interest. The district court did not err in granti ng summary judgment in favor of Nielsen on this claim. For the foregoing reasons, the judgment of the district court is AFFIRMED.