Opinion ID: 2747894
Heading Depth: 3
Heading Rank: 1

Heading: Purported Assignment to Gorsuch Cooper

Text: According to the NTPB provision, the Credit Agreement “is made and entered into for the sole protection and benefit of the parties hereto and their respective permitted successors and assigns,” and all others are precluded from bringing claims. App. at 76. Gorsuch Cooper argues it is a permitted assignee and can therefore bring suit under the Credit Agreement. For evidence of the assignment, Gorsuch Cooper points to a January 6, 2004 agreement in which Gorsuch, Ltd. assigned Gorsuch Cooper its rights and obligations in a contract to purchase property. On January 7, 2004, Wells Fargo extended Gorsuch, Ltd. a $5.5 million loan (“Term Loan”). Gorsuch, Ltd. signed a promissory note (“Term Note”) for the same amount. Gorsuch, Ltd. transferred the proceeds of the loan to Gorsuch Cooper, which then purchased the property. Gorsuch Cooper contends Wells Fargo was “fully aware” that Gorsuch, Ltd. had assigned its rights to purchase the -9- property, knew the Term Loan would be used for that acquisition, “and intended and consented to this use.” Id. at 20. Because the Term Note was incorporated into the Credit Agreement by reference,8 Gorsuch Cooper argues the assignment from Gorsuch, Ltd. to Gorsuch Cooper was a permitted assignment under the Credit Agreement. Accepting the facts alleged, Gorsuch Cooper fails to make a plausible claim for relief. First, Gorsuch Cooper’s claim is barred by express non-assignment clauses in both the Term Loan and the Credit Agreement. The Term Loan states: “Borrower may not assign or transfer its interest hereunder without Bank’s prior written consent.” Id. at 108. The Credit Agreement similarly states: “Borrower may not assign or transfer its interests or rights hereunder without Bank’s prior written consent.” Id. at 75. Colorado law recognizes the validity of non-assignment clauses. Parrish Chiropractic Ctrs., P.C. v. Progressive Cas. Ins. Co., 874 P.2d 1049, 1052 (Colo. 1994) (en banc). Gorsuch Cooper contends Wells Fargo tacitly approved of the assignment, but they never demonstrate—or even allege—Wells Fargo gave written permission for the January 6, 2004 assignment to Gorsuch Cooper or to any future assignments. The express terms of the Term Loan and Credit Agreement therefore preclude recovery by Gorsuch Cooper. 8 Section 1.2(a) of the Credit Agreement provides: “Borrower’s obligation to repay the [Term Loan] shall be evidenced by a promissory note dated as of January 7, 2004 (‘[Term Note]’), all terms of which are incorporated herein by this reference.” App. at 64. -10- Even without a non-assignment clause, Colorado’s Credit Agreement Statute of Frauds prohibits implied assignments: “A credit agreement may not be implied under any circumstances, including, without limitation, from the relationship, fiduciary or otherwise, of the creditor and the debtor or from performance or partial performance by or on behalf of the creditor or debtor, or by promissory estoppel.” Colo. Rev. Stat. Ann. § 38-10-124(3). Absent written documentation, Gorsuch Cooper cannot allege Wells Fargo tacitly accepted legal obligations to Gorsuch Cooper under the Term Loan or Credit Agreement. Finally, the documents the Gorsuch Entities attach to their complaint pertain to collateral agreements and fail to demonstrate Wells Fargo was party to any assignment of rights or obligations.9 The written assignment from Gorsuch, Ltd. to Gorsuch Cooper assigns Gorsuch, Ltd.’s rights and obligations under a contract to buy and sell real estate with the Continental Divide Company. It does not reference Wells Fargo or the proceeds from the Term Loan. The Term Loan and Term Note are between Wells Fargo and Gorsuch, Ltd. Gorsuch Cooper delivered a Deed of Trust to Wells Fargo as security for 9 The Gorsuch Businesses attached the Credit Agreement, Assignment, Term Note, Term Loan, Loan Agreements, and Deed of Trust to their complaint as exhibits. We therefore consider these documents part of their complaint in our Rule 12(b)(6) analysis. Fed. R. Civ. P. 10(c); Hall v. Bellmon, 935 F.2d 1106, 1112 (10th Cir. 1991). -11- the Term Note, but did so as a guarantor, not a permitted assignee.10 The materials demonstrate Wells Fargo loaned money to Gorsuch, Ltd. and Gorsuch, Ltd. loaned money to Gorsuch Cooper. They do not show Wells Fargo was a party or consented in writing to any assignment of rights or obligations. The factual allegations made by the Gorsuch Entities, even if accepted as true, fail to demonstrate Gorsuch Cooper was a permitted assignee under the Credit Agreement. As a result, Gorsuch Cooper remains subject to the NTPB provision. 2. Gorsuch Entities’ Claim to be Third-Party Beneficiaries The Gorsuch Entities contend the district court erred when it dismissed their claim to be third-party beneficiaries. They argue the court gave undue weight to the NTPB provision. They further argue that other aspects of the Credit Agreement and the circumstances surrounding its formation demonstrate the Gorsuch Entities were intended third-party beneficiaries. We again do not find the Gorsuch Entities’ arguments persuasive. First, under Colorado law, NTPB provisions offer strong proof of the parties’ 10 Even in Gorsuch Cooper and Aspen’s own proposed third amended complaint, they describe the transfer of the proceeds from Gorsuch, Ltd. to Gorsuch Cooper as a separate transaction: “Gorsuch, Ltd. and Gorsuch Cooper entered into a separate loan transaction, whereby Gorsuch, Ltd. lent the $5,500,000.00 it had borrowed from Wells Fargo, to Gorsuch Cooper for the acquisition of the Gorsuch Cooper Property.” App. at 964. -12- intent. Second, the NTPB provision in the Credit Agreement is clear and unambiguous. Third, Wells Fargo did not waive the NTPB provision through its conduct.
Under Colorado law, the parties to a contract must intend to create third-party beneficiaries, and the best evidence of their intent is the contract itself: The key question is the intent of the parties to the actual contract to confer a benefit on a third party. That intent must appear from the contract itself or be shown by necessary implication. It is a question of fact to be determined by the terms of the contract taken as a whole, construed in the light of the circumstances under which it was made and the apparent purpose the parties were trying to accomplish. Concrete Contractors, Inc. v. E.B. Roberts Const. Co., 664 P.2d 722, 725 (Colo. App. 1982). If written documents are ambiguous, courts may consider extrinsic evidence to determine the parties’ intent. Chambliss/Jenkins Assocs. v. Forster, 650 P.2d 1315, 1318 (Colo. App. 1982). If an agreement is contained in multiple documents, courts construe those documents together. Id. Nevertheless, “[t]he intent of the parties to a contract is to be determined primarily from the language of the instrument itself.” Ad Two, Inc. v. City & Cnty. of Denver ex rel. Manager of Aviation, 9 P.3d 373, 376 (Colo. 2000) (en banc). Courts construing Colorado law have determined an NTPB provision offers strong proof of the parties’ intent to preclude recognition of third-party beneficiaries. In The Arc of The Pikes Peak Region v. Nat’l Mentor Holdings, No. 10-cv-01144, 2011 WL 1047081, at  (D. Colo. Mar. 18, 2011), the court considered NTPB provisions in two -13- contracts, determined “the contracting parties’ intent is expressed clearly in the contracts,” and concluded the alleged third-party beneficiaries did not state a claim on which relief could be granted. A party may allege it was intended to benefit from a contract, but such allegations do not overcome contradictory statements in the text of a contract attached to their complaint. See Flannery v. Recording Indus. Ass’n of Am., 354 F.3d 632, 638 (7th Cir. 2004) (“[W]hen a document contradicts a complaint to which it is attached, the document’s facts or allegations trump those in the complaint.”).
The Gorsuch Entities have not demonstrated they were intended beneficiaries of the Credit Agreement. Under the intent-focused inquiry prescribed by Colorado law, the express NTPB provision offers the clearest indication of the agreement between Gorsuch, Ltd. and Wells Fargo. Furthermore, the documents the Gorsuch Entities attached to their complaint identify Gorsuch, Ltd. and Wells Fargo as the sole contracting parties. Wells Fargo recognized the Gorsuch Entities as affiliates of Gorsuch, Ltd. and guarantors for security purposes, but never as borrowers with rights against Wells Fargo. Simply because a contract contemplates or references another party does not undermine an NTPB provision. Maisel v. Erickson Constr., Inc., No. 11-cv-00555, 2012 WL 3155834, at  (D. Colo. Aug. 3, 2012). The Gorsuch Entities cite Diamond Castle Partners IV PRC, L.P. v. IAC/InterActiveCorp, 82 A.D.3d 421 (N.Y. App. Div. 2011), for the proposition that -14- NTPB provisions are not dispositive, but the decision is readily distinguishable. In Diamond Castle, the boilerplate NTPB provision appeared alongside another provision giving the buyer’s affiliates enforceable rights, and the term “parties” was used throughout the agreement to include the buyer’s affiliates. Id. at 421-22. In the instant case, no such ambiguity exists. The Credit Agreement did not give the Gorsuch Entities enforceable rights against Wells Fargo, and the terms “Borrower” and “Affiliates” are used independently.11 The Gorsuch Entities refer to corporate resolutions delivered to Wells Fargo that identify the Gorsuch Entities as providers of “third party collateral,” but also acknowledge they “will benefit by any credit now or hereafter extended by Wells Fargo Bank, National Association (‘Bank’) to Gorsuch, Ltd. (‘Borrower’).” 12 App. at 306, 317. The language indicates Wells Fargo was aware the Gorsuch Entities would benefit from the line of credit, but does not contradict the terms of the Credit Agreement, which indicates the proceeds from the line of credit “shall be used to finance Borrower’s 11 The term “parties” in the NTPB provision refers to Wells Fargo and Gorsuch, Ltd., who are listed as the Bank and the Borrower in the Credit Agreement. App. at 63, 78. 12 The resolution for Gorsuch, Limited at Keystone Mountain and certificate for Gorsuch Cooper contain this phrase but omit the word “any.” App. at 87, 328. The various guaranty agreements between Wells Fargo and the Gorsuch Entities were referenced in the complaint and the Credit Agreement, App. at 37, 69, and the certificate for Gorsuch Cooper was attached to the complaint, App. at 87. -15- working capital requirements” and bars third parties from staking claims to it. Id. at 63. In light of the Credit Agreement’s clear distinction between Gorsuch, Ltd. as the borrower and the Gorsuch Entities as guarantors or third-party obligors, language acknowledging the Gorsuch Entities would benefit from credit does not make them intended beneficiaries. The district court did not err in deciding the explicit text of the NTPB provision barred the Gorsuch Entities’ claims, even in light of these collateral documents.
The Gorsuch Entities finally argue for the first time on appeal that Wells Fargo waived the NTPB provision through its conduct. Because this argument was forfeited below, we review it for plain error. Richison v. Ernest Grp., Inc., 634 F.3d 1123, 112728 (10th Cir. 2011). “To show plain error, a party must establish the presence of (1) error, (2) that is plain, which (3) affects substantial rights, and which (4) seriously affects the fairness, integrity, or public reputation of judicial proceedings.” Id. The Gorsuch Entities fail to demonstrate error because Wells Fargo did not waive the NTPB provision. The district court considered the circumstances surrounding the Credit Agreement but concluded Colorado law limits circumstantial inferences in the face of a clear and plainly understood provision. The Credit Agreement includes not only an NTPB provision but also provisions disclaiming implied waivers and requiring modifications to be in writing and signed. The provisions closely track the Colorado -16- Credit Agreement Statute of Frauds, which prohibits implied credit agreements, Colo. Rev. Stat. Ann. § 38-10-124(3), and broadly defines “credit agreement” to include “[a]ny amendment of, cancellation of, waiver of, or substitution for any or all of the terms or provisions” of a credit agreement, Colo. Rev. Stat. Ann. § 38-10-124(1)(a)(2). Colorado courts have held “the plain language of the statute . . . expressly precludes exceptions by implication or construction.” Hewitt v. Pitkin Cnty. Bank & Trust Co., 931 P.2d 456, 458 (Colo. App. 1995) (quotations omitted). Our conclusion that Wells Fargo did not waive the NTPB provision is supported by the district court’s findings, the text of the Credit Agreement, and Colorado law. The district court did not err, much less plainly err.