Opinion ID: 172000
Heading Depth: 2
Heading Rank: 2

Heading: Plaintiffs' Fiduciary-Duty Claims

Text: Mr. Haynes and HaynesTSA have alleged that Trane breached fiduciary duties arising from a confidential relationship. They claim that Trane assumed fiduciary duties by inducing their trust, and breached those duties by maneuvering to squeeze, and ultimately seize control of, their operations. The district court granted JMOL against these claims at the close of evidence, and the Plaintiffs contend that in doing so it violated the law of the case established on the first appeal. As with Mr. Haynes's contract-modification claim, we consider the merits of the claim before addressing the law of the case. Our review is de novo. See McInnis, 458 F.3d at 1136. Because the parties assume that Trane's fiduciary obligations (if any) were controlled by Colorado law, we assume the same. See Grynberg, 538 F.3d at 1346. Under that law, to prevail on a fiduciary-duty claim based on a confidential relationship, the Plaintiffs had to show that (1) they reposed trust in Trane; (2) doing so was justified or was invited, ostensibly accepted, or acquiesced in by Trane; (3) Trane assumed a primary duty to represent [their] interest[s] in the subject of the transaction; (4) the duty that arose by reason of the confidential relationship extended to the subject matter of their claims; and (5) they were damaged by the violation of that duty. Equitex, Inc. v. Ungar, 60 P.3d 746, 752 (Colo.Ct.App. 2002) (internal quotation marks omitted). We need not analyze the final four elements, for the Plaintiffs' evidence failed to satisfy the first. As the Plaintiffs stress, Mr. Haynes's testimony could support the second element: He stated, for instance, that Trane management had told franchisees that they should trust the Trane company, and that they were in a partnership type of relationship. Aplts. App. Vol. V at 2202. He also testified that Trane officials stated that Philosophically, we strive to view and treat our distributors as a partner first, a customer second, and a friend third. Id. at 2205. But the Plaintiffs had to show more to establish the first element; they had to show that they actually reposed trust in Trane. See Equitex, 60 P.3d at 752. They presented no evidence, however, that they trusted Trane. Indeed, Mr. Haynes's testimony demonstrated that his relationship with Trane was, if anything, one of deepening mistrust. He explained that as early as 1975 he and other franchisees had formed an association of franchisees in response to adverse Trane policies. According to Mr. Haynes, strong disagreements arose in the 1980s when Trane limited the profits franchisees could draw from the sale of non-Trane products before sharing with Trane. Mr. Haynes explained that franchisees generally felt very, very strongly that there was no reason for Trane to participate in third party transactions, Aplts. App. Vol. V at 2098, and that he personally viewed this and other Trane conduct as an incursion on the managerial autonomy secured by his franchise agreement. Moreover, Mr. Haynes was not concerned merely with Trane's managerial overreaching; there was a graver threat. Mr. Haynes testified that in 1985 Trane unveiled its long-term plan to acquire its independent franchises. In sum, the evidence showed that the Plaintiffs were on their guard in their dealings with Trane. With no evidence of their reposed trust, there simply was not a legally sufficient evidentiary basis to find in the Plaintiffs' favor. Fed. R.Civ.P. 50(a)(1). No fiduciary relationship existed. The Plaintiffs contend, however, that the law-of-the-case doctrine requires that we reverse the district court's rejection of their fiduciary-duty claims. They point to our holding in Haynes I that the district court erroneously granted summary judgment against those claims. See 51 Fed. Appx. at 801. According to the Plaintiffs, that holding precluded JMOL in the second trial. We disagree. As an initial matter, it is not certain whether a reversal of summary judgment operates as the law of the case to prevent a later grant of JMOL. Compare Stagl v. Delta Air Lines, Inc., 117 F.3d 76, 80 (2d Cir.1997) (rejecting contention that reversal of summary judgment was law of the case preventing JMOL on ground that propriety of JMOL is to be determined by the record that is made [after remand], not by the law of the case doctrine), with Kerman v. City of New York, 374 F.3d 93, 110 (2d Cir.2004) (law of the case bars JMOL on evidence previously deemed sufficient to overcome summary judgment). But we need not resolve that issue here. Even if a ruling on summary judgment can create the law of the case controlling a later JMOL determination, an exception to the doctrine applies here. In Haynes I we reversed summary judgment on the basis of an affidavit by Mr. Haynes. See 51 Fed.Appx. at 801. In that affidavit he stated that, based on the parties' long-standing relationship and a number of assurances made by Trane, he did trust Trane. Aplts. App. Vol. I at 155G. This statement satisfied the first element of the fiduciary-duty claims. But, as noted above, his testimony at the second trial omitted this assertion. The district court did not depart from any legal principle established in Haynes I by ruling at the second trial that the Plaintiffs had not made out their fiduciary-duty claims. Thus, the law-of-the-case doctrine did not bar entry of JMOL. See Wessel, 463 F.3d at 1143.