Opinion ID: 167572
Heading Depth: 2
Heading Rank: 3

Heading: Judicial Estoppel and the Demery Declaration

Text: The Harmsens next contend that the district court erred by failing to invoke the doctrine of judicial estoppel against Lloyd’s as to its exchange rate argument because Lloyd’s previously agreed to the $1.51 exchange rate in an Indiana case. 2 Specifically, the Harmsens rely on Society of Lloyd’s v. Tufts, Civil Action No. 03-2316 (E.D. La. July 27, 2004) (applying the exchange rate as of the date of the English judgments), and Society of Lloyd’s v. Abramson, No. 3:03-MC-001-P, 2004 U.S. Dist. LEXIS 16092, at  (N.D. Tex. Mar. 29, 2004) (applying the exchange rate set forth in Clause 18 of the Equitas Contract). -8- Lloyd’s, through the Demery Declaration, counters that it never made such an agreement. According to Demery, Lloyd’s did not agree to the $1.51 exchange rate in the Indiana case, but accidentally accepted less than the amount owed in that case due to his miscommunication with another Lloyd’s employee. The Harmsens charge the district court with committing additional error by failing to strike the Demery Declaration as being in violation of the parol evidence rule. We recently explained the doctrine of judicial estoppel as follows: Where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him. Johnson v. Lindon City Corp., 405 F.3d 1065, 1069 (10th Cir. 2005) (quotation and alteration omitted). In this case, the district court rejected the Harmsens’ judicial estoppel argument based on Demery’s explanation of what happened in the Indiana case. Therefore, the strength of that argument on appeal turns on whether the district court’s consideration of the Demery Declaration was proper. The parol evidence rule is a substantive rule of evidence. Its application in federal diversity cases is, therefore, governed by state law. See Blanke v. Alexander, 152 F.3d 1224, 1231 (10th Cir. 1998). Utah recognizes the doctrine of partial integration under which parol evidence not inconsistent with the written -9- portions of a contract is admissible to prove a part not reduced to writing. Stanger v. Sentinel Sec. Life Ins. Co., 669 P.2d 1201, 1205 (Utah 1983). In addition, “a court may consider extrinsic evidence if the meaning of the contract is ambiguous or uncertain.” Ward v. Intermountain Farmers Ass'n, 907 P.2d 264, 268 (Utah 1995). Whether a contract is partially integrated or ambiguous such that resort to parol evidence by the district court was proper is generally a question of law that we review de novo. See Flying J Inc. v. Comdata Network, Inc., 405 F.3d 821, 832 (10th Cir. 2005), cert. denied, 126 S. Ct. 1331 (2006); accord Betaco, Inc. v. Cessna Aircraft Co., 32 F.3d 1126, 1131 (7th Cir. 1994). On the other hand, the district court’s interpretation of the extrinsic evidence is a finding of fact that we review for clear error. See Flying J Inc., 405 F.3d at 832; Betaco, 32 F.3d at 1131. It is unclear in this case whether the district court admitted the Demery Declaration pursuant to the doctrine of partial integration or to clarify ambiguity in Clause 18. Either way, we agree with Lloyd’s that the Equitas Contract is only partially integrated in terms of the exchange rate issue. 3 By its own terms, Clause 18 applies only to Equitas premiums that were “denominated in US Dollars.” Aplt. App. at 403. It is entirely silent as to what exchange rate should apply to 3 Since the record contains only an excerpt from the Equitas Contract, and the parties cite to no other provision, we assume that there are no other provisions relevant to the parties’ exchange rate arguments. -10- U.S. judgments expressed in English pounds. Therefore, the district court committed no error in relying on the Demery Declaration to clarify the scope of Clause 18 or as a basis to reject the Harmsens’ judicial estoppel argument.