Court Opinion

ID: 3159383
Source: CourtListenerOpinion
Date Created: 2015-12-02 18:01:35.696458+00
Date Added: 2024-06-11T12:13:51.793864
License: Public Domain

FILED
                                                                    United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                        Tenth Circuit

                             FOR THE TENTH CIRCUIT                       December 2, 2015
                         _________________________________
                                                                        Elisabeth A. Shumaker
                                                                            Clerk of Court
EMORY RUSSELL; STEVE LYMAN;
GARY KELLEY; LEE MALLOY;
LARRY ROBINSON; GARY
HAMILTON; ART SCHAAP; GUY
SMITH,

      Plaintiffs - Appellants,
                                                           No. 15-2042
v.                                             (D.C. No. 1:13-CV-00760-KG-LAM)
                                                            (D. N.M.)
THE NEW MEXICO INTERSTATE
STREAM COMMISSION; THE NEW
MEXICO ENERGY, MINERALS AND
NATURAL RESOURCES
DEPARTMENT, State Parks Division;
ESTEVAN LOPEZ, Individually and in his
official capacity as Director of the New
Mexico Interstate Stream Commission;
TOMMY MUTZ, Individually and in his
official capacity as Director of the New
Mexico State Parks Division,

      Defendants - Appellees.
                      _________________________________

                             ORDER AND JUDGMENT*
                         _________________________________

Before TYMKOVICH, Chief Judge, HOLMES and PHILLIPS, Circuit Judges.
                 _________________________________

      *
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
      This case involves the termination of dock license agreements on New

Mexico’s Ute Reservoir. Plaintiffs appeal from three orders of the district court, the

combined effect of which was to grant summary judgment in favor of defendants on

plaintiffs’ state and federal claims challenging the terminations. We dismiss part of

this appeal for lack of jurisdiction, and, exercising jurisdiction under 28 U.S.C.

§ 1291 over the remainder of the appeal, affirm the judgment.

I. Background

      Plaintiffs entered into license agreements with the New Mexico Interstate

Stream Commission that permitted them to maintain private boat docks at Ute

Reservoir in Ute Lake State Park. Ute Reservoir is managed by the Commission and

the State Parks Division of the New Mexico Energy, Minerals, and Natural Resources

Department (“Division”). In May 2013, defendants informed plaintiffs by letter that

their license agreements were being terminated because the Division had determined

that the docks had become a threat to public safety. A drought had yielded extremely

low water levels at the reservoir, “grounding” the docks and causing them structural

damage.

      Plaintiffs sued, asserting a federal claim for violation of their due process

rights under 42 U.S.C. § 1983 and a state claim for breach of contract. Both sides

moved for summary judgment. In short, the court determined plaintiffs did not have

a cognizable property interest in the license agreements, and it granted summary

judgment in defendants’ favor on the due process claim. It dismissed the contract

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claim without prejudice. And it awarded defendants their costs and attorney fees

pursuant to the indemnity provision in the license agreements.

      Plaintiffs filed a Motion to Alter or Amend Judgment, arguing 42 U.S.C.

§ 1988 prohibited awarding attorney fees incurred in connection with their § 1983

claim based on the license agreements’ indemnity provision and that the indemnity

provision was unconscionable. The court agreed with the former but not the latter,

and amended its previous award by limiting defendants to costs and attorney fees

incurred in connection with the contract claim only.

      Plaintiffs contend the district court erred by concluding (1) they did not have a

property interest in the license agreements and (2) the indemnity provision of license

agreements was neither procedurally nor substantively unconscionable.

      Defendants, in turn, argue that we lack jurisdiction to consider plaintiffs’ first

argument because they did not timely appeal the district court’s August 2014 orders

disposing of their due process claim. As explained below, we agree with defendants’

jurisdictional argument and therefore dismiss the appeal in part as to the due process

claim. In addition, we reject plaintiffs’ contention that the indemnity provision is

unconscionable.

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II. Jurisdiction

      Where the United States is not a party, a civil notice of appeal must be filed

within thirty days of the order or judgment being appealed. Fed. R. App. P. 4(a)(1).

“A timely filed notice of appeal is an absolute prerequisite to our jurisdiction.” Utah

Women’s Clinic, Inc. v. Leavitt, 75 F.3d 564, 566 (10th Cir. 1995). Here, the orders

granting summary judgment on plaintiffs’ due process claim were entered on

August 29, 2014, yet plaintiffs did not file their notice of appeal until March 4, 2015.

Plaintiffs contend that their Motion to Alter or Amend Judgment, properly construed

as a Rule 59(e) motion, tolled the thirty-day period until the entry of the order

disposing the motion. However, even if we construe plaintiffs’ motion as a

Rule 59(e) motion, it is well established that “a Rule 59(e) motion, challenging only

the award of costs and attorney’s fees, does not toll the time for a merits appeal.” Id.

at 567. In an attempt to circumvent this clear precedent, plaintiffs assert that their

motion is distinguishable from a typical challenge to an award of costs and attorney

fees because it addressed the substantive correctness of the district court’s legal

reasoning. But the correctness of plaintiffs’ legal argument does not change the fact

that their motion challenged only costs and attorney fees. See Yost v. Stout, 607 F.3d
1239, 1243 (10th Cir. 2010) (concluding that a motion to alter or amend the judgment

challenging only the court’s denial of fees – and not the court’s judgment on its

merits – did not toll the time in which an appeal could be taken on the merits).

Therefore, Yost and Utah Women’s Clinic compel the conclusion that we lack

jurisdiction to reach the merits of plaintiffs’ due process claim in this appeal.

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III. Indemnity Provision

      In awarding defendants their attorney fees and costs, the district court relied on

the indemnity provision in the license agreements, which provides, in relevant part:

“Licensee shall further indemnify the Commission for any attorneys’ fees incurred in

connection with, and/or staff attorneys’ salaries allocable to, any action the

Commission takes to enforce this Agreement.” Aplt. App., Vol. 1, at 50. Plaintiffs

argue this provision should not be enforced because it is both procedurally and

substantively unconscionable. We are not persuaded.

      We review de novo issues relating to unconscionability of a contract provision.

Figueroa v. THI of New Mexico at Casa Arena Blanca, LLC, 2013-NMCA-077, ¶ 23,

306 P.3d 480. To determine whether a contract is unconscionable, we apply state

law. THI of New Mexico at Hobbs Center, LLC v. Patton, 741 F.3d 1162, 1169

(10th Cir. 2014). Under New Mexico law, a court may decline to enforce a contract

provision if it is procedurally unconscionable, substantively unconscionable, or a

combination of both. Strausberg v. Laurel Healthcare Providers, LLC,

2013-NMSC-032, ¶ 32, 304 P.3d 409. Procedural unconscionability depends on “the

particular factual circumstances surrounding the formation of the contract, including

the relative bargaining strength, sophistication of the parties, and the extent to which

either party felt free to accept or decline terms demanded by the other.” Figueroa,

2012-NMCA-077, ¶ 22, 306 P.3d 480 (internal quotation marks omitted).

Substantive unconscionability concerns “the legality and fairness of the contract

terms themselves, including whether the contract terms are commercially reasonable

                                           5
and fair, the purpose and effect of the terms, the one-sidedness of the terms, and

other similar public policy concerns.” Id. (internal quotation marks omitted).

Because unconscionability is an affirmative contract defense, the party alleging

unconscionability has the burden of proving a contract provision is unenforceable on

that basis. Strausberg, 2013-NMSC-032, ¶ 39, 304 P.3d 409.

      In support of their argument that the indemnity provision is procedurally

unconscionable, plaintiffs state in their brief that by the time they were presented

with copies of the license agreement containing the provision, their docks were

already floating on Ute Reservoir at a cost of tens of thousands of dollars each, and

thus plaintiffs were offered the license agreements on a take-it-or-leave-it basis. But

plaintiffs point to no evidence in the record that they did not freely and willingly

enter into the license agreements. Their conclusory assertion, devoid of factual

support, is insufficient to prove procedural unconscionability. Plaintiffs’ argument

concerning substantive unconscionability also is underdeveloped. Rather than

arguing that the provision is unconscionable as applied to them in this case, they raise

various arguments as to how it might be applied in a way that is one-sided and

unconscionable, such as by billing them for the time spent drafting the termination

letters. In the absence of any evidence that plaintiffs’ were actually billed for this

time or that the indemnity provision was actually applied to them in an unfair

manner, they have not met their burden of proving substantive unconscionability.

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The appeal is dismissed in part, and the judgment is affirmed.

                                    Entered for the Court

                                    Timothy M. Tymkovich
                                    Chief Judge

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