Court Opinion

ID: 2766848
Source: CourtListenerOpinion
Date Created: 2015-01-06 17:00:47.952329+00
Date Added: 2024-06-11T10:45:45.351145
License: Public Domain

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

                                    TENTH CIRCUIT                           January 6, 2015

                                                                          Elisabeth A. Shumaker
 DIEBOLD ENTERPRISES SECURITY                                                 Clerk of Court
 SYSTEMS, INC., a New York
 corporation,

        Plaintiff - Appellant,

 v.                                                           No. 14-1010
                                                 (D.C. No. 1:13-CV-00505-REB-KLM)
 LOW VOLTAGE WIRING, LTD., a                                   (D. Colo.)
 Colorado corporation, d/b/a LVW
 Electronics, Inc.,

        Defendant - Appellee.

                                 ORDER AND JUDGMENT*

Before LUCERO, MURPHY, and McHUGH, Circuit Judges.

                                   I. INTRODUCTION

       The question in this case is whether Diebold Enterprises Security Systems, Inc.

(Diebold) is entitled to recover sales taxes it claims to have incurred in performing work

        * After examining Appellant=s brief and the appellate record, this panel has
determined unanimously that oral argument would not materially assist the determination
of this appeal. See Fed. R. App. P. 34(a)(2) and 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 This order and judgment is not
binding precedent, except under the doctrines of law of the case, res judicata, and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.
pursuant to a subcontract with Low Voltage Wiring (Low Voltage). Exercising

jurisdiction under 28 U.S.C. § 1291, we conclude Diebold unambiguously released all of

its claims related to the subcontract and is therefore not entitled to any additional amounts

for sales tax. As a result, we affirm the grant of summary judgment in favor of Low

Voltage, but on a different basis than that relied upon by the district court.

                                   II. BACKGROUND

                                 A. Factual Background

       Low Voltage contracted with the United States Army Engineering and Support

Center (the Government) to install certain security systems at Fort George G. Meade,

Maryland (the Project). In January 2010, Low Voltage hired Diebold to perform some of

the work on the Project under a separate subcontract (the Subcontract).

1. Subcontract Provisions

       Of relevance here, the Subcontract contained a number of provisions which impact

the total amount due, including contractual provisions in the body of the Subcontract

itself, as well as exhibits and contract provisions incorporated into the Subcontract by

reference. The provisions in the main body of the Subcontract do not expressly address

sales tax, but otherwise limit the Subcontract price. However, government contractor

provisions and an exhibit that are incorporated into the Subcontract by reference do make

express reference to sales tax. We briefly describe the relevant contract language.

       Section C, paragraph (8) of the Subcontract, entitled “Limitation of Funds”

contains five subparagraphs, (a) through (e). Joint Appendix (J.A.) 301–302.

                                             -2-
Subparagraph (a) establishes the “cumulative total sum presently available for payment

and allotted to this Subcontract” as the amount of $6,813,511.58. Subparagraph (a) also

states: “Diebold’s Pricing Proposal is attached as Exhibit C, Section J and hereby

incorporated by reference.” Id. at 301. In turn, Exhibit C is a “Pricing Proposal

Summary,” which states a “Total Project Material & Installation with Maintenance &

Monitoring” price of “$6,813,511.58,” the same amount included in the body of

subparagraph (a). Id. at 301, 353. Subsequent change orders increased the $6,813,511.58

cumulative total sum allotted to the Subcontract to $7,889,051.49.

       Subparagraph (b) of Section C (8) of the Subcontract provides, “The

Subcontractor agrees to perform the work on this Subcontract as set forth in the attached

Statement of Work incorporated herein as Attachments, Exhibits A and B.” J.A. 301.

Thus, subparagraph (b) incorporates two exhibits by reference into the Subcontract. Only

the first, Exhibit A, is relevant to the issues on appeal. Exhibit A is a “Fort Meade

Statement of Work from Diebold” and contains a description of the work to be performed

under the Subcontract. Id. at 219. The first section of Exhibit A is the “Diebold Executive

Summary,” id., which includes “Conditions,” “Clarifications,” and “Exclusions.” Id. at

243–44. Of significance here, the third-numbered Exclusion states:

       Taxes-All prices for items are exclusive of taxes such as . . . sales . . . taxes
       which may be imposed by any taxing authority. If such taxes must be paid
       by Diebold or if Diebold is liable for the collection of such tax . . . , [t]he
       amount thereof shall be in addition to the amounts at which Diebold offers
       to sell items herein. Customer agrees to pay all such taxes or to reimburse
       Diebold for such taxes.

                                              -3-
Id. at 244. This same “Exclusion” appears in two other sections of Exhibit A: the “Duress

Executive Summary” and the “Training Plan.” Id. at 251, 290.

      Subparagraphs C (8)(c) and C (8)(d) also relate to the amount due under the

Subcontract:

      c.       The Subcontractor agrees to perform work as specified within this
               Subcontract up to the point at which the total amount paid and
               payable by [Low Voltage] pursuant to the terms of this Subcontract
               equals, but does not exceed the total amount actually allotted to the
               Subcontract.

      d.       No notice, communication or representation in any other form or
               from any person other than written notice from the [Low Voltage’s]
               Contracts Administrator shall affect the amount allotted to the
               Subcontract. In the absence of the specified written notice, [Low
               Voltage] shall not be obligated to reimburse the Subcontractor for
               any costs in excess of the total amount then allotted to the
               Subcontract, whether those excess costs were incurred during the
               course of the Subcontract or as a result of termination. Any costs
               incurred by Subcontractor in excess of the amount allotted shall not
               be an allowable cost of the Subcontract if the allotment is
               subsequently increased, unless the specified notice by [Low
               Voltage’s] Contracts Administrator specifically states that such costs
               are allowable. . . . Change orders issued pursuant to the Changes
               clause, or any other clause of this Subcontract, shall not be
               considered an authorization to the Subcontractor to exceed the
               amount allotted to the Subcontract in absence of a statement in the
               change order, or other contractual modification, increasing the
               amount allotted.

Id. at 301–302.

      The next provision of relevance is found in the “Subcontract Clauses” section of

the Subcontract. Paragraph 52, incorporates various Federal Acquisition Regulations

(FAR): “This Subcontract incorporates the following clauses by reference, with the same

                                             -4-
force and effect as if they were given in full text. . . . 52.229-1[:] State and Local Taxes

. . . 52.229-[3][:] Federal, State And Local Taxes.”1 Id. at 311–13. FAR 52-229-3

provides:

       Federal, State, and Local Taxes (FEB 2013)

       ...

       (b)    (1) The contract price includes all applicable Federal, State, and
              local taxes and duties, except as provided in subparagraph (b)(2)(i)
              of this clause.

              (2) Taxes imposed under 26 U.S.C. 5000C may not be—

                     (i) Included in the contract price; nor

                     (ii) Reimbursed.

48 C.F.R. § 52.229-3 (emphasis added).2 But the Subcontract also incorporates FAR

52.229-1, which states:

       State and Local Taxes (APR 1984)

       Notwithstanding the terms of the Federal, State, and Local Taxes clause,
       the contract price excludes all State and local taxes levied on or measured
       by the contract or sales price of the services or completed supplies
       furnished under this contract. The Contractor shall state separately on its
       invoices taxes excluded from the contract price, and the Government

       1
         The Subcontract actually lists Government Acquisition Regulation 52.229-6, but
the district court and both parties agree this is a scrivener’s error, and that the correct
provision on Federal, State and Local Taxes is 52.229-3. We therefore include provision
52.229-3, rather than 52.229-6 in our description of the Subcontract.
       2
         The omitted language from 52.229-3 defines various terms, excludes trivial tax
increases, and addresses federal taxes that may be imposed after the parties have agreed
to the contract, excise taxes, and the consequences of failing to provide notice.

                                             -5-
       agrees either to pay the amount of the taxes to the Contractor or provide
       evidence necessary to sustain an exemption.

Id. § 52.229-1 (emphasis added).

       In summary, neither the Subcontract itself nor Exhibit C, the Pricing Proposal,

expressly discusses sales tax. Instead, they both identify a specific dollar amount as the

amount proposed to perform the Subcontract and the amount allocated to the Subcontract.

The Subcontract further provides that Low Voltage “shall not be obligated to reimburse

the Subcontractor for any costs in excess of the total amount then allotted to the

Subcontract . . . .” J.A. 301–302. But the Subcontract also incorporates Exhibit A, the

Fort Meade Statement of Work, which in three places states the contract price is

exclusive of sales taxes and the amount of any sales tax paid or to be collected by

Diebold will be paid by the “Customer.” Finally, the Subcontract incorporates by

reference two FAR provisions: FAR 52.229-3, which states the contract price is inclusive

of sales tax, and in apparent contrast, FAR 52.229-1, which provides that

“notwithstanding” FAR 52.229-3, the contract price is exclusive of sales tax.

2. Request for Equitable Adjustment and Pass-Through Agreement

       Upon completion of its work under the Subcontract, Diebold asked Low Voltage

to submit a Request for Equitable Adjustment (REA) to the Government, requesting that

the Government reimburse Diebold for additional costs incurred on the project. Low

Voltage agreed to submit a Revised REA, pursuant to a Pass-Through Agreement

between Low Voltage and Diebold. The Pass-Through Agreement includes two

                                            -6-
paragraphs relevant to the issues on appeal. The first is found in paragraph 5 of the Pass-

Through Agreement and contains Diebold’s release of all claims against Low Voltage

except for those made in the contemporaneous REA and any then-outstanding invoices:

       5. Except for the instant REA and any outstanding invoices and as
       otherwise provided in this Agreement, Diebold releases, discharges and
       agrees to hold [Low Voltage] harmless from any and all REAs, demands,
       charges or claims of any kind or nature whatsoever, from any and all
       damages, actions or causes of action, either in law or in equity, which it
       may now have, which are known or unknown by Diebold at the time of
       execution of this Agreement, that relate to the Project.

J.A. 129.

       Paragraph 6 of the Pass-Through Agreement states that upon resolution of

the REA and the payment of Diebold’s outstanding invoices, the release contained

in paragraph 5 shall become absolute and final as to all of Diebold’s claims against

Low Voltage:

       6. It is the purpose of this [Pass-Through] Agreement, except for the
       conditions set forth above, forever to settle, adjust, and discharge all REAs
       or claims of whatever kind or nature that Diebold may have accrued against
       [Low Voltage] which relate to the Project. Upon resolution of Diebold’s
       REA and final [Low Voltage] payment of Diebold’s outstanding invoices,
       the release described in Paragraph 5 shall thereupon become absolute and
       final as to all of Diebold’s claims against [Low Voltage].

Id. Low Voltage submitted the REA on behalf of Diebold, but the Government rejected

it. The REA did not include any amounts for sales tax. All the invoices Diebold

submitted to Low Voltage as of the time of the Pass-Through Agreement have been paid.

                                            -7-
3.     Final Release

       After the Government denied the REA, Diebold submitted final Invoice #082830

to Low Voltage on May 18, 2012 (the Invoice). The Invoice requested a final installment

payment of $930,995.43, which, when added to the installment payments previously paid,

would total the cumulative total sum of $7,889,051.49 allotted to the Subcontract. In

addition, the Invoice sought $470,646.15 in sales taxes Diebold claimed it had paid to the

State of Maryland in connection with the project.

       A few days later, on May 21, 2012, Diebold and Low Voltage executed a Final

Release of Claims. Low Voltage then paid $830,995.43 to Diebold—the $930,995.43

installment payment requested in the Invoice minus $100,000 related to warranty issues

not at issue in this case—but did not pay the amount invoiced for sales tax. Low Voltage

eventually paid the $100,000 it had withheld from the final contract installment, but it

refused to pay the $470,646.15 Diebold had requested for reimbursement of sales tax.

                              B. Procedural Background

       On February 26, 2013, Diebold sued Low Voltage for breach of contract based on

its failure to pay the sales tax. Three months later and before discovery was completed,

Low Voltage filed a motion for summary judgment, arguing Diebold had waived and

released all claims against Low Voltage in the Final Release and in the Pass-Through

Agreement. Diebold opposed summary judgment, claiming both releases were

conditional releases premised on payment of the sales taxes at issue in the lawsuit. To

support its position, Diebold pointed to the language of the Final Release indicating the
                                            -8-
parties entered into it pursuant to the terms of the Subcontract and to induce payment of

the Invoice. Diebold asserted that because both the Subcontract and the Invoice required

payment of sales taxes, the Final Release did so as well.

       In reply, Low Voltage continued to assert that the Pass-Through Agreement and

Final Release plainly waived Diebold’s claim. Low Voltage also claimed that Diebold

was never entitled to sales tax under the Subcontract. Low Voltage advanced three

arguments in support of this position: (1) the Subcontract expressly rejects different or

additional terms, so Exhibit A was an unconsented-to variance from the terms of the

Subcontract; (2) incorporation of the Federal Acquisition Regulations shows the contract

price already included sales tax; and (3) the plain language of the pricing provision caps

Diebold’s reimbursement to the allotted Subcontract price.

       Diebold moved to strike the newly-raised arguments in Low Voltage’s reply and,

in the alternative, moved for leave to file a surreply to address the question of whether the

Subcontract provided Diebold a right to sales tax. Although Diebold had briefed its

position that the Subcontract obligated Low Voltage to reimburse Diebold for sales tax in

addition to paying the Subcontract price, it claimed it had been given no opportunity to

respond to Low Voltage’s reliance on the Federal Acquisition Regulations raised for the

first time in reply. The district court denied the motion to strike but granted the motion to

file a surreply. Diebold’s surreply focused only on whether the Federal Acquisition

Regulations were incorporated by reference into the Subcontract.

                                             -9-
       Ultimately, the district court granted Low Voltage’s motion for summary

judgment. But instead of ruling on the grounds Low Voltage raised in the initial

motion—that Diebold had released all claims against it in the Pass-Through Agreement

and in the Final Release—the district court held the terms of the Subcontract clearly and

unambiguously limited the total amount available to Diebold to the cumulative total sum

allocated to the Subcontract. Accordingly, the district court concluded Diebold had no

contractual right to request reimbursement for sales tax in excess of that sum. It declined

to address as moot whether Diebold had released all claims against Low Voltage. Diebold

now appeals. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm, but on the

alternative ground that Diebold released all claims against Low Voltage.

                                  III.   DISCUSSION

                                A. Standard of Review

       We review a grant of summary judgment de novo, applying the same standards as

the district court. Merrifield v. Bd. of Cnty. Comm’rs, 654 F.3d 1073, 1077 (10th Cir.

2011). In a diversity case, we apply state law to the underlying claims while federal law

governs the propriety of a grant of summary judgment. Reid v. Geico Gen. Ins. Co., 499
F.3d 1163, 1167 (10th Cir. 2007). “Therefore, the substantive law of [Colorado] applies

                                            -10-
and governs as we review the issues raised on appeal in this case.” Kovnat v. Xanterra

Parks & Resorts, 770 F.3d 949, 954 (10th Cir. 2014) (internal quotation marks omitted).3

       Summary judgment shall be granted if “there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a). When reviewing summary judgment, “[w]e examine the record and all reasonable

inferences that might be drawn from it in the light most favorable to the nonmoving

party.” Merrifield, 654 F.3d at 1077.

                                        B. Analysis

       “[I]t is well established that ‘we are free to affirm a district court decision on any

ground for which there is a record sufficient to permit conclusions of law, even grounds

not relied upon by the district court.’” Okla. ex rel. Office of State Fin. v. United States,

292 F.3d 1261, 1264 (10th Cir. 2002) (brackets omitted) (quoting United States v.

Sandoval, 29 F.3d 537, 542 n.6 (10th Cir. 1994)). Affirming on an alternative basis is

appropriate “so long as the appellant has had a fair opportunity to address that ground.”

       3
         The Final Release does not include a choice of law provision that could invoke
another forum’s law. The Subcontract does. The Subcontract is to be governed, to the
extent possible, by “the law of US Government contracts as set forth by statute and
applicable regulations and decisions by the appropriate courts and the Boards of Contract
Appeals,” and beyond that, by the laws of Colorado. The Supreme Court has held that
ordinary government contracts are generally governed by the rules applicable to contracts
between private parties. United States v. Winstar Corp., 518 U.S. 839, 914 (1996). Thus,
irrespective of whether the choice of law provision in the Subcontract is applied to the
Final Release, we rely on Colorado law to interpret both contracts.

                                             -11-
Merrifield, 654 F.3d at 1077. We do so here and hold the Final Release unambiguously

bars Diebold from seeking further recovery under the Subcontract.4

       “A release is the relinquishment of a vested right or claim to a person against

whom the claim is enforceable.” Neves v. Potter, 769 P.2d 1047, 1049 (Colo. 1989). “A

general release is an instrument by which one party relinquishes all its claims against

another for consideration. Once a claim is released, the release bars the injured party from

seeking further recovery.” CMCB Enters., Inc. v. Ferguson, 114 P.3d 90, 96 (Colo. App.

2005).5

       Releases are interpreted using normal tools of contract interpretation. Neves, 769
P.2d at 1053. The purpose of contract interpretation is to determine the mutual intent of

the parties. See E. Ridge of Fort Collins, LLC v. Larimer & Weld Irrigation Co., 109 P.3d
969, 973 (Colo. 2005); Neves, 769 P.2d at 1055 (endorsing United States Supreme Court

cases that “viewed intent as the polestar to determining the scope of a release.”). Our

       4
          Because we reach this conclusion, we need not address the alternative grounds
Low Voltage offers for affirming the district court’s decision, including: whether the
Subcontract required Low Voltage to compensate Diebold for sales tax; whether Diebold
failed to comply with the Subcontract’s invoicing requirements by billing Low Voltage
for all incurred sales tax over seven months after Diebold completed its work under the
Subcontract, rather than by the tenth day of the month following the month in which the
expense was incurred; and whether Diebold waived its claim by failing to ask for sales
tax in the Request for Equitable Adjustment.
       5
        Although we are not bound by the opinions of state intermediate courts of
appeals in diversity cases, their opinions provide guidance. Martin K. Eby Const. Co. v.
OneBeacon Ins. Co., ___ F. 3d ___, No. 13-3076, 2014 WL 6910685, at *4 (10th Cir.
Dec. 9, 2014).

                                            -12-
starting point is the plain language of the contract. May v. United States, 756 P.2d 362,

369 (Colo. 1988). That plain language must be examined and construed according to the

generally accepted meaning of the words used. Lake Durango Water Co. v. Pub. Util.

Co., 67 P.3d 12, 20 (Colo. 2003). In determining a contract’s meaning, we must examine

the entire instrument instead of viewing clauses or phrases in isolation. Allstate Ins. Co. v.

Huizar, 52 P.3d 816, 819 (Colo. 2002). We strive to harmonize different parts of a

contract to give all relevant provisions effect. Level 3 Commc’ns, LLC v. Liebert Corp.,

535 F.3d 1146, 1154 (10th Cir. 2008) (applying Colorado law). In this endeavor, “a more

specific provision controls the effect of general provisions.” Id. (quoting E-470 Pub.

Highway Auth. v. Jagow, 30 P.3d 798, 801 (Colo. Ct. App. 2001), aff’d, 49 P.3d 1151

(Colo. 2002)).

       “When a contractual provision unambiguously resolves the parties’ dispute, the

interpreting court’s task is over.” Id. at 1154. On the other hand, if a contract is

ambiguous, then extrinsic evidence of the parties’ intent is admissible. E. Ridge, 109 P.3d

at 973. A contract is ambiguous “if it is fairly susceptible to more than one

interpretation.” Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 912 (Colo. 1996).

       In the present case, the Final Release provides:

       Pursuant to the terms of Master Subcontract # 1521, for value received, and
       in order to induce payment of final invoice #082830, and in consideration
       of the total sum of the subcontract in the amount of $7,889,050.18 which
       has been received and paid for in accordance with the contracted Terms and
       Conditions under Master Subcontract # 1521 for the benefit of the Fort
       Meade DISA Project said Subcontractor, Diebold Enterprise Security
       Systems, Inc., does remise, release, and discharge [Low Voltage], its
                                             -13-
        officers, agents and employees, of and from all liabilities, obligations,
        claims, and demands whatsoever under or arising from the said
        Subcontract, including modifications.

        NO ADDITIONAL INVOICE (S) WILL BE SUBMITTED AND NO
        FUTURE CLAIMS WILL BE MADE; CONSIDER THIS
        SUBCONTRACT CLOSED.

J.A. 175.

        By its terms, the Final Release contains four relevant clauses: that it was (1)

entered into “Pursuant to the terms of [the Subcontract],” (2) entered into “in order

to induce payment of final invoice #082830,” (3) entered into “in consideration of

the total sum of the subcontract in the amount of $7,889,050.18 which has been

received and paid for,” and (4) entered into in exchange for Diebold’s promise to

“remise, release, and discharge [Low Voltage] . . . of and from all . . . claims . . .

arising from the said Subcontract.” To give each of these clauses effect, the Final

Release must be interpreted such that Diebold has released all claims against Low

Voltage, including any claim for sales tax. See Level 3 Commc’ns, 535 F.3d at

1154.

        To begin, the Final Release references the terms of the Subcontract, indicates

value has been received, and states “in order to induce payment of final invoice

#082830.” These recitals provide context for the release by acknowledging the dispute

between the parties over the terms of the Subcontract as they relate to payment of the

Invoice. See Rocky Mountain Ass’n of Credit Mgmt. v. Hessler Mfg. Co., 553 P.2d 840,

842 (Colo. App. 1976) (A release must be “construed in light of the manner in which its

                                             -14-
terms relate to all of the circumstances surrounding the transaction.”). As explained, Low

Voltage claimed the Subcontract limited the amounts due to Diebold to the cumulative

total sum allotted to the Subcontract, which was initially $6,813,611.58, but later

increased to $7,889,051.49. The $930,995.43 installment payment requested in the

Invoice, if paid, would bring the total amount Low Voltage had paid to Diebold under the

Subcontract to that $7,889,051.49 cumulative total sum. But the Invoice also includes

Diebold’s request for sales tax, which, if paid, would have exceeded the cumulative total

sum allocated to the Subcontract by $470,646.15. Instead of creating binding obligations,

the introductory clauses of the Final Release merely place it in context by generally

identifying the Subcontract and indicating that for an unspecified “value received,”

Diebold was entering into the Final Release to induce payment of the Invoice.

       Next, the Final Release makes specific reference to the amount of

“consideration” given in exchange for Diebold’s release of claims. It states, “in

consideration of the total sum of the subcontract in the amount of

$7,889,050.18 . . . , [Diebold] does remise, release, and discharge [Low Voltage]

. . . from all liabilities, obligations, claims, and demands whatsoever under or

arising from the said Subcontract . . . .” Unlike the general prior reference to

“value received,” the following clause expressly defines the “consideration” paid

for the release of claims as “the total sum of the subcontract in the amount of

$7,889,050.18.” As a result, the Final Release resolves the dispute concerning

payment of the Invoice in favor of the position asserted by Low Voltage. As
                                            -15-
discussed, if Low Voltage paid the $930,995.43 Diebold requested in the Invoice

as the final contract installment, but not the $470,646.15 Diebold requested as

sales tax, the cumulative sum total paid under the Subcontract would equal

$7,889,051.49.6 Thus, by identifying the consideration for the Final Release as that

sum, the parties excluded the amount Diebold requested for sales tax. Otherwise,

the consideration identified for the release of claims by Diebold would have been

$8,359,696.33 ($7,889,050.18 + $470,646.15).

       The last relevant provision of the Final Release is the bolded and

capitalized sentence: “NO ADDITIONAL INVOICE (S) WILL BE

SUBMITTED AND NO FUTURE CLAIMS WILL BE MADE; CONSIDER

THIS SUBCONTRACT CLOSED.” This final statement leaves no doubt that

upon receipt of the stated consideration of $7,889,050.18, Diebold was not entitled

to any other amounts under the Subcontract, including amounts it claimed for sales

tax.

       In summary, the first three clauses of the Final Release identify the Subcontract

and the outstanding Invoice. The operative language of the Final Release is found in the

latter two clauses, which expressly identify the dollar amount of the consideration

exchanged for Diebold’s release of all claims against Low Voltage. Diebold concedes

       6
         The parties agree the total sum owed under the Subcontract, after change orders,
was $7,889,051.49, not the $7,889,050.19 identified in the Final Release. Neither party
has attached any significance to this $1.30 discrepancy, and we agree that it is
unimportant.

                                           -16-
that Low Voltage made the final installment payment of $930,995.43, and thus Low

Voltage paid the $7,889,050.18 identified in the Final Release. In exchange, Diebold

released all claims against Low Voltage arising from the Subcontract and the Subcontract

was closed. Under the plain language of the Final Release, Low Voltage is entitled to

summary judgment on Diebold’s claim to recover any additional amounts.

       In reaching that conclusion, we reject Diebold’s argument that the Final Release

was contingent upon the payment of sales tax. According to Diebold, the statements that

the release was entered into pursuant to the Subcontract and to induce payment of the

Invoice indicate that all amounts due under the Subcontract and the full amount requested

in the Invoice must be paid before the release is effective. We reject this interpretation.

       First, there is nothing in the Final Release that expressly makes it conditional on

any future event. “[A] condition precedent in a contract is not favored and will not be

given effect unless established by clear and unequivocal language.” Main Electric, Ltd. v.

Printz Servs. Corp., 980 P.2d 522, 526 (Colo. 1999). Rather than being contingent upon

future payment of sales tax, the Final Release states that upon the payment of the full

Subcontract price, which is specifically defined as $7,889,050.18, Diebold “does

. . . release” all of its claims against Low Voltage and the Subcontract is closed. If the

reference to the Subcontract in the Final Release was intended to allow Diebold to sue

Low Voltage for an alleged breach of the Subcontract, such as failure to pay sales tax,

then Diebold’s promise to “remise, release, and discharge [Low Voltage] of and from all

. . . claims . . . arising from the said Subcontract” would have been limited accordingly.
                                             -17-
But there is nothing in the express language of the Final Release that supports any

limitation to the general release of all claims arising from the Subcontract. Here, there is

no clear or unequivocal language making the general release of claims conditional upon

Low Voltage’s payment of the $470,646.15 that Diebold requested for sales taxes.

       Second, a general statement that the Final Release is entered into pursuant to the

Subcontract does not incorporate a requirement to pay sales tax, because the parties

disagreed on whether the Subcontract permitted Diebold to seek reimbursement from

Low Voltage for such expenses. Thus, a reference to the Subcontract does not reflect a

meeting of the minds to make the Final Release conditional on the payment of sales tax.

Instead, it simply identifies the subject matter of the Final Release as the dispute about

the payment of the Invoice under the Subcontract. To interpret the “pursuant to” language

as Diebold suggests—making the release conditional to Low Voltage’s performance of

its obligations under the Subcontract—would directly contradict the broad language of

the Final Release which discharges all claims “under or arising from the Subcontract.”

Accordingly, we reject this interpretation. See Level 3 Commc’ns, 535 F.3d at 1154

(providing that we interpret contracts to give effect to all provisions).

       Similarly, although the Final Release indicates it was entered to induce payment of

the Invoice, it does not state the Invoice would be paid “in full.” And by negative

implication, the language suggests Low Voltage had refused to pay the Invoice prior to

Diebold’s execution of the Final Release. See Shams v. Howard, 165 P.3d 876, 880

(Colo. Ct. App. 2007) (providing that negative implications are useful when interpreting
                                             -18-
contract terms); Ball Corp. v. Fisher, 51 P.3d 1053, 1062 (Colo. Ct. App. 2001) (same).

Although this clause highlights the parties’ dispute concerning the Invoice, it does not

indicate a resolution based on the payment of consideration other than that specifically

identified in the Final Release. Accordingly, we reject Diebold’s argument that the

references to the Subcontract and the Invoice implicate a promise to make some future

payment of the sales taxes claimed in the Invoice.

       In addition, Diebold’s interpretation would effectively read out the consideration

clause of the Final Release, which states “in consideration of the total sum of the

subcontract in the amount of $7,889,050.18 . . . Diebold . . . does remise, release, and

discharge [Low Voltage] . . . from all liabilities, obligations, claims, and demands

whatsoever under or arising from the said Subcontract . . . .” We reject interpretations of

a contract that do not give effect to relevant clauses. See Level 3 Commc’ns, 535 F.3d at

1154. Diebold’s reading would also ignore the specific amount of consideration stated in

the Final Release. In contrast, our interpretation enforces that unambiguous statement

identifying the amount exchanged for the release of claims, while also giving meaning to

the opening clauses as placing the agreement in context. But even if those opening

clauses could be construed to be a general reference to Diebold’s rights under the

Subcontract, the more specific clause setting forth the specific amount of consideration

paid for the release of all claims under or arising from the Subcontract would take

precedence. See Green Shoe Mfg. Co. v. Farber, 712 P.2d 1014, 1016 (Colo. 1986)

(“[S]pecific provisions in contract express more exactly what parties intend than broad or
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general clauses.”) (citing Denver Joint Stock Land Bank v. Markham, 107 P.2d 313

(Colo. 1940)).

      For these reasons, we conclude Diebold unambiguously released all of its claims

against Low Voltage under or arising from the Subcontract, including its claim for the

reimbursement of sales taxes.

                                  IV.CONCLUSION

      Therefore, we AFFIRM the judgment of the district court granting summary

judgment, but on the alternative ground that the Final Release entitles Low Voltage to

judgment as a matter of law.

                                         ENTERED FOR THE COURT

                                         Carolyn B. McHugh
                                         Circuit Judge

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