Auto-Trol Technology Corp. v. J. Fox, Inc.

24 F. App'x 986
CourtCourt of Appeals for the Tenth Circuit
DecidedJanuary 10, 2002
Docket00-1412
StatusUnpublished
Cited by1 cases

This text of 24 F. App'x 986 (Auto-Trol Technology Corp. v. J. Fox, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Auto-Trol Technology Corp. v. J. Fox, Inc., 24 F. App'x 986 (10th Cir. 2002).

Opinion

ORDER AND JUDGMENT *

TACHA, Chief Circuit Judge.

This case involves a dispute over royalties that Appellee Auto-trol Technology Corporation (“Auto-trol”) allegedly owes to Appellants J. Fox, Inc. and James Fox 1 (“Fox”) under a software licensing agreement. Auto-trol brought suit seeking a declaratory judgment terminating its contractual relationship with Fox and establishing that Auto-trol did not owe Fox any royalties. Fox counterclaimed for breach of contract, fraudulent nondisclosure, and misrepresentation. The district court granted Auto-trol summary judgment on Fox’s counterclaims, and certified its order as a final judgment under Rule 54(b). We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and AFFIRM as to the causes of action accruing before February 24, 1993, and REVERSE and REMAND as to roy *988 alties that became due after February 24, 1993.

I. Background

On March 17, 1982, Auto-trol and Fox entered into a Lieense/Exchange Agreement (“Agreement”) that granted Autotrol the exclusive right to sublicense, or sell, computer software developed by Fox. In exchange, Auto-trol agreed to pay Fox a 60% royalty on all sublicenses within 60 days of the receipt of payment from the resale customers. The Agreement also required Auto-trol to: maintain adequate books and records of all sales of Fox’s product; maintain all customer receipts from such sales; send Fox quarterly statements of total sales; certify that the amounts it paid were the full amounts owed; and allow Fox to audit its records.

On February 10, 1983, Fox’s attorney wrote to Auto-trol complaining that the terms of the Agreement had not been met with respect to the payment and reporting schedule. Fox proposed, and Auto-trol accepted, changes in the schedule of royalty payments and changes that permitted Fox to terminate the Agreement under certain conditions.

In 1986, the parties amended the Agreement to change Fox’s royalties to 50% of sublicense fees and 50% of software maintenance fees, and to make royalties due within 30 days following the end of the calendar quarter. During these negotiations, Fox’s attorney again noted that he had not received the contractually required statements of total sales and payments.

On February 23, 1987, Fox sent Autotrol a letter identifying a discrepancy of $214,059 between payments Fox should have received and what Fox actually received. On May 20,1987, Auto-trol replied to Fox’s letter, conceding that some additional royalties were due. Auto-trol explained that the underpayment resulted from confusion as to whether royalties were due upon shipment to customers or upon receipt of payment from customers, and from the lack of an effective system for tracking sales according to the model of software package sold. On June 17, 1987, Fox again wrote to Auto-trol, and indicated that discrepancies still remained between Auto-trol’s and Fox’s calculations of royalties. Correspondence continued through the end of 1987 regarding these discrepancies.

On March 30, 1988, Auto-trol stated that it had responded to all of Fox’s concerns and that it would no longer allow inquiries into transactions prior to January 1987. On April 19, 1988, Auto-trol proposed an amendment to the Agreement that would limit to two years the period in which Fox could raise questions regarding royalties. Fox rejected the proposed amendment.

On May 22,1989, Fox wrote to Auto-trol to request a summary of all royalty payments due, and asked when he could expect whatever additional royalties were owed to him. On November 24, 1990, Fox sent Auto-trol a “master list” that showed every instance in which Fox had found evidence of a sale of Fox’s software, and a separate column indicating whether or not Fox had received payment for the alleged sale. After sending the master list in 1990, Fox failed to follow up, except possibly to call to ensure that the document had been received.

Auto-trol notified Fox on January 17, 1995, that it intended to eliminate Fox’s products from its product lines and that it wished to terminate the Agreement. On March 15, 1995, Fox replied by asking to review Auto-trol’s records of Fox software sales prior to terminating the Agreement, because he believed that there were a number of unanswered inquiries regarding past payments. On October 25, 1996, Fox wrote Auto-trol that he did not accept *989 Auto-trol’s attempt to terminate the Agreement, and that he was exercising his option to examine their records. After some negotiations regarding the conditions of the visit, Fox visited Auto-trol on January 13 and 14, 1997. On February 12, 1997, Fox submitted an invoice for $4,162,115.35 in past-due royalties and interest, which Fox claims to have discovered during his audit of the records.

Auto-trol filed suit on January 27, 1999, seeking declaratory judgment that it owed nothing further to Fox under the Agreement, and that the Agreement had been terminated. On February 24, 1999, Fox counterclaimed for breach of contract, fraudulent nondisclosure, and misrepresentation.

On December 10, 1999, Auto-trol moved for summary judgment on the counterclaims, arguing that all of the counterclaims were barred by the applicable statutes of limitations, and that the second and third counterclaims were contract claims disguised as tort claims for fraud.

The district court granted summary judgment to Auto-trol and dismissed all three counterclaims.

II. Discussion

Fox now appeals the dismissal of his breach of contract claim, arguing that there were genuine issues of material fact concerning the running of the statute of limitations. He asserts that the statute did not start running until Fox inspected Auto-trol’s records in 1997 because he was not aware of all the facts relevant to his claim, that the statute of limitations was tolled by Auto-trol’s breach of a fiduciary relationship, and that the statute of limitations should be tolled based on principles of equity.

A. Standard of Review

We review the grant of summary judgment de novo, applying the same standard as the district court. Whitesel v. Sengenberger, 222 F.3d 861, 866 (10th Cir. 2000). Summary judgment is appropriate when there is no genuine issue of material fact, viewing the evidence in the light most favorable to the nonmoving party. Id. (citing Fed.R.Civ.P. 56(c)).

B. Statute of Limitations

Colorado law applies a six-year statute of limitations to “actions to recover a liquidated debt or an unliquidated, determinable amount of money due to the person bringing the action.... ” Colo.Rev. Stat. § 13~80-103.5(l)(a).

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Bluebook (online)
24 F. App'x 986, Counsel Stack Legal Research, https://law.counselstack.com/opinion/auto-trol-technology-corp-v-j-fox-inc-ca10-2002.