Banghart Properties v. Colorado Mills

• Court: Colorado Court of Appeals
• Decided: October 9, 2025
• Docket: 24CA2104
• Status: Unpublished

Opinion

24CA2104 Banghart Properties v Colorado Mills 10-09-2025

COLORADO COURT OF APPEALS

Court of Appeals No. 24CA2104 Prowers County District Court No. 24CV30004 Honorable Mike Davidson, Judge

Banghart Properties, LLC,

Plaintiff-Appellant,

v.

Colorado Mills, LLC,

Defendant-Appellee.

JUDGMENT AFFIRMED

Division II Opinion by JUDGE FOX Brown and Meirink, JJ. concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced October 9, 2025

Pitler and Associates, P.C., Robert L. Pitler, Aurora, Colorado, for Plaintiff- Appellant

Allen Vellone Wolf Helfrich & Factor P.C., Patrick D. Vellone, Drew J. Horowitz, Averil K. Andrews, Denver, Colorado, for Defendant-Appellee ¶1 Plaintiff, Banghart Properties, LLC (Banghart), appeals the

district court’s judgment dismissing its complaint against

defendant, Colorado Mills, LLC (Mills), and the court’s order

refusing Banghart’s subsequent motion for leave to file a second

amended complaint (SAC). We decline to review the dismissal but

affirm the district court’s refusal to allow the amendment.

I. Background

¶2 Banghart had two contracts to sell eight million pounds of

“high oleic sunflower seeds” to Mills by March 2023 (the contracts).

The first contract, “Purchase Agreement #2220HO,” dated March 3,

2022, was for five million pounds of seeds and listed a “term” of

“2022 Crop – Picked up Onida, SD area – Oct 2022 – Mar 2023.”

The second contract, “Purchase Agreement #22670,” dated

November 8, 2022, was for three million pounds of seeds and listed

a “term” of “2022 Crop – Picked up – January to March 2023.” The

first contract’s “price” was “$35.00/cwt FOB sellers[’] location,” and

the second contract’s “price” was “$28.75/cwt FOB sellers[’]

1 location.”1 While most of the seeds were delivered by March 2023,

some shipments arrived after that deadline.

¶3 In February 2024, Banghart sued Mills for breach of contract,

noneconomic damages,2 and breach of the implied covenant of good

faith and fair dealing, alleging that “in March-April 2023” Mills

wrongly refused to arrange and pay for shipment of the seeds and

canceled the contracts. Banghart argued that the parties

“established a course of dealing[] where Mill[s] submit[ted] a

purchase order that describe[d] quantity, price and terms[,]

including FOB Seller with Mills hiring the common carrier to pick

up the [seeds] for Mill[s] at Banghart’s locations.” According to

Banghart, Mills “had the duty to contract for and arrange for the

common carrier pickup” of the seeds and “willfully and improperly

1 “Cwt” stands for “hundredweight,” Merriam-Webster Dictionary,

https://perma.cc/W3DE-6QJA, which itself refers to “a unit of weight equal to 100 pounds,” Merriam-Webster Dictionary, https://perma.cc/4RR7-77WK; see also Segelke v. Pet Inc., 528 P.2d 929, 930 (Colo. App. 1974) (not published pursuant to C.A.R. 35(f)) (“The contract which the parties executed in February 1966 provided that plaintiff was to sell to defendant 30,000 hundredweights (cwt.) of potatoes during the coming season.”). 2 Banghart’s “claim” for noneconomic damages was based on

theories that Mills acted intentionally, willfully, and with malice aforethought and that Mills also caused Banghart “anxiety, distress and worry.”

2 breached the two contracts” by refusing to do so. Banghart alleged

that a decrease in the price of seeds motivated Mills’ sudden

refusal.

¶4 Mills moved to dismiss the complaint for failure to state a

claim upon which relief could be granted pursuant to C.R.C.P.

12(b)(5). Mills argued that the contracts’ “FOB Seller” price and

March 2023 deadline plainly indicated that Banghart was required

to pay for all the seeds’ delivery by March 2023. According to Mills,

it was Banghart that breached the contracts by failing to timely

deliver the seeds, and Mills was not obligated to ship the seeds or

pay for seeds received after March 2023.

¶5 The district court ruled in Mills’ favor. The court reasoned

that the contracts obligated Banghart to sell Mills the seeds “no

later than March 2023,” and the language “FOB sellers[’] location”

unambiguously meant that Banghart had to arrange and pay for

shipping. The court rejected Banghart’s course of dealing and

course of performance arguments because these doctrines cannot

contradict the express terms of a written contract. And because

Mills had not breached the contracts, Banghart had no claim for

3 damages, so the court dismissed Banghart’s complaint on July 11,

2024.

¶6 Banghart later moved to amend the complaint but raised the

same three claims on the same grounds as in the original

complaint. Before Mills responded or the court ruled on the first

amended complaint, Banghart requested leave to file the SAC. The

proposed SAC added detail to Banghart’s allegations. For example,

Banghart included “tickets” as an exhibit to the SAC, evidencing

Banghart’s post-March 2023 deliveries to Mills to support the

course of performance argument. The SAC also alleged that the

parties agreed to extend the contracts’ deadline, as evidenced by the

course of performance shown by the tickets, but conceded that

Mills “fully performed on [the first] contract.” Regardless, Banghart

alleged that Mills had a “continuing duty to purchase 2,842,431

pounds of seeds as required by [the second] contract.” Despite

these changes, however, Banghart’s SAC substantively raised the

same three claims as the original complaint.3

3 Banghart’s SAC dropped the theory that Mills caused Banghart

“anxiety, distress and worry.”

4 ¶7 The court rejected Banghart’s request to file the SAC because

the SAC “advanced the same arguments that the court rejected” in

the original complaint. The court found the requested amendment

to be “futile” because (1) Banghart relied on the rejected course of

performance arguments, and (2) the controlling written contracts

plainly disputed Banghart’s claims. The court further found that

the SAC was “vexatious” and that, “by acting as if the [c]ourt never

issued [its] order, [Banghart engaged] in stubbornly litigious

conduct that has caused [Mills] to unnecessarily incur additional

attorney fees in responding to the motion.” Invoking section 13-17-

102(4), C.R.S. 2025, the court awarded Mills “reasonable attorney

fees.” This appeal followed.

II. Issues on Appeal

¶8 Banghart raises three arguments on appeal. First, Banghart

argues that the district court misinterpreted the meaning of the

“FOB sellers[’] location” language to conclude that Banghart — not

Mills — breached the contracts. Second, Banghart argues that the

parties’ course of performance and their later oral agreement

modified the contracts. Third, Banghart argues that the court erred

5 by deeming the SAC futile. Mills, in turn, disputes these

contentions and requests appellate attorney fees.

¶9 Because Banghart did not timely appeal the district court’s

July 11, 2024, dismissal order, challenges to that order are not

properly before us. See C.A.R. 4. However, in assessing whether

Banghart’s proposed amendments were futile, we must examine the

original complaint’s deficiencies.

III. Analysis

A. Standard of Review and Applicable Legal Principles

¶ 10 “We review a district court’s decision denying a motion for

leave to amend for an abuse of discretion. But we review de novo a

district court’s determination that an amendment would be futile

because the amended complaint couldn’t survive a motion to

dismiss.” Houser v. CenturyLink, Inc., 2022 COA 37, ¶ 47 (citations

omitted). A district court may deny leave to amend a complaint for

futility “if it is legally insufficient or fails to cure defects in the

previous pleadings.” Id. at ¶ 48.

¶ 11 We review contract interpretation de novo, and our “primary

goal is to give effect to the parties’ intent.” French v. Centura Health

Corp., 2022 CO 20, ¶¶ 24-25. To determine the parties’ intent, we

6 first look to “the language of the instrument itself,” and “[w]hen a

written contract is complete and free from ambiguity, we will deem

it to express the parties’ intent and enforce it according to its

terms.” Id. at ¶ 25.

¶ 12 “Whether an ambiguity exists, as a matter of law, is for the

court to determine.” Columbus Invs. v. Lewis, 48 P.3d 1222, 1228

(Colo. 2002). We undertake “decid[ing] whether provisions of an

agreement are ambiguous by examining the instrument’s language

and construing that language in harmony with the plain and

generally accepted meaning of the words employed” to discern

whether a contract’s terms are “susceptible of more than one

reasonable interpretation.” French, ¶ 25.

B. Application

¶ 13 Recall that the district court concluded that Banghart’s

original complaint failed to state a claim. See C.R.C.P. 12(b)(5);

Carbajal v. Wells Fargo Bank, N.A., 2020 COA 49, ¶ 12. Banghart’s

proposed SAC relied on the same theories as its original complaint

and failed to cure the defects of the prior complaint, so the court

properly denied Banghart leave to file the SAC based on its futility.

See Houser, ¶¶ 47-48.

7 1. Breach of Contract and FOB

¶ 14 Banghart’s SAC alleges a contractual breach. In Colorado, to

establish breach of contract, a plaintiff must prove the following

elements by a preponderance of the evidence: “(1) the existence of a

contract, (2) the plaintiff’s performance of the contract or

justification for nonperformance, (3) the defendant’s failure to

perform the contract, and (4) the plaintiff’s damages as a result of

the defendant’s failure to perform the contract.” Univ. of Denv. v.

Doe, 2024 CO 27, ¶ 46.

¶ 15 Elements two and three are contested in this case — whether

Banghart performed its obligations under the contract and, if so,

whether Mills failed to perform. Determining whether Banghart

breached the contract requires interpreting the “FOB sellers[’]

location” language in the contracts. And whether Mills breached

the contracts depends on whether course of performance could

modify the contracts.

¶ 16 F.O.B., or “free on board,” is statutorily defined in Colorado

Uniform Commercial Code (UCC) section 4-2-319(1), C.R.S. 2025,

which says that, “[u]nless otherwise agreed[,] the term F.O.B. . . . at

a named place, even though used only in connection with the stated

8 price, is a delivery term.” When the term is “F.O.B. the place of

shipment, the seller must at that place ship the goods . . . and bear

the expense and risk of putting them into the possession of the

carrier.” § 4-2-319(1)(a) (emphasis added).

¶ 17 The contracts unambiguously obligated Banghart to sell Mills

the seeds by March 2023. And the “FOB sellers[’] location”

language unambiguously obligated Banghart to arrange and pay for

shipping. See id. There is no ambiguity in the contracts, and we

therefore must enforce them as written. See Columbus Invs., 48

P.3d at 1228; French, ¶ 25.

¶ 18 Given these clear terms, Banghart breached the contracts

when it refused to arrange and pay for shipping of all seeds by

March 2023. Mills could then reject the remainder of the

undelivered seeds — regardless of whether it accepted partial late

shipments or paid some of the prior shipping costs. See § 4-2-

601(a), (c), C.R.S. 2025 (“[I]f the goods or the tender of delivery fail

in any respect to conform to the contract, the buyer may: (a) Reject

the whole; or . . . (c) Accept any . . . units and reject the rest.”

(emphasis added)); see also U.C.C. § 2-601 cmt. 1 (A.L.I. & Unif. L.

9 Comm’n 2022) (“Partial acceptance is permitted whether the part of

the goods accepted conforms or not.”).

¶ 19 Banghart contends that the standard definition of F.O.B. in

section 4-2-319(1)(a) did not apply because the contracts were

“silent” on who would arrange and pay for shipping, and the parties

modified the contracts by their course of performance since Mills

routinely arranged and paid for shipping. But the contracts were

not silent on this point; they expressly provided for who would be

responsible for arranging and paying for shipping when they

detailed that the price included “FOB sellers[’] location.” And, as we

explain below, course of performance cannot modify the written

contracts.

2. Modification

¶ 20 Under the UCC, which governs contracts for the sale of goods

like seeds, §§ 4-2-102(1), -105(1), C.R.S. 2025, express and

unambiguous terms in contracts “may not be contradicted by

evidence of any prior agreement or of a contemporaneous oral

agreement,” § 4-2-202, C.R.S. 2025; they only “may be explained or

supplemented . . . [b]y course of dealing, usage of trade, or by

course of performance,” § 4-2-202(a).

10 ¶ 21 In dismissing the complaint, and later finding the SAC futile,

the district court relied on this principle to conclude that course of

performance could not modify the written contracts to contradict

their plain and unambiguous terms. Banghart, however, contends

that the court misinterpreted KN Energy, Inc. v. Great Western

Sugar Co., 698 P.2d 769, 778-79 (Colo. 1985), in reaching that

conclusion. But the court correctly interpreted KN Energy, which

reiterated that course of performance evidence “may be used as an

aid to interpretation,” but it may “not contradict the express terms

of the writing.” Id.; see § 4-2-208(2); see also Nelson v. Elway, 908

P.2d 102, 107 (Colo. 1995) (“Even when extrinsic evidence is

admissible to ascertain the intent of the parties, such evidence may

not be used to demonstrate an intent that contradicts or adds to

the intent expressed in the writing.”). With no ambiguity in the

11 contracts, any course of performance evidence is irrelevant because

it contradicted the express terms of the written contracts.4

¶ 22 There is, as Banghart highlights, an exception for partially

performed contracts, but only “[w]ith respect to goods for which

payment has been made and accepted or which have been received

and accepted.” § 4-2-201(3)(c), C.R.S. 2025. Put another way,

partial performance is limited to the goods that have been accepted

— that is, to the past. Id.; see also U.C.C. § 2-201 cmt. 2 (“‘Partial

performance’ as a substitute for the required memorandum can

4 Banghart contends in the reply brief, seemingly for the first time,

that an alleged oral agreement was made prior to the contracts. And it is true, as Banghart highlights, that KN Energy, Inc. v. Great Western Sugar Co., 698 P.2d 769, 778 (Colo. 1985), provided that courts may consider the parties’ prior course of dealing to interpret a contract’s express terms and determine the parties’ intent even if the agreement’s express terms are not ambiguous. But “intent evidenced by such [prior] conduct is presumed to have been incorporated into the written contract unless the intent evidenced by the conduct has been ‘carefully negated’ by the written terms.” Id. (emphasis added) (quoting § 4-2-202 official cmt. 2, C.R.S. 1984). The written terms of the contracts here are plain and unambiguous and negate any alleged prior agreement or contradictory course of dealing evidence. Moreover, to the extent that Banghart’s arguments in the reply brief differ from the opening brief, we do not consider arguments raised for the first time in a reply brief. See Meadow Homes Dev. Corp. v. Bowens, 211 P.3d 743, 748 (Colo. App. 2009).

12 validate the contract only for the goods which have been accepted

or for which payment has been made and accepted.”).

3. The SAC Was Futile

¶ 23 The contracts unambiguously required Banghart to arrange

and pay for shipment of the seeds, which had to be delivered by

March 2023. See Columbus Invs., 48 P.3d at 1228; French, ¶ 25.

Banghart failed to do this and thereby breached the contracts,

allowing Mills to reject later seed deliveries. See § 4-2-601(a), (c).

Any alleged modifications to the contracts through the course of

performance could not contradict the clear written terms of the

contract. See KN Energy, 698 P.2d at 778-79. Banghart’s proposed

SAC failed for the same reasons its original complaint did.

4. Unpreserved Challenges

¶ 24 It was only on appeal that Banghart specifically argued that an

oral agreement modified the contracts. Because Banghart did not

preserve its oral modification claim for appeal, we decline to

consider it. See Gebert v. Sears, Roebuck & Co., 2023 COA 107,

¶ 25 (“To properly preserve an argument for appeal, the party

asserting the argument must present ‘the sum and substance of the

argument’ to the district court.” (citation omitted)).

13 ¶ 25 Banghart also did not adequately present its waiver argument

to the district court, so we also decline to consider whether waiver

applies. See id.; Antolovich v. Brown Grp. Retail, Inc., 183 P.3d 582,

604 (Colo. App. 2007) (declining to address underdeveloped

arguments raised as part of a “shotgun approach setting forth a

multitude of arguments with little analysis”).

IV. Attorney Fees

¶ 26 Finally, we address Mills’ request for attorney fees. Mills

argues that C.A.R. 38(b) and section 13-17-102(4) merit an award of

appellate attorney fees because Banghart’s appeal is frivolous and

lacks substantial justification. Banghart contends that its appeal

was grounded in precedent, brought in good faith, and necessary to

protect its interests.

¶ 27 C.A.R. 38(b) provides, “If the appellate court determines that

an appeal or cross-appeal is frivolous, it may award damages it

deems appropriate, including attorney fees . . . .” Appeals can be

frivolous “as filed where the judgment by the court below is so

plainly correct and the legal authority contrary to appellant’s

position so clear that there is really no appealable issue” or can be

frivolous “as argued where the appellant commits misconduct in

14 arguing the appeal.” SG Ints. I, Ltd. v. Kolbenschlag, 2019 COA 115,

¶ 42. Frivolity is a high bar, and such determinations should “only

be used to impose sanctions in clear and unequivocal cases when

the appellant presents no rational argument, or when the appeal is

prosecuted for the sole purpose of harassment or delay.” Id.

¶ 28 Section 13-7-102(4), provides that courts “shall assess

attorney fees” against those who bring actions lacking “substantial

justification,” meaning actions that are “substantially frivolous,

substantially groundless, or substantially vexatious,” § 13-17-

101.5(1), C.R.S. 2025. As with C.A.R. 38(b), a frivolous claim “has

no rational argument to support it based on the evidence or the law.

A claim is groundless if there is no credible evidence to support” it,

while “[a] vexatious claim or defense is one brought or maintained

in bad faith.” Zivian v. Brooke-Hitching, 28 P.3d 970, 974 (Colo.

App. 2001).

¶ 29 Banghart’s arguments on appeal were difficult to discern (as

were the factual allegations, such as whether an oral agreement to

modify the contracts existed), and the cited authority did not

support Banghart’s positions. But we do not conclude that

Banghart’s appeal clearly and unequivocally presented no rational

15 argument. Nor can we unequivocally say that there was no

evidence to support Banghart’s claims, that the appeal was brought

in bad faith, or that Banghart committed misconduct in bringing

the appeal. We have rejected Banghart’s appellate claims, but they

are not frivolous or substantially groundless. See SG Ints., ¶ 42;

Zivian, 28 P.3d at 974. Thus, we decline to award Mills appellate

attorney fees.

V. Disposition

¶ 30 We affirm the district court’s denial of Banghart’s motion for

leave to file the SAC.

JUDGE BROWN and JUDGE MEIRINK concur.