FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT October 9, 2020 _________________________________ Christopher M. Wolpert Clerk of Court JAMES SWEET; ASTANZA DESIGN, a Colorado limited liability company,
Plaintiffs - Appellants,
v. No. 19-4112 (D.C. No. 2:16-CV-00225-RJS) CORPORATION OF THE PRESIDING (D. Utah) BISHOP OF THE CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS, a Utah corporation,
Defendant - Appellee. _________________________________
ORDER AND JUDGMENT * _________________________________
Before TYMKOVICH, Chief Judge, BRISCOE, and CARSON, Circuit Judges. _________________________________
In this diversity action, Plaintiffs-Appellants James Sweet and Astanza Design
LLC (collectively “Sweet”) sued Defendant-Appellee Corporation of the Presiding
Bishop of the Church of Jesus Christ of Latter-Day Saints (“the Church”) for
intentional interference with economic relations under Utah law. Sweet alleged that
the Church interfered with Sweet’s exclusive sales representation agreements with
two foreign furniture manufacturers, Giemme (d/b/a Francesco Molon) and Caoba de
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel.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. Aplt. App. P. 32.1 and 10th Cir. R. 32.1. Honduras, by successfully pressuring the manufacturers to deal with the Church
directly in their business relations and eliminate Sweet as their exclusive sales
representative. The district court granted summary judgment to the Church and
denied Sweet’s subsequent alternative motions for alteration of judgment or relief
from judgment. Sweet now appeals. Exercising jurisdiction pursuant to 28 U.S.C.
§ 1291, we affirm.
I
James Sweet owns Astanza Design LLC, an international interior design and
global sourcing firm. In 2008, Sweet was contacted by an agent of the Church, who
wanted to purchase furniture for new temples in San Salvador and Rome. Sweet
introduced the Church to Honduran and Italian furniture manufacturers, Caoba de
Honduras and Giemme (d/b/a Francesco Molon).
In 2009, Sweet entered into a representation agreement with Caoba
establishing Sweet as the exclusive sales representative for Caoba in its business with
the Church. In addition to entitling Sweet to a commission for each purchase the
Church made from Caoba, the agreement prohibited Caoba from “deal[ing] with the
. . . Church directly . . . to market or sell [Caoba’s] Products or Services to the LDS
Church.” Aplt. App. at 116. Sweet entered into a similar agreement with Giemme in
2011. These arrangements continued for the next few years, during which time the
Church honored the agreements and worked with Sweet. But after selecting Giemme
to be the primary furniture supplier for the LDS temple in Rome, “the Church
preferred not to deal with a middleman.” Aple. Br. at 5.
2 Starting in 2012, new Church managers began pressuring Giemme to work
directly with the Church. Among other things, “[one Church representative]
threatened that, unless [Giemme] eliminated Sweet, [the Church] would not purchase
any furniture from [Giemme] for its Rome Temple.” Aplt. App. at 901. The Church
similarly pressured Caoba to end its exclusive representation agreement with Sweet.
Both manufacturers complied. Although Giemme assured Sweet that he would be
copied on communications and still receive commissions, Giemme did not follow
through on these assurances. Caoba similarly “ceased paying [Sweet’s] commission
and excluded [him] from all communications with the Church.” Aplt. Br. at 11.
II
Sweet sued the Church for intentional interference with economic relations and
unjust enrichment 1 in the United States District Court for the District of Utah under
diversity jurisdiction. Thus, Utah law, the law of the forum state, governs. See Macon
v. United Parcel Serv., Inc., 743 F.3d 708, 713 (10th Cir. 2014).
Under Utah law, a plaintiff alleging intentional interference with economic
relations must prove “(1) that the defendant intentionally interfered with the
plaintiff’s existing or potential economic relations, (2) . . . by improper means,
(3) causing injury to the plaintiff.” Eldridge v. Johndrow, 345 P.3d 553, 556 (Utah
2015). The latter two elements were at issue in this case before the district court.
1 Because Sweet did not contest dismissal of the unjust enrichment claim, the district court dismissed that claim with prejudice. Sweet does not appeal that ruling here. 3 Utah law clearly recognizes “violence, threats or other intimidation” as
improper means of interference. C.R. England v. Swift Transp. Co., 437 P.3d 343,
353 (Utah 2019). A plaintiff can also show improper means by pointing to a
defendant’s “actions that are contrary to law, such as violations of statutes,
regulations, or recognized common-law rules, or actions that violate an established
standard of a trade or profession.” Id. (quotation marks and citation omitted).
To prove damages, a plaintiff must produce sufficient evidence “to permit the
trier of fact to determine with reasonable certainty the amount of lost . . . profits.”
TruGreen Cos. v. Mower Bros., Inc., 199 P.3d 929, 933 (Utah 2008) (quoting
Sawyers v. FMA Leasing Co., 722 P.2d 773, 774 (Utah 1986)). Although not
“exacting,” the reasonable certainty standard requires a plaintiff’s evidence to “rise[]
above speculation and provide[] a reasonable, even though not necessarily precise,
estimate of damages.” Id. at 932–33 (quoting Atkin Wright & Miles v. Mountain
States Tel. & Tel. Co., 709 P.2d 330, 336 (Utah 1985)). Nevertheless, “[m]ere
conclusions and conjecture will not suffice. . . . [A] plaintiff must provide supporting
evidence.” Sunridge Dev. Corp. v. RB & G Eng’g, Inc., 305 P.3d 171, 176 (Utah Ct.
App. 2013) (quotation marks and citations omitted).
To recover damages in the form of lost profits, a Utah plaintiff must prove net
loss, which is “determined by computing the difference between the gross profits and
the expenses that would be incurred in acquiring such profits.” Sawyers, 722 P.2d at
774. “[R]easonable certainty requires more than a mere estimate of net profits. In
addition to proof of gross profits, there must generally be supporting evidence of
4 overhead expenses, or other costs of producing income from which a net figure can
be derived.” Id.
As regards his claim that the Church had intentionally interfered with his
economic relations, Sweet alleged the Church engaged in improper means under Utah
law by violating a standard in the furniture, fixtures, and equipment (FF&E) industry.
Under that standard, purchasers and customers honor exclusive representation
agreements between outside sales representatives and manufacturers, like the
exclusive agreements Sweet had with both Giemme and Caoba. Sweet offered three
experts from the FF&E industry who all spoke to the existence of this standard.
To prove damages, Sweet relied on purchases made by the Church in 2012 and
several assumptions about the volume and value of those purchases over the years to
estimate $3.5 million in lost revenue. Sweet provided documentation from the
Church and bank slips to support this determination. As for costs, Sweet stated in his
declaration,
[B]ecause I worked out of my home, I had no incremental costs associated with rent, utilities, office phone, cell phone, internet and equipment costs associated with Giemme and Caoba business. Although there were costs for travel specific to the LDS Church or proportioned if the travel includes other business purposes, those costs were de minim[i]s. These above stated costs have been included in my projections.
Aplt. App. at 613–14; see also id. at 903–04. Sweet provided no documentation of
any of these costs.
The Church moved for summary judgment. After a hearing, the district court
granted summary judgment on the narrow grounds that Sweet failed to provide
5 evidence of net loss, as required by Utah law. The district court concluded that
“although [Sweet] produce[d] evidence of lost gross revenue, [he] does not supply
evidence of the costs [he] would have incurred in acquiring that revenue.” Id. at 903.
The district court rejected Sweet’s argument that because the overhead costs of his
business were de minimis, he did not have to prove them with absolute precision. The
district court found no basis for such a de minimis exception in Utah law, and even if
such an exception did exist, the court ruled “Sweet fail[ed] to provide the evidence
necessary—i.e., cost figures or reasonable estimates—for a factfinder to determine
whether such costs were de minim[i]s.” Id. at 904. The district court confined its
summary judgment ruling to this cost issue and did not address whether the Church
engaged in improper means by violating an industry standard.
Sweet then filed alternative Rule 59(e) and Rule 60(b)(1) motions for
alteration of judgment or relief from judgment. He urged the court to reverse its grant
of summary judgment for the Church or excuse his “mistake” in failing to provide
evidence of costs and allow him to offer supplementary documentation proving his
costs were de minimis. Sweet attached proof of his costs to his post-judgment
motions.
The district court denied both of Sweet’s motions. As to the motion for
alteration of judgment, the court concluded
Rule 59(e) affords Sweet no relief. Sweet does not argue an intervening change in the controlling law. Sweet has not shown the evidence he now seeks to produce was previously unavailable. Sweet shows only the difficulty of estimating [his] costs using available evidence. And rather
6 than having a clear conviction that judicial error occurred, the court maintains a firm conviction no judicial error occurred. 2
Id. at 1191 (emphasis in original).
As for Sweet’s Rule 60(b) motion, the district court declined to excuse as a
“mistake” Sweet’s failure to supply adequate evidence of his costs. The district court
acknowledged that making this estimate was “a challenging, unexpected, and unusual
task,” but “without it, [the Church] could not test Sweet’s conclusion [his] costs were
de minim[i]s.” Id. at 1195–96. Stressing finality interests, the district court decided
that Sweet’s voluntary failure to provide evidence of costs was not enough to merit
relief from judgment, “even where [Sweet] might cure any prejudice by tardily
supplying a damages figure.” Id. at 1196. Because “Sweet could have protected
against [his] mistake,” the district court denied the Rule 60(b)(1) motion. Id.
III
We review a district court’s grant of summary judgment de novo. Auto-Owners
Ins. Co. v. Csaszar, 893 F.3d 729, 733 (10th Cir. 2018). Summary judgment is
appropriate when “the movant shows that 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); see also Savant Homes, Inc. v. Collins, 809 F.3d 1133, 1137 (10th Cir.
2016). When applying this standard, we draw all reasonable inferences from the
2 The district court also concluded that denying Sweet’s Rule 59(e) motion would not result in manifest injustice because Sweet would have lost his case anyway as he failed to prove the Church had engaged in improper means by violating an industry standard. 7 record in the light most favorable to the non-moving party. Berry & Murphy, P.C. v.
Carolina Cas. Ins. Co., 586 F.3d 803, 808 (10th Cir. 2009).
Sweet argues on appeal that the district court improperly demanded
mathematical precision for his proof of costs, rather than adhering to Utah law’s
requirement of proving damages with “reasonable certainty.” Sweet alleged that he
did not have overhead costs associated with his business: he worked from home, he
did not have any employees or storage spaces, and he would have paid for internet
and cable even if Giemme and Caoba had not breached their agreements. The only
real avoided cost was the travel on behalf of Giemme and Caoba’s business with the
Church. But because Sweet traveled on behalf of multiple clients on each trip, he
never allocated a precise cost amount to each client. In his view, he should not have
to provide a precise number on these negligible costs to meet his burden on damages;
claiming that such costs were de minimis should be enough. This is allowed, Sweet
urges, because Utah law only requires a “reasonable approximation” of damages and
this standard “in and of itself, means that a failure to specify a de minimis cost would
not defeat [the] reasonable certainty” required to show damages. Aplt. Br. at 38. In
Sweet’s view, a “[contrary] rule that required a plaintiff to establish every avoided
cost no matter how small with mathematical certainty would thus contradict the
entire body of Utah law on lost profits.” Id.
We disagree. Utah courts have not created a de minimis exception to the
requirement that a plaintiff prove costs. In Garcia v. Mountain States Tel. & Tel. Co.,
a dentist whose professional listing was erroneously removed from the phone book
8 lost his case because he “tried and submitted his case on the theory of his loss of
gross income.” 315 F.2d 166, 168 (10th Cir. 1963). Because “there [wa]s nothing to
indicate or from which the claimant’s net loss c[ould] be determined,” we affirmed
the district court’s directed verdict against the plaintiff, relying on Utah law. Id. at
169. In Sawyers v. FMA Leasing Co., the Utah Supreme Court held that a truck
distributor’s “failure to place before the court financial summaries, monthly sales
volume breakdowns, costs of sales expenses, or any other overhead expenses from
which the trial court could reasonably have calculated [their] lost net profit [wa]s
fatal to their claim.” 722 P.2d 773, 775 (Utah 1986). And most recently, in Sunridge
Dev. Corp. v. RB & G Eng’g, Inc., the Utah Court of Appeals concluded that a
residential homebuilder did not create an issue of material fact on damages by
“discuss[ing] costs in general terms but never provid[ing] any figures, either for the
total cost of building the additional units or for building an average unit.” 305 P.3d
171, 179 (Utah Ct. App. 2013).
Sweet argues that the nature of his business, “as a home-based, commission-
only sales representative,” Aplt. Br. at 37, distinguishes his business from those at
issue in these cases and thereby entitles him to a different result. It is true that “Utah
courts have not addressed lost profits for a business like [Sweet’s], where revenue
from additional clients does not require additional costs to generate but rather goes
directly to profit margin.” 3 Id. at 33. But Sweet must still show something. Utah
3 Sweet additionally argues the district court improperly drew inferences against him and engaged in “rank speculation” by concluding he must have incurred 9 courts have not adjusted the requirements for proof of costs depending on the type of
business involved or the amount of costs at issue. The district court was correct that
Sweet had identified no Utah case law allowing a plaintiff to satisfy its burden of
showing net loss by claiming its costs were de minimis. As a result, the law of
intentional interference in Utah is clear: plaintiffs must prove to a reasonable
certainty their net loss, which requires proof of costs. Sawyers, 722 P.2d at 774.
Sweet’s proof of gross loss, combined with his testimony that his costs were de
minimis, is not enough to create a genuine dispute of material fact. Atkin Wright &
Miles v. Mountain States Tel. & Tel. Co., 709 P.2d 330, 336 (Utah 1985) (“Proof of
loss of gross income only is an insufficient foundation for proof of amount of
damages.”); Sunridge Dev. Corp., 305 P.3d at 180 (“At the summary judgment stage,
‘mere conclusions and conjecture’ are insufficient to establish a prima facie case as
to the amount of damages.”) (citation omitted).
Sweet is correct that he did not have to prove every line of costs with
mathematical precision. But again, he had to show something to meet his burden
under Utah law. See Cook Assocs., Inc. v. Warnick, 664 P.2d 1161, 1166 (Utah 1983)
(plaintiff carried its burden on damages by “provid[ing] a breakdown of monthly
sales volumes, costs of sale, and net profits”). Allowing a plaintiff to invoke a de
minimis exception anytime its costs are small would ultimately become a question of
some sort of overhead costs in his business. Aplt. Br. at 38–40. Yet Sweet undermines this contention by acknowledging he did incur costs during the travel on behalf of Giemme and Caoba but that those costs were de minimis. 10 degree and relativity unmoored from any guidance from the Utah courts. Whether a
de minimis exception is applicable would be a fact-dependent inquiry and could
potentially stray from what Utah courts have consistently required plaintiffs to show:
proof of net loss. See SCO Grp., Inc. v. Int’l Bus. Machines Corp., 879 F.3d 1062,
1082 (10th Cir. 2018) (“[W]e are generally reticent to expand state law without clear
guidance from the highest court.”) (citation omitted).
Sweet did not show proof of net loss because he did not provide evidence of
his costs beyond his allegations that such costs were de minimis. Because we are
unable to find such an exception under Utah law and because Sweet did not carry his
burden on the element of damages, the district court’s grant of summary judgment for
the Church was proper.
IV
We review denials of post-judgment motions under Rules 59(e) and 60(b) for
abuse of discretion. Jennings v. Rivers, 394 F.3d 850, 854 (10th Cir. 2005). A legal
error constitutes an abuse of discretion. Xlear, Inc. v. Focus Nutrition, LLC, 893 F.3d
1227, 1233 (10th Cir. 2018).
Relief under Rule 59(e) is allowed in three situations: when the moving party
shows “(1) an intervening change in the controlling law, (2) new evidence previously
unavailable, [or] (3) the need to correct clear error or prevent manifest injustice.”
Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). “Thus, a motion
for reconsideration is appropriate where the court has misapprehended the facts, a
party’s position, or the controlling law.” Id. None of these conditions are presented
11 here. The district court correctly concluded that Sweet did not argue an intervening
change in the controlling law. And rather than showing new evidence that was
previously unavailable, “Sweet show[ed] only the difficulty of estimating [his] costs
using available evidence.” Aplt. App. at 1191 (emphasis in original). “Where a party
seeks Rule 59(e) relief to submit additional evidence, the movant must show either
that the evidence is newly discovered [or,] if the evidence was available at the time
of the decision being challenged, that counsel made a diligent yet unsuccessful effort
to discover the evidence.” Devon Energy Prod. Co. v. Mosaic Potash Carlsbad, Inc.,
693 F.3d 1195, 1213 (10th Cir. 2012) (brackets in original). Because Sweet argued
neither of those points, the district court did not abuse its discretion in denying the
Rule 59(e) motion. 4
Rule 60(b)(1) may relieve a party from a final judgment based on the existence
of “mistake, inadvertence, surprise, or excusable neglect.” Fed. R. Civ. Pro. 60(b)(1).
“[T]he ‘mistake’ provision . . . provides for the reconsideration of judgments only
where: (1) a party has made an excusable litigation mistake or an attorney in the
litigation has acted without authority from a party, or (2) where the judge has made a
substantive mistake of law or fact in the final judgment or order.” Cashner v.
Freedom Stores, Inc., 98 F.3d 572, 576 (10th Cir. 1996). “Generally speaking, a party
4 Given that we affirm the district court’s grant of summary judgment on the costs issue, and also conclude that the district court did not abuse its discretion in denying Sweet’s Rule 59(e) motion, we need not address the district court’s conclusion that Sweet’s claims would also fail because he did not establish an industry standard. 12 who takes deliberate action with negative consequences . . . will not be relieved of
the consequences [by Rule 60(b)(1)] when it subsequently develops that the choice
was unfortunate.” Id. at 577 (brackets in original). “Similarly, Rule 60(b)(1) relief is
not available for a party who simply misunderstands the legal consequences of his
deliberate acts.” Id.
The district court correctly concluded that relief under Rule 60(b)(1) is not
appropriate “when the mistake was the result of a deliberate and counseled decision
by the party.” Id. Throughout the litigation, Sweet made a clear choice: he
consistently invoked a de minimis exception for proof of costs despite Utah law’s
clear requirement that plaintiffs provide evidence of net loss. Although Sweet’s
home-office business model is unique when compared to the businesses at issue in
the relevant cases, the Utah courts have not recognized a de minimis exception for
such businesses or deviated from requiring proof of costs. Rule 60(b)(1)’s mistake
provision does not provide an out for Sweet.
We note that the district court did recognize that proof of costs in this case
may have been a “challenging, unexpected, and unusual task.” Aplt. App. at 1195.
But the fact that Sweet did eventually come forward with proof of his costs after
summary judgment only shows that presentation of that evidence could have come
earlier. “Rule 60(b)(1) is not available to allow a party merely to reargue an issue
previously addressed by the court when the reargument merely advances . . .
supporting facts which were available for presentation at the time of the original
argument.” Cashner, 98 F.3d at 577. Because “Sweet could have protected against
13 [his] mistake,” Aplt. App. at 1196, the district court’s denial of the Rule 60(b)(1)
motion and its refusal to consider supplemental evidence of costs was not an abuse of
discretion. 5
V
We AFFIRM the district court’s grant of summary judgment and the denial of
Sweet’s Rule 59(e) and 60(b)(1) motions.
Entered for the Court
Mary Beck Briscoe Circuit Judge
5 The district court considered Sweet’s motion for reconsideration only under Rule 60(b)(1)’s “mistake” provision, concluding that Sweet waived any argument as to “excusable neglect” because Sweet only cursorily invoked that provision in his 60(b)(1) motion. Aplt. App. at 1194 n.49. We need not decide whether this determination was correct because Sweet’s decision to rely on a de minimis exception to the proof of costs requirement cannot accurately be characterized as neglect under Rule 60(b)(1). Jennings v. Rivers, 394 F.3d 850, 856 (10th Cir. 2005) (“‘[E]xcusable neglect’ is understood to encompass situations in which failure to comply with a . . . deadline is attributable to negligence. . . . [Neglect] therefore encompasses both simple, faultless omissions to act and, more commonly, omissions caused by carelessness.”) (quotation marks and citations omitted). 14