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Chimney Rock Public Power District v. Tri-State Generation and Transmission Association, Inc.

United States District Court, D. Colorado

June 12, 2014

CHIMNEY ROCK PUBLIC POWER DISTRICT, MIDWEST ELECTRIC COOPERATIVE CORPORATION, NORTHWEST RURAL PUBLIC POWER DISTRICT, and PANHANDLE RURAL ELECTRIC MEMBERSHIP ASSOCIATION, Plaintiffs,
v.
TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC., Defendant/Third-Party Plaintiff,
v.
WAYNE COBB, RYAN REIBER, ROLLAND SKINNER, and JERRY UNDERWOOD, Third-Party Defendants.

ORDER DENYING WAYNE COBB AND ROLLAND SKINNER'S MOTION TO AMEND THE JUDGMENT AND MOTION FOR FEES AND COSTS

WILLIAM J. MARTINEZ, District Judge.

In this diversity action, Defendant and Third-Party Plaintiff Tri-State Generation and Transmission Association, Inc. ("Tri-State") brought Third-Party Claims against four individuals, Wayne Cobb, Jerry Underwood, Rolland Skinner, and Ryan Reiber (collectively "Third-Party Defendants").[1] (ECF No. 84.) Cobb and Skinner were dismissed from this action on August 21, 2013, when the Court granted their Motions to Dismiss. (ECF No. 252.) This matter is before the Court on Cobb and Skinner's Rule 59 Motion to Amend the Judgment ("Rule 59 Motion") (ECF No. 275) and Motion for Fees and Costs (ECF No. 276) (together the "Motions"). For the reasons set forth below, the Motions are denied.

I. BACKGROUND

This breach of contract action was brought by Plaintiffs Chimney Rock Public Power District ("Chimney Rock"), Midwest Electric Cooperative Corporation ("Midwest"), Northwest Rural Public Power District ("Northwest"), and Panhandle Rural Electric Membership Association ("PREMA"), (collectively "Plaintiffs") against Tri-State, a Colorado generation and transmission association of which Plaintiffs are all members. (ECF No. 1-1.)

On September 28, 2009, Plaintiffs[2] filed their Complaint in the District of Nebraska against Tri-State and various individual defendants[3], alleging breach of contract, breach of fiduciary duty, and related claims arising from a dispute over the rates at which Tri-State sold electric power to Plaintiffs. (ECF No. 1-2.) After the District of Nebraska granted a Motion to Change Venue under 28 U.S.C. § 1404(a), the case was transferred to this Court on September 24, 2010. (ECF Nos. 1-71, 1-77.)

On December 3, 2012, Tri-State filed its claims against the Third-Party Defendants. (ECF No. 84.) These claims included a claim for breach of fiduciary duty against Wayne Cobb, a member of the board of directors of Northwest, and Jerry Underwood, a member of the board of directors of PREMA, both of whom were members of Tri-State's board of directors at all relevant times. ( Id. ¶¶ 26-27, 47, 53, 87-91.) Tri-State also asserted a claim against Rolland Skinner, an employee of Northwest, and Ryan Reiber, an employee of PREMA, for aiding and abetting Cobb's and Underwood's breach of fiduciary duty. ( Id. ¶¶ 8-9, 92-95.)

In December 2012, separate Motions to Dismiss pursuant to Rule 12(b)(6) were filed by Cobb and Underwood (ECF No. 113) and Reiber and Skinner (ECF No. 117). On August 21, 2013, the Court granted the Motions to Dismiss in part, dismissing all claims against Cobb and Skinner due to immunities granted by the Nebraska Political Subdivisions Tort Claims Act. (ECF No. 252.) The Court ordered that the parties should bear their own costs. ( Id. at 23.)

On October 9, 2013, Cobb and Skinner filed the instant Motions, requesting that the Court rescind its order that the parties bear their own costs, and instead award them attorneys' fees and costs. (ECF Nos. 275 & 276.) On Tri-State's motion, the Court bifurcated briefing on the issue of entitlement to fees and costs from the amounts of those fees and costs. (ECF No. 277.) On October 30, 2013, Tri-State filed its Responses to the Motions with respect to Cobb and Skinner's entitlement to fees and costs (ECF Nos. 285 & 286), and on November 18, 2013, Cobb and Skinner filed their Replies (ECF Nos. 289 & 290).

II. ANALYSIS

In the Rule 59 Motion, Cobb and Skinner contend that they are entitled to costs as a matter of law under both Colorado law and Federal law. (ECF No. 275.) In the Motion for Fees and Costs, Cobb and Skinner argue that they are also entitled to their reasonable attorneys' fees under Colorado law. (ECF No. 276.) The Court will discuss each of the Motions in turn.

A. Rule 59 Motion: Costs

Federal Rule of Civil Procedure 59(e) permits a Court to alter or amend a judgment on timely motion by a party. "Rule [59(e)] was adopted to make clear that the district court possesses the power to rectify its own mistakes in the period immediately following the entry of judgment." White v. N.H. Dep't of Emp't Sec., 455 U.S. 445, 450 (1982) (internal quotation marks and brackets omitted). Here, the Order challenged by Cobb and Skinner was not a judgment. ( See ECF No. 252.) However, the same legal standard apply to both a Rule 59 motion and a motion for reconsideration: the Court has discretion to amend an order or judgment "to correct clear error or prevent manifest injustice." Servants of the 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. It is not appropriate to revisit issues already addressed or advance arguments that could have been raised in prior briefing." Id. (internal citation omitted).

Cobb and Skinner argue that the Court's refusal to award costs was a clear error of law, because an award of costs is mandatory under Colorado law. (ECF No. 275 at 2 (citing Colo. Rev. Stat. § 13-16-113(2) ("[W]here any such [tort] action is dismissed prior to trial under rule 12(b) of the Colorado rules of civil procedure, the defendant shall have judgment for his costs.")).)

In support of their contention that the Court should apply Colorado law, Cobb and Skinner cite to an unpublished case, Infant Swimming Research, Inc. v. Faegre & Benson, LLP, 335 F.App'x 707, 716 (10th Cir. 2009). In Infant Swimming, the court affirmed a district court's decision to award costs under § 13-16-113. Infant Swimming did not hold that a district court sitting in diversity jurisdiction must award costs ...


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