United States District Court, D. Colorado
HAWG TOOLS, LLC, a Colorado limited liability company, Plaintiff,
NEWSCO INTERNATIONAL ENERGY SERVICES, INC., NEWSCO INTERNATIONAL ENERGY SERVICES USA, INC., a/k/a NEWSCO USA, INC., NEWSCO DIRECTIONAL & HORIZONTAL SERVICES, INC., and JOE FICKEN, an individual, Defendants.
ORDER DENYING PLAINTIFFS MOTION TO RE-OPEN
E. Blackburn United States District Judge
matter before me is Plaintiff Hawg Tools, LLC's
Motion To Lift Stay Entered on March 9, 2015 [Doc. #61] and
To Administratively Reopen Case [#62],
filed July 28, 2017. I deny the motion.
court has jurisdiction over this matter pursuant to 28 U.S.C.
§1332 (diversity of citizenship).
STANDARD OF REVIEW
that is administratively closed pursuant to D.C.COLO.LCivR
41.2 may be reopened for good cause. Generally, there is good
cause to reopen when parties seek to litigate remaining
issues that are ripe for review. American Family Mutual
Insurance Co. v. Teamcorp, Inc., 835 F.Supp.2d 1083,
1086 (D. Colo. 2011). Nevertheless, courts may exercise
discretion by denying a motion to reopen where the relief
sought would be futile. Id.
March 2014, a jury found in favor of plaintiff against
defendants on claims for misappropriation of trade secrets,
conversion, and breach of contract related to the design of
two types of “bearing packs” used in oil field
operations. In post-trial proceedings, plaintiff moved under
the Colorado Uniform Trade Secrets Act, §7-74-103,
C.R.S., to permanently enjoin defendants from using its trade
secrets in one of the two designs. The trial court, however,
noted the general verdict form used in the case made it
impossible to determine whether the jury had found the entire
design to be a trade secret or only some part thereof.
(Plf. Reply Br., Exh. 2 ¶ 5 at 2-3.) It
therefore denied plaintiff's motion for permanent
injunctive relief. (Id., Exh. 2
¶ ¶ 6-7 at 3-4.)
plaintiff thereafter filed this lawsuit to seek ongoing and
future damages for defendants' alleged continuing use of
the bearing pack design after December 31,
2013. At the time this suit was filed, however,
defendants' appeal was still pending before the Colorado
Court of Appeals. I therefore granted defendants' motion
to stay these proceedings and administratively closed this
matter pending the outcome of that appeal. (See
Order Sustaining Objection to Order of the United States
Magistrate Judge and Administratively Closing Case [#61],
filed March 9, 2015.) On January 12, 2017, the Colorado Court
of Appeals vacated the jury's verdict on plaintiff's
misappropriation of trade secrets claim, but upheld the
verdicts on the claims of conversion and breach of contract.
(See Plf. Reply Br., Exh. 2.) The Colorado Supreme
Court subsequently denied the parties' cross-petitions
for writ of certiorari. 2017 WL 2772254 (Colo. June
26, 2017). Plaintiff now moves to reopen this case to seek
ongoing and future damages for conversion claim against all
defendants (or in the alternative, for unjust enrichment), as
well as for breach of contract against defendant Joe Ficken.
defendants suggest plaintiff is attempting to engage in
improper claim-splitting now that plaintiff's state court
claims have been reduced to judgment, the proper rubric is
claim preclusion. See Katz v. Gerardi, 655 F.3d
1212, 1218 (10th Cir. 2011); Hernandez v.
Asset Acceptance, LLC, 970 F.Supp.2d 1194, 1200-01 (D.
Colo. 2013). Claim preclusion “secures the peace and
repose of society by the settlement of matters capable of
judicial determination, ” Nevada v. United
States, 463 U.S. 110, 129, 103 S.Ct. 2906, 2917-18, 77
L.Ed.2d 509 (1983) (citation and internal quotation marks
omitted), by “protecting litigants from the burden of
relitigating an identical issue with the same party or his
privy and of promoting judicial economy by preventing
needless litigation, ” Parklane Hosiery Co. v.
Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 649, 58 L.Ed.2d
preclusion requires (1) a judgment on the merits in the
earlier action; (2) identity of the parties or privies in the
two suits; and (3) identity of the cause of action in both
suits.” Yapp v. Excel Corp., 186 F.3d 1222,
1226 (10th Cir. 1999). As the first two elements
of this test are not in dispute, the only question is whether
the claims plaintiff seeks to bring in this lawsuit arise out
of the same transaction, or series of connected transactions,
as the previous suit. Id. at 1227. Plaintiff
maintains its claims for ongoing or future damages relate not
to continuing wrongs and therefore are not precluded.
respect to plaintiff's claim of conversion, the law is
plainly to the contrary. Under Colorado law,
“[c]onversion is not a continuing tort.” Farm
Credit of Southern Colorado, ACA v. Mason, - P.3d. -,
2017 WL 1279716 at *10 (Colo.App. April 6, 2017), cert.
granted, 2017 WL 4391812 (Colo. Oct. 2, 2017) (No.
17SC346) (citing Employers' Fire Insurance Co. v.
Western. Guaranty Fund Services, 924 P.2d 1107, 1111
(Colo.App. 1996)). See also Kelley v. New York Life
Insurance & Annuity Corp., 2008 WL 1782647 at *6 (D.
Colo. April 17, 2008). Instead, property is considered
converted when a demand for its return is refused, and
damages are based on the fair market value of property
converted at the time and the place of the conversion.
Kelley, 2008 WL 1782647 at *6. By contrast, the
continuing violation doctrine applies only to
“continuing unlawful acts and conduct, not [to]
continual ill effects from an initial violation.”
Salas v. United States, 2012 WL 4097303 at *3 (D.
Colo. Sept. 18, 2012), affirmed in relevant part,
527 Fed.Appx. 813 (10th Cir. May 21, 2013).
See also Anderson Living Trust v. WPX Energy Production,
LLC, 27 F.Supp.3d 1188, 1214 (D.N.M. 2014). Thus, as the
magistrate judge previously found, “the fact that
Defendants continue to possess the property does not mean
that Plaintiff accrues a new claim daily.” Hawg
Tools, LLC v. Newso International Energy Services,
Inc., 2015 WL 1064519 at *7 (D. Colo. Feb. 23, 2015).
plaintiff pursue a claim for unjust enrichment as an
alternative to conversion. “Under res
judicata, or claim preclusion, a final judgment on the
merits of an action precludes the parties or their privies
from relitigating issues that were or could have
been raised in the prior action.” Wilkes v.
Wyoming Department of Employment, 314 F.3d 501,
504-05 (10th Cir. 2002), cert. denied,
124 S.Ct. 181 (2003) (emphasis in original). This rule
precludes plaintiff from presenting new theories of the case
or seeking “remedies or forms of relief not demanded in
the first action:”
Typically, even when the injury caused by an actionable wrong
extends into the future and will be felt beyond the date of
judgment, the damages awarded by the judgment are
nevertheless supposed to embody the money equivalent of the
entire injury. Accordingly, if a plaintiff who has recovered
a judgment against a defendant in a certain amount becomes
dissatisfied with his recovery and commences a second action
to obtain increased ...