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Southern Cross Ranches, LLC v. JBC Agricultural Management, LLC

Court of Appeals of Colorado, Third Division

April 18, 2019

SOUTHERN CROSS RANCHES, LLC, and Ranch Management, LLC, Plaintiffs-Appellees,
JBC AGRICULTURAL MANAGEMENT, LLC, Defendant-Appellant, and Crystal River Meat, LLC, Third-Party Plaintiff-Appellant.

Page 1013

          Weld County District Court No. 16CV30552, Honorable Todd L. Taylor, Judge

         Allen Vellone Wolf Helfrich & Factor P.C., Patrick D. Vellone, Jordan Factor, Rachel A. Sternlieb, Lance J. Henry, Denver, Colorado, for Plaintiffs-Appellees

         Chipman Glasser, LLC, David S. Chipman, John M. Bowlin, Denver, Colorado, for Defendant-Appellant and Third-Party Plaintiff-Appellant


         JUDGE WEBB

         [¶ 1] Everyone would agree that under C.R.C.P. 56, summary judgment is proper only in the absence of any disputed issue of material fact. But if the nonmoving party fails to oppose a summary judgment motion, must the trial court examine the entire record on file for factual disputes or may the court limit its analysis to materials cited in the motion? This question is unresolved in Colorado and had divided the federal courts until a 2010 amendment to Fed.R.Civ.P. 56(c)(3), which now provides, "[t]he court need consider only the cited materials, but it may consider other materials in the record."

         [¶ 2] We conclude that a trial court is not required to review the entire record on file for factual disputes before ruling on a summary

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judgment motion. Even so, we further conclude that in this case the trial court abused its discretion by making inconsistent rulings, first denying and then granting summary judgment, without explanation. Therefore, we reverse the summary judgments and remand for further proceedings.

          I. Background and Procedural History

         [¶ 3] JBC Agricultural Management, LLC, entered into separate contracts to buy cattle from plaintiffs Southern Cross Ranches, LLC, and Ranch Management, LLC (collectively, sellers). In turn, JBC contracted to sell the cattle to Crystal River Meat, LLC, its subsidiary (collectively, buyers). Sellers brought this action alleging that JBC had breached the contracts by failing to make any payments, starting with an initial payment due in October 2015. JBC counterclaimed alleging, as relevant here, that after the initial payment deadlines had been extended, sellers breached the contracts by failing to certify, source, feed, and care for the cattle as required by the contracts, and then by failing to provide adequate assurances that they would do so. Crystal River intervened and made similar allegations in a third-party complaint.

         [¶ 4] After substantial discovery had been taken, JBC moved for summary judgment on its breach of contract counterclaim. JBC supported the motion with an affidavit from its principal, Tai W. Jacober (Jacober affidavit), detailing problems with the cattle and referencing emails that Jacober averred confirmed extension of the initial payment deadline. Sellers opposed the motion with counter affidavits and an outspoken brief.[1]

         [¶ 5] On June 12, 2017, in a lengthy written order, the trial court began by saying

Because JBC has not met its burden to show that there is not a genuine dispute about whether it breached the purchase agreements at issue before the [sellers’] alleged breach, I deny the motion. I also deny JBC’s motion because a genuine dispute exists as to the issue of adequate assurances.

          The court recognized JBC’s admission that "it did not make the initial payment due under the agreements." Then the court noted JBC’s assertion that "the parties modified the terms of the agreements through email and agreed to defer the initial payment due on October 15 to a later date." But "[t]he plaintiffs responded by submitting affidavits ... both asserting that neither of the plaintiffs expressly or impliedly agreed to modify JBC’s obligation to make the first payment."

         [¶ 6] Shortly thereafter, and less than a month before the then-scheduled trial date, counsel for buyers moved to withdraw, citing nonpayment. The trial court granted the motion and reset the trial to February 5, 2018. The case remained dormant until November 3, 2017, when sellers moved for summary judgment on all claims, counterclaims, and third-party claims.

         [¶ 7] Because buyers were still without counsel, they could not oppose the motion. See Woodford Mfg. Co. v. A.O.Q., Inc., 772 P.2d 652, 653 (Colo.App. 1988). The trial court signed the summary judgment orders tendered by sellers, one of which entered judgment against JBC for approximately $ 2,500,000 plus interest, costs, and attorney fees; the other dismissed the counterclaims and Crystal River’s third-party complaint. The orders did not mention any aspect of the earlier summary judgment proceeding.

         [¶ 8] Four weeks later, new counsel entered their appearance for buyers. Counsel moved to vacate the summary judgment orders under C.R.C.P. 60(b)(5). According to the motion, the trial court had improperly entered the summary judgment orders without having considered "the entire record, and its own prior holdings, which demonstrated the existence of genuine issues of material fact." The court denied the motion, explaining only that "[b]ecause [buyers] have a remedy — an

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appeal — relief under C.R.C.P. 60(b)(5) is not appropriate."[2]

         [¶ 9] Buyers now contend the summary judgments should be set aside on four grounds. First, because sellers submitted conclusory affidavits, they failed to meet their burden to prove the nonexistence of a genuine issue of material fact. Second, the materials supporting JBC’s earlier summary judgment motion, which the trial court should have considered, established disputed issues of material fact. Third, the trial court did not cite any exception to the law of the case doctrine in disregarding its earlier summary judgment order finding disputed issues of material fact. And fourth, the court denied buyers due process by entering summary judgment against them after having explained in allowing their counsel to withdraw that they could not lose on the merits until trial.

         [¶ 10] Sellers agree that the first three contentions were preserved. Buyers concede that the fourth assertion was not preserved. Because we agree with buyers that the trial court’s inconsistent summary judgment rulings require reversal, we do not reach the fourth contention.

          II. Summary Judgment

          A. Standard of Review and General Law

         [¶ 11] Summary judgment is reviewed de novo, applying the same standard as the trial court. City of Fort Collins v. Colo. Oil, 2016 CO 28, ¶ 9, 369 P.3d 586. But "arguments and evidence not presented to the trial court in connection with a motion for summary judgment will not be considered on appeal." Timm v. Reitz, 39 P.3d 1252, 1255 (Colo.App. 2001).

         [¶ 12] Summary judgment is appropriate only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c); Martini v. Smith, 42 P.3d 629, 632 (Colo. 2002). The opposing party is entitled to the benefit of all favorable inferences that may reasonably be drawn from the undisputed facts, and all doubts as to the existence of a triable issue of fact must be resolved against the moving party. Martini, 42 P.3d at 632.

         [¶ 13] Summary judgment allows the parties to "pierce the formal allegations of the pleadings and save the time and expense connected with trial when, as a matter of law, based on undisputed facts, one party could not prevail." Peterson v. Halsted,829 P.2d 373, 375 (Colo. 1992). Yet, summary judgment "is a drastic remedy, to be granted only when there is a clear showing that the applicable ...

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