United States District Court, D. Colorado
VALLEY FRESH PRODUCE, INC., a California corporation, and JOHN COTTLE, an individual, Plaintiffs,
v.
WESTERN SKYWAYS, INC., a Colorado corporation, ALAN HEAD, an individual, RYAN DICKERSON, an individual, THOMAS W. FARIS, an individual, and DOES 1 through 5, whose true names are unknown, Defendants.
ORDER
PHILIP
A. BRIMMER, Chief United States District Judge.
This
matter is before the Court on Plaintiffs’ Fed.R.Civ.P.
56 Motion for Partial Summary Judgment [Docket No. 58] and
Defendants’ Motion for Partial Summary Judgment
Pursuant to Fed.R.Civ.P. 56 [Docket No. 59]. The Court has
subject matter jurisdiction under 28 U.S.C. §§
1331, 1332, and 1367.
I.
BACKGROUND[1]
This
case involves a dispute concerning defendants’
installation of a turbonormalized engine system in
plaintiffs’ aircraft. At all times relevant to the
dispute, defendant Western Skyways, Inc.
(“Western”) was a re-manufacturer of aircraft
engines operating under Repair Station Certificate Number
WS9R575J issued by the Federal Aviation Administration
(“FAA”) pursuant to 49 U.S.C. § 44707(2).
Docket No. 58 at 2, ¶ 4; Docket No. 59 at 2-3, ¶ 1.
Western owned and operated a website,
www.westernskyways.com, where it advertised itself
as a turbonormalization “specialist” and
represented that pilots could “Fly [Western’s]
200 Series Cessna above the weather at faster Speeds with
Western Skyways Turbonormalizing Engine System, the newest
addition to [Western’s] line of legendary STC’ed
aircraft engine products.” Docket No. 59 at 5,
¶¶ 20-21; see also Docket No. 58 at 3,
¶¶ 7-9.[2]
On or
about September 8, 2015, plaintiff John Cottle contacted
Western about the possibility of the company completing a
turbonormalization conversion on his 1980 Cessna T210N model
aircraft (“the aircraft”). Docket No. 59 at 3,
¶ 5-6.[3] A few months earlier, the Federal Aviation
Administration (“FAA”) had issued two
supplemental type certificates (“STCs”) jointly
in the name of Western and another entity, DERS Group SVC,
LLC (“DERS”). Docket No. 58 at 3, ¶ 10;
Docket No. 59 at 4, ¶ 13. The STCs governed the
turbonormalization of certain Cessna aircraft, including the
Cessna T210N. Docket No. 58 at 3, ¶ 10; Docket No. 59 at
4, ¶ 13.
On
February 18, 2016, Western employee Eric Barker sent
plaintiffs a formal quotation offering to complete the
conversion with a turbonormalization system, a Western
“Gold Seal” remanufactured engine, and a new
propeller for $77, 484, plus $5, 000-$7, 000 in incidental
costs. Docket No. 59 at 3, ¶¶ 7-8. Plaintiffs
accepted the proposal and paid Western $85, 573.04 to
complete the turbonormalization conversion. Id. at
4, ¶ 11; Docket No. 58 at 4, ¶ 15. On or about
April 18, 2016, Mr. Cottle delivered N111VF to
Western’s facility in Montrose, Colorado. Docket No. 58
at 4, ¶ 16; Docket No. 59 at 5, ¶ 15. Western did
not perform the turbonormalization conversion pursuant to its
repair station authority under 14 C.F.R. Part 145. Docket No.
67 at 9, ¶ 3; see also 14 C.F.R. § 145.1
(“This part . . . contains the rules a certified repair
station must follow related to its performance of
maintenance, preventive maintenance, or alterations of an
aircraft, airframe, aircraft engine, propeller, appliance, or
component part to which part 43
applies.”)[4] Instead, Western had its FAA-certified
mechanics perform and sign off on the work required by the
applicable STCs. Docket No. 58 at 4, ¶ 13; Docket No. 59
at 3, ¶ 2-4; Docket No. 67 at 3-4, ¶ 13; Docket No.
69 at 5, ¶ 24; Docket No. 74 at 4, ¶
24.[5]
Western
returned N111VF to plaintiffs on August 13, 2016. Docket No.
58 at 4, ¶ 17; Docket No. 59 at 5, ¶ 19. On the day
of the return, plaintiffs had N111VF inspected by Federico
Helicopters, Inc., an FAA-certified repair station, which
determined that N111VF had not been turbornormalized in
accordance with the controlling STCs and was therefore
unairworthy. Docket No. 58 at 4, ¶ 18; Docket No. 59 at
5, ¶ 19.
Plaintiffs
filed this lawsuit on June 14, 2017. Docket No. 1. The
complaint asserts claims for: (1) violation of the Colorado
Consumer Protection Act (“CCPA”), Colo. Rev.
Stat. § 6-1-101 et seq.; (2) breach of implied
warranty under Colo. Rev. Stat. § 4-2-314; (3) breach of
express warranty under Colo. Rev. Stat. § 4-2-313; (4)
breach of contract; (5) unjust enrichment; (6) negligence;
(7) fraudulent concealment; and (8) false advertising in
violation of the Lanham Act, 15 U.S.C. § 1125(a). Docket
No. 1 at 9-16. The first through fifth causes of action are
asserted against Western only. See Id . at 9-13. The
sixth and seventh causes of action are asserted against all
four named defendants – Western, Mr. Head, Mr.
Dickerson, and Mr. Faris. See Id . at 14-15. The
eighth cause of action is asserted against Western and Mr.
Head. See Id . at 16. On January 11, 2019, the
parties filed cross-motions for partial summary judgment.
See Docket Nos. 58, 59.[6]
II.
LEGAL STANDARD
Summary
judgment is warranted under Federal Rule of Civil Procedure
56 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 Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248-50 (1986). A disputed fact is “material” if
under the relevant substantive law it is essential to proper
disposition of the claim. Wright v. Abbott Labs.,
Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). Only
disputes over material facts can create a genuine issue for
trial and preclude summary judgment. Faustin v. City
& Cty. of Denver, 423 F.3d 1192, 1198 (10th Cir.
2005). An issue is “genuine” if the evidence is
such that it might lead a reasonable jury to return a verdict
for the nonmoving party. Allen v. Muskogee, 119 F.3d
837, 839 (10th Cir. 1997).
Where
“the moving party does not bear the ultimate burden of
persuasion at trial, it may satisfy its burden at the summary
judgment stage by identifying a lack of evidence for the
nonmovant on an essential element of the nonmovant’s
claim.” Bausman v. Interstate Brands Corp.,
252 F.3d 1111, 1115 (10th Cir. 2001) (internal quotation
marks omitted) (quoting Adler v. Wal-Mart Stores,
Inc., 144 F.3d 664, 671 (10th Cir. 1998)). “Once
the moving party meets this burden, the burden shifts to the
nonmoving party to demonstrate a genuine issue for trial on a
material matter.” Concrete Works of Colo., Inc. v.
City & Cty. of Denver, 36 F.3d 1513, 1518 (10th Cir.
1994). The nonmoving party may not rest solely on the
allegations in the pleadings, but instead must designate
“specific facts showing that there is a genuine issue
for trial.” Celotex Corp. v. Catrett, 477 U.S.
317, 324 (1986) (internal quotation marks omitted). “To
avoid summary judgment, the nonmovant must establish, at a
minimum, an inference of the presence of each element
essential to the case.” Bausman, 252 F.3d at
1115. When reviewing a motion for summary judgment, a court
must view the evidence in the light most favorable to the
non-moving party. Id. However, where, as here, there
are cross motions for summary judgment, the reasonable
inferences drawn from affidavits, attached exhibits, and
depositions are rendered in the light most favorable to the
non-prevailing party. Jacklovich v. Simmons, 392
F.3d 420, 425 (10th Cir. 2004). Furthermore, “[w]hen
the parties file cross motions for summary judgment, we are
entitled to assume that no evidence needs to be considered
other than that filed by the parties, but summary judgment is
nevertheless inappropriate if disputes remain as to material
facts.” Atlantic Richfield Co. v. Farm Credit Bank
of Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000)
(internal quotation marks omitted).
III.
EVIDENTIARY ISSUES
The
Court begins by addressing two evidentiary issues raised in
the parties’ summary judgment motions.
The
first issue concerns the admissibility of Eric Barker’s
affidavit, Docket No. 67-1, which was submitted by defendants
in opposition to plaintiffs’ motion for summary
judgment. Plaintiffs request that the Court exclude the
affidavit and its exhibits under Ralston v. Smith &
Nephew Richards, Inc., 275 F.3d 965 (10th Cir. 2001),
because “Mr. Barker was deposed and subject to
cross-examination” and his “affidavit does not
resolve any lack of clarity in the record.” Docket No.
70 at 1-2.[7] In Ralston, the court held that
the district court did not abuse its discretion in excluding
an affidavit that “directly contradicted certain
positions previously taken by [the affiant] and which were
detrimental to [the plaintiff’s] sole remaining cause
of action” because the circumstances supported a
conclusion that the affidavit sought to create a “sham
fact issue.” 275 F.3d at 973. In reaching that holding,
the court identified three factors relevant to “whether
a contradicting affidavit seeks to create a sham fact
issue”: (1) whether “the affiant was
cross-examined during his earlier testimony”; (2)
whether “the affiant had access to the pertinent
evidence at the time of his earlier testimony or whether the
affidavit was based on newly discovered evidence”; and
(3) whether “the earlier testimony reflects confusion
which the affidavit attempts to explain.” Id.
at 973. Plaintiffs have not shown that these factors weigh in
favor of excluding Mr. Barker’s testimony. Even
assuming Mr. Barker had access to the same exhibits and was
subject to cross-examination during his deposition,
plaintiffs have submitted only two short excerpts from Mr.
Barker’s deposition, neither of which appears to
contradict Mr. Barker’s affidavit. See Docket
Nos. 58-8, 72-3.[8] Because the Court is unable to conclude,
based on the record before it, that Mr. Barker’s
affidavit was intended to contradict his earlier testimony,
there is no basis for excluding the affidavit under
Ralston. See Knitter v. Corvias Military Living,
LLC, 758 F.3d 1214, 1218 n.3 (10th Cir. 2014) (holding
that witness’s affidavit did not “fit[] the sham
affidavit paradigm” because it did not “contain
any allegations that would directly contradict [the
witness’s] earlier deposition testimony”
(internal quotation marks omitted)); see also Law Co.,
Inc. v. Mohawk Constr. & Supply Co., Inc., 577 F.3d
1164, 1169 (10th Cir. 2009) (holding that the district court
abused its discretion by excluding affidavits without first
identifying how they conflicted with prior deposition
testimony).
The
second evidentiary issue concerns plaintiffs’ reliance
on an uncertified transcript of Philip Baker’s
deposition. See Docket Nos. 58-15, 69-4. The front
page of the transcript contains a disclaimer stating that it
is an “unedited” and “uncertified rough
draft transcript” that “cannot be used or cited
in any court proceedings.” Docket No. 58-15 at 2;
Docket No. 69-4 at 2. Given this clear language and
plaintiffs’ failure to provide any explanation for
submitting an uncertified transcript of Mr. Baker’s
deposition, the Court will not consider the transcript for
purposes of resolving the parties’ summary judgment
motions. See Fed. R. Civ. P. 30(f)(1) (requiring
that deposition transcripts include a certification
“that the witness was duly sworn and that the
deposition accurately records the witness’s
testimony”); compare Christmon v. B&B Airparts,
Inc., 735 F. App’x 510, 513 (10th Cir. 2018)
(unpublished) (holding that Fed.R.Civ.P. 30(f)(1) did not bar
the court’s consideration of certain deposition
testimony on summary judgment because the defendant had filed
the requisite certification with the court).[9]
IV.
DEFENDANTS’ MOTION FOR PARTIAL SUMMARY
JUDGMENT
Defendants
move for summary judgment on plaintiffs’ Lanham Act,
CCPA, fraudulent concealment, unjust enrichment, and
negligence claims. See generally Docket No. 59.
A.
Lanham Act Claim
Plaintiffs
assert a claim under the Lanham Act, 15 U.S.C. §
1125(a), based on allegedly false or misleading statements of
fact made by Western and/or Mr. Head with respect to
“their ability to turbonormalize the engines of 210
Series Cessna aircraft.” Docket No. 1 at 17,
¶¶ 85. Defendants assert that this claim fails as a
matter of law because a consumer is not entitled to bring a
claim for false advertising under the Lanham Act.
See Docket No. 59 at 12. Plaintiffs make no argument
in opposition to defendants’ request for summary
judgment on this claim. See generally Docket No. 69;
see also Docket No. 74 at 2 (noting
plaintiffs’ failure to address defendants’
argument regarding the Lanham Act claim).
The
Court agrees that plaintiffs’ claim is foreclosed by
Lexmark International, Inc. v. Static Control Components,
Inc., 572 U.S. 118 (2014), in which the Supreme Court
held that a plaintiff asserting a false advertising claim
under the Lanham Act “must allege an injury to a
commercial interest in reputation or sales” and thus
“[a] consumer who is hoodwinked into purchasing a
disappointing product . . . cannot invoke the protection
of” the statute. Id. at 131-32; see also
POM Wonderful LLC v. Coca-Cola Co., 573 U.S. 102, 107
(2014) (“Though in the end consumers also benefit from
the [Lanham] Act’s proper enforcement, the cause of
action [for unfair competition through misleading
advertising] is for competitors, not consumers.”).
Because plaintiffs assert a Lanham Act claim based on
injuries allegedly sustained by them as consumers of
defendants’ turbonormalizing services, see
Docket No. 1 at 4, 6, 8, 17, ¶¶ 12-15, 24, 33,
85-87; Docket No. 77 at 2-3, defendants are entitled to
summary judgment on this claim.
B.
Colorado Consumer Protection Act Claim
Plaintiffs
allege that Western violated the CCPA, Colo. Rev. Stat.
§ 6-1-101 et seq., by making allegedly false,
unfair, and deceptive statements regarding its status as a
“turbonormalization specialist.” Docket No. 1 at
9-10, ¶¶ 41-48; Docket No. 77 at 2-3. Defendants
move for summary judgment on this claim, arguing that (1) the
challenged statements constitute non-actionable
“puffery, ” Docket No. 59 at 7; and (2) the
challenged statements were not deceptive. Id. at
10-11.
To
succeed on a claim under the CCPA, plaintiffs must show that:
(1) Western engaged in an unfair or deceptive trade practice;
(2) the challenged practice occurred in the course of
Western’s business, vocation, or occupation; (3) the
challenged practice significantly impacts the public as
actual or potential consumers of Western’s goods,
services, or property; (4) plaintiffs suffered injury in fact
to a legally protected interest; and (5) the challenged
practice caused plaintiffs’ injury. Alpine Bank v.
Hubbell, 555 F.3d 1097, 1112 (10th Cir. 2009) (citing
Hall v. Walter, 969 P.2d 224, 235 (Colo. 1998)).
As
relevant here, the CCPA provides that a
person engages in a deceptive trade practice when, in the
course of the person’s business, vocation, or
occupation, the person . . .
(e) Either knowingly or recklessly makes a false
representation as to the characteristics, ingredients, uses,
benefits, alterations, or quantities of goods, food,
services, or property or a false representation as to the
sponsorship, approval, status, affiliation, or connection of
a person therewith; . . .
(g) Represents that goods, food, services, or property are of
a particular standard, quality, or grade, or that goods are
of a particular style or model, if he knows or should know
that they are of another; . . .
(u) Fails to disclose material information concerning goods,
services, or property which information was known at the time
of an advertisement or sale if such failure to disclose such
information was intended to induce the consumer to enter into
a transaction[.]
Colo. Rev. Stat. § 6-1-105(1); see also Docket
No. 58 at 15 (citing Colo. Rev. Stat. §§
6-1-105(1)(e), (g), and (u) as bases for CCPA
claim).[10] These provisions proscribe both the
making of false representations and the failure to disclose
material information concerning goods, services, or property.
1.
False Representations
At all
times relevant to this lawsuit, Western advertised itself on
its website as “Western Skyways – The
Turbonormalization Engine Systems Specialist” and
represented that pilots could “Fly [our] 200 Series
Cessna above the weather at faster Speeds with Western
Skyways Turbonormalizing Engine System, the newest addition
to our line of legendary STC’ed aircraft engine
products.” Docket No. 59 at 5, ¶ 21. Plaintiffs
allege that these statements were “false, unfair, and
deceptive” under the CCPA because Western “is not
a turbonormalization specialist, and does not hold the STC on
the T210 aircraft engine.” Docket No. 1 at 10, ¶
46. Western argues it is entitled to summary judgment on this
claim because there is no dispute that Western is a
turbonormalization specialist and holds the relevant STCs.
Docket No. 59 at 10.
The
Court agrees that plaintiffs have failed to establish the
first element of their false representation claim under the
CCPA. To show that Western engaged in a deceptive trade
practice, plaintiffs must offer proof of a knowing
“misrepresentation or . . . false representation [that]
had the capacity or tendency to deceive, even if it did
not.” Rhino Linings USA, Inc. v. Rocky Mountain
Rhino Lining, Inc., 62 P.3d 142, 148 (Colo. 2003);
see also Crowe v. Tull, 126 P.3d 196, 204 (Colo.
2006) (“A CCPA claim will only lie if the plaintiff can
show the defendant knowingly engaged in a deceptive trade
practice.”). A “misrepresentation”
is defined as “a false or misleading statement that
induces the recipient to act or refrain from acting.”
Rhino Linings USA, Inc., 62 P.3d at 147.
Plaintiffs
assert that the statements on Western’s website were
false or misleading in two respects: (1) Western was not
actually a turbonormalization “specialist”
because it was “incapable of performing the
turbonormalizing as advertised”; and (2) Western did
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