Valley Fresh Produce, Inc. v. Western Skyways, Inc.

          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 ...