Free Notice (Other) - District Court of Colorado - Colorado

Case 1:01-cv-00083-REB-CBS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 1:01-cv-00083-REB-CBS STOCKMAN'S WATER COMPANY, LLC, a Colorado limited liability company, Plaintiff, and PETER HORNICK, an individual domiciled in New York, and AMERICAN WATER DEVELOPMENT, INC., a Colorado corporation, Intervening Plaintiffs, vs. VACA PARTNERS, L.P., a Delaware limited partnership; FARALLON CAPITAL MANAGEMENT, LLC, a Delaware limited liability company; and JASON FISH, a California resident, an individual, Defendants.

NOTICE OF SAGUACHE COUNTY DISTRICT COURT'S ORDER GRANTING SUMMARY JUDGMENT ON REMAINING CLAIMS

Defendants, Vaca Partners, L.P., Farallon Capital Management, LLC, and Jason Fish (collectively, "Defendants"), hereby notify this Court that on November 16, 2005, the Colorado District Court for Saguache County (the "State Court") issued its Order Granting Summary Judgment on Remaining Claims (the "Summary Judgment Order") in Cabeza de Vaca Land & Cattle Co. v. American Water Development Inc., No. 02CV15 (the "State Action"). A copy of the State Court's Summary Judgment Order is attached to this Notice as Exhibit A. In it, the State Court interpreted its May 9, 2003 Order That Security Documents of American Water

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Development, Inc Are Invalid and Released and for Damages and Other Relief Provided for by C.R.S. § 38-35-204 and C.R.S. § 38-35-109 (the "54(b) Order"), and the Court of Appeals' order affirming the 54(b) Order. In so doing, the State Court made numerous factual findings or legal holdings that are relevant to arguments advanced by Intervening Plaintiff, American Water Development, Inc.'s ("AWDI"), in its Modified Motion for Relief from Order or in the Alternative for Entry of Judgment ("Motion"). To give some examples: 1. In its Motion, AWDI argues that the 54(b) Order was not a final judgment.

AWDI analogizes the State Court's findings on the issue of breach as analogous to rulings on a motion for a preliminary injunction, and argues that the findings are therefore not binding. (Mot. at 9, 13.) The State Court rejected the identical argument made to it by AWDI: [T]he May 9, 2003, Order of this Court . . . was a final order and was certified to the Court of Appeals pursuant to C.R.C.P. 54(b). The Court of Appeals affirmed this Court's findings and legal determinations on this issue. AWDI argues that the findings made by this Court in its prior orders should not be viewed as binding for all purposes. AWDI argues these should be viewed as preliminary findings similar to those made in a preliminary injunction. This argument is wholly without merit. The provisions of § 38-35-201, et seq., stand as an independent claim. AWDI appealed the ruling of this Court in regard to these issues and the Court of Appeals affirmed the findings and conclusions. (Summary Judgment Order at 8 (emphasis added).) 2. In its Motion, AWDI hypothesized that the State Court's unwillingness to enter

judgment under Rule 58 in 2003 showed that the issue of "whether the parties breached any aspect of the AGRI has not been the subject of any final judgment." (Mot. at 9.) In the Summary Judgment Order, the Court rejected AWDI's speculation about its reasons for deciding not to enter a final judgment under C.R.C.P. 58 in 2003: [T]his Court declined to grant a final judgment pursuant to C.R.C.P. 58 directly following the Court's [May 9, 2003 Order]. The Court indicated at the time that it 2

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would not do so because AWDI was entitled to conduct discovery and to have the time permitted to respond as provided by C.R.C.P. 56. Neither party should have understood the Court as saying any more or less than the request for summary judgment was not properly before the Court. It now is. (Summary Judgment Order at 5.) 3. In the Motion, AWDI argues that it did not have a "full and fair opportunity to

litigate all issues relating to any breach of the AGRI. (Mot. at 11 (caption) (capitalization omitted).) In the Summary Judgment Order, the State Court held to the contrary: Nothing in [an affidavit submitted by AWDI] supports the contention that there is a legitimate claim that has not been litigated. The Court reviewed and fully considered the terms of the AGRI in determining the invalidity of the liens in its prior rulings. As Judge Blackburn so succinctly put it in his order dated December 30, 2003, "AWDI makes no credible argument that Cabeza's duties under the AGRI extended beyond paying it money." (Summary Judgment Order at 8.) 4. In its Summary Judgment Order, the State Court emphasized repeatedly that both

it and the Colorado Court of Appeals had already found that AWDI, not Cabeza, breached the AGRI. The State Court declared: a. In the [54(b) Order], the Court found that AWDI materially breached the AGRI and that Cabeza did not commit a breach . . . .

(Summary Judgment Order at 3 (quoting 54(b) Order at 9).) b. In this case, the undisputed material facts preclude AWDI from satisfying the elements of its breach of contract counterclaim. AWDI has failed to articulate any factual basis to establish that Cabeza breached the Deed of Trust or the AGRI. To begin with, this Court has already found and the Court of Appeals concurred that (1) Cabeza never defaulted on the Deed of Trust; and (2) it was AWDI, not Cabeza, who breached the AGRI.

(Id. at 6.)

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c.

Because the undisputed material facts establish that Cabeza never was in default of the Deed of Trust, AWDI cannot continue to argue that there is a viable dispute regarding whether Cabeza failed to perform its contractual obligations under the Deed of Trust. . . . [T]he Court of Appeals considered and rejected the suggestion that there is some duty owed under the Deed of Trust that was not satisfied by the tendering of the full amount due as calculated under the terms of the AGRI.

(Id. at 6-7.) d. AWDI cannot prevail on its claim that Cabeza breached the AGRI because the undisputed facts establish that AWDI materially breached the AGRI while Cabeza did not.

(Id. at 7 (quoting 54(b) Order at 9).) e. Cabeza's performance of its contractual obligations, being "reasonable," was not in breach of the AGRI. (Id. [previously citing to 54(b) Order at 9].) In contrast, AWDI's refusal to release the security documents "was a material breach of the AGRI." (Id.)

(Id.) f. There are no disputed or undisputed material facts set forth by AWDI that would support a remaining claim for breach of contract or a related argument of violation of implied covenant of fair dealing. . . . As both the Court of Appeals and Judge Blackburn have also observed, AWDI has set forth no facts to support such a claim [for breach of the implied covenant of good faith and fair dealing] because they have made no credible claim that Cabeza, Vaca or Farallon owed any duty to AWDI pursuant to the AGRI and Deed of Trust except to pay AWDI its percentage of the sale of the water assets as they were sold. That duty was fully performed.

(Id. at 11.) In conclusion, in its Summary Judgment Order, the State Court interpreted its prior 54(b) Order, as affirmed by the Colorado Court of Appeals, as a final judgment that resolved the central issues raised by AWDI in its claims before this Court. Accordingly, the Summary

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Judgment Order demonstrates that it is appropriate for this Court to rule that the doctrine of issue preclusion bars relitigation of the breach issues raised by AWDI in this Federal Court Action. Respectfully submitted this 21st day of November, 2005. BROWNSTEIN HYATT & FARBER, P.C. By: s/Stanley L. Garnett_______________ Stanley L. Garnett Richard P. Barkley Annie T. Kao 410 17th Street, 22nd Floor Denver, Colorado 80202 (303) 223-1100 [email protected] [email protected] [email protected] ATTORNEYS FOR APPELLEES, VACA PARTNERS, L.P., FARALLON CAPITAL MANAGEMENT, LLC, AND JASON FISH

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CERTIFICATE OF SERVICE The undersigned hereby certifies that on the 21st day of November, 2005, a true and correct copy of the foregoing NOTICE OF SAGUACHE COUNTY DISTRICT COURT'S ORDER GRANTING SUMMARY JUDGMENT ON REMAINING CLAIMS was served via the CM/ECF system to the following addresses: Allan L. Hale, Esq. John G. Lubitz, Esq. Robert T. Hoban, Esq. Hale Friesen, LLP 1430 Wynkoop Street, Suite 300 Denver, Colorado 80202 [email protected] [email protected] [email protected] Richard I. Brown, Esq. Patrick J. Casey, Esq. Laura J. Nelson, Esq. John Alan Call, Esq. Lottner Rubin Fishman Brown & Saul, P.C. 633 Seventeenth Street, Suite 2700 Denver, Colorado 80202 [email protected] [email protected] [email protected] [email protected] Robert J. Bruce, Esq. Lawlis & Bruce, LLC 1875 Lawrence Street, Ste. 750 Denver, CO 80202 [email protected]

s/ Catherine Olguin______________ Catherine Olguin