December 10, 2017

Colorado Court of Appeals: Roaring Fork Transportation Authority Possessed Eminent Domain Power by Statute

The Colorado Court of Appeals issued its opinion in Sos v. Roaring Fork Transportation Authority on Thursday, November 16, 2017.

Eminent Domain—Inverse Condemnation Claim—Compensable Damages—Restoration Damages—Diminution in Value.

Sos owns property on which he owns and operates a tire business. The Roaring Fork Transportation Authority (RFTA) built a bus station on the property north of and adjacent to his property. Before RFTA began construction, an earthen embankment rested on the property line between Sos’s and RFTA’s properties. Sos regularly sold tires and other items on the embankment and, with the previous owner’s permission, on the northern property. As part of its construction, RFTA removed the embankment and built a wall on its property, and then restored the embankment, which the wall relies on for lateral support. Sos then wanted to remove the embankment to facilitate his business. He brought an inverse condemnation claim against RFTA because the bus station wall relies on his property for lateral support. RFTA moved for summary judgment and Sos moved for partial summary judgment, regarding whether a compensable taking or damages had occurred. The district court denied RFTA’s motion and granted Sos’s motion, determining that the force the bus station wall permanently imposed on the embankment constituted compensable damage under article II, section 15 of the Colorado Constitution, and that the proper measure of damages was restoration damages rather than diminution in value.

On appeal, RFTA argued that the district court erred in determining that RFTA possessed the power of eminent domain because the General Assembly had not granted RFTA this power expressly or by clear implication, and because it does not possess the power of eminent domain, Sos cannot establish an inverse condemnation claim. Pursuant to the plain language of C.R.S. § 43-4-604, RFTA has the power of eminent domain by clear implication.

RFTA next asserted that the district court erred in concluding that RFTA’s bus station wall caused compensable damage because the wall’s construction did not substantially diminish the value of Sos’s property or substantially change Sos’s use of his property. The district court found, with record support, that RFTA authorized the building of the bus station wall and that RFTA incorporated the embankment’s support into the bus station wall’s design and construction. The court, therefore, properly determined that the imposition of force on Sos’s embankment was the natural consequence of RFTA’s intentional construction of the bus station wall. Further, the record, including RFTA’s own expert opinions, supported the district court’s finding that the bus station wall imposed a new force on Sos’s embankment to such a degree that an engineered remedy was now required before the embankment could be excavated. The district court properly determined that RFTA damaged Sos’s property.

RFTA next contended that the district court erred in ruling that restoration costs rather than diminution of value was the proper measure of damages. The record shows that the diminution in value of Sos’s property after RFTA built the bus station was de minimis. But RFTA’s construction substantially limited Sos’s use and enjoyment of the embankment area. Therefore, the district court properly determined Sos’s damages under the measure of restoration costs.

RFTA further argued that the district court erred in allowing evidence of Sos’s business and personal uses for his property because such interests are non-compensable in condemnation cases. RFTA contended that Sos presented no admissible evidence regarding restoration costs or supporting the damages award. The Court of Appeals concluded that the district court’s damages award is supported by competent record evidence.

RFTA also argued that the district court erred in rejecting its proposed instructions regarding diminution of value being the proper measure of damages. The district court’s decision was supported by competent evidence and did not cause the commissioners to be inaccurately instructed on the law.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Colorado RTD Manager Found Guilty of Bribery

Tenth Circuit Court of Appeals issued its opinion in United States v. Hardin on Wednesday, October 25, 2017.

Defendant Hardin was the senior manager for the Regional Transportation District (RTD) in Colorado. Part of Hardin’s job responsibilities included setting goals on projects for small business participation and ensuring compliance of small business participation on various projects. Ward was the owner of a busing company as well as a manufacturing representative for Build Your Dream, a manufacturer of automobiles and rechargeable batteries. Ward represents Build Your Dream to sell their merchandise in Denver.

Ward’s busing company contracted with RTD as a service provider for Access-a-Ride, a program that provides local bus transportation in Denver for people with disabilities. From that point on, Ward paid Defendant monthly bribes in exchange for Defendant’s help to secure a contract with RTD, as RTD was preparing to solicit bids for the purchase of shuttle buses. Ward would meet with Defendant every month and pay Defendant to help Ward win the contract. Further, Defendant gave Ward information on potential competitors to allow Ward to tailor his proposal to RTD.

Unbeknownst to Defendant, Ward had previously pleaded guilty to tax evasion and, to receive a reduced sentence, relayed Defendant’s original bribe request to the Federal Bureau of Investigation. Ward then became the FBI’s confidential informant to investigate Defendant for bribery. The meetings and conversations between Ward and Defendant were all recorded.

Defendant was charged with four counts of committing bribery involving a program that receives federal funds. The jury found Defendant guilty of three counts relating to the proposed shuttle bus contract. Defendant appealed, arguing that, by dismissing one count, it could not be shown that he had solicited the requisite $5,000 threshold that is set by the federal-program bribery statute. The Tenth Circuit found that the $5,000 pertains to the subject matter of the bribe and Ward paid for Defendant’s help with respect to the lucrative shuttle bus purchase contract. The Tenth Circuit was persuaded that the statute was sufficiently definite to give Defendant fair notice of the criminality of his conduct.

The Tenth Circuit Court of Appeals AFFIRMED Defendant’s conviction and sentence.

Tenth Circuit: Chicken Farmer Prejudiced by District Court’s Judgment on Basis Not Raised by Either Party

The Tenth Circuit Court of Appeals issued its opinion in Oldham v. O.K. Farms, Inc. on Monday, September 25, 2017.

Plaintiff, Earl Oldham, had entered into a contract with O.K. Farms (O.K.), which contract is at issue in this case. Under the contract, O.K. would provide Oldham with chickens to raise, the chickens would remain O.K.’s property, and Oldham would be paid for providing their care. Although the contract had a three-year duration, O.K. retained the right to terminate the contract for certain specified reasons, including breach of any term or condition of the contract, abandonment or neglect of a flock, and failure to care for or causing damage to O.K.’s equipment or property.

Early one morning, Oldham discovered one of his three chicken houses had flooded and contacted O.K. requesting help. Oldham then briefly left the farm to open his tire shop, and when he returned, he was informed by an O.K. field technician that it was his problem, not O.K.’s, and Oldham would have to deal with it. Oldham began complaining at the lack of help provided by O.K. and requested they come and get all of the chickens.

An O.K. crew arrived at Oldham’s farm, removed the live chickens, and brought them to a nearby farm to be raised by a different farmer. Oldham was paid for the work he had done raising the chickens to that point, reduced by the cost of catching and moving the chickens. O.K. subsequently sent Oldham a letter, providing him with a ninety-day notice of contract termination. O.K. provided its reasoning behind termination of the contract: (1) Oldham breached the terms and conditions of the contract by failing to adequately provide for the animal welfare of the chickens in his care; (2) Oldham abandoned and neglected the flock to open his tire shop when the chickens were encountering a threat to their welfare; and (3) the flooding in the henhouse damaged O.K.’s property, the chickens.

In response to these allegations, Oldham contended the flooding was the result of an act of God, not neglect. As for the abandonment argument, Oldham argued that he did not abandon the chickens by leaving for fifteen to twenty minutes while an O.K. field technician was at the scene telephoning his supervisor to determine what they should do about the situation.

This appeal follows the district court’s granting of summary judgment in favor of O.K. on the premise that Oldham abandoned the flock when he requested O.K. come pick up all of the chickens, not just the ones in the flooded henhouse.

After carefully reviewing the summary judgment record and the parties’ arguments, the court determined that the district court granted judgment on a basis that was not raised by O.K. or briefed by either party. The only argument regarding abandonment that O.K. raised in its brief was the argument that Oldham abandoned the flock by leaving to open his tire shop. O.K. never raised any argument that Oldham abandoned his flock by telling O.K. to come get all of the birds.

The rules of civil procedure permit a district court to grant summary judgment on grounds not raised by a party, but only after giving notice and a reasonable time to respond. The district court gave no notice that it intended to grant summary judgment on a basis that was not raised by O.K., nor did the district court give Oldham any time to respond to this decision, much less reasonable time to consider the new theory and develop the arguments to dispute it. The court found that Oldham was prejudiced by this lack of notice and opportunity to respond.

In order to establish the requisite prejudice, the losing party must identify what additional arguments he could have made or evidence he could have produced or relied on to undermine the district court’s ruling. In this case, Oldham evidenced that he was motivated by concern for all of the other chickens’ welfare in telling O.K. to pick up all of the chickens, as there was more rain forecasted and he did not want another henhouse to be flooded. This concern for the chicken’s welfare might have been relevant to the district court’s holding that Oldham legally abandoned the chickens. The court found that this information was enough to show prejudice.

The Tenth Circuit Court of Appeals REVERSED and REMANDED for further proceedings.

Colorado Court of Appeals: Corporation with No Property or Payroll of Its Own Need Not Be Included on Tax Return

The Colorado Court of Appeals issued its opinion in Agilent Technologies, Inc. v. Colorado Department of Revenue on Thursday, November 2, 2017.

Holding CompanyPropertyCorporate Income Tax ReturnsCombined Returns.

Agilent Technologies, Inc. (Agilent) is incorporated in Delaware, but during the years at issue (tax years 2000 to 2007), it maintained research and development and manufacturing sites in Colorado. Agilent timely filed corporate income tax returns for these years. Agilent Technologies World Trade, Inc. (WT) is a subsidiary of Agilent and is incorporated in Delaware. It was formed as a holding company to own foreign entities operating solely outside the United States. As a holding company, WT does not own or rent property, has no payroll, and does not advertise or sell products or services of its own.

For federal tax purposes, WT and the foreign entities elected to be taxed as a single corporation. Agilent did not include WT in its corporate tax returns for the years at issue. The Department of Revenue (Department) issued notices of corporate income tax deficiency requiring that Agilent include WT in its Colorado combined returns for the years at issue and assessed tax, interest, and penalties. Agilent contested the Department’s adjustments, and the director upheld the notices. Agilent sought review in the district court. The district court concluded that the Department was prohibited from requiring Agilent to include WT in its Colorado combined corporate income tax returns and entered summary judgment for Agilent.

On appeal, the Department contended that the district court erred when it held that WT was not an includible C corporation under C.R.S. § 39-22- 303(12)(c). Conversely, Agilent argued that C.R.S. § 39-22-303(8) required exclusion of WT from its combined return. C.R.S. § 39-22-303(12)(c) requires inclusion of a corporation in a combined report if “more than twenty percent of the C corporation’s property and payroll” is assigned to locations inside the United States. Because WT had no property factors, although it wasn’t prohibited from including WT, Agilent was not required to include WT in its Colorado combined tax return.

The Department also contended that the district court erred when it ruled that, as a matter of law, C.R.S. § 39-22-303(6) could not be applied as an alternative basis for including WT in Agilent’s tax return. It also contended that the economic substance doctrine should be applied to permit taxation of WT even in the absence of specific statutory authorization. C.R.S. § 39-22-303(6) authorizes the Department to allocate income and deductions among corporations that are owned or controlled by the same interests on a fair and impartial basis to clearly reflect income and avoid abuse. However, C.R.S. § 39-22-303(6) cannot be applied to allocate income among affiliated corporations that were not otherwise includible under C.R.S. § 39-22-303(8) to (12). Accordingly, the district court did not err in concluding that C.R.S. § 39-22-303(6) did not provide a basis for including WT in Agilent’s tax return. Further, it was not alleged that WT lacks a business purpose apart from reducing tax liability. Therefore, the economic substance doctrine does not provide an independent basis in this case for including WT in Agilent’s combined return.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Complaint Not Moot when Injury Can Be Redressed By Favorable Judicial Decision

The Tenth Circuit Court of Appeals issued its opinion in EEOC v. CollegeAmerica Denver, Inc. on Tuesday, September 5, 2017.

This case arises out of a dispute between CollegeAmerica Denver., Inc. (Company) and a former employee, Ms. Potts. The Company and Potts resolved a dispute by entering into a settlement agreement, but the Company came to believe that Potts breached the settlement agreement, leading the Company to sue Potts in state court. The suit sparked the interest of the Equal Employment Opportunity Commission (EEOC), which believed that the Company’s interpretation and enforcement of the settlement agreement was unlawful and interfered with the statutory rights of Potts. Based on this belief, the EEOC sued the Company in federal court.

The district court dismissed the EEOC’s unlawful-interference claim as moot, however, the EEOC is appealing the dismissal in light of the Company’s new theory against Potts: that she breached the settlement agreement by reporting adverse information to the EEOC without notifying the Company. The EEOC believes that by presenting this new theory, the Company was continuing to interfere with Potts’s and the EEOC’s statutory rights. The Tenth Circuit Court of Appeals reviewed this appeal and holds that the claim is not moot.

In deciding if a case is moot, the Tenth Circuit assesses whether a favorable judicial decision would have some effect in the real world. In other words, if a plaintiff no longer suffers an actual injury that can be redressed by a favorable judicial decision, the claim is moot.

A special rule applies when the defendant voluntarily stops the challenged conduct. When the conduct stops, the claim will be deemed moot only if two conditions exist: (1) it is absolutely clear the allegedly wrongful behavior could not reasonably be expected to recur; and (2) interim relief or events have completely and irrevocably eradicated the effects of the alleged violation. The court held that the first condition was not met, as the Company continued to stand by its new theory of how Potts had breached the settlement agreement. Therefore, mootness due to voluntary cessation is not applicable here.

The Tenth Circuit further disagreed with the Company’s argument that the case was moot because the outcome would not affect anything in the real world. The court found that if the EEOC prevailed on the merits and obtained an injunction, the Company could not present its new theory in the state-court suit against Potts. The inability to present this theory would constitute an effect in the real world, preventing dismissal based on mootness.

The Tenth Circuit further rejected the Company’s newly raised argument that the EEOC sought overly-broad, unauthorized injunctive and declaratory relief, finding that a federal court should not dismiss a meritorious constitutional claim because the complaint seeks one remedy rather than another plainly appropriate one.

The Tenth Circuit Court of Appeals REVERSED and REMANDED for further proceedings.

Colorado Supreme Court: Hospital Has No Private Right of Action Against Police Department for Cost of Treatment

The Colorado Supreme Court issued its opinion in City of Arvada ex rel. Arvada Police Department v. Denver Health & Hospital Authority on Monday, October 9, 2017.

Prisons—Costs of Incarceration.

Arvada police arrested a severely injured man and sent him to Denver Health Medical Center. Denver Health and Hospital Authority (Denver Health) sued Arvada for the cost of care, claiming that C.R.S. § 16-3-401, which says that persons in custody “shall be . . . provided . . . medical treatment,” required Arvada to pay the hospital for the detainee’s care. Here, the Colorado Supreme Court clarified that (1) whether a statute provides a private right of action is a question of standing, and (2) the same test for a private right of action under Allstate Insurance Co. v. Parfrey, 830 P.2d 905 (Colo. 1992), applies for claims against both governmental and non-governmental defendants. Applying Parfrey to Denver Health’s statutory claim, the court held that C.R.S. § 16-3-401 does not provide hospitals a private right of action to sue police departments for the cost of providing healthcare to persons in custody. Accordingly, it concluded that the trial court erred by granting summary judgment to Denver Health on the statutory claim. The court remanded the case for consideration of Denver Health’s unjust enrichment claim based on Arvada’s statutory duty to provide care for persons in custody.

Summary provided courtesy of Colorado Lawyer.

Colorado Supreme Court: Claim Arose Prior to Filing Bankruptcy Petition and Therefore was Dischargeable

The Colorado Supreme Court issued its opinion in Hardegger v. Clark on Monday, October 2, 2017.

Contribution—Bankruptcy Discharge—Tax Withholding Liability—26 U.S.C. § 6672(d).

This case required the supreme court to determine when the right of contribution provided in 26 U.S.C. § 6672(d) (2012) gives rise to a “claim” under the U.S. Bankruptcy Code. Applying the “conduct test,” under which a claim arises for bankruptcy purposes at the time the debtor committed the conduct on which the claim is based, the court concluded that petitioner’s claim for contribution arose when the parties’ jointly owned company incurred federal tax withholding liability, rendering the parties potentially responsible for that debt. Because this conduct occurred before respondents filed their bankruptcy petition, the court concluded that petitioner’s claim constituted a pre-petition debt that was subject to discharge. Accordingly, the court affirmed the judgment of the court of appeals.

Summary provided courtesy of Colorado Lawyer.

Colorado Supreme Court: Amendment to Rule 26 Does Not Mandate Exclusion of Non-disclosed Expert Testimony

The Colorado Supreme Court issued its opinion in Catholic Health Initiatives Colorado v. Earl Swensson Associates, Inc. on Monday, October 2, 2017.

Expert Testimony—Discovery Sanctions.

In this case, the Colorado Supreme Court considered whether an amendment to Colorado Rule of Civil Procedure 26(a)(2)(B) providing that expert testimony “shall be limited to matters disclosed in detail in the [expert] report” mandates the exclusion of expert testimony as a sanction when the underlying report fails to meet the requirements of Rule 26. The court concluded this amendment did not create mandatory exclusion of expert testimony and that instead, the harm and proportionality analysis under Rule 37(c) remains the proper framework for determining sanctions for discovery violations. Accordingly, the court made its rule to show cause absolute and remanded the case for further proceedings.

Summary provided courtesy of Colorado Lawyer.

 

Colorado Supreme Court: Damages Clause Not Void Where Non-offending Party Offered Choice of Actual or Liquidated Damages

The Colorado Supreme Court issued its opinion in Ravenstar, LLC v. One Ski Hill Place, LLC on Monday, September 11, 2017.

Freedom of Contract—Liquidated Damages Clauses—Contractual Damages.

In this case, the Colorado Supreme Court considered whether a liquidated damages clause in a contract is invalid because the contract gives the non-breaching party the option to choose between liquidated damages and actual damages. The court concluded that such an option does not invalidate the clause. Instead, parties are free to contract for a damages provision that allows a non-breaching party to elect between liquidated damages and actual damages. However, such an option must be exclusive, meaning a party who elects to pursue one of the available remedies may not pursue the alternative remedy set forth in the contract. Therefore, under the facts of this case, the liquidated damages clause in the contracts at issue is enforceable. Accordingly, the supreme court affirmed the judgment of the court of appeals.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Meal Plans Provided Wholesale to College and Therefore Improperly Taxed

The Colorado Court of Appeals issued its opinion in Sodexo America, LLC v. City of Golden on Thursday, September 7, 2017.

Tax—Meal Plans—Students—Wholesale—Contract.

Sodexo America, LLC (Sodexo) provides food services and food to the Colorado School of Mines (Mines) pursuant to a contract with Mines. Mines, in turn, contracts with its students to provide them food (the food obtained, prepared, and served by Sodexo) through various meal plans. The City of Golden (City) taxes Sodexo for students’ use of the meal plans. Sodexo collects and remits sales tax on campus food purchased with cash, check, or credit card. But the City also assesses Sodexo for sales tax on transactions whereby students swipe meal cards in exchange for meal plan meals, which taxation Sodexo challenged. The district court granted summary judgment in favor of the City on Sodexo’s challenges to the City’s assessment and denial of refunds.

On appeal, Sodexo contended that the City can’t tax it for meals purchased by Mines’ students under the students’ contracts with Mines. The Golden Municipal Code states that the City may levy sales tax on the purchase price of food, but exempts from taxation wholesale sales. Under the relevant contract and pursuant to the plain language of the Code, no sales occur between Sodexo and Mines’ students with meal plans; instead, Sodexo sells meal plan meals to Mines at wholesale. Because the Code expressly exempts wholesale sales from taxation, the City’s assessment is invalid.

The judgment was reversed, and the case was remanded for entry of judgment in Sodexo’s favor and for any other proceedings consistent with this opinion.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: District Court Properly Denied Attorney Fees to Non-prevailing Party

The Colorado Court of Appeals issued its opinion in Klein v. Tiburon Development, LLC on Thursday, August 10, 2017.

Attorney Fees—Fee-Shifting Provision—Contract—Violation of Public Policy—Substantial Justification.

Following remand, the district court denied the Kleins’ request for attorney fees and costs pursuant to a line of credit agreement (LOC) between them and Tiburon Development LLC (Tiburon). The district court granted Tiburon’s and Sell’s (a member of Tiburon) motions for attorney fees and costs.

On appeal, the Kleins contended that the district court erroneously denied their request for attorney fees pursuant to the fee-shifting provision of the LOC. However, enforcing  and awarding the Kleins their attorney fees and costs pursuant to the LOC would violate public policy because the Kleins lost the predominant and only contested part of the LOC claim, and they had only nominal success on the secondary and uncontested issue of entitlement to interest on the LOC. It would have been an abuse of discretion to conclude that the Kleins were the prevailing party on the LOC claim. Further, the Kleins were sanctioned for their conduct during the litigation and ordered to pay all of Tiburon’s attorney fees.

The Kleins next contended that the district court erred in awarding Sell the attorney fees he incurred in seeking an award of fees because Sell failed to carry his burden to prove that the Kleins’ defense to his fees motion lacked substantial justification, and the district court never found that the Kleins’ defense was frivolous. An award of fees incurred in seeking fees under C.R.S. § 13-17-102 must be supported by a determination in the record that the sanctioned party’s defense to the fees motion lacked substantial justification. Because the record in this case does not support that finding, the district court erred in including in its fee award the fees Sell incurred in pursuing his motion for fees.

The Kleins further contended that the district court’s award of fees to Sell unreasonably included fees Sell incurred to respond to the Kleins’ C.R.C.P. 59 motion, which they asserted was not relevant to their claims against Sell. It was not an abuse of discretion for the district court to award Sell the attorney fees he incurred to respond to the Kleins’ C.R.C.P. 59 motion, and the decision was supported by findings in the record.

The judgments denying an award of attorney fees and costs to the Kleins and awarding Sell the attorney fees he incurred to respond to the Kleins’ C.R.C.P. 59 motion were affirmed. The judgment was reversed insofar as the court awarded Sell the attorney fees he incurred in seeking fees against the Kleins, and the case was remanded for the district court to subtract the amount of such fees from the award.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Jury Instructions Sufficient to Apprise Jury of Elements of Crime

The Tenth Circuit Court of Appeals issued its opinion in United States v. Wright on Tuesday, February 21, 2017.

Bruce Carlton Wright was convicted on one count of conspiracy to commit bank fraud in violation of 18 U.S.C. §§ 1349 and 1344, and on eleven counts of bank fraud in violation of 18 U.S.C. § 1344. Wright was sentenced to thirty-three months imprisonment and ordered to pay restitution to the bank involved. Wright appealed, claiming the district court erred by: (1) not including intent to defraud as an element of conspiracy to commit bank fraud in the jury instruction; (2) responding to a written question from the jury by directing the jury to consider each count of the indictment separately; (3) denying Wright’s motion for new trial based on a Brady violation; (4) improperly calculating of the bank’s loss amount under USSG § 2B1.1(b)(1); and (5) improperly calculating of the restitution amount.

Because Wright did not properly object during his original trial in relation to his first, second, fourth, and fifth claims on appeal, the court reviewed them under the plain-error standard, which requires a plaintiff to establish an “error, that is plain, which affects substantial rights, and seriously effects the fairness, integrity, or public reputation of judicial proceedings.” The court stated that a plain error affects a defendant’s substantial rights if there is a reasonable probability that, if the error had not occurred, the result of the proceeding would have been different.

Concerning Wright’s first claim, that the court erred by not including the necessary element of intent to defraud to convict on a charge of conspiracy to commit bank fraud in the jury instruction, the court reviewed the jury instructions in light of the context of the entire trial to see if the instructions accurately stated the law and provided the jury with a correct understanding of the facts of the case. The court rejected this claim, saying that Wright could not show error because, while the court did not list intent to defraud in the instruction, the omission was cured because the instruction relating to committing bank fraud did incorporate “intent to defraud” by requiring an agreement to commit bank fraud.

During deliberations, the jury asked the judge if it they had to find Wright guilty on count 1 in order to convict him on any of the subsequent counts. Over objection of counsel, who agreed with the legal answer provided by the court but requested different phrasing, the judge responded, “No, you must consider each count separately.” On appeal, Wright contends that the answer should have been “Yes,” because, citing Pinkerton v. United States, the conviction would have been based on the acts of a co-conspirator and not his own acts (as his co-conspirator was testifying at his trial). The court stated that Wright had waived his ability to assert error under Pinkerton by failing to object on that basis at the district court level.  Instead, because Wright had generally objected to the instruction, the court reviews for plain error. However, because Wright argued under an abuse of discretion, and not plain error he waived his right to argue the claim.

In support for his motion for new trial, Wright argued that the government withheld a victim impact statement that the bank president had prepared for his coconspirator’s sentencing. Wright claimed that the information would have helped him to impeach his co-conspirator at his own trial. In their assessment of Wright’s motion, the court stated that Wright would have to show the prosecution suppressed material evidence that was favorable to Wright.  While the court determined the statement was not given to Wright prior to the trial, and that it was favorable to him, he failed in showing that the information included in the impact statement was material enough that it could have undermined confidence in the outcome of the case because Wright already attacked his co-conspirator’s credibility extensively at trial.

In calculating Wright’s sentence and amount of restitution he would be required to pay to the victims, the district court looked to the amount of Wright’s fraudulent draw requests, and determined he owed to be $1,094, 490. Wright was provided the sum in the presentencing report, which he accepted. Because the Bank recovered sums due to its sale, the sales price should be subtracted from the outstanding loan balance to calculate restitution to avoid a windfall to the victim. However, because the amount of restitution and sentence is a factual question, Wright was required to object at the district court level for it to rise to the level of a plain error reviewable on appeal. Wright accepted the amount in the pre-sentencing report, and the court held that Wright had accepted the calculation of restitution and his sentence as correct.

The Tenth Circuit Court of Appeals affirmed the district court’s rejection of Wright’s motion for new trial and rejected Wright’s other claims as to the amount and length of his sentence.