Gibson v. Weyerhaeuser Company , 35 F. App'x 834 ( 2002 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
MAY 24 2002
TENTH CIRCUIT
PATRICK FISHER
Clerk
LYNN GIBSON; JAMES SIMMONS
d/b/a Simmons Logging; LANE PERRIN
and KEVIN PERRIN d/b/a Perrin
Logging; TRAVIS NEAL BUTLER;
LYNN HARDAWAY d/b/a L & S
Logging,
No. 01-7067
Plaintiffs-Appellants, (D.C. No. 00-CV-474-S)
v. (Eastern District of Oklahoma)
WEYERHAEUSER COMPANY, a
Washington corporation,
Defendant-Appellee.
ORDER AND JUDGMENT*
Before SEYMOUR, Circuit Judge, McWIILLIAMS, Senior Circuit Judge, and
HENRY, Circuit Judge.
Weyerhaeuser Company (“Weyerhaeuser”), a paper manufacturing company
incorporated in the State of Washington, operates a wood mill in Wright City, Oklahoma.
Weyerhaeuser obtained “timber rights” from nearby landowners, and then contracted
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
with “loggers” to harvest the timber in question and deliver the timber to its Wright City
facility.
Lynn Gibson, and five other loggers (hereinafter referred to as “the plaintiffs”),
citizens and residents of Oklahoma and Arkansas, brought the present action in the United
States District Court for the Eastern District of Oklahoma against Weyerhaeuser for
fraud, jurisdiction being based on diversity of citizenship. 28 U.S.C. § 1332. The
charging part of plaintiffs’ complaint reads, in its entirety, as follows:
At various times beginning in the summer of 1995 and
continuing until the summer of 1999, the Defendant,
Weyerhaeuser Company, by and through its agents and
employees intentionally, maliciously and fraudulently induced
and persuaded the Plaintiffs to purchase new, different and/or
additional equipment on financial credit for the purpose of
conducting the business of logging timber for the benefit of
Weyerhaeuser. Said inducements were verbal promises that
Plaintiffs would be logging for Weyerhaeuser long as
Plaintiffs so desired. Said inducements were made with the
knowledge that Weyerhaeuser’s quality and quantity of timber
products would increase as a result thereof; however, at such
time as said promises and inducements were made,
Weyerhaeuser had no intention of providing sufficient future
work to the Plaintiffs to enable Plaintiffs to pay for the newly
purchased equipment and with the further knowledge that
Plaintiffs would rely on the inducement to their detriment and
financial loss. As a result of these fraudulent inducements,
each of the Plaintiffs relied upon the same to their detriment
and purchased additional or different equipment spending
amounts of money in excess of $75,000.00 each.
Notwithstanding a bona fide good faith effort by each of these
Plaintiffs to provide logging products and services for
Weyerhaeuser, the company has excluded them from contract
logging through no fault of Plaintiffs, causing each Plaintiff to
be damaged in an amount in excess of $75,000.00. (Emphasis
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added.)
In the prayer of their complaint, each of the plaintiffs asked for judgment against
Weyerhaeuser in an amount of not less than $75,000.00 for deceit, actual damages, loss of
credit, loss of property, loss of anticipated profits, and punitive damages in an amount in
excess of actual damages.
The gist of the plaintiffs’ complaint is that Weyerhaeuser, through its agents and
employees, fraudulently induced the plaintiffs to purchase new and additional equipment
for the purpose of logging timber for Weyerhaeuser with verbal promises that they
“would be logging for Weyerhaeuser long as plaintiffs so desired” and that when those
promises were made, “Weyerhaeuser had no intention of providing sufficient future work
to the plaintiffs to enable the plaintiffs to pay for the newly purchased equipment and
with the further knowledge that plaintiffs would rely on the inducement to their detriment
and financial loss.” By its answer, Weyerhaeuser denied all of those allegations.
Discovery ensued and various depositions and affidavits were filed in the district
court. Weyerhaeuser then filed a motion for summary judgment and a brief in support
thereof, seeking, inter alia, summary judgment in its favor because there was “no
evidence of any fraudulent intent on the part of Weyerhaeuser.” Plaintiffs filed a
response and brief in opposition to the motion. After hearing, the district court granted
Weyerhaeuser’s motion for summary judgment and entered judgment in favor of
Weyerhaeuser, the district court holding that the “plaintiffs have absolutely no evidence
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that defendant made statements regarding future work with knowledge of its falsity or
recklessly without knowledge as to its truth or falsity. Further, there is absolutely no
evidence that the statements made were false.”1 Later, plaintiffs filed a motion to
reconsider, which the district court denied. Plaintiffs appeal, contending the district court
erred in granting Weyerhaeuser’s motion for summary judgment and in denying their
motion to reconsider. We affirm.
In F.D.I.C. v. Hamilton, 122 F.3d 854, 858 (10th Cir. 1997), we spoke as follows:
To establish fraud, Oklahoma law requires the proponent to
show by clear and convincing evidence “a false material
representation made as a positive assertion which is either
known to be false, or made recklessly without knowledge of
the truth, with the intention that it be acted upon by a party to
his or her detriment.” Rainbow Travel Serv. v. Hilton Hotels
Corp., 896 F.2d 1233, 1240 (10th Cir. 1990).
In granting Weyerhaeuser’s motion for summary judgment, the district court did
make reference to the “clear and convincing evidence” requirement involved in a claim of
fraud, and, on appeal, counsel argues that the district court erred in considering the “clear
and convincing evidence” requirement at the summary judgment stage of the proceedings.
In other words, the “clear and convincing evidence” requirement, according to counsel,
would properly be considered in, for example, a post-trial motion challenging the
sufficiency of the evidence to support a jury verdict in favor of a plaintiff in a fraud
At the same time, the district court, for about the same reasons, dismissed any
1
possible claim for “negligent misrepresentation.”
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action, but is not to be considered when a motion for summary judgment is under
consideration. In our view, that particular argument is disposed of in Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 252 (1986). There, in a libel case, the Supreme Court stated
that “we are convinced that the inquiry involved in a ruling on a motion for summary
judgment or for a directed verdict necessarily implicates the substantive evidentiary
standard of proof that would apply at the trial on the merits.” See also North Texas Prod.
Credit Assoc. v. McCurtain Cty. Nat’l. Bank, 222 F.3d 800, 813 (10th Cir. 2000), and
Applied Genetics v. First Affiliated Sec., 912 F.2d 1238, 1243 (10th. Cir. 1999), where we
followed Anderson v. Liberty Lobby, Inc. and held that the “clear and convincing
evidence” requirement in a fraud case applied on summary judgment.2
The “loggers contracts” which plaintiffs had with Weyerhaeuser were only for a
comparatively short period of time, i.e., up to around 120 days. There is no suggestion by
any plaintiff that Weyerhaeuser terminated any of their short term contracts. Rather,
plaintiffs complain that they were not given additional 120 day contracts by
Weyerhaeuser. Weyerhaeuser’s position on this matter is that plaintiffs were not given
so-called “renewal” contracts because they failed to comply with its newly created
2
In support of his contention that the “clear and convincing evidence” requirement
should not be considered on summary judgment, counsel relies on Tenneco Oil Co. v.
Joiner, 696 F.2d 768 (10th Cir. 1982). That case involved a suit by a principal against his
agent for breach of a fiduciary duty and it was in that context that we held that the “clear
and convincing evidence” requirement did not apply. In the instant case, there is no
suggestion that there was a fiduciary relationship between the plaintiffs and
Weyerhaeuser. Plaintiffs were independent contractors.
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“contractor management system,” a system adopted by Weyerhaeuser at the government’s
insistence, designed to measure a contractor’s performance in various categories
including safety, the environment, truck weight, management and workmanship.
Fraud is never presumed, and must be established by clear and convincing
evidence that the person charged with fraud had a specific intent to defraud. Barnett v.
Life Ins. Co. of the Southwest, 562 F.2d 15, 19 (10th Cir. 1977); followed in FDIC v.
Palermo, 815 F.2d 1329, 1335 (10th Cir. 1987). As indicated, the district court, in
granting Weyerhaeuser’s motion for summary judgment, concluded that the plaintiffs had
failed to show that any statements of Weyerhaeuser employees concerning “future work”
with Weyerhaeuser were made with knowledge of their falsity, or, indeed, that the
statements, when made, were in fact false. As indicated, there were numerous
depositions and affidavits before the district court, and we are in accord with the district
court’s analysis of the evidentiary matter then before it. The district court did not err in
granting Weyerhaeuser’s motion for summary judgment.
As above stated, plaintiffs thereafter filed a motion to reconsider under Fed. R.
Civ. P. 60(b). In support of that motion, the plaintiffs, inter alia, submitted two affidavits
from loggers who said that they almost always received advance notice from
Weyerhaeuser that a “safety audit” was about to be conducted, which notice the plaintiffs
did not receive, and that such would somehow indicate that Weyerhaeuser knew when
statements were made by its employees regarding “future work” that such were false.
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The district court rejected that argument and denied plaintiffs’ motion to reconsider.
Again, we agree with the district court.
This case involves a civil action charging fraud. It is not an action for breach of
contract, and, at best, is one based on an “unkept promise.” In this general connection,
see Roberts v. Wells Fargo AG Credit Corp., 990 F.2d 1169 (10th Cir. 1993). The action
in that case was based on an alleged oral promise by Wells Fargo to renew a line of credit
note. In that case we recognized that for a false representation to be the basis for a fraud
action the representation generally had to be of an existing fact and not one based on a
promise as to a future act. However, at the same time, we also recognized that a promise
to act in the future accompanied by a present intention not to perform was an exception to
the general rule. In Wells Fargo we affirmed the district court’s grant of summary
judgment in favor of Wells Fargo on plaintiff’s fraud claim and spoke as follows:
Here, although plaintiffs allege fraud, they have
presented no evidence that Wells Fargo’s promise to perform
was accompanied by an intent not to do so. Indeed, “[t]he
only proof in this record upon which we can predicate an
intent not to keep the promises made is the fact that such
promises were not kept.” Dismissal of plaintiffs’ fraud claim
was appropriate because breach of a contract alone is not
proof of fraud. (Citations omitted.)
Id. at 1173.
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Judgment affirmed.
Entered for the court,
Robert H. McWilliams
Senior Circuit Judge
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