                                                            F I L E D
                                                      United States Court of Appeals
                                                              Tenth Circuit
                 UNITED STATES CO URT O F APPEALS
                                                          November 7, 2006
                              TENTH CIRCUIT              Elisabeth A. Shumaker
                                                             Clerk of Court

CHAVEZ PROPERTIES-AIRPORT
PARKIN G ALBUQUERQUE, LP, a
Georgia limited partnership;
PA RK IN G CO M PA N Y O F
AM ERICA, INC., a Georgia
corporation,

     Plaintiffs-Appellees/Cross-
     Appellants,

v.                                          Nos. 04-2338 and 04-2339
                                          (D.C. No. CIV-02-0145-JP/AC T)
JOHN LORENTZEN, individually;                         (D .N.M .)
PA RK AND SH UTTLE, INC., a New
M exico corporation; WE S G O LDEN,
individually,

     Defendants-Appellants/Cross-
     Appellees.


CHAVEZ PROPERTIES-AIRPORT
PARKIN G ALBUQUERQUE, LP, a
Georgia limited partnership;
PA RK IN G CO M PA N Y O F
AM ERICA, INC., a Georgia
corporation,

     Plaintiffs-Appellants,

v.                                               No. 05-2053
                                       (D.C. No. CIV-02-0145-JP/AC T)
JOHN LORENTZEN, individually;                     (D .N.M .)
PA RK AND SH UTTLE, INC., a New
M exico corporation; WE S G O LDEN,
individually,
          Defendants-Appellees.


 CHAVEZ PROPERTIES-AIRPORT
 PARKIN G ALBUQUERQUE, LP, a
 Georgia limited partnership;
 PA RK IN G CO M PA N Y O F
 AM ERICA, INC., a Georgia
 corporation,

          Plaintiffs-Appellees,                        No. 05-2388
                                             (D.C. No. CIV-02-0145-JP/AC T)
 v.                                                     (D .N.M .)

 JOHN LORENTZEN, individually;
 PA RK AND SH UTTLE, INC., a New
 M exico corporation; WE S G O LDEN,
 individually,

          Defendants-Appellants.



                             OR D ER AND JUDGM ENT *


Before L UC ER O, B AL DOC K , and HA RTZ, Circuit Judges.




      This case arises from the failed union of two parking lot operations

providing parking services for the Albuquerque International Airport. Plaintiff

Chavez Properties-Airport Parking Albuquerque, LP (CPA PA ), owner and



      *
        This order and judgment is not binding precedent, except under the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.

                                         2
operator of Airport Fast Park, and Defendant John Lorentzen, owner and operator

of Defendant Park and Shuttle, Inc. (PSI), entered into a Joint Venture Agreement

joining their two parking lots. In turn, the Joint Venture entered into a contract

with Plaintiff Parking Company of A merica (PCA) to manage the Joint Venture

parking lot. For a host of reasons, the deal fell through and the parties filed

numerous claims against one another. After a bench trial, the district court found

for Plaintiffs but awarded only nominal damages. The district court taxed

Plaintiffs’ costs on Defendants but refused to award attorney fees. Defendants

appeal the district court’s judgment as well as the award of costs. Plaintiffs

cross-appeal the district court’s damage award and denial of attorney fees. W e

have jurisdiction pursuant to 28 U.S.C. § 1291. W e apply New M exico law in

this diversity action, affirming in part and remanding in part for additional

findings of fact and conclusions of law.

                                           I.

      On January 1, 2000, CPA PA and Lorentzen verbally entered into a Joint

Venture Agreement, the primary purpose of which was to consolidate expenses

thereby increasing the profitability of their parking lots. The Joint Venture

Agreement designated M anual Chavez, Jr. and Robert Chavez, part owners of

CPA PA , and Lorentzen as managers of the Joint Venture. The agreement

required the managers to unanimously agree to all management decisions, except

those delegated to the management company designated in a separate agreement.

                                           3
The agreement provided the parties split profits with CPA PA receiving 57% and

PSI receiving 43% . The parties based this division of profits on the number of

parking spaces each contributed to the Joint Venture parking lot.

      To avoid daily management hassles, the joint venturers entered into a

Parking M anagement Agreement with PCA, an entity of CPA PA , to manage the

combined properties. 1 The Parking M anagement Agreement provided that PCA

would manage the combined properties for the benefit of the Joint Venture

partners. Defendant W es Golden, PCA’s employee, served as the parking

operations site manager for the Joint Venture parking lot until December 2001

when PCA decided to remove him from site operations manager and transfer him

to the marketing manager position. The Parking M anagement Agreement

specified the parking manager’s duties including operation of the lot, paying all

expenses, collecting all revenue, providing financial reports, and making monthly

profit distributions to the Joint Venture partners. Testimony at trial made clear

PCA’s function was to manage the day to day activities of the lot while the Joint

Venture managers provided high level management.

      Almost from the beginning of the Joint Venture, Lorentzen began to

express dissatisfaction with the Joint Venture Agreement and the Parking



      1
         Notably, the parties did not sign the Joint Venture Agreement or the
Parking M anagement Agreement until M arch 1, 2001. Despite the delay, the
parties acknowledge both agreements became effective on January 1, 2000.
Additionally, the parties agree both contracts extended for a period of ten years.

                                         4
M anagement Agreement. W ithin the first few months of the Joint Venture,

Lorentzen sent letters to Robert Chavez expressing his discontent with certain

items billed to the Joint Venture, complaining about PCA’s management

decisions, and requesting management fees for himself or a more favorable

ownership split. A complete breakdown of the relationship began in late 2001

when Lorentzen wrote a series of letters objecting to certain charges to the Joint

Venture and objecting to PCA’s decision to replace Golden as the site manager.

Lorentzen threatened to terminate the agreements if Robert Chavez and PCA did

not comply with his demands.

      In early January 2002, Lorentzen put the proverbial nail in the coffin when

he removed PCA’s credit card machines from the Joint Venture lot, took PCA’s

machines to his home, and installed his own credit card machines, thus diverting

over $70,000 of Joint Venture funds to an account exclusively under his control.

Lorentzen’s actions prompted Robert Chavez and Tim Chavez, Senior Operations

M anager for PCA, to travel to Albuquerque in attempt to rectify the situation.

Robert Chavez and Lorentzen spent several days trying to work out their

differences. During the course of their meetings, Lorentzen demanded

modification of the Joint Venture Agreement and the Parking M anagement

Agreement. Specifically, Lorentzen demanded Southwest Realty, which he

owned and operated, be substituted for PCA as the manager of the Joint Venture.

He also demanded a 50/50 profit split and demanded W es G olden remain the site

                                          5
operations manager or that PCA buy him out at three times his annual salary.

Needless to say, Robert Chavez did not accept the proposed modifications.

      On January 25, 2002, after two days of unsuccessful negotiations w ith

Lorentzen, Robert Chavez, along with other PCA representatives attempted to

remove the credit card machines Lorentzen installed and reinstall PCA’s

machines. Golden, with the assistance of others, prevented re-installation of

PCA’s machines. Golden called the police and had Chavez and the PCA

representatives escorted off the property. PCA representatives were not allowed

on the property until February 11, 2002, when PCA and CPA PA received a

temporary restraining order (TRO) allowing them to take back control of the

property and resume management of the Joint Venture parking lot.

      After PCA regained management control, they discovered Golden removed

several items during their absence— namely computers containing PCA’s

proprietary information including billing information, frequent parker

information, and contract parker information. 2 Additionally, PCA discovered

Lorentzen entered into several unauthorized contracts on behalf of the Joint

Venture. Finally, the testimony at trial showed that even after the district court

entered the TRO, Lorentzen and Golden remained on the property, reeking havoc



      2
          Although PCA fired Golden the day he called police and had its
representatives escorted off the property, he remained in control of the parking lot
operation due to his relationship with Lorentzen. According to the testimony at
trial, he officially began working for Lorentzen the day PCA fired him.

                                          6
among PCA employees. In particular, Golden and Lorentzen continued to give

comm ands to PCA employees resulting in great confusion among the employees

as to who was in charge. Several witnesses at trial described the atmosphere as

very “tense.”

      Also of particular importance to this appeal, after PCA informed Golden he

was being removed as operations manager in December of 2001, he entered into a

contract on behalf of PCA with Airport Shuttle, a company owned by Lorentzen.

According to the contract, PCA agreed to provide eighteen parking spaces on the

Joint Venture lot for Airport Shuttle’s use. At the time Golden signed the

contract, PCA provided contract parking at the Joint Venture lot for $50 per

month. But, the contract Golden executed charged Airport Shuttle only $20 per

month per space. Additionally, the contract only provided that Airport Shuttle

would occupy eighteen spaces when in fact, it occupied fifty spaces. PCA never

received payment for Airport Shuttle’s use of the fifty spaces. The contract was

never discussed with anyone at PCA as required by its policy, and several days

after he was fired from PCA in January of 2001, Golden went to work for

Lorentzen.

      CPA PA and PCA brought suit against Lorentzen, Golden and PSI claiming

breach of contract; conspiracy to divest funds, assets, and customers; and breach

of fiduciary duty. Defendants filed a separate suit (later consolidated with the

initial lawsuit) claiming accounting (claims of waste and mismanagement), actual

                                          7
or constructive fraud and conspiracy to defraud, tortious interference with

beneficial business relations, breach of fiduciary duty, conversion of corporate

funds and opportunities, damage to credit reputation, and attorney fees and costs.

In M ay of 2002, after the TRO became effective but before trial, the court

assigned an arbiter to the case. The arbiter functioned to keep the business

operating in an orderly fashion pending trial. If either party disagreed with a

ruling issued by the arbiter, it had the option of presenting the issue to the district

court. Use of the arbiter became unnecessary when the parties agreed to

terminate the Joint Venture and the Parking M anagement Agreement effective

December 1, 2003. Thereafter, the parties separated the Joint Venture lot and

resumed running their separate businesses.

      The case proceeded to a bench trial in November 2003. After three days of

testimony, the court delayed the trial because Plaintiffs’ counsel became ill. The

trial resumed for an additional eight days in M arch 2004. At the conclusion of

the trial, the district court issued a written order finding in favor of Plaintiffs on

their claims of breach of fiduciary duty and breach of contract and against

Defendants on their claims. In particular, the court found Defendant Golden

breached his fiduciary duty to his employer PCA. The court also found Lorentzen

and PSI breached their fiduciary duty to the Joint Venture, and breached the Joint

Venture Agreement and the Parking M anagement Agreement. The court further

found Golden, although an employee of PCA, joined forces w ith Lorentzen in

                                            8
effort to terminate or modify the Joint Venture. Despite Defendants’

transgressions, the court refused to award Plaintiffs damages, save for $1 in

nominal damages. The court entered two additional orders, one taxing Plaintiffs’

costs against Defendants, and the other denying Plaintiffs’ motion for attorney

fees.

        These cross-appeals followed. In an appeal from a bench trial, we review

the district court’s legal conclusions de novo, and its factual findings for clear

error. W e will reverse only if the district court’s findings are without factual

support in the record or if, after reviewing all the evidence, we are left with a

definite and firm conviction that a mistake has been made. See Keys Y outh

Servs., Inc. v. City of O lathe, 248 F.3d 1267, 1274 (10th Cir. 2001).

                                           II.

        Defendants challenge several of the district court’s findings on appeal.

Specifically, Defendants argue the district court erred in finding: 1) Plaintiffs did not

breach their fiduciary duties to Defendants; 2) Plaintiffs did not tortiously interfere

with Defendants’ beneficial business relationships; 3) Defendants are not entitled to

an accounting; 4) Defendants ratified Plaintiffs’ alleged m isconduct prior to M arch

2001; 5) Golden conspired with Lorentzen to breach the contracts; 6) Defendants are

not entitled to damages, costs and legal fees; and 7) Plaintiffs did not commit a

prim a facie tort. In a separate appeal, Defendants claim the district court erred in

awarding Plaintiffs $19,980.66 in costs.

                                           9
                                          A.

      Defendants first argue the district court erred in determining Plaintiffs did not

breach their fiduciary duties to Defendants.       Like partners in a partnership, a

fiduciary relationship exists between parties to a joint venture. Lightsey v. M arshall,

992 P.2d 904, 908 (N.M . App. 1999). This duty requires joint venturers to “deal

honestly and fairly with each other in accounting for profits and losses of the joint

venture.”   Id.   Defendants claim Plaintiffs breached this duty in several w ays

including: 1) assessing a portion of the cost of the H ummingbird computer software

package to the Joint Venture; 2) assessing Airport Fast Park’s van rental expense to

the Joint Venture; 3) assessing losses from the Hyatt Regency Tamaya contract to the

Joint Venture; 4) refusing to provide certain financial documents and reports; 5)

favoring Airport Fast Park vehicles over PSI’s vehicles for maintenance and repair;

6) failing to pay vendors; 7) overpaying for insurance coverage; 8) violating the

arbiter’s rulings; 8) failing to establish an operating budget; and 9) general

mismanagement. The district court disposed of Defendants’ complaints, finding they

involved management decisions specifically appointed to PCA in the Parking

M anagement Agreement. Thus, according to the district court, the decisions, good

or bad, did not amount to breaches of fiduciary duty. W e agree with the district

court’s assessment that most of Defendants’ complaints involved management

decisions assigned to PCA pursuant to the management agreement. For instance,

PCA’s decision to purchase additional insurance, its billing practices, the

                                          10
maintenance and repair schedule for the vans, dissemination of financial statements

and budgeting w ere all management issues entrusted to PCA. 3

      Defendants’ other claims also do not amount to breaches of fiduciary duty.

Lorentzen’s complaints regarding the Joint Venture’s payment for a portion of the

Hummingbird software installed at PCA are not actionable as the evidence presented

at trial showed PCA credited the Joint Venture with the cost of the software after

Lorentzen objected. Additionally, attributing the lease expense for Airport Fast

Park’s vans to the Joint Venture was also not a breach of fiduciary duty. The record

show s Lorentzen knew at the time he entered into the agreement the lease expense

was part of the Airport Fast Park’s expenses absorbed into the Joint Venture. The

expense was fully disclosed in the financial disclosure documents Lorentzen received

during discussions leading up to the Joint Venture. Despite his knowledge of this

expense, he entered into the Joint V enture verbally and later formalized the

documents in M arch of 2001. W e can hardly say charging the Joint V enture for an

expense Defendant was aware of prior to forming the Joint Venture was a breach of




      3
       Defendants relied on Plaintiffs’ alleged failure to produce certain financial
documents to support its claim for accounting. In particular, Defendant Lorentzen
com plained he did not receive Daily Operating Reports (DORs). Because we
agree with the district court that Plaintiffs’ dissemination of financial reports
involved management decisions and because the record indicates Lorentzen
received all information needed to perform his function as a manager of the Joint
Venture, we summarily find no error in the district court’s decision refusing to
order an accounting.

                                        11
fiduciary duty. 4   Defendants’ complaints regarding Plaintiffs’ alleged failure to

comply with the arbiter’s rulings are also not supported by the record. The record

shows that for each alleged instance of non-compliance, Plaintiffs appealed the

arbiter’s ruling to the district court, an action fully within their rights.

      Finally, Defendants’ allegation that Plaintiffs breached their fiduciary duty by

charging the loss on the Tamaya contract to the Joint Venture is not a basis for

reversing the district court’s decision. A disputed issue of fact arose as to whether

the Tamaya contract was part of the Joint Venture. The district court, serving as the

fact finder, obviously believed Plaintiffs’ witness Dale Losey when he testified the

contract was a part of the Joint V enture and, therefore, any loss or profit was

attributable to the Joint Venture. The district court’s conclusion certainly is not

unreasonable in light of the fact both Lorentzen and Golden signed the contract, an

act that bound the Joint V enture to the terms of the contract. See Keys Youth Servs.,

248 F.3d at 1274 (“[W]e w ill reverse the district court’s finding only if it is without

factual support in the record . . . .”) (internal quotation marks omitted). In sum , w e

find no error in the district court’s conclusion that Plaintiffs’ conduct did not amount

to a breach of the fiduciary duty.

                                           B.


      4
          Defendants’ argument that the district court misapplied the doctrine of
ratification has no application in this case. The district court found that a charge
to the Joint Venture Defendant knew about even before the inception of the Joint
Venture is not evidence of Plaintiffs alleged breach of fiduciary duty. Prior
knowledge does not implicate the doctrine of ratification.

                                           12
      Defendants next argue the district court erred in finding insufficient evidence

to support their claim of tortious interference with beneficial business relations.

The elements of tortious interference are (1) interference in a relationship or

transaction; (2) with an improper motive or by improper means; or (3) without

justification or privilege. Quintana v. First Interstate Bank, 737 P.2d 896, 898 (N .M .

App. 1987). Defendants claim PCA failed to pay bills to various vendors in attempt

to erode Defendants’ relationship with those vendors. Although Plaintiffs admittedly

had some problems with their billing practices, we find nothing in the record (nor

does Defendant point us to any evidence) indicating PCA’s delay in paying bills was

motivated by some intent to interfere with Defendants’ business relationships. See

M & M Tools v. M ilchem, Inc., 612 P.2d 241, 246 (N.M . App. 1980) (noting a

defendant acts w ith an “improper motive” for purposes of proving a interference with

business relations claim when the defendant’s sole purpose is to harm the plaintiff).

Accordingly, we conclude the district court did not err in finding Defendants failed

to show Plaintiffs tortiously interfered with their business relations.

                                           C.

      Finally, Defendants argue the district court should have considered their claim

that Plaintiffs committed a prima facie tort. The district court summarily dismissed

Defendants’ prima facie tort claim along with several others in its written order. The

elements of prima facie tort are 1) an intentional and lawful act, 2) an intent to injure

the plaintiff, 3) injury to the plaintiff as a result of the intentional act, and 4) the


                                           13
absence of justification for the injurious act. Schmitz v. Smentowski, 785 P.2d 726,

734-35 (N.M . 1990). “Prima facie tort is not intended to provide a remedy for every

intentionally caused harm , rather, it is a remedy for acts committed with intent to

injure the plaintiff and without justification.” Kitchell v. Public Serv. Co., 972 P.2d

344, 348 (N.M . 1998). Analyzing liability requires balancing the intent to injure

Defendants against both the justification for the injurious act and the severity of the

injury. Id. But, if a party claiming a prima facie tort presents no evidence of an

intent to injure, as is the case here, the court need not conduct the balancing test. Id.

Defendants brief does not point to a shred of evidence showing Plaintiffs’ acted with

the intent to injure D efendants. Defendants simply conclude in the course of three

sentences that the district court should have considered whether Plaintiff committed

a prima facie tort because they lost on their other claims. Such a bald assertion is

insufficient for consideration on appeal. Alder v. Wal-M art, 144 F.3d 664, 679 (10th

Cir. 1998). Accordingly, Defendants w aived this argument. 5

                                           D.

      Golden also appeals the district court’s conclusion he breached his fiduciary

duty when he and Lorentzen joined forces to terminate or modify the Joint Venture

Agreement.     Golden argues he did not owe Plaintiffs a fiduciary duty, and


      5
         Because we find the district court properly determined Defendants failed
to prove any of its claims, we need not address Defendants assertions the district
court erred in rejecting its experts calculation of damages, failing to assess
punitive damages against Plaintiffs, and failing to aw ard Defendants their court
costs and legal fees.

                                           14
insufficient evidence supports the district court’s finding he entered into a conspiracy

with Defendant Lorentzen to destroy the Joint Venture. 6 W e are not persuaded.

First, the district court found Golden owed a fiduciary duty to his employer, PCA

and/or the Joint Venture, by virtue of being an employee. Golden does not challenge

this finding on appeal. He instead argues he did not ow e a fiduciary duty because

he did not sign the Joint Venture Agreement or the Parking M anagement Agreement.

Because Golden fails to cite any case law or adequately explain how the district

court erred in its ruling, we find Golden waived this argument on appeal. See Alder,

144 F.3d at 679 (arguments inadequately briefed in the opening brief are waived).

      Second, the district court’s order adequately lays out the evidence showing

Golden and Lorentzen acted together to terminate or modify the Joint Venture.

Notably, Golden allowed Lorentzen to sign contracts binding the Joint Venture for

which Lorentzen had no authority, and he did not prevent Lorentzen from removing

credit card machines installed by PCA, thus diverting Joint V enture funds into

Lorentzen’s own account. Also, Golden physically prevented PCA employees from

removing Lorentzen’s credit card machines and re-installing PCA’s machines. And,

as the district court recognized, Golden was involved in “pirating the hard drives and

computer information maintained by PC A in the m anagement of the joint venture,


      6
         W e note, contrary to Defendants’ contentions in its brief, the district
court did not find Golden and Lorentzen entered into a “conspiracy” as the term is
understood in the technical legal sense. Instead, the court found Golden and
Lorentzen worked together to destroy the Joint Venture and in doing so they each
breached their respective fiduciary duties.

                                          15
thus depriving PCA of its use while the parties commenced over tw o years of

litigation.” In apparent exchange for Golden’s loyalty, Lorentzen demanded PCA

continue to employ Golden as site operations manager after it decided to demote him

to marketing manager. Or, in the alternative, Lorentzen demanded PCA buy out

Golden’s contract at three times his yearly salary. Such acts support the district

court’s finding that Lorentzen and Golden worked together to either modify or

terminate the Joint Venture A greement and as a result, Golden breached his fiduciary

duties. Accordingly, we find no error in the district court’s conclusions.

                                          E.

      Defendants filed a separate appeal challenging the district court’s award of

costs to Plaintiffs.   The district court’s order, dated November 10, 2005, taxed

Defendants with costs in the amount of $19,980.66. Defendants complain Plaintiffs

are not “prevailing parties” and thus the district court should not have awarded them

costs. Additionally, Defendants complain the district court should not have awarded

Plaintiffs costs for the first three days of trial transcripts and costs for the court

appointed appraiser’s fees. An award of costs under 28 U.S.C. § 1920 and Fed. R.

Civ. P. 54(d)(1) rests in the sound discretion of the trial court. Allison v. Bank One-

Denver, 289 F.3d 1223, 1248 (10th Cir. 2002). “To hold that the district court

abused its discretion, [this court] must have a definite conviction that the [trial]

court, upon weighing relevant factors, clearly erred in its judgment.” Gordon v. U.S.

Steel Corp., 724 F.2d 106, 108 (10th Cir. 1983).


                                          16
      Defendants argue Plaintiffs did not prevail because they received only $1 in

damages and because the parties entered into a joint stipulation prior to trial

resolving one of the more contentious claims. W e are not convinced. First, for

purposes of Rule 54(d)(1), “the litigant in whose favor judgment is rendered is the

prevailing party . . . .” Barber v. T.D. W illiamson, Inc., 254 F.3d 1223, 1234 (10th

Cir. 2001) (citations and quotations omitted); see also Head v. M edford, 62 F.3d 351,

354 (11th Cir. 1995) (“Cases from this and other circuits consistently support

shifting costs if the prevailing party obtains judgment on even a fraction of the

claims advanced.”) (internal quotations omitted). 7 In this case, the district court

entered judgment in favor of Plaintiffs. That Plaintiffs failed to submit reliable

evidence of damages, resulting in a nominal damage award, does not alter their

prevailing party status for purpose of Rule 54(d)(1).         Furthermore, Plaintiffs

successfully defended themselves against all of Defendants’ counterclaims, making

them the prevailing party on all theories. 8


      7
        These cases suggest a more lenient standard for “prevailing party” status
for purposes of awarding costs than those cases discussing “prevailing party”
status for purposes of awarding attorney’ fees. See, e.g., Gudenkauf v. Stauffer
Communs., 158 F.3d 1074, 1076 (10th Cir. 1998). Accordingly, Defendants’
reliance on cases discussing “prevailing party” status for purposes of attorney
fees is unpersuasive.
      8
         Defendants’ argument that the parties resolved one of the major
contentions before trial in a joint stipulation, thus robbing Plaintiffs of
“prevailing party” status, is equally unavailing. The joint stipulation Defendants
referred to called for the termination of the Joint Venture. Defendants contend
the separation of the parking lots “took up the most energy and expense.”
                                                                         (continued...)

                                          17
      D efendants specifically object to the district court’s award of costs for trial

transcripts from the first three days of trial, and the fees for the court appointed

appraiser. Trial began in November 2003. After three days of trial, Plaintiffs’

attorney became quite ill and could not continue. The district court continued the

trial until M arch 2004 when trial was completed after an additional eight days. The

district court awarded Plaintiffs’ costs for the entire trial transcript. Defendants

contend the district court abused its discretion in awarding Plaintiffs the costs for the

trial transcripts from the three days of trial in Novem ber because D efendants were

not to blame for the delay. This may seem like a legitimate complaint but the fact

is Plaintiffs were entitled to costs for the entire trial transcript whether transcribed

in November or M arch. Pursuant to 28 U.S.C. § 1920(2), a prevailing party is

entitled to recover “fees for the court reporter for all or any part of the stenographic

transcript necessarily obtained for use in this case.” The district court awarded the

cost for the trial transcript on the basis the transcript was “obtained for Plaintiffs use

in preparing for trial and to assist the attorneys and the Court in preparing findings

of fact and conclusions of law.”       In addition to proposed findings of fact and

conclusions of law, the district judge also requested written closing arguments and

post-trial briefs at the close of trial. Because Plaintiffs used the trial transcript to


      8
        (...continued)
Defendants statement may be true as to pre-trial matters, but the costs which the
district court imposed (i.e. trial transcripts, witness travel and subsistence costs,
costs incurred by court appointed expert, and deposition expenses for those
witnesses w ho testified at trial) w ere directly related to issues resolved at trial.

                                           18
assist in preparing these items, the district court did not abuse its discretion in

awarding costs for the entire transcript.

      The court also did not abuse its discretion in taxing the costs of the court

appointed appraiser to Defendants. Pursuant to 28 U.S.C. § 1920(6), the district

court may tax as costs, “compensation of court appointed experts.” Defendants argue

Plaintiffs should not be awarded costs for the services of the appraiser because

Defendants benefitted from the court’s adoption of the appraisal report. Nothing in

the statute requires the court to consider who benefitted from the court appointed

experts findings and Defendants cite no authority for such an assertion. Accordingly,

the district court’s cost award will be upheld.

                                            III.

      W e next address Plaintiffs’ claims on appeal. Plaintiffs challenge the district

court’s $1 damage aw ard, the district court’s apparent neglect of Plaintiffs’ claim

concerning the Airport Shuttle contract, and the district court’s denial of their motion

for attorney fees. W e address each argument in turn.

                                            A.

      W e review the amount of a damage award for clear error and questions of law

de novo. See, e.g., Dill v. City of Edmond, Okla., 155 F.3d 1193, 1209 (10th C ir.

1998). “The methodology a district court uses in calculating a damage award, such

as determining the proper elements of the award or the proper scope of recovery, is

a question of law.” See Southern Co. M RI v. M ed-Alliance, 166 F.3d 1094, 1100


                                            19
(10th Cir. 1999); see also In re Air Crash Disaster Near Cerritos, Cal., on August 31,

1986, 982 F.2d 1271, 1275 (9th Cir. 1992) (“When a legal determination such as the

proper elem ents of an award of damages is review ed, a de novo standard is

applied.”).

      In cases such as this, where profit is an inducement to making a contract, “loss

of profits as a result of the breach is generally considered to be within the

contemplation of the parties and recovery for lost profits will be allowed as damages

if causation is proved with reasonable certainty.” Camino Real M obile H ome Park

Partnership v. W olfe, 891 P.2d 1190, 1200 (N.M . 1995). The court considers certain

factors including “the pre-existing or historic profits of an established business,

together with other facts and circumstances” in arriving at an estimation of the lost

profits resulting from the breach of contract. Ranchers Exploration & Dev. Corp. v.

M iles, 696 P.2d 475, 477 (N .M . 1995). W here a party establishes a legal right to

damages, the fact lost profits may not be computed with exact mathematical certainty

does not prevent the plaintiff from recovering. Id. “Even though the amount of

damages need not be proven with mathematical certainty, neither can it be based on

surmise, conjecture or speculation.” Camino Real, 891 P.2d at 1201.

      At trial, Plaintiffs attempted to establish lost profits through the testimony of

M artin and Robert Chavez, and Exhibit 271, which Robert prepared. Robert, with

the assistance of Exhibit 271, testified to the amount of expense savings CPAPA lost

as a result of the failure of the Joint V enture. Robert explained the actual average


                                         20
monthly expenses of the Joint Venture were $117,027.54. He then subtracted that

figure from the average monthly expenses prior to the Joint Venture, resulting in a

difference of $23,276.88 in expense savings per month. M ultiplied by twelve, the

total annual expense saving amounted to $279,313.56.          Robert then calculated

CPAPA’s percentage interest in the Joint Venture (57% ) in the total annual expense

savings, and came up with $159,151.73 as CPA PA ’s average yearly expense savings

resulting from its involvement with the Joint Venture. Finally, Robert multiplied this

figure by six, the number of years remaining in the Joint Venture, resulting in

$954,910.38 in total lost expense savings.

      Apparently alarmed when the district court made comments concerning the

inadequacy of Robert’s testimony, Plaintiffs called M artin Chavez to testify. M artin,

who is the president of PCA and partial owner of CPA PA , testified as to the

diminution in the value of CPAPA as a result of D efendants’ breach. Like lost

profits, damages measured by diminution of value flow “‘from the disappointment

of a special purpose for the subject matter of the contract’” when that subject matter

is known to both parties. Id. at 1200 (quoting W all v. Pate, 715 P.2d 449, 450 (N .M .

1986)). See also Eateries, Inc. v. J.R. Sim plot Co., 346 F.3d 1225, 1236 (10th Cir.

2003) (noting damages may be measured by diminution in value when a party loses

a business due to the wrongful act of another). M artin used the 1998 profit and loss

statement from CPA PA and the profit and loss statements generated during the Joint

Venture to make his calculations. He calculated the difference between the income


                                          21
and expenses, both pre and post Joint V enture, and then applied a 9.5 percent

capitalization rate to value the business prior to the Joint Venture and at the

conclusion of the Joint Venture. Finally, M artin subtracted the pre and post Joint

Venture values and concluded CPA PA suffered a significant loss resulting from the

failure of the Joint Venture.

      The district court awarded Plaintiffs $1 in damages, rejecting Plaintiffs’

damage evidence as speculative and conjectural.          The court found Robert’s

calculation flawed because it did not establish C PA PA ’s actual lost profits, but

instead only focused on CPA PA ’s expenses before and during the Joint Venture. The

court noted Robert Chavez “did not try to calculate the future profits of the company,

nor did he determine the present value of the expense savings he calculated.” Thus,

the district court determ ined his testimony was merely “surmise, conjecture or

speculation.” The court also found M artin’s attempt to show loss in value of the

company was equally flaw ed. The court further found that if M artin attempted to

show lost profits, he failed to establish the present value of such profits and failed

to show what portion of those profits CPA PA would have realized while operating

its business separately. W e agree with the district court and find neither Robert nor

M artin Chavez’s testimony provided the trier of fact with an adequate basis upon

which to calculate lost profits.

      Plaintiffs argue on appeal the district court erred because it held R obert and

M artin Chavez, w ho testified as laymen, to the same standard it would expert


                                         22
economists. At the outset, w e agree with the general proposition that lay persons,

especially business owners, are qualified to testify regarding lost profits. Ranchers

Exploration, 696 P.2d at 478.     But, such witnesses are still required to present

testimony which enables the trier of fact to properly calculate damages. Such was

not the case here. In the case of Robert’s testimony, he failed to even mention

historical profits or estimate future profits in his lost profits calculation. A basic

principle of accounting is that profits are determined only after operating expenses

are deducted from income. Lost profits are, by their definition, the receipts or

income one would receive after expenses are deducted.           Here, Plaintiffs only

presented evidence of expenses, not income. W ithout anything to compare them to,

evidence of expenses are irrelevant. In calculating lost profits, evidence of gross

profits alone has no evidentiary value and failure to present evidence of expenses is

detrimental to the claim. See, e.g., Deaton, Inc. v. Aeroglide Corp. 657 P.2d 109,

114 (N .M . 1982) (plaintiff’s failure to introduce evidence of expenses rendered its

claim for lost profits speculative). W e have no reason to assume the converse is not

true— attempting to compute lost profits with evidence of expenses but no evidence

of income lacks the evidentiary thrust necessary to prove one’s claim for damages.

Thus, we find the district court did not err in concluding Robert’s failure to present

evidence of CPA PA ’s profits was fatal to the lost profits calculation.

      W e also agree that M artin’s testimony did not provide a sufficient basis upon

which the district court could calculate damages. To the extent M artin attempted to


                                          23
show diminution in value, he did not use the correct data. Such a showing required

an assessment of CPAPA’s fair market value immediately prior to the Joint Venture

and its fair market value immediately following the termination of the Joint Venture.

See generally Jones v. Lee, 971 P.2d 858, 862 (N.M . App. 1998); Eateries, Inc., 346

F.3d at 1236. M arket value is “‘the present value of a projected profit stream.’” Id.

(quoting R.E.B., Inc. v. Ralston Purina Co., 525 F.2d 749, 754-55 (10th Cir. 1975)).

Projecting a profit stream requires an analysis of future profits. Id. Future profits

are calculated by taking the difference between expected revenue and expected

expenses. Id. (citing Black’s Law Dictionary 1226 (7th ed. 1999)). “Fair market

value, therefore, incorporates expected earnings and expenses.” Id. (citing Protectors

Ins. Serv. v. United States Fid. & Guar. Co., 132 F.3d 612, 615 (10th Cir. 1998)).

      In arriving at the pre-Joint Venture value, M artin used the 1998 profit and loss

statement to calculate CPA PA ’s pre-Joint V enture expenses even though the 1999

figures were most relevant. 9 And, instead of using the pre-Joint Venture historical

profits to calculate the pre-Joint Venture market value, he averaged the Joint

Venture’s profits over the course of the entire Joint Venture and then carved out

CPAPA’s percentage of the profits. Failure to use historical profits and failure to

use the most relevant expense figures to calculate pre-Joint Venture m arket value


      9
         CPA PA ’s argument that it used the 1998 expense figures because the
parties used those figures during contract negotiations is unpersuasive.
Calculation of diminution in value requires an evaluation of the company’s value
immediately prior to the contract, not the value of the company one year or more
prior to the contract.

                                         24
skew ed his entire calculation. M artin applied a capitalization rate to these faulty

numbers and then subtracted that figure from the capitalized post-Joint Venture

value. Even assuming his post-Joint Venture value figures were correct and the

capitalization rate M artin chose w as correct, failure to accurately calculate the pre-

Joint Venture value flaw ed the entire calculation. Accordingly, the district court

correctly decided not to rely on these numbers to calculate damages. 10

                                          B.

      Next, we address Plaintiffs’ claim that the district court failed to consider its

claim regarding the A irport Shuttle contract. As noted above, on January 15, 2002,

Golden executed a contract purportedly on behalf of the Joint Venture, providing

parking spaces to Airport Shuttle, a company owned by Lorentzen. 11 The contract

provided Airport Shuttle unlimited use of eighteen spaces on the Joint V enture lot

at a deeply discounted rate of $20 per month. Not only were the rates significantly

lower than the usual rate of $50 per month, the contract favored Airport Shuttle as

it provided only Airport Shuttle could cancel the contract.        The record reflects

Golden executed the contract after PCA notified him he would not longer serve as


      10
          To the extent M artin attempted to show lost profits by subtracting the
1998 expense figures from CPA PA ’s portion of the Joint Venture profits, and
multiplying by six (the number of years remaining in the Joint Venture), his
calculations were similarly faulty.
      11
          Jack Henderson, Lorentzen’s employee, executed the contract on behalf
of Airport Shuttle. According to Henderson’s testimony at trial, Lorentzen asked
him to sign the contract for fear that if Lorentzen signed it himself a conflict of
interest might arise.

                                          25
operations manager for the Joint Venture, and that even if Golden continued to serve

as operations manager, he had no authority to sign the contract on behalf of PCA

without prior approval from corporate headquarters. Of further importance, Golden

went to work for Lorentzen ten days after he signed the contract. Testimony at trial

also revealed Airport Shuttle eventually used fifty spaces on the lot, instead of the

eighteen space contemplated by the contract, and the Joint Venture never received

payment for Airport Shuttle’s use of the parking spaces. Despite this evidence in the

record, the district court made no mention of Plaintiffs’ claim in its written order.

      CPAPA claims it w as damaged by the unauthorized contract with Airport

Shuttle in the amount of $32,775. This am ount constitutes CPA PA ’s 57% of the

$57,500, the amount Airport Shuttle should have paid the Joint Venture at the usual

rate of $50 per m onth for fifty spaces during the term of the contract. The district

court’s failure to rule on this matter precludes meaningful appellate review. Ramey

Constr. Co., Inc. v. Apache Tribe, 616 F.2d 464, 466-67 (10th Cir. 1980) (noting that

F.R.C.P. 52(a)’s requirements that the trial judge “find facts specially and state

separately its conclusions of law” serves to (1) engender care on the part of trial

judges in ascertaining the facts; and (2) make possible meaningful appellate review).

Accordingly, remand is required for the district court to make findings of facts and

conclusions of the law regarding the Airport Shuttle contract.

                                          C.

      Finally, Plaintiffs claim the district court erred in refusing to impose attorney


                                          26
fees against Defendants under paragraph 1.08 of the Joint Venture Agreement. That

paragraph states:

         Unauthorized Acts. Either Party hereto acting or purporting to act for
         or on behalf of the other Party hereto in violation of the terms and
         provisions of this Agreement shall be acting without authority and the
         Party acting or purporting to act shall indemnify and hold the other
         Party harmless from and against any and all claims, loss, liability or
         expense, which might arise or result from any such act or acts,
         including, without limitation, all attorneys’ fees and expenses actually
         incurred.

The determination of a contractual term is a question of law that this court review s

de novo. See Carland v. M etropolitan Life Ins. Co., 935 F.2d 1114, 1120 (10th Cir.

1991).

         Reading the provision in the context of the Joint Venture Agreement we agree

with the district court and find the provision only relates to liabilities to third parties

created by the unauthorized conduct of one of the parties to the Joint V enture

Agreement. The provision does not appear to set aside the “American Rule” at least

as it applies to litigation between the parties to the Joint Venture Agreement. See

M cClain Co. v. Page & W irtz Constr. Co., 694 P.2d 1349 (N.M . 1985) (New M exico

follows the “American Rule” in that each party bears the financial burden of

litigating a civil claim, absent a statute or agreement to the contrary). Accordingly,

the district court did not err when it denied Plaintiffs’ application for attorney fees.

         For the foregoing reasons, this matter is AFFIRM ED in part and REM AN DED




                                            27
in part for the district court’s consideration as stated herein.



                                         Entered for the Court,



                                         Bobby R. Baldock
                                         Circuit Judge




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