                                                                         FILED
                                                              United States Court of Appeals
                                                                      Tenth Circuit
                      UNITED STATES COURT OF APPEALS
                                                                  December 22, 2008
                            FOR THE TENTH CIRCUIT
                                                                  Elisabeth A. Shumaker
                                                                      Clerk of Court


    THE BEVILL COMPANY, INC.,

                Plaintiff-Appellant,
                                                          No. 08-3063
    v.                                           (D.C. No. 2:01-CV-02524-CM)
                                                            (D. Kan.)
    SPRINT/UNITED MANAGEMENT
    COMPANY,

                Defendant-Appellee.


                             ORDER AND JUDGMENT *


Before HOLMES, ANDERSON, and BALDOCK, Circuit Judges.



         This breach of contract case is before us for the third time. The Bevill

Company, Inc. (Bevill) now appeals from (1) the district court’s decision, entered

after a bench trial, that Sprint/United Management Company (Sprint) properly

terminated the contract with Bevill both for convenience and for cause and Bevill



*
       After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
failed to prove any damages and (2) the district court’s order granting Sprint’s

motion for partial summary judgment to strike Bevill’s request for a jury trial

because Bevill had waived its right to a jury trial in its contract with Sprint.

Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

                      FACTS AND PROCEDURAL HISTORY

      On August 1, 2000, Bevill and Sprint entered into a Master Services

Agreement (MSA) and a Contract Order as a single agreement. Robert Bevill

negotiated the agreement on behalf of Bevill. The agreement provided that Bevill

would provide dial-up internet access services to soldiers living in the barracks of

military bases where Sprint provided telecommunications services pursuant to a

separate contract with the Army and Air Force Exchange Services (AAFES). The

agreement included Bevill’s projection that it would provide dial-up internet

access to 20% of the base populations within one year of beginning service. 1

      Bevill was to provide dial-up access for a three-month trial period to four

military bases to evaluate profitability and viability of the program before

providing service to all bases. After Bevill provided this service for three full

months at all four bases, the parties were to meet to review the program

performance statistics and future direction of the program. If the parties

determined


1
       Although Mr. Bevill testified that 20% represented a maximum, the district
court found this testimony not credible.

                                          -2-
      that program penetration levels and profitability goals have been
      reasonably met, Sprint will issue formal written acceptance of the
      program test period. At that time, Sprint will also issue formal
      authorization to proceed with a build-out of the remaining base
      locations which have been determined to be viable. If it is agreed by
      the parties that all stated program goals have been reasonably met,
      this formal authorization to proceed cannot be unreasonably withheld
      by Sprint.

Aplt. App., Vol. I at 71. But, if upon their review, the parties determined

      that the program has not achieved its stated goals, the representatives
      of the parties will work together to develop a formal, written cure
      plan detailing the steps that will be taken by all parties to effect the
      necessary changes to bring the program into compliance. If the
      parties are unable, after all due effort, to reach agreement on the
      cure plan or the future direction of the program, Sprint reserves the
      right to unilaterally terminate the program under section 4 of this
      agreement.

Id. (emphasis added).

      On October 3, 2001, the parties’ representatives met to discuss whether the

dial-up internet sales could be profitable based on the results of the test period.

During the meeting, Sprint’s representatives expressed concern that there were

not enough subscribers and no showing of sufficient profitability and stated that

Sprint expected Bevill to have subscribers totaling 5% of the base population,

which was one quarter of the 20% figure projected by the agreement, or 533

subscriptions for the trial period. Mr. Bevill stated that this would be difficult to

achieve. One Sprint representative, D.J. McDyre, told Mr. Bevill that Bevill must

have at least 400 subscribers for Sprint to move forward and end the trial period.

That number was based on Mr. Bevill’s representation that he needed 100

                                          -3-
subscribers per base to break even. Sprint extended the trial period for ninety

days so that Bevill could reach this goal.

       In a later communication with Mr. McDyre, Mr. Bevill suggested a trial

period goal of 283 subscribers, which was 5% of Sprint’s telephone customers.

Sprint refused to accept this. Bevill and Sprint could not agree on the subscriber

levels needed for the program to proceed. On October 15, 2001, Mr. Bevill sent

an email message to the AAFES complaining about the subscriber goal

established by Sprint.

       On October 23, 2001, Sprint sent Bevill a letter terminating the contract for

convenience pursuant to MSA § 4.2. Section 4.2, titled “Termination for

Convenience,” provides that “Sprint may terminate this Agreement or any

Contract Order(s) or both at any time without liability by providing a termination

notice to [Bevill]. Unless otherwise provided in the notice, the termination is

effective 10 days after the date of the notice.” Id. at 42.

       On November 2, 2001, before the effective date of the termination, Bevill

filed its complaint asserting that Sprint had no cause to terminate the agreement.

Bevill sought an injunction to prevent termination of the contract unless Sprint

showed cause or, if termination occurred, an award of compensatory damages and

lost profits.

       In November 2001, Sprint agreed to reconsider its termination for

convenience. It requested that Bevill provide Sprint with a business plan and

                                          -4-
other financial information. Sprint again requested a revenue report that had been

requested on October 3, but never received. On December 3, 2001, Bevill

provided Sprint with the report along with an email note indicating that Bevill had

set up an escrow account for commissions. Also during December, Bevill

provided Sprint with a bank statement showing a zero balance as of October 31,

2001; a bank statement from another company of Mr. Bevill’s, World Wide

OnLine, indicating that credit card payments for the agreement had been

deposited in that account; deposit slips for the World Wide OnLine account

reflecting payments from individual soldiers; Bevill’s business plan showing

assets of $81; and financial information indicating that Bevill had $33,000 in cash

as of December 17. Based on this information, Sprint concluded that Bevill was

commingling money from the agreement with money in other accounts.

Additionally, Bevill never paid Sprint or AAFES any commissions because there

was no money available in the Bevill account to do so, and Bevill never actually

set up an escrow account. Also, Sprint received notice in December that some of

Bevill’s equipment was being repossessed.

      Mr. Bevill and his attorney met with Sprint representatives on

December 28, 2001, to further discuss whether the termination for convenience

should be reconsidered. Again, the parties were unable to reach agreement on the

subscriber goals or future direction of the program.




                                         -5-
        On January 21, 2002, Sprint sent Bevill another letter confirming that it

would not change its decision to terminate for convenience. Although the letter

noted that no reasons were required to terminate for convenience, it pointed to the

commingling of Bevill funds with Mr. Bevill’s personal funds and with the funds

of other business interests, Bevill’s failure to pay bills resulting in repossession of

equipment used to perform under the agreement, and the lack of a reasonable and

attainable business plan showing a likelihood that Bevill could achieve

profitability.

        After Mr. Bevill’s second deposition, Sprint sent Bevill a letter dated

March 13, 2002, terminating the agreement for cause pursuant to MSA § 4.3 as a

back-up to the termination for convenience. Section 4.3 permits termination for

cause

        [i]f a party believes the other party has materially breached this
        Agreement or a Contract Order or both, that party may give the other
        party a material breach notice, identifying the action or inaction that
        is the basis of the breach. The party that gave the breach notice may
        terminate this Agreement or the affected Contract Order or both if
        the breaching party has not cured the breach within 30 days after the
        date of the breach notice. Unless otherwise provided in the notice or
        unless the breach has been cured, the termination is effective 31 days
        after the date of the notice.

Id. The letter terminating for cause noted, among other things, the following

material breaches: Bevill’s failure to account for or pay commissions, allowing

commission money to be held by a business entity with no legal right to receive

or hold the money, failure to maintain accounting records in accordance with

                                          -6-
generally accepted accounting principles, and commingling of funds with other

entities. Bevill did not respond to the termination-for-cause letter.

         On April 4, 2002, the district court granted Sprint’s motion for summary

judgment on the complaint, deciding that under the terms of the contract Sprint

was permitted to terminate the contract for convenience without breach. On

April 30, 2002, Bevill ceased business operations.

         Thereafter, Bevill appealed the district court’s summary-judgment order.

We, however, remanded to the district court to determine whether Bevill “ha[d]

standing to challenge/enforce the terms of the contract.” Bevill Co. v.

Sprint/United Mgmt. Co., 77 F. App’x 461, 462, 464 (10th Cir. 2003)

(recognizing the agreement was executed by Bevill, a Delaware company, but the

breach of contract action was filed by Bevill, a New Hampshire company not in

existence when the agreement was executed). After deciding that Bevill did have

standing, the district court granted summary judgment to Sprint, again holding

that under the terms of the contract, Sprint could terminate at its convenience. On

appeal, we determined that the contract was ambiguous whether Sprint could

terminate for convenience without first making “all due effort” to reach an

agreement with Bevill for a “cure plan or the future direction of the program,”

and we therefore remanded for further proceedings to resolve the ambiguity.

Bevill Co. v. Sprint/United Mgmt. Co., 154 F. App’x 49, 49, 51-52 (10th Cir.

2005).

                                          -7-
      Upon remand, the district court held a bench trial, after determining Bevill

knowingly and voluntarily waived a jury trial in the agreement. After trial, the

district court considered the parties’ post-trial briefing and additional evidence

not presented at trial, issued findings of fact and conclusions of law under Fed. R.

Civ. P. 52(a), and concluded for several alternative reasons that Bevill was not

entitled to recover on its breach-of-contract claim.

      First, the court determined that “Bevill’s only claimed damages–lost

profits–were not caused by the claimed breach of contract–Sprint’s attempt to

terminate the contract for convenience.” Aplee. App., Vol. III at 628.

      Sprint’s mere attempt to terminate the Contract does not give rise to
      an action for lost profits allegedly sustained because the contract was
      terminated. The causal connection is missing. Even assuming that
      Sprint breached the contract by giving Bevill notice of termination
      for convenience without first giving all due effort to reach an
      agreement on a cure plan or the future direction of the program,
      Bevill failed to show that if Sprint had given “all due effort,” the
      parties could have reached an agreement that would have resulted in
      the lost profits that Bevill claims. Bevill’s performance and ability
      to generate profits was only affected (if at all) upon actual
      termination of the contract. Because Bevill failed to show damages
      caused by Sprint’s alleged breach, Bevill is not entitled to relief.

Id. (citation omitted).

      Additionally, the court concluded that Sprint properly terminated for

convenience, because Sprint complied with the contract requirements and used

“all due effort” to agree on a cure plan or future direction of the program, but

there was no possibility for an agreement. Because the parties could not agree on


                                          -8-
subscriber goals for the three-month trial period, the court therefore decided the

parties could not develop a cure plan. More specifically, the court found that

through the meetings and informal communications, Sprint attempted to comply

with the requirement that the parties work together on a formal, written cure plan,

but a cure plan could not be achieved until the parties agreed on the subscriber

goals for the program. The court also found that Mr. Bevill’s modification of his

projection that he could reach 20% of the base population within a year to a much

lower number was unreasonable and was the reason the parties were unable to

reach agreement on the subscriber goals. Also, the court rejected Bevill’s

argument that Sprint did not act in good faith by insisting Bevill sell dial-up to

soldiers without telephone service, because reaching 5% or 20% of a base

population would not require Bevill to sell to soldiers who did not have Sprint

telephone service.

      Next, the district court concluded that Sprint properly terminated the

contract for cause due to Bevill’s material breaches of the contract. In particular,

the court found that Bevill materially breached the contract by commingling

funds, by transferring agreement money to Mr. Bevill and other entities, by

failing to pay commissions, by making false statements regarding an escrow

account and money in the account, and by providing false financial statements. In

addition to finding the breaches to be material, the court also found that Sprint

considered the breaches to be material. Further, the court found that Bevill never

                                          -9-
attempted to cure these defaults, but if it had, the dishonesty of providing false

statements and financial information could not reasonably be cured and the failure

to pay commissions could not be cured because the Bevill account had no money.

      Finally, the court concluded that Bevill did not show that it would have

made any profit if the contract, which was only for dial-up services, had remained

in effect. Although the court took into account the fact that Bevill was a start-up

company, the court did not rely on Bevill’s historical failure to make a profit.

Instead, the court concluded Bevill failed to prove damages based on the evidence

at trial of Bevill’s business practices, the terms of the agreement, and the viability

of dial-up internet access in light of the soldiers’ preference for high-speed

internet access.

                                     ANALYSIS

      As indicated above, following the bench trial, the district court made

findings of fact and conclusions of law. The court’s “[f]indings of fact, whether

based on oral or other evidence, must not be set aside unless clearly erroneous,

and [we] must give due regard to the trial court’s opportunity to judge the

witnesses’ credibility.” Fed. R. Civ. P. 52(a)(6). “A finding of fact is not clearly

erroneous unless it is without factual support in the record, or unless the court

after reviewing all the evidence, is left with a definite and firm conviction that the

district court erred.” United States v. Jarvison, 409 F.3d 1221, 1224 (10th Cir.

2005) (quotation marks omitted).

                                         -10-
      We review the district court’s conclusions of law de novo. State Ins. Fund

v. Ace Transp. Inc., 195 F.3d 561, 564 (10th Cir. 1999). In doing so, we “apply[]

the same standard that the trial court would apply in making its initial ruling.” Id.

                                          I.

      Bevill argues that the district court erred as a matter of law by applying an

incorrect legal standard to determine that Bevill, as a start-up company, cannot

show lost profits. Bevill maintains that Kansas law 2 holds that start-up companies

can show lost profits, but the district court improperly applied the wrong legal

standard when it relied on Olathe Manufacturing, Inc. v. Browning

Manufacturing, 915 P.2d 86, 103-06 (Kan. 1996), which decided that the expert

testimony concerning lost profits was speculative and unreliable. Olathe

Manufacturing, however, cites Vickers v. Wichita State University, 518 P.2d 512

(Kan. 1974), the very case Bevill now asserts provides the correct legal standard.

See Olathe Mfg., 915 P.2d at 103-04 (discussing and quoting from Vickers and

noting that it “is the key Kansas case in the area of lost profits”). Both cases

require a plaintiff to prove lost profits with reasonable certainty based on the facts

of the individual case. Id. at 103-06; Vickers, 518 P.2d at 515-17. And Olathe

Manufacturing specifically relied on Vickers in holding that certain expert

testimony was speculative. Olathe Mfg., 915 P.2d at 106. Thus, the two cases do

not present different standards. Based on our de novo review, we conclude that

2
      The agreement provides, and the parties agree, that Kansas law applies.

                                         -11-
the district court applied correct legal standards. See Salve Regina Coll. v.

Russell, 499 U.S. 225, 231 (1991) (concluding a court of appeals must review a

district court’s determination of state law de novo).

      Furthermore, contrary to Bevill’s assertion, the district court did not decide

that a start-up company can never recover lost profits; rather, the court decided

that Bevill was required to show lost profits with some reasonable certainty. The

court took “into account the fact that Bevill was a start up company, and

accordingly [did] not rel[y] solely on Bevill’s historical failure to make a profit.”

Aplt. App., Vol. III at 630. 3

                                          II.

      Bevill argues that the district court erred in failing to follow our directive

in Bevill, 154 F. App’x at 49, 51-52, to resolve the ambiguity between the MSA

and the Contract Order and instead treated the directive as dicta. There, however,

was no need for the district court to resolve the ambiguity, because the court

decided that Sprint needed to use “all due effort.” Under the circumstances, we

decline to conclude that our mandate precluded the district court from proceeding

3
       We note that Bevill does not challenge the district court’s findings
regarding its failure to establish damages. The court found that Bevill did not
show that it was capable of making a profit under the agreement and that Bevill’s
financial practices showed a lack of attention to detail, such that it would not
become profitable. Additionally, the court found that Bevill could not make a
profit comparable to the profit Sprint was making providing DSL internet access,
because the agreement was only for dial-up access, which was losing popularity.
In other words, Sprint’s income from selling DSL access did not show the income
Bevill would make if Sprint had not terminated the contract.

                                         -12-
as it did. Cf. Proctor & Gamble Co. v. Haugen, 317 F.3d 1121, 1126 (10th Cir.

2003) (“Although a district court is bound to follow the mandate, and the mandate

controls all matters within its scope, . . . a district court on remand is free to pass

upon any issue which was not expressly or impliedly disposed of on appeal.”

(quotation marks omitted)).

                                           III.

      Bevill argues that the district court erred in deciding that Sprint properly

terminated the agreement for convenience because Sprint did not exercise “all due

effort” to reach an agreement with Bevill and Sprint’s failure to do so was a

breach of the contract. According to Bevill, the district court failed to provide the

subsidiary facts necessary for us to review the steps the court took to conclude

that Sprint used “all due effort” before terminating for convenience. Further,

Bevill contends that Sprint’s assertion that the parties could not reach an

agreement regarding the subscription level was based on the fact that Sprint set an

impossible goal that Bevill sell dial-up internet services to soldiers without Sprint

telephone service and that Sprint denied Bevill the ability to offer DSL internet

access.

      Sprint first counters that we should decline to review this issue because

Bevill failed to provide record citations to support its arguments and cited in its

opening brief to only its statement of the facts in its post-trial brief. Also, the




                                           -13-
majority of the record cites in Bevill’s reply brief are not included in the parties’

appendices. 4

      An appellant has a responsibility to provide an adequate appendix for

appellate review. See 10th Cir. R. 10.2(B), 30.1(A)(1); United States v. Dago,

441 F.3d 1238, 1251 (10th Cir. 2006). “The appellant must provide all portions

of the transcript necessary to give the court a complete and accurate record of

proceedings related to the issues on appeal.” 10th Cir. R. 10.1(A)(1). An

appellant, however, cannot fulfill its obligation to provide record support by

merely citing to its statement of facts in a district court brief to show that the

district court’s factual findings were clearly erroneous. Cf. Doeblers’ Pa.

Hybrids, Inc. v. Doebler, 442 F.3d 812, 820 n.8 (3d Cir. 2006) (noting that

appellant’s citation to its statement of undisputed facts in a summary judgment

motion does not fulfill the mandate of Fed. R. App. P. 28(e) that citations be to

the appendix). Also, citation references should be to the appendices, and not to

the transcripts. See 10th Cir. R. 28.1(A). And transcript excerpts must be

included in an appendix when referred to in a brief. See id. at 10.3(D)(4).




4
      In its reply brief, Bevill contends that Sprint has “unreasonably and
vexatiously increas[ed] litigation costs by including unnecessary material in the
appendix.” Fed. R. App. P. 30(b)(2). According to Bevill, the majority of
Sprint’s appendix is available in the record and referenced in the two prior
appeals. We disagree. Each appeals stands on its own. Our rules do not relieve
the parties from providing an adequate appendix in subsequent appeals.

                                          -14-
      Because Bevill did not provide a sufficient appendix, we could decline to

consider this issue. See 10th Cir. R. 10.3(B); see also United States S.E.C. v.

Maxxon, Inc., 465 F.3d 1174, 1175 n.1 (10th Cir. 2006) (deciding that appellants

who fail to provide a record sufficient for appellate review risk summary

dismissal of their claims). But since Sprint has provided a sufficient appendix to

affirm the district court, we proceed to consider this issue on its merits.

      In reviewing on the merits, however, we will “not sift through [Sprint’s]

appendix to find support for” Bevill’s arguments. Phillips v. James, 422 F.3d

1075, 1081 (10th Cir. 2005). Nor will we consider factual statements or

assertions made by Bevill in its briefs that are supported by citation to transcript

or deposition pages not included in the appendices or by citations to its statement

of the facts in its post-trial brief. Instead, we will decide this appeal only on the

portions of the record provided in the appendices. We remind counsel of the

importance of following court rules to aid our consideration of appeals, as

“[t]hese rules are not empty gestures.” Travelers Indem. Co. v. Accurate

Autobody, Inc., 340 F.3d 1118, 1121 (10th Cir. 2003).

      We now proceed to the merits of this issue. The district court found that

Sprint terminated for convenience after making “all due effort” to develop a cure

plan. Bevill contends that the court reached this conclusion without providing the

subsidiary facts necessary to allow us to determine the steps the court took to

reach its decision. See Roberts v. Metro. Life Ins. Co., 808 F.2d 1387, 1390 (10th

                                          -15-
Cir. 1987) (requiring a district court to make findings sufficient to indicate the

factual basis for the court’s ultimate conclusion). This, however, is not a case

where the district court made conclusory findings unsupported by the subsidiary

facts or explanatory reasoning. See id. at 1390-91. The district court’s factual

findings, summarized in this order and judgment, are sufficiently detailed to

enable us to determine whether the findings are clearly erroneous. See id. at

1391. Upon careful review of the appendices, we conclude that the findings are

not clearly erroneous. Because Sprint used “all due effort” to reach an agreement

with Bevill concerning subscriber goals, but no agreement was reached, Sprint

properly terminated for convenience. Accordingly, we affirm for substantially the

same reasons set forth by the district court in its memorandum and order of

February 5, 2008. Aplee. App., Vol. III at 617.

                                         IV.

      Bevill argues that the district court erred in deciding that Sprint properly

terminated for cause. Because we affirm the district court’s determination that

Sprint properly terminated for convenience, we need not address this issue.

                                          V.

      Bevill’s next issue concerns the district court’s summary-judgment decision

to deny a jury trial. Sprint filed a motion for partial summary judgment to strike

Bevill’s jury-demand request, claiming only that Bevill waived its right to a jury

trial in MSA § 16.4. The district court found that Bevill knowingly accepted the

                                         -16-
jury waiver. But because the court could not determine the relative bargaining

positions of the parties or other facts about the parties and their negotiations, the

court could not determine if Bevill’s waiver was voluntary. Accordingly, the

court denied Sprint’s motion for summary judgment without prejudice.

      Sprint later renewed its motion, presenting evidence that the waiver was

voluntary. The district court agreed, finding that Mr. Bevill negotiated the

contract with Sprint over the course of seven months, he drafted entirely or

almost entirely twelve of the thirty-six pages of the Contract Order, he has a

college education and has done post-graduate work, he has business experience as

an independent contractor, he set up Bevill specifically to enter into the

agreement with Sprint, he funded the business with his own money and loans

from friends, he consulted with an attorney before signing the agreement, and he

negotiated language in the Contract Order to negate certain unfavorable language

in the MSA but did not attempt to negate the jury waiver in the MSA. Correctly

applying federal law to this jury-trial waiver issue, the court determined

Mr. Bevill was able to bargain successfully with respect to many aspects of the

contract, and therefore there was no “gross disparity” in bargaining power.

Telum, Inc. v. E.F. Hutton Credit Corp., 859 F.2d 835, 837 (10th Cir. 1988).

Although the court recognized that Mr. Bevill may have been at a disadvantage

from a bargaining standpoint, the court was unwilling to hold that the

disadvantage caused Bevill’s acceptance of the jury waiver to be involuntary.

                                          -17-
      Bevill argues that the district court erred in granting Sprint’s renewed

motion for partial summary judgment since there was no significant change in the

facts regarding Mr. Bevill’s level of sophistication and business experience from

the first motion. Bevill instead contends that the parties had grossly

disproportionate bargaining power and Mr. Bevill was a systems engineer, not a

sophisticated businessman, whereas Sprint is a large corporation.

             We review a district court’s decision to grant summary
      judgment de novo, viewing all facts in the light most favorable to the
      party opposing summary judgment. We will affirm a grant of
      summary judgment if there is no genuine issue of material fact and
      the prevailing party is entitled to judgment under the law.

Grynberg v. Total, S.A., 538 F.3d 1336, 1346 (10th Cir. 2008) (citation omitted).

      Applying these standards, we conclude that the district court correctly

granted Sprint’s summary-judgment motion. Contrary to Bevill’s assertion, the

first motion contained no evidence about Mr. Bevill’s level of sophistication or

business experience. Also contrary to Bevill’s assertion, the evidence does not

show grossly disproportionate bargaining power. Accordingly, we affirm for

substantially the same reasons set forth by the district court in its memorandum

and order of April 30, 2007. Aplt. Opening Br., Tab C.




                                         -18-
                                          VI.

      Lastly, Bevill requests an award of costs and attorney’s fees against Sprint

if this case is remanded to the district court again. In light of our affirmance of

the district court’s decision, this request is moot.

                                    CONCLUSION

      The judgment of the district court is AFFIRMED.


                                                       Entered for the Court



                                                       Bobby R. Baldock
                                                       Circuit Judge




                                          -19-
