                                                                        FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit

                                                                 November 5, 2013
                 UNITED STATES COURT OF APPEALS
                                                                Elisabeth A. Shumaker
                                                                    Clerk of Court
                              TENTH CIRCUIT


 In re: DAVID A. MASCIO, d/b/a DM
 CAPITAL, INC., MASCIO ASSET
 MANAGEMENT, INC., MASCIO
 ASSET MANAGEMENT, LLC;
 MONICA L. MASCIO,

      Debtors.
 _______________________
                                                       No. 12-1312
 DAVID A. MASCIO,                            (D.C. No. 1:11-CV-02678-CMA)
                                                        (D. Colo.)
          Appellant,

 v.

 PAUL GRONEWOLLER;
 GRONEWOLLER & ASSOCIATES,

          Appellees.


                       ORDER AND JUDGMENT *

Before BRISCOE, Chief Judge, SEYMOUR, and LUCERO, Circuit Judges.


      This case involves a claim by Paul Gronewoller and Gronewoller &

Associates, Inc. (collectively Gronewoller) objecting to the dischargeability in


      *
        This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, or collateral estoppel. Although the
court generally disfavors the citation of an order and judgment, it may be cited for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
bankruptcy of an investment debt of David Mascio. The district court affirmed

the bankruptcy court’s determinations that Mascio’s debt to Gronewoller was not

dischargeable because of fraud in the inducement and that Gronewoller was

entitled to $183,641.17 in damages. Mascio appeals, raising several issues.

Exercising jurisdiction under 28 U.S.C. § 158(d)(1), we affirm.

      We will not recite in detail the facts of this case, which are well known to

the parties after more than ten years of litigation. Gronewoller alleged that he

was induced by Mascio’s fraudulent misrepresentations to purchase a 49 percent

interest in a financial and investment advisory business. After disputes arose

regarding the business, Gronewoller filed suit against Mascio for fraud in state

court in 2001. Shortly before trial, Mascio filed for bankruptcy. Gronewoller

then commenced this adversary proceeding to deny discharge of the debt under 11

U.S.C. § 523(a), and to recover damages.

      After a trial, the bankruptcy court entered an order in favor of Gronewoller.

That order was followed by a series of appeals by Mascio to the district court,

remands to the bankruptcy court, and ultimately an affirmance in favor of

Gronewoller. Mascio raises three issues in his appeal to this court.

      First, Mascio contends Gronewoller waived his claim of fraud in the

inducement by his continued participation and investment after obtaining full

knowledge of Mascio’s misrepresentaton regarding the SEC registration of

Mascio’s company. The bankruptcy court held that Gronewoller’s performance,

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“despite knowledge of the February 2000 letter [from the SEC informing Mascio

of deregistration of his company due to less than $25 million under management],

does not constitute a waiver of his fraud claims” based on “consideration [of] the

date of the letter (February 2000), the year to which the letter pertains (1999), the

company named in the letter (Mascio Asset Management, Inc. or MAM), and the

numerous documents executed after February 2000 which painted a different

financial picture.” Aplt. App. at 31-32. The district court affirmed the

bankruptcy court, concluding that “[a]ny concerns that might have arisen because

of the Letter were alleviated by other documents corroborating Mascio’s false

representation that MAM had sufficient assets to qualify for SEC registration.”

Id. at 65.

       Second, Mascio contends the bankruptcy court erred in using extrinsic

evidence beyond the “agreed value” stated in the parties’ Asset Purchase and

Contribution Agreement to determine the “represented value” of the company in

calculating Gronewoller’s damages. The bankruptcy court considered extrinsic

evidence from Gronewoller showing that Mascio had represented the value to be

higher than the agreed value set forth in the contract. The district court affirmed

this approach but remanded the issue to the bankruptcy court to re-calculate the

represented value based only on those representations “with a clear connection to

the January 1, 2001 purchase date,” id. at 76-77. The bankruptcy court thereafter

found that the only representation with a clear connection to the purchase date

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was Mascio’s representation to Gronewoller that he anticipated the assets under

management to remain above $30 million through December 31, 2000, which

formed the basis of Gronewoller’s calculation of MAM, Inc.’s value. Mascio

argues that the court should have based damages on the “agreed value” set out in

the Agreement.

      Third, Mascio contends the bankruptcy court used the wrong “date of

purchase” in calculating damages, asserting that the appropriate date was October

1, 2000, the date of the Asset Purchase Agreement, rather than January 1, 2001,

the date Gronewoller transferred payment pursuant to the Agreement. The district

court determined that this issue was raised for the first time in Mascio’s third

appeal, after the January 1, 2001 date “ha[d] consistently been used as the ‘date

of purchase’ for the purpose of calculating damages,” without objection. Id. at

84. The court therefore held the issue waived.

      We review district and bankruptcy courts’ conclusions of law de novo and

their findings of fact for clear error. In re Baldwin, 593 F.3d 1155, 1159 (10th

Cir. 2010). We have thoroughly reviewed the record and the decisions of the

bankruptcy court and district court in light of Mr. Mascio’s claims on appeal, and

we are not persuaded that those courts erred. Accordingly, we AFFIRM




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substantially for the reasons given by the district court.

                                        ENTERED FOR THE COURT


                                        Stephanie K. Seymour
                                        Circuit Judge




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