GeoMetWatch Corp. v. Behunin

• Decision Date: 29 June 2022
• Docket Number: 19-4130
• Citation: 38 F.4th 1183
• Parties: GEOMETWATCH CORP., a Nevada corporation, Plaintiff Counter Defendant - Appellant, v. Robert T. BEHUNIN, an individual; Curtis Roberts, an individual; Scott Jensen, an individual; Alan E. Hall, an individual; Island Park Group of Companies, a Utah limited liability company; Tempus Global Data, a Delaware corporation, Defendants - Appellees, Utah State University Advanced Weather Systems Foundation, a Utah corporation; Utah State University Research Foundation, a Utah corporation, d/b/a Space Dynamics Laboratory, Defendant Counterclaimants - Appellees, and Utah State University, a state university ; Erin Housley, an individual; Mark Hurst, an individual; Debbie Wade, an individual; Brent Keller, an individual, Defendants, v. David Crain, Third-Party Defendant.
• Court: U.S. Court of Appeals — Tenth Circuit

38 F.4th 1183

GEOMETWATCH CORP., a Nevada corporation, Plaintiff Counter Defendant - Appellant,

v.Robert T. BEHUNIN, an individual; Curtis Roberts, an individual; Scott Jensen, an individual; Alan E. Hall, an individual; Island Park Group of Companies, a Utah limited liability company; Tempus Global Data, a Delaware corporation, Defendants - Appellees,Utah State University Advanced Weather Systems Foundation, a Utah corporation; Utah State University Research Foundation, a Utah corporation, d/b/a Space Dynamics Laboratory, Defendant Counterclaimants - Appellees,andUtah State University, a state university ; Erin Housley, an individual; Mark Hurst, an individual; Debbie Wade, an individual; Brent Keller, an individual, Defendants,

v.David Crain, Third-Party Defendant.

No. 19-4130

United States Court of Appeals, Tenth Circuit.

FILED June 29, 2022

James E. Magleby (Peggy Tomsic, Adam A. Alba, Yevgen Kovalov, with him on the briefs), Magleby Cataxinos & Greenwood, Salt Lake City, Utah, for Plaintiff-Appellant.

David W. Tufts (David L. Arrington and Matthew J. Orme, with him on the brief), Durham Jones & Pinegar, Salt Lake City, Utah, for Defendants-Appellees Alan E. Hall, Tempus Global Data, Inc., and Island Park Group of Companies, LLC.

Joshua D. Davidson, Assistant Utah Solicitor General (Peggy E. Stone, Assistant Utah Solicitor General with him on the brief), Utah Attorney General's Office, Salt Lake City, Utah, for Defendants-Appellees Utah State University Research Foundation, Robert T. Behunin, and Curtis Roberts.

Beth J. Ranschau, Ray Quinney & Nebeker P.C. (Arthur B. Berger, Ray Quinney & Nebeker P.C. and Ryan B. Bell, Kunzler Bean & Adamson, P.C. with her on the brief), Salt Lake City, Utah, for Defendants-Appellees Utah State University Advanced Weather Systems Foundation and Scott Jensen.

Before HOLMES and KELLY, Circuit Judges, and LUCERO, Senior Circuit Judge.

HOLMES, Circuit Judge.

Plaintiff-Appellant GeoMetWatch Corporation, ("GMW") appeals from several district court orders granting summary judgment to Defendant-Appellees Alan Hall, Erin Housley, Brent Keller, Mark Hurst, Debbie Wade, Island Park Investments, and Tempus Global Data, Inc. (collectively, the "Hall Defendants");¹ Utah State University Advanced Weather Systems Foundation ("AWSF") and Scott Jensen (collectively, the "AWSF Defendants");² and Utah State University Research Foundation ("USURF"), Robert Behunin, and Curtis Roberts (collectively, the "USURF Defendants").³

The instant lawsuit was borne out of the collapse of a venture GMW entered into that was created for the purpose of constructing and deploying a satellite-hosted weather sensor system. GMW describes this as a "trade secrets" case, alleging that all Defendants, led by Mr. Hall, conspired to drive GMW out of business on the eve of this successful and groundbreaking weather forecasting venture by stealing its confidential and trade secret information, forming a competing business, and pulling out of agreements that Mr. Hall made with GMW.

The district court granted summary judgment to the Hall Defendants on an array of claims. That judgment was primarily based on an overarching deficiency in GMW's case, namely, a lack of non-speculative and sufficiently probative evidence of a causal nexus between Defendants’ alleged bad acts and GMW's asserted damages. The court also granted summary judgment in favor of USURF, AWSF, and Mr. Roberts because they are allegedly immune from lawsuit under the Utah Governmental Immunity Act ("UGIA"). Subsequently, the court granted summary judgment to Mr. Jensen and Mr. Behunin on all claims, concluding generally that GMW's showing of causation also was deficient as to them. The court likewise awarded partial summary judgment to AWSF on its breach-of-contract counterclaim against GMW, effectively denying GMW's cross-motion for summary judgment and affirmative defenses.

GMW avers that the district court's decisions were all made in error, raising three issues on appeal: First, whether the district court erred by granting summary judgment to the Hall Defendants based on GMW's lack of non-speculative causation evidence; second, whether the court erred by granting summary judgment to USURF, AWSF, and Mr. Roberts on the basis of governmental immunity under Utah law; and third, whether the court erred by granting partial summary judgment to AWSF on its counterclaim and by denying GMW's cross-motion for summary judgment. We conclude that GMW's arguments are either unpreserved or unavailing. As a result, we affirm the district court's decisions.

I

A

This suit stems from the failed development of a weather-detecting satellite sensor system. One of the players in this failed venture, USURF, developed a weather system sensor called the Geosynchronous Imaging Fourier Transform Spectrometer—or the GIFTS sensor—in the early 2000s. The GIFTS sensor was funded by the National Aeronautics and Space Administration ("NASA") and the National Oceanic and Atmospheric Administration ("NOAA"). It possessed the ability to provide high-resolution atmospheric data that could be used to improve weather forecasting.

In 2008, David Crain and Gene Pache founded GMW, a Nevada corporation, with a vision of employing sensors like GIFTS to provide proprietary weather data for sale. To this end, GMW discussed building a commercial version of the GIFTS sensor with USURF. USURF eventually agreed to build this commercial version, which was called the Sounding and Tracking Observatory for Regional Meteorology—or the STORM sensor. GMW and USURF thus entered into a Preferred Service Provider Agreement ("PSPA") to put onto paper their agreement. Along the way, GMW obtained a verbal commitment from NASA that GMW could have the GIFTS sensor—and, in September 2010, GMW became the first company to obtain a remote sensing license from NOAA, which would allow GMW to operate up to six GIFTS or STORM-type sensors in orbit and commercialize the resulting weather-related data.

GMW sought out potential customers for data gathered from the STORM sensor throughout 2011. GMW was largely unable to secure firm purchase commitments. The only agreement it entered into, beyond letters of intent, was a non-binding License and Services Agreement with a Chinese data company. But while this Agreement reflected a willingness on the Chinese company's part to purchase $8.9 million worth of weather data per month, the contract the company eventually entered into with GMW only obligated it to purchase a significantly lower amount: $300,000 worth of weather data per month.

In early 2012, GMW began discussions with AsiaSat, a Hong Kong-based foreign entity in the business of operating commercial satellites. The discussions concerned AsiaSat hosting the STORM sensor on its AsiaSat 9 satellite. Significantly, the parties discussed the possibility of AsiaSat using its balance sheet to secure a loan of roughly $170 million from the Export-Import Bank ("EXIM Bank"). GMW would then use the loan proceeds to build the STORM sensor.

The EXIM Bank "provides financing to international borrowers who buy export goods from the United States."

GeoMetWatch Corp. v. Hall , No. 1:14-00060-JNP, 2018 WL 6240991, at *2 n.4 (D. Utah Nov. 27, 2018) (emphasis added). The bank therefore could not structure a loan where GMW would be the borrower because it was a domestic entity; AsiaSat, as the foreign entity, would need to submit the loan application and be the borrower. This arrangement, however, would expose AsiaSat to significant potential financial liability given the high costs of the STORM project. See id. at *2 ("AsiaSat was concerned about its ‘exposure’ in doing a deal with [GMW] .... [and] was worried that it would take out a loan with EXIM Bank, [GMW's] business would fail, and AsiaSat ‘would be on the hook to pay off the debt.’ ").

On April 3, 2013, GMW and AsiaSat executed a formal Cooperation Agreement, which reflected some of AsiaSat's concerns regarding the EXIM Bank's loan process. Under the Cooperation Agreement, GMW was required to meet two conditions before AsiaSat was required to seek out a loan with the EXIM Bank: (1) provide a guarantee, or "backstop," and (2) provide a Convertible Note. Section 2.2.1 of the Cooperation Agreement outlined these conditions precedent:

2.2.1 Conditions to Obligations of AsiaSat .... The obligations of AsiaSat ... to consummate the transactions contemplated by this [Cooperation] Agreement shall be subject to the fulfillment or AsiaSat's ... waiver of each of the following conditions: ...

(b) AsiaSat ... shall have received from GMW the Convertible Note duly executed by an authorized officer of GMW, which Convertible Note shall be in full force and effect on the Effective Date;

(c) AsiaSat ... shall have received legally valid and binding guarantees and/or other credit support (including letters of credit) in favor of AsiaSat ... given by a guarantor (or bank, in the case of letters of credit) acceptable to AsiaSat ... in [its] sole and absolute discretion and, in each case, in form and substance satisfactory to AsiaSat ... in [its] sole and absolute discretion, which shall guarantee the full performance and payment of the obligations of GMW ....

Aplt.’s App., Vol. 13, at 2868 (Cooperation Agreement between AsiaSat and GMW, dated Apr. 3, 2013). Under Article 15.1.1(g) of the Cooperation Agreement, AsiaSat could terminate the agreement "at any time after the Cut-off Time"—i.e., July 31, 2013—"by written notice to GMW, if the conditions set forth in Article 2.2.1 ... [were] not fulfilled on or prior to the Cut-off Time." Id. at 2895. The Cut-off Time also could be modified by a written agreement between the parties.

The guarantee, or "backstop," in Article 2.2.1(b) was intended to protect AsiaSat's financial interests in the event GMW would be unable to pay off the loan, and it was a critical facet of AsiaSat's agreement and relationship with GMW. See GeoMetWatch , 2018 WL 6240991, at *2 ; see also id. at *3 ...