CASCADE ENERGY AND METALS CORP. v. BANKS

Nos. 86-1156, 86-1157 and 86-1202.

896 F.2d 1557 (1990)

CASCADE ENERGY AND METALS CORPORATION, a Nevada corporation, Plaintiff-Appellee, Cross-Appellant, v. Jeffrey G. BANKS, Kenneth Caldwell, Coastal Computer Investments, a California partnership, Elmer J. Davis, Harmatz and Hodowski, a California partnership, David G. Henry, Roger A. Mann, H.E. Moses, Robert A. Nickerson, Peter P. Samarin, Herbert W. Stoltenberg, Edwin Stoltenberg, Chris Waugh, Samuel Harmatz, Bernard Hodowski, Patricia Stoltenberg, Mann Caldwell Partnership, a partnership, Delford R. Ashley, George Slater, Patricia Slater, Robert Doub, Sam Hambarian, Alyce Hambarian, Lionel Ascher, A.C. Nejedly, R.E. Donahey, Grace V. Duncan and Elliot Weinberg, Defendants-Appellants, Cross-Appellees. Jeffery G. BANKS, Kenneth Caldwell, Coastal Computer Investments, a California partnership, Elmer J. Davis, Harmatz and Hodowski, a California partnership, David G. Henry, Roger A. Mann, Mann Caldwell Partnership, H.E. Moses, Robert A. Nickerson, Peter P. Samarin, Patricia Stoltenberg, Herbert W. Stoltenberg, Edwin Stoltenberg, Chris Waugh, Delford R. Ashley, George Slater, Patricia Slater, Robert Doub, Sam Hambarian, Alyce Hambarian, Lionel Ascher, A.C. Nejedly, R.E. Donahey, Grace V. Duncan, Elliot Weinberg, Bernard Hodowski and Samuel Harmatz, Counterclaimants, Cross-claimants, Cross-Counterdefendants, Appellants, Cross-Appellees, v. CASCADE ENERGY AND METALS CORPORATION, Counterdefendant, Cross-Counterclaimant, Crossclaim Defendant, Appellee, and W. David Weston, Telegraph Mine Limited, a partnership, Rex Montis Silver Co., Telegraph Mine Joint Venture, Gold Technics, Ltd., a limited partnership, Interphase Corp., James F. Peters, as Trustee of the Gnolaum Unitrust, Cross-Counterclaimants, Cross-Defendants, Crossclaim Defendants, Appellees, Cross-Appellants. Harold Masunaga, Marion Harada, Ukio Ayabe, Lyle Muller, Charles Higashi, Joseph Green, and William Ohara, Amici Curiae.

United States Court of Appeals, Tenth Circuit.

Rehearing Denied April 25, 1990.


Attorney(s) appearing for the Case

Steven W. Snarr (Michael E. Talbot with him on the brief), Salt Lake City, Utah, for Cascade Energy and Metals Corp.

Richard A. Love of Reish & Luftman, Los Angeles, Cal. (George M. Haley of Haley & Stolebarger, Salt Lake City, Utah, with him on the brief), for Jeffery G. Banks, Kenneth Caldwell, Coastal Computer Investments, Elmer J. Davis, David G. Henry, Roger A. Mann, Mann Caldwell Partnership, Robert A. Nickerson, Peter P. Samarin, Patricia Stoltenberg, Herbert W. Stoltenberg, Edwin Stoltenberg, Delford Ashley, George Slater, Patricia Slater, Robert Doub, Sam Hambarian, Alyce Hambarian, and Lionel Ascher (the "Associate Defendants").

Richard A. Love of Reish & Luftman, Los Angeles, Cal., for Samuel Harmatz, Bernard Hodowski, A.C. Nejedly, Chris Waugh, H.E. Moses, R.E. Donahey, Grace V. Duncan, Elliot Weinberg, and Harmatz and Hodowski partnership (the "Gold Technics Defendants").

A. Park Smoot, Salt Lake City, Utah, for W. David Weston.

Ronald S. George, Pocatello, Idaho, for Telegraph Mine Ltd.

Lynn P. Heward, Salt Lake City, Utah, for Rex Montis Silver Co.

Delwin T. Pond, Salt Lake City, Utah, for Gnolaum Unitrust.

Delwin T. Pond, Salt Lake City, Utah, for amici curiae.

Before McKAY, BARRETT, and EBEL, Circuit Judges.


EBEL, Circuit Judge.

This diversity case involves a dispute over a gold mine. The basic controversy is between the mine's principal promoters (W. David Weston and his affiliated entities) and a group of investors in the mine.

The Weston entities basically appeal from the district court's determination after a bench trial that they breached their fiduciary duties to the investors by concealing large cost overruns during the mine's development and by then trying...

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