Twiford Enterprises v. Rolling Hills
20-8048
10th Cir.Jul 9, 2021Background
- Twiford Enterprises, a Wyoming cattle-ranching business, refinanced cattle loans with Rolling Hills Bank & Trust (RHB) in 2014 and later refinanced real‑estate loans with RHB in 2015; the loan and forbearance documents contained Iowa choice‑of‑law clauses.
- RHB stopped advancing funds after the real‑estate loans, declared TEI in default, and TEI could not obtain replacement financing.
- In 2016–2017 TEI signed debt modification and two forbearance agreements that granted RHB additional forbearance/credit and contained broad, unconditional releases waiving known and unknown claims; Twiford family members signed as guarantors.
- TEI (and Twiford guarantors) sued RHB for breach, fraud, negligent misrepresentation, and related claims, alleging RHB induced refinancing and manufactured a default.
- The district court converted RHB’s motion to dismiss into summary judgment, held most claims barred by Iowa’s statute of frauds and, crucially, concluded the releases barred the remaining claims; the Twifords appealed.
- The Tenth Circuit applied Wyoming choice‑of‑law rules, enforced the parties’ Iowa choice‑of‑law selection, and affirmed: Iowa law governs; the releases bar the suit; the economic‑duress defense fails.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law | Choice‑of‑law clauses should not be enforced; Wyoming law should apply | Parties agreed to Iowa law in contracts; Wyoming will enforce valid choice clauses | Enforced Iowa law under Wyoming choice‑of‑law rules and Restatement §187 |
| Do the Releases bar the claims? | Releases were procured wrongfully and should not bar tort/contract claims | Releases are broad, unambiguous, and bars all claims arising on or before execution | Releases are valid and bar the Twifords’ claims |
| Economic duress defense | Twifords signed under economic duress because RHB stopped advances and forced agreements | Twifords accepted substantial benefits (forbearance + $850,000) and had alternatives | Economic duress not proven; defense fails (cannot accept benefits and repudiate release) |
| Public policy / adhesion / Statute of Frauds argument | Application of Iowa law or statute of frauds is contrary to Wyoming public policy; loan docs were contracts of adhesion | Choice‑of‑law and releases enforceable; adhesion/public‑policy arguments waived | Public‑policy/adhesion arguments waived or rejected; court did not overturn releases on that basis |
Key Cases Cited
- Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) (forum state’s conflicts rules govern choice‑of‑law in diversity cases)
- Res. Tech. Corp. v. Fisher Sci. Co., 924 P.2d 972 (Wyo. 1996) (parties’ contractual choice of law presumptively applies)
- Verne R. Houghton Ins. Agency, Inc. v. Orr Drywall Co., 470 N.W.2d 39 (Iowa 1991) (releases construed as contracts; unambiguous full releases enforced)
- City of Asbury v. Iowa City Dev. Bd., 723 N.W.2d 188 (Iowa 2006) (elements required to prove economic duress)
- Turner v. Low Rent Hous. Agency of City of Des Moines, 387 N.W.2d 596 (Iowa 1986) (a party may not accept benefits of an agreement and later claim duress)
- Cowboy’s LLC v. Schumacher, 419 P.3d 498 (Wyo. 2018) (Wyoming precedent supports enforcement of agreements relinquishing claims)