In this сase we must consider whether the district court erred when it granted summary judgment in favor of the Appellees, David Hendricks and Magnolia Mountain (collectively “Magnolia”), dismissing all of the claims Appellant, Mountain Highlands, brought against them. Because Mountain Highlands failed to present sufficient evidence in support of its claims, we hold the district court did not err in its decision.
In August 2003, Mountain Highlands purchased the Ski Riо resort near Taos, New Mexico, from Magnolia. Shortly after Mountain Highlands’s purchase of these properties, a title dispute arose between the prior owners of Ski Rio and Magnolia. Eventually, the New Mexico courts determined Magnolia had conveyed clear title to Mountain Highlands, subject only to a mortgage creditor, Signature Capital. Nevertheless, the length of the title dispute placed financial strain on Mountain Highlands and, as a result and to prevent Signature Capital from foreclosing on the property, Mountain Highlands filed for Chapter 11 bankruptcy in January 2006.
In аn effort to extricate itself from bankruptcy, Mountain Highlands prepared a reorganization plan which was approved by all of its creditors, including Magnolia, with the exception of Signature Capital. As part of this plan, Mountain Highlands and Magnolia entered into a real estate exchange agreement whereby Magnolia agreed to accept certain real property interests in satisfaction of the debt owed to it by Mountain Highlands. This exchange agreement was conditioned upon the bankruptcy court’s approval of Mountain Highlands’s reorganizatiоn plan, but it also allegedly required Magnolia to support the plan.
A few months later, while its proposed reorganization plan was still pending before the bankruptcy court, Mountain Highlands filed а motion with the bankruptcy court to sell Ski Rio out of the ordinary course of business, free and clear of liens, claims, and interests. Shortly before a hearing on Mountain Highlands’s motion, however, Magnoliа objected to the proposed sale, asking the bankruptcy court to determine whether Magnolia could receive cash from the sale or whether it was bound by the earlier exchange agreement. Ultimately the bankruptcy judge signed an order, stipulated to by Signature Capital and Magnolia, allowing the sale to go forward, but, at the same time, he also issued an order denying cоnfirmation of Mountain Highlands’s reorganization plan. Mountain Highlands then brought suit against Magnolia for, inter alia, 1) breach of the covenant of good faith and fair dealing; 2) interference with prospective economic advantage; and 3) prima facie tort. Following a period of discovery, the district court granted summary judgment in favor of Magnolia on all claims. Mountain Highlands now appeals.
“We review the district court’s grant of summary judgment de novo, applying the same legal standard used by the district court.”
Wilkerson v. Shinseki,
As a preliminary matter, we address the principal basis underlying Mountain Highlands’s claims against Magnolia: the bankruptcy court’s denial of Mountain Highlands’s proposed reorganization plan. In denying the plan, the bankruptcy court first stated that
[Mountain Highlands] has now filed a motion for approval of a § 363(f) sale of the property. The Court is making its decision based оn the record and the facts as presented at the evidentiary hearing, without regard to more recent developments, including the proposed sale as well as the overall tightening of thе credit markets.
(Appellees’ Supplemental App. at 857 n. 5 (internal citation omitted).) The bankruptcy court then denied the plan after conducting a detailed analysis of both the plan’s fеasibility and Mountain Highlands’s compliance with the Bankruptcy Code. 1 Despite the bankruptcy court’s language stating the basis for its opinion, Mountain Highlands argues there is a genuine issue of fact as to whеther Magnolia’s objection to the motion to sell ultimately caused the bankruptcy court to deny the proposed reorganization plan. We are not persuaded.
We think the bankruptсy judge’s opinion is clear on this issue. He did not consider the “more recent developments,” which clearly included the sale, and, under a common sense reading of the order, Magnolia’s objеctions to that sale. Indeed, if there was any doubt about the judge’s meaning, he removed that doubt at a later hearing by stating he did not deny the plan because of Magnolia’s objections but that “it was precisely almost the opposite, which is to say ... I decided entirely independently of what you-all were wanting to do, that the plan shouldn’t be confirmed.”
2
(Appellant’s App. at 703.) Thus, we conclude the bankruptcy court’s denial of Mountain Highlands’s plan can
A. Breach of the covenant of good faith and fair dealing
Under New Mexico law, “every contract imposes a duty of good faith and fair dealing on the parties with respect to the performance and enforcement of the terms of the contract.”
Sanders v. FedEx Ground Package Sys., Inc.,
B. Interference unth prospective contractual relations and prima facie tort
The district court granted summary judgment on both of these claims after it concluded the record did not contain any evidence showing Magnolia intended to interfere in the negotiations between Signature Capital and Mountain Highlands or, indeed, that Magnolia was even aware such nеgotiations were occurring. Thus, the court concluded, Mountain Highlands had failed to establish the necessary element of intent.
See M & M Rental Tools, Inc. v. Milchem, Inc.,
Therefore, for these and the foregoing reasons, wе AFFIRM the district court’s grant of summary judgment in favor of Magnolia.
Notes
. On appeal Mountain Highlands has filed a motion to strike Appellees' supplemental appendix, which consists entirely of documents from the underlying bankruptcy proceedings, including a full copy of the bankruptcy court's memorandum opinion in support of its order denying Mountain Highlands's proposed reorganization plan. This motion is based on Mountain Highlands's assertion that the appendix "is composed mostly or entirely of documents that were not introduced in the District Court” and this supplemental appendix does not comply with the Federal Rules of Appellate Procedure. (Appellant's Mot. To Strike at 2 (footnote omitted).) However, because the district court considered the bankruptcy court’s order in its еntirety and because we resolve this appeal without reference to the other documents included in Appellees' supplemental appendix, we DENY Mountain Highlands's motion.
. Mountain Highlands argues the district court erred by concluding this statement was admissible under Rule 807 of the Federal Rules of Evidence. However, we conclude the district court did not abuse its discretion by ruling that a statement by a federal bankruptcy judge, made on the record in a hearing before both the parties in this case and clarifying the grounds for an earlier ruling, has sufficient “guarantees of trustworthiness” so as to fall under the residual hearsay exception. Fed.R.Evid. 807.