## Facts

- Phillips Uranium Corporation conducted a uranium exploration project in southwest Colorado involving drilling assessment holes.
- Phillips retained surveyors and a drilling contractor (Desert Drilling Company) to perform the work.
- Desert Drilling began drilling believing it was on a claim where Phillips had permission from the surface owner and federal mineral owner.
- Due to a surveying error, drilling occurred on land owned by Thom Panunzio, who had refused Phillips permission to enter and drill.
- Alan Bradbury, a neighbor, investigated the drilling noise, knew Panunzio opposed drilling on his land, and told the drillers they were on the wrong property.
- The drillers stated they were acting on instructions from a Phillips geologist; Bradbury left a message for the geologist to review maps showing the property lines.
- The incident escalated into a confrontation; the jury found for Bradbury and Panunzio on tort claims tied to the unauthorized entry and conduct and awarded compensatory and exemplary damages.
- Phillips appealed, challenging denial of a motion in limine to exclude certain plaintiffs’ exhibits and challenging the sufficiency of evidence supporting exemplary damages under Colorado law.

## Issues

1. Whether the district court abused its discretion by denying Phillips’ motion in limine and admitting plaintiffs’ exhibits over objections of unfair prejudice and inadmissibility.
2. Whether the evidence was sufficient under Colorado law to support the jury’s award of exemplary damages based on willful and wanton conduct (or malice/fraud).

## Decision

- The Tenth Circuit affirmed the district court’s judgment.
- The court held the district court did not abuse its discretion in admitting the challenged exhibits and denying the motion in limine.
- The court held sufficient evidence supported submission of exemplary damages to the jury and the jury’s exemplary damages award under Colorado law.

## Legal Principles

- District courts have broad discretion over evidentiary rulings, including motions in limine; reversal requires a clear abuse of discretion causing substantial prejudice.
- Under Federal Rule of Evidence 403, relevant evidence may be excluded only if its probative value is substantially outweighed by the danger of unfair prejudice.
- In a diversity case, state law governs the substantive standard for exemplary (punitive) damages; Colorado permits exemplary damages for injuries attended by fraud, malice, or willful and wanton conduct.
- Colorado “willful and wanton” conduct includes purposeful action undertaken heedlessly and recklessly, without regard to consequences or the rights and safety of others.
- Evidence that a defendant continued or failed to promptly halt a significant physical intrusion after being informed of a lack of permission can support a finding of willful and wanton conduct.
- On appellate review, the evidence is viewed in the light most favorable to the verdict; the appellate court does not reweigh credibility or resolve evidentiary conflicts against the prevailing party.

## Conclusion

The Tenth Circuit left intact a jury verdict awarding compensatory and exemplary damages for unauthorized drilling on private land, concluding that the challenged exhibits were properly admitted and that the evidence permitted a reasonable jury to find willful and wanton conduct under Colorado exemplary-damages law.


Bradbury v. Phillips Petroleum Co., 815 F.2d 1356 (10th Cir. 1987)