Free Reply to Response to Motion - District Court of Federal Claims - federal

Case 1:98-cv-00168-FMA

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS NORTH STAR ALASKA HOUSING CORP., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 98-168C (Judge Allegra)

DEFENDANT'S REPLY TO PLAINTIFF'S OPPOSITION TO DEFENDANT'S SECOND MOTION IN LIMINE Plaintiff, North Star Alaska Housing Corp., argues that it does not, in Case No. 02-1632C, present a total cost-type claim. Opposition To Defendant's Second Motion In Limine ("Pl. Opp.") at 2-3, 5 & n.5. However, there are significant similarities

between North Star's Case 02-1632C damage theory and a total cost claim. Under the total cost method, the measure of damages is

the difference between the actual cost of the contract and the contractor's bid. (Fed. Cir. 2002). Raytheon Co. v. White, 305 F.3d 1354, 1365 Similarly, North Star alleges that the

Government increased its costs beyond those contemplated when it executed the lease of Birchwood Homes. Complaint ("Compl.") at 1-2 ¶¶ 4-5. Case No. 02-1632C

And North Star's

methodology, which compares, through an appraiser, the cost of operating Birchwood Homes to that of operating Sprucewood Homes, (Appendix To Defendant's Second Motion In Limine at 4-6) does not distinguish Birchwood Homes costs for which the Government may be responsible from costs that North Star should bear; another

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similarity to a total cost claim. at 1365.

See Raytheon, 305 F.3d

Regardless of whether the comparison of the cost of operating Birchwood Homes to that of operating Sprucewood Homes resembles a total cost claim, and regardless of whether that comparison may be a valid approach to appraising the market value of Birchwood Homes, the Court should exclude evidence of that comparison because it is not the best evidence available of the actual costs of the Government breaches that North Star alleges in Case No. 02-1632C. A contractor must prove its costs using Delco The

the best evidence available under the circumstances.

Elecs. Corp. v. United States, 17 Cl. Ct. 302, 321 (1989).

preferred method is through the submission of actual cost data. Id. Actual cost data is preferred because it provides the Court

with documented underlying expenses, ensuring that the final amount of any damage award will not be a windfall for either the Government or the contractor. See Propellex Corp. v. Brownlee,

342 F.3d 1335, 1338 (Fed. Cir. 2003). North Star argues that our motion in limine is premature (Pl. Opp. at 5), but its response to the motion rebuts that argument. North Star indicates that it has calculated damages in

Case No. 02-1632C "separate and distinct from the damages assessed by [its appraisal expert]." Pl. Opp. at 2 & n.1, 5 n.5.

Indeed, a breakdown is available, by issue, of at least some of -2-

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the alleged damages claimed in Case No. 02-1632C: namely, the cost of temporary occupants, depreciation, unpaid overhead, rent abatements, and the Army's decisions not to make incentive fee awards. Case No. 02-1632C Complaint at 10, 15, 17, 20; Appendix

To Defendant's Reply To Plaintiff's Opposition To Defendant's Second Motion In Limine at 2. The calculation of the actual

costs underlying those issues demonstrates that the best evidence available of its damage claims in Case No. 02-1632C is the actual cost data underlying those claims, not a comparison of the cost of operating Birchwood Homes to the cost of operating Sprucewood Homes. Therefore, the Court should exclude from trial evidence

that the cost to North Star of operating Birchwood Homes was, during the period 1997 through September 1, 2002, greater than the cost to Polar Star of operating Sprucewood Homes, or that the cost of operating Birchwood Homes exceeds those North Star contemplated when it executed the lease of Birchwood Homes. For the foregoing reasons and those set forth in our motion, the Court should grant our Defendant's Second Motion In Limine. Respectfully submitted, PETER D. KEISLER Assistant Attorney General

s/David M. Cohen DAVID M. COHEN Director -3-

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OF COUNSEL WILLIAM. M. EDWARDS Assistant District Counsel United States Army Corps of Engineers Alaska District

s/Timothy P. McIlmail TIMOTHY P. MCILMAIL Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Telephone: (202) 307-0361 Facsimile: (202) 514-7965 Attorneys for Defendant

May 24, 2005

-4-

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Certificate of Filing I hereby certify that on May 24, 2005 the foregoing Defendant's Reply To Plaintiff's Opposition To Defendant's Second Motion In Limine was filed electronically. I understand that

notice of this filing will be sent to all parties by operation of the Court's electronic filing system. filing through the Court's system. Parties may access this

s/Timothy P. McIlmail