Free Motion in Limine - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-cv-1099-JLK-DLW WOLF CREEK SKI CORPORATION, INC.

Plaintiff(s), v. LEAVELL-MCCOMBS JOINT VENTURE D/B/A THE VILLAGE AT WOLF CREEK Defendant(s). ______________________________________________________________________________ DEFENDANT'S MOTION IN LIMINE TO EXCLUDE EVIDENCE, TESTIMONY OR ARGUMENT STATING OR SUGGESTING THAT THE JOINT VENTURE IS ATTEMPTING TO FORCE PLAINTIFF INTO SELLING THE SKI AREA ______________________________________________________________________________

Defendant Leavell-McCombs Joint Venture ("Joint Venture"), through its undersigned counsel, respectfully submits the following Motion in limine to exclude evidence, testimony, or argument stating or suggesting that the Joint Venture is or has been attempting through this litigation, or by other means, to drive Plaintiff into bankruptcy or financial difficulty in order to acquire control over the Wolf Creek Ski Corporation ("Ski Corp.") or the Wolf Creek Ski Area ("Ski Area"). In support of this motion, the Joint Venture states as follows: Certificate of Conferral: Pursuant to D.C.Colo.LCivR. 7.1A, the undersigned has conferred with opposing counsel to resolve the matter disputed herein and such counsel indicated that Plaintiff will oppose the relief requested herein.

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I. INTRODUCTION At issue herein is whether the Ski Corp. breached an agreement with the Joint Venture (the "SURP Agreement") by failing to obtain governmental approval for an access road (the "Tranquility Access Road") connecting the Village Property to nearby Highway 160. The Ski Corp.'s ongoing breach also arises from its continuing conduct in failing to support the Joint Venture's planned development as agreed in the SURP Agreement. The Joint Venture's fraud, unjust enrichment, promissory estoppel and breach of the covenant of good faith claims stem from the Ski Corp.'s actions leading up to the execution of the SURP Agreement and conduct in concealing its wrongdoing in the years thereafter. The Ski Corp. has asserted a single breach of contract claim, and a promissory estoppel claim in the alternative, based on the same allegation: that the Joint Venture breached the SURP Agreement by failing to build a covered road connecting to the Tranquility Access Road and from there leading on into the heart of the Village Property as the "Village Access Road". The Ski Corp. has hurled a dizzying number of other derogatory accusations at the Joint Venture, and its officers and agents, calculated in total to tarnish the Joint Venture's reputation in the minds of the public, the governmental agencies with which the Joint Venture is working, the jury pool, and even this Court. In the Pretrial Order filed January 18, 2008, docket # 262, Plaintiff's statement of claims and defenses ended with the following declaration: "With a Right of First Refusal on the Ski Area, and their nearly infinite resources, the Joint Venture is attempting to bankrupt the Ski Area with litigation costs with the hope that the Joint Venture can force Wolf Creek to sell the Ski Area to them." This groundless assertion ("False Assertion") is neither at issue herein nor is

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truthful. Furthermore it is unsupported by any evidence other than inference based on a single vague statement by Mr. Honts quoted in a newspaper article that only now has been identified as a trial exhibit herein. The False Assertion is pure speculation designed to prejudice the jury by improperly comparing the financial resources of the parties in keeping with Plaintiff's xenophobic rhetoric describing Mr. McCombs as a "Texas billionaire." Accordingly, it is neither true, relevant, or permissible, and evidence of it is inadmissible hearsay under Federal Rules of Evidence 401, 402, 403, 801 and 802. II. STANDARD OF REVIEW The motion in limine is a creature of neither the Federal Rules of Civil Procedure ("F.R.C.P") nor the Federal Rules of Evidence ("F.R.E."). First Savings Bank, F.S.B. v. U.S. Bancorp, 117 F. Supp.2d 1078, 1082 (D.Kan.2000); U.S. v. 215.7 Acres of Land, More or Less, 719 F. Supp. 273, 275 (D.Del. 1989)("[t]he Federal Rules of Civil Procedure do not explicitly authorize in limine rulings. Rather the court may make such rulings pursuant to its inherent authority to manage the course of trials."). Courts have held that such motions do, however, aid the trial process by enabling the Court to rule in advance of trial on the relevance of certain forecasted evidence, as to issues that are definitely set for trial, without lengthy argument at, or interruption of the trial. See First Savings Bank, 117 F. Supp.2d at 1082; see also Palmieri v. Defaria, 898 F.3d 136, 141 (2d Cir. 1996); In re Hardesty, 242 B.R. 712, 714 (D.Kan. 1999). They also may save the parties time, effort and cost in preparing and presenting their cases. First Savings Bank, 117 F. Supp.2d at 1082; Deghand v. Wal-Mart Stores, Inc., 908 F. Supp. 1176, 1180 (D.Kan. 1997).

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The movant has the burden of demonstrating that the evidence is inadmissible on any relevant ground. First Savings Bank, 117 F. Supp.2d at 1082; In re Hardesty, 242 B.R. at 714. As a general rule, a federal district court is limited to excluding, in limine, only such evidence that is clearly inadmissible on all possible grounds. Crosson v. Caermar, Inc., 212 F. Supp.2d 875, 880 (N.D.Ill.2002); see also Knotts v. Black & Decker, Inc., 204 F. Supp.2d 1029, 1034 fn. 4 (N.D. Ohio 2002). Even so, relevant evidence may be excluded in order to promote the administration of the judicial process, and the discretion of the trial court will not be disturbed absent a manifest injustice to the parties. Thewatt v. Ontko, 814 F.2d 1466, 1470 (10th Cir. 1987). Denial of a motion in limine does not necessarily mean that all evidence contemplated by the motion will be admitted at trial. First Savings Bank, 117 F. Supp.2d at 1082. Denial only means that the court cannot decide admissibility outside the context of trial. Id.; see also Knotts, 204 F. Supp.2d at 1034 n. 4 ("[d]enial of a motion in limine merely means that without the context of trial, the court is unable to determine whether the evidence in question should be excluded. The court will entertain objections on individual proffers as they arise at trial, even though the proffer falls within the scope of a denied motion in limine."). III. APPLICABLE RULES OF EVIDENCE A. FEDERAL RULE OF EVIDENCE 401 "Relevant evidence" means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Fed.R.Evid. 401.

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B.

FEDERAL RULE OF EVIDENCE 402 All relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, by Act of Congress, by these rules, or by other rules prescribed by the Supreme Court pursuant to statutory authority. Evidence which is not relevant is not admissible.

C.

FEDERAL RULE OF EVIDENCE 403 Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.

Fed.R.Evid. 403. D. FEDERAL RULE OF EVIDENCE 801 (a) Statement. A "statement" is (1) an oral or written assertion or (2) nonverbal conduct of a person, if it is intended by the person as an assertion. (b) Declarant. A "declarant" is a person who makes a statement. (c) Hearsay. "Hearsay" is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted. Fed.R.Evid. 801. E. FEDERAL RULE OF EVIDENCE 802 Hearsay is not admissible except as provided by these rules or by other rules prescribed by the Supreme Court pursuant to statutory authority or by Act of Congress. Fed.R.Evid. 802. IV. ARGUMENT According to the Ski Corp., the only physical evidence in support of the False Assertion is a quote from Mr. Honts contained in an October 14, 2005 Denver Post newspaper article entitled "Ruling Freezes Wolf Creek Project." Therein, Mr. Honts allegedly stated: "The reason 5

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we have to go through this is the ski area failed to honor its commitment with regard to access in 1999. Some of my lawyers are licking their lips. I don't know if that resort is worth what the damages are going to be." See Exhibit A (email from opposing explaining). Defendants do not possess a copy of this newspaper article which, at times herein is called the "Evidence". There are several impediments, both evidentiary and procedural, to admissibility of this Evidence. A. THE EVIDENCE IS INADMISSIBLE HEARSAY UNDER THE RULE S 801 AND 802. "`Hearsay' is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." Fed.R.Evid. 801. "Hearsay is not admissible except as provided by these rules or by other rules prescribed by the Supreme Court pursuant to statutory authority or by Act of Congress." Fed.R.Evid. 802. The Ski Corp.'s Evidence is inadmissible hearsay. The reporter is an out-of-court

declarant whose statement (written report) is offered to prove that Mr. Honts made the statement quoted in the report. None of the hearsay exceptions listed in F.R.E. 803 apply. See Mayor of City of Philadelphia v. Educational Equality League, 415 U.S. 605, 619, 94 S. Ct. 1323, 1332 n.19 (1974). In addition, newspaper reports are especially circumspect hearsay given the

reporter's desire to market his/her work and appeal to his/her readers. New England Mut. Life Ins. Co. v. Anderson, 888 F.2d 646 650 (10th Cir. 1989). Given that the Evidence is inadmissible hearsay, it cannot provide support for the False Assertion. Without such evidence, it would be improper for the Ski Corp. to make this claim to the jury or suggest anything of a similar nature.

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B.

THE EVIDENCE MAY NOT BE USED AT TRIAL UNDER F.R.C.P. 26 AND 37. Under the Federal Rules of Civil Procedure, "[i]f a party fails to provide information or

identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." Fed.R.Civ.P. 37(c)(1). Although the Evidence was published in October 2005, it has not previously been brought to the Joint Venture's attention, and the Joint Venture did not learn of Plaintiff's intent to use it at trial until Plaintiff produced its list of trial exhibits attached to the January 2008 Pretrial Order.1 Accordingly,

there is no substantial justification for the Ski Corp.'s failure to produce this document as required under F.R.C.P. 26(a)(1). Even assuming the evidentiary hurdle of the hearsay rule could be overcome, the Ski Corp.'s failure to timely disclose this document precludes it from using the Evidence at trial. C. THE FALSE ASSERTION
IS INDEED FALSE AND COMPLETELY LACKING IN ANY OTHER EVIDENTIARY SUPPORT AND THEREFORE IMPROPER TO PRESENT TO THE JURY.

The Ski Corp. asserts that the False Assertion is "an inference of the Joint Venture's state of mind and motive based on the Joint Venture's overblown damages case, litigation strategies and pleadings, and the existence of the right of first refusal." Exhibit A. Translation: the False Assertion is based on pure speculation; a paranoid fantasy with no good faith basis in truth. It has been repeated again and again, in a variety of guises, under the philosophy that if you say something often enough, people will believe it.

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Plaintiff does not deny that the Evidence was not previously produced but asserts its belief that the Joint Venture was nevertheless aware of it. Counsel for the Joint Venture has been unable to verify the truth of this claim.

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For example, on April 28, 2004, the Denver Post ran an article that stated: "Pitcher said he worries that a politically well-connected McCombs could push his family off the mountain." Exhibit B. And, a Monday, May 16, 2005 Associate Press article contained the following variation of the False Assertion: Pitcher said he thinks the developers are trying to run his family off the land, either by pushing the lawsuit or building something that will ruin the nature of the ski area. Exhibit C. The journalist who wrote this latter article questioned Mr. Honts about the False

Assertion and quoted him as giving the following response: "I don't know what will happen if we get the judgment. We just want our money." Id. (emphasis added). Nothing in that statement even suggests an intention to drive the Ski Corp. into bankruptcy, an intention to exercise the Right of First Refusal, or that the Joint Venture covets the Ski Area. And, unlike the Ski Corp. which has subpoenaed financial records from Mr. Honts and Bob Honts Properties, Inc., the Joint Venture has never requested financial records for the Ski Corp. or subpoenaed any financial information from the Pitcher family members (who are the sole stockholders). If indeed the Joint Venture were bent on ruining the Ski Corp., it would have surely demanded these records in order to ascertain what kind of effort would be required to drive the Ski Corp. into financial ruin. Of course, the truth is that the Ski Corp. knows there is no factual basis for the False Assertion and no factual basis for Mr. Pitcher's statement to the press that the Joint Venture `is pushing' this lawsuit. On the contrary, the Ski Corp. initiated this litigation and the Joint Venture is the defendant resisting. As has been briefed in the past, when the Joint Venture notified the Ski Corp. of its breach of contract, instead of trying to negotiate a resolution, the Ski

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Corp. initiated legal proceedings. In fact, the Ski Corp. also initiated a separate lawsuit in Mineral County to overturn county approval of the Joint Venture's development plan. Therefore, it is a complete reversal of reality for the Ski Corp. to depict the Joint Venture as the aggressor herein and a patent attempt to gain the sympathy of the public. Moreover, the Ski Corp. has accused the Joint Venture of improperly trying to influence Congress through its lobbying efforts to obtain access to its property. And while simultaneously hinting that the Joint Venture is improperly exercising limitless political muscle, the Ski Corp. has quietly spent hundreds of thousand of dollars in lobbying activities to prevent the Joint Venture from obtaining access to its property along the alignment provided in the SURP Agreement. Specifically, from 2004 through 2007, the Ski Corp. spent $640,000.00 in lobbying expenses according to the Senate Office of Public Relations. See Exhibit D. It spent over $200,000.00 in each of the years 2005 and 2006 ­ the years when it was opposing approval of the Joint Venture's EIS and road permit application. Id. Meanwhile, the Joint Venture's own lobbying expenses during that same 2004-2007 time period totaled less than $90,000.00. Exhibit E. Accordingly, the Ski Corp. outspent the Joint Venture by 7:1 trying to prevent the very thing it contractually agreed to support; all the while accusing the Joint Venture of using its allegedly unlimited financial resources to improperly influence Congress. No one forced or "pushed" the Ski Corp. to go to such extremes to prevent the Joint Venture from acquiring access to its property along the Tranquility Access Road (a continuing breach of the SURP Agreement and the implied duty of good faith). Certainly, such exorbitant expenditures cannot be laid at the Joint Venture's door step. Moreover, the fact and amount of these expenditures suggest that the Ski Corp. is nowhere near bankruptcy. If the Ski Corp. is

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concerned about being out-spent by the Joint Venture, that concern is not mirrored in reality and certainly has not manifested itself in any cost-cutting measures. Finally, if indeed the Joint Venture's political connections and financial wherewithal were as powerful as the Ski Corp. persists in portraying, the Joint Venture would have gotten its access road in the original land trade rather as required by law under 16 USC. 3210(a), the Alaska National Interest Lands Conservation Act. Instead, almost twenty years after that trade, every effort to obtain a viable access road has been blocked, primarily by the Ski Corp., wholly disproving the Ski Corp.'s tale of persecution. Based on the totality of the foregoing, including the lack of any genuine evidence as well as the existence of other facts that contradict the False Assertion, the Ski Corp. cannot claim to have a good faith belief in the False Assertion and therefore cannot in good faith argue the proposition to the jury. D. THE FALSE ASSERTION IS NOT RELEVANT TO ANY CLAIM OR DEFENSE HEREIN AND IS HIGHLY PREJUDICIAL AND INFLAMATORY. Evidence is relevant when it has any tendency to make a fact of consequence more probable or less probable than it would be without the evidence. Fed.R.Evid. 401. Relevancy is not an inherent characteristic of any item of evidence but exists only as a relation between an item of evidence and a matter properly provable in the case. Huddleston v. U.S., 485 U.S. 681, 689, 108 S. Ct. 1496, 1501 (1988). In determining whether evidence is relevant, the court must consider whether it relates to a fact that is of consequence to the determination of the claim and whether the evidence makes it more or less probable that said consequential fact exists. Staley v. Bridgestone/Firestone, Inc., 106 F.3d 1504, 1512 (10th Cir. 1997).

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In this case, even assuming that the Joint Venture were indeed intent on driving the Ski Corp. into financial ruin in order to wrest possession of the Ski Area, that intent is not relevant to whether or not the Ski Corp. breached the SURP Agreement or committed fraud in inducing the Joint Venture into conveying 40 acres of easements in exchange for virtually nothing. It is not relevant to whether the Joint Venture must build an underground tunnel as opposed to a "covered road" under § 2.01 of the SURP Agreement. And, it has no relationship to the parties' intent in forming the SURP Agreement. Accordingly, it is not admissible under F.R.E. 402. The Ski Corp. implies that the statement attributed to Mr. Honts is relevant to motive, presumably under F.R.E. 404. Motive, however, is not itself an ultimate issue. Charles Alan Wright & Kenneth W. Graham, Jr., 22 FED. PRAC. & PROC. EVID. § 5240 (2008 update). "[P]roof of motive must always be directed at some other fact that is an ultimate issue in the case." Id. Accordingly, it is not enough for the Ski Corp. to cry "motive." The motive itself

must be necessary to establish some other fact or element at issue instead of a pretext for the admission of impermissible character evidence. See id. ("[C]ourts must be on guard to prevent the motive label from being used to smuggle forbidden evidence of propensity to the jury.") Typically, facts or elements that depend on evidence of motive include (1) establishing that an act was committed, (2) establishing the identity of an actor, or (3) establishing the requisite mental state. Id. Here, the Ski Corp. has not, and cannot identify any such underlying fact or element that relies on evidence of motive for proof. As a result, even assuming the

statement attributed to Mr. Honts were evidence of motive, it lacks relevance. See Section A of the Joint Ventures' companion motion in limine to exclude evidence of Mr. Honts' bankruptcy and financial condition.

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Even if the False Assertion or Evidence relevant, they are properly excluded "if [their] probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." FedR.Evid. 403; see also Texas Eastern Transmission Corp. v. Marine Office-Appleton & Cox Corp, 579 F.2d 561, 567 (10th Cir. 1978) citing Fed.R.Evid. 403. It is well settled that evidence suggesting that a judgment against a party would be financially disastrous is inadmissible. Rebolledo v. Herr-Voss Corp., 101 F. Supp.2d 1034, 1036 (N.D.Ill. 2000). "The general rule is that, during trial, no reference should be made to the wealth or poverty of a party, nor should the financial status of one party be contrasted with the other's." Brough v. Imperial Sterling Ltd., 297 F.3d 1172, 1178 (11th Cir. 2002). Here, reference at trial to the Evidence, the False Assertion or any variation of the False Assertion suggesting that the Joint Venture is financially more powerful than the Ski Corp. and bent on destroying it would be highly prejudicial because it would tend to elicit sympathy for the Ski Corp. and antipathy against Mr. Honts and the Joint Venture. Such portrayals based on the relative wealth of the parties are prejudicial and not to be permitted. V. CONCLUSION WHEREFORE, the Joint Venture respectfully requests the Court to instruct the Ski Corp., through the Ski Corp.'s counsel, and its counsel individually, not to mention, refer to, interrogate concerning, voluntarily answer, or attempt to convey before the jury, at any time during these proceedings, in any manner, either directly or indirectly, information regarding the Evidence or repetition of the False Assertion, or any variation thereof, and not to make any reference or inference to the fact that this motion has been filed, argued, or ruled on by the Court;

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and further that Ski Corp.'s counsel be instructed to warn and caution each and every witness appearing in Ski Corp.'s phase of this litigation to strictly comply with the rulings of the Court. A proposed Order is attached hereto. Respectfully submitted this 21st day of March, 2008 BERG HILL GREENLEAF & RUSCITTI LLP

___s/ Kim A. Tomey_______ George V. Berg, Jr. Kim A. Tomey 1712 Pearl Street Boulder, CO 80302 Phone: (303) 402-1600 Fax: (303) 402-1601 Email: [email protected] Attorneys for Defendant

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CERTIFICATE OF SERVICE I hereby certify that on this 21st day of March, 2008, I electronically filed the foregoing DEFENDANT'S MOTION IN LIMINE TO EXCLUDE EVIDENCE, TESTIMONY OR ARGUMENT STATING OR SUGGESTING THAT THE JOINT VENTURE IS ATTEMPTING TO FORCE PLAINTIFF INTO SELLING THE SKI AREA with the Clerk of the Court using the CM/ECF system which will send notification to such filing to the following e-mail addresses, Andrew R. Shoemaker Hogan & Hartson LLP 1470 Walnut Street, Suite 200 Boulder, CO 80302 [email protected] Jim Moriarty Moriarty Leyendecker & Erben PC 1123 Spruce Street, Suite 200 Boulder, CO 80302 [email protected] Cynthia A. Mitchell Hogan & Hartson LLP 1470 Walnut Street, Suite 200 Boulder, CO 80302 [email protected] Robert D. Erben Moriarty Leyendecker & Erben PC 1123 Spruce Street, Suite 200 Boulder, CO 80302 [email protected] David Krivit Moriarty Leyendecker & Erben PC 1123 Spruce Street, Suite 200 Boulder, CO 80302 [email protected] Michael E. McLachlan McLachlan & Underell, LLC 813 Main Avenue, Suite 308 Durango, CO 81301 [email protected]

____s/ Linda D. Smith_____________

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