Free Brief in Opposition to Motion - District Court of Colorado - Colorado

Case 1:04-cv-01099-JLK-DW

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-K-1099-JLK-DLW WOLF CREEK SKI CORPORATION, INC., Plaintiff, v. LEAVELL-McCOMBS JOINT VENTURE, d/b/a THE VILLAGE AT WOLF CREEK, Defendant.

PLAINTIFF WOLF CREEK SKI CORPORATION'S OPPOSITION TO DEFENDANT'S MOTION TO SURREPLY

Plaintiff, Wolf Creek Ski Corporation ("Ski Corporation"), respectfully submits this Opposition to Defendant's Motion to Surreply, and states as follows: 1. No surreply is warranted in this case because Wolf Creek did not raise any new

arguments in its Response to the Court's October 13, 2006 Order ("Oct. 13th Response") (Docket # 219). To the contrary, Wolf Creek argued that the Draft Default Letter does not have any effect on Defendant's fraud and negligent misrepresentation claim, and then explained why, given that fact and the current state of the evidence, summary judgment is warranted. Indeed, Defendant does not identify any "new arguments." Rather, Defendant seeks to expose an allegedly "erroneous statement of law" and insists that Wolf Creek "re-argues" facts previously briefed. Defendant's Motion to Surreply ("Motion to Surreply") (Docket #222) at ¶¶ 4-9, 10-12. Without any "new arguments" to respond to, Defendant does not provide any basis to surreply, and its motion should therefore be denied.

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2.

Nonetheless, Defendant insists that a surreply is warranted and makes three

arguements. First, Defendant devotes the majority of its briefing to refuting a footnote in the Oct. 13th Response that addresses the Joint Venture's contract claims, which Defendant claims contains a misstatement of the law.1 See Oct. 13th Response at 6 n2. Second, Defendant raises an equitable tolling defense, which is not applicable to Defendant's fraud and negligent misrepresentation claims. Third, Defendant raises new factual arguments that were not addressed in its prior briefing and which should therefore be ignored. We address these arguments in turn below. 3. First, Defendant takes issue with the principle that a party may be estopped from

using the statute of limitations as a defense where the party has prevailed upon another party to forgo its claims for the entire limitations period. Contrary to Defendant's assertions, this principle is well-established under state and federal law. 4. Equitable estoppel arises "where the parties recognize the basis for suit, but the

wrongdoer prevails upon the other to forgo enforcing his right until the statutory time has lapsed."2 Aldrich v. McCulloch Properties, Inc., 627 F.2d 1036, 1043 n7 (10th Cir. 1980)

1 Wolf Creek raised this point because it anticipated--correctly, as it turns out--that Defendant would argue that this Court's findings regarding Defendant's contract claims also apply to its fraud and negligent misrepresentation claims. See Defendant's Response to Court's Request for Further Briefing (Docket #220) at 6-7. Thus, Wolf Creek's arguments regarding equitable estoppel are not "new," but rather were set forth to refute Defendant's suggestion that this Court's prior rulings on the contract claims "apply equally" to its fraud and negligent misrepresentation claims. Id.; see also Defendant's Response to Plaintiff's Motion for Summary Judgment ("Response") (Docket # 156) at 42. 2 Plaintiff is confusing two concepts. Equitable estoppel, as explained above, occurs where one party prevails upon another to forgo and claim for the entire limitations period. By contrast, equitable tolling arises where a party wrongfully conceals facts that would give rise to a claim, and where the other party cannot, through the exercise of reasonable diligence, discover the facts 2
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(emphasis added) (citing Glus v. Brooklyn Easter. Dist. Terminal, 359 U.S. 231, 233-34 (1959); United States v. Reliance Ins. Co., 436 F.2d 1366, 1370-71 (10th Cir. 1971)). This principle has been uniformly accepted and applied throughout this Circuit. See, e.g., Shell Western E&P, Inc. v. Dolores County Bd. of Comm'rs, 948 P.2d 1002, 1007 (Colo. 1997) ("Where a defendant's wrongful actions have been the cause of a plaintiff's failure to institute a timely action, the defendant may be estopped from relying upon the resulting delay as a defense to the plaintiff's claim.") (emphasis added); Lee v. City and County of Denver, 482 P.2d 389, 392 (Colo. App. 1971) (holding that a "necessary prerequisite" of applying the equitable estoppel doctrine is "a showing of positive acts by the defendants which would have caused the plaintiff to fail to initiate [the] suit within the statutory period.") (emphasis added); Brewer v. Food Giant Supermarkets, Inc., 589 P.2d 459, 460 (Az. App. 1978) (summary judgment affirmed where basis for estoppel ended within limitations period); Luther v. Sohl, 181 N.W.2d 268, 270 (Neb. 1970) ("Judicial decisions almost uniformly support the proposition that if a plaintiff has ample time to institute his action, after the inducement for delay has ceased to operate, he cannot excuse his failure to act within the statutory time on the ground of estoppel."); see generally 43 A.L.R.3d 429 § 6 (Estoppel is not available "where the fraudulent conduct, or misrepresentations, relied upon for estoppel ceased being made at a time prior to the termination of the limitation period, and where plaintiff had ample time within which to bring the suit before termination of the period.").

himself. See Aldrich, 627 F.2d at 1042. This Court's prior ruling with respect to Defendant's contract claims were based on equitable estoppel, not equitable tolling. See December 1, 2005 Order at 10-11 (Docket # 117). Thus, Defendant's suggestion that this Court's prior rulings support an equitable tolling defense is unavailing and should be ignored. 3
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5.

Defendant relies solely on Colorado-Ute Electric Association v. Envirotech Corp.,

524 F. Supp. 1152 (D. Colo. 1981), to refute this principle. However, the Colorado-Ute court did not rely on equitable estoppel, but rather based its holding on the repair doctrine. In that case, the defendant repeatedly reassured the plaintiff that it would honor its commitments and warranties under a sales contract and attempted several times to repair equipment subject to the contract. The court held that, under the circumstances, the plaintiff's breach of contract claim was not barred by the statue of limitations because the statute was tolled by the defendant's repair efforts. Colorado-Ute, 524 F. Supp. at 1155. The court noted that Colorado recognizes the "doctrine that repair efforts toll the statute of limitations," and grounded its holding on that doctrine. Id. at 1155-56. While the court did cite the equitable estoppel doctrine in dicta, its analysis on that point was thin, and the holding was clearly based on the repair doctrine rather than equitable estoppel. Thus, Defendant has not provided any evidence to refute the wellestablished principle that equitable estoppel may only negate a statute of limitations defense where a party was induced to forgo its rights for the entire limitations period. 6. Next, Defendant asserts that its fraud and negligent misrepresentation claims are

timely because the limitations period was equitably tolled. This argument is new. The facts set forth by Defendant allege an equitable estoppel defense, not equitable tolling. 7. Under the equitable tolling doctrine, a party may bring an action after the statute

of limitations has expired where the other party engaged in affirmative acts or active deception to conceal facts giving rise to the claim and the other party could not have discovered those facts through the exercise of reasonable diligence. See Edwards v. Int'l Union, 46 F.3d 1047, 1055 (10th Cir. 1995); Industrial Constructors Corp. v. United States Bureau of Reclamation, 15 F.3d

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963, 969 (10th Cir. 1994). Here, Defendant has consistently alleged that it was "lulled to sleep on its action" by Kingsbury Pitcher's "continued assurances" that Wolf Creek would honor is contract obligations and obtain the road. See Response at 42. In other words, Defendant argues that it did not bring its fraud and negligent misrepresentation claims earlier not because it was not aware of facts giving rise to its claims, but rather because Kingsbury Pitcher reassured them that it was unnecessary to bring the claims. This is an equitable estoppel argument, not an equitable tolling one. Lee, 482 P.2d at 391 (observing that the purpose of equitable estoppel is to prevent a party from benefiting by inducing another to forgo a claim). 8. Indeed, Defendant insists that its equitable tolling defense, such as it is, is

supported by the reasoning employed by this Court in its recommendation concerning Wolf Creek's first summary judgment motion. See Response at 42-43. There, this Court invoked equitable estoppel principles when it found that fact questions remain regarding "whether or not the Joint Venture reasonably relied on Wolf Creek's assurances." Recommendation of Magistrate Judge on Plaintiff Wolf Creek Ski Corporation, Inc.'s Motion for Summary Judgment (Docket #117) at 10. Thus, not only do Defendant's factual allegations support only an equitable estoppel defense, but this Court's prior rulings also limit Defendant to such a defense. Accordingly, Defendant's new arguments concerning equitable tolling should be ignored.3

3 To the extent Defendant argues--again for the first time--that the "new evidence" it discovered in October 2004 supports its equitable tolling defense, that argument has no merit. This "new evidence" is cumulative of what Defendant already knew as of September 1999 when it received the Joyner Letter (i.e., that Wolf Creek had met with representatives of Colorado Wild and arrived at the terms of the Joyner compromise). In any case, this "new evidence" concerns acts that took place after the 1999 Agreement was executed. See Oct. 13th Response at ¶ 7. Thus, Defendant cannot claim that it could not discover the facts necessary to bring its fraud claim prior to October 2004. The only evidence Defendant offers to support its theory that Wolf 5
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9.

Finally, Defendant argues for the first time that Wolf Creek's intent can be

inferred from the fact that a reference to the access road as a "future link" to the development was removed from the EA by Davey Pitcher. Motion to Surreply at ¶ 11. In its Response, Defendant admitted that it does not know who omitted this language from the EA, and it did not argue that this omission was evidence of Wolf Creek's intent prior to the 1999 Agreement, but rather that it was done in an apparent attempt to "mislead the opponents [of the Village] into believing that the Access Road to the Village Property had been abandoned." Response at 27. Thus, the suggestion (1) that Davey Pitcher or anyone from Wolf Creek removed the "future link" language or (2) that the removal of this language is proof of Wolf Creek's intent is new and cannot properly be raised in a Motion to Surreply.4 Accordingly, this argument should be ignored. 10. Put simply, Defendants have not identified any new arguments set forth by Wolf

Creek, and thus it has no basis to surreply. Accordingly, Defendant's Motion to Surreply should be denied.

Creek did not intend to honor its obligations under the 1999 Agreement before the agreement was executed was known to Defendant in September 1999. 4 In any case, this argument is a red herring. Defendant admits that the EA included the Alternative IV map, which depicted the access road. See Response at p. 7, ¶ 12. Thus, the alteration in the language of the EA could not have been, as Defendant suggests, and attempt to fraudulently remove any reference to the access road from the EA since the map depicting the road was admittedly attached to the EA. 6
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Respectfully submitted this 30th day of October, 2006.

s/Andrew R. Shoemaker Andrew R. Shoemaker HOGAN & HARTSON L.L.P. 1470 Walnut Street, Suite 200 Boulder, Colorado 80302 (303) 720-5300 Telephone (303) 720-5301 Facsimile Attorneys for Plaintiff Wolf Creek Ski Corporation, Inc.

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CERTIFICATE OF SERVICE I hereby certify that on this 30th day of October, 2006, I electronically filed the foregoing PLAINTIFF WOLF CREEK SKI CORPORATION'S OPPOSITION TO DEFENDANT'S MOTION TO SURREPLY with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: George V. Berg: Sally P. Berg: Melissa M. Heidman: Kathleen M. Morgan: James Robert Moriarty: Kimberly A. Tomey: [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

s/Andrew R. Shoemaker

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