Free Reply to Response to Motion - District Court of Colorado - Colorado

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

Document 211

Filed 09/21/2006

Page 1 of 12

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). ______________________________________________________________________________ LEAVELL-McCOMBS JOINT VENTURE'S REPLY ON ITS MOTION TO AMEND SCHEDULING ORDER ______________________________________________________________________________ Leavell-McCombs Joint Venture (the "Joint Venture"), through its undersigned counsel, hereby submits this Reply to its Motion to Amend Scheduling Order (the "Motion") as follows: I. INTRODUCTION The thrust of the Ski Corporation's Response is that the "preferred" road alignment did not change over the course of the EIS1 approval process and thus the Road Costs could have been calculated in October 2004. But the Joint Venture has learned from the unhappy outcome of the Ski Corporation's 1999 EA that preferred alignments can abruptly be eliminated and that the actions of the Forest Service and vagrant preferences of the Ski Corporation are beyond prediction. Accordingly, judicious planning cannot take place until a final Forest Service

decision has been issued.

1

Capitalized terms have the same meaning as in the Motion.

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

Document 211

Filed 09/21/2006

Page 2 of 12

Running throughout the Response is the attempt to cast even the most innocuous actions by the Joint Venture as bad faith based purely on suspicious projections. Among other things, the Ski Corporation ignores its own Rule 26(a)(1) disclosures of at least 13 `expert' witnesses whose involvement in this matter is largely, if not entirely, a result of their professional expertise. If disclosure of such professionals is bad faith, then "the pot calls the kettle black."2 Finally, the Response continues to misunderstand its burden of proof on damages. The Joint Venture need only present evidence of the fact of the damages through the testimony of Mr. Honts (allowing some latitude for lay opinion given his ownership interest and involvement with all aspects of development). The Ski Corporation has the burden to show that such damages are unreasonable and unnecessary. This it cannot do since it has not designated a qualified expert. For these reasons, and others explained below, the Joint Venture requests that the Scheduling Order be amended to permit designation of an expert on Road Costs. II. ARGUMENT A. DAMAGES
IN THIS CASE ARE EVOLVING AND CANNOT BE PREDICTED PRECISELY BECAUSE OF THE VAGARIES OF THE SKI CORPORATION.

The Response argues that the designation of the Dual Access Alternative as the `preferred' alternative in the October 2004 DEIS somehow increased the Joint Venture's duty to predict and provide for the Road Costs. The `preferred' designation, however, does not change the extremely speculative location of the final selected road alignment(s) and attendant costs. Seven years ago, when the Ski Corporation was pursuing its own facilities expansion through the EA process, the Access Road to the Village was deemed the preferred alternative while a Snow Shed Road equivalent was rejected by both the Forest Service and the Ski
2

Cervantes' Don Quixote.

2

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

Document 211

Filed 09/21/2006

Page 3 of 12

Corporation because of its perceived greater negative impact on the environment. Exh. A-11 at WC 14680.3 By November 2004, however, the Ski Corporation had completely reversed its position on both roads, urging the Forest Service to reject any alignment that included the Access Road and arguing that the previously shunned Snow Shed Road (Alternative 3) was preferable. Exh. A-3, at WC 14352-55. Thus, neither the `preferred' designation nor objectionable

classification are reliable indicators of the eventual outcome.4 With the happy benefit of hindsight conveniently unclouded by any memory of its own treacherous involvement, the Ski Corporation is oblivious to the complexities of this case in which, as a result of Ski Corporation's ongoing breaches, damages continue to evolve (and escalate). Although the Joint Venture admittedly foresaw the possibility of the Road Costs, other costs, which have not materialized, were also foreseeable but were equally speculative at the time expert reports were due in this case. Under Rule 26(a)(2)(B), those reports were required to contain "a complete statement of the expert's opinions and the basis therefore." See UpsherSmith Laboratories, Inc. v. Mylan Laboratories, Inc., 944 F. Supp. 1411, 1440 (D. Minn. 1996) (striking three of defendant's experts whose reports violated "both the letter and the spirit" of Rule 26(a)(2) by being "uninformative, boilerplate renditions" that failed to disclose "the facts and rationale" underlying the opinions expressed."). Here, a Rule 26(a)(2) compliant report would have required topographical surveys, soil sampling, and the preparation of plans and

The rejected alignment was located "approximately 600 yards down the pass [i.e. east] towards South Fork." Id. The Snow Shed Road is approximately one-third mile (586 yds.) east towards South Fork. Exh. A-2 § 2.4, at p. 2-6. 4 The Ski Corporation also faults the Joint Venture for designing the Snow Shed Road so as to avoid a replat ignoring the fact that it is the Ski Corporation that has placed the Joint Venture in this Catch-22 situation. The Mineral County District Court ruled that the Joint Venture's development plan was proper in every particular other than the access road issue. Thus, now that the access issue is resolved, when the Joint Venture re-submits its PUD to Mineral County for approval, the Ski Corporation will be estopped from challenging it; unless the Joint Venture changes the plan. Of course, that is precisely what the Ski Corporation hopes.

3

3

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

Document 211

Filed 09/21/2006

Page 4 of 12

specifications on the order of those required to bid the project ­ a process that costs tens of thousands of dollars and yet could ultimately be a waste of resources if the alignment changed by even a hundred yards. As a compromise, the Joint Venture put placeholders in Ms. Meer's report. Previously, the Ski Corporation argued that the lack of such placeholders was reason to deny the Joint Venture's November 2005 request to designate a lost profit expert. See docket #112, at 22 n.11. Here, placeholders have been preserved and the principle previously advanced by the Ski Corporation has not changed ­ but, once again, the Ski Corporation's position has. B. THE JOINT VENTURE DOES NOT SEEK RECONSIDERATION OF ITS EARLIER MOTION TO AMEND; IT MERELY SEEKS REVIEW OF THE CURRENT MOTION UNDER THE STANDARD ADOPTED BY BINDING TENTH CIRCUIT PRECEDENT. Either the Ski Corporation is incapable of distinguishing between amendments to add new experts (as is the current case) and other types of scheduling order amendments, or it believes that this Court is not. Either way, once again it stumbles badly in its legal analysis. 5 Among other faults, the Response erroneously cites Strozier v. U.S. Postal Serv., No. 04-cv0007, 2005 WL 2141709 (D. Colo. Aug. 19 2005) for the proposition that "virtually every Colorado court" applies the "diligence" standard cited in Marcin (and therefore implicitly ignores Burks and Summers).6 However, the Strozier court actually applied the four factors of the Smith Test in reaching its decision to permit late designation of experts noting that, under

See Motion at 19-21. Additionally, the Ski Corporation completely misunderstands the argument made in the Motion that the "manifest injustice" standard in Smith (which is identical to the "good cause" standard in Burks and Summers) is not more lenient than the "diligence" test. See Motion pp. 19-20. It is more stringent; and it was the Ski Corporation that incorrectly argued the reverse. See Docket # 112 pp. 14-15 n.5. 6 Marcin Engineering LLC v. Founders of Grizzly Ranch, LLC, 291 F.R.D. 516, 521 (D. Colo. 2003); Burks v. Oklahoma Publ'g Co., 81 F.3d 975, 979 (10th Cir.), cert. denied, 519 U.S. 931, 117 S. Ct. 302 (1996); Summers v. Missouri Pac. R.R. Sys., 132 F.3d 599, 604 (10th Cir. 1997).

5

4

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

Document 211

Filed 09/21/2006

Page 5 of 12

Summers, exclusion of evidence was a "drastic sanction."

2005 WL 2141709 at *3.

Accordingly, Strozier actually undermines the Ski Corporation's premise. Equally damaging to the Ski Corporation's credibility is that its survey of "virtually every" Colorado case somehow missed at least two cases that applied the four factor test. See Washington v. Arapahoe County Dept. of Social Services, 197 F.R.D. 439, 441 (D. Colo. 2000) (refusing to strike plaintiff's experts designated after deadline in scheduling order); Estenfelder v. Gates Corp., 199 F.R.D. 351, 356 (D. Colo. 2001) (permitting defendant to conduct depositions after discovery cut-off established in scheduling order). The remaining legal authority cited in the Response consists of unconvincing case law from outside the Tenth Circuit, non-binding treatises, an out-of-date Tenth Circuit case,7 and an assortment of unreported and inapposite cases on non-expert scheduling order amendments.8 The arguments advanced imply that Colorado federal judges are (1) incapable of making crucial distinctions, and/or (2) have wrongly decided prior cases and/or (3) may properly disregard binding Tenth Circuit Court of Appeals precedent. Any of these implications is false. C. THERE IS NO PREJUDICE OR BAD FAITH. 1. There is no prejudice. The Response claims prejudice resulting both from delay and from increased discovery costs. Neither claim, however, has a basis in fact or law. With respect to delay, permitting late
SIL-FLO, Inc. v. SFHC, 917 F.2d 1507 (10th Cir. 1990). Lozaya v. Garrou Constr. Co., No. 04-cv-02569, 2006 WL 1028869 (D. Colo. April 17, 2006) (motion to amend to file belated dispositive motion); Wireless Tel. Services Antitrust Lit., No. 02 Civ. 2637, 2004 WL 2244502 (S.D.N.Y. Oct. 6, 2004) (motion to amend complaint); Hannah v. Roadway Express, Inc., 200 F.R.D. 651 (D. Colo. 2001) (review under Rule 60(b) of a motion to reconsider denial of motion to amend); Pumpco Inc. v. Schenker Int'l, Inc., 204 F.R.D. 667 (motion to amend pleadings); Colorado Visionary Acad. v. Medtronic, Inc., 194 F.R.D. 684 (D. Colo. 2000) (motion to amend pleadings); Marcin Engineering LLC v. Founders of Grizzly Ranch, LLC, 291 F.R.D. 516, 521 (D. Colo. 2003) (motion to reopen discovery to avoid summary judgment under Rule 56(f) -previously distinguished in the Joint Venture's Motion).
8 7

5

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

Document 211

Filed 09/21/2006

Page 6 of 12

designation of experts is unlikely to impact trial setting. First, courts have permitted late designations as little as eight days before trial without changing the trial date. See Davis v. Duplantis, 448 F.2d 918, 921 (5th Cir.1971).9 Second, the Ski Corporation has requested that trial not take place during the ski season. See docket # 209 ¶ 5. Thus, even if the Court's calendar permitted, it is unlikely that trial could take place before next spring. Accordingly, there is no likelihood of prejudice resulting from delay. As to the increased costs, the Ski Corporation goes far afield to find any legal authority for the proposition that increased discovery costs is sufficiently prejudicial to deny amendment. The type of prejudice contemplated by Tenth Circuit precedent is the unfair surprise that hinders the presentation of the opposing party's case at trial. Smith v. Ford Motor Co., 626 F.2d 784, 798 (10th Cir. 1980);10 Burks, 81 F.3d at 979-980;11 Summers, 132 F.3d at 605.12 Furthermore, the Ski Corporation cannot complain about the cost of retaining a rebuttal expert since is not required to do so; the ability to interview or depose a new expert is deemed sufficient cure. See Summers, 132 F.3d at 605; Estenfelder, 199 F.R.D. at 356. Moreover, the Ski Corporation's claimed impoverishment has not hampered its ability to spend hundreds of thousands of dollars outside the context of this litigation to oppose the Joint Venture's development. Notably, the Ski

Trial judge did not abuse his discretion in permitting unlisted medical witness to testify in medical malpractice case where plaintiff's counsel was notified nine days before trial of new witness, had witness' report eight days before trial, and had opportunity to depose witness. 10 Defendant "was prejudiced in the presentation of its case" by expert testimony outside the scope disclosed in the final pretrial order; had defendant been apprised in advance of expert's testimony, defendant could have taken his deposition and been well prepared at trial to cross-examine him. 11 Finding defendants could not have been surprised that plaintiff would want to introduce new corroborating testimony and that prejudice was unlikely because testimony did not introduce any new issues at trial other than witness credibility but upholding trial court's exclusion of witness on basis of bad faith. 12 Finding that defendant could not have been surprised that plaintiffs would seek to designate new expert after prior experts were stricken, and there was no prejudice because defendant was already prepared to introduce expert testimony contradicting plaintiffs' diagnosis.

9

6

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

Document 211

Filed 09/21/2006

Page 7 of 12

Corporation does not even attempt to argue unfair surprise because it has known about this item of damages since at least February of last year. 2. There is no bad faith. Requesting an amendment to a scheduling order is not willful non-compliance with scheduling order deadlines as the Ski Corporation suggests. If it were, then every motion to amend would be per se bad faith meriting automatic denial. In fact, even the unilateral filing of belated expert designations without prior leave of court is not deemed sufficiently willful so as to justify exclusion. See Washington, 197 F.R.D. at 441. Nor are the Joint Venture's legitimate efforts to limit the Ski Corporation's scorched earth discovery of financial documents and attorney files evidence of bad faith. This Court has never so ruled and the Ski Corporation has cited no case for any such preposterous proposition. In fact, nowhere does the Ski Corporation cite to any case on point in support of this argument. And, while the Response accuses the Joint Venture of bad faith by failing to produce a revised privilege log, both parties are working to produce a log that is compliant with this Court's instructions of July 26, 2006. Meanwhile, it is the Ski Corporation, not the Joint Venture, that has "maneuvered around" this Court's Scheduling Order deadlines. The Joint Venture has been open and

straightforward with its amendment requests, the antithesis of subterfuge. The Ski Corporation, on the other hand, has twice circumvented this Court's Scheduling Order deadlines without openly acknowledging the attempt or honestly addressing the "good cause" standard13 it now so
13

In December 2005, the Ski Corporation filed a motion for summary judgment before first requesting a deadline extension, which it obtained by stipulation without any showing of good cause. More recently, in its self-styled Motion to Exclude Joint Venture's New Experts and Related Testimony or, in the Alternative, for Allowing the Ski Corporation Limited Discovery and Rebuttal Experts (the "Motion to Exclude") the Ski Corporation requested

7

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

Document 211

Filed 09/21/2006

Page 8 of 12

expediently embraces. Rather, through the artifice of seeking to exclude faux experts, the Ski Corporation obtained a unilateral extension of discovery from persons it had known about for over 16 months without any showing of diligence ­ all the while continuing to accuse the Joint Venture of trying to "backdoor expert testimony." Not only do such accusations threaten to chill the exercise of the parties obligations under Rule 26, they completely overlook the fact that the Ski Corporation's own Initial Rule 26(a)(1) Disclosures identified two professional land surveyors, two licensed design professionals, one attorney,14 and eight Forest Service employees whose knowledge of this case derives almost exclusively from their professional involvement. If identification of such professionals in a Rule 26(a)(1) disclosure is the equivalent of bad faith, then the Ski Corporation itself is culpable of bad faith. All or some of the Disclosed Individuals had ongoing interactions with Forest Service and Mineral County personnel and thus are percipient fact witnesses regarding, among other things, communications with the Forest Service, the PUD application and approval, and the DEIS process. As such, they are individuals who are likely to possess discoverable information that may be used by the Joint Venture to support its claims and defenses within the meaning of Rule 26(a)(1) and are not "experts" subject to the disclosure requirements of Rule 26(a)(2). See Gomez v. Rivera Rodriguez, 344 F.3d 103, 113 (1st Cir. 2003);15 Dorn v. Burlington Northern

additional time for discovery and leave to designate its own `rebuttal' experts. The individuals that were the subject of the Motion to Exclude were Randall J. Phelps, Mark Blauer, George Murphy, David Malish, Nick Roe, and Kim Poole (the "Disclosed Individuals"). The Ski Corporation made absolutely no showing whatsoever as to why it had not sought discovery of the Disclosed Individuals before the discovery cut-off. 14 John Lynch (land surveyor); Daryl Coster (same); Sam Brown (architect); Robert M. Takeda (engineer); and John S. Wilder (attorney). 15 Rule 26(a)(2) "does not encompass a percipient witness who happens to be an expert. If the individual is not providing testimony under Rule 702, he is not an expert witness for the purpose of Rule 26."

8

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

Document 211

Filed 09/21/2006

Page 9 of 12

Santa Fe Railroad Co., 397 F.3d 1183, 1192 (9th Cir. 2005);16 Magdaleno v. Burlington Northern R. Co., 5 F. Supp.2d 899, 903 (D. Colo. 1998).17 Given this Court's ruling that no Forest Service personnel can be compelled to testify,18 the Joint Venture cannot rule out the possibility that the Disclosed Individuals may be called as witnesses at trial. Thus, disclosure of these individuals was not only proper, but required. Finally, it is a delusion to conclude that the current Motion is related to the Court's Order on the Motion to Exclude. Aside from the fantastical notion that the factually detailed and legally intricate 34-page Motion was conceived and executed within four days of the Court's Order, the Joint Venture had already stipulated that it would not be calling the Disclosed Individuals in an expert capacity. See docket # 193 p. 2.19 Thus, the Court's Order had no impact on the Joint Venture's trial strategy and there is no merit to the Ski Corporation's suspicions in this regard. In sum, there is absolutely no evidence of bad faith on the part of the Joint Venture. Under applicable Tenth Circuit precedent, the lack of prejudice, ability to cure and absence of bad faith weigh in favor of permitting amendment to designate a new expert.

Testimony from highway patrol officer concerning the angle of truck driver's tire mark was admissible as an observation of a percipient witness or a permissible opinion by a lay witness, and thus exclusion of such testimony was an abuse of discretion. 17 Ergonomics expert's opinion that no machinists engaged in repetitive activities but that machinists were subject to joint deviation, force exertion, and vibration did not constitute scientific, technical, or other specialized knowledge as defined by expert testimony rule, but constituted an observation about which any witness that observed facility could testify. 18 See Docket # 107. 19 Nor was the Motion in any way related to the unavailability of Murfee Engineering and the Ski Corporation's supposition in this regard is premised on the faulty assumption that whoever prepared the recent Road Cost rough estimates (as opposed to the eventual design/builder or design/bidder) would be retained in an expert capacity.

16

9

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

Document 211

Filed 09/21/2006

Page 10 of 12

D.

MR. HONTS CAN OPINE ON THE FACT OF THE ROAD COSTS. There is no dispute that Mr. Honts need not be qualified as an expert under FRE 702 in

order to testify as to the fact of the Road Costs as evidenced by actual invoices or binding contractual commitments. Moreover, as the owner of the property, and based on his credentials, he is afforded some leeway in the scope of his lay opinions. See Motion pp. 29-32. See also Dorn, 397 F.3d 1183 and Magdaleno, 5 F.Supp.2d 899 supra. What the Response fails to comprehend (or rebut with any legal authority) is that the Ski Corporation must show that such expenditures are unreasonable and unnecessary. This it cannot do since it has not designated a qualified expert of its own. The Joint Venture, on the other hand, may not need expert testimony on Road Costs at trial, unless protracted opposition to development causes the Road Costs to be deferred to the future. As a precaution, and

anticipating that the Ski Corporation will continue to oppose the proposed development at all costs, the Joint Venture seeks leave to designate an engineering expert to opine on a category of damages that has already been disclosed. III. CONCLUSION

In short, as long as the Ski Corporation continues to openly oppose the Joint Venture's PUD and full use of the Access Road in derogation of its duties under the 1999 SURP Agreement, damages in this case will remain in flux. Accordingly, fairness dictates that the Joint Venture be permitted to designate an engineering expert in the event the Road Costs are not expended by the time of trial. Not permitting amendment in this case not only jeopardizes the most significant item of the Joint Venture's damages, it allows the Ski Corporation to continue its breaches with impunity relying on the immutability of the Scheduling Order.

10

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

Document 211

Filed 09/21/2006

Page 11 of 12

Respectfully submitted this 21st day of September, 2006.

__s/ Kim A Tomey George V. Berg, Jr., Esq. Kim A. Tomey, Esq. BERG HILL GREENLEAF & RUSCITTI LLP 1712 Pearl Street Boulder, CO 80302 Phone: (303) 402-1600 Fax: (303) 402-1601 Email: [email protected] [email protected] Attorneys for Defendant

11

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

Document 211

Filed 09/21/2006

Page 12 of 12

CERTIFICATE OF SERVICE I hereby certify that on September 21, 2006, I electronically filed the foregoing LEAVELL-McCOMBS JOINT VENTURE'S REPLY ON ITS MOTION TO AMEND SCHEDULING ORDER with the Clerk of the Court using the CM/ECF system which will send notification to such filing to the following e-mail addresses, and I hereby certify that I have mailed or served the document or paper to the following non CM/ECF participants in the manner (mail, hand-delivery, etc.) indicated by the non-participant's name: Andrew R. Shoemaker Hogan & Hartson LLP 1470 Walnut Street, Suite 200 Boulder, CO 80302 [email protected] Jim Moriarty Moriarty Leyendecker 1123 Spruce Street, Suite 200 Boulder, CO 80302 [email protected] Kathleen M. Morgan Moriarty Leyendecker 1123 Spruce Street, Suite 200 Boulder, CO 80302 [email protected] Sally Berg Moriarty Leyendecker 1123 Spruce Street, Suite 200 Boulder, CO 80302 [email protected] Denise D. Riley Hogan & Hartson LLP 1200 Seventeenth Street, Suite 1500 Denver, CO 80202 [email protected] Cynthia A. Mitchell Hogan & Hartson LLP 1470 Walnut Street, Suite 200 Boulder, CO 80302 [email protected]

______s/ Martha Meshak________________

12